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: 1-12762
MID-AMERICA APARTMENT COMMUNITIES, INC.
(Exact Name of Registrant as Specified in Charter)
TENNESSEE 62-1543819
(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
(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 at April 17, 2000
----- -----------------
Common Stock, $.01 par value 17,658,232
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2000 (Unaudited)
and December 31, 1999
Consolidated Statements of Operations for the three months
ended March 31, 2000
and 1999 (Unaudited)
Consolidated Statements of Cash Flows for the three months
ended March 31, 2000 and 1999 (Unaudited)
Notes to Consolidated 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
Mid-America Apartment Communities, Inc.
Consolidated Balance Sheets
March 31, 2000 (Unaudited) and December 31, 1999
(Dollars in thousands)
2000 1999
---- ----
Assets:
Real estate assets:
Land $ 120,467 $ 119,823
Buildings and improvements 1,176,754 1,172,780
Furniture, fixtures and equipment 28,090 28,238
Construction in progress 59,826 58,840
- ------------------------------------------------------------------------------
1,385,137 1,379,681
Less accumulated depreciation (156,211) (146,611)
- ------------------------------------------------------------------------------
1,228,926 1,233,070
Land held for future development 1,712 1,710
Commercial properties, net 5,164 5,217
Investment in and advances to real estate
joint venture 8,018 8,054
- ------------------------------------------------------------------------------
Real estate assets, net 1,243,820 1,248,051
Cash and cash equivalents 18,270 14,092
Restricted cash 13,180 12,537
Deferred financing costs, net 9,986 10,272
Other assets 13,287 13,871
- ------------------------------------------------------------------------------
Total assets $1,298,543 $1,298,823
==============================================================================
Liabilities and Shareholders' Equity:
Liabilities:
Notes payable $ 754,475 $ 744,238
Accounts payable 1,401 2,122
Accrued expenses and other liabilities 21,301 23,199
Security deposits 4,727 4,739
Deferred gain on disposition of properties 4,525 4,581
- ------------------------------------------------------------------------------
Total liabilities and deferred gain 786,429 778,879
Minority interest 54,805 56,060
Shareholders' equity:
Preferred stock, $.01 par value, 20,000,000
shares authorized, $173,470,750 or $25 per
share liquidation preference:
2,000,000 shares at 9.5% Series A Cumulative 20 20
1,938,830 shares at 8.875% Series B Cumulative 19 19
2,000,000 shares at 9.375% Series C Cumulative 20 20
1,000,000 shares at 9.5% Series E Cumulative 10 10
Common stock, $.01 par value (authorized 50,000,000
shares; issued 17,662,199 and 17,971,960 shares
March 31, 2000 and December 31, 1999,
respectively) 176 180
Additional paid-in capital 555,423 562,547
Other (1,276) (1,053)
Accumulated distributions in excess of net income (96,795) (89,869)
Treasury stock at cost, 12,800 and 355,900, shares
at March 31, 2000 and December 31, 1999,
respectively (288) (7,990)
- ------------------------------------------------------------------------------
Total shareholders' equity 457,309 463,884
- ------------------------------------------------------------------------------
Total liabilities and shareholders' equity $1,298,543 $1,298,823
==============================================================================
See accompanying notes to consolidated financial statements.
Mid-America Apartment Communities, Inc.
Consolidated Statements of Operations
Three months ended March 31, 2000 and 1999
(Dollars in thousands except per share data)
(Unaudited)
2000 1999
---- ----
Revenues:
Rental $54,492 $56,182
Other 777 661
Management and development income, net 180 246
Equity in earnings (loss) of real estate joint venture (41) 21
- -------------------------------------------------------------------------------
Total revenues 55,408 57,110
- -------------------------------------------------------------------------------
Expenses:
Personnel 5,869 6,482
Building repairs and maintenance 2,272 2,380
Real estate taxes and insurance 6,319 6,083
Utilities 1,949 2,432
Landscaping 1,431 1,411
Other operating 2,474 2,462
Depreciation and amortization 13,459 12,516
General and administrative 3,780 3,139
Interest 12,220 12,001
Amortization of deferred financing costs 714 692
- -------------------------------------------------------------------------------
Total expenses 50,487 49,598
- -------------------------------------------------------------------------------
Income before gain on dispositions,
minority interest in operating partnership
income and extraordinary item 4,921 7,512
- -------------------------------------------------------------------------------
Gain on disposition of properties 2,991 4,698
- -------------------------------------------------------------------------------
Income before minority interest in operating
partnership income and extraordinary item 7,912 12,210
Minority interest in operating partnership income 540 1,196
- -------------------------------------------------------------------------------
Income before extraordinary item 7,372 11,014
Extraordinary item - loss on debt extinguishment,
net of minority interest (56) (67)
- -------------------------------------------------------------------------------
Net income 7,316 10,947
Dividends on preferred shares 4,030 4,027
- -------------------------------------------------------------------------------
Net income available for common shareholders $ 3,286 $ 6,920
- -------------------------------------------------------------------------------
(Continued)
Mid-America Apartment Communities, Inc.
Consolidated Statements of Operations (Continued)
Three months ended March 31, 2000 and 1999
(Dollars in thousands except per share data)
(Unaudited)
2000 1999
---- ----
Net income available per common share:
- -------------------------------------------------------------------------------
Basic (in thousands):
Average common shares outstanding 17,630 18,902
- -------------------------------------------------------------------------------
Basic earnings per share:
Net income available per common share $ 0.19 $ 0.37
- -------------------------------------------------------------------------------
before extraordinary item
Diluted (in thousands):
Average common shares outstanding 17,630 18,902
Effect of dilutive stock options 25 27
- -------------------------------------------------------------------------------
Average dilutive common shares outstanding 17,655 18,929
- -------------------------------------------------------------------------------
Diluted earnings per share:
Net income available per common share $ 0.19 $ 0.37
- -------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
Mid-America Apartment Communities, Inc.
Consolidated Statements of Cash Flows
Three months ended March 31, 2000 and 1999
(Dollars in thousands)
2000 1999
---- ----
Cash flows from operating activities:
Net income $ 7,316 $ 10,947
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 14,173 13,208
Amortization of unearned compensation 137 17
Equity in (earnings) loss of real estate joint venture 41 (21)
Minority interest in operating partnership income 540 1,196
Extraordinary item 56 67
Gain on dispositions (2,991) (4,698)
Changes in assets and liabilities:
Restricted cash (643) (1,007)
Other assets 505 (1,410)
Accounts payable (721) (3,653)
Accrued expenses and other liabilities (1,833) 1,877
Security deposits (12) (196)
- -------------------------------------------------------------------------------
Net cash provided by operating activities 16,568 16,327
- --------------------------------------------------------------------------------
Cash flows from investing activities:
Purchases of real estate assets (1,046) -
Improvements to properties (2,628) (7,013)
Construction of units in progress and future development (17,697) (17,802)
Proceeds from disposition of real estate assets 12,774 64,588
Investment in and advances to real estate joint venture (5) (5,549)
Escrow funding for tax free exchange - (15,744)
- -------------------------------------------------------------------------------
Net cash provided by (used in) investing activities (8,602) 18,480
- --------------------------------------------------------------------------------
Cash flows from financing activities:
Net change in credit lines 13,490 (19,685)
Proceeds from notes payable - 11,760
Principal payments on notes payable (1,037) (4,044)
Payment of deferred financing costs (428) (245)
Repurchase of common stock (288) -
Proceeds from issuances of common shares and units 433 1,007
Distributions to unitholders (1,718) (1,723)
Dividends paid on common shares (10,210) (10,865)
Dividends paid on preferred shares (4,030) (4,027)
- -------------------------------------------------------------------------------
Net cash used in financing activities (3,788) (27,822)
- -------------------------------------------------------------------------------
Net increase in cash and cash equivalents 4,178 6,985
- -------------------------------------------------------------------------------
Cash and cash equivalents, beginning of period 14,092 7,237
- -------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 18,270 $ 14,222
===============================================================================
Supplemental disclosure of cash flow information:
Interest paid $ 13,469 $ 12,231
Supplemental disclosure of noncash investing and financing
activities:
Conversion of units for common shares $ 66 $ -
Issuance of advances in exchange for common shares and units $ 359 $ -
Interest capitalized $ 973 $ 1,417
See accompanying notes to consolidated financial statements.
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000 and 1999 (Unaudited)
1. Basis of presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the accounting policies in effect as of December 31, 1999, as
set forth in the annual consolidated financial statements of Mid-America
Apartment Communities, Inc. ("MAAC" or the "Company"), as of such date. In the
opinion of management, all adjustments necessary for a fair presentation of the
consolidated financial statements have been included and all such adjustments
were of a normal recurring nature. All significant intercompany accounts and
transactions have been eliminated in consolidation. The results of operations
for the three-month period ended March 31, 2000 are not necessarily indicative
of the results to be expected for the full year.
2. Real Estate Transactions
Property Dispositions
On February 11, 2000, the Company sold the 120-unit Pine Trails apartment
community for approximately $2,815,000 for cash and recorded a gain on
disposition of $471,000. On February 25, 2000, the Company sold the 248-unit
MacArthur Ridge apartment community for approximately $12,075,000 for cash and
recorded a gain on disposition of $2,071,000. The proceeds from both
dispositions were used to reduce debt, fund the development pipeline, and to
fund share repurchases.
3. Stock Repurchase Plan
In connection with the Company's stock repurchase plan, the Company retired an
additional 355,900 shares during the quarter ending March 31, 2000 that were
repurchased in 1999. The Company also repurchased 12,800 shares of common stock
during the first quarter of 2000 for a cost of approximately $288,000 at an
average price per common share of $22.50. The Company intends to retire these
shares in the second quarter of 2000.
4. Share and Unit Information
At March 31, 2000, 17,636,599 common shares and 2,960,546 operating partnership
units were outstanding, a total of 20,597,145 shares and units. Additionally,
MAAC has outstanding options for 1,294,219 shares of common stock at March 31,
2000.
5. Segment Information
At March 31, 2000, the Company owned and operated 129 apartment communities in
13 different states from which it derives all significant sources of earnings
and operating cash flows. The Company'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 Company. 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 Company'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 for the three months ended as of March 31:
2000 1999
-------- -------
Multifamily rental revenues $58,947 $56,270
Other multifaily revenues 470 496
-------- -------
Segment revenues 59,417 56,766
-------- -------
Reconciling items to consolidated revenues:
Joint Venture revenues (4,503) (88)
Management and development income, net 180 246
Equity in earnings (loss) of real estate Joint Venture (41) 21
Interest income and other revenues 355 165
-------- -------
Total revenues $55,408 $57,110
======== =======
Multifamily net operating income $37,073 $35,502
Reconciling items to net income available for common
shareholers:
Joint Venture net operating income (2,473) (74)
Management and development income, net 180 246
Equity in earnings (loss) of real estate Joint Venture (41) 21
Interest income and other revenues 355 165
Interest expense (12,220) 12,001)
General and administrative expenses (3,780) (3,139)
Depreciation and amortization (13,459) 12,516)
Amortization of deferred financing costs (714) (692)
Gain on dispositions 2,991 4,698
Extraordinary items, net (56) (67)
Minority interest (540) (1,196)
Dividends on preferred shares (4,030) (4,027)
-------- -------
Net income available for comon shareholders $3,286 $6,920
======== =======
2000 1999
----------- -----------
Assets:
Multifamily real estate assets $1,485,955 $1,444,950
Accumulated depreciation - multifamily assets (159,337) (146,611)
----------- -----------
Segment assets 1,326,618 1,298,339
----------- -----------
Reconciling items to total assets:
Joint Venture multifamily real estate assets, net (97,692) (65,269)
Land held for future development 1,712 1,710
Commercial properties, net 5,164 5,217
Investment in and advances to real estate joint
ventures 8,018 8,054
Cash and restricted cash 31,450 26,629
Deferred financing costs 9,986 10,272
Other assets 13,287 13,871
----------- -----------
Total assets $1,298,543 $1,298,823
=========== ===========
6. Subsequent Events
Property Dispositions
In April 2000 the Company sold the 176-unit Clearbrook Village Apartments for
$8.1 million, the 253-unit Winchester Square Apartments for $8.8 million and the
624-unit McKellar Woods Apartments for $14.6 million all located in Memphis,
Tennessee. Also the Company provided a $400,000 loan to the buyer repayable in
ten years at 7.5% interest rate for the sale of the Clearbrook Village
Apartments. The proceeds from the sale were used to fund two acquisitions and to
pay down the Company's Credit Line.
Property Acquisitions
In April 2000 the Company acquired the 200-unit Huntington Chase Apartments
located in Warner Robins, GA for $11.6 million and assumed a 6.85% note payable
of $9.6 million. The Company also acquired the 240-unit Indigo Point Apartments
located in Brandon, FL for $11.5 million.
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 consolidated financial condition and
results of operations of the Company for the three months ended March 31, 2000
and 1999. This discussion should be read in conjunction with the financial
statements appearing elsewhere 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 the Company owned or had an ownership
interest in, including the 10 properties containing 2,793 apartment units owned
by its 33.3% unconsolidated Joint Venture, at March 31, 2000 was 33,974 in 129
communities compared to the 34,571 units in 131 communities owned at March 31,
1999. The average monthly rental per apartment unit increased to $619 at March
31, 2000 from $598 at March 31, 1999. Overall occupancy at March 31, 2000 and
1999 was 95.4% and 94.0%, respectively.
FUNDS FROM OPERATIONS
Funds from operations ("FFO") represents net income (computed in accordance with
generally accepted accounting principals "GAAP") excluding extraordinary items,
minority interest in Operating Partnership income, gain or loss on disposition
of real estate assets, and certain non-cash and other items, primarily
depreciation and amortization, less preferred stock dividends. Adjustments for
the unconsolidated joint venture are made to include the Company's portion of
FFO in the calculation. The Company computes FFO in accordance with NAREIT's
definition, which eliminates amortization of deferred financing costs and
depreciation of non-real estate assets as items added back to net income when
computing FFO. This definition reflects the recommendations of NAREIT's Best
Financial Practices Council that FFO should include all operating results, both
recurring and non-recurring, except those defined as "extraordinary" under GAAP.
The Company's FFO calculation reflects this definition for all periods
presented.
The Company's policy is to expense the cost of interior painting, vinyl
flooring, and blinds as incurred for stabilized properties. During the
stabilization period for acquisition properties, these items are capitalized
because they are necessary for the repositioning of the property for continued
use, and, thus, are not deducted in calculating FFO.
FFO should not be considered as an alternative to net income or any other GAAP
measurement of performance, as an indicator of operating performance or as an
alternative to cash flow from operating, investing, and financing activities as
a measure of liquidity. The Company believes that FFO is helpful in
understanding the Company's results of operations in that such calculation
reflects the Company's ability to support interest payments and general
operating expenses before the impact of certain activities such as changes in
other assets and accounts payable. The Company's calculation of FFO may differ
from the methodology for calculating FFO utilized by other REITs and,
accordingly, may not be comparable to such other REITs. Depreciation expense
includes $96,000 and $99,000 at March 31, 2000 and 1999, respectively, which
relates to computer software, office furniture and fixtures and other assets
found in other industries and which is required to be recognized, for purposes
of computing funds from operations.
Funds from operations for the three months ended March 31, 2000 and 1999 is
calculated as follows (in thousands):
2000 1999
---------- ------------
Net income available for common shareholders $ 3,286 $ 6,920
Depreciation and amortization 13,363 12,417
Adjustment for joint venture depreciation 299 -
Minority interest 540 1,196
Gain on disposition of properties (2,991) (4,698)
Extraordinary items 56 67
---------- ------------
Funds from operations $ 14,553 $ 15,902
========== ============
Weighted average shares and units:
Basic 20,591 21,914
Diluted 20,616 22,941
RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED MARCH 31, 2000 TO THE THREE MONTHS ENDED MARCH
31, 1999
Rental revenues for 2000 decreased by $1,690,000 due primarily to decreases of
(i) $4,325,000 from the sale of 10 properties to the BRE/MAAC Associates L.L.C.
joint venture ("Joint Venture") in 1999 and (ii) $1,638,000 from the sale of
Hidden Oaks Apartments, Sailwinds at Lake Magdalene Apartments and Regency Club
Apartments in 1999 and (iii) $269,000 from the sale of Pine Trails and MacArthur
Ridge Apartments in 2000. These decreases were partially offset by increases in
rental revenue of (i) $3,666,000 from the communities in development
("Development Communities") and (ii) $876,000 from the communities owned
throughout both periods.
Property operating expenses for 2000 decreased $936,000 due primarily to
decreases of (i) $1,732,000 from the sale of 10 properties to the Joint Venture
in 1999 and (ii) $787,000 from the sale of Hidden Oaks Apartments, Sailwinds at
Lake Magdalene Apartments and Regency Club Apartments in 1999 and (iii) $120,000
from the sale of Pine Trails and MacArthur Ridge Apartments in 2000. These
decreases were partially offset by increases in property operating expenses of
(i) $1,188,000 from the Development Communities and (ii) $515,000 from the
communities owned throughout both periods.
General and administrative expense increased by $641,000 for the three months
ended March 31, 2000. The largest components of the increase are (i) $200,000
related to the addition and expansion of certain administrative functions to
support the Company's portfolio, (ii) $130,000 related to the Company's focus on
training and (iii) $70,000 due to increased franchise taxes related to recent
changes in Tennessee state laws.
Depreciation and amortization expense increased by $943,000 primarily due to (i)
$1,233,000 from the Development Communities, and (ii) $1,015,000 from the
communities owned throughout both periods. These increases were partially offset
by depreciation and amortization expense decreases of (i) $840,000 due to the
sale of 10 properties to the Joint Venture in 1999 and (ii) $427,000 from the
sale of Hidden Oaks Apartments, Sailwinds at Lake Magdalene Apartments and
Regency Club Apartments in 1999 and (iii) $38,000 from the sale of Pine Trails
and MacArthur Ridge Apartments in 2000.
Interest expense increased $219,000 during the three months ended March 31, 2000
due primarily to additional funding of the new development properties and share
repurchases.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities increased from $16,327,000 for the
three months ended March 31, 1999 to $16,568,000 for the three months ended
March 31, 2000. Net cash provided by operating activities were relatively
unchanged between the periods as the decrease in net income was offset by an
increase in working capital.
Net cash from investing activities decreased by $27,082,000 from a source of
$18,480,000 for the three months ended March 31, 1999 to a usage of $8,602,000
for the three months ended March 31, 2000. Property dispositions in 2000
increased cash provided by investing activities by approximately $12,774,000
compared to approximately $43,295,000 in net property dispositions in 1999,
which includes 6 properties sold to the Joint Venture in March 1999. Capital
expenditures for new development properties and improvements to properties
reduced cash provided by investing activities by $20,325,000 in 2000 compared to
$24,815,000 in capital expenditures in 1999.
As of March 31, 2000 the Company's communities in various stages of development
and lease-up are summarized as follows ($'s in 000's):
Current
Total Estimated
Location Units Cost
-------- ----- ---------
Development Communities:
In Lease-up:
Grand Reserve Lexington .... Lexington, KY 370 32,761
Kenwood Club at the Park ... Katy(Houston), TX 320 18,807
----- --------
690 $ 51,568
Under Construction:
Grande View Nashville ...... Nashville, TN 433 35,434
Reserve at Dexter
Lake Phase II ............ Memphis, TN 244 16,605
----- --------
677 $ 52,039
----- --------
Total Units Currently Under
Development .............. 1,367 $103,607
Apartments
--------------------------
Cost to
Date Completed Leased Occupied
---- --------- ------ --------
Development Communities:
In Lease-up:
Grand Reserve Lexington .... 26,664 117 49 38
Kenwood Club at the Park ... 16,376 256 58 35
------- --- --- --
$43,040 373 107 73
Under Construction:
Grande View Nashville ...... 18,422 -- -- --
Reserve at Dexter
Lake Phase II ............ 13,808 56 47 21
------- --- --- --
$32,230 56 47 21
------- --- --- --
Total Units Currently Under
Development .............. $75,270 429 154 94
Actual capital expenditures for development of communities and community
improvements for the three months ending March 31, 2000 are summarized below:
($'s in 000's)
Community development $ 17,697
Recurring capital at stabilized properties 1,768
Revenue enhancing projects at stabilized properties 700
Corporate additions and improvements 160
------------
$ 20,325
============
Net cash used by financing activities decreased by $24,034,000 from $27,822,000
in 1999 to $3,788,000 for the same period in 2000. The decrease was primarily
due to borrowing and repayment activity of the Company's credit lines and notes
payable.
At March 31, 2000, the Company had $186.9 million outstanding on the credit
lines. At March 31, 2000, the Company had $218.7 million (including the credit
lines) of floating rate debt at an average interest rate of 6.7%; all other debt
was fixed rate term debt at an average interest rate of 7.1%. In 2000, the
Company received an additional $12.0 million from the FNMA Credit Line which is
part of a $195 million credit facility. The Company expects to use the credit
lines to fund future property acquisitions and new property development, and to
provide letters of credit as credit enhancements for tax-exempt bonds. The
credit lines are secured and are subject to borrowing base calculations that
effectively reduce the maximum amount that may be borrowed under the credit
lines to $261.8 million as of April 30, 2000.
The weighted average interest rate and weighted average maturity at March 31,
2000 for the $754.5 million of notes payable were 7.0% and 10.3 years,
respectively.
The Company 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) and payment of distributions by the Company in accordance with REIT
requirements under the Code.
The Company expects to meet its long term liquidity requirements, such as
scheduled mortgage debt maturities, property developments and acquisitions,
expansions and non-recurring capital expenditures, through long and medium-term
collateralized and uncollateralized fixed rate borrowings, fundings from the
Company's credit lines, potential asset sales and joint venture transactions.
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 Company'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 Company 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 Company 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, rehabilitation costs on the apartment
communities, and future development. Although the Company 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 on Form 10-Q 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 Company or any other person
that the objectives and plans of the Company 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
Company'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 and Reports on Form 8-K
(a) The following exhibits are filed as part of this report.
(27) Financial Data Schedule for the period ended 3/31/00
(b) Reports on Form 8-K
No reports were filed on Form 8-K for the period ended
3/31/00.
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 APARTMENT COMMUNITIES, INC.
Date: 5/12/00 /s/ Simon R. C. Wadsworth
------------- -----------------------------
Simon R.C. Wadsworth
Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)