Exhibit 99.1 Press Release
Mid-America Apartment Communities, Inc.
A self-managed Equity REIT
Press Release, 2nd Quarter Earnings 2001
FROM: Simon R. C. Wadsworth, CFO
SUBJECT: For Immediate Release
DATE: August 2, 2001
MAA Reports Continued Solid Earnings Results
o Second quarter Funds From Operations (FFO) 71 cents per share; meeting
expectations
o New development properties continue to perform well
o Occupancy 94.3% at quarter end; down from 95.4% a year earlier
o Significant loan refinancings completed, reducing overall debt cost to 6.7%
o Sold $15 million asset at 8.5% cap rate, reflective of high portfolio quality
Mid-America Apartment Communities, Inc. (MAA: NYSE) today announced Funds From
Operations of $14.4 million (71 cents per share) for the second quarter ending
June 30, 2001. "Our diversified portfolio of properties continue to post solid
results amidst more challenging market and economic conditions," reported George
Cates, Chairman and CEO. "In the past two months, we refinanced loans totaling
$84 million, resulting in debt cost reduction. Our balance sheet continues to
strengthen as a result of the completion and lease-up of our development
pipeline, the steady earnings contribution from our stabilized portfolio, and
the highly successful refinancings completed since the first of the year."
"Second quarter operating results were in line with our expectations" reported
Eric Bolton, President and COO. "Despite increased pressure on occupancy,
primarily in Memphis, we met revenue expectations as a result of steady rent
growth and reduced resident turnover. Same store rent growth was 2.8% and
resident turnover declined 2.8% as compared to the second quarter of last year.
Through the first six months of this year we reduced resident turnover 2.6% as
compared to the same period a year earlier. This marks the sixth consecutive
quarter that we have posted a decline in year to date turnover; an important
performance benchmark in these very competitive market conditions. Overall same
store revenue growth was 2.5%."
"We ended the second quarter at 92% occupancy in our Memphis portfolio, down
from 95% at the same time last year. While demand remains steady in this market
and new construction permits are declining, it will likely not be until the
second quarter of next year before we see demand catch up to the oversupply of
new construction in this market. We expect periodic over supply situations to
develop from time to time. The excess supply pressures tend to be short lived as
demand is fairly steady in our markets and excess new starts are reined in
pretty quickly. Occupancy throughout the remainder of our portfolio continues to
be solid. Markets showing continued strength are Dallas, Austin, Houston, Tampa,
Hampton, VA, Greenville, SC and Jackson, MS."
"Same store expenses grew only 2.4% over the second quarter last year; good
performance coming off the prior year's unsustainably low 1.4% benchmark.
Expense items experiencing the largest increase were advertising and marketing,
reflective of the highly competitive market conditions, and landscaping - very
dry conditions throughout the southeast in 2000 have begun to take their toll
with tree removal and drought related costs this year. Continuing gains in
utility cost management initiatives (water, gas, and trash removal) and
personnel productivity (improved 5.2%) partially offset expense increases
elsewhere. Same store expenses increased by 2.4% and net operating income grew
by 2.6% for the quarter.
Mid-America's new development pipeline continues to perform in line with
expectations. During the quarter, lease up was completed at Kenwood Club (Katy,
TX) with occupancy at 96.9% by quarter end. Lease up projects in progress in
Lexington, KY (Grand Reserve) and Nashville, TN (Grande View) are making steady
progress; each should reach 90% occupancy by early 2002. The initial units of
the final 244-unit phase of the Reserve at Dexter Lake (Memphis, TN) came on
line during the second quarter, with completion expected in early 2002. The
second phase continues to lease up and reached 90% occupancy by the end of the
quarter.
Simon Wadsworth, CFO reported, "With $84 million successfully completed at the
beginning of July, most of our refinancing is accomplished for this year. We now
have no significant debt maturities until 2003. We've successfully fixed or
swapped 88% of our total debt and we may fix additional amounts as the year
progresses."
"Pressure from property tax increases continues, and we expect to have
adequately accrued for potential rate changes and reappraisals. We have
completed $15 million of asset sales, with another $11 million scheduled in the
second half of the year. Further asset sales now tend to build unused balance
sheet capacity, and dilute earnings (by 2 1/2 cents per share per $10 million on
a full year basis) and share value growth, although building 'dry powder' for
future acquisitions."
"The occupancy slippage and Memphis market pressures cause concern, but we
believe that the current FFO forecast of $2.83/share for 2001 remains achievable
(third quarter 71 cents, fourth quarter 72 cents) as we continually gain
strength from maturing new development. We will be under most pressure in the
current third quarter. The First Call consensus for FFO/share of $2.95 next year
is in line with our internal forecasts, ranging from $2.92 -$2.97, depending on
numerous operating and economic factors including continued net operating income
growth between 2.0%-2.5%, future interest rate environment, and timing of
planned asset sales and capital reinvestment."
As previously reported, effective October 1, 2001 George Cates will retire as
Chief Executive Officer. He will continue as Chairman of the Board for the
ensuing year. Cates said, "This succession has been planned for several years.
Eric and our management team will continue our successful strategy, centered on
steadily building our true return - the growth in share value plus cash paid out
to our owners."
"While pleased with our 23% overall market return for the year to date, we
remain convinced that the intrinsic value of our shares remains well above the
market's price. The real value of our high quality properties is evidenced by
numerous third party awards and reconfirmed by the cap rates on recent sale
transactions. Our flexible strategy and approach to this cyclical business is
sound. Our return on assets, an especially important benchmark in a business
utilizing this much capital, is strong and steadily improving as the development
pipeline matures - and is above that of the other apartment REITs who, like
ourselves, have a significant development component. Our management team is deep
and experienced. As committed, significant owners, we remain focused on building
a solid return for our fellow owners."
A conference call will be held tomorrow, August 3, 2001, at 10AM (CDT) to
discuss the recent quarterly results. Call in number is 847-413-3712;
moderator's name George E. Cates; conference ID 4308365 or "Mid-America
Apartment Communities." The conference will also be available on digital replay.
To access the replay, please dial 630-652-3000 and enter the passcode 4308365,
through August 10, 2001. A transcript will also be available on our web site,
www.maac.net, shortly after the call.
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, costs remaining to complete
development properties, planned disposition, disposition pricing, planned
acquisitions, developments, 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, 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 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
- -----------------------------------------------------------------------------------------------------------------------------
Unaudited - Dollars in thousands except per share data
Three months ended June 30, Six months ended June 30,
------------------------------ --------------------------------
2001 2000 2001 2000
-------------- -------------- --------------- ---------------
Property revenues $ 57,453 $ 55,169 $ 113,734 $ 110,083
Property operating expenses 21,170 20,259 41,972 40,573
- -----------------------------------------------------------------------------------------------------------------------------
Net operating income 36,283 34,910 71,762 69,510
Interest and other non-property income 429 359 716 714
Management and development income, net 191 182 379 362
FFO from real estate joint ventures 348 191 516 449
Property management expenses 2,693 2,358 5,282 4,809
General & adminstrative 1,472 1,388 2,913 2,717
Interest expense 13,843 12,318 27,302 24,538
Gain/(loss) on sale of non-depreciable assets (5) - 229 -
Preferred dividend distribution 4,029 4,029 8,057 8,059
Depreciation and amortization non-real estate assets 158 95 325 192
Amortization of deferred financing costs 636 819 1,165 1,532
- -----------------------------------------------------------------------------------------------------------------------------
Funds from operations 14,415 14,635 28,558 29,188
Depreciation and amortization 12,936 12,562 25,766 25,925
Joint venture depreciation adjustment included in FFO 314 301 627 600
Gain/(loss) on sale of non-depreciable assets included in FFO (5) - 229 -
Preferred dividend distribution add back (4,029) (4,029) (8,057) (8,059)
- -----------------------------------------------------------------------------------------------------------------------------
Income before gain on sale of assets, minority interest
and extraordinary item 5,199 5,801 9,993 10,722
Net gain/(loss) on sale of assets (5) 6,394 164 9,385
Minority interest in operating partnership income (149) (1,403) (251) (1,943)
- -----------------------------------------------------------------------------------------------------------------------------
Net income before extraordinary item 5,045 10,792 9,906 18,164
Ex item - Loss on debt extinguishment , net of MI 443 148 443 204
Preferred dividend distribution 4,029 4,029 8,057 8,059
- -----------------------------------------------------------------------------------------------------------------------------
Net income available for common shareholders $ 573 $ 6,615 $ 1,406 $ 9,901
=============================================================================================================================
Weighted average common shares and units - Diluted 20,416 20,611 20,431 20,613
Funds from operations per share - Diluted $ 0.71 $ 0.71 $ 1.40 $ 1.42
Net income available for common shareholders
before extraordinary items per share - Diluted $ 0.07 $ 0.38 $ 0.12 $ 0.57
Net income available for common shareholders
after extraordinary items per share - Diluted $ 0.04 $ 0.37 $ 0.09 $ 0.56
- -----------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
- -----------------------------------------------------------------------------------------------------------------------------
Dollars in thousands
Unaudited
June 30, December 31,
2001 2000
--------------- ---------------
Assets
Real estate assets, net $1,239,566 $1,244,475
Cash and cash equivalents, including restricted cash 24,653 33,567
Other assets 22,534 25,729
- -----------------------------------------------------------------------------------------------------------------------------
Total assets $1,286,753 $1,303,771
=============================================================================================================================
Liabilities
Bonds and notes payable $790,708 $781,089
Other liabilities 37,207 37,306
- -----------------------------------------------------------------------------------------------------------------------------
Total liabilities 827,915 818,395
Shareholders' equity and minority interest 458,838 485,376
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Total liabilities & shareholders' equity $1,286,753 $1,303,771
=============================================================================================================================
Exhibit 99.2 Supplemental Data
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OPERATING RESULTS
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Dollars in thousands except per share data
ROA Annualized Trailing
2Q01 4 Quarters
------------ ------------
Gross Real Estate Assets, Average $1,451,521 $1,432,687
EBITDA $ 129,800 $ 127,470
EBITDA/Gross Real Estate Asses 8.9% 8.9%
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- -------------------------
2001 2000 2001 2000
-------------- ----------- ------------- ---------
Common and Preferred Dividends as % of FFO 88% 85%
EBITDA/Debt Service (1) 2.15 2.23
EBITDA/Fixed Charges (2) 1.70 1.74
Total Debt as % of Gross Real Estate Assets 55% 54%
MAA portion of JV debt $27,779 $27,466
Capitalized Interest YTD $ 811 $ 1,126
FAD
FFO $14,415 $14,635 $28,558 $29,188
Average Units 30,985 30,797 30,944 30,976
Average Shares - Diluted 20,416 20,611 20,431 20,613
Recurring Capex (annual $400/unit) $ 3,099 $ 3,080 $ 6,189 $ 6,195
FAD $11,316 $11,555 $22,369 $22,993
Free Cash Flow (3) $12,110 $12,469 $23,859 $24,718
PER SHARE (DILUTED)
FFO $ 0.71 $ 0.71 $ 1.40 $ 1.42
FAD $ 0.55 $ 0.56 $ 1.09 $ 1.12
Free Cash Flow (3) $ 0.59 $ 0.60 $ 1.17 $ 1.20
Distribution $ 0.585 $ 0.580 $ 1.170 $ 1.160
(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.
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OTHER DATA
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Three months ended June 30, Six months ended June 30,
--------------------------- --------------------------
2001 2000 2001 2000
-------------- ----------- ----------- -----------
Weighted average common shares and units - Basic 20,332 20,540 20,374 20,566
Weighted average common shares and units - Diluted 20,416 20,611 20,431 20,613
Number of apartment units with ownership interest
(excluding development units not delivered) 33,778 33,591 33,778 33,591
Apartment units added during period, net - (346) 166 (310)
PER SHARE DATA
Funds from operations per share - Basic $ 0.71 $ 0.71 $ 1.40 $ 1.42
Funds from operations per share - Diluted $ 0.71 $ 0.71 $ 1.40 $ 1.42
Net income available for common shareholders
before extraordinary items - Diluted $ 0.07 $ 0.38 $ 0.12 $ 0.57
Net income available for common shareholders
after extraordinary items - Diluted $ 0.04 $ 0.37 $ 0.09 $ 0.56
Dividend declared per common share $ 0.585 $ 0.580 $ 1.170 $ 1.160
DIVIDEND INFORMATION (latest declaration) Payment Payment Record
per Share Date Date
----------- ----------- -----------
Common Dividend - quarterly $0.5850 7/31/2001 7/24/2001
Preferred Series A - monthly $0.1979 7/15/2001 7/1/2001
Preferred Series B - monthly $0.1849 7/15/2001 7/1/2001
Preferred Series C - quarterly $0.5859 7/15/2001 7/1/2001
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PROPERTY STATISTICS
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100% Owned Properties Not in Lease-Up
---------------------------------------------------------------
Average Occupancy by
Geographic Market
-------------------------------- Average Rental Rate by
Total Properties at June 30, 2001 March 2001 Geographic Market
--------------------------------- --------------------- ------------------------------
Number of Number of Percent of June 2001 MAA Market Percent
Properties Units Total Occupancy Occupancy Occupancy June 2001 June 2000 Change
---------- ---------- ---------- ---------- ---------- --------- --------- --------- --------
Memphis, TN 11 4,208 12% 91.8% 93.4% 91.0% $624.60 $606.20 3.0%
Chattanooga, TN 4 943 3% 92.6% 93.3% 95.4% $650.90 $637.00 2.2%
Jackson, TN 5 904 3% 92.8% 91.9% 91.1% $603.40 $591.80 2.0%
Nashville, TN 4 1,158 3% 94.1% 94.0% 94.1% $679.90 $671.10 1.3%
Jacksonville, FL 8 2,726 8% 94.1% 95.0% 96.2% $666.70 $644.90 3.4%
Florida (except Jacksonville) 13 3,758 11% 93.1% 94.7% 94.6% $691.10 $674.90 2.4%
Georgia 22 5,707 17% 94.5% 96.5% 91.8% $703.70 $684.70 2.8%
South Carolina 12 2,604 8% 96.1% 94.7% 93.1% $615.10 $599.00 2.7%
Alabama 4 952 3% 93.9% 93.8% 93.4% $645.90 $637.10 1.4%
Texas 15 4,312 13% 95.9% 96.5% 94.2% $653.80 $632.40 3.4%
Arkansas & Missouri 4 1,128 3% 96.1% 96.2% 92.9% $599.20 $577.10 3.8%
Mississippi 10 2,382 7% 95.0% 94.2% 93.9% $567.20 $555.60 2.1%
Kentucky & Ohio 8 1,962 6% 96.2% 95.2% 91.2% $629.80 $616.80 2.1%
North Carolina & Virginia 4 1,034 3% 96.0% 96.7% 95.2% $650.60 $608.50 6.9%
- ---------------------------------------------------------------------------------------------------------------------------------
Total 124 33,778 100% 94.3% 94.9% 93.5% $649.80 $632.10 2.8%
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SAME STORE STATISTICS
- ---------------------------------------------------------------------------------------------------------------------------
Dollars in thousands except Average Rental Rate
Three Months Ended June 30,
------------------------------
Percent
2001 2000 Change
---------- -------- --------
Revenues $53,089 $51,783 2.5%
Operating Expenses 13,123 12,951 1.3%
RE Taxes and Insurance 5,893 5,615 5.0%
- ----------------------------------------------------------
Total Expenses 19,016 18,566 2.4%
- ----------------------------------------------------------
NOI $34,073 $33,217 2.6%
- ----------------------------------------------------------
Units 28,699 28,699
Average Rental Rate $647.57 $629.96 2.8%
Physical Occupancy 94.3% 95.4% -1.2%
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DEBT AS OF JULY 2, 2001
- ----------------------------------------------------------------------------------------------------------------------------
Dollars in thousands
Principal Average Years Average
Balance to Maturity Rate
----------- -------------- ----------
Fixed Rate - Conventional $448,840 7.7 7.2%
Fixed Rate - Tax-free 119,952 20.3 6.1%
Line of Credit - Swapped to Fixed Rate 125,000 7.1 6.9%
Variable Rate - Tax-free 22,560 26.6 4.2%
Variable Rate - Conventional 68,688 7.1 4.5%
-------------------------------------
Total $785,040 10.4 6.7%
FUTURE PAYMENTS Average
Scheduled Rate for
Amortization Maturities Total Maturities
------------- ------------- -------- -----------
2001 $ 2,279 $ 57,166 $ 59,445 5.3%
2002 4,584 11,390 15,974 7.5%
2003 4,319 158,244 162,563 6.6%
2004 4,196 71,168 75,364 7.7%
2005 3,977 36,125 40,102 7.0%
Thereafter 164,832 266,760 431,592 7.1%
---------------------------------------------------
Total $184,187 $600,853 $785,040 6.7%
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DEVELOPMENT PIPELINE
- ----------------------------------------------------------------------------------------------------------------------------
Dollars in thousands
DEVELOPMENT STATISTICS Actual/Forecast
------------------------------------
Current Construction
Total Estimated Cost to --------------- Initial Stabil-
Units Cost Date Start Finish Occupancy ization
----------- ------------ --------- -------- ------- ----------- --------
Completed Communities in Lease-up
Grand Reserve Lexington Lexington, KY 370 $ 33,127 $ 31,779 3Q98 3Q00 4Q99 4Q01
Kenwood Club at the Park Katy, TX 320 17,978 17,611 2Q99 2Q00 1Q00 2Q01
Reserve at Dexter Lake Phase II Memphis, TN 244 16,898 16,173 2Q99 2Q01 1Q00 3Q01
Grande View Nashville Nashville, TN 433 37,600 36,649 1Q99 2Q01 3Q00 1Q02
-------------------------------------
Total Completed Communities 1,367 105,603 102,212
Under Construction
Reserve at Dexter Lake Phase III Memphis, TN 244 16,869 11,174 3Q00 1Q02 2Q01 3Q02
-------------------------------------
Total Units in Lease-up/Development 1,611 $122,472 $113,386
=====================================
OCCUPANCY STATISTICS Apartments
-------------------------------------
Available Leased Occupied
------------- ----------- -----------
Completed Communities in Lease-up
Grand Reserve Lexington 370 302 280
Kenwood Club at the Park 320 320 310
Reserve at Dexter Lake Phase II 238 224 214
Grande View Nashville 432 316 284
-------------------------------------
Total Completed Communities 1,360 1,162 1,088
Under Construction
Reserve at Dexter Lake Phase III 4 4 2
-------------------------------------
Total Units in Lease-up/Development 1,364 1,166 1,090
=====================================