Exhibit 99.1 Press Release
Mid-America Apartment Communities, Inc.
A self-managed Equity REIT
Press Release, 3rd Quarter Earnings 2001
FROM: Simon R. C. Wadsworth, CFO
SUBJECT: MAA Reports 4.5% Funds from Operations Growth
DATE: November 1, 2001
Memphis, TN November 1, 2001 Mid-America Apartment Communities, Inc. (NYSE: MAA)
o Third quarter FFO of $0.70 per share.
o Occupancy remains stable; 3rd quarter up slightly from the 2nd quarter.
o Favorable financing environment and new development lease-up continues
to strengthen balance sheet.
Memphis, TN. Mid-America Apartment Communities, Inc. (NYSE: MAA) today announced
Funds From Operations ("FFO") for the third quarter ended September 30, 2001 of
$14.3 million, or $0.70 per share. This is in line with recently revised
earnings estimates and represents a 4.5% growth in FFO per share as compared to
$13.7 million or $0.67 per share reported for the same quarter last year.
FFO is a widely-accepted measure of a REIT's performance. Net income available
for common shareholders per share increased to $0.52 per share for the quarter
(as compared to $0.09 per share for the same period one year ago) which includes
a $9.9 million gain on sale of assets.
Eric Bolton, President and CEO said, "While we have recently experienced growing
pressure on operating performance from a combination of slower job growth and
softness from excess new development in a few markets, we are pleased to see
other factors working to off-set some of this current drag on earnings. We
continue to take advantage of the low interest rate environment through
favorable refinancing transactions and have further reduced our debt costs. In
addition, unit turnover year to date continued its improvement, now running 0.5%
below last year. Mid-America's diversification of investments in a number of
southeastern and south central region middle-tier and tertiary cities
contributes to less volatile portfolio performance, in contrast to a number of
the larger metropolitan cities throughout the country that are experiencing a
more significant economic slow down. Given the anticipated softness in the
economy over the next several quarters, earlier this month we introduced more
caution into our earnings forecast for the remainder of this year and for 2002."
"Overall occupancy at the end of the third quarter was 94.4%, 0.7% below the
same point last year but up slightly from 94.3% at the end of the second quarter
this year. Leasing traffic significantly declined during the latter part of
September, by roughly 14% as compared to the same period last year. The
reduction in leasing from normal seasonal patterns contributed to lower than
expected revenues during the month. We did see leasing traffic return to more
normal seasonal patterns in October. Our focus on continuous improvements in
operating productivity continues to keep expense growth well in hand. On a same
store portfolio basis, revenue growth for the quarter was 0.6% and operating
expenses were flat with no growth as compared to the last year's third quarter,
resulting in NOI growth of 1.0%."
"We continue to strengthen our balance sheet with $89 million of debt
refinancing completed in the third quarter at an average rate of 5.77%," said
Simon Wadsworth, Executive VP and CFO. "We have now locked in our interest rate
exposure at an average rate of 6.8% on almost 90% of our total debt. The average
interest rate for our debt is now below 6.6% and we anticipate further
reductions during the fourth quarter. Our new development pipeline continues to
make steady progress with lease up performance for the remaining projects in
line with expectations. The only remaining construction left to complete is the
third and final phase of the Reserve at Dexter Lake in Memphis, which we expect
to be finished in the first quarter of 2002, with just $2.8 million still to
fund."
"We recently announced revised forecasts for the balance of 2001 and for 2002.
We anticipate FFO of $2.80 per share for the full year of 2001, and a range of
2.82-$2.92 per share for 2002, with our current estimate at $2.87 per share
based on the assumptions presented. Our quarterly estimates for next year are
$0.68 cents/share in Q1, $0.72 cents/share in each of the next two quarters and
$0.75 cents/share in the last quarter of the year. Assuming there are no
developments which generate further negative pressure on the economy, we expect
to see some strengthening in occupancy in the spring as excess supply conditions
in a few markets improve, along with normal increased seasonal leasing activity.
We are forecasting same-store growth in the 1.6% range for all of 2002. While
the balance sheet capacity that we continue to build provides for some upside
potential for earnings growth above our current forecast, we have assumed no new
acquisition activity in those forecasts."
"Market softness continues to be confined primarily to the company's Memphis and
Jackson, TN properties," according to Tom Grimes, VP and Division Director. "We
continue to see extensive concessions at our Memphis properties and expect that
it will be the third or fourth quarter of next year before this market begins to
firm up." The Memphis property group reported 91.0% occupancy at quarter end,
comparing to 94.8% occupancy at the same point last year. Elsewhere, markets
continue to remain fairly stable. Lee Little, Senior VP and Division Director
said, "Our markets in Dallas and Houston continue to enjoy good occupancy. In
addition, our Carolina and Florida property groups also continue to report solid
performance."
"Despite the drop in leasing over the latter part of September, and the more
cautious assumptions we have introduced into our forecast, we are encouraged by
the overall outlook for our properties in the portfolio's diversified large,
middle and tertiary markets," said Bolton. "Our entire portfolio is in excellent
condition as a result of continuous capital improvements and upgrades. Our
balance sheet is improving and we completed our new development pipeline
initiative at just the right time. We are quite comfortable with our dividend
payout and believe that the market's current pricing of our stock continues to
make it an attractive investment. We have growing capacity within our balance
sheet and look forward to further increasing value for our shareholders over the
course of 2002 and beyond."
A conference call will be held tomorrow, November 2, 2001, at 10AM (Central
Time) to discuss the recent quarterly results. Call in number is 847-413-3712;
moderator's name Eric Bolton; conference ID 4824365 or "Mid-America Apartment
Communities." The conference will also be available on digital replay. To access
the replay, please dial 402-220-0820 (no passcode is needed) through November 9,
2001. A transcript of prepared remarks 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 acquisitions, planned dispositions,
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.
MAA is a self-administered, self-managed apartment-only real estate investment
trust which owns or has ownership interest in 33,480 apartment units throughout
the southeast and southcentral U.S. and in Texas, including 189 units in the
development pipeline. For further details, please refer to our website at
www.maac.net or contact Simon R. C. Wadsworth at (901) 682-6668, ext. 105. 6584
Poplar Ave., Suite 300, Memphis, TN 38138.
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited - In thousands except per share data
Three months ended September 30, Nine months ended September 30,
----------------------------------- ----------------------------------
2001 2000 2001 2000
---------------- ---------------- ---------------- ----------------
Property revenues $ 56,779 $ 56,470 $ 170,513 $ 166,553
Property operating expenses 21,726 22,029 63,698 62,602
------------------------------------------------------------------------------------------------------------------------------------
Net operating income 35,053 34,441 106,815 103,951
Interest and other non-property income 271 309 987 1,023
Management and development income, net 190 187 569 549
FFO from real estate joint ventures 253 274 769 723
Property management expenses 2,241 2,402 7,523 7,211
General & adminstrative 1,514 1,298 4,427 4,015
Interest expense 13,024 13,006 40,326 37,544
Gain on sale of non-depreciable assets - - 229 -
Preferred dividend distribution 4,028 4,028 12,085 12,087
Depreciation and amortization non-real estate assets 156 167 481 359
Amortization of deferred financing costs 530 620 1,695 2,152
------------------------------------------------------------------------------------------------------------------------------------
Funds from operations 14,274 13,690 42,832 42,878
Depreciation and amortization 12,760 12,570 38,526 38,496
Joint venture depreciation adjustment included in FFO 316 303 943 902
Gain on sale of non-depreciable assets included in FFO - - 229 -
Preferred dividend distribution add back (4,028) (4,028) (12,085) (12,087)
------------------------------------------------------------------------------------------------------------------------------------
Income before gain on sale of assets, minority interest
and extraordinary item 5,226 4,845 15,219 15,567
Net gain on sale of assets 9,900 1,119 10,064 10,504
Minority interest in operating partnership income (1,853) (337) (2,104) (2,280)
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Income before extraordinary item 13,273 5,627 23,179 23,791
Ex item - Loss on debt extinguishment , net of MI 183 - 626 204
Preferred dividend distribution 4,028 4,028 12,085 12,087
------------------------------------------------------------------------------------------------------------------------------------
Net income available for common shareholders $ 9,062 $ 1,599 $ 10,468 $ 11,500
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Weighted average common shares and units - Diluted 20,503 20,520 20,455 20,582
Funds from operations per share - Diluted $ 0.70 $ 0.67 $ 2.09 $ 2.08
Net income available for common shareholders
before extraordinary items per share - Diluted $ 0.53 $ 0.09 $ 0.63 $ 0.67
Net income available for common shareholders
after extraordinary items per share - Diluted $ 0.52 $ 0.09 $ 0.60 $ 0.65
CONSOLIDATED BALANCE SHEETS
In thousands
Unaudited
September 30, December 31,
2001 2000
---------------- ----------------
Assets
Real estate assets, net $1,222,152 $1,244,475
Cash and cash equivalents, including restricted cash 25,047 33,567
Other assets 26,322 25,729
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Total assets $1,273,521 $1,303,771
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Liabilities
Bonds and notes payable $ 775,467 $ 781,089
Other liabilities 48,065 37,306
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Total liabilities 823,532 818,395
Shareholders' equity and minority interest 449,989 485,376
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Total liabilities & shareholders' equity $1,273,521 $1,303,771
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Exhibit 99.2 Supplemental Data
OPERATING RESULTS
Dollars and shares in thousands except per share data
ROA Annualized Trailing
3Q01 4 Quarters
------------- --------------
Gross Real Estate Assets, Average $1,442,448 $1,439,692
EBITDA $ 125,928 $ 127,744
EBITDA/Gross Real Estate Asses 8.7% 8.9%
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2001 2000 2001 2000
---------------- ------------- ----------- -----------------
Common and Preferred Dividends as % of FFO 87% 89%
EBITDA/Debt Service (1) 2.20 2.14
EBITDA/Fixed Charges (2) 1.73 1.68
Total Debt as % of Gross Real Estate Assets 54% 55%
MAA portion of JV debt $26,903 $29,153
Capitalized Interest YTD $ 1,067 $ 2,950
FAD
FFO $14,274 $13,690 $42,832 $42,878
Average Units 30,606 30,869 30,855 30,940
Average Shares - Diluted 20,503 20,520 20,455 20,582
Recurring Capex (annual $400/unit) $ 3,061 $ 3,087 $ 9,257 $ 9,282
FAD $11,213 $10,603 $33,575 $33,596
Free Cash Flow (3) $11,899 $11,390 $35,752 $36,107
PER SHARE (DILUTED)
FFO $ 0.70 $ 0.67 $ 2.09 $ 2.08
FAD $ 0.55 $ 0.52 $ 1.64 $ 1.63
Free Cash Flow (3) $ 0.58 $ 0.56 $ 1.75 $ 1.75
Distribution $ 0.585 $ 0.580 $ 1.755 $ 1.740
</Table>
(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.
OTHER DATA
Shares and units in thousands except per share data
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2001 2000 2001 2000
------------------ ----------- ---------------- ------------
Weighted average common shares and units - Basic 20,340 20,435 20,362 20,522
Weighted average common shares and units - Diluted 20,503 20,520 20,455 20,582
Number of apartment units with ownership interest
(excluding development units not delivered) 33,291 33,727 33,291 33,727
Apartment units added during period, net (487) 136 (321) (174)
PER SHARE DATA
Funds from operations per share - Basic $ 0.70 $ 0.67 $ 2.10 $ 2.09
Funds from operations per share - Diluted $ 0.70 $ 0.67 $ 2.09 $ 2.08
Net income available for common shareholders
before extraordinary items - Diluted $ 0.53 $ 0.09 $ 0.63 $ 0.67
Net income available for common shareholders
after extraordinary items - Diluted $ 0.52 $ 0.09 $ 0.60 $ 0.65
Dividend declared per common share $ 0.585 $ 0.580 $ 1.755 $ 1.740
DIVIDEND INFORMATION (latest declaration) Payment Payment Record
per Share Date Date
------------ ------------- ------------
Common Dividend - quarterly $0.5850 10/31/2001 10/24/2001
Preferred Series A - monthly $0.1979 10/15/2001 10/1/2001
Preferred Series B - monthly $0.1849 10/15/2001 10/1/2001
Preferred Series C - quarterly $0.5859 10/15/2001 10/1/2001
COMMUNITY STATISTICS
Represents current stabilized communities
At September 30, 2001
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MAA
Average
Number of Portfolio MAA Market Rental Rate
Units Concentration Occupancy Occupancy(1) Per Unit
------------- ---------------- -------------- --------------- --------------
Georgia, excluding Atlanta 4,383 13.9% 96.2% 92.6% $ 640.63
Memphis, Tennessee 4,177 13.2% 91.0% 93.8% $ 614.12
Jacksonville, Florida 2,846 9.0% 95.7% 94.9% $ 671.25
Florida, excluding Jacksonville and Tampa 2,518 8.0% 94.1% 92.6% $ 702.00
Dallas, Texas 2,056 6.5% 95.7% 96.0% $ 647.90
Mississippi 1,673 5.3% 95.6% 93.8% $ 581.75
Atlanta, Georgia 1,652 5.2% 92.3% 94.3% $ 782.77
Greenville, South Carolina 1,492 4.7% 94.0% 92.8% $ 587.39
Austin, Texas 1,254 4.0% 96.9% 93.0% $ 714.32
Nashville, Tennessee 1,150 3.6% 94.6% 95.2% $ 670.30
Tampa, Florida 1,120 3.5% 95.3% 94.7% $ 742.94
Kentucky 994 3.1% 97.1% 95.2% $ 609.22
Alabama 952 3.0% 94.2% 94.1% $ 648.27
Chattanooga, Tennessee 943 3.0% 97.5% 95.0% $ 548.18
Little Rock, Arkansas 808 2.6% 93.1% 91.0% $ 607.22
South Carolina, excluding Greenville 784 2.5% 94.5% 94.7% $ 687.10
North Carolina 738 2.3% 94.0% 94.1% $ 619.07
Houston, Texas 682 2.2% 97.7% 96.6% $ 585.43
Jackson, Tennessee 664 2.1% 89.5% 95.8% $ 604.64
Ohio 414 1.3% 91.5% 95.7% $ 708.74
Virginia 296 0.9% 94.6% 96.8% $ 670.51
----------------------------------------------------------------------------
Total 31,596 100.0% 94.4% 94.0% $ 650.18
(1) Certain market data provided by REIS and MPF. Current statistics on some of
the smaller market data was not available and is represented above at June 30,
2001.
SAME STORE STATISTICS
Dollars in thousands except Average Rental Rate
Three Months Ended September 30,
--------------------------------------
Percent
2001 2000 Change
------------ ------------- ---------
Revenues $52,771 $52,466 0.6%
Property Operating Expenses 13,863 14,177 -2.2%
RE Taxes and Insurance 6,021 5,716 5.3%
------------------------------------------------------------------------
Total Operating Expenses 19,884 19,893 0.0%
------------------------------------------------------------------------
NOI $32,887 $32,573 1.0%
------------------------------------------------------------------------
Units 28,573 28,567
Average Rental Rate $654.38 $638.29 2.5%
Physical Occupancy 94.4% 95.5% -1.2%
DEBT AS OF SEPTEMBER 30, 2001
Dollars in thousands
Principal Average Years Average
Balance to Maturity Rate
-------------- ------------- -----------
Fixed Rate - Conventional $442,086 7.1 7.2%
Fixed Rate - Tax-free 119,380 20.1 6.1%
Line of Credit - Swapped to Fixed Rate 125,000 6.8 6.9%
Variable Rate - Tax-free 22,560 26.4 3.6%
Variable Rate - Conventional 66,441 6.9 4.2%
----------------------------------------
Total $775,467 10.1 6.6%
FUTURE PAYMENTS Average
Scheduled Rate for
Amortization Maturities Total Maturities
-------------- ------------- ---------- ------------
2001 $ 1,042 $ 52,166 $ 53,208 4.6%
2002 4,089 11,390 15,479 7.5%
2003 3,832 156,120 159,952 6.4%
2004 3,909 71,168 75,077 7.7%
2005 3,669 36,125 39,794 7.0%
Thereafter 142,809 289,148 431,957 6.8%
----------------------------------------------------
Total $159,350 $616,117 $775,467 6.6%
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 $ 33,176 $31,529 3Q98 3Q00 4Q99 1Q02
Reserve at Dexter Lake Phase II Memphis, TN 244 16,898 16,035 2Q99 2Q01 1Q00 1Q02
Grande View Nashville Nashville, TN 433 37,746 36,537 1Q99 2Q01 3Q00 1Q02
------------- ----------- -----------
Total Completed Communities 1,047 87,820 84,101
Under Construction
Reserve at Dexter Lake Phase III Memphis, TN 244 16,869 14,026 3Q00 1Q02 2Q01 3Q02
------------- ----------- -----------
Total Units in Lease-up/Development 1,291 $104,689 $98,127
------------- ----------- -----------
OCCUPANCY STATISTICS Apartments
-------------------------------------
Available Leased Occupied
------------- ----------- -----------
Completed Communities in Lease-up
Grand Reserve Lexington 370 307 301
Reserve at Dexter Lake Phase II 223 195 192
Grande View Nashville 432 347 337
------------- ----------- -----------
Total Completed Communities 1,025 849 830
Under Construction
Reserve at Dexter Lake Phase III 98 12 10
------------- ----------- -----------
Total Units in Lease-up/Development 1,123 861 840
------------- ----------- -----------