Exhibit 99.1 Press Release
Mid-America Apartment Communities, Inc.
A self-managed Equity REIT
Press Release, 1st Quarter Earnings 2002
FROM: Simon R. C. Wadsworth, CFO
SUBJECT: First Quarter 2002 Earnings Exceed Expectations
DATE: May 1, 2002
Memphis, TN, Mid-America Apartment Communities, Inc. (NYSE: MAA) reported Funds
From Operations ("FFO") of $13,877,000 or $0.68 per share for the quarter ended
March 31, 2002. This is $0.01 per share ahead of forecast and compares to
$14,143,000 or $.69 per share for the first quarter 2001, with 2001 figures
including a $0.01 gain on sale of land. Highlights for the first quarter were:
o FFO earnings exceeded forecast and First Call consensus.
o Occupancy improved to 94.2% by quarter end, from 92.8% at year end.
o Market conditions remain demanding, but improvement is expected later
this year.
o FFO earnings forecast of $2.80 per share for 2002 reaffirmed.
Net Income for the first quarter was $4,300,000 or $0.02 per common share. This
compares to $4,861,000 or $0.05 per common share for the same period a year ago.
The majority of this variance is due to increased depreciation expense from
development properties and the prior year's gain on sale of land.
Eric Bolton, President and CEO said, "Although our FFO earnings were ahead of
forecasts, results for the quarter reflect the impact of the continued
competitive leasing environment. While we were able to achieve improvement in
occupancy, sluggish job growth, excess new construction and active single-family
home buying continue to pressure pricing on new leases. We expect the leasing
market to remain challenging over the balance of 2002 with some improvement
starting in the latter half of the year."
"We have planned for this environment and remain comfortable with our forecasts
for the remainder of the year. While the challenging market conditions will
dampen revenue growth from our existing properties in 2002, we believe the
environment will increasingly create acquisition opportunities that meet our
strict underwriting guidelines."
Simon Wadsworth, Executive Vice-President and CFO said, "Our same store results
were impacted by a 1% reduction in occupancy from a year ago, along with a $0.03
per share increase in leasing concession costs. The net effect was a 1% decline
in same store revenues as compared to the same period a year ago. Same store
expenses rose 2.5%, and NOI was down by 3.0%. The majority of the same store
performance pressure was concentrated at our Memphis properties, with some
pressure also evident in Austin and Atlanta. We believe that market conditions
have bottomed out and expect to see some strengthening toward year end."
"During the quarter the four remaining new development properties were
effectively completed, and leasing continues to progress with their occupancy
reaching 70% at quarter end. In April our Lexington property achieved occupancy
of more than 90%, and the pace of leasing has picked up with the spring season.
Our Nashville development should be stabilized within the next six months. Our
forecast assumes it will take the balance of the year to complete the lease-up
of the new phase III of our Reserve at Dexter Lake property in Memphis."
"As these properties continue to stabilize, the capacity on our balance sheet
grows, which will also be helped by improved performance from existing
properties projected for the balance of the year. We've reduced debt outstanding
compared to a year ago. As a result of this reduction, the interest rate
environment, and the refinancings that we completed last year, our interest
expense was down $1.1 million for the quarter compared to a year ago. Our
greater balance sheet strength and our reduced interest costs contributed to
substantial improvement in our financial ratios over a year ago."
Al Campbell, Vice-President and Director of Financial Planning, said "Our
internal FFO forecast for 2002 remains at $2.80, with $0.70 for each of the next
two quarters, and $0.72 for Q4. Important variables will be leasing concessions,
the renewal pricing of our property and casualty insurance program and real
estate taxes. Our forecast is based on a 0.3% increase in same store NOI for all
of 2002 and assumes an improvement in market conditions later this year. While
our base forecast doesn't include any acquisitions or dispositions, the impact
of such transactions would be more significant in 2003."
Bolton said, "Despite the weaker economic environment we are continuing to make
steady progress in increasing our financial strength. We remain very disciplined
in evaluating opportunities to invest capital and will be patient in adding
earning assets to the portfolio. Our dividend is secure and coverage ratios are
improving."
MAA is a self-administered, self-managed apartment-only real estate investment
trust which owns or has ownership interest in 33,459 apartment units including
25 units in the development pipeline 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, 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
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In thousands except per share data
Three months ended March 31,
-----------------------------------
2002 2001
---------------- ----------------
Property revenues $ 55,659 $ 56,281
Property operating expenses 21,187 20,802
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Net operating income 34,472 35,479
Interest and other non-property income 134 287
Management and development income, net 186 188
FFO from real estate joint ventures 320 168
Property management expenses 2,472 2,589
General & administrative 1,446 1,441
Interest expense 12,362 13,459
Gain on disposition of non-depreciable assets - 234
Preferred dividend distribution 4,028 4,028
Depreciation and amortization non-real estate assets 270 167
Amortization of deferred financing costs 657 529
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Funds from operations 13,877 14,143
Depreciation and amortization 13,239 12,830
Joint venture depreciation adjustment included in FFO 343 313
Gain on disposition of non-depreciable assets included in FFO - 234
Preferred dividend distribution add back (4,028) (4,028)
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Income before gain on disposition of assets and
minority interest 4,323 4,794
Net gain on disposition of assets 64 169
Minority interest in operating partnership income (87) (102)
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Net income 4,300 4,861
Preferred dividend distribution 4,028 4,028
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Net income available for common shareholders $ 272 $ 833
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Weighted average common shares - Diluted 17,596 17,510
Weighted average common shares and units - Diluted 20,512 20,446
Funds from operations per share and units - Diluted $ 0.68 $ 0.69
Net income available for common shareholders - Diluted $ 0.02 $ 0.05
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CONSOLIDATED BALANCE SHEETS
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In thousands
March 31, December 31,
2002 2001
---------------- ----------------
Assets
Real estate assets, net $1,209,767 $1,216,933
Cash and cash equivalents, including restricted cash 21,010 23,432
Other assets 21,819 23,123
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Total assets $1,252,596 $1,263,488
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Liabilities
Bonds and notes payable $ 783,607 $ 779,664
Other liabilities 33,803 41,564
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Total liabilities 817,410 821,228
Shareholders' equity and minority interest 435,186 442,260
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Total liabilities & shareholders' equity $1,252,596 $1,263,488
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OPERATING RESULTS
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Dollars and shares in thousands except per share data
ROA Annualized Trailing
1Q02 4 Quarters
-------------- --------------
Gross Real Estate Assets, Average $1,456,146 $1,449,959
EBITDA $ 122,148 $ 125,262
EBITDA/Gross Real Estate Asses 8.4% 8.6%
Three Months Ended March 31,
------------------------------
2002 2001
-------------- ---------------
Common and Preferred Dividends as % of FFO 87% 88%
EBITDA/Debt Service (1) 2.31 2.15
EBITDA/Fixed Charges (2) 1.78 1.69
Total Debt as % of Gross Real Estate Assets 53% 55%
MAA portion of JV debt $27,036 $27,893
Capitalized Interest YTD $ 127 $ 476
FAD
FFO $13,877 $14,143
Average Units 30,614 30,913
Average Shares - Diluted 20,512 20,446
Recurring Capex $ 1,800 $ 2,948
FAD $12,077 $11,195
Free Cash Flow (3) $13,004 $11,891
PER SHARE (DILUTED)
FFO $ 0.68 $ 0.69
FAD $ 0.59 $ 0.55
Free Cash Flow (3) $ 0.63 $ 0.58
Distribution $ 0.585 $ 0.585
(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 estate
depreciation and amortization.
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OTHER DATA
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Shares and units in thousands except per share data
Three Months Ended March 31,
------------------------------
2002 2001
------------- ---------------
Weighted average common shares and units - Basic 20,371 20,416
Weighted average common shares and units - Diluted 20,512 20,446
Number of apartment units with ownership interest
(excluding development units not delivered) 33,434 33,778
Apartment units added during period, net 23 166
PER SHARE DATA
Funds from operations per share and units - Basic $ 0.68 $ 0.69
Funds from operations per share and units - Diluted $ 0.68 $ 0.69
Net income available for common shareholders -
Diluted $ 0.02 $ 0.05
Dividend declared per common share $ 0.585 $ 0.585
DIVIDEND INFORMATION (latest declaration) Payment Payment Record
per Share Date Date
------------ -------------- --------------
Common Dividend - quarterly $0.5850 4/30/2002 4/23/2002
Preferred Series A - monthly $0.1979 5/15/2002 5/1/2002
Preferred Series B - monthly $0.1849 5/15/2002 5/1/2002
Preferred Series C - quarterly $0.5859 4/15/2002 4/1/2002
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COMMUNITY STATISTICS
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Represents current stabilized communities
At March 31, 2002
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MAA
Average
Number of Portfolio MAA Rental Rate
Units Concentration Occupancy Per Unit
------------ --------------- ------------- --------------
Tennessee
Memphis 4,429 13.9% 92.1% $ 623.41
Nashville 966 3.0% 93.3% $ 690.20
Chattanooga 943 2.9% 96.2% $ 555.40
Jackson 664 2.1% 92.9% $ 608.85
Florida
Jacksonville 2,846 8.9% 94.9% $ 679.09
Tampa 1,120 3.5% 94.2% $ 750.86
Other 2,518 7.8% 94.6% $ 710.87
Georgia
Atlanta 1,652 5.1% 95.5% $ 781.87
Columbus / LaGrange 1,509 4.7% 95.5% $ 650.67
Augusta / Aiken / Savannah 1,132 3.5% 94.6% $ 616.58
Other 1,742 5.4% 93.6% $ 656.26
Texas
Dallas 2,056 6.4% 92.1% $ 652.41
Austin 1,254 3.9% 96.2% $ 718.80
Houston 1,002 3.1% 97.5% $ 663.68
South Carolina
Greenville 1,492 4.6% 93.8% $ 569.54
Other 784 2.4% 95.8% $ 679.57
Kentucky
Lexington 554 1.7% 92.4% $ 606.42
Other 624 1.9% 93.8% $ 612.74
Mississippi 1,673 5.2% 95.8% $ 580.26
Arkansas 808 2.5% 93.1% $ 613.64
Alabama 952 3.0% 93.8% $ 653.29
North Carolina 738 2.3% 94.3% $ 596.57
Ohio 414 1.3% 90.3% $ 703.05
Virginia 296 0.9% 97.3% $ 673.80
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Total 32,168 100.0% 94.2% $ 654.75
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SAME STORE STATISTICS
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Dollars in thousands except Average Rental Rate
Three Months Ended March 31,
----------------------------------------
Percent
2002 2001 Change
---------- ------------- -------------
Revenues $52,245 $52,797 -1.0%
Property Operating Expenses 13,234 13,102 1.0%
RE Taxes and Insurance 6,205 5,872 5.7%
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Total Operating Expenses 19,439 18,974 2.5%
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NOI $32,806 $33,823 -3.0%
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Units 28,803 28,797
Average Rental Rate $656.79 $646.25 1.6%
Average Physical Occupancy 94.1% 95.1% -1.0%
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DEBT AS OF MARCH 31, 2002
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Dollars in thousands
Principal Average Years Average
Balance to Maturity Rate
----------- --------------- ----------
Conventional - Fixed Rate or Swapped $ 576,016 6.5 6.9%
Tax-free - Fixed Rate or Swapped 118,312 23.3 6.1%
Conventional - Variable Rate 66,719 7.6 2.5%
Tax-free - Variable Rate 22,560 25.9 2.6%
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Total $ 783,607 9.7 6.3%
FUTURE PAYMENTS
Average
Scheduled Rate for
Amortization Maturities Total Maturities
------------- ------------ ----------- ----------
2002 $ 2,970 $ 21,314 $ 24,284 5.4%
2003 3,740 154,120 157,860 6.5%
2004 3,862 71,168 75,030 7.0%
2005 4,086 3,215 7,301 8.8%
2006 4,167 36,010 40,177 6.4%
Thereafter 129,760 349,195 478,955 6.0%
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Total $ 148,585 $ 635,022 $ 783,607 6.3%
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DEVELOPMENT PIPELINE
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Units Percentage of
------------------------------------------ Available
Available Units to Lease
--------------------
Total to Lease Occupied Leased Occupied Leased
-------- ----------- ----------- -------- ---------- --------
Properties in Lease-up
Grand Reserve Lexington Lexington, KY 370 370 326 356 88% 96%
Grande View Nashville Nashville, TN 433 432 340 366 79% 85%
Reserve at Dexter Lake Phase II Memphis, TN 244 206 176 181 85% 88%
Reserve at Dexter Lake Phase III Memphis, TN 244 219 54 68 25% 31%
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Total 1,291 1,227 896 971 73% 79%