EXHIBIT 99.3
MID-AMERICA APARTMENT COMMUNITIES, INC.
Historical Summary of Gross Income
and Direct Operating Expenses
(Highwood Apartments)
Year ended December 31, 1997
Independent Auditors' Report
The Board of Directors
Mid-America Apartment Communities, Inc.:
We have audited the accompanying Historical Summary of Gross
Income and Direct Operating Expenses (Historical Summary) of
Highwood Apartments (the Acquisition Property), as described in
Note 1, for the year ended December 31, 1997. This Historical
Summary is the responsibility of the Acquisition Property's
management. Our responsibility is to express an opinion on this
Historical Summary for the Acquisition Property based on our
audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the statement is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the Historical Summary for the
Acquisition Property. An audit also includes assessing the
accounting principles used and the significant estimates made by
management, as well as evaluating the overall presentation of the
Historical Summary for the Acquisition Property. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary for the Acquisition Property
was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission as
described in Note 1 and is not intended to be a complete
presentation of the Acquisition Property's revenues and expenses.
In our opinion, the Historical Summary referred to above presents
fairly, in all material respects, the gross income and direct
operating expenses described in Note 1 to the Historical Summary
for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Memphis, Tennessee
August 14, 1998
MID-AMERICA APARTMENT COMMUNITIES, INC.
Historical Summary of Gross Income and Direct Operating Expenses
(Highwood Apartments)
Year ended December 31, 1997
Gross income - total revenue $ 1,398,765
Direct operating expenses:
Operating expenses 309,780
Real estate taxes 172,593
Repairs and maintenance 112,749
-----------
595,122
Gross income in excess -----------
of direct operating expenses $ 803,643
===========
See accompanying notes to Historical Summary of Gross Income and
Direct Operating Expenses for the Acquisition Property.
MID-AMERICA APARTMENT COMMUNITIES, INC.
Notes to Historical Summary of Gross Income
and Direct Operating Expenses
(Highwood Apartments)
December 31, 1997
(1) Accounting Policies
Description
The accompanying financial statement includes the operations
of Highwood Apartments (the Acquisition Property) owned by
parties unaffiliated with Mid-America Apartment Communities,
Inc. (the Company) and Mid-America Apartments, L.P. (the
Operating Partnership). The Acquisition Property, a multi-
family residential property located in Plano, Texas was
acquired by a subsidiary of the Operating Partnership on
July 21, 1998 and contains 196 apartment units.
Basis of Presentation
The accompanying financial statement is not representative
of the actual operations for the period presented. Certain
expenses have been excluded because the Operating
Partnership does not anticipate that they will be incurred
in future operations of the property. Expenses excluded
consist of depreciation and amortization, management fees
and other costs not directly related to the future
operations of the Acquisition Property. Operating expenses
include payroll, utilities, advertising, and other general
and administrative costs. Management is not aware of any
material factors relating to this Acquisition Property that
would cause this financial statement not to be indicative of
future operating results as related to gross income and
direct operating expenses.
Income Recognition
Revenues from rental property are recognized when due from
tenants. Leases are generally for one year or less.
(Continued)
2
MID-AMERICA APARTMENT COMMUNITIES, INC.
Notes to Historical Summary of Gross Income
and Direct Operating Expenses
(Highwood Apartments)
(2) Pro Forma Taxable Operating Results and
Funds Generated From Operations (Unaudited)
The pro forma table reflects the taxable operating results
and funds generated from operations of the Acquisition
Property for the twelve months ended June 30, 1998 as
adjusted for certain items which can be factually supported.
This statement does not purport to forecast actual operating
results for any period in the future.
Pro forma net operating income (exclusive of
depreciation and amortization) $ 877,261
Less estimated depreciation expense 323,360
---------
Pro forma taxable operating income 553,901
Add depreciation not requiring outlay of funds 323,360
---------
Pro forma funds generated from operations $ 877,261
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Depreciation for the buildings is estimated using a straight-
line method over a 25-year life.