-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
FOZ2sTAassRC+aAoG+jiI8fEsOuHq4J6qfBdEdFbkcVu2khmBboyJ84m9NNaCaWx
sP/vg+hyjaSzGSLi007Igw==
<SEC-DOCUMENT>0000912057-01-506011.txt : 20010409
<SEC-HEADER>0000912057-01-506011.hdr.sgml : 20010409
ACCESSION NUMBER: 0000912057-01-506011
CONFORMED SUBMISSION TYPE: 10-K405
PUBLIC DOCUMENT COUNT: 4
CONFORMED PERIOD OF REPORT: 20001231
FILED AS OF DATE: 20010402
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: MID AMERICA APARTMENT COMMUNITIES INC
CENTRAL INDEX KEY: 0000912595
STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798]
IRS NUMBER: 621543819
STATE OF INCORPORATION: TN
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K405
SEC ACT:
SEC FILE NUMBER: 001-12762
FILM NUMBER: 1589016
BUSINESS ADDRESS:
STREET 1: 6584 POPLAR AVE
STREET 2: STE 340
CITY: MEMPHIS
STATE: TN
ZIP: 38138
BUSINESS PHONE: 9016826600
MAIL ADDRESS:
STREET 1: 6584 POPLAR AVE
STREET 2: SUITE 340
CITY: MEMPHIS
STATE: TN
ZIP: 38138
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<FILENAME>a2043423z10-k405.txt
<DESCRIPTION>10-K405
<TEXT>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
<TABLE>
<C> <S>
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
COMMISSION FILE NUMBER: 1-12762
------------------------
MID-AMERICA APARTMENT COMMUNITIES, INC.
(Exact Name of Registrant as Specified in Charter)
<TABLE>
<S> <C>
TENNESSEE 62-1543819
(State of Incorporation) (I.R.S. Employer Identification
Number)
</TABLE>
6584 POPLAR AVENUE, SUITE 340
MEMPHIS, TENNESSEE 38138
(Address of principal executive offices)
(901) 682-6600
Registrant's telephone number, including area code
Securities registered pursuant to Section 12 (b) of the Act:
<TABLE>
<CAPTION>
NAME OF EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- -------------------
<S> <C>
Common Stock, par value $.01 per share New York Stock Exchange
Series A Cumulative Preferred Stock, par value $.01 per
share New York Stock Exchange
Series B Cumulative Preferred Stock, par value $.01 per
share New York Stock Exchange
Series C Cumulative Redeemable Preferred Stock, par value
$.01 per share New York Stock Exchange
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12 (G) OF THE ACT:
None
------------------------
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. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in PART III of this Form 10-K or any amendment to this
Form 10-K. /X/
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, (based on the closing price of such stock ($22.35 per share), as
reported on the New York Stock Exchange, on March 15, 2001) was approximately
$343,000,000 (for purposes of this calculation, directors and executive officers
are treated as affiliates).
The number of shares outstanding of the Registrant's Common Stock as of
March 15, 2001, was 17,461,677 shares, of which approximately 2,109,790 were
held by affiliates.
The Registrant's definitive proxy statement in connection with the 2001
Annual Meeting of Shareholders (to be filed pursuant to Regulation 14A) is
incorporated by reference into Part III of this Annual Report on Form 10-K.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM PAGE
- --------------------- --------
<S> <C> <C>
PART I
1. Business.................................................... 3
2. Properties.................................................. 6
3. Legal Proceedings........................................... 12
4. Submission of Matters to a Vote of Security Holders......... 12
PART II
Market for Registrant's Common Equity and Related
5. Stockholder Matters....................................... 12
6. Selected Financial Data..................................... 13
Management's Discussion and Analysis of Financial Condition
7. and Results of Operations................................. 15
Quantitative and Qualitative Disclosures About Market
7A. Risk...................................................... 21
8. Financial Statements and Supplementary Data................. 22
Changes in and Disagreements with Accountants on Accounting
9. and Financial Disclosure.................................. 22
PART III
10. Directors and Executive Officers of the Registrant.......... 23
11. Executive Compensation...................................... 23
Security Ownership of Certain Beneficial Owners and
12. Management................................................ 23
13. Certain Relationships and Related Transactions.............. 23
PART IV
Exhibits, Financial Statement Schedule and Reports on Form
14. 8-K....................................................... 23
</TABLE>
2
<PAGE>
PART I
ITEM 1. BUSINESS
THE COMPANY
Founded in 1994, Mid-America Apartment Communities, Inc. (the "Company") is
a Memphis, Tennessee-based self-administered and self-managed umbrella
partnership ("UPREIT") real estate investment trust ("REIT"). Between 1994 and
December 31, 2000, the Company increased the number of properties of which it is
the sole owner from 22 to 114 properties with 30,819 apartment units,,
representing an increase of 25,239 apartment units. The Company is also a
participant in a joint venture (the "Joint Venture") with Blackstone Real Estate
Acquisitions, LLC ("Blackstone"). The Joint Venture owned 10 properties,
representing 2,793 apartment units at December 31, 2000. The Company retains a
33.33% ownership interest in the Joint Venture and has an agreement to manage
the operations of the communities for a fee of 4% of revenues.
The Company's business is conducted principally through Mid-America
Apartments, L.P. (the "Operating Partnership"). The Company is the sole general
partner of the Operating Partnership, holding, 181,208 Common Units or a 1%
general partnership interest in the Operating Partnership as of December 31,
2000. The Company's wholly-owned qualified REIT subsidiary, MAC II of
Delaware, Inc., a Delaware corporation, is a limited partner in the Operating
Partnership and, as of December 31, 2000, held 14,944,629 Common Units, or
82.75% of all outstanding Common Units.
The Company employed 1,004 full time and 118 part time employees at
December 31, 2000.
OPERATING PHILOSOPHY
INVESTMENT FOCUS. Depending on opportunities and the real estate cycle,
Company management uses its real estate skills and experience to invest
profitably. Between 1994 and 1997, the Company focused on the acquisition and
redevelopment of existing apartments. Between 1998 and 2000, its concentration
was on development of new apartments. In 1999, the Company established and sold
assets to a joint venture. During 2000, the Company sold assets and repurchased
its common shares. Management will continue to adapt its investment focus to
opportunities and markets.
HIGH QUALITY ASSETS. The Company maintains its assets in excellent
condition, believing that continuous maintenance will lead to higher long-run
returns on investment. It believes that being recognized by third parties for
its quality of properties, landscaping, and property management will lead to
higher rents and profitability. The Company sells assets selectively in order to
ensure that its portfolio consists only of high quality well-located assets
within its market area.
DIVISERSIFIED MARKET FOCUS. The Company focuses on owning, operating,
developing, constructing and acquiring apartment communities (the "Communities")
throughout the southeast and Texas.
INTENSIVE MANAGEMENT FOCUS. The Company strongly emphasizes on-site
property management. Particular attention is paid to opportunities to increase
rents, raise average occupancy rates, and control costs, with property managers
and regional management being given the responsibility for monitoring market
trends and the discretion to react to such trends. The Company, as part of its
intense management focus, has established regional training facilities to
produce highly trained property managers, leasing consultants and service
technicians who work on-site at each of the Communities.
DECENTRALIZED OPERATIONAL STRUCTURE. The Company's operational structure is
organized on a decentralized basis. Management believes that its decentralized
operating structure capitalizes on specific market knowledge, increases personal
accountability relative to a centralized structure and is beneficial in the
acquisition, redevelopment and development process.
3
<PAGE>
PROACTIVE ASSET MANAGEMENT
The Company focuses on maximizing the return on assets and adding to the
intrinsic underlying value of each share, and routinely reviews each asset based
on its determined value and sells those which no longer fit its investment
criteria. The Company constantly evaluates the effectiveness of its capital
allocations and makes adjustments to its strategy, including investing in
acquisitions and new development, debt retirement, and repurchases of Company
shares.
STRATEGIES
The Company seeks to increase operating cash flow and earnings per share to
maximize shareholder value through a balanced strategy of internal and external
growth.
OPERATING GROWTH STRATEGY. Management's goal is to maximize the Company's
return on investment in each Community by increasing rental rates and reducing
operating expenses while maintaining high occupancy levels. The Company seeks
higher net rental revenues by enhancing and maintaining the competitiveness of
the Communities and manages expenses through its system of detailed management
reporting and accountability in order to achieve increases in operating cash
flow. The steps taken to meet these objectives include:
- empowering the Company's property managers to adjust rents in response to
local market conditions and to concentrate resident turnover in peak
rental demand months;
- offering new services to residents, including telephone, cable, and
internet access on which it generates fee and commission income;
- implementing programs to control expenses through investment in
cost-saving initiatives, such as the installation of individual apartment
unit water and utility meters in certain Communities;
- improving the "curb appeal" of the Communities through extensive
landscaping and exterior improvements and repositioning Communities from
time to time to maintain market leadership positions;
- compensating employees through performance-based compensation and stock
ownership programs;
- maintaining a hands-on management style and "flat" organizational
structure that emphasizes senior management's continued close contact with
the market and employees; and
- selling or exchanging underperforming assets and repurchasing common
shares when cost of capital and asset values permit.
DEVELOPMENT STRATEGY. In late 1997, the Company's emphasis shifted from
acquisitions to development because of the higher quality assets and higher long
term investment returns generated by development. In 2001, the Company will
complete a four-year $300 million construction program of high quality
apartments in multiple markets. This represents the completion of the
development pipeline initiated in 1997. In 1999, management decided to exit the
construction and development business upon completion of the Company's existing
development pipeline after determining that market conditions were changing,
making it unlikely that future proposed projects would meet its profitability
targets.
In 2000, the Company completed the following development projects,
consisting of a total of 934 apartment units which are currently in various
stages of lease-up:
- 320 unit Kenwood Club in Katy, Texas
- 370 unit Grand Reserve Lexington in Lexington, Kentucky
- 244 unit Reserve at Dexter Lake Phase II in Memphis, Tennessee
4
<PAGE>
At December 31, 2000, the Company had two uncompleted development properties
with a total of 677 apartment units in various stages of lease-up, development,
construction, and pre-development, all scheduled to be completed in 2001, and
leased throughout 2001 and 2002. The Company anticipates an additional capital
investment in this development pipeline of approximately $17 million in 2001.
These projects are expected to be funded by the Company's outstanding lines of
credit ("Credit Lines"), selective property dispositions and possible joint
venture transactions.
ACQUISITION STRATEGY. One of the Company's strategies is to acquire and
redevelop apartment communities that meet its investment criteria and long-term
strategic objectives. During 2000, the Company acquired two properties, the
200-unit Huntington Chase in Warner Robins, Georgia and the 240-unit Indigo
Point in Brandon, Florida. These properties were acquired to complete a tax-free
exchange transaction related to two properties sold during the year as part of
the Company's disposition strategy, discussed below.
JOINT VENTURE STRATEGY. One of the Company's strategies is to sell or to
contribute apartment communities to a joint venture when a favorable return can
be achieved and to co-invest with joint venture partners in additional
redevelopment opportunities. The Company is actively seeking attractively priced
opportunities in which it and joint venture partners can invest in, and
established a joint venture in 1999 with Blackstone.
DISPOSITION STRATEGY. The Company is committed to the selective disposition
of non-strategic assets, defined as those apartment communities that no longer
meet its investment criteria and long-term strategic objectives. Typically, the
Company selects assets for disposition that do not meet its present investment
criteria including future return on investment, location, market, potential for
growth, and capital needs.
The following apartment communities, containing an aggregate of 1,902
apartment units, were sold or exchanged during 2000:
<TABLE>
<CAPTION>
NUMBER GROSS
PROPERTY LOCATION OF UNITS DATE PROCEEDS
- -------- --------------- -------- ----------------- -----------
<S> <C> <C> <C> <C>
Pine Trails.................. Clinton, MS 120 February 11, 2000 $ 2,815,000
MacArthur Ridge.............. Irving, TX 248 February 25, 2000 12,075,000
Clearbrook Village........... Memphis, TN 176 April 19, 2000 8,093,000
Winchester Square............ Memphis, TN 253 April 19, 2000 8,815,000
McKellar Woods............... Memphis, TN 624 April 19, 2000 14,536,000
Whispering Oaks.............. Little Rock, AR 207 August 17, 2000 6,200,000
Riverwind.................... Columbus, GA 44 October 13, 2000 900,000
2000 Wynnton................. Columbus, GA 72 October 13, 2000 2,050,000
Hollybrook................... Dalton, GA 158 November 17, 2000 5,600,000
----- -----------
Total........................ 1,902 $61,084,000
===== ===========
</TABLE>
SHARE REPURCHASE PROGRAM
In 1999, the Company's Board of Directors approved an increase in the number
of shares authorized to be repurchased to 4 million common shares, of which the
Company repurchased approximately 1.7 million common shares (8% of the common
shares and Common Units outstanding) as of December 31, 2000. From time to time
the Company intends to sell assets based on its disposition strategy outlined in
this Annual Report and use the proceeds to repurchase shares when it believes
that shareholder value is enhanced. Factors affecting this determination include
the share price, asset dispositions and pricing, financing agreements and rates
of return of alternative investments.
5
<PAGE>
COMPETITION
All of the Company's Communities are located in areas that include other
apartment communities. Occupancy and rental rates are affected by the number of
competitive apartment communities in a particular area. The Company's properties
compete with numerous other multifamily properties, the owners of which may have
greater resources than the Company and whose management may have more experience
than the Company's management. Moreover, single-family rental housing,
manufactured housing, condominiums and the new and existing home markets provide
housing alternatives to potential residents of apartment communities.
RECENT DEVELOPMENTS
In January 2001, the Company raised its quarterly distribution to common
shareholders from $.58 per share to $.585 per share, effective with its
distribution paid on January 31, 2001.
In January 2001, the Company entered into an interest rate swap agreement
with a notional amount of $25 million, the effect of which was to lock the
interest rate on $25 million of the FNMA Credit Facility at approximately 6.2%.
The swap agreement expires December 1, 2005.
ITEM 2. PROPERTIES
The Company seeks to acquire and develop apartment communities appealing to
middle and upper income residents in mid-size cities in the southeastern United
States and Texas. Approximately 70% of the Company's apartment units are located
in Georgia, Florida, Tennessee and Texas markets. The Company's strategic focus
is to provide its residents high quality apartment units in attractive community
settings, characterized by extensive landscaping and attention to aesthetic
detail. The Company utilizes its experience and expertise in maintenance,
landscaping, marketing and management to effectively "reposition" many of the
apartment communities it acquires to raise occupancy levels and per unit average
rentals.
The following table sets forth certain historical information for the
communities the Company owned or maintained an ownership interest in, including
the 10 properties containing 2,793 apartment units owned by the Joint Venture,
at December 31, 2000:
6
<PAGE>
<TABLE>
<CAPTION>
APPROXI-
MATE AVERAGE
YEAR RENTABLE UNIT
YEAR MANAGEMENT NUMBER AREA SIZE
PROPERTY LOCATION COMPLETED COMMENCED OF UNITS (SQUARE FT.) (SQUARE FT.)
- ----------------------------------- --------------------- ------------- ------------ -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
COMPLETED AND OWNED:
Eagle Ridge Birmingham, AL 1986 1998 200 181,400 907
Abbington Place Huntsville, AL 1987 1998 152 162,792 1,071
Paddock Club--Huntsville I Huntsville, AL 1989 1997 200 211,600 1,058
Paddock Club--Huntsville II Huntsville, AL 1998 1998 192 212,736 1,108
Paddock Club Montgomery I & II Montgomery, AL 1999 1998 208 230,880 1,110
------ ---------- -----
952 999,408 1,050
------ ---------- -----
Calais Forest Little Rock, AR 1987 1994 260 195,000 750
Napa Valley Little Rock, AR 1984 1996 240 183,120 763
Westside Creek I Little Rock, AR 1984 1997 142 147,964 1,042
Westside Creek II Little Rock, AR 1986 1997 166 172,972 1,042
------ ---------- -----
808 699,056 865
------ ---------- -----
Tiffany Oaks Altamonte Springs, FL 1985 1996 288 234,144 813
Marsh Oaks Atlantic Beach, FL 1986 1995 120 93,240 777
Indigo Point Brandon, FL 1989 2000 240 194,640 811
Paddock Club--Brandon I & II Brandon, FL 1997/99 1997 440 516,120 1,173
Anatole Daytona Beach, FL 1986 1995 208 149,136 717
Paddock Club--Gainsville Gainsville, FL 1999 1998 264 293,040 1,110
Cooper's Hawk Jacksonville, FL 1987 1995 208 218,400 1,050
Hunter's Ridge at Deerwood Jacksonville, FL 1987 1997 336 295,008 878
Lakeside Jacksonville, FL 1985 1996 416 344,032 827
Paddock Club--Jacksonville I, II&
III Jacksonville, FL 1989/96 1997 440 475,200 1,080
Paddock Club--Mandarin Jacksonville, FL 1998 1998 288 330,336 1,147
St. Augustine Jacksonville, FL 1987 1995 400 304,400 761
Woodbridge at the Lake Jacksonville, FL 1985 1994 188 166,004 883
Woodhollow Jacksonville, FL 1986 1997 450 342,000 760
Paddock Club--Lakeland Lakeland, FL 1988/90 1997 464 505,296 1,089
Savannahs at James Landing Melbourne, FL 1990 1995 256 238,592 932
Paddock Park--Ocala I Ocala, FL 1986 1997 200 202,200 1,011
Paddock Park--Ocala II Ocala, FL 1988 1997 280 283,080 1,011
Paddock Club--Panama City Panama City, FL 2000 1998 254 283,972 1,118
Paddock Club--Tallahassee I Tallahassee, FL 1990 1997 192 207,936 1,083
Paddock Club--Tallahassee II Tallahassee, FL 1995 1997 112 121,296 1,083
Belmere Tampa, FL 1984 1994 210 202,440 964
Links at Carrollwood Tampa, FL 1980 1998 230 214,820 934
------ ---------- -----
6,484 6,215,332 959
------ ---------- -----
<CAPTION>
ENCUMBRANCES AT
AVERAGE AVERAGE DECEMBER 31, 2000
RENT PER OCCUPANCY ---------------------------------
UNIT AT % AT MORTGAGE
DECEMBER 31, DECEMBER 31, PRINCIPAL INTEREST MATURITY
PROPERTY 2000 2000 (000'S) RATE DATE
- ----------------------------------- ------------ ------------ --------- -------- ----------
<S> <C> <C> <C> <C> <C>
COMPLETED AND OWNED:
Eagle Ridge $608 96.50% $ 6,292 8.250% 7/1/2028
Abbington Place $572 91.45% $ --(1) (1) (1)
Paddock Club--Huntsville I $607 95.00% $ --(2) (2) (2)
Paddock Club--Huntsville II $679 96.35% $ --(2) (2) (2)
Paddock Club Montgomery I & II $719 87.98% $ --(1) (1) (1)
---- ------ --------
$641 93.49% $ 6,292
---- ------ --------
Calais Forest $574 96.54% $ --(1) (1) (1)
Napa Valley $558 94.58% $ --(3) (3) (3)
Westside Creek I $644 91.55% $ --(3) (3) (3)
Westside Creek II $608 92.77% $ 4,828 8.760% 10/1/2006
---- ------ --------
$588 94.31% $ 4,828
---- ------ --------
Tiffany Oaks $625 97.57% $ --(3) (3) (3)
Marsh Oaks $585 98.33% $ --(3) (3) (3)
Indigo Point $657 97.50% $ --(4) (4) (4)
Paddock Club--Brandon I & II $812 96.59% $ --(1) (1) (1)
Anatole $606 95.19% $ 7,000(5) 5.690%(5) 12/1/2027(5)
Paddock Club--Gainsville $803 97.73% $ --(5) (5) (5)
Cooper's Hawk $683 98.08% $ --(6) (6) (6)
Hunter's Ridge at Deerwood $634 96.43% $ --(7) (7) (7)
Lakeside $617 97.36% $ --(3) (3) (3)
Paddock Club--Jacksonville I, II&
III $747 90.23% $ --(8) (8) (8)
Paddock Club--Mandarin $781 93.06% $ --(1) (1) (1)
St. Augustine $578 94.00% $ --(6) (6) (6)
Woodbridge at the Lake $640 96.28% $ --(1) (1) (1)
Woodhollow $614 96.44% $ 9,579 7.500% 9/1/2002
Paddock Club--Lakeland $683 91.16% $ --(8) (8) (8)
Savannahs at James Landing $621 96.48% $ --(6) (6) (6)
Paddock Park--Ocala I $641 86.50% $ 6,805 7.500% 10/1/2008
Paddock Park--Ocala II $690 91.43% $ --(1) (1) (1)
Paddock Club--Panama City $775 80.31% $ --(5) (5) (5)
Paddock Club--Tallahassee I $721 94.79% $ --(1) (1) (1)
Paddock Club--Tallahassee II $718 94.64% $ 4,671 8.500% 4/1/2036
Belmere $680 95.71% $ --(3) (3) (3)
Links at Carrollwood $691 94.35% $ 5,607 8.750% 2/1/2003
---- ------ --------
$680 94.26% $ 33,662
---- ------ --------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
APPROXI-
MATE AVERAGE
YEAR RENTABLE UNIT
YEAR MANAGEMENT NUMBER AREA SIZE
PROPERTY LOCATION COMPLETED COMMENCED OF UNITS (SQUARE FT.) (SQUARE FT.)
- ----------------------------------- --------------------- ------------- ------------ -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
High Ridge Athens, GA 1987 1997 160 186,560 1,166
Bradford Pointe Augusta, GA 1986 1997 192 156,288 814
Shenandoah Ridge Augusta, GA 1975/84 1994 272 222,768 819
Westbury Creek Augusta, GA 1984 1997 120 107,040 892
Fountain Lake Brunswick, GA 1983 1997 110 129,800 1,180
Park Walk College Park, GA 1985 1997 124 112,716 909
Whisperwood Spa and Club Columbus, GA 1980/86/88/98 1997 1,008 1,220,688 1,211
Willow Creek Columbus, GA 1968/78 1997 285 246,810 866
Terraces at Fieldstone Conyers, GA 1999 1998 316 351,076 1,111
Whispering Pines I LaGrange, GA 1982 1997 120 123,960 1,033
Whispering Pines II LaGrange, GA 1984 1997 96 99,168 1,033
Westbury Springs Lilburn, GA 1983 1997 150 137,700 918
Austin Chase Macon, GA 1996 1997 256 292,864 1,144
The Vistas Macon, GA 1985 1997 144 153,792 1,068
Georgetown Grove Savannah, GA 1997 1998 220 239,800 1,090
Island Retreat St. Simons Island, GA 1978 1998 112 129,584 1,157
Wildwood I Thomasville, GA 1980 1997 120 123,960 1,033
Wildwood II Thomasville, GA 1984 1997 96 99,168 1,033
Hidden Lake I Union City, GA 1985 1997 160 171,200 1,070
Hidden Lake II Union City, GA 1987 1997 160 171,200 1,070
Three Oaks I Valdosta, GA 1983 1997 120 123,960 1,033
Three Oaks II Valdosta, GA 1984 1997 120 123,960 1,033
Huntington Chase Warner Robins, GA 1997 2000 200 218,400 1,092
Southland Station I Warner Robins, GA 1987 1997 160 186,720 1,167
Southland Station II Warner Robins, GA 1990 1997 144 168,048 1,167
Terraces at Towne Lake Woodstock, GA 1998 1997 264 286,968 1,087
Terraces at Towne Lake II Woodstock, GA 1999 1998 238 272,986 1,147
------ ---------- -----
5,467 5,857,184 1,071
------ ---------- -----
Fairways at Hartland Bowling Green, KY 1996 1997 240 251,280 1,047
Paddock Club Florence Florence, KY 1994 1997 200 207,000 1,035
Lakepointe Lexington, KY 1986 1994 118 90,624 768
Mansion, The Lexington, KY 1989 1994 184 138,736 754
Village, The Lexington, KY 1987 1994 252 182,700 725
Stonemill Village Louisville, KY 1985 1994 384 324,096 844
------ ---------- -----
1,378 1,194,436 867
------ ---------- -----
<CAPTION>
ENCUMBRANCES AT
AVERAGE AVERAGE DECEMBER 31, 2000
RENT PER OCCUPANCY ---------------------------------
UNIT AT % AT MORTGAGE
DECEMBER 31, DECEMBER 31, PRINCIPAL INTEREST MATURITY
PROPERTY 2000 2000 (000'S) RATE DATE
- ----------------------------------- ------------ ------------ --------- -------- ----------
<S> <C> <C> <C> <C> <C>
High Ridge $779 93.13% $ --(3) (3) (3)
Bradford Pointe $565 94.27% $ 4,760(5) 5.790%(5) 6/1/2028(5)
Shenandoah Ridge $500 90.07% $ --(3) (3) (3)
Westbury Creek $574 99.17% $ 3,072 7.594% 11/1/2024
Fountain Lake $704 88.18% $ 2,887 7.750% 4/1/2024
Park Walk $673 98.39% $ 3,291 6.370% 11/1/2025
Whisperwood Spa and Club $666 91.96% $ --(1) (1) (1)
Willow Creek $517 96.84% $ --(3) (3) (3)
Terraces at Fieldstone $829 94.62% $ --(1) (1) (1)
Whispering Pines I $584 92.50% $ 2,662 7.750% 1/1/2023
Whispering Pines II $589 89.58% $ 2,435 6.150% 12/1/2024
Westbury Springs $708 97.33% $ 4,119 7.500% 7/1/2023
Austin Chase $681 99.22% $ --(7) (7) (7)
The Vistas $608 97.22% $ 3,952 6.230% 3/1/2028
Georgetown Grove $730 98.64% $ 10,411 7.750% 7/1/2037
Island Retreat $722 91.96% $ 3,318 7.215% 3/1/2003
Wildwood I $500 97.50% $ 1,991 7.500% 12/1/2020
Wildwood II $536 94.79% $ 1,952 6.573% 7/1/2024
Hidden Lake I $694 95.00% $ 4,385 6.340% 12/1/2026
Hidden Lake II $672 95.63% $ --(3) (3) (3)
Three Oaks I $532 92.50% $ 2,750 7.500% 2/1/2022
Three Oaks II $557 93.33% $ 2,834 6.259% 7/1/2024
Huntington Chase $695 95.50% $ 9,504 6.850% 11/1/2008
Southland Station I $662 99.38% $ --(3) (3) (3)
Southland Station II $675 97.92% $ --(1) (1) (1)
Terraces at Towne Lake $845 94.70% $ 15,067 8.250% 1/1/2037
Terraces at Towne Lake II $852 94.12% $ --(1) (1) (1)
---- ------ --------
$667 94.62% $ 79,390
---- ------ --------
Fairways at Hartland $609 92.50% $ --(1) (1) (1)
Paddock Club Florence $751 92.00% $ 9,563 7.250% 2/1/2036
Lakepointe $582 99.15% $ --(3) (3) (3)
Mansion, The $586 95.11% $ --(1) (1) (1)
Village, The $611 91.27% $ --(3) (3) (3)
Stonemill Village $599 97.66% $ --(2) (2) (2)
---- ------ --------
$622 94.56% $ 9,563
---- ------ --------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
APPROXI-
MATE AVERAGE
YEAR RENTABLE UNIT
YEAR MANAGEMENT NUMBER AREA SIZE
PROPERTY LOCATION COMPLETED COMMENCED OF UNITS (SQUARE FT.) (SQUARE FT.)
- ----------------------------------- --------------------- ------------- ------------ -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Canyon Creek St. Louis, MO 1983 1994 320 312,320 976
------ ---------- -----
Riverhills Grenada, MS 1972 1985 96 81,984 854
Advantages, The Jackson, MS 1984 1991 252 199,080 790
Crosswinds Jackson, MS 1988/89 1996 360 443,160 1,231
Pear Orchard Jackson, MS 1985 1994 389 338,430 870
Reflection Pointe Jackson, MS 1986 1988 296 254,856 861
Somerset Jackson, MS 1980 1995 144 126,864 881
Woodridge Jackson, MS 1987 1988 192 175,104 912
------ ---------- -----
1,729 1,619,478 937
------ ---------- -----
Hermitage at Beechtree Cary, NC 1988 1997 194 169,750 875
Corners, The Winston-Salem, NC 1982 1993 240 173,520 723
------ ---------- -----
434 343,270 791
------ ---------- -----
Fairways at Royal Oak Cincinnati, OH 1988 1994 214 214,428 1,002
------ ---------- -----
Woodwinds Aiken, SC 1988 1997 144 165,168 1,147
Tanglewood Anderson, SC 1980 1994 168 140,784 838
Paddock Club--Columbia Columbia, SC 1989/95 1997 336 367,584 1,094
The Fairways Columbia, SC 1992 1994 240 213,840 891
Highland Ridge Greenville, SC 1984 1995 168 143,976 857
Howell Commons Greenville, SC 1986/88 1997 348 292,668 841
Paddock Club--Greenville Greenville, SC 1996 1997 208 212,160 1,020
Park Haywood Greenville, SC 1983 1993 208 156,832 754
Spring Creek Greenville, SC 1985 1995 208 182,000 875
Runaway Bay Mt. Pleasant, SC 1988 1995 208 177,840 855
Park Place Spartanburg, SC 1987 1997 184 195,224 1,061
------ ---------- -----
2,420 2,248,076 929
------ ---------- -----
Steeplechase Chattanooga, TN 1986 1991 108 98,604 913
Windridge Chattanooga, TN 1984 1997 174 238,728 1,372
Oaks, The Jackson, TN 1978 1993 100 87,500 875
Post House Jackson Jackson, TN 1987 1989 150 163,650 1,091
Post House North Jackson, TN 1987 1989 144 144,720 1,005
Williamsburg Village Jackson, TN 1987 1994 148 121,360 820
<CAPTION>
ENCUMBRANCES AT
AVERAGE AVERAGE DECEMBER 31, 2000
RENT PER OCCUPANCY ---------------------------------
UNIT AT % AT MORTGAGE
DECEMBER 31, DECEMBER 31, PRINCIPAL INTEREST MATURITY
PROPERTY 2000 2000 (000'S) RATE DATE
- ----------------------------------- ------------ ------------ --------- -------- ----------
<S> <C> <C> <C> <C> <C>
Canyon Creek $577 94.69% $ --(2) (2) (2)
---- ------ --------
Riverhills $402 90.63% $ --
Advantages, The $487 95.24% $ --(2) (2) (2)
Crosswinds $626 93.06% $ --(3) (3) (3)
Pear Orchard $589 85.86% $ --(3) (3) (3)
Reflection Pointe $594 88.51% $ 5,882(5) 5.940%(5) 12/1/2027(5)
Somerset $527 96.53% $ --(3) (3) (3)
Woodridge $542 94.79% $ 4,615 6.500% 10/1/2027
---- ------ --------
$562 91.32% $ 10,497
---- ------ --------
Hermitage at Beechtree $705 96.91% $ --(3) (3) (3)
Corners, The $574 96.25% $ 3,954 7.850% 6/15/2003
---- ------ --------
$632 96.54% $ 3,954
---- ------ --------
Fairways at Royal Oak $652 91.59% $ --(3) (3) (3)
---- ------ --------
Woodwinds $633 96.53% $ 3,428 8.840% 6/1/2005
Tanglewood $546 95.24% $ 2,316 7.600% 11/15/2002
Paddock Club--Columbia $698 90.48% $ --(1) (1) (1)
The Fairways $631 93.33% $ 7,523 8.500% 3/1/2033
Highland Ridge $526 89.29% $ --(9) (9) (9)
Howell Commons $537 99.43% $ --(3) (3) (3)
Paddock Club--Greenville $717 89.42% $ --(2) (2) (2)
Park Haywood $570 95.67% $ --(3) (3) (3)
Spring Creek $549 90.87% $ --(9) (9) (9)
Runaway Bay $722 98.56% $ --(9) (9) (9)
Park Place $630 97.83% $ --(3) (3) (3)
---- ------ --------
$617 94.30% $ 13,267
---- ------ --------
Steeplechase $589 96.30% $ --(3) (3) (3)
Windridge $686 95.40% $ 5,299 6.314% 12/1/2024
Oaks, The $540 98.00% $ --(2) (2) (2)
Post House Jackson $617 93.33% $ 5,002 8.170% 10/1/2027
Post House North $632 94.44% $ 3,375 5.980% 9/1/2025
Williamsburg Village $556 95.95% $ --(3) (3) (3)
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
APPROXI-
MATE AVERAGE
YEAR RENTABLE UNIT
YEAR MANAGEMENT NUMBER AREA SIZE
PROPERTY LOCATION COMPLETED COMMENCED OF UNITS (SQUARE FT.) (SQUARE FT.)
- ----------------------------------- --------------------- ------------- ------------ -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Woods at Post House Jackson, TN 1997 1995 122 118,950 975
Crossings Memphis, TN 1973 1991 80 90,000 1,125
Eastview Memphis, TN 1973 1984 432 356,400 825
Gleneagles Memphis, TN 1975 1990 184 189,520 1,030
Greenbrook Memphis, TN 1980 1988 1,031 934,086 906
Hickory Farm Memphis, TN 1985 1994 200 150,200 751
Kirby Station Memphis, TN 1978 1994 371 310,156 836
Lincoln on the Green Memphis, TN 1988/98 1994 618 535,188 866
Park Estate Memphis, TN 1974 1977 82 96,924 1,182
Reserve at Dexter Lake I Memphis, TN 1999 1998 252 262,332 1,041
River Trace I Memphis, TN 1981 1997 244 205,692 843
River Trace II Memphis, TN 1985 1997 196 165,228 843
Savannah Creek Memphis, TN 1989 1996 204 237,048 1,162
Sutton Place Memphis, TN 1991 1996 253 268,686 1,062
Paddock Club--Murfreesboro Murfreesboro, TN 1999 1998 240 268,800 1,120
Brentwood Downs Nashville, TN 1986 1994 286 220,220 770
Park at Hermitage Nashville, TN 1987 1995 440 392,480 892
------ ---------- -----
6,059 5,656,472 934
------ ---------- -----
Balcones Woods Austin, TX 1983 1997 384 313,728 817
Stassney Woods Austin, TX 1985 1995 288 248,832 864
Travis Station Austin, TX 1987 1995 304 249,888 822
Celery Stalk Dallas, TX 1978 1994 410 374,740 914
Courtyards at Campbell Dallas, TX 1986 1998 232 168,200 725
Deer Run Dallas, TX 1985 1998 304 206,720 680
Lodge at Timberglen Dallas, TX 1983 1994 260 226,200 870
Westborough Crossing Katy, TX 1984 1994 274 197,280 720
Highwood Plano, TX 1983 1998 196 156,800 800
Cypresswood Court Spring, TX 1984 1994 208 160,576 772
Green Tree Place Woodlands, TX 1984 1994 200 152,200 761
------ ---------- -----
3,060 2,455,164 802
------ ---------- -----
Township Hampton, VA 1987 1995 296 248,048 838
------ ---------- -----
TOTAL COMPLETED AND OWNED PROPER-
TIES 29,621 28,062,672 947
------ ---------- -----
<CAPTION>
ENCUMBRANCES AT
AVERAGE AVERAGE DECEMBER 31, 2000
RENT PER OCCUPANCY ---------------------------------
UNIT AT % AT MORTGAGE
DECEMBER 31, DECEMBER 31, PRINCIPAL INTEREST MATURITY
PROPERTY 2000 2000 (000'S) RATE DATE
- ----------------------------------- ------------ ------------ --------- -------- ----------
<S> <C> <C> <C> <C> <C>
Woods at Post House $659 97.54% $ 5,223 7.250% 9/1/2035
Crossings $715 95.00% $ --(2) (2) (2)
Eastview $543 92.36% $ 11,593 7.320% 4/1/2009
Gleneagles $603 97.28% $ --(2) (2) (2)
Greenbrook $574 91.17% $ --(4) (4) (4)
Hickory Farm $566 93.00% $ --(2) (2) (2)
Kirby Station $607 94.88% $ --(3) (3) (3)
Lincoln on the Green $686 91.75% $ --(8) (8) (8)
Park Estate $786 90.24% $ --(4) (4) (4)
Reserve at Dexter Lake I $795 79.76% $ --(5) (5) (5)
River Trace I $546 96.31% $ 5,544 7.500% 2/1/2022
River Trace II $586 94.39% $ 5,498 6.380% 2/1/2026
Savannah Creek $644 97.55% $ --(3) (3) (3)
Sutton Place $628 93.68% $ --(3) (3) (3)
Paddock Club--Murfreesboro $792 92.50% $ --(1) (1) (1)
Brentwood Downs $680 97.90% $ --(1) (1) (1)
Park at Hermitage $615 92.95% $ 7,540 5.790% 2/1/2019
---- ------ --------
$627 93.18% $ 49,074
---- ------ --------
Balcones Woods $743 98.44% $ 8,396 7.630% 11/1/2003
Stassney Woods $634 100.00% $ 4,470 6.600% 4/1/2019
Travis Station $602 97.70% $ 3,955 6.600% 4/1/2019
Celery Stalk $676 92.44% $ 8,460 9.006% 12/1/2004
Courtyards at Campbell $668 97.41% $ --(1) (1) (1)
Deer Run $625 93.75% $ --(1) (1) (1)
Lodge at Timberglen $657 96.15% $ 4,740 9.006% 12/1/2004
Westborough Crossing $539 97.08% $ 3,958 9.006% 12/1/2004
Highwood $687 97.45% $ --(4) (4) (4)
Cypresswood Court $562 98.56% $ 3,330 9.006% 12/1/2004
Green Tree Place $615 95.50% $ 3,180 9.006% 12/1/2004
---- ------ --------
$642 96.60% $ 40,489
---- ------ --------
Township $649 95.27% $ 10,800(5) 5.780%(5) 2/1/2028(5)
---- ------ --------
TOTAL COMPLETED AND OWNED PROPER-
TIES $642 94.20% $261,816
---- ------ --------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
APPROXI-
MATE AVERAGE
YEAR RENTABLE UNIT
YEAR MANAGEMENT NUMBER AREA SIZE
PROPERTY LOCATION COMPLETED COMMENCED OF UNITS (SQUARE FT.) (SQUARE FT.)
- ----------------------------------- --------------------- ------------- ------------ -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
JOINT VENTURE PROPERTIES:
Colony at South Park Aiken, SC 1989/91 1997 184 174,800 950
Lane at Towne Crossing Mesquite, TX 1983 1994 384 277,632 723
Northwood Arlington, TX 1980 1998 270 224,100 830
Walden Run McDonough, GA 1997 1998 240 271,200 1,130
Woods, The Austin, TX 1977 1997 278 214,060 770
Woodstream Greensboro, NC 1983 1994 304 217,056 714
Cedar Mill Memphis, TN 1973/86 1982/94 276 297,804 1,079
Hamilton Pointe Chattanooga, TN 1989 1992 361 256,671 711
Hidden Creek Chattanooga, TN 1987 1988 300 259,200 864
Lakeshore Landing Ridgeland, MS 1974 1994 196 171,108 873
------ ---------- -----
TOTAL JOINT VENTURE PROPERTIES 2,793 2,363,631 846
------ ---------- -----
DEVELOPMENT PROPERTIES:
Kenwood Club Katy, TX 2000 1999 320 318,080 994
Reserve at Dexter Lake Phase II Memphis, TN 2000 1999 244 257,176 1,054
Grand Reserve Lexington Lexington, KY 2000 1999 370 432,530 1,169
Grand View Nashville Nashville, TN N/A 1999 264 292,248 1,107
------ ---------- -----
TOTAL DEVELOPMENT PROPERTIES 1,198 1,300,034 1,085
------ ---------- -----
TOTAL PROPERTIES 33,612 31,726,337 944
====== ========== =====
<CAPTION>
ENCUMBRANCES AT
AVERAGE AVERAGE DECEMBER 31, 2000
RENT PER OCCUPANCY ---------------------------------
UNIT AT % AT MORTGAGE
DECEMBER 31, DECEMBER 31, PRINCIPAL INTEREST MATURITY
PROPERTY 2000 2000 (000'S) RATE DATE
- ----------------------------------- ------------ ------------ --------- -------- ----------
<S> <C> <C> <C> <C> <C>
JOINT VENTURE PROPERTIES:
Colony at South Park $607 98.91% N/A
Lane at Towne Crossing $568 95.57% N/A
Northwood $560 97.41% N/A
Walden Run $751 95.42% N/A
Woods, The $753 99.64% N/A
Woodstream $572 98.36% N/A
Cedar Mill $595 95.29% N/A
Hamilton Pointe $495 95.84% N/A
Hidden Creek $502 92.33% N/A
Lakeshore Landing $551 93.37% N/A
---- ------ --------
TOTAL JOINT VENTURE PROPERTIES $589 96.17% $ --
---- ------ --------
DEVELOPMENT PROPERTIES:
Kenwood Club $795 78.44% $ --(5) (5) (5)
Reserve at Dexter Lake Phase II $852 81.15% $ --(5) (5) (5)
Grand Reserve Lexington $938 53.24% $ --(5) (5) (5)
Grand View Nashville $933 63.64% $ --(5) (5) (5)
---- ------ --------
TOTAL DEVELOPMENT PROPERTIES $881 67.95% $ --
---- ------ --------
TOTAL PROPERTIES $646 93.43% $261,816
==== ====== ========
</TABLE>
- ------------------------------
(1) Encumbered by the FNMA Credit Line, with an outstanding balance of $83.1
million with a variable interest rate of 7.218%, $65 million with a fixed
rate of 7.712% and two interest rate swap agreements both for $25 million at
7.383% and 7.360% at December 31, 2000.
(2) Encumbered by a $39.6 million mortgage with a maturity of July 1, 2001 and
an interest rate of 8.650%
(3) Encumbered by a $142 million loan with a maturity of March 3, 2003 and an
average interest rate of 6.376%
(4) Encumbered, along with one corporate property, by a $35.8 million mortgage
with a maturity of April 1, 2005 and an interest rate of 7.000%
(5) Encumbered by the AmSouth Credit Line, with an outstanding balance of $7.4
million with a variable interest rate of 8.750% at December 31, 2000.
(6) Encumbered by a $15.7 million mortgage securing a tax-exempt bond amortizing
over 25 years with an average interest rate of 5.750%
(7) Encumbered by a $13.7 million mortgage securing a tax-exempt bond amortizing
over 25 years with an average interest rate of 5.281%
(8) Encumbered by a $47.5 million mortgage with a maturity of December 15, 2004
and an interest rate of 7.040%
(9) Encumbered by a $9.6 million mortgage securing a tax-exempt bond amortizing
over 25 years with an average interest rate of 6.090%
11
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
The Company is not presently subject to any material litigation nor, to the
Company's knowledge, is any material litigation threatened against the Company,
other than routine litigation arising in the ordinary course of business, some
of which is expected to be covered by liability insurance and none of which is
expected to have a material adverse effect on the business, financial condition,
liquidity or results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock has been listed and traded on the New York Stock
Exchange ("NYSE") under the symbol "MAA" since its initial public offering in
February 1994. On March 15, 2001, the reported last sale price of the Company's
common stock on the NYSE was $22.35 per share, and there were approximately
1,500 holders of record of the common stock. The Company estimates there are
approximately 13,500 beneficial owners of its common stock. The following table
sets forth the quarterly high and low sales prices of the Company's common stock
as reported on the NYSE and the distributions declared by the Company with
respect to the periods indicated.
<TABLE>
<CAPTION>
SALES PRICES
------------------- DIVIDENDS
HIGH LOW DECLARED
-------- -------- ---------
<S> <C> <C> <C>
1999:
First Quarter.................................... $24.125 $20.875 $.575
Second Quarter................................... $25.000 $21.188 $.575
Third Quarter.................................... $23.125 $21.000 $.575
Fourth Quarter................................... $23.063 $21.438 $.575
2000:
First Quarter.................................... $23.375 $22.000 $ .58
Second Quarter................................... $24.500 $22.375 $ .58
Third Quarter.................................... $24.875 $23.000 $ .58
Fourth Quarter................................... $23.875 $21.250 $ .58
</TABLE>
The Company's annual distribution rate for 2001 with respect to its common
stock is expected to be $2.34 per share. The actual distributions made by the
Company will be affected by a number of factors, including the gross revenues
received from the Communities, the operating expenses of the Company, the
interest expense incurred on borrowings and unanticipated capital expenditures.
The Company pays a preferential regular distribution on the Series A,
Series B, Series C and Series E Preferred Stock at annual rates of $2.375,
$2.21875, $2.34375 and $2.375 per share, respectively. No distribution may be
made on the Company's common stock unless all accrued distributions have been
made with respect to each series of preferred stock. No assurance can be given
that the Company will be able to maintain its distribution rate on its common
stock or make required distributions with respect to the Series A, Series B,
Series C, and Series E Preferred Stock.
Future distributions by the Company will be at the discretion of the Board
of Directors and will depend on the actual funds available for distribution of
the Company, its financial condition, capital requirements, the annual
distribution requirements under the REIT provisions of the Internal Revenue Code
and such other factors as the Board of Directors deems relevant.
12
<PAGE>
The Company had a Dividend Reinvestment and Stock Purchase Plan (the
"DRSPP") under which holders of common stock (and Series A, Series B, Series C
and Series E Preferred Stock) could elect automatically to reinvest their
distributions in additional shares of common stock and/or to make optional
purchases of common stock free of brokerage commissions and charges. Shares
purchased directly from the Company pursuant to the DRSPP were purchased at up
to a 3% discount from their fair market value at the Company's discretion. To
fulfill its obligations under the DRSPP, the Company may either issue additional
shares of common stock or repurchase common stock in the open market. In 1999,
the Company implemented the Direct Stock Purchase and Distribution Reinvestment
Plan (the "DSPDRP"), which has terms substantially similar to the above DRSPP,
except for certain additional benefits relating to purchase of the Company's
Common Stock. This plan replaced the DRSPP, whose participants were
automatically enrolled in the new plan.
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial data on an historical
basis for the Company. This data should be read in conjunction with the
consolidated financial statements and notes thereto and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included
elsewhere in this Annual Report on Form 10-K.
13
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
SELECTED FINANCIAL DATA
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
2000 1999 1998 1997 1996
---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Total revenues........................................ $ 224,640 $ 226,322 $ 215,543 $ 139,116 $111,882
Expenses:
Property expenses................................... 83,446 84,885 79,917 52,404 42,570
Depreciation and amortization....................... 51,844 49,903 46,021 27,737 21,443
General and administrative.......................... 14,826 14,479 11,960 6,602 6,154
Interest............................................ 50,736 48,302 45,704 28,943 25,766
Amortization of deferred financing costs............ 2,758 2,854 2,348 888 661
Gain on dispositions, net............................... 11,587 10,237 408 -- 2,185
---------- ---------- ---------- ---------- --------
Income before minority interest in operating partnership
income and extraordinary items........................ 32,617 36,136 30,001 22,542 17,473
Minority interest in operating partnership income....... (2,626) (2,497) (2,254) (2,693) (3,213)
Extraordinary items--loss on early extinguishment of
debt.................................................. (204) (67) (990) (8,622) --
---------- ---------- ---------- ---------- --------
Net income.............................................. 29,787 33,572 26,757 11,227 14,260
Preferred dividends..................................... 16,114 16,114 11,430 5,252 990
---------- ---------- ---------- ---------- --------
Net income available for common shareholders............ $ 13,673 $ 17,458 $ 15,327 $ 5,975 $ 13,270
========== ========== ========== ========== ========
PER SHARE DATA:
Basic and diluted:
Before extraordinary items.......................... $ 0.79 $ 0.93 $ 0.87 $ 1.05 $ 1.21
Extraordinary items................................. (0.01) -- (0.05) (0.62) --
---------- ---------- ---------- ---------- --------
Net income available per common share............... $ 0.78 $ 0.93 $ 0.82 $ 0.43 $ 1.21
========== ========== ========== ========== ========
Dividends declared.................................... $ 2.325 $ 2.305 $ 2.225 $ 2.155 $ 2.065
BALANCE SHEET DATA:
Real estate owned, at cost............................ $1,430,378 $1,396,743 $1,434,733 $1,211,693 $641,893
Real estate owned, net................................ $1,244,475 $1,248,051 $1,315,368 $1,134,704 $592,335
Total assets.......................................... $1,303,771 $1,298,823 $1,366,427 $1,193,870 $611,199
Total debt............................................ $ 781,089 $ 744,238 $ 753,427 $ 632,213 $315,239
Minority interest..................................... $ 51,383 $ 56,060 $ 61,441 $ 62,865 $ 39,238
Shareholders' equity.................................. $ 433,993 $ 463,884 $ 517,299 $ 461,300 $241,384
Weighted average common shares (000's):
Basic............................................... 17,544 18,784 18,725 13,892 10,938
Diluted............................................. 17,597 18,808 18,770 13,955 10,983
OTHER DATA (AT END OF PERIOD):
Market capitalization (shares and units).............. $ 634,903 $ 639,095 $ 670,123 $ 710,175 $436,739
Ratio of total debt to total capitalization(1)........ 55.2% 53.8% 52.9% 47.1% 41.9%
Number of properties, including ownership interest.... 124 129 129 116 73
Number of apartment units, including ownership
interest............................................ 33,612 33,901 33,831 30,579 19,280
</TABLE>
- ------------------------------
(1) Total capitalization is total debt and market capitalization of preferred
shares, common shares and partnership units.
14
<PAGE>
ITEM 7. 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 years ended December 31, 2000,
1999, and 1998. This discussion should be read in conjunction with all of the
consolidated financial statements included in this Annual Report on Form 10-K.
As of December 31, 2000, 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 the Joint Venture was 33,612 in 124 Communities,
compared to the 33,901 units in 129 Communities owned at December 31, 1999 and
33,831 in 129 Communities owned at December 31, 1998. For fully-owned
properties, the average monthly rental per apartment unit, excluding units in
lease-up, increased to $642 at December 31, 2000 from $610 at December 31, 1999
and $597 at December 31, 1998. For these same units, overall occupancy at
December 31, 2000, 1999 and 1998 was 94.2%, 94.6% and 94.1%, respectively.
FUNDS FROM OPERATIONS
Funds from operations ("FFO") represents net income (computed in accordance
with Generally Accepted Accounting Principles, or "GAAP") excluding
extraordinary items, minority interest in Operating Partnership income, gain or
loss on disposition of real estate assets, plus depreciation and amortization
related to real estate, and adjustments for the Joint Venture to reflect FFO on
the same basis. This definition of FFO is in accordance with the National
Association of Real Estate Investment Trust's ("NAREIT") recommended definition,
which was modified during 1999. The Company adopted this definition effective
January 1, 2000, and has reflected this clarification for all periods presented
in the accompanying consolidated financial statements.
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 continued use of the property, 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.
FFO for all periods presented has been adjusted to conform with NAREIT's
clarified definition discussed above. FFO decreased during 2000 by approximately
$2,258,000 to $57,456,000 versus $59,714,000 in 1999 due to asset dispositions,
investment in new development and additional interest expense incurred to fund
share repurchases. Over the last two years, the Company has sold a total of
5,833 units under its disposition strategy, discussed earlier in this Annual
Report, and reallocated the majority of the proceeds from those sales to the
reduction of debt, the share repurchase program and the completion of the
development pipeline, all uses which management believes have increased
remaining shareholder
15
<PAGE>
value. For the three years ended December 31, 2000, 1999 and 1998, FFO is
calculated as follows (dollars in thousands):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Net income available for common shareholders................ $ 13,673 $ 17,458 $15,327
Depreciation and amortization............................... 51,330 49,188 45,776
Adjustment for joint venture depreciation................... 1,210 741 --
Minority interest........................................... 2,626 2,497 2,254
Gain on dispositions, net................................... (11,587) (10,237) (408)
Extraordinary items--loss on early extinguishment of debt... 204 67 990
-------- -------- -------
Funds from operations....................................... $ 57,456 $ 59,714 $63,939
======== ======== =======
Weighted average shares and units:
Basic..................................................... 20,498 21,794 21,717
Diluted................................................... 20,551 21,817 21,764
</TABLE>
RESULTS OF OPERATIONS
COMPARISON OF YEAR ENDED DECEMBER 31, 2000 TO THE YEAR ENDED DECEMBER 31, 1999
During 2000 the Company completed development of 1,173 total apartment units
in 2 new communities and 4 existing communities, sold 9 communities containing
1,902 total units and purchased 2 communities containing 440 units.
Property revenues for 2000 decreased by approximately $1,682,000 due
primarily to decreases of (i) $6,710,000 due to the sale of 10 properties to the
BRE/MAAC Associates, L.L.C. joint venture ("Joint Venture") in 1999,
(ii) $5,241,000 from the sale of the Hidden Oaks, Sailwinds at Lake Magdalene
and Regency Club apartments ("1999 Dispositions") in 1999, and (iii) $6,913,000
from the sale or exchange of the Pine Trails, MacArthur Ridge, Clearbrook
Village, Winchester Square, McKellar Woods, Whispering Oaks, Riverwind, 2000
Wynnton and Hollybrook apartments ("2000 Dispositions") in 2000. These decreases
were partially offset by increases of (i) $8,993,000 from the development
communities, (ii) $2,441,000 from the purchase of the Huntington Chase and
Indigo Point apartments ("2000 Acquisitions") in 2000, and (iii) $5,748,000 from
the communities owned throughout both periods.
Property revenues in 2000 included approximately $787,000 of ancillary
income from an agreement made with an internet service provider. This agreement
was terminated early in 2001. The Company is currently seeking an agreement with
an alternative service provider; however, in 2001, the income from this
ancillary product line is expected to be substantially less than that earned in
2000.
Property operating expenses include costs for property personnel, building
repairs and maintenance, real estate taxes and insurance, utilities, landscaping
and other property related costs. As a percentage of total property revenues,
property operating expenses decreased from 37.9% in 1999 to 37.5% in 2000. The
majority of the decrease is due to utility expenses that dropped from 4.1% of
property revenues in 1999 to 3.4% in 2000 as the Company continued to see
savings from its program to submeter units for water usage. Property operating
expenses for 2000 decreased by approximately $1,439,000 due primarily to
decreases of (i) $2,755,000 from the sale of 10 properties to the Joint Venture
in 1999, (ii) $2,578,000 from the 1999 Dispositions, and (iii) $3,018,000 from
the 2000 Dispositions. These decreases were partially offset by increases of
(i) $3,502,000 due to the development communities, (ii) $992,000 due to the 2000
Acquisitions, and (iii) $2,418,000 due to the communities owned throughout both
periods.
Depreciation and amortization expense increased by approximately $1,941,000
primarily due to (i) $494,000 from the 2000 Acquisitions, (ii) $3,538,000 from
the development communities, and
16
<PAGE>
(iii) $2,355,000 from the communities owned throughout both periods. These
increases were partially offset by decreases of (i) $1,623,000 due to the sale
of 10 properties to the Joint Venture in 1999, (ii) $1,426,000 due to the 1999
Dispositions, and (iii) $1,397,000 due to the 2000 Dispositions. Amortization of
costs in excess of fair value of net assets ("goodwill") acquired was $312,000
and $849,000, for 2000 and 1999, respectively, which is included in depreciation
and amortization in the accompanying consolidated statements of operations. The
decrease is primarily related to reduction of goodwill originally recorded in
connection with the Flournoy Development Company ("Flournoy") acquisition, a
large portion of which was written-off in June 1999 when the development and
construction assets were sold back to the former Flournoy principals.
Amortization of deferred financing costs was $2,758,000 and $2,854,000 for 2000
and 1999, respectively.
General and administrative expense increased 2.4% or $347,000 as compared to
the prior year. The most significant items contributing to the increase were
health insurance costs, which increased $126,000 due to recent increasing
premiums and claims experience, and airplane costs, which increased $230,000 due
to unusually high repair and maintenance experienced during the current year
coupled with other travel costs while the repairs were being made. Management
remains focused on maintaining the efficiency of the support functions, and
based on current plans expects general and administrative costs to sustain
inflationary level increases over the next year.
Interest expense increased approximately $2,434,000 due primarily to
increased average borrowings related to the funding of the development pipeline
and the higher short term interest rate environment experienced during the early
quarters of 2000, which increased the cost of the Company's variable rate debt.
As the interest rate environment improved near the end of 2000, the Company
locked the rate on 86% of all outstanding debt versus 76% at December 31, 1999.
The Company's average borrowing cost at December 31, 2000 was 7.14% as compared
to 7.06% on December 31, 1999. The average maturity on the Company's debt was
10.9 years at December 31, 2000.
For the year ended December 31, 2000, the Company recorded a net gain on
disposition of assets totaling $11,587,000 primarily related to the disposition
of the nine properties during the year of which two were non-taxable exchanges.
In 2000, the Company recorded an extraordinary loss of approximately
$204,000, net of minority interest, from the early extinguishment of debt
related to the property dispositions during the year.
As a result of the foregoing, income before minority interest and
extraordinary items for the year ended December 31, 2000 decreased by $3,519,000
over 1999
COMPARISON OF YEAR ENDED DECEMBER 31, 1999 TO THE YEAR ENDED DECEMBER 31, 1998
During 1999 the Company sold 10 apartment communities containing 2,793
apartment units to the Joint Venture and retained a 33.33% ownership interest
and continued to manage the units for a fee of 4% of revenue. The Company also
completed development of 1,277 total apartment units in 7 new communities and 2
existing communities and sold three communities containing 1,138 units.
Total property revenues for 1999 increased by $11,375,000 due primarily to
increases of (i) $6,424,000 from the 8 communities acquired in 1998 and owned
throughout 1999, (ii) $12,113,000 from the development communities, and
(iii) $4,587,000 from the communities owned throughout both periods. These
increases were partially offset by decreases of (i) $9,687,000 due to the sale
of 10 properties to the Joint Venture in 1999, and (ii) $2,062,000 from the
sales of Redford Park apartments in 1998 and the Hidden Oaks, Sailwinds at Lake
Magdalene and Regency Club apartments in 1999.
Property operating expenses include costs for property personnel, building
repairs and maintenance, real estate taxes and insurance, utilities, landscaping
and other property related costs. As a percentage of property revenues, property
operating expenses increased from 37.6% in 1998 to 37.9% in 1999. The
17
<PAGE>
majority of the increase is related to increased real estate taxes. Reappraisals
in some of the Company's markets, coupled with changes in tax rates in Shelby
County, Tennessee, and the annexation of three of the Company's properties in
the City of Memphis were the principal causes of the increase. Certain other
expenses contributed to the increase in operating expenses, including initial
lease-up costs for the development properties, and expenses associated with
certain fires and wind damage occurring during the year. Personnel costs
remained flat as a percentage of rental revenues from 1998 to 1999. In 1999
building repairs and maintenance costs decreased to 4.6% of rental revenues as
compared to 4.8% in 1998 primarily as a result of the Company's significant
investment of capital for the last two years to reposition 7,600 units acquired
in the 1997 FDC acquisition. Also in 1999, utilities costs decreased to 4.1% of
rental revenue as compared to 4.5% for the same period in 1998 mainly due to
continued savings from the Company's program to submeter units for water usage.
Property operating expenses for 1999 increased by $4,968,000 due primarily to
(i) $2,637,000 from the 8 communities acquired in 1998 and owned throughout
1999, (ii) $4,290,000 from the development communities completed during 1998 and
1999 and (iii) $2,530,000 from the communities owned throughout both periods.
These increases were partially offset by decreases of (i) $3,609,000 due to the
sale of 10 properties to the Joint Venture in 1999 and (ii) $880,000 from the
sale of Redford Park Apartments in 1998 and the sale of Hidden Oaks Apartments,
Sailwinds at Lake Magdalene Apartments and Regency Club Apartments in 1999.
Depreciation and amortization expense increased by $3,882,000 primarily due
to (i) $1,448,000 from the 8 communities acquired in 1998 and owned throughout
1999, (ii) $2,232,000 from the development communities completed during 1998 and
1999, and (iii) $1,661,000 from the communities owned throughout both periods.
These increases were partially offset by decreases of (i) $1,793,000 due to the
sale of 10 properties to the Joint Venture in 1999, and (ii) $291,000 from the
sale of Redford Park Apartments in 1998 and the sale of Hidden Oaks Apartments,
Sailwinds at Lake Magdalene Apartments and Regency Club Apartments in 1999.
Amortization of costs in excess of fair value of net assets acquired was
$849,000 and $1,474,000, for 1999 and 1998, respectively, which is included in
depreciation and amortization in the accompanying consolidated statements of
operations. The decrease is due to the write off of goodwill in connection with
the sale of FDC during 1999. Amortization of deferred financing costs was
$2,854,000 and $2,348,000 for 1999 and 1998, respectively. The majority of the
increase is due to additional financing costs related to the restructuring of
the AmSouth Credit Line and the addition of the new FNMA Credit Line.
General and administrative expense increased by $2,519,000 mainly due to
(i) approximately $800,000 in additional property level and support management
bonuses related primarily to improved property level performance at certain
properties as compared to the prior year, (ii) approximately $700,000 in
additional training costs related to the Company's recent investment in regional
training centers, (iii) approximately $450,000 in additional administrative
costs related to recent systems initiatives and staffing changes to support the
Company's portfolio growth, (iv) approximately $250,000 from increased franchise
and excise taxes related to recent legislative changes in the state of
Tennessee, and (v) approximately $240,000 in increased employee insurance costs.
Interest expense increased $2,598,000 due primarily increased debt related
to the 10 property acquisitions in 1998 and additional credit line funding to
complete the new development properties. The Company reduced its average
borrowing cost to 7.06% at December 31, 1999 as compared to 7.11% on
December 31, 1998. The average maturity on the Company's debt was 10.7 years and
10.9 years at December 31, 1999 and 1998, respectively.
18
<PAGE>
For the year ended December 31, 1999, the Company recorded a net gain on
disposition of assets totaling $10,237,000 comprised of the following
transactions:
<TABLE>
<CAPTION>
GAIN (LOSS)
-----------
<S> <C>
Gain on sale of ten communities sold to Joint Venture,
net of deferred gain of $4,581,000........................ $ 9,264,000
Gain on sale of three communities........................... 5,004,000
Loss on sale of FDC......................................... (4,031,000)
-----------
$10,237,000
===========
</TABLE>
The Company recorded an extraordinary loss of $67,000, net of minority
interest, for 1999 related to the early extinguishment of the mortgage for
Eastview Apartments.
As a result of the foregoing, income before minority interest and
extraordinary items for the year ended December 31, 1999 increased $6,135,000
over the same period a year earlier.
LIQUIDITY AND CAPITAL RESOURCES
During 2000, the Company invested $53,389,000 in the development pipeline,
reduced from the $71,563,000 during 1999. The Company expects to fund an
additional $17,000,000 during 2001 to complete the entire $300,000,000 pipeline
began in 1997.
The following table summarizes the Company's remaining communities in
various stages of lease-up, construction, development, and pre-development as of
December 31, 2000 (Dollars in 000's):
<TABLE>
<CAPTION>
ANTICIPATED ANTICIPATED ANTICIPATED
TOTAL BUDGETED COSTS TO FINISH INITIAL STABIL-
LOCATION UNITS COST DATE DATE OCCUPANCY IZATION
------------- -------- --------- -------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
COMPLETED COMMUNITIES
IN LEASE-UP:
Grand Reserve Lexington............... Lexington, KY 370 $33,355 $32,500 2Q 2000 4Q 1999 3Q 2001
Reserve at Dexter Lake II............. Memphis, TN 244 16,743 16,536 4Q 2000 1Q 2000 2Q 2001
Kenwood Club.......................... Katy, TX 320 18,243 18,243 2Q 2000 1Q 2000 2Q 2001
--- ------- -------
TOTAL COMPLETED COMMUNITIES......... 934 $68,341 $67,279
=== ======= =======
DEVELOPMENT COMMUNITIES
IN LEASE-UP:
Grande View........................... Nashville, TN 433 $36,217 $33,465 1Q 2001 2Q 2000 1Q 2002
--- ------- -------
433 36,217 33,465
--- ------- -------
UNDER CONSTRUCTION
Reserve at Dexter Lake III............ Memphis, TN 244 16,869 3,206 4Q 2001 2Q 2001 3Q 2002
--- ------- -------
244 16,869 3,206
--- ------- -------
TOTAL DEVELOPMENT COMMUNITIES......... 677 $53,086 $36,671
=== ======= =======
</TABLE>
Capital improvements to existing properties totaled $17,469,000 for the year
ended December 31, 2000, as compared to $34,377,000 for 1999. The 1999
expenditures included significant costs for repositioning 1999 acquisitions and
remaining cost for the properties acquired in connection with the Flournoy
acquisition.
19
<PAGE>
Actual capital expenditures for property improvements during 2000 are
summarized below:
<TABLE>
<CAPTION>
(IN 000'S)
<S> <C>
Recurring capital at stabilized properties.................. $12,697
Revenue enhancing projects at stabilized properties......... 3,973
Capital improvements to pre-stabilized properties........... 164
Corporate overhead capital improvements..................... 635
-------
$17,469
=======
</TABLE>
Net cash used in financing activities decreased from $107,209,000 during the
year ended December 31, 1999 to $42,199,000 during 2000. During 2000, the
Company borrowed an additional funding of $27,048,000 under its Credit
Facilities and notes payable combined, mainly used to fund the development
pipeline and share repurchases. Also during 2000, the Company used a net of
$3,356,000 to repurchase common shares, and distributed a total of $63,201,000
to Common Unitholders, common shareholders, and preferred shareholders.
As of December 31, 2000, the Company had a $295,000,000 secured credit
facility with FNMA (the "FNMA Facility") which matures in 2009. The FNMA
Facility provides for both fixed and variable rate borrowings. The interest rate
on the variable portion renews every 90 days and is based on the FNMA mortgage
backed security rate on the date of renewal, which has historically approximated
3 month LIBOR less a spread ranging from .05%-.10%, plus a fee of .67% based on
the outstanding borrowings. Borrowings under the FNMA Facility totaled
$198,070,000 at December 31, 2000, consisting of $65,000,000 under the fixed
portion at a rate of 7.712% and the remaining $133,070,000 under the variable
rate portion of the facility. The proceeds from draws under the FNMA Facility
were primarily used to pay down other credit lines and fund development.
Additionally, the Company maintains an $85,000,000 secured credit facility
with a group of banks led by AmSouth Bank, and a $10,000,000 unsecured credit
facility with Compass Bank. As of December 31, 2000, the Company had $7,432,000
and $10,000,000 outstanding under these credit facilities, respectively.
The two secured credit facilities are subject to borrowing base calculations
that effectively reduce the maximum amount that may be borrowed. The total
amount that could be borrowed under the Credit Lines at December 31, 2000 was
approximately $268,500,000.
At December 31, 2000, the Company had outstanding three interest rate swap
agreements, totaling $75 million to lock the interest rate on a portion of the
Company's variable rate debt. At December 31, 2000, the Company had
$75.5 million (after considering the interest rate swaps) of conventional
floating rate debt at an average interest rate of 7.218% and an additional
$32 million of tax-free variable rate debt at an average rate of 5.812%; all
other debt was fixed rate term debt at an average interest rate of 7.19%.
The weighted average interest rate and weighted average maturity at
December 31, 2000 for the $781.1 million of total notes payable were 7.14% and
10.9 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, issuance of debt or
additional equity securities in the Company, potential joint venture
transactions and the Credit Lines.
20
<PAGE>
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.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS 133). SFAS 133 was later amended by
SFAS No. 137 and SFAS No. 138. SFAS 133, as amended, requires recognition of the
fair value of all derivative instruments, including certain derivative
instruments embedded in other contracts (collectively referred to as
derivatives), on the balance sheet and establishes new accounting rules for
hedging activities. The Company adopted FAS 133, as amended, on January 1, 2001.
The adoption did not impact its results of operations, cash flows or financial
position.
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, but are not limited
to, the plans and objectives of management for future operations, including
plans and objectives relating to capital expenditures, rehabilitation costs on
the apartment communities, future development, anticipated growth rates of
revenues and expenses, and anticipated share repurchases. 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-K 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 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's primary market risk exposure is to changes in interest rates
obtainable on its secured and unsecured borrowings. At December 31, 2000, 55% of
the Company's total capitalization consisted of borrowings. The Company's
interest rate risk objective is to limit the impact of interest rate
fluctuations on earnings and cash flows and to lower its overall borrowing
costs. To achieve this objective, the Company manages its exposure to
fluctuations in market interest rates for its borrowings through the use of
fixed rate debt instruments to the extent that reasonably favorable rates are
obtainable with such arrangements and may enter into derivative financial
instruments such as interest rate swaps, caps and treasury locks to mitigate its
interest rate risk on a related financial instrument or to effectively lock the
interest rate on a portion of its variable debt. The Company does not enter into
derivative or interest rate transactions for trading purposes. Approximately 86%
of the Company's outstanding debt was subject to fixed rates with a weighted
average of 7.2% at December 31, 2000. The Company regularly reviews interest
rate exposure on
21
<PAGE>
its outstanding borrowings in an effort to minimize the risk of interest rate
fluctuations. The Company does not have any other material market-sensitive
financial instruments.
The table below provides information about the Company's financial
instruments that are sensitive to changes in interest rates. For debt
obligations, the table presents principal cash flows and related weighted
average interest rates by expected maturity dates. Weighted average variable
rates are based on rates in effect at the reporting date (Dollars in 000's).
<TABLE>
<CAPTION>
TOTAL FAIR
2001 2002 2003 2004 2005 THEREAFTER TOTAL VALUE
-------- -------- -------- -------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Long-term Debt
Fixed Rate............................ $44,236 $16,111 $166,294 $75,536 $40,492 $256,101 $598,770 $605,125
Average interest rate................. 8.46% 7.33% 6.57% 7.64% 7.11% 7.22% 7.18%
Variable Rate*........................ $10,000 $ 7,432 $ -- $ -- $ -- $164,887 $182,319 $182,319
Average interest rate................. 7.88% 8.75% 0.00% 0.00% 0.00% 6.95% 7.07%
Interest Rate Swaps
Variable to Fixed..................... $ -- $ -- $ 25,000 $ -- $25,000 $ 25,000 $ 75,000 $ (2,200)
Average pay rate.................... 7.17% 7.38% 7.36% 7.30%
</TABLE>
- ------------------------------
* Excluding the effect of interest rate swap agreements.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Independent Auditors' Report, Consolidated Financial Statements and
Selected Quarterly Financial Information are set forth on pages F-1 to F-28 of
this Annual Report on Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no disagreements with the Company's independent accountants
on any matter of accounting principles or practices or financial statement
disclosure.
22
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated by reference to the Company's definitive proxy statement to be
filed with the Securities and Exchange Commission.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference to the Company's definitive proxy statement to be
filed with the Securities and Exchange Commission.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated by reference to the Company's definitive proxy statement to be
filed with the Securities and Exchange Commission.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated by reference to the Company's definitive proxy statement to be
filed with the Securities and Exchange Commission.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this Annual Report on
Form 10-K:
<TABLE>
<C> <S> <C>
1. Independent Auditors' Report................................ F-1
Consolidated Balance Sheets as of December 31, 2000 and
1999...................................................... F-2
Consolidated Statements of Operations for the years ended
December 31, 2000, 1999 and 1998.......................... F-3
Consolidated Statements of Shareholders' Equity for the
years ended December 31, 2000, 1999 and 1998.............. F-4
Consolidated Statements of Cash Flows for the years ended
December 31, 2000, 1999 and 1998.......................... F-5
Notes to Consolidated Financial Statements for the years
ended December 31, 2000, 1999 and 1998.................... F-6
2. Financial Statement Schedule required to be filed by Item 8
and Paragraph (d) of this Item 14:
Schedule III--Real Estate Investments and Accumulated
Depreciation as of December 31, 2000...................... F-28
3. The exhibits required by Item 601 of Regulation S-K, except
as otherwise noted, have been filed with previous reports
by the registrant and are herein incorporated by
reference.
</TABLE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBERS EXHIBIT DESCRIPTION
- --------------------- -------------------
<C> <S>
3.1+ Amended and Restated Charter of Mid-America Apartment
Communities, Inc. dated as of January 10, 1994, as filed
with the Tennessee Secretary of State on January 25, 1994
3.2****** Articles of Amendment to the Charter of Mid-America
Apartment Communities, Inc. dated as of January 28, 1994, as
filed with the Tennessee Secretary of State on January 28,
1994
3.3** Mid-America Apartment Communities, Inc. Articles of
Amendment to the Amended and Restated Charter Designating
and Fixing the Rights and Preferences of A Series of
Preferred Stock dated as of October 9, 1996, as filed with
the Tennessee Secretary of State on October 10, 1996
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBERS EXHIBIT DESCRIPTION
- --------------------- -------------------
<C> <S>
3.4+ Mid-America Apartment Communities, Inc. Articles of
Amendment to the Amended and Restated Charter dated
November 17, 1997, as filed with the Tennessee Secretary of
State on November 18, 1997
3.5*** Mid-America Apartment Communities, Inc. Articles of
Amendment to the Amended and Restated Charter Designating
and Fixing the Rights and Preferences of A Series of
Preferred Stock dated as of November 17, 1997, as filed with
the Tennessee Secretary of State on November 18, 1997
3.6+ Mid-America Apartment Communities, Inc. Articles of
Amendment to the Amended and Restated Charter dated
December 15, 1997, as filed with the Tennessee Secretary of
State on December 31, 1997
3.7+ Bylaws of Mid-America Apartment Communities, Inc.
3.8++ Mid-America Apartment Communities, Inc. Articles of
Amendment to the Amended and Restated Charter dated
June 25, 1998, as filed with the Tennessee Secretary of
State on June 30, 1998
3.9++++ Mid-America Apartment Communities, Inc. Articles of
Amendment to the Amended and Restated Charter dated December
, 1998, as filed with the Tennessee Secretary of State on
December 28, 1998
4.1+ Form of Common Share Certificate
4.2**** Form of 9.5% Series A Cumulative Preferred Stock Certificate
4.3***** Form of 8 7/8% Series B Cumulative Preferred Stock
Certificate
4.4+++ Form of 9.375% Series C Cumulative Preferred Stock
Certificate
4.5++++ Form of 9.5% Series E Cumulative Preferred Stock Certificate
4.6++++ Shareholders' Rights Plan dated March 1, 1999
10.1+ Second Amended and Restated Agreement of Limited Partnership
of Mid-America Apartments, L.P., a Tennessee limited
partnership
10.2+++++ Employment Agreement between the Registrant and George E.
Cates dated December , 1999
10.3+++++ Employment Agreement between the Registrant and H. Eric
Bolton dated December , 1999
10.4+++++ Employment Agreement between the Registrant and Simon R.C.
Wadsworth dated December , 1999
10.5# Third Amended and Restated 1994 Restricted Stock and Stock
Option Plan
10.6++++ Revolving Credit Agreement between the Registrant and
AmSouth Bank dated March 16, 1998
10.7+++++ Sixth Amendment to Revolving Credit Agreement between the
Registrant and AmSouth Bank dated November 12, 1999
10.8 Seventh Amendment to Revolving Credit Agreement between the
Registrant and AmSouth Bank dated July 21, 2000
10.9+++++ Master Credit Facility Agreement between the Registrant and
WMF Washington Mortgage Corp. dated November 10, 1999
10.10+ Note Purchase Agreement of the Operating Partnership and the
Registrant and Prudential Insurance Company of America
10.11+ Amendment 1 to Note Purchase Agreement of the Operating
Partnership and the Registrant and Prudential Insurance
Company of America
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBERS EXHIBIT DESCRIPTION
- --------------------- -------------------
<C> <S>
11.1 Statement re: computation of per share earnings (included
within the Form 10-K)
12.1 Statement re: computation of ratios (definition of ratios
used are disclosed as footnotes on the related table(s)
within the Form 10-K)
21.1 List of Subsidiaries
23.1 Consent of KPMG LLP
</TABLE>
- ------------------------
** Filed as Exhibit 1 to the Registrant's Registration Statement on
Form 8-A filed with the Commission on October 11, 1996
*** Filed as Exhibit 4.1 to the Registrant's Registration Statement on
Form 8-A filed with the Commission on November 19, 1997
**** Filed as Exhibit 3 to the Registrant's Registration Statement on
Form 8-A filed with the Commission on October 11, 1996
***** Filed as Exhibit 4.3 to the Registrant's Registration Statement on
Form 8-A filed with the Commission on November 19, 1997
****** Filed as an exhibit to the 1996 Annual Report of the Registrant on
Form 10-K for the year ended December 31, 1996
+ Filed as an exhibit to the 1997 Annual Report of the Registrant on
Form 10-K for the year ended December 31, 1997
++ Filed as Exhibit 4.3 to the Registrant's Registration Statement on
Form 8-A filed with the Commission on June 25, 1998
+++ Filed as Exhibit 4.2 to the Registrant's Registration Statement on
Form 8-A filed with the Commission on June 25, 1998
++++ Filed as an exhibit to the 1998 Annual Report of the Registrant on
Form 10-K for the year ended December 31, 1998
+++++ Filed as an exhibit to the 1999 Annual Report of the Registrant on
Form 10-K for the year ended December 31, 1999
# Filed as an exhibit to the Registrant's Proxy Statement for the 2000
Annual Meeting of Shareholders
(b) Reports on Form 8-K
The following reports were filed on Form 8-K by the registrant during the
fourth quarter of 2000:
<TABLE>
<CAPTION>
FORM EVENTS REPORTED DATE OF REPORT
- --------------------- --------------- --------------
<C> <S> <C>
8-K Announcement of conference call to discuss third quarter
2000 results........................................... 10/12/00
8-K Response to peer announcement related to current market
conditions............................................. 10/26/00
8-K Third quarter 2000 conference call transcript with third
quarter 2000 earnings release and supplemental data.... 11/03/00
</TABLE>
(c) Exhibits:
See Item 14(a)(3) above.
(d) Financial Statement Schedules:
See Item 14(a)(2) above.
25
<PAGE>
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.
<TABLE>
<S> <C> <C>
MID-AMERICA APARTMENT COMMUNITIES, INC.
Date: March 27, 2001 /s/ GEORGE E. CATES
-----------------------------------------
George E. Cates
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE
OFFICER
(PRINCIPAL EXECUTIVE OFFICER)
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<S> <C>
Date: March 27, 2001 /s/ GEORGE E. CATES
------------------------------------------------
George E. Cates
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)
Date: March 27, 2001 /s/ SIMON R.C. WADSWORTH
------------------------------------------------
Simon R.C. Wadsworth
Executive Vice President
(Principal Financial and Accounting Officer)
Date: March 27, 2001 /s/ H. ERIC BOLTON
------------------------------------------------
H. Eric Bolton
President and Chief Operating Officer
Date: March 27, 2001 /s/ JOHN F. FLOURNOY
------------------------------------------------
John F. Flournoy
Director
Date: March 27, 2001 /s/ ROBERT F. FOGELMAN
------------------------------------------------
Robert F. Fogelman
Director
Date: March 27, 2001 /s/ JOHN S. GRINALDS
------------------------------------------------
John S. Grinalds
Director
Date: March 27, 2001 /s/ O. MASON HAWKINS
------------------------------------------------
O. Mason Hawkins
Director
Date: March 27, 2001 /s/ RALPH HORN
------------------------------------------------
Ralph Horn
Director
Date: March 27, 2001 /s/ MICHAEL S. STARNES
------------------------------------------------
Michael S. Starnes
Director
</TABLE>
26
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Mid-America Apartment Communities, Inc.
We have audited the accompanying consolidated balance sheets of Mid-America
Apartment Communities, Inc. and subsidiaries (the "Company") as of December 31,
2000 and 1999 and the related consolidated statements of operations,
shareholders' equity and cash flows for each of the years in the three-year
period ended December 31, 2000. In connection with our audits of the
consolidated financial statements, we have also audited the accompanying
financial statement Schedule III: Real Estate and Accumulated Depreciation.
These financial statements and the financial statement schedule are the
responsibility of the management of the Company. Our responsibility is to
express an opinion on these consolidated financial statements and the financial
statement schedule based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects the financial position of the Company
as of December 31, 2000 and 1999, and the results of the their operations and
their cash flows for each of the years in the three-year period ended
December 31, 2000, in conformity with accounting principles generally accepted
in the United States of America. Also, in our opinion, the related financial
statement schedule when considered in relationship to the basic financial
statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.
KPMG LLP
Memphis, Tennessee
February 23, 2001
F-1
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2000 AND 1999
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C>
ASSETS:
REAL ESTATE ASSETS:
Land...................................................... $ 124,867 $ 119,823
Buildings and improvements................................ 1,231,603 1,172,780
Furniture, fixtures and equipment......................... 29,094 28,238
Construction in progress.................................. 28,523 58,840
---------- ----------
1,414,087 1,379,681
Less accumulated depreciation............................. (183,652) (146,611)
---------- ----------
1,230,435 1,233,070
Land held for future development.......................... 1,366 1,710
Commercial properties, net................................ 5,044 5,217
Investment in and advances to real estate joint venture... 7,630 8,054
---------- ----------
REAL ESTATE ASSETS, NET................................. 1,244,475 1,248,051
Cash and cash equivalents................................... 16,095 14,092
Restricted cash............................................. 17,472 12,537
Deferred financing costs, net............................... 9,700 10,272
Other assets................................................ 16,029 13,871
---------- ----------
TOTAL ASSETS............................................ $1,303,771 $1,298,823
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY:
LIABILITIES:
Notes payable............................................. $ 781,089 $ 744,238
Accounts payable.......................................... 1,740 2,122
Accrued expenses and other liabilities.................... 26,589 23,199
Security deposits......................................... 4,611 4,739
Deferred gain on disposition of properties................ 4,366 4,581
---------- ----------
TOTAL LIABILITIES AND DEFERRED GAIN..................... 818,395 778,879
MINORITY INTEREST........................................... 51,383 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 17,506,968 and 17,971,960 shares at December 31,
2000 and 1999, respectively............................. 175 180
Additional paid-in capital................................ 551,809 562,547
Other..................................................... (1,171) (1,053)
Accumulated distributions in excess of net income......... (116,889) (89,869)
Treasury stock at cost, 355,900 shares at December 31,
1999.................................................... -- (7,990)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY.............................. 433,993 463,884
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.............. $1,303,771 $1,298,823
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-2
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Revenues:
Rental revenues........................................... $219,039 $221,342 $210,256
Other property revenues................................... 3,493 2,872 2,583
-------- -------- --------
Total property revenues................................... 222,532 224,214 212,839
Interest and other income................................. 1,526 1,388 863
Management and development income, net.................... 739 751 1,841
Equity in loss of real estate joint venture............... (157) (31) --
-------- -------- --------
Total revenues............................................ 224,640 226,322 215,543
-------- -------- --------
Expenses:
Property operating expenses:
Personnel............................................... 24,268 25,239 24,053
Building repairs and maintenance........................ 9,701 10,107 10,030
Real estate taxes and insurance......................... 25,021 24,561 22,459
Utilities............................................... 7,635 9,119 9,376
Landscaping............................................. 6,027 5,634 5,009
Other operating......................................... 10,794 10,225 8,990
Depreciation and amortization........................... 51,844 49,903 46,021
-------- -------- --------
135,290 134,788 125,938
General and administrative................................ 14,826 14,479 11,960
Interest expense.......................................... 50,736 48,302 45,704
Amortization of deferred financing costs.................. 2,758 2,854 2,348
-------- -------- --------
Total expenses............................................ 203,610 200,423 185,950
-------- -------- --------
Income before gain on dispositions, minority interest in
operating partnership income and extraordinary items...... 21,030 25,899 29,593
-------- -------- --------
Gain on dispositions, net................................... 11,587 10,237 408
-------- -------- --------
Income before minority interest in operating partnership
income and extraordinary items............................ 32,617 36,136 30,001
Minority interest in operating partnership income........... 2,626 2,497 2,254
-------- -------- --------
Income before extraordinary items........................... 29,991 33,639 27,747
-------- -------- --------
Extraordinary items--loss on early extinguishment of debt... (204) (67) (990)
-------- -------- --------
Net income.................................................. 29,787 33,572 26,757
Dividends on preferred shares............................... 16,114 16,114 11,430
-------- -------- --------
Net income available for common shareholders................ $ 13,673 $ 17,458 $ 15,327
======== ======== ========
Net income available per common share:
Basic (in thousands):
Average common shares outstanding......................... 17,544 18,784 18,725
======== ======== ========
Basic earnings per share:
Net income available per common share before extraordinary
items................................................... $ 0.79 $ 0.93 $ 0.87
Extraordinary items....................................... (0.01) -- (0.05)
-------- -------- --------
Net income available per common share..................... $ 0.78 $ 0.93 $ 0.82
======== ======== ========
Diluted (in thousands):
Average common shares outstanding......................... 17,544 18,784 18,725
Effect of dilutive stock options.......................... 53 24 45
-------- -------- --------
Average dilutive common shares outstanding................ 17,597 18,808 18,770
======== ======== ========
Diluted earnings per share:
Net income available per common share before extraordinary
items................................................... $ 0.79 $ 0.93 $ 0.87
Extraordinary items....................................... (0.01) -- (0.05)
-------- -------- --------
Net income available per common share..................... $ 0.78 $ 0.93 $ 0.82
======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
(DOLLARS AND SHARES IN THOUSANDS)
<TABLE>
<CAPTION>
ACCUMULATED
PREFERRED STOCK COMMON STOCK ADDITIONAL DISTRIBUTIONS
-------------------- ------------------- PAID-IN IN EXCESS OF
SHARES AMOUNT SHARES AMOUNT CAPITAL OTHER NET INCOME
--------- -------- -------- -------- ---------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE DECEMBER 31, 1997................ 3,939 $39 18,479 $185 $500,492 $(1,045) $ (38,371)
Issuance of common shares................ -- -- 308 4 7,953 -- --
Issuance of Series C preferred shares.... 2,000 20 -- -- 48,060 -- --
Issuance of Series E preferred shares.... 1,000 10 -- -- 24,735 -- --
Exercise of stock options................ -- -- 5 -- 129 -- --
Notes receivable issued for units (Note
9)..................................... -- -- -- -- -- (1,458) --
Amortization of LESOP Provision employee
advances (Note 9)...................... -- -- -- -- -- 145 --
Shares issued in exchange for units...... -- -- 86 -- 1,785 -- --
Amortization of unearned compensation.... -- -- -- -- -- 121 --
Dividends on common stock ($2.20 per
share)................................. -- -- -- -- -- -- (40,832)
Dividends on preferred stock............. -- -- -- -- -- -- (11,430)
Net income............................... -- -- -- -- -- -- 26,757
----- --- ------ ---- -------- ------- ---------
BALANCE DECEMBER 31, 1998................ 6,939 69 18,878 189 583,154 (2,237) (63,876)
Repurchase of common shares (Note 8)..... -- -- (1,118) (11) (25,072) -- --
Issuance of common shares................ -- -- 154 2 3,516 -- --
Exercise of stock options................ -- -- -- -- 27 -- --
Notes receivable issued for shares (Note
9)..................................... -- -- 9 -- -- (100) --
Payments received on notes receivable
(Note 9)............................... -- -- -- -- -- 343 --
Amortization of LESOP Provision employee
advances (Note 9)...................... -- -- -- -- -- 447 --
Shares issued in exchange for units...... -- -- 49 -- 922 -- --
Amortization of unearned compensation.... -- -- -- -- -- 494 --
Dividends on common stock ($2.30 per
share)................................. -- -- -- -- -- -- (43,451)
Dividends on preferred stock............. -- -- -- -- -- -- (16,114)
Net income............................... -- -- -- -- -- -- 33,572
----- --- ------ ---- -------- ------- ---------
BALANCE DECEMBER 31, 1999................ 6,939 69 17,972 180 562,547 (1,053) (89,869)
Retire treasury stock.................... -- -- (356) (4) (7,986) -- --
Repurchase of common shares (Note 8)..... -- -- (259) (3) (6,087) -- --
Issuance of common shares................ -- -- 60 1 1,371 -- --
Exercise of stock options................ -- -- 1 -- 22 -- --
Restricted shares issued to officers and
directors (Note 9)..................... -- -- 16 -- 359 (359) --
Notes receivable issued for shares (Note
9)..................................... -- -- 53 1 1,218 (206) --
Amortization of LESOP Provision employee
advances (Note 9)...................... -- -- -- -- -- 327 --
Shares issued in exchange for units...... -- -- 20 -- 365 -- --
Amortization of unearned compensation.... -- -- -- -- -- 120 --
Dividends on common stock ($2.32 per
share)................................. -- -- -- -- -- -- (40,693)
Dividends on preferred stock............. -- -- -- -- -- -- (16,114)
Net income............................... -- -- -- -- -- -- 29,787
----- --- ------ ---- -------- ------- ---------
BALANCE DECEMBER 31, 2000................ 6,939 $69 17,507 $175 $551,809 $(1,171) $(116,889)
===== === ====== ==== ======== ======= =========
<CAPTION>
TREASURY
STOCK TOTAL
-------- --------
<S> <C> <C>
BALANCE DECEMBER 31, 1997................ $ -- $461,300
Issuance of common shares................ -- 7,957
Issuance of Series C preferred shares.... -- 48,080
Issuance of Series E preferred shares.... -- 24,745
Exercise of stock options................ -- 129
Notes receivable issued for units (Note
9)..................................... -- (1,458)
Amortization of LESOP Provision employee
advances (Note 9)...................... -- 145
Shares issued in exchange for units...... -- 1,785
Amortization of unearned compensation.... -- 121
Dividends on common stock ($2.20 per
share)................................. -- (40,832)
Dividends on preferred stock............. -- (11,430)
Net income............................... -- 26,757
------ --------
BALANCE DECEMBER 31, 1998................ -- 517,299
Repurchase of common shares (Note 8)..... (7,990) (33,073)
Issuance of common shares................ -- 3,518
Exercise of stock options................ -- 27
Notes receivable issued for shares (Note
9)..................................... -- (100)
Payments received on notes receivable
(Note 9)............................... -- 343
Amortization of LESOP Provision employee
advances (Note 9)...................... -- 447
Shares issued in exchange for units...... -- 922
Amortization of unearned compensation.... -- 494
Dividends on common stock ($2.30 per
share)................................. -- (43,451)
Dividends on preferred stock............. -- (16,114)
Net income............................... -- 33,572
------ --------
BALANCE DECEMBER 31, 1999................ (7,990) 463,884
Retire treasury stock.................... 7,990 --
Repurchase of common shares (Note 8)..... -- (6,090)
Issuance of common shares................ -- 1,372
Exercise of stock options................ -- 22
Restricted shares issued to officers and
directors (Note 9)..................... -- --
Notes receivable issued for shares (Note
9)..................................... -- 1,013
Amortization of LESOP Provision employee
advances (Note 9)...................... -- 327
Shares issued in exchange for units...... -- 365
Amortization of unearned compensation.... -- 120
Dividends on common stock ($2.32 per
share)................................. -- (40,693)
Dividends on preferred stock............. -- (16,114)
Net income............................... -- 29,787
------ --------
BALANCE DECEMBER 31, 2000................ $ -- $433,993
====== ========
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
2000 1999 1998
-------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $29,787 $ 33,572 $ 26,757
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization........................... 54,602 52,757 48,369
Amortization of unearned stock compensation............. 120 494 121
Equity in loss of real estate joint venture............. 157 31 --
Minority interest in operating partnership income....... 2,626 2,497 2,254
Extraordinary items..................................... 204 67 990
Gain on dispositions, net............................... (11,587) (10,237) (408)
Changes in assets and liabilities:
Restricted cash....................................... (4,935) (3,300) 4,115
Other assets.......................................... (2,475) (4,591) 1,044
Accounts payable...................................... (382) (4,459) 786
Accrued expenses and other liabilities................ 3,175 8,325 (4,031)
Security deposits..................................... (128) (178) 408
------- --------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES............... 71,164 74,978 80,405
------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of real estate assets........................... (14,799) -- (63,732)
Improvements to properties................................ (17,469) (34,377) (32,336)
Construction of units in progress and future
development............................................. (53,389) (71,563) (107,963)
Proceeds from disposition of real estate assets........... 58,428 134,977 5,424
Proceeds from sale of development and construction
assets.................................................. -- 18,134 --
Proceeds from (advances to) real estate joint venture..... 267 (8,085) --
------- --------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES....... (26,962) 39,086 (198,607)
------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in credit lines................................ (32,393) 56,389 71,789
Proceeds from notes payable............................... 75,000 11,760 232,799
Principal payments on notes payable....................... (15,559) (75,989) (210,571)
Payment of deferred financing costs....................... (2,186) (3,420) (7,097)
Repurchase of common stock................................ (6,090) (33,073) --
Proceeds from issuances of common shares and units........ 2,734 3,549 9,586
Proceeds from issuance of preferred shares................ -- -- 72,825
Redemption of unitholder interests........................ -- -- (150)
Distributions to unitholders.............................. (6,898) (6,860) (6,285)
Dividends paid on common shares........................... (40,693) (43,451) (40,832)
Dividends paid on preferred shares........................ (16,114) (16,114) (11,430)
------- --------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES....... (42,199) (107,209) 110,634
------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS...... 2,003 6,855 (7,568)
------- --------- ---------
Cash and cash equivalents, beginning of period.............. 14,092 7,237 14,805
------- --------- ---------
Cash and cash equivalents, end of period.................... $16,095 $ 14,092 $ 7,237
======= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid............................................. $50,277 $ 49,375 $ 45,607
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING
ACTIVITIES:
Assumption of debt related to property acquisitions....... $ 9,559 $ -- $ 26,231
Conversion of units for common shares..................... $ 365 $ 922 $ 1,785
Issuance of units related to property acquisitions........ $ -- $ -- $ 1,911
Issuance of advances in exchange for common shares and
units................................................... $ 238 $ 100 $ 1,458
Interest capitalized...................................... $ 3,730 $ 3,967 $ 4,265
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND FORMATION OF THE COMPANY
Mid-America Apartment Communities, Inc. ("Mid-America") is a
self-administrated and self-managed real estate investment trust which owns,
develops, constructs, acquires and operates multifamily apartment communities
mainly in the southeastern United States, and in Texas. The company owns and
operates 114 apartment communities principally through its majority owned
subsidiary, Mid-America Apartments, L.P. (the "Operating Partnership") and its
subsidiary, Mid-America Capital Partners, L.P. ("MACP"). MACP is a special
purpose entity established in 1997 to issue first mortgage bonds. The Company
also owns a 33.33% interest in a real estate joint venture which owns 10
apartment communities, for which the Company provides management services. From
the period November 1997 through June 1999, the company conducted third party
property management, construction and development activities through its service
corporation, Flournoy Development Corporation.
BASIS OF PRESENTATION
The consolidated financial statements presented herein include the accounts
of Mid-America, the Operating Partnership, MACP, and all other subsidiaries
("the Company"). The Company owns 51% to 100% of all consolidated subsidiaries.
The Company uses the equity method of accounting for its investments in 20 to
50 percent-owned entities. All significant intercompany accounts and
transactions have been eliminated in consolidation.
MINORITY INTEREST
Minority interest in the accompanying consolidated financial statements
relates to the ownership interest in the Operating Partnership by the holders of
Class A Common Units of the Operating Partnership ("Operating Partnership
Units"). Mid-America is the sole general partner of the Operating Partnership.
Net income is allocated to the minority interest based on their respective
ownership percentage of the Operating Partnership. Issuance of additional common
shares or Operating Partnership Units changes the ownership of both the minority
interest and Mid-America. Such transactions and the proceeds therefrom are
treated as capital transactions and result in an allocation between
shareholders' equity and minority interest to account for the change in the
respective percentage ownership of the underlying equity of the Operating
Partnership.
The Company's Board of Directors established economic rights in respect to
each Operating Partnership Unit that were equivalent to the economic rights in
respect to each share of common stock. The holder of each unit may redeem their
units in exchange for one share of common stock or cash, at the option of the
Company. The Operating Partnership has followed the policy of paying the same
per unit distribution in respect to the units as the per share distribution in
respect to the common stock. Operating Partnership net income for 2000, 1999 and
1998 was allocated approximately 16.3%, 15.6% and 15.6%, respectively, to
holders of Operating Partnership Units and 83.7%, 84.4% and 84.4%, respectively,
to Mid-America.
USE OF ESTIMATES
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities, the disclosure of
contingent assets and liabilities, and the reported
F-6
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
amounts of revenues and expenses to prepare these financial statements in
conformity with accounting principles generally accepted in the United States of
America. Actual results could differ from those estimates.
REVENUE RECOGNITION
The Company leases multifamily residential apartments under operating leases
with terms of one year or less. Rental and other revenues are recorded when
earned.
RENTAL COSTS
Costs associated with rental activities are expensed as incurred. Certain
costs associated with the lease-up of development projects, including cost of
model units, their furnishings, signs, and "grand openings" are capitalized and
amortized over their estimated useful lives. All other costs relating to renting
development projects are expensed as incurred.
CASH AND CASH EQUIVALENTS
The Company considers cash, investments in money market accounts and
certificates of deposit with original maturities of three months or less to be
cash equivalents.
RESTRICTED CASH
Restricted cash consists of escrow deposits held by lenders for property
taxes, insurance, debt service and replacement reserves.
REAL ESTATE ASSETS AND DEPRECIATION
Real estate assets are carried at depreciated cost. Repairs and maintenance
costs are expensed as incurred while significant improvements, renovations, and
replacements are capitalized. The cost of interior painting, vinyl flooring and
blinds are expensed as incurred.
In conjunction with acquisitions of properties, the Company's policy is to
provide in its acquisition budgets adequate funds to complete any deferred
maintenance items to bring the properties to the required standard, including
the cost of replacement appliances, carpet, interior painting, vinyl flooring
and blinds. These costs are capitalized.
Depreciation is computed on a straight-line basis over the estimated useful
lives of the related assets which range from 8 to 40 years for land improvements
and buildings and 5 years for furniture, fixtures and equipment.
The Company records all gains and losses on real estate in accordance with
SFAS No. 66. The total gain for the period ended December 31, 2000, 1999 and
1998 was approximately $11,587,000, $10,237,000 and $408,000, respectively.
F-7
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF
The Company accounts for long-lived assets in accordance with the provisions
of SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." This Statement requires that long-lived
assets and certain identifiable intangibles be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to future net cash flows
expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying amount or fair value less
costs to sell.
Development projects and the related carrying costs, including interest,
property taxes, insurance and allocated development overhead during the
construction period, are capitalized and reported in the accompanying balance
sheet as "construction in progress" during the construction period. Upon
completion and certification for occupancy of individual units within a
development, amounts representing the completed unit's portion of total
estimated development costs for the project are transferred to land, buildings,
and furniture, fixtures and equipment as real estate held for investment.
Capitalization of interest, property taxes, insurance and allocated development
overhead costs ceases upon the transfer, and the assets are depreciated over
their estimated useful lives. Total interest capitalized during 2000, 1999 and
1998 was $3,730,000, $3,967,000 and $4,265,000, respectively.
LAND HELD FOR FUTURE DEVELOPMENT
Real estate held for future development consists primarily of sites intended
for future multifamily developments.
INVESTMENT IN AND ADVANCES TO REAL ESTATE JOINT VENTURE
The Company's investment in an unconsolidated real estate joint venture is
recorded on the equity method as the Company does not have a controlling
interest in the joint venture. The portion of the gain realized upon the
Company's sale of apartment communities to the joint venture was deferred in
proportion to the Company's ownership interest in the joint venture. The
deferred gain will be amortized over 20 years, which approximates the useful
life of the joint venture's real estate assets.
DEFERRED COSTS AND OTHER INTANGIBLES
Deferred financing costs are amortized over the terms of the related debt
using a method which approximates the interest method. Cost in excess of fair
value of net assets acquired is amortized using the straight-line method over
30 years.
DERIVATIVE FINANCIAL INSTRUMENTS
The Company has only limited involvement with derivative financial
instruments and does not use them for trading purposes. The Company utilizes
derivative financial instruments as hedges in anticipation of future debt
transactions to manage well-defined interest rate risk or as protection to hedge
the interest
F-8
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
rate risk of the Company's variable rate debt by locking the effective rate on
portions of the outstanding lines of credit.
For interest rate swaps, the differential to be paid or received is accrued
and recognized in interest expense and may change as interest rates change. If a
swap is terminated prior to maturity, the gain or loss is recognized over the
remaining original life of the swap if the item hedged remains outstanding, or
immediately, if the item hedged does not remain outstanding. If the swap is not
terminated prior to maturity, but the underlying hedged item is no longer
outstanding, the interest rate swap is marked to market and any unrealized gain
or loss is recognized immediately.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS 133). SFAS 133 was later amended by
SFAS No. 137 and SFAS No. 138. SFAS 133, as amended, requires recognition of the
fair value of all derivative instruments, including certain derivative
instruments embedded in other contracts (collectively referred to as
derivatives), on the balance sheet and establishes new accounting rules for
hedging activities. The Company adopted FAS 133, as amended, on January 1, 2001.
The adoption did not impact the Company's results of operations, cash flows or
financial position.
RECLASSIFICATION
Certain prior year amounts have been reclassified to conform with 2000
presentation. The reclassifications had no effect on net income available for
common shareholders.
2. SALE OF DEVELOPMENT, CONSTRUCTION AND FEE MANAGEMENT BUSINESSES
On June 30, 1999, the Company sold its development, construction and fee
management businesses back to the principals of Flournoy Development Company
("Flournoy"). The Company received net proceeds of $18.1 million for these
assets and recorded a net loss of approximately $4.0 million, relating mainly to
the write-off of goodwill related to the original purchase transaction. In the
transaction, Flournoy reacquired the development businesses, related fixed
assets including single family development, land and property held for sale, and
the fee management business of 5,131 tax credit apartment units. The Company has
contracted with Flournoy to complete the remaining portion of its development
pipeline which was estimated to be approximately $17 million at December 31,
2000.
3. REAL ESTATE JOINT VENTURE
The Company currently owns a 33.3% interest in a joint venture (the "Joint
Venture") with Blackstone Real Estate Acquisitions, LLC ("Blackstone") which was
formed in 1999 when the Company sold 10 apartment communities containing 2,793
apartment units to the Joint Venture for $97.9 million. The Company made an
initial investment and advances to the Joint Venture totaling approximately
$8 million and manages the communities for a fee of 4% of revenues.
The Company recognized a gain of approximately $9.0 million and deferred
gains for the Company's retained interest of approximately $4.8 million. The
Joint Venture had a total of $106 million of undepreciated gross assets and
$88 million of liabilities at December 31, 2000.
F-9
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
4. BORROWINGS
The Company maintains an $85 million securitized credit facility with a
group of banks led by AmSouth Bank (the "Amsouth Credit Line"). The Amsouth
Credit Line bears an interest rate of LIBOR plus a spread ranging from 1.35% to
1.75% (1.35% at December 31, 2000) based on certain quarterly coverage
calculations established by the agreement. This credit line expires in May 2002
and is subject to certain borrowing base calculations that effectively reduce
the amount that may be borrowed. At December 31, 2000, the Company had
$7.4 million outstanding on the AmSouth Credit Line and had another
$31.8 million available to be borrowed under the agreement.
The Company also maintains a $295 million secured credit facility with FNMA
(the "FNMA Facility") which matures in 2009. The FNMA Facility provides for both
fixed and variable rate borrowings. The interest rate on the variable portion
renews every 90 days and is based on the FNMA mortgage backed security rate on
the date of renewal, which has historically approximated three month LIBOR less
a spread ranging from .05%-.10%, plus a fee of .67%. Borrowings under the FNMA
Facility totaled $198.1 million at December 31, 2000, consisting of $65 million
under the fixed portion at a rate of 7.712% and the remaining $133.1 million
under the variable rate portion of the facility. During 2000, the Company
entered into two interest rate swap agreements, totaling $50 million to lock the
interest rate on a portion of the variable rate borrowings outstanding under the
FNMA Facility at approximately 7.4%. The FNMA Facility is subject to certain
borrowing base calculations that effectively reduce the amount that may be
borrowed. The total amount available under these calculations was outstanding as
of December 31, 2000.
The Company also had outstanding at December 31, 2000 a $10 million
unsecured short-term note payable with Compass Bank, which matures in May 2001.
At December 31, 2000, the Company had $75.5 million (after considering the
interest rate swaps) variable rate debt outstanding at an average interest rate
of 7.2% and an additional $32 million of tax-free variable rate debt outstanding
at an average rate of 5.812%; all other debt was fixed at an average interest
rate of 7.19%.
During 2000, the Company paid off a portion of its note payable to
Prudential Mortgage, which is secured by several properties. The payment was
related to the disposition of one of the properties securing the note, and the
Company incurred a prepayment penalty of approximately $204,000, net of minority
interest, related to the early extinguishment of the mortgage which is included
in "Extraordinary items--loss on early extinguishment of debt" in the
accompanying financial statements.
The Company had approximately $565.6 million and $570.8 million at
December 31, 2000 and 1999, respectively, outstanding under various mortgage
notes and bonds payable secured by real estate assets.
The Company had outstanding $142 million aggregate principal amount of
6.376% Bonds due 2003 (the "Bonds"). The Bonds are secured by a first priority
deed of trust, security agreement and assignment of rents and leases in respect
of 26 mortgaged properties, with a net book value of $201 million at
December 31, 2000.
During 1999, the Company paid certain borrowings prior to maturity and
incurred prepayment costs of $67,000, net of minority interest, related to the
early extinguishment. During 1998, the Company refinanced certain notes payable
and refunded certain bonds incurring prepayment costs totaling $990,000, net of
minority interest, related to the early extinguishment. For 1999 and 1998, these
costs are included in "Extraordinary items--loss on early extinguishment of
debt" in the accompanying financial statements.
F-10
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
4. BORROWINGS (CONTINUED)
As of December 31, 2000, the Company estimated that the weighted average
interest rate on the Company's debt was 7.14% with an average maturity of
10.9 years.
The following table summarizes the Company's indebtedness at December 31,
2000.
<TABLE>
<CAPTION>
ACTUAL AVERAGE INTEREST
INTEREST RATES RATE MATURITY 2000 1999
-------------- ---------------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Fixed Rate:
Taxable............................ 6.376-9.006% 7.369% 2001-2037 $504.3 $442.6
Tax-exempt......................... 5.281-7.594% 6.162% 2008-2028 94.5 96.3
Interest rate swaps................ 7.170-7.383% 7.300% 2003-2006 75.0 25.0
------ ------
$673.8 $563.9
------ ------
Variable Rate:
Taxable............................ 7.218% 7.218% 2009 $ 75.5 $148.4
Tax-exempt......................... 5.690-5.980% 5.812% 2025-2028 31.8 31.9
------ ------
$107.3 $180.3
------ ------
$781.1 $744.2
====== ======
</TABLE>
Scheduled principal repayments on the borrowings at December 31, 2000 are as
follows (dollars in thousands):
<TABLE>
<CAPTION>
YEAR AMORTIZATION BALLOON PAYMENTS TOTAL
- ---- ------------ ---------------- --------
<S> <C> <C> <C>
2001................................... $ 4,694 $ 49,544 $ 54,238
2002................................... 4,721 18,822 23,543
2003................................... 4,473 161,821 166,294
2004................................... 4,368 71,168 75,536
2005................................... 4,193 36,299 40,492
Thereafter............................. 168,716 252,270 420,986
-------- -------- --------
$191,165 $589,924 $781,089
======== ======== ========
</TABLE>
The Company's indebtedness includes various restrictive financial covenants.
The Company believes that it was in compliance with these covenants as of
December 31, 2000.
5. FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS
Cash and cash equivalents, restricted cash, accounts payable, accrued
expenses and other liabilities and security deposits are carried at amounts
which reasonably approximate their fair value due to their short term nature.
Fixed rate notes payable at December 31, 2000 and 1999 total $673.8 million
and $563.9 million, respectively, and have an estimated fair value of
$678.71 million and $541.5 million (excluding prepayment penalties) based upon
interest rates available for the issuance of debt with similar terms and
remaining maturities as of December 31, 2000 and 1999. The carrying value of
variable rate notes payable at December 31, 2000 and 1999 total $107.3 million
and $180.3 million, respectively, which reasonably
F-11
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
5. FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS (CONTINUED)
approximates their fair value because the related variable interest rates
available for the issuance of debt with similar terms and remaining maturities
reasonably approximate market rates.
The Company has three interest rate swap agreements for $25 million notional
amount each which were outstanding as of December 31, 2000. The Company
estimates that at December 31, 2000, the combined fair market value of all the
interest rate swaps outstanding was $(2.2) million.
The fair value estimates presented herein are based on information available
to management as of December 31, 2000 and 1999. Although management is not aware
of any factors that would significantly affect the estimated fair value amounts,
such amounts have not been comprehensively revalued for purposes of these
financial statements since that date, and current estimates of fair value may
differ significantly from the amounts presented herein.
6. COMMITMENTS AND CONTINGENCIES
The Company is not presently subject to any material litigation nor, to the
Company's knowledge, is any material litigation threatened against the Company,
other than routine litigation arising in the ordinary course of business, some
of which is expected to be covered by liability insurance and none of which is
expected to have a material adverse effect on the consolidated financial
statements of the Company.
The Company had total expenses related to operating leases for the years
ended December 31, 2000, 1999, and 1998 of $407,000, $256,000, and $138,000,
respectively.
The Company's commitments for the next five years under operating lease
agreements outstanding at December 31, 2000 are as follows:
<TABLE>
<CAPTION>
YEAR
- ----
<S> <C>
2001........................................................ $ 587,971
2002........................................................ 587,971
2003........................................................ 587,971
2004........................................................ 342,919
2005........................................................ 257,189
----------
Total....................................................... $2,364,021
==========
</TABLE>
7. INCOME TAXES
No provision for federal income taxes has been made in the accompanying
consolidated financial statements. The Company has made an election to be taxed
as a Real Estate Investment Trust ("REIT") under Sections 856 through 860 of the
Code. As a REIT, the Company generally is not subject to Federal income tax to
the extent it distributes 95% (through December 31, 1999 and 90% thereafter) of
its REIT taxable income to its shareholders and meets certain other tests
relating to the number of shareholders, types of assets and allocable income. If
the Company fails to qualify as a REIT in any taxable year, the Company will be
subject to the Federal income tax (including any applicable alternative minimum
tax) on its taxable income at regular corporate rates. Even though the Company
qualifies for taxation as a REIT, the Company may be subject to certain Federal,
state and local taxes on its income and property and to Federal income and
excise tax on its undistributed income.
F-12
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
7. INCOME TAXES (CONTINUED)
Earnings and profits, which determine the taxability of dividends to
shareholders, differ from net income reported for financial reporting purposes
primarily because of differences in depreciable lives, bases of certain assets
and liabilities and in the timing of recognition of earnings upon disposition of
properties. For federal income tax purposes, the following summarizes the
taxability of cash distributions paid on the common shares in 1999 and 1998 and
the estimated taxability for 2000:
<TABLE>
<CAPTION>
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Per common share
Ordinary income...................................... $1.31 $1.40 $1.28
Capital gains........................................ .25 .18 --
Return of capital.................................... .76 .72 .92
----- ----- -----
Total................................................ $2.32 $2.30 $2.20
===== ===== =====
</TABLE>
8. SHAREHOLDERS' EQUITY
SERIES A PREFERRED STOCK
Series A Cumulative Preferred Stock ("Series A Preferred Stock") has a
$25.00 per share liquidation preference and a preferential cumulative annual
distribution of $2.375 per share, payable monthly. The Company issued has
outstanding 2,000,000 Series A Preferred shares for which it received net
proceeds of $47.8 million. On and after November 1, 2001, the Series A Preferred
shares will be redeemable for cash at the option of the Company, in whole or in
part, at a redemption price equal to the liquidation preference plus dividends
accrued and unpaid to the redemption date.
SERIES B PREFERRED STOCK
Series B Cumulative Preferred Stock ("Series B Preferred Stock") has a
$25.00 per share liquidation preference and a preferential cumulative annual
distribution of $2.21875 per share, payable monthly. The Company issued has
outstanding 1,938,830 Series B Preferred shares for which it received net
proceeds of $46.6 million. On and after December 1, 2002, the Series B Preferred
shares will be redeemable for cash at the option of the Company, in whole or in
part, at a redemption price equal to the liquidation preference plus dividends
accrued and unpaid to the redemption date.
SERIES C PREFERRED STOCK
Series C Cumulative Redeemable Preferred Stock ("Series C Preferred Stock")
has a $25.00 per share liquidation preference and a preferential cumulative
annual distribution of $2.34375 per share, payable quarterly. The Company has
outstanding 2,000,000 Series C Preferred shares for which it received net
proceeds of $48.1 million. On and after June 30, 2003, the Series C Preferred
shares will be redeemable for cash at the option of the Company, in whole or in
part, at a redemption price equal to the liquidation preference plus dividends
accrued and unpaid to the redemption date.
F-13
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
8. SHAREHOLDERS' EQUITY (CONTINUED)
SERIES D PREFERRED STOCK--SHAREHOLDERS RIGHTS PLAN
During December 1998, the Board of Directors authorized a Shareholders
Rights Plan (the "Rights Plan"). In implementing the Rights Plan, the Board
declared a distribution of one right for each of the Company's outstanding
common shares which would become exercisable only if a person or group (the
"Acquiring Person") becomes the beneficial owner of 10% or more of the common
shares or announces a tender or exchange offer that would result in ownership of
10% of the Company's common shares. The rights will trade with the Company's
common stock until exercisable. Each holder of a right, other than the Acquiring
Person, is in that event entitled to purchase one common share of the Company
for each right at one half of the then current price.
SERIES E PREFERRED STOCK
Series E Cumulative Preferred Stock ("Series E Preferred Stock") has a
$25.00 per share liquidation preference and a preferential cumulative annual
distribution of $2.375 per share, payable monthly. The Company has outstanding
1,000,000 Series E Preferred shares issued in a direct placement with a private
investor. The Company received net proceeds of $24.7 million. In December 2003,
the securities may be required by the purchaser to be redeemed by the Company in
cash or common stock, at the Company's option, at the then market price. The
Series E Preferred Stock is equal in rank with the Company's other series of
Preferred Stock with respect to the payment of dividends and amounts upon
liquidation, dissolution or winding up.
DIRECT STOCK PURCHASE AND DISTRIBUTION REINVESTMENT PLAN
In January 1999 the Company adopted the DSPDRP pursuant to which the
Company's shareholders have the ability to reinvest all or part of distributions
from Mid-America common stock, preferred stock or limited partnership interests
in Mid-America Apartments, L.P. Also, the plan provides the opportunity for
shareholders to buy additional shares through an optional cash investment. This
plan replaced the Company's previous Dividend Reinvestment and Stock Purchase
Plan (the "DRSPP"). The Company has registered with the Securities and Exchange
Commission the offer and sale of up to 1,600,000 shares of common stock pursuant
to the DSPDRP and DRSPP. Additional shares will be purchased at the market price
on the "Investment Date" each month, which shall in no case be later than ten
business days following the distribution payment date. Common stock shares
totaling 25,242, in 2000, 111,637 in 1999, and 62,175 in 1998 were acquired by
shareholders.
STOCK REPURCHASE PLAN
In 1999, the Company's Board of Directors approved a stock repurchase plan
to acquire up to a total of 4.0 million shares of the Company's common shares.
Through December 31, 2000, the Company has repurchased and retired approximately
1.7 million shares of common stock for a cost of approximately $39 million at an
average price per common share of $22.56.
EARNINGS PER SHARE
The computation of basic earnings per share is based on the weighted average
number of common shares outstanding. The computation of diluted earnings per
share is based on the weighted average
F-14
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
8. SHAREHOLDERS' EQUITY (CONTINUED)
number of common shares outstanding plus the shares resulting from the assumed
exercise of all dilutive outstanding options using the treasury stock method.
The Series E Preferred Shares, which may be convertible five years from the date
of issuance, are not included in the calculation because the assumed conversion
would be anti-dilutive.
A reconciliation of the numerators and denominators of the basic and diluted
earnings per share computations for the years ended December 31, 2000, 1999 and
1998 is presented on the Consolidated Statements of Operations.
9. EMPLOYEE BENEFIT PLANS
401(K) SAVINGS PLAN
The Mid-America Apartment Communities, Inc. 401(k) Savings Plan is a defined
contribution plan that satisfies the requirements of Section 401(a) and 401(k)
of the Code. The Company may, but is not obligated to, make a matching
contribution of $.50 for each $1.00 contributed, up to 6% of the participant's
compensation. The Company's contribution to this plan was $216,000, $204,200 and
$318,200 in 2000, 1999 and 1998, respectively.
NON-QUALIFIED DEFERRED COMPENSATION PLAN
The Company has adopted a non-qualified deferred compensation plan for key
employees who are not qualified for participation in the Company's 401(k)
Savings Plan. Under the terms of the plan, employees may elect to defer a
percentage of their compensation and the Company matches a portion of their
salary deferral. The plan is designed so that the employees' investment earnings
under the non-qualified plan should be the same as the earning assets in the
Company's 401(k) Savings Plan. The Company's match to this plan in 2000, 1999
and 1998 was $27,800, $17,300 and $19,100, respectively.
EMPLOYEE STOCK PURCHASE PLAN
The Mid-America Apartment Communities, Inc. Employee Stock Purchase Plan
(the "ESPP") provides a means for employees to purchase common stock of the
Company. The Board has authorized the issuance of 150,000 shares for the plan.
The ESPP is administered by the Compensation Committee who may annually grant
options to employees to purchase annually up to an aggregate of 15,000 shares of
common stock at a price equal to 85% of the market price of the common stock.
During 2000, 1999 and 1998, the ESPP purchased 4,326, 6,721 and 5,242 shares,
respectively.
EMPLOYEE STOCK OWNERSHIP PLAN
The Mid-America Apartment Communities, Inc. Employee Stock Ownership Plan
(the "ESOP") is a non-contributory stock bonus plan that satisfies the
requirements of Section 401(a) of the Internal Revenue Code. Each employee of
the Company is eligible to participate in the ESOP after attaining the age of
21 years and completing one year of service with the Company. Participants' ESOP
accounts will be 100% vested after five years of continuous service, with no
vesting prior to that time. The Company contributed 22,500 shares of common
stock to the ESOP upon conclusion of the Initial Offering. During 2000, 1999 and
1998, the Company contributed $600,400, $640,100 and $448,300, respectively, to
the ESOP which purchased an additional 25,967, 28,233 and 17,156 shares,
respectively.
F-15
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
9. EMPLOYEE BENEFIT PLANS (CONTINUED)
STOCK OPTION PLAN
The Company has adopted the 1994 Restricted Stock and Stock Option Plan (the
"Plan") to provide incentives to attract and retain independent directors,
executive officers and key employees. The Plan provides for the grant of options
to purchase a specified number of shares of common stock ("Options") or grants
of restricted shares of common stock ("Restricted Stock"). The Plan also allows
the Company to grant options to purchase Operating Partnership Units at the
price of the common stock on the New York Stock Exchange on the day prior to
issuance of the units (the "LESOP Provision"). The Plan authorizes the issuance
of 2,000,000 common shares or options to acquire shares which vest over five
years. Under the terms of the Plan, the Company can advance directors, executive
officers, and key employees a portion of the cost of the common stock or units.
The employee advances mature five years from date of issuance and accrue
interest, payable in arrears, at a rate established at the date of issuance. The
Company has also entered into supplemental bonus agreements with the employees
which are intended to fund the payment of a portion of the advances over a five
year period. Under the terms of the supplemental bonus agreements, the Company
will pay bonuses to these employees equal to 3% of the original note balance on
each anniversary date of the advance, limited to 15% of the aggregate purchase
price of the shares and units. The advances become due and payable and the bonus
agreement will terminate if the employees voluntarily terminate their employment
with the Company. The Company also agreed to pay a bonus to certain executive
officers in an amount equal to the debt service on the advances for as long as
they remain employed by the Company.
As of December 31, 2000, the Company had advances outstanding relating to
the Plan totaling $1,171,000, which is presented as a reduction to shareholders'
equity in the accompanying consolidated balance sheets. Advances to executive
officers totaled $840,000 at interest rates ranging from 5.59%-6.49% and
maturing at various dates from 2002 to 2005. Advances to key employees totaled
$331,000 at interest rates ranging from 7.5%-9.0% maturing at various dates from
2002 to 2005.
Additionally in 2000, the Company issued 5,450 restricted stock shares to
current independent directors at a price of $22.1875 per share. These shares
will vest in one year. The Company also issued 10,750 restricted stock shares to
executive officers at a price of $22.1875. These shares will vest 10% each over
the next ten years. The executive officers have the option to accelerate the
vesting in lieu of bonuses.
F-16
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
9. EMPLOYEE BENEFIT PLANS (CONTINUED)
A summary of changes in Options to acquire shares of the Company's common
stock and Operating Partnership Units, including grants and exercises pursuant
to the LESOP provision, for the three years ended December 31, 2000 is as
follows:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE
OPTIONS EXERCISE PRICE
--------- ----------------
<S> <C> <C>
Outstanding at December 31, 1997................... 523,500 $25.40
Granted.......................................... 663,250 28.78
Exercised........................................ (338,581) 28.28
Forfeited........................................ (52,850) 27.81
---------
Outstanding at December 31, 1998................... 795,319 26.87
Granted.......................................... 371,750 22.25
Forfeited........................................ (243,800) 25.86
---------
Outstanding at December 31, 1999................... 923,269 25.35
Granted.......................................... 401,000 22.29
Exercised........................................ (54,350) 22.93
Forfeited........................................ (70,325) 24.78
---------
Outstanding at December 31, 2000................... 1,199,594 24.47
=========
Options exercisable:
December 31, 1998................................ 208,769 $23.19
December 31, 1999................................ 285,694 23.34
December 31, 2000................................ 381,744 24.25
</TABLE>
Exercise prices for options outstanding as of December 31, 2000 ranged from
$19.75 to $29.50. The weighted average remaining contractual life of those
options is 7.0 years.
The Company has adopted SFAS No. 123, "Accounting for Stock-Based
Compensation", which requires either the (i) fair value of employee stock-based
compensation plans be recorded as a component of compensation expense in the
statement of operations as of the date of grant of awards related to such plans,
or (ii) impact of such fair value on net income and earnings per share be
disclosed on a pro forma basis in a footnote to financial statements for awards
granted after December 15, 1994, if the accounting for such awards continues to
be in accordance with Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees," ("APB 25"). The Company will continue such
accounting under the provisions of APB 25. If the fair value method of
accounting allowed under SFAS No. 123 had been used by the Company, the pro
forma net income available to common shareholders would have been $13,494,000,
$17,254,000, $14,681,000 for 2000, 1999 and 1998, respectively. The pro forma
diluted net income available per common share would have been $0.77, $0.92 and
$0.78 for 2000, 1999 and 1998, respectively. The calculation was prepared using
the Black-Scholes option pricing model using the following factors: 1) risk free
interest rate of 5.28% and 6.38% for 2000 and 1999, respectively, 2) expected
life of 7.0 years and 7.3 years for 2000 and 1999, respectively, 3) expected
volatility of 14.05% and 19.14% for 2000 and 1999, respectively, and
4) expected dividends of 10.16% for both 2000 and 1999. The weighted average
fair value of all options granted during the year is $8,938,000 at a weighted
average option price of $22.29 per share.
F-17
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
10. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
The Company has only limited involvement with derivative financial
instruments and does not use them for trading purposes. The Company occasionally
utilizes derivative financial instruments as hedges in anticipation of future
debt transactions to manage well-defined interest rate risk or as protection to
hedge the interest rate risk of the Company's variable rate debt by locking the
effective rate on portions of the outstanding lines of credit.
During 2000, the Company entered two interest rate swap agreements, each
with a notional amount of $25 million, to effectively lock the interest rate on
$50 million of the FNMA Credit Facility at approximately 7.4%. The swap
agreements expire in September of 2005 and 2006.
In 1998, the Company entered an interest rate swap agreement which expires
on August 15, 2003 that effectively locks the interest rate the Company pays on
a portion of its AmSouth Credit Line. As of December 31, 2000, $25 million
notional amount was outstanding on this agreement with a fixed interest rate
paid by the Company of 7.17%.
11. RELATED PARTY TRANSACTIONS
Pursuant to a management contract with the Joint Venture, the Company
manages the operations of the 10 Joint Venture apartment communities for a fee
of 4% of the revenues of the Joint Venture. The Company received approximately
$737,000 and $453,000 as management fees from the Joint Venture in 2000 and
1999, respectively.
As described in Note 2, the Company sold its development, construction and
management fee business in June 1999 to a director of the Company. The director
was a former principle of Flournoy, which was acquired by the Company in
November 1997. The Company has contracted with Flournoy to complete the
remaining portion of its development pipeline, which is expected to be
accomplished during 2001.
12. SEGMENT INFORMATION
At December 31, 2000, the Company owned or had an ownership interest in 124
multifamily apartment communities, including the 10 apartment communities owned
by the Joint Venture, 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. The
Company's chief operating decision maker evaluates the performance of each
individual property based on its contribution to net operating income in order
to ensure that the individual property continues to meet the Company's return
criteria and long term investment goals. The Company defines each of its
multifamily communities as an individual operating segment. It has also
determined that all of its communities have similar economic characteristics and
also meet the other criteria which permit the communities to be aggregated into
one reportable segment, which is acquisition, development, and operation of the
multifamily communities owned.
The revenues, net operating income, assets and real estate investment
capital expenditures for the aggregated multifamily segment are summarized as
follows for the years ended as of December 31, 2000,
F-18
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
12. SEGMENT INFORMATION (CONTINUED)
1999 and 1998 (in 000's): For purposes of this disclosure, multifamily revenues,
net operating income and real estate assets include amounts related to the 10
properties owned by the unconsolidated Joint Venture.
<TABLE>
<CAPTION>
2000 1999 1998
---------- ---------- --------
<S> <C> <C> <C>
Multifamily rental revenues................................ $ 237,330 $ 233,442 $210,591
Other multifamily revenues................................. 3,670 2,116 2,248
---------- ---------- --------
Segment revenues......................................... 241,000 235,558 212,839
Reconciling items to consolidated revenues:
Joint Venture revenues................................... (18,468) (11,344) --
Management and development income, net................... 739 751 1,841
Equity in loss of real estate joint venture.............. (157) (31) --
Interest income and other revenues....................... 1,526 1,388 863
---------- ---------- --------
Total revenues......................................... $ 224,640 $ 226,322 $215,543
========== ========== ========
Multifamily net operating income........................... 149,288 145,874 132,922
Reconciling items to net income:
Joint Venture net operating income....................... (10,202) (6,545) --
Management and development income, net................... 739 751 1,841
Equity in loss of real estate joint venture.............. (157) (31) --
Interest income and other revenues....................... 1,526 1,388 863
Depreciation and amortization............................ (51,844) (49,903) (46,021)
General and administrative expenses...................... (14,826) (14,479) (11,960)
Interest expense......................................... (50,736) (48,302) (45,704)
Amortization of deferred financing costs................. (2,758) (2,854) (2,348)
Gain on dispositions, net................................ 11,587 10,237 408
Extraordinary items--loss on early extinguishment of
debt................................................... (204) (67) (990)
Minority interest in operating partnership income........ (2,626) (2,497) (2,254)
Dividends on preferred shares............................ (16,114) (16,114) (11,430)
---------- ---------- --------
Net income available for common shareholders........... $ 13,673 $ 17,458 $ 15,327
========== ========== ========
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C> <C>
ASSETS:
Multifamily real estate assets............................. $1,516,096 $1,480,232
Accumulated depreciation--multifamily assets............... (189,516) (148,839)
---------- ----------
1,326,580 1,331,393
Reconciling items to total assets:
Joint Venture multifamily real estate assets, net........ 96,145 98,323
Land held for future development......................... 1,366 1,710
Commercial properties, net............................... 5,044 5,217
Investment in and advances to real estate joint
venture................................................ 7,630 8,054
Cash and restricted cash................................. 33,567 26,629
Other assets............................................. 25,729 24,143
---------- ----------
Total Assets........................................... $1,303,771 $1,298,823
========== ==========
</TABLE>
F-19
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
12. SEGMENT INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Multifamily expenditures for property improvements,
acquisitions and construction............................. $96,674 $107,508 $204,031
Less reconciling items:
Joint Venture property improvements....................... (1,458) (1,568) --
------- -------- --------
Total expenditures for property improvements,
acquisitions and construction......................... $95,216 $105,940 $204,031
======= ======== ========
</TABLE>
13. SUBSEQUENT EVENTS
DECLARATION OF DIVIDEND
The Company declared a 2000 fourth quarter common stock dividend of $0.585
per share in January 2001 to be paid January 31, 2001 to holders of record on
January 24, 2001.
INTEREST RATE SWAP AGREEMENT
In January 2001, the Company entered into an interest rate swap agreement
with a notional amount of $25 million, the effect of which was to lock the
interest rate on $25 million of the FNMA Credit Facility at approximately 6.2%.
The swap agreement expires December 1, 2005.
F-20
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
14. SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
MID-AMERICA APARTMENT COMMUNITIES, INC.
QUARTERLY FINANCIAL DATA (UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 2000
-----------------------------------------
FIRST SECOND THIRD FOURTH
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Total revenues.......................................... $55,408 $55,601 $56,937 $56,694
Income before minority interest in operating partnership
income and extraordinary item......................... $ 7,912 $12,195 $ 5,964 $ 6,546
Minority interest in operating partnership income....... $ 540 $ 1,403 $ 337 $ 346
Extraordinary item, net of minority interest............ $ (56) $ (148) $ -- $ --
Net income available for common shareholders............ $ 3,286 $ 6,615 $ 1,599 $ 2,173
Per share:
Basic and diluted per share:
Net income available per common shares..................
Before extraordinary item............................. $ 0.19 $ 0.38 $ 0.09 $ 0.13
Extraordinary item.................................... -- (0.01) -- --
------- ------- ------- -------
Net income available per common share................. $ 0.19 $ 0.37 $ 0.09 $ 0.13
======= ======= ======= =======
Dividend declared....................................... $ 0.580 $ 0.580 $ 0.580 $ 0.585
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999
-----------------------------------------
FIRST SECOND THIRD FOURTH
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Total revenues.......................................... $57,089 $56,362 $56,983 $55,888
Income before minority interest in operating partnership
income and extraordinary item......................... $ 7,512 $ 2,275 $11,445 $14,904
Minority interest in operating partnership income
(loss)................................................ $ 1,196 $ (414) $ 917 $ 798
Extraordinary item, net of minority interest............ $ (67) $ -- $ -- $ --
Net income (loss) available for common shareholders..... $ 6,920 $(1,340) $ 6,500 $ 5,378
Per share:
Basic and diluted per share:
Net income available per common shares
Before extraordinary item............................. $ 0.37 $ (0.07) $ 0.34 $ 0.29
Extraordinary item.................................... -- -- -- --
------- ------- ------- -------
Net income available per common share................. $ 0.37 $ (0.07) $ 0.34 $ 0.29
======= ======= ======= =======
Dividend declared....................................... $ 0.575 $ 0.575 $ 0.575 $ 0.580
</TABLE>
F-21
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST ACQUISITION
--------------------- ---------------------
BUILDINGS BUILDINGS
AND AND
PROPERTY LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- --------------------- ------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
COMPLETED PROPERTIES
Eagle Ridge Birmingham, AL $ 6,292 $ 851 $ 7,667 $ -- $ 698
Abbington Place Huntsville, AL --(1) 524 4,724 -- 780
Paddock Club-- Huntsville, AL --(2) 830 7,470 -- 811
Huntsville I
Paddock Club-- Huntsville, AL --(2) 909 10,152 -- 72
Huntsville II
Paddock Club Montgomery, AL --(1) 965 13,190 -- 359
Montgomery I & II
Calais Forest Little Rock, AR --(1) 1,026 9,244 -- 1,549
Napa Valley Little Rock, AR --(3) 960 8,642 -- 803
Westside Creek I Little Rock, AR --(3) 616 5,559 -- 614
Westside Creek II Little Rock, AR 4,828 654 5,904 -- 285
Tiffany Oaks Altamonte Springs, FL --(3) 1,024 9,219 -- 1,279
Marsh Oaks Atlantic Beach, FL --(3) 244 2,829 -- 718
Indigo Point Brandon, FL --(4) 1,167 10,500 -- 571
Paddock Club--Brandon Brandon, FL --(1) 2,896 26,111 -- 192
I & II
Anatole Daytona Beach, FL 7,000(5) 1,227 5,879 -- 755
Paddock Club-- Gainsville, FL --(5) 1,800 15,879 -- 17
Gainsville
Cooper's Hawk Jacksonville, FL --(6) 854 7,500 -- 973
Hunter's Ridge at Jacksonville, FL --(7) 1,533 13,835 -- 610
Deerwood
Lakeside Jacksonville, FL --(3) 1,431 12,883 289 2,772
Paddock Club-- Jacksonville, FL --(8) 2,294 20,750 (2) 532
Jacksonville I,
II & III
Paddock Club-- Jacksonville, FL --(1) 1,410 14,967 -- 180
Mandarin
St. Augustine Jacksonville, FL --(6) 2,858 6,475 (1) 2,367
Woodbridge at the Lake Jacksonville, FL --(1) 645 5,804 -- 1,438
Woodhollow Jacksonville, FL 9,579 1,686 15,179 -- 1,916
<CAPTION>
GROSS AMOUNT
CARRIED AT
DECEMBER 31, LIFE USED
2000(11) TO COMPUTE
------------------------- DEPRECIATION
BUILDINGS IN LATEST
AND ACCUMULATED DATE OF INCOME
PROPERTY LAND FIXTURES TOTAL DEPRECIATION NET CONSTRUCTION STATEMENT(10)
- ---------------------- ------------ ---------- ---------- ------------ ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMPLETED PROPERTIES
Eagle Ridge $ 851 $ 8,365 $ 9,216 $ (803) $ 8,413 1986 5-40
Abbington Place 524 5,504 6,028 (599) 5,429 1987 5-40
Paddock Club-- 830 8,281 9,111 (887) 8,224 1989 5-40
Huntsville I
Paddock Club-- 909 10,224 11,133 (691) 10,442 1998 5-40
Huntsville II
Paddock Club 965 13,549 14,514 (747) 13,767 1999 5-40
Montgomery I & II
Calais Forest 1,026 10,793 11,819 (2,490) 9,329 1987 5-40
Napa Valley 960 9,445 10,405 (1,472) 8,933 1984 5-40
Westside Creek I 616 6,173 6,789 (857) 5,932 1984 5-40
Westside Creek II 654 6,189 6,843 (743) 6,100 1986 5-40
Tiffany Oaks 1,024 10,498 11,522 (1,572) 9,950 1985 5-40
Marsh Oaks 244 3,547 3,791 (814) 2,977 1986 5-40
Indigo Point 1,167 11,071 12,238 (248) 11,990 1989 5-40
Paddock Club--Brandon 2,896 26,303 29,199 (2,470) 26,729 1997/99 5-40
I & II
Anatole 1,227 6,634 7,861 (1,435) 6,426 1986 5-40
Paddock Club-- 1,800 15,896 17,696 (849) 16,847 1999 5-40
Gainsville
Cooper's Hawk 854 8,473 9,327 (1,833) 7,494 1987 5-40
Hunter's Ridge at 1,533 14,445 15,978 (1,274) 14,704 1987 5-40
Deerwood
Lakeside 1,720 15,655 17,375 (3,193) 14,182 1985 5-40
Paddock Club-- 2,292 21,282 23,574 (2,185) 21,389 1989/96 5-40
Jacksonville I,
II & III
Paddock Club-- 1,410 15,147 16,557 (1,036) 15,521 1998 5-40
Mandarin
St. Augustine 2,857 8,842 11,699 (2,254) 9,445 1987 5-40
Woodbridge at the Lake 645 7,242 7,887 (1,649) 6,238 1985 5-40
Woodhollow 1,686 17,095 18,781 (2,503) 16,278 1986 5-40
</TABLE>
F-22
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST ACQUISITION
--------------------- ---------------------
BUILDINGS BUILDINGS
AND AND
PROPERTY LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- --------------------- ------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Paddock Club-- Lakeland, FL --(8) 2,254 20,452 -- 1,376
Lakeland
Savannahs at James Melbourne, FL --(6) 582 7,868 -- 1,756
Landing
Paddock Park--Ocala I Ocala, FL 6,805 901 8,177 -- 994
Paddock Park-- Ocala, FL --(1) 1,383 12,547 -- 549
Ocala II
Paddock Club--Panama Panama City, FL --(5) 898 14,276 -- 29
City
Paddock Club-- Tallahassee, FL --(1) 950 8,550 -- 319
Tallahassee I
Paddock Club-- Tallahassee, FL 4,671 530 4,805 -- 145
Tallahassee II
Belmere Tampa, FL --(3) 851 7,667 1 1,847
Links at Carrollwood Tampa, FL 5,607 817 7,355 110 2,271
High Ridge Athens, GA --(3) 884 7,958 -- 401
Bradford Pointe Augusta, GA 4,760(5) 772 6,949 -- 633
Shenandoah Ridge Augusta, GA --(3) 650 5,850 8 2,028
Westbury Creek Augusta, GA 3,072 400 3,626 -- 450
Fountain Lake Brunswick, GA 2,887 502 4,551 -- 870
Park Walk College Park, GA 3,291 536 4,859 -- 306
Whisperwood Spa and Columbus, GA --(1) 4,290 42,722 (4) 2,898
Club
Willow Creek Columbus, GA --(3) 614 5,523 -- 869
Terraces at Fieldstone Conyers, GA --(1) 1,284 15,819 -- 24
Whispering Pines I LaGrange, GA 2,662 454 4,116 -- 423
Whispering Pines II LaGrange, GA 2,435 370 3,354 -- 277
Westbury Springs Lilburn, GA 4,119 665 6,038 -- 532
Austin Chase Macon, GA --(7) 1,409 12,687 -- (360)
The Vistas Macon, GA 3,952 595 5,403 -- 494
Georgetown Grove Savannah, GA 10,411 1,288 11,579 -- 274
Island Retreat St. Simons Island, GA 3,318 510 4,594 -- 529
<CAPTION>
GROSS AMOUNT
CARRIED AT
DECEMBER 31, LIFE USED
2000(11) TO COMPUTE
------------------------- DEPRECIATION
BUILDINGS IN LATEST
AND ACCUMULATED DATE OF INCOME
PROPERTY LAND FIXTURES TOTAL DEPRECIATION NET CONSTRUCTION STATEMENT(10)
- ---------------------- ------------ ---------- ---------- ------------ ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Paddock Club-- 2,254 21,828 24,082 (2,435) 21,647 1988/90 5-40
Lakeland
Savannahs at James 582 9,624 10,206 (1,983) 8,223 1990 5-40
Landing
Paddock Park--Ocala I 901 9,171 10,072 (1,035) 9,037 1986 5-40
Paddock Park-- 1,383 13,096 14,479 (1,497) 12,982 1988 5-40
Ocala II
Paddock Club--Panama 898 14,305 15,203 (1,247) 13,956 2000 5-40
City
Paddock Club-- 950 8,869 9,819 (1,000) 8,819 1990 5-40
Tallahassee I
Paddock Club-- 530 4,950 5,480 (554) 4,926 1995 5-40
Tallahassee II
Belmere 852 9,514 10,366 (2,133) 8,233 1984 5-40
Links at Carrollwood 927 9,626 10,553 (987) 9,566 1980 5-40
High Ridge 884 8,359 9,243 (930) 8,313 1987 5-40
Bradford Pointe 772 7,582 8,354 (841) 7,513 1986 5-40
Shenandoah Ridge 658 7,878 8,536 (1,984) 6,552 1975/84 5-40
Westbury Creek 400 4,076 4,476 (481) 3,995 1984 5-40
Fountain Lake 502 5,421 5,923 (664) 5,259 1983 5-40
Park Walk 536 5,165 5,701 (592) 5,109 1985 5-40
Whisperwood Spa and 4,286 45,620 49,906 (4,746) 45,160 1980/86/88/98 5-40
Club
Willow Creek 614 6,392 7,006 (755) 6,251 1968/78 5-40
Terraces at Fieldstone 1,284 15,843 17,127 (931) 16,196 1999 5-40
Whispering Pines I 454 4,539 4,993 (523) 4,470 1982 5-40
Whispering Pines II 370 3,631 4,001 (424) 3,577 1984 5-40
Westbury Springs 665 6,570 7,235 (727) 6,508 1983 5-40
Austin Chase 1,409 12,327 13,736 (941) 12,795 1996 5-40
The Vistas 595 5,897 6,492 (664) 5,828 1985 5-40
Georgetown Grove 1,288 11,853 13,141 (1,096) 12,045 1997 5-40
Island Retreat 510 5,123 5,633 (392) 5,241 1978 5-40
</TABLE>
F-23
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST ACQUISITION
--------------------- ---------------------
BUILDINGS BUILDINGS
AND AND
PROPERTY LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- --------------------- ------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Wildwood I Thomasville, GA 1,991 438 3,971 -- 311
Wildwood II Thomasville, GA 1,952 372 3,372 -- 186
Hidden Lake I Union City, GA 4,385 675 6,128 -- 641
Hidden Lake II Union City, GA --(3) 621 5,587 -- 243
Three Oaks I Valdosta, GA 2,750 462 4,188 -- 544
Three Oaks II Valdosta, GA 2,834 460 4,170 -- 260
Huntington Chase Warner Robins, GA 9,504 1,160 10,437 -- 189
Southland Station I Warner Robins, GA --(3) 777 6,992 -- 639
Southland Station II Warner Robins, GA --(1) 693 6,292 -- 290
Terraces at Towne Lake Woodstock, GA 15,067 1,689 15,321 -- 156
Terraces at Towne Woodstock, GA --(1) 1,331 11,918 -- 8
Lake II
Fairways at Hartland Bowling Green, KY --(1) 1,038 9,342 -- 1,071
Paddock Club Florence Florence, KY 9,563 1,209 10,969 -- 419
Lakepointe Lexington, KY --(3) 411 3,699 -- 723
Mansion, The Lexington, KY --(1) 694 6,242 -- 1,101
Village, The Lexington, KY --(3) 900 8,097 -- 1,192
Stonemill Village Louisville, KY --(2) 1,169 10,518 -- 1,917
Canyon Creek St. Louis, MO --(2) 880 7,923 245 2,282
Riverhills Grenada, MS -- 153 2,092 -- 496
Advantages, The Jackson, MS --(2) 422 3,727 -- 1,123
Crosswinds Jackson, MS --(3) 1,535 13,826 -- 1,348
Pear Orchard Jackson, MS --(3) 1,352 12,168 (1) 1,682
Reflection Pointe Jackson, MS 5,882(5) 710 8,770 140 2,668
Somerset Jackson, MS --(3) 477 4,294 -- 779
Woodridge Jackson, MS 4,615 471 5,522 -- 577
Hermitage at Beechtree Cary, NC --(3) 900 8,099 -- 954
Corners, The Winston-Salem. NC 3,954 685 6,165 -- 732
Fairways at Royal Oak Cincinnati, OH --(3) 814 7,335 -- 1,050
Woodwinds Aiken, SC 3,428 503 4,540 -- 501
Tanglewood Anderson, SC 2,316 427 3,853 -- 884
<CAPTION>
GROSS AMOUNT
CARRIED AT
DECEMBER 31, LIFE USED
2000(11) TO COMPUTE
------------------------- DEPRECIATION
BUILDINGS IN LATEST
AND ACCUMULATED DATE OF INCOME
PROPERTY LAND FIXTURES TOTAL DEPRECIATION NET CONSTRUCTION STATEMENT(10)
- ---------------------- ------------ ---------- ---------- ------------ ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wildwood I 438 4,282 4,720 (486) 4,234 1980 5-40
Wildwood II 372 3,558 3,930 (410) 3,520 1984 5-40
Hidden Lake I 675 6,769 7,444 (742) 6,702 1985 5-40
Hidden Lake II 621 5,830 6,451 (656) 5,795 1987 5-40
Three Oaks I 462 4,732 5,194 (576) 4,618 1983 5-40
Three Oaks II 460 4,430 4,890 (478) 4,412 1984 5-40
Huntington Chase 1,160 10,626 11,786 (246) 11,540 1997 5-40
Southland Station I 777 7,631 8,408 (898) 7,510 1987 5-40
Southland Station II 693 6,582 7,275 (747) 6,528 1990 5-40
Terraces at Towne Lake 1,689 15,477 17,166 (1,675) 15,491 1998 5-40
Terraces at Towne 1,331 11,926 13,257 (670) 12,587 1999 5-40
Lake II
Fairways at Hartland 1,038 10,413 11,451 (1,374) 10,077 1996 5-40
Paddock Club Florence 1,209 11,388 12,597 (1,265) 11,332 1994 5-40
Lakepointe 411 4,422 4,833 (1,051) 3,782 1986 5-40
Mansion, The 694 7,343 8,037 (1,628) 6,409 1989 5-40
Village, The 900 9,289 10,189 (2,207) 7,982 1987 5-40
Stonemill Village 1,169 12,435 13,604 (3,024) 10,580 1985 5-40
Canyon Creek 1,125 10,205 11,330 (2,442) 8,888 1983 5-40
Riverhills 153 2,588 2,741 (835) 1,906 1972 5-40
Advantages, The 422 4,850 5,272 (1,640) 3,632 1984 5-40
Crosswinds 1,535 15,174 16,709 (2,554) 14,155 1988/89 5-40
Pear Orchard 1,351 13,850 15,201 (3,342) 11,859 1985 5-40
Reflection Pointe 850 11,438 12,288 (2,493) 9,795 1986 5-40
Somerset 477 5,073 5,550 (1,182) 4,368 1980 5-40
Woodridge 471 6,099 6,570 (1,355) 5,215 1987 5-40
Hermitage at Beechtree 900 9,053 9,953 (1,073) 8,880 1988 5-40
Corners, The 685 6,897 7,582 (1,725) 5,857 1982 5-40
Fairways at Royal Oak 814 8,385 9,199 (1,898) 7,301 1988 5-40
Woodwinds 503 5,041 5,544 (608) 4,936 1988 5-40
Tanglewood 427 4,737 5,164 (1,072) 4,092 1980 5-40
</TABLE>
F-24
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST ACQUISITION
--------------------- ---------------------
BUILDINGS BUILDINGS
AND AND
PROPERTY LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- --------------------- ------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Paddock Club-- Columbia, SC --(1) 1,840 16,560 -- 715
Columbia
The Fairways Columbia, SC 7,523 910 8,207 -- 560
Highland Ridge Greenville, SC --(9) 482 4,337 -- 512
Howell Commons Greenville, SC --(3) 1,304 11,740 -- 767
Paddock Club-- Greenville, SC --(2) 1,200 10,800 -- 347
Greenville
Park Haywood Greenville, SC --(3) 325 2,925 35 2,744
Spring Creek Greenville, SC --(9) 597 5,374 -- 715
Runaway Bay Mt. Pleasant, SC --(9) 1,085 7,269 -- 917
Park Place Spartanburg, SC --(3) 723 6,504 -- 860
Steeplechase Chattanooga, TN --(3) 217 1,957 -- 1,424
Windridge Chattanooga, TN 5,299 817 7,416 -- 489
Oaks, The Jackson, TN --(2) 177 1,594 -- 763
Post House Jackson Jackson, TN 5,002 443 5,078 -- 889
Post House North Jackson, TN 3,375 381 4,299 (57) 1,011
Williamsburg Village Jackson, TN --(3) 523 4,711 -- 584
Woods at Post House Jackson, TN 5,223 240 6,839 -- 711
Crossings Memphis, TN --(2) 554 2,216 -- 729
Eastview Memphis, TN 11,593 700 9,646 -- 1,850
Gleneagles Memphis, TN --(2) 443 3,983 -- 2,050
Greenbrook Memphis, TN --(4) 2,100 24,468 25 10,069
Hickory Farm Memphis, TN --(2) 580 5,220 (19) 756
Kirby Station Memphis, TN --(3) 1,148 10,337 -- 2,491
Lincoln on the Green Memphis, TN --(8) 1,498 20,483 -- 8,300
Park Estate Memphis, TN --(4) 178 1,141 -- 1,161
Reserve at Dexter Memphis, TN --(5) 1,260 16,043 -- 22
Lake I
River Trace I Memphis, TN 5,544 881 7,996 -- 847
River Trace II Memphis, TN 5,498 741 6,727 -- 323
<CAPTION>
GROSS AMOUNT
CARRIED AT
DECEMBER 31, LIFE USED
2000(11) TO COMPUTE
------------------------- DEPRECIATION
BUILDINGS IN LATEST
AND ACCUMULATED DATE OF INCOME
PROPERTY LAND FIXTURES TOTAL DEPRECIATION NET CONSTRUCTION STATEMENT(10)
- ---------------------- ------------ ---------- ---------- ------------ ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Paddock Club-- 1,840 17,275 19,115 (1,872) 17,243 1989/95 5-40
Columbia
The Fairways 910 8,767 9,677 (1,959) 7,718 1992 5-40
Highland Ridge 482 4,849 5,331 (935) 4,396 1984 5-40
Howell Commons 1,304 12,507 13,811 (1,801) 12,010 1986/88 5-40
Paddock Club-- 1,200 11,147 12,347 (1,224) 11,123 1996 5-40
Greenville
Park Haywood 360 5,669 6,029 (1,227) 4,802 1983 5-40
Spring Creek 597 6,089 6,686 (1,180) 5,506 1985 5-40
Runaway Bay 1,085 8,186 9,271 (1,708) 7,563 1988 5-40
Park Place 723 7,364 8,087 (869) 7,218 1987 5-40
Steeplechase 217 3,381 3,598 (967) 2,631 1986 5-40
Windridge 817 7,905 8,722 (871) 7,851 1984 5-40
Oaks, The 177 2,357 2,534 (639) 1,895 1978 5-40
Post House Jackson 443 5,967 6,410 (1,344) 5,066 1987 5-40
Post House North 324 5,310 5,634 (1,148) 4,486 1987 5-40
Williamsburg Village 523 5,295 5,818 (1,231) 4,587 1987 5-40
Woods at Post House 240 7,550 7,790 (2,230) 5,560 1997 5-40
Crossings 554 2,945 3,499 (989) 2,510 1973 5-40
Eastview 700 11,496 12,196 (3,387) 8,809 1973 5-40
Gleneagles 443 6,033 6,476 (2,385) 4,091 1975 5-40
Greenbrook 2,125 34,537 36,662 (8,310) 28,352 1980 5-40
Hickory Farm 561 5,976 6,537 (1,464) 5,073 1985 5-40
Kirby Station 1,148 12,828 13,976 (2,993) 10,983 1978 5-40
Lincoln on the Green 1,498 28,783 30,281 (5,181) 25,100 1988/98 5-40
Park Estate 178 2,302 2,480 (1,084) 1,396 1974 5-40
Reserve at Dexter 1,260 16,065 17,325 (643) 16,682 1999 5-40
Lake I
River Trace I 881 8,843 9,724 (1,039) 8,685 1981 5-40
River Trace II 741 7,050 7,791 (814) 6,977 1985 5-40
</TABLE>
F-25
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST ACQUISITION
--------------------- ---------------------
BUILDINGS BUILDINGS
AND AND
PROPERTY LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- --------------------- ------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Savannah Creek Memphis, TN --(3) 778 7,013 -- 807
Sutton Place Memphis, TN --(3) 894 8,053 -- 1,087
Paddock Club-- Murfreesboro, TN --(1) 915 14,774 -- 28
Murfreesboro
Brentwood Downs Nashville, TN --(1) 1,193 10,739 -- 897
Park at Hermitage Nashville, TN 7,540 1,524 14,800 -- 1,880
Balcones Woods Austin, TX 8,396 1,598 14,398 -- 1,819
Stassney Woods Austin, TX 4,470 1,621 7,501 -- 1,766
Travis Station Austin, TX 3,955 2,282 6,169 (1) 1,302
Celery Stalk Dallas, TX 8,460 1,463 13,165 (1) 2,488
Courtyards at Campbell Dallas, TX --(1) 988 8,893 -- 861
Deer Run Dallas, TX --(1) 1,252 11,271 -- 1,280
Lodge at Timberglen Dallas, TX 4,740 825 7,422 (1) 1,994
Westborough Crossing Katy, TX 3,958 677 6,091 (1) 1,050
Highwood Plano, TX --(4) 864 7,783 -- 842
Cypresswood Court Spring, TX 3,330 577 5,190 (1) 1,124
Green Tree Place Woodlands, TX 3,180 539 4,850 -- 942
Township Hampton, VA 10,800(5) 1,509 8,189 -- 811
-------- -------- ---------- ---- ----------
TOTAL COMPLETED
PROPERTIES $261,816 $117,067 $1,063,415 $764 $ 128,775
-------- -------- ---------- ---- ----------
CONSTRUCTION OF UNITS
IN LEASE-UP
Kenwood Club Katy, TX $ --(5) $ 1,002 $ 16,496 $ -- $ --
Reserve at Dexter Lake Memphis, TN --(5) 1,027 14,792 -- --
Phase II
Grand Reserve Lexington, KY --(5) 2,024 33,681 -- 100
Lexington
Grand View Nashville Nashville, TN --(5) 1,731 30,669 -- 100
-------- -------- ---------- ---- ----------
TOTAL CONSTRUCTION
OF UNITS IN
LEASE-UP $ -- $ 5,784 $ 95,638 $ -- $ 200
-------- -------- ---------- ---- ----------
<CAPTION>
GROSS AMOUNT
CARRIED AT
DECEMBER 31, LIFE USED
2000(11) TO COMPUTE
------------------------- DEPRECIATION
BUILDINGS IN LATEST
AND ACCUMULATED DATE OF INCOME
PROPERTY LAND FIXTURES TOTAL DEPRECIATION NET CONSTRUCTION STATEMENT(10)
- ---------------------- ------------ ---------- ---------- ------------ ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Savannah Creek 778 7,820 8,598 (1,300) 7,298 1989 5-40
Sutton Place 894 9,140 10,034 (1,553) 8,481 1991 5-40
Paddock Club-- 915 14,802 15,717 (650) 15,067 1999 5-40
Murfreesboro
Brentwood Downs 1,193 11,636 12,829 (2,771) 10,058 1986 5-40
Park at Hermitage 1,524 16,680 18,204 (3,477) 14,727 1987 5-40
Balcones Woods 1,598 16,217 17,815 (2,355) 15,460 1983 5-40
Stassney Woods 1,621 9,267 10,888 (1,941) 8,947 1985 5-40
Travis Station 2,281 7,471 9,752 (1,555) 8,197 1987 5-40
Celery Stalk 1,462 15,653 17,115 (3,677) 13,438 1978 5-40
Courtyards at Campbell 988 9,754 10,742 (843) 9,899 1986 5-40
Deer Run 1,252 12,551 13,803 (1,111) 12,692 1985 5-40
Lodge at Timberglen 824 9,416 10,240 (2,284) 7,956 1983 5-40
Westborough Crossing 676 7,141 7,817 (1,661) 6,156 1984 5-40
Highwood 864 8,625 9,489 (774) 8,715 1983 5-40
Cypresswood Court 576 6,314 6,890 (1,452) 5,438 1984 5-40
Green Tree Place 539 5,792 6,331 (1,349) 4,982 1984 5-40
Township 1,509 9,000 10,509 (1,724) 8,785 1987 5-40
-------- ---------- ---------- --------- ----------
TOTAL COMPLETED
PROPERTIES $117,831 $1,192,190 $1,310,021 $(182,489) $1,127,532
-------- ---------- ---------- --------- ----------
CONSTRUCTION OF UNITS
IN LEASE-UP
Kenwood Club $ 1,002 $ 16,496 $ 17,498 $ (363) 17,135 2000 5-40
Reserve at Dexter Lake 1,027 14,792 15,819 (168) 15,651 2000 5-40
Phase II
Grand Reserve 2,024 33,781 35,805 (553) 35,252 2000 5-40
Lexington
Grand View Nashville 1,731 30,769 32,500 (79) 32,421 N/A 5-40
-------- ---------- ---------- --------- ----------
TOTAL CONSTRUCTION
OF UNITS IN
LEASE-UP $ 5,784 $ 95,838 $ 101,622 $ (1,163) $ 100,459
-------- ---------- ---------- --------- ----------
</TABLE>
F-26
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST ACQUISITION
--------------------- ---------------------
BUILDINGS BUILDINGS
AND AND
PROPERTY LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- --------------------- ------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
CONSTRUCTION OF UNITS
IN PROCESS
Reserve at Dexter Lake Katy, TX $ --(5) $ 1,252 $ 1,192 $ -- $ --
Phase III
-------- -------- ---------- ---- ----------
TOTAL CONSTRUCTION
OF UNITS IN
PROCESS $ -- $ 1,252 $ 1,192 $ -- $ --
-------- -------- ---------- ---- ----------
TOTAL PROPERTIES $261,816 $124,103 $1,160,245 $764 $ 128,975
-------- -------- ---------- ---- ----------
LAND HELD FOR FUTURE VARIOUS $ -- $ 1,366 $ -- $ --
DEVELOPMENTS
COMMERCIAL PROPERTIES VARIOUS 300 2,769 -- 4,226
-------- -------- ---------- ---- ----------
TOTAL OTHER $ -- $ 300 $ 4,135 $ -- $ 4,226
-------- -------- ---------- ---- ----------
TOTAL REAL ESTATE
ASSETS $261,816 $124,403 $1,164,380 $764 $ 133,201
======== ======== ========== ==== ==========
<CAPTION>
GROSS AMOUNT
CARRIED AT
DECEMBER 31, LIFE USED
2000(11) TO COMPUTE
------------------------- DEPRECIATION
BUILDINGS IN LATEST
AND ACCUMULATED DATE OF INCOME
PROPERTY LAND FIXTURES TOTAL DEPRECIATION NET CONSTRUCTION STATEMENT(10)
- ---------------------- ------------ ---------- ---------- ------------ ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSTRUCTION OF UNITS
IN PROCESS
Reserve at Dexter Lake $ 1,252 $ 1,192 $ 2,444 $ -- $ 2,444 -- N/A
Phase III
-------- ---------- ---------- --------- ----------
TOTAL CONSTRUCTION
OF UNITS IN
PROCESS $ 1,252 $ 1,192 $ 2,444 $ -- $ 2,444
-------- ---------- ---------- --------- ----------
TOTAL PROPERTIES $124,867 $1,289,220 $1,414,087 $(183,652) $1,230,435
-------- ---------- ---------- --------- ----------
LAND HELD FOR FUTURE $ -- $ 1,366 $ 1,366 $ -- $ 1,366 N/A N/A
DEVELOPMENTS
COMMERCIAL PROPERTIES 300 6,995 7,295 (2,251) 5,044 Various 5-40
-------- ---------- ---------- --------- ----------
TOTAL OTHER $ 300 $ 8,361 $ 8,661 $ (2,251) $ 6,410
-------- ---------- ---------- --------- ----------
TOTAL REAL ESTATE
ASSETS $125,167 $1,297,581 $1,422,748 $(185,903) $1,236,845
======== ========== ========== ========= ==========
</TABLE>
- ------------------------------
(1) Encumbered by the FNMA Credit Line, with an outstanding balance of $83.1
million with a variable interest rate of 7.218%, $65 million with a fixed
rate of 7.712% and two interest rate swap agreements both for $25 million
at 7.383% and 7.360% at December 31, 2000.
(2) Encumbered by a $39.6 million mortgage with a maturity of July 1, 2001 and
an interest rate of 8.650%
(3) Encumbered by a $142 million bond with a maturity of March 3, 2003 and an
average interest rate of 6.376%
(4) Encumbered, along with one corporate property, by a $35.8 million mortgage
with a maturity of April 1, 2005 and an interest rate of 7.000%
(5) Encumbered by the AmSouth Credit Line, with an outstanding balance of $7.4
million with a variable interest rate of 8.750% at December 31, 2000.
(6) Encumbered by a $15.7 million mortgage securing a tax-exempt bond
amortizing over 25 years with an average interest rate of 5.750%
(7) Encumbered by a $13.7 million mortgage securing a tax-exempt bond
amortizing over 25 years with an average interest rate of 5.281%
(8) Encumbered by a $47.5 million mortgage with a maturity of December 15, 2004
and an interest rate of 7.040%
(9) Encumbered by a $9.6 million mortgage securing a tax-exempt bond amortizing
over 25 years with an average interest rate of 6.090%
(10) Depreciation is on a straight line basis over the estimated useful asset
life which ranges from 8 to 40 years for land improvements and buildings
and 5 years for furniture , fixtures and equipment.
(11) The aggregate cost for Federal income tax purposes was approximately
$1,416 million at December 31, 2000. The total gross amount of real estate
assets for GAAP purposes exceeds the aggregate cost for Federal income tax
purposes, principally due to purchase accounting adjustments recorded
under accounting principles generally accepted in the United States of
America.
F-27
<PAGE>
MID-AMERICA APARTMENT COMMUNITIES, INC.
SCHEDULE III
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
A summary of activity for real estate investments and accumulated
depreciation is as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
2000 1999 1998
---------- ---------- ----------
DOLLARS IN THOUSANDS
<S> <C> <C> <C>
Real estate investments:
Balance at beginning of year........................... $1,396,743 $1,434,733 $1,211,693
Acquisitions........................................... 24,358 -- 91,895
Improvements and development........................... 70,858 105,940 136,933
Disposition of real estate assets...................... (61,157) (152,015) (5,788)
Investment in and advances to real estate joint
venture.............................................. (424) 8,085 --
---------- ---------- ----------
Balance at end of year............................... $1,430,378 $1,396,743 $1,434,733
========== ========== ==========
Accumulated depreciation:
Balance at beginning of year........................... $ 146,611 $ 117,773 $ 76,989
Depreciation........................................... 50,985 48,687 41,556
Disposition of real estate assets...................... (13,944) (19,849) (772)
---------- ---------- ----------
Balance at end of year............................... $ 183,652 $ 146,611 $ 117,773
========== ========== ==========
</TABLE>
The Company's consolidated balance sheet at December 31, 2000 includes
accumulated depreciation of $2,251 in the caption "Commercial properties, net".
See accompanying independent auditors' report.
F-28
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>2
<FILENAME>a2043423zex-10_8.txt
<DESCRIPTION>EXHIBIT 10.8
<TEXT>
<PAGE>
SEVENTH AMENDMENT TO REVOLVING CREDIT AGREEMENT
This Seventh Amendment to Revolving Credit Agreement (the "Seventh
Amendment") is dated as of July 21, 2000, among Mid-America Apartment
Communities, Inc. ("MAAC"), Mid-America Apartments, L.P. ("Mid-America"), the
financial institutions listed on Schedule 1, as amended or supplemented from
time to time (the "Lenders"), AmSouth Bank, an Alabama banking corporation, as
Administrative Agent for the Lenders, its successors and assigns (in such
capacity, the "Administrative Agent"), and Commerzbank AG, New York and Grand
Cayman Branches, as Co-Arranger and Syndication Agent.
RECITALS
A. MAAC, Mid-America, certain Lenders and the Administrative Agent
entered into that certain Revolving Credit Agreement dated as of March 16, 1998,
executed in amendment and restatement of that certain Revolving Credit Agreement
among MAAC, Mid-America, the Administrative Agent and certain lenders, dated
November 20, 1997, as amended by First Amendment to Revolving Credit Agreement
dated as of May 15, 1998, by Second Amendment to Revolving Credit Agreement
dated as of October 1, 1998, by Third Amendment to Revolving Credit Agreement
dated as of November 12, 1998, by Fourth Amendment to Revolving Credit Agreement
dated as of March 31, 1999, by Fifth Amendment to Revolving Credit Agreement
dated as of May 28, 1999, and by Sixth Amendment to Revolving Credit Agreement
dated as of November 12, 1999 (as it may be amended further from time to time,
the "Agreement"). Unless otherwise defined in this Seventh Amendment,
capitalized terms shall the meaning assigned to them in the Agreement.
B. The Borrowers have requested that the Agreement be amended to
extend the Maturity Date and to modify certain other provisions of the
Agreement.
C. The parties to the Agreement desire to execute this Seventh
Amendment to evidence the extension of the Maturity Date and the other
modifications.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals, the parties
hereby agree as follows:
1. Section 1.1, The Loans, is hereby amended by deleting the amount of
"$150,000,000" and replacing it with the amount of "$85,000,000".
2. Section 1.3, Commitments, is hereby amended by deleting the amount
of "$150,000,000.00" and replacing it with the amount of
"$85,000,000.00".
3. Section 1.11(a), Letter of Credit Fees, is hereby amended by
replacing the percentage of one and fifty hundredths of one percent
(1.50%) with one and thirty-five
1
<PAGE>
hundredths of one percent (1.35%), to be effective for any letters
of credit issued or renewed after January 1, 2001. 1.
4. Section 1.11(c), Facility Fees, is hereby amended by adding to the
end of the current definition the following provision:
Effective for the quarter commencing on January 1, 2001, the
Facility Fee shall be determined based upon either (i) the then
applicable ratio of the average for the prior 6-month period of
advances under the Swing Line Facility and the Notes plus the sum of
all Letters of Credit outstanding as of the last day of the
applicable quarter to the sum of Development Project Costs as of the
last day of the applicable quarter and the value of all Stabilized
Properties as of said day (based on the Adjusted NOI of said
Stabilized Properties, as may be adjusted pursuant to subparagraphs
(d) and (e) of the definition of "Advance Rate" set forth in Section
11.1 hereof) or (ii) the then applicable ratio of Adjusted NOI for
all Mortgaged Properties (based on the prior three months
annualized) to Assumed Debt Service, as follows:
<TABLE>
<CAPTION>
Advances under Swing Line Facility plus
Notes plus Letters of Credit/Development Adjusted NOI/Assumed
Project Costs plus value of Stabilized Properties Debt Service Facility Fee
- ------------------------------------------------- ------------ ------------
<S> <C> <C> <C>
> =$57.5% but < 60% > =$1.5 but < 1.6 20 basis points
> =$55% but < 57.5% > =$1.6 but < 1.7 15 basis points
> =$52.5% but < 55% > =$1.7 but < 1.85 15 basis points
> =$50% but < 52.5% > =$1.85 but < 2.0 15 basis points
< 50% > =$2.0 15 basis points
</TABLE>
If the calculation of the two covenants used to determine the
Facility Fee after January 1, 2001, would result in two different
Facility Fees, the higher Facility Fee shall be deemed the
applicable Facility Fee.
5. Section 6.8, Other Financial Covenants, is hereby amended as
follows:
(a) Subsection (a) is hereby amended by replacing "sixty-two percent
(62%)" with "sixty-five percent (65%)".
(b) Subsection (c) is hereby amended by replacing "1.70" with
"1.65".
(c) Subsection (f) is hereby deleted in its entirety and replaced
with the following:
2
<PAGE>
(f) Through the quarter ended June 30, 2000, permit the
ratio of Adjusted NOI for all Mortgaged Properties
(based on the prior three (3) months, annualized) to
Assumed Debt Service to be less than 1.25 to 1.0. For
the quarter ended September 30, 2000, permit such ratio
to be less than 1.35 to 1.0. From the quarter ended
December 31, 2000, through the quarter ended September
30, 2001, permit such ratio to be less than 1.50 to 1.0.
Thereafter, permit such ratio to be less than 1.75 to
1.0.
(d) Subsection (h) is hereby deleted in its entirety and replaced
with the following:
(h) Through the quarter ended September 30, 2001, fail to
maintain as of the end of each fiscal quarter a ratio of
Adjusted NOI from Stabilized Properties only (based on
the prior three (3) months, annualized) to Assumed Debt
Service for the same period (utilizing a 30-year assumed
amortization period instead of a 25-year period) of at
least 1.25 to 1.0. Thereafter, permit such ratio to be
less than 1.50 to 1.0.
4. Section 11.1, Definitions, is hereby amended as follows:
(a) The definition of "Advance Rate" is hereby amended by replacing
the current Advance Rate for Development Projects of "50%" (in
subparagraph (c) thereof) with the new Advance Rate of "40%".
Notwithstanding the preceding sentence, the Advance Rate for the
Katy, Texas property, until it becomes a Stabilized Property, shall
be 37%.
(b) The definition of "Borrowing Base" is hereby amended by
replacing "$41,250,000" (in both places where such figure appears)
with "$30,000,000".
(c) The definition of "Margin" is hereby deleted in its entirety and
replaced with the following:
Margin, through December 31, 2000, shall be determined based
upon the then applicable ratio of Total Liabilities to Total Market
Value of Assets, as follows:
Total Liabilities/Total
Market Value of Assets LIBOR Margin
- ---------------------- ------------
< 55% 145 basis points
>= 55% but < 60% 165 basis points
>=60% but < 62.50% 175 basis points
>=62.50% 185 basis points
3
<PAGE>
Effective January 1, 2001, Margin shall be determined based
upon either (i) the then applicable ratio of the average for the
prior 6-month period of advances under the Swing Line Facility and
the Notes plus the sum of all Letters of Credit outstanding as of
the last day of the applicable quarter to the sum of Development
Project Costs as of the last day of the applicable quarter and the
value of all Stabilized Properties as of said day (based on the
Adjusted NOI of said Stabilized Properties, as may be adjusted
pursuant to subparagraphs (d) and (e) of the definition of "Advance
Rate" set forth Section 11.1 hereof) or (ii) the then applicable
ratio of Adjusted NOI for all Mortgaged Properties (based on the
prior three months annualized) to Assumed Debt Service, as follows:
<TABLE>
<CAPTION>
Advances under Swing Line Facility and
Notes plus Letters of Credit/Development Adjusted NOI/Assumed
Project Costs plus value of Stabilized Properties Debt Service LIBOR Margin
- ------------------------------------------------- ------------ ------------
<S> <C> <C> <C>
> =$57.5% but < 60% > =$1.5 but < 1.6 175 basis points
> =$55% but < 57.5% > =$1.6 but < 1.7 165 basis points
> =$52.5% but < 55% > =$1.7 but < 1.85 155 basis points
> =$50% but < 52.5% > =$1.85 but < 2.0 145 basis points
< 50% > =$2.0 135 basis points
</TABLE>
If the calculation of the two covenants used to determine the Margin
after January 1, 2001, would result in two different Margins, the
higher Margin shall be deemed the applicable Margin.
(d) The definition of "Maturity Date" is hereby amended by replacing
"November 24, 2001" with "May 23, 2002".
5. Fees. In consideration of this Seventh Amendment, the Borrowers
shall pay to the Lenders on the date hereof an extension fee equal
to 12.5 basis points of the Commitments ($106,250.00). An additional
extension fee shall be payable by the Borrowers to the
Administrative Agent on the date hereof pursuant to a separate
letter agreement between the Administrative Agent and the Borrowers.
The Borrowers shall pay the Administrative Agent such other fees as
required by the Administrative Agent in a separate letter agreement
between the Administrative Agent and the Borrowers.
6. Schedule 1 is hereby deleted in its entirety and replaced with
Schedule 1 attached hereto and made a part hereof.
7. Schedule 2 is hereby deleted in its entirety and replaced with
Schedule 2 attached hereto and made a part hereof.
4
<PAGE>
8. Schedule 3 is hereby deleted in its entirety and replaced with
Schedule 3 attached hereto and made a part hereof.
9. Schedule 4 is hereby deleted in its entirety and replaced with
Schedule 4 attached hereto and made a part hereof.
10. Exhibit J is hereby amended by replacing the Debt Covenant Worksheet
for Compliance Certificate with the Worksheet attached hereto and
made a part hereof.
11. This Seventh Amendment shall not be effective until the following
conditions have been fulfilled:
a. The Administrative Agent has received a fully executed
original of this Seventh Amendment;
b. The Administrative Agent has received an original Note
executed to the order of each Lender, in the principal amount
of such Lender's commitment and evidencing such Lender's
Loans;
c. The fees required herein have been received by the
Administrative Agent;
d. The Administrative Agent has received appropriate resolutions
of the Borrowers and the Subsidiaries authorizing the
transactions contemplated herein;
e. The Administrative Agent has received an opinion of counsel to
each of the Borrowers, which opinion shall be satisfactory to
the Administrative Agent in all respects; and
f. The Administrative Agent has received a confirmation from each
Subsidiary that is a Mortgagor that its Subsidiary Guaranty is
in full force and effect.
12. The parties hereto acknowledge that since the inception of the
Loans, AmSouth Bank has served as the Administrative Agent for the
Lenders and that in such capacity, AmSouth Bank has also served as
the sole Arranger and the Syndication Agent under the Agreement. The
Lenders, the Administrative Agent and the Borrowers hereby appoint
Commerzbank AG, New York and Grand Cayman Branches as a Co-Arranger
and the Syndication Agent under the Agreement (the "Co-Arranger").
The parties, specifically including the Co-Arranger, acknowledge
that the Co-Arranger shall not receive any additional fees as a
Co-Arranger and the Syndication Agent under the Agreement.
5
<PAGE>
Except as expressly amended hereby, the Agreement shall remain in
full force and effect in accordance with its terms.
Each Borrower represents and warrants that no Event of Default has
occurred and is continuing under the Agreement, nor does any event that upon
notice or lapse of time or both would constitute such an Event of Default exist.
IN WITNESS WHEREOF, the parties have executed this Seventh Amendment
as of the date first set forth above.
Signature page to
Seventh Amendment to Revolving Credit Agreement
MID-AMERICA APARTMENT
COMMUNITIES, INC.
By _____________________________________
Name____________________________________
Title___________________________________
<PAGE>
Signature page to
Seventh Amendment to Revolving Credit Agreement
MID-AMERICA APARTMENTS, L.P.
By Mid-America Apartment
Communities, Inc.
Its Sole General Partner
By ___________________________________
Name__________________________________
Title_________________________________
<PAGE>
Signature page to
Seventh Amendment to Revolving Credit Agreement
AMSOUTH BANK,
in its individual capacity as Lender
and as Administrative Agent
By _____________________________________
Name____________________________________
Title___________________________________
<PAGE>
Signature page to
Seventh Amendment to Revolving Credit Agreement
HIBERNIA NATIONAL BANK
By _____________________________________
Name____________________________________
Title___________________________________
<PAGE>
Signature page to
Seventh Amendment to Revolving Credit Agreement
COMMERZBANK AG,
NEW YORK AND GRAND CAYMAN
BRANCHES, in its individual capacity as
Lender and as Co-Arranger and
Syndication Agent
By _____________________________________
Name____________________________________
Title___________________________________
By _____________________________________
Name____________________________________
Title___________________________________
<PAGE>
Signature page to
Seventh Amendment to Revolving Credit Agreement
FIRST TENNESSEE BANK, N.A.
By _____________________________________
Name____________________________________
Title___________________________________
<PAGE>
Signature page to
Seventh Amendment to Revolving Credit Agreement
NATIONAL BANK OF COMMERCE OF
BIRMINGHAM
By _____________________________________
Name____________________________________
Title___________________________________
<PAGE>
SCHEDULE 1
List of Lenders Percentage
- --------------- ----------
AmSouth Bank 29.41%
Hibernia National Bank 10.0%
National Bank of Commerce 10.0%
of Birmingham
First Tennessee Bank, N.A 23.53%
Commerzbank AG, New York
and Grand Cayman Branches 27.06%
=====
TOTAL 100.0%
<PAGE>
SCHEDULE 2
[Current List of Properties]
Availability
Property Advance Rate as of 7/21/00
- -------- ------------ -------------
I. Stabilized Properties:
1. Reflection Pointe (MS) 60% $ 7,048,503
2. Anatole (FL) 60% 5,427,657
3. Township (VA) 60% 7,741,459
4. Sterling Ridge (GA) 60% 4,582,333
5. Courtyards at Campbell (TX) 60% 6,002,703
6. Deer Run (TX) 60% 5,665,952
7. Reserve at Dexter I (TN) 60% 9,630,000
8. Paddock Club Gainesville (FL) 60% 10,440,000
9. Paddock Club Panama City (FL) 60% 10,740,000
II. Development Projects:
1. Grande View Nashville (TN) 40% of cost $ 9,488,006
2. Grand Reserve Lexington (KY) 40% of cost 11,613,890
3. Reserve at Dexter II (TN) 40% of cost 5,708,175
4. Kenwood Club Katy (TX) 37% of cost 5,942,089
<PAGE>
SCHEDULE 3
[Notice Addresses]
AmSouth Bank
Real Estate Department
9th Floor
AmSouth/Sonat Building
1900 5th Avenue North
Birmingham, Alabama 35203
Attention: Mr. Lawrence B. Clark
Hibernia National Bank
313 Carondolet Street
Suite 1400
New Orleans, Louisiana 70130
Attn: Ms. Yancey Jones
First Tennessee Bank, N.A.
1st Floor-Real Estate
165 Madison Avenue
Memphis, Tennessee 38103
Attn: Ms. Jennifer Andrews
Commerzbank AG, New York
and Grand Cayman Branches
Two World Financial Center
225 Liberty Street, 34th Floor
New York, New York 10281
Attn: Mr. Marcus Perry
National Bank of Commerce of Birmingham
1927 1st Avenue North
Birmingham, AL 35203
Attn: Mr. J. Cotten Volman
Mid-America Apartment Communities, Inc.
6584 Poplar
Suite 340
Memphis, Tennessee 38138
Attention: Mr. Simon R.C. Wadsworth
Mid-America Apartments, L.P.
6584 Poplar
Suite 340
Memphis, Tennessee 38138
Attention: Mr. Simon R.C. Wadsworth
<PAGE>
SCHEDULE 4
[Subsidiaries & Ownership]
Mid-America Apartments of Texas, L.P., a Texas limited partnership
<PAGE>
Mid-America Apartment Communities
Revolving Credit Agreement
Debt Covenant Worksheet
for Compliance Certificate
================================================================================
Quarter Quarter
Ending Ending Annualized
------ ------ ----------
- --------------------------------------------------------------------------------
Total Liabilities
- --------------------------------------------------------------------------------
EBITDA-MAA
- --------------------------------------------------------------------------------
EBITDA-FDC
- --------------------------------------------------------------------------------
EBITDA-Combined
- --------------------------------------------------------------------------------
Total Market Value
- --------------------------------------------------------------------------------
Total Liabilities/Total Market Value
- --------------------------------------------------------------------------------
Total Development and JV Investment
As % of Total Market Value
- --------------------------------------------------------------------------------
Total Annualized Fixed Charges
- --------------------------------------------------------------------------------
Preferred Dividend
- --------------------------------------------------------------------------------
Principal (from below)
- --------------------------------------------------------------------------------
Interest
- --------------------------------------------------------------------------------
Total Annualized Fixed Charges
- --------------------------------------------------------------------------------
EBITDA/ANNUALIZED FIXED
CHARGES:
- --------------------------------------------------------------------------------
Principal
- --------------------------------------------------------------------------------
From Mac Schedule
- --------------------------------------------------------------------------------
Westside Creek II
- --------------------------------------------------------------------------------
FDC
- --------------------------------------------------------------------------------
Total Principal
================================================================================
Total Annualized Debt Service:
- --------------------------------------------------------------------------------
Principal
- --------------------------------------------------------------------------------
Interest
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Total Debt Service
- --------------------------------------------------------------------------------
EBITDA/DEBT SERVICE
- --------------------------------------------------------------------------------
Tangible Net Worth
- --------------------------------------------------------------------------------
Equity
- --------------------------------------------------------------------------------
Less Intangibles
- --------------------------------------------------------------------------------
Tangible Net Worth
- --------------------------------------------------------------------------------
AmSouth Properties only
- --------------------------------------------------------------------------------
Adjusted NOI of Mortgaged Properties
- --------------------------------------------------------------------------------
Assumed Debt Service
- --------------------------------------------------------------------------------
Adjusted NOI/Assumed Debt Service
- --------------------------------------------------------------------------------
Dividend Payments
- --------------------------------------------------------------------------------
Common Dividend Payment
- --------------------------------------------------------------------------------
Preferred Divident Payment
- --------------------------------------------------------------------------------
Total Dividend Payment
- --------------------------------------------------------------------------------
FFO
- --------------------------------------------------------------------------------
FFO + Preferred Dividend
- --------------------------------------------------------------------------------
Total Dividends/FFO+Preferred
================================================================================
<PAGE>
<TABLE>
<CAPTION>
=========================================================================================
[Quarter]
- -----------------------------------------------------------------------------------------
<S> <C> <C>
> 2.00:1.0 Debt Service Ratio
- -----------------------------------------------------------------------------------------
> 1.65:1.0 Fixed Charge Ratio
- -----------------------------------------------------------------------------------------
> 1.25:1.0 (through 6/30/00) Adjusted NOI Ratio
- -----------------------------------------------------------------------------------------
> 1.35:1.0 (quarter ended Adjusted NOI Ratio
9/30/00)
- -----------------------------------------------------------------------------------------
> 1.50:1.0 (quarter ended 12/31/00 through Adjusted NOI Ratio
quarter ended 9/30/01)
- -----------------------------------------------------------------------------------------
> 1.75:1.0 thereafter Adjusted NOI Ratio
- -----------------------------------------------------------------------------------------
> $550MM with accumulated depreciation Net Worth
added back
- -----------------------------------------------------------------------------------------
< 7.5% MVA Development & Construction Debt
- -----------------------------------------------------------------------------------------
< 90% FFO Dividend payout
- -----------------------------------------------------------------------------------------
< 65% Debt/Total Market Value of Assets
- -----------------------------------------------------------------------------------------
< 10% Development Project Costs/
Total Market Value of Assets
- -----------------------------------------------------------------------------------------
> 1.25:1.0 (through 9/30/01) Adjusted NOI Ratio
(Stabilized Properties)
- -----------------------------------------------------------------------------------------
> 1.50:1.0 thereafter Adjusted NOI Ratio
(Stabilized Properties)
=========================================================================================
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21.1
<SEQUENCE>3
<FILENAME>a2043423zex-21_1.txt
<DESCRIPTION>EXHIBIT 21.1
<TEXT>
<PAGE>
Exhibit 21.1
Listing of subsidiaries of Mid-America Apartment Communities, Inc.
America First Austin Reit, Inc
America First Florida Reit Inc
America First Sourth Carolina Reit inc
America First Tennessee Reit Inc
America First Texas Reit Inc
Fairways-Columbia LP
Fountain Lakes Apartments Ltd.
Hidden Lake Ltd.
Jackson LP
MAAC of Duval, LP
MAAC,Tanglewood LP
MAACOD, Inc.
MAACP, Inc.
MAC II of Delaware, Inc
MAC of Austin Inc
MAC of Delaware, Inc
MAC of Huntington Chase LLC
Madison LP
Mid-America Apartments of Austin LP
Mid-America Apartments of Birmingham, LP
Mid-America Apartments of Duval LP
Mid-America Apartments of Little Rock, LP
Mid-America Apartments of Savannah, LP
Mid-America Apartments of St. Simons, LP
Mid-America Apartments of Texas LP
Mid-America Apartments Runaway Bay LP
Mid-America Apartments Stassney Woods LP
Mid-America Apartments Travis Station LP
Mid-America Apartments, LP
Mid-America Capital Partners, L.P.
Mid-America Finance, Inc.
Mid-America Holdings LLC
Mid-America Mortgage Trust 1998-1
Paddock Club Florence, A Limited Partnership
Paddock Club Greenville, A Limited Partnership
Paddock Club Huntsville, A Limited Partnership
Paddock Club Jacksonville, A Limited Partnership
Paddock Club Jacksonville, Phase II, A Limited Partnership
Paddock Club Lakeland, A Limited Partnership
Paddock Club Tallahassee, A Limited Partnership
Paddock Park Apartments Ltd.
Park Walk Apartments Ltd.
River Hills Partnership
River Trace Apartments Ltd.
River Trace Apartments Phase II Ltd.
The Vistas Ltd.
The Woods Post House LP
Three Oaks Apartments Phase II Ltd.
Three Oaks Ltd.
Towne Lake Hills Apartments, A Limited Partnership
Westbury Creek Ltd.
Westbury Springs Ltd.
Whispering Pines Ltd.
Whispering Pines Phase II, Ltd.
<PAGE>
Listing of subsidiaries of Mid-America Apartment Communities, Inc.
Wildwood Apartments Ltd
Wildwood Apartments Phase II Ltd.
Windridge Apartments Ltd.
Woodridge Joint Venture LP
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>4
<FILENAME>a2043423zex-23_1.txt
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<PAGE>
Exhibit 23.1
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors and Shareholders
Mid-America Apartment Communities, Inc.:
We consent to incorporation by reference in the registration statement (No.
33-941416) on Form S-8 and the registrations statements (Nos. 333-71315,
333-60285 and, 333-570309) on Form S-3 of Mid-America Apartment Communities,
Inc., of our report dated February 23, 2001, relating to the consolidated
balance sheets of Mid-America Apartment Communities, Inc. as of December 31,
2000 and 1999, and the related consolidated statements of operations,
shareholders' equity and cash flows for each of the years in the three-year
period ended December 31, 2000, and the related schedule, which report appears
in the December 31, 2000 Annual Report on Form 10-K of Mid-America Apartment
Communities, Inc.
KPMG LLP
Memphis, Tennessee
March 27, 2001
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----