10-K 1 d14130.htm

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003

Commission File Number: 1-12762

MID-AMERICA APARTMENT COMMUNITIES, INC.
(Exact Name of Registrant as Specified in Charter)

TENNESSEE		62-1543819
(State of Incorporation)		(I.R.S. Employer Identification Number)

6584 POPLAR AVENUE, SUITE 300
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:

Title of Each Class		Name of Exchange on Which Registered

Common Stock, par value $.01 per share		New York Stock Exchange
Series F Cumulative Redeemable Preferred Stock, par value $.01 per share		New York Stock Exchange
Series H Cumulative Redeemable Preferred Stock, par value $.01 per share		New York Stock Exchange

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.
	x Yes o 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.
	o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).	x Yes o No

The aggregate market value of the voting stock held by non-affiliates of the Registrant, (based on the closing price of such stock ($27.01 per share), as reported on the New York Stock Exchange, on June 30, 2003) was approximately $448,600,000 (for purposes of this calculation, directors and executive officers are treated as affiliates).

The number of shares of the Registrant’s common stock outstanding as of February 29, 2004, was 20,086,319 shares, of which approximately 1,333,541 were held by affiliates.

The Registrant’s definitive proxy statement in connection with the 2004 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.

MID-AMERICA APARTMENT COMMUNITIES, INC.

TABLE OF CONTENTS

Item		Page

	PART I

1.	Business	2
2.	Properties	8
3.	Legal Proceedings	12
4.	Submission of Matters to Vote of Security Holders	12

	PART II

5.	Market for Registrant’s Common Equity and Related Stockholder Matters	12
6.	Selected Financial Data	13
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
7A.	Quantitative and Qualitative Disclosures About Market Risk	29
8.	Financial Statements and Supplementary Data	30
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	30
9A.	Controls and Procedures	30

	PART III

10.	Directors and Executive Officers of the Registrant	31
11.	Executive Compensation	31
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	31
13.	Certain Relationships and Related Transactions	31
14.	Principal Accountant Fees and Services	32

	PART IV

15.	Exhibits, Financial Statement Schedules and Reports on Form 8-K	32

PART I

ITEM 1. BUSINESS

WEBSITE ACCESS OF REGISTRANT’S REPORTS

A copy of this Annual Report on Form 10-K, along with the Company’s Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to the aforementioned filings, are available on the Company’s website free of charge. The filings can be found on the Investors’ page under SEC Filings. The Company’s website also contains its Corporate Governance Guidelines, Code of Ethics Policy and the charters of the committees of the Board of Directors. These items can be found on the Investors’ page under Corporate Governance. The Company’s website address is www.maac.net. Reference to the Company’s website does not constitute incorporation by reference of the information contained on the site and should not be considered part of this document. All of the aforementioned materials may also be obtained free of charge by contacting the Investor Relations Department at Mid-America Apartment Communities, Inc., 6584 Poplar Avenue, Suite 300, Memphis, TN 38138.

OVERVIEW OF THE COMPANY

Founded in 1994, Mid-America Apartment Communities, Inc. (the “Company”) is a Memphis, Tennessee-based self-administered and self-managed umbrella partnership real estate investment trust (“REIT”) that focuses on acquiring, owning and operating apartment communities. Between 1994 and December 31, 2003, the Company increased the number of properties of which it is the sole owner from 22 to 124 properties with 34,686 apartment units, representing an increase of 29,106 apartment units. The Company is also a participant in a joint venture with Crow Holdings, Mid-America CH/Realty LP (“CH/Realty”). CH/Realty owned three properties with 1,048 apartment units at December 31, 2003. The Company retains a 33.33% ownership interest in the joint venture and is paid a management fee of 4% of revenues from the apartment communities owned by the joint venture.

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 201,502 common units of partnership interest (“Common Units”) comprising a 1% general partnership interest in the Operating Partnership as of December 31, 2003. 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, 2003, held 17,010,015 Common Units, or 84.42% of all outstanding Common Units.

The Company employed 1,069 full time and 82 part time employees at December 31, 2003.

OPERATING PHILOSOPHY

The Company’s primary objective is to maintain a stable cash flow that will fund its dividend through all parts of the real estate investment cycle. The Company focuses on growing through its existing investments and, when accretive to cash flow and shareholder value, through external investments.

INVESTMENT FOCUS. The Company’s primary investment focus is on apartment communities in the Southeastern United States and Texas. Between 1994 and 1997, the Company grew largely through the acquisition and redevelopment of existing communities. Between 1998 and 2000, its concentration was on development of new communities.

The Company’s present focus is on the acquisition of properties that it believes can be repositioned with appropriate use of capital and its operating management skills. The Company is also interested in increasing its investment in properties in larger and faster growing markets within its current market area to balance its portfolio between small, middle and large-tier markets, and intends to do this through acquiring apartment communities with the potential for above average growth and return through investments in joint ventures and in direct purchases. The Company will continue its established process of selling mature assets, and will 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 civic and industry trade organizations for the high quality of its properties, landscaping, and property management will lead to higher rents and profitability. The Company periodically sells assets selectively in order to ensure that its portfolio consists only of high quality, well-located assets within its market area.

DIVERSIFIED MARKET FOCUS. The Company believes the stability of its cash flow is enhanced and it will generate higher risk adjusted cash flow returns with lower volatility through its diversified investments over large, middle and small-tier markets throughout the southeastern United States 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. Property managers and regional managers are 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 a number of training programs to produce highly competent property managers, leasing consultants and service technicians who work on-site at the Company’s apartment communities (the “Communities”) to generate the highest possible income from the Company’s assets.

DECENTRALIZED OPERATIONAL STRUCTURE. The Company operates in a decentralized manner. Management believes that its decentralized operating structure capitalizes on specific market knowledge, provides greater personal accountability than a centralized structure and is beneficial in the acquisition, redevelopment and development processes. To support this decentralized operational structure, senior and executive management are proactively involved in supporting and reviewing property operations through extensive asset management programs and frequent on-site visitations. The Company is currently in the process of installing a new web-based property management system which increases the amount of information shared between senior and executive management and the properties, and does so on a real time basis, improving the support provided to the operating environment.

PROACTIVE BALANCE SHEET AND PORTFOLIO MANAGEMENT

The Company focuses on maximizing the return on assets and adding to the intrinsic underlying value of each share of the Company’s common stock, routinely reviewing each asset based on its determined value and selling 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 existing and new apartment communities, debt retirement, and repurchases or issuances of shares of the Company’s preferred and common stock.

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 managing 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 during peak rental demand months;

•	offering new services to residents, including telephone, cable, and internet access, on which the Company 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;

•	analyzing individual asset productivity performances to identify best practices and improvement areas;

•	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;

•	selling or exchanging underperforming assets and repurchasing or issuing shares of common and preferred stock when cost of capital and asset values permit;

•	allocating additional capital where the investment will generate the highest returns for the Company; and

•	developing new ancillary income programs aimed at delivering new consumer services and products to its residents while generating fee income for the Company.

JOINT VENTURE STRATEGY. One of the Company’s strategies is to co-invest with private capital partners in joint venture opportunities which enable it to obtain a higher return on its investment through management fees, which leverages the Company’s recognized skills in acquiring, repositioning, redeveloping and managing multifamily investments. In addition, the joint venture investment strategy provides a platform for creating more capital diversification and lower investment risk for the Company. The Company is actively seeking attractively priced opportunities in which it and its joint venture partner

can invest. The Company established a joint venture in 2002 with Crow Holdings and established a second joint venture with Crow Holdings in early 2004.

DISPOSITION STRATEGY. The Company is committed to the selective disposition of mature assets, defined as those apartment communities that no longer meet the Company’s 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.

On July 10, 2003, the Company sold the Crossings apartments, an 80-unit apartment community in Memphis, Tennessee, that was built in 1973.

ACQUISITION STRATEGY. One of the Company’s growth strategies is to acquire and redevelop apartment communities that meet its investment criteria and focus as discussed above. The Company has extensive experience and research-based skills in the acquisition and repositioning of multifamily properties. In addition, the Company will acquire newly built and developed properties that can be purchased on a favorable pricing basis. The Company will continue to evaluate opportunities that arise, and will utilize this strategy to increase the share of its assets in faster growing and larger markets in the Southeast and Texas.

On January 20, 2003, CH/Realty acquired The Preserve at Arbor Lakes, a 284-unit apartment community in Jacksonville, Florida.

On February 7, 2003, the Company acquired the Green Oaks apartments, a 300-unit apartment community located in Grand Prairie, Texas. On May 1, 2003 the Company transferred the Green Oaks apartments to CH/Realty.

On May 6, 2003, the Company acquired the Jefferson Pines apartments, a 308-unit apartment community located in Houston, Texas.

On August 25, 2003, the Company purchased the limited partnership interest held by Blackstone Real Estate Advisors (“Blackstone”) in BRE/MAAC Associates, LLC (“BreMaac”), a joint venture between the Company and Blackstone which owned 10 properties containing 2,793 apartment units.

On September 30, 2003, the Company acquired Los Rios Park apartments, a 498-unit community located in Plano, Texas.

On December 3, 2003, the Company acquired the Lighthouse Court apartments, a 501-unit community located in Jacksonville, Florida.

DEVELOPMENT STRATEGY. In late 1997, the Company’s emphasis shifted from acquisitions to development because of its belief that under then-current market conditions, such development would generate higher quality assets and higher long-term investment returns. In 2002, the Company completed a $300 million construction program of high quality apartments in several markets. This represents the completion of the development program 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 the Company’s profitability targets over the next few years.

As of December 31, 2003, the Company had no properties in development. The Company periodically evaluates opportunities for profitable future development investments.

COMMON AND PREFERRED STOCK.

The Company continuously reviews opportunities for lowering its cost of capital, and increasing value per share. The Company evaluates opportunities to repurchase stock when it believes that its stock price is below the value of its assets and accordingly repurchased common stock, funded by asset sales, between 1999 and 2001. The Company also looks for opportunities where it can acquire or develop communities, selectively funded by stock sales, when it will add to shareholder value and the investment return is projected to substantially exceed its cost of capital. The Company also opportunistically seeks to lower its cost of capital through refinancing preferred stock and debt such as it did in 2003.

On July 10, 2003, in an underwritten public offering, the Company sold 5,600,000 shares of its 8.30% Series H Cumulative Redeemable Preferred Stock (“Series H”) at $25 per share less an underwriting discount of $0.7875 per share. The net proceeds of the sale were applied to the redemption of all the issued and outstanding shares of the Company’s 9.5% Series A Cumulative Preferred Stock and 9 3/8% Series C Cumulative Redeemable Preferred Stock as well as 1,600,000 shares of the 1,938,830 issued and outstanding shares of the Company’s 8 7/8% Series B Cumulative Preferred Stock (“Series B”) on August 12, 2003.

On July 16, 2003, the underwriters of the Company’s Series H offering exercised an option to purchase an additional 525,000 shares of the Series H preferred stock for $25 per share less the underwriting discount, and on August 4, 2003, the underwriters exercised an option to purchase the remaining additional 75,000 shares of the Series H preferred stock for $25 per share less the underwriting discount. The net proceeds were used to redeem the remaining issued and outstanding shares of the Series B preferred stock on August 18, 2003.

On August 22, 2003, the Company sold 700,000 shares of its common stock to certain advisory clients of Cohen & Steers Capital Management, Inc. The stock was sold at a price of $28.40 per share. The $19,870,000 in net proceeds from the sale were used to partially fund the purchase of the BreMaac limited partnership interest held by Blackstone.

On September 19, 2003, the Company sold 665,000 shares of its common stock to certain advisory clients of Cohen & Steers Capital Management, Inc. and to Scudder RREEF Real Estate Fund II, Inc. The stock was sold at a price of $29.36 per share. The $19,500,000 in net proceeds from the sale were used to partially fund the purchase the Los Rios Park apartments.

On December 2, 2003, the Company sold 400,000 shares of its common stock to RREEF America, L.L.C. on behalf of itself and Scudder RREEF Real Estate Fund II, Inc. The stock was sold at a price of $30.00 per share. The $11,996,000 in net proceeds from the sale were used to partially fund the acquisition of the Lighthouse Court apartments.

SHARE REPURCHASE PROGRAM

In 1999, the Company’s Board of Directors approved an increase in the number of shares of the Company’s common stock authorized to be repurchased to 4 million shares. As of December 31, 2003 the Company had repurchased a total of approximately 1.86 million shares (8% of the shares of common stock and Common Units outstanding as of the beginning of the repurchase program). 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. No shares were repurchased during 2002 or 2003 under this plan.

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 owners of competing apartment communities may have greater resources than the Company, and the managers of these communities 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.

Apartment communities compete on the basis of monthly rent, discounts, and facilities offered such as apartment size and amenities, and apartment community amenities, including recreational facilities, resident services, and physical property condition. The Company makes capital improvements to both the Communities and individual apartments on a regular basis in order to maintain a competitive position in each individual market.

ENVIRONMENTAL MATTERS

As part of the acquisition process, the Company generally obtains environmental studies on all of its Communities from various outside environmental engineering firms. The purpose of these studies is to identify potential sources of contamination at the Communities and to assess the status of environmental regulatory compliance. These studies generally include historical reviews of the Communities, reviews of certain public records, preliminary investigations of the sites and surrounding properties, visual inspection for the presence of asbestos, PCBs and underground storage tanks and the preparation and issuance of written reports. Depending on the results of these studies, more invasive procedures, such as soil sampling or ground water analysis, will be performed to investigate potential sources of contamination. These studies must be satisfactorily completed before the Company takes ownership of an acquisition property, however, no assurance can be given that the studies identify all significant environmental problems.

Under various federal, state and local laws and regulations, an owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances on properties. Such laws often impose such liability without regard to whether the owner caused or knew of the presence of hazardous or toxic substances and whether or not the storage of such substances was in violation of a resident’s lease. Furthermore, the cost of remediation and removal of such substances may be substantial, and the presence of such substances, or the failure to promptly remediate such substances, may adversely affect the owner’s ability to sell such real estate or to borrow using such real estate as collateral.

The Company is aware of environmental concerns specifically relating to potential issues resulting from mold in residential properties and has in place an active management and preventive maintenance program that includes procedures specifically related to mold. The Company has established a policy requiring residents to sign a mold addendum to lease. The Company has also purchased a $2 million insurance policy that covers remediation and exposure to mold. The current policy expires in 2007, but is renewable at that time. The Company, therefore, believes that its exposure to this issue is limited and controlled.

The environmental studies received by the Company have not revealed any material environmental liabilities. The Company is not aware of any existing conditions that would currently be considered an environmental liability. Nevertheless, it is possible that the studies do not reveal all environmental liabilities or that there are material environmental liabilities of which the Company is unaware. Moreover, no assurance can be given concerning future laws, ordinances or regulations, or the potential introduction of hazardous or toxic substances by neighboring properties or residents.

The Company believes that its Communities are in compliance in all material respects with all applicable federal, state and local ordinances and regulations regarding hazardous or toxic substances and other environmental matters.

RECENT DEVELOPMENTS

DISTRIBUTION. In January 2004, the Company announced a quarterly distribution to common shareholders of $.585 per share, paid on January 31, 2004.

ACQUISITIONS. On January 15, 2004, the Company established a second joint venture with Crow Holdings, Mid-America CH/Realty II LP (“CH/Realty II”) which acquired the Jefferson at Timberglen apartments, a 522-unit community in Dallas, Texas.

On January 23, 2004, the Company acquired the Monthaven Park Apartments, a 456-unit community located in Hendersonville, Tennessee.

ITEM 2. PROPERTIES

The Company and its joint venture seek to acquire apartment communities located in the southeastern United States and Texas that are primarily appealing to middle income residents with the potential for above average growth and return on investment. Approximately 75% 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 rents.

The following table sets forth certain historical information for the Communities the Company owned or maintained an ownership interest in, including the 3 properties containing 1,048 apartment units owned by the Company’s joint venture, at December 31, 2003:

Property	Location	Year Completed	Year Management Commenced	Number of Units	Approximate Rentable Area (Square Footage)	Average Unit Size (Square Footage)	Monthly Rent per Unit at December 31, 2003		Average Occupancy Percent at December 31, 2003		Encumbrances at December 31, 2003

											Mortgage Principal (000’s)			Interest Rate		Maturity Date

Owned:
Eagle Ridge	Birmingham, AL	1986	1998	200	181,400	907	$	647	97.00	%	$	-	(1)		(1)		(1)
Abbington Place	Huntsville, AL	1987	1998	152	162,792	1,071	$	586	92.11	%	$	-	(1)		(1)		(1)
Paddock Club - Huntsville	Huntsville, AL	1989/98	1997	392	414,736	1,058	$	660	92.35	%	$	-	(1)		(1)		(1)
Paddock Club - Montgomery	Montgomery, AL	1999	1998	208	230,880	1,110	$	704	94.71	%	$	-	(1)		(1)		(1)

				952	989,808	1,040	$	655	93.80	%	$	-

Calais Forest	Little Rock, AR	1987	1994	260	195,000	750	$	597	95.00	%	$	-	(1)		(1)		(1)
Napa Valley	Little Rock, AR	1984	1996	240	183,120	763	$	606	95.42	%	$	-	(1)		(1)		(1)
Westside Creek I	Little Rock, AR	1984	1997	142	147,964	1,042	$	693	92.25	%	$	-	(1)		(1)		(1)
Westside Creek II	Little Rock, AR	1986	1997	166	172,972	1,042	$	647	96.39	%	$	4,658		8.760	%	10/01/2006

				808	699,056	865	$	627	94.93	%	$	4,658

Tiffany Oaks	Altamonte Springs, FL	1985	1996	288	234,144	813	$	664	94.44	%	$	-	(1)		(1)		(1)
Marsh Oaks	Atlantic Beach, FL	1986	1995	120	93,240	777	$	635	98.33	%	$	-	(1)		(1)		(1)
Indigo Point	Brandon, FL	1989	2000	240	194,640	811	$	713	91.67	%	$	-	(4)		(4)		(4)
Paddock Club - Brandon	Brandon, FL	1997/99	1997	440	516,120	1,173	$	846	92.50	%	$	-	(2)		(2)		(2)
Anatole	Daytona Beach, FL	1986	1995	208	149,136	717	$	652	98.56	%	$	7,000	(10)	1.183	%(10)	10/15/2032	(10)
Paddock Club - Gainsville	Gainsville, FL	1999	1998	264	293,040	1,110	$	829	96.21	%	$	-	(2)		(2)		(2)
Cooper’s Hawk	Jacksonville, FL	1987	1995	208	218,400	1,050	$	746	97.12	%	$	-	(6)		(6)		(6)
Hunter’s Ridge at Deerwood	Jacksonville, FL	1987	1997	336	295,008	878	$	701	93.75	%	$	-	(7)		(7)		(7)
Lakeside	Jacksonville, FL	1985	1996	416	344,032	827	$	684	92.55	%	$	-	(1)		(1)		(1)
Lighthouse Court	Jacksonville, FL	2003	2003	501	556,110	1,110	$	910	72.06	%	$	-	(1)		(1)		(1)
Paddock Club - Jacksonville	Jacksonville, FL	1989/96	1997	440	475,200	1,080	$	801	92.73	%	$	-	(8)		(8)		(8)
Paddock Club - Mandarin	Jacksonville, FL	1998	1998	288	330,336	1,147	$	828	93.40	%	$	-	(2)		(2)		(2)
St. Augustine	Jacksonville, FL	1987	1995	400	304,400	761	$	615	95.75	%	$	-	(6)		(6)		(6)
Woodbridge at the Lake	Jacksonville, FL	1985	1994	188	166,004	883	$	677	94.68	%	$	-	(2)		(2)		(2)
Woodhollow	Jacksonville, FL	1986	1997	450	342,000	760	$	679	92.67	%	$	-	(1)		(1)		(1)
Paddock Club - Lakeland	Lakeland, FL	1988/90	1997	464	505,296	1,089	$	714	92.03	%	$	-	(8)		(8)		(8)
Savannahs at James Landing	Melbourne, FL	1990	1995	256	238,592	932	$	668	98.83	%	$	-	(6)		(6)		(6)
Paddock Park - Ocala	Ocala, FL	1986/88	1997	480	485,280	1,011	$	717	93.13	%	$	6,805	(2),(3)		(2),(3)		(2),(3)
Paddock Club - Panama City	Panama City, FL	2000	1998	254	283,972	1,118	$	844	93.31	%	$	-	(2)		(2)		(2)
Paddock Club - Tallahassee	Tallahassee, FL	1990/95	1997	304	329,232	1,083	$	795	90.46	%	$	-	(2)		(2)		(2)
Belmere	Tampa, FL	1984	1994	210	202,440	964	$	713	89.05	%	$	-	(1)		(1)		(1)
Links at Carrollwood	Tampa, FL	1980	1998	230	214,820	934	$	732	94.35	%	$	-	(1)		(1)		(1)

				6,985	6,771,442	969	$	743	92.15	%	$	13,804

High Ridge	Athens, GA	1987	1997	160	186,560	1,166	$	735	100.00	%	$	-	(1)		(1)		(1)
Bradford Pointe	Augusta, GA	1986	1997	192	156,288	814	$	605	94.79	%	$	4,760		2.148	%	06/01/2028
Shenandoah Ridge	Augusta, GA	1982	1994	272	222,768	819	$	553	92.65	%	$	-	(1)		(1)		(1)
Westbury Creek	Augusta, GA	1984	1997	120	107,040	892	$	635	96.67	%	$	3,480	(15)	1.905	%(15)	05/15/2033	(15)
Fountain Lake	Brunswick, GA	1983	1997	110	129,800	1,180	$	727	93.64	%	$	-	(5)		(5)		(5)
Park Walk	College Park, GA	1985	1997	124	112,716	909	$	667	96.77	%	$	3,112		6.370	%	11/01/2025
Whisperwood Spa and Club	Columbus, GA	1980/82/84/86/98	1997	1,008	1,220,688	1,211	$	711	94.84	%	$	-	(1)		(1)		(1)
Willow Creek	Columbus, GA	1971/77	1997	285	246,810	866	$	543	96.84	%	$	-	(1)		(1)		(1)
Terraces at Fieldstone	Conyers, GA	1999	1998	316	351,076	1,111	$	801	84.81	%	$	-	(1)		(1)		(1)
Whispering Pines I	LaGrange, GA	1982	1997	120	123,960	1,033	$	547	90.83	%	$	-	(5)		(5)		(5)
Whispering Pines II	LaGrange, GA	1984	1997	96	99,168	1,033	$	564	97.92	%	$	2,292		6.150	%	12/01/2024
Westbury Springs	Lilburn, GA	1983	1997	150	137,700	918	$	678	98.67	%	$	-	(1)		(1)		(1)
Austin Chase	Macon, GA	1996	1997	256	292,864	1,144	$	699	94.92	%	$	-	(7)		(7)		(7)
The Vistas	Macon, GA	1985	1997	144	153,792	1,068	$	604	95.14	%	$	3,737		6.230	%	03/01/2028
Walden Run	McDonough, GA	1997	1998	240	271,200	1,130	$	720	94.17	%	$	10,084		7.320	%	04/01/2009
Georgetown Grove	Savannah, GA	1997	1998	220	239,800	1,090	$	776	98.64	%	$	10,240		7.750	%	07/01/2037
Island Retreat	St. Simons Island, GA	1978	1998	112	129,584	1,157	$	756	93.75	%	$	-	(1)		(1)		(1)
Wildwood	Thomasville, GA	1980/84	1997	216	223,128	1,033	$	565	93.06	%	$	-	(1)		(1)		(1)
Hidden Lake I	Union City, GA	1985	1997	160	171,200	1,070	$	687	90.00	%	$	4,146		6.340	%	12/01/2026
Hidden Lake II	Union City, GA	1987	1997	160	171,200	1,070	$	668	93.75	%	$	-	(1)		(1)		(1)
Three Oaks	Valdosta, GA	1983/84	1997	240	247,920	1,033	$	601	88.75	%	$	-	(1)		(1)		(1)
Huntington Chase	Warner Robins, GA	1997	2000	200	218,400	1,092	$	673	90.00	%	$	9,160		6.850	%	11/01/2008
Southland Station	Warner Robins, GA	1987/90	1997	304	354,768	1,167	$	661	92.76	%	$	-	(1)		(1)		(1)
Terraces at Towne Lake	Woodstock, GA	1998/99	1997/98	502	559,954	1,115	$	745	88.45	%	$	-	(1)		(1)		(1)

Property	Location	Year Completed	Year Management Commenced	Number of Units	Approximate Rentable Area (Square Footage)	Average Unit Size (Square Footage)	Monthly Rent per Unit at December 31, 2003		Average Occupancy Percent at December 31, 2003		Encumbrances at December 31, 2003

											Mortgage Principal (000’s)			Interest Rate		Maturity Date

				5,707	6,128,384	1,074	$	676	93.32	%	$	51,013

Fairways at Hartland	Bowling Green, KY	1996	1997	240	251,280	1,047	$	616	99.17	%	$	-	(1)		(1)		(1)
Paddock Club - Florence	Florence, KY	1994	1997	200	207,000	1,035	$	721	93.50	%	$	9,723		5.875	%	01/01/2044
Grand Reserve Lexington	Lexington, KY	2000	1999	370	432,530	1,169	$	842	92.16	%	$	-	(1)		(1)		(1)
Lakepointe	Lexington, KY	1986	1994	118	90,624	768	$	613	94.07	%	$	-	(1)		(1)		(1)
Mansion, The	Lexington, KY	1989	1994	184	138,736	754	$	606	97.83	%	$	-	(1)		(1)		(1)
Village, The	Lexington, KY	1989	1994	252	182,700	725	$	606	95.24	%	$	-	(1)		(1)		(1)
Stonemill Village	Louisville, KY	1985	1994	384	324,096	844	$	604	93.23	%	$	-	(1)		(1)		(1)

				1,748	1,626,966	931	$	671	94.68	%	$	9,723

Riverhills	Grenada, MS	1972	1985	96	81,984	854	$	403	89.58	%	$	-	(1)		(1)		(1)
Crosswinds	Jackson, MS	1988/90	1996	360	443,160	1,231	$	649	96.67	%	$	-	(1)		(1)		(1)
Pear Orchard	Jackson, MS	1985	1994	389	338,430	870	$	622	95.37	%	$	-	(1)		(1)		(1)
Reflection Pointe	Jackson, MS	1986	1988	296	254,856	861	$	620	94.93	%	$	5,880	(11)	1.231	%(11)	05/15/2031	(11)
Somerset	Jackson, MS	1981	1995	144	126,864	881	$	564	96.53	%	$	-	(1)		(1)		(1)
Woodridge	Jackson, MS	1987	1988	192	175,104	912	$	555	97.92	%	$	4,404		6.500	%	10/01/2027
Lakeshore Landing	Ridgeland, MS	1974	1994	196	171,108	873	$	570	97.45	%	$	5,378		8.280	%	09/01/2009
Savannah Creek	Southaven, MS	1989	1996	204	237,048	1,162	$	667	89.22	%	$	-	(1)		(1)		(1)
Sutton Place	Southaven, MS	1991	1996	253	268,686	1,062	$	637	90.51	%	$	-	(1)		(1)		(1)

				2,130	2,097,240	985	$	608	94.60	%	$	15,662

Hermitage at Beechtree	Cary, NC	1988	1997	194	169,750	875	$	587	95.88	%	$	-	(1)		(1)		(1)
Woodstream	Greensboro, NC	1983	1994	304	217,056	714	$	507	98.68	%	$	9,479		7.320	%	04/01/2009
Corners, The	Winston-Salem, NC	1982	1993	240	173,520	723	$	543	90.00	%	$	-	(2)		(2)		(2)

				738	560,326	759	$	540	95.12	%	$	9,479

Fairways at Royal Oak	Cincinnati, OH	1988	1994	214	214,428	1,002	$	632	92.06	%	$	-	(1)		(1)		(1)

Colony at South Park	Aiken, SC	1989/91	1997	184	174,800	950	$	657	91.30	%	$	6,185		7.320	%	04/01/2009
Woodwinds	Aiken, SC	1988	1997	144	165,168	1,147	$	694	88.19	%	$	-	(1)		(1)		(1)
Tanglewood	Anderson, SC	1980	1994	168	140,784	838	$	530	92.26	%	$	-	(1)		(1)		(1)
Paddock Club - Columbia	Columbia, SC	1989/95	1997	336	367,584	1,094	$	710	87.80	%	$	-	(1)		(1)		(1)
The Fairways	Columbia, SC	1992	1994	240	213,840	891	$	617	90.00	%	$	7,735	(12)	1.231	%(12)	05/15/2031	(12)
Highland Ridge	Greenville, SC	1984	1995	168	143,976	857	$	497	98.21	%	$	-	(9)		(9)		(9)
Howell Commons	Greenville, SC	1986/88	1997	348	292,668	841	$	521	92.82	%	$	-	(1)		(1)		(1)
Paddock Club - Greenville	Greenville, SC	1996	1997	208	212,160	1,020	$	677	91.83	%	$	-	(1)		(1)		(1)
Park Haywood	Greenville, SC	1983	1993	208	156,832	754	$	503	96.15	%	$	-	(1)		(1)		(1)
Spring Creek	Greenville, SC	1985	1995	208	182,000	875	$	507	98.56	%	$	-	(9)		(9)		(9)
Runaway Bay	Mt. Pleasant, SC	1988	1995	208	177,840	855	$	749	93.27	%	$	-	(9)		(9)		(9)
Park Place	Spartanburg, SC	1987	1997	184	195,224	1,061	$	613	91.30	%	$	-	(1)		(1)		(1)

				2,604	2,422,876	930	$	607	92.43	%	$	13,920

Hamilton Pointe	Chattanooga, TN	1989	1992	361	256,671	711	$	512	93.35	%	$	7,616		8.280	%	09/01/2009
Hidden Creek	Chattanooga, TN	1987	1988	300	259,200	864	$	534	93.00	%	$	6,339		8.280	%	09/01/2009
Steeplechase	Chattanooga, TN	1986	1991	108	98,604	913	$	605	91.67	%	$	-	(1)		(1)		(1)
Windridge	Chattanooga, TN	1984	1997	174	238,728	1,372	$	708	94.25	%	$	5,465	(16)	1.897	%(16)	05/15/2033	(16)
Oaks, The	Jackson, TN	1978	1993	100	87,500	875	$	522	93.00	%	$	-	(1)		(1)		(1)
Post House Jackson	Jackson, TN	1987	1989	150	163,650	1,091	$	610	92.67	%	$	5,095		1.881	%	10/15/2032
Post House North	Jackson, TN	1987	1989	144	144,720	1,005	$	586	95.83	%	$	3,375	(13)	1.231	%(13)	05/15/2031	(13)
Bradford Chase	Jackson, TN	1987	1994	148	121,360	820	$	544	93.24	%	$	-	(1)		(1)		(1)
Woods at Post House	Jackson, TN	1997	1995	122	118,950	975	$	642	94.26	%	$	5,111		6.070	%	09/01/2035
Cedar Mill	Memphis, TN	1973/86	1982/94	276	297,804	1,079	$	609	95.65	%	$	8,199		8.280	%	09/01/2009
Eastview	Memphis, TN	1973	1984	432	356,400	825	$	540	90.97	%	$	11,228		7.320	%	04/01/2009
Gleneagles	Memphis, TN	1975	1990	184	189,520	1,030	$	609	91.30	%	$	-	(1)		(1)		(1)
Greenbrook	Memphis, TN	1974/78/83/86	1988	1,037	939,522	906	$	599	86.11	%	$	-	(4)		(4)		(4)
Hickory Farm	Memphis, TN	1985	1994	200	150,200	751	$	564	92.00	%	$	-	(1)		(1)		(1)
Kirby Station	Memphis, TN	1978	1994	371	310,156	836	$	631	95.96	%	$	-	(1)		(1)		(1)
Lincoln on the Green	Memphis, TN	1988/98	1994	618	535,188	866	$	702	96.12	%	$	-	(8)		(8)		(8)
Park Estate	Memphis, TN	1974	1977	82	96,924	1,182	$	829	98.78	%	$	-	(4)		(4)		(4)
Reserve at Dexter Lake	Memphis, TN	1999/2001	1998	740	792,540	1,071	$	812	93.51	%	$	-	(5)		(5)		(5)
River Trace I	Memphis, TN	1981	1997	244	205,692	843	$	547	93.44	%	$	-	(1)		(1)		(1)
River Trace II	Memphis, TN	1985	1997	196	165,228	843	$	578	95.92	%	$	5,206		6.380	%	02/01/2026
Paddock Club - Murfreesboro	Murfreesboro, TN	1999	1998	240	268,800	1,120	$	791	96.25	%	$	-	(1)		(1)		(1)

Property	Location	Year Completed	Year Management Commenced	Number of Units	Approximate Rentable Area (Square Footage)	Average Unit Size (Square Footage)	Monthly Rent per Unit at December 31, 2003		Average Occupancy Percent at December 31, 2003		Encumbrances at December 31, 2003

											Mortgage Principal (000’s)			Interest Rate		Maturity Date

Brentwood Downs	Nashville, TN	1986	1994	286	220,220	770	$	667	92.31	%	$	-	(1)		(1)		(1)
Grand View Nashville	Nashville, TN	2001	1999	433	479,331	1,107	$	848	89.84	%	$	-	(1)		(1)		(1)
Park at Hermitage	Nashville, TN	1987	1995	440	392,480	892	$	592	91.59	%	$	6,780		5.790	%	02/01/2019

				7,386	6,889,388	933	$	644	92.47	%	$	64,412

Northwood Place	Arlington, TX	1980	1998	270	224,100	830	$	586	87.04	%	$	6,446		7.320	%	04/01/2009
Balcones Woods	Austin, TX	1983	1997	384	313,728	817	$	637	94.27	%	$	-	(2)		(2)		(2)
Stassney Woods	Austin, TX	1985	1995	288	248,832	864	$	621	94.44	%	$	4,050		6.600	%	04/01/2019
Travis Station	Austin, TX	1987	1995	304	249,888	822	$	532	86.18	%	$	3,585		6.600	%	04/01/2019
Woods, The	Austin, TX	1977	1997	278	214,060	770	$	699	91.73	%	$	10,676		7.320	%	04/01/2009
Celery Stalk	Dallas, TX	1978	1994	410	374,740	914	$	674	89.27	%	$	8,460		9.006	%	12/01/2004
Courtyards at Campbell	Dallas, TX	1986	1998	232	168,200	725	$	653	91.81	%	$	-	(2)		(2)		(2)
Deer Run	Dallas, TX	1985	1998	304	206,720	680	$	591	86.84	%	$	-	(2)		(2)		(2)
Lodge at Timberglen	Dallas, TX	1983	1994	260	226,200	870	$	648	91.15	%	$	4,740		9.006	%	12/01/2004
Legacy Pines	Houston, TX	1999	2003	308	283,360	920	$	926	89.29	%	$	-	(1)		(1)		(1)
Westborough Crossing	Katy, TX	1984	1994	274	197,280	720	$	613	87.96	%	$	3,958		9.006	%	12/01/2004
Kenwood Club	Katy, TX	2000	1999	320	318,080	994	$	801	88.75	%	$	-	(2)		(2)		(2)
Lane at Towne Crossing	Mesquite, TX	1983	1994	384	277,632	723	$	572	95.83	%	$	10,783		7.320	%	04/01/2009
Highwood	Plano, TX	1983	1998	196	156,800	800	$	665	90.31	%	$	-	(4)		(4)		(4)
Los Rios Park	Plano, TX	2000	2003	498	470,112	944	$	738	87.15	%	$	-	(2)		(2)		(2)
Cypresswood Court	Spring, TX	1984	1994	208	160,576	772	$	604	94.23	%	$	3,330		9.006	%	12/01/2004
Green Tree Place	Woodlands, TX	1984	1994	200	152,200	761	$	670	92.00	%	$	3,180		9.006	%	12/01/2004

				5,118	4,242,508	829	$	664	90.37	%	$	59,208

Township	Hampton, VA	1987	1995	296	248,048	838	$	755	99.32	%	$	10,800	(14)	1.202	%(14)	10/15/2032	(14)

Total Owned Properties				34,686	32,890,470	948	$	667	92.68	%	$	252,678

Joint Venture Properties with Crow Holdings:
Preston Hills at Mill Creek	Buford, GA	2000	2002	464	517,360	1,115	$	778	92.46	%		N/A
Preserves at Arbor Lake	Jacksonville, FL	1992	2003	284	315,240	1,110	$	962	90.49	%		N/A
Green Oaks	Grand Prairie, TX	1996	2003	300	286,500	955	$	759	92.33	%		N/A

Total Joint Venture Properties with Crow Holdings				1,048	1,119,100	1,068	$	822	91.89	%	$	-

Total Properties				35,734	34,009,570	952	$	672	92.66	%	$	252,678

(1)		Encumbered by a $451 million FNMA facility, with an outstanding balance of $416.4 million with a variable interest rate of 1.831% on which there exists nine interest rate swap agreements totaling $275 million at an average rate of 6.180% at December 31, 2003.
(2)		Encumbered by a $160 million FNMA facility, with an outstanding balance of $139.4 million, $29.4 million of which had a variable interest rate of 2.105%, $65 million with a fixed rate of 7.712%, $25 million with a fixed rate of 6.920% and $20 milllion with a fixed rate of 5.770% at December 31, 2003.
(3)		Phase I of Paddock Park - Ocala is encumbered by $6.8 million in bonds on which there exists a $6.8 million interest rate cap of 6.000% which terminates on October 24, 2007.
(4)		Encumbered, along with one corporate property, by a mortgage with a principal balance of $40.0 million at December 31, 2003, with a maturity of April 1, 2009 and an interest rate of 2.172% on which there is a $25 million interest rate swap agreement with a rate of 4.580%.
(5)		Encumbered by a credit line with AmSouth Bank, with no outstanding balance at December 31, 2003.
(6)		Encumbered by a mortgage securing a tax-exempt bond amortizing over 25 years with principal balance of $14.2 million at December 31, 2003, and an average interest rate of 5.867%.
(7)		Encumbered by a mortgage securing a tax-exempt bond amortizing over 25 years with a principal balance of $13.0 million at December 31, 2003, and an average interest rate of 5.081%.
(8)		Encumbered by a $47.5 million mortgage with a maturity of December 15, 2004 and an interest rate of 6.040%
(9)		Encumbered by a mortgage securing a tax-exempt bond amortizing over 25 years with a principal balance of $8.8 million at December 31, 2003, and an average interest rate of 6.090%.
(10)		Encumbered by $7 million in bonds on which there exists a $7 million interest rate swap fixed at 3.948% and maturing on October 24, 2007.
(11)		Encumbered by $5.9 million in bonds on which there exists a $5.9 million interest rate swap fixed at 5.037% and maturing on June 15, 2008.
(12)		Encumbered by $7.7 million in bonds on which there exists a $7.7 million interest rate swap fixed at 5.287% and maturing on June 15, 2008.
(13)		Encumbered by $3.4 million in bonds on which there exists a $3.4 million interest rate swap fixed at 5.037% and maturing on June 15, 2008.
(14)		Encumbered by $10.8 million in bonds on which there exists a $10.8 million interest rate swap fixed at 3.948% and maturing on October 24, 2007.
(15)		$3.0 million of this bond hedged through an interest rate swap at a rate of 3.226%
(16)		$5.0 million of this bond is hedged through an interest rate swap at a rate of 3.226%

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 February 27, 2004, the reported last sale price of the Company’s common stock on the NYSE was $35.86 per share, and there were approximately 1,500 holders of record of the common stock. The Company estimates there are approximately 13,900 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 dividends declared by the Company with respect to the periods indicated.

	Sales Prices				Dividends Declared

	High		Low

2003:
First Quarter	$	24.980	$	23.100		$	0.585
Second Quarter	$	27.450	$	23.670		$	0.585
Third Quarter	$	31.450	$	26.740		$	0.585
Fourth Quarter	$	34.290	$	30.020		$	0.585

2002:
First Quarter	$	26.750	$	25.100		$	0.585
Second Quarter	$	27.420	$	25.510		$	0.585
Third Quarter	$	26.900	$	22.250		$	0.585
Fourth Quarter	$	25.440	$	22.000		$	0.585

The Company’s quarterly dividend rate is currently $0.585 per common share. The Board of Directors reviews and declares the dividend rate quarterly. Actual dividends 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 currently pays a preferential regular distribution on the Series F, Series G and Series H Preferred Stock at annual rates of $2.3125, $2.15625 and $2.075 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 the Company’s 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 F, Series G and Series H 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.

The Company has established the Direct Stock Purchase and Distribution Reinvestment Plan (the “DSPDRP”) under which holders of common stock (and Series F, Series G and Series H Preferred Stock) can 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 of at least $250, but not more than $5,000 in any given month. To fulfill its obligations under the DSPDRP, the Company may either issue additional shares of common stock or repurchase common stock in the open market. The Company may elect to sell shares under the DSPDRP at up to a 5% discount, but did not sell any shares at a discount in 2003.

Information related to securities authorized for issuance under equity compensation plans as required in paragraph (d)(2) of this Item is incorporated by reference to the Company’s definitive proxy statement to be filed with the Securities and Exchange Commission.

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.

MID-AMERICA APARTMENT COMMUNITIES, INC.
SELECTED FINANCIAL DATA
(Dollars in thousands except per share data)

		Year Ended December 31,

		2003		2002		2001		2000		1999

Operating Data:
	Total revenues	$	240,906	$	233,044	$	232,642	$	227,022	$	225,745
	Expenses: