MEMPHIS, Tenn., Nov. 4 /PRNewswire-FirstCall/ -- Mid-America
Apartment Communities, Inc. (NYSE:MAA), or Mid-America, reported
net income available for common shareholders for the quarter ended
September 30, 2009, of $3,402,000, or $0.12 per diluted common
share, as compared to net income available for common shareholders
of $2,977,000, or $0.11 per diluted common share, for the third
quarter of 2008. Funds from operations, or FFO, the widely accepted
measure of performance for real estate investment trusts, was
$27,418,000 or $0.89 per diluted share/unit for the third quarter
of 2009, as compared to $26,837,000 or $0.90 per diluted share/unit
for the same quarter of 2008. Third quarter 2009 FFO per diluted
share/unit was $0.04 ahead of the mid-point of Mid-America's
guidance. A reconciliation of FFO to net income available for
common shareholders and an expanded discussion of the components of
FFO can be found later in this release. For the nine months ended
September 30, 2009, net income available for common shareholders
was $18,256,000, or $0.64 per diluted common share, as compared to
$12,867,000, or $0.48 per diluted common share, for the nine months
ended September 30, 2008. In the first nine months of 2009,
Mid-America recorded gains from the disposition of two properties
totaling $2,600,000; without these gains, net income available per
diluted common share for the nine months ended September 30, 2009
would have been $0.55. For the nine months ended September 30,
2009, FFO was $87,967,000, or $2.87 per diluted share/unit,
compared to $81,647,000, or $2.81 per diluted share/unit, for the
nine months ended September 30, 2008. Highlights: -- As a result of
stronger than expected operating results, FFO performance of $0.89
per diluted share/unit for the third quarter of 2009 was $0.04
above the mid-point of prior guidance. -- Physical occupancy for
the same store portfolio ended the third quarter at a very strong
96.0%, ahead of the same period last year by 70 basis points. --
Property operating performance for the third quarter was better
than forecasted with same store revenues declining only 1.7% and
net operating income, or NOI, declining 2.1% compared to the same
period last year. -- Same store property level expenses for the
third quarter declined 1.3% as compared to the prior year. --
Mid-America completed the renovation and repositioning of 514
apartments in the third quarter of 2009 with rent increases
averaging 10%. -- During the third quarter, Mid-America Multifamily
Fund II, LLC, Mid-America's previously announced new joint venture,
acquired its first property. -- In October, Mid-America acquired
Park Crest at Innisbrook, a 432-unit upper-end property in the
Tampa, FL metro area. -- At the end of the quarter, Mid-America had
$177 million of unused capacity available under its existing credit
facilities and is well positioned to make additional opportunistic
investments. -- Mid-America remains in a strong financial position
as its fixed charge coverage ratio reached a record for a third
quarter of 2.59, up from 2.49 for the third quarter of 2008. -- As
a result of the strong third quarter results and improved outlook
for the fourth quarter, Mid-America has increased its guidance for
FFO per diluted share/unit for 2009 to a range of $3.69 to $3.79
from a previous range of $3.55 to $3.75. Fund II: Partnership with
Institutional Capital In July, Mid-America's new joint venture,
Mid-America Multifamily Fund II, LLC, or Fund II, purchased its
first property. The 294-unit Ansley Village is a new high-quality
community located just south of Atlanta, in Macon, GA. The
community was 70% occupied when acquired from a bank subsidiary,
which had taken the property by deed in lieu of foreclosure, and
was 82.3% occupied by the end of the quarter. Fund II anticipates
acquiring up to $250 million of assets over the next 12 to 15
months, financed approximately with 1/3 equity. Mid-America is a
1/3 owner of the fund, and will receive fees for property
management, asset management, acquisition, and a promote fee in the
event the investment returns exceed certain threshold levels.
Mid-America's existing joint venture, Mid-America Multifamily Fund
I, LLC, that owns two properties acquired in 2008 will remain in
place but has no plans to make further acquisitions. Wholly-owned
Acquisitions: Increasing Opportunities In October, Mid-America
acquired Park Crest at Innisbrook, a 432-unit upscale community
located in the Palm Harbor suburb of Tampa, FL. The property was
built in 2000 and has a superior location at the entrance of the
Innisbrook Resort and Golf Club and is near top schools, retail and
employment centers in the market. Mid-America remains active
underwriting several other investment opportunities in its target
markets. New Development: One Remaining Expansion Project Under Way
Mid-America has one development project currently remaining in
process, the 45-unit expansion of Copper Ridge I in Dallas, TX.
Construction is forecasted to be completed by the end of 2009 with
an additional investment of $1.5 million expected. No further
development projects are being planned at the current time.
Construction of the initial 216 units at Copper Ridge I and the 124
units at St. Augustine II in Jacksonville, FL is complete. At
quarter end, Copper Ridge I was 86% occupied and St. Augustine II
was 98% occupied. Property Redevelopment: Continuing to Generate
Strong Investment Returns Redevelopment of 1,682 apartment units
was completed during the first nine months of 2009, at an average
cost of $3,873 per unit, compared to 3,118 units redeveloped at a
cost of $4,892 per unit for the first nine months of 2008. The
average monthly rent increase achieved on the renovated apartments
in the first nine months of 2009 was $72 per apartment,
representing a 10% increase from the average rent level of
non-renovated apartments. The projected unleveraged internal rate
of return on the renovation program is 10%. Mid-America anticipates
completing the redevelopment of approximately 2,000 apartments this
year with a total investment of $9 million, including $1.7 million
invested in exterior projects. Dispositions As part of its
long-term strategy of maintaining a portfolio of newer,
high-quality properties, Mid-America completed the sale of two
communities during the first nine months of 2009, a 25-year old
property with 304 units in Greensboro, NC and a 36-year old
property with 96 units in Grenada, MS. One additional property,
River Trace, a 25-year old property with 440 units located in
Memphis, TN, is under contract and the sale is expected to close in
the fourth quarter. The combined sales proceeds for all three
assets are expected to be approximately $30 million representing a
blended cap rate of about 7.1%. Technology Platform: Driving Higher
Efficiencies and Enhanced Performance Mid-America continues to take
advantage of technology advancements to create superior operating
processes and capture higher efficiencies throughout its operating
platform. The company recently launched Access 24/7, a program that
contains an up-graded web portal which both enhances communications
with residents and also allows for on-line resident payment
processing at all properties. Access 24/7 also helps enable the
continued capture of internet-based leasing traffic. During the
third quarter, 51% of Mid-America's new leasing traffic originated
from the internet. In July, the company completed the move of its
ancillary fee business billing in-house, and as a result, the
company expects to achieve approximately $300,000 of FFO in billing
cost savings in 2009. Additionally, the company is generating cost
reductions from efficiencies captured through automated inventory
management processes. These new processes resulted in a reduction
in the cost per unit of "make ready" apartments by 5% during the
first three quarters of 2009 as compared to the same period in the
prior year. Operating Results: Strong Performance Eric Bolton,
Chairman and Chief Executive Officer, said "Despite continued weak
leasing conditions, Mid-America delivered solid operating results
in the third quarter. While our markets have clearly been impacted
by the downturn in the economy, a diversified portfolio strategy,
disciplined capital allocation practices, and a strong operating
platform have enabled Mid-America to hold up well through this
difficult part of the cycle. "The leasing environment will continue
to be challenged throughout the remainder of the year and into 2010
as a weak employment market weighs on the demand for apartment
housing. However, we are seeing early stabilization in pricing
trends across the portfolio and believe that rents will begin to
move up next year. While leasing conditions will likely take
several quarters to materially improve, and various markets will
come back quicker than others, we don't expect to see an overall
deterioration in the current leasing trends across our portfolio as
we head into 2010. "The company is well positioned for new growth
and we expect to see increasing opportunities over the next year to
make additional attractive investments and further position the
portfolio for robust performance as the economy begins to recover.
With a strong balance sheet in place, we are excited about future
growth opportunities through both new wholly-owned investments as
well as new Fund II investments." Simon Wadsworth, Executive Vice
President and Chief Financial Officer, said "Our same store
property operating performance was better than expected based on
strong occupancy, higher than expected fee income, and continued
strong expense control. Compared to the prior year, the impact on
our revenues of lower pricing for new leases was partially offset
by occupancy levels 70 basis points above the prior year and
positive resident reception of several ancillary fee income
programs. Our property level expenses declined compared to the same
quarter a year ago as continued low resident turnover helped
moderate personnel and repair and maintenance expense growth, while
utilities, real estate taxes and insurance costs all declined
compared to the same period a year ago. "We continue to benefit
from the low interest rate environment, as our average interest
rate for the third quarter was 4.4%, down from 4.7% a year ago. Our
balance sheet continues to show strength, with leverage at 49%, no
significant upcoming debt maturities, and over $177 million in
unused debt capacity." Third Quarter 2009 Same Store Results:
Strong Execution Drives Stable Performance In a Weak Economy
Percent Change From Three Months Ended September 30, 2008 (Prior
Year): Average Physical Effective Markets Revenue(1) Expense NOI(1)
Occupancy Rent ------- --------- ------- ------ --------- ---------
Primary -2.6% -3.2% -2.1% 0.7% -3.6% Secondary -1.1% 0.6% -2.3%
0.7% -2.3% ---- ---- ---- ---- ---- Operating Same Store -1.8%
-1.3% -2.2% 0.7% -2.9% Total Same Store -1.7% -1.3% -2.1% (1)
Revenue and NOI by market and for Operating Same Store are
presented before the impact of straight-line revenue adjustments.
Total Same Store includes straight-line revenue adjustments. A
reconciliation of NOI to net income attributable to Mid-America
Apartment Communities, Inc. and an expanded discussion of the
components of NOI can be found later in this release. Same store
revenues for the third quarter of 2009 declined 1.7% compared to
the third quarter of 2008. Average effective rents for the third
quarter were $722 which was 2.9% below the same period in 2008.
This decline was partially offset by a 0.7% improvement in physical
occupancy, which ended the third quarter of 2009 at a strong 96.0%.
Revenues in Mid-America's secondary markets held up better, on
average down only 1.1% compared to a decline of 2.6% in
Mid-America's primary markets. Same store lease concessions in the
third quarter of 2009 remained essentially flat with the same
period a year ago at approximately 0.9% of net potential rent.
Traffic was slightly down for the third quarter of 2009, 1.1% below
the same period last year, but resident turnover was at a record
low of 58.1%, 3.4% below the same period last year, offsetting the
traffic decline and providing support for the continued growth in
occupancy during the quarter. The number of residents leaving to
buy a house declined by just over 4%, but remained at 22% of all
move-outs; the number leaving to rent a home was 4.8% during the
third quarter 2009, a modest increase from 4.1% for the same period
a year earlier. Delinquency was only 0.52% of net potential rent in
the third quarter 2009, down 7% from the same quarter in 2008.
Successful implementation of several ancillary income initiatives
also produced a 6.8% growth in fee income for the third quarter
2009 as compared to the prior year. Same store property expenses
for the third quarter of 2009 decreased by 1.3% compared to the
prior year period. Expense control initiatives and reduced resident
turnover combined to limit increases in both personnel expense,
0.4% above the prior year, and repair and maintenance expense, 1.1%
above the prior year. Reduced natural gas costs and lower vacancy
produced a 4.0% decline in utility costs for the third quarter of
2009, as compared to the same quarter in 2008. Real estate tax
expense dropped 3.4% reflecting the continued impact of favorable
prior year appeals, decreases in assessments, and moderation in tax
rates. Insurance expense for the third quarter declined 4.3% below
the same quarter in 2008, benefiting from our favorable insurance
renewal completed in July. Same store NOI decreased by 2.1% in the
third quarter of 2009 compared to the same quarter a year ago.
Excluded from the same store group are eight properties that are
part of Mid-America's redevelopment program which are going through
an extensive renovation. The supplementary schedules contain a
report of same store performance, which includes this
eight-property group. Financing, Balance Sheet: Continued Strength
and Flexibility Mid-America's balance sheet continues to show
strength with the fixed charge coverage at 2.59 for the third
quarter of 2009, compared to 2.49 for the same quarter a year ago.
Leverage at quarter end, defined as debt to total gross assets was
49%, compared to 51% at September 30, 2008. At the end of the third
quarter of 2009, Mid-America had $177 million of unused debt
capacity available to borrow under its existing credit facilities.
Mid-America has no additional debt maturities for the balance of
2009, and only its $50 million bank line of credit maturing in
2010, which is currently being negotiated and is expected to be
renewed early next year. On November 1, 2009, Mid-America replaced
a $65 million security under its Fannie Mae credit facility, which
had a fixed rate of 7.7%, using variable rate borrowings under the
same facility. Current plans are to use a combination of interest
rate swaps and caps to fix or hedge the interest rate on the new
borrowings, which are expected to produce annual savings between
$0.08 and $0.10 per diluted share/unit. Mid-America raised a total
of $24.6 million of additional common equity during the third
quarter of 2009 at an average price of $41.60 per share net of
issuance costs using our established continuous equity offering
program. Adjusted Funds from Operations and Capital Expenditures
Recurring capital expenditures totaled $7.4 million for the third
quarter of 2009, approximately $0.24 per diluted share/unit,
resulting in adjusted funds from operations, or AFFO, of $0.65 per
diluted share/unit compared to AFFO of $0.66 per diluted share/unit
in the third quarter of last year. Total property capital
expenditures on existing properties were $9.8 million, plus $3.0
million of expenditures on the redevelopment program. For the nine
months ended September 30, 2009, recurring capital expenditures
totaled $18.8 million, approximately $0.61 per diluted share/unit,
resulting in AFFO of $2.25 per diluted share/unit compared to AFFO
of $2.19 per diluted share/unit for the nine months ended September
30, 2008. Total property capital expenditures on existing
properties were $26.4 million, plus $8.2 million of expenditures on
the redevelopment program. A reconciliation of AFFO to net income
attributable to Mid-America Apartment Communities, Inc. and an
expanded discussion of the components of AFFO can be found later in
this release. Common Dividend: $2.46 Annual Rate Mid-America
declared a quarterly common dividend of $0.615 per share/unit
payable on October 30, 2009, to holders of record on October 15,
2009. This represents Mid-America's 63rd consecutive quarterly cash
dividend to shareholders/unit holders. 2009 Forecast: FFO Guidance
Increased Mid-America experienced stronger revenues than expected
for the third quarter of 2009 mainly due to strong occupancy and
higher fee income than originally projected for the quarter.
Property operating expenses were also more favorable than expected
due to lower utility costs and continued favorable real estate tax
assessments. Mid-America continues to believe operating conditions
for the remainder of the year will be challenging, but overall, a
combination of Mid-America's more resilient markets and strong
operating platform have thus far driven better than expected
results. The favorable interest environment also continues to
support a low borrowing cost expectation for the fourth quarter.
Management's latest forecast is for FFO per diluted share/unit for
2009 to be in a range of $3.69 to $3.79 per diluted share/unit
compared to prior guidance of $3.55 to $3.75. FFO per diluted
share/unit for the fourth quarter of 2009 is expected to be in the
range of $0.82 to $0.92. Management will continue to address the
anticipated future needs for additional debt or equity based on its
evaluation of external growth opportunities. Full-year same store
NOI is projected to decline 1.5% to 3.0%, compared to the prior
forecast of 2.5% to 4.5%. Same store revenues are forecasted to
decline in a range of 1% to 2% compared to the prior year. Guidance
continues to include $75 million of wholly-owned acquisitions and
$30 million of dispositions for the full year of 2009. Guidance
currently includes $50 million of acquisitions for the new joint
venture for the full year of 2009, as compared to $75 million
projected at the end of the second quarter. The average interest
rate for 2009 continues to be projected at 4.4%. Supplemental
Material and Conference Call Supplemental data to this release can
be found on the investor relations page of the Mid-America web site
at http://www.maac.net/. Mid-America will host a conference call to
further discuss third quarter results and 2009 prospects on Friday,
November 6, 2009, at 9:00 AM Central Time. The conference call-in
number is 866-847-7859 and the moderator's name is Eric Bolton.
About Mid-America Apartment Communities, Inc. Mid-America is a
self-administered, self-managed apartment-only real estate
investment trust, which currently owns or has ownership interest in
43,119 apartment units throughout the Sunbelt region of the U.S.
For further details, please refer to the Mid-America website at
http://www.maac.net/ or contact Investor Relations at . 6584 Poplar
Ave., Memphis, TN 38138. Forward-Looking Statements We consider
portions of this press release to be forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, with respect to
our expectations for future periods. Forward looking statements do
not discuss historical fact, but instead include statements related
to expectations, projections, intentions or other items related to
the future. Such forward-looking statements include, without
limitation, statements concerning property acquisitions and
dispositions, development activity and capital expenditures,
capital raising activities, rent growth, occupancy, and rental
expense growth. Words such as "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "estimates," and variations of such
words and similar expressions are intended to identify such
forward-looking statements. Such statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements to be materially
different from the results of operations or plans expressed or
implied by such forward-looking statements. Such factors include,
among other things, unanticipated adverse business developments
affecting us, or our properties, adverse changes in the real estate
markets and general and local economies and business conditions.
Although we believe that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of
the assumptions could be inaccurate, and therefore such
forward-looking statements included in this press release may not
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 us or any other person that the results or
conditions described in such statements or our objectives and plans
will be achieved. The following factors, among others, could cause
our future results to differ materially from those expressed in the
forward-looking statements: -- inability to generate sufficient
cash flows due to market conditions, changes in supply and/or
demand, competition, uninsured losses, changes in tax and housing
laws, or other factors; -- increasing real estate taxes and
insurance costs; -- failure of new acquisitions to achieve
anticipated results or be efficiently integrated into us; --
failure of development communities to lease-up as anticipated; --
inability of a joint venture to perform as expected; -- inability
to acquire additional or dispose of existing apartment units on
favorable economic terms; -- losses from catastrophes in excess of
our insurance coverage; -- unexpected capital needs; -- inability
to attract and retain qualified personnel; -- potential liability
for environmental contamination; -- adverse legislative or
regulatory tax changes; -- litigation and compliance costs
associated with laws requiring access for disabled persons; --
imposition of federal taxes if we fail to qualify as a REIT under
the Internal Revenue Code in any taxable year or foregone
opportunities to ensure REIT status; -- inability to acquire
funding through the capital markets; -- inability to pay required
distributions to maintain REIT status due to required debt
payments; -- changes in interest rate levels, including that of
variable rate debt, such as extensively used by us; -- loss of
hedge accounting treatment for interest rate swaps; -- the
continuation of the good credit of our interest rate swap and cap
providers; -- the availability of credit, including mortgage
financing, and the liquidity of the debt markets, including a
material deterioration of the financial condition of the Federal
National Mortgage Association and the Federal Home Loan Mortgage
Corporation, at present operating under the conservatorship of the
United States Government; and -- inability to meet loan covenants.
Reference is hereby made to the filings of Mid-America Apartment
Communities, Inc., with the Securities and Exchange Commission,
including quarterly reports on Form 10-Q, reports on Form 8-K, and
its annual report on Form 10-K, particularly including the risk
factors contained in the latter filing. CONSOLIDATED STATEMENTS OF
OPERATIONS (in thousands except per share data)
--------------------------------------------------------------------------
Three months ended Nine months ended September 30, September 30,
------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ----
Property revenues $94,446 $93,734 $282,352 $275,830 Management and
fee income, net 78 58 205 147 Property operating expenses (41,662)
(40,961) (118,686) (115,753) Depreciation (23,913) (22,559)
(71,316) (66,545) Acquisition expenses (30) - (139) - Property
management expenses (4,007) (4,230) (12,751) (12,875) General and
administrative (3,163) (2,996) (8,306) (8,747)
-------------------------- ------ ------ ------ ------ Income from
continuing operations before non-operating items 21,749 23,046
71,359 72,057 Interest and other non-property income 161 115 309
339 Interest expense (14,371) (15,039) (43,072) (46,279) Loss on
debt extinguishment (2) (3) (140) (3) Amortization of deferred
financing costs (587) (586) (1,781) (1,700) Net casualty loss and
other settlement proceeds (109) (1,131) (253) (587) Gain (loss) on
sale of non- depreciable assets 1 - 1 (3)
--------------------------- -- -- -- -- Income from continuing
operations before loss from real estate joint ventures 6,842 6,402
26,423 23,824 Loss from real estate joint ventures (288) (274)
(640) (556) --------------------------- ---- ---- ---- ---- Income
from continuing operations 6,554 6,128 25,783 23,268 Discontinued
operations: Income from discontinued operations 311 386 1,058 734
Gains (loss) on sales of discontinued operations 13 - 2,600 (120)
------------------------ -- -- ----- ---- Consolidated net income
6,878 6,514 29,441 23,882 Net income attributable to noncontrolling
interests (260) (321) (1,536) (1,366) --------------------------
---- ---- ------ ------ Net income attributable to Mid-America
Apartment Communities, Inc. 6,618 6,193 27,905 22,516 Preferred
dividend distribution (3,216) (3,216) (9,649) (9,649) Net income
available for common shareholders $3,402 $2,977 $18,256 $12,867
======================== ====== ====== ======= ======= Weighted
average common shares - Diluted 28,441 27,597 28,192 26,721 Net
income per share available for common shareholders - Diluted $0.12
$0.11 $0.64 $0.48 FUNDS FROM OPERATIONS (in thousands except per
share data)
---------------------------------------------------------- Three
months ended Nine months ended September 30, September 30,
------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ----
Net income attributable to Mid-America Apartment Communities, Inc.
$6,618 $6,193 $27,905 $22,516 Depreciation of real estate assets
23,419 22,123 69,832 65,388 Net casualty loss and other settlement
proceeds 109 1,131 253 587 Gains on dispositions within real estate
joint ventures - - - (38) Depreciation of real estate assets of
discontinued operations (1) - 4 - 706 (Gains) loss on sales of
discontinued operations (13) - (2,600) 120 Depreciation of real
estate assets of real estate joint ventures 241 281 690 651
Preferred dividend distribution (3,216) (3,216) (9,649) (9,649) Net
income attributable to noncontrolling interests 260 321 1,536 1,366
-------------------------- --- --- ----- ----- Funds from
operations 27,418 26,837 87,967 81,647 Recurring capital
expenditures (7,430) (7,000) (18,849) (18,038)
------------------------------ ------ ------ ------- -------
Adjusted funds from operations $19,988 $19,837 $69,118 $63,609
------------------------------ ------- ------- ------- -------
Weighted average common shares and units - Diluted 30,837 29,968
30,663 29,101 Funds from operations per share and unit - Diluted
$0.89 $0.90 $2.87 $2.81 Adjusted funds from operations per share
and unit - Diluted $0.65 $0.66 $2.25 $2.19 (1) Amounts represent
depreciation expense prior to communities being classified as
discontinued operations. CONSOLIDATED BALANCE SHEETS (in thousands)
------------------------------------------ Sept 30, 2009 Dec 31,
2008 ------------- ------------ Assets Real estate assets Land
$243,147 $240,426 Buildings and improvements 2,262,685 2,198,063
Furniture, fixtures and equipment 72,585 65,540 Capital
improvements in progress 10,386 25,268
-------------------------------- ------ ------ 2,588,803 2,529,297
Accumulated depreciation (763,949) (694,054)
------------------------ -------- -------- 1,824,854 1,835,243 Land
held for future development 1,306 1,306 Commercial properties, net
8,764 7,958 Investments in real estate joint ventures 8,805 6,824
-------------------------- ----- ----- Real estate assets, net
1,843,729 1,851,331 Cash and cash equivalents 16,489 9,426
Restricted cash 1,101 414 Deferred financing costs, net 13,943
15,681 Other assets 19,311 16,840 Goodwill 4,106 4,106 Assets held
for sale 13,193 24,157 -------------------- ------ ------ Total
assets $1,911,872 $1,921,955 ============ ========== ==========
Liabilities and Shareholders' Equity Liabilities Notes payable
$1,314,157 $1,323,056 Accounts payable 1,175 1,234 Fair market
value of interest rate swaps 58,981 76,961 Accrued expenses and
other liabilities 76,459 66,982 Security deposits 8,758 8,705
Liabilities associated with assets held for sale 304 595
--------------------------------------- --- --- Total liabilities
1,459,834 1,477,533 Redeemable stock 2,523 1,805 Shareholders'
equity Series H cumulative redeemable preferred stock 62 62 Common
stock 288 282 Additional paid-in capital 979,260 954,127
Accumulated distributions in excess of net income (499,040)
(464,617) Accumulated other comprehensive income (55,090) (72,885)
-------------------------------------- ------- ------- Total
Mid-America Apartment Communities, Inc. shareholders' equity
425,480 416,969 Noncontrolling interest 24,035 25,648
----------------------- ------ ------ Total equity 449,515 442,617
------------ ------- ------- Total liabilities and shareholders'
equity $1,911,872 $1,921,955 ===================================
========== ========== SHARE AND UNIT DATA (in thousands)
---------------------------------- Three months ended Nine months
ended September 30, September 30, ------------- ------------- 2009
2008 2009 2008 ---- ---- ---- ---- NET INCOME SHARES Weighted
average common shares - Basic 28,364 27,474 28,186 26,570 Weighted
average common shares - Diluted 28,441 27,597 28,192 26,721 FUNDS
FROM OPERATIONS SHARES AND UNITS Weighted average common shares and
units - Basic 30,760 29,880 30,587 28,986 Weighted average common
shares and units - Diluted 30,837 29,968 30,663 29,101 PERIOD END
SHARES AND UNITS Common shares at September 30, 28,836 28,089
28,836 28,089 Limited partnership units at September 30, 2,386
2,406 2,386 2,406 Outstanding options at September 30, 24 26 24 26
Unvested shares in share based plans at September 30, 99 156 99 156
NON-GAAP FINANCIAL AND OTHER DEFINITIONS Funds From Operations
(FFO) FFO represents net income (computed in accordance with U.S.
generally accepted accounting principles, or GAAP) excluding
extraordinary items, net income attributable to noncontrolling
interest, gains or losses on disposition of real estate assets,
plus depreciation of real estate and adjustments for joint ventures
to reflect FFO on the same basis. This definition of FFO is in
accordance with the National Association of Real Estate Investment
Trust's definition. Disposition of real estate assets includes
sales of real estate included in discontinued operations as well as
proceeds received from insurance and other settlements from
property damage. Our 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 should
not be considered as an alternative to net income. Mid-America
believes that FFO is helpful in understanding our operating
performance in that FFO excludes depreciation expense of real
estate assets. Mid-America believes that GAAP historical cost
depreciation of real estate assets is generally not correlated with
changes in the value of those assets, whose value does not diminish
predictably over time, as historical cost depreciation implies. In
response to the SEC's Staff Policy Statement relating to Emerging
Issues Task Force Topic D-42 concerning the calculation of earnings
per share for the redemption of preferred stock, Mid-America has
included the amount charged to retire preferred stock in excess of
carrying values in its FFO calculation. We believe, however, that
FFO before amount charged to retire preferred stock in excess of
carrying values is also an important measure of operating
performance as the amount charged to retire preferred stock in
excess of carrying values is a non-cash adjustment representing
issuance costs in prior periods for preferred stock. Adjusted Funds
From Operations (AFFO) For purposes of these computations, AFFO is
composed of FFO less recurring capital expenditures and the amount
charged to retire preferred stock in excess of carrying values. As
an owner and operator of real estate, we consider AFFO to be an
important measure of performance from core operations because AFFO
measures our ability to control revenues, expenses and recurring
capital expenditures. Earnings Before Interest Taxes Depreciation
and Amortization (EBITDA) For purposes of these computations,
EBITDA is composed of net income before net gain on asset sales and
insurance and other settlement proceeds, and gain or loss on debt
extinguishment, plus depreciation, interest expense, and
amortization of deferred financing costs. EBITDA is a non-GAAP
financial measure we use as a performance measure. As an owner and
operator of real estate, we consider EBITDA to be an important
measure of performance from core operations because EBITDA does not
include various income and expense items that are not indicative of
our operating performance. EBITDA should not be considered as an
alternative to net income as an indicator of financial performance.
Our computation of EBITDA may differ from the methodology utilized
by other companies to calculate EBITDA. Same Store Portfolio
Apartment communities are generally added into our Same Store
Portfolio the quarter following 12 months of ownership. In the case
of newly developed apartment communities, or communities acquired
in lease-up, they become part of the Same Store Portfolio beginning
the first full quarter 12 months after achieving 90% occupancy for
90 days. Communities which are being extensively renovated in which
at least $5,500 per apartment unit is being invested on at least
50% of turns are excluded from the Same Store Portfolio. Twelve
months after the renovations at a community are substantially
complete, communities are returned to the Same Store Portfolio
beginning in the next full quarter. Also excluded from our Same
Store Portfolio are communities that have been approved by the
Board of Directors for disposition. DATASOURCE: Mid-America
Apartment Communities, Inc. CONTACT: Investor Relations of
Mid-America Apartment Communities, +1-901-682-6600, or Web Site:
http://www.maac.net/
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