MEMPHIS, Tenn., Aug. 6 /PRNewswire-FirstCall/ -- Mid-America
Apartment Communities, Inc. (NYSE:MAA), or Mid-America, reported
net income available for common shareholders for the quarter ended
June 30, 2009, of $6,931,000, or $0.25 per diluted common share, as
compared to net income available for common shareholders of
$5,427,000, or $0.20 per diluted common share, for the second
quarter of 2008. In the second quarter of 2009, Mid-America
recorded total gains of $1,155,000 from the sale of Riverhills, a
96-unit property located in Mississippi; without this, net income
available per diluted common share in the second quarter of 2009
would have been $0.20. Funds from operations, or FFO, the widely
accepted measure of performance for real estate investment trusts,
was $29,824,000 or $0.98 per diluted share/unit for the second
quarter of 2009, as compared to $27,828,000 or $0.95 per diluted
share/unit for the same quarter of 2008, an increase of 3% and a
second quarter record result. Second quarter 2009 FFO per diluted
share/unit was 5 cents ahead of the mid-point of Mid-America's
guidance. A reconciliation of FFO to net income attributable to
Mid-America Apartment Communities, Inc. and an expanded discussion
of the components of FFO can be found later in this release. For
the six months ended June 30, 2009, net income available for common
shareholders was $14,854,000, or $0.53 per common share, as
compared to $9,890,000, or $0.38 per common share, for the six
months ended June 30, 2008. In the first six months of 2009,
Mid-America recorded gains from the disposition of two properties
totaling $2,587,000; without these gains, net income available per
common share for the six months ended June 30, 2009 would have been
$0.43. For the six months ended June 30, 2009, FFO was $60,549,000,
or $1.98 per diluted share/unit, compared to $54,810,000, or $1.91
per diluted share/unit, for the six months ended June 30, 2008, a
per share/unit increase of 4%. Highlights: -- FFO performance of
$0.98 per diluted share/unit is a second quarter record and $0.03
ahead of last year. -- Physical occupancy for the same store
portfolio ended the second quarter of 2009 at 95.6%, ahead of 95.0%
at the same point last year, and a new second quarter record. --
Property operating performance was better than forecast with same
store net operating income, or NOI, in the second quarter declining
just 0.2% as compared to the comparable period in the prior year.
-- The company announced the formation of Mid-America Multifamily
Fund II, LLC, in which it has a 1/3 interest, with plans to invest
in up to $250 million of apartment properties on behalf of the fund
over the next 18 months. -- Mid-America finalized its 2009 - 2010
property and casualty insurance program renewal with a cost
increase of less than 1%. -- During the second quarter Mid-America
acquired a new upscale property in its initial lease-up in Phoenix,
AZ, Sky View Ranch. -- In May, Mid-America sold a 36-year old
property, Riverhills in Grenada, MS. -- Mid-America completed the
renovation and repositioning of 605 apartments in the second
quarter of 2009 with rent increases averaging 11%. -- Mid-America
continues to be in a strong financial position as its fixed charge
coverage ratio reached a record 2.71 for the second quarter of
2009, up from 2.51 for the second quarter of 2008. -- At the end of
the quarter Mid-America had available $163 million of unused
capacity under its existing credit facilities. -- As a result of
the strong second quarter results and an improved operating outlook
for the balance of the year, Mid-America has increased its FFO per
diluted share/unit guidance for 2009 to a range of $3.55 to $3.75
from a previous range of $3.47 to $3.67. Fund II: New Partnership
with Private Capital In June, Mid-America announced the formation
of Mid-America Multifamily Fund II, LLC, or Fund II, a joint
venture with institutional capital. Fund II will target to invest
in multi-family properties that are 7-years old or older which
provide value-add or turn-around opportunities. Fund II will pursue
investment opportunities located in Mid-America's present region
and market area. Mid-America does not plan to contribute any of its
existing assets to Fund II. Fund II anticipates acquiring up to
$250 million of assets, 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 in the
event the investment returns exceed certain threshold levels, will
also earn a promote fee at the end of Fund II's expected 6 - 7 year
investment period. In July, Fund II purchased Ansley Village a
294-unit property in lease-up located just south of Atlanta in
Macon, GA. The property was completed in 2008, is 70% occupied, and
was owned by a bank subsidiary which had taken the property by deed
in lieu of foreclosure. Mid-America offered this new acquisition
opportunity to Fund II due to market concentration of assets in its
own portfolio. Mid-America's existing joint venture, Mid-America
Multifamily Fund I, LLC, that owns two properties acquired in 2008
has no plans to make further acquisitions, will remain in place and
is unaffected by the formation of Fund II. Wholly-owned
Acquisitions: Increasing Opportunities In June, Mid-America closed
on the purchase of Sky View Ranch, a 232-unit property in lease-up
in the Gilbert/Mesa sub-market of Phoenix, AZ for $17.5 million.
The newly built upscale property is still in its initial lease-up
and was 81% occupied at the end of June. With close proximity to
educational and medical centers, including the new M.D. Anderson
Cancer Center slated to open in 2011, Mid-America expects to
capture an attractive investment return as the Phoenix apartment
market recovers over the next few years. Mid-America is currently
underwriting several other investment opportunities, including
distressed lease-up properties. New Development: One Expansion
Project Under Way Mid-America has one development project in
process, the 45-unit expansion of Copper Ridge I in Dallas, TX.
Construction is forecast to be completed by the end of 2009.
Construction of the initial 216 units at Copper Ridge I and 124
units at St. Augustine II (Jacksonville, FL) is complete. Copper
Ridge I was 77% occupied at quarter end, and St. Augustine II was
83% occupied. Property Redevelopment: Expanding and Generating
Strong Investment Returns Redevelopment of 1,121 apartment units
was completed in the first half of 2009, at an average cost of
$4,191 per unit, compared to 1,932 units redeveloped at $4,672 per
unit for the first half of 2008. The average monthly rent increase
achieved on the renovated apartments in the first half 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 9%.
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 high-return 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 Riverhills, a 36-year old
property with 96 units in Grenada, MS, on May 12, 2009, for $2.7
million, a 6.4% cap rate. In January, Mid-America completed the
sale of Woodstream, a 25-year old property in Greensboro, NC. One
additional property, River Trace, a 25-year old property with 440
units located in Memphis, TN, is under contract for sale, with a
closing scheduled for September. The blended selling cap rate for
all three properties is 7.1%. Operating Results: Stable Outlook
Eric Bolton, Chairman and Chief Executive Officer, said, "We were
pleased with the solid operating performance in the second quarter
despite continued pressure from weak employment conditions and a
struggling economy. Strong occupancy and a continued focus on
expense control generated better than expected results. While our
markets have clearly been impacted by the downturn in the economy,
we believe that as a result of our diversified portfolio strategy,
disciplined capital allocation practices, strong operating platform
and the conservative nature with which we have financed our
business, Mid-America remains in a solid position. "We expect the
leasing environment will continue to be challenged throughout the
year as a weak employment market weighs on the demand for apartment
housing. However, as a result of reduced resident turnover, a
strengthened leasing platform and continued success in capturing
more efficiency in property operations, we remain optimistic that
we will not see a material deterioration in operating results. "We
are pleased to have put Fund II in place to take advantage of what
we expect will be expanded opportunities to create additional value
for our shareholders through attractive new investments, and
together with the capacity on our own balance sheet, we are poised
to take advantage of such opportunities." Simon Wadsworth,
Executive Vice President and Chief Financial Officer, said, "Our
results for the second quarter benefited from strong occupancy and
better than expected expense performance. Expenses benefited from
lower unit turnover and lower real estate taxes resulting from
reduced negotiated assessments and successful appeals of 2008
values. Reduced repair and maintenance expense resulting from lower
unit turnover and continued gains in efficiency with marketing
costs contributed to the 1.1% decline in same store expenses in the
second quarter of 2009 versus the same quarter of 2008. During the
quarter we wrapped up the renewal of our property and casualty
insurance program effective July 1, and were particularly pleased
to capture less than a 1% increase in premiums on an almost
identical program, despite the hardening of the insurance market.
The favorable interest rate environment also benefited us, reducing
our average interest rate for the second quarter of 2009 to 4.4%,
down from 4.9% a year ago. Following the refinancing of the $38.3
million mortgage maturity on April 1, 2009, we still had $163
million of unused debt capacity, and no further significant debt
maturities until 2011. "During the quarter we recorded expenses of
$107,000 as a reduction of FFO associated with the acquisition of
Sky View Ranch, and $141,000 to prepay a bond." Second Quarter 2009
Same Store Results: Strong Execution Drives Stable Performance
Percent Change From Three Months Ended June 30, 2008 (Prior Year):
Average Physical Effective Markets Revenue(1) Expense NOI(1)
Occupancy Rent ------- ---------- ------- ------ --------- ----
Primary -1.3% -2.8% -0.2% 0.6% -1.7% Secondary -0.1% 0.6% -0.7%
0.7% -1.0% ---------- ------- ------ --------- ---- Operating Same
Store -0.7% -1.1% -0.4% 0.6% -1.3% Total Same Store -0.6% -1.1%
-0.2% (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 revenue growth for the second quarter of 2009 declined 0.6%
compared to the second quarter of 2008, with ending physical
occupancy of 95.6%, up 0.6% from last year, and a new record high
for any second quarter. Revenues in Mid-America's secondary markets
declined by 0.1% compared to a decline of 1.3% in Mid-America's
primary markets. Along with strong performance by the secondary
markets, Dallas and South Florida had positive same-store revenue
growth, and Houston was just slightly negative. Same store lease
concessions declined by 33%, from 1.3% of net potential rent in the
second quarter of 2008 to 0.9% in the second quarter of 2009.
Effective rent per unit declined slightly by 1.3% in the second
quarter of 2009 from the second quarter of 2008 and average
effective rent per unit now stands at $730. Walk-in traffic
decreased slightly by 0.1%, and, partially due to the high
occupancy already achieved, applications decreased by 7% in the
second quarter of 2009 from the second quarter of 2008. Delinquency
decreased 10% to 0.36% of net potential rent in the second quarter
of 2009 compared to 0.39% in the second quarter of 2008. The number
of move-ins decreased by 1.3% as a result of reaching such a high
occupancy level at the beginning of the quarter and because of
fewer move-outs. Unit turnover for the second quarter of 2009
declined on an annualized basis to 59.5% from 65.6% in 2008. The
number of residents leaving to buy a house declined by 22% to 21.5%
of move-outs in the second quarter of 2009 from 25.0% in the second
quarter of 2008, and the number leaving to rent a house increased
modestly from 4.3% of move-outs in the second quarter of 2008 to
4.8% in the second quarter of 2009. Same store property expenses
for the second quarter of 2009 decreased by 1.1% compared to the
prior year period. Real estate tax expense dropped by 6.6%
reflecting the impact of successful tax appeals from 2008 and
actual and expected assessment decreases, especially in Texas and
Florida, partially offset by forecast rate increases. Mid-America
now forecasts real estate taxes to be approximately flat with last
year. Insurance expense was down by 9.9%, and Mid-America has
renewed its new insurance policy for the 2009 - 2010 year at less
than a 1% increase in expense. Repair and maintenance costs
declined by 5% on fewer turns, and total personnel costs increased
by 2.0%. Same store NOI decreased by 0.2% in the second quarter of
2009 compared to the same quarter a year ago with continued solid
performance in many of our markets. Excluded from the same store
group are eight properties which are part of Mid-America's
redevelopment program, and 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 fixed charge coverage continues to strengthen and was
2.71 for the second quarter of 2009, a record, compared to 2.51 for
the same quarter a year ago, and above the apartment sector median.
At quarter-end, debt was 50% of total gross assets, compared to 50%
at June 30, 2008. At the end of the second quarter of 2009,
Mid-America had $163 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 in 2010 which is expected to be
renegotiated late this year. On December 1, 2009, $65 million of
Mid-America's Fannie Mae credit facility, which is currently fixed
at 7.7%, reverts to floating rate. Assuming that the rate is re-set
using interest rate swaps and caps, Mid-America anticipates
annualized savings of approximately $0.07 per share. In 2009,
Mid-America's total funding for development is forecast at $9
million, of which $6.6 million has been invested during the first
half year. The anticipated redevelopment expenditures for 2009 are
$9 million, of which $5.2 million has been invested as of the end
of the second quarter. Adjusted Funds from Operations and Capital
Expenditures Recurring capital expenditures totaled $7.6 million
for the second quarter of 2009, approximately $0.25 per diluted
share/unit, resulting in AFFO of $0.73 per diluted share/unit
compared to AFFO of $0.71 per diluted share/unit in the second
quarter of last year. Total property capital expenditures on
existing properties were $11.2 million, plus $2.6 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 July 31, 2009, to holders of record on July
15, 2009. This represents Mid-America's 62nd consecutive quarterly
cash dividend to shareholders/unit holders. 2009 Forecast
Mid-America experienced stronger revenues than expected mainly due
to stronger occupancy in the second quarter and now expects this
revenue trend to continue for the balance of 2009. Mid-America also
now anticipates expenses to run at a lower level than previously
forecast due to moderate repair and maintenance, personnel, and
real estate tax expense. Based on the renewal negotiated effective
July 1, 2009, insurance costs for the balance of the year are also
expected to be below prior forecasts. Mid-America's secondary
markets together with its Texas portfolio have generally been more
resilient to unemployment pressures than for the nation, although
management expects operating conditions for the balance of the year
to be challenging. Strong operations, favorable expenses and
interest rates have thus far offset some of the pressure resulting
from the weaker job markets. Management's latest forecast is for
FFO per diluted share/unit for 2009 to be in a range of $3.55 to
$3.75 per diluted share/unit compared to prior guidance of $3.47 to
$3.67. FFO per diluted share/unit for the third quarter of 2009 is
expected to be $0.80 to $0.90, and for the fourth quarter $0.77 to
$0.87. 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 2.5% to 4.5%, compared to the prior forecast
of 4% to 6%. Same store revenues are forecast to decline in a range
of 1% to 2%, compared to the prior forecast of a decline of 1.5% to
2.5%. Prior guidance of $75 million of wholly-owned acquisitions,
$75 million of acquisitions in a joint venture, and $30 million of
dispositions, still seems to be a reasonable projection for the
year. 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 second quarter results
and 2009 prospects on Friday, August 7, 2009, at 9:15 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 42,685 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; --
inability to acquire funding through the capital markets; --
inability to pay required distributions to maintain REIT status due
to required debt payments; -- changes in variable interest rates;
-- loss of hedge accounting treatment for interest rate swaps due
to volatility in the financial markets; -- unexpected capital
needs; -- significant disruption in the credit markets, including
the inability of Fannie Mae and Freddie Mac to continue as major
suppliers of debt financing for multi-family housing and for us; --
increasing real estate taxes and insurance costs; -- losses from
catastrophes in excess of our insurance coverage; -- inability to
meet loan covenants; -- inability to attract and retain qualified
personnel, -- failure of new acquisitions to achieve anticipated
results or be efficiently integrated into us; -- failure of
development communities to lease-up as anticipated; -- inability to
timely dispose of assets; -- potential liability for environmental
contamination; -- litigation and compliance costs associated with
laws requiring access for disabled persons; -- inability of a joint
venture to perform as expected; and -- the 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. 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 Six months ended June 30, June 30, -------- -------- 2009
2008 2009 2008 ---- ---- ---- ---- Property revenues $94,370
$91,375 $187,906 $182,096 Management and fee income, net 63 61 127
89 Property operating expenses (38,793) (37,890) (77,024) (74,792)
Depreciation (23,818) (22,070) (47,403) (43,986) Acquisition
expenses (107) - (109) - Property management expenses (4,503)
(4,387) (8,744) (8,645) General and administrative (2,686) (2,831)
(5,143) (5,751) -------------------------- ------ ------ ------
------ Income from continuing operations before non-operating items
24,526 24,258 49,610 49,011 Interest and other non-property income
68 116 148 224 Interest expense (14,472) (15,035) (28,701) (31,240)
Loss on debt extinguishment (141) - (138) - Amortization of
deferred financing costs (588) (486) (1,194) (1,114) Net casualty
gains (loss) and other settlement proceeds - 416 (144) 544 Loss on
sale of non-depreciable assets - - - (3)
------------------------------- --- --- --- -- Income from
continuing operations before loss from real estate joint ventures
9,393 9,269 19,581 17,422 Loss from real estate joint ventures
(156) (199) (352) (282) --------------------------- ---- ---- ----
---- Income from continuing operations 9,237 9,070 19,229 17,140
Discontinued operations: Income from discontinued operations 326
148 747 348 Gains (loss) on sales of discontinued operations 1,155
(61) 2,587 (120) -------------------------- ----- --- ----- ----
Consolidated net income 10,718 9,157 22,563 17,368 Net income
attributable to noncontrolling interests (570) (513) (1,276)
(1,045) --------------------------- ---- ---- ------ ------ Net
income attributable to Mid-America Apartment Communities, Inc.
10,148 8,644 21,287 16,323 Preferred dividend distribution (3,217)
(3,217) (6,433) (6,433) Net income available for common
shareholders $6,931 $5,427 $14,854 $9,890 ====================
====== ====== ======= ====== Weighted average common shares -
Diluted 28,184 26,761 28,175 26,279 Net income per share available
for common shareholders - Diluted $0.25 $0.20 $0.53 $0.38 FUNDS
FROM OPERATIONS (in thousands except per share data)
--------------------------------------------------------- Three
months ended Six months ended June 30, June 30, -------- --------
2009 2008 2009 2008 ---- ---- ---- ---- Net income attributable to
Mid-America Apartment Communities, Inc. $10,148 $8,644 $21,287
$16,323 Depreciation of real estate assets 23,293 21,656 46,413
43,265 Net casualty (gains) loss and other settlement proceeds -
(416) 144 (544) Gains on dispositions within real estate joint
ventures - (38) - (38) Depreciation of real estate assets of
discontinued operations (1) - 350 - 702 (Gains) loss on sales of
discontinued operations (1,155) 61 (2,587) 120 Depreciation of real
estate assets of real estate joint ventures 185 275 449 370
Preferred dividend distribution (3,217) (3,217) (6,433) (6,433) Net
income attributable to noncontrolling interests 570 513 1,276 1,045
----------------------- --- --- ----- ----- Funds from operations
29,824 27,828 60,549 54,810 Recurring capital expenditures (7,637)
(7,171) (11,418) (11,038) ----------------- ------ ------ -------
------- Adjusted funds from operations $22,187 $20,657 $49,131
$43,772 ------------------- ------- ------- ------- -------
Weighted average common shares and units - Diluted 30,587 29,146
30,579 28,663 Funds from operations per share and unit - Diluted
$0.98 $0.95 $1.98 $1.91 Adjusted funds from operations per share
and unit - Diluted $0.73 $0.71 $1.61 $1.53 (1) Amounts represent
depreciation expense prior to communities being classified as
discontinued operations. CONSOLIDATED BALANCE SHEETS (in thousands)
------------------------------------------ Jun 30, 2009 Dec 31,
2008 ------------ ------------ Assets Real estate assets Land
$243,119 $240,426 Buildings and improvements 2,250,935 2,198,063
Furniture, fixtures and equipment 70,511 65,540 Capital
improvements in progress 10,568 25,268
-------------------------------- ------ ------ 2,575,133 2,529,297
Accumulated depreciation (740,383) (694,054)
------------------------ -------- -------- 1,834,750 1,835,243 Land
held for future development 1,306 1,306 Commercial properties, net
8,527 7,958 Investments in real estate joint ventures 6,572 6,824
----------------------------------------- ----- ----- Real estate
assets, net 1,851,155 1,851,331 Cash and cash equivalents 6,080
9,426 Restricted cash 687 414 Deferred financing costs, net 14,513
15,681 Other assets 14,508 16,840 Goodwill 4,106 4,106 Assets held
for sale 13,085 24,157 -------------------- ------ ------ Total
assets $1,904,134 $1,921,955 ============ ========== ==========
Liabilities and Shareholders' Equity Liabilities Notes payable
$1,323,648 $1,323,056 Accounts payable 1,916 1,234 Fair market
value of interest rate swaps 54,055 76,961 Accrued expenses and
other liabilities 67,568 66,982 Security deposits 8,966 8,705
Liabilities associated with assets held for sale 373 595
--------------------------------------- --- --- Total liabilities
1,456,526 1,477,533 Redeemable stock 1,976 1,805 Shareholders'
equity Series H cumulative redeemable preferred stock 62 62 Common
stock 282 282 Additional paid-in capital 955,267 954,127
Accumulated distributions in excess of net income (484,312)
(464,617) Accumulated other comprehensive income (50,218) (72,885)
-------------------------------------- ------- ------- Total
Mid-America Apartment Communities, Inc. shareholders' equity
421,081 416,969 Noncontrolling interest 24,551 25,648
----------------------- ------ ------ Total equity 445,632 442,617
------------ ------- ------- Total liabilities and shareholders'
equity $1,904,134 $1,921,955 ===================================
========== ========== SHARE AND UNIT DATA (in thousands)
---------------------------------- Three months ended Six months
ended June 30, June 30, -------- -------- 2009 2008 2009 2008 ----
---- ---- ---- NET INCOME SHARES Weighted average common shares -
Basic 28,105 26,599 28,095 26,113 Weighted average common shares -
Diluted 28,184 26,761 28,175 26,279 FUNDS FROM OPERATIONS SHARES
AND UNITS Weighted average common shares and units - Basic 30,509
29,017 30,499 28,535 Weighted average common shares and units -
Diluted 30,587 29,146 30,579 28,663 PERIOD END SHARES AND UNITS
Common shares at June 30, 28,224 27,483 28,224 27,483 Limited
partnership units at June 30, 2,404 2,406 2,404 2,406 Outstanding
options at June 30, 24 95 24 95 Unvested shares in share based
plans at June 30, 99 140 99 140 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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