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, 1999
Commission File Number: 333-42441
MID-AMERICA CAPITAL PARTNERS, L.P.
(Exact Name of Registrant as Specified in Charter)
TENNESSEE 62-1717980
(State of Incorporation) (I.R.S. Employer Identification
Number)
6584 POPLAR AVENUE, SUITE 340
MEMPHIS, TENNESSEE 38138
(Address of principal executive offices)
(901) 682-6600
Registrant's telephone number, including area code
Securities registered pursuant to Section 12 (b) of the Act:
Title of Each Class
Commercial Mortgage Pass Through Certificates, Series 1998 -1
Representing Benefical Ownership in Mid-America Capital Partners,
L.P. 6.376% First Mortgage Bonds, Due 2003
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 [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in PART III of this Form 10-K or any amendment to this
Form 10-K. [ x ]
<PAGE>
MID-AMERICA CAPITAL PARTNERS, L.P.
TABLE OF CONTENTS
Item
PART I
1. Business
2. Properties
3. Legal Proceedings
4. Submission of Matters to Vote of Security Holders
PART II
5. Market for Registrant's Common Equity and Related Stockholder
Matters
6. Selected Financial Data
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
7A.
8. Financial Statements and Supplementary Data
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
PART III
10. Directors and Executive Officers of the Registrant
11. Executive Compensation
12. Security Ownership of Certain Beneficial Owners and Management
13. Certain Relationships and Related Transactions
PART IV
14. Exhibits, Financial Statement Schedule and Reports on Form 8-K
<PAGE>
PART I
ITEM 1. BUSINESS
THE COMPANY
Mid-America Capital Partners, L.P. (the Partnership) is a special purpose
Delaware limited partnership. The Partnership was formed on November 24, 1997
for the sole purpose to own and operate 26 apartment communities (the Mortgaged
Properties) and manage, renovate, improve, lease, sell, transfer, exchange,
mortgage and otherwise deal with the Mortgaged Properties. The sole limited
partner of the Partnership is Mid-America Apartments, L.P., a Tennessee limited
partnership (MAALP), which is a majority owned subsidiary of Mid-America
Apartment Communities, Inc. (MAAC). MAAC owns, directly or through its
subsidiaries, all of the outstanding units of partnership interest. MAAC is a
self-administered and self-managed umbrella partnership real estate investment
trust (REIT). MAAC conducts a substantial portion of its operations through
MAALP and subsidiaries of MAALP. The sole general partner of the Partnership is
MAACP, Inc., a Tennessee corporation (MAACP), a wholly-owned subsidiary of MAAC.
The term of the Partnership shall be to December 31, 2020, unless terminated
earlier as provided in the Partnership Agreement or as otherwise provided by
law.
The Partnership was formed to succeed substantially all the interests in Capital
Properties Group (predecessor to the Partnership, "Predecessor"). Distributions
to the Partners relating to operations of the Mortgaged Properties will be based
upon net cash flow as defined in the Partnership Agreement. Profits and losses
are allocated to the Partners in proportion with their ownership interests.
Subsequent to the Partnership formation, MAALP contributed its interest in 20 of
the Mortgaged Properties, and the right to acquire the Reorganization Properties
(as defined below) to the Partnership in exchange for 99% limited partnership
interest in the Partnership. MAACP contributed cash in exchange for a 1% general
partnership interest in the Partnership.
The Mortgaged Properties consist of (i) 20 properties contributed by MAALP
comprising the Predecessor; (ii) 5 properties acquired on November 25, 1997 by
the Partnership in connection with the consummation of the merger of Flournoy
Development Company (FDC) with and into MAAC and the other transactions
(collectively, the Reorganization Properties) as described in the Agreement and
Plan of Reorganization dated as of September 15, 1997 (the Plan of
Reorganization) between FDC, MAAC and MAALP consisting of 4 properties acquired
from Brown-Flournoy Equity Income Fund Limited Partnership (the Brown-Flournoy
Properties) and Willow Creek; and (iii) one property (Hermitage at Beechtree)
which was acquired November 25, 1997 through the merger of Hermitage at
Beechtree, L.L.C. with and into the Partnership. The Partnership recorded the
five properties acquired in connection with the Plan of Reorganization using the
purchase method of accounting.
OPERATING PHILOSOPHY
INTENSIVE MANAGEMENT FOCUS. The Partnership strongly emphasizes on-site property
management. Particular attention is paid to opportunities to increase rents,
raise average occupancy rates, and control costs, with property managers and
regional management being given the responsibility for monitoring market trends
and the discretion to react to such trends.
DEDICATION TO CUSTOMER SERVICE. Management's experience is that maintaining a
consistently high level of customer satisfaction leads to greater demand for the
Partnership's apartment units, higher occupancy and rental rates, and increased
long-term profitability. The Partnership, as part of its intense management
focus, has established regional training facilities to produce highly trained
property managers, leasing consultants and service technicians on-site at each
of the Mortgaged Properties. Management believes that this commitment to
training and excellence in associates ultimately translates to higher customer
satisfaction. Also, management undertakes frequent resident surveys and focus
groups, in order to measure customer satisfaction.
<PAGE>
DECENTRALIZED OPERATIONAL STRUCTURE. The Partnership's operational structure is
organized on a decentralized basis. The Partnership's property managers have
overall operating responsibility for their specific Mortgaged Properties.
Property managers report to area managers or regional managers. Management
believes that its decentralized operating structure capitalizes on specific
market knowledge, increases personal accountability relative to a centralized
structure and is beneficial in the acquisition, redevelopment and development
process.
GROWTH STRATEGIES
Management's goal is to maximize its return on investment in each apartment
community by increasing rental rates and reducing operating expenses while
maintaining high occupancy levels. The Partnership seeks higher net rental
revenues by enhancing and maintaining the competitiveness of the Mortgaged
Properties and manages expenses through its system of detailed management
reporting and accountability in order to achieve increases in operating cash
flow. The steps taken to meet these objectives include:
o empowering the Partnership's property managers to adjust rents in response
to local market conditions and to concentrate resident turnover in peak
rental demand months;
o implementing programs to control expenses through investment in cost-saving
initiatives;
o ensuring that, through monthly inspections of all Mortgaged Properties by
senior management and prompt attention to maintenance and recurring capital
needs as well as defined preventive maintenance programs conducted
quarterly at each property, the Mortgaged Properties are properly
maintained;
o improving the "curb appeal" of the Mortgaged Properties through extensive
landscaping and exterior improvements and repositioning Mortgaged
Properties from time to time to maintain market leadership positions;
o investing heavily in training programs for its property level personnel;
o compensating employees through performance-based compensation and stock
ownership programs; and
o maintaining a hands-on management style and "flat" organizational structure
that emphasizes senior management's continued close contact with the market
and employees.
COMPETITION
All of the Partnership's Mortgaged Properties 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
Partnership's properties compete with numerous other multifamily properties, the
owners of which may have greater resources than the Partnership and whose
management may have more experience than the Partnership'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.
<PAGE>
ITEM 2. PROPERTIES
The following table sets forth certain historical information on the 26
Mortgaged Properties owned at December 31, 1999:
The following table presents information concerning the properties at December
31, 1999:
<TABLE>
Approximate Average Rent Per Occupancy
Year Year Rentable Unit Unit at % at
Comp- Management Number Area Size December 31, December 31,
Property (1) Location leted Commenced Of Units (Square Ft.)(Square Ft.) 1999 1999
- ------------ -------- ----- --------- -------- ----------- ------------ ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Belmere .............. Tampa, FL 1984 1994 210 202,440 964 $649 92.9%
Crosswinds ........... Jackson, MS 1988/1990 1996 360 443,200 1,231 $606 96.1%
Fairways at Royal Oak Cincinnati, OH 1988 1994 214 214,477 1,002 $627 92.5%
Hermitage at Beechtree Cary, NC 1988 1997 194 169,776 875 $687 89.2%
Hidden Lake II ....... Union City, GA 1987 1997 160 154,000 963 $670 95.6%
High Ridge ........... Athens, GA 1987 1997 160 186,608 1,166 $765 94.4%
Howell Commons ....... Greenville, SC 1986/88 1997 348 292,840 841 $509 95.7%
Kirby Station ........ Memphis, TN 1978 1994 371 310,173 836 $589 98.4%
Lakepointe ........... Lexington, KY 1986 1994 118 90,614 768 $562 99.2%
Lakeside ............. Jacksonville, FL 1985 1996 416 344,192 827 $605 91.3%
Marsh Oaks ........... Atlantic Beach, FL 1986 1995 120 93,280 777 $560 94.2%
Napa Valley .......... Little Rock, AR 1984 1996 240 183,216 763 $548 92.9%
Park Haywood ......... Greenville, SC 1983 1993 208 156,776 754 $537 98.1%
Park Place ........... Spartanburg, SC 1987 1997 184 195,312 1,061 $604 91.8%
Pear Orchard ......... Jackson, MS 1985 1994 389 338,400 870 $577 94.1%
Savannah Creek ....... Memphis, TN 1989 1996 204 237,200 1,162 $624 96.1%
Shenandoah Ridge ..... Augusta, GA 1982 1994 272 222,800 819 $477 97.1%
Somerset Place ....... Jackson, MS 1981 1995 144 126,848 881 $519 94.4%
Southland Station I .. Warner Robins, GA 1987 1997 160 186,704 1,167 $642 97.5%
Steeplechase ......... Chattanooga, TN 1986 1991 108 98,602 913 $566 92.6%
Sutton Place ......... Memphis, TN 1991 1996 253 267,600 1,062 $595 95.7%
Tiffany Oaks ......... Altamonte Springs, FL 1985 1996 288 234,224 813 $607 97.6%
Village, The ......... Lexington, KY 1989 1994 252 182,716 725 $593 95.6%
Westside Creek I ..... Little Rock, AR 1984 1997 142 148,030 1,042 $604 89.4%
Williamsburg Village . Jackson, TN 1987 1994 148 121,412 820 $539 90.5%
Willow Creek ......... Columbus, GA 1971-77 1997 285 246,668 866 $504 97.2%
===================================================================================
Total Properties 5,948 5,448,108 916 $586 94.82%
===================================================================================
</TABLE>
(1) All 26 of these communities are encumbered by the Bonds of $142 million
which mature on March 3, 2003 and have an interest rate of 6.376%.
<PAGE>
TEM 3. LEGAL PROCEEDINGS
The Partnership is not presently subject to any material litigation nor, to the
Partnership's knowledge, is any material litigation threatened against the
Partnership, 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 Partnership.
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
None.
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial data on an historical basis
for the Partnership. 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.
<TABLE>
Mid - America Capital Partners, L.P.
(a limited partnership)
Selected Financial Data
(Dollars in thousands except per share data)
Year Ended December 31,
----------------------------------------------------------------------
----------------------------------------------------------------------
(Predecessor)
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Operating Data:
Total revenues $ 39,683 $ 38,742 $ 30,949 $ 20,251 $ 14,497
Expenses:
Property expenses 14,517 14,207 10,985 7,207 5,306
General and administrative 1,596 1,515 1,238 810 580
Interest 9,083 9,162 1,671 2,169 2,225
Depreciation and amortization 8,853 8,324 6,389 4,000 2,614
Amortization of deferred financing costs 990 1,026 152 58 48
----------------------------------------------------------------------
Income before extraordinary item 4,644 4,508 10,514 6,007 3,724
Extraordinary item - loss on debt extinguishment - (86) (16) - -
----------------------------------------------------------------------
Net income $ 4,644 $ 4,422 $ 10,498 $ 6,007 $ 3,724
======================================================================
Balance Sheet Data:
Real estate owned, at cost $ 238,319 $ 233,164 $ 227,608 $ 158,285 $ 87,240
Real estate owned, net $ 207,157 $ 210,855 $ 213,623 $ 150,699 $ 83,653
Total assets $ 230,447 $ 224,324 $ 219,363 $ 151,257 $ 84,216
Total debt $ 142,000 $ 142,000 $ 140,000 $ 16,461 $ 22,830
Partners' capital $ 82,855 $ 78,211 $ 73,789 $ 131,951 $ 59,978
Other Data (at end of period):
Number of properties owned 26 26 26 18 12
Number of apartment units owned 5,948 5,948 5,948 4,314 2,554
</TABLE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The following is a discussion of the financial condition and results of
operations of the Partnership and its Predecessor for the years ended December
31, 1999, 1998 and 1997. This discussion should be read in conjunction with the
financial statements included in this report.
The Partnership had 26 communities consisting of 5,948 total apartment units at
December 31, 1999, 1998 and 1997.
RESULTS OF OPERATIONS
COMPARISON OF THE PARTNERSHIP'S YEAR ENDED DECEMBER 31, 1999 TO THE YEAR ENDED
DECEMBER 31, 1998
Total revenues increased $941,000 in 1999 due to increased rental revenues.
Rental revenues increased as compared to 1998 due to a 2.4% increase in the
average rental rate and a .5% increase in the average occupancy during 1999 for
the total 5,948 units owned.
Property operating expenses include costs for personnel, building repairs and
maintenance, real estate taxes and insurance, utilities, landscaping and other
operating costs. Property operating expenses for 1999 increased by $310,000
mainly due to increases of $218,000 in real estate taxes and insurance, $112,000
in landscaping, and $107,000 in other operating costs. These increases were
partially offset by costs reductions of $89,000 in building repairs and
maintenance and $38,000 in utilities.
COMPARISON OF THE PARTNERSHIP'S YEAR ENDED DECEMBER 31, 1998 TO THE
PREDECESSOR'S YEAR ENDED DECEMBER 31, 1997
Total revenues for 1998 increased by $7,793,000 due primarily to $7,217,000 from
the communities acquired in 1997 and $576,000 from the communities owned
throughout both periods.
Property operating expenses include costs for personnel, repairs and
maintenance, real estate taxes and insurance, utilities, landscaping and other
operating costs. Property operating expenses for 1998 increased by $3,222,000
due primarily to $2,735,000 from the communities acquired in 1997 and $487,000
from the communities owned throughout both periods.
Depreciation and amortization expense increased $2,809,000 for 1998 compared to
the same period a year earlier primarily due to (i) depreciation expense of
$1,427,000 from the communities acquired in 1997, (ii) depreciation expense of
$508,000 from the communities owned throughout both periods, and (iii) $874,000
of additional amortization expense for the deferred financing costs incurred on
the March 6, 1998 issuance of Bonds.
Interest expense increased $7,491,000 in 1998 as compared to 1997 primarily due
to the issuance of the Bonds.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities increased to $17,128 in 1999 from
$12,285 in 1998. The increase was primarily due to changes in operating assets
and liabilities during the period primarily related to timing of payments for
real estate taxes and amounts due to affiliates.
The Partnership used $5,155,000 in cash for investing activities. The funds were
used for preventive maintenance and recurring capital needs, as well as,
improving the "curb appeal" of the properties through landscaping and exterior
improvements.
The Partnership used $8,306,000 in financing activities during 1999, $7,639,000
of which was related to payments of excess flows to the Limited Partner. An
additional $667,000 was used to repay a bank overdraft from December 1998.
The Partnership believes that cash provided by operations is adequate and
anticipates that it will continue to be adequate in both the short and long-term
to meet operating requirements (including recurring capital expenditures at the
Mortgaged Properties).
INSURANCE
In the opinion of management, property and casualty insurance is in place which
provides adequate coverage to provide financial protection against normal
insurable risks such that it believes that any loss experienced would not have a
significant impact on the Partnership's liquidity, financial position, or
results of operations.
INFLATION
Substantially all of the resident leases at the Mortgaged Properties allow, at
the time of renewal, for adjustments in the rent payable thereunder, and thus
may enable the Partnership to seek rent increases. The substantial majority of
these leases are for one year or less. The short-term nature of these leases
generally serves to reduce the risk to the Partnership of the adverse effects of
inflation.
YEAR 2000
During 1999 the Company completed all phases of an action plan designed to
minimize the impact of Year 2000 ("Y2K") issue. Currently the Company has
experienced no internal or external business disruptions associated with the Y2K
issue. There can be, however, no assurance that future unforeseen Y2K problems
will not cause disruptions to our internal business systems, or those of our
vendors. In the event that these disruptions are significant, they could have a
material impact on the Company.
RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS
The Management's Discussion and Analysis of Financial Condition and Results of
Operations contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the safe harbors created thereby. These statements include the plans and
objectives of management for future operations, including plans and objectives
relating to capital expenditures and rehabilitation costs on the apartment
Mortgaged Properties. Although the Partnership believes that the assumptions
underlying the forward-looking statements are reasonable, any of the assumptions
could be inaccurate and, therefore, there can be no assurance that the
forward-looking statements included in this report will prove to be accurate. In
light of the significant uncertainties inherent in the forward-looking
statements included herein, the inclusion of such information should not be
regarded as a representation by the Partnership or any other person that the
objectives and plans of the Partnership will be achieved.
<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnership's primary market risk exposure is to changes in interest rates
obtainable on the Bonds. The Partnership's interest rate risk objective is to
limit the impact of interest rate fluctuations on earnings and cash flows and to
lower its overall borrowing costs. To achieve this objective, the Partnership
manages its exposure to fluctuations in market interest rates for its borrowings
through the use of fixed rate debt instruments to the extent that reasonably
favorable rates are obtainable with such arrangements and may enter into
derivative financial instruments such as interest rate swaps, caps and treasury
locks to mitigate its interest rate risk on a related financial instrument or to
effectively lock the interest rate on a portion of its variable debt. The
Partnership does not enter into derivative or interest rate transactions for
speculative purposes. The Bonds outstanding at December 31, 1999 have a fixed
interest rate of 6.376% and mature in 2003. When the Bonds mature in 2003, the
Partnership will have exposure to interest rate risk related to the expected
refinincing of the the Bond principal. As of December 31, 1999, the interest
rate on the Bonds reasonably approximated the rate attainable by the Partnership
on debt instruments with similar terms. The Partnership does not have any other
material market-sensitive financial instruments.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Independent Auditors' Report, Consolidated Financial Statements and Selected
Quarterly Financial Information are set forth herein.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no disagreements with the Partnership's independent accountants
on any matter of accounting principles or practices or financial statement
disclosure.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated herein by reference to the Registrant's filing on Form S-3 relating
to the issuance of the Bonds, filed with the Securities and Exchange Commission
December 17, 1997.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated herein by reference to the Registrant's filing on Form S-3 relating
to the issuance of the Bonds, filed with the Securities and Exchange Commission
December 17, 1997.
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated herein by reference to the Registrant's filing on Form S-3 relating
to the issuance of the Bonds, filed with the Securities and Exchange Commission
December 17, 1997.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MAALP provides the Mortgaged Properties management and other services (including
employee benefits) for a 4% management fee. MAALP also provides funds, as
needed, for the capital improvements made to the Mortgaged Properties.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this Annual Report on Form
10-K:
1. Independent Auditors' Report
Balance Sheets as of December 31, 1999 and 1998
Statements of Operations for the years ended
December 31, 1999, 1998 and 1997
Statements of Partners' Capital for the years ended
December 31, 1999, 1998 and 1997
Statement of Cash Flows for the years ended
December 31, 1999, 1998 and 1997
Notes to Financial Statements for the years ended
December 31, 1999, 1998 and 1997
2. Financial Statement Schedule required to be filed by item 8 and
Paragraph (d) of this item 14: Schedule III - Real Estate Investments
and Accumulated Depreciation as of December 31, 1999
3. The exhibits required by Item 601 of Regulation S-K, except as
otherwise noted, have been filed with previous reports by the
registrant and are herein incorporated by reference.
<PAGE>
Exhibit
Numbers Exhibit Description
- ------- -------------------
1.1* Underwriting Agreement
3.1* Certificate of Limited Partnership of Mid-America Capital Partners, L.P.
3.2* Limited Partnership Agreement between MAAC, Inc., as General Partner
and Mid-America Apartments, L.P., a limited partner relating to the
formation of Mid-America Capital Partners, L.P., a Delaware
limited partnership
3.3* Certificate of Incorporation of MAACP, Inc.
3.4* Bylaws of MAACP, Inc.
3.5* Certificate of Incorporation of Mid-America Finance, Inc.
3.6* Bylaws of Mid-America Finance, Inc.
4.1* Form of Amended and Restated Indenture among Mid-America Capital
Partners, L.P. and Mid-America Apartments, as issuer and La Salle
National Bank, as Trustee
4.2* Form of Trust Agreement between Mid-America Finance, Inc. as depositor
and La Salle National Bank, as Trustee
4.3* Form of Certificate
4.4* Form of Bond
5.1* Opinion of Baker, Donelson, Bearman & Caldwell, a professional
corporation
10.1* Cash Collateral Account Security, Pledge and Assignment Agreement
among Mid-America Capital Partners, L.P. and Mid-America Apartments,
L.P. and First Union Bank, and Morgan Stanley Mortgage Capital, Inc.,
and La Salle National Bank dated November 21, 1997
10.2* Form of Deed of Trust, Assignment of Leases and Rents and Security
Agreement
25.1* Statement of Eligibility and Qualification of Indenture Trustee on
Form T-1
27.1 Financial Data Schedule for the period ended 12/31/99
- ----------------------------------------
* Previously filed as exhibits to the Partnership's Registration Statement on
Form S-3, filed with the Commission on December 17, 1997 under Commission
File No. 333-42441.
(b) Reports on Form 8-K
The following reports were filed on Form 8-K by the registrant
during the fourth quarter of 1999:
None.
(c) Exhibits:
See Item 14(a)(3) above.
(d) Financial Statement Schedules:
See Item 14(a)(2) above.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
MID-AMERICA CAPITAL PARTNERS, L.P.
Date: Simon R.C. Wadsworth
President
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons in the capacities and on the dates
indicated.
Date: 3/29/00 /s/Simon R.C. Wadsworth
------- ------------------------
Simon R.C. Wadsworth
President
(Principal Executive Officer)
Date: 3/29/00 /s/Mark S. Martini
------- ------------------------
Mark S. Martini
(Principal Financial and
Accounting Officer)
Date: 3/29/00 /s/George E. Cates
------- ------------------------
George E. Cates
Director
Date: 3/29/00 /s/H. Eric Bolton, Jr.
------- ------------------------
H. Eric Bolton, Jr.
Director
Date: 3/27/00 /s/Stephen M. Carpenter
------- ------------------------
Stephen M. Carpenter
Director
Date: 3/27/00 /s/Howard Eddings, Jr.
------- ------------------------
Howard Eddings, Jr.
Director
<PAGE>
Independent Auditors' Report
The Partners
Mid-America Capital Partners, L.P.:
We have audited the accompanying balance sheets of Mid-America Capital Partners,
L.P. (the "Partnership") as of December 31, 1999 and 1998, and the related
statements of operations, partners' capital and cash flows for each of the years
in the three-year period ended December 31, 1999. In connection with our audits
of the financial statements we also have audited the financial statement
Schedule III, Real Estate Investments and Accumulated Depreciation. These
financial statements and the financial statement schedule are the responsibility
of the management of the Partnership. Our responsibility is to express an
opinion on these financial statements and financial statement schedule based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Partnership as of December
31, 1999 and 1998, and the results of operations and cash flows of the
Partnership for each of the years in the three-year period ended December 31,
1999, in conformity with generally accepted accounting principles. Also, in our
opinion, the related financial statement schedule, when considered in relation
to the financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.
KPMG LLP
Memphis, Tennessee
February 25, 2000
<PAGE>
PART I. Financial Information
ITEM 1.
Mid-America Capital Partners, L.P.
(a limited partnership)
Balance Sheets
December 31, 1999 and 1998
(Dollars in thousands)
<TABLE>
1999 1998
---- ----
Assets:
<S> <C> <C>
Real estate assets:
Land ..................................... $ 21,305 $ 21,305
Buildings and improvements ............... 210,761 204,886
Furniture, fixtures and equipment ........ 5,439 4,603
Construction in progress ................. 814 2,370
- --------------------------------------------------------------------------------
238,319 233,164
Less accumulated depreciation ............ (31,162) (22,309)
- --------------------------------------------------------------------------------
Real estate assets, net ............. 207,157 210,855
Cash ..................................... 3,667 --
Restricted cash .......................... 34 406
Deferred financing costs, net ............ 3,258 4,248
Other assets ............................. 79 202
- --------------------------------------------------------------------------------
Total assets .......................... $ 214,195 $ 215,711
================================================================================
Liabilities and Partners' Capital
Liabilities:
Bonds payable ............................ $ 142,000 $ 142,000
Bank overdraft ........................... -- 667
Accounts payable ......................... 404 438
Accrued expenses and other liabilities ... 2,895 1,828
Due to affiliate ......................... 1,499 474
Security deposits ........................ 794 706
- --------------------------------------------------------------------------------
Total liabilities ..................... 147,592 146,113
Partners' Capital:
General Partner .......................... 2,453 2,407
Limited Partner .......................... 80,402 75,804
Due from Limited Partner ................. (16,252) (8,613)
- --------------------------------------------------------------------------------
Total partners' capital ............... 66,603 69,598
- --------------------------------------------------------------------------------
Total liabilities and partners' capital $ 214,195 $ 215,711
================================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Mid-America Capital Partners, L.P.
(a limited partnership)
Statements of Operations
Years ended December 31, 1999, 1998 and 1997
(Dollars in thousands)
<TABLE>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Revenues:
Rental .......................................$39,260 $38,316 $30,691
Other ........................................ 423 426 258
- --------------------------------------------------------------------------------
Total revenues ............................... 39,683 38,742 30,949
- --------------------------------------------------------------------------------
Expenses:
Personnel .................................... 4,251 4,251 3,148
Building repairs and maintenance ............. 1,964 2,053 1,519
Real estate taxes and insurance .............. 4,044 3,826 2,985
Utilities .................................... 1,516 1,554 1,173
Landscaping .................................. 1,090 978 869
Other operating .............................. 1,652 1,545 1,291
Depreciation and amortization real estate
assets ..................................... 8,825 8,284 6,360
Depreciation and amortization non-real
estate assets .............................. 28 40 29
General and administrative ................... 1,596 1,515 1,238
Interest ..................................... 9,083 9,162 1,671
Amortization of deferred financing costs ..... 990 1,026 152
- --------------------------------------------------------------------------------
Total expenses ............................... 35,039 34,234 20,435
- --------------------------------------------------------------------------------
Income before extraordinary item .................... 4,644 4,508 10,514
- --------------------------------------------------------------------------------
Extraordinary item:
Loss on debt extinguishment .................. -- 86 16
- --------------------------------------------------------------------------------
Net income ..........................................$ 4,644 $ 4,422 $10,498
================================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Mid-America Capital Partners, L.P.
(a limited partnership)
Statements of Partners' Capital
Years ended December 31, 1999, 1998 and 1997
(Dollars in thousands)
<TABLE>
CPG
Partners' Due
Capital From Total
General Limited (Prede- Limited Partners'
Partner Partner (cessor) Partner Capital
------- ------- -------- -------- -------
<S> <C> <C> <C> <C>
Balance December 31, 1996 .............. $ -- $ -- $ 131,951 $ -- $ 131,951
Capital contributions, net
(prior to Partnership formation) -- -- 24,359 -- 24,359
Formation contribution ........... 2,271 166,630 (166,630) -- 2,271
Merger with Hermitage
at Beechtree, LLC ............ 90 8,890 -- -- 8,980
Capital distributions, net ....... -- (104,270) -- -- (104,270)
Net cash payments to Limited
Partner........................ (1,264) (1,264)
Net income ....................... 2 176 10,320 10,498
- -------------------------------------------------------------------------------------------
Balance December 31, 1997 .............. 2,363 71,426 -- (1,264) 72,525
Net cash payments to Limited
Partner........................ (7,349) (7,349)
Net income ....................... 44 4,378 -- 4,422
- -------------------------------------------------------------------------------------------
Balance December 31, 1998 .............. $2,407 $ 75,804 $ -- (8,613) $ 69,598
Net cash payments to Limited
Partner........................ (7,639) (7,639)
Net income ....................... 46 4,598 -- 4,644
- --------------------------------------------------------------------------------------------
Balance December 31, 1998 .............. $2,453 $ 80,402 $ -- $(16,252) $ 66,603
============================================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Mid-America Capital Partners, L.P.
(a limited partnership)
Statements of Cash Flows
Years ended December 31, 1999, 1998 and 1997
(Dollars in thousands)
<TABLE>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income ............................... $ 4,644 $ 4,422 $ 10,498
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization .... 9,843 9,350 6,541
Extraordinary item ............... -- 86 16
Changes in assets and liabilities:
Restricted cash .............. 372 526 (654)
Due to/from affiliate ........ 1,025 (1,122) 1,596
Other assets ................. 123 29 (120)
Accounts payable ............. (34) 48 (197)
Accrued expenses and other
liabilities ................ 1,067 (1,047) 1,166
Security deposits ............ 88 (7) 164
- ----------------------------------------------------------------------------------------
Net cash provided by operating
activities ..................... 17,128 12,285 19,010
Cash flows from investing activities:
Purchases of real estate assets .. -- -- (33,280)
Improvements to properties ....... (5,155) (5,556) (4,951)
- ----------------------------------------------------------------------------------------
Net cash used in investing
activities ..................... (5,155) (5,556) (38,231)
Cash flows from financing activities:
Bank overdraft ................... (667) 667 --
Proceeds from notes payable ...... -- 142,000 140,000
Principal payments on bridge
notes payable .................. -- (140,000) --
Principal payments on
notes payable .................. -- -- (38,589)
Deferred financing costs ......... -- (3,617) (1,850)
Due from limited partner ......... (7,639) (7,349) (1,264)
Capital contributions,
net (Predecessor) .............. -- -- 24,359
Formation contribution ........... -- -- 2,271
Capital distributions, net ....... -- -- (104,270)
- ----------------------------------------------------------------------------------------
Net cash used in financing
activities ..................... (8,306) (8,299) 20,657
- ----------------------------------------------------------------------------------------
Net increase (decrease) in cash
and cash equivalents ........... 3,667 (1,570) 1,436
- ----------------------------------------------------------------------------------------
Cash, beginning of period ....................... -- 1,570 134
- ----------------------------------------------------------------------------------------
Cash, end of period ............................. $ 3,667 $ -- $ 1,570
========================================================================================
Supplemental disclosure of cash flow information:
Interest paid ................................ $ 9,083 $ 9,276 $ 947
- ----------------------------------------------------------------------------------------
Noncash investing activities:
Asumption of debt related to
property acquisitions ................... $ -- $ -- $ 22,112
- ----------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
MID-AMERICA CAPITAL PARTNERS, L.P.
(a limited partnership)
Notes to Financial Statements
December 31, 1999, 1998 and 1997
(1) Organization and Summary of Significant Accounting Policies
Organization
Mid-America Capital Partners, L.P. (the Partnership) is a special
purpose Delaware limited partnership. The Partnership was formed on
November 24, 1997 for the sole purpose to own and operate 26 apartment
communities (the Mortgaged Properties) and manage, renovate, improve,
lease, sell, transfer, exchange, mortgage and otherwise deal with the
Mortgaged Properties. The sole limited partner of the Partnership is
Mid-America Apartments, L.P., a Tennessee limited partnership (MAALP),
which is a majority owned subsidiary of Mid-America Apartment
Communities, Inc. (MAAC). MAAC owns, directly or through its
subsidiaries, all of the outstanding units of partnership interest.
MAAC is a self-administered and self-managed umbrella partnership real
estate investment trust (REIT). MAAC conducts a substantial portion of
its operation through MAALP and subsidiaries of MAALP. The sole general
partner of the Partnership is MAACP, Inc., a Tennessee corporation
(MAACP), a wholly-owned subsidiary of MAAC. The term of the Partnership
shall be to December 31, 2020, unless terminated earlier as provided in
the Partnership Agreement or as otherwise provided by law.
The Partnership was formed to succeed substantially all the interests
in Capital Properties Group (predecessor to the Partnership,
"Predecessor"). Distributions to the Partners relating to operations of
the Mortgaged Properties will be based upon net cash flow as defined in
the Partnership Agreement. Profits and losses are allocated to the
Partners in proportion with their ownership. Distributions from ongoing
operations of the Partnership are distributed 100% to MAALP and charged
to its capital account.
Subsequent to the Partnership formation, MAALP contributed its interest
in 20 of the Mortgaged Properties, and the right to acquire the
Reorganization Properties (as defined below) to the Partnership in
exchange for 99% limited partnership interest in the Partnership. MAACP
contributed cash in exchange for a 1% general partnership interest in
the Partnership.
The Mortgaged Properties consist of (i) 20 properties contributed by
MAALP comprising the Predecessor; (ii) 5 properties acquired on
November 25, 1997 by the Partnership in connection with the
consummation of the merger of Flournoy Development Partnership (FDC)
with and into MAAC and the other transactions (collectively, the
Reorganization Properties) as described in the Agreement and Plan of
Reorganization dated as of September 15, 1997 (the Plan of
Reorganization) between FDC, MAAC and MAALP consisting of 4 properties
acquired from Brown-Flournoy Equity Income Fund Limited Partnership
(the Brown-Flournoy Properties) and Willow Creek; and (iii) one
property (Hermitage at Beechtree) which was acquired November 25, 1997
through the merger of Hermitage at Beechtree, L.L.C. with and into the
Partnership. The Partnership recorded the five properties acquired in
connection with the Plan of Reorganization using the purchase method
of accounting.
<PAGE>
Basis of Presentation
The accompanying statement of operations, statement of partners'
capital, and statement of cash flows include the accounts of the
Partnership from November 24, 1997 (the Partnership Formation Date)
through December 31, 1997 and the accounts of the Predecessor for the
period from January 1, 1997 through the Partnership Formation Date. As
part of the Partnership formation, the contribution of all Mortgaged
Property interests was reflected at historical cost in a manner similar
to that used in pooling-of-interests accounting.
All significant intercompany accounts and transactions have been
eliminated in consolidation.
Revenue Recognition
The Partnership leases residential apartments under operating leases
with terms generally one year or less. Rental and other revenues are
recorded when earned.
Rental Operations
The Partnership owns and operates apartment units which are leased to
tenants on terms of one year or less, with monthly payments due in
advance. In management's opinion, due to the number of tenants, the
type and diversity of submarkets in which the Mortgaged Properties
operate, and the collection terms, there is no concentration of credit
risk.
Restricted Cash
Restricted cash consists of escrow deposits held by lenders for
property taxes, insurance, debt service and replacement reserves.
Real Estate Assets and Depreciation
Real estate assets are carried at the lower of depreciated cost or
estimated fair value, less cost to sell. Interest, property taxes and
other development costs incurred during construction is capitalized
until completion. Repairs and maintenance costs are expensed as
incurred while significant improvements, renovations and replacements
are capitalized. The cost of interior painting, vinyl flooring and
blinds are expensed as incurred.
In conjunction with acquisitions of properties, the Partnership's
policy is to provide in its acquisition budgets adequate funds to
complete any deferred maintenance items to bring the properties to the
required standards, including the cost of replacement appliances,
carpet, interior painting, vinyl flooring and blinds. These costs are
capitalized.
Depreciation is computed on a straight-line basis over the estimated
useful lives of the related assets which range from 8 to 40 years for
land improvements and buildings and 5 years for furniture, fixtures and
equipment.
Deferred Financing Costs
Deferred financing costs are amortized over the terms of the related
debt using a method which approximates the interest method.
<PAGE>
Due from Limited Partner
The Partnership periodically makes payments to the Limited Partner
based upon the excess cash flows of the Mortgaged Properties (other
than the five properties discussed below) from rental operations or
receives cash from the limited partner to fund capital improvements on
the Mortgaged Properties. These payments and receipts are recorded as
a receivable or payable to the Limited Partner and are presented as a
reduction of partners' capital in the accompanying financial
statements as there are no defined repayment terms between the Limited
Partner and the Partnership.
Due to Affiliate
The Partnership has five properties, Hidden Lake II, High Ridge, Park
Place, Southland Station I and Willow Creek that make payments or
receive cash from MAAC in a manner similar to that of the Partnership
and Limited Partner described above. These payments and receipts are
recorded on the balance sheet of the Partnership as a receivable or
payable to an affiliate, MAAC.
Capital Contributions, Net
MAALP provided cash management and vendor remittance services for the
Predecessor. Net cash flows resulting from these services are treated
as capital contributions or distributions. In addition, MAALP provided
funding for the Predecessor's property acquisition and improvement
projects and for debt service related to the notes payable included in
the Predecessor combined financial statements. The amount of these
funded activities are contributed by MAALP to the Predecessor as
capital contributions. Capital contributions, net for the year ended
December 31, 1997, consisted of funds utilized by (dollars in
thousands):
Acquisitions and improvements of properties $19,064
Principal payments on notes payable 16,461
Intercompany remittances, net (11,166)
--------
$24,359
========
Income Taxes
No provision for federal income taxes has been made in the accompanying
financial statements. Each partner is responsible for reporting his
share of taxable income or loss from the real estate investments.
Use of Estimates
Management of the Partnership has made a number of estimates and
assumptions relating to the reporting of assets and liabilities, the
disclosure of contingent assets and liabilities, and the repoted
amounts of revenues and expenses to prepare these financial statements
in conformity with generally accepted accounting principles. Actual
results could differ from those estimates.
Reclassification
Certain prior year amounts have been reclassified to conform with the
1999 presentation.
<PAGE>
(2) Bridge Notes and Bonds Payable
On November 24, 1997 the Mortgaged Properties were acquired by the
Partnership and were pledged to secure a $140 million loan (the "Bridge
Notes") received from Morgan Stanley Mortgage Capital Inc. A portion of
the proceeds from the Bridge Notes were utilized in connection with the
acquisition of certain of the Reorganization Properties, the funding of
deferred financing costs, the establishment of replacement reserves and
the remainder being distributed to MAALP.
On March 6, 1998, the Partnership issued $142 million aggregate
principal amount of 6.376% Bonds due 2003 (the "Bonds"). The Bonds are
secured by a first priority deed of trust, security agreement and
assignment of rents and leases in respect of the 26 mortgaged
properties, with a net book value of $207.2 million at December 31,
1999. The net proceeds from the sale of the Bonds were applied to the
Bridge Notes and utilized to fund costs of the issuance.
In anticipation of the March 6, 1998 Bond issuance discussed above, the
Partnership entered four separate interest rate swaps in 1997 with
notional amounts aggregating $140 million, the effect of which was to
lock the interest rate on $140 million of the Bonds at an average rate
of 6.62%. On March 6, 1998 the Company realized a $1.4 million loss on
the interest rate contracts. The realized loss resulting from the
change in the market value of these contracts is being amortized into
interest expense over the life of the related debt issuance. Thus, the
effective borrowing cost of the Bonds is 6.62% until maturity in March
2003.
(3) Fair Value Disclosure of Financial Instruments
Cash, accounts payable, bank overdrafts, accrued expenses and other
liabilities and security deposits are carried at amounts which
reasonably approximate their fair value.
The fixed rate Bonds had a carrying value at December 31, 1999 and
1998 of $142 million which reasonably estimated their fair value
(excluding prepayment penalties) based upon interest rates available
for the issuance of debt with similar terms and remaining maturities
as of December 31, 1999 and 1998. These notes are subject to
prepayment penalties which would be required to retire these notes
prior to maturity.
The fair value estimates presented herein are based on information
available to management as of December 31, 1999 and 1998. Although
management is not aware of any factors that would significantly affect
the estimated fair value amounts, such amounts have not been
comprehensively revalued for purposes of these financial statements
since that date, and current estimates of fair value may differ
significantly from the amounts presented herein.
(4) Recent Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activity, effective for years
beginning after June 15, 1999. In June 1999, SFAS No. 137 was issued to
defer the implementation of SFAS No. 133 to all fiscal years beginning
after June 15, 2000. The accounting statement is not expected to have a
material impact on the Partner's financial statements. The Partnership
will adopt this accounting standard in 2001.
<PAGE>
(5) Commitments and Contingencies
The Partnership is not presently subject to any material litigation
nor, to the Partnership's knowledge, is any material litigation
threatened against the Partnership or any of the Mortgaged Properties,
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 financial statements of the Partnership.
(7) Related Party Transactions
The accompanying financial statements include the revenues and certain
direct operating expenses of the Mortgaged Properties. MAALP provides
the Properties management and other services (including employee
benefits) at a 4% management fee and also provides funds for the
improvement of the Mortgaged Properties. Management fees incurred by
the Partnership under the terms of the agreement with MAALP were
approximately $1,587,000, $1,530,000, and $1,228,000 for the years
ended 1999, 1998 and 1997, respectively.
MAALP employees at the Mortgaged Properties participate in employee
benefit plans sponsored by MAAC.
(8) Financial Instruments with Off-Balance Sheet Risk
The Partnership has only limited involvement with derivative financial
instruments and does not use them for trading purposes. The Partnership
occasionally utilizes derivative financial instruments as hedges in
anticipation of future debt transactions to manage well-defined
interest rate risk.
(9) Segment Information
At December 31, 1999, the Partnership owned and operated 26
multifamily apartment communities from which it derives all
significant sources of earnings and operating cash flows. The
Partnership's operational structure is organized on a decentralized
basis, with individual property managers having overall responsibility
and authority regarding the operations of their respective properties.
Each property manager individually monitors local and area trends in
rental rates, occupancy percentages, and operating costs. Property
managers are given the on-site responsibility and discretion to react
to such trends in the best interest of the Partnership. The
Partnership's chief operating decision maker evaluates the performance
of each individual property based on its contribution to net operating
income in order to ensure that the individual property continues to
meet the Partnership's return criteria and long term investment goals.
The Partnership defines each of its multifamily communities as an
individual operating segment. It has also determined that all of its
communities have similar economic characteristics and also meet the
other criteria which permit the communities to be aggregated into one
reportable segment, which is acquisition, development, and operation
of the multifamily communities owned.
The revenues, net operating income, assets and real estate investment
capital expenditures for the aggregated multifamily segment are
summarized as follows for the years ended December 31, 1999, 1998 and
1997 (in 000's):
<PAGE>
(9) Segment Information-(continued)
1999 1998 1997
---- ---- ----
Multifamily rental revenues $ 39,683 $ 38,742 $ 30,949
========== =========== ============
Multifamily net operating income 25,166 24,535 19,964
Reconciling items to net income:
Interest expense (9,083) (9,162) (1,671)
General and administrative expenses (1,596) (1,515) (1,238)
Depreciation and amortization (8,853) (8,324) (6,389)
Amortization of deferred
financing costs (990) (1,026) (152)
Extraordinary items, net - (86) (16)
========== =========== ============
Net income $ 4,644 $ 4,422 $ 10,498
========== =========== ============
Assets 1999 1998
- ------ ---- ----
Multifamily real estate assets $ 238,319 $ 233,164
Accumulated depreciation -
multifamily assets (31,162) (22,309)
----------- -----------
207,157 210,855
Cash and Restricted Cash 3,701 406
Other assets 19,589 13,063
=========== ===========
Total Assets $ 230,447 $ 224,324
=========== ===========
1999 1998 1997
---- ---- ----
Total expenditures for
property additions $ 5,155 $ 5,556 $ 4,951
=========== =========== ==========
<PAGE>
(10) Selected Quarterly Financial Data (Unaudited)
(Dollars in thousands)
Year Ended December 31, 1999
----------------------------
First Second Third Fourth
----- ------ ----- ------
Total revenues $ 9,655 $ 9,874 $10,063 $10,091
Net income $ 1,088 $ 1,220 $ 1,104 $ 1,232
Year Ended December 31, 1998
----------------------------
First Second Third Fourth
Total revenues $ 9,706 $ 9,567 $ 9,819 $ 9,650
Income before
extraordinary item $ 1,213 $ 1,157 $ 1,100 $ 1,038
Extraordinary item $ (86) $ - $ -
Net income $ 1,127 $ 1,157 $ 1,100 $ 1,038
<PAGE>
MID-AMERICA CAPITAL PARTNERS, L.P.
Schedule III
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
December 31, 1999
(Dollars in thousands)
<TABLE>
Cost Capitalized Gross Amount
Initial Cost Acquisition December 31, 1999
------------------ ------------------ -----------------
Building Building
Metropolitan and and
Property Name Area Encumbrances Land Fixtures Land Fixtures Land
- ------------- ---- ------------ ---- ------- ---- -------- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Belmere .............. Tampa, FL -- (1) 851 7,667 808 851
Crosswinds ........... Jackson, MS -- (1) 1,535 13,826 830 1,535
Fairways at Royal Oak Cincinnati, OH -- (1) 814 7,335 617 814
Hermitage at Beechtree Cary, NC -- (1) 900 8,099 7 900
Hidden Lake II ....... Union City, GA -- (1) 621 5,587 3 621
High Ridge ........... Athens, GA -- (1) 884 7,958 2 884
Howell Commons ....... Greenville, SC -- (1) 1,304 11,740 316 1,304
Kirby Station ........ Memphis, TN -- (1) 1,148 10,337 1,753 1,148
Lakepointe ........... Lexington, KY -- (1) 411 3,699 571 411
Lakeside ............. Jacksonville, FL -- (1) 1,431 12,883 289 2,034 1,720
Marsh Oaks ........... Atlantic Beach, FL -- (1) 244 2,829 459 244
Napa Valley .......... Little Rock, AR -- (1) 960 8,642 448 960
Park Haywood ......... Greenville, SC -- (1) 325 2,925 35 2,250 360
Park Place ........... Spartanburg, SC -- (1) 723 6,504 2 723
Pear Orchard ......... Jackson, MS -- (1) 1,352 12,168 982 1,352
Savannah Creek ....... Memphis, TN (4) -- (1) 778 7,013 365 778
Shenandoah Ridge ..... Augusta, GA -- (1) 650 5,850 8 1,678 658
Somerset ............. Jackson, MS -- (1) 477 4,294 523 477
Southland Station I .. Warner Robins, GA -- (1) 777 6,992 14 777
Steeplechase ......... Chattanooga, TN -- (1) 217 1,957 1,087 217
Sutton Place ......... Memphis, TN (4) -- (1) 894 8,053 537 894
The Village .......... Lexington, KY -- (1) 900 8,097 757 900
Tiffany Oaks ......... Altamonte Springs, FL -- (1) 1,024 9,219 500 1,024
Westside Creek I ..... Little Rock, AR -- (1) 616 5,559 180 616
Williamsburg Village . Jackson, TN -- (1) 523 4,711 407 523
Willow Creek ......... Columbus, GA -- (1) 623 5,523 3 614
- -----------------------------------------------------------------------------------------------------------------------------------
Total ................ $ 142,000 $ 20,982 $ 189,467 $ 332 $ 17,133 $ 21,305
===================================================================================================================================
Gross Amount
Carried at Life Used
December 31, 1999 to
----------------- Compute
Building Depreciation
and Accumulated in Latest
Property Name Fixtures Total Depreciation Net Construction Income Statement
- ------------- -------- ----- ------------ --- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Belmere .............. 9,396 10,247 (1,698) 8,549 1984 5 - 40
Crosswinds ........... 14,971 16,506 (1,917) 14,589 1988/1990 5 - 40
Fairways at Royal Oak 8,299 9,113 (1,559) 7,554 1988 5 - 40
Hermitage at Beechtree 8,950 9,850 (675) 9,175 1988 5 - 40
Hidden Lake II ....... 5,811 6,432 (432) 6,000 1987 5 - 40
High Ridge ........... 8,247 9,131 (611) 8,520 1987 5 - 40
Howell Commons ....... 12,412 13,716 (1,302) 12,414 1986/1988 5 - 40
Kirby Station ........ 12,654 13,802 (2,443) 11,359 1978 5 - 40
Lakepointe ........... 4,364 4,775 (879) 3,896 1986 5 - 40
Lakeside ............. 15,338 17,058 (2,418) 14,640 1985 5 - 40
Marsh Oaks ........... 3,429 3,673 (630) 3,043 1986 5 - 40
Napa Valley .......... 9,342 10,302 (1,083) 9,219 1984 5 - 40
Park Haywood ......... 5,520 5,880 (1,004) 4,876 1983 5 - 40
Park Place ........... 7,316 8,039 (550) 7,489 1987 5 - 40
Pear Orchard ......... 13,612 14,964 (2,792) 12,172 1985 5 - 40
Savannah Creek ....... 7,622 8,400 (973) 7,427 1989 5 - 40
Shenandoah Ridge ..... 7,797 8,455 (1,628) 6,827 1982 5 - 40
Somerset ............. 4,988 5,465 (969) 4,496 1981 5 - 40
Southland Station I .. 7,563 8,340 (565) 7,775 1987 5 - 40
Steeplechase ......... 3,262 3,479 (816) 2,663 1986 5 - 40
Sutton Place ......... 9,030 9,924 (1,152) 8,772 1991 5 - 40
The Village .......... 9,164 10,064 (1,825) 8,239 1989 5 - 40
Tiffany Oaks ......... 10,418 11,442 (1,140) 10,302 1985 5 - 40
Westside Creek I ..... 6,054 6,670 (612) 6,058 1984 5 - 40
Williamsburg Village . 5,254 5,777 (1,016) 4,761 1987 5 - 40
Willow Creek ......... 6,201 6,815 (473) 6,342 1971/1977 5 - 40
- ---------------------------------------------------------------------------------------------------------
Total ................ $ 217,014 $238,319 ($ 31,162) $207,157
========================================================================================================
</TABLE>
- -------------------------
(1) These 26 communities are encumbered by the $142 million Bonds
which mature on March 3, 2003 and have an interest rate of 6.376%.
<PAGE>
MID AMERICA CAPITAL PARTNERS, L.P.
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
Years ended December 31, 1999, 1998 and 1997
A summary of activity for real estate investments and accumulated depreciation
is as follows:
Mid - America Capital Partners, L.P.
(a limited partnership)
Real Estate Investments and Accumulated Depreciation
(Dollars in thousands)
1999 1998 1997
---- ---- ----
Real estate investments:
Balance at beginning of year $ 233,164 $ 227,608 $ 158,285
Acquisitions - - 64,372
Improvements 5,155 5,556 4,951
-------------- ------------ ------------
Balance at end of year $ 238,319 $ 233,164 $ 227,608
============== ============ ============
Accumulated depreciation:
Balance at beginning of year $ 22,309 $ 13,985 $ 7,596
Depreciation 8,853 8,324 6,389
-------------- ------------ ------------
Balance at end of year $ 31,162 $ 22,309 $ 13,985
============== ============ ============
See accompanying independentauditor's report.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the Balance Sheet at
December 31, 1999 and Statement of Operations for the year ended December 31,
1999, and is qualified inits entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 3,701
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 238,319
<DEPRECIATION> (31,162)
<TOTAL-ASSETS> 214,195
<CURRENT-LIABILITIES> 0
<BONDS> 142,000
0
0
<COMMON> 0
<OTHER-SE> 66,603
<TOTAL-LIABILITY-AND-EQUITY> 214,295
<SALES> 39,260
<TOTAL-REVENUES> 39,683
<CGS> 14,517
<TOTAL-COSTS> 14,517
<OTHER-EXPENSES> 11,439
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,083
<INCOME-PRETAX> 4,644
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,644
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,644
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
