EXHIBIT 99.1
NOVEMBER 2, 2000. MEMPHIS, TN . MID-AMERICA APARTMENT COMMUNITIES (NYSE:MAA)
Announces new development performance and earnings meet expectations
o Funds From Operations (FFO) of 67 cents per share for the third quarter, 2000,
in line with company forecasts and consensus expectations
o New development properties continue to lease up as expected and perform well;
steadily growing contribution to value and FFO per share
o Markets are balanced, with a few pockets of overbuilding. MAA's diversified
portfolio in strong job growth states is well positioned
o Occupancy remains strong at 95.4%. Resident turnover dropped by 6%.
o Capital structure risk further reduced: conventional floating rate debt now
only 9% of all debt
o Over 1.7 million MAA shares (almost 8%) repurchased in the last five quarters
o H. Eric Bolton, Jr. to become CEO in late 2001 under formal succession plan
o More awards: U.S. Community Service and portfolio excellence
Mid-America Apartment Communities, Inc. (MAA:NYSE) today announced Funds From
Operations (FFO) of 67 cents per share for the third quarter which ended
September 30, 2000. "Earnings for the quarter met our and consensus expectations
and were one of our best third quarters ever. We continue to expect that FFO
growth per share will accelerate in the latter half of 2001 as new development
properties stabilize," said George E. Cates, Chairman and CEO. "When coupled
with our solid dividend, the true return - share value growth plus cash paid out
- to our owners continues to grow at a solid rate, both short term and over long
periods of time."
"Three of our five new development properties, totaling 934 units and
representing an investment of $68 million, are now effectively complete," said
H. Eric Bolton, Jr., President and Chief Operating Officer. "63% are occupied or
leased. We expect the leasing rate to slow somewhat during the winter months, a
normal seasonal pattern, and to complete lease-up by the end of the second
quarter next year. These properties are meeting forecasts. Two additional
development properties with 677 apartments will be completed next year at a
total expected cost of $52 million, of which $30 million has already been
invested, with the balance to be financed by our credit facilities. We've
already completed 129 of these apartments and 100% are occupied or leased."
"On average, we anticipate that our new properties will generate a 10% NOI yield
in their first year of stabilization. The new development pipeline continues to
meet expectations. Upon stabilization, we will have added significant value to
MAA shares as a result of our new development program over the last three years.
While this investment strategy diminished our earnings last year, the short term
FFO pressure now lessens steadily and should be behind us entirely by the end of
next year. The value-building benefits of this major, positive investment in the
future will show increasingly, especially as we reach the prime leasing quarters
in the second half, 2001."
"Our markets continue to be in balance generally, although we have seen some
increase in new supply pressures over the summer in a few of our markets.
Occupancy at September 30 was a solid 95.4%, down only 0.1% from a year earlier.
Same store occupancy was 95.5%, down 0.1%. We're pleased with the progress made
in lowering resident turnover, down 6% in the third quarter as compared to a
year earlier."
"Average rental rate per unit increased 3.7% to $637.20. Same store average
rental rate per unit was up 2.9% and revenues, +2.2%. Same store property level
expenses were up 2.5%, all expenses (including property taxes and casualty
insurance) +2.6%, and net operating income +2.0%. We continue to foresee NOI
growth of about 2.5% for the next year or so, reflected in consensus and our
forecasts. As has been the case, market conditions remain demanding and most
growth will result from the steadily increasing contribution of our new
development pipeline."
"Most new supply pressure has come from activity in our Columbia, SC; Columbus,
GA, and Memphis markets, with modest overbuilding occurring in others. Austin,
Atlanta, Dallas, Jacksonville and Jackson, MS continue to perform well. You will
note from the details posted on our web page, www.maac.net, that we continue to
outperform our markets. Our well-diversified portfolio, with a solid mix of
large-, middle- and small-tier markets throughout the thirteen-state area of the
southeast and Texas, is properly positioned for solid long-term performance. The
sunbelt states remain as the most vibrant job growth areas of the country and
should continue, over time, to deliver the highest risk-adjusted performance."
Simon Wadsworth, CFO, said that "the company's internal forecast of 71
cents/share for the fourth quarter, 2000 remains intact. Subject to a number of
variables such as changes in anticipated market conditions and the pace of new
development lease-up, we continue to expect 2001 FFO per share to be 70 cents
for the first quarter and $2.90 for the full year." Bolton added that "the first
quarter will be the toughest as we'll be dealing with the demands of leasing 366
recently delivered and presently vacant new units during winter time, the
traditionally weakest leasing season of the year."
"Revenue yield per unit is increasing faster than same store revenue per unit,
reflective of the unrelenting upgrading of our award winning portfolio, whose
current average age is 11.4 years. We continually reduce our average portfolio
age as we add new properties while selling older ones. As most recently
announced on September 28 (see the company's web page), Mid-America continues to
earn more independent recognition for portfolio excellence than does any other
apartment REIT."
Wadsworth: "In the last 12 months we've further improved our award-winning
portfolio by selling 2,542 apartments whose average age was 22 years for $84
million, and at an average cap rate of 8.7%. We've simultaneously added 1,479
new or recently constructed units. Our overall return on assets continues among
the leaders in our industry at 8.8% and rising. Overhead costs continue to be
tightly controlled, and as projected early in the year we anticipate only
inflationary growth for the full year."
"Current street estimates of net asset value range from $27.51 to $29.25 per
share, which seems to us a reasonable range. Even so, these estimates may
understate our true intrinsic value, based upon the discounted present value of
our anticipated future cash flow and thus including the growing and future
contribution from our new development pipeline."
"As planned, during the quarter we took advantage of a debt market rally to fix
interest rates on $115 million of variable rate debt at the interest rates we'd
projected, and therefore with no impact on our forecast for the remainder of
this year or next year. This reduced our conventional variable rate debt to 9%
of our outstanding debt; we have a further 4% in tax-free low-floaters. Our
average debt cost is 7.15%. $40 million of 8.6% debt matures mid-2001; our
projections assume its refinance at current rates," said Wadsworth. "Almost 8%
of our equity has been repurchased in the pasts five quarters at an average
price of $22.56 per share. We will continue to seek opportunities to repurchase
when, by so doing, we can add materially to share value while maintaining
leverage at or below its present and comfortably safe level. Our intense focus
for now is on completing the lease-up of our development pipeline, at which time
we will have several value-building options open to us."
"Our financial position, including our sound dividend coverage, strengthens as
the development pipeline is completed and stabilized. Our balance sheet is
conservatively structured for the apartment market which over the years,
especially in our very well diversified markets, has been a remarkably stable
business."
In addition to the third quarter results, the company also announced that under
its formal succession plan, George E Cates will retire as CEO on September 25,
2001 at which time President and Chief Operating Officer H. Eric Bolton, Jr.
will succeed to the CEO position. Cates will remain as executive Chairman of the
Board until his 65th birthday on September 25, 2002. Cates said "my retirement
and Eric's move into the CEO role has been under discussion by the Board and
planned for some time. We are fully confident that under his leadership,
Mid-America will continue to grow share value and generate solid returns for our
owners, employee associates, and resident customers."
Mid-America was chosen as national winner of Multifamily Executive magazine's
Community Service Award on October 18, awarded to the company that has best
taken an active role in local or national markets by offering time, services,
people and resources for charitable causes. The company's Open Arms and
community services programs were particularly cited for excellence in the
national award.
A conference call will be held on Friday, November 3, 2000 at 10AM (CST) to
discuss third quarter matters. Call in number is 800-837-6858; moderator's name
George E. Cates; conference ID 2954342 or "Mid-America Apartment Communities."
The conference will also be available on digital replay. To access the replay,
please dial 888-843-8954 and enter the passcode 2954342, through November 10,
2000. The replay will also be available on our web site, www.maac.net.
MAA is a self-administered, self-managed apartment-only real estate investment
trust which owns or has ownership interest in 34,183 apartment units throughout
the southeastern and midwest U.S. and in Texas, including 572 units in the
development pipeline. For further details, please refer to our website at
www.maac.net or contact Simon R. C. Wadsworth at (901) 682-6668, ext. 104. 6584
Poplar Ave., suite 340, Memphis, TN 38138.
Certain matters in this press release may constitute forward-looking statements
within the meaning of Section 27-A of the Securities Act of 1933 and Section 21E
of the Securities and Exchange Act of 1934. Such statements include, but are not
limited to, statements made about anticipated growth rate of revenues and
expenses at Mid-America's properties, anticipated lease-up (and rental
concessions) at development properties, costs remaining to complete development
properties, planned disposition, disposition pricing, and planned acquisitions
and developments. Actual results and the timing of certain events could differ
materially from those projected in or contemplated by the forward-looking
statements due to a number of factors, including a downturn in general economic
conditions or the capital markets, competitive factors including overbuilding or
other supply/demand imbalances in some or all of our markets, construction
delays that could cause new and add-on apartment units to reach the market later
than anticipated, changes in interest rates and other items that are difficult
to control such as insurance rates, increases in real estate taxes in many of
our markets, as well as the other general risks inherent in the apartment and
real estate businesses. 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.
<TABLE>
MID-AMERICA APARTMENT COMMUNITIES, INC. ("MAA")
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands - except per share data)
<CAPTION>
Three months ended September 30, Nine months ended September 30,
------------------------------- -----------------------------------------
2000 1999 2000 1999
-------------- --------------- -------------------- -------------------
<S> <C> <C> <C> <C>
Property revenues $56,470 $56,526 $166,553 $168,814
Property operating expenses 22,029 21,826 62,602 64,282
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Net operating income 34,441 34,700 103,951 104,532
Interest and other non-property income 309 323 1,023 1,033
Management and development income, net 187 149 549 572
FFO from real estate joint ventures 274 235 723 474
General & adminstrative 3,700 3,844 11,226 9,993
Interest expense 13,006 12,116 37,544 36,312
Preferred dividend distribution 4,028 4,028 12,087 12,084
Depreciation and amortization non-real estate assets 167 95 359 289
Amortization of deferred financing costs 620 682 2,152 2,059
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Funds from operations 13,690 14,642 42,878 45,874
Depreciation and amortization 12,570 12,100 38,496 37,047
Joint venture depreciation adjustment included in FFO 303 250 902 438
Preferred dividend distribution add back (4,028) (4,028) (12,087) (12,084)
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Income before gain on sale of assets, minority interest
and extraordinary item 4,845 6,320 15,567 20,473
Net gain on sale of assets 1,119 5,125 10,504 5,457
Minority interest in operating partnership income (337) (917) (2,280) (1,699)
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Net income before extraordinary item 5,627 10,528 23,791 24,231
Ex item - Loss on debt extinguishment , net of MI - - 204 67
Preferred dividend distribution 4,028 4,028 12,087 12,084
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Net income available for common shareholders $ 1,599 $ 6,500 $ 11,500 $ 12,080
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PER SHARE DATA:
Funds from operations per share - Basic $ 0.67 $ 0.66 $ 2.09 $ 2.09
Funds from operations per share - Fully Diluted $ 0.67 $ 0.66 $ 2.08 $ 2.08
Net income available for common shareholders
before extraordinary items - Basic $ 0.09 $ 0.34 $ 0.67 $ 0.64
Net income available for common shareholders
after extraordinary items - Basic $ 0.09 $ 0.34 $ 0.65 $ 0.64
Dividend declared per common share $ 0.580 $ 0.575 $ 1.740 $ 1.725
OTHER DATA:
Weighted average common shares and units - Basic 20,436 22,024 20,522 21,972
Weighted average common shares and units - Fully Diluted 20,520 22,039 20,582 22,017
Number of apartment units with ownership interest,
excluding development units not delivered 33,727 34,733 33,727 34,733
Apartment units added (sold) during period, net 136 (92) (174) 902
</TABLE>
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<TABLE>
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<CAPTION>
(Unaudited)
September 30, 2000 December 31, 1999
-------------------- -------------------
<S> <C> <C>
Assets:
Real estate assets, net $1,249,346 $1,248,051
Cash and cash equivalents, including restricted cash 34,150 26,629
Other assets 27,447 24,143
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Total assets $1,310,943 $1,298,823
=================================================================================================================================
Liabilities:
Bonds and notes payable $ 776,512 $ 744,238
Other liabilities 40,200 34,641
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Total liabilities 816,712 778,879
Shareholders' equity and minority interest 494,231 519,944
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Total liabilities & shareholders' equity $1,310,943 $1,298,823
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