form10-q.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE
ACT OF 1934
For
the
quarterly period ended June 30, 2007
or
[
]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
For
the
transition period from to ______
Commission
File Number: 1-12762
MID-AMERICA
APARTMENT COMMUNITIES, INC.
(Exact
name of registrant as specified in its charter)
TENNESSEE
|
62-1543819
|
(State
or other jurisdiction of
|
(I.R.S.
Employer Identification No.)
|
incorporation
or organization)
|
|
6584
POPLAR AVENUE, SUITE 300
|
|
MEMPHIS,
TENNESSEE
|
38138
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(901)
682-6600
(Registrant's
telephone number, including area code)
N/A
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
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 whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange
Act.
Large
accelerated filer [X]
|
Accelerated
filer [ ]
|
Non-accelerated
filer [ ]
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
[ ]
Yes [X] No
Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date:
|
Number
of Shares Outstanding
|
Class
|
at
July 18, 2007
|
Common
Stock, $.01 par value
|
25,513,105
|
MID-AMERICA
APARTMENT COMMUNITIES, INC.
|
|
|
|
TABLE
OF CONTENTS
|
|
|
Page
|
|
PART
I – FINANCIAL INFORMATION
|
|
Item
1.
|
Financial
Statements
|
|
|
Condensed
Consolidated Balance Sheets as of June 30, 2007 (Unaudited) and
December
31, 2006
|
2
|
|
Condensed
Consolidated Statements of Operations for the three and six months
ended
June 30, 2007, and 2006 (Unaudited)
|
3
|
|
Condensed
Consolidated Statements of Cash Flows for the six months ended
June 30,
2007, and 2006 (Unaudited)
|
4
|
|
Notes
to Condensed Consolidated Financial Statements (Unaudited)
|
5
|
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
8
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
17
|
Item
4.
|
Controls
and Procedures
|
17
|
|
|
|
|
PART
II – OTHER INFORMATION
|
|
Item
1.
|
Legal
Proceedings
|
18
|
Item
1A.
|
Risk
Factors
|
18
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
18
|
Item
3.
|
Defaults
Upon Senior Securities
|
18
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
18
|
Item
5.
|
Other
Information
|
18
|
Item
6.
|
Exhibits
|
19
|
|
Signatures
|
20
|
Mid-America Apartment Communities, Inc.
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
|
June
30, 2007 (Unaudited) and December 31, 2006
|
|
|
|
|
|
|
(Dollars
in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30, 2007
|
|
|
December
31, 2006
|
|
Assets:
|
|
|
|
|
|
|
|
Real
estate assets:
|
|
|
|
|
|
|
|
Land
|
|
$ |
209,146
|
|
|
$ |
206,635
|
|
|
Buildings
and improvements
|
|
|
1,961,618
|
|
|
|
1,921,462
|
|
|
Furniture,
fixtures and equipment
|
|
|
51,376
|
|
|
|
51,374
|
|
|
Capital
improvements in progress
|
|
|
27,171
|
|
|
|
20,689
|
|
|
|
|
|
2,249,311
|
|
|
|
2,200,160
|
|
|
Less
accumulated depreciation
|
|
|
(573,473 |
) |
|
|
(543,802 |
) |
|
|
|
|
1,675,838
|
|
|
|
1,656,358
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
held for future development
|
|
|
2,360
|
|
|
|
2,360
|
|
|
Commercial
properties, net
|
|
|
7,120
|
|
|
|
7,103
|
|
|
Investments
in and advances to real estate joint venture
|
|
|
51
|
|
|
|
3,718
|
|
|
Real
estate assets, net
|
|
|
1,685,369
|
|
|
|
1,669,539
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
|
4,292
|
|
|
|
5,545
|
|
Restricted
cash
|
|
|
4,149
|
|
|
|
4,145
|
|
Deferred
financing costs, net
|
|
|
16,175
|
|
|
|
16,033
|
|
Other
assets
|
|
|
38,445
|
|
|
|
38,865
|
|
Goodwill
|
|
|
4,105
|
|
|
|
4,472
|
|
Assets
held for sale
|
|
|
8,573
|
|
|
|
8,047
|
|
|
Total
assets
|
|
$ |
1,761,108
|
|
|
$ |
1,746,646
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Shareholders' Equity:
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Notes
payable
|
|
$ |
1,195,570
|
|
|
$ |
1,196,349
|
|
|
Accounts
payable
|
|
|
647
|
|
|
|
2,773
|
|
|
Accrued
expenses and other liabilities
|
|
|
63,882
|
|
|
|
57,919
|
|
|
Security
deposits
|
|
|
8,345
|
|
|
|
7,670
|
|
|
Liabilities
associated with assets held for sale
|
|
|
235
|
|
|
|
269
|
|
|
Total
liabilities
|
|
|
1,268,679
|
|
|
|
1,264,980
|
|
|
|
|
|
|
|
|
|
|
|
Minority
interest
|
|
|
32,086
|
|
|
|
32,600
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
stock
|
|
|
2,901
|
|
|
|
3,418
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
Preferred
stock, $.01 par value per share, 20,000,000 shares
authorized,
|
|
|
|
|
|
|
|
|
|
$166,863
or $25 per share liquidation preference;
|
|
|
|
|
|
|
|
|
|
9
1/4% Series F Cumulative Redeemable Preferred Stock,
|
|
|
|
|
|
|
|
|
|
3,000,000
shares authorized, 474,500 shares issued and outstanding
|
|
|
5
|
|
|
|
5
|
|
|
8.30%
Series H Cumulative Redeemable Preferred Stock,
|
|
|
|
|
|
|
|
|
|
6,200,000
shares authorized, 6,200,000 shares issued and outstanding
|
|
|
62
|
|
|
|
62
|
|
|
Common
stock, $.01 par value per share, 50,000,000 shares
authorized;
|
|
|
|
|
|
|
|
|
|
25,511,314
and 25,093,156 shares issued and outstanding at
|
|
|
|
|
|
|
|
|
|
June
30, 2007, and December 31, 2006, respectively (1)
|
|
|
255
|
|
|
|
251
|
|
|
Additional
paid-in capital
|
|
|
835,930
|
|
|
|
814,006
|
|
|
Accumulated
distributions in excess of net income
|
|
|
(396,652 |
) |
|
|
(379,573 |
) |
|
Accumulated
other comprehensive income
|
|
|
17,842
|
|
|
|
10,897
|
|
|
Total
shareholders' equity
|
|
|
457,442
|
|
|
|
445,648
|
|
|
Total
liabilities and shareholders' equity
|
|
$ |
1,761,108
|
|
|
$ |
1,746,646
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to condensed consolidated financial
statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Number
of shares issued and outstanding represent total shares of
common stock
regardless of classification on the
|
|
|
condensed
consolidated balance sheet.
|
|
Mid-America Apartment Communities, Inc.
|
|
Condensed
Consolidated Statements of Operations
|
|
Three
and six months ended June 30, 2007, and 2006
|
|
(Dollars in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended June 30,
|
|
|
Six
months ended June 30,
|
|
|
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
Operating
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
revenues
|
|
$ |
82,875
|
|
|
$ |
76,305
|
|
|
$ |
164,087
|
|
|
$ |
150,159
|
|
|
Other
property revenues
|
|
|
3,904
|
|
|
|
3,438
|
|
|
|
7,649
|
|
|
|
6,923
|
|
|
Total
property revenues
|
|
|
86,779
|
|
|
|
79,743
|
|
|
|
171,736
|
|
|
|
157,082
|
|
|
Management
fee income
|
|
|
-
|
|
|
|
52
|
|
|
|
34
|
|
|
|
104
|
|
|
Total
operating revenues
|
|
|
86,779
|
|
|
|
79,795
|
|
|
|
171,770
|
|
|
|
157,186
|
|
Property
operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel
|
|
|
10,099
|
|
|
|
9,358
|
|
|
|
19,822
|
|
|
|
18,308
|
|
|
Building
repairs and maintenance
|
|
|
3,188
|
|
|
|
2,910
|
|
|
|
6,244
|
|
|
|
5,325
|
|
|
Real
estate taxes and insurance
|
|
|
11,624
|
|
|
|
9,878
|
|
|
|
22,722
|
|
|
|
19,363
|
|
|
Utilities
|
|
|
4,761
|
|
|
|
4,519
|
|
|
|
9,548
|
|
|
|
9,145
|
|
|
Landscaping
|
|
|
2,296
|
|
|
|
2,111
|
|
|
|
4,568
|
|
|
|
4,182
|
|
|
Other
operating
|
|
|
4,128
|
|
|
|
3,601
|
|
|
|
7,847
|
|
|
|
6,983
|
|
|
Depreciation
|
|
|
21,108
|
|
|
|
19,386
|
|
|
|
42,396
|
|
|
|
38,026
|
|
|
Total
property operating expenses
|
|
|
57,204
|
|
|
|
51,763
|
|
|
|
113,147
|
|
|
|
101,332
|
|
Property
management expenses
|
|
|
4,431
|
|
|
|
3,464
|
|
|
|
8,880
|
|
|
|
5,975
|
|
General
and administrative expenses
|
|
|
2,882
|
|
|
|
2,682
|
|
|
|
5,812
|
|
|
|
6,043
|
|
Income
from continuing operations before non-operating items
|
|
|
22,262
|
|
|
|
21,886
|
|
|
|
43,931
|
|
|
|
43,836
|
|
Interest
and other non-property income
|
|
|
51
|
|
|
|
215
|
|
|
|
145
|
|
|
|
332
|
|
Interest
expense
|
|
|
(16,034 |
) |
|
|
(15,736 |
) |
|
|
(32,048 |
) |
|
|
(31,338 |
) |
Loss
on debt extinguishment
|
|
|
(52 |
) |
|
|
(1 |
) |
|
|
(52 |
) |
|
|
(551 |
) |
Amortization
of deferred financing costs
|
|
|
(574 |
) |
|
|
(504 |
) |
|
|
(1,135 |
) |
|
|
(989 |
) |
Minority
interest in operating partnership income
|
|
|
(763 |
) |
|
|
(408 |
) |
|
|
(1,801 |
) |
|
|
(821 |
) |
Loss
from investments in real estate joint ventures
|
|
|
(51 |
) |
|
|
(35 |
) |
|
|
(58 |
) |
|
|
(119 |
) |
Incentive
fee from real estate joint ventures
|
|
|
-
|
|
|
|
-
|
|
|
|
1,019
|
|
|
|
-
|
|
Net
gain on insurance and other settlement proceeds
|
|
|
332
|
|
|
|
225
|
|
|
|
842
|
|
|
|
225
|
|
Gain
on sale of non-depreciable assets
|
|
|
226
|
|
|
|
-
|
|
|
|
226
|
|
|
|
-
|
|
Gain
on dispositions within real estate joint ventures
|
|
|
-
|
|
|
|
-
|
|
|
|
5,387
|
|
|
|
-
|
|
Income
from continuing operations
|
|
|
5,397
|
|
|
|
5,642
|
|
|
|
16,456
|
|
|
|
10,575
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from discontinued operations before
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
asset
impairment, settlement proceeds and gain on sale
|
|
|
278
|
|
|
|
250
|
|
|
|
543
|
|
|
|
443
|
|
|
Gain
on sale of discontinued operations
|
|
|
3,443
|
|
|
|
-
|
|
|
|
3,443
|
|
|
|
-
|
|
Net
income
|
|
|
9,118
|
|
|
|
5,892
|
|
|
|
20,442
|
|
|
|
11,018
|
|
Preferred
dividend distribution
|
|
|
3,490
|
|
|
|
3,491
|
|
|
|
6,981
|
|
|
|
6,981
|
|
Net
income available for common shareholders
|
|
$ |
5,628
|
|
|
$ |
2,401
|
|
|
$ |
13,461
|
|
|
$ |
4,037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
25,288
|
|
|
|
23,152
|
|
|
|
25,188
|
|
|
|
22,645
|
|
|
Effect
of dilutive stock options
|
|
|
176
|
|
|
|
222
|
|
|
|
189
|
|
|
|
228
|
|
|
Diluted
|
|
|
25,464
|
|
|
|
23,374
|
|
|
|
25,377
|
|
|
|
22,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income available for common shareholders
|
|
$ |
5,628
|
|
|
$ |
2,401
|
|
|
$ |
13,461
|
|
|
$ |
4,037
|
|
Discontinued
property operations
|
|
|
(3,721 |
) |
|
|
(250 |
) |
|
|
(3,986 |
) |
|
|
(443 |
) |
Income
from continuing operations available for common
shareholders
|
|
$ |
1,907
|
|
|
$ |
2,151
|
|
|
$ |
9,475
|
|
|
$ |
3,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share - basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
available
for common shareholders
|
|
$ |
0.07
|
|
|
$ |
0.09
|
|
|
$ |
0.37
|
|
|
$ |
0.16
|
|
|
Discontinued
property operations
|
|
|
0.15
|
|
|
|
0.01
|
|
|
|
0.16
|
|
|
|
0.02
|
|
|
Net
income available for common shareholders
|
|
$ |
0.22
|
|
|
$ |
0.10
|
|
|
$ |
0.53
|
|
|
$ |
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
available
for common shareholders
|
|
$ |
0.07
|
|
|
$ |
0.09
|
|
|
$ |
0.37
|
|
|
$ |
0.16
|
|
|
Discontinued
property operations
|
|
|
0.15
|
|
|
|
0.01
|
|
|
|
0.16
|
|
|
|
0.02
|
|
|
Net
income available for common shareholders
|
|
$ |
0.22
|
|
|
$ |
0.10
|
|
|
$ |
0.53
|
|
|
$ |
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared per common share
(1)
|
|
$ |
0.605
|
|
|
$ |
0.595
|
|
|
$ |
1.210
|
|
|
$ |
1.785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The
Company declared and paid $1.19 per common share during the six
months
ended June 30, 2006. During that same period
|
|
|
the
Company also declared an additional $0.595 per common share that
was not
paid until July 31, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to condensed consolidated financial
statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid-America
Apartment Communities, Inc.
|
|
|
|
|
|
|
Consolidated
Statements of Cash Flows
|
|
|
|
|
|
|
Six
Months Ended June 30, 2007 and 2006
|
|
|
|
|
|
|
(Dollars
in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
Cash
flows from operating activities:
|
|
|
|
|
|
|
Net
income
|
|
$ |
20,442
|
|
|
$ |
11,018
|
|
Adjustments
to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Income
from discontinued operations before asset impairment,
settlement
|
|
|
|
|
|
|
|
|
proceeds
and gain on sale
|
|
|
(543 |
) |
|
|
(443 |
) |
Depreciation
and amortization of deferred financing costs
|
|
|
43,531
|
|
|
|
39,015
|
|
Stock
compensation expense
|
|
|
490
|
|
|
|
646
|
|
Stock
issued to employee stock ownership plan
|
|
|
440
|
|
|
|
385
|
|
Redeemable
stock issued
|
|
|
184
|
|
|
|
186
|
|
Amortization
of debt premium
|
|
|
(1,018 |
) |
|
|
(930 |
) |
Income
from investments in real estate joint ventures
|
|
|
58
|
|
|
|
119
|
|
Minority
interest in operating partnership income
|
|
|
1,801
|
|
|
|
821
|
|
Loss
on debt extinguishment
|
|
|
52
|
|
|
|
551
|
|
Derivative
interest expense
|
|
|
98
|
|
|
|
(120 |
) |
Gain
on sale of non-depreciable assets
|
|
|
(226 |
) |
|
|
-
|
|
Gain
on sale of discontinued operations
|
|
|
(3,443 |
) |
|
|
-
|
|
Gain
on disposition within real estate joint ventures
|
|
|
(5,387 |
) |
|
|
-
|
|
Incentive
fee from real estate joint ventures
|
|
|
(1,019 |
) |
|
|
-
|
|
Net
gain on insurance and other settlement proceeds
|
|
|
(842 |
) |
|
|
(225 |
) |
Changes
in assets and liabilities:
|
|
|
|
|
|
|
|
|
Restricted
cash
|
|
|
(4 |
) |
|
|
689
|
|
Other
assets
|
|
|
5,479
|
|
|
|
2,741
|
|
Accounts
payable
|
|
|
(2,124 |
) |
|
|
2,874
|
|
Accrued
expenses and other
|
|
|
226
|
|
|
|
2,574
|
|
Security
deposits
|
|
|
652
|
|
|
|
780
|
|
Net
cash provided by operating activities
|
|
|
58,847
|
|
|
|
60,681
|
|
Cash
flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchases
of real estate and other assets
|
|
|
(35,225 |
) |
|
|
(82,213 |
) |
Improvements
to existing real estate assets
|
|
|
(13,916 |
) |
|
|
(14,356 |
) |
Renovations
to existing real estate assets
|
|
|
(4,709 |
) |
|
|
(2,468 |
) |
Development
|
|
|
(9,950 |
) |
|
|
(551 |
) |
Distributions
from real estate joint ventures
|
|
|
9,855
|
|
|
|
137
|
|
Contributions
to real estate joint ventures
|
|
|
(98 |
) |
|
|
-
|
|
Proceeds
from disposition of real estate assets
|
|
|
13,778
|
|
|
|
1,089
|
|
Net
cash used in investing activities
|
|
|
(40,265 |
) |
|
|
(98,362 |
) |
Cash
flows from financing activities:
|
|
|
|
|
|
|
|
|
Net
change in credit lines
|
|
|
11,572
|
|
|
|
1,659
|
|
Proceeds
from notes payable
|
|
|
-
|
|
|
|
13,235
|
|
Principal
payments on notes payable
|
|
|
(11,333 |
) |
|
|
(28,737 |
) |
Payment
of deferred financing costs
|
|
|
(1,298 |
) |
|
|
(1,905 |
) |
Proceeds
from issuances of common shares and units
|
|
|
21,783
|
|
|
|
87,321
|
|
Distributions
to unitholders
|
|
|
(3,012 |
) |
|
|
(2,990 |
) |
Dividends
paid on common shares
|
|
|
(30,566 |
) |
|
|
(26,619 |
) |
Dividends
paid on preferred shares
|
|
|
(6,981 |
) |
|
|
(6,981 |
) |
Net
cash (used by) provided by financing activities
|
|
|
(19,835 |
) |
|
|
34,983
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
(1,253 |
) |
|
|
(2,698 |
) |
Cash
and cash equivalents, beginning of period
|
|
|
5,545
|
|
|
|
14,064
|
|
Cash
and cash equivalents, end of period
|
|
$ |
4,292
|
|
|
$ |
11,366
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
$ |
33,809
|
|
|
$ |
32,989
|
|
Supplemental
disclosure of noncash investing and financing
activities:
|
|
|
|
|
|
|
|
|
Conversion
of units to common shares
|
|
$ |
84
|
|
|
$ |
136
|
|
Interest
capitalized
|
|
$ |
520
|
|
|
$ |
47
|
|
Marked-to-market
adjustment on derivative instruments
|
|
$ |
6,945
|
|
|
$ |
17,505
|
|
Reclass
of redeemable stock from equity to liabilities
|
|
$ |
442
|
|
|
$ |
-
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to condensed consolidated financial
statements.
|
|
|
|
|
|
|
|
|
Mid-America
Apartment Communities, Inc.
Notes
to Condensed Consolidated Financial Statements
June
30, 2007, and 2006 (Unaudited)
1. BASIS
OF PRESENTATION
The
accompanying unaudited condensed consolidated financial statements have been
prepared by the management of Mid-America Apartment Communities, Inc., or
Mid-America, in accordance with U.S. generally accepted accounting principles
for interim financial information and applicable rules and regulations of
the
Securities and Exchange Commission and Mid-America’s accounting policies in
effect as of December 31, 2006, as set forth in our annual consolidated
financial statements, as of such date. In the opinion of management, all
adjustments necessary for a fair presentation of the condensed consolidated
financial statements have been included and all such adjustments were of
a
normal recurring nature. All significant intercompany accounts and transactions
have been eliminated in consolidation. The results of operations for the
three
and six month periods ended June 30, 2007, are not necessarily indicative
of the
results to be expected for the full year. These financial statements should
be
read in conjunction with our audited financial statements and notes thereto
included in Mid-America’s Annual Report on Form 10-K for the year ended December
31, 2006.
RECLASSIFICATION
Certain
prior period amounts have been reclassified to conform to the 2007
presentation. The reclassifications had no effect on net income
available for common shareholders.
2. SEGMENT
INFORMATION
At
June
30, 2007, Mid-America owned 137 multifamily apartment communities in 13
different states from which it derives all significant sources of earnings
and
operating cash flows. Our 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
Mid-America. Our 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 our return
criteria and long-term investment goals. We define each of our multifamily
communities as an individual operating segment. We have also determined
that all of our communities have similar economic characteristics and also
meet
the other criteria which permit the communities to be aggregated into one
reportable segment, which is the acquisition and operation of the multifamily
communities owned.
3. COMPREHENSIVE
INCOME
Total
comprehensive income and its components for the three and six month periods
ended June 30, 2007, and 2006, were as follows (dollars in
thousands):
|
|
Three
months
|
|
|
Six
months
|
|
|
|
ended
June 30,
|
|
|
ended
June 30,
|
|
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$ |
9,118
|
|
|
$ |
5,892
|
|
|
$ |
20,442
|
|
|
$ |
11,018
|
|
Marked-to-market
adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
on
derivative instruments
|
|
|
9,871
|
|
|
|
7,088
|
|
|
|
6,945
|
|
|
|
17,505
|
|
Total
comprehensive income
|
|
$ |
18,989
|
|
|
$ |
12,980
|
|
|
$ |
27,387
|
|
|
$ |
28,523
|
|
The
marked-to-market adjustment on derivative instruments is based upon the change
of interest rates available for derivative instruments with similar terms
and
remaining maturities existing at each balance sheet date.
4. REAL
ESTATE DISPOSITIONS
On
May 3,
2007, Mid-America sold the Gleneagles and Hickory Farms apartments, 184 and
200
units, respectively, generating a $3.4 million gain for Mid-America. Both
communities are located in Memphis, Tennessee.
5. REAL
ESTATE ACQUISITIONS
On
May
30, 2007, Mid-America acquired the Ranchstone and Park Place apartments,
220 and
229 units, respectively. Both communities are located in Houston,
Texas.
6. DISCONTINUED
OPERATIONS
As
part
of Mid-America’s disposition strategy to selectively dispose of mature assets
that no longer meet our investment criteria and long-term strategic objectives,
in April 2006, we entered into an agreement to list the 184-unit Gleneagles
apartments and the 200-unit Hickory Farm apartments both located in Memphis,
Tennessee, for sale. Both of these communities were subsequently sold on
May 3,
2007. Also in line with this strategy, in March 2007, we entered into an
agreement to list the 144-unit Somerset apartments and the 192-unit Woodridge
apartments both located in Jackson, Mississippi, for sale. In accordance
with
Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, these communities are considered held for sale in the
accompanying condensed consolidated financial statements.
The
following is a summary of discontinued operations for the three and six month
periods ended June 30, 2007, and 2006, (dollars in thousands):
|
|
Three
Months Ended
|
|
|
Six
Months Ended
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
revenues
|
|
$ |
786
|
|
|
$ |
1,143
|
|
|
$ |
1,962
|
|
|
$ |
2,334
|
|
Other
revenues
|
|
|
46
|
|
|
|
58
|
|
|
|
113
|
|
|
|
122
|
|
Total
revenues
|
|
|
832
|
|
|
|
1,201
|
|
|
|
2,075
|
|
|
|
2,456
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
operating expenses
|
|
|
432
|
|
|
|
624
|
|
|
|
1,096
|
|
|
|
1,195
|
|
Depreciation
|
|
|
(1 |
) |
|
|
130
|
|
|
|
132
|
|
|
|
420
|
|
Interest
expense
|
|
|
123
|
|
|
|
197
|
|
|
|
304
|
|
|
|
398
|
|
Total
expense
|
|
|
554
|
|
|
|
951
|
|
|
|
1,532
|
|
|
|
2,013
|
|
Income
from discontinued operations before
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
gain
on sale and settlement proceeds
|
|
|
278
|
|
|
|
250
|
|
|
|
543
|
|
|
|
443
|
|
Income
from discontinued operations
|
|
$ |
278
|
|
|
$ |
250
|
|
|
$ |
543
|
|
|
$ |
443
|
|
7. SHARE
AND UNIT INFORMATION
At
June
30, 2007, 25,511,314 common shares and 2,482,593 operating partnership units
were outstanding, representing a total of 27,993,907 shares and units.
Additionally, Mid-America had outstanding options for the purchase of 144,620
shares of common stock at June 30, 2007, of which 64,477 were anti-dilutive.
At
June 30, 2006, 24,025,183 common shares and 2,508,403 operating partnership
units were outstanding, representing a total of 26,533,586 shares and units.
Additionally, Mid-America had outstanding options for the purchase of 246,952
shares of common stock at June 30, 2006, of which 116,865 were
anti-dilutive.
During
the three month period ended June 30, 2007, we issued 90,000 shares of common
stock through at-the-market offerings or negotiated transactions and received
net proceeds of approximately $5.1 million under a controlled equity offering
program.
8. DERIVATIVE
FINANCIAL INSTRUMENTS
In
the
normal course of business, Mid-America uses certain derivative financial
instruments to manage, or hedge, the interest rate risk associated with our
variable rate debt or as hedges in anticipation of future debt transactions
to
manage well-defined interest rate risk associated with the
transaction.
We
do not
use derivative financial instruments for speculative or trading purposes.
Further, Mid-America has a policy of entering into contracts with major
financial institutions based upon their credit rating and other
factors. When viewed in conjunction with the underlying and
offsetting exposure that the derivatives are designated to hedge, Mid-America
has not sustained any material loss from those instruments nor do we anticipate
any material adverse effect on our net income or financial position in the
future from the use of derivatives.
Mid-America
requires that derivative financial instruments designated as cash flow hedges
be
effective in reducing the interest rate risk exposure that they are designated
to hedge. This effectiveness is essential for qualifying for hedge accounting.
Instruments that meet the hedging criteria are formally designated as hedging
instruments at the inception of the derivative contract. We formally document
all relationships between hedging instruments and hedged items, as well as
our
risk-management objective and strategy for undertaking the hedge transaction.
This process includes linking all derivatives that are designated as fair
value
or cash flow hedges to specific assets and liabilities on the balance sheet
or
to specific firm commitments or forecasted transactions. We also formally
assess, both at the inception of the hedging relationship and on an ongoing
basis, whether the derivatives used are highly effective in offsetting changes
in fair values or cash flows of hedged items. When it is determined that
a
derivative has ceased to be a highly effective hedge, Mid-America discontinues
hedge accounting prospectively.
All
of
our derivative financial instruments are reported at fair value and represented
on the balance sheet, and are characterized as cash flow hedges. These
transactions hedge the future cash flows of debt transactions through interest
rate swaps that convert variable payments to fixed payments and interest
rate
caps that limit the exposure to rising interest rates. The unrealized
gains/losses in the fair value of these hedging instruments are reported
on the
balance sheet with a corresponding adjustment to accumulated other comprehensive
income, with any ineffective portion of the hedging transactions reclassified
to
earnings. During the three and six month periods ended June 30, 2007, and
2006,
the ineffective portion of the hedging transactions was not
significant.
9. RECENT
ACCOUNTING PRONOUNCEMENTS
In
June
2006, the Financial Accounting Standards Board, or FASB, issued Interpretation
No. 48 “Accounting for Uncertainty in Income Taxes”, or FIN 48. FIN 48 clarifies
the accounting for uncertainty in income taxes recognized in financial
statements in accordance with FASB Statement No. 109, Accounting for Income
Taxes. Mid-America adopted FIN 48 effective January 1, 2007. FIN 48
prescribes a recognition threshold and measurement attribute for the recognition
and measurement of tax positions taken in tax returns. Mid-America has
identified and examined our tax positions, including our status as a real
estate
investment trust, for all open tax years through December 31, 2006, and
concluded that the full benefit of each tax position taken should be recognized
in the financial statements. There are no significant changes in unrecognized
tax benefits that are reasonably possible within the twelve months following
the
adoption date.
FIN
48
requires that an enterprise must calculate interest and penalties related
to
unrecognized tax benefits. The decision regarding where to classify
interest and penalties on the income statement is an accounting policy decision
that should be consistently applied. Interest and penalties
calculated on any future uncertain tax positions will be presented as a
component of income tax expense. No interest and penalties are
accrued under FIN 48 on our balance sheet as of June 30, 2007.
Mid-America’s
tax years that remain subject to examination for U.S. federal purposes range
from 2003 through 2006. Our tax years that remain open for state examination
vary but range from 2002 through 2006.
In
September 2006, the FASB issued Statement No. 157 “Fair Value
Measurements”, or Statement 157. Statement 157
defines fair value, establishes a framework for measuring fair value and
expands
disclosures about fair value measurements. Statement 157 is effective for
fiscal
years beginning after November 15, 2007, and interim periods within those
fiscal
years. Mid-America does not believe the adoption of Statement 157 will have
a
material impact on our consolidated financial condition or results of operations
taken as a whole.
10. SUBSEQUENT
EVENTS
REAL
ESTATE DISPOSITIONS
On
July
16, 2007, Mid-America sold the Somerset and Woodridge apartments, 144 and
192
units, respectively. Both communities are located in Jackson,
Mississippi.
REAL
ESTATE ACQUISITIONS
On
July
6, 2007, Mid-America acquired the Chalet at Fall Creek apartments, 268 units,
located in Houston, Texas.
Item
2. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
CRITICAL
ACCOUNTING POLICIES AND ESTIMATES
The
following discussion and analysis of financial condition and results of
operations are based upon Mid-America’s condensed consolidated financial
statements, and the notes thereto, which have been prepared in accordance
with
U.S. generally accepted accounting principles, or GAAP. The preparation of
these
condensed consolidated financial statements requires us to make a number
of
estimates and assumptions that affect the reported amounts and disclosures
in
the condensed consolidated financial statements. On an ongoing basis, we
evaluate our estimates and assumptions based upon historical experience and
various other factors and circumstances. We believe that our estimates and
assumptions are reasonable in the circumstances; however, actual results
may
differ from these estimates and assumptions.
We
believe that the estimates and assumptions that are most important to the
portrayal of our financial condition and results of operations, in that they
require the most subjective determinations, form the basis of accounting
policies deemed to be most critical. These critical accounting policies include
revenue recognition, capitalization of expenditures and depreciation of assets,
impairment of long-lived assets, including goodwill, and fair value of
derivative financial instruments.
Revenue
Recognition
Mid-America
leases multifamily residential apartments under operating leases primarily
with
terms of one year or less. Rent and other property income is
recorded when due from residents and is recognized monthly as it is earned.
Other property income consists primarily of utility rebillings, other expense
reimbursements, and administrative, application and other fees charged to
residents. Interest, management fees, and all other sources of income
are recognized as earned.
We
record
all gains and losses on sales of real estate in accordance with Statement
No.
66, Accounting for Sales of Real Estate.
Capitalization
of expenditures and depreciation of assets
Mid-America
carries real estate assets at their depreciated cost. 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, 5 years
for
furniture, fixtures, and equipment, and 3 to 5 years for computers and software,
all of which are subjective determinations. Repairs and maintenance costs
are
expensed as incurred while significant improvements, renovations, and
replacements are capitalized. The cost to complete any deferred repairs and
maintenance at properties acquired by us in order to elevate the condition
of
the property to our standards are capitalized as incurred.
Development
costs, which are limited to adding new units to three existing properties,
are
capitalized in accordance with Statement No. 67, Accounting for Costs and
Initial Rental Operations of Real Estate
Projects and Statement No. 34, Capitalization of
Interest Cost.
Impairment
of long-lived assets, including goodwill
Mid-America
accounts for long-lived assets in accordance with the provisions of Statement
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets,
or Statement 144, and evaluates goodwill for impairment under Statement
No.
142, Goodwill and Other Intangible Assets, or Statement 142. We
evaluate goodwill for impairment on an annual basis in our fiscal fourth
quarter, or sooner if a goodwill impairment indicator is identified. We
periodically evaluate long-lived assets, including investments in real estate
and goodwill, for indicators that would suggest that the carrying amount
of the
assets may not be recoverable. The judgments regarding the existence of such
indicators are based on factors such as operating performance, market
conditions, and legal factors.
In
accordance with Statement 144, long-lived assets, such as real estate assets,
equipment, and purchased intangibles subject to amortization, are reviewed
for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets
to
be held and used is measured by a comparison of the carrying amount of an
asset
to estimated undiscounted future cash flows expected to be generated by the
asset. If the carrying amount of an asset exceeds its estimated future cash
flows, an impairment charge is recognized by the amount by which the carrying
amount of the asset exceeds the fair value of the asset. Assets to be disposed
of are separately presented in the balance sheet and reported at the lower
of
the carrying amount or fair value less costs to sell, and are no longer
depreciated. The assets and liabilities of a disposed group classified as
held
for sale are presented separately in the appropriate asset and liability
sections of the balance sheet.
Goodwill
is tested annually for impairment, and is tested for impairment more frequently
if events and circumstances indicate that the asset might be impaired. An
impairment loss is recognized to the extent that the carrying amount exceeds
the
asset’s fair value. This determination is made at the reporting unit level and
consists of two steps. First, we determine the fair value of a reporting
unit
and compare it to its carrying amount. In the apartment industry, the primary
method used for determining fair value is to divide annual operating cash
flows
by an appropriate capitalization rate. We determine the appropriate
capitalization rate by reviewing the prevailing rates in a property’s market or
submarket. Second, if the carrying amount of a reporting unit exceeds its
fair
value, an impairment loss is recognized for any excess of the carrying amount
of
the reporting unit’s goodwill over the implied fair value of that goodwill. The
implied fair value of goodwill is determined by allocating the fair value
of the
reporting unit in a manner similar to a purchase price allocation, in accordance
with Statement No. 141, Business Combinations. The residual fair value
after this allocation is the implied fair value of the reporting unit
goodwill.
Fair
value of derivative financial instruments
Mid-America
utilizes certain derivative financial instruments, primarily interest rate
swaps
and caps, during the normal course of business to manage, or hedge, the interest
rate risk associated with our variable rate debt or as hedges in anticipation
of
future debt transactions to manage well-defined interest rate risk associated
with the transaction. The valuation of the derivative financial instruments
under Statement No. 133 Accounting for Derivative Instruments and Hedging
Activities, as amended, requires us to make estimates and judgments that
affect the fair value of the instruments.
In
order
for a derivative contract to be designated as a hedging instrument, the
relationship between the hedging instrument and the hedged item must be highly
effective. While our calculation of hedge effectiveness contains some subjective
determinations, the historical correlation of the cash flows of the hedging
instruments and the underlying hedged item are measured before entering into
the
hedging relationship and have been found to be highly correlated.
We
measure ineffectiveness using the change in the variable cash flows method
at
the inception of the hedge and for each reporting period thereafter, through
the
term of the hedging instruments. Any amounts determined to be ineffective
are
recorded in earnings. The change in fair value of the interest rate
swaps and caps designated as cash flow hedges are recorded to accumulated
other
comprehensive income in the statement of shareholders’ equity.
OVERVIEW
OF THE THREE MONTHS ENDED JUNE 30, 2007
Mid-America’s
operating results for the three months ended June 30, 2007, benefited from
continued improvement in market conditions which helped us grow rental rates
at
our existing communities. Our operations also benefited from a full quarter
of
performance from the four communities acquired in 2006 after the first quarter,
as well as a month of operations from the two communities acquired in May
2007. Increasing operating and administrative expenses offset some of
the benefit of the revenue increases.
Net
income benefited from the sale of land and the disposition of two communities,
resulting in gains of approximately $226,000 and $3.4 million,
respectively.
On
May 9,
2007, Mid-America entered into a joint venture, Mid-America Multifamily Fund
I,
LLC. The joint venture was established to acquire multifamily properties.
No
properties had been acquired by the joint venture as of June 30,
2007.
The
following is a discussion of the consolidated financial condition and results
of
operations of Mid-America for the three and six month periods ended June
30,
2007. This discussion should be read in conjunction with the condensed
consolidated financial statements appearing elsewhere in this report. These
financial statements include all adjustments, which are, in the opinion of
management, necessary to reflect a fair statement of the results for the
interim
period presented, and all such adjustments are of a normal recurring
nature.
RESULTS
OF OPERATIONS
COMPARISON
OF THE THREE MONTHS ENDED JUNE 30, 2007, TO THE THREE MONTHS ENDED JUNE 30,
2006
Property
revenues for the three months ended June 30, 2007, increased by approximately
$7,036,000 from the three months ended June 30, 2006, due to (i) a $3,087,000
increase in property revenues from the six properties acquired since the
end of
the first quarter of 2006, and (ii) a $3,949,000 increase in property revenues
from all other communities. The increase in property revenues from all other
communities was generated primarily by our same store portfolio and was driven
by a 2.8% increase in average rent per unit and a reduction in the rate of
concessions of net potential rent from 4.1% to 2.7% from the second quarter
of
2006 to the second quarter of 2007, respectively.
Property
operating expenses include costs for property personnel, building repairs
and
maintenance, real estate taxes and insurance, utilities, landscaping and
other
property related costs. Property operating expenses for the three months
ended
June 30, 2007, increased by approximately $3,719,000 from the three months
ended
June 30, 2006, due primarily to increases in property operating expenses
of (i)
$1,485,000 from the six properties acquired since the end of the first quarter
of 2006, and (ii) $2,234,000 from all other communities. The increase in
property operating expenses from all other communities consisted primarily
of
our same store portfolio and was driven by an increase in insurance expense
of
$724,000 over the same quarter last year as a result of higher premiums incurred
upon our policy renewal on July 1, 2006, as well as an increase of $334,000
over
the same quarter last year due to real estate taxes.
Depreciation
expense for the three months ended June 30, 2007, increased by approximately
$1,722,000 from the three months ended June 30, 2006, primarily due to the
increases in depreciation expense of (i) $948,000 from the six properties
acquired since the end of the first quarter of 2006, (ii) $632,000 from all
other communities, and (iii) $142,000 from the amortization of the fair market
value of leases of acquired communities. Increases of depreciation expense
from
all other communities resulted from asset additions made during the normal
course of business.
Property
management expenses increased by approximately $967,000 from the second quarter
of 2006 to the second quarter of 2007 primarily related to an increase in
personnel incentives resulting from improved property operations, and increased
franchise and excise taxes resulting from state law changes. General and
administrative expenses increased by approximately $200,000 over this same
period mainly as a result of increased corporate level staffing.
Interest
expense increased approximately $298,000 in the three months ended June 30,
2007, from the three months ended June 30, 2006, due to the increase in our
average borrowing cost from 5.49% for the second quarter of 2006, to 5.51%
for
the second quarter of 2007, as well as a $30.7 million increase in the average
debt outstanding from the second quarter of 2006 to the second quarter of
2007
related to new acquisitions, and our development and redevelopment
programs.
In
the
three months ended June 30, 2007, Mid-America benefited from a $226,000 gain
due
to the sale of excess land to a municipality, as well as a $3.4 million gain
due
to the sale of two of our communities. No such gains were experienced in
the
second quarter of 2006.
Primarily
as a result of the foregoing, net income increased by approximately $3,226,000
in the second quarter of 2007 from the second quarter of
2006.
COMPARISON
OF THE SIX MONTHS ENDED JUNE 30, 2007, TO THE SIX MONTHS ENDED JUNE 30,
2006
Property
revenues for the six months ended June 30, 2007, increased by approximately
$14,654,000 from the six months ended June 30, 2006, due to (i) a $7,212,000
increase in property revenues from the eight properties acquired in 2006 and
2007, and (ii) a $7,442,000 increase in property revenues from all other
communities. The increase in property revenues from all other communities was
generated primarily by our same store portfolio and was driven by increases
in
average rent per unit and a reduction in the rate of concessions of net
potential rent from the first six months of 2006 to the first six months of
2007.
Property
operating expenses include costs for property personnel, building repairs and
maintenance, real estate taxes and insurance, utilities, landscaping and other
property related costs. Property operating expenses for the six months ended
June 30, 2007, increased by approximately $7,445,000 from the six months ended
June 30, 2006, due primarily to increases in property operating expenses of
(i)
$3,556,000 from the eight properties acquired in 2006 and 2007, and (ii)
$3,889,000 from all other communities. The increase in property operating
expenses from all other communities consisted primarily of our same store
portfolio and was driven by an increase in insurance expense over the same
quarter last year as a result of higher premiums incurred upon our policy
renewal on July 1, 2006.
Depreciation
expense for the six months ended June 30, 2007, increased by approximately
$4,370,000 from the six months ended June 30, 2006, primarily due to the
increases in depreciation expense of (i) $2,281,000 from the
eight properties acquired in 2006 and 2007, (ii) $1,286,000 from all other
communities, and (iii) $803,000 from the amortization of the fair market value
of leases of acquired communities. Increases of depreciation expense from all
other communities resulted from asset additions made during the normal course
of
business.
Property
management expenses increased by approximately $2,905,000 from the first half
of
2006 to the first half of 2007 primarily related to an increase in personnel
incentives resulting from improved property operations, and increased franchise
and excise taxes resulting from state law changes. General and administrative
expenses decreased by approximately $231,000 over this same period mainly as
a
result of decreased corporate level personnel bonuses.
Interest
expense increased approximately $710,000 in the six months ended June 30, 2007,
from the six months ended June 30, 2006, due to the increase in our average
borrowing cost from 5.45% for the first six months of 2006, to 5.52% for the
first six months of 2007, as well as a $26.5 million increase in the average
debt outstanding from the first six months of 2006 to the first six months
of
2007 related to new acquisitions, and our development and redevelopment
programs.
In
the
six months ended June 30, 2007, Mid-America benefited from a net gain on
insurance and other settlement proceeds of approximately $842,000 compared
to
$225,000 for the first six months of 2006.
During
the first six months of 2007, Mid-America also benefited from the sale of our
last joint venture property with Crow Holdings, resulting in a gain of $5.4
million and incentive fees of $1.0 million, a $226,000 gain due to the sale
of
excess land to a municipality, and a $3.4 million gain due to the sale of two
of
our communities. No such gains were experienced in the first six months of
2006.
Primarily
as a result of the foregoing, net income increased by approximately $9,424,000
in the first half of 2007 from the first half of 2006.
FUNDS
FROM OPERATIONS AND NET INCOME
Funds
from operations, or FFO, represents net income (computed in accordance with
GAAP), excluding extraordinary items, minority interest in Operating Partnership
income, gain 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, or NAREIT, definition. Disposition of real
estate assets includes sales of discontinued operations as well as proceeds
received from insurance and other settlements from property damage.
In
response to the Securities and Exchange Commission’s Staff Policy Statement
relating to EITF Topic D-42 concerning the calculation of earnings per share
for
the redemption of preferred stock, we include the amount charged to retire
preferred stock in excess of carrying values in our FFO
calculation.
Mid-America’s
policy is to expense the cost of interior painting, vinyl flooring, and blinds
as incurred for stabilized properties. During the stabilization period for
acquisition properties, these items are capitalized as part of the total
repositioning program of newly acquired properties, and, thus are not deducted
in calculating FFO.
FFO
should not be considered as an alternative to net income or any other GAAP
measurement of performance, as an indicator of operating performance or as
an
alternative to cash flow from operating, investing, and financing activities
as
a measure of liquidity. We believe that FFO is helpful to investors in
understanding our operating performance in that such calculation excludes
depreciation expense on real estate assets. We believe 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. 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.
The
following table is a reconciliation of FFO to net income for the three and
six
month periods ended June 30, 2007, and 2006 (dollars and shares in
thousands):
|
|
Three
months
|
|
|
Six
months
|
|
|
|
ended
June 30,
|
|
|
ended
June 30,
|
|
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
Net
income
|
|
$ |
9,118
|
|
|
$ |
5,892
|
|
|
$ |
20,442
|
|
|
$ |
11,018
|
|
Depreciation
of real estate assets
|
|
|
20,781
|
|
|
|
19,042
|
|
|
|
41,752
|
|
|
|
37,344
|
|
Net
gain on insurance and other settlement proceeds
|
|
|
(332 |
) |
|
|
(225 |
) |
|
|
(842 |
) |
|
|
(225 |
) |
Gain
on dispositions within real estate joint ventures
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,387 |
) |
|
|
-
|
|
Depreciation
of real estate assets of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
discontinued
operations
|
|
|
(1 |
) |
|
|
130
|
|
|
|
132
|
|
|
|
420
|
|
Gain
on sale of discontinued operations
|
|
|
(3,443 |
) |
|
|
-
|
|
|
|
(3,443 |
) |
|
|
-
|
|
Depreciation
of real estate assets of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
real
estate joint ventures
|
|
|
-
|
|
|
|
121
|
|
|
|
14
|
|
|
|
261
|
|
Preferred
dividend distribution
|
|
|
(3,490 |
) |
|
|
(3,491 |
) |
|
|
(6,981 |
) |
|
|
(6,981 |
) |
Minority
interest in operating partnership income
|
|
|
763
|
|
|
|
408
|
|
|
|
1,801
|
|
|
|
821
|
|
Funds
from operations
|
|
$ |
23,396
|
|
|
$ |
21,877
|
|
|
$ |
47,488
|
|
|
$ |
42,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares and units:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
27,775
|
|
|
|
25,662
|
|
|
|
27,676
|
|
|
|
25,160
|
|
Diluted
|
|
|
27,951
|
|
|
|
25,884
|
|
|
|
27,865
|
|
|
|
25,387
|
|
FFO
for
the three and six month periods ended June 30, 2007, increased primarily
as the
result of recently acquired properties and improved performance from
existing
properties, as well as the sale of excess land of $226,000 to a municipality
which was classified as a non-depreciable asset.
TRENDS
Mid-America
believes that the primary driver of demand by apartment residents is
by job
growth, which has continued to be strong throughout the Sunbelt, our
operating
region.
In
the
first six months of 2007, community performance continued to be stable
and
growing throughout most of Mid-America’s markets. Overall, demand for
apartment homes continues to be strong throughout our markets, allowing
for
absorption of new supply and continued pricing traction in most
markets. Some of our markets were weaker than the portfolio as a
whole, including Tampa and Orlando, where we have a total of 5 communities.
These markets experienced some reversing of condominiums to the rental
market.
Columbus, Georgia, where military deployment caused a temporary reduction
in
demand, was also weaker than the portfolio as a whole.
Mid-America
faces cost pressures from increasing operating expenses, especially insurance
and real estate tax costs, as well as increasing prices of materials
that we use
in maintaining, renovating and further developing our apartments.
We
believe that the current environment of strong demand and reduced competition
from single family homes, while somewhat offset by rising expenses, will
continue to contribute to better operating results in the near
future.
LIQUIDITY
AND CAPITAL RESOURCES
Net
cash
flow provided by operating activities decreased by approximately $1.9
million
from $60.7 million in the first six months of 2006 to $58.8 million in
the first
six months of 2007 as cash from improved existing and new property operations
was more than offset by a decrease in our accounts payable levels from
the first
six months of 2006 to the first six months of 2007.
Net
cash
used in investing activities decreased during the first six months of 2007
from
the first six months of 2006 to approximately $40.3 million from $98.4 million
mainly related to $82.2 million of cash used for acquisitions in the first
six
months of 2006 compared to $35.2 million for the first six months of 2007.
Mid-America also received $23.6 million in cash during the first six months
of
2007 as the result of property sales, this compares to only $1.2 million
for the
first six months of 2006.
The
first
six months of 2007 used net cash for financing activities of $19.8 million
while
the first six months of 2006 provided net cash from financing activities
of
$35.0 million. This change was due mainly to the $87.3 million of proceeds
from
issuances of common stock in the first six months of 2006 compared to only
$21.8
million for the first six months of 2007.
The
weighted average interest rate at June 30, 2007, for the $1.2 billion of
debt
outstanding was 5.5% compared to 5.6% on $1.1 billion of debt outstanding
at
June 30, 2006. Mid-America utilizes both conventional and tax exempt debt
to
help finance its activities. Borrowings are made through individual property
mortgages and secured credit facilities. We utilize fixed rate borrowings,
interest rate swaps and interest rate caps to manage our current and future
interest rate risk. More details on our borrowings can be found in the schedule
presented later in this section.
At
June
30, 2007, Mid-America had secured credit facility relationships with Prudential
Mortgage Capital which are credit enhanced by the Federal National Mortgage
Association, or FNMA, Federal Home Loan Mortgage Corporation, or Freddie
MAC,
and a group of banks led by AmSouth Bank. Together, these credit facilities
provided a total borrowing capacity of $1.4 billion and an availability to
borrow of $1.2 billion at June 30, 2007. Mid-America had total borrowings
outstanding under these credit facilities of $1.0 billion at June 30,
2007.
Approximately
71% of Mid-America’s outstanding obligations at June 30, 2007, were borrowed
through facilities with/or credit enhanced by FNMA, also referred to as the
FNMA
facilities. The FNMA facilities have a combined line limit of $1.0 billion,
all
of which was available to borrow at June 30, 2007. Mid-America had total
borrowings outstanding under the FNMA facilities of approximately $854 million
at June 30, 2007. Various traunches of the facilities mature from 2010 through
2014. The FNMA facilities provide for both fixed and variable rate borrowings.
The interest rate on the majority of the variable portion renews every 90
days
and is based on the FNMA Discount Mortgage Backed Security, or DMBS, rate
on the
date of renewal, which has typically approximated three-month LIBOR less
an
average spread of 0.05% - 0.06% over the life of the FNMA facilities, plus
a
credit enhancement fee of 0.62% to 0.795%.
Each
of
Mid-America’s secured credit facilities is subject to various covenants and
conditions on usage, and are subject to periodic re-evaluation of collateral.
If
we were to fail to satisfy a condition to borrowing, the available credit
under
one or more of the facilities could not be drawn, which could adversely affect
our liquidity. In the event of a reduction in real estate values the amount
of
available credit could be reduced. Moreover, if we were to fail to make a
payment or violate a covenant under a credit facility, after applicable cure
periods, one or more of our lenders could declare a default, accelerate the
due
date for repayment of all amounts outstanding and/or foreclose on properties
securing such facilities. Any such event could have a material adverse
effect.
As
of
June 30, 2007, Mid-America had entered into interest rate swaps totaling
a
notional amount of $689 million, including a $25 million swap which does
not go
into effect until July 2007. To date, these swaps have proven to be highly
effective hedges. We also had interest rate cap agreements totaling a notional
amount of approximately $42 million as of June 30, 2007.
Summary
details of the debt outstanding at June 30, 2007, follow in the table
below:
|
|
|
|
|
|
|
|
Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance/
|
|
Average
|
|
Average
|
|
Average
|
|
|
|
|
|
Line
|
|
Line
|
|
Notional
|
|
Interest
|
|
Rate
|
|
Contract
|
|
|
|
|
|
Limit
|
|
Availability
|
|
Amount
|
|
Rate
|
|
Maturity
|
|
Maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMBINED
DEBT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
Rate or Swapped
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conventional
|
|
|
|
|
|
$ 853,154,809
|
|
5.6%
|
|
9/28/2011
|
|
9/28/2011
|
|
|
Tax
Exempt
|
|
|
|
|
|
73,355,000
|
|
4.3%
|
|
1/3/2012
|
|
1/3/2012
|
|
|
|
Subtotal
Fixed Rate or Swapped
|
|
|
|
926,509,809
|
|
5.5%
|
|
10/5/2011
|
|
10/5/2011
|
|
Variable
Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conventional
|
|
|
|
|
|
216,179,262
|
|
5.9%
|
|
8/27/2007
|
|
10/24/2012
|
|
|
Tax
Exempt
|
|
|
|
|
|
10,855,004
|
|
4.7%
|
|
7/22/2007
|
|
5/30/2020
|
|
|
Conventional
- Capped
|
|
|
|
|
|
17,936,000
|
|
5.9%
|
|
11/13/2009
|
|
11/13/2009
|
|
|
Tax
Exempt - Capped
|
|
|
|
|
|
24,090,000
|
|
4.6%
|
|
11/27/2009
|
|
11/27/2009
|
|
|
|
Subtotal
Variable Rate
|
|
|
|
|
|
269,060,266
|
|
5.8%
|
|
8/22/2007
|
|
4/11/2013
|
|
Total
Combined Debt Outstanding
|
|
|
|
|
$
1,195,570,075
|
|
5.5%
|
|
10/31/2010
|
|
2/7/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNDERLYING
DEBT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual
Property Mortgages/Bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
Conventional
Fixed Rate
|
|
|
|
|
|
$ 135,154,809
|
|
4.8%
|
|
8/29/2013
|
|
8/29/2013
|
|
|
Tax
Exempt Fixed Rate
|
|
|
|
|
|
12,025,000
|
|
5.2%
|
|
12/1/2028
|
|
12/1/2028
|
|
|
Tax
Exempt Variable Rate
|
|
|
|
|
|
4,760,004
|
|
4.8%
|
|
7/31/2007
|
|
6/1/2028
|
|
FNMA
Credit Facilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
Free Borrowings
|
|
$ 91,515,000
|
|
$ 91,515,000
|
|
91,515,000
|
|
4.6%
|
|
7/15/2007
|
|
3/1/2014
|
|
|
Conventional
Borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
Rate Borrowings
|
|
90,000,000
|
|
90,000,000
|
|
90,000,000
|
|
7.5%
|
|
7/1/2009
|
|
7/1/2009
|
|
|
|
Variable
Rate Borrowings
|
|
862,914,000
|
|
862,914,000
|
|
672,318,000
|
|
5.9%
|
|
8/30/2007
|
|
5/9/2013
|
|
Subtotal
FNMA Facilities
|
|
1,044,429,000
|
|
1,044,429,000
|
|
853,833,000
|
|
5.9%
|
|
11/3/2007
|
|
1/12/2013
|
|
Freddie
Mac Credit Facility I
|
|
100,000,000
|
|
96,404,000
|
|
96,404,000
|
|
5.9%
|
|
9/7/2007
|
|
7/1/2011
|
|
Freddie
Mac Credit Facility II
|
|
200,000,000
|
|
47,325,000
|
|
47,325,000
|
|
5.8%
|
|
8/31/2007
|
|
6/2/2014
|
|
AmSouth
Credit Facility
|
|
40,000,000
|
|
33,144,020
|
|
6,177,450
|
|
7.3%
|
|
7/31/2007
|
|
5/24/2008
|
|
Union
Planters Bank
|
|
|
|
|
|
39,890,812
|
|
6.4%
|
|
7/31/2007
|
|
4/1/2009
|
|
Total
Underlying Debt Outstanding
|
|
|
|
|
$
1,195,570,075
|
|
5.8%
|
|
9/5/2008
|
|
2/7/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HEDGING
INSTRUMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate Swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIBOR
indexed
|
|
|
|
|
|
$ 628,000,000
|
|
5.5%
|
|
8/5/2011
|
|
|
|
|
BMA
indexed
|
|
|
|
|
|
61,330,000
|
|
4.1%
|
|
9/10/2008
|
|
|
|
Total
Interest Rate Swaps
|
|
|
|
|
|
$ 689,330,000
|
|
5.4%
|
|
5/2/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate Caps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIBOR
indexed
|
|
|
|
|
|
$ 17,936,000
|
|
6.2%
|
|
11/13/2009
|
|
|
|
|
BMA
indexed
|
|
|
|
|
|
24,090,000
|
|
6.0%
|
|
11/27/2009
|
|
|
|
Total
Interest Rate Caps
|
|
|
|
|
|
$ 42,026,000
|
|
6.1%
|
|
11/21/2009
|
|
|
|
Mid-America
believes that it has adequate resources to fund its current operations, annual
refurbishment of its properties, and incremental investment in new apartment
properties. We rely on the efficient operation of the financial markets to
finance debt maturities, and are also heavily reliant on the creditworthiness
of
FNMA, which provided credit enhancement for approximately $854 million of
our
debt as of June 30, 2007. The interest rate market for FNMA DMBS, which in
our
experience is highly correlated with three-month LIBOR interest rates, is
also
an important component of our liquidity and interest rate swap effectiveness.
In
the event that the FNMA DMBS market becomes less efficient, or the credit
of
FNMA becomes impaired, we would seek alternative sources of debt
financing.
For
the
six months ended June 30, 2007, Mid-America’s net cash provided by operating
activities was in excess of covering funding improvements to existing real
estate assets, distributions to unitholders, and dividends paid on common
and
preferred shares by approximately $4.4 million. This compares to an excess
of
approximately $9.7 million for the same period in 2006. While Mid-America
has
sufficient liquidity to permit distributions at current rates through additional
borrowings, if necessary, any significant deterioration in operations could
result in our financial resources being insufficient to pay distributions
to
shareholders at the current rate, in which event we would be required to
reduce
the distribution rate.
The
following table reflects the Company’s total contractual cash obligations which
consists of its long-term debt and operating leases as of June 30, 2007,
(dollars in thousands):
Contractual
|
|
Payments
Due by Period
|
|
Obligations
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
Thereafter
|
|
|
Total
|
|
Long-Term
Debt
(1)
|
|
$ |
2,226
|
|
|
$ |
116,583
|
|
|
$ |
106,623
|
|
|
$ |
121,827
|
|
|
$ |
216,962
|
|
|
$ |
631,349
|
|
|
$ |
1,195,570
|
|
Operating
Lease
|
|
|
6
|
|
|
|
12
|
|
|
|
3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
21
|
|
Total
|
|
$ |
2,232
|
|
|
$ |
116,595
|
|
|
$ |
106,626
|
|
|
$ |
121,827
|
|
|
$ |
216,962
|
|
|
$ |
631,349
|
|
|
$ |
1,195,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Represents
principal payments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OFF-BALANCE
SHEET ARRANGEMENTS
At
June
30, 2007, and 2006, Mid-America did not have any relationships with
unconsolidated entities or financial partnerships, such as entities often
referred to as structured finance, special purpose entities, which would
have
been established for the purpose of facilitating off-balance sheet arrangements
or other contractually narrow or limited purposes. On May 9, 2007, Mid-America
entered into a joint venture, Mid-America Multifamily Fund I, LLC. The
joint
venture was established to acquire multifamily properties. No properties
had
been acquired by the joint venture as of June 30, 2007. In addition, we
do not
engage in trading activities involving non-exchange traded contracts. As
such,
we are not materially exposed to any financing, liquidity, market, or credit
risk that could arise if we had engaged in such relationships. Mid-America
does
not have any relationships or transactions with persons or entities that
derive
benefits from their non-independent relationships with us or our related
parties
other than those disclosed in Item 8. Financial Statements and Supplementary
Data - Notes to Consolidated Financial Statements Note 14 in the Company’s 2006
Annual Report on Form 10-K.
Mid-America’s
investments in real estate joint ventures are unconsolidated and are recorded
on
the equity method as we do not have a controlling interest.
INSURANCE
Mid-America
renegotiated our insurance programs July 1, 2007. Management believes that
the
property and casualty insurance program in place provides appropriate insurance
coverage for financial protection against insurable risks such that any
insurable loss experienced would not have a significant impact on Mid-America’s
liquidity, financial position or results of operation. Management expects
to
obtain a reduction in annual policy premiums of approximately $1.5 million
from
the increased rates experienced at the July 1, 2006, renewal.
INFLATION
Substantially
all of the resident leases at our communities allow, at the time of renewal,
for
adjustments in the rent payable hereunder, and thus may enable us to seek
rent
increases. Almost all leases are for one year or less. The short-term nature
of
these leases generally serves to reduce the risk of the adverse effects
of
inflation.
IMPACT
OF RECENTLY ISSUED ACCOUNTING STANDARDS
In
June
2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty
in Income Taxes, or Interpretation 48. Interpretation 48 provides
clarification concerning the accounting for uncertainty in income taxes
in an
enterprise’s financial statement in accordance with FASB Statement No. 109,
Accounting for Income Taxes. Interpretation 48 is
effective for fiscal years beginning after December 15, 2006. Mid-America
adopted Interpretation 48 effective January 1, 2007. The adoption of
Interpretation 48 had no material impact on Mid-America’s consolidated financial
condition or results of operations taken as a whole.
In
September 2006, the FASB issued Statement No. 157, Fair Value
Measurements, or Statement 157. Statement 157
defines fair value, establishes a framework for measuring fair value and
expands
disclosures about fair value measurements. Statement 157 is effective for
fiscal
years beginning after November 15, 2007, and interim periods within those
fiscal
years. Mid-America does not believe the adoption of Statement 157 will
have a
material impact on our consolidated financial condition or results of operations
taken as a whole.
RISKS
ASSOCIATED WITH FORWARD-LOOKING STATEMENTS
This
and
other sections of this Quarterly Report contain 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, but are not limited to, statements about anticipated market
conditions, expected growth rates of revenues and expenses, planned asset
dispositions, disposition pricing, planned acquisitions and developments,
property financings, expected interest rates and planned capital expenditures.
In some cases, you can identify forward-looking statements by terms including
“anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,”
“plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” and
similar expressions intended to identify forward-looking statements. Although
the Company 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 on Form 10-Q 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 Mid-America or any other person that the objectives and plans
of Mid-America will be achieved. In evaluating any forward-looking statement,
you should specifically consider the information set forth under the caption
“Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2006, as supplemented herein by Part II, Item 1A: “Risk Factors,”
as well as other cautionary statements contained elsewhere in this report,
including the matters discussed in “Critical Accounting Policies and Estimates”
above.
Item
3. Quantitative
and Qualitative Disclosures About Market Risk
This
information has been omitted as there have been no material changes in
Mid-America’s market risk as disclosed in the 2006 Annual Report on Form 10-K
except for the changes as discussed under Item 2. Management’s Discussion and
Analysis of Financial Condition and Results of Operations under the “Liquidity
and Capital Resources” section, which is incorporated by reference
herein.
Item
4. Controls
and Procedures
MANAGEMENT’S
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
The
management of Mid-America, with the participation of our principal executive
and
financial officers, has evaluated the effectiveness of our disclosure controls
and procedures in ensuring that the information required to be disclosed in
our
filings under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the Securities
and
Exchange Commission’s rules and forms, including ensuring that such information
is accumulated and communicated to Mid-America’s management as appropriate to
allow timely decisions regarding required disclosure. Based on such evaluation,
our principal executive and financial officers have concluded that such
disclosure controls and procedures were effective as of June 30, 2007, (the
end
of the period covered by this Quarterly Report on Form 10-Q).
CHANGES
IN INTERNAL CONTROL OVER FINANCIAL REPORTING
During
the three months ended June 30, 2007, there were no changes in Mid-America’s
internal control over financial reporting that materially affected, or that
are
reasonably likely to materially affect, Mid-America’s internal control over
financial reporting.
PART
II – OTHER INFORMATION
Item
1. Legal
Proceedings
None.
Item
1A. Risk
Factors
As
of
June 30, 2007, there have been no material changes to the risk factors
previously disclosed under “Item 1A. Risk Factors” in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2006.
Item
2. Unregistered
Sales of Equity Securities and Use of Proceeds
None.
Item
3. Defaults
Upon Senior Securities
None.
Item
4. Submission
of Matters to a Vote of Security Holders
The
annual meeting of the shareholders of Mid-America was held on May 22,
2007.
Nominees
Mary E. McCormick and William B. Sansom were elected to serve as class I
directors by a plurality of votes cast at the meeting. Shares on this proposal
were voted as follows:
|
|
For
|
|
|
Withheld
|
|
Mary
E. McCormick
|
|
|
23,649,225
|
|
|
|
280,679
|
|
William
B. Sansom
|
|
|
23,616,336
|
|
|
|
313,568
|
|
Ernst
& Young LLP was ratified as Mid-America’s independent registered public
accounting firm for the 2007 fiscal year by a majority of the shares represented
at the meeting. Shares on this proposal were voted as follows:
|
|
For
|
|
|
Against
|
|
|
Abstain
|
|
Ernst
& Young LLP
|
|
|
23,827,527
|
|
|
|
85,839
|
|
|
|
16,538
|
|
Item
5. Other
Information
None.
Item
6. Exhibits
(a)
|
The
following exhibits are filed as part of this
report.
|
Exhibit
Number
|
Exhibit
Description
|
10
|
Limited
Liability Company Agreement of Mid-America Multifamily Fund I,
LLC dated
as of May 9, 2007
|
31.1
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
31.2
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
32.1
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350,
as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,
as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Signatures
Pursuant
to the requirements 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
APARTMENT COMMUNITIES, INC.
|
|
|
Date: August
2, 2007
|
/s/Simon
R.C. Wadsworth
|
|
Simon
R.C. Wadsworth
|
|
Executive
Vice President and
|
|
Chief
Financial Officer
|
|
(Principal
Financial and Accounting Officer)
|