TENNESSEE
|
62-1543819
|
(State
or other jurisdiction of
|
(I.R.S.
Employer Identification No.)
|
incorporation
or organization)
|
6584
POPLAR AVENUE, SUITE 300
|
38138
|
MEMPHIS,
TENNESSEE
|
(Zip
Code)
|
(Address
of principal executive offices)
|
Large
accelerated filer [X]
|
Accelerated
filer [ ]
|
Non-accelerated
filer [ ]
|
Number
of Shares Outstanding
|
|
Class
|
at
July 19, 2006
|
Common
Stock, $.01 par value
|
24,044,783
|
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, 2006 (Unaudited) and December
31, 2005
|
2
|
|||
Condensed
Consolidated Statements of Operations for the three and six months
ended
June 30, 2006 and 2005 (Unaudited)
|
3
|
|||
Condensed
Consolidated Statements of Cash Flows for the six months ended June
30,
2006 and 2005 (Unaudited)
|
4
|
|||
Notes
to Condensed Consolidated Financial Statements (Unaudited)
|
5
|
|||
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
16
|
||
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
26
|
||
Item
4.
|
Controls
and Procedures
|
26
|
||
PART
II - OTHER INFORMATION
|
||||
Item
1.
|
Legal
Proceedings
|
27
|
||
Item
1A.
|
Risk
Factors
|
27
|
||
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
28
|
||
Item
3.
|
Defaults
Upon Senior Securities
|
28
|
||
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
28
|
||
Item
5.
|
Other
Information
|
28
|
||
Item
6.
|
Exhibits
|
28
|
||
Signatures
|
35
|
Mid-America
Apartment Communities, Inc.
|
|||||||
Condensed
Consolidated Balance Sheets
|
|||||||
June
30, 2006 (Unaudited) and December 31, 2005
|
|||||||
(Dollars
in thousands, except per share data)
|
|||||||
June
30, 2006
|
December
31, 2005
|
||||||
Assets:
|
|||||||
Real
estate assets:
|
|||||||
Land
|
$
|
190,862
|
$
|
179,523
|
|||
Buildings
and improvements
|
1,813,395
|
1,740,818
|
|||||
Furniture,
fixtures and equipment
|
48,115
|
46,301
|
|||||
Capital
improvements in progress
|
2,981
|
4,175
|
|||||
2,055,353
|
1,970,817
|
||||||
Less
accumulated depreciation
|
(503,793
|
)
|
(473,421
|
)
|
|||
1,551,560
|
1,497,396
|
||||||
Land
held for future development
|
1,366
|
1,366
|
|||||
Commercial
properties, net
|
7,156
|
7,345
|
|||||
Investments
in and advances to real estate joint venture
|
3,926
|
4,182
|
|||||
Real
estate assets, net
|
1,564,008
|
1,510,289
|
|||||
Cash
and cash equivalents
|
11,366
|
14,064
|
|||||
Restricted
cash
|
4,586
|
5,534
|
|||||
Deferred
financing costs, net
|
15,935
|
15,338
|
|||||
Other
assets
|
22,645
|
20,181
|
|||||
Goodwill
|
5,051
|
5,051
|
|||||
Assets
held for sale
|
7,328
|
-
|
|||||
Total
assets
|
$
|
1,630,919
|
$
|
1,570,457
|
|||
Liabilities
and Shareholders' Equity:
|
|||||||
Liabilities:
|
|||||||
Notes
payable
|
$
|
1,125,235
|
$
|
1,140,046
|
|||
Accounts
payable
|
5,986
|
3,278
|
|||||
Accrued
expenses and other liabilities
|
29,012
|
28,380
|
|||||
Security
deposits
|
7,209
|
6,429
|
|||||
Liabilities
associated with assets held for sale
|
290
|
-
|
|||||
Total
liabilities
|
1,167,732
|
1,178,133
|
|||||
Minority
interest
|
31,935
|
29,798
|
|||||
Shareholders'
equity:
|
|||||||
Preferred
stock, $.01 par value, 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;
|
|||||||
24,025,183
and 22,048,372 shares issued and outstanding at
|
|||||||
June
30, 2006, and December 31, 2005, respectively
|
240
|
220
|
|||||
Additional
paid-in capital
|
757,581
|
671,885
|
|||||
Other
|
-
|
(2,422
|
)
|
||||
Accumulated
distributions in excess of net income
|
(351,269
|
)
|
(314,352
|
)
|
|||
Accumulated
other comprehensive income (loss)
|
24,633
|
7,128
|
|||||
Total
shareholders' equity
|
431,252
|
362,526
|
|||||
Total
liabilities and shareholders' equity
|
$
|
1,630,919
|
$
|
1,570,457
|
|||
See
accompanying notes to condensed consolidated financial
statements.
|
Mid-America
Apartment Communities, Inc.
|
||||||||||||||||
Condensed
Consolidated Statements of
Operations
|
||||||||||||||||
Three
and six months ended June 30, 2006 and
2005
|
||||||||||||||||
(Dollars
in thousands, except per share data)
|
||||||||||||||||
Three
months ended
|
Six
months ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||||
Operating
revenues:
|
||||||||||||||||
Rental
revenues
|
$
|
76,842
|
$
|
69,290
|
$
|
151,264
|
$
|
137,327
|
||||||||
Other
property revenues
|
3,470
|
3,124
|
6,994
|
6,011
|
||||||||||||
Total
property revenues
|
80,312
|
72,414
|
158,258
|
143,338
|
||||||||||||
Management
fee income
|
52
|
103
|
104
|
221
|
||||||||||||
Total
operating revenues
|
80,364
|
72,517
|
158,362
|
143,559
|
||||||||||||
Property
operating expenses:
|
||||||||||||||||
Personnel
|
9,437
|
8,633
|
18,456
|
16,907
|
||||||||||||
Building
repairs and maintenance
|
2,947
|
2,631
|
5,383
|
4,912
|
||||||||||||
Real
estate taxes and insurance
|
9,950
|
9,507
|
19,505
|
18,858
|
||||||||||||
Utilities
|
4,573
|
4,038
|
9,258
|
8,157
|
||||||||||||
Landscaping
|
2,132
|
1,950
|
4,222
|
3,878
|
||||||||||||
Other
operating
|
3,629
|
3,470
|
7,035
|
6,840
|
||||||||||||
Depreciation
|
19,515
|
18,244
|
38,286
|
36,135
|
||||||||||||
Total
property operating expenses
|
52,183
|
48,473
|
102,145
|
95,687
|
||||||||||||
Property
management expenses
|
3,464
|
2,892
|
5,975
|
5,700
|
||||||||||||
General
and administrative expenses
|
2,682
|
2,163
|
6,043
|
4,819
|
||||||||||||
Income
from continuing operations before non-operating items
|
22,035
|
18,989
|
44,199
|
37,353
|
||||||||||||
Interest
and other non-property income
|
215
|
130
|
332
|
287
|
||||||||||||
Interest
expense
|
(15,833
|
)
|
(14,404
|
)
|
(31,534
|
)
|
(28,073
|
)
|
||||||||
Loss
on debt extinguishment
|
(1
|
)
|
(90
|
)
|
(551
|
)
|
(94
|
)
|
||||||||
Amortization
of deferred financing costs
|
(504
|
)
|
(489
|
)
|
(989
|
)
|
(949
|
)
|
||||||||
Minority
interest in operating partnership income
|
(408
|
)
|
(778
|
)
|
(821
|
)
|
(1,038
|
)
|
||||||||
(Loss)
income from investments in real estate joint ventures
|
(35
|
)
|
(193
|
)
|
(119
|
)
|
125
|
|||||||||
Incentive
fee from real estate joint ventures
|
-
|
1,723
|
-
|
1,723
|
||||||||||||
Net
gain (loss) on insurance and other settlement proceeds
|
225
|
(16
|
)
|
225
|
(9
|
)
|
||||||||||
Gain
on sale of non-depreciable assets
|
-
|
334
|
-
|
334
|
||||||||||||
Gain
on disposition within real estate joint ventures
|
-
|
3,034
|
-
|
3,034
|
||||||||||||
Income
from continuing operations
|
5,694
|
8,240
|
10,742
|
12,693
|
||||||||||||
Discontinued
operations:
|
||||||||||||||||
Gain
from discontinued operations before
|
||||||||||||||||
asset
impairment, settlement proceeds and gain on sale
|
198
|
102
|
276
|
94
|
||||||||||||
Asset
impairment on discontinued operations
|
-
|
(149
|
)
|
-
|
(243
|
)
|
||||||||||
Net
loss on insurance and other settlement proceeds on
|
||||||||||||||||
discontinued
operations
|
-
|
-
|
-
|
(25
|
)
|
|||||||||||
Net
income
|
5,892
|
8,193
|
11,018
|
12,519
|
||||||||||||
Preferred
dividend distribution
|
3,491
|
3,635
|
6,981
|
7,348
|
||||||||||||
Net
income available for common shareholders
|
$
|
2,401
|
$
|
4,558
|
$
|
4,037
|
$
|
5,171
|
||||||||
Weighted
average shares outstanding (in thousands):
|
||||||||||||||||
Basic
|
23,152
|
21,351
|
22,645
|
21,140
|
||||||||||||
Effect
of dilutive stock options
|
222
|
274
|
228
|
279
|
||||||||||||
Diluted
|
23,374
|
21,625
|
22,873
|
21,419
|
||||||||||||
Net
income available for common shareholders
|
$
|
2,401
|
$
|
4,558
|
$
|
4,037
|
$
|
5,171
|
||||||||
Discontinued
property operations
|
(198
|
)
|
47
|
(276
|
)
|
174
|
||||||||||
Income
from continuing operations available for common
shareholders
|
$
|
2,203
|
$
|
4,605
|
$
|
3,761
|
$
|
5,345
|
||||||||
Earnings
per share - basic:
|
||||||||||||||||
Income
from continuing operations
|
||||||||||||||||
available
for common shareholders
|
$
|
0.09
|
$
|
0.22
|
$
|
0.17
|
$
|
0.25
|
||||||||
Discontinued
property operations
|
0.01
|
(0.01
|
)
|
0.01
|
(0.01
|
)
|
||||||||||
Net
income available for common shareholders
|
$
|
0.10
|
$
|
0.21
|
$
|
0.18
|
$
|
0.24
|
||||||||
Earnings
per share - diluted:
|
||||||||||||||||
Income
from continuing operations
|
||||||||||||||||
available
for common shareholders
|
$
|
0.09
|
$
|
0.21
|
$
|
0.17
|
$
|
0.25
|
||||||||
Discontinued
property operations
|
0.01
|
-
|
0.01
|
(0.01
|
)
|
|||||||||||
Net
income available for common shareholders
|
$
|
0.10
|
$
|
0.21
|
$
|
0.18
|
$
|
0.24
|
||||||||
Dividends
declared per common share
(1)
|
$
|
0.595
|
$
|
0.585
|
$
|
1.785
|
$
|
1.170
|
||||||||
(1) The
Company declared and paid $1.19 per common share during the six months
ended June 30, 2006.
|
||||||||||||||||
During
this same period the Company also declared an additional $0.595 per
common
share that will not be paid until July 31, 2006.
|
||||||||||||||||
See
accompanying notes to condensed consolidated financial
statements.
|
Mid-America
Apartment Communities, Inc.
|
|||||||
Condensed
Consolidated Statements of Cash Flows
|
|||||||
Six
Months Ended June 30, 2006 and 2005
|
|||||||
(Dollars
in thousands)
|
|||||||
2006
|
2005
|
||||||
Cash
flows from operating activities:
|
|||||||
Net
income
|
$
|
11,018
|
$
|
12,519
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Gain
from discontinued operations before asset impairment,
settlement
|
|||||||
proceeds
and
gain on sale
|
(276
|
)
|
(94
|
)
|
|||
Depreciation
and amortization of deferred financing costs
|
39,275
|
37,084
|
|||||
Stock
compensation expense
|
646
|
392
|
|||||
Amortization
of debt premium
|
(930
|
)
|
(932
|
)
|
|||
Loss
(income) from investments in real estate joint
ventures
|
119
|
(125
|
)
|
||||
Minority
interest in operating partnership income
|
821
|
1,038
|
|||||
Loss
on debt extinguishment
|
551
|
94
|
|||||
Derivative
interest (income) expense
|
(120
|
)
|
-
|
||||
Gain
on sale of non-depreciable assets
|
-
|
(334
|
)
|
||||
Gain
on disposition within real estate joint ventures
|
-
|
(3,034
|
)
|
||||
Incentive
fee from real estate joint ventures
|
-
|
(1,723
|
)
|
||||
Net
loss on insurance and other settlement proceeds on
discontinued
|
|||||||
operations
|
-
|
25
|
|||||
Asset
impairment on discontinued operations
|
-
|
243
|
|||||
Net
(gain) loss on insurance and other settlement
proceeds
|
(225
|
)
|
9
|
||||
Changes
in assets and liabilities:
|
|||||||
Restricted
cash
|
689
|
(1,225
|
)
|
||||
Other
assets
|
2,741
|
5,555
|
|||||
Accounts
payable
|
2,874
|
1,672
|
|||||
Accrued
expenses and other
|
2,574
|
3,367
|
|||||
Security
deposits
|
780
|
453
|
|||||
Net
cash provided by operating activities
|
60,537
|
54,984
|
|||||
Cash
flows from investing activities:
|
|||||||
Purchases
of real estate and other assets
|
(82,213
|
)
|
(47,314
|
)
|
|||
Improvements
to existing real estate assets
|
(17,802
|
)
|
(10,521
|
)
|
|||
Distributions
from real estate joint ventures
|
137
|
14,755
|
|||||
Proceeds
from disposition of real estate assets
|
1,089
|
8,432
|
|||||
Net
cash used in investing activities
|
(98,789
|
)
|
(34,648
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Net
change in credit lines
|
1,659
|
(26,337
|
)
|
||||
Proceeds
from notes payable
|
13,235
|
19,486
|
|||||
Principal
payments on notes payable
|
(28,737
|
)
|
(1,320
|
)
|
|||
Payment
of deferred financing costs
|
(1,905
|
)
|
(493
|
)
|
|||
Proceeds
from issuances of common shares and units
|
87,892
|
20,951
|
|||||
Distributions
to unitholders
|
(2,990
|
)
|
(3,067
|
)
|
|||
Dividends
paid on common shares
|
(26,619
|
)
|
(24,725
|
)
|
|||
Dividends
paid on preferred shares
|
(6,981
|
)
|
(7,348
|
)
|
|||
Net
cash provided by financing activities
|
35,554
|
(22,853
|
)
|
||||
Net
decrease in cash and cash equivalents
|
(2,698
|
)
|
(2,517
|
)
|
|||
Cash
and cash equivalents, beginning of period
|
14,064
|
9,133
|
|||||
Cash
and cash equivalents, end of period
|
$
|
11,366
|
$
|
6,616
|
|||
Supplemental
disclosure of cash flow information:
|
|||||||
Interest
paid
|
$
|
32,989
|
$
|
29,344
|
|||
Supplemental
disclosure of noncash investing and financing
activities:
|
|||||||
Conversion
of
units to common shares
|
$
|
136
|
$
|
20
|
|||
Issuance
of
restricted common shares
|
$
|
39
|
$
|
813
|
|||
Marked-to-market
adjustment on derivative instruments
|
$
|
17,505
|
$
|
2,308
|
|||
Fair
value adjustment on debt assumed
|
$
|
-
|
$
|
2,277
|
|||
Reclass
of preferred stock from equity to liabilities
|
$
|
-
|
$
|
10,000
|
|||
See
accompanying notes to condensed consolidated financial
statements.
|
Three
|
Six
|
|||||||||
Months
|
Months
|
|||||||||
Ended
|
Ended
|
|||||||||
June
30, 2005
|
June
30, 2005
|
|||||||||
Net
income
|
$
|
8,193
|
$
|
12,519
|
||||||
Preferred
dividend distribution
|
3,635
|
7,348
|
||||||||
Net
income available for
|
||||||||||
common
shareholders
|
4,558
|
5,171
|
||||||||
Add:
Stock-based employee
|
||||||||||
compensation
expense included
|
||||||||||
in
reported net income
|
-
|
-
|
||||||||
Less:
Stock-based employee
|
||||||||||
compensation
expense from
|
||||||||||
employee
stock purchase plan discount
|
7
|
14
|
||||||||
Less:
Stock-based employee
|
||||||||||
compensation
expense determined
|
||||||||||
under
fair value method of accounting
|
26
|
56
|
||||||||
Pro
forma net income available for
|
||||||||||
common
shareholders
|
$
|
4,525
|
$
|
5,101
|
||||||
Average
common shares outstanding - Basic
|
21,351
|
21,140
|
||||||||
Average
common shares outstanding - Diluted
|
21,625
|
21,419
|
||||||||
Net
income available per common share:
|
||||||||||
Basic
as reported
|
$
|
0.21
|
$
|
0.24
|
||||||
Basic
pro forma
|
$
|
0.21
|
$
|
0.24
|
||||||
Diluted
as reported
|
$
|
0.21
|
$
|
0.24
|
||||||
Diluted
pro forma
|
$
|
0.21
|
$
|
0.24
|
||||||
Assumptions:(1)
|
||||||||||
Risk
free interest rate
|
N/A
|
N/A
|
||||||||
Expected
life - Years
|
N/A
|
N/A
|
||||||||
Expected
volatility
|
N/A
|
N/A
|
||||||||
Expected
dividends
|
N/A
|
N/A
|
||||||||
(1)No
grants were issued in the periods shown.
|
Three
months ended June 30,
|
Six
months ended June 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Volatility
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||
Expected
life
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||
Risk-free
rate
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||
Dividend
yield
|
N/A
|
N/A
|
N/A
|
N/A
|
Weighted-
|
|||||||||||||
Weighted-
|
|
Average
|
|
|
|
||||||||
|
|
|
|
Average
|
|
Remaining
|
|
Aggregate
|
|
||||
|
|
|
|
Exercise
|
|
Contractual
|
|
Intrinsic
|
|
||||
Options
|
|
Shares
|
|
Price
|
|
Life
|
|
Value
|
|
||||
Outstanding
at January 1, 2006
|
398,052
|
$
|
24.83
|
||||||||||
Granted
|
-
|
-
|
|||||||||||
Exercised
|
(123,360
|
)
|
24.09
|
||||||||||
Forfeited
or expired
|
(7,350
|
)
|
26.03
|
||||||||||
Outstanding
at March 31, 2006
|
267,342
|
$
|
25.14
|
3.8
|
$
|
7,916,799
|
|||||||
Granted
|
-
|
-
|
|||||||||||
Exercised
|
(6,570
|
)
|
23.82
|
||||||||||
Forfeited
or expired
|
(13,820
|
)
|
25.52
|
||||||||||
Outstanding
at June 30, 2006
|
246,952
|
$
|
25.12
|
3.7
|
$
|
7,563,212
|
|||||||
Exercisable
at June 30, 2006
|
174,847
|
$
|
24.96
|
2.9
|
$
|
5,383,478
|
Weighted
|
|||||||
Average
|
|||||||
Grant-Date
|
|||||||
Nonvested
Shares
|
Shares
|
Fair
Value
|
|||||
Nonvested
at January 1, 2006
|
5,375
|
$
|
22.19
|
||||
Granted
|
-
|
||||||
Vested
|
(1,075
|
)
|
$
|
22.19
|
|||
Forfeited
|
-
|
||||||
Nonvested
at March 31, 2006
|
4,300
|
$
|
22.19
|
||||
Granted
|
-
|
||||||
Vested
|
-
|
||||||
Forfeited
|
-
|
||||||
Nonvested
at June 30, 2006
|
4,300
|
$
|
22.19
|
Weighted
|
|||||||
Average
|
|||||||
Grant-Date
|
|||||||
Nonvested
Shares
|
Shares
|
Fair
Value
|
|||||
Nonvested
at January 1, 2006
|
86,477
|
$
|
25.65
|
||||
Granted
|
-
|
||||||
Vested
|
-
|
||||||
Forfeited
|
-
|
||||||
Nonvested
at March 31, 2006
|
86,477
|
$
|
25.65
|
||||
Granted
|
-
|
||||||
Vested
|
-
|
||||||
Forfeited
|
(4,561
|
)
|
$
|
25.65
|
|||
Nonvested
at June 30, 2006
|
81,916
|
$
|
25.65
|
Weighted
|
|||||||
Average
|
|||||||
Grant-Date
|
|||||||
Nonvested
Shares
|
Shares
|
Fair
Value
|
|||||
Nonvested
at January 1, 2006
|
8,852
|
$
|
38.50
|
||||
Granted
|
-
|
||||||
Vested
|
(4,426
|
)
|
$
|
38.50
|
|||
Forfeited
|
-
|
||||||
Nonvested
at March 31, 2006
|
4,426
|
$
|
38.50
|
||||
Granted
|
-
|
||||||
Vested
|
-
|
||||||
Forfeited
|
-
|
||||||
Nonvested
at June 30, 2006
|
4,426
|
$
|
38.50
|
Weighted
|
|||||||
Average
|
|||||||
Grant-Date
|
|||||||
Nonvested
Shares
|
Shares
|
Fair
Value
|
|||||
Nonvested
at January 1, 2006
|
8,596
|
$
|
40.71
|
||||
Granted
|
73
|
$
|
56.60
|
||||
Vested
|
-
|
||||||
Forfeited
|
(1,228
|
)
|
$
|
40.71
|
|||
Nonvested
at March 31, 2006
|
7,441
|
$
|
40.87
|
||||
Granted
|
-
|
||||||
Vested
|
3,757
|
$
|
41.02
|
||||
Forfeited
|
-
|
||||||
Nonvested
at June 30, 2006
|
3,684
|
$
|
40.71
|
Weighted
|
|||||||
Average
|
|||||||
Grant-Date
|
|||||||
Nonvested
Shares
|
Shares
|
Fair
Value
|
|||||
Nonvested
at January 1, 2006
|
-
|
||||||
Granted
|
-
|
||||||
Vested
|
-
|
||||||
Forfeited
|
-
|
||||||
Nonvested
at March 31, 2006
|
-
|
||||||
Granted
|
4,774
|
$
|
52.34
|
||||
Vested
|
-
|
||||||
Forfeited
|
-
|
||||||
Nonvested
at June 30, 2006
|
4,774
|
$
|
52.34
|
Volatility
|
17.10%
|
|
Expected
life in years
|
3
|
|
Risk-free
rate
|
3.77%
|
|
Dividend
yield
|
5.20%
|
Weighted
|
|||||||
Average
|
|||||||
Grant-Date
|
|||||||
Nonvested
Shares
|
Shares
|
Fair
Value
|
|||||
Nonvested
at January 1, 2006
|
36,691
|
$
|
45.42
|
||||
Granted
|
-
|
||||||
Vested
|
-
|
||||||
Forfeited
|
-
|
||||||
Nonvested
at March 31, 2006
|
36,691
|
$
|
45.42
|
||||
Granted
|
-
|
||||||
Vested
|
-
|
||||||
Forfeited
|
-
|
||||||
Nonvested
at June 30, 2006
|
36,691
|
$
|
45.42
|
Volatility
|
6.38%
|
|
Expected
life in years
|
3
|
|
Risk-free
rate
|
1.99%
|
|
Dividend
yield
|
9.60%
|
Weighted
|
|||||||
Average
|
|||||||
Grant-Date
|
|||||||
Nonvested
Shares
|
Shares
|
Fair
Value
|
|||||
Nonvested
at January 1, 2006
|
75,895
|
$
|
34.72
|
||||
Granted
|
-
|
||||||
Vested
|
-
|
||||||
Forfeited
|
-
|
||||||
Nonvested
at March 31, 2006
|
75,895
|
$
|
34.72
|
||||
Granted
|
-
|
||||||
Vested
|
-
|
||||||
Forfeited
|
-
|
||||||
Nonvested
at June 30, 2006
|
75,895
|
$
|
34.72
|
Three
months
|
Six
months
|
||||||||||||
ended
June 30,
|
ended
June 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Net
income
|
$
|
5,892
|
$
|
8,193
|
$
|
11,018
|
$
|
12,519
|
|||||
Marked-to-market
adjustment
|
|||||||||||||
on
derivative instruments
|
7,088
|
(8,993
|
)
|
17,505
|
2,308
|
||||||||
Total
comprehensive income
|
$
|
12,980
|
$
|
(800
|
)
|
$
|
28,523
|
$
|
14,827
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
June
30,
|
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Revenues
|
|||||||||||||
Rental
revenues
|
$
|
606
|
$
|
597
|
$
|
1,229
|
$
|
1,796
|
|||||
Other
revenues
|
26
|
(11
|
)
|
51
|
32
|
||||||||
Total
revenues
|
632
|
586
|
1,280
|
1,828
|
|||||||||
Expenses
|
|||||||||||||
Property
operating expenses
|
334
|
481
|
802
|
1,602
|
|||||||||
Interest
expense
|
100
|
3
|
202
|
132
|
|||||||||
Asset
impairment
|
-
|
149
|
-
|
243
|
|||||||||
Total
expense
|
434
|
633
|
1,004
|
1,977
|
|||||||||
Gain
(loss) from discontinued operations before
|
|||||||||||||
gain
on sale and settlement proceeds
|
198
|
(47
|
)
|
276
|
(149
|
)
|
|||||||
Net
loss on insurance and other settlement
|
|||||||||||||
proceeds
|
-
|
-
|
-
|
(25
|
)
|
||||||||
Gain
(loss) from discontinued operations
|
$
|
198
|
$
|
(47
|
)
|
$
|
276
|
$
|
(174
|
)
|
June
30, 2006
|
June
30, 2005
|
||||||
Total
Portfolio (includes partial ownership in joint ventures)
|
|||||||
Number
of apartment units
|
39,179
|
37,365
|
|||||
Number
of apartment communities
|
135
|
130
|
|||||
100%
Owned (excludes partial ownership in joint ventures)
|
|||||||
Number
of apartment units
|
38,657
|
36,843
|
|||||
Number
of apartment communities
|
134
|
129
|
|||||
Average
monthly rent (excluding joint ventures)
|
$
|
711
|
$
|
688
|
|||
Average
physical occupancy (excluding joint ventures)
|
95.0
|
%
|
94.2
|
%
|
Three
months
|
Six
months
|
||||||||||||
ended
June 30,
|
ended
June 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Net
income
|
$
|
5,892
|
$
|
8,193
|
$
|
11,018
|
$
|
12,519
|
|||||
Depreciation
of real estate assets
|
19,171
|
17,909
|
37,604
|
35,469
|
|||||||||
Net
(gain) loss on insurance and other settlement proceeds
|
(225
|
)
|
16
|
(225
|
)
|
9
|
|||||||
Gain
on dispositions within real estate joint ventures
|
-
|
(3,034
|
)
|
-
|
(3,034
|
)
|
|||||||
Net
loss on insurance and other settlement proceeds
|
|||||||||||||
of
discontinued operations
|
-
|
-
|
-
|
25
|
|||||||||
Depreciation
of real estate assets of
|
|||||||||||||
discontinued
operations
|
1
|
160
|
160
|
318
|
|||||||||
Depreciation
of real estate assets of
|
|||||||||||||
real
estate joint ventures
|
121
|
115
|
261
|
247
|
|||||||||
Preferred
dividend distribution
|
(3,491
|
)
|
(3,635
|
)
|
(6,981
|
)
|
(7,348
|
)
|
|||||
Minority
interest in operating partnership income
|
408
|
778
|
821
|
1,038
|
|||||||||
Funds
from operations
|
$
|
21,877
|
$
|
20,502
|
$
|
42,658
|
$
|
39,243
|
|||||
Weighted
average shares and units:
|
|||||||||||||
Basic
|
25,662
|
23,984
|
25,160
|
23,774
|
|||||||||
Diluted
|
25,884
|
24,258
|
25,387
|
24,053
|
Outstanding
|
|||||||||||||||||||
Balance/
|
Average
|
Average
|
Average
|
||||||||||||||||
Line
|
Line
|
Notional
|
Interest
|
Rate
|
Contract
|
||||||||||||||
Limit
|
Availability
|
Amount
|
Rate
|
Maturity
|
Maturity
|
||||||||||||||
COMBINED
DEBT
|
|||||||||||||||||||
Fixed
Rate or Swapped
|
|||||||||||||||||||
Conventional
|
$
|
876,062,701
|
5.7
|
%
|
5/19/2011
|
5/19/2011
|
|||||||||||||
Tax
Exempt
|
73,640,000
|
4.3
|
%
|
1/27/2012
|
1/27/2012
|
||||||||||||||
Subtotal
Fixed
Rate or Swapped
|
949,702,701
|
5.6
|
%
|
6/7/2011
|
6/7/2011
|
||||||||||||||
Variable
Rate
|
|||||||||||||||||||
Conventional
|
122,651,575
|
6.0
|
%
|
8/25/2006
|
5/9/2012
|
||||||||||||||
Tax
Exempt
|
10,855,004
|
4.5
|
%
|
7/15/2006
|
5/30/2020
|
||||||||||||||
Conventional
-
Capped
|
17,936,000
|
6.0
|
%
|
11/13/2009
|
11/13/2009
|
||||||||||||||
Tax
Exempt -
Capped
|
24,090,000
|
4.3
|
%
|
11/25/2009
|
11/25/2009
|
||||||||||||||
Subtotal
Variable
Rate
|
175,532,579
|
5.7
|
%
|
8/17/2006
|
3/11/2013
|
||||||||||||||
Total
Combined Debt Outstanding
|
$
|
1,125,235,280
|
5.6
|
%
|
9/6/2010
|
9/15/2011
|
|||||||||||||
UNDERLYING
DEBT
|
|||||||||||||||||||
Individual
Property Mortgages/Bonds
|
|||||||||||||||||||
Conventional
Fixed Rate
|
$
|
133,062,701
|
4.8
|
%
|
3/5/2015
|
3/5/2015
|
|||||||||||||
Tax
Exempt Fixed Rate
|
12,310,000
|
5.2
|
%
|
12/1/2028
|
12/1/2028
|
||||||||||||||
Tax
Exempt Variable Rate
|
4,760,004
|
4.7
|
%
|
7/15/2006
|
6/1/2028
|
||||||||||||||
FNMA
Credit Facilities
|
|||||||||||||||||||
Tax
Free Borrowings
|
$
|
91,515,000
|
$
|
91,515,000
|
91,515,000
|
4.3
|
%
|
7/15/2006
|
3/1/2014
|
||||||||||
Conventional
Borrowings
|
|||||||||||||||||||
Fixed
Rate Borrowings
|
110,000,000
|
110,000,000
|
110,000,000
|
7.2
|
%
|
1/10/2009
|
1/10/2009
|
||||||||||||
Variable
Rate Borrowings
|
748,485,000
|
745,314,000
|
604,318,000
|
6.0
|
%
|
8/30/2006
|
4/2/2013
|
||||||||||||
Subtotal
FNMA Facilities
|
950,000,000
|
946,829,000
|
805,833,000
|
5.9
|
%
|
12/20/2006
|
10/11/2012
|
||||||||||||
Freddie
Mac Credit Facility I
|
100,000,000
|
96,404,000
|
96,404,000
|
5.9
|
%
|
9/7/2006
|
7/1/2011
|
||||||||||||
Freddie
Mac Credit Facility II
|
200,000,000
|
29,825,000
|
29,825,000
|
5.9
|
%
|
8/1/2006
|
6/2/2014
|
||||||||||||
AmSouth
Credit Facility
|
40,000,000
|
30,203,438
|
3,040,575
|
7.0
|
%
|
7/31/2006
|
5/24/2007
|
||||||||||||
Union
Planters Bank
|
40,000,000
|
6.2
|
%
|
7/30/2006
|
4/1/2009
|
||||||||||||||
Total
Underlying Debt Outstanding
|
$
|
1,125,235,280
|
5.7
|
%
|
2/16/2008
|
2/4/2013
|
|||||||||||||
HEDGING
INSTRUMENTS
|
|||||||||||||||||||
Interest
Rate Swaps
|
|||||||||||||||||||
LIBOR
indexed
|
$
|
633,000,000
|
4.8
|
%
|
10/14/2010
|
||||||||||||||
LIBOR
indexed (forward swap)
|
10,000,000
|
5.7
|
%
|
3/1/2014
|
|||||||||||||||
BMA
indexed
|
61,330,000
|
3.3
|
%
|
9/10/2008
|
|||||||||||||||
Total
Interest Rate Swaps
|
$
|
704,330,000
|
4.7
|
%
|
8/25/2010
|
||||||||||||||