GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

MidAmerica Apartment Communities Inc. Reports Operating Results (10-Q)

August 06, 2009 | About:

MidAmerica Apartment Communities Inc. (MAA) filed Quarterly Report for the period ended 2009-08-06.

Mid America Apartment Communities Inc. is a real estate investment trust which ownes and operates apartments. The company also manages but does not own properties containing apartment units. The company seeks to acquire and develop apartment communities appealing to middle and upper income residents. MidAmerica Apartment Communities Inc. has a market cap of $1.21 billion; its shares were traded at around $42.8 with a P/E ratio of 11.9 and P/S ratio of 3.3. The dividend yield of MidAmerica Apartment Communities Inc. stocks is 5.7%. MidAmerica Apartment Communities Inc. had an annual average earning growth of 2.6% over the past 5 years.

Highlight of Business Operations:

Property operating expenses include costs for property personnel, property bonuses, 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, 2009 were approximately $38.8 million, an increase of approximately $0.9 million from the three months ended June 30, 2008 due primarily to increases in property operating expenses of (i) $1.2 million from the five properties acquired since the first quarter of 2008, and (ii) $0.3 million from our development and lease-up communities. These increases were partially offset by a decrease in property operating expense of $0.6 million from all other communities. The decrease in property operating expenses from all other communities was generated primarily by our same store portfolio and was driven by a 6.6% decrease in real estate taxes resulting from reduced negotiated assessments and successful appeals of 2008 values.

Depreciation expense for the three months ended June 30, 2009 was approximately $23.8 million, an increase of approximately $1.7 million from the three months ended June 30, 2008 primarily due to the increases in depreciation expense of (i) $0.9 million from the five properties acquired since the first quarter of 2008, (ii) $0.1 million from our development and lease-up communities, and (iii) $0.9 million from all other communities. Increases of depreciation expense from all other communities resulted from asset additions made during the normal course of business. These increases were partially offset by a decrease in depreciation expense of $0.2 million from the expiration of the amortization of intangible lease assets of leases of previously acquired communities.

Property revenues for the six months ended June 30, 2009 were approximately $187.9 million, an increase of $5.8 million from the six months ended June 30, 2008 due to (i) a $5.9 million increase in property revenues from the six properties acquired during 2008 and 2009, and (ii) a $1.2 million increase in property revenues from our development and lease-up communities. These increases were partially offset by a $1.3 million decrease in property revenues from all other communities. The decrease in property revenues from all other communities was generated primarily by our same store portfolio and was driven by a 0.8% decrease in average effective rent per unit in the first six months of 2009 from the first six months of 2008.

Property operating expenses include costs for property personnel, property bonuses, 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, 2009 were approximately $77.0 million, an increase of approximately $2.2 million from the six months ended June 30, 2008 due primarily to increases in property operating expenses of (i) $2.3 million from the six properties acquired during 2008 and 2009, and (ii) $0.5 million from our development and lease-up communities. These increases were partially offset by a decrease in property operating expense of $0.6 million from all other communities. The decrease in property operating expenses from all other communities was generated primarily by our same store portfolio and was driven by a $0.4 million decrease in incentive bonuses.

Depreciation expense for the six months ended June 30, 2009 was approximately $47.4 million, an increase of approximately $3.4 million from the six months ended June 30, 2008 primarily due to the increases in depreciation expense of (i) $1.8 million from the six properties acquired during 2008 and 2009, (ii) $0.3 million from our development and lease-up communities, and (iii) $1.7 million from all other communities. Increases of depreciation expense from all other communities resulted from asset additions made during the normal course of business. These increases were partially offset by a decrease in depreciation expense of $0.4 million from the expiration of the amortization of intangible lease assets of previously acquired communities.

Net cash used in investing activities was approximately $29.5 million during the first six months of 2009 compared $104.2 million during the first six months of 2008, mainly related to acquisition and disposition activity. In the first six months of 2008, Mid-America had total cash outflows of $58.3 million for two wholly owned acquisitions and $6.9 million representing Mid-America s share of two acquisitions purchased by Mid-America Multifamily Fund I, LLC, or Fund I, Mid-America s joint venture. This compares to cash outflows of approximately $17.7 million in the first six months of 2009 for the purchase of one wholly owned property and three individual units of a previous acquisition. In the first six months of 2009, Mid-America received a total of approximately $14.7 million from the sale of two properties. No dispositions were made in 2008. Mid-America also spent approximately $9.6 million more on development communities during the first six months of 2008 than in the same period of 2009.

Read the The complete ReportMAA is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC.

Rating: 2.0/5 (2 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK