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

November 05, 2009 | About:
10qk

10qk

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MidAmerica Apartment Communities Inc. (MAA) filed Quarterly Report for the period ended 2009-11-05.

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 $1.27 billion; its shares were traded at around $45.1 with a P/E ratio of 12.4 and P/S ratio of 3.5. The dividend yield of Midamerica Apartment Communities Inc. stocks is 5.5%. 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 September 30, 2009 were approximately $41.7 million, an increase of approximately $0.7 million from the three months ended September 30, 2008 due primarily to increases in property operating expenses of (i) $0.8 million from the four properties acquired since the second quarter of 2008, and (ii) $0.2 million from our development and lease-up communities. These increases were partially offset by a decrease in property operating expense of $0.3 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 reduction in turnover expenses resulting from moveouts which decreased 5.5% and a 3.4% decrease in real estate taxes resulting from reduced negotiated assessments and successful appeals of 2008 values.

Depreciation expense for the three months ended September 30, 2009 was approximately $23.9 million, an increase of approximately $1.4 million from the three months ended September 30, 2008 primarily due to the increases in depreciation expense of (i) $0.7 million from the four properties acquired since the second quarter of 2008, (ii) $0.2 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 $0.4 million from the expiration of the amortization of intangible lease assets of leases of previously acquired communities.

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 nine months ended September 30, 2009 were approximately $118.7 million, an increase of approximately $2.9 million from the nine months ended September 30, 2008 due primarily to increases in property operating expenses of (i) $3.0 million from the six properties acquired during 2008 and 2009, and (ii) $0.8 million from our development and lease-up communities. These increases were partially offset by a decrease in property operating expense of $0.9 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 decreases in incentive bonuses, real estate taxes resulting from reduced negotiated assessments and successful appeals of 2008 values and reduced insurance rates.

Depreciation expense for the nine months ended September 30, 2009 was approximately $71.3 million, an increase of approximately $4.8 million from the nine months ended September 30, 2008 primarily due to the increases in depreciation expense of (i) $2.2 million from the six properties acquired during 2008 and 2009, (ii) $0.6 million from our development and lease-up communities, and (iii) $2.7 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 $0.7 million from the expiration of the amortization of intangible lease assets of previously acquired communities.

Net cash used in investing activities was approximately $48.5 million during the first nine months of 2009 compared to $225.0 million during the first nine months of 2008, mainly related to acquisition and disposition activity. In the first nine months of 2008, we had cash outflows of $156.1 million, mainly related to five wholly owned acquisitions and $7.4 million, mainly related to our share of two acquisitions purchased by Mid-America Multifamily Fund I, LLC, or Fund I, one of our joint ventures. This compares to cash outflows of approximately $17.9 million in the first nine months of 2009, mainly related to the purchase of one wholly owned property and six individual units of a previous acquisition, and $2.7 million mainly related to our share of an acquisition purchased by Mid-America Multifamily Fund II, LLC, or Fund II, our other joint venture. In the first nine months of 2009, we received a total of approximately $14.4 million from the sale of two properties. No dispositions were made in 2008. We also spent approximately $13.7 million more on development communities during the first nine months of 2008 than in the same period of 2009.

Net cash used in financing activities was approximately $52.2 million for the first nine months of 2009, compared to net cash provided by financing activities of approximately $145.0 million during the first nine months of 2008. During the first nine months of 2008, we received proceeds of approximately $98.6 million from the issuance of shares of common stock through our continuous equity offering program, or CEO, which we use for general corporate business including paying down loans and partially financing acquisitions. During the first nine months of 2009, we received proceeds of approximately $24.6 million through our CEO. During the first nine months of 2008, Mid-America increased our borrowings under our credit lines by approximately $177.2 million, primarily to partially finance the five wholly-owned acquisitions made during that time period. During the comparable period in 2009, Mid-America increased our borrowings by $35.7 million through our credit facilities, primarily to partially finance the single wholly-owned acquisition made during that period.

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

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