Rule 3-14 Financial Information


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K
___________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 28, 2006 (November 3, 2006)


MID-AMERICA APARTMENT COMMUNITIES, INC.
(Exact name of registrant as specified in its charter)


TENNESSEE
1-12762
62-1543819
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)

6584 Poplar Avenue, Suite 300
  
Memphis, Tennessee
38138
(Address of Principal Executive Offices)
(Zip Code)


Registrant's telephone number, including area code: (901) 682-6600


N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 

ITEM 2.01 Completion of Acquisition or Disposition of Assets
 


As of November 3, 2006, Mid-America Apartment Communities, Inc. (the “Company”), has during the 2006 fiscal year acquired various apartment communities located in North Carolina, Texas, Arizona and Georgia for a total gross contractual purchase price of $196,300,000. Accordingly, the Company is hereby filing certain financial information indicated under Rule 3-14 and Article 11 of Regulation S-X relating to the properties detailed below and henceforth referred to as the “Acquired Properties”:


Apartment
      
Number
  
Date
Community
  
Location
  
of Units
  
Acquired
             
Preserve at Brier Creek
  
Raleigh, NC
  
250
  
January 19, 2006
             
Silverado
  
Austin, TX
  
312
  
March 23, 2006
             
Grand Courtyard
  
Dallas, TX
  
390
  
April 27, 2006
             
Reserve at Woodwind Lakes
  
Houston, TX
  
328
  
September 6, 2006
             
Talus Ranch
  
Phoenix, AZ
  
240
  
September 29, 2006
             
Sansol
  
Phoenix, AZ
  
240
  
September 29, 2006
             
Oaks at Wilmington Island
  
Savannah, GA
  
306
  
October 12, 2006

 
 


ITEM 9.01 Financial Statements and Exhibits
 

Financial Statements and Exhibits

(a) Financial statements of real estate operations acquired

Silverado apartments:
 
Report of independent public accounting firm

Statement of revenue and certain expenses for twelve months ended December 31, 2005

Reserve at Woodwind Lakes apartments:
 
Report of independent public accounting firm

Statement of revenue and certain expenses for twelve months ended December 31, 2005 and six months ended June 30, 2006 (unaudited)

Talus Ranch apartments:
 
Report of independent public accounting firm

Statement of revenue and certain expenses for twelve months ended December 31, 2005 and six months ended June 30, 2006 (unaudited)

Sansol apartments:
 
Report of independent public accounting firm

Statement of revenue and certain expenses for twelve months ended December 31, 2005 and six months ended June 30, 2006 (unaudited)

Oaks at Wilmington Island apartments:
 
Report of independent public accounting firm

Statement of revenue and certain expenses for twelve months ended December 31, 2005 and nine months ended September 30, 2006 (unaudited)

Preserve at Brier Creek apartments:

Statement of revenue and certain expenses for twelve months ended December 31, 2005 (unaudited)

Grand Courtyard apartments

Statement of revenue and certain expenses for twelve months ended December 31, 2005 (unaudited) and three months ended March 31, 2006 (unaudited)

(b) Pro Forma Financial Information

Pro forma condensed consolidated balance sheet as of September 30, 2006 (unaudited)

Pro forma condensed consolidated statements of operations for the nine months ended September 30, 2006 (unaudited) and for the twelve months ended December 31, 2005 (unaudited)
 




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: November 28, 2006
/s/Simon R.C. Wadsworth
 
Simon R.C. Wadsworth
 
Executive Vice President and Chief Financial Officer
 
(Principal Financial and Accounting Officer) 


 


INDEPENDENT AUDITOR’S REPORT


To the Board of Directors
of Mid-America Apartment Communities, Inc.


We have audited the accompanying statement of revenue and certain expenses of Silverado Apartments (the Acquisition Property), as described in Note 1, for the year ended December 31, 2005. This statement is the responsibility of the Acquisition Properties management. Our responsibility is to express an opinion on the statement of revenue and certain expenses for the Acquisition Property based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenue and certain expenses for the Acquisition property. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the statement of revenue and certain expenses referred to above presents fairly, in all material respects, the revenue and certain expenses described in Note 1 for the year ended December 31, 2005, in conformity with generally accepted accounting principals.

The accompanying statement of revenue and certain expenses for the Acquisition Property was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in Note 1 and is not intended to be a complete presentation of the Acquisition Property’s revenues and expenses.


/s/ Watkins Uiberall PLLC

Memphis, Tennessee
October 24, 2006
 
 

MID-AMERICA APARTMENT COMMUNITIES, INC.

STATEMENT OF REVENUE AND CERTAIN EXPENSES

SILVERADO APARTMENTS
 
 
 

        
   
Twelve months ended
 
 
 
December 31, 2005
  
       
Rental and other property income
  
$
2,896,814
  
         
 Rental expenses:
        
  Operating expenses
    
858,501
 
   Real estate taxes
    
614,112
 
   Repairs and maintenance
    
110,463
 
     
1,583,076
 
         
Revenue in excess of certain expenses
  
$
1,313,738
  
 
 
 
 
 

The accompanying notes are an integral part of this schedule.

 
 

MID-AMERICA APARTMENT COMMUNITIES, INC.

NOTES TO STATEMENT OF REVENUE
AND CERTAIN EXPENSES
SILVERADO APARTMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General 

The accompanying financial statements includes the operations of Silverado Apartments (the Acquisition Property) owned by parties unaffiliated with Mid-America Apartment Communities, Inc. (the company) and Mid-America Apartments, L.P. (the operating partnership). The Acquisition Property, a multi-family residential property located in Austin, Texas was acquired by a subsidiary of the Operating Partnership on March 23, 2006 and contains 312 units.

Basis of Presentation 

The statement of revenue and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, including Rule 3-14 of Regulation S-X. Accordingly, certain expenses such as depreciation, amortization, income taxes, mortgage interest expense and entity expenses are not reflected in the statement of revenue and certain expenses. In addition, some expenses have been excluded because the Operating Partnership does not anticipate that they will be incurred in the future operation of this property. Expenses excluded consist primarily of management fees. Direct operating expenses primarily include payroll, utilities, leasing and marketing, insurance and other general and administrative costs.

Revenue Recognition 

Revenues from rental property are recognized when due from tenants. Leases are generally for one year or less.

Use of Estimates

The preparation of financial statements in conformity with accounting principals generally accepted in the United States of America requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
 
 
 
 
 

INDEPENDENT AUDITOR’S REPORT


To the Board of Directors
of Mid-America Apartment Communities, Inc.


We have audited the accompanying statement of revenue and certain expenses of Reserve at Woodwind Lakes Apartments (the Acquisition Property), as described in Note 1, for the year ended December 31, 2005. This statement is the responsibility of the Acquisition Properties management. Our responsibility is to express an opinion on the statement of revenue and certain expenses for the Acquisition Property based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenue and certain expenses for the Acquisition Property. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the statement of revenue and certain expenses referred to above presents fairly, in all material respects, the revenue and certain expenses described in Note 1 for the year ended December 31, 2005, in conformity with generally accepted accounting principals.

The accompanying statement of revenue and certain expenses for the Acquisition Property was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in Note 1 and is not intended to be a complete presentation of the Acquisition Property’s revenues and expenses.


/s/ Watkins Uiberall PLLC

Memphis, Tennessee
October 13, 2006
 
 
 

MID-AMERICA APARTMENT COMMUNITIES, INC.

STATEMENT OF REVENUE AND CERTAIN EXPENSES

RESERVE AT WOODWIND LAKES APARTMENTS

 

       
Six months ended
 
 
 
Twelve months ended
 
June 30, 2006
 
 
 
December 31, 2005
 
(unaudited)
  
           
Rental and other property income
  
$
2,803,640
  
$
1,497,039
  
               
Rental expenses:
              
   Operating expenses
    
829,092
   
354,593
 
  Real estate taxes
    
583,941
   
257,115
 
  Repairs and maintenance
    
290,801
   
116,523
 
     
1,703,834
   
728,231
 
               
Gross income in excess of certain expenses
  
$
1,099,806
  
$
768,808
  
 
 
 
 

 
The accompanying notes are an integral part of this schedule.
 
 
 

MID-AMERICA APARTMENT COMMUNITIES, INC.

NOTES TO STATEMENT OF REVENUE
AND CERTAIN EXPENSES
RESERVE AT WOODWIND LAKES APARTMENTS
 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General 

The accompanying financial statements includes the operations of Reserve at Woodwind Lakes Apartments (the Acquisition Property) owned by parties unaffiliated with Mid-America Apartment Communities, Inc. (the company) and Mid-America Apartments, L.P. (the operating partnership). The Acquisition Property, a multi-family residential property located in Houston, Texas was acquired by a subsidiary of the Operating Partnership on September 6, 2006 and contains 328 units.

Basis of Presentation 

The statement of revenue and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, including Rule 3-14 of Regulation S-X. Accordingly, certain expenses such as depreciation, amortization, income taxes, mortgage interest expense and entity expenses are not reflected in the statement of revenue and certain expenses. In addition, some expenses have been excluded because the Operating Partnership does not anticipate that they will be incurred in the future operation of this property. Expenses excluded consist primarily of management fees. Direct operating expenses primarily include payroll, utilities, leasing and marketing, insurance and other general and administrative costs.

The accompanying unaudited interim statement of revenue and certain expenses has been prepared on the same basis as the statement of revenue and certain expenses for the year ended December 31, 2005. In the opinion of the management of property all adjustments consisting only of normal recurring adjustments necessary for fair presentation of the information for this interim period have been made. The revenue in excess of certain expenses for such interim period is not necessarily indicative of the excess of revenue over certain expenses for the full year.

Revenue Recognition 

Revenues from rental property are recognized when due from tenants. Leases are generally for one year or less.

Use of Estimates

The preparation of financial statements in conformity with accounting principals generally accepted in the United States of America requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.




INDEPENDENT AUDITOR’S REPORT


To the Board of Directors
of Mid-America Apartment Communities, Inc.


We have audited the accompanying statement of revenue and certain expenses of Talus Ranch Apartments (the Acquisition Property), as described in Note 1, for the year ended December 31, 2005. This statement is the responsibility of the Acquisition Properties management. Our responsibility is to express an opinion on the statement of revenue and certain expenses for the Acquisition Property based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenue and certain expenses for the Acquisition Property. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the statement of revenue and certain expenses referred to above presents fairly, in all material respects, the revenue and certain expenses described in Note 1 for the year ended December 31, 2005, in conformity with generally accepted accounting principals.

The accompanying statement of revenue and certain expenses for the Acquisition Property was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in Note 1 and is not intended to be a complete presentation of the Acquisition Property’s revenues and expenses.


/s/ Watkins Uiberall PLLC

Memphis, Tennessee
September 29, 2006
 
 
 
 

MID-AMERICA APARTMENT COMMUNITIES, INC.

STATEMENT OF REVENUE AND CERTAIN EXPENSES

TALUS RANCH APARTMENTS

 

       
Six months ended
  
   
Twelve months ended
 
June 30, 2006
 
 
 
December 31, 2005
 
(unaudited)
  
           
Rental and other property income
  
$
1,297
  
$
212,128
  
               
 Rental expense:
              
  Operating expenses
    
98,551
   
263,162
 
  Real estate taxes
    
-
   
13,677
 
  Repairs and maintenance
    
-
   
18,320
 
     
98,551
   
295,159
 
               
Revenues in excess of certain expenses
  
$
(97,254
)
$
(83,031
)

 

 
 
 
The accompanying notes are an integral part of this schedule.
 
 

MID-AMERICA APARTMENT COMMUNITIES, INC.

NOTES TO STATEMENT OF REVENUE
AND CERTAIN EXPENSES
TALUS RANCH APARTMENTS
 
 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General 

The accompanying financial statements includes the operations of Talus Ranch Apartments (the Acquisition Property) owned by parties unaffiliated with Mid-America Apartment Communities, Inc. (the company) and Mid-America Apartments, L.P. (the operating partnership). The Acquisition Property, a multi-family residential property located in Phoenix was acquired by the Operating Partnership on September 29, 2006 and contains 240 units. The Acquisition Property was newly constructed in 2005 and 2006 with multiple buildings which were certified for occupancy between November, 2005 and June, 2006. Accordingly, the statement of revenue and certain expenses reflect the initial rental period ended December 31, 2005.
 
Basis of Presentation 

The statement of revenue and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, including Rule 3-14 of Regulation S-X. Accordingly, certain expenses such as depreciation, amortization, income taxes, mortgage interest expense and entity expenses are not reflected in the statement of revenue and certain expenses. In addition, some expenses have been excluded because the Operating Partnership does not anticipate that they will be incurred in the future operation of this property. Expenses excluded consist primarily of management fees. Direct operating expenses primarily include payroll, utilities, leasing and marketing, insurance and other general and administrative costs.

The accompanying unaudited interim statement of revenue and certain expenses has been prepared on the same basis as the statement of revenue and certain expenses for the year ended December 31, 2005. In the opinion of the management of property all adjustments consisting only of normal recurring adjustments necessary for fair presentation of the information for this interim period have been made. The revenue in excess of certain expenses for such interim period is not necessarily indicative of the excess of revenue over certain expenses for the full year.

Revenue Recognition 

Revenues from rental property are recognized when due from tenants. Leases are generally for one year or less.

Use of Estimates

The preparation of financial statements in conformity with accounting principals generally accepted in the United States of America requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

 
 

INDEPENDENT AUDITOR’S REPORT


To the Board of Directors
of Mid-America Apartment Communities, Inc.


We have audited the accompanying statement of revenue and certain expenses of Sansol Apartments (the Acquisition Property), as described in Note 1, for the year ended December 31, 2005. This statement is the responsibility of the Acquisition Properties management. Our responsibility is to express an opinion on the statement of revenue and certain expenses for the Acquisition Property based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenue and certain expenses for the Acquisition Property. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the statement of revenue and certain expenses referred to above presents fairly, in all material respects, the revenue and certain expenses described in Note 1 for the year ended December 31, 2005, in conformity with generally accepted accounting principals.

The accompanying statement of revenue and certain expenses for the Acquisition Property was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in Note 1 and is not intended to be a complete presentation of the Acquisition Property’s revenues and expenses.


/s/ Watkins Uiberall PLLC

Memphis, Tennessee
September 29, 2006
 
 
 
 

MID-AMERICA APARTMENT COMMUNITIES, INC.

STATEMENT OF REVENUE AND CERTAIN EXPENSES

SANSOL APARTMENTS
 
 
 

   
 
 
Six months ended
 
 
 
Twelve months ended
 
June 30, 2006
 
 
 
December 31, 2005
 
(unaudited)
  
           
Rental and other property income
  
$
4,118
  
$
192,076
  
               
Rental expenses:
              
  Operating expenses
    
97,248
   
264,915
 
  Real estate taxes
    
-
   
14,987
 
  Repairs and maintenance
    
-
   
14,591
 
     
97,248
   
294,493
 
               
Revenues in excess of certain expenses
  
$
(93,130
)
$
(102,417
)
 
 
 
 
 
 
The accompanying notes are an integral part of this schedule.
 
 
 
 

MID-AMERICA APARTMENT COMMUNITIES, INC.

NOTES TO STATEMENT OF REVENUE
AND CERTAIN EXPENSES
SANSOL APARTMENTS
 
 
 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General 

The accompanying financial statements includes the operations of Sansol Apartments (the Acquisition Property) owned by parties unaffiliated with Mid-America Apartment Communities, Inc. (the company) and Mid-America Apartments, L.P. (the operating partnership). The Acquisition Property, a multi-family residential property located in Phoenix was acquired by the Operating Partnership on September 29, 2006 and contains 240 units. The Acquisition Property was newly constructed in 2005 and 2006 with multiple buildings which were certified for occupancy between November, 2005 and June 2006. Accordingly, the statement of revenue and certain expenses reflect the initial rental period ended December 31, 2005.

Basis of Presentation 

The statement of revenue and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, including Rule 3-14 of Regulation S-X. Accordingly, certain expenses such as depreciation, amortization, income taxes, mortgage interest expense and entity expenses are not reflected in the statement of revenue and certain expenses. In addition, some expenses have been excluded because the Operating Partnership does not anticipate that they will be incurred in the future operation of this property. Expenses excluded consist primarily of management fees. Direct operating expenses primarily include payroll, utilities, leasing and marketing, insurance and other general and administrative costs.

The accompanying unaudited interim statement of revenue and certain expenses has been prepared on the same basis as the statement of revenue and certain expenses for the year ended December 31, 2005. In the opinion of the management of property all adjustments consisting only of normal recurring adjustments necessary for fair presentation of the information for this interim period have been made. The revenue in excess of certain expenses for such interim period is not necessarily indicative of the excess of revenue over certain expenses for the full year.

Revenue Recognition 

Revenues from rental property are recognized when due from tenants. Leases are generally for one year or less.

Use of Estimates

The preparation of financial statements in conformity with accounting principals generally accepted in the United States of America requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

 
 
 

INDEPENDENT AUDITOR’S REPORT


To the Board of Directors
of Mid-America Apartment Communities, Inc.


We have audited the accompanying statement of revenue and certain expenses of Oaks at Wilmington Island (the Acquisition Property), as described in Note 1, for the year ended December 31, 2005. The statement is the responsibility of the Acquisition Properties management. Our responsibility is to express an opinion on the statement of revenue and certain expenses for the Acquisition Property based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenue and certain expenses for the Acquisition Property. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the statement of revenue and certain expenses referred to above presents fairly, in all material respects, the revenue and certain expenses described in Note 1 for the year ended December 31, 2005, in conformity with generally accepted accounting principals.

The accompanying statement of revenue and certain expenses for the Acquisition Property was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in Note 1 and is not intended to be a complete presentation of the Acquisition Property’s revenues and expenses.


/s/ Watkins Uiberall PLLC

Memphis, Tennessee
October 23, 2006
 
 
 

MID-AMERICA APARTMENT COMMUNITIES, INC.

STATEMENT OF REVENUE AND CERTAIN EXPENSES

OAKS AT WILMINGTON ISLAND
 

   
 
 
Nine months ended
 
 
 
Twelve months ended
 
September 30, 2006
 
 
 
December 31, 2005
 
(unaudited)
  
           
Rental and other property income
  
$
2,648,839
  
$
2,178,989
  
               
Rental expenses:
              
  Operating expenses
    
726,381
   
471,469
 
  Real estate taxes
    
236,269
   
189,482
 
  Repairs and maintenance
    
132,209
   
144,230
 
     
1,094,859
   
805,181
 
               
Revenue in excess of certain expenses
  
$
1,553,980
  
$
1,373,808
  
 

 
 
 
 
The accompanying notes are an integral part of this schedule.
 
 
 

MID-AMERICA APARTMENT COMMUNITIES, INC.

NOTES TO STATEMENT OF REVENUE
AND CERTAIN EXPENSES
OAKS AT WILMINGTON ISLAND
 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General 

 The accompanying financial statements includes the operations of Oaks at Wilmington Island (the Acquisition Property) owned by parties unaffiliated with Mid-America Apartment Communities, Inc. (the company) and Mid-America Apartments, L.P. (the operating partnership). The Acquisition Property, a multi-family residential property located in Savannah, Georgia was acquired by the Operating Partnership on October 12, 2006 and contains 306 units.

Basis of Presentation 

The statement of revenue and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, including Rule 3-14 of Regulation S-X. Accordingly, certain expenses such as depreciation, amortization, income taxes, mortgage interest expense and entity expenses are not reflected in the statement of revenue and certain expenses. In addition, some expenses have been excluded because the Operating Partnership does not anticipate that they will be incurred in the future operation of this property. Expenses excluded consist primarily of management fees. Direct operating expenses primarily include payroll, insurance, utilities, advertising, and other general and administrative costs.

The accompanying unaudited interim statement of revenue and certain expenses was prepared on the same basis as the statement of revenues and certain expenses for the year ended December 31, 2005. In the opinion of the management of the property, all adjustments consisting only of normal recurring adjustments necessary for fair presentation of the information for this interim period have been made. The revenue in excess of certain expenses for such interim period is not necessarily indicative of the excess of revenue over certain expenses for the full year.

Revenue Recognition 

Revenues from rental property are recognized when due from tenants. Leases are generally for one year or less.

Use of Estimates

The preparation of financial statements in conformity with accounting principals generally accepted in the United States of America requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
 
 
 
 

MID-AMERICA APARTMENT COMMUNITIES, INC.

STATEMENT OF REVENUE AND CERTAIN EXPENSES

PRESERVE AT BRIER CREEK APARTMENTS
 

   
Twelve months ended
 
 
 
December 31, 2005
 
 
 
(unaudited)
  
       
Rental and other property income
  
$
2,409,501
  
         
Rental expenses
        
  Operating expenses
    
584,667
 
  Real estate taxes
    
206,702
 
  Repairs and maintenance
    
142,613
 
     
933,982
 
         
Gross income in excess of certain expenses
  
$
1,475,519
  
 

 
 
 
 
The accompanying notes are an integral part of this schedule.
 
 
 

MID-AMERICA APARTMENT COMMUNITIES, INC.

NOTES TO STATEMENT OF REVENUE
AND CERTAIN EXPENSES
PRESERVE AT BRIER CREEK APARTMENTS
 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General 
 
The accompanying unaudited financial statements includes the operations of Preserve at Brier Creek (the Acquisition Property) owned by parties unaffiliated with Mid-America Apartment Communities, Inc. (the Company) and Mid-America Apartments, L.P. (the Operating Partnership). The Acquisition Property, a multi-family residential property located in Raleigh, North Carolina was acquired by the Operating Partnership on January 19, 2006 and contains 250 units.

Basis of Presentation 

The statement of revenue and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, including Rule 3-14 of Regulation S-X. Accordingly, certain expenses such as depreciation, amortization, income taxes, mortgage interest expense and entity expenses are not reflected in the statement of revenue and certain expenses. In addition, some expenses have been excluded because the Operating Partnership does not anticipate that they will be incurred in the future operation of this property. Expenses excluded consist primarily of management fees. Direct operating expenses primarily include payroll, utilities, leasing and marketing, insurance and other general and administrative costs.

Revenue Recognition 

Revenues from rental property are recognized when due from tenants. Leases are generally for one year or less.

Use of Estimates

The preparation of financial statements in conformity with accounting principals generally accepted in the United States of America requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
 
 
 
 

MID-AMERICA APARTMENT COMMUNITIES, INC.

STATEMENT OF REVENUE AND CERTAIN EXPENSES

GRAND COURTYARD APARTMENTS
 
 

   
Twelve months ended
 
Three months ended
 
 
 
December 31, 2005
 
March 31, 2006
 
 
 
(unaudited)
 
(unaudited)
  
           
Rental and other property income
  
$
3,309,998
  
$
860,797
  
               
Rental expenses
              
  Operating expenses
    
910,237
   
212,320
 
  Real estate taxes
    
638,484
   
159,636
 
  Repairs and maintenance
    
129,076
   
43,280
 
     
1,677,797
   
415,236
 
               
Gross income in excess of certain expenses
  
$
1,632,201
  
$
445,561
  
 
 

 
 
 
The accompanying notes are an integral part of this schedule.
 
 
 

MID-AMERICA APARTMENT COMMUNITIES, INC.

NOTES TO STATEMENT OF REVENUE
AND CERTAIN EXPENSES
GRAND COURTYARD APARTMENTS
 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General 

The accompanying unaudited financial statements includes the operations of Grand Courtyard (the Acquisition Property) owned by parties unaffiliated with Mid-America Apartment Communities, Inc. (the Company) and Mid-America Apartments, L.P. (the Operating Partnership). The Acquisition Property, a multi-family residential property located in Dallas, Texas and was acquired by a subsidiary of the Operating Partnership on April 27, 2006 and contains 390 units.

Basis of Presentation 

The statement of revenue and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, including Rule 3-14 of Regulation S-X. Accordingly, certain expenses such as depreciation, amortization, income taxes, mortgage interest expense and entity expenses are not reflected in the statement of revenue and certain expenses. In addition, some expenses have been excluded because the Operating Partnership does not anticipate that they will be incurred in the future operation of this property. Expenses excluded consist primarily of management fees. Direct operating expenses primarily include payroll, utilities, leasing and marketing, insurance and other general and administrative costs.

The accompanying unaudited interim statement of revenue and certain expenses has been prepared on the same basis as the statement of revenue and certain expenses for the year ended December 31, 2005. In the opinion of the management of property all adjustments consisting only of normal recurring adjustments necessary for fair presentation of the information for this interim period have been made. The revenue in excess of certain expenses for such interim period is not necessarily indicative of the excess of revenue over certain expenses for the full year.

Revenue Recognition 

Revenues from rental property are recognized when due from tenants. Leases are generally for one year or less.

Use of Estimates

The preparation of financial statements in conformity with accounting principals generally accepted in the United States of America requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
 
 
 
 

 
Pro Forma Condensed Consolidated Balance Sheet
 
 
     The accompanying unaudited Pro Forma Condensed Consolidated Balance Sheet of Mid-America Apartment Communities, Inc. is presented as if Oaks at Wilmington Island had been acquired on September 30, 2006. The remaining Acquired Properties were acquired prior to September 30, 2006 and therefore are already represented in the historical amounts. This Pro Forma Condensed Consolidated Balance Sheet should be read in conjunction with the Pro Forma Condensed Consolidated Statement of Operations for the nine-month period ended September 30, 2006 and for the year ended December 31, 2005 and the historical consolidated financial statements and notes thereto of the Company reported on Form 10-Q for the nine-month period ended September 30, 2006 and on Form 10-K for the year ended December 31, 2005. In management’s opinion, all adjustments necessary to reflect the acquisition of Oaks at Wilmington Island have been made. The following Pro Forma Condensed Consolidated Balance Sheet is not necessarily indicative of what the actual financial position would have been assuming the above transaction had been consummated at September 30, 2006, nor does it purport to represent the future financial position of the Company.
 
 
 
 

Mid-America Apartment Communities, Inc.
  
Pro forma condensed consolidated balance sheet
  
September 30, 2006 (Unaudited)
 
(Dollars in thousands)
  
   
Historical
  
Pro Forma
  
Pro Forma
  
   
Amounts (A)
  
Adjustments (B)
  
Amounts
  
Assets:
              
Real estate assets:
              
Land
  
$
204,569
  
$
5,508
  
$
210,077
  
Buildings and improvements
    
1,888,083
   
23,662
   
1,911,745
 
Furniture, fixtures and equipment
    
50,032
   
78
   
50,110
 
Capital improvements in progress
    
10,549
   
-
   
10,549
 
     
2,153,233
   
29,248
   
2,182,481
 
Less accumulated depreciation
    
(522,721
)
  
-
   
(522,721
)
     
1,630,512
   
29,248
   
1,659,760
 
                     
Land held for future development
    
2,360
   
-
   
2,360
 
Commercial properties, net
    
6,966
   
-
   
6,966
 
Investments in and advances to real estate joint venture
    
3,839
   
-
   
3,839
 
Real estate assets, net 
    
1,643,677
   
29,248
   
1,672,925
 
                     
Cash and cash equivalents
    
7,689
   
2,286
   
9,975
 
Restricted cash
    
5,186
   
-
   
5,186
 
Deferred financing costs, net
    
15,715
   
-
   
15,715
 
Other assets
    
38,730
   
(12,473
)
  
26,257
 
Goodwill
    
5,051
   
-
   
5,051
 
Assets held for sale
    
7,435
   
-
   
7,435
 
Total assets 
  
$
1,723,483
  
$
19,061
  
$
1,742,544
  
                     
Liabilities and Shareholders' Equity:
                    
Liabilities:
                    
Notes payable
  
$
1,202,217
  
$
18,911
  
$
1,221,128
  
Accounts payable
    
678
   
-
   
678
 
Accrued expenses and other liabilities
    
50,827
   
77
   
50,904
 
Security deposits
    
7,498
   
73
   
7,571
 
Liabilities associated with assets held for sale
    
213
   
-
   
213
 
Total liabilities 
    
1,261,433
   
19,061
   
1,280,494
 
                     
Minority interest
    
32,207
   
-
   
32,207
 
                     
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;
                    
24,489,874 and 22,048,372 shares issued and outstanding at 
                    
September 30, 2006, and December 31, 2005, respectively 
    
245
   
-
   
245
 
Additional paid-in capital
    
782,249
   
-
   
782,249
 
Other
    
-
   
-
       
Accumulated distributions in excess of net income
    
(363,717
)
  
-
   
(363,717
)
Accumulated other comprehensive income
    
10,999
   
-
   
10,999
 
Total shareholders' equity 
    
429,843
   
-
   
429,843
 
Total liabilities and shareholders' equity 
  
$
1,723,483
  
$
19,061
  
$
1,742,544
  
                     
                     
See accompanying notes.
                    
 
 
 
 
 

 
Notes to Pro Forma Condensed Consolidated Balance Sheet
 
 
(A)
 
Represents the condensed consolidated balance sheet of the Company as of September 30, 2006, as contained in the historical consolidated financial statements and notes thereto filed on Form 10-Q. This includes the completed acquisitions of the Acquired Properties, except for Oaks at Wilmington Island, that were purchased during the nine month period ended September 30, 2006 for a total purchase price of $167.3 million of which $5.2 million has been allocated to the FMV of leases. These acquisitions were funded through draws under the Company’s line of credit facilities, various equity transactions, and the assumption of a mortgage note.
 
 
(B)
 
Represents the acquisition of Oaks at Wilmington Island for a total purchase price of $29.1 million of which $1.0 million has been allocated to the FMV of leases. The acquisition was funded through $18.9 million in draws under a line of credit facility and the remainder from proceeds of equity issued prior to September 30, 2006. The proceeds were received subsequent to September 30, 2006 and accordingly were recorded as a receivable within other assets in the Historical Amounts.
 
 
 
 
 
 

 
Pro Forma Condensed Consolidated Statements of Operations
 
 
     The accompanying unaudited Pro Forma Condensed Consolidated Statements of Operations for the nine months ended September 30, 2006 and for the twelve months ended December 31, 2005 of the Company is presented as if the Acquired Properties had been acquired on January 1, 2005.
 
 
     These Pro Forma Condensed Consolidated Statements of Operations should be read in conjunction with the historical consolidated financial statements included in the Company’s previous filings with the Securities and Exchange Commission.
 
 
     The unaudited Pro Forma Condensed Consolidated Statements of Operations are not necessarily indicative of what the actual results of operations would have been for the nine-month period ended September 30, 2006 or for the twelve months ended December 31, 2005 assuming the above transactions had been consummated on January 1, 2005, nor do they purport to represent the future results of operations of the Company.
 
 
 
 

                
Mid-America Apartment Communities, Inc.  
  
Pro forma condensed consolidated statement of operations  
 
Nine months ended September 30, 2006 (Unaudited)  
 
(Dollars in thousands, except per share data)  
  
                
   
 HISTORICAL
 
PRO FORMA
 
PRO FORMA
 
 
 
 AMOUNTS (A)
 
ADJUSTMENTS (B)
 
AMOUNTS
  
                
Operating revenues:
               
Rental revenues 
  
$
230,396
  
$
7,054
  
$
237,450
  
Other property revenues 
    
10,558
   
246
   
10,804
 
Total property revenues 
    
240,954
   
7,300
   
248,254
 
Management fee income 
    
157
   
-
   
157
 
Total operating revenues 
    
241,111
   
7,300
   
248,411
 
Property operating expenses:
                    
Personnel 
    
28,230
   
1,031
   
29,261
 
Building repairs and maintenance 
    
8,737
   
455
   
9,192
 
Real estate taxes and insurance 
    
30,158
   
1,375
   
31,533
 
Utilities 
    
14,726
   
484
   
15,210
 
Landscaping 
    
6,429
   
160
   
6,589
 
Other operating 
    
10,690
   
604
   
11,294
 
Depreciation 
    
57,899
   
1,962
   
59,861
 
Total property operating expenses 
    
156,869
   
6,071
   
162,940
 
Property management expenses
    
9,591
   
-
   
9,591
 
General and administrative expenses
    
8,708
   
-
   
8,708
 
Income from continuing operations before non-operating items
    
65,943
   
1,229
   
67,172
 
Interest and other non-property income
    
494
   
-
   
494
 
Interest expense
    
(47,039
)
  
(3,709
)
  
(50,748
)
Gain (loss) on debt extinguishment
    
(551
)
  
-
   
(551
)
Amortization of deferred financing costs
    
(1,508
)
  
(151
)
  
(1,659
)
Minority interest in operating partnership income
    
(1,196
)
  
-
   
(1,196
)
(Loss) income from investments in real estate joint ventures
    
(135
)
  
-
   
(135
)
Incentive fee from real estate joint ventures
    
-
   
-
   
-
 
Net (loss) gain on insurance and other settlement proceeds
    
171
   
-
   
171
 
Gain on sale of non-depreciable assets
    
32
   
-
   
32
 
Gain on disposition within real estate joint ventures
    
-
   
-
   
-
 
Income from continuing operations
    
16,211
   
(2,631
)
  
13,580
 
Discontinued operations:
                    
Income from discontinued operations before 
                    
 asset impairment, settlement proceeds and gain on sale
    
437
   
-
   
437
 
Asset impairment on discontinued operations 
    
-
   
-
   
-
 
Net loss on insurance and other settlement proceeds on 
                    
 discontinued operations
    
-
   
-
   
-
 
Net income
    
16,648
   
(2,631
)
  
14,017
 
Preferred dividend distribution
    
10,472
   
-
   
10,472
 
Net income available for common shareholders
  
$
6,176
  
$
(2,631
)
$
3,545
  
                     
Weighted average shares outstanding (in thousands):
                    
Basic 
    
23,099
   
23,099
   
23,099
 
Effect of dilutive stock options 
    
226
   
226
   
226
 
Diluted 
    
23,325
   
23,325
   
23,325
 
                     
Net income available for common shareholders
  
$
6,176
  
$
(2,631
)
$
3,545
  
Discontinued property operations
    
(437
)
  
-
   
(437
)
Income from continuing operations available for common shareholders
  
$
5,739
  
$
(2,631
)
$
3,108
  
                     
Earnings per share - basic:
                    
Income from continuing operations  
                    
  available for common shareholders 
  
$
0.25
  
$
(0.11
)
$
0.13
  
Discontinued property operations 
  
$
0.02
  
$
-
  
$
0.02
  
Net income available for common shareholders 
  
$
0.27
  
$
(0.11
)
$
0.15
  
                     
Earnings per share - diluted:
                    
Income from continuing operations  
                    
  available for common shareholders 
  
$
0.24
  
$
(0.11
)
$
0.13
  
Discontinued property operations 
  
$
0.02
  
$
-
  
$
0.02
  
Net income available for common shareholders 
  
$
0.26
  
$
(0.11
)
$
0.15
  
                     
                     
See accompanying notes.
                    
 
 
 
 
 

                
Mid-America Apartment Communities, Inc.  
 
Pro forma condensed consolidated statement of operations  
 
Twelve months ended December 31, 2005 (Unaudited)  
 
(Dollars in thousands, except per share data)  
  
                
   
 HISTORICAL
  
PRO FORMA
  
PRO FORMA
  
   
 AMOUNTS (A)
  
ADJUSTMENTS (C)
  
AMOUNTS
  
                
Operating revenues:
               
Rental revenues 
  
$
285,965
  
$
13,512
  
$
299,477
  
Other property revenues 
    
11,165
   
539
   
11,704
 
Total property revenues 
    
297,130
   
14,051
   
311,181
 
Management fee income 
    
325
   
-
   
325
 
Total operating revenues 
    
297,455
   
14,051
   
311,506
 
Property operating expenses:
                    
Personnel 
    
35,771
   
1,632
   
37,403
 
Building repairs and maintenance 
    
11,097
   
725
   
11,822
 
Real estate taxes and insurance 
    
37,677
   
2,634
   
40,311
 
Utilities 
    
16,749
   
732
   
17,481
 
Landscaping 
    
7,978
   
335
   
8,313
 
Other operating 
    
14,444
   
769
   
15,213
 
Depreciation 
    
75,050
   
8,039
   
83,089
 
Total property operating expenses 
    
198,766
   
14,866
   
213,632
 
Property management expenses
    
11,871
   
-
   
11,871
 
General and administrative expenses
    
10,354
   
-
   
10,354
 
Income from continuing operations before non-operating items
    
76,464
   
(815
)
  
75,649
 
Interest and other non-property income
    
498
   
-
   
498
 
Interest expense
    
(58,751
)
  
(5,112
)
  
(63,863
)
Gain (loss) on debt extinguishment
    
(409
)
  
-
   
(409
)
Amortization of deferred financing costs
    
(2,011
)
  
(242
)
  
(2,253
)
Minority interest in operating partnership income
    
(1,571
)
  
-
   
(1,571
)
(Loss) income from investments in real estate joint ventures
    
65
   
-
   
65
 
Incentive fee from real estate joint ventures
    
1,723
   
-
   
1,723
 
Net (loss) gain on insurance and other settlement proceeds
    
749
   
-
   
749
 
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
    
20,125
   
(6,169
)
  
13,956
 
Discontinued operations:
                    
Income from discontinued operations before 
                    
 asset impairment, settlement proceeds and gain on sale
    
(113
)
  
-
   
(113
)
Asset impairment on discontinued operations 
    
(243
)
  
-
   
(243
)
Net loss on insurance and other settlement proceeds on 
                    
 discontinued operations
    
(25
)
  
-
   
(25
)
Net income
    
19,744
   
(6,169
)
  
13,575
 
Preferred dividend distribution
    
14,329
   
-
   
14,329
 
Net income available for common shareholders
  
$
5,415
  
$
(6,169
)
$
(754
)
                     
Weighted average shares outstanding (in thousands):
                    
Basic 
    
21,405
   
21,405
   
21,405
 
Effect of dilutive stock options 
    
202
   
202
   
202
 
Diluted 
    
21,607
   
21,607
   
21,607
 
                     
Net income available for common shareholders
  
$
5,415
  
$
(6,169
)
$
(754
)
Discontinued property operations
    
381
   
-
   
381
 
Income from continuing operations available for common shareholders
  
$
5,796
  
$
(6,169
)
$
(373
)
                     
Earnings per share - basic:
                    
Income from continuing operations  
                    
  available for common shareholders 
  
$
0.27
  
$
(0.29
)
$
(0.02
)
Discontinued property operations 
  
$
(0.02
)
$
-
  
$
(0.02
)
Net income available for common shareholders 
  
$
0.25
  
$
(0.29
)
$
(0.04
)
                     
Earnings per share - diluted:
                    
Income from continuing operations  
                    
  available for common shareholders 
  
$
0.27
  
$
(0.29
)
$
(0.01
)
Discontinued property operations 
  
$
(0.02
)
$
-
  
$
(0.02
)
Net income available for common shareholders 
  
$
0.25
  
$
(0.29
)
$
(0.03
)
                     
                     
See accompanying notes.
                    
 
 
 
 

 
Notes to Pro Forma Condensed Consolidated Statements of Operations
 
 
(A)
 
Represents the historical consolidated statement of operations of the Company as contained in the historical consolidated financial statements included in previous filings with the Securities and Exchange Commission.
 
 
(B)
 
Represents the pro forma revenues and expenses prior to acquisition during the nine months ended September 30, 2006 attributable to the Acquired Properties as if the acquisitions had occurred on January 1, 2005. Interest expense of $3.7 million includes pro forma interest of $2.9 million attributable to draws under a line of credit and $0.8 million attributable to a mortgage note assumed. Depreciation expense of $2.0 million includes 1.0 million for the amortization of the FMV of leases. Depreciation relates to the aggregate purchase price of $196.3 million less the allocation to land of $32.5 million, less $1.4 million for other acquisition adjustments.
  
 
 
(C)
 
Represents the pro forma revenues and expenses for the year ended December 31, 2005 attributable to the Acquired Properties as if the acquisitions had occurred on January 1, 2005. Interest expense of $5.1 million includes pro forma interest of $3.9 million attributable to draws under a line of credit and $1.2 million attributable to a mortgage note assumed. Depreciation expense of $8.0 million includes $4.3 million for the amortization of the FMV of leases. Depreciation relates to the aggregate purchase price of $196.3 million less the allocation to land of $32.5 million, less $1.4 million for other acquisition adjustments.
 

 
(D)
 
The pro forma table below reflects cash generated from operations for the Company for the twelve months ended December 31, 2005 as if the Acquired Properties were acquired on January 1, 2005. This statement does not purport to forecast actual operating results for any period in the future.
 
 

   
Historical
 
Pro Forma
 
Pro Forma
 
 
 
Amounts
 
Adjustments
 
Amounts
  
               
Net income
  
$
19,744
  
$
(6,169
)
$
13,575
  
Addback: Depreciation of real estate assets
    
73,704
   
8,039
   
81,743
 
Subtract: Net gain on insurance and other settlement proceeds
    
749
   
-
   
749
 
Subtract: Gain on dispositions within unconsolidated entities
    
3,034
   
-
   
3,034
 
Subtract: Net loss on insurance and other settlement
                    
  proceeds of discontinued operations
    
(25
)
  
-
   
(25
)
Addback: Depreciation of real estate assets of real estate
                    
  joint ventures
    
482
   
-
   
482
 
Subtract: Preferred dividend distribution
    
14,329
   
-
   
14,329
 
Addback: Minority interest in operating partnership income
    
1,571
   
-
   
1,571
 
Funds from operations
    
77,414
   
1,870
   
79,284
 
Capital Expenditures
                
(26,300
)
Cash from operations
              
$
52,984