CHICAGO, Oct. 23 /PRNewswire/ -- Manufactured Home Communities, Inc. (NYSE: MHC) today announced results for the third quarter and nine months ended September 30, 2001. For the third quarter of 2001, funds from operations (FFO) were $16.4 million or $.61 per share on a fully diluted basis compared to $15.4 million or $.57 per fully diluted share in the same period in 2000. This represents a 7 percent increase in FFO per share on a fully diluted basis. Third quarter revenues were $55.5 million compared to $53.9 million in the third quarter of 2000. For the third quarter of 2001, average occupancy was 94.1 percent and average monthly base rent per site for the Core Portfolio was $376.67 up from $360.64 in the same period last year.

For the nine months ended September 30, 2001, FFO was $49.2 million or $1.83 per share on a fully diluted basis compared to $47.4 million or $1.71 per fully diluted share in the same period in 2000. This represents a 7 percent increase in FFO per share on a fully diluted basis. Revenues were $169.3 million compared to $165.3 million in the nine months ended September 30, 2001 and 2000, respectively. For the nine months ended September 30, 2001, average occupancy was 94.4 percent and average monthly base rent per site for the Core Portfolio was $374.33 up from $359.06 in the same period last year.

MHC's management projects that 2002 core property performance will continue in line with fundamentals. As of October 31, approximately 60 percent of the MHC portfolio will have received rent increase notices for 2002. The average rate increase will be approximately 5 percent. Core expense growth is expected to be in line with CPI except for higher property payroll costs due to employment related insurance increases and substantially higher costs related to property level insurance. MHC expects to fill approximately 250 expansion sites in 2002, while maintaining relatively stable occupancy levels. Based upon these factors, core net operating income is expected to increase by approximately 4 to 4.5 percent.

"We continue to have confidence in the performance of our Core portfolio," said Howard Walker MHC's CEO. He added, "However, recent events have increased the potential for volatility in our sales and marketing operation. We are monitoring the ability of our potential customers to sell their existing homes, the performance of the financial markets and local economic conditions for their impact on our customers' confidence levels."

2002 results will be impacted by 1) the recently completed sale of a single property for $10.8 million; and 2) the variability in home sales at MHC's affiliate, Realty Systems, Inc. (RSI). In the senior communities, RSI results could be impacted by the ability of potential homebuyers to sell their existing residence as well as by financial markets volatility. In the family communities, RSI results could be impacted by local economic conditions as well as by homebuyer credit availability.

Based upon the factors set forth above, MHC projects that 2002 FFO per share growth will be between 5 and 9 percent. In addition, due to the increased variability in home sales in the fourth quarter of 2001, MHC projects that FFO per share for the full year 2001 will range from $2.47 to $2.51 per share.

The forward-looking statements contained in this news release are subject to certain risks and uncertainties including, but not limited to, the Company's ability to maintain rental rates and occupancy; the Company's assumptions about rental and home sales markets levels; the effect of interest rates as well as other risks indicated from time to time in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

Manufactured Home Communities, Inc. owns or has a controlling interest in 148 quality communities in 23 states consisting of 50,747 sites. MHC is a self-administered, self-managed, real estate investment trust (REIT) with headquarters in Chicago.

A live webcast of the Company's conference call discussing these results will be available via the Company's website in the Investor Data section at www.mhchomes.com at 12:00 noon Central time today.

                     Manufactured Home Communities, Inc.
                           Selected Financial Data
                                 (Unaudited)
               (Amounts in thousands except for per share data)

                                Quarters Ended           Nine Months Ended
                             Sept. 30,   Sept. 30,     Sept. 30,   Sept. 30,
                               2001        2000          2001        2000
    Revenues
      Base rental income      $ 48,992   $ 47,218      $146,776    $141,776
      RV base rental income        722        560         3,207       5,435
      Utility and other income   4,976      4,973        17,392      15,701
      Equity in income
       of affiliates               682        857         1,359       1,649
      Interest income              164        267           552         731
        Total revenues          55,536     53,875       169,286     165,292
    Expenses
      Property operating
       and maintenance          15,434     14,653        46,778      44,471
      Real estate taxes          4,185      4,119        13,216      12,807
      Property management        2,221      2,072         6,735       6,631
      General and administrative 1,557      1,346         5,070       5,006
        Total expenses          23,397     22,190        71,799      68,915

    Operating income (EBITDA)   32,139     31,685        97,487      96,377
      Interest and related
       amortization            (12,610)   (13,169)      (38,920)    (39,654)
      Depreciation on
       corporate assets           (332)      (291)         (945)       (839)
      Income allocated to
       Preferred OP Units       (2,813)    (2,813)       (8,439)     (8,439)
    Funds from
     operations (FFO)         $ 16,384   $ 15,412      $ 49,183    $ 47,445

      Depreciation on real
       estate and other costs   (8,729)    (8,510)      (25,996)    (25,934)
      Gain on sale of properties
       and other                   ---        ---         8,093      12,053
      Extraordinary loss on
       early extinguishments
       of debt                     ---        ---           ---      (1,305)
      Income allocated to
       Common OP Units          (1,558)    (1,451)       (6,404)     (6,558)
    Net Income                $  6,097   $  5,451      $ 24,876    $ 25,701

    Net Income per
     Common Share - Basic     $    .29   $    .26      $   1.19    $   1.18
    Net Income per
     Common Share -
     Fully Diluted            $    .28   $    .25      $   1.16    $   1.16

    FFO per Common Share
     - Basic                  $    .62   $    .58      $   1.86    $   1.73
    FFO per Common Share
     - Fully Diluted          $    .61   $    .57      $   1.83    $   1.71

    Average Common Shares
     - Basic                    21,108     21,166        20,958      21,775
    Average Common Shares
     and OP Units - Basic       26,548     26,749        26,433      27,380
    Average Common Shares
     and OP Units -
     Fully Diluted              27,071     27,077        26,914      27,706


    Funds From Operations:
        The Company believes that Funds From Operations provide an indicator
    of its financial performance and is influenced by both the operations of
    the properties and the capital structure of the Company.  FFO is defined
    by the National Association of Real Estate Investment Trusts ("NAREIT") as
    net income (computed in accordance with generally accepted accounting
    principles ["GAAP"]), before allocation to minority interests, excluding
    gains (or losses) from sales of property, plus real estate depreciation.
    The Company computes FFO in accordance with the NAREIT definition, which
    may differ from the methodology for calculating FFO utilized by other
    equity REITs and, accordingly, may not be comparable to such other REITs.


                     Manufactured Home Communities, Inc.
                                 (Unaudited)

    Selected Balance Sheet Data:               As of               As of
                                           September 30,        December 31,
    (Amounts in thousands)                     2001                2000

    Total real estate, net                  $ 1,033,667         $ 1,036,596
    Cash and cash equivalents               $     5,065         $     2,847
    Total assets                            $ 1,108,913         $ 1,104,304

    Mortgage notes payable                  $   591,334         $   556,578
    Unsecured debt                          $   121,486         $   163,106
    Total liabilities                       $   764,837         $   764,938
    Minority interest                       $   171,153         $   171,271
    Total shareholder's equity              $   172,923         $   168,095



    Total Shares and OP Units Outstanding:     As of               As of
                                           September 30,        December 31,
                                               2001                2000

    Total Common Shares Outstanding          21,414,103          21,064,785
    Total Common OP Units Outstanding         5,439,874           5,514,330



    Site Totals:                               As of                As of
                                           September 30,        December 31,
                                               2001                 2000
    Manufactured Housing Sites
     Owned and Operated                          46,314              46,734
    Manufactured Housing Sites in Joint Ventures  1,521               1,521
    Total RV Sites                                3,497               3,197
      Total Sites                                51,332              51,452



    Site and Occupancy Averages:

                                Quarters Ended           Nine Months Ended
                             Sept. 30,   Sept. 30,     Sept. 30,   Sept. 30,
                               2001        2000          2001        2000

    Average total sites        46,313      46,718        46,412      47,043
    Average occupied sites     43,563      44,094        43,795      44,362
    Occupancy %                  94.1%       94.4%         94.4%       94.3%
    Monthly Base Rent
     Per Site                $ 374.87    $ 356.95      $ 372.38    $ 355.10
    Monthly Base Rent
     Per Site -
     Core Portfolio*         $ 376.67    $ 360.64      $ 374.33    $ 359.06

    (*) Represents rent per site for properties owned in both periods
        of comparison

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SOURCE Manufactured Home Communities, Inc.
Web site: http: //www.mhchomes.com
CONTACT: Marty McKenna of Manufactured Home Communities, +1-312-928-1901