Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

November 14, 1996

10-Q: Quarterly report pursuant to Section 13 or 15(d)

Published on November 14, 1996


SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1996

Commission File Number 1-12672

BAY APARTMENT COMMUNITIES, INC.
(Exact name of Registrant as specified in its Charter)

MARYLAND 77-0404318
(State of Incorporation) (I.R.S. Employer Identification No.)

4340 STEVENS CREEK BLVD., #275, SAN JOSE, CALIFORNIA 95129
(Address of principal executive offices, including zip code)

408-983-1500
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed
since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve (12) months (or such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past ninety (90) days:

YES X NO
--- ---

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.



Class Shares Outstanding Date
- ------------------------- ------------------ ----------------

Common, $0.01 par value 18,996,088 November 7, 1996
Preferred, Series A, $.01 2,308,800 November 7, 1996
par value
Preferred, Series B, $.01 405,022 November 7, 1996
par value

BAY APARTMENT COMMUNITIES, INC.
FORM 10-Q
INDEX




PART I - FINANCIAL INFORMATION Page
----

Item 1. Consolidated Financial Statements (unaudited):

Consolidated Balance Sheets as of September 30, 1996 and December 31, 1995 3

Consolidated Statements of Operations for the Quarters ended
September 30, 1996 and 1995 4

Consolidated Statements of Operations for the Nine months ended
September 30, 1996 and 1995 5

Consolidated Statements of Cash Flows for the Nine months ended
September 30, 1996 and 1995 6-7

Notes to Consolidated Financial Statements 8-15


Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. 16-23


PART II - OTHER INFORMATION


Item 1: Legal Proceedings 24

Item 2: Changes in Securities 24

Item 3: Defaults Upon Senior Securities 24

Item 4: Submission of Matters to a Vote of Security Holders 24

Item 5: Other Information 24

Item 6: Exhibits and Reports on Form 8-K 24-25

Signatures 26

PART I - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

BAY APARTMENT COMMUNITIES, INC.
CONSOLIDATED BALANCE SHEETS




September 30, December 31,
(Dollars in thousands, except per share data) 1996 1995
------------- ------------
(Unaudited)

ASSETS
Real estate assets:
Land $152,277 $ 97,334
Buildings and improvements 494,665 354,213
Furniture, fixtures and equipment 34,642 23,383
-------- --------
681,584 474,930
Less accumulated depreciation (47,274) (34,552)
-------- --------
Operating real estate assets 634,310 440,378
Construction in progress 50,145 23,280
-------- --------
Net real estate assets 684,455 463,658

Cash and cash equivalents 931 1,677
Restricted cash 787 --
Other assets, net 11,991 11,855
-------- --------
TOTAL ASSETS $698,164 $477,190
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable $257,684 $227,801
Accounts payable and accrued expenses 6,687 4,054
Dividends payable 8,714 5,420
Other liabilities 4,153 2,332
-------- --------
TOTAL LIABILITIES 277,238 239,607
-------- --------

Contingencies (Note 4) -- --
-------- --------
Minority interest 7,084 --
-------- --------
Shareholders' equity:

Preferred stock, $.01 par value; 25,000,000 shares authorized;
2,308,800 shares of Series A outstanding at both September 30, 1996
and December 31, 1995; 405,022 shares of Series B outstanding
at September 30, 1996 and no shares outstanding at December 31, 1995 27 23

Common stock, $.01 par value; 40,000,000 shares authorized;
18,990,826 shares outstanding at September 30, 1996;
11,544,287 shares outstanding at December 31, 1995 190 115

Paid-in capital 435,362 251,163

Dividends in excess of accumulated earnings (21,737) (13,718)
-------- --------
TOTAL SHAREHOLDERS' EQUITY 413,842 237,583
-------- --------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $698,164 $477,190
======== ========



The accompanying notes are an integral part of these consolidated financial
statements.

3
BAY APARTMENT COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)




Quarter ended Quarter ended
September 30, September 30,
(Dollars in thousands, except per share data) 1996 1995
------------- -------------

Revenues:
Rental $ 22,380 $ 13,284
Other 670 340
----------- -----------
Total revenues 23,050 13,624
----------- -----------
Expenses:
Property operating 5,407 3,375
Property taxes 1,840 1,065
General and administrative 997 711
Interest and financing 3,743 2,958
Depreciation and amortization 5,080 3,388
----------- -----------
Total expenses 17,067 11,497
----------- -----------

Income before minority interest 5,983 2,127
Minority interest 138 6
----------- -----------
Net income $ 5,845 $ 2,121
=========== ===========
Earnings per common share:
Income before minority interest $ 0.29 $ 0.18
Minority interest 0.01 --
----------- -----------
Earnings available per common share $ 0.28 $ 0.18
=========== ===========

Dividends declared per common share $ 0.40 $ 0.39
=========== ===========

Weighted average shares outstanding 16,796,991 11,544,287
=========== ===========




The accompanying notes are an integral part of these consolidated financial
statements.


4
BAY APARTMENT COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)



Nine Months Nine Months
ended ended
(Dollars in thousands, except per share data) September 30, 1996 September 30, 1995
------------------ ------------------

Revenues:
Rental $ 56,381 $ 37,262
Other 1,538 1,059
Gain on sale -- 2,412
----------- -----------
Total revenues 57,919 40,733
----------- -----------
Expenses:
Property operating 13,253 8,961
Property taxes 4,528 3,101
General and administrative 2,723 1,817
Interest and financing 10,850 8,431
Depreciation and amortization 13,277 9,949
----------- -----------
Total expenses 44,631 32,259
----------- -----------
Income before minority interest and
extraordinary item 13,288 8,474
Minority interest 165 14
----------- -----------
Income before extraordinary item 13,123 8,460
Extraordinary item 511 --
----------- -----------
Net income $ 12,612 $ 8,460
=========== ===========
Earnings per common share:
Income before minority interest and
extraordinary item $ 0.74 $ 0.73
Minority interest 0.01 --
----------- -----------
Income before extraordinary item 0.73 0.73
Extraordinary item 0.04 --
----------- -----------
Earnings available per common share $ 0.69 $ 0.73
=========== ===========

Dividends declared per common share $ 1.20 $ 1.16
=========== ===========

Weighted average shares outstanding 13,643,066 11,544,287
=========== ===========



The accompanying notes are an integral part of these consolidated financial
statements.


5
BAY APARTMENT COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)



Nine Months Nine Months
ended ended
(Dollars in thousands) September 30, 1996 September 30, 1995
------------------ ------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 12,612 $ 8,460
Gain on sale -- (2,412)
NONCASH EXPENSES INCLUDED IN NET INCOME:
Depreciation and amortization 13,277 9,949
Minority interest 165 14
Extraordinary item 511 --

CASH PROVIDED BY (USED FOR) OPERATING ASSETS AND LIABILITIES:
Restricted cash (787) 1,000
Other assets (1,202) (4,844)
Accounts payable and accrued expenses 2,633 (154)
Other liabilities 1,821 435
--------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 29,030 12,448
--------- --------
CASH FLOWS PROVIDED BY (USED FOR) INVESTING ACTIVITIES:
Proceeds from sale, net -- 17,487
Capital expenditures (871) (452)
Acquisition of properties (144,043) (13,565)
Construction in progress (53,467) (26,230)
--------- --------
NET CASH USED FOR INVESTING ACTIVITIES (198,381) (22,760)
--------- --------
CASH FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES:
Proceeds from stock offerings, net of offering costs 183,507 --
Proceeds from exercise of stock options 476 --
Borrowings on notes payable -- 13,765
Notes payable principal payments (306) (224)
Borrowings on construction notes payable 21 --
Borrowings on lines of credit 157,000 39,828
Repayments on lines of credit (154,700) (32,163)
Partner and minority interest distributions (56) (45)
Dividends paid (17,337) (13,276)
--------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 168,605 7,885
--------- --------

Decrease in cash and cash equivalents (746) (2,427)

Cash and cash equivalents, beginning of period 1,677 4,698
--------- --------

Cash and cash equivalents, end of period $ 931 $ 2,271
========= ========





6
BAY APARTMENT COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) (CONT.)



Nine Months Nine Months
ended ended
(Dollars in thousands) September 30, 1996 September 30, 1995
------------------ ------------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the period for:


Interest (net of amount capitalized) $10,935 $ 8,431
======= =======

Supplemental disclosures of noncash
investing and financing activities:


Noncash transfers of construction in progress $26,602 $45,302
======= =======

Assumption of notes payable by the Company $27,868 $10,561
======= =======

Contribution of minority interest $ 7,270 $ --
======= =======

Dividends declared but not paid $ 8,714 $ 4,502
======= =======


The accompanying notes are an integral part of these consolidated financial
statements.




7
BAY APARTMENT COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:

Organization, Initial Public Offering and Subsequent Offerings

Bay Apartment Communities, Inc. (the "Company") was formed in 1978 to
develop, lease and manage upscale apartment communities. Before March 17, 1994,
the Company was a part of the Greenbriar Group which consisted of Bay Apartment
Communities, Inc. and certain affiliated entities. The Greenbriar Group included
one land parcel held for future development, 12 apartment communities
transferred to the Company in the reorganization transactions and the
partnerships that held 11 of these apartment communities. The Greenbriar Group
became Bay Apartment Communities, Inc. as a result of certain reorganization
transactions in connection with the sale of shares of common stock in an initial
public offering. Also included in this reorganization was the combination of
building and management affiliates into the Company. The Company is a
self-administered and self-managed real estate investment trust ("REIT") which
acquires, builds, owns and manages apartment communities primarily in Northern
California. At September 30, 1996, the Company owned 34 apartment communities,
comprising 8,586 apartment homes.

On March 17, 1994, the Company completed its initial public offering of
10,889,742 shares of common stock, and received $199,998 in net proceeds (the
"Initial Offering"). The net proceeds were used to pay off mortgage debt,
purchase five apartment communities, purchase outside partners' partnership
interests, and pay debt origination costs (primarily legal fees). In October,
1995, the Company issued 2,308,800 shares of Series A preferred stock for a net
amount of approximately $48,269 (the "1995 Offering"). The proceeds were used to
purchase land for future construction, pay off and close a construction loan and
pay down debt on credit lines which were subsequently drawn on to purchase
apartment communities. In May, 1996, the Company issued 1,248,191 shares of
common stock in a direct placement and 413,223 shares of common stock and
405,022 shares of Series B preferred stock in an underwritten offering
(collectively, the "1996 Offerings"), and received approximately $49,481 in net
proceeds. The proceeds were used to purchase three communities, Park Centre,
Parkside Commons, and Sunset Towers, and repay borrowings on a secured credit
facility. Both secured credit facilities were subsequently closed, resulting in
the write-off of $511, representing unamortized loan and non-use fees, which was
recorded as an extraordinary item. On August 5, 1996, the Company completed an
underwritten public offering of 5,750,000 shares of common stock and received
$134,026 in net proceeds. The net proceeds were used to purchase two apartment
communities acquired after the closing of the offering, Channing Heights and
Martinique Gardens, and to repay amounts borrowed under the unsecured line of
credit, including amounts borrowed to purchase four apartment communities
acquired prior to the closing of the offering; Countrybrook, Larkspur Canyon
(formerly Villa Marguerite), The Fountains, and Mill Creek.

The interim unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and in conjunction with the rules and regulations of the Securities
and Exchange Commission ("SEC"). Certain information and footnote disclosures
normally included in financial statements required by generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. These unaudited financial statements should be read in conjunction
with the financial statements and notes thereto included in the Company's Annual
Report on Form 10-K for the period ended December 31, 1995. The results of
operations for the quarter ended September 30, 1996 are not necessarily
indicative of the operating results for the full year. Management believes that
the disclosures are adequate to make the information presented not misleading.
In the opinion of management, all adjustments and eliminations, consisting only
of normal, recurring adjustments necessary for a fair presentation of the
financial statements for the interim periods have been included.




8
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Principles of Consolidation

The accompanying consolidated financial statements include the accounts
of the Company, and its wholly-owned partnerships and subsidiaries. The
accompanying consolidated financial statements also include the accounts of Bay
Countrybrook L.P., a Delaware limited partnership (the "Partnership"). The
general partner of the Partnership is a wholly-owned subsidiary of the Company,
Bay G.P., Inc., a Maryland corporation. All significant intercompany balances
and transactions have been eliminated in consolidation.

Bay Countrybrook L.P.

In connection with the formation of the Partnership, 298,577 units of
limited partnership interests ("Units") were issued to the existing partners of
the contributor of the Countrybrook community. Under the terms of the limited
partnership agreement, holders of Units have the right to require the
Partnership to redeem their Units for cash, subject to certain conditions. The
Company may, however, elect to deliver an equivalent number of shares of common
stock to the holders of Units in satisfaction of the Partnership's obligation to
redeem the Units for cash.

Operating Real Estate Assets

Subsequent to occupancy, significant expenditures, generally exceeding
$5, which improve or extend the life of the asset are capitalized. The operating
real estate assets are stated at cost and consist of land, buildings and
improvements, furniture, fixtures and equipment, and other costs incurred during
development and construction and reconstruction.

Apartment homes available for occupancy are generally leased on a one
year or less basis. Rental income and operating costs incurred during the
initial lease-up period are fully recognized as they accrue.

Capitalization of Costs During Development and Reconstruction

Cost capitalization during development of constructed assets (including
interest and related loan fees, property taxes and other direct and indirect
costs) begins when active development commences and ends when the asset is
delivered and a certificate of occupancy is issued. Cost capitalization during
reconstruction of acquired assets (including interest and related loan fees,
property taxes and other direct and indirect costs) begins when apartment homes
are taken out of service for reconstruction and ends when the apartment home
reconstruction is complete and placed in service.

Depreciation

Depreciation is calculated on operating real estate assets using the
straight-line method over their estimated useful lives, which range from ten to
thirty years. Furniture, fixtures and equipment are generally depreciated using
the straight-line method over their estimated useful lives, which range from
five to seven years.

Income Taxes

The Company has elected to be taxed as a REIT under the Internal
Revenue Code of 1986, as amended, (the "Code") beginning with the tax year which
ended December 31, 1994. A corporate REIT is a legal entity which holds real
estate interests and through certain levels of payments of dividends to
shareholders and other criteria, is permitted to reduce or avoid the payment of
federal and state income taxes at the corporate level. As a result, the Company
will not be subject to federal and state income taxation at the corporate level
if certain requirements are met. Accordingly, no provision for federal and state
income taxes has been made.



9
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Deferred Financing Costs

Included in other assets, net are costs associated with obtaining debt
financing and credit enhancements. Such costs are being amortized over the term
of the associated debt or credit enhancement.

Cash and Cash Equivalents

Cash and cash equivalents include all cash and liquid investments with
an original maturity of three months or less from the date acquired. Interest
income amounted to $58 and $61 for the quarters ended September 30, 1996 and
1995, respectively.

Earnings per Share

Earnings per share with respect to the Company for the quarters ended
September 30, 1996 and 1995 is computed based upon the weighted average number
of common shares outstanding during the period plus (in periods where they have
a dilutive effect) the net additional number of shares which would be issuable
upon the exercise of stock options assuming that the Company used the proceeds
received to repurchase outstanding shares at market prices.

Additionally, other potentially dilutive securities, which may not
qualify as common stock equivalents, are considered when calculating earnings
per share on a primary and fully diluted basis. No such securities were
outstanding during the quarter ended September 30, 1995, and the assumed
conversion of such securities during the quarter ended September 30, 1996,
results in an antidilutive effect; therefore, earnings per share presentation on
a primary and fully diluted basis is unnecessary. Earnings per share is net of
the preferred stock dividends declared for the period, which were $1,118 and
$3,118 for the quarter ended and nine months ended September 30, 1996,
respectively. No preferred stock was outstanding during the nine months ended
September 30, 1995.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.

Concentration of Geographic Risk

Primarily all of the Company's apartment communities are located in
Northern California and most are located in the San Francisco Bay Area. This
geographic concentration could expose the Company to a significant loss should
one event affect the entire area such as an economic downturn, an earthquake or
other environmental event.

Financial Instruments

The Company enters into interest rate swap agreements (the "Swap
Agreements"), with parties whose credit ratings by Standard and Poor's Ratings
Group are AAA to limit the Company's exposure should interest rates rise above
specified levels. The Swap Agreements are held for purposes other than trading.
The amortization of the cost of the Swap Agreements is included in amortization
expense. The remaining unamortized cost of the Swap Agreements is included as
"Other Assets" on the balance sheet.


10
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Newly Issued Accounting Standards

In October 1995, Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-based Compensation" ("SFAS 123"), was issued. This
statement requires the fair value of stock options and other stock-based
compensation issued to employees to be either included as compensation expense
in the income statement, or the pro forma effect on net income and earnings per
share of such compensation expense to be disclosed in the footnotes to the
Company's financial statements commencing in 1996. The Company expects to adopt
SFAS 123 on a disclosure basis only. As such, implementation of SFAS 123 is not
expected to impact the Company's consolidated balance sheet or income statement.

2. INTEREST CAPITALIZED

Interest costs associated with projects under development or
reconstruction aggregating $894 for the quarter ended September 30, 1996 and
$1,132 for the quarter ended September 30, 1995 have been capitalized.


11
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)


3. NOTES PAYABLE



September 30, December 31,
1996 1995
------------- ------------

Tax-exempt variable rate under interest rate swaps:

Foxchase I and II and Fairway Glen are encumbered by first deeds of trust which
collateralize three housing bond issues maturing November 1, 2007. The Company
has entered into an interest rate swap agreement with a financial institution
under which the interest rate is fixed until March, 2004 at a total of 5.88%,
interest only. The bonds contain covenants which require 20% of the units to be
leased or held available for lease to low or moderate income families. $35,980 $35,980

Waterford and Villa Mariposa are encumbered by first deeds of trust which
collateralize two housing bond issues. The Company has entered into an interest
rate swap agreement with a financial institution under which the interest rate
is fixed until March, 2004 at a total of 5.88%, interest only. Such bonds
require monthly payments of interest only and mature on August 1, 2014 and March
1, 2017, respectively. The bonds contain covenants which require 20% of the
units to be leased or held available for lease to low or moderate income
families. 51,400 51,400

Barrington Hills is encumbered by a first deed of trust which collateralizes
housing bond issues maturing June 15, 2025, fully amortizing over the term. The
Company has entered into an interest rate swap agreement under which the
interest rate is fixed until June, 2010 at an effective rate of 6.48% including
the amortization of financing costs. The bonds contain covenants which require
20% of the units to be leased or held available for lease to low or moderate
income families. 13,376 13,482

Crossbrook is encumbered by a first deed of trust which collateralizes housing
bond issues maturing June 15, 2025, fully amortizing over the term. The Company
has entered into an interest rate swap agreement under which the interest rate
is fixed until June, 2010 at an effective rate of 6.48% including the
amortization of financing costs. The bonds contain covenants which require 20%
of the units to be leased or held available for lease to low or moderate income
families. 8,601 8,667

Rivershore is encumbered by a first deed of trust which collateralizes housing
bond issues maturing November 15, 2022, fully amortizing over the term. The
Company has entered into an interest rate swap agreement under which the
interest rate is fixed until June, 2010 at an effective rate of 6.48% including
the amortization of financing costs. The bonds contain covenants which require
20% of the units to be leased or held available for lease to low or moderate
income families. 10,478 10,572



12


September 30, December 31,
1996 1995
------------- ------------

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)


Canyon Creek is encumbered by a first deed of trust which collateralizes housing
bond issues maturing June 15, 2025, fully amortizing over the term. The Company
has entered into an interest rate swap agreement under which the interest rate
is fixed until June, 2010 at an effective rate of 6.48% including the
amortization of financing costs. The bonds contain convenants which require 20%
of the units to be leased or held available for lease to low or moderate
income families. 38,800 38,800

Sea Ridge is encumbered by a first deed of trust which collateralizes housing
bond issues maturing June 15, 2025, fully amortizing over the term. The Company
has entered into an interest rate swap agreement under which the interest rate
is fixed until June, 2010 at an effective rate of 6.48% including the
amortization of financing costs. The bonds contain convenants which require 20%
of the units to be leased or held available for lease to low or moderate income
families. 17,600 17,600
------- -------

Subtotal 176,235 176,501
------- -------

Tax-exempt fixed rate:

Countrybrook is encumbered by a first deed of trust which collateralizes housing
bond issues maturing March 1, 2012, partially amortizing over the term. The
interest rate on the bonds is fixed until April, 2002 at an effective interest
rate of 7.87% including the amortization of financing costs. The bonds contain
covenants which require 20% of the units to be leased or held available for
lease to low or moderate income families. 20,193 --
------- -------

Subtotal 20,193 --
------- -------
Tax-exempt variable rate:

City Heights is encumbered by a first deed of trust which collateralizes housing
bond issues maturing March 1, 2018. Interest only payments are required monthly
at a variable rate set weekly by the remarketing agent (6.37% at September 30,
1996 and 6.81% at December 31, 1995 including the amortization of financing
costs). The bonds contain convenants which require 20% of the units to be leased
or held available for lease to low or moderate income families. The bonds have
been placed with an institutional investor who has the right to require the
Company to repurchase the bonds by March 10, 1997. The Company currently has the
right to repurchase the bonds at its option. 20,800 20,800

Larkspur Canyon (formerly Villa Marguerite) is encumbered by a first deed of
trust which collateralizes housing bond issues maturing March 1, 2023. Interest
only payments are required monthly at a variable rate set weekly by the
remarketing agent (5.65% at September 30, 1996 including the amortization of
financing costs). The bond payments are secured by a $7,823 irrevocable direct
pay letter of credit. The bonds contain covenants which require 20% of the units
to be leased or held available for lease to low or moderate income families. 7,635 --
------- -------

Subtotal 28,435 20,800
------- -------


13


September 30, December 31,
1996 1995
------------- ------------

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Construction Note Payable:

Construction note payable with an aggregate amount available of $25,500 bearing
interest at LIBOR plus 2.15%. This note is collateralized by a first deed of
trust on the Rosewalk at Waterford Park community. 21 --
-------- --------
Subtotal 21 --
-------- --------
Credit Lines:

Line of credit with an aggregate amount available of $80,000 maturing December,
1996 and collateralized by the Sommerset and Regatta Bay communities. This line
bears interest at the 30-day LIBOR rate plus 2.25%. Interest only payments are
required monthly. Based on the assets pledged as collateral, there was $18,062
available under this line at December 31, 1995. This line was closed in May,
1996. -- --

Line of credit with an aggregate amount available of $47,000 maturing December,
1997 and collateralized by the Hampton Place and Carriage Square communities
This line bears interest at the prime rate or various LIBOR rates plus 1.60%
This line was closed in May, 1996. -- 30,500

Unsecured line of credit with an aggregate amount available of $200,000
maturing May, 1999. This line bears interest at various LIBOR rates plus 1.55%. 32,800 --
-------- --------
Subtotal 32,800 30,500
-------- --------
Total Notes Payable $257,684 $227,801
======== ========


Principal payments on outstanding notes payable as of September 30, 1996 are due
as follows:



1996 $ 20,954
1997 1,051
1998 1,395
1999 34,299
2000 1,611
Thereafter 198,374
--------
Total $257,684
========


4. CONTINGENCIES

The Company is subject to various legal proceedings and claims that
arise in the ordinary course of business. These matters are generally covered by
insurance. While the resolution of these matters cannot be predicted with
certainty, management believes that the final outcome of such matters will not
have a material adverse effect on the financial position or results of
operations of the Company.




14
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

5. SUBSEQUENT EVENTS

On October 9, 1996, the Company paid off the remaining balance of $21
and terminated the construction note payable that was collateralized by a first
deed of trust on the Rosewalk at Waterford Park community.

As of November 8, 1996, the Company had elected to issue 3,812 shares
of common stock to limited partners of Bay Countrybrook L.P. who had requested a
redemption of their partnership units for cash. 2,287 of these shares had been
issued as of November 8, 1996.




15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

This Form 10-Q contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 including, without limitation, statements relating to
development activities of the Company. Although the Company believes that the
expectations reflected in such forward-looking statements are based on
reasonable assumptions, the Company's actual results and performance of
development communities could differ materially from those set forth in the
forward-looking statements. Certain factors that might cause such a difference
include general economic conditions, local real estate conditions, construction
delays due to unavailability of materials, weather conditions or other delays
and those factors discussed below in this Form 10-Q.

RESULTS OF OPERATIONS

The following discussion sets forth historical results of operations
for the Company for the quarters ended September 30, 1996 and 1995. The
following table outlines the communities acquired or leased-up during 1995 and
1996:



1995 ACQUISITION 1995 DEVELOPMENT
COMMUNITIES COMMUNITIES
----------- -----------
COMMUNITY DATE ACQUIRED COMMUNITY STATUS
- --------- ------------- --------- ------
Sea Ridge February 17, 1995(a) Carriage Square (b)
Rivershore April 28, 1995 Canyon Creek (c)
City Heights October 19, 1995
Promenade October 25, 1995
The Pointe December 12, 1995



1996 QUARTER 2 ACQUISITION 1996 DEVELOPMENT
COMMUNITIES COMMUNITIES
----------- -----------
COMMUNITY DATE ACQUIRED COMMUNITY STATUS
- --------- ------------- --------- ------
Park Centre May 15, 1996 Rosewalk (d)
Parkside Commons May 15, 1996 Lawrence Exprway. Site (e)
Sunset Towers May 22, 1996 Stevens Creek Blvd. Site (f)
The Alameda Site (g)


1996 QUARTER 3 ACQUISITION
COMMUNITIES
-----------
COMMUNITY DATE ACQUIRED
- --------- -------------
Countrybrook July 12, 1996
Larkspur Canyon July 19, 1996
(formerly Villa Marguerite)
The Fountains July 26, 1996
Mill Creek July 26, 1996
Channing Heights August 7, 1996
Martinique Gardens August 7, 1996




16


The 1995 and 1996 Quarter 2 and 3 Acquisition Communities and the 1995
and 1996 Development Communities are collectively termed the "Acquisition
Communities."

(a) Under significant renovation commencing July, 1995 and under lease-up in
1996.

(b) Occupancy commenced in January, 1995 and operations stabilized in October,
1995.

(c) Occupancy commenced in April, 1995 and operations stabilized in December,
1995.

(d) Lease-up commenced in June, 1996, occupancy commenced in August, 1996 and
operations are expected to be stabilized in June, 1997.

(e) Purchased on May 16, 1996, occupancy is expected to commence in June, 1997
and operations are expected to be stabilized in December, 1998.

(f) The Company purchased 2.5 acres of this site on April 26, 1996 and has
entered into a contract to acquire the contiguous 5.4 acres. If the
contiguous site is acquired and the planned community is developed,
occupancy is expected to commence in March, 1998 and operations are
expected to be stabilized in December, 1998.

(g) The Company has entered into contracts to acquire two sites. If the sites
for this development are acquired and the planned community is developed,
occupancy is expected to commence in June, 1998 and operations are expected
to be stabilized in June, 1999.

There are risks associated with the Company's development and
construction activities which include: development and acquisition opportunities
explored by the Company may be abandoned; construction costs of a community may
exceed original estimates due to increased materials, labor or other expenses,
which could make completion of the community uneconomical; occupancy rates and
rents at a newly completed community are dependent on a number of factors,
including market and general economic conditions, and may not be sufficient to
make the community profitable; financing may not be available on favorable terms
for the development of a community; and construction and lease-up may not be
completed on schedule, resulting in increased debt service expense and
construction costs. Development activities are also subject to risks relating to
the inability to obtain, or delays in obtaining, all necessary zoning, land-use,
building, occupancy, and other required governmental permits and authorizations.
The occurrence of any of the events described above could adversely affect the
Company's ability to achieve its projected yields on communities under
development or reconstruction and could prevent the Company from making expected
distributions.

Acquisitions entail risks that investments will fail to perform in
accordance with expectations and that judgments with respect to the cost of
improvements to bring an acquired community up to standards established for the
market position intended for that community will prove inaccurate, as well as
general investment risks associated with any new real estate investment.
Although the Company undertakes an evaluation of the physical condition of each
new community before it is acquired, certain defects or necessary repairs may
not be detected until after the community is acquired, which could significantly
increase the Company's total acquisition costs.


17
COMPARISON OF THE QUARTER ENDED SEPTEMBER 30, 1996 TO THE QUARTER ENDED
SEPTEMBER 30, 1995.

The Company's results of operations are summarized as follows for the quarters
ended September 30, 1996 and 1995:


For the quarter
ended September 30,
---------------------
(Dollars in thousands) 1996 1995 $-Change %-Change
------- ------- ------- --------

Revenues:
Rental $22,380 $13,284 $ 9,096 68.5%
Other 670 340 330 97.1%
------- ------- -------
Total revenues 23,050 13,624 9,426 69.2%
------- ------- -------
Expenses:
Property operating 5,407 3,375 2,032 60.2%
Property taxes 1,840 1,065 775 72.8%
General and administrative 997 711 286 40.2%
Interest and financing 3,743 2,958 785 26.5%
Depreciation and amortization 5,080 3,388 1,692 49.9%
------- ------- -------
Total expenses 17,067 11,497 5,570 48.5%
------- ------- -------

Income before minority interest 5,983 2,127 3,856 181.3%
Minority interest 138 6 132 2,200.0%
------- ------- -------

Net income $ 5,845 $ 2,121 $ 3,724 175.6%
======= ======= =======


Revenues from rental property increased primarily as a result of the
addition of the Acquisition Communities. The 1995 Acquisition Communities
contributed $2,923 for the quarter ended September 30, 1996, versus $765 for the
quarter ended September 30, 1995. The 1995 Development Communities contributed
$2,482 for the quarter ended September 30, 1996, versus $1,606 for the quarter
ended September 30, 1995. The 1996 Quarter 2 Acquisition Communities and the
1996 Quarter 3 Acquisition Communities contributed $1,941 and $2,756,
respectively. Rosewalk contributed $159. The remainder of the increase was from
the remaining communities. The Acquisition Communities also contributed to the
majority of the increase in other income.

Property operating expenses increased primarily as a result of the
addition of the Acquisition Communities. Of the $2,032 increase, $541 was
attributable to the 1995 Acquisition Communities, $35 was attributable to the
1995 Development Communities, $495 was attributable to the 1996 Quarter 2
Acquisition Communities, $525 was attributable to the 1996 Quarter 3 Acquisition
Communities, and $75 was attributable to Rosewalk with the remainder of the
increase attributable to the remaining communities. In addition, property tax
increased primarily as a result of the addition of the Acquisition Communities.

General and administrative costs increased for the quarter ended
September 30, 1996 as compared with the quarter ended September 30, 1995,
primarily due to the growth in employee-related costs needed to manage the
Acquisition Communities. The 1996 and 1995 amounts are net of $592 and $177,
respectively, of allocated indirect project costs capitalized to construction
and reconstruction projects, representing approximately 37% and 20% of total
general and administrative expense for the quarters ended September 30, 1996 and
1995, respectively.

Interest and financing expense increased for the quarter ended
September 30, 1996 as compared to the quarter ended September 30, 1995 due to
higher balances of debt and related interest expense on the Acquisition
Communities, offset in part by a lower overall cost of funds.

Depreciation and amortization expense increased due to the addition of
the Acquisition Communities.


18
THE COMPANY'S RESULTS OF PROPERTY OPERATIONS (EARNINGS BEFORE INTEREST, TAXES
AND DEPRECIATION - "EBITDA") ON A "SAME STORE" BASIS (SEE NOTE 1) IS SUMMARIZED
BELOW FOR THE QUARTERS ENDED SEPTEMBER 30, 1996 AND 1995:




For the quarter(1)
ended September 30,
--------------------------
(Dollars in thousands) 1996 1995 $-Change %-Change
------ ------ -------- --------

Revenues $9,862 $8,820 $1,042(2) 11.8%
Expenses 2,876 2,799 77(3) 2.8%
------ ------ ------
EBITDA $6,986 $6,021 $ 965 16.0%
====== ====== ======




(1) Includes the communities owned upon the Initial Offering and four
acquisitions comprising a total of 3,330 apartment homes.

(2) Same Store revenues increased due to rental increases of $856, vacancy
reductions of $102, concession reductions of $65 and a net other income
increase of $19.

(3) Same Store expenses increased primarily due to increases in insurance,
repairs and maintenance, property taxes and utilities offset in part by
reductions in management and administrative costs, turnover costs and
marketing and advertising costs.




19
LIQUIDITY AND CAPITAL RESOURCES

In May, 1996, the Company replaced both its $80 million secured credit
facility and its $47 million secured credit facility (the "Credit Facilities")
with a new, three year, $150 million unsecured line of credit. In August, 1996,
the Company expanded this unsecured line of credit to $200 million (the
"Unsecured Line of Credit"). The Company paid non-refundable fees totaling
$800,000 so that the lender would make the unsecured line available for
construction purposes. These fees are capitalized against the construction
projects to which the line relates. The Unsecured Line of Credit matures in May,
1999 and currently bears interest at various LIBOR rates plus 1.55%.

The Company has considered its short-term liquidity needs and
anticipates that these needs will be fully funded from cash flows provided by
operating activities. The Company believes that its principal short-term
liquidity needs are to fund normal recurring expenses, debt service requirements
and the distributions required to maintain the Company's REIT qualification
under the Code.

The Company expects to fund certain committed construction, acquisition
and rehabilitation projects with a combination of working capital and the
Unsecured Line of Credit. The Company intends to use available working capital
first and available proceeds under its Unsecured Line of Credit second.

The Company's outstanding debt as of September 30, 1996 is summarized as
follows:



Interest Rate
(Dollars in thousands) Balance Available Matures Rate Protection
------- --------- ------- ---- ----------

Tax-exempt variable rate
under interest rate swap $ 88,855 $ -- November, 2022 - 6.48%(a) Interest rate is
June, 2025 fixed until June, 2010.
Tax-exempt variable rate
under interest rate swap 87,380 -- November, 2007 - 5.88%(b) Interest rate is
March, 2017 fixed until March, 2004.

Tax-exempt fixed rate 20,193 -- March, 2012 7.87%(c)

Tax-exempt variable rate 20,800 -- March, 2018 6.37%(d)

Tax-exempt variable rate 7,635 -- March, 2023 5.65%(e)
-------- --------

Subtotal 224,863 --

$200,000 Unsecured
Line of Credit(f) 32,800 167,200 May, 1999 Libor + 1.55%

Rosewalk
Construction loan(g) 21 25,479 October, 1997 Libor + 2.15%
-------- --------

Total $257,684 $192,679
======== ========



(a) The 6.48% rate represents an all-in financing cost, including
amortization of deferred financing costs.

(b) The 5.88% rate excludes the amortization of financing costs paid by the
sponsor prior to the Initial Offering; if such costs were included, the
all-inclusive effective rate would be 6.30%.

(c) The 7.87% rate represents an all-in financing cost, including
amortization of deferred financing costs, and is fixed until April, 2002.


20
(d) The 6.37% rate represents an all-in financing cost, including
amortization of all deferred financing costs. The Company has the right
to repurchase these bonds and currently plans to repurchase and reissue
them on a long term fixed rate basis by March 10, 1997.

(e) The 5.65% rate represents an all-in financing cost, including
amortization of all deferred financing costs. The debt floats in a
seven-day put bond mode with a current interest rate of 3.75%.

(f) The Unsecured Line of Credit balance was used for development and
construction purposes.

(g) The Company paid off and terminated this loan on October 9, 1996.

The Company anticipates that its cash flow and cash available from the
Unsecured Line of Credit will be adequate to meet its liquidity requirements for
the foreseeable future. The Company anticipates that dividends will be paid from
Funds from Operations.

Net cash provided by operations for the nine months ended September 30,
1996 increased to $29,030 from $12,448 for the nine months ended September 30,
1995, primarily due to higher net income and non-cash charges to net income from
the addition of the Acquisition Communities and increases in short-term
liability balances. Additionally, less net cash was used for other asset
purchases during the nine months ended September 30, 1996 than the nine months
ended September 30, 1995.

Net cash used for investing activities was $198,381 and $22,760 for the
nine months ended September 30, 1996 and 1995, respectively. This increase
reflects the expenditures for the purchases of the 1996 Quarter 2 and 3
Acquisition Communities as well as the purchases of the Lawrence Expressway Site
and the Stevens Creek Boulevard Site. Additionally, there were net increases in
amounts used to complete the Rosewalk community, as well as other refurbishment
and reconstruction projects.

Net cash provided by financing activities was $168,605 and $7,885 for
the nine months ended September 30, 1996 and 1995, respectively. The net cash
provided from financing activities in 1996 reflects primarily the net proceeds
from the 1996 Offerings and the August 5, 1996 public offering less dividends
paid.

INFLATION

Substantially all of the leases at the Company's apartment communities
are for a term of one year or less, which will enable the Company to counter the
adverse effects of inflation by increasing rents upon renewal of existing leases
or commencement of new leases. However, these short-term leases permit a
resident to leave at the end of the lease term at minimal cost to the resident.


FUNDS FROM OPERATIONS AND FUNDS AVAILABLE FOR DISTRIBUTION

Many industry analysts consider Funds from Operations an appropriate
measure of performance of an equity REIT. Funds from Operations ("FFO") as
defined by the National Association of Real Estate Investment Trusts ("NAREIT"),
means net income (or loss) (computed in accordance with generally accepted
accounting principles), excluding gains (or losses) from debt restructuring and
sales of property, plus depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. This definition was revised by
NAREIT effective for periods after 1995 to exclude the add-back of non-real
estate depreciation and the amortization of recurring deferred financing costs
("FFO-revised definition"). The Company believes that in order to facilitate a
clear understanding of the historical operating results, FFO and FFO-revised
definition should be examined in conjunction with net income (loss) as presented
in the financial statements. FFO and FFO-revised definition should not be
considered as a substitute for net income (loss) as a measure of results of
operations or for cash flow from operations as a measure of liquidity.


21
For the quarter ended September 30, 1996, FFO-revised definition
increased from $5,287 to $10,831 from the quarter ended September 30, 1995. This
increase is primarily due to higher net income and depreciation add-back due to
the addition of the Acquisition Communities.

Funds from Operations and Funds Available for Distribution for the
quarters ended September 30, 1996, June 30, 1996, March 31, 1996, December 31,
1995 and September 30, 1995, are summarized as follows:


CALCULATION OF FUNDS FROM OPERATIONS AND FUNDS AVAILABLE FOR DISTRIBUTION




---------Quarter Ended---------

Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
1996 1996 1996 1995 1995
---- ---- ---- ---- ----

(Dollars in thousands)
Net income $ 5,845 $ 3,572 $ 3,195 $ 3,000 $ 2,121
Depreciation - real estate assets 4,899 4,008 3,692 3,380 3,044
Extraordinary item -- 511 -- -- --
Amortization of non-recurring costs,
primarily legal, from the issuance
of tax-exempt bonds(1) 87 88 95 152 122
----------- ----------- ----------- ----------- -----------
Subtotal - FFO
revised definition(2) 10,831 8,179 6,982 6,532 5,287

Recurring adjustments to net income:
Amortization of origination fees
on Credit Facilities(3) -- 41 104 159 152
Amortization of reincorporation costs 7 7 7 -- --
Amortization of credit
enhancement costs(4) 38 38 38 38 38
Depreciation - non-real estate assets 49 38 35 36 32
----------- ----------- ----------- ----------- -----------
Subtotal-FFO 10,925 8,303 7,166 6,765 5,509

Capital improvements(5) (457) (252) (162) (241) (157)
Loan principal payments (131) (88) (88) (72) (94)
----------- ----------- ----------- ----------- -----------
Funds Available for Distribution ("FAD") $ 10,337 $ 7,963 $ 6,916 $ 6,452 $ 5,258
=========== =========== =========== =========== ===========
Weighted average shares outstanding(6) 19,686,087 15,205,997 13,969,068 13,927,603 11,544,287
=========== =========== =========== =========== ===========



(1) Represents the amortization of pre-1986 bond issuance costs carried
forward to the Company, under the pooling of interest method of
accounting, and costs associated with the reissuance of tax-exempt bonds
incurred prior to the Initial Offering in order to preserve the
tax-exempt status of the bonds at the Initial Offering.

(2) FFO before recurring amortization represents the revised definition of
FFO adopted by the NAREIT Board of Governors for periods after 1995.

(3) Represents origination fees and costs incurred at the initial setup of
the Credit Facilities. Such costs are amortized over the life of the
respective Credit Facilities. These Credit Facilities were closed in May,
1996 and the unamortized loan fees were recorded as an extraordinary
item.

(4) Represents origination fees and costs incurred at the initial setup of
the credit enhancements used for the issuance of tax-exempt bonds. Such
costs are amortized over the life of the respective credit enhancements.


22
(5) Capital improvements represent amounts expended at communities acquired
or developed prior to 1995. A breakdown of expenditures is as follows:




Total Per Unit
(Dollars in thousands, except Quarter ended Quarter ended
per unit data) September 30, 1996 September 30, 1996
------------------ ------------------

Non-revenue generating:
Exterior painting $161 $19
Leasing pavilion construction 119 14
Fitness center equipment 24 3
Other capital improvements 52 6
---- ---
Subtotal 356 42
---- ---
Revenue generating:
Fixtures 71 8
Appliances 30 3
---- ---
Subtotal 101 11
---- ---
Total Improvements $457 $53
==== ===


The Company, as a matter of policy, expenses any apartment-related
expenditure less than $5,000. These normally include any expenditure
related to the interior of an apartment. The Company typically
capitalizes non-revenue generating expenditures such as those for new
security gate systems, leasing pavilion reconstruction and redecorating,
roofing repair and replacement, exterior siding repair and repainting and
parking area resurfacing. The Company also capitalizes revenue generating
expenditures and cashflow enhancing improvements such as those expended
for construction of new garages or installation of water conservation
devices which almost immediately and permanently either earn additional
revenue or reduce expenses. Appliance additions represents primarily the
acquisition of washer/dryer units for apartments which generate
additional rental and other income. Capitalized expenditures as described
here exclude major reconstruction costs incurred in conjunction with the
acquisition and repositioning of newly purchased apartment communities.
Such costs are added to the purchase price of those communities. The per
unit calculation for the quarter is based on the ending number of units
in the portfolio on September 30, 1996.

(6) The weighted average shares outstanding shown differs from the weighted
average shares outstanding for the purpose of calculating earnings per
share because the conversion of preferred stock is antidilutive for
calculating earnings per share, but dilutive for the purposes of
calculating FFO per share and FFO-revised definition per share.





23
PART II - OTHER INFORMATION

Item 1: Legal Proceedings

None

Item 2: Changes in Securities

None

Item 3: Defaults Upon Senior Securities

None

Item 4: Submission of Matters to a Vote of Security Holders

None

Item 5: Other Information

None

Item 6: Exhibits and Reports on Form 8-K

(a) Exhibits

Index to Exhibits


Exhibit No. Description


3(i).1 Amended and Restated Articles of Incorporation of the Company.
(Incorporated by reference to Exhibit 3(i).1 to Form 8-B of Bay
Apartment Communities, Inc. dated June 8, 1995).

3(i).2 Forms of Articles Supplementary of the Company. (Incorporated by
reference to Exhibit 3(i).1 to Form 8-K of Bay Apartment
Communities, Inc. dated September 25, 1995).

3(i).3 Articles Supplementary relating to the Series B Preferred Stock of
the Company. (Incorporated by reference to Exhibit 3(i).1 to Form
8-K of Bay Apartment Communities, Inc. dated May 6, 1996.)

3(ii).1 Amended and Restated to By-laws of the Company. (Incorporated by
reference to Exhibit 10.1 to Form 8-B of Bay Apartment
Communities, Inc. dated June 8, 1995).

10.1 Letter agreement dated August 30, 1996 amending the Revolving Loan
Agreement, dated May 8, 1996, among the Company as Borrower, Union
Bank of Switzerland (New York Branch) as Co- Agent and Bank, and
Union Bank of Switzerland (New York Branch) as Administrative
Agent.

23.1 Consent of Rosen Consulting Group. (Incorporated by reference to
Exhibit 23.1 to Form 8-K of Bay Apartment Communities, Inc. dated
July 5, 1996).

23.2 Consent of Ann Roulac and Company. (Incorporated by reference to
Exhibit 23.2 to Form 8-K of Bay Apartment Communities, Inc. dated
July 5, 1996).




24
27.1 Financial Data Schedule.

99.1 The Apartment Markets in Orange, Santa Clara, Alameda, San
Francisco and San Mateo Counties, dated June 28, 1996, and the
addendum thereto, presented to the Company by the Rosen Consulting
Group. (Incorporated by reference to Exhibit 99.1 to Form 8-K of
Bay Apartment Communities, Inc. dated July 5, 1996).

99.2 San Francisco Bay Area Rental Analysis, dated June 30, 1996
presented to the Company by Ann Roulac and Company. (Incorporated
by reference to Exhibit 99.2 to Form 8-K of Bay Apartment
Communities, Inc. dated July 5, 1996).

(b) Reports on Form 8-K

1. Form 8-K of the Company, dated July 5, 1996, regarding reports
prepared for the Company by Ann Roulac and Company and the Rosen
Consulting Group. These reports provide the Company with
information including, but not limited to, general market
overviews, and demographic trends.




25
SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) 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.



BAY APARTMENT COMMUNITIES, INC.


Date: November 8, 1996 /s/ Gilbert M. Meyer
--------------------
Gilbert M. Meyer
President and Chairman of the Board


Date: November 8, 1996 /s/ Jeffrey B.Van Horn
----------------------
Jeffrey B. Van Horn
Chief Financial Officer
(authorized Officer of the Registrant
and Principal Financial Officer)




26