<PAGE>
================================================================================


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                            -------------------------

                                    FORM 10-Q
          [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2001

                                       OR

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

                        For the transition period from       to
                   Commission file numbers 1-12080 and 0-28226

                            ------------------------

                              POST PROPERTIES, INC.
                           POST APARTMENT HOMES, L.P.
             (Exact name of registrant as specified in its charter)

             GEORGIA                                       58-1550675
             GEORGIA                                       58-2053632

  (State or other jurisdiction                           (I.R.S. Employer
of incorporation or organization)                        Identification No.)

            4401 NORTHSIDE PARKWAY, SUITE 800, ATLANTA, GEORGIA 30327
              (Address of principal executive offices -- zip code)

                                 (404) 846-5000
              (Registrant's telephone number, including area code)

          3350 CUMBERLAND CIRCLE, SUITE 2200, ATLANTA, GEORGIA 30339
                     (Former name, former address and former
                       fiscal year, if changed since last
                                     report)

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

Post Properties, Inc.      Yes  [X]    No [  ]
Post Apartment Homes, L.P. 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.

     36,821,089 shares of common stock outstanding as of November 12, 2001
(excluding treasury stock).


================================================================================
<PAGE>

                              POST PROPERTIES, INC.
                           POST APARTMENT HOMES, L.P.

                                      INDEX

<TABLE>
<S>                                                                                                            <C>
PART I   FINANCIAL INFORMATION                                                                                 PAGE

         ITEM 1    FINANCIAL STATEMENTS

         POST PROPERTIES, INC.
             Consolidated Balance Sheets as of September 30, 2001 and December 31, 2000...........................1
             Consolidated Statements of Operations for the three and nine months ended
                September 30, 2001 and 2000.......................................................................2
             Consolidated Statement of Shareholders' Equity and Accumulated Earnings for the
                nine months ended September 30, 2001..............................................................3
             Consolidated Statements of Cash Flows for the nine months ended
                September 30, 2001 and 2000.......................................................................4
             Notes to Consolidated Financial Statements...........................................................5

         POST APARTMENT HOMES, L.P.
             Consolidated Balance Sheets as of September 30, 2001 and December 31, 2000..........................12
             Consolidated Statements of Operations for the three and nine months ended
                September 30, 2001 and 2000......................................................................13
             Consolidated Statement of Partners' Equity for the nine months ended
                September 30, 2001...............................................................................14
             Consolidated Statements of Cash Flows for the nine months ended
                September 30, 2001 and 2000......................................................................15
             Notes to Consolidated Financial Statements .........................................................16

         ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATIONS.......................................................................................22

         ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.......................................33

PART II  OTHER INFORMATION.......................................................................................34

         ITEM 1    LEGAL PROCEEDINGS
         ITEM 2    CHANGES IN SECURITIES AND USE OF PROCEEDS
         ITEM 3    DEFAULTS UPON SENIOR SECURITIES
         ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDER
         ITEM 5    OTHER INFORMATION
         ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K

         SIGNATURES..............................................................................................35
</TABLE>



<PAGE>
                              POST PROPERTIES, INC.
                           CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                    SEPTEMBER 30,         DECEMBER 31,
                                                                                        2001                  2000
                                                                                    -------------         ------------
                                                                                     (UNAUDITED)
<S>                                                                                  <C>                 <C>
ASSETS
Real estate investments:
   Land ...................................................................          $   271,376           $   281,525
   Building and improvements ..............................................            1,727,495             1,681,798
   Furniture, fixtures and equipment ......................................              208,221               190,968
   Construction in progress ...............................................              474,354               509,702
   Land held for future development .......................................               49,081                28,995
                                                                                     -----------           -----------
                                                                                       2,730,527             2,692,988
   Less: accumulated depreciation .........................................             (382,284)             (345,121)
   Assets held for sale ...................................................               50,154               122,047
   Investments in and advances to unconsolidated real estate entities .....               36,377                    --
                                                                                     -----------           -----------
      Total real estate investments .......................................            2,434,774             2,469,914
Cash and cash equivalents .................................................                4,926                 7,459
Restricted cash ...........................................................                1,344                 1,272
Deferred charges, net .....................................................               18,701                21,700
Other assets ..............................................................               53,618                50,892
                                                                                     -----------           -----------
   Total assets ...........................................................          $ 2,513,363           $ 2,551,237
                                                                                     ===========           ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable .............................................................          $ 1,256,804           $ 1,213,309
Accrued interest payable ..................................................               15,859                10,751
Dividends and distributions payable .......................................               33,230                33,933
Accounts payable and accrued expenses .....................................               82,688                67,136
Security deposits and prepaid rents .......................................                9,392                 9,407
                                                                                     -----------           -----------
      Total liabilities ...................................................            1,397,973             1,334,536
                                                                                     -----------           -----------
Minority interest of preferred unitholders in Operating Partnership........               70,000                70,000
                                                                                     -----------           -----------
Minority interest of common unitholders in Operating Partnership ..........              109,595               118,091
                                                                                     -----------           -----------

Commitments and contingencies..............................................                   --                    --
   Shareholders' equity
   Preferred stock, $.01 par value, 20,000,000 authorized:
   8 1/2% Series A Cumulative  Redeemable Shares, liquidation
     preference $50 per share, 1,000,000 shares issued and
     outstanding ..........................................................                   10                    10
   7 5/8% Series B Cumulative Redeemable Shares, liquidation
     preference $25 per share, 2,000,000 shares issued and
     outstanding ..........................................................                   20                    20
   7 5/8% Series C Cumulative Redeemable Shares, liquidation
     preference $25 per share, 2,000,000 shares issued and
     outstanding ..........................................................                   20                    20
   Common stock, $.01 par value, 100,000,000 authorized,
    39,699,116 and 39,662,192 shares issued, 36,860,834 and 38,853,596
    shares outstanding at September 30, 2001 and December 31, 2000,
    respectively ..........................................................                  396                   396
   Additional paid-in capital .............................................            1,049,241             1,057,067
   Accumulated earnings ...................................................                   --                    --
   Accumulated other comprehensive income, net of minority interest .......               (9,144)                   --
   Deferred compensation ..................................................                 (530)                   --
                                                                                     -----------           -----------
                                                                                       1,040,013             1,057,513
   Treasury stock, at cost, 2,838,282 and 808,596
     shares at September 30, 2001 and December 31, 2000, respectively .....             (104,218)              (28,903)
                                                                                     -----------           -----------
      Total shareholders' equity ..........................................              935,795             1,028,610
                                                                                     -----------           -----------
   Total liabilities and shareholders' equity .............................          $ 2,513,363           $ 2,551,237
                                                                                     ===========           ===========
</TABLE>


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


                                      -1-
<PAGE>
                              POST PROPERTIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED                      NINE MONTHS ENDED
                                                                       SEPTEMBER 30,                         SEPTEMBER 30,
                                                              -------------------------------       -------------------------------
                                                                  2001               2000               2001               2000
                                                              ------------       ------------       ------------       ------------
<S>                                                           <C>                <C>                <C>                <C>
REVENUE:
  Rental ...............................................      $     91,036       $     93,152       $    278,881       $    271,220
  Property management - third-party ....................             1,102                987              3,469              2,828
  Landscape services - third-party .....................             2,879              2,743              8,470              7,843
  Interest .............................................               370                476              1,358              1,463
  Other ................................................             3,732              3,872             11,686             12,762
                                                              ------------       ------------       ------------       ------------
      Total revenue ....................................            99,119            101,230            303,864            296,116
                                                              ------------       ------------       ------------       ------------
EXPENSES:
  Property operating and maintenance
     (exclusive of items shown separately below) .......            34,704             34,017            105,680             96,906
  Depreciation expense .................................            19,343             17,930             56,106             51,367
  Property management - third-party ....................               924                731              2,834              2,249
  Landscape services - third-party .....................             2,777              2,376              7,795              6,860
  Interest .............................................            14,058             12,789             43,763             35,551
  Amortization of deferred loan costs ..................               513                413              1,456              1,196
  General and administrative ...........................             3,395              2,678              9,802              6,806
  Minority interest in consolidated property
   partnerships ........................................              (527)              (381)            (1,344)            (1,195)
                                                              ------------       ------------       ------------       ------------
       Total expense ...................................            75,187             70,553            226,092            199,740
                                                              ------------       ------------       ------------       ------------
Income before net gain on sale of assets, minority
  interest of unitholders in Operating Partnership,
  cumulative effect of accounting change and
  extraordinary item ...................................            23,932             30,677             77,772             96,376
Net gain on sale of assets .............................             8,179                958             23,950              1,627
Minority interest of preferred unitholders in
  Operating Partnership ................................            (1,400)            (1,400)            (4,200)            (4,200)
Minority interest of common unitholders in
  Operating Partnership ................................            (3,322)            (3,156)           (10,495)            (9,899)
                                                              ------------       ------------       ------------       ------------
Income before cumulative effect of accounting change
  and extraordinary item ...............................            27,389             27,079             87,027             83,904
Cumulative effect of accounting change, net
  of minority interest .................................                --                 --               (613)                --
Extraordinary item, net of minority interest ...........                --                 --                (77)                --
                                                              ------------       ------------       ------------       ------------
Net income .............................................            27,389             27,079             86,337             83,904
Dividends to preferred shareholders ....................            (2,969)            (2,969)            (8,906)            (8,907)
                                                              ------------       ------------       ------------       ------------
Net income available to common shareholders ............      $     24,420       $     24,110       $     77,431       $     74,997
                                                              ============       ============       ============       ============
EARNINGS PER COMMON SHARE - BASIC
Income before cumulative effect of accounting change
  and extraordinary item (net of  preferred dividend) ..      $       0.64       $       0.61       $       2.03       $       1.91
Cumulative effect of accounting change, net
  of minority interest .................................                --                 --              (0.02)                --
Extraordinary item, net of minority interest ...........                --                 --                 --                 --
                                                              ------------       ------------       ------------       ------------
Net income available to common shareholders ............      $       0.64       $       0.61       $       2.01       $       1.91
                                                              ============       ============       ============       ============
Weighted average common shares outstanding - basic .....        37,899,668         39,556,981         38,463,672         39,293,302
                                                              ============       ============       ============       ============
EARNINGS PER COMMON SHARE - DILUTED
Income before cumulative effect of accounting change
  and extraordinary item (net of preferred dividend) ...      $       0.64       $       0.60       $       2.02       $       1.88
Cumulative effect of accounting change, net of
  minority interest ....................................                --                 --              (0.02)                --
Extraordinary item, net of minority interest ...........                --                 --                 --                 --
                                                              ------------       ------------       ------------       ------------
Net income available to common shareholders ............      $       0.64       $       0.60       $       2.00       $       1.88
                                                              ============       ============       ============       ============
Weighted average common shares outstanding diluted .....        38,185,054         40,422,756         38,721,056         39,980,339
                                                              ============       ============       ============       ============
Dividends declared .....................................      $       0.78       $       0.76       $       2.34       $       2.28
                                                              ============       ============       ============       ============
</TABLE>


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

                                      -2-
<PAGE>


                              POST PROPERTIES, INC.
               CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY AND
                              ACCUMULATED EARNINGS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                   ACCUMULATED
                                                           ADDITIONAL                 OTHER
                                        PREFERRED  COMMON   PAID-IN    ACCUMULATED COMPREHENSIVE    DEFERRED     TREASURY
                                         SHARES    SHARES   CAPITAL      EARNINGS      INCOME    COMPENSATION      STOCK
                                        ---------  ------   -------    ----------- ------------- ------------    --------
<S>                                     <C>       <C>     <C>          <C>         <C>           <C>             <C>
SHAREHOLDERS' EQUITY AND
ACCUMULATED EARNINGS,
  DECEMBER 31, 2000 .................   $    50   $396    1,057,067    $     --   $    --         $  --         $ (28,903)
  Proceeds from Dividend
    Reinvestment and Employee Stock
    Purchase Plans ..................        --     --       (1,760)         --        --            --            10,156
  Adjustment for minority interest
    of unitholders in Operating
    Partnership at dates of capital
    transactions ....................        --     --        5,580          --        --            --                --

COMPREHENSIVE INCOME 2001:

  Net income ........................        --     --           --      86,337        --            --                --
  Transition adjustment for
    derivative instruments, net of
    minority interest ...............        --     --           --          --    (1,299)           --                --
  Change in derivative instrument
    value, net of minority interest .        --     --           --          --    (7,845)           --                --
TOTAL COMPREHENSIVE INCOME ..........

Restricted stock issuances ..........        --     --           46          --        --          (644)              598
Amortization of deferred
  compensation.......................        --     --           --          --        --           114                --
Treasury stock acquisitions .........        --     --           --          --        --            --           (86,069)
Dividends to preferred shareholders .        --     --           --      (8,906)       --            --                --
Dividends to common shareholders ....        --     --      (11,692)    (77,431)       --            --                --
                                        -------   ----   ----------    --------   -------         -----         ---------
SHAREHOLDERS' EQUITY AND ACCUMULATED
  EARNINGS, SEPTEMBER 30, 2001 ......   $    50   $396    1,049,241    $     --   $(9,144)        $(530)        $(104,218)
                                        =======   ====   ==========    ========   =======         =====         =========

<CAPTION>

                                            TOTAL
                                            -----
<S>                                      <C>
SHAREHOLDERS' EQUITY AND
ACCUMULATED EARNINGS,
  DECEMBER 31, 2000 .................    $ 1,028,610
  Proceeds from Dividend
    Reinvestment and Employee Stock
    Purchase Plans ..................          8,396
  Adjustment for minority interest
    of unitholders in Operating
    Partnership at dates of capital
    transactions ....................          5,580

COMPREHENSIVE INCOME 2001:

  Net income ........................         86,337
  Transition adjustment for
    derivative instruments, net of
    minority interest ...............         (1,299)
  Change in derivative instrument
    value, net of minority interest .         (7,845)
                                         -----------
TOTAL COMPREHENSIVE INCOME ..........         77,193

Restricted stock issuances ..........             --
Amortization of deferred
   compensation .....................            114
Treasury stock acquisitions .........        (86,069)
Dividends to preferred shareholders .         (8,906)
Dividends to common shareholders ....        (89,123)
                                         -----------
SHAREHOLDERS' EQUITY AND ACCUMULATED
  EARNINGS, SEPTEMBER 30, 2001 ......    $   935,795
                                         ===========

</TABLE>


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

                                      -3-
<PAGE>
                              POST PROPERTIES, INC
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                               NINE MONTHS ENDED
                                                                                                  SEPTEMBER 30,
                                                                                          -----------------------------
                                                                                            2001               2000
                                                                                          ---------           ---------
<S>                                                                                       <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income .....................................................................          $  86,337           $  83,904
Adjustments to reconcile net income to net cash provided by operating
 activities:
  Net gain on sale of assets ...................................................            (23,950)             (1,627)
  Minority interest of preferred unitholders in Operating Partnership ..........              4,200               4,200
  Minority interest of common unitholders in Operating Partnership .............             10,495               9,899
  Equity in loss of unconsolidated real estate entities ........................                 26                  --
  Cumulative accounting change, net of minority interest .......................                613                  --
  Extraordinary item, net of minority interest .................................                 77                  --
  Depreciation .................................................................             56,106              51,367
  Amortization of deferred loan costs ..........................................              1,456               1,196
Changes in assets, (increase) decrease in:
  Restricted cash ..............................................................                (72)                 45
  Other assets .................................................................             (4,607)            (12,719)
  Deferred charges .............................................................               (292)             (1,263)
Changes in liabilities, increase (decrease) in:
  Accrued interest payable .....................................................              5,108               6,249
  Accounts payable and accrued expenses ........................................              8,419              10,827
  Security deposits and prepaid rents ..........................................                (15)                887
                                                                                          ---------           ---------
Net cash provided by operating activities ......................................            143,901             152,965
                                                                                          ---------           ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Construction and acquisition of real estate assets, net of payables ............           (173,571)           (279,371)
Net proceeds from sale of assets ...............................................            215,660              75,231
Capitalized interest ...........................................................            (16,803)            (18,992)
Recurring capital expenditures .................................................             (9,719)             (7,802)
Corporate additions and improvements ...........................................             (1,850)             (1,991)
Non-recurring capital expenditures .............................................             (1,220)             (2,336)
Revenue generating capital expenditures ........................................             (2,620)             (4,257)
Investments in and advances to unconsolidated real estate entities .............             (6,820)                 --
                                                                                          ---------           ---------
Net cash provided by (used in) investing activities ............................              3,057            (239,518)
                                                                                          ---------           ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of financing costs .....................................................               (300)             (1,260)
Debt proceeds ..................................................................            215,950             241,000
Debt payments ..................................................................           (172,455)            (56,244)
Distributions to preferred unitholders .........................................             (4,200)             (4,200)
Distributions to common unitholders ............................................            (12,006)            (11,520)
Proceeds from Dividend Reinvestment and Employee Stock Purchase Plans ..........              8,396              26,658
Treasury stock acquisitions ....................................................            (86,069)                 --
Dividends paid to preferred shareholders .......................................             (8,906)             (8,907)
Dividends paid to common shareholders ..........................................            (89,901)            (86,905)
                                                                                          ---------           ---------
Net cash (used in) provided by financing activities ............................           (149,491)             98,622
                                                                                          ---------           ---------
Net (decrease) increase in cash and cash equivalents ...........................             (2,533)             12,069
Cash and cash equivalents, beginning of period .................................              7,459               5,870
                                                                                          ---------           ---------
Cash and cash equivalents, end of period .......................................          $   4,926           $  17,939
                                                                                          =========           =========
</TABLE>


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


                                      -4-
<PAGE>
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
--------------------------------------------------------------------------------

1.       ORGANIZATION AND FORMATION OF THE COMPANY

         ORGANIZATION AND FORMATION OF THE COMPANY
         Post Properties, Inc. (the "Company"), which was incorporated on
         January 25, 1984, is the successor by merger to the original Post
         Properties, Inc., a Georgia corporation which was formed in 1971. The
         Company was formed to develop, lease and manage upscale multi-family
         apartment communities.

         The Company elected to be taxed as a real estate investment trust
         ("REIT") for Federal income tax purposes beginning with the taxable
         year ended December 31, 1993. A REIT is a legal entity which holds real
         estate interests and, through payments of dividends to shareholders, in
         practical effect is not subject to Federal income taxes at the
         corporate level.

         BASIS OF PRESENTATION
         The accompanying unaudited financial statements have been prepared by
         the Company's management in accordance with generally accepted
         accounting principles for interim financial information and applicable
         rules and regulations of the Securities and Exchange Commission.
         Accordingly, they do not include all of the information and footnotes
         required by generally accepted accounting principles for complete
         financial statements. In the opinion of management, all adjustments
         (consisting only of normally recurring adjustments) considered
         necessary for a fair presentation have been included. The results of
         operations for the nine-month period ended September 30, 2001 are not
         necessarily indicative of the results that may be expected for the full
         year. These financial statements should be read in conjunction with the
         Company's audited financial statements and notes thereto included in
         the Post Properties, Inc. Annual Report on Form 10-K for the year ended
         December 31, 2000. Certain 2000 amounts have been reclassified to
         conform to the current year's financial statement presentation.

2.       NOTES PAYABLE

         As of September 30, 2001, the Operating Partnership had $323,000
         aggregate principal amount of notes outstanding under a Medium Term
         Note Program. Medium Term Notes of $37,000 and $30,000 were repaid on
         April 2, 2001 and June 7, 2001, respectively.

3.       SALE OF ASSETS AND ASSETS HELD FOR SALE

         At December 31, 2000, the Company had four communities, two commercial
         properties and one tract of land held for sale. During the first three
         quarters of 2001, the Company authorized the sale of five communities
         and 11 tracts of land consisting of: three communities and six tracts
         of land in Dallas, Texas, two communities in Atlanta, Georgia, two
         tracts of land in Charlotte, North Carolina, one tract in Phoenix,
         Arizona, one tract in Tampa, Florida and one tract in Denver Colorado.
         The Company also reclassified from assets held for sale two communities
         located in Dallas, Texas.


                                      -5-
<PAGE>
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
--------------------------------------------------------------------------------


         The table below summarizes the current year sale of assets through
         September 30, 2001:

<TABLE>
<CAPTION>
                                   NUMBER OF
                PROPERTY             UNITS       DATE SOLD        LOCATION               GROSS PROCEEDS        NET PROCEEDS
                --------          ----------     ---------        --------               --------------        ------------
           <S>                    <C>            <C>             <C>                     <C>                  <C>
           Post Creek                 810        April           Atlanta, GA                 $ 67,250            $ 66,641
           The Lee                     80        May             Nashville, TN                  3,950               3,839
           Post Lakeside              327        May             Dallas, TX                    22,470              22,124
           Post Winsted               314        May             Dallas, TX                    20,263              19,949
           Post Shores                908        June            Dallas, TX                    76,750              75,774
           Post Pointe                360        September       Atlanta, GA                   22,400              22,116
           Land Parcel                N/A        May             Charlotte, NC                  1,942               1,876
           Land Parcel                N/A        March           Denver, CO                     1,155               1,137
           Land Parcel                N/A        August          Dallas, TX                     2,320               2,204
                                                                                             --------            ========
                                                                                             $218,500            $215,660
                                                                                             ========            ========
</TABLE>

         As of September 30, 2001, assets held for sale included one community,
         two commercial properties and nine tracts of land consisting of land,
         buildings and improvements and furniture, fixtures and equipment and
         were recorded at $50,154, which represented the lower of depreciated
         cost or fair value less cost to sell. The Company has recorded net
         gains of $8,179 and $23,950 for the three and nine months ended
         September 30, 2001, respectively. The net gains include reserves of
         $1,530 and $12,795 for the three and nine months ended September 30,
         2001, respectively, to write down to fair market value the real estate
         assets designated as held for sale. The Company expects the sale of the
         remaining assets to occur within the next 12 months.

         For the three months ended September 30, 2001 and 2000, the
         consolidated statement of operations includes revenue less operating
         and maintenance expense, exclusive of depreciation, of $918 and $1,022,
         respectively, from communities held for sale at September 30, 2001. For
         the nine months ended September 30, 2001 and 2000, the consolidated
         statement of operations includes revenue less operating and maintenance
         expense, exclusive of depreciation, of $2,863 and $2,924, respectively,
         from communities held for sale at September 30, 2001. Depreciation
         expense of $265 was recognized on these assets in 2001 prior to the
         assets being classified as held for sale. Depreciation expense has not
         been recognized subsequent to the date of held for sale classification.

4.       EARNINGS PER SHARE

         For the three and nine months ended September 30, 2001 and 2000, a
         reconciliation of the numerator and denominator used in the computation
         of basic and diluted earnings per share is as follows:


<TABLE>
<CAPTION>
                                                                              THREE MONTHS ENDED            NINE MONTHS ENDED
                                                                                  SEPTEMBER 30,                SEPTEMBER 30,
                                                                          ---------------------------   ---------------------------
                                                                               2001          2000          2001           2000
                                                                          ------------   ------------   ------------   ------------
<S>                                                                       <C>            <C>            <C>            <C>
Basic and diluted income available to common shareholders (numerator):
  Income before cumulative effect of accounting
    change and extraordinary item ......................................  $     27,389   $     27,079   $     87,027   $     83,904
    Less: Preferred stock dividends ....................................        (2,969)        (2,969)        (8,906)        (8,907)
                                                                          ------------   ------------   ------------   ------------
Income available to common shareholders
    before cumulative effect of accounting change
    and extraordinary item .............................................  $     24,420   $     24,110   $     78,121   $     74,997
                                                                          ============   ============   ============   ============
Common shares (denominator):
  Weighted average shares outstanding-basic ............................    37,899,668     39,556,981     38,463,672     39,293,302
  Incremental shares from assumed conversion
    of options .........................................................       285,386        865,775        257,384        687,037
                                                                          ------------   ------------   ------------   ------------
  Weighted average shares outstanding - diluted ........................    38,185,054     40,422,756     38,721,056     39,980,339
                                                                          ============   ============   ============   ============
</TABLE>


                                      -6-

<PAGE>
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
--------------------------------------------------------------------------------


5.       SUPPLEMENTAL CASH FLOW INFORMATION

         Non-cash investing and financing activities for the nine months ended
         September 30, 2001 and 2000 were as follows:

         (a)      During the nine months ended September 30, 2001 and 2000,
                  holders of 37,516 and 12,014 units, respectively, in the
                  Operating Partnership exercised their option to convert their
                  units to shares of Common Stock of the Company on a
                  one-for-one basis. These conversions and adjustments for the
                  dilutive impact of the Dividend Reinvestment and Employee
                  Stock Purchase and Option Plans and other capital transactions
                  result in adjustments to minority interest. The net effect of
                  the conversions and adjustments was a reclassification
                  decreasing minority interest and increasing shareholder's
                  equity in the amount of $5,580 for the nine months ended
                  September 30, 2001 and increasing minority interest and
                  decreasing shareholder's equity in the amount of $683 for the
                  nine months ended September 30, 2000.
         (b)      For cash flow purposes, investments in and advances to
                  unconsolidated real estate entities excludes non-cash
                  contributions of $29,583 for the nine months ended September
                  30, 2001.
         (c)      See footnote 6, "New Accounting Pronouncements" for
                  information on non-cash activity related to derivative
                  instruments.

6.       NEW ACCOUNTING PRONOUNCEMENTS

         On January 1, 2001, the Company adopted SFAS No. 133, "Accounting for
         Derivative Instruments and Hedging Activities," as amended by SFAS No.
         138, "Accounting for Certain Derivative Instruments and Hedging
         Activities." This standard establishes accounting and reporting
         standards for derivative and hedging activities and requires the
         Company to recognize all derivative instruments on its balance sheet at
         fair value. Additionally, the fair value adjustments will affect either
         shareholders' equity or net income, depending on whether the derivative
         instrument qualifies as a hedge for accounting purposes and, if so, the
         nature of the hedging activity.

         Upon adoption of SFAS No. 133, the Company recorded a derivative
         instrument liability of $1,299, net of minority interest, and an
         adjustment of $1,299, net of minority interest, to accumulated other
         comprehensive income, a shareholders' equity account, representing the
         fair value of its outstanding interest rate swap agreements. The
         Company also recorded a net transition adjustment loss in the statement
         of operations of $613, net of minority interest, relating to the write
         down of the book value of it's interest rate cap agreements to their
         fair value.

         In the normal course of business, the Company is exposed to the effect
         of interest rate changes. The Company limits these risks by following
         established risk management policies and procedures including the use
         of derivatives. The Company's outstanding derivative financial
         instruments represent cash flow hedges that are designated specifically
         to reduce exposure to interest rate risk by locking in the expected
         future cash payments on certain designated debt obligations. This was
         accomplished using interest rate swap and interest rate cap
         arrangements.

         For all outstanding derivative financial instruments and for future use
         of derivative financial instruments, the Company designates the
         specific instruments as a hedge of identified cash flow exposure. The
         Company formally documents all relationships between hedging
         instruments and hedged items, as well as its risk-management objective
         and strategy for undertaking various hedged transactions. In this
         documentation, the Company will specifically identify the asset,
         liability, firm commitment, or forecasted transaction that has been
         designated as a hedged item and will state how the hedged instrument is
         expected to hedge the risks related to the hedged item.

         The Company will formally measure effectiveness of its hedging
         relationships both at the hedge inception and on an ongoing basis in
         accordance with its risk management policy. The Company may discontinue
         hedge accounting prospectively when it is determined that the
         derivative is no longer effective in offsetting changes in the fair
         value or cash flows of a hedged item; when the derivative is expired or
         sold, terminated or exercised; or when the derivative is re-designated
         to no longer be a hedged instrument.


                                      -7-
<PAGE>
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
--------------------------------------------------------------------------------


         At September 30, 2001, the Company has outstanding interest rate swap
         agreements with a notional value of $129,000 and maturity dates ranging
         from 2005 to 2009. For the nine months ended September 30, 2001, the
         Company recorded the unrealized net loss of $7,845, net of minority
         interest, on these cash flow hedges as a liability and a reduction in
         accumulated other comprehensive income, a shareholders' equity account,
         in the accompanying consolidated balance sheet. This unrealized net
         loss of $7,845 was comprised of an unrealized net loss of $2,764, net
         of minority interest, for the three months ended March 31, 2001, an
         unrealized net gain of $2,314, net of minority interest, for the three
         months ended June 30, 2001 and an unrealized net loss of $7,395, net of
         minority interest, for the three months ended September 30, 2001. In
         addition, the Company recorded the change in fair value of the
         ineffective component of its outstanding interest rate cap agreements
         in its statement of operations for the nine months ended September 30,
         2001. This charge against earnings during the period and the fair value
         of the interest rate cap agreements as of September 30, 2001 were not
         significant to the Company's financial position or results of
         operations. Within the next twelve months, the Company expects to
         reclassify out of accumulated other comprehensive income approximately
         $1,698.

         The Financial Accounting Standards Board ("FASB") has issued Statement
         No. 144, "Accounting for the Impairment or Disposal of Long-Lived
         Assets," that replaces FASB Statement No. 121, "Accounting for the
         Impairment of Long-Lived Assets and for Long-Lived Assets to be
         Disposed Of." Statement No. 144 requires that long-lived assets be
         measured at the lower of carrying amount or fair value less cost to
         sell, whether reported in continuing operations or in discontinued
         operations. The provisions of Statement No. 144 are effective for
         financial statements issued for fiscal year beginning after December
         15, 2001. The Company believes the provisions of Statement No. 144 will
         not have a significant effect on the Company's results of operations or
         its financial position.

         The Securities and Exchange Commission (SEC) issued Staff Accounting
         Bulletin No. 101 (SAB 101), Revenue Recognition, which provides
         guidance on the recognition, presentation, and disclosure of revenue in
         financial statements. SAB 101 was implemented in the fourth quarter of
         2000. The adoption of SAB 101 has had no significant effect on the
         Company's results of operations or its financial position.

7.       SEGMENT INFORMATION

         SEGMENT DESCRIPTION
         SFAS No. 131, "Disclosure About the Segments of an Enterprise and
         Related Information" requires companies to present segment information
         based on the way that management organizes the segments within the
         enterprise for making operating decisions and assessing performance.
         The segment information is prepared on substantially the same basis as
         the internally reported information used by the Company's chief
         operating decision makers to manage the business.

         The Company's chief operating decision-makers focus on the Company's
         primary sources of income, which are property rental operations and
         third party services. Property rental operations are broken down into
         five segments based on the various stages in the property ownership
         lifecycle. Third party services are designated as one segment. The
         Company's six segments are further described as follows:

         Property Rental Operations

         -        Mature communities - those communities which have been
                  stabilized (the point at which a property reaches 95%
                  occupancy or one year after completion of construction) for
                  both the current and prior year.

         -        Communities stabilized during 2000 - communities which reached
                  stabilized occupancy in the prior year.

         -        Development and lease up communities - those communities which
                  are in lease-up but were not stabilized by the beginning of
                  the current year, including communities which stabilized
                  during the current year.

         -        Communities held for sale - those communities that are
                  currently being actively marketed for sale.

         -        Sold communities - communities which were sold in the current
                  or prior year.

         Third Party Services - fee income and related expenses from the
         Company's apartment community management, landscaping and corporate
         apartment rental services.



                                      -8-
<PAGE>
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
--------------------------------------------------------------------------------


         On November 7, 2001, the Company sold Post Landscape Group, Inc., a
         subsidiary entity that provides landscape maintenance, design and
         installation services to third parties. In addition, the Company has
         agreed to sell its apartment community management division, RAM
         Partners, Inc. ("RAM") by year-end. The Company intends to finance
         these purchases over a five to seven year period. The related purchase
         notes amortize on, or approximately on, a 10-year schedule with a
         balloon payment due at the end of year five. Two one-year renewal
         options are available. Under generally accepted accounting principles,
         any gain on sale will not be recorded until such time the conditions
         for gain recognition are met. Until such time, the net assets of
         these divisions will be carried on the Company's balance sheet at book
         value.

SEGMENT PERFORMANCE MEASURE
         The Company uses the National Association of Real Estate Investment
         Trusts ("NAREIT") definition of Funds From Operations ("FFO").
         Effective January 1, 2000, NAREIT amended its definition of FFO to
         include in FFO all non-recurring transactions, except those that are
         defined as extraordinary under generally accepted accounting principles
         ("GAAP"). The Company adopted this new definition effective January 1,
         2000. FFO for any period means the consolidated net income of the
         Company and its subsidiaries for such period excluding gains or losses
         from debt restructuring and sales of property plus depreciation of real
         estate assets, and after adjustment for unconsolidated partnerships and
         joint ventures, all determined on a consistent basis in accordance with
         GAAP. FFO presented herein is not necessarily comparable to FFO
         presented by other real estate companies because not all real estate
         companies use the same definition. The Company's FFO is comparable to
         the FFO of real estate companies that use the current NAREIT
         definition. FFO should not be considered as an alternative to net
         income (determined in accordance with GAAP) as a measure of the
         Company's liquidity, nor is it necessarily indicative of sufficient
         cash flow to fund all of the Company's needs or ability to service
         indebtedness or pay dividends.

         SEGMENT INFORMATION
         The following table reflects each segment's contribution to FFO
         together with a reconciliation of segment contribution to FFO, total
         FFO and income before extraordinary item and preferred dividends.
         Additionally, substantially all of the Company's assets relate to the
         Company's property rental operations. Asset cost, depreciation and
         amortization by segment are not presented because such information is
         not reported internally at the segment level.


                                      -9-
<PAGE>
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
--------------------------------------------------------------------------------


         Summarized financial information concerning the Company's reportable
         segments is shown in the following tables:


<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED             NINE MONTHS ENDED
                                                                      SEPTEMBER 30,                 SEPTEMBER 30,
                                                                 -----------------------      ------------------------
                                                                  2001            2000           2001          2000
                                                                 --------      ---------      ---------      ---------
<S>                                                              <C>           <C>            <C>            <C>
REVENUES
Fully stabilized communities ...............................     $ 64,864      $  64,414      $ 194,827      $ 190,572
Communities stabilized during 2000 .........................       11,616         10,777         35,131         27,788
Development and lease-up communities .......................       12,216          5,097         31,576         11,226
Communities held for sale ..................................        1,552          1,591          4,714          4,615
Sold communities ...........................................          735         11,558         12,538         36,389
Third party services .......................................        3,981          3,730         11,939         10,671
Other ......................................................        4,155          4,063         13,139         14,855
                                                                 --------      ---------      ---------      ---------
Consolidated revenues ......................................     $ 99,119      $ 101,230      $ 303,864      $ 296,116
                                                                 ========      =========      =========      =========
CONTRIBUTION TO FUNDS FROM OPERATIONS
Fully stabilized communities ...............................     $ 43,545      $  44,577      $ 132,614      $ 132,835
Communities stabilized during 2000 .........................        7,494          7,210         23,186         18,137
Development and lease-up communities .......................        7,730          2,692         18,985          5,523
Communities held for sale ..................................          918          1,022          2,863          2,924
Sold communities ...........................................          437          7,825          7,864         25,165
Third party services .......................................          280            623          1,310          1,562
                                                                 --------      ---------      ---------      ---------

Contribution to FFO ........................................       60,404         63,949        186,822        186,146
                                                                 --------      ---------      ---------      ---------

Other operating income, net of expense .....................       (1,849)        (1,939)        (5,521)        (1,993)

Depreciation on non-real estate assets .....................         (611)          (583)        (1,857)        (1,794)
Minority interest in consolidated property
   partnerships ............................................          527            381          1,344          1,195
Interest expense ...........................................      (14,058)       (12,789)       (43,763)       (35,551)
Amortization of deferred loan costs ........................         (513)          (413)        (1,456)        (1,196)
General and administrative .................................       (3,395)        (2,678)        (9,802)        (6,806)
Dividends to preferred shareholders ........................       (2,969)        (2,969)        (8,906)        (8,907)
                                                                 --------      ---------      ---------      ---------

Total FFO ..................................................       37,536         42,959        116,861        131,094
                                                                 --------      ---------      ---------      ---------

Depreciation on real estate assets .........................      (17,973)       (16,651)       (52,195)       (47,825)
Net gain on sale of assets .................................        8,179            958         23,950          1,627
Minority interest of common unitholders in
   Operating Partnership ...................................       (3,322)        (3,156)       (10,495)        (9,899)
Dividends to preferred shareholders ........................        2,969          2,969          8,906          8,907
                                                                 --------      ---------      ---------      ---------
Income before cumulative effect of accounting
  change, extraordinary item and preferred
  dividends ................................................     $ 27,389      $  27,079      $  87,027      $  83,904
                                                                 ========      =========      =========      =========
</TABLE>


                                      -10-
<PAGE>
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
--------------------------------------------------------------------------------


8.       PROJECT ABANDONMENT, EMPLOYEE SEVERANCE AND IMPAIRMENT CHARGES

         In the fourth quarter of 2000, management decided to restrict its
         development activities to fewer markets, refine its development
         strategy, exit the for-sale housing business and make changes in its
         executive management team. Employees affected by the management changes
         were primarily four executives and five accounting department employees
         in the Dallas regional office.

         The following table summarizes the activity relating to the unpaid
         severance charges during the nine months ended September 30, 2001:

<TABLE>
            <S>                                                <C>
            Severance accrual at December 31, 2000             $  2,250
            Severance payment during first quarter 2001           1,382
            Severance payment during second quarter 2001            631
            Severance payment during third quarter 2001             166
                                                               --------
            Severance accrual at September 30, 2001            $     71
                                                               ========
</TABLE>

9.       INVESTMENTS IN REAL ESTATE ENTITIES

         In April 2001, the Company contributed two apartment communities under
         development in Atlanta, Georgia to joint ventures with an institutional
         investor, The Company holds a 35% equity interest in the joint
         ventures. The total estimated development cost of the joint venture
         properties of $67,000 is being funded through partner equity
         contributions proportionate to the partners' ownership interest and
         through construction financing provided by the Company. No gain or loss
         was recognized on the Company's contribution to the joint ventures. The
         Company provides real estate services (development, construction and
         property management) to the joint ventures. The Company accounts for
         these joint ventures using the equity method of accounting.

         At September 30, 2001, the Company's investment in and advances to the
         joint ventures accounted for using the equity method totaled $36,377.
         The combined total assets, liabilities and equity of the joint ventures
         at September 30, 2001, were $48,890, $35,876 and $13,014, respectively
         accounted for using the equity method. During the third quarter of
         2001, one of the communities commenced its initial rental operations.
         The Company recorded an equity in loss from this joint venture totaling
         $26 during the third quarter. Such equity in loss is included in other
         revenue in the accompanying consolidated financial statements.

         In the third quarter of 2001, the Company commenced the development of
         a 138-unit apartment community in New York, New York, through an entity
         that will be approximately 64% owned by the Company. Total estimated
         development costs of approximately $52,000 are being funded through
         partner equity contributions proportionate to the partners' ownership
         interest and through construction financing provided by the Company.
         Through September 30, 2001, total development costs were approximately
         $11,000. The financial statements of this majority owned entity are
         consolidated with the accompanying consolidated financial statements of
         the Company.

10.      STOCK BASED COMPENSATION PLAN

         In 2001, the Company, under its existing Employee Stock Plan, granted
         17,566 shares of restricted stock to company officers. The restricted
         shares vest ratably over a five-year period. The total value of the
         restricted share grants of $644 was initially reflected in
         shareholders' equity as additional capital and as deferred
         compensation, a contra shareholders' equity account. Such deferred
         compensation is amortized ratably into compensation expense over the
         vesting period.


                                      -11-
<PAGE>
                           POST APARTMENT HOMES, L.P.
                           CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                 SEPTEMBER 30,     DECEMBER 31,
                                                                                     2001             2000
                                                                                --------------     ------------
                                                                                (UNAUDITED)
<S>                                                                              <C>               <C>
ASSETS
   Real estate investments:
     Land .................................................................      $   271,376       $   281,525
     Building and improvements ............................................        1,727,495         1,681,798
     Furniture, fixtures and equipment ....................................          208,221           190,968
     Construction in progress .............................................          474,354           509,702
     Land held for future development .....................................           49,081            28,995
                                                                                 -----------       -----------
                                                                                   2,730,527         2,692,988
     Less: accumulated depreciation .......................................         (382,284)         (345,121)
     Assets held for sale .................................................           50,154           122,047
     Investments in and advances to unconsolidated real estate entities ...           36,377                --
                                                                                 -----------       -----------
     Total real estate investments ........................................        2,434,774         2,469,914
   Cash and cash equivalents ..............................................            4,926             7,459
   Restricted cash ........................................................            1,344             1,272
   Deferred charges, net ..................................................           18,701            21,700
   Other assets ...........................................................           53,618            50,892
                                                                                 -----------       -----------
     Total assets .........................................................      $ 2,513,363       $ 2,551,237
                                                                                 ===========       ===========
LIABILITIES AND PARTNERS' EQUITY
   Notes payable ..........................................................      $ 1,256,804       $ 1,213,309
   Accrued interest payable ...............................................           15,859            10,751
   Distributions payable ..................................................           33,230            33,933
   Accounts payable and accrued expenses ..................................           82,688            67,136
   Security deposits and prepaid rents ....................................            9,392             9,407
                                                                                 -----------       -----------
     Total liabilities ....................................................        1,397,973         1,334,536
                                                                                 -----------       -----------
   Commitments and contingencies
   Partners' equity before adjustment for other comprehensive income ......        1,125,771         1,216,701
   Accumulated other comprehensive income .................................          (10,381)               --
                                                                                 -----------       -----------
     Total partners' equity................................................        1,115,390         1,216,701
                                                                                 -----------       -----------
    Total liabilities and partners' equity ................................      $ 2,513,363         2,551,237
                                                                                 ===========       ===========

</TABLE>

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


                                      -12-



<PAGE>
                           POST APARTMENT HOMES, L.P.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED             NINE MONTHS ENDED
                                                                      SEPTEMBER 30,                 SEPTEMBER 30,
                                                             ----------------------------    ----------------------------
                                                                  2001            2000           2001          2000
                                                             ------------    ------------    ------------    ------------
<S>                                                          <C>             <C>             <C>             <C>
REVENUES
  Rental .................................................   $     91,036    $     93,152    $    278,881    $    271,220
  Property management - third party ......................          1,102             987           3,469           2,828
  Landscape services - third party .......................          2,879           2,743           8,470           7,843
  Interest ...............................................            370             476           1,358           1,463
  Other ..................................................          3,732           3,872          11,686          12,762
                                                             ------------    ------------    ------------    ------------
         Total revenue ...................................         99,119         101,230         303,864         296,116
                                                             ------------    ------------    ------------    ------------
EXPENSES
  Property operating and maintenance (exclusive of items
    shown separately below) ..............................         34,704          34,017         105,680          96,906
  Depreciation expense ...................................         19,343          17,930          56,106          51,367
  Property management - third party ......................            924             731           2,834           2,249
  Landscape services - third party .......................          2,777           2,376           7,795           6,860
  Interest ...............................................         14,058          12,789          43,763          35,551
  Amortization of deferred loan costs ....................            513             413           1,456           1,196
  General and administrative .............................          3,395           2,678           9,802           6,806
  Minority interest in consolidated property partnerships            (527)           (381)         (1,344)         (1,195)
                                                             ------------    ------------    ------------    ------------
   Total expenses ........................................         75,187          70,553         226,092         199,740
                                                             ------------    ------------    ------------    ------------
  Income before net gain on sale of assets, cumulative
    effect of accounting change and extraordinary
    item .................................................         23,932          30,677          77,772          96,376
  Net gain on sale of assets .............................          8,179             958          23,950           1,627
                                                             ------------    ------------    ------------    ------------
  Income before cumulative effect of accounting
    change and extraordinary item ........................         32,111          31,635         101,722          98,003
  Cumulative effect of accounting change..................             --              --            (695)             --
  Extraordinary item .....................................             --              --             (88)             --
                                                             ------------    ------------    ------------    ------------
  Net income .............................................         32,111          31,635         100,939          98,003
  Distributions to preferred unitholders .................         (4,369)         (4,369)        (13,106)        (13,107)
                                                             ------------    ------------    ------------    ------------
  Net income available to common unitholders .............   $     27,742    $     27,266    $     87,833    $     84,896
                                                             ============    ============    ============    ============
EARNINGS PER COMMON UNIT - BASIC
  Income before extraordinary item (net of preferred
   distributions) ........................................   $       0.64    $       0.61    $       2.03    $       1.91
  Cumulative effect of accounting change .................             --              --           (0.02)             --
  Extraordinary item .....................................             --              --              --              --
                                                             ------------    ------------    ------------    ------------
  Net income available to common unitholders .............   $       0.64    $       0.61    $       2.01    $       1.91
                                                             ============    ============    ============    ============
  Weighted average common units outstanding ..............     43,054,521      44,738,392      43,631,222      44,480,261
                                                             ============    ============    ============    ============
EARNINGS PER COMMON UNIT - DILUTED
  Income before extraordinary item (net of
    preferred distributions) .............................   $       0.64    $       0.60    $       2.02    $       1.88
  Cumulative effect of accounting change..................             --              --           (0.02)             --
  Extraordinary item .....................................             --              --              --              --
                                                             ------------    ------------    ------------    ------------
  Net income available to common unitholders .............   $       0.64    $       0.60    $       2.00    $       1.88
                                                             ============    ============    ============    ============
  Weighted average common units outstanding ..............     43,339,907      45,604,167      43,888,606      45,167,298
                                                             ============    ============    ============    ============
  Distributions declared .................................   $       0.78    $       0.76    $       2.34    $       2.28
                                                             ============    ============    ============    ============

</TABLE>

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


                                      -13-
<PAGE>
                           POST APARTMENT HOMES, L.P.
                   CONSOLIDATED STATEMENT OF PARTNERS' EQUITY
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                  GENERAL        LIMITED
                                                                  PARTNER        PARTNERS            TOTAL
                                                                 --------       -----------       -----------
<S>                                                              <C>            <C>               <C>
PARTNERS' EQUITY, DECEMBER 31, 2000 .......................      $ 12,110       $ 1,204,591       $ 1,216,701
Contributions from the Company related to Dividend
    Reinvestment and Employee Stock Purchase Plans ........            84             8,312             8,396
Purchase of units .........................................            --           (86,069)          (86,069)
Distributions to preferred unitholders ....................            --           (13,106)          (13,106)
Distributions to common unitholders .......................        (1,012)         (100,192)         (101,204)

Comprehensive Income:
   Net income .............................................         1,009            99,930           100,939

   Transition adjustment for derivative instruments .......           (15)           (1,457)           (1,472)
   Change in derivative instrument value ..................           (89)           (8,820)           (8,909)
                                                                 --------       -----------       -----------
Total Comprehensive Income ................................           905            89,653            90,558


Contributions from the Company related to restricted shares
  issued, net of amortization of deferred compensation ....             1               113               114
                                                                 --------       -----------       -----------
PARTNERS' EQUITY, SEPTEMBER 30, 2001 ......................      $ 12,088       $ 1,103,302       $ 1,115,390
                                                                 ========       ===========       ===========
</TABLE>


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

                                      -14-
<PAGE>


                           POST APARTMENT HOMES, L.P.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                               NINE MONTHS ENDED
                                                                                  SEPTEMBER 30,
                                                                            -------------------------
                                                                              2001            2000
                                                                            ---------       ---------
<S>                                                                         <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ...........................................................      $ 100,939       $  98,003
Adjustments to reconcile net income to net cash provided
   By operating activities:
   Net gain on sale of assets ........................................        (23,950)         (1,627)
   Equity in loss of unconsolidated real estate entities .............             26              --
   Extraordinary item ................................................             88              --
   Depreciation ......................................................         56,106          51,367
   Amortization of deferred loan costs ...............................          1,456           1,196
   Cumulative effect of accounting change ............................            695              --
Changes in assets, (increase) decrease in
   Restricted cash ...................................................            (72)             45
   Other assets ......................................................         (4,607)        (12,719)
   Deferred charges ..................................................           (292)         (1,263)
Changes in liabilities, increase (decrease) in:
   Accrued interest payable ..........................................          5,108           6,249
   Accounts payable and accrued expenses .............................          8,419          10,827
   Security deposits and prepaid rents ...............................            (15)            887
                                                                            ---------       ---------
   Net cash provided by operating activities .........................        143,901         152,965
                                                                            ---------       ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Construction and acquisition of real estate assets,
   net of payables ...................................................       (173,571)       (279,371)
 Net proceeds from sale of assets ....................................        215,660          75,231
 Capitalized interest ................................................        (16,803)        (18,992)
 Recurring capital expenditures ......................................         (9,719)         (7,802)
 Corporate additions and improvements ................................         (1,850)         (1,991)
 Non-recurring capital expenditures ..................................         (1,220)         (2,336)
 Revenue generating capital expenditures .............................         (2,620)         (4,257)
 Investments in and advances to unconsolidated real estate
   entities ..........................................................         (6,820)             --
                                                                            ---------       ---------
 Net cash provided by (used in) investing activities .................          3,057        (239,518)
                                                                            ---------       ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of financing costs ...........................................           (300)         (1,260)
Debt proceeds ........................................................        215,950         241,000
Debt payments ........................................................       (172,455)        (56,244)
Purchase of units ....................................................        (86,069)             --
Proceeds from contributions from the Company related to Dividend
   Reinvestment and Employee Stock Purchase Plans ....................          8,396          26,658
Distributions paid to preferred unitholders ..........................        (13,106)        (13,107)
Distributions paid to common unitholders .............................       (101,907)        (98,425)
                                                                            ---------       ---------
Net cash (used in) provided by financing activities ..................       (149,491)         98,622
                                                                            ---------       ---------
Net (decrease) increase in cash and cash equivalents .................         (2,533)         12,069
Cash and cash equivalents, beginning of period .......................          7,459           5,870
                                                                            ---------       ---------
Cash and cash equivalents, end of period .............................      $   4,926       $  17,939
                                                                            =========       =========
</TABLE>

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


                                      -15-
<PAGE>
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
------------------------------------------------------------------------------


1.       ORGANIZATION AND FORMATION OF THE COMPANY

         ORGANIZATION AND FORMATION OF THE COMPANY
         Post Apartment Homes, L.P. (the Operating Partnership), a Georgia
         limited partnership, was formed on January 22, 1993, to conduct the
         business of developing, leasing and managing upscale multi-family
         apartment communities for Post Properties, Inc. (the "Company").

         The Company elected to be taxed as a real estate investment trust
         ("REIT") for Federal income tax purposes beginning with the taxable
         year ended December 31, 1993. A REIT is a legal entity which holds real
         estate interests and, through payments of dividends to shareholders, in
         practical effect is not subject to Federal income taxes at the
         corporate level.

         BASIS OF PRESENTATION
         The accompanying unaudited financial statements have been prepared by
         the Operating Partnership's management in accordance with generally
         accepted accounting principles for interim financial information and
         applicable rules and regulations of the Securities and Exchange
         Commission. Accordingly, they do not include all of the information and
         footnotes required by generally accepted accounting principles for
         complete financial statements. In the opinion of management, all
         adjustments (consisting only of normally recurring adjustments)
         considered necessary for a fair presentation have been included. The
         results of operations for the nine-month period ended September 30,
         2001 are not necessarily indicative of the results that may be expected
         for the full year. These financial statements should be read in
         conjunction with the Operating Partnership's audited financial
         statements and notes thereto included in the Post Apartment Homes, L.P.
         Annual Report on Form 10-K for the year ended December 31, 2000.
         Certain 2000 amounts have been reclassified to conform to the current
         year's financial statement presentation.

2.       NOTES PAYABLE

         As of September 30, 2001 the Operating Partnership had $323,000
         aggregate principal amount of notes outstanding under a Medium Term
         Note Program. Medium Term Notes of $37,000 and $30,000 were repaid on
         April 2, 2001 and June 7, 2001, respectively.

3.       SALE OF ASSETS AND ASSETS HELD FOR SALE

         At December 31, 2000, the Operating Partnership had four communities,
         two commercial properties and one tract of land held for sale. During
         the first three quarters of 2001, the Operating Partnership authorized
         the sale of five communities and 11 tracts of land consisting of: three
         communities and six tracts of land in Dallas, Texas, two communities in
         Atlanta, Georgia, two tracts of land in Charlotte, North Carolina, one
         tract in Phoenix, Arizona, one tract in Tampa, Florida and one tract in
         Denver Colorado. The Operating Partnership also reclassified from
         assets held for sale two communities located in Dallas, Texas.


                                      -16-
<PAGE>
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
------------------------------------------------------------------------------


    The table below summarizes the current year sale of assets through September
30, 2001:

<TABLE>
<CAPTION>
        PROPERTY        NUMBER OF UNITS    DATE SOLD        LOCATION                   GROSS PROCEEDS        NET PROCEEDS
        --------        ---------------    ---------        ---------                  --------------        ------------
   <S>                  <C>                <C>              <C>                        <C>                   <C>
   Post Creek                 810            April           Atlanta, GA                   $ 67,250            $ 66,641
   The Lee                     80            May             Nashville, TN                    3,950               3,839
   Post Lakeside              327            May             Dallas, TX                      22,470              22,124
   Post Winsted               314            May             Dallas, TX                      20,263              19,949
   Post Shores                908            June            Dallas, TX                      76,750              75,774
   Post Pointe                360            September       Atlanta, GA                     22,400              22,116
   Land Parcel                N/A            May             Charlotte, NC                    1,942               1,876
   Land Parcel                N/A            March           Denver, CO                       1,155               1,137
   Land Parcel                N/A            August          Dallas, TX                       2,320               2,204
                                                                                           --------            --------
                                                                                           $218,500            $215,660
                                                                                           ========            ========
</TABLE>

         As of September 30, 2001, assets held for sale included one community,
         two commercial properties and nine tracts of land consisting of land,
         buildings and improvements and furniture, fixtures and equipment and
         were recorded at $50,154, which represented the lower of depreciated
         cost or fair value less cost to sell. The Operating Partnership has
         recorded net gains of $8,179 and $23,950 for the three and nine months
         ended September 30, 2001, respectively. The net gains include reserves
         of $1,530 and $12,795 for the three and nine months ended September 30,
         2001, respectively, to write down to fair market value the real estate
         assets designated as held for sale. The Operating Partnership expects
         the sale of the remaining assets to occur within the next 12 months.

         For the three months ended September 30, 2001 and 2000, the
         consolidated statement of operations includes revenue less operating
         and maintenance expense, exclusive of depreciation, of $918 and $1,022,
         respectively, from communities held for sale at September 30, 2001. For
         the nine months ended September 30, 2001 and 2000, the consolidated
         statement of operations includes revenue less operating and maintenance
         expense, exclusive of depreciation, of $2,863 and $2,924, respectively,
         from communities held for sale at September 30, 2001. Depreciation
         expense of $265 was recognized on these assets in 2001 prior to the
         assets being classified as held for sale. Depreciation expense has not
         been recognized subsequent to the date of held for sale classification.

4.       EARNINGS PER UNIT

         For the three and nine months ended September 30, 2001 and 2000, a
         reconciliation of the numerator and denominator used in the computation
         of basic and diluted earnings per unit is as follows:

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED                  NINE MONTHS ENDED
                                                                      SEPTEMBER 30,                         SEPTEMBER 30,
                                                             -------------------------------       -------------------------------
                                                                   2001              2000              2001               2000
                                                             ------------       ------------       ------------       ------------
<S>                                                          <C>                <C>                <C>                <C>
Basic and diluted income available to common
  Unitholders (numerator):
Income before cumulative effect of
  accounting change and extraordinary item ............      $     32,111       $     31,635       $    101,722       $     98,003
Less: Preferred unit distributions ....................            (4,369)            (4,369)           (13,106)           (13,107)
                                                             ------------       ------------       ------------       ------------
Income available to common unitholders
  before cumulative effect of accounting change and
  extraordinary item ..................................      $     27,742       $     27,266       $     88,616       $     84,896
                                                             ============       ============       ============       ============
Common units (denominator):
Weighted average units outstanding - basic ............        43,054,521         44,738,392         43,631,222         44,480,261
Incremental units from assumed conversion
  of options ..........................................           285,386            865,775            257,384            687,037
                                                             ------------       ------------       ------------       ------------
Weighted average units outstanding - diluted ..........        43,339,907         45,604,167         43,888,606         45,167,298
                                                             ============       ============       ============       ============
</TABLE>


                                      -17-
<PAGE>
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
------------------------------------------------------------------------------


5.       NEW ACCOUNTING PRONOUNCEMENTS

         On January 1, 2001, the Operating Partnership adopted SFAS No. 133,
         "Accounting for Derivative Instruments and Hedging Activities," as
         amended by SFAS No. 138, "Accounting for Certain Derivative Instruments
         and Hedging Activities." This standard establishes accounting and
         reporting standards for derivative and hedging activities and requires
         the Operating Partnership to recognize all derivative instruments on
         its balance sheet at fair value. Additionally, the fair value
         adjustments will affect either shareholders' equity or net income,
         depending on whether the derivative instrument qualifies as a hedge for
         accounting purposes and, if so, the nature of the hedging activity.

         Upon adoption of SFAS No. 133, the Operating Partnership recorded a
         derivative instrument liability of $1,472, and an adjustment of $1,472,
         to accumulated other comprehensive income, a partners' equity account,
         representing the fair value of its outstanding interest rate swap
         agreements. The Operating Partnership also recorded a net transition
         adjustment loss in the statement of operations of $695, relating to the
         write down of the book value of it's interest rate cap agreements to
         their fair value.

         In the normal course of business, the Operating Partnership is exposed
         to the effect of interest rate changes. The Operating Partnership
         limits these risks by following established risk management policies
         and procedures including the use of derivatives. The Operating
         Partnership's outstanding derivative financial instruments represent
         cash flow hedges that are designated specifically to reduce exposure to
         interest rate risk by locking in the expected future cash payments on
         certain designated debt obligations. This was accomplished using
         interest rate swap and interest rate cap arrangements. For all
         outstanding derivative financial instruments and for future use of
         derivative financial instruments, the Operating Partnership designates
         the specific instruments as a hedge of identified cash flow exposure.
         The Operating Partnership formally documents all relationships between
         hedging instruments and hedged items, as well as its risk-management
         objective and strategy for undertaking various hedged transactions. In
         this documentation, the Operating Partnership will specifically
         identify the asset, liability, firm commitment, or forecasted
         transaction that has been designated as a hedged item and will state
         how the hedged instrument is expected to hedge the risks related to the
         hedged item.

         The Operating Partnership will formally measure effectiveness of its
         hedging relationships both at the hedge inception and on an ongoing
         basis in accordance with its risk management policy. The Operating
         Partnership may discontinue hedge accounting prospectively when it is
         determined that the derivative is no longer effective in offsetting
         changes in the fair value or cash flows of a hedged item; when the
         derivative is expired or sold, terminated or exercised; or when the
         derivative is re-designated to no longer be a hedged instrument.

         At September 30, 2001 the Operating Partnership has outstanding
         interest rate swap agreements with a notional value of $129,000 and
         maturity dates ranging from 2005 to 2009. For the nine months ended
         September 30, 2001, the Operating Partnership recorded the unrealized
         net loss of $8,909 on these cash flow hedges as a liability and a
         reduction in accumulated other comprehensive income, a partners' equity
         account, in the accompanying consolidated balance sheet. This
         unrealized net loss of $8,909 was comprised of an unrealized net loss
         of $3,134 for the three months ended March 31, 2001, an unrealized net
         gain of $2,622 for the three months ended June 30, 2001 and an
         unrealized net loss of $8,397 for the three months ended September 30,
         2001. In addition, the Operating Partnership recorded the change in
         fair value of the ineffective component of its outstanding interest
         rate cap agreements in its statement of operations for the nine months
         ended September 30, 2001. This charge against earnings during the
         period and the fair value of the interest rate cap agreements as of
         September 30, 2001 were not significant to the Operating Partnership's
         financial position or results of operations. Within the next twelve
         months, the Operating Partnership expects to reclassify out of
         accumulated other comprehensive income approximately $1,698.

         The Financial Accounting Standards Board ("FASB") has issued Statement
         No. 144, "Accounting for the Impairment or Disposal of Long-Lived
         Assets," that replaces FASB Statement No. 121, "Accounting for the
         Impairment of Long-Lived Assets and for Long-Lived Assets to be
         Disposed Of." Statement No. 144 requires that long-lived assets be
         measured at the lower of carrying amount or fair value less cost to
         sell, whether reported in continuing operations or in discontinued
         operations. The provisions of Statement No. 144 are effective for
         financial statements issued for fiscal years beginning after December
         15, 2001. The Operating Partnership believes the provisions of
         Statement No. 144 will not have a significant effect on the Operating
         Partnership's results of operations or its financial position.

         The Securities and Exchange Commission (SEC) issued Staff Accounting
         Bulletin No. 101 (SAB 101), Revenue Recognition, which provides
         guidance on the recognition, presentation, and disclosure of revenue in
         financial statements. SAB 101 was implemented in the fourth quarter of
         2000. The adoption of SAB 101 has had no significant effect on the
         Operating Partnership's results of operations or its financial
         position.


                                      -18-
<PAGE>
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
------------------------------------------------------------------------------


6.       SEGMENT INFORMATION

         SEGMENT DESCRIPTION

         SFAS No. 131, "Disclosure About the Segments of an Enterprise and
         Related Information" requires companies to present segment information
         based on the way that management organizes the segments within the
         enterprise for making operating decisions and assessing performance.
         The segment information is prepared on substantially the same basis as
         the internally reported information used by the Operating Partnership's
         chief operating decision makers to manage the business.

         The Operating Partnership's chief operating decision makers focus on
         the Operating Partnership's primary sources of income, which are
         property rental operations and third party services. Property rental
         operations are broken down into five segments based on the various
         stages in the property ownership lifecycle. Third party services are
         designated as one segment. The Operating Partnership's six segments are
         further described as follows: Property Rental Operations

         -        Mature communities - those communities which have been
                  stabilized (the point in time which a property reached 95%
                  occupancy or one year after completion of construction) for
                  both the current and prior year.

         -        Communities stabilized during 2000 - communities which reached
                  stabilized occupancy in the prior year.

         -        Development and Lease up Communities - those communities which
                  are in lease-up but were not stabilized by the beginning of
                  the current year including communities which stabilized during
                  the current year.

         -        Communities held for sale - those communities that are
                  currently being actively marketed for sale.

         -        Sold communities - communities which were sold in the current
                  or prior year.

         Third Party Services - fee income and related expenses from the
         Operating Partnership's apartment community management, landscaping and
         corporate apartment rental services.

         On November 7, 2001, the Operating Partnership sold Post Landscape
         Group, Inc., a subsidiary entity that provides landscape maintenance,
         design and installation services to third parties. In addition, the
         Operating Partnership has agreed to sell its apartment community
         management division, RAM Partners Inc. ("RAM") by year-end. The
         Operating Partnership intends to finance these purchases over a five
         to seven year period. The related purchase notes amortize on, or
         approximately on, a 10-year schedule with a balloon payment due at the
         end of year five. Two one-year renewal options are available. Under
         generally accepted accounting principles, any gain on sale will not be
         recorded until such time the conditions for gain recognition are met.
         Until such time, the net assets of these divisions will be carried on
         the Operating Partnership balance sheet at book value.

         SEGMENT PERFORMANCE MEASURE
         The Operating Partnership uses the National Association of Real Estate
         Investment Trusts ("NAREIT") definition of Funds From Operations
         ("FFO"). Effective January 1, 2000, NAREIT amended its definition of
         FFO to include in FFO all non-recurring transactions, except those that
         are defined as extraordinary under generally accepted accounting
         principles ("GAAP"). The Operating Partnership adopted this new
         definition effective January 1, 2000. FFO for any period means the
         consolidated net income of the Operating Partnership and its
         subsidiaries for such period excluding gains or losses from debt
         restructuring and sales of property plus depreciation of real estate
         assets, and after adjustment for unconsolidated partnerships and joint
         ventures, all determined on a consistent basis in accordance with GAAP.
         FFO presented herein is not necessarily comparable to FFO presented by
         other real estate companies because not all real estate companies use
         the same definition. The Operating Partnership's FFO is comparable to
         the FFO of real estate companies that use the current NAREIT
         definition. FFO should not be considered as an alternative to net
         income (determined in accordance with GAAP) as a measure of the
         Operating Partnership's liquidity, nor is it necessarily indicative of
         sufficient cash flow to fund all of the Operating Partnership's needs
         or ability to service indebtedness or make distributions.


                                      -19-
<PAGE>
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
------------------------------------------------------------------------------


         SEGMENT INFORMATION

         The following table reflects each segment's contribution to FFO
         together with a reconciliation of segment contribution to FFO, total
         FFO and income before extraordinary item. Additionally, substantially
         all of the Operating Partnership's assets relate to the Operating
         Partnership's property rental operations. Asset cost, depreciation and
         amortization by segment are not presented because such information is
         not reported internally at the segment level.

Summarized financial information concerning the Operating Partnership's
reportable segments is shown in the following tables.


<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                    SEPTEMBER 30,                  SEPTEMBER 30,
                                                             ------------------------       -------------------------
                                                               2001            2000            2001           2000
                                                             --------       ---------       ---------       ---------
<S>                                                          <C>            <C>             <C>             <C>
REVENUES
Fully stabilized communities ..........................      $ 64,864       $  64,414       $ 194,827       $ 190,572
Communities stabilized during 2000 ....................        11,616          10,777          35,131          27,788
Development and lease-up communities ..................        12,216           5,097          31,576          11,226
Communities held for sale .............................         1,552           1,591           4,714           4,615
Sold communities ......................................           735          11,558          12,538          36,389
Third party services ..................................         3,981           3,730          11,939          10,671
Other .................................................         4,155           4,063          13,139          14,855
                                                             --------       ---------       ---------       ---------

Consolidated revenues .................................      $ 99,119       $ 101,230       $ 303,864       $ 296,116
                                                             ========       =========       =========       =========

CONTRIBUTION TO FUNDS FROM OPERATIONS
Fully stabilized communities ..........................      $ 43,545       $  44,577       $ 132,614       $ 132,835
Communities stabilized during 2000 ....................         7,494           7,210          23,186          18,137
Development and lease-up communities ..................         7,730           2,692          18,985           5,523
Communities held for sale .............................           918           1,022           2,863           2,924
Sold communities ......................................           437           7,825           7,864          25,165
Third party services ..................................           280             623           1,310           1,562
                                                             --------       ---------       ---------       ---------

Contribution to FFO ...................................        60,404          63,949         186,822         186,146
                                                             --------       ---------       ---------       ---------

Other operating income, net of expense ................          (449)           (539)         (1,321)          2,207
Depreciation on non-real estate assets ................          (611)           (583)         (1,857)         (1,794)
Minority interest in consolidated property
partnerships ..........................................           527             381           1,344           1,195
Interest expense ......................................       (14,058)        (12,789)        (43,763)        (35,551)
Amortization of deferred loan costs ...................          (513)           (413)         (1,456)         (1,196)
General and administrative ............................        (3,395)         (2,678)         (9,802)         (6,806)
Distributions to preferred unitholders ................        (4,369)         (4,369)        (13,106)        (13,107)
                                                             --------       ---------       ---------       ---------

Total FFO .............................................        37,536          42,959         116,861         131,094
                                                             --------       ---------       ---------       ---------

Depreciation on real estate assets ....................       (17,973)        (16,651)        (52,195)        (47,825)
Net gain on sale of assets ............................         8,179             958          23,950           1,627
Distributions to preferred unitholders ................         4,369           4,369          13,106          13,107
                                                             --------       ---------       ---------       ---------
Income before cumulative effect of accounting
change, extraordinary item and preferred
distributions .........................................      $ 32,111       $  31,635       $ 101,722       $  98,003
                                                             ========       =========       =========       =========
</TABLE>


                                      -20-
<PAGE>
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
------------------------------------------------------------------------------

7.       PROJECT ABANDONMENT, EMPLOYEE SEVERANCE AND IMPAIRMENT CHARGES

         In the fourth quarter of 2000, management decided to restrict its
         development activities to fewer markets, refine its development
         strategy, exit the for-sale housing business and make changes in its
         executive management team.

         Employees affected by the management changes were primarily four
         executives and five accounting department employees in the Dallas
         regional office.

         The following table summarizes the activity relating to the unpaid
         severance charges during the three months ended September 30, 2001:

<TABLE>
            <S>                                                <C>
            Severance accrual at December 31, 2000             $  2,250
            Severance payment during first quarter 2001           1,382
            Severance payment during second quarter 2001            631
            Severance payment during third quarter 2001             166
                                                               --------
            Severance accrual at September 30, 2001            $     71
                                                               ========
</TABLE>

8.       INVESTMENTS IN REAL ESTATE ENTITIES:

         In April 2001, the Operating Partnership contributed two apartment
         communities under development in Atlanta, Georgia to joint ventures
         with an institutional investor. The Operating Partnership holds a 35%
         equity interest in the joint ventures. The total estimated development
         cost of the joint venture properties of $67,000 is being funded through
         partner equity contributions proportionate to the partners' ownership
         interest and through construction financing provided by the Operating
         Partnership. No gain or loss was recognized on the Operating
         Partnership's contribution to the joint ventures. The Operating
         Partnership provides real estate services (development, construction
         and property management) to the joint ventures. The Operating
         Partnership accounts for these joint ventures using the equity method
         of accounting.

         At September 30, 2001, the Operating Partnership's investment in and
         advances to the joint ventures accounted for using the equity method
         totaled $36,377. The combined total assets, liabilities and equity of
         the joint ventures accounted for using the equity method at September
         30, 2001, were $48,890, $35,876 and $13,014, respectively. During the
         third quarter of 2001, one of the communities commenced its initial
         rental operations. The Operating Partnership recorded equity in loss
         from this joint venture totaling $26 during the third quarter. Such
         equity in loss is included in other revenue in the accompanying
         consolidated financial statements.

         In the third quarter of 2001, the Operating Partnership commenced the
         development of a 138-unit apartment community in New York, New York,
         through an entity that will be approximately 64% owned by the
         Operating Partnership. Total estimated development costs of
         approximately $52,000 are being funded through partner equity
         contributions proportionate to the partners' ownership interest and
         through construction financing provided by the Operating Partnership.
         Through September 30, 2001, total development costs were approximately
         $11,000. The financial statements of this majority owned entity are
         consolidated with the accompanying consolidated financial statements
         of the Operating Partnership. For cash flow purposes, investments in
         and advances to unconsolidated entities excludes non-cash
         contributions of $29,583 for the nine months ended September 30, 2001.

9.       STOCK BASED COMPENSATION PLAN

         In 2001, the Company, under its existing Employee Stock Plan, granted
         17,566 shares of restricted stock to Operating Partnership officers.
         The restricted shares vest ratably over a five-year period. The total
         value of the restricted share grants of $644 was initially reflected in
         partners' equity offset by the amount of the unamortized deferred
         compensation expense. Such deferred compensation is amortized ratably
         into compensation expense over the vesting period.


                                      -21-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
--------------------------------------------------------------------------------


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

OVERVIEW

The following discussion should be read in conjunction with all of the financial
statements appearing elsewhere in this report. The following discussion is based
primarily on the Consolidated Financial Statements of Post Properties, Inc. (the
"Company") and Post Apartment Homes, L.P. (the Operating Partnership). Except
for the effect of minority interest in the Operating Partnership, the following
discussion with respect to the Company is the same for the Operating
Partnership.

As of September 30, 2001, there were 42,004,729 units in the Operating
Partnership outstanding, of which 36,860,834 or 87.8%, were owned by the Company
and 5,143,895, or 12.2%, were owned by other limited partners (including certain
officers and directors of the Company). As of September 30, 2001, there were
7,800,000 preferred units outstanding, of which 5,000,000 were owned by the
Company.

RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND
2000

The Company recorded net income available to common shareholders of $24,420 and
$77,431 for the three and nine months ended September 30, 2001, respectively,
which represent increases of 1.3% and 3.2%, respectively, over the corresponding
periods in 2000 primarily as a result of net gains from the sale of assets.

COMMUNITY OPERATIONS

The Company's net income is generated primarily from the operation of its
apartment communities. For purposes of evaluating comparative operating
performance, the Company categorizes its operating communities based on the
period each community reaches stabilized occupancy. A community is generally
considered by the Company to have achieved stabilized occupancy on the earlier
to occur of (i) attainment of 95% physical occupancy on the first day of any
month or (ii) one year after completion of construction.

As of September 30, 2001, the Company's portfolio of apartment communities
consisted of the following: (i) 66 communities which were completed and
stabilized for all of the current and prior year, (ii) ten communities which
achieved full stabilization during the prior year, (iii) 18 communities either
stabilized in the current year or presently in the development or lease-up
stages and (iv) one community that is currently held for sale.

For communities with respect to which construction is completed and the
community has become fully operational, all property operating and maintenance
expenses are expensed as incurred and those recurring and non-recurring
expenditures relating to acquiring new assets, materially enhancing the value of
an existing asset, or substantially extending the useful life of an existing
asset are capitalized. (See "Capitalization of Fixed Assets and Community
Improvements").

Since its inception, the Company has applied an accounting policy related to
communities in the development and lease-up stage whereby substantially all
operating expenses (including pre-opening marketing expenses) are expensed as
incurred. The Company treats each unit in an apartment community separately for
cost accumulation, capitalization and expense recognition purposes. Prior to the
commencement of leasing activities, interest and other construction costs are
capitalized and reflected on the balance sheet as construction in progress. Once
a unit is placed in service, all operating expenses allocated to that unit,
including interest, are expensed as incurred. During the lease-up phase, the sum
of interest expense on completed units and other operating expenses (including
pre-opening marketing expenses) will typically exceed rental revenues, resulting
in a "lease-up deficit," which continues until such time as rental revenues
exceed such expenses. Lease up deficits for the three and nine months ended
September 30, 2001 were $488 and $2,256, respectively. Lease up deficits for the
three and nine months ended September 30, 2000 were $521 and $2,138,
respectively.


                                      -22-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
--------------------------------------------------------------------------------


In order to evaluate the operating performance of its communities, the Company
has presented financial information which summarizes the operating income on a
comparative basis for all of its operating communities combined and for
communities which have reached stabilization prior to January 1, 2000.

ALL OPERATING COMMUNITIES

The operating performance for all of the Company's apartment communities
combined for the three and nine months ended September 30, 2001 and 2000 is
summarized as follows:

<TABLE>
<CAPTION>

                                                               THREE MONTHS ENDED                     NINE MONTHS ENDED
                                                                  SEPTEMBER 30,                          SEPTEMBER 30,
                                                        -------------------------------       -----------------------------------
                                                          2001        2000      %CHANGE         2001           2000      %CHANGE
                                                        --------   --------    --------       --------      --------     --------
<S>                                                     <C>        <C>         <C>            <C>           <C>          <C>
Rental and other revenue:
Mature communities (1) ...........................      $64,864    $ 64,414        0.7%       $194,827      $190,572         2.2%
Communities stabilized during 2000 ...............       11,616      10,777        7.8%         35,131        27,788        26.4%
Development and lease-up communities (2) .........       12,216       5,097      139.7%         31,576        11,226       181.3%
Communities held for sale (3) ....................        1,552       1,591       (2.5)%         4,714         4,615         2.1%
Sold communities (4) .............................          735      11,558      (93.3)%        12,538        36,389       (65.5)%
Other revenue (5) ................................        3,785       3,587        5.5%         11,781        13,392       (12.0)%
                                                        -------    --------                   --------      --------
                                                         94,768      97,024       (2.3)%       290,567       283,982         2.3%
                                                        -------    --------                   --------      --------
Property operating and maintenance expense
(exclusive of depreciation and
amortization):
Mature communities (1) ...........................       21,319      19,837        7.5%         62,213        57,737         7.8%
Communities stabilized during 2000 ...............        4,122       3,567       15.6%         11,945         9,651        23.8%
Development and lease-up communities (2) .........        4,486       2,405       86.5%         12,591         5,703       120.8%
Communities held for sale (3) ....................          634         569       11.4%          1,851         1,691         9.5%
Sold communities (4) .............................          298       3,733      (92.0)%         4,674        11,224       (58.4)%
Other expenses (6) ...............................        3,845       3,906       (1.5)%        12,406        10,900        13.8%
                                                        -------    --------                   --------      --------
                                                         34,704      34,017        2.0%        105,680        96,906         9.1%
                                                        -------    --------                   --------      --------
Revenue in excess of specified expense ...........      $60,064    $ 63,007       (4.7)%      $184,887      $187,076        (1.2)%
                                                        =======    ========                   ========      ========
Recurring capital expenditures: (7)
  Carpet .........................................      $   793    $    777        2.1%       $  2,192      $  2,187         0.2%
  Other ..........................................        1,987       2,563      (22.5)%         7,527         5,615        34.1%
                                                        -------    --------                   --------      --------
  Total ..........................................      $ 2,780    $  3,340      (16.8)%      $  9,719      $  7,802        24.6%
                                                        =======    ========                   ========      ========
Average apartment units in service ...............       31,318      31,763       (1.4)%        31,777        31,254         1.7%
                                                        =======    ========                   ========      ========
Recurring capital expenditures per
  apartment unit .................................      $    89    $    105      (15.2)%      $    306      $    250        22.4%
                                                        =======    ========                   ========      ========
</TABLE>


(1)  Communities which reached stabilization prior to January 1, 2000.
(2)  Communities in the "construction", "development" or "lease-up" stage
     during 2000 and, therefore, not considered fully stabilized for all of
     the periods presented.
(3)  Includes one community and two commercial properties in Texas.
(4)  Includes one community containing 213 units which was sold February 4,
     2000, three communities containing 983 units which were sold on September
     6, 2000, two communities containing 367 units which were sold November 9,
     2000, one community containing 296 units which was sold December 21, 2000,
     one community containing 125 units which was sold December 28, 2000, one
     community containing 810 units which was sold April 10, 2001, one
     community containing 80 units which was sold May 1, 2001, one community
     containing 327 units which was sold May 10, 2001, one community containing
     314 units which was sold May 23, 2001, one community containing 908 units
     which was sold June 21, 2001, and one community containing 360 units which
     was sold on September 25, 2001.
(5)  Includes revenue from furnished apartment rentals above the unfurnished
     rental rates, revenue from commercial properties and other revenue not
     directly related to property operations.
(6)  Includes certain indirect central office operating expenses related to
     management, ground maintenance, costs associated with furnished apartment
     rentals and operating expenses from commercial properties.
(7)  In addition to these expenses which relate to property operations, the
     Company incurs recurring and non-recurring expenditures relating to
     acquiring new assets, materially enhancing the value of an existing asset
     or substantially extending the useful life of an existing asset, all of
     which are capitalized.


                                      -23-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)



For the three months ended September 30, 2001, rental and other revenue
decreased $2,256, or 2.3%, compared to the same period in the prior year
primarily as a result of asset sales partially offset by the completion and
lease-up of new communities. For the nine months ended September 30, 2001,
rental and other revenue increased $6,585, or 2.3% compared to the same period
in the prior year primarily as a result of the completion and lease-up of new
communities and increased rental rates for existing communities partially offset
by asset sales. For the three and nine months ended September 30, 2001, property
operating and maintenance expenses increased $687, or 2.0%, and $8,774, or 9.1%,
respectively, compared to the same periods in the prior year, primarily due to
the completion of new communities and increases in personnel costs, real estate
taxes and insurance in the mature communities.

For the three months ended September 30, 2001, recurring capital expenditures
decreased $560, or 16.8% ($16, or 15.2% on a per unit apartment basis), compared
to the same period in the prior year, primarily due to the timing of capital
expenditures. For the nine months ended September 30, 2001, recurring capital
expenditures increased $1,917, or 24.6% ($56, or 22.4% on a per unit apartment
basis) compared to the same period in the prior year, primarily due to
additional units placed in service and the extent of scheduled capital
improvements.

MATURE COMMUNITIES

The Company defines mature communities as those which have reached stabilization
prior to the beginning of the previous calendar year.

The operating performance of the 66 communities containing an aggregate of
22,612 units, which were fully stabilized as of January 1, 2000, is summarized
as follows:

<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED                    NINE MONTHS ENDED
                                                             SEPTEMBER 30,                          SEPTEMBER 30,
                                                   ---------------------------------    ------------------------------------
                                                                                 %                                      %
                                                    2001          2000        CHANGE       2001           2000        CHANGE
                                                   -------       -------      ------     --------       --------      ------
<S>                                                <C>           <C>          <C>        <C>            <C>           <C>
Rental and other revenue (1) ................      $64,864       $64,414        0.7%     $194,827       $190,572       2.2%
Property operating and maintenance
  expense (exclusive of depreciation and
  amortization) (1) .........................       21,319        19,837        7.5%       62,213         57,737       7.8%
                                                   -------       -------                 --------       --------
Revenue in excess of specified expense ......      $43,545       $44,577       (2.3)%    $132,614       $132,835      (0.2)%
                                                   -------       -------                 --------       --------
Recurring capital expenditures: (2)
  Carpet ....................................      $   745       $   653       14.1%     $  1,887       $  1,776       6.3%
  Other .....................................        1,810         2,211      (18.1)%       6,357          4,824      31.8%
                                                   -------       -------                 --------       --------
  Total .....................................      $ 2,555       $ 2,864      (10.8)%    $  8,244       $  6,600      24.9%
                                                   =======       =======                 ========       ========
Recurring capital expenditures per
  apartment unit (3) ........................      $   113       $   127      (11.0)%    $    365       $    292      25.0%
                                                   =======       =======                 ========       ========
Average economic occupancy (4) ..............         95.1%         97.1%      (2.1)%        95.4%          96.8%     (1.4)%
                                                   =======       =======                 ========       ========
Average monthly rental rate per
  apartment unit (5) ........................      $   957       $   940        1.8%     $    954       $    932       2.3%
                                                   =======       =======                 ========       ========
Apartment units in service ..................       22,612        22,612                   22,612         22,612
                                                   =======       =======                 ========       ========
</TABLE>

(1)      Communities which reached stabilization prior to January 1, 2000.

(2)      In addition to those expenses which relate to property operations, the
         Company incurs recurring and non-recurring expenditures relating to
         acquiring new assets, materially enhancing the value of an existing
         asset, or substantially extending the useful life of an existing asset,
         all of which are capitalized.

(3)      In addition to such capitalized expenditures, the Company expensed $205
         and $176 per unit on building maintenance (inclusive of direct
         salaries) and $59 and $58 per unit on landscaping (inclusive of direct
         salaries) for the three months ended September 30, 2001 and 2000,
         respectively.


                                      -24-
<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)



(4)      Average economic occupancy is defined as gross potential rent less
         vacancy losses, model expenses and bad debt divided by gross potential
         rent for the period, expressed as a percentage. The calculation of
         average economic occupancy does not include a deduction for concessions
         and employee discounts. Average economic occupancy, including these
         amounts would have been 94.1% and 95.2% for the three months ended
         September 30, 2001 and 2000, respectively. For the three months ended
         September 30, 2001 and 2000, concessions were $401 and $1,020,
         respectively, and employee discounts were $212 and $229, respectively.

(5)      Average monthly rental rate is defined as the average of the gross
         actual rates for occupied units and the anticipated rental rates for
         unoccupied units.

For the three and nine months ended September 30, 2001, rental and other revenue
increased $450, or 0.7%, and $4,255, or 2.2%, respectively, compared to the same
periods in the prior year, primarily due to increased rental rates partially
offset by the impact of lower average occupancy between periods. For the three
and nine months ended September 30, 2001, property operating and maintenance
expenses (exclusive of depreciation and amortization) increased $1,482, or 7.5%,
and $4,476, or 7.8%, respectively, compared to the same periods in the prior
year, primarily as a result of increased personnel expense, real estate taxes
and insurance.

For the three months ended September 30, 2001, recurring capital expenditures
per unit decreased $14, or 11.0%, compared to the same period in the prior year,
as a result of the timing of expenditures. For the nine months ended September
30, 2001, recurring capital expenditures increased $73, or 25%, compared to the
same period in the prior year as a result of the extent of scheduled capital
improvements.

THIRD PARTY SERVICES

THIRD PARTY MANAGEMENT SERVICES

The Company provides asset management, leasing and other consulting services to
non-related owners of apartment communities through its subsidiary, RAM
Partners, Inc. ("RAM"). The operating performance of RAM for the three and nine
months ended September 30, 2001 and 2000 is summarized as follows:


<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED                    NINE MONTHS ENDED
                                                      SEPTEMBER 30,                       SEPTEMBER 30,
                                             --------------------------------     -----------------------------
                                               2001        2000       %CHANGE       2001        2000    %CHANGE
                                             --------   ---------     -------     --------   ---------  -------
<S>                                          <C>        <C>           <C>         <C>        <C>        <C>
Property management and other revenue..      $  1,102   $     987       11.7%     $  3,469   $   2,828   22.7%
Property management expense............           924         731       26.4%        2,834       2,249   26.0%
Depreciation expense...................             8           7       14.3%           23          21    9.5%
                                             --------   ---------                 --------   ---------
Revenue in excess of specified expense.      $    170   $     249      (31.7)%    $    612   $     558    9.7%
                                             ========   =========                 ========   =========
Average apartment units managed........        17,171      14,613       17.5%       16,558      14,114   17.3%
                                             ========   =========                 ========   =========
</TABLE>

The decrease in revenue in excess of specified expense for the three months
ended September 30, 2001 compared to the same period in the prior year is
primarily attributable to increased expenses associated with the procurement of
new management contracts during the period. The increase in revenue in excess of
specified expense for the nine months ended September 30, 2001 compared to the
same period in the prior year is primarily attributable to an increase in the
average number of units managed.

The Company has entered into an agreement to sell RAM to a group of its
management. This transaction is expected to close by year-end (See footnote 7
to the accompanying consolidated financial statements).


                                      -25-
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)



THIRD PARTY LANDSCAPE SERVICES

The Company provides landscape maintenance, design and installation services to
non-related parties through a subsidiary, Post Landscape Group, Inc. ("Post
Landscape Group"), formerly called Post Landscape Services, Inc.

The operating performance of Post Landscape Group for the three and nine months
ended September 30, 2001 and 2000 is summarized as follows:


<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED                     NINE MONTHS ENDED
                                                       SEPTEMBER 30,                           SEPTEMBER 30,
                                            -----------------------------------    ---------------------------------
                                              2001         2000       % CHANGE        2001        2000     % CHANGE
                                            ---------   ---------     ---------    ---------    ---------  ---------
<S>                                         <C>         <C>           <C>          <C>          <C>        <C>
Landscape services and other revenue......  $   2,879   $   2,743        5.0%      $   8,470    $   7,843      8.0%
Landscape services expense................      2,777       2,376       16.9%          7,795        6,860     13.6%
Depreciation expense......................        120          96       25.0%            339          273     24.2%
                                            ---------   ---------                  ---------    ---------
Revenue in excess of specified expense....  $    (18)   $     271     (106.6)%     $     336    $     710    (52.7)%
                                            =========   =========                  =========    =========
</TABLE>

The decrease in revenue in excess of specified expense for the three and nine
months ended September 30, 2001 compared to the same periods in the prior year
is primarily attributable to a reduction in landscape installation volume
resulting from a slow down in commercial construction in Post Landscape Group's
markets.

On November 7, 2001, the Company sold Post Landscape Group to a group of its
management (See footnote 7 to the accompanying consolidated financial
statements).

OTHER EXPENSES

Depreciation expense increased $1,413, or 7.9%, and $4,739, or 9.2%,
respectively, for the three and nine months ended September 30, 2001 compared to
the same periods in the prior year, primarily as a result of an increase in
units in service, additional leasehold improvements and technology expenditures.

General and administrative expense increased $717, or 26.8%, and $2,996, or
44.0%, respectively, for the three and nine months ended September 30, 2001,
compared to the same period in the prior year, primarily as a result of reduced
capitalization of overhead to a declining investment in communities under
development, increased salary expense, insurance costs and internet
infrastructure maintenance costs.

Interest expense increased $1,269, or 9.9%, and $8,212, or 23.1%, respectively,
for the three and nine months ended September 30, 2001 compared to the same
period in the prior year primarily due to an increase in debt used to fund the
development and lease-up of new communities and the repurchase of the Company's
common stock.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

The Company's net cash provided by operating activities decreased from $152,965
for the nine months ended September 30, 2000 to $143,901 for the nine months
ended September 30, 2001, principally due to reduced operating income as a
result of property sales and changes in working capital. Net cash provided by
(used in) investing activities increased from ($239,518) in the nine months
ended September 30, 2000 to $3,057 in the nine months ended September 30, 2001
principally due to decreased construction spending and greater proceeds from the
sale of communities in 2001. The Company's net cash provided by (used in)
financing activities decreased from $98,622 for the nine months ended September
30, 2000 to ($149,491) for the nine months ended September 30, 2001 primarily
due to increased debt payments and treasury stock purchases.


                                      -26-
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)



The Company has elected to be taxed as a Real Estate Investment Trust ("REIT")
under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended,
commencing with its taxable year ended December 31, 1993. REITs are subject to a
number of organizational and operational requirements, including a requirement
that they currently distribute 90% of their ordinary taxable income. The Company
generally will not be subject to Federal income tax on net income.

At September 30, 2001, the Company had total indebtedness of $1,256,804, an
increase of $43,495 from its total indebtedness at December 31, 2000, and cash
and cash equivalents of $4,926. At September 30, 2001, the Company's
indebtedness included approximately $229,974 in conventional mortgages payable
secured by individual communities, tax-exempt bond indebtedness of $235,880
senior unsecured notes of $703,000, borrowings under it's revolving credit
facility ("the Revolver") of $83,000 and other unsecured lines of credit and
unsecured debt of $4,950.

The Company expects to meet its short-term liquidity requirements generally
through its net cash provided by operations and borrowings under credit
arrangements and expects to meet certain of its long-term liquidity
requirements, such as scheduled debt maturities, repayment of financing of
construction and development activities, and possible property acquisitions,
through long-term secured and unsecured borrowings and the issuance of debt
securities or additional equity securities of the Company, sales of communities,
joint ventures, or, possibly in connection with acquisitions of land or improved
properties, units of the Operating Partnership. The Company believes that its
net cash provided by operations, as supplemented by borrowings under its
existing credit arrangements, will be adequate and anticipates that it will
continue to be adequate to meet both operating requirements and payment of
dividends by the Company in accordance with REIT requirements in both the short
and the long term. The budgeted expenditures for improvements and renovations to
certain of the communities are expected to be funded from property operations.

Lines Of Credit

The Company has three unsecured lines of credit with total availability of
$525,000. As of September 30, 2001, there was $85,950 outstanding on these
lines.

Medium Term Notes

As of September 30, 2001, the Operating Partnership had $323,000 aggregate
principal amount of notes outstanding under a Medium Term Note Program. Medium
Term Notes in the amounts of $37,000 and $30,000 were repaid on April 2, 2001
and June 7, 2001, respectively.

Fixed Rate Notes

On March 12, 2001, the Operating Partnership issued $50,000 of unsecured notes.
These notes bear interest at 6.71% and mature March 13, 2006. Net proceeds of
$49,700 were used to repay outstanding indebtedness and repurchase the Company's
common stock.

Sale of Assets

During the first three-quarters of 2001, the Company sold six communities and
three tracts of land for gross proceeds of $218,500. Net proceeds of
approximately $215,660 were used to repay outstanding indebtedness and fund
additional development projects.

Stock Repurchase Program

The Company's Board of Directors has approved the purchase of up to $200,000 of
the Company's common stock and an additional $50,000 of preferred stock.
Purchases will be made from time to time in the open market and it is expected
that funding of the program will come from operating cash flow, existing bank
facilities and proceeds from asset sales. Through September 30, 2001, the
Company has repurchased 3,087,600 shares of its common stock at a total cost of
$112,689.


                                      -27-
<PAGE>



MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)



Schedule of Indebtedness

The following table reflects the Company's indebtedness at September 30, 2001:

<TABLE>
<CAPTION>
             DESCRIPTION                     LOCATION                 INTEREST RATE                DATE (1)        BALANCE
             -----------                     --------                 -------------                --------        -------
<S>                                          <C>                 <C>                               <C>            <C>
CONVENTIONAL FIXED RATE (SECURED)
Northwestern Mutual Life.................    Dallas, TX                    7.69%                    10/01/07          28,372
Northwestern Mutual Life.................    Dallas, TX                    7.69%                    10/01/07          50,712
Northwestern Mutual Life.................    Atlanta, GA                   6.50% (2)                03/01/09          47,918
Parkwood Townhomes(TM)....................   Dallas, TX                    7.375%                   04/01/14             772
FNMA.....................................    Atlanta, GA                   6.975% (3)               07/23/29         102,200
                                                                                                                  ----------
                                                                                                                     229,974
TAX EXEMPT FLOATING RATE (SECURED)
Post Ashford(R)Series 1995...............    Atlanta, GA        "AAA" NON-AMT + .515% (4)(5)        06/01/25           9,895
Post Valley(R)Series 1995................    Atlanta, GA        "AAA" NON-AMT + .515% (4)(5)        06/01/25          18,600
Post Brook(R)Series 1995.................    Atlanta, GA        "AAA" NON-AMT + .515% (4)(5)        06/01/25           4,300
Post Village(R)(Atlanta) Hills
  Series 1995                                Atlanta, GA        "AAA" NON-AMT + .515% (4)(5)        06/01/25           7,000
Post Mill(R)Series 1995..................    Atlanta, GA        "AAA" NON-AMT + .515% (4)(5)        06/01/25          12,880
Post Canyon(R)Series 1996................    Atlanta, GA        "AAA" NON-AMT + .515% (4)(5)        06/01/25          16,845
Post Corners(R)Series 1996...............    Atlanta, GA        "AAA" NON-AMT + .515% (4)(5)        06/01/25          14,760
Post Bridge(R)...........................    Atlanta, GA        "AAA" NON-AMT + .515% (4)(5)        06/01/25          12,450
Post Village(R)(Atlanta) Gardens.........    Atlanta, GA        "AAA" NON-AMT + .515% (4)(5)        06/01/25          14,500
Post Chase(R)............................    Atlanta, GA        "AAA" NON-AMT + .515% (4)(5)        06/01/25          15,000
Post Walk(R).............................    Atlanta, GA        "AAA" NON-AMT + .515% (4)(5)        06/01/25          15,000
Post Lake(R).............................    Orlando, FL        "AAA" NON-AMT + .515% (4)(5)        06/01/25          28,500
Post Fountains at Lee Vista(R)...........    Orlando, FL        "AAA" NON-AMT + .515% (4)(5)        06/01/25          21,500
Post Village(R)(Atlanta) Fountains
   And Meadows...........................    Atlanta, GA        "AAA" NON-AMT + .515% (4)(5)        06/01/25          26,000
Post Court(R)............................    Atlanta, GA        "AAA" NON-AMT + .515% (4)(5)        06/01/25          18,650
                                                                                                                  ----------
                                                                                                                     235,880
SENIOR NOTES (UNSECURED)
Northwestern Mutual Life.................      N/A                       8.37%                      06/07/02          20,000
Senior Notes.............................      N/A                       7.25%                      10/01/03         100,000
Medium Term Notes........................      N/A                       7.30%                      04/01/04          13,000
Medium Term Notes........................      N/A                       6.69%                      09/22/04          10,000
Medium Term Notes........................      N/A                       7.28% (6)                  02/01/05          25,000
Medium Term Notes........................      N/A                       8.12%                      06/15/05         150,000
Medium Term Notes........................      N/A                       6.78%                      09/22/05          25,000
Senior Notes.............................      N/A                       6.71%                      03/13/06          50,000
Senior Notes.............................      N/A                       7.50%                      10/01/06          25,000
Senior Notes.............................      N/A                       7.70%                      12/20/10         185,000
Mandatory Par Put Remarketed
Securities...............................      N/A                       6.85% (7)                  03/16/15         100,000
                                                                                                                  ----------
                                                                                                                     703,000
LINES OF CREDIT AND OTHER
UNSECURED DEBT

Cash Management Line.....................      N/A           LIBOR + .675% or prime minus .25%      02/13/02           2,950
                                                              LIBOR + .750% or prime minus
Revolver - Syndicated ...................      N/A                      .25%(8)                     04/30/04          83,000
City of Phoenix..........................      N/A                     5.00% (9)                    03/01/21           2,000
                                                                                                                  ----------

                                                                                                                      87,950

TOTAL....................................                                                                         $1,256,804
                                                                                                                  ==========
</TABLE>

(1)      All of the mortgages can be prepaid at any time, subject to certain
         prepayment penalties.

(2)      This note bears interest at 6.50% with an effective rate of 7.30% after
         consideration of a terminated swap agreement.

(3)      In December 2000, the Company entered into a swap transaction that
         fixed the rate of interest on this note at 6.975%, inclusive of credit
         enhancement and other fees, from January 1, 2001 through July 31, 2009.

(4)      Bond financed (interest rate on bonds + credit enhancement fees
         effective October 1, 1998).

(5)      These bonds are cross-collateralized. The Company purchased an interest
         rate cap that limits exposure to increases in the base rate to 5%.

(6)      The Company entered into a swap transaction that fixed the rate on the
         note of 7.28%, inclusive of credit enhancement and other fees, through
         maturity.

(7)      The annual interest rate on these securities to March 16, 2005 is
         6.85%. On this date, they are subject to mandatory tender for
         remarketing.

(8)      Represents stated rate. The Company may also make "money market" loans
         of up to $160,000 at rates below the stated rate. At September 30,
         2001, the outstanding balance of the Revolver consisted of "money
         market" loans with an average interest rate of 3.84%.

(9)      This loan is interest-free for the first three years, with interest at
         5.00% thereafter. Repayment commenced on March 1, 2001 subject to the
         conditions set forth in the Agreement.


                                      -28-
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)



Dividend Reinvestment Plan

During the third quarter, the Company announced the adoption of a dividend
reinvestment and stock purchase plan. The plan is available to all shareholders
of the Company and allows shareholders to acquire additional shares of the
Company's common stock through the reinvestment of regular quarterly dividends
and optional cash payments. The Company currently plans to purchase the required
additional shares on the open market as allowed under this plan.

Current Development Activity

The Company's apartment communities under development or in initial lease-up are
summarized in the following table:

<TABLE>
<CAPTION>
                                                         ESTIMATED                   ESTIMATED                   ESTIMATED
                                             # OF       QUARTER OF                  QUARTER OF                  QUARTER OF
    METROPOLITAN AREA                        UNITS   CONSTRUCTION START         FIRST UNITS AVAILABLE       STABILIZED OCCUPANCY
    -----------------                        -----   ------------------         ---------------------       --------------------

    <S>                                      <C>     <C>                        <C>                         <C>
    WHOLLY OWNED CONSTRUCTION/LEASE-UP
    COMMUNITIES:

    CHARLOTTE, NC
    Post Gateway Place II...............       204          3Q'00                       4Q'01                       4Q'02
    SUBTOTAL

    TAMPA, FL
    Post Harbour Place III..............       259          2Q'01                       2Q'02                       2Q'03


    HOUSTON, TX
    Post Midtown Square(TM)(II)...........     193          1Q'00                       4Q'00                       4Q'01

    DENVER, CO
    Post Uptown Square(TM)(II)............     247          1Q'00                       4Q'01                       4Q'02
    SUBTOTAL

    WASHINGTON, D.C.
    Post Pentagon Row...................       504          2Q'99                       2Q'01                       3Q'02
    Post Massachusetts Avenue...........       269          2Q'01                       1Q'03                       4Q'03
                                             -----
    SUBTOTAL                                   773
                                             -----

    PASADENA, CA
    Post Paseo Colorado.................       387          2Q'00                       2Q'02                       2Q'03

    Subtotal Wholly-Owned
                                             -----
    Construction/Lease-up Communities        2,063
                                             =====
    CO-INVESTMENT
    CONSTRUCTION/LEASE-UP
    COMMUNITIES

    ATLANTA, GA
    Post Peachtree(TM)(1).................     121          2Q'00                       3Q'01                       2Q'02
    Post Biltmore (1)...................       276          3Q'00                       4Q'01                       4Q'02
                                             -----
    SUBTOTAL                                   397
                                             -----

    NEW YORK, NY
    Post Luminaria (2)                                      3Q'01                       3Q'02                       2Q'03

                                               138
                                             -----
    Subtotal Co-Investment
    Construction/Lease-up Communities
                                               535
    TOTAL                                    -----
                                             2,598
                                             =====
</TABLE>

The Company is also currently conducting feasibility and other pre-development
studies for possible new Post(R) communities in some of its primary market
areas.

(1)      Effective April 2001, these communities are being developed as a joint
         venture (the Company's equity ownership is 35%).

(2)      This development is structured through joint ventures, with the Company
         and an outside developer contributing approximately 70% of the equity
         and a landowner contributing the balance.


                                      -29-
<PAGE>


MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)



Capitalization of Fixed Assets and Community Improvements

The Company has established a policy of capitalizing those expenditures relating
to acquiring new assets, materially enhancing the value of an existing asset, or
substantially extending the useful life of an existing asset. All expenditures
necessary to maintain a community in ordinary operating condition are expensed
as incurred. During the first five years of a community (which corresponds to
the estimated depreciable life), carpet replacements are expensed as incurred.
Thereafter, carpet replacements are capitalized.

Acquisition of assets and community improvement expenditures for the three and
nine months ended September 30, 2001 and 2000 are summarized as follows:


<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED          NINE MONTHS ENDED
                                                             SEPTEMBER 30,               SEPTEMBER 30,
                                                        ----------------------      ----------------------
                                                          2001          2000          2001          2000
                                                        --------      --------      --------      --------
<S>                                                     <C>           <C>           <C>           <C>
New community development and acquisition activity      $ 63,207      $112,384      $186,545      $303,038
Non-recurring capital expenditures:
  Revenue generating additions and improvements              612         2,068         2,620         4,257
  Other community additions and improvements                 401           898         1,220         2,336
Recurring capital expenditures:
  Carpet replacements                                        793           777         2,192         2,187
  Community additions and improvements                     1,987         2,563         7,527         5,615
  Corporate additions and improvements                       610           665         1,850         1,991
                                                        --------      --------      --------      --------
                                                        $ 67,610      $119,355      $201,954      $319,424
                                                        ========      ========      ========      ========
</TABLE>

INFLATION

Substantially all of the leases at the communities allow, at the time of
renewal, for adjustments in the rent payable thereunder, and thus may enable the
Company to seek increases in rents. The substantial majority of these leases are
for one year or less and the remaining leases are for up to two years. At the
expiration of a lease term, the Company's lease agreements provide that the term
will be extended unless either the Company or the lessee gives at least sixty
(60) days written notice of termination; in addition, the Company's policy
permits the earlier termination of a lease by a lessee upon thirty (30) days
written notice to the Company and the payment of one month's additional rent as
compensation for early termination. The short-term nature of these leases
generally serves to reduce the risk to the Company of the adverse effect of
inflation.

NEW ACCOUNTING PRONOUNCEMENTS

On January 1, 2001, the Company adopted SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended by SFAS No. 138, "Accounting for
Certain Derivative Instruments and Hedging Activities." This standard
establishes accounting and reporting standards for derivative and hedging
activities and requires the Company to recognize all derivative instruments on
its balance sheet at fair value. Additionally, the fair value adjustments will
affect either shareholders' equity or net income, depending on whether the
derivative instrument qualifies as a hedge for accounting purposes and, if so,
the nature of the hedging activity.

Upon adoption of SFAS No. 133, the Company recorded a derivative instrument
liability of $1,299, net of minority interest, and an adjustment of $1,299, net
of minority interest, to accumulated other comprehensive income, a shareholders'
equity account, representing the fair value of its outstanding interest rate
swap agreements. The Company also recorded a net transition adjustment loss in
the statement of operations of $613, net of minority interest, relating to the
write down of the book value of it's interest rate cap agreements to their fair
value.

In the normal course of business, the Company is exposed to the effect of
interest rate changes. The Company limits these risks by following established
risk management policies and procedures including the use of derivatives. The
Company's


                                      -30-
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)



outstanding derivative financial instruments represent cash flow hedges that are
designated debt obligations. This was accomplished using interest rate swap and
interest rate cap arrangements.

For all outstanding derivative financial instruments and for future use of
derivative financial instruments, the Company designates the specific
instruments as a hedge of identified cash flow exposure. The Company formally
documents all relationships between hedging instruments and hedged items, as
well as its risk-management objective and strategy for undertaking various
hedged transactions. In this documentation, the Company will specifically
identify the asset, liability, firm commitment, or forecasted transaction that
has been designated as a hedged item and will state how the hedged instrument is
expected to hedge the risks related to the hedged item.

The Company will formally measure effectiveness of its hedging relationships
both at the hedge inception and on an ongoing basis in accordance with its risk
management policy. The Company may discontinue hedge accounting prospectively
when it is determined that the derivative is no longer effective in offsetting
changes in the fair value or cash flows of a hedged item; when the derivative is
expired or sold, terminated or exercised; or when the derivative is
re-designated to no longer be a hedged instrument.

At September 30, 2001, the Company has outstanding interest rate swap agreements
with a notional value of $129,000 and maturity dates ranging from 2005 to 2009.
For the nine months ended September 30, 2001, the Company recorded the
unrealized net loss of $7,845, net of minority interest, on these cash flow
hedges as a liability and a reduction in accumulated other comprehensive income,
a shareholders' equity account, in the accompanying consolidated balance sheet.
This unrealized net loss of $7,845 was comprised of an unrealized net loss of
$2,764, net of minority interest, for the three months ended March 31, 2001, an
unrealized net gain of $2,314, net of minority interest, for the three months
ended June 30, 2001 and an unrealized net loss of $7,395, net of minority
interest, for the three months ended September 30, 2001. In addition, the
Company recorded the change in fair value of the ineffective component of its
outstanding interest rate cap agreements in its statement of operations for the
nine months ended September 30, 2001. This charge against earnings during the
period and the fair value of the interest rate cap agreements as of September
30, 2001 were not significant to the Company's financial position or results of
operations. Within the next twelve months, the Company expects to reclassify out
of accumulated other comprehensive income approximately $1,698.

The Financial Accounting Standards Board ("FASB") has issued Statement No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets," that replaces
FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of." Statement No. 144 requires that
long-lived assets be measured at the lower of carrying amount or fair value less
cost to sell, whether reported in continuing operations or in discontinued
operations. The provisions of Statement No. 144 are effective for financial
statements issued for fiscal years beginning after December 15, 2001. The
Company believes the provisions of Statement No. 144 will not have a
significant effect on the Company's results of operations or its financial
position.

The Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin
No. 101 (SAB 101), Revenue Recognition, which provides guidance on the
recognition, presentation, and disclosure of revenue in financial statements.
SAB 101 was implemented in the fourth quarter of 2000. The adoption of SAB 101
has had no significant effect on the Company's results of operations or its
financial position.

FUNDS FROM OPERATIONS AND CASH AVAILABLE FOR DISTRIBUTION

Historical Funds from Operations

The Company considers funds from operations ("FFO") an appropriate measure of
performance of an equity REIT. Effective January 1, 2000, FFO is defined by the
National Association of Real Estate Trusts as net income available to common
shareholders determined in accordance with generally accepted accounting
principles ("GAAP"), excluding gains (or losses) from debt restructuring and
sales of property, plus depreciation of real estate assets, and after adjustment
for unconsolidated partnerships and joint ventures. FFO should not be considered
as an alternative to net income (determined in accordance with GAAP) as an
indicator of the Company's financial performance or to cash flow from operating
activities (determined in accordance with GAAP) as a measure of the Company's
liquidity, nor is it necessarily indicative of sufficient cash flow to fund all
of the Company's needs. Cash available for distribution ("CAD") is defined as
FFO less capital expenditures funded by operations and loan amortization
payments. The Company believes that in order to facilitate a clear understanding
of the consolidated historical operating results of the Company, FFO and CAD
should be examined in conjunction with net income as presented in the
consolidated financial statements and data included elsewhere in this report.
FFO and CAD for


                                      -31-
<PAGE>

the three and nine months ended September 30, 2001 and 2000 presented on a
historical basis are summarized in the following table:

Calculations of Funds from Operations and Cash Available for Distribution

<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                                    SEPTEMBER 30,                     SEPTEMBER 30,
                                                            -----------------------------     ------------------------------
                                                                2001             2000             2001             2000
                                                            ------------     ------------     ------------     ------------

<S>                                                         <C>              <C>              <C>              <C>
Net income available to common shareholders ............    $     24,420     $     24,110     $     77,431     $     74,997
   Cumulative effect of accounting change, net of
   minority interest ...................................              --               --              613               --
   Extraordinary item, net of minority interest ........              --               --               77               --
   Net gain on sale of assets (1) ......................          (8,179)            (958)         (23,950)          (1,627)
   Minority interest of common unitholders in
    Operating Partnership ..............................           3,322            3,156           10,495            9,899
                                                            ------------     ------------     ------------     ------------
Adjusted net income ....................................          19,563           26,308           64,666           83,269
   Depreciation of real estate assets (2) ..............          17,973           16,651           52,195           47,825
                                                            ------------     ------------     ------------     ------------
Funds from Operations (3) ..............................          37,536           42,959          116,861          131,094
Recurring capital expenditures (4) .....................          (2,780)          (3,340)          (9,719)          (7,802)
Non-recurring capital expenditures (5) .................            (401)            (898)          (1,220)          (2,336)
Loan amortization payments .............................            (772)          (1,027)          (2,320)          (1,626)
                                                            ------------     ------------     ------------     ------------
Cash Available for Distribution ........................    $     33,583     $     37,694     $    103,602     $    119,330
                                                            ============     ============     ============     ============
Revenue generating capital expenditures (6) ............    $        612     $      2,068     $      2,620     $      4,257
                                                            ============     ============     ============     ============

Cash Flow Provided By (Used In):
Operating activities ...................................    $     58,959     $     63,941     $    143,901     $    152,965
Investing activities ...................................    $    (50,934)    $    (75,388)    $      3,057     $   (239,518)
Financing activities ...................................    $    (17,368)    $     14,172     $   (149,491)    $     98,622

Weighted average common shares outstanding - basic .....      37,899,668       39,556,981       38,463,672       39,293,302
                                                            ============     ============     ============     ============
Weighted average common shares and units
outstanding - basic ....................................      43,054,521       44,738,392       43,631,222       44,480,261
                                                            ============     ============     ============     ============
Weighted average common shares outstanding - diluted ...      38,185,054       40,422,756       38,721,056       39,980,339
                                                            ============     ============     ============     ============
Weighted average common shares and units
outstanding - diluted ..................................      43,339,907       45,604,167       43,888,606       45,167,298
                                                            ============     ============     ============     ============
</TABLE>

(1)      Net gain on sale of assets includes reserves of $1,530 and $12,795 for
         the three and nine months ended September 30, 2001, respectively, to
         write down to fair market value real estate assets designated as held
         for sale.

(2)      Depreciation on real estate assets is net of the minority interest
         portion of depreciation in consolidated partnerships and depreciation
         on non-real estate assets.

(3)      The Company uses the National Association of Real Estate Investment
         Trusts ("NAREIT") definition of FFO. Effective January 1, 2000, NAREIT
         amended its definition of FFO to include in FFO all non-recurring
         transactions, except those that are defined as extraordinary under
         generally accepted accounting principles. The Company adopted this new
         definition effective January 1, 2000. FFO for any period means the
         Consolidated Net Income of the Company and its subsidiaries for such
         period excluding gains or losses from debt restructuring and sales of
         property plus depreciation of real estate assets, and after adjustment
         for unconsolidated partnerships and joint ventures, all determined on a
         consistent basis in accordance with generally accepted accounting
         principles. FFO presented herein is not necessarily comparable to FFO
         presented by other real estate companies due to the fact that not all
         real estate companies use the same definition. However, the Company's
         FFO is comparable to the FFO of real estate companies that use the
         current NAREIT definition.

(4)      Recurring capital expenditures consisted primarily of $793 and $777 of
         carpet replacement and $1,987 and $2,563 of other additions and
         improvements to existing communities for the three months ended
         September 30, 2001 and 2000, respectively and $2,192 and $2,187 of
         carpet replacement and $7,527 and $5,615 of other additions and
         improvements to existing communities for the nine months ended
         September 30, 2001 and 2000, respectively. Since the Company does not
         add back the depreciation of non-real estate assets in its calculation
         of FFO, capital expenditures of


                                      -32-
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)



         $610 and $665 for the three months ended September 30, 2001 and 2000,
         respectively, and $1,850 and $1,991 for the nine months ended September
         30, 2001 and 2000, respectively, are excluded from the calculation of
         CAD.

(5)      Non-recurring capital expenditures consisted of community additions and
         improvements of $401 and $898 for the three months ended September 30,
         2001 and 2000, respectively, and $1,220 and $2,336 for the nine months
         ended September 30, 2001 and 2000, respectively.

(6)      Revenue generating capital expenditures are primarily comprised of
         major renovations of communities.

ITEM 3.         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's primary market risk exposure is interest rate risk. At September
30, 2001, the Company had $235,880 in variable tax-exempt debt tied to "AAA"
NON-AMT. In addition, the Company has interest rate risk associated with fixed
rate debt at maturity. At September 30, 2001, the Company had $934,974 of fixed
rate debt outstanding. The value of the fixed rate debt has not changed
significantly since December 31, 2000. The discussion in this section is the
same for the Company and the Operating Partnership, except that all
indebtedness described herein has been incurred by the Operating Partnership.

Management has and will continue to manage interest rate risk as follows:

-        Maintain a conservative ratio of fixed rate, long-term debt to total
         debt such that variable rate exposure is kept to an acceptable level;

-        Fix certain long-term variable rate debt through the use of interest
         rate swaps or interest rate caps with appropriately matching
         maturities;

-        Use treasury locks where appropriate to fix rates on anticipated debt
         transactions, and

-        Take advantage of favorable market conditions for issuance of long-term
         debt and/or equity.

Management uses various financial models and advisors to achieve these
objectives. The following table summarizes the notional values and fair values
of the Company's derivative financial instruments of September 30, 2001. The
notional value provides an indication of the extent of the Company's involvement
in these instruments at that time, but does not represent exposure to credit,
interest rate or market risks.

<TABLE>
<CAPTION>
                                                          Average
                                                          Pay Rate/        Expected                Fair
Interest Rate Derivatives        Notional Amount          Cap Rate         Settlement Date         Value
-------------------------        ---------------          --------         ---------------         -----
<S>                              <C>                      <C>              <C>                    <C>

Interest Rate Swaps
  Variable to fixed              $104,000 amortizing
                                 to $90,270               6.04%            07/31/09               $ (8,220)

  Variable to fixed              25,000                   6.53%            02/01/05                 (2,162)

Interest rate cap                76,000                   5.00%            02/01/03                      3

Interest rate cap                141,230                  5.00%            02/01/03                      5

Interest rate cap                $18,650                  5.00%            02/01/03                      1
</TABLE>

At September 30, 2001, the derivative instrument assets and liabilities were
reported at their fair value in the Company's balance sheet.


                                      -33-
<PAGE>




PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

         None

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

         None

ITEM 5.  OTHER INFORMATION

         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

         The registrants agree to furnish a copy of all agreements relating to
         long-term debt upon request of the Commission.

         (b)      Reports on Form 8-K

         There were no reports on Form 8-K filed by either registrant during the
         three month period ended September 30, 2001.


                                      -34-
<PAGE>


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.



POST PROPERTIES, INC.



November 14, 2001                        /s/ R. Gregory Fox
------------------------                 ----------------------------
          (Date)                         R. Gregory Fox
                                         Executive Vice President,
                                         Chief Financial Officer
                                         (Principal Financial Officer)




November 14, 2001                        /s/ Arthur J. Quirk
------------------------                 ----------------------------
          (Date)                         Arthur J. Quirk
                                         Vice President and Controller,
                                         Chief Accounting Officer


                                      -35-
<PAGE>



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.



POST APARTMENT HOMES, L.P.
                                           By: Post GP Holdings, Inc., as
                                               General Partner



November 14, 2001                          /s/ R. Gregory Fox
------------------------                   ---------------------------------
          (Date)                           R. Gregory Fox
                                           Executive Vice President,
                                           Chief Financial Officer
                                           (Principal Financial Officer)



November 14, 2001                          /s/ Arthur J. Quirk
------------------------                   ----------------------------
          (Date)                           Arthur J. Quirk
                                           Vice President and Controller,
                                           Chief Accounting Officer


                                      -36-