<PAGE>   1
================================================================================
                                  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 June 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.

         38,546,778 shares of common stock outstanding as of August 8, 2001
(excluding treasury stock).

================================================================================


<PAGE>   2

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

                                      INDEX

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

         ITEM 1  FINANCIAL STATEMENTS

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

         POST APARTMENT HOMES, L.P.
             Consolidated Balance Sheets as of June 30, 2001 and December 31, 2000...........................    11
             Consolidated Statements of Operations for the three and six months ended
                June 30, 2001 and 2000.......................................................................    12
             Consolidated Statement of Partners' Equity for the six months ended
                June 30, 2001................................................................................    13
             Consolidated Statements of Cash Flows for the six months ended
                June 30, 2001 and 2000.......................................................................    14
             Notes to Consolidated Financial Statements .....................................................    15

         ITEM 2  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                   OPERATIONS................................................................................    21

         ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..................................    32

PART II  OTHER INFORMATION...................................................................................    33

         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..........................................................................................    34
</TABLE>


<PAGE>   3

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

<TABLE>
<CAPTION>
                                                                                          JUNE 30,           DECEMBER 31,
                                                                                            2001                 2000
                                                                                        ------------         ------------
                                                                                        (UNAUDITED)
<S>                                                                                     <C>                  <C>
ASSETS
Real estate investments:
   Land ........................................................................        $    268,366         $    281,525
   Building and improvements ...................................................           1,681,798            1,686,773
   Furniture, fixtures and equipment ...........................................             200,807              190,968
   Construction in progress ....................................................             463,151              509,702
   Investments in and advances to unconsolidated entities ......................              25,497                   --
   Land held for future development ............................................              44,291               28,995
                                                                                        ------------         ------------
                                                                                           2,688,885            2,692,988
   Less: accumulated depreciation ..............................................            (363,377)            (345,121)
   Assets held for sale ........................................................              65,480              122,047
                                                                                        ------------         ------------
Real estate investments ........................................................           2,390,988            2,469,914
Cash and cash equivalents ......................................................              14,269                7,459
Restricted cash ................................................................               1,316                1,272
Deferred charges, net ..........................................................              20,918               21,700
Other assets ...................................................................              52,323               50,892
                                                                                        ------------         ------------
   Total assets ................................................................        $  2,479,814         $  2,551,237
                                                                                        ============         ============

LIABILITIES AND SHAREHOLDERS' EQUITY
   Notes payable ...............................................................        $  1,172,355         $  1,213,309
   Accrued interest payable ....................................................               8,285               10,751
   Dividends and distributions payable .........................................              34,555               33,933
   Accounts payable and accrued expenses .......................................              63,189               67,136
   Security deposits and prepaid rents .........................................               9,261                9,407
                                                                                        ------------         ------------
      Total liabilities ........................................................           1,287,645            1,334,536
                                                                                        ------------         ------------


Minority interest of preferred unitholders in Operating Partnership ............              70,000               70,000
                                                                                        ------------         ------------
Minority interest of common unitholders in Operating Partnership ...............             115,693              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,
      39,676,204 and 39,662,192 shares issued, 38,535,781
      and 38,853,596 shares outstanding at June 30, 2001
      and December 31, 2000, respectively.......................................                 396                  396
   Additional paid-in capital ..................................................           1,049,477            1,057,067
   Accumulated earnings ........................................................                  --                   --
   Accumulated other comprehensive income, net of minority interest ............              (1,749)                  --

   Deferred compensation .......................................................                (530)                  --
                                                                                        ------------         ------------
                                                                                           1,047,644            1,057,513
   Less common stock in treasury at cost, 1,140,423 and 808,596 shares
      at June 30, 2001 and December 31, 2000, respectively .....................             (41,168)             (28,903)
                                                                                        ------------         ------------
   Total shareholders' equity ..................................................           1,006,476            1,028,610
                                                                                        ------------         ------------
   Total liabilities and shareholders' equity ..................................        $  2,479,814         $  2,551,237
                                                                                        ============         ============
</TABLE>

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


                                      -1-

<PAGE>   4

                              POST PROPERTIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED                  SIX MONTHS ENDED
                                                                              JUNE 30,                          JUNE 30,
                                                                   ----------------------------      ----------------------------
                                                                       2001             2000             2001             2000
                                                                   -----------      -----------      -----------      -----------
<S>                                                                <C>              <C>              <C>              <C>
REVENUE:
  Rental .....................................................     $    92,994      $    90,243      $   187,845      $   178,067
  Property management - third-party ..........................           1,192              933            2,368            1,841
  Landscape services - third-party ...........................           3,161            2,999            5,591            5,101
  Interest ...................................................             503              448              987              987
  Other ......................................................           4,312            4,823            7,954            8,890
                                                                   -----------      -----------      -----------      -----------
      Total revenue ..........................................         102,162           99,446          204,745          194,886
                                                                   -----------      -----------      -----------      -----------
EXPENSES:
  Property operating and maintenance
     (exclusive of items shown separately below) .............          35,183           32,238           70,977           62,890
  Depreciation expense .......................................          18,872           16,430           36,763           33,436
  Property management - third-party ..........................             973              730            1,910            1,518
  Landscape services - third-party ...........................           2,756            2,479            5,018            4,484
  Interest ...................................................          14,720           12,062           29,705           22,763
  Amortization of deferred loan costs ........................             490              400              942              784
  General and administrative .................................           3,331            1,633            6,406            4,127
  Minority interest in consolidated property partnerships ....            (537)            (260)            (817)            (815)
                                                                   -----------      -----------      -----------      -----------
       Total expense .........................................          75,788           65,712          150,904          129,187
                                                                   -----------      -----------      -----------      -----------
Income before net gain (loss) on sale of assets,
  minority interest of unitholders in Operating
 Partnership, cumulative effect of accounting change
  and extraordinary item .....................................          26,374           33,734           53,841           65,699
Net gain (loss) on sale of assets ............................          15,660              (18)          15,771              669
Minority interest of preferred unitholders in
  Operating Partnership ......................................          (1,400)          (1,400)          (2,800)          (2,800)
Minority interest of common unitholders in
  Operating Partnership ......................................          (4,443)          (3,423)          (7,173)          (6,743)
                                                                   -----------      -----------      -----------      -----------
Income before cumulative effect of accounting change
  and extraordinary item .....................................          36,191           28,893           59,639           56,825
Cumulative effect of accounting change, net
  of minority interest .......................................              --               --             (613)              --
Extraordinary item, net of minority interest .................             (77)              --              (77)              --
                                                                   -----------      -----------      -----------      -----------
Net income ...................................................          36,114           28,893           58,949           56,825
Dividends to preferred shareholders ..........................          (2,969)          (2,969)          (5,938)          (5,938)
                                                                   -----------      -----------      -----------      -----------
Net income available to common shareholders ..................     $    33,145      $    25,924      $    53,011      $    50,887
                                                                   ===========      ===========      ===========      ===========

EARNINGS PER COMMON SHARE - BASIC
Income before cumulative effect of accounting change
  and extraordinary item (net of preferred dividend) .........     $      0.86      $      0.66             1.39      $      1.30
Cumulative effect of accounting change, net
  of minority interest .......................................              --               --            (0.02)              --
Extraordinary item, net of minority interest .................              --               --               --               --
                                                                   -----------      -----------      -----------      -----------
Net income available to common shareholders ..................     $      0.86      $      0.66      $      1.37      $      1.30
                                                                   ===========      ===========      ===========      ===========
Weighted average common shares outstanding - basic ...........      38,653,625       39,294,234       38,750,350       39,160,002
                                                                   ===========      ===========      ===========      ===========

EARNINGS PER COMMON SHARE - DILUTED
Income before cumulative effect of accounting change
  and extraordinary item (net of preferred dividend) .........     $      0.85      $      0.65      $      1.38      $      1.28
Cumulative effect of accounting change, net of minority
  interest ...................................................              --               --            (0.02)              --
Extraordinary item, net of minority interest .................              --               --               --               --
                                                                   -----------      -----------      -----------      -----------
Net income available to common shareholders ..................     $      0.85      $      0.65      $      1.36      $      1.28
                                                                   ===========      ===========      ===========      ===========
Weighted average common shares outstanding diluted ...........      38,884,223       40,130,580       38,995,749       39,753,796
                                                                   ===========      ===========      ===========      ===========
Dividends declared ...........................................     $      0.78      $      0.76      $      1.56      $      1.52
                                                                   ===========      ===========      ===========      ===========
</TABLE>

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


                                      -2-
<PAGE>   5

                              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
                                                 SHARES           SHARES          CAPITAL            EARNINGS          INCOME
                                               ----------       ----------       ----------        -----------      -------------
<S>                                            <C>              <C>              <C>               <C>              <C>
SHAREHOLDERS' EQUITY AND
  ACCUMULATED EARNINGS,
  DECEMBER 31, 2000 ....................       $       50       $      396       $1,057,067        $       --        $       --
  Proceeds from Dividend
   Reinvestment and Employee
   Stock Purchase Plans ................               --               --           (1,442)               --                --
  Adjustment for minority interest
   of unitholders in Operating
   Partnership at dates of capital
   transactions ........................               --               --            1,174                --                --
COMPREHENSIVE INCOME 2001:
     Net income ........................               --               --               --            58,949                --
     Transition adjustment for
     derivative instruments, net
     of minority interest ..............               --               --               --                --            (1,299)
     Change in derivative
     instrument value, net of
     minority interest .................               --               --               --                --              (450)

TOTAL COMPREHENSIVE INCOME

Restricted stock issuances .............               --               --               46                --                --
Deferred Compensation ..................               --               --               --                --                --
Treasury stock acquisitions ............               --               --               --                --                --
Dividends to preferred shareholders ....               --               --               --            (5,938)               --
Dividends to common shareholders .......               --               --           (7,368)          (53,011)               --
                                               ----------       ----------       ----------        ----------        ----------
SHAREHOLDERS' EQUITY AND
   ACCUMULATED EARNINGS,
   JUNE 30, 2001 .......................       $       50       $      396       $1,049,477        $       --        $   (1,749)
                                               ==========       ==========       ==========        ==========        ==========

<CAPTION>
                                                   DEFERRED             TREASURY
                                                 COMPENSATION            STOCK                TOTAL
                                                 ------------         -----------          -----------

<S>                                              <C>                  <C>                  <C>
SHAREHOLDERS' EQUITY AND
  ACCUMULATED EARNINGS,
  DECEMBER 31, 2000 ....................         $        --          $   (28,903)         $ 1,028,610
  Proceeds from Dividend
   Reinvestment and Employee
   Stock Purchase Plans ................                  --                8,523                7,081
  Adjustment for minority interest
   of unitholders in Operating
   Partnership at dates of capital
   transactions ........................                  --                   --                1,174
COMPREHENSIVE INCOME 2001:
     Net income ........................                  --                   --               58,949
     Transition adjustment for
     derivative instruments, net
     of minority interest ..............                  --                   --               (1,299)
     Change in derivative
     instrument value net of
     minority interest .................                  --                   --                 (450)
                                                                                           -----------
TOTAL COMPREHENSIVE INCOME ............                                                        57,200

Restricted stock issuances .............                (644)                 598                   --
Deferred compensation ..................                 114                                       114
Treasury stock acquisitions ............                                  (21,386)             (21,386)
Dividends to preferred shareholders ....                                                        (5,938)
Dividends to common shareholders .......                  --                   --              (60,379)
                                                 -----------          -----------          -----------
SHAREHOLDERS' EQUITY AND
   ACCUMULATED EARNINGS,
   JUNE 30, 2001 .......................                (530)         $   (41,168)         $ 1,006,476
                                                 ===========          ===========          ===========


</TABLE>


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


                                      -3-
<PAGE>   6

                              POST PROPERTIES, INC
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                        SIX MONTHS ENDED
                                                                                            JUNE 30,
                                                                                     2001              2000
                                                                                   ---------         ---------
<S>                                                                                <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ................................................................        $  58,949         $  56,825
Adjustments to reconcile net income to net cash provided by operating
  activities:
  Net gain on sale of assets ..............................................          (15,771)             (669)
  Minority interest of preferred unitholders in Operating Partnership .....            2,800             2,800
  Minority interest of common unitholders in Operating Partnership ........            7,173             6,743
  Cumulative accounting change, net of minority interest ..................              613                --
  Extraordinary item, net of minority interest  ...........................               77                --
  Depreciation ............................................................           36,763            33,436
  Amortization of deferred loan costs .....................................              942               784
Changes in assets, (increase) decrease in:
  Restricted cash .........................................................              (44)             (122)
  Other assets ............................................................           (3,157)          (16,676)
  Deferred charges ........................................................           (1,370)           (2,039)
Changes in liabilities, increase (decrease) in:
  Accrued interest payable ................................................           (2,466)             (106)
  Accounts payable and accrued expenses ...................................              579             7,005
  Security deposits and prepaid rents .....................................             (146)            1,043
                                                                                   ---------         ---------
Net cash provided by operating activities .................................           84,942            89,024
                                                                                   ---------         ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Construction and acquisition of real estate assets, net of payables .......         (118,676)         (174,263)
Net proceeds from sale of assets ..........................................          191,340            31,415
Capitalized interest ......................................................          (11,753)          (11,867)
Recurring capital expenditures ............................................           (6,939)           (4,462)
Corporate additions and improvements ......................................           (1,240)           (1,326)
Non-recurring capital expenditures ........................................             (819)           (1,438)
Revenue generating capital expenditures ...................................           (2,008)           (2,189)
Distributions from unconsolidated entities ................................            4,086                --
                                                                                   ---------         ---------
Net cash provided by (used in) investing activities .......................           53,991          (164,130)
                                                                                   ---------         ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of financing costs ................................................             (300)               --
Debt proceeds .............................................................          130,000           200,000
Debt payments .............................................................         (170,954)          (64,555)
Distributions to preferred unitholders ....................................           (2,800)           (2,800)
Distributions to common unitholders .......................................           (7,976)           (7,582)
Proceeds from Dividend Reinvestment and Employee Stock Purchase Plans .....            7,081            19,268
Treasury stock acquisitions ...............................................          (21,386)               --

Dividends paid to preferred shareholders ..................................           (5,938)           (2,969)

Dividends paid to common shareholders .....................................          (59,850)          (56,912)
                                                                                   ---------         ---------
Net cash (used in) provided by financing activities .......................         (132,123)           84,450
                                                                                   ---------         ---------
Net increase in cash and cash equivalents .................................            6,810             9,344
Cash and cash equivalents, beginning of period ............................            7,459             5,870
                                                                                   ---------         ---------
Cash and cash equivalents, end of period ..................................        $  14,269         $  15,214
                                                                                   =========         =========
</TABLE>

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


                                      -4-
<PAGE>   7

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 six-month period ended June 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 June 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 two
         quarters of 2001, the Company authorized the sale of five communities
         and ten tracts of land consisting of: three communities and six tracts
         of land in Dallas, Texas, two communities in Atlanta, Georgia, one
         tract 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 properties
         located in Dallas, Texas. In April 2001, the Company sold an 810-unit
         community located in Atlanta, Georgia, for $67,250. Net proceeds on the
         sale were approximately $66,641. In May 2001, the Company sold three
         communities: one community containing 80 units located in Nashville,
         Tennessee for $3,950 with net proceeds of approximately $3,839 and two
         communities containing a total of 641 units located in Dallas, Texas
         for $42,733 with net proceeds of approximately $42,073. In June 2001,
         the Company sold a 908-unit community located in Dallas, Texas for
         $76,750. Net proceeds were approximately $75,774. In addition to these
         communities, the Company has sold two tracts of land: one tract in
         Charlotte, North Carolina for $1,942 with net proceeds of approximately
         $1,876 and one tract in Denver, Colorado for $1,155 with net proceeds
         of approximately $1,137. The proceeds from these sales were used to
         repay outstanding indebtedness and fund additional development
         projects.


                                      -5-
<PAGE>   8

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


         At June 30, 2001, the remaining two communities, two commercial
         properties and nine tracts of land consisting of land, buildings and
         improvements and furniture, fixture and equipment were recorded at
         $65,480, which represented the lower of depreciated cost or fair value
         less cost to sell. The Company has recorded net gains of $15,660 and
         $15,771 for the three and six months ended June 30, 2001, respectively.
         The net gains included reserves of $3,822 and $15,608 for the three and
         six months ended June 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 in 2001.

         For the three months ended June 30, 2001 and 2000, the consolidated
         statement of operations includes revenue less operating and maintenance
         expense, exclusive of depreciation, of $1,513 and $1,490, respectively,
         from communities held for sale at June 30, 2001. For the six months
         ended June 30, 2001 and 2000, the consolidated statement of operations
         included revenue less operating and maintenance expense, exclusive of
         depreciation, of $3,013 and $2,957, respectively, from communities held
         for sale at June 30, 2001. Depreciation expense totaling $388 was
         recognized on these assets 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 six months ended June 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                   SIX MONTHS ENDED
                                                                         JUNE 30,                             JUNE 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 ....................       $    36,191        $    28,893        $    59,639        $    56,825
    Less: Preferred stock dividends ..................            (2,969)            (2,969)            (5,938)            (5,938)
                                                             -----------        -----------        -----------        -----------
Income available to common shareholders
    before cumulative effect of accounting change
    and extraordinary item ...........................       $    33,222        $    25,924        $    53,701        $    50,887
                                                             ===========        ===========        ===========        ===========
Common shares (denominator):
  Weighted average shares outstanding-basic ..........        38,653,625         39,294,234         38,750,350         39,160,002
  Incremental shares from assumed conversion
    of options .......................................           230,598            836,346            245,399            593,794
                                                             -----------        -----------        -----------        -----------
  Weighted average shares outstanding - diluted ......        38,884,223         40,130,580         38,995,749         39,753,796
                                                             ===========        ===========        ===========        ===========
</TABLE>

5.       SUPPLEMENTAL CASH FLOW INFORMATION

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

         (a)      During the six months ended June 30, 2001 and 2000, holders of
                  14,604 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 $1,174 for the six months ended June 30, 2001 and
                  increasing minority interest and decreasing shareholder's
                  equity in the amount of $315 for the six months ended June 30,
                  2000.


                                      -6-
<PAGE>   9

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


         (b)      For cash flow purposes, investment in and advances to
                  unconsolidated entities excludes non-cash contributions of
                  $29,583 for the six months ended June 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 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 June 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 six months ended June 30, 2001, the Company
         recorded the unrealized loss of $450, 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
         $450 was comprised of an unrealized net loss of $2,764, net of minority
         interest, for the three months ended March 31, 2001 and an unrealized
         net gain of $2,314, net of minority interest, for the three months
         ended June 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 six months
         ended June 30, 2001. This charge against earnings during the period and
         the fair value of the interest rate cap agreements as of June 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
         $450.

         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-
<PAGE>   10

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


7.       SEGMENT DESCRIPTION

         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.

         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 make 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


                                      -8-
<PAGE>   11

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


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

<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED                   SIX MONTHS ENDED
                                                                         JUNE 30,                             JUNE 30,
                                                              -----------------------------         -----------------------------
                                                                 2001               2000               2001               2000
                                                              ----------         ----------         ----------         ----------
<S>                                                           <C>                <C>                <C>                <C>
REVENUES
Fully stabilized communities .........................        $   65,105         $   63,488         $  129,964         $  126,159
Communities stabilized during 2000 ...................            11,720              9,396             23,515             17,011
Development and lease-up communities .................            10,496              3,549             19,359              6,128
Communities held for sale ............................             2,396              2,318              4,746              4,573
Sold communities .....................................             3,457             11,257             10,219             23,282
Third party services .................................             4,353              3,932              7,959              6,942
Other ................................................             4,635              5,506              8,983             10,791
                                                              ----------         ----------         ----------         ----------

Consolidated revenues ................................        $  102,162         $   99,446         $  204,745         $  194,886
                                                              ==========         ==========         ==========         ==========

CONTRIBUTION TO FUNDS FROM OPERATIONS
Fully stabilized communities .........................        $   44,416         $   44,125         $   89,070         $   88,258
Communities stabilized during 2000 ...................             7,719              6,142             15,692             10,928
Development and lease-up communities .................             6,311              1,684             11,254              2,830
Communities held for sale ............................             1,513              1,490              3,012              2,957
Sold communities .....................................             1,919              7,588              6,359             16,286
Third party services .................................               624                723              1,031                940
                                                              ----------         ----------         ----------         ----------

Contribution to FFO ..................................            62,502             61,752            126,418            122,199
                                                              ----------         ----------         ----------         ----------

Other operating income, net of expense ...............            (1,332)               331             (3,673)               (57)

Depreciation on non-real estate assets ...............              (592)              (634)            (1,246)            (1,210)
Minority interest in consolidated property
   partnerships ......................................               537                260                817                815
Interest expense .....................................           (14,720)           (12,062)           (29,705)           (22,763)
Amortization of deferred loan costs ..................              (490)              (400)              (942)              (784)
General and administrative ...........................            (3,331)            (1,633)            (6,406)            (4,127)
Dividends to preferred shareholders ..................            (2,969)            (2,969)            (5,938)            (5,938)
                                                              ----------         ----------         ----------         ----------

Total FFO ............................................            39,605             44,645             79,325             88,135
                                                              ----------         ----------         ----------         ----------

Depreciation on real estate assets ...................           (17,600)           (15,280)           (34,222)           (31,174)
Net gain (loss) on sale of assets ....................            15,660                (18)            15,771                669
Minority interest of common unitholders in
   Operating Partnership .............................            (4,443)            (3,423)            (7,173)            (6,743)
Dividends to preferred shareholders ..................             2,969              2,969              5,938              5,938
                                                              ----------         ----------         ----------         ----------
Income before cumulative effect of accounting
change, extraordinary item and preferred
dividends ............................................        $   36,191         $   28,893         $   59,639         $   56,825
                                                              ==========         ==========         ==========         ==========
</TABLE>


                                      -9-
<PAGE>   12

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 six months ended June 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 accrual at June 30, 2001                   $    237
                                                          ========
</TABLE>

9.       INVESTMENTS IN UNCONSOLIDATED ENTITIES

         In April 2001, the Company contributed two apartment communities under
         development in Atlanta, Georgia to joint ventures with an institutional
         investor. The Company has a 35% equity interest in the joint venture.
         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.

         At June 30, 2001, the Company's investment in and advances to the joint
         ventures totaled $25,497. The combined total assets, liabilities and
         equity of the joint ventures at June 30, 2001, were $38,273, $25,183
         and $13,090, respectively. The joint venture properties had not
         commenced operations as of June 30, 2001.

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.


                                      -10-
<PAGE>   13


                           POST APARTMENT HOMES, L.P.
                           CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                   JUNE 30,         DECEMBER 31,
                                                                                     2001              2000
                                                                                  -----------       ------------
                                                                                  (UNAUDITED)
<S>                                                                               <C>                 <C>
ASSETS
   Real estate investments:
     Land .................................................................       $  268,366          $  281,525
     Building and improvements ............................................        1,686,773           1,681,798
     Furniture, fixtures and equipment ....................................          200,807             190,968
     Construction in progress .............................................          463,151             509,702
     Investments in and advances to unconsolidated entities
                                                                                      25,497                  --
     Land held for future development .....................................           44,291              28,995
                                                                                  ----------          ----------
                                                                                   2,688,885           2,692,988
     Less: accumulated depreciation .......................................         (363,377)           (345,121)
     Assets held for sale .................................................           65,480             122,047
                                                                                  ----------          ----------
   Real estate investments ................................................        2,390,988           2,469,914
   Cash and cash equivalents ..............................................           14,269               7,459
   Restricted cash ........................................................            1,316               1,272
   Deferred charges, net ..................................................           20,918              21,700
   Other assets ...........................................................           52,323              50,892
                                                                                  ----------          ----------
     Total assets .........................................................       $2,479,814          $2,551,237
                                                                                  ==========          ==========
LIABILITIES AND PARTNERS' EQUITY
   Notes payable ..........................................................       $1,172,355          $1,213,309
   Accrued interest payable ...............................................            8,285              10,751
   Distributions payable ..................................................           34,555              33,933
   Accounts payable and accrued expenses ..................................           63,189              67,136
   Security deposits and prepaid rents ....................................            9,261               9,407
                                                                                  ----------          ----------
     Total liabilities ....................................................        1,287,645           1,334,536
                                                                                  ----------          ----------
   Commitments and contingencies ..........................................
                                                                                  ----------          ----------
   Partners' equity before adjustment for other comprehensive income ......        1,194,153           1,216,701
   Accumulated other comprehensive income .................................           (1,984)                 --
                                                                                  ----------          ----------
     Total partners' equity ...............................................        1,192,169           1,216,701
                                                                                  ----------          ----------
    Total liabilities and partners' equity ................................       $2,479,814          $2,551,237
                                                                                  ==========          ==========
</TABLE>

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


                                      -11-
<PAGE>   14


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

<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED                 SIX MONTHS ENDED
                                                                              JUNE 30,                         JUNE 30,
                                                                   ----------------------------      ----------------------------
                                                                       2001             2000             2001            2000
                                                                   -----------      -----------      -----------      -----------
<S>                                                                <C>              <C>              <C>              <C>
REVENUES
  Rental .....................................................     $    92,994      $    90,243      $   187,845      $   178,067
  Property management - third party ..........................           1,192              933            2,368            1,841
  Landscape services - third party ...........................           3,161            2,999            5,591            5,101
  Interest ...................................................             503              448              987              987
  Other ......................................................           4,312            4,823            7,954            8,890
                                                                   -----------      -----------      -----------      -----------
         Total revenue .......................................         102,162           99,446          204,745          194,886
                                                                   -----------      -----------      -----------      -----------
EXPENSES
  Property operating and maintenance (exclusive of items
    shown separately below) ..................................          35,183           32,238           70,977           62,890
  Depreciation expense .......................................          18,872           16,430           36,763           33,436
  Property management - third party ..........................             973              730            1,910            1,518
  Landscape services - third party ...........................           2,756            2,479            5,018            4,484
  Interest ...................................................          14,720           12,062           29,705           22,763
  Amortization of deferred loan costs ........................             490              400              942              784
  General and administrative .................................           3,331            1,633            6,406            4,127
  Minority interest in consolidated property partnerships ....            (537)            (260)            (817)            (815)
                                                                   -----------      -----------      -----------      -----------
   Total expenses ............................................          75,788           65,712          150,904          129,187
                                                                   -----------      -----------      -----------      -----------
  Income before net gain (loss) on sale of assets,
    cumulative effect of accounting change
    and extraordinary item ...................................          26,374           33,734           53,841           65,699
  Net gain (loss) on sale of assets ..........................          15,660              (18)          15,771              669
                                                                   -----------      -----------      -----------      -----------
  Income before cumulative effect of accounting
   change and extraordinary item .............................          42,034           33,716           69,612           66,368
  Cumulative effect of accounting change .....................              --               --             (695)              --
  Extraordinary item .........................................             (88)              --              (88)              --
                                                                   -----------      -----------      -----------      -----------

  Net income .................................................          41,946           33,716           68,829           66,368
  Distributions to preferred unitholders .....................          (4,369)          (4,369)          (8,738)          (8,738)
                                                                   -----------      -----------      -----------      -----------
  Net income available to common unitholders .................     $    37,577      $    29,347      $    60,091      $    57,630
                                                                   ===========      ===========      ===========      ===========
EARNINGS PER COMMON UNIT - BASIC
  Income before extraordinary item (net of preferred
   distributions) ............................................     $      0.86      $      0.66      $      1.39      $      1.30
  Cumulative effect of accounting change .....................              --               --            (0.02)              --
  Extraordinary item .........................................              --               --               --               --
                                                                    ----------      -----------      -----------      -----------

  Net income available to common unitholders .................     $      0.86      $      0.66      $      1.37      $      1.30
                                                                   ===========      ===========      ===========      -----------
  Weighted average common units outstanding ..................      43,821,817       44,480,337       43,924,352       44,349,766
                                                                   ===========      ===========      ===========      ===========
EARNINGS PER COMMON UNIT - DILUTED
  Income before extraordinary item (net of
   preferred distributions) ..................................     $      0.85      $     0.65       $     1.38       $      1.28
  Cumulative effect of accounting change .....................              --               --            (0.02)              --
  Extraordinary item .........................................              --               --               --               --
                                                                    ----------      -----------      -----------      -----------
  Net income available to common unitholders .................     $      0.85      $     0.65       $     1.36       $      1.28
                                                                   ===========      ===========      -----------      ===========
  Weighted average common units outstanding ..................      44,052,415       45,316,683       44,169,751       44,943,560
                                                                   ===========      ===========      ===========      ===========
  Distributions declared .....................................     $      0.78      $      0.76      $      1.56      $      1.52
                                                                   ===========      ===========      ===========      ===========
</TABLE>


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


                                      -12-
<PAGE>   15

                           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 ............              71            7,010            7,081
Purchase of units .............................................              --          (21,386)         (21,386)
Distributions to preferred unitholders ........................              --           (8,738)          (8,738)
Distributions to common unitholders ...........................            (684)         (67,764)         (68,448)
Comprehensive Income:
   Net income .................................................             688           68,141           68,829
   Transition adjustment for derivative instruments ...........             (15)          (1,457)          (1,472)
   Change in derivative instrument value ......................              (5)            (507)            (512)
                                                                     ----------       ----------       ----------
Total Comprehensive Income ....................................             668           66,177           66,845
Contributions from the Company related to restricted shares
   issued, net of deferred compensation .......................               1              113              114
                                                                     ----------       ----------       ----------
PARTNERS' EQUITY, JUNE 30, 2001 ...............................      $   12,166       $1,180,003       $1,192,169
                                                                     ==========       ==========       ==========
</TABLE>


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


                                      -13-
<PAGE>   16


                           POST APARTMENT HOMES, L.P.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                       SIX MONTHS ENDED
                                                                           JUNE 30,
                                                                  -------------------------
                                                                    2001            2000
                                                                  ---------       ---------
<S>                                                               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income .................................................      $  68,829       $  66,368
Adjustments to reconcile net income to net cash provided
   by operating activities:
   Net gain on sale of assets ..............................        (15,771)           (669)
   Extraordinary item ......................................             88              --
   Depreciation ............................................         36,763          33,436
   Amortization of deferred loan costs .....................            942             784
   Cumulative effect of accounting change ..................            695              --
Changes in assets, (increase) decrease in
   Restricted cash .........................................            (44)           (122)
   Other assets ............................................         (3,157)        (16,676)
   Deferred charges ........................................         (1,370)         (2,039)
Changes in liabilities, increase (decrease) in:
   Accrued interest payable ................................         (2,466)           (106)
   Accounts payable and accrued expenses ...................            579           7,005
   Security deposits and prepaid rents .....................           (146)          1,043
                                                                  ---------       ---------
   Net cash provided by operating activities ...............         84,942          89,024
                                                                  ---------       ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Construction and acquisition of real estate assets,
   net of payables .........................................       (118,676)       (174,263)
 Proceeds from sale of assets ..............................        191,340          31,415
 Capitalized interest ......................................        (11,753)        (11,867)
 Recurring capital expenditures ............................         (6,939)         (4,462)
 Corporate additions and improvements ......................         (1,240)         (1,326)
 Non-recurring capital expenditures ........................           (819)         (1,438)
 Revenue generating capital expenditures ...................         (2,008)         (2,189)
 Distributions from unconsolidated entities ................          4,086
                                                                  ---------       ---------
 Net cash provided by (used in) investing activities .......         53,991        (164,130)
                                                                  ---------       ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of financing costs .................................           (300)             --
Debt proceeds ..............................................        130,000         200,000
Debt payments ..............................................       (170,954)        (64,555)
Purchase of units ..........................................        (21,386)             --
Proceeds from contributions from the Company related to
   Dividend Reinvestment and Employee Stock Purchase Plans..          7,081          19,268
Distributions paid to preferred unitholders ................         (8,738)         (5,769)
Distributions paid to common unitholders ...................        (67,826)        (64,494)
                                                                  ---------       ---------
Net cash (used in) provided by financing activities ........       (132,123)         84,450
                                                                  ---------       ---------
Net increase in cash and cash equivalents ..................          6,810           9,344
Cash and cash equivalents, beginning of period .............          7,459           5,870
                                                                  ---------       ---------
Cash and cash equivalents, end of period ...................      $  14,269       $  15,214
                                                                  =========       =========
</TABLE>


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


                                      -14-
<PAGE>   17

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 six-month period ended June 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 June 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 two quarters of 2001, the Operating Partnership authorized
         the sale of five communities and ten tracts of land consisting of:
         three communities and six tracts of land in Dallas, Texas, two
         communities in Atlanta, Georgia, one tract 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 properties located in
         Dallas, Texas. In April 2001, the Operating Partnership sold an
         810-unit community located in Atlanta, Georgia, for $67,250. Net
         proceeds on the sale were approximately $66,641. In May 2001, the
         Operating Partnership sold three communities: one community containing
         80 units located in Nashville, Tennessee for $3,950 with net proceeds
         of approximately $3,839 and two communities containing a total of 641
         units located in Dallas, Texas for $42,733 with net proceeds of
         approximately $42,073. In June 2001, the Operating Partnership sold a
         908-unit community located in Dallas, Texas for $76,750. Net proceeds
         were approximately $75,774. In addition to these communities, the
         Operating Partnership has sold two tracts of land: one tract in
         Charlotte, North Carolina for $1,942 with net proceeds of approximately
         $1,876 and one tract in Denver, Colorado for $1,155 with net proceeds
         of approximately $1,137. The proceeds from these sales were used to
         repay outstanding indebtedness and fund additional development
         projects.

         At June 30, 2001, the remaining two communities, two commercial
         properties and nine tracts of land consisting of land, buildings and
         improvements and furniture, fixture and equipment were recorded at
         $65,480, which represented the lower of depreciated cost or fair value
         less cost to sell. The Operating Partnership has recorded net


                                      -15-
<PAGE>   18

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

         gains of $15,660 and $15,771 for the three and six months ended June
         30, 2001, respectively. The net gains included reserves of $3,822 and
         $15,608 for the three and six months ended June 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 in 2001.

         For the three months ended June 30, 2001 and 2000, the consolidated
         statement of operations includes revenue less operating and maintenance
         expense, exclusive of depreciation of $1,513 and $1,490, respectively,
         from communities held for sale at June 30, 2001. For the six months
         ended June 30, 2001 and 2000, the consolidated statement of operations
         included revenue less operating and maintenance expense, exclusive of
         depreciation of $3,013 and $2,957, respectively, from communities held
         for sale at June 30, 2001. Depreciation expense totaling $388 was
         recognized on these assets 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 six months ended June 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              SIX MONTHS ENDED
                                                                           JUNE 30,                          JUNE 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 ...........    $     42,034     $     33,716     $     69,612     $     66,368
      Less: Preferred unit distributions ....................          (4,369)          (4,369)          (8,738)          (8,738)
                                                                 ------------     ------------     ------------     ------------
      Income available to common unitholders
        Before cumulative effect of accounting change
        extraordinary item ..................................    $     37,665     $     29,347     $     60,874     $     57,630
                                                                 ============     ============     ============     ============
      Common units (denominator):
      Weighted average units outstanding - basic ............      43,821,817       44,480,337       43,924,352       44,349,766
      Incremental units from assumed conversion
        of options ..........................................         230,598          836,346          245,399          593,794
                                                                 ------------     ------------     ------------     ------------
      Weighted average units outstanding - diluted ..........      44,052,415       45,316,683       44,169,751       44,943,560
                                                                 ============     ============     ============     ============
</TABLE>

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 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.



                                      -16-
<PAGE>   19
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)


         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 June 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 six months ended June 30,
         2001, the Operating Partnership recorded the unrealized loss of $512 on
         these cash flow hedges as a liability and a reduction in accumulated
         other comprehensive income, a partner's equity account, in the
         accompanying consolidated balance sheet. This unrealized net loss of
         $512 was comprised of an unrealized net loss of $3,134 for the three
         months ended March 31, 2001 and an unrealized net gain of $2,622 for
         the three months ended June 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 six months ended June 30, 2001. This
         charge against earnings during the period and the fair value of the
         interest rate cap agreements as of June 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 $450.

         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.

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.


                                      -17-
<PAGE>   20

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


         -        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.

         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.

         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.


                                      -18-
<PAGE>   21
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(Dollars in thousands, except per unit data)


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

<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED        SIX MONTHS ENDED
                                                               JUNE 30,                  JUNE 30,
                                                       ----------------------     -----------------------
                                                         2001          2000         2001          2000
                                                       ---------     --------     ---------     ---------
<S>                                                    <C>           <C>          <C>           <C>
REVENUES
Fully stabilized communities .....................     $  65,105     $ 63,488     $ 129,964     $ 126,159
Communities stabilized during 2000 ...............        11,720        9,396        23,515        17,011
Development and lease-up communities .............        10,496        3,549        19,359         6,128
Communities held for sale ........................         2,396        2,318         4,746         4,573
Sold communities .................................         3,457       11,257        10,219        23,282
Third party services .............................         4,353        3,932         7,959         6,942
Other ............................................         4,635        5,506         8,983        10,791
                                                       ---------     --------     ---------     ---------

Consolidated revenues ............................     $ 102,162     $ 99,446     $ 204,745     $ 194,886
                                                       =========     ========     =========     =========

CONTRIBUTION TO FUNDS FROM OPERATIONS
Fully stabilized communities .....................     $  44,416     $ 44,125     $  89,070     $  88,258
Communities stabilized during 2000 ...............         7,719        6,142        15,692        10,928
Development and lease-up communities .............         6,311        1,684        11,254         2,830
Communities held for sale ........................         1,513        1,490         3,012         2,957
Sold communities .................................         1,919        7,588         6,359        16,286
Third party services .............................           624          723         1,031           940
                                                       ---------     --------     ---------     ---------

Contribution to FFO ..............................        62,502       61,752       126,418       122,199
                                                       ---------     --------     ---------     ---------

Other operating income, net of expense ...........            68        1,731          (873)        2,743
Depreciation on non-real estate assets ...........          (592)        (634)       (1,246)       (1,210)
Minority interest in consolidated property
partnership ......................................           537          260           817           815
Interest expense .................................       (14,720)     (12,062)      (29,705)      (22,763)
Amortization of deferred loan costs ..............          (490)        (400)         (942)         (784)
General and administrative .......................        (3,331)      (1,633)       (6,406)       (4,127)
Distributions to preferred unitholders ...........        (4,369)      (4,369)       (8,738)       (8,738)
                                                       ---------     --------     ---------     ---------

Total FFO ........................................        39,605       44,645        79,325        88,135
                                                       ---------     --------     ---------     ---------

Depreciation on real estate assets ...............       (17,600)     (15,280)      (34,222)      (31,174)
Net gain (loss) on sale of assets ................        15,660          (18)       15,771           669
Distributions to preferred unitholders ...........         4,369        4,369         8,738         8,738
                                                       ---------     --------     ---------     ---------


Income before cumulative effect of accounting
  change, extraordinary item and preferred
  distributions ..................................     $  42,034     $ 33,716     $  69,612     $  66,368
                                                       =========     ========     =========     =========
</TABLE>



                                      -19-
<PAGE>   22
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(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 June 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 accrual at June 30, 2001                        $  237
                                                                   ======
</TABLE>

8.       INVESTMENTS IN UNCONSOLIDATED 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 has a 35%
         equity interest in the joint venture. The total estimated development
         cost of the joint venture properties of $67,000 is being through funded
         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.

         At June 30, 2001, the Operating Partnership's investment in and
         advances to the joint ventures totaled $25,497. The combined total
         assets, liabilities and equity of the joint ventures at June 30, 2001,
         were $38,273, $25,183 and $13,090, respectively. The joint venture
         properties had not commenced operations as of June 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.


                                      -20-
<PAGE>   23
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(Dollars in thousands, except per 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 June 30, 2001, there were 43,702,588 units in the Operating Partnership
outstanding, of which 38,535,781 or 88.2%, were owned by the Company and
5,166,807, or 11.8%, were owned by other limited partners (including certain
officers and directors of the Company). As of June 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 SIX MONTHS ENDED JUNE 30, 2001 AND 2000

The Company recorded net income available to common shareholders of $33,145 and
$53,011 for the three and six months ended June 30, 2001, respectively, which
represent increases of 27.9% and 4.2%, 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 June 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) 17 communities either stabilized in
the current year or presently in the development or lease-up stages and (iv) two
communities that are 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 six months ended June
30, 2001 were $605 and $1,768, respectively. Lease up deficits for the three and
six months ended June 30, 2000 were $765 and $1,617, respectively.


                                      -21-
<PAGE>   24
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(Dollars in thousands, except per 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 six months ended June 30, 2001 and 2000 is summarized
as follows:

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED                         SIX MONTHS ENDED
                                                                  JUNE 30,                                  JUNE 30,
                                                      --------------------------------        ------------------------------------
                                                        2001         2000      %CHANGE          2001          2000        %CHANGE
                                                      -------      -------     -------        --------      --------      --------
<S>                                                   <C>          <C>         <C>            <C>           <C>
 Rental and other revenue:
 Mature communities (1) ...........................   $65,105      $63,488         2.5%       $129,964      $126,159         3.0%
 Communities stabilized during 2000 ...............    11,720        9,396        24.7%         23,515        17,011        38.2%
 Development and lease-up communities (2) .........    10,496        3,549       195.7%         19,359         6,128       215.9%
 Communities held for sale (3) ....................     2,396        2,318         3.4%          4,746         4,573         3.8%
 Sold communities (4) .............................     3,457       11,257       (69.3)%        10,219        23,282       (56.1)%
 Other revenue (5) ................................     4,132        5,058       (18.3)%         7,996         9,804       (18.4)%
                                                      -------      -------                    --------      --------
                                                       97,306       95,066         2.4%        195,799       186,957         4.7%
                                                      -------      -------                    --------      --------
 Property operating and maintenance expense
 (exclusive of depreciation and amortization):
 Mature communities (1) ...........................    20,689       19,363         6.8%         40,894        37,901         7.9%
 Communities stabilized during 2000 ...............     4,001        3,254        23.0%          7,823         6,083        28.6%
 Development and lease-up communities (2) .........     4,185        1,865       124.4%          8,105         3,298       145.8%
 Communities held for sale (3) ....................       883          828         6.6%          1,734         1,616         7.3%
 Sold communities (4) .............................     1,538        3,669       (58.1)%         3,860         6,996       (44.8)%
 Other expenses (6) ...............................     3,887        3,259        19.3%          8,561         6,996        22.4%
                                                      -------      -------                    --------      --------
                                                       35,183       32,238         9.1%         70,977        62,890        12.9%
                                                      -------      -------                    --------      --------
 Revenue in excess of specified expense ...........   $62,123      $62,828        (1.1)%      $124,822      $124,067         0.6%
                                                      =======      =======                    ========      ========
 Recurring capital expenditures: (7)
   Carpet .........................................   $   725      $   619        17.1%       $  1,399      $  1,410        (0.8)%
   Other ..........................................     3,588        1,905        88.3%          5,540         3,052        81.5%
                                                      =======      =======                    ========      ========
   Total ..........................................   $ 4,313      $ 2,524        70.9%       $  6,939      $  4,462        55.5%
                                                      =======      =======                    ========      ========
 Average apartment units in service ...............    32,153       31,418         2.3%         32,234        31,182         3.4%
                                                      =======      =======                    ========      ========
 Recurring capital expenditures per
   Apartment unit .................................   $   134      $    80        67.5%       $    215      $    143        50.3%
                                                      =======      =======                    ========      ========
</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 in Georgia and 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
         and one community containing 908 units which was sold June 21, 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, grounds 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.


                                      -22-
<PAGE>   25
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(Dollars in thousands, except per unit data)


For the three and six months ended June 30, 2001, rental and other revenue
increased $2,240, or 2.4%, and $8,842, or 4.7%, respectively, compared to the
same periods in the prior year primarily as a result of the completion of new
communities and increased rental rates for existing communities partially offset
by asset sales and a reduction in other revenue. For the three and six months
ended June 30, 2001, property operating and maintenance expenses increased
$2,945, or 9.1%, and $8,087, or 12.9%, 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 and six months ended June 30, 2001, recurring capital expenditures
increased $1,789, or 70.9% ($54, or 67.5% on a per unit apartment basis), and
$2,477, or 55.5% ($72, or 50.3% on a per unit apartment basis), respectively,
compared to the same periods in the prior year, primarily due to the timing of
capital expenditures.

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                       SIX MONTHS ENDED
                                                                  JUNE 30,                                JUNE 30,
                                                      --------------------------------     --------------------------------------
                                                                                  %                                         %
                                                        2001       2000        CHANGE        2001          2000          CHANGE
                                                      -------    -------       -------     --------       -------        ------
<S>                                                   <C>        <C>           <C>         <C>            <C>            <C>
 Rental and other revenue (1) .....................   $65,105    $63,488         2.5%      $129,964       $126,159         3.0%
 Property operating and maintenance
    Expense (exclusive of depreciation and
    amortization) (1) .............................    20,689     19,363         6.8%        40,894         37,901         7.9%
                                                      -------    -------                   --------       --------
 Revenue in excess of specified expense ...........   $44,416    $44,125         0.7%      $ 89,070       $ 88,258         0.9%
                                                      -------    -------                   --------       --------
 Recurring capital expenditures: (2)
    Carpet ........................................   $   591    $   530        11.5%      $  1,142       $  1,123         1.7%
    Other .........................................     2,885      1,661        73.7%         4,546          2,613        74.0%
                                                      -------    -------                   --------       --------
    Total .........................................     3,476    $ 2,191        58.6%      $  5,688       $  3,736        52.2%
                                                      =======    =======                   ========       ========
 Recurring capital expenditures per
    Apartment unit (3) ............................   $   154    $    97        58.8%      $    252       $    165        52.7%
                                                      =======    =======                   ========       ========
 Average economic occupancy (4) ...................      95.3%      96.6%       (1.3)%         95.6%          96.6%       (1.0)%
                                                      =======    =======                   ========       ========
 Average monthly rental rate per
    Apartment unit (5) ............................   $   954    $   932         2.4%      $    952       $    928         2.5%
                                                      =======    =======                   ========       ========
 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 $178
         and $160 per unit on building maintenance (inclusive of direct
         salaries) and $59 and $59 per unit on landscaping (inclusive of direct
         salaries) for the three months ended June 30, 2001 and 2000,
         respectively.
(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 94.5% and 94.4% for the three months ended June
         30, 2001 and 2000, respectively. For the three months ended June 30,
         2001 and 2000, concessions were $260 and $1,215, respectively, and
         employee discounts were $251 and $221, 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 six months ended June 30, 2001, rental and other revenue
increased $1,617, or 2.5%, and $3,805, or 3.0%, respectively, compared to the
same periods in the prior year, primarily due to increased rental rates. For the
three and six months ended June 30, 2001, property operating and maintenance
expenses (exclusive of depreciation and amortization) increased $1,326, or 6.8%,
and $2,993, or 7.9%, respectively, compared to the same periods in the prior
year, primarily as a result of increased personnel expense, real estate taxes
and insurance.



                                      -23-
<PAGE>   26
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(Dollars in thousands, except per unit data)


For the three and six months ended June 30, 2001, recurring capital expenditures
per unit increased $57, or 58.8%, and $87, or 52.7%, respectively, compared to
the same periods in the prior year, as a result of the timing of expenditures.

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 six
months ended June 30, 2001 and 2000 is summarized as follows:

<TABLE>
<CAPTION>

                                                               THREE MONTHS ENDED                    SIX MONTHS ENDED
                                                                    JUNE 30,                             JUNE 30,
                                                         ------------------------------       -------------------------------
                                                           2001         2000    %CHANGE        2001         2000      %CHANGE
                                                         -------      -------   -------       -------      -------    -------
<S>                                                      <C>          <C>        <C>          <C>          <C>        <C>
 Property management and other revenue ............      $ 1,192      $   933      27.8%      $ 2,368      $ 1,841      28.6%
 Property management expense ......................          973          730      33.3%        1,910        1,518      25.8%
 Depreciation expense .............................            8            7      14.3%           15           14       7.1%
                                                         -------      -------                 -------      -------
 Revenue in excess of specified expense ...........      $   211      $   196       7.7%      $   443      $   309      43.4%
                                                         =======      =======                 =======      =======
 Average apartment units managed ..................       15,899       14,098      12.8%       15,816       13,916      13.7%
                                                         =======      =======                 =======      =======
</TABLE>


The increase in revenue in excess of specified expense for the three and six
months ended June 30, 2001 compared to the same periods in the prior year is
primarily attributable to an increase in the average number of units managed.

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 six months
ended June 30, 2001 and 2000 is summarized as follows:

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED                   SIX MONTHS ENDED
                                                                     JUNE 30,                           JUNE 30,
                                                         -------------------------------     -------------------------------
                                                         2001         2000     % CHANGE       2001        2000      % CHANGE
                                                         ------      ------    --------      ------      ------     --------
<S>                                                      <C>         <C>       <C>           <C>         <C>        <C>
 Landscape services and other revenue .............      $3,161      $2,999         5.4%     $5,591      $5,101         9.6%
 Landscape services expense .......................       2,756       2,479        11.2%      5,018       4,484        11.9%
 Depreciation expense .............................         111          90        23.3%        219         177        23.7%
                                                         ------      ------                  ------      ------
 Revenue in excess of specified expense ...........      $  294      $  430       (31.6)%    $  354      $  440       (19.5)%
                                                         ======      ======                  ======      ======
</TABLE>

The decrease in revenue in excess of specified expense for the three and six
months ended June 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 PLG's markets.

OTHER EXPENSES

Depreciation expense increased $2,442, or 14.9%, and $3,327, or 10.0%,
respectively, for the three and six months ended June 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 $1,698, or 104.0%, and $2,279, or
55.2%, respectively, for the three and six months ended June 30, 2001, compared
to the same period in the prior year, primarily as a result of reduced
capitalization


                                      -24-
<PAGE>   27
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(Dollars in thousands, except per unit data)


of overhead to communities under development, increased salary expense,
insurance costs and relocation expense due to management changes.

Interest expense increased $2,658, or 22.0%, and $6,942, or 30.5%, respectively,
for the three and six months ended June 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 $89,024
for the six months ended June 30, 2000 to $84,942 for the six months ended June
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 ($164,130) in the six months ended June 30, 2000 to
$53,991 in the six months ended June 30, 2001 principally due to decreased
construction spending and proceeds from the sale of five communities in the
second quarter of 2001. The Company's net cash provided by (used in) financing
activities increased from $84,450 for the six months ended June 30, 2000 to
($132,123) for the six months ended June 30, 2001 primarily due to increased
debt payments and treasury stock purchases.

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 June 30, 2001, the Company had total indebtedness of $1,172,355, a decrease
of $40,954 from its total indebtedness at December 31, 2000, and cash and cash
equivalents of $14,269. At June 30, 2001, the Company's indebtedness included
approximately $233,475 in conventional mortgages payable secured by individual
communities, tax-exempt bond indebtedness of $235,880 and senior unsecured notes
of $703,000.

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 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 June 30, 2001, there were no outstanding balances on these
lines.

Medium Term Notes

As of June 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.


                                      -25-
<PAGE>   28
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(Dollars in thousands, except per unit data)


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 two quarters of 2001, the Company sold five communities and two
tracts of land for $193,762. Net proceeds of approximately $191,340 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 $100,000 of
the Company's common 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 June
30, 2001, the Company has repurchased 1,345,200 shares of its common stock at a
total cost of $48,007.


                                      -26-
<PAGE>   29
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(Dollars in thousands, except per unit data)


Schedule of Indebtedness
The following table reflects the Company's indebtedness at June 30, 2001:

<TABLE>
<CAPTION>

                                                                                                   MATURITY    PRINCIPAL
             DESCRIPTION                              LOCATION               INTEREST RATE         DATE (1)     BALANCE
             -----------                              --------               -------------         --------   ----------
<S>                                                 <C>              <C>                           <C>        <C>
 CONVENTIONAL FIXED RATE (SECURED)
 Parkwood Townhomes(TM) ......................      Dallas, TX                  7.375%              04/01/14         781
 Northwestern Mutual Life ....................          N/A                     6.50%(2)            03/01/09      48,144
 Northwestern Mutual Life ....................      Dallas, TX                  7.69%               10/01/07      28,467
 Northwestern Mutual Life ....................      Dallas, TX                  7.69%               10/01/07      50,883
 FNMA ........................................      Atlanta, GA                 6.975%(3)           07/23/29     103,200
                                                                                                              ----------
                                                                                                                 231,475
 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                     6.78%               09/22/05      25,000
 Senior Notes ................................          N/A                     7.50%               10/01/06      25,000
 Mandatory Par Put Remarketed
   Securities ................................          N/A                     6.85%(6)            03/16/15     100,000
 Medium Term Notes ...........................          N/A                     7.28%(7)            02/01/05      25,000
 Medium Term Notes ...........................          N/A                     8.12%               06/15/05     150,000
 Senior Notes ................................          N/A                     7.70%               12/20/10     185,000
 Senior Notes ................................          N/A                     6.71%               03/13/06      50,000
                                                                                                              ----------
                                                                                                                 703,000
LINES OF CREDIT AND OTHER UNSECURED DEBT


Revolver - Syndicated ........................          N/A          LIBOR + .750% or prime minus
                                                                                  .25%(8)           04/30/04          --

Cash Management Line..........................          N/A          LIBOR + .675% or prime minus
                                                                                  .25%              02/13/02          --
City of Phoenix...............................          N/A                   5.00% (9)             03/01/21       2,000
                                                                                                              ----------
TOTAL.........................................                                                                $1,172,355
                                                                                                              ==========
</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 has purchased an
         interest rate cap that limits the Company's exposure to increases in
         the base rate to 5%.
(6)      The annual interest rate on these securities to March 16, 2005 (the
         "Remarketing Date") is 6.85%. On the Remarketing Date, they are subject
         to mandatory tender for remarketing.
(7)      In October 2000, 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.
(8)      Represents stated rate. The Company may also make "money market" loans
         of up to $160,000 at rates below the stated rate.
(9)      This loan is interest-free for the first three years, with interest at
         5.00% thereafter. Repayment is to commence on March 1, 2001 subject to
         the conditions set forth in the Agreement.


                                      -27-
<PAGE>   30
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(Dollars in thousands, except per unit data)


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(TM) .................            232          3Q'99                 3Q'00                     4Q'01
 Post Gateway Place II ..................            204          3Q'00                 3Q'01                     3Q'02
                                                  ------
 SUBTOTAL ...............................            436
                                                  ------

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


 DALLAS, TX
 Post Legacy ............................            384          3Q'99                 3Q'00                     4Q'01

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

 DENVER, CO
 Post Uptown Square(TM)I ................            449          1Q'98                 3Q'99                     3Q'01
 Post Uptown Square(TM)(II) .............            247          1Q'00                 4Q'01                     4Q'02
                                                  ------
 SUBTOTAL ...............................            696
                                                  ------

 PHOENIX, AZ
 Post Roosevelt Square(TM) ..............            403          4Q'98                 1Q'00                     4Q'01

 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 ......          3,531
                                                  ======
 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)......................            138          3Q'01                 3Q'02                     2Q'03
                                                  ------
 Subtotal Co-Investment
 Construction/Lease-up Communities ......            535
                                                  ------
 TOTAL ..................................          4,066
                                                  ======

</TABLE>

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

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

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


                                      -28-
<PAGE>   31
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(Dollars in thousands, except per 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
six months ended June 30, 2001 and 2000 are summarized as follows:



<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                   SIX MONTHS ENDED
                                                                          JUNE 30,                            JUNE 30,
                                                                 --------------------------          --------------------------
                                                                    2001             2000              2001              2000
                                                                 --------          --------          --------          --------
<S>                                                              <C>               <C>               <C>               <C>
 New community development and acquisition activity .........    $ 48,872          $ 99,643          $123,338          $190,654
 Non-recurring capital expenditures:
    Revenue generating additions and improvements ...........         906             1,457             2,008             2,189
    Other community additions and improvements ..............         497               764               819             1,438
 Recurring capital expenditures:
    Carpet replacements .....................................         725               619             1,399             1,410
    Community additions and improvements ....................       3,586             1,905             5,540             3,052
    Corporate additions and improvements ....................         729               413             1,240             1,326
                                                                 --------          --------          --------          --------
                                                                 $ 55,315          $104,801          $134,344          $200,069
                                                                 ========          ========          ========          ========
</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 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.


                                      -29-
<PAGE>   32
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(Dollars in thousands, except per unit data)


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 June 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 six months ended June 30, 2001, the Company recorded the unrealized loss of
$450, 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 $450 was comprised of an unrealized net loss of $2,764, net of minority
interest, for the three months ended March 31, 2001 and an unrealized net gain
of $2,314, net of minority interest, for the three months ended June 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 six months ended June 30, 2001. This charge against earnings
during the period and the fair value of the interest rate cap agreements as of
June 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 $450.

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.



                                      -30-
<PAGE>   33
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(Dollars in thousands, except per unit data)


FFO and CAD for the three and six months ended June 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            SIX MONTHS ENDED
                                                                               JUNE 30,                      JUNE 30,
                                                                     ---------------------------    ---------------------------
                                                                         2001           2000            2001           2000
                                                                     ------------   ------------    ------------   ------------
<S>                                                                  <C>            <C>             <C>            <C>
 Net income available to common shareholders ......................  $     33,145   $     25,924    $     53,011   $     50,887
    Cumulative effect of accounting change, net of minority
     interest .....................................................            --             --             613             --
    Extraordinary item, net of minority interest ..................            77             --              77             --
    Net (gain) loss on sale of assets (1) .........................       (15,660)            18         (15,771)          (669)
    Minority  interest of common unitholders in Operating
     Partnership ..................................................         4,443          3,423           7,173          6,743
                                                                     ------------   ------------    ------------   ------------
 Adjusted net income ..............................................        22,005         29,365          45,103         56,961
    Depreciation of real estate assets (2) ........................        17,600         15,280          34,222         31,174
                                                                     ------------   ------------    ------------   ------------
 Funds from Operations (3) ........................................        39,605         44,645          79,325         88,135
 Recurring capital expenditures (4) ...............................        (4,313)        (2,524)         (6,939)        (4,462)
 Non-recurring capital expenditures (5) ...........................          (497)          (764)           (819)        (1,438)
 Loan amortization payments .......................................          (758)          (289)         (1,548)          (599)
                                                                     ------------   ------------    ------------   ------------
 Cash Available for Distribution ..................................  $     34,037   $     41,068    $     70,019   $     81,636
                                                                     ============   ============    ============   ============
 Revenue generating capital expenditures (6) ......................  $        906   $      1,457    $      2,008   $      2,189
                                                                     ============   ============    ============   ============

 Cash Flow Provided By (Used In):

 Operating activities .............................................  $     48,011   $     46,664    $     84,942   $     89,024
 Investing activities .............................................  $    129,665   $   (103,743)   $     53,991   $   (164,130)
 Financing activities .............................................  $   (166,433)  $     52,950    $   (132,123)  $     84,450

 Weighted average common shares outstanding - basic ...............    38,653,625     39,294,234      38,750,350     39,160,002
                                                                     ============   ============    ============   ============
 Weighted average common shares and units
 outstanding - basic ..............................................    43,821,817     44,480,337      43,924,352     44,349,766
                                                                     ============   ============    ============   ============
 Weighted average common shares outstanding - diluted .............    38,884,223     40,130,580      38,995,749     39,753,796
                                                                     ============   ============    ============   ============
 Weighted average common shares and units
 outstanding - diluted ............................................    44,052,415     45,316,683      44,169,751     44,943,560
                                                                     ============   ============    ============   ============

</TABLE>

(1)      Net gain (loss) on sale of assets includes reserves of $3,822 and
         $15,608 for the three and six months ended June 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 $725 and $619 of
         carpet replacement and $3,588 and $1,905 of other additions and
         improvements to existing communities for the three months ended June
         30, 2001 and 2000, respectively and $1,399 and $1,410 of carpet
         replacement and $5,540 and $3,052 of other additions and improvements
         to existing communities for the six months ended June 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 $729 and $413 for the three months ended June
         30, 2001 and 2000, respectively, and $1,240 and $1,326 for the six
         months ended June 30, 2001 and 2000, respectively, are excluded from
         the calculation of CAD.
(5)      Non-recurring capital expenditures consisted of community additions and
         improvements of $497 and $764 for the three months ended June 30, 2001
         and 2000, respectively, and $819 and $1,438 for the three months ended
         June 30, 2001 and 2000, respectively.
(6)      Revenue generating capital expenditures are primarily comprised of
         major renovations of communities.



                                      -31-
<PAGE>   34
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
(Dollars in thousands, except per unit data)



ITEM 3.         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's primary market risk exposure is interest rate risk. At June 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. 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 lock where appropriate to fix rates on anticipated debt
         transactions, and

-        Take advantage of favorable mark conditions for 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. 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                $  (911)

Variable to fixed                25,000                   6.53%            02/01/05                 (1,073)

Interest rate cap                76,000                   5.00%            02/01/03                      1

Interest rate cap                141,230                  5.00%            02/01/03                      3

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

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



                                      -32-
<PAGE>   35

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

                The Company's Annual Meeting of Shareholders was held May 22,
                2001. The matter subject to a vote of shareholders was the
                election of one director to serve until the 2003 Annual
                Meeting of Shareholders and three directors to serve until
                the 2004 Annual Meeting of Shareholders. The voting results
                were as follows:

<Table>
<Caption>
                                                  For           Withheld
                                               ----------       --------
                <S>                            <C>              <C>
                Term Expires 2003
                -----------------
                Ronald de Waal                 29,188,339       226,595

                Term Expires 2004
                -----------------
                Robert L. Anderson             29,186,655       228,279
                Arthur M. Blank                29,188,339       226,595
                John T. Glover                 29,188,165       226,769
</Table>

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 June 30, 2001.



                                      -33-
<PAGE>   36


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.



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


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


                                      -34-
<PAGE>   37

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



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


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


                                      -35-