GERMANTOWN, Tenn., July 29, 2020 /PRNewswire/ -- Mid-America
Apartment Communities, Inc., or MAA (NYSE: MAA), today announced
operating results for the quarter ended June 30, 2020.
Net Income Available for Common Shareholders
For the
quarter ended June 30, 2020, net income available for MAA
common shareholders was $74.1
million, or $0.65 per diluted
common share, compared to $61.0
million, or $0.53 per diluted
common share, for the quarter ended June 30, 2019.
Results for the quarter ended June 30, 2020, included
$11.7 million, or $0.10 per diluted common share, of non-cash
income related to the fair value adjustment of the embedded
derivative in the MAA Series I preferred shares and $4.3 million, or $0.04 per diluted common share, of non-cash
income, net of tax, related to gains recognized from an
unconsolidated limited partnership. Results for the quarter
ended June 30, 2019, included $4.6
million, or $0.04 per diluted
common share, of non-cash income related to the embedded derivative
in the preferred shares.
For the six months ended June 30, 2020, net income
available for MAA common shareholders was $109.9 million, or $0.96 per diluted common share, compared to
$123.7 million, or $1.09 per diluted common share, for the six
months ended June 30, 2019. Results for the six months
ended June 30, 2020, included $15.9
million, or $0.14 per diluted
common share, of non-cash expense related to the fair value
adjustment of the embedded derivative in the preferred shares and
$4.2 million, or $0.04 per diluted common share, of non-cash
income, net of tax, related to gains recognized from an
unconsolidated limited partnership. Results for the six
months ended June 30, 2019, included $4.1 million, or $0.04 per diluted common share, of non-cash
income related to the embedded derivative in the preferred
shares.
Core Funds from Operations (FFO) and FFO
Core FFO,
which adjusts FFO for items that are not considered part of MAA's
core business operations, for the quarter ended June 30,
2020 was $188.9 million, or $1.59 per diluted
common share and unit, or per Share, as compared to $180.8
million, or $1.53 per Share, for the quarter
ended June 30, 2019. For the quarter ended June 30,
2020, FFO was $202.6 million, or
$1.71 per Share, compared to
$185.7 million, or $1.57 per Share, for the quarter ended
June 30, 2019. FFO results for the quarter ended
June 30, 2020, included $11.7
million, or $0.10 per Share,
of non-cash income related to the fair value adjustment of the
embedded derivative in the preferred shares and $4.3 million, or $0.04 per Share, of non-cash income, net of tax,
related to gains recognized from an unconsolidated limited
partnership. FFO results for the quarter ended June 30, 2019,
included $4.6 million, or
$0.04 per Share, of non-cash income
related to the embedded derivative in the preferred shares.
Core FFO for the six months ended June 30, 2020 was
$380.1 million, or $3.21 per Share, as compared to $358.2 million, or $3.03 per Share, for the
six months ended June 30, 2019. For the six months ended
June 30, 2020, FFO was $364.7
million, or $3.08 per Share,
compared to $372.1 million, or
$3.15 per Share, for the six months
ended June 30, 2019. FFO results for the six months
ended June 30, 2020, included $15.9
million, or $0.14 per Share,
of non-cash expense related to the fair value adjustment of the
embedded derivative in the preferred shares and $4.2 million, or $0.04 per Share, of non-cash income, net of tax,
related to gains recognized from an unconsolidated limited
partnership. FFO results for the six months ended
June 30, 2019, included $4.1
million, or $0.03 per Share,
of non-cash income related to the embedded derivative in the
preferred shares.
A reconciliation of FFO and Core FFO to net income available for
MAA common shareholders, and an expanded discussion of the
components of FFO and Core FFO, can be found later in this
release.
Eric Bolton, Chairman and Chief
Executive Officer, said, "Our second quarter results were better
than expected. While the country continues to work through
challenges associated with COVID-19, MAA's portfolio of high
quality communities, well diversified across the Sunbelt markets,
supported by a strong operating platform and a dedicated team of
associates, is performing well."
Second Quarter 2020 Highlights
- Property revenues from the Same Store Portfolio increased 2.1%
during the second quarter of 2020 as compared to the same period in
the prior year. Results were driven by a 3.4% growth in Average
Effective Rent per Unit for the Same Store Portfolio.
- Property operating expenses for the Same Store Portfolio
increased 2.4% during the second quarter of 2020 as compared to the
same period in the prior year.
- Net Operating Income, or NOI, from the Same Store Portfolio
increased 2.0% during the second quarter of 2020 as compared to the
same period in the prior year.
- Resident turnover remained low as resident move outs for the
Same Store Portfolio for the second quarter of 2020 was 46.3% on a
rolling twelve month basis.
- During the second quarter of 2020, MAA completed the
development of Copper Ridge II in the Fort Worth, TX market.
- As of the end of the second quarter of 2020, MAA had six
properties under development, representing 1,940 units once
complete, with a total projected cost of $459.5 million and an estimated $243.7 million remaining to be funded.
- During the second quarter of 2020, MAA completed the initial
lease-up of Sync 36 II in the Denver,
CO market.
- As of the end of the second quarter of 2020, MAA had two
properties in their initial lease-up with physical occupancy
averaging 63.3%. One property is expected to stabilize in the
fourth quarter of 2020 and the other property is expected to
stabilize in the second quarter of 2021.
COVID-19 Developments
In these unprecedented times,
MAA believes the best way it can help its residents is to work with
those who have lost wages or compensation due to the COVID-19
pandemic so that they can remain in their homes. MAA has
offered these impacted residents amendments to their leases that
provided varying degrees of payment flexibility with respect to
April, May, June and July rent and waived late fees and interest
charges under the original lease for rent that was deferred under a
lease amendment.
MAA's on-site leasing offices have remained open throughout the
COVID-19 pandemic. As governmental authorities began issuing
orders and directives to combat the spread of COVID-19, MAA's
leasing offices transitioned to operate on a virtual basis, with
full staff still on-site to continue serving current and
prospective new residents. To support its associates who
continued to work on-site on a daily basis, MAA provided those
associates with enhanced leave and sick time policies, enhanced
flextime arrangements and additional COVID-19 paid time off, among
other benefits. In addition, MAA made modifications to its
health and retirement plans to assist all of its associates and
their families during this time of crisis. In May, MAA
resumed normal operations at its on-site leasing offices, once
again permitting public access and walk-in traffic, subject to
social distancing restrictions. Likewise, in May, MAA began
reopening property amenities as permitted by governmental orders,
directives and guidelines.
MAA's balance sheet remains very strong, with low leverage,
significant availability from its unsecured revolving credit
facility, and limited near-term debt maturities and funding
obligations. Operating metrics for the second quarter of 2020 and
the month of July (through July 27,
2020) include the following:
- Through July 27, 2020, rent cash
collections and promises to pay under lease amendments signed by
residents financially impacted by COVID-19, combined, represented
99.4% of billed residential rent for the second quarter of
2020.
- Through July 27, 2020, rent cash
collections represented 98.1% of billed residential rent for
July 2020. This compares to 96.4%
average cash collections of April, May and June rents through the
27th of each such month. Rent cash collections and
promises to pay under lease amendments signed by residents
financially impacted by COVID-19, combined, represented 98.4% of
billed residential rent for July
2020. This compares to 98.7% average combined collections
and deferrals of April, May and June rents through the
27th of each such month.
- Through July 27, 2020, Average
Physical Occupancy for the Same Store Portfolio was 95.3% for the
month of July.
Additional metrics related to the impact of the COVID-19
pandemic on MAA's business are included in the supplemental
schedules accompanying this
release.
Same Store Portfolio Operating Results
To ensure
comparable reporting with prior periods, the Same Store Portfolio
includes properties that were stabilized and owned by MAA at the
beginning of the previous year.
The Same Store Portfolio revenue growth of 2.1% during the
second quarter of 2020 was primarily a result of a 3.4% increase in
Average Effective Rent per Unit, as compared to the same period in
the prior year. Average Effective Rent per Unit growth was
partially offset by lower Average Physical Occupancy and lower
collections as compared to the more normal operating conditions
during the second quarter of 2019. Rent growth for the Same
Store Portfolio for both new and renewing leases, as compared to
the prior lease, on a combined basis increased an average of 1.2%
during the second quarter of 2020. Average Physical Occupancy
for the Same Store Portfolio was 95.4% for the second quarter of
2020, as compared to 96.0% in the same period in the prior
year. Property operating expenses increased 2.4% for the
second quarter of 2020 as compared to the same period in the prior
year. This resulted in Same Store NOI growth of 2.0% for the second
quarter of 2020 as compared to the same period in the prior
year.
The Same Store Portfolio revenue growth of 3.2% during the six
months ended June 30, 2020 was primarily a result of a 3.8%
increase in Average Effective Rent per Unit, as compared to the
same period in the prior year. Rent growth for the Same Store
Portfolio for both new and renewing leases, as compared to the
prior lease, on a combined basis increased an average of 1.8%
during the six months ended June 30, 2020. Average
Physical Occupancy for the Same Store Portfolio was 95.6% for the
six months ended June 30, 2020, as compared to 95.9% in
the same period in the prior year. Property operating
expenses increased 2.8% for the six months ended June 30, 2020
as compared to the same period in the prior year. This resulted in
Same Store NOI growth of 3.4% for the six months ended
June 30, 2020 as compared to the same period in the prior
year.
A reconciliation of NOI, including Same Store NOI, to net income
available for MAA common shareholders, and an expanded discussion
of the components of NOI, can be found later in this release.
Development and Lease-up Activity
As of the end of the
second quarter of 2020, MAA had six development communities under
construction. MAA expects to complete construction of one of
these development communities in 2020, four in 2021 and one in
2022. Total development costs for the six communities are
projected to be $459.5 million, of
which an estimated $243.7 million
remained to be funded as of the end of the second quarter of
2020. The expected average stabilized NOI yield on these
communities is 6.1%. During the second quarter of 2020, MAA funded
$57.4 million of construction costs
on current and completed development projects.
During the second quarter of 2020, MAA completed
construction on the Phase II multifamily apartment community
expansion of Copper Ridge, located in Fort Worth, Texas, and that apartment
community moved into MAA's lease-up portfolio. As of the end of the
second quarter of 2020, MAA had two apartment communities,
representing a total of 439 units, remaining in initial lease-up:
The Greene, located in
Greenville, South Carolina and
Copper Ridge II. Physical occupancy for these lease-up
projects averaged 63.3% at the end of the second quarter of
2020.
Acquisition and Disposition Activity
MAA did not
acquire or dispose of any apartment communities, land parcels or
commercial properties during the three months ended June 30,
2020.
Redevelopment Activity
MAA suspended its interior
redevelopment activities as of the beginning of the second quarter
as a result of COVID-19 shelter-in-place governmental directives,
but MAA restarted these activities in May in accordance with
governmental guidelines issued in connection with the reopening of
the U.S. economy. Upon restart, MAA continued its interior
redevelopment program at select apartment communities throughout
the portfolio. During the second quarter of 2020, MAA
redeveloped the interior of 655 units, bringing the total units
renovated during the six months ended June 30, 2020 to 2,095
at an average cost of $6,601 per
unit, achieving average rental rate increases of approximately 9.1%
above non-renovated units. MAA's SmartHome technology initiative
(mobile control of lights, thermostat and security, as well as leak
monitoring) was also suspended during the second quarter, after
installing 8,017 units in the first quarter of 2020. MAA restarted
this program in early July and expects to complete an additional
16,000 units by the end of 2020. The 8,017 units completed in the
first quarter were installed at an average cost of approximately
$1,350 per unit and achieved an
average rent increase of $25 per
unit.
During the second quarter of 2020, MAA continued its program to
upgrade and reposition the amenity and common areas at select
properties. The program includes targeted plans to move all units
at the properties to higher rents that are expected to deliver
yields on cost averaging 8% beginning in calendar year 2021.
During the second quarter of 2020, repositioning work continued at
five of these properties and work was initiated on an additional
three properties. Work will begin at the other two identified
properties later this year or early in 2021 as market conditions
stabilize.
Capital Expenditures
Recurring capital expenditures
totaled $25.1 million for the second
quarter of 2020, or approximately $0.21 per Share, as compared to $24.4 million, or $0.21 per Share, for the same period in the prior
year. These expenditures led to Core Adjusted Funds from
Operations, or Core AFFO, of $1.38
per Share for the second quarter of 2020, compared to $1.32 per Share for the same period in the prior
year.
Redevelopment, revenue enhancing, commercial and other capital
expenditures during the second quarter of 2020 were $24.8 million, as compared to $29.9 million for the same period in the prior
year. These expenditures led to Funds Available for Distribution,
or FAD, of $139.0 million for the
second quarter of 2020, compared to $126.6
million for the same period in the prior year.
Recurring capital expenditures totaled $39.7 million for the six months ended
June 30, 2020, or approximately $0.33 per Share, as compared to
$36.9 million, or $0.31 per Share, for the same period in the prior
year. These expenditures led to Core AFFO of $2.88 per Share for the six months ended
June 30, 2020, compared to $2.72
per Share for the same period in the prior year.
Redevelopment, revenue enhancing, commercial and other capital
expenditures during the six months ended June 30, 2020 were
$52.6 million, as compared to
$55.7 million for the same period in
the prior year. These expenditures led to FAD of $287.8 million for the six months ended
June 30, 2020, compared to $265.5
million for the same period in the prior year.
A reconciliation of FFO, Core FFO, Core AFFO and FAD to net
income available for MAA common shareholders, and an expanded
discussion of the components of FFO, Core FFO, Core AFFO and FAD,
can be found later in this release.
Financing Activities
As of June 30, 2020, MAA had
approximately $926.6 million of
combined cash and available capacity under Mid-America Apartments,
L.P.'s unsecured revolving credit facility, net of commercial paper
borrowings. Mid-America Apartments, L.P. (referred to as
MAALP) is MAA's operating partnership.
Dividends and distributions paid on shares of common stock and
noncontrolling interests during the second quarter of 2020 were
$118.4 million, as compared to
$113.4 million for the same period in
the prior year.
Balance Sheet
As of June 30, 2020:
- Total debt to adjusted total assets (as defined in the
covenants for the bonds issued by MAALP) was 31.2%;
- Total debt outstanding was $4.5
billion with an average effective interest rate of
approximately 3.7%;
- 91.3% of total debt was fixed against rising interest rates for
an average of approximately 7.7 years; and
- Unencumbered NOI was 91.1% of total NOI.
106th Consecutive Quarterly Common Dividend
Declared
MAA declared its 106th consecutive quarterly common
dividend, which will be paid on July 31,
2020 to holders of record on July
15, 2020. The current annual dividend rate is
$4.00 per common share.
2020 Net Income per Diluted Common Share, Core FFO and Core
AFFO per Share Guidance
As a result of the material change
in broad economic conditions in the U.S., in late March MAA
withdrew its calendar year 2020 guidance for Net income per diluted
common share, Core FFO per Share and Core AFFO per
Share. Given continued higher than normal uncertainty in
the outlook for the U.S. economy and a number of actions being
considered by federal, state and local governments to help stop the
spread of the COVID virus, and the potential for wide-ranging
impact on rent collections, fees and occupancy, at this point MAA
is not providing quarterly or full year 2020 guidance for Net
income per diluted common share, Core FFO per Share or Core AFFO
per Share. The supplemental schedules accompanying this
release include an update on certain second quarter of 2020
operating metrics as well as certain July
2020 operating metrics. MAA will continue to monitor
conditions related to the COVID-19 pandemic and will reestablish
full year guidance as more information becomes available. However,
given the comparable stability of operating expenses, MAA does
reconfirm that it expects Same Store Portfolio operating expense
growth for the full year to fall within the range initially
projected of 3.75% to 4.75%, as compared to 2019. As previously
disclosed, pressures on real estate taxes and insurance along with
the roll out of the Double Play bulk cable and internet program are
driving the majority of the expected increase.
Supplemental Material and Conference Call
Supplemental
data to this release can be found under the "Filings and
Financials" navigation tab on the "For Investors" page of our
website at www.maac.com. MAA will host a conference call to further
discuss second quarter results on Thursday,
July 30, 2020, at 9:00 AM Central
Time. The conference call-in number is
877-830-2596. You may also join the live webcast of the
conference call by accessing the "For Investors" page of our
website at www.maac.com. MAA's filings with the Securities
and Exchange Commission, or SEC, are filed under the registrant
names of Mid-America Apartment Communities, Inc. and Mid-America
Apartments, L.P.
About MAA
MAA, an S&P 500 company, is a real
estate investment trust, or REIT, focused on delivering full-cycle
and superior investment performance for shareholders through the
ownership, management, acquisition, development and redevelopment
of quality apartment communities in the Southeast, Southwest, and
Mid-Atlantic regions of the United States. As of
June 30, 2020, MAA had ownership interest in 102,105 apartment
units, including communities currently in development, across 16
states and the District of
Columbia. For further details, please visit the MAA website
at www.maac.com or contact Investor Relations at
investor.relations@maac.com, or via mail at MAA, 6815 Poplar Ave.,
Suite 500, Germantown, TN 38138,
Attn: Investor Relations.
Forward-Looking Statements
Sections of this release
contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, with respect to
our expectations for future periods. Forward-looking statements do
not discuss historical fact, but instead include statements related
to expectations, projections, intentions or other items related to
the future. Such forward-looking statements include, without
limitation, statements regarding the potential impact of the
COVID-19 pandemic on our business, statements regarding expected
operating performance and results, property stabilizations,
property acquisition and disposition activity, joint venture
activity, development and renovation activity and other capital
expenditures, and capital raising and financing activity, as well
as lease pricing, revenue and expense growth, occupancy, interest
rate and other economic expectations. Words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks,"
"estimates," "forecasts," "projects," "assumes," "will," "may,"
"could," "should," "target," "outlook," "guidance" and variations
of such words and similar expressions are intended to identify such
forward-looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors, as
described below, which may cause our actual results, performance or
achievements to be materially different from the results of
operations, financial conditions or plans expressed or implied by
such forward-looking statements. Although we believe that the
assumptions underlying the forward-looking statements contained
herein are reasonable, any of the assumptions could be inaccurate,
and therefore such forward-looking statements included in this
release may not prove to be accurate. In light of the significant
uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as
a representation by us or any other person that the results or
conditions described in such statements or our objectives and plans
will be achieved.
The following factors, among others, could cause our actual
results, performance or achievements to differ materially from
those expressed or implied in the forward-looking statements:
- the COVID-19 pandemic and measures taken or that may be taken
by federal, state and local governmental authorities to combat the
spread of the disease;
- inability to generate sufficient cash flows due to unfavorable
economic and market conditions, changes in supply and/or demand,
competition, uninsured losses, changes in tax and housing laws, or
other factors;
- exposure, as a multifamily focused REIT, to risks inherent in
investments in a single industry and sector;
- adverse changes in real estate markets, including, but not
limited to, the extent of future demand for multifamily units in
our significant markets, barriers of entry into new markets which
we may seek to enter in the future, limitations on our ability to
increase rental rates, competition, our ability to identify and
consummate attractive acquisitions or development projects on
favorable terms, our ability to consummate any planned dispositions
in a timely manner on acceptable terms, and our ability to reinvest
sale proceeds in a manner that generates favorable returns;
- failure of new acquisitions to achieve anticipated results or
be efficiently integrated;
- failure of development communities to be completed within
budget and on a timely basis, if at all, to lease-up as anticipated
or to achieve anticipated results;
- unexpected capital needs;
- changes in operating costs, including real estate taxes,
utilities and insurance costs;
- inability to obtain appropriate insurance coverage at
reasonable rates, or at all, or losses from catastrophes in excess
of our insurance coverage;
- ability to obtain financing at favorable rates, if at all, and
refinance existing debt as it matures;
- level and volatility of interest or capitalization rates or
capital market conditions;
- price volatility, dislocations and liquidity disruptions in the
financial markets and the resulting impact on financing;
- the effect of any rating agency actions on the cost and
availability of new debt financing;
- the effect of the phase-out of the London Interbank Offered
Rate, or LIBOR, as a variable rate debt benchmark by the end of
2021 and the transition to a different benchmark interest
rate;
- significant decline in market value of real estate serving as
collateral for mortgage obligations;
- significant change in the mortgage financing market that would
cause single-family housing, either as an owned or rental product,
to become a more significant competitive product;
- our ability to continue to satisfy complex rules in order to
maintain our status as a REIT for federal income tax purposes, the
ability of MAALP to satisfy the rules to maintain its status as a
partnership for federal income tax purposes, the ability of our
taxable REIT subsidiaries to maintain their status as such for
federal income tax purposes, and our ability and the ability of our
subsidiaries to operate effectively within the limitations imposed
by these rules;
- inability to attract and retain qualified personnel;
- cyber liability or potential liability for breaches of our or
our service providers' information technology systems, or business
operations disruptions;
- potential liability for environmental contamination;
- adverse legislative or regulatory developments;
- extreme weather, natural disasters, disease outbreak and public
health events;
- legal proceedings relating to various issues, which, among
other things, could result in a class action lawsuit;
- compliance costs associated with numerous federal, state and
local laws and regulations, including those costs associated with
laws requiring access for disabled persons; and
- other risks identified in this release and in reports we file
with the SEC or in other documents that we publicly
disseminate.
New factors may also emerge from time to time that could have a
material adverse effect on our business. Except as required
by law, we undertake no obligation to publicly update or revise
forward-looking statements contained in this release to reflect
events, circumstances or changes in expectations after the date of
this release.
FINANCIAL
HIGHLIGHTS
|
|
Dollars in
thousands, except per share data
|
Three months ended
June 30,
|
|
|
Six months ended
June 30,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
|
|
2019
|
|
Rental and other
property revenues
|
$
|
413,026
|
|
|
$
|
407,390
|
|
|
$
|
831,124
|
|
|
|
|
$
|
808,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for MAA common shareholders
|
$
|
74,140
|
|
|
$
|
60,995
|
|
|
$
|
109,866
|
|
|
|
|
$
|
123,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total NOI
(1)
|
$
|
255,555
|
|
|
$
|
253,248
|
|
|
$
|
520,481
|
|
|
|
|
$
|
505,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.65
|
|
|
$
|
0.53
|
|
|
$
|
0.96
|
|
|
|
|
$
|
1.09
|
|
Diluted
|
$
|
0.65
|
|
|
$
|
0.53
|
|
|
$
|
0.96
|
|
|
|
|
$
|
1.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations
per Share - diluted: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
(1)
|
$
|
1.71
|
|
|
$
|
1.57
|
|
|
$
|
3.08
|
|
|
|
|
$
|
3.15
|
|
Core FFO
(1)
|
$
|
1.59
|
|
|
$
|
1.53
|
|
|
$
|
3.21
|
|
|
|
|
$
|
3.03
|
|
Core AFFO
(1)
|
$
|
1.38
|
|
|
$
|
1.32
|
|
|
$
|
2.88
|
|
|
|
|
$
|
2.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
|
1.00
|
|
|
$
|
0.96
|
|
|
$
|
2.00
|
|
|
|
|
$
|
1.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends/Core FFO
(diluted) payout ratio
|
|
62.9
|
%
|
|
|
62.7
|
%
|
|
|
62.3
|
%
|
|
|
|
|
63.4
|
%
|
Dividends/Core AFFO
(diluted) payout ratio
|
|
72.5
|
%
|
|
|
72.7
|
%
|
|
|
69.4
|
%
|
|
|
|
|
70.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated interest
expense
|
$
|
42,118
|
|
|
$
|
45,936
|
|
|
$
|
85,600
|
|
|
|
|
$
|
91,636
|
|
Mark-to-market debt
adjustment
|
|
58
|
|
|
|
86
|
|
|
|
92
|
|
|
|
|
|
171
|
|
Debt discount and
debt issuance cost amortization
|
|
(1,190)
|
|
|
|
(1,835)
|
|
|
|
(2,380)
|
|
|
|
|
|
(3,640)
|
|
Capitalized
interest
|
|
1,628
|
|
|
|
705
|
|
|
|
3,019
|
|
|
|
|
|
1,093
|
|
Total interest
incurred
|
$
|
42,614
|
|
|
$
|
44,892
|
|
|
$
|
86,331
|
|
|
|
|
$
|
89,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
principal on notes payable
|
$
|
1,743
|
|
|
$
|
1,825
|
|
|
$
|
3,483
|
|
|
|
|
$
|
3,672
|
|
|
|
(1)
|
A reconciliation of
the following items and an expanded discussion of their respective
components can be found later in this release: (i) NOI to Net
income available for MAA common shareholders; and (ii) FFO, Core
FFO and Core AFFO to Net income available for MAA common
shareholders.
|
(2)
|
See the "Share and
Unit Data" section for additional information.
|
FINANCIAL
HIGHLIGHTS (CONTINUED)
|
|
Dollars in
thousands, except share price
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020
|
|
|
December 31,
2019
|
|
Gross Assets
(1)
|
|
$
|
14,338,256
|
|
|
$
|
14,185,703
|
|
Gross Real Estate
Assets (1)
|
|
$
|
14,165,312
|
|
|
$
|
13,996,700
|
|
Total debt
|
|
$
|
4,472,608
|
|
|
$
|
4,454,598
|
|
Common shares and
units outstanding
|
|
|
118,423,860
|
|
|
|
118,313,567
|
|
Share
price
|
|
$
|
114.67
|
|
|
$
|
131.86
|
|
Book equity
value
|
|
$
|
6,184,910
|
|
|
$
|
6,303,590
|
|
Market equity
value
|
|
$
|
13,579,664
|
|
|
$
|
15,600,827
|
|
Net Debt/Adjusted
EBITDAre (2)
|
|
4.69x
|
|
|
4.71x
|
|
|
|
(1)
|
A reconciliation of
Gross Assets to Total assets and Gross Real Estate Assets to Real
estate assets, net, along with an expanded discussion of their
components, can be found later in this release.
|
(2)
|
Adjusted
EBITDAre in this calculation represents the trailing twelve
month period for each date presented. A reconciliation of the
following items and an expanded discussion of their respective
components can be found later in this release: (i) EBITDA,
EBITDAre and Adjusted EBITDAre to Net income; and
(ii) Net Debt to Unsecured notes payable and Secured notes
payable.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
Dollars in
thousands, except per share data
|
Three months ended
June 30,
|
|
|
Six months ended
June 30,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental and other
property revenues
|
$
|
413,026
|
|
|
$
|
407,390
|
|
|
$
|
831,124
|
|
|
$
|
808,568
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding real estate taxes and insurance
|
|
95,555
|
|
|
|
96,172
|
|
|
|
186,923
|
|
|
|
185,965
|
|
Real estate taxes and
insurance
|
|
61,916
|
|
|
|
57,970
|
|
|
|
123,720
|
|
|
|
117,554
|
|
Depreciation and
amortization
|
|
127,190
|
|
|
|
123,944
|
|
|
|
253,578
|
|
|
|
246,733
|
|
Total property
operating expenses
|
|
284,661
|
|
|
|
278,086
|
|
|
|
564,221
|
|
|
|
550,252
|
|
Property management
expenses
|
|
11,730
|
|
|
|
13,454
|
|
|
|
26,373
|
|
|
|
27,296
|
|
General and
administrative expenses
|
|
10,557
|
|
|
|
10,398
|
|
|
|
23,821
|
|
|
|
22,735
|
|
Interest
expense
|
|
42,118
|
|
|
|
45,936
|
|
|
|
85,600
|
|
|
|
91,636
|
|
(Gain) loss on sale of
depreciable real estate assets
|
|
(2)
|
|
|
|
—
|
|
|
|
27
|
|
|
|
13
|
|
(Gain) loss on sale of
non-depreciable real estate assets
|
|
(5)
|
|
|
|
(297)
|
|
|
|
371
|
|
|
|
(9,260)
|
|
Other non-operating
(income) expense
|
|
(14,643)
|
|
|
|
(4,575)
|
|
|
|
13,889
|
|
|
|
(4,694)
|
|
Income before income
tax expense
|
|
78,610
|
|
|
|
64,388
|
|
|
|
116,822
|
|
|
|
130,590
|
|
Income tax
expense
|
|
(1,200)
|
|
|
|
(682)
|
|
|
|
(1,867)
|
|
|
|
(1,323)
|
|
Income from
continuing operations before real estate joint venture
activity
|
|
77,410
|
|
|
|
63,706
|
|
|
|
114,955
|
|
|
|
129,267
|
|
Income from real
estate joint venture
|
|
318
|
|
|
|
435
|
|
|
|
725
|
|
|
|
832
|
|
Net income
|
|
77,728
|
|
|
|
64,141
|
|
|
|
115,680
|
|
|
|
130,099
|
|
Net income
attributable to noncontrolling interests
|
|
2,666
|
|
|
|
2,224
|
|
|
|
3,970
|
|
|
|
4,522
|
|
Net income available
for shareholders
|
|
75,062
|
|
|
|
61,917
|
|
|
|
111,710
|
|
|
|
125,577
|
|
Dividends to MAA
Series I preferred shareholders
|
|
922
|
|
|
|
922
|
|
|
|
1,844
|
|
|
|
1,844
|
|
Net income available
for MAA common shareholders
|
$
|
74,140
|
|
|
$
|
60,995
|
|
|
$
|
109,866
|
|
|
$
|
123,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for common shareholders
|
$
|
0.65
|
|
|
$
|
0.53
|
|
|
$
|
0.96
|
|
|
$
|
1.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for common shareholders
|
$
|
0.65
|
|
|
$
|
0.53
|
|
|
$
|
0.96
|
|
|
$
|
1.09
|
|
SHARE AND UNIT
DATA
|
|
Shares and units
in thousands
|
Three months ended
June 30,
|
|
|
Six months ended
June 30,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Net Income Shares
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares - basic
|
|
114,204
|
|
|
|
113,838
|
|
|
|
114,158
|
|
|
|
113,783
|
|
Effect of dilutive
securities
|
|
234
|
|
|
|
249
|
|
|
|
324
|
|
|
|
211
|
|
Weighted average
common shares - diluted
|
|
114,438
|
|
|
|
114,087
|
|
|
|
114,482
|
|
|
|
113,994
|
|
Funds From
Operations Shares And Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares and units - basic
|
|
118,263
|
|
|
|
117,935
|
|
|
|
118,220
|
|
|
|
117,886
|
|
Weighted average
common shares and units - diluted
|
|
118,423
|
|
|
|
118,139
|
|
|
|
118,383
|
|
|
|
118,079
|
|
Period End Shares
And Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares at
June 30,
|
|
114,365
|
|
|
|
114,043
|
|
|
|
114,365
|
|
|
|
114,043
|
|
Operating Partnership
units at June 30,
|
|
4,059
|
|
|
|
4,090
|
|
|
|
4,059
|
|
|
|
4,090
|
|
Total common shares
and units at June 30,
|
|
118,424
|
|
|
|
118,133
|
|
|
|
118,424
|
|
|
|
118,133
|
|
|
|
(1)
|
For additional
information on the calculation of diluted common shares and
earnings per common share, please refer to the Notes to Condensed
Consolidated Financial Statements in MAA's Quarterly Report on Form
10-Q for the three and six months ended June 30, 2020,
expected to be filed with the SEC on or about July 30,
2020.
|
CONSOLIDATED
BALANCE SHEETS
|
|
Dollars in
thousands
|
|
|
|
|
|
|
|
|
June 30, 2020
|
|
|
December 31,
2019
|
|
Assets
|
|
|
|
|
|
|
|
Real estate
assets:
|
|
|
|
|
|
|
|
Land
|
$
|
1,910,655
|
|
|
$
|
1,905,757
|
|
Buildings and
improvements and other
|
|
11,960,028
|
|
|
|
11,841,978
|
|
Development and
capital improvements in progress
|
|
196,824
|
|
|
|
116,424
|
|
|
|
14,067,507
|
|
|
|
13,864,159
|
|
Less: Accumulated
depreciation
|
|
(3,206,943)
|
|
|
|
(2,955,253)
|
|
|
|
10,860,564
|
|
|
|
10,908,906
|
|
Undeveloped
land
|
|
34,548
|
|
|
|
34,548
|
|
Investment in real
estate joint venture
|
|
43,590
|
|
|
|
43,674
|
|
Real estate assets,
net
|
|
10,938,702
|
|
|
|
10,987,128
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
19,667
|
|
|
|
20,476
|
|
Restricted
cash
|
|
15,927
|
|
|
|
50,065
|
|
Other
assets
|
|
157,017
|
|
|
|
172,781
|
|
Total
assets
|
$
|
11,131,313
|
|
|
$
|
11,230,450
|
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
Unsecured notes
payable
|
$
|
3,849,784
|
|
|
$
|
3,828,201
|
|
Secured notes
payable
|
|
622,824
|
|
|
|
626,397
|
|
Accrued expenses and
other liabilities
|
|
473,795
|
|
|
|
472,262
|
|
Total
liabilities
|
|
4,946,403
|
|
|
|
4,926,860
|
|
|
|
|
|
|
|
|
|
Redeemable common
stock
|
|
13,333
|
|
|
|
14,131
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
Preferred
stock
|
|
9
|
|
|
|
9
|
|
Common
stock
|
|
1,140
|
|
|
|
1,140
|
|
Additional paid-in
capital
|
|
7,168,886
|
|
|
|
7,166,073
|
|
Accumulated
distributions in excess of net income
|
|
(1,202,536)
|
|
|
|
(1,085,479)
|
|
Accumulated other
comprehensive loss
|
|
(12,665)
|
|
|
|
(13,178)
|
|
Total MAA
shareholders' equity
|
|
5,954,834
|
|
|
|
6,068,565
|
|
Noncontrolling
interests - Operating Partnership units
|
|
209,894
|
|
|
|
214,647
|
|
Total Company's
shareholders' equity
|
|
6,164,728
|
|
|
|
6,283,212
|
|
Noncontrolling
interests - consolidated real estate entities
|
|
6,849
|
|
|
|
6,247
|
|
Total
equity
|
|
6,171,577
|
|
|
|
6,289,459
|
|
Total liabilities and
equity
|
$
|
11,131,313
|
|
|
$
|
11,230,450
|
|
RECONCILIATION OF
FFO, CORE FFO, CORE AFFO AND FAD TO NET INCOME AVAILABLE FOR MAA
COMMON SHAREHOLDERS
|
|
Amounts in
thousands, except per share and unit data
|
Three months ended
June 30,
|
|
|
Six months ended
June 30,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Net income available
for MAA common shareholders
|
$
|
74,140
|
|
|
$
|
60,995
|
|
|
$
|
109,866
|
|
|
$
|
123,733
|
|
Depreciation and
amortization of real estate assets
|
|
125,668
|
|
|
|
122,323
|
|
|
|
250,514
|
|
|
|
243,533
|
|
(Gain) loss on sale of
depreciable real estate assets
|
|
(2)
|
|
|
|
—
|
|
|
|
27
|
|
|
|
13
|
|
Depreciation and
amortization of real estate assets of real estate joint
venture
|
|
153
|
|
|
|
166
|
|
|
|
305
|
|
|
|
311
|
|
Net income
attributable to noncontrolling interests
|
|
2,666
|
|
|
|
2,224
|
|
|
|
3,970
|
|
|
|
4,522
|
|
Funds from operations
attributable to the Company
|
|
202,625
|
|
|
|
185,708
|
|
|
|
364,682
|
|
|
|
372,112
|
|
(Income) loss on
embedded derivative in preferred shares (1)
|
|
(11,693)
|
|
|
|
(4,594)
|
|
|
|
15,945
|
|
|
|
(4,070)
|
|
(Gain) loss on sale of
non-depreciable real estate assets
|
|
(5)
|
|
|
|
(297)
|
|
|
|
371
|
|
|
|
(9,260)
|
|
(Gain) loss from
unconsolidated limited partnerships, net of tax
(1)(2)
|
|
(4,262)
|
|
|
|
179
|
|
|
|
(4,185)
|
|
|
|
324
|
|
Net casualty (gain)
loss and other settlement proceeds (1)
|
|
(151)
|
|
|
|
(309)
|
|
|
|
696
|
|
|
|
(1,853)
|
|
Loss (gain) on debt
extinguishment (1)
|
|
—
|
|
|
|
47
|
|
|
|
(1)
|
|
|
|
55
|
|
Non-routine legal
costs and settlements (1)
|
|
—
|
|
|
|
200
|
|
|
|
40
|
|
|
|
1,016
|
|
COVID-19 related costs
(1)
|
|
2,411
|
|
|
|
—
|
|
|
|
2,607
|
|
|
|
—
|
|
Mark-to-market debt
adjustment (3)
|
|
(58)
|
|
|
|
(86)
|
|
|
|
(92)
|
|
|
|
(171)
|
|
Core funds from
operations
|
|
188,867
|
|
|
|
180,848
|
|
|
|
380,063
|
|
|
|
358,153
|
|
Recurring capital
expenditures
|
|
(25,118)
|
|
|
|
(24,358)
|
|
|
|
(39,692)
|
|
|
|
(36,918)
|
|
Core adjusted funds
from operations
|
|
163,749
|
|
|
|
156,490
|
|
|
|
340,371
|
|
|
|
321,235
|
|
Redevelopment capital
expenditures
|
|
(10,075)
|
|
|
|
(14,826)
|
|
|
|
(24,023)
|
|
|
|
(27,271)
|
|
Revenue enhancing
capital expenditures
|
|
(8,447)
|
|
|
|
(9,813)
|
|
|
|
(16,375)
|
|
|
|
(17,852)
|
|
Commercial capital
expenditures
|
|
(1,143)
|
|
|
|
(1,037)
|
|
|
|
(1,538)
|
|
|
|
(2,456)
|
|
Other capital
expenditures
|
|
(5,086)
|
|
|
|
(4,187)
|
|
|
|
(10,676)
|
|
|
|
(8,164)
|
|
Funds available for
distribution
|
$
|
138,998
|
|
|
$
|
126,627
|
|
|
$
|
287,759
|
|
|
$
|
265,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and
distributions paid
|
$
|
118,407
|
|
|
$
|
113,373
|
|
|
$
|
236,744
|
|
|
$
|
226,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares - diluted
|
|
114,438
|
|
|
|
114,087
|
|
|
|
114,482
|
|
|
|
113,994
|
|
FFO weighted average
common shares and units - diluted
|
|
118,423
|
|
|
|
118,139
|
|
|
|
118,383
|
|
|
|
118,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for common shareholders
|
$
|
0.65
|
|
|
$
|
0.53
|
|
|
$
|
0.96
|
|
|
$
|
1.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations
per Share - diluted
|
$
|
1.71
|
|
|
$
|
1.57
|
|
|
$
|
3.08
|
|
|
$
|
3.15
|
|
Core funds from
operations per Share - diluted
|
$
|
1.59
|
|
|
$
|
1.53
|
|
|
$
|
3.21
|
|
|
$
|
3.03
|
|
Core adjusted funds
from operations per Share - diluted
|
$
|
1.38
|
|
|
$
|
1.32
|
|
|
$
|
2.88
|
|
|
$
|
2.72
|
|
|
|
(1)
|
Included in Other
non-operating (income) expense in the Consolidated Statements of
Operations.
|
(2)
|
For the three and six
months ended June 30, 2020, $5.0 million and $4.9 million,
respectively, of gains from unconsolidated limited partnerships are
offset by $0.7 million of income tax expense.
|
(3)
|
Included in Interest
expense in the Consolidated Statements of Operations.
|
RECONCILIATION OF
NET OPERATING INCOME TO NET INCOME AVAILABLE FOR MAA COMMON
SHAREHOLDERS
|
|
Dollars in
thousands
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
June 30,
2020
|
|
|
March 31,
2020
|
|
|
June 30,
2019
|
|
|
June 30,
2020
|
|
|
June 30,
2019
|
|
Net Operating
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
NOI
|
$
|
242,713
|
|
|
$
|
249,287
|
|
|
$
|
238,016
|
|
|
$
|
492,000
|
|
|
$
|
475,854
|
|
Non-Same Store and
Other NOI
|
|
12,842
|
|
|
|
15,639
|
|
|
|
15,232
|
|
|
|
28,481
|
|
|
|
29,195
|
|
Total NOI
|
|
255,555
|
|
|
|
264,926
|
|
|
|
253,248
|
|
|
|
520,481
|
|
|
|
505,049
|
|
Depreciation and
amortization
|
|
(127,190)
|
|
|
|
(126,388)
|
|
|
|
(123,944)
|
|
|
|
(253,578)
|
|
|
|
(246,733)
|
|
Property management
expenses
|
|
(11,730)
|
|
|
|
(14,643)
|
|
|
|
(13,454)
|
|
|
|
(26,373)
|
|
|
|
(27,296)
|
|
General and
administrative expenses
|
|
(10,557)
|
|
|
|
(13,264)
|
|
|
|
(10,398)
|
|
|
|
(23,821)
|
|
|
|
(22,735)
|
|
Interest
expense
|
|
(42,118)
|
|
|
|
(43,482)
|
|
|
|
(45,936)
|
|
|
|
(85,600)
|
|
|
|
(91,636)
|
|
Gain (loss) on sale of
depreciable real estate assets
|
|
2
|
|
|
|
(29)
|
|
|
|
—
|
|
|
|
(27)
|
|
|
|
(13)
|
|
Gain (loss) on sale of
non-depreciable real estate assets
|
|
5
|
|
|
|
(376)
|
|
|
|
297
|
|
|
|
(371)
|
|
|
|
9,260
|
|
Other non-operating
income (expense)
|
|
14,643
|
|
|
|
(28,532)
|
|
|
|
4,575
|
|
|
|
(13,889)
|
|
|
|
4,694
|
|
Income tax
expense
|
|
(1,200)
|
|
|
|
(667)
|
|
|
|
(682)
|
|
|
|
(1,867)
|
|
|
|
(1,323)
|
|
Income from real
estate joint venture
|
|
318
|
|
|
|
407
|
|
|
|
435
|
|
|
|
725
|
|
|
|
832
|
|
Net income
attributable to noncontrolling interests
|
|
(2,666)
|
|
|
|
(1,304)
|
|
|
|
(2,224)
|
|
|
|
(3,970)
|
|
|
|
(4,522)
|
|
Dividends to MAA
Series I preferred shareholders
|
|
(922)
|
|
|
|
(922)
|
|
|
|
(922)
|
|
|
|
(1,844)
|
|
|
|
(1,844)
|
|
Net income available
for MAA common shareholders
|
$
|
74,140
|
|
|
$
|
35,726
|
|
|
$
|
60,995
|
|
|
$
|
109,866
|
|
|
$
|
123,733
|
|
RECONCILIATION OF
EBITDA, EBITDAre AND ADJUSTED EBITDAre TO NET
INCOME
|
|
Dollars in
thousands
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
June 30, 2020
|
|
|
June 30, 2019
|
|
|
June 30, 2020
|
|
|
December 31,
2019
|
|
Net income
|
$
|
77,728
|
|
|
$
|
64,141
|
|
|
$
|
352,199
|
|
|
$
|
366,618
|
|
Depreciation and
amortization
|
|
127,190
|
|
|
|
123,944
|
|
|
|
503,688
|
|
|
|
496,843
|
|
Interest
expense
|
|
42,118
|
|
|
|
45,936
|
|
|
|
173,811
|
|
|
|
179,847
|
|
Income tax
expense
|
|
1,200
|
|
|
|
682
|
|
|
|
4,240
|
|
|
|
3,696
|
|
EBITDA
|
|
248,236
|
|
|
|
234,703
|
|
|
|
1,033,938
|
|
|
|
1,047,004
|
|
Gain on sale of
depreciable real estate assets
|
|
(2)
|
|
|
|
—
|
|
|
|
(80,974)
|
|
|
|
(80,988)
|
|
Adjustments to reflect
the Company's share of EBITDAre of unconsolidated
affiliates
|
|
336
|
|
|
|
339
|
|
|
|
1,346
|
|
|
|
1,351
|
|
EBITDAre
|
|
248,570
|
|
|
|
235,042
|
|
|
|
954,310
|
|
|
|
967,367
|
|
(Gain) loss on
embedded derivative in preferred shares (1)
|
|
(11,693)
|
|
|
|
(4,594)
|
|
|
|
2,129
|
|
|
|
(17,886)
|
|
Gain on sale of
non-depreciable real estate assets
|
|
(5)
|
|
|
|
(297)
|
|
|
|
(2,416)
|
|
|
|
(12,047)
|
|
(Gain) loss from
unconsolidated limited partnerships, net of tax
(1)(2)
|
|
(4,262)
|
|
|
|
179
|
|
|
|
(7,463)
|
|
|
|
(2,954)
|
|
Net casualty gain and
other settlement proceeds (1)
|
|
(151)
|
|
|
|
(309)
|
|
|
|
(841)
|
|
|
|
(3,390)
|
|
Loss on debt
extinguishment (1)
|
|
—
|
|
|
|
47
|
|
|
|
197
|
|
|
|
253
|
|
Non-routine legal
costs and settlements (1)
|
|
—
|
|
|
|
200
|
|
|
|
1,300
|
|
|
|
2,276
|
|
COVID-19 related costs
(1)
|
|
2,411
|
|
|
|
—
|
|
|
|
2,607
|
|
|
|
—
|
|
Mark-to-market debt
adjustment (3)
|
|
(58)
|
|
|
|
(86)
|
|
|
|
(177)
|
|
|
|
(256)
|
|
Adjusted
EBITDAre
|
$
|
234,812
|
|
|
$
|
230,182
|
|
|
$
|
949,646
|
|
|
$
|
933,363
|
|
|
|
(1)
|
Included in Other
non-operating (income) expense in the Consolidated Statements of
Operations.
|
(2)
|
For the three and
twelve months ended June 30, 2020, $5.0 million and $9.1 million,
respectively, of gains from unconsolidated limited partnerships are
offset by $0.7 million and $1.6 million, respectively, of income
tax expense. For the twelve months ended December 31, 2019,
$3.8 million of gains from unconsolidated limited partnerships are
offset by $0.9 million of income tax expense.
|
(3)
|
Included in Interest
expense in the Consolidated Statements of Operations.
|
RECONCILIATION OF
NET DEBT TO UNSECURED NOTES PAYABLE AND SECURED NOTES
PAYABLE
|
|
Dollars in
thousands
|
|
|
|
|
|
|
|
|
June 30, 2020
|
|
|
December 31,
2019
|
|
Unsecured notes
payable
|
$
|
3,849,784
|
|
|
$
|
3,828,201
|
|
Secured notes
payable
|
|
622,824
|
|
|
|
626,397
|
|
Total debt
|
|
4,472,608
|
|
|
|
4,454,598
|
|
Cash and cash
equivalents
|
|
(19,667)
|
|
|
|
(20,476)
|
|
1031(b) exchange
proceeds included in Restricted cash (1)
|
|
—
|
|
|
|
(33,843)
|
|
Net Debt
|
$
|
4,452,941
|
|
|
$
|
4,400,279
|
|
|
|
(1)
|
Included in
Restricted cash in the Consolidated Balance Sheets.
|
RECONCILIATION OF
GROSS ASSETS TO TOTAL ASSETS
|
|
Dollars in
thousands
|
|
|
|
|
|
|
|
|
|
|
June 30, 2020
|
|
|
December 31,
2019
|
|
Total
assets
|
|
$
|
11,131,313
|
|
|
$
|
11,230,450
|
|
Accumulated
depreciation
|
|
|
3,206,943
|
|
|
|
2,955,253
|
|
Gross
Assets
|
|
$
|
14,338,256
|
|
|
$
|
14,185,703
|
|
RECONCILIATION OF
GROSS REAL ESTATE ASSETS TO REAL ESTATE ASSETS, NET
|
|
Dollars in
thousands
|
|
|
|
|
|
|
|
|
June 30, 2020
|
|
|
December 31,
2019
|
|
Real estate assets,
net
|
$
|
10,938,702
|
|
|
$
|
10,987,128
|
|
Accumulated
depreciation
|
|
3,206,943
|
|
|
|
2,955,253
|
|
Cash and cash
equivalents
|
|
19,667
|
|
|
|
20,476
|
|
1031(b) exchange
proceeds included in Restricted cash (1)
|
|
—
|
|
|
|
33,843
|
|
Gross Real Estate
Assets
|
$
|
14,165,312
|
|
|
$
|
13,996,700
|
|
|
|
(1)
|
Included in
Restricted cash in the Consolidated Balance Sheets.
|
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDAre
For purposes of calculations
in this release, Adjusted Earnings Before Interest, Income Taxes,
Depreciation and Amortization for real estate, or Adjusted
EBITDAre, represents EBITDAre further adjusted for
items that are not considered part of MAA's core operations such as
adjustments related to the fair value of the embedded derivative in
the MAA Series I preferred shares, gain or loss on sale of
non-depreciable assets, adjustments for gains or losses from
unconsolidated limited partnerships, net casualty gain or loss,
gain or loss on debt extinguishment, non-routine legal costs and
settlements, COVID-19 related costs and mark-to-market debt
adjustments. As an owner and operator of real estate, MAA
considers Adjusted EBITDAre to be an important measure of
performance from core operations because Adjusted EBITDAre
does not include various income and expense items that are not
indicative of operating performance. MAA's computation of
Adjusted EBITDAre may differ from the methodology utilized
by other companies to calculate Adjusted EBITDAre.
Adjusted EBITDAre should not be considered as an alternative
to Net income as an indicator of operating performance.
Core Adjusted Funds from Operations (Core AFFO)
Core
AFFO is composed of Core FFO less recurring capital expenditures.
Core AFFO should not be considered as an alternative to Net income
available for MAA common shareholders as an indicator of operating
performance. As an owner and operator of real estate, MAA
considers Core AFFO to be an important measure of performance from
operations because Core AFFO measures the ability to control
revenues, expenses and recurring capital expenditures.
Core Funds from Operations (Core FFO)
Core FFO
represents FFO as adjusted for items that are not considered part
of MAA's core business operations such as adjustments related to
the fair value of the embedded derivative in the MAA Series I
preferred shares, gain or loss on sale of non-depreciable assets,
adjustments for gains or losses from unconsolidated limited
partnerships, net casualty gain or loss, gain or loss on debt
extinguishment, non-routine legal costs and settlements, COVID-19
related costs and mark-to-market debt adjustments. While MAA's
definition of Core FFO may be similar to others in the industry,
MAA's methodology for calculating Core FFO may differ from that
utilized by other REITs and, accordingly, may not be comparable to
such other REITs. Core FFO should not be considered as an
alternative to Net income available for MAA common shareholders as
an indicator of operating performance. MAA believes that Core FFO
is helpful in understanding its core operating performance between
periods in that it removes certain items that by their nature are
not comparable over periods and therefore tend to obscure actual
operating performance.
EBITDA
For purposes of calculations in this release, Earnings Before
Interest, Income Taxes, Depreciation and Amortization, or EBITDA,
is composed of net income plus depreciation and amortization,
interest expense, and income taxes. As an owner and operator
of real estate, MAA considers EBITDA to be an important measure of
performance from core operations because EBITDA does not include
various expense items that are not indicative of operating
performance. EBITDA should not be considered as an alternative to
Net income as an indicator of operating performance.
EBITDAre
For purposes of calculations in this release, Earnings Before
Interest, Income Taxes, Depreciation and Amortization for real
estate, or EBITDAre, is composed of EBITDA further adjusted
for the gain or loss on sale of depreciable asset sales and plus
adjustments to reflect MAA's share of EBITDAre of
unconsolidated affiliates. As an owner and operator of real
estate, MAA considers EBITDAre to be an important measure of
performance from core operations because EBITDAre does not
include various expense items that are not indicative of operating
performance. While MAA's definition of EBITDAre is in
accordance with NAREIT's definition, it may differ from the
methodology utilized by other companies to calculate
EBITDAre. EBITDAre should not be considered as an
alternative to Net income as an indicator of operating
performance.
Funds Available for Distribution (FAD)
FAD is composed of Core FFO less total capital expenditures,
excluding development spending and property acquisitions. FAD
should not be considered as an alternative to Net income available
for MAA common shareholders as an indicator of operating
performance. As an owner and operator of real estate, MAA
considers FAD to be an important measure of performance from core
operations because FAD measures the ability to control revenues,
expenses and total capital expenditures.
Funds From Operations (FFO)
FFO represents net income available for MAA common shareholders
(calculated in accordance with GAAP) excluding gains or losses on
disposition of operating properties and asset impairment, plus
depreciation and amortization of real estate assets, net income
attributable to noncontrolling interests, and adjustments for joint
ventures. Because net income attributable to noncontrolling
interests is added back, FFO, when used in this document,
represents FFO attributable to the Company. While MAA's
definition of FFO is in accordance with NAREIT's definition, it may
differ from the methodology for calculating FFO utilized by other
companies and, accordingly, may not be comparable to such other
companies. FFO should not be considered as an alternative to
Net income available for MAA common shareholders as an indicator of
operating performance. MAA believes that FFO is helpful in
understanding operating performance in that FFO excludes
depreciation and amortization of real estate assets. MAA
believes that GAAP historical cost depreciation of real estate
assets is generally not correlated with changes in the value of
those assets, whose value does not diminish predictably over time,
as historical cost depreciation implies.
Gross Assets
Gross Assets represents Total assets plus Accumulated
depreciation. MAA believes that Gross Assets can be used as a
helpful tool in evaluating its balance sheet positions. MAA
believes that GAAP historical cost depreciation of real estate
assets is generally not correlated with changes in the value of
those assets, whose value does not diminish predictably over time,
as historical cost depreciation implies.
Gross Real Estate Assets
Gross Real Estate Assets represents Real estate assets, net plus
Accumulated depreciation and Cash and cash equivalents. MAA
believes that Gross Real Estate Assets can be used as a helpful
tool in evaluating its balance sheet positions. MAA believes
that GAAP historical cost depreciation of real estate assets is
generally not correlated with changes in the value of those assets,
whose value does not diminish predictably over time, as historical
cost depreciation implies.
Net Debt
Net Debt represents Unsecured notes payable and Secured notes
payable less Cash and cash equivalents. MAA believes Net Debt
is a helpful tool in evaluating its debt position.
Net Operating Income (NOI)
Net Operating Income represents Rental and other property revenues
less Total property operating expenses, excluding depreciation and
amortization, for all properties held during the period, regardless
of their status as held for sale. NOI should not be considered as
an alternative to Net income available for MAA common
shareholders. MAA believes NOI by market is a helpful tool in
evaluating the operating performance within MAA's markets because
it measures the core operations of property performance by
excluding corporate level expenses and other items not related to
property operating performance.
Same Store NOI
Same Store NOI represents Rental and other property revenues less
Total property operating expenses, excluding depreciation and
amortization, for all properties classified within the Same Store
Portfolio during the period. Same Store NOI should not be
considered as an alternative to Net income available for MAA common
shareholders. MAA believes Same Store NOI is a helpful tool
in evaluating the operating performance within MAA's markets
because it measures the core operations of property performance by
excluding corporate level expenses and other items not related to
property operating performance.
Non-Same Store and Other NOI
Non-Same Store and Other NOI represents Rental and other property
revenues less Total property operating expenses, excluding
depreciation and amortization, for all properties classified within
the Non-Same Store and Other Portfolio during the period. Non-Same
Store and Other NOI should not be considered as an alternative to
Net income available for MAA common shareholders. MAA
believes Non-Same Store and Other NOI is a helpful tool in
evaluating the operating performance within MAA's markets because
it measures the core operations of property performance by
excluding corporate level expenses and other items not related to
property operating performance.
OTHER KEY DEFINITIONS
Average Effective Rent per Unit
Average Effective Rent per Unit represents the average of gross
rent amounts after the effect of leasing concessions for occupied
units plus prevalent market rates asked for unoccupied units,
divided by the total number of units. Leasing concessions represent
discounts to the current market rate. MAA believes average
effective rent is a helpful measurement in evaluating average
pricing. It does not represent actual rental revenue collected per
unit.
Average Physical Occupancy
Average Physical Occupancy represents the average of the daily
physical occupancy for the respective period.
Development Communities
Communities remain identified as development until certificates of
occupancy are obtained for all units under development. Once all
units are delivered and available for occupancy, the community
moves into the Lease-up Communities portfolio.
Lease-up Communities
New acquisitions acquired during lease-up and newly developed
communities remain in the Lease-up Communities portfolio until
stabilized. Communities are considered stabilized after
achieving at least 90% occupancy for 90 days.
Non-Same Store and Other Portfolio
Non-Same Store and Other Portfolio includes recently acquired
communities, communities in development or lease-up, communities
that have been identified for disposition, communities that have
undergone a significant casualty loss, stabilized communities that
do not meet the requirements defined by the Same Store Portfolio,
retail properties and commercial properties.
Same Store Portfolio
MAA reviews its Same Store Portfolio at the beginning of each
calendar year, or as significant transactions or events warrant.
Communities are generally added into the Same Store Portfolio if
they were owned and stabilized at the beginning of the previous
year. Communities are considered stabilized after achieving
at least 90% occupancy for 90 days. Communities that have been
approved by MAA's Board of Directors for disposition are excluded
from the Same Store Portfolio. Communities that have
undergone a significant casualty loss are also excluded from the
Same Store Portfolio.
Unencumbered NOI
Unencumbered NOI represents NOI generated by unencumbered assets
(as defined in MAALP's bond covenants).
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SOURCE MAA