MEMPHIS, Tenn., July 29,
2015 /PRNewswire/ -- Mid-America Apartment Communities, Inc., or
MAA, (NYSE: MAA) today announced operating results for the quarter
ended June 30, 2015.
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Highlights
- Core Funds from Operations, or Core FFO, per diluted common
share and unit, or per Share, was $1.36 for the second quarter; 15% above the same
period in the prior year and represents a record quarterly
performance for the company.
- Same store net operating income, or NOI, for the second quarter
increased 7.5% as compared to the same period in the prior
year.
- Average effective rent per unit for the same store portfolio
increased 4.7% during the second quarter as compared to the prior
year, while average physical occupancy also increased 1.0%.
- Physical occupancy for the same store portfolio ended the
quarter at 96.7%.
- Resident turnover for the same store portfolio remained low for
the second quarter of 2015 at 53.6% on a rolling twelve month
basis.
- During the quarter the company acquired two properties, a
325-unit community located in Scottsdale,
Arizona and a new 254-unit community located in Richmond, Virginia.
- During the second quarter the company completed construction on
an expansion project in Nashville,
Tennessee and also began construction on two additional
expansion projects at existing communities located in Charleston, South Carolina and Orlando, Florida.
- Since the beginning of the year the company has completed the
sale of 21 properties for a combined price of $354.3 million. This pricing produced a 5.8%
economic cap rate, based on trailing twelve months' NOI, and a
14.1% leveraged internal rate of return on the capital
invested.
- With the completion of the sale of these 21 properties, at an
average age of 25 years, the company has exited 11 markets
year-to-date within the Secondary Market segment of the
portfolio.
- Year-to-date the company has renovated 2,432 apartment homes
under our redevelopment program, achieving average rental rate
increases of 10.2% above non-renovated homes.
- The company is issuing revised guidance for the full year of
2015, with Core FFO now expected to be in the range of $5.25 per Share to $5.41 per Share for the full year, an increase
from the prior guidance range of $5.09 per Share to $5.33 per Share.
Eric Bolton, Chairman and Chief
Executive Officer, said, "Leasing conditions across our high-growth
markets coupled with the opportunities captured from our merger
transaction closed in late 2013 continue to generate strong
results. Delivery of new apartment product across a number of
our markets is being well absorbed by the growing demand for
apartment housing. We're pleased with the results captured
from our planned property sales for the year. The capital
recycling being completed this year, coupled with the significant
recycling activity over the past few years, has the company well
positioned to capture the benefits of the robust leasing
environment and the full cycle performance objective that drives
our strategy."
Funds from Operations
For the quarter ended
June 30, 2015, FFO was $112.4
million, or $1.41 per Share,
compared to $95.5 million, or
$1.20 per Share, for the quarter
ended June 30, 2014. Core FFO, which excludes certain
non-cash or non-routine items, for the quarter ended June 30,
2015 was $108.0 million, or
$1.36 per Share, as compared to
$93.9 million, or $1.18 per Share, for the quarter ended
June 30, 2014.
For the six months ended June 30,
2015, FFO was $219.3 million,
or $2.76 per Share, compared to
$192.9 million, or $2.43 per Share, for the six months ended
June 30, 2014. Core FFO for the
six months ended June 30, 2015 was
$213.2 million, or $2.68 per Share, as compared to $189.5 million, or $2.39 per Share, for the six months ended
June 30, 2014.
A reconciliation of FFO and Core FFO to net income attributable
to MAA and an expanded discussion of the components of FFO and Core
FFO can be found later in this press release.
Net Income Available to Common Shareholders
For the
quarter ended June 30, 2015, net income available for common
shareholders was $136.3 million, or
$1.81 per diluted common share,
compared to $31.6 million, or
$0.42 per diluted common share, for
the quarter ended June 30, 2014. Results for the quarter
ended June 30, 2015 included $105.4
million, or $1.40 per diluted
common share, of gains related to the sale of real estate assets
during the period. Results for the quarter ended
June 30, 2014 included $3.9
million, or $0.05 per diluted
common share, of merger and integration expenses and $3.6 million, or $0.05 per diluted common share, of gains related
to the sale of real estate assets during the period.
For the six months ended June 30,
2015, net income available for common shareholders was
$197.6 million, or $2.62 per diluted common share, compared to
$46.5 million, or $0.62 per diluted common share, for the six
months ended June 30, 2014.
Results for the six months ended June 30,
2015 included $135.6 million,
or $1.80 per diluted common share, of
gains related to the sale of real estate assets during the
period. Results for the six months ended June 30, 2014 included $9.9 million, or $0.13 per diluted common share, of merger and
integration expenses and $12.2
million, or $0.16 per diluted
common share, of gains related to the sale of real estate assets
during the period.
Second Quarter Same Store Operating Results
Operating results for the Same Store portfolio of 71,376
apartment units for the company's Large Market and Secondary Market
portfolios are presented below:
|
Percent Change
From
|
|
Three months
ended
|
|
Three months ended
June 30, 2014
|
|
June 30,
2015
|
|
|
|
|
|
|
|
Average
|
|
Average
|
|
|
|
|
|
|
|
Effective
|
|
Physical
|
|
Revenue
|
|
Expense
|
|
NOI
|
|
Rent per
Unit
|
|
Occupancy
|
Large
Markets
|
7.0
|
%
|
|
5.3
|
%
|
|
8.1
|
%
|
|
5.4
|
%
|
|
96.1
|
%
|
Secondary
Markets
|
5.3
|
%
|
|
3.6
|
%
|
|
6.5
|
%
|
|
3.2
|
%
|
|
96.2
|
%
|
Same Store
|
6.4
|
%
|
|
4.7
|
%
|
|
7.5
|
%
|
|
4.7
|
%
|
|
96.2
|
%
|
Total Same Store revenue growth of 6.4% during the second
quarter was primarily produced by a 5.3% increase in revenues per
occupied unit, to $1,102, combined
with a 1.0% increase in average physical occupancy for the quarter,
as compared to the same period in the prior year.
Overall physical occupancy for the Same Store portfolio ended the
quarter at 96.7%. Operating expenses increased 4.7% for the
quarter, with the largest portion of the growth related to
increases in real estate tax and personnel expenses for the
quarter.
A reconciliation of NOI, including same store NOI, to net income
attributable to MAA and an expanded discussion of the components of
NOI can be found later in this release.
Acquisition and Disposition Activity
During the second
quarter, MAA acquired two new communities: SkySong, a 325-unit
community located in Scottsdale,
Arizona, and Retreat at West Creek, a 254-unit community
located in Richmond, Virginia, for
a combined purchase price of $111.3
million. Both communities were acquired during
lease-up, and ended the second quarter with average occupancy of
82%. These acquisitions bring the year-to-date purchase price
for new acquisitions properties to $157.8
million.
During the second quarter, the company sold 14 multifamily
properties: Woodwinds, a 144-unit community located in Aiken, South Carolina; Westbury Creek, a 120-unit community located in
Augusta, Georgia; Colony at
Southpark, a 184-unit community located in Aiken, South Carolina; Bradford Pointe, a 192-unit community located in
Augusta, Georgia; Oaks, a 100-unit
community located in Jackson,
Tennessee; Post House North, a 145-unit community located in
Jackson, Tennessee; Bradford Chase, a 148-unit community located in
Jackson, Tennessee; Post House
Jackson, a 150-unit community located in Jackson, Tennessee; Woods of Post House, a
122-unit community located in Jackson,
Tennessee; Southland Station, a 304-unit community located
in Warner Robbins, Georgia; Huntington Chase, a 200-unit
community located in Warner Robbins,
Georgia; Paddock Park, a 480-unit
community located in Ocala,
Florida; Anatole, a 208-unit community located in
Daytona Beach, Florida; and
Sutton Place, a 253-unit community
located in the Memphis, Tennessee
metropolitan area.
Immediately following quarter-end, the company sold 3 additional
multifamily properties: Whisperwood, a 1,008-unit community located
in Columbus, Georgia; Colonial
Grand at Wilmington, a 390-unit
community located in Wilmington, North
Carolina; and Savannah Creek,
a 204-unit community located in the Memphis, Tennessee metropolitan area.
Year to date, MAA received combined gross proceeds of
$354.3 million related to these
dispositions and expects to recognize total net gains on the sale
of real estate assets of approximately $190
million, with $135.4 million
recognized as of the end of the second quarter related to the first
eighteen communities sold. As a result of these property
sales, the company has exited eleven markets included in the
Secondary Market segment of the portfolio, achieving an economic
cap rate of 5.8% and internal rates of return on invested capital
of 14.1% on a leveraged basis and 10.3% on an unleveraged
basis.
Also during the second quarter, the company sold Colonial
Promenade Craft Farms, a commercial asset, along with a related
land parcel for combined gross proceeds of $9.1 million.
Development and Lease-up Activity
During the second
quarter MAA completed the construction of Colonial Grand at
Bellevue Phase II, an expansion of a community located in
Nashville, Tennessee, and began
construction on two additional phase two expansions of current
communities: a 78-unit expansion of River's Walk, located in
Charleston, South Carolina; and a
314-unit expansion of Randal Lakes,
located in Orlando,
Florida. With these additions, the company had four
multifamily development projects remaining under construction at
the end of the second quarter with a total projected development
cost of $118.8 million, with
$63.7 million remaining to be
funded. Colonial Grand at Bellevue Phase II remains in
lease-up with occupancy at 62.3% at quarter-end.
Redevelopment Activity
The company continues its
redevelopment program at select communities throughout the
portfolio. During the second quarter, MAA renovated a total
of 1,410 units at an average cost of $4,531 per unit, bringing total units renovated
during the year to 2,432 achieving average rental rate increases of
10.2% above non-renovated units.
Capital Expenditures
Recurring capital expenditures
for the portfolio totaled $21.9
million for the second quarter, or approximately
$0.28 per Share, as compared to
$19.6 million, or $0.24 per Share, for the same period in
2014. These expenditures resulted in Core Adjusted Funds from
Operations, or Core AFFO, of $1.08
per Share, for the second quarter, compared to $0.94 per Share for the same period in
2014.
Recurring capital expenditures for the portfolio totaled
$32.5 million for the six months
ended June 30, 2015, or approximately
$0.41 per Share, as compared to
$25.7 million or $0.32 per Share, for the same period in
2014. These expenditures resulted in Core Adjusted Funds from
Operations, or Core AFFO, of $2.27
per Share for the six months ended June 30,
2015, compared to $2.07 per
Share for the same period in 2014.
Total capital expenditures for the portfolio during the second
quarter were $31.6 million on
existing properties, with an additional $7.6
million on redevelopment opportunities. Total capital
expenditures for the portfolio during the six months ended
June 30, 2015 were $48.1 million on existing properties, with an
additional $12.7 million on
redevelopment opportunities.
A reconciliation of FFO and Core AFFO to net income attributable
to MAA and an expanded discussion of the components of FFO and Core
AFFO can be found later in this release.
Financing Activity
As part of the disposition plans
and continued balance sheet improvement, during the quarter, the
company paid off $35.6 million
related to two property mortgages with scheduled maturities.
Balance Sheet
As of June 30, 2015,
- Total debt to total capitalization was 37.3% (based on the
June 30, 2015 closing stock
price),
- Total net debt to total gross assets (based on gross book value
at June 30, 2015) was 41.4%,
- Total debt outstanding was $3.4
billion at an average effective interest rate of 3.6%,
- 92.3% of the total debt was fixed or hedged against rising
interest rates for an average of 4.3 years,
- Fixed charge coverage ratio (Recurring EBITDA divided by
interest expense adjusted for mark-to-market debt adjustment) was
4.14x and total net debt to Recurring EBITDA was 6.01x,
- Approximately $367.3 million
combined cash and capacity was available under the company's
unsecured credit facility, and
- Unencumbered assets increased to 70.3% of gross real estate
assets as compared to 66.9% in the prior year.
A reconciliation of EBITDA and Recurring EBITDA to consolidated
net income and an expanded discussion of the components of EBITDA
and Recurring EBITDA can be found later in this release.
86th Consecutive Quarterly Common Dividend
Declared
Our Board of Directors declared its 86th
consecutive quarterly common dividend at an annual rate of
$3.08 per common share and unit,
which will be paid on July 31, 2015
to holders of record on July 15,
2015.
2015 Core FFO per Share Guidance
The company is
revising prior guidance for full year Core FFO, which is now
projected to be in a range of $5.25
per Share to $5.41 per Share, or
$5.33 per Share at the midpoint, an
increase from the prior guidance range of $5.09 per Share to $5.33 per Share.
Management now expects full year revenue growth from the Same
Store portfolio to be in the 4.5% to 5.5% range, while property
operating expense growth is expected to be in the 4.0% to 5.0%
growth. This growth will result in expected property NOI
growth in the range of 4.5% to 5.5%, an increase from the prior
guidance range of 3.0% to 4.0%.
On a quarterly basis, Core FFO per Share for the third quarter
is expected to be in the range of $1.24 per Share to $1.36 per Share, and for the fourth quarter in a
range of $1.29 per Share to
$1.41 per Share.
The company continues to expect total recurring capital
expenditures for the full year 2015 to be in the range of
$50 million - $54 million, producing
Core AFFO of $4.60 per Share to
$4.76 per Share, or $4.68 per Share at the mid-point, representing a
9.3% increase over Core AFFO per Share in the prior year.
Additional information on our 2015 financial and earnings
guidance is included in the supplemental data accompanying this
press release.
Supplemental Material and Conference Call
Supplemental
data to this press release can be found 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, 2015, at 9:00 AM Central Time. The conference
call-in number is 866-952-7532, and the moderator's name is
Tim Argo. You may also join
the live webcast of the conference call by accessing the "For
Investors" page of our website at www.maac.com. Our filings
with the Securities and Exchange Commission are filed under the
registrant names of Mid-America Apartment Communities, Inc. and
Mid-America Apartments, L.P.
About MAA
MAA is a self-administered, self-managed
real estate investment trust, which owned 79,977 apartment units
throughout the Southeast and Southwest regions of the United States as of June 30, 2015.
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, 6584 Poplar Ave., Memphis, TN 38138, Attn: Investor
Relations.
Forward-Looking Statements
Sections of this press
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, or the
Exchange Act, 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
concerning property acquisitions and dispositions, joint venture
activity, development and renovation activity as well as other
capital expenditures, capital raising activities, rent and expense
growth, occupancy, financing activities and interest rate and other
economic expectations. Words such as "expects," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates," 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 which may cause the 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. Such factors include, among other
things, unanticipated adverse business developments affecting us,
or our properties, adverse changes in the real estate markets and
general and local economies and business conditions. 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 report 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 future
results to differ materially from those expressed in the
forward-looking statements:
- inability to generate sufficient cash flows due to 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;
- 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, if at all,
within budget and on a timely basis or to lease-up as
anticipated;
- unexpected capital needs;
- changes in operating costs, including real estate taxes,
utilities and insurance costs;
- 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;
- loss of hedge accounting treatment for interest rate swaps or
interest rate caps;
- the continuation of the good credit of our interest rate swap
and cap providers;
- 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;
- 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 our operating partnership 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;
- potential liability for breaches of our privacy or information
security systems;
- potential liability for environmental contamination;
- adverse legislative or regulatory tax changes;
- litigation and compliance costs associated with laws requiring
access for disabled persons; and
- other risks identified in this press release and, from time to
time, in other reports we file with the Securities and Exchange
Commission, or the SEC, or in other documents that we publicly
disseminate.
We undertake no obligation to publicly update or revise these
forward-looking statements to reflect events, circumstances or
changes in expectations after the date on which this report is
filed.
FINANCIAL
HIGHLIGHTS
|
Dollars in
thousands, except per share data
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Total property
revenue
|
$ 258,891
|
|
$ 245,244
|
|
$ 517,443
|
|
$ 489,396
|
|
|
|
|
|
|
|
|
Total NOI
|
$ 158,035
|
|
$ 147,346
|
|
$ 315,938
|
|
$ 294,972
|
|
|
|
|
|
|
|
|
Management &
leasing fee revenue
|
$
-
|
|
$
61
|
|
$
-
|
|
$
143
|
|
|
|
|
|
|
|
|
Recurring
EBITDA
|
$ 144,398
|
|
$ 133,016
|
|
$ 287,039
|
|
$ 268,381
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
1.81
|
|
$
0.42
|
|
$
2.62
|
|
$
0.62
|
Diluted
|
$
1.81
|
|
$
0.42
|
|
$
2.62
|
|
$
0.62
|
|
|
|
|
|
|
|
|
Funds from operations
per share (diluted):
|
|
|
|
|
|
|
|
FFO
|
$
1.41
|
|
$
1.20
|
|
$
2.76
|
|
$
2.43
|
Core FFO
|
$
1.36
|
|
$
1.18
|
|
$
2.68
|
|
$
2.39
|
Core AFFO
|
$
1.08
|
|
$
0.94
|
|
$
2.27
|
|
$
2.07
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
$ 0.7700
|
|
$ 0.7300
|
|
$ 1.5400
|
|
$ 1.4600
|
|
|
|
|
|
|
|
|
Dividends/Core FFO
(diluted) payout ratio
|
56.6%
|
|
61.9%
|
|
57.5%
|
|
61.1%
|
Dividends/Core AFFO
(diluted) payout ratio
|
71.3%
|
|
77.7%
|
|
67.8%
|
|
70.5%
|
|
|
|
|
|
|
|
|
Consolidated interest
expense
|
$ 29,528
|
|
$ 30,163
|
|
$ 59,459
|
|
$ 60,839
|
Mark-to-market debt
adjustment
|
5,337
|
|
7,094
|
|
10,731
|
|
14,235
|
Capitalized
interest
|
490
|
|
337
|
|
964
|
|
850
|
Total interest
incurred
|
$ 35,355
|
|
$ 37,594
|
|
$ 71,154
|
|
$ 75,924
|
|
|
|
|
|
|
|
|
Principal payments on
notes payable
|
$
2,115
|
|
$
2,504
|
|
$
4,387
|
|
$
5,055
|
FINANCIAL
HIGHLIGHTS (CONTINUED)
|
|
Dollars in
thousands, except per share data
|
|
|
|
As
of
|
|
June 30,
2015
|
|
December 31,
2014
|
Total gross
assets
|
$
8,243,645
|
|
$
8,207,272
|
Total debt
|
$
3,442,244
|
|
$
3,524,515
|
Common shares and
units, outstanding end of period
|
79,561,396
|
|
79,458,827
|
Share price, end of
period
|
$
72.81
|
|
$
74.68
|
Book equity value,
end of period
|
$
3,148,583
|
|
$
3,057,722
|
Market equity value,
end of period
|
$
5,792,865
|
|
$
5,933,985
|
Debt to total market
capitalization ratio
|
37.3%
|
|
37.3%
|
Total net debt/total
gross assets
|
41.4%
|
|
42.6%
|
Unencumbered
Assets/Gross Real Estate Assets
|
70.3%
|
|
66.9%
|
Recurring EBITDA/Debt
Service
|
3.90x
|
|
3.75x
|
Fixed Charge Coverage
(1)
|
4.14x
|
|
3.99x
|
Total Net Debt
(2)/Recurring EBITDA (3)
|
6.01x
|
|
6.37x
|
|
|
|
|
(1) Fixed charge coverage
represents Recurring EBITDA divided by interest expense adjusted
for mark-to-market debt adjustment and any preferred
dividends.
|
(2)
Total Net Debt equals Total Debt less Cash and Cash
Equivalents.
|
|
|
(3)
Recurring EBITDA represents the twelve months ended June 30,
2015.
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
Dollars in
thousands, except per share data
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating
revenues:
|
|
|
|
|
|
|
|
Rental
revenues
|
$ 236,165
|
|
$ 223,361
|
|
$ 471,106
|
|
$ 445,111
|
Other property
revenues
|
22,726
|
|
21,883
|
|
46,337
|
|
44,285
|
Total property
revenues
|
258,891
|
|
245,244
|
|
517,443
|
|
489,396
|
Management fee
income
|
—
|
|
61
|
|
—
|
|
143
|
Total operating
revenues
|
258,891
|
|
245,305
|
|
517,443
|
|
489,539
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Property operating
expenses
|
100,856
|
|
97,898
|
|
201,505
|
|
195,526
|
Depreciation and
amortization
|
74,396
|
|
69,631
|
|
147,508
|
|
159,644
|
Acquisition
expense
|
1,159
|
|
947
|
|
1,499
|
|
958
|
Property management
expenses
|
6,986
|
|
9,579
|
|
15,478
|
|
16,590
|
General and
administrative expenses
|
6,657
|
|
5,212
|
|
13,224
|
|
9,554
|
Merger related
expenses
|
—
|
|
795
|
|
—
|
|
2,871
|
Integration related
expenses
|
—
|
|
3,151
|
|
—
|
|
6,993
|
Income from
continuing operations before non-operating items
|
68,837
|
|
58,092
|
|
138,229
|
|
97,403
|
Interest and other
non-property income (expense)
|
29
|
|
899
|
|
(180)
|
|
1,040
|
Interest
expense
|
(29,528)
|
|
(30,163)
|
|
(59,459)
|
|
(60,839)
|
Loss on debt
extinguishment
|
(3)
|
|
—
|
|
(3,379)
|
|
—
|
Amortization of
deferred financing costs
|
(905)
|
|
(1,174)
|
|
(1,822)
|
|
(2,485)
|
Net casualty gain
(loss) after insurance and other settlement proceeds
|
510
|
|
(295)
|
|
490
|
|
(305)
|
Gain on sale of
depreciable real estate assets excluded from discontinued
operations
|
105,182
|
|
3,658
|
|
135,410
|
|
6,222
|
Gain (loss) on sale
of non-depreciable real estate assets
|
172
|
|
(22)
|
|
172
|
|
535
|
Income before income
tax expense
|
144,294
|
|
30,995
|
|
209,461
|
|
41,571
|
Income tax
expense
|
(398)
|
|
(523)
|
|
(907)
|
|
(793)
|
Income from
continuing operations before joint venture activity
|
143,896
|
|
30,472
|
|
208,554
|
|
40,778
|
(Loss) gain from real
estate joint ventures
|
(23)
|
|
2,919
|
|
(4)
|
|
2,895
|
Income from
continuing operations
|
143,873
|
|
33,391
|
|
208,550
|
|
43,673
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Loss from discontinued
operations before gain on sale
|
—
|
|
(4)
|
|
—
|
|
(51)
|
Net casualty loss after
insurance and other settlement proceeds on discontinued
operations
|
—
|
|
(1)
|
|
—
|
|
(3)
|
Gain on sale of
discontinued operations
|
—
|
|
—
|
|
—
|
|
5,481
|
Consolidated net
income
|
143,873
|
|
33,386
|
|
208,550
|
|
49,100
|
Net income attributable
to noncontrolling interests
|
7,574
|
|
1,773
|
|
10,984
|
|
2,621
|
Net income
available for MAA common shareholders
|
$ 136,299
|
|
$ 31,613
|
|
$ 197,566
|
|
$ 46,479
|
|
|
|
|
|
|
|
|
Earnings per common
share - basic:
|
|
|
|
|
|
|
|
Income from continuing
operations available for common shareholders
|
$
1.81
|
|
$
0.42
|
|
$
2.62
|
|
$
0.55
|
Discontinued property
operations
|
—
|
|
—
|
|
—
|
|
0.07
|
Net income available
for common shareholders
|
$
1.81
|
|
$
0.42
|
|
$
2.62
|
|
$
0.62
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted:
|
|
|
|
|
|
|
|
Income from continuing
operations available for common shareholders
|
$
1.81
|
|
$
0.42
|
|
$
2.62
|
|
$
0.55
|
Discontinued property
operations
|
—
|
|
—
|
|
—
|
|
0.07
|
Net income available
for common shareholders
|
$
1.81
|
|
$
0.42
|
|
$
2.62
|
|
$
0.62
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$ 0.7700
|
|
$ 0.7300
|
|
$ 1.5400
|
|
$ 1.4600
|
SHARE AND UNIT
DATA
|
Shares and units
in thousands
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
NET INCOME SHARES
(1)
|
|
|
|
|
|
|
|
Weighted average
common shares - Basic
|
75,168
|
|
74,948
|
|
75,157
|
|
74,876
|
Weighted average
partnership units outstanding
|
—
|
|
—
|
|
—
|
|
—
|
Effect
of dilutive securities
|
—
|
|
—
|
|
—
|
|
162
|
Weighted average
common shares - Diluted
|
75,168
|
|
74,948
|
|
75,157
|
|
75,038
|
FUNDS FROM
OPERATIONS SHARES AND UNITS
|
|
|
|
|
|
|
|
Weighted average
common shares and units - Basic
|
79,356
|
|
79,156
|
|
79,346
|
|
79,090
|
Weighted average
common shares and units - Diluted
|
79,554
|
|
79,351
|
|
79,530
|
|
79,292
|
PERIOD END SHARES
AND UNITS
|
|
|
|
|
|
|
|
Common shares at June
30,
|
75,375
|
|
75,195
|
|
75,375
|
|
75,195
|
Partnership units at
June 30,
|
4,186
|
|
4,207
|
|
4,186
|
|
4,207
|
Total shares and
units at June 30,
|
79,561
|
|
79,402
|
|
79,561
|
|
79,402
|
|
|
|
|
|
|
|
|
(1)
For additional information on the calculation of diluted shares and
earnings per share, please refer to the Notes to Condensed
Consolidated Financial Statements in our Quarterly Report on Form
10-Q for the six months ended June 30, 2015, filed with the SEC on
July 31, 2015.
|
FUNDS FROM
OPERATIONS
|
|
Dollars in
thousands, except per share data
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Net income available
for MAA common shareholders
|
$
136,299
|
|
$
31,613
|
|
$
197,566
|
|
$
46,479
|
|
Depreciation and
amortization of real estate assets
|
73,663
|
|
69,044
|
|
146,116
|
|
158,493
|
|
Depreciation and
amortization of real estate assets of discontinued
operations
|
—
|
|
—
|
|
—
|
|
42
|
|
Gain on sale of
discontinued operations
|
—
|
|
—
|
|
—
|
|
(5,481)
|
|
Gain on sale of
depreciable real estate assets excluded from discontinued
operations
|
(105,182)
|
|
(3,658)
|
|
(135,410)
|
|
(6,222)
|
|
Gain on disposition
within unconsolidated entities
|
—
|
|
(3,414)
|
|
(12)
|
|
(3,414)
|
|
Depreciation and
amortization of real estate assets of real estate joint
ventures
|
6
|
|
155
|
|
13
|
|
354
|
|
Net income
attributable to noncontrolling interests
|
7,574
|
|
1,773
|
|
10,984
|
|
2,621
|
|
Funds from operations
attributable to the Company
|
112,360
|
|
95,513
|
|
219,257
|
|
192,872
|
|
Acquisition
expense
|
1,159
|
|
947
|
|
1,499
|
|
958
|
|
Merger related
expenses
|
—
|
|
795
|
|
—
|
|
2,871
|
|
Integration related
expenses
|
—
|
|
3,151
|
|
—
|
|
6,993
|
|
(Gain) loss on sale
of non-depreciable real estate assets
|
(172)
|
|
22
|
|
(172)
|
|
(535)
|
|
Mark-to-market debt
adjustment
|
(5,337)
|
|
(7,094)
|
|
(10,731)
|
|
(14,235)
|
|
Loss on debt
extinguishment
|
3
|
|
540
|
(1)
|
3,379
|
|
540
|
(1)
|
Core funds from
operations attributable to the Company
|
108,013
|
|
93,874
|
|
213,232
|
|
189,464
|
|
Recurring capital
expenditures
|
(21,899)
|
|
(19,606)
|
|
(32,496)
|
|
(25,659)
|
|
Core adjusted funds
from operations
|
$
86,114
|
|
$
74,268
|
|
$
180,736
|
|
$
163,805
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares and units - Diluted
|
79,554
|
|
79,351
|
|
79,530
|
|
79,292
|
|
|
|
|
|
|
|
|
|
|
Funds from operations
per share and unit - Diluted
|
$
1.41
|
|
$
1.20
|
|
$
2.76
|
|
$
2.43
|
|
Core funds from
operations per share and unit - Diluted
|
$
1.36
|
|
$
1.18
|
|
$
2.68
|
|
$
2.39
|
|
Core adjusted funds
from operations per share and unit - Diluted
|
$
1.08
|
|
$
0.94
|
|
$
2.27
|
|
$
2.07
|
|
|
|
|
|
|
|
|
|
|
(1) The
loss on debt extinguishment for 2014 is MAA's share of debt
extinguishment costs incurred by our joint venture, Mid-America
Multifamily Fund II.
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
Dollars in
thousands
|
|
|
|
|
June 30,
2015
|
|
December 31,
2014
|
Assets
|
|
|
|
Real estate
assets
|
|
|
|
Land
|
$
904,504
|
|
$
913,408
|
Buildings and
improvements
|
6,705,727
|
|
6,781,210
|
Furniture, fixtures
and equipment
|
214,943
|
|
214,742
|
Capital improvements
in progress
|
69,975
|
|
80,772
|
|
7,895,149
|
|
7,990,132
|
Accumulated
depreciation
|
(1,338,726)
|
|
(1,358,400)
|
|
6,556,423
|
|
6,631,732
|
Undeveloped
land
|
52,629
|
|
55,997
|
Corporate property,
net
|
8,331
|
|
7,988
|
Investments in real
estate joint ventures
|
1,809
|
|
1,791
|
Assets held for
sale
|
64,265
|
|
—
|
Real estate assets,
net
|
6,683,457
|
|
6,697,508
|
Cash and cash
equivalents
|
30,030
|
|
26,653
|
Restricted
cash
|
53,406
|
|
28,181
|
Deferred financing
cost, net
|
12,764
|
|
17,812
|
Other
assets
|
62,149
|
|
61,119
|
Goodwill
|
1,607
|
|
2,321
|
Total
assets
|
$
6,843,413
|
|
$
6,833,594
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Liabilities
|
|
|
|
Secured notes
payable
|
$
1,413,793
|
|
$
1,592,116
|
Unsecured notes
payable
|
2,028,451
|
|
1,932,399
|
Accounts
payable
|
11,884
|
|
8,395
|
Fair market value of
interest rate swaps
|
13,071
|
|
13,392
|
Accrued expenses and
other liabilities
|
215,134
|
|
219,044
|
Security
deposits
|
11,281
|
|
10,526
|
Liabilities
associated with assets held for sale
|
1,216
|
|
—
|
Total
liabilities
|
3,694,830
|
|
3,775,872
|
Redeemable
stock
|
6,298
|
|
5,911
|
Shareholders'
equity
|
|
|
|
Common
stock
|
754
|
|
752
|
Additional paid-in
capital
|
3,622,323
|
|
3,619,270
|
Accumulated
distributions in excess of net income
|
(647,413)
|
|
(729,086)
|
Accumulated other
comprehensive income (loss)
|
952
|
|
(412)
|
Total MAA
shareholders' equity
|
2,976,616
|
|
2,890,524
|
Noncontrolling
interest
|
165,669
|
|
161,287
|
Total
equity
|
3,142,285
|
|
3,051,811
|
Total liabilities and
shareholders' equity
|
$
6,843,413
|
|
$
6,833,594
|
|
|
|
|
NON-GAAP FINANCIALS AND OTHER 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.
We believe 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
quarter.
Average Total Revenue per Occupied Unit
Average total revenue per occupied
unit represents total revenue divided by the average daily number
of units that were physically occupied.
Core Adjusted Funds From Operations (Core AFFO)
For purposes of these
computations, Core AFFO is composed of Core FFO less recurring
capital expenditures. As an owner and operator of real estate, we
consider Core AFFO to be an important measure of performance from
core operations because Core AFFO measures our ability to control
revenues, expenses and recurring capital expenditures.
Core Funds From Operations (Core FFO)
Core FFO represents FFO excluding
certain non-cash or non-routine items such as acquisition, merger
and integration expenses, mark-to-market debt adjustments, loss or
gain on debt extinguishment, and loss or gain on sale of
non-depreciable assets. While our definition of Core FFO is
similar to others in our industry, our precise 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. We believe that Core FFO is helpful in understanding
our operating performance in that it removes certain items that by
their nature are not comparable over periods and therefore tend to
obscure actual operating performance.
Development Portfolio
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 Portfolio.
Earnings Before Interest Taxes Depreciation and Amortization
(EBITDA)
For purposes of these
computations, EBITDA is composed of net income before net gain on
asset sales and insurance and other settlement proceeds, and gain
or loss on debt extinguishment, plus depreciation, interest
expense, income taxes, and amortization of deferred financing
costs. EBITDA is a non-GAAP financial measure we use as a
performance measure. As an owner and operator of real estate,
we consider EBITDA to be an important measure of performance from
core operations because EBITDA does not include various income and
expense items that are not indicative of our operating performance.
EBITDA should not be considered as an alternative to net income as
an indicator of financial performance. Our computation of EBITDA
may differ from the methodology utilized by other companies to
calculate EBITDA.
Effective Occupancy
Effective occupancy represents
contract rents on occupied units divided by the sum of market rents
on vacant units and contract rents on occupied units.
Funds From Operations (FFO)
FFO represents net income
available for common shareholders (computed in accordance with U.S.
generally accepted accounting principles, or GAAP) excluding
extraordinary items, asset impairment, gains or losses on
disposition of real estate assets, plus net income attributable to
noncontrolling interest, depreciation of real estate, and
adjustments for joint ventures to reflect FFO on the same
basis. Because noncontrolling interest is added back, FFO,
when used in this document, represents FFO attributable to the
Company. While our definition of FFO is in accordance with
the National Association of Real Estate Investment Trust's
definition, it may differ from the methodology for calculating FFO
utilized by other REITs and, accordingly, may not be comparable to
such other REITs. FFO should not be considered as an
alternative to net income. MAA believes that FFO is helpful
in understanding our operating performance in that FFO excludes
depreciation expense 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.
Lease-up Portfolio
New acquisitions acquired during
lease-up and newly developed communities remain in the Lease-up
Portfolio until stabilized.
Net Operating Income (NOI)
Net operating income represents
total property revenues less total property operating expenses,
excluding depreciation, for all properties held during the period,
regardless of their status as held for sale. We believe NOI by
market is a helpful tool in evaluating the operating performance
within our 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 Non-Same Store Portfolio
Other Non-Same Store includes
recent acquisitions, communities in development or lease-up,
communities that have undergone a significant casualty loss, and
commercial assets.
Recurring Earnings Before Interest Taxes Depreciation and
Amortization (Recurring EBITDA)
Recurring EBITDA represents EBITDA
excluding certain non-cash or non-routine items such as acquisition
and merger and integration expenses. We believe Recurring
EBITDA is an important performance measure as it adjusts for
certain items that by their nature are not comparable over periods
and therefore tend to obscure actual operating performance.
Recurring EBITDA should not be considered as an alternative to net
income as an indicator of financial performance. Our computation of
Recurring EBITDA may differ from the methodology utilized by other
companies to calculate Recurring EBITDA.
Same Store Portfolio
We review our Same Store Portfolio
at the beginning of each calendar year, or as significant
transactions warrant. Communities are generally added into the Same
Store Portfolio if they were owned and stabilized at the beginning
of the previous year. Communities that have been approved by
the Board of Directors for disposition are excluded from our Same
Store Portfolio. Communities that have undergone a
significant casualty loss are also excluded from our Same Store
Portfolio. Within our Same Store Portfolio communities are
designated as operating in Large or Secondary markets:
Large Market Same Store
communities are generally those communities in markets with a
population of at least one million and at least 1% of the total
public multifamily REIT units.
Secondary Market Same Store
communities are generally those communities in markets with either
a population less than one million or less than 1% of the total
public multifamily REIT units, or both.
Stabilized Communities
Communities are considered
stabilized after achieving 90% occupancy for 90 days.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/maa-reports-second-quarter-results-300120787.html
SOURCE MAA