GERMANTOWN, Tenn., July 26,
2023 /PRNewswire/ -- Mid-America Apartment
Communities, Inc., or MAA (NYSE: MAA), today announced operating
results for the quarter ended June 30, 2023.
Second Quarter 2023
Operating Results
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Three months ended
June 30,
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Six months ended
June 30,
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2023
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2022
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2023
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2022
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Earnings per common
share - diluted
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$
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1.24
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$
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1.82
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$
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2.40
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$
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2.76
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Funds from operations
(FFO) per Share - diluted
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$
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2.39
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$
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1.82
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$
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4.70
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$
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3.89
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Core FFO per Share -
diluted
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$
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2.28
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$
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2.02
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$
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4.56
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$
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4.00
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A reconciliation of FFO and Core FFO to Net income
available for MAA common shareholders, and discussion of the
components of FFO and Core FFO, can be found later in this release.
FFO per Share – diluted and Core FFO per Share – diluted include
diluted common shares and units.
Eric Bolton, Chairman and Chief
Executive Officer, said, "Leasing conditions across our markets
continue to reflect a strong demand for apartment housing.
Leasing traffic remains strong and move-outs by existing residents
remain historically low. Our Sunbelt markets continue to
demonstrate solid employment conditions and positive migration
trends that are further supporting absorption of the new apartment
supply delivering in our markets. Overall performance remains
ahead of our expectations we had for calendar year 2023."
Highlights
- During the second quarter of 2023, MAA's Same Store Portfolio
produced growth in revenues of 8.1%, as compared to the same period
in the prior year, with Average Effective Rent per Unit up 9.3%
while capturing strong Average Physcial Occupancy of 95.5%.
- During the second quarter of 2023, MAA's Same Store Portfolio
property operating expense and Net Operating Income (NOI) increased
by 7.2% and 8.6%, respectively, as compared to the same period in
the prior year.
- As of June 30, 2023, resident
turnover remained low at 45.7% on a trailing 12 month basis driven
by historically low levels of move-outs associated with buying
single family-homes.
- As of the end of the second quarter of 2023, MAA had six
communities under development, representing 2,310 units once
complete, with a projected total cost of $735.0 million and an estimated $343.5 million remaining to be funded.
- As of the end of the second quarter of 2023, MAA had a recently
completed development community in lease-up. That community is
expected to stabilize in the fourth quarter of 2023.
- During the second quarter of 2023, MAA completed the lease-up
of MAA LoSo, located in the Charlotte,
North Carolina market.
- MAA completed the redevelopment of 1,878 apartment homes during
the second quarter of 2023, capturing average rental rate increases
of approximately 8% above non-renovated units.
- MAA's balance sheet remains strong with a historically low Net
Debt/Adjusted EBITDAre ratio of 3.41x and $1.4 billion of combined cash and available
capacity under MAALP's unsecured revolving credit facility as of
June 30, 2023.
Same Store Portfolio Operating Results
To ensure comparable reporting with prior periods, the Same
Store Portfolio includes properties that were owned by MAA and
stabilized at the beginning of the previous year. Same Store
Portfolio results for the three and six months ended June 30,
2023 as compared to the same period in the prior year are
summarized below:
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Three months ended
June 30, 2023 vs. 2022
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Six months ended
June 30, 2023 vs. 2022
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Revenues
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Expenses
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NOI
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Average Effective
Rent per Unit
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Revenues
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Expenses
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NOI
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Average Effective
Rent per Unit
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Same Store Operating
Growth
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8.1 %
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7.2 %
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8.6 %
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9.3 %
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9.5 %
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7.7 %
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10.5 %
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10.9 %
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A reconciliation of NOI, including Same Store NOI, to Net
income available for MAA common shareholders, and discussion of the
components of NOI, can be found later in this release.
Same Store Portfolio operating statistics for the three and six
months ended June 30, 2023 are summarized below:
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Three months ended
June 30, 2023
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Six months ended
June 30, 2023
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June 30,
2023
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Average Effective
Rent per Unit
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Average Physical
Occupancy
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Average Effective
Rent per Unit
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Average Physical
Occupancy
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Resident
Turnover
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Same Store Operating
Statistics
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$
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1,673
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95.5 %
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$
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1,665
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95.5 %
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45.7 %
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Same Store Portfolio lease pricing for both new and renewing
leases effective during the second quarter of 2023, on a blended
basis, increased 3.8% as compared to the prior lease, driven by a
6.8% increase for renewing leases and a 0.5% increase for leases to
new move-in residents.
Same Store Portfolio lease pricing for both new and renewing
leases effective during the six months ended June 30, 2023, on
a blended basis, increased 3.8% as compared to the prior lease,
driven by a 7.4% increase for renewing leases and a 0.1% increase
for leases to new move-in residents.
Development and Lease-up Activity
A summary of MAA's development communities under construction as
of the end of the second quarter of 2023 is set forth below
(dollars in thousands):
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Units as
of
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Development Costs as
of
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Expected
Project
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Total
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June 30,
2023
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June 30,
2023
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Completions By
Year
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Development
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Expected
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Spend
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Expected
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Projects
(1)
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Total
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Delivered
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Leased
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Total
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to
Date
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Remaining
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2023
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2024
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2025
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6
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2,310
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255
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141
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$
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735,000
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$
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391,475
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$
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343,525
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1
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3
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2
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(1)
Three of the development projects are currently leasing or are
expected to begin leasing during the third quarter of
2023.
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During the second quarter of 2023, MAA funded $51.3 million of costs for current and planned
projects, including predevelopment activities. MAA expects to begin
multifamily development projects on four to six land parcels
currently owned or under contract over the next 18 to 24
months.
During the second quarter of 2023, MAA completed the lease-up of
MAA LoSo, located in the Charlotte, North
Carolina market. A summary of the total units, physical
occupancy and cost of MAA's lease-up communities as of the end of
the second quarter of 2023 is set forth below (dollars in
thousands):
Total
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As of June 30,
2023
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Lease-Up
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Total
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Physical
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Spend
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Projects
(1)
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Units
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Occupancy
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to
Date
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1
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350
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80.9 %
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$
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59,726
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(1)
Lease-up project is expected to stabilize in the fourth quarter of
2023.
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The current expected average stabilized NOI yield on the
four communities either currently leasing or expected to begin
leasing during the third quarter of 2023 is 7.2%.
Property Redevelopment and Repositioning Activity
A summary of MAA's interior redevelopment program and Smart Home
technology initiative as of the end of the second quarter of 2023
is set forth below:
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As of June 30,
2023
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Units
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Units
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Average
Cost
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Increase in
Average
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Remaining
Units
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Completed
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Completed
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per
Unit
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Effective Rent per
Unit
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Expected to be
Completed
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QTD
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YTD
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YTD
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YTD
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Through December 31,
2023
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Redevelopment
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1,878
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3,206
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$
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6,217
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$
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106
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3,000 -
4,000
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Smart
Home
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2,276
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20,530
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$
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1,452
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$
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20
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(1)
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3,500 -
4,500
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(1)
Projected increase upon lease renewal, opt in or unit
turnover.
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As of June 30, 2023, MAA had
completed installation of Smart Home technology (unit entry locks,
mobile control of lights and thermostat and leak monitoring) in
over 92,000 units across its apartment community portfolio since
the initiative began during the first quarter of 2019.
During the second quarter of 2023, MAA continued its property
repositioning program to upgrade and reposition the amenity and
common areas at select apartment communities resulting in higher
and above market rent growth. The five projects started or
projected to start in 2022 and 2023 are expected to deliver yields
on cost averaging 8%. During the six months ended June 30,
2023, work continued on properties selected for this program in
2022. An additional six projects are expected to start in the
second half of 2023. For the six months ended June 30, 2023,
MAA spent $6.9 million on this
program. As of June 30, 2023, for all projects completed
and either fully or partially repriced, MAA has captured yields on
cost averaging approximately 18%.
Capital Expenditures
A summary of MAA's capital expenditures and Funds Available for
Distribution (FAD) for the three and six months ended June 30,
2023 and 2022 is set forth below (dollars in millions, except
per Share data):
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Three months ended
June 30,
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Six months ended
June 30,
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2023
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2022
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2023
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2022
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Core FFO
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$
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273.3
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$
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239.9
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$
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545.5
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$
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474.0
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Recurring capital
expenditures
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(32.7)
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(31.0)
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(49.0)
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(45.6)
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Core adjusted FFO (Core
AFFO)
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240.6
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208.9
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496.5
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428.4
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Redevelopment, revenue
enhancing, commercial and other capital expenditures
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(57.4)
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(62.9)
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(108.8)
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(85.9)
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FAD
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$
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183.2
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$
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146.0
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$
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387.7
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$
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342.5
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Core FFO per Share -
diluted
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$
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2.28
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$
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2.02
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$
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4.56
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$
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4.00
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Core AFFO per Share -
diluted
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$
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2.01
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$
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1.76
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$
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4.15
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$
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3.61
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A reconciliation of FFO, Core FFO, Core AFFO and FAD to Net
income available for MAA common shareholders, and discussion of the
components of FFO, Core FFO, Core AFFO and FAD, can be found later
in this release.
Balance Sheet and Financing Activities
As of June 30, 2023, MAA had $1.4 billion of combined
cash and available capacity under MAALP's unsecured revolving
credit facility. MAALP refers to Mid-America Apartments, L.P.,
which is MAA's operating partnership.
Dividends and distributions paid on shares of common stock and
noncontrolling interests during the second quarter of 2023 were
$167.7 million, as compared to
$129.0 million for the same period in
the prior year.
Balance sheet highlights as of June 30, 2023 are summarized
below (dollars in billions):
Total debt to
adjusted total assets (1)
|
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Net Debt/Adjusted
EBITDAre (2)
|
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Total debt
outstanding
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Average effective
interest rate
|
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Fixed rate debt as a
% of total debt
|
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Total debt average
years to maturity
|
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27.5 %
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3.41x
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$
|
4.4
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3.4 %
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100.0 %
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|
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7.5
|
|
|
|
|
|
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(1)
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As defined in the
covenants for the bonds issued by MAALP.
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(2)
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Adjusted
EBITDAre is calculated for the trailing twelve month period
ended June 30, 2023.
|
A reconciliation of Net Debt to Unsecured notes payable and
Secured notes payable and a reconciliation of
Adjusted EBITDAre to Net income, along with discussion
of the components of Net Debt and Adjusted EBITDAre, can be
found later in this release.
118th Consecutive Quarterly Common Dividend Declared
MAA declared its 118th consecutive quarterly common dividend,
which will be paid on July 31, 2023
to holders of record on July 14,
2023. The current annual dividend rate is $5.60 per common share. The timing and amount of
future dividends will depend on actual cash flows from operations,
MAA's financial condition, capital requirements, the annual
distribution requirements under the REIT provisions of the Internal
Revenue Code of 1986 and other factors as MAA's Board of Directors
deems relevant. MAA's Board of Directors may modify the dividend
policy from time to time.
2023 Earnings and Same Store Portfolio Guidance
MAA is updating its prior 2023 guidance for Earnings per common
share, Core FFO per Share and Core AFFO per Share. MAA expects to
update its full year 2023 Earnings per common share, Core FFO per
Share and Core AFFO per Share guidance on a quarterly basis.
FFO, Core FFO and Core AFFO are non-GAAP financial measures.
Acquisition and disposition activity materially affects
depreciation and capital gains or losses, which combined, generally
represent the majority of the difference between Net income
available for common shareholders and FFO. As discussed in the
definitions of non-GAAP financial measures found later in this
release, MAA's definition of FFO is in accordance with the National
Association of Real Estate Investment Trusts', or NAREIT's,
definition, and Core FFO represents FFO further adjusted for items
that are not considered part of MAA's core business operations. MAA
believes that Core FFO is helpful in understanding operating
performance in that Core FFO excludes not only depreciation expense
of real estate assets and certain other non-routine items, but it
also excludes certain items that by their nature are not comparable
over periods and therefore tend to obscure actual operating
performance.
2023
Guidance
|
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Previous
Range
|
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Previous
Midpoint
|
|
|
Revised
Range
|
|
Revised
Midpoint
|
Earnings:
|
|
Full Year
2023
|
|
Full Year
2023
|
|
|
Full Year
2023
|
|
Full Year
2023
|
Earnings per common
share - diluted
|
|
$6.05 to
$6.41
|
|
$6.23
|
|
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$5.04 to
$5.32
|
|
$5.18
|
Core FFO per Share -
diluted
|
|
$8.93 to
$9.29
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|
$9.11
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|
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$9.00 to
$9.28
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|
$9.14
|
Core AFFO per Share -
diluted
|
|
$8.01 to
$8.37
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$8.19
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$8.08 to
$8.36
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$8.22
|
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MAA Same Store
Portfolio:
|
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|
|
|
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|
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Property revenue
growth
|
|
5.25% to
7.25%
|
|
6.25 %
|
|
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5.50% to
7.00%
|
|
6.25 %
|
Property operating
expense growth
|
|
5.15% to
7.15%
|
|
6.15 %
|
|
|
5.30% to
6.80%
|
|
6.05 %
|
NOI growth
|
|
5.30% to
7.30%
|
|
6.30 %
|
|
|
5.60% to
7.10%
|
|
6.35 %
|
MAA expects Core FFO for the third quarter of 2023 to be in
the range of $2.18 to $2.34 per
Share, or $2.26 per Share at the
midpoint. MAA does not forecast Earnings per common share on a
quarterly basis as MAA generally cannot predict the timing of
forecasted acquisition and disposition activity within a particular
quarter (rather than during the course of the full year).
Additional details and guidance items are provided in the
Supplemental Data to this release.
Our property and casualty insurance programs renewed on
July 1, 2023 with a total premium
increase of approximately 20%, in line with prior guidance.
Supplemental Material and Conference Call
Supplemental data to this release can be found on the "For
Investors" page of the MAA website at www.maac.com. MAA will host a
conference call to further discuss second quarter results on
July 27, 2023, at 9:00 AM Central Time. The conference call-in
number is 877-830-2597. You may also join the live webcast of the
conference call by accessing the "For Investors" page of the MAA
website at www.maac.com. MAA's filings with the Securities and
Exchange Commission (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
(REIT) focused on delivering full-cycle and superior investment
performance for shareholders through the ownership, management,
acquisition, development and redevelopment of quality apartment
communities primarily in the Southeast, Southwest and Mid-Atlantic
regions of the United States. As
of June 30, 2023, MAA had ownership interest in 101,986
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 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," "budget," "target," "outlook,"
"proforma," "opportunity," "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:
- 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 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 or collect 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 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;
- material changes in operating costs, including real estate
taxes, utilities and insurance costs, due to inflation and other
factors;
- 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, or
refinance existing debt as it matures;
- level and volatility of interest or capitalization rates or
capital market conditions;
- the effect of any rating agency actions on the cost and
availability of new debt financing;
- the impact of adverse developments affecting the U.S. or global
banking industry, including bank failures and liquidity concerns,
which could cause continued or worsening economic and market
volatility, and regulatory responses thereto;
- significant change in the mortgage financing market or other
factors that would cause single-family housing or other alternative
housing options, either as an owned or rental product, to become a
more significant competitive product;
- 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;
- changes in the legal requirements we are subject to, or the
imposition of new legal requirements, that adversely affect our
operations;
- extreme weather and natural disasters;
- disease outbreaks and other public health events and measures
that are taken by federal, state, and local governmental
authorities in response to such outbreaks and events;
- impact of climate change on our properties or operations;
- legal proceedings or class action lawsuits;
- impact of reputational harm caused by negative press or social
media postings of our actions or policies, whether or not
warranted;
- compliance costs associated with numerous federal, state and
local laws and regulations; 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.
Dollars in
thousands, except per share data
|
|
Three months ended
June 30,
|
|
|
Six months ended
June 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Rental and other
property revenues
|
|
$
|
535,146
|
|
|
$
|
495,040
|
|
|
$
|
1,064,179
|
|
|
$
|
971,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for MAA common shareholders
|
|
$
|
144,766
|
|
|
$
|
209,780
|
|
|
$
|
279,754
|
|
|
$
|
319,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total NOI
(1)
|
|
$
|
340,813
|
|
|
$
|
313,363
|
|
|
$
|
687,043
|
|
|
$
|
620,021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.24
|
|
|
$
|
1.82
|
|
|
$
|
2.40
|
|
|
$
|
2.77
|
|
Diluted
|
|
$
|
1.24
|
|
|
$
|
1.82
|
|
|
$
|
2.40
|
|
|
$
|
2.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations
per Share - diluted: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
(1)
|
|
$
|
2.39
|
|
|
$
|
1.82
|
|
|
$
|
4.70
|
|
|
$
|
3.89
|
|
Core FFO
(1)
|
|
$
|
2.28
|
|
|
$
|
2.02
|
|
|
$
|
4.56
|
|
|
$
|
4.00
|
|
Core AFFO
(1)
|
|
$
|
2.01
|
|
|
$
|
1.76
|
|
|
$
|
4.15
|
|
|
$
|
3.61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per
common share
|
|
$
|
1.4000
|
|
|
$
|
1.2500
|
|
|
$
|
2.8000
|
|
|
$
|
2.3375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends/Core FFO
(diluted) payout ratio
|
|
|
61.4
|
%
|
|
|
61.9
|
%
|
|
|
61.4
|
%
|
|
|
58.4
|
%
|
Dividends/Core AFFO
(diluted) payout ratio
|
|
|
69.7
|
%
|
|
|
71.0
|
%
|
|
|
67.5
|
%
|
|
|
64.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated interest
expense
|
|
$
|
36,723
|
|
|
$
|
38,905
|
|
|
$
|
74,004
|
|
|
$
|
78,026
|
|
Mark-to-market debt
adjustment
|
|
|
12
|
|
|
|
(35)
|
|
|
|
25
|
|
|
|
(71)
|
|
Debt discount and debt
issuance cost amortization
|
|
|
(1,530)
|
|
|
|
(1,474)
|
|
|
|
(3,061)
|
|
|
|
(2,947)
|
|
Capitalized
interest
|
|
|
3,137
|
|
|
|
2,057
|
|
|
|
5,883
|
|
|
|
3,893
|
|
Total interest
incurred
|
|
$
|
38,342
|
|
|
$
|
39,453
|
|
|
$
|
76,851
|
|
|
$
|
78,901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
principal on notes payable
|
|
$
|
368
|
|
|
$
|
348
|
|
|
$
|
730
|
|
|
$
|
691
|
|
|
|
(1)
|
A reconciliation of the
following items and 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.
|
Dollars in
thousands, except share price
|
|
|
|
|
|
|
|
|
June 30,
2023
|
|
|
December 31,
2022
|
|
Gross Assets
(1)
|
|
$
|
15,970,287
|
|
|
$
|
15,543,912
|
|
Gross Real Estate
Assets (1)
|
|
$
|
15,746,029
|
|
|
$
|
15,336,793
|
|
Total debt
|
|
$
|
4,396,393
|
|
|
$
|
4,414,903
|
|
Common shares and units
outstanding
|
|
|
119,831,650
|
|
|
|
118,645,269
|
|
Share price
|
|
$
|
151.86
|
|
|
$
|
156.99
|
|
Book equity
value
|
|
$
|
6,371,063
|
|
|
$
|
6,210,419
|
|
Market equity
value
|
|
$
|
18,197,634
|
|
|
$
|
18,626,121
|
|
Net Debt/Adjusted
EBITDAre (2)
|
|
3.41x
|
|
|
3.71x
|
|
|
|
(1)
|
A reconciliation of
Gross Assets to Total assets and Gross Real Estate Assets to Real
estate assets, net, along with discussion of their components, can
be found later in this release.
|
(2)
|
Adjusted EBITDAre is
calculated for the trailing twelve month period for each date
presented. A reconciliation of the following items and discussion
of their respective components can be found later in this release:
(i) Net Debt to Unsecured notes payable and Secured notes payable;
and (ii) EBITDA, EBITDAre and Adjusted EBITDAre to
Net income.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
Dollars in
thousands, except per share data (Unaudited)
|
|
Three months ended
June 30,
|
|
|
Six months ended
June 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental and other
property revenues
|
|
$
|
535,146
|
|
|
$
|
495,040
|
|
|
$
|
1,064,179
|
|
|
$
|
971,118
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding real estate taxes and insurance
|
|
|
116,604
|
|
|
|
110,007
|
|
|
|
225,208
|
|
|
|
211,124
|
|
Real estate taxes and
insurance
|
|
|
77,729
|
|
|
|
71,670
|
|
|
|
151,928
|
|
|
|
139,973
|
|
Depreciation and
amortization
|
|
|
138,972
|
|
|
|
134,144
|
|
|
|
277,473
|
|
|
|
267,882
|
|
Total property
operating expenses
|
|
|
333,305
|
|
|
|
315,821
|
|
|
|
654,609
|
|
|
|
618,979
|
|
Property management
expenses
|
|
|
16,091
|
|
|
|
15,630
|
|
|
|
34,019
|
|
|
|
32,167
|
|
General and
administrative expenses
|
|
|
13,882
|
|
|
|
15,580
|
|
|
|
29,805
|
|
|
|
31,903
|
|
Interest
expense
|
|
|
36,723
|
|
|
|
38,905
|
|
|
|
74,004
|
|
|
|
78,026
|
|
Loss (gain) on sale of
depreciable real estate assets
|
|
|
1
|
|
|
|
(131,965)
|
|
|
|
(14)
|
|
|
|
(131,964)
|
|
Gain on sale of
non-depreciable real estate assets
|
|
|
—
|
|
|
|
(355)
|
|
|
|
(54)
|
|
|
|
(378)
|
|
Other non-operating
(income) expense
|
|
|
(16,992)
|
|
|
|
28,325
|
|
|
|
(20,459)
|
|
|
|
17,530
|
|
Income before income
tax (expense) benefit
|
|
|
152,136
|
|
|
|
213,099
|
|
|
|
292,269
|
|
|
|
324,855
|
|
Income tax (expense)
benefit
|
|
|
(2,861)
|
|
|
|
3,052
|
|
|
|
(3,805)
|
|
|
|
4,494
|
|
Income from continuing
operations before real estate joint venture activity
|
|
|
149,275
|
|
|
|
216,151
|
|
|
|
288,464
|
|
|
|
329,349
|
|
Income from real
estate joint venture
|
|
|
382
|
|
|
|
409
|
|
|
|
767
|
|
|
|
788
|
|
Net income
|
|
|
149,657
|
|
|
|
216,560
|
|
|
|
289,231
|
|
|
|
330,137
|
|
Net income
attributable to noncontrolling interests
|
|
|
3,969
|
|
|
|
5,858
|
|
|
|
7,633
|
|
|
|
8,633
|
|
Net income available
for shareholders
|
|
|
145,688
|
|
|
|
210,702
|
|
|
|
281,598
|
|
|
|
321,504
|
|
Dividends to MAA
Series I preferred shareholders
|
|
|
922
|
|
|
|
922
|
|
|
|
1,844
|
|
|
|
1,844
|
|
Net income available
for MAA common shareholders
|
|
$
|
144,766
|
|
|
$
|
209,780
|
|
|
$
|
279,754
|
|
|
$
|
319,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for common shareholders
|
|
$
|
1.24
|
|
|
$
|
1.82
|
|
|
$
|
2.40
|
|
|
$
|
2.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for common shareholders
|
|
$
|
1.24
|
|
|
$
|
1.82
|
|
|
$
|
2.40
|
|
|
$
|
2.76
|
|
Shares and units in
thousands
|
|
Three months ended
June 30,
|
|
|
Six months ended
June 30,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net Income Shares
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares - basic
|
|
|
116,621
|
|
|
|
115,353
|
|
|
|
116,401
|
|
|
|
115,306
|
|
Effect of dilutive
securities
|
|
|
104
|
|
|
|
203
|
|
|
|
157
|
|
|
|
336
|
|
Weighted average
common shares - diluted
|
|
|
116,725
|
|
|
|
115,556
|
|
|
|
116,558
|
|
|
|
115,642
|
|
Funds From
Operations Shares And Units
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares and units - basic
|
|
|
119,776
|
|
|
|
118,555
|
|
|
|
119,558
|
|
|
|
118,509
|
|
Weighted average
common shares and units - diluted
|
|
|
119,823
|
|
|
|
118,638
|
|
|
|
119,607
|
|
|
|
118,654
|
|
Period End Shares
And Units
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares at
June 30,
|
|
|
116,677
|
|
|
|
115,439
|
|
|
|
116,677
|
|
|
|
115,439
|
|
Operating Partnership
units at June 30,
|
|
|
3,155
|
|
|
|
3,202
|
|
|
|
3,155
|
|
|
|
3,202
|
|
Total common shares
and units at June 30,
|
|
|
119,832
|
|
|
|
118,641
|
|
|
|
119,832
|
|
|
|
118,641
|
|
|
|
(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, 2023,
expected to be filed with the SEC on or about July 27,
2023.
|
CONSOLIDATED BALANCE
SHEETS
|
Dollars in thousands
(Unaudited)
|
|
|
|
|
|
|
|
|
June 30,
2023
|
|
|
December 31,
2022
|
|
Assets
|
|
|
|
|
|
|
Real estate
assets:
|
|
|
|
|
|
|
Land
|
|
$
|
2,008,523
|
|
|
$
|
2,008,364
|
|
Buildings and
improvements and other
|
|
|
13,076,345
|
|
|
|
12,841,947
|
|
Development and
capital improvements in progress
|
|
|
394,798
|
|
|
|
332,035
|
|
|
|
|
15,479,666
|
|
|
|
15,182,346
|
|
Less: Accumulated
depreciation
|
|
|
(4,579,117)
|
|
|
|
(4,302,747)
|
|
|
|
|
10,900,549
|
|
|
|
10,879,599
|
|
Undeveloped
land
|
|
|
73,861
|
|
|
|
64,312
|
|
Investment in real
estate joint venture
|
|
|
42,347
|
|
|
|
42,290
|
|
Real estate assets,
net
|
|
|
11,016,757
|
|
|
|
10,986,201
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
150,155
|
|
|
|
38,659
|
|
Restricted
cash
|
|
|
13,570
|
|
|
|
22,412
|
|
Other assets
|
|
|
210,688
|
|
|
|
193,893
|
|
Total
assets
|
|
$
|
11,391,170
|
|
|
$
|
11,241,165
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Unsecured notes
payable
|
|
$
|
4,033,091
|
|
|
$
|
4,050,910
|
|
Secured notes
payable
|
|
|
363,302
|
|
|
|
363,993
|
|
Accrued expenses and
other liabilities
|
|
|
623,714
|
|
|
|
615,843
|
|
Total
liabilities
|
|
|
5,020,107
|
|
|
|
5,030,746
|
|
|
|
|
|
|
|
|
Redeemable common
stock
|
|
|
20,991
|
|
|
|
20,671
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
Preferred
stock
|
|
|
9
|
|
|
|
9
|
|
Common
stock
|
|
|
1,168
|
|
|
|
1,152
|
|
Additional paid-in
capital
|
|
|
7,405,572
|
|
|
|
7,202,834
|
|
Accumulated
distributions in excess of net income
|
|
|
(1,235,118)
|
|
|
|
(1,188,854)
|
|
Accumulated other
comprehensive loss
|
|
|
(9,514)
|
|
|
|
(10,052)
|
|
Total MAA
shareholders' equity
|
|
|
6,162,117
|
|
|
|
6,005,089
|
|
Noncontrolling
interests - Operating Partnership units
|
|
|
165,626
|
|
|
|
163,595
|
|
Total Company's
shareholders' equity
|
|
|
6,327,743
|
|
|
|
6,168,684
|
|
Noncontrolling
interests - consolidated real estate entities
|
|
|
22,329
|
|
|
|
21,064
|
|
Total
equity
|
|
|
6,350,072
|
|
|
|
6,189,748
|
|
Total liabilities and
equity
|
|
$
|
11,391,170
|
|
|
$
|
11,241,165
|
|
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,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net income available
for MAA common shareholders
|
|
$
|
144,766
|
|
|
$
|
209,780
|
|
|
$
|
279,754
|
|
|
$
|
319,660
|
|
Depreciation and
amortization of real estate assets
|
|
|
137,456
|
|
|
|
132,333
|
|
|
|
274,254
|
|
|
|
264,343
|
|
Loss (gain) on sale of
depreciable real estate assets
|
|
|
1
|
|
|
|
(131,965)
|
|
|
|
(14)
|
|
|
|
(131,964)
|
|
MAA's share of
depreciation and amortization of real estate assets of real estate
joint venture
|
|
|
152
|
|
|
|
156
|
|
|
|
303
|
|
|
|
310
|
|
Net income
attributable to noncontrolling interests
|
|
|
3,969
|
|
|
|
5,858
|
|
|
|
7,633
|
|
|
|
8,633
|
|
FFO attributable to
common shareholders and unitholders
|
|
|
286,344
|
|
|
|
216,162
|
|
|
|
561,930
|
|
|
|
460,982
|
|
(Gain) loss on
embedded derivative in preferred shares (1)
|
|
|
(4,952)
|
|
|
|
21,835
|
|
|
|
(9,387)
|
|
|
|
9,939
|
|
Gain on sale of
non-depreciable real estate assets
|
|
|
—
|
|
|
|
(355)
|
|
|
|
(54)
|
|
|
|
(378)
|
|
(Gain) loss on
investments, net of tax (1) (2)
|
|
|
(6,575)
|
|
|
|
16,489
|
|
|
|
(5,769)
|
|
|
|
24,566
|
|
Casualty related
charges (recoveries), net (1) (3)
|
|
|
75
|
|
|
|
(14,413)
|
|
|
|
371
|
|
|
|
(22,125)
|
|
Legal costs and
settlements, net (1)
|
|
|
(1,600)
|
|
|
|
(2)
|
|
|
|
(1,600)
|
|
|
|
535
|
|
COVID-19 related costs
(1)
|
|
|
—
|
|
|
|
105
|
|
|
|
—
|
|
|
|
442
|
|
Mark-to-market debt
adjustment (4)
|
|
|
(12)
|
|
|
|
35
|
|
|
|
(25)
|
|
|
|
71
|
|
Core FFO attributable
to common shareholders and unitholders
|
|
|
273,280
|
|
|
|
239,856
|
|
|
|
545,466
|
|
|
|
474,032
|
|
Recurring capital
expenditures
|
|
|
(32,669)
|
|
|
|
(30,957)
|
|
|
|
(48,999)
|
|
|
|
(45,674)
|
|
Core AFFO attributable
to common shareholders and unitholders
|
|
|
240,611
|
|
|
|
208,899
|
|
|
|
496,467
|
|
|
|
428,358
|
|
Redevelopment capital
expenditures
|
|
|
(26,310)
|
|
|
|
(42,393)
|
|
|
|
(57,719)
|
|
|
|
(53,507)
|
|
Revenue enhancing
capital expenditures
|
|
|
(20,388)
|
|
|
|
(14,172)
|
|
|
|
(32,045)
|
|
|
|
(22,928)
|
|
Commercial capital
expenditures
|
|
|
(1,129)
|
|
|
|
(1,106)
|
|
|
|
(2,436)
|
|
|
|
(2,027)
|
|
Other capital
expenditures (5)
|
|
|
(9,567)
|
|
|
|
(5,214)
|
|
|
|
(16,555)
|
|
|
|
(7,410)
|
|
FAD attributable to
common shareholders and unitholders
|
|
$
|
183,217
|
|
|
$
|
146,014
|
|
|
$
|
387,712
|
|
|
$
|
342,486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and
distributions paid
|
|
$
|
167,742
|
|
|
$
|
129,009
|
|
|
$
|
333,854
|
|
|
$
|
257,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares - diluted
|
|
|
116,725
|
|
|
|
115,556
|
|
|
|
116,558
|
|
|
|
115,642
|
|
FFO weighted average
common shares and units - diluted
|
|
|
119,823
|
|
|
|
118,638
|
|
|
|
119,607
|
|
|
|
118,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for common shareholders
|
|
$
|
1.24
|
|
|
$
|
1.82
|
|
|
$
|
2.40
|
|
|
$
|
2.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per Share -
diluted
|
|
$
|
2.39
|
|
|
$
|
1.82
|
|
|
$
|
4.70
|
|
|
$
|
3.89
|
|
Core FFO per Share -
diluted
|
|
$
|
2.28
|
|
|
$
|
2.02
|
|
|
$
|
4.56
|
|
|
$
|
4.00
|
|
Core AFFO per Share -
diluted
|
|
$
|
2.01
|
|
|
$
|
1.76
|
|
|
$
|
4.15
|
|
|
$
|
3.61
|
|
|
|
(1)
|
Included in Other
non-operating (income) expense in the Consolidated Statements of
Operations.
|
(2)
|
For the three and six
months ended June 30, 2023 gain on investments are presented
net of tax expense of $1.7 million and $1.5 million,
respectively. For the three and six months ended
June 30, 2022, loss on investments are presented net of tax
benefit of $4.4 million and $6.5 million, respectively.
|
(3)
|
For the three and six
months ended June 30, 2022, MAA recognized a gain of $12.8
million and $20.4 million, respectively, from the receipt of
insurance proceeds that exceeded its casualty losses related to
winter storm Uri.
|
(4)
|
Included in Interest
expense in the Consolidated Statements of Operations.
|
(5)
|
For the three and six
months ended June 30, 2022, $0.8 million and $1.3 million,
respectively, of corporate related capital expenditures are
excluded from other capital expenditures.
|
RECONCILIATION OF
NET OPERATING INCOME TO NET INCOME AVAILABLE FOR MAA COMMON
SHAREHOLDERS
|
Dollars in
thousands
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
June 30,
2023
|
|
|
March 31,
2023
|
|
|
June 30,
2022
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
Net Operating
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
NOI
|
|
$
|
323,435
|
|
|
$
|
328,940
|
|
|
$
|
297,888
|
|
|
$
|
652,375
|
|
|
$
|
590,324
|
|
Non-Same Store and
Other NOI
|
|
|
17,378
|
|
|
|
17,290
|
|
|
|
15,475
|
|
|
|
34,668
|
|
|
|
29,697
|
|
Total NOI
|
|
|
340,813
|
|
|
|
346,230
|
|
|
|
313,363
|
|
|
|
687,043
|
|
|
|
620,021
|
|
Depreciation and
amortization
|
|
|
(138,972)
|
|
|
|
(138,501)
|
|
|
|
(134,144)
|
|
|
|
(277,473)
|
|
|
|
(267,882)
|
|
Property management
expenses
|
|
|
(16,091)
|
|
|
|
(17,928)
|
|
|
|
(15,630)
|
|
|
|
(34,019)
|
|
|
|
(32,167)
|
|
General and
administrative expenses
|
|
|
(13,882)
|
|
|
|
(15,923)
|
|
|
|
(15,580)
|
|
|
|
(29,805)
|
|
|
|
(31,903)
|
|
Interest
expense
|
|
|
(36,723)
|
|
|
|
(37,281)
|
|
|
|
(38,905)
|
|
|
|
(74,004)
|
|
|
|
(78,026)
|
|
(Loss) gain on sale of
depreciable real estate assets
|
|
|
(1)
|
|
|
|
15
|
|
|
|
131,965
|
|
|
|
14
|
|
|
|
131,964
|
|
Gain on sale of
non-depreciable real estate assets
|
|
|
—
|
|
|
|
54
|
|
|
|
355
|
|
|
|
54
|
|
|
|
378
|
|
Other non-operating
income (expense)
|
|
|
16,992
|
|
|
|
3,467
|
|
|
|
(28,325)
|
|
|
|
20,459
|
|
|
|
(17,530)
|
|
Income tax (expense)
benefit
|
|
|
(2,861)
|
|
|
|
(944)
|
|
|
|
3,052
|
|
|
|
(3,805)
|
|
|
|
4,494
|
|
Income from real
estate joint venture
|
|
|
382
|
|
|
|
385
|
|
|
|
409
|
|
|
|
767
|
|
|
|
788
|
|
Net income
attributable to noncontrolling interests
|
|
|
(3,969)
|
|
|
|
(3,664)
|
|
|
|
(5,858)
|
|
|
|
(7,633)
|
|
|
|
(8,633)
|
|
Dividends to MAA
Series I preferred shareholders
|
|
|
(922)
|
|
|
|
(922)
|
|
|
|
(922)
|
|
|
|
(1,844)
|
|
|
|
(1,844)
|
|
Net income available
for MAA common shareholders
|
|
$
|
144,766
|
|
|
$
|
134,988
|
|
|
$
|
209,780
|
|
|
$
|
279,754
|
|
|
$
|
319,660
|
|
RECONCILIATION OF
EBITDA, EBITDAre AND ADJUSTED EBITDAre TO NET
INCOME
|
Dollars in
thousands
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
|
June 30,
2023
|
|
|
June 30,
2022
|
|
|
June 30,
2023
|
|
|
December 31,
2022
|
|
Net income
|
|
$
|
149,657
|
|
|
$
|
216,560
|
|
|
$
|
613,870
|
|
|
$
|
654,776
|
|
Depreciation and
amortization
|
|
|
138,972
|
|
|
|
134,144
|
|
|
|
552,589
|
|
|
|
542,998
|
|
Interest
expense
|
|
|
36,723
|
|
|
|
38,905
|
|
|
|
150,725
|
|
|
|
154,747
|
|
Income tax expense
(benefit)
|
|
|
2,861
|
|
|
|
(3,052)
|
|
|
|
2,091
|
|
|
|
(6,208)
|
|
EBITDA
|
|
|
328,213
|
|
|
|
386,557
|
|
|
|
1,319,275
|
|
|
|
1,346,313
|
|
Loss (gain) on sale of
depreciable real estate assets
|
|
|
1
|
|
|
|
(131,965)
|
|
|
|
(82,812)
|
|
|
|
(214,762)
|
|
Adjustments to reflect
the Company's share of EBITDAre of an unconsolidated
affiliate
|
|
|
336
|
|
|
|
340
|
|
|
|
1,350
|
|
|
|
1,357
|
|
EBITDAre
|
|
|
328,550
|
|
|
|
254,932
|
|
|
|
1,237,813
|
|
|
|
1,132,908
|
|
(Gain) loss on
embedded derivative in preferred shares (1)
|
|
|
(4,952)
|
|
|
|
21,835
|
|
|
|
1,781
|
|
|
|
21,107
|
|
Gain on sale of
non-depreciable real estate assets
|
|
|
—
|
|
|
|
(355)
|
|
|
|
(485)
|
|
|
|
(809)
|
|
(Gain) loss on
investments (1)
|
|
|
(8,317)
|
|
|
|
20,860
|
|
|
|
6,971
|
|
|
|
45,357
|
|
Casualty related
charges (recoveries), net (1) (2)
|
|
|
75
|
|
|
|
(14,413)
|
|
|
|
(7,434)
|
|
|
|
(29,930)
|
|
Loss on debt
extinguishment (1)
|
|
|
—
|
|
|
|
—
|
|
|
|
47
|
|
|
|
47
|
|
Legal costs and
settlements, net (1)
|
|
|
(1,600)
|
|
|
|
(2)
|
|
|
|
6,400
|
|
|
|
8,535
|
|
COVID-19 related
costs (1)
|
|
|
—
|
|
|
|
105
|
|
|
|
133
|
|
|
|
575
|
|
Adjusted
EBITDAre
|
|
$
|
313,756
|
|
|
$
|
282,962
|
|
|
$
|
1,245,226
|
|
|
$
|
1,177,790
|
|
|
|
(1)
|
Included in Other
non-operating (income) expense in the Consolidated Statements of
Operations.
|
(2)
|
For the three months
ended June 30, 2022 and twelve months ended June 30, 2023
and December 31, 2022, MAA recognized a gain of $12.8 million,
$8.6 million and $29.0 million, respectively, from the receipt of
insurance proceeds that exceeded its casualty losses related to
winter storm Uri.
|
RECONCILIATION OF
NET DEBT TO UNSECURED NOTES PAYABLE AND SECURED NOTES
PAYABLE
|
Dollars in
thousands
|
|
|
|
|
|
|
|
|
June 30,
2023
|
|
|
December 31,
2022
|
|
Unsecured notes
payable
|
|
$
|
4,033,091
|
|
|
$
|
4,050,910
|
|
Secured notes
payable
|
|
|
363,302
|
|
|
|
363,993
|
|
Total debt
|
|
|
4,396,393
|
|
|
|
4,414,903
|
|
Cash and cash
equivalents
|
|
|
(150,155)
|
|
|
|
(38,659)
|
|
1031(b) exchange
proceeds included in Restricted cash (1)
|
|
|
—
|
|
|
|
(9,186)
|
|
Net Debt
|
|
$
|
4,246,238
|
|
|
$
|
4,367,058
|
|
|
(1)
Included in Restricted cash in the Consolidated Balance
Sheets.
|
RECONCILIATION OF
GROSS ASSETS TO TOTAL ASSETS
|
|
Dollars in
thousands
|
|
|
|
|
|
|
|
|
June 30,
2023
|
|
|
December 31,
2022
|
|
Total assets
|
|
$
|
11,391,170
|
|
|
$
|
11,241,165
|
|
Accumulated
depreciation
|
|
|
4,579,117
|
|
|
|
4,302,747
|
|
Gross Assets
|
|
$
|
15,970,287
|
|
|
$
|
15,543,912
|
|
RECONCILIATION OF
GROSS REAL ESTATE ASSETS TO REAL ESTATE ASSETS, NET
|
Dollars in
thousands
|
|
|
|
|
|
|
|
|
June 30,
2023
|
|
|
December 31,
2022
|
|
Real estate assets,
net
|
|
$
|
11,016,757
|
|
|
$
|
10,986,201
|
|
Accumulated
depreciation
|
|
|
4,579,117
|
|
|
|
4,302,747
|
|
Cash and cash
equivalents
|
|
|
150,155
|
|
|
|
38,659
|
|
1031(b) exchange
proceeds included in Restricted cash (1)
|
|
|
—
|
|
|
|
9,186
|
|
Gross Real Estate
Assets
|
|
$
|
15,746,029
|
|
|
$
|
15,336,793
|
|
|
(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, gain or loss on investments, casualty related (recoveries)
charges, net, gain or loss on debt extinguishment, legal costs and
settlements, net and COVID-19 related costs. 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. Because net income attributable to
noncontrolling interests is added back, Core AFFO, when used in
this release, represents Core AFFO attributable to common
shareholders and unitholders. 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, gain or loss on investments, net of tax,
casualty related (recoveries) charges, net, gain or loss on debt
extinguishment, legal costs and settlements, net, COVID-19 related
costs, mark-to-market debt adjustments and other non-core items.
Because net income attributable to noncontrolling interests is
added back, Core FFO, when used in this release, represents Core
FFO attributable to common shareholders and unitholders. 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 adjustments to reflect MAA's share of
EBITDAre of an unconsolidated affiliate. 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, property
acquisitions, capital expenditures relating to significant casualty
losses that management expects to be reimbursed by insurance
proceeds and corporate related capital expenditures. Because net
income attributable to noncontrolling interests is added back, FAD,
when used in this release, represents FAD attributable to common
shareholders and unitholders. 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 capital expenditures.
Funds From Operations (FFO)
FFO represents net income available for MAA
common shareholders (calculated in accordance with GAAP) excluding
gain or loss 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
release, represents FFO attributable to common shareholders and
unitholders. 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.
NON-GAAP FINANCIAL MEASURES (Continued)
Gross Real Estate Assets
Gross Real Estate Assets represents Real estate
assets, net plus Accumulated depreciation, Cash and cash
equivalents and 1031(b) exchange proceeds included in Restricted
cash. 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 and 1031(b)
exchange proceeds included in Restricted cash. 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 is a helpful tool in
evaluating operating performance 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 includes all storm-related
expenses related to hurricanes. 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 operating performance 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 excludes
storm-related expenses related to hurricanes. 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 operating performance 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 an applicable
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
when achieving 90% average physical 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 disposed of or identified for
disposition, communities that have experienced a significant
casualty loss, stabilized communities that do not meet the
requirements defined by the Same Store Portfolio, retail properties
and commercial properties.
Resident Turnover
Resident turnover represents resident move outs
excluding transfers within the Same Store Portfolio as a
percentage of expiring leases on a rolling twelve month basis
as of the end of the reported quarter.
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 when achieving
90% average physical 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
experienced a significant casualty loss are also excluded from the
Same Store Portfolio.
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SOURCE MAA