TABLE OF CONTENTS |
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3 | |
8 | |
9 | |
10 | |
11 | |
14 | |
15 | |
S-1 | |
Components of Net Operating Income/Components of Same Store Portfolio Property Operating Expenses | S-3 |
Multifamily Same Store Portfolio NOI Contribution Percentage | S-4 |
S-5 | |
S-8 | |
S-9 | |
S-9 | |
S-11 | |
S-12 |
2
EARNINGS RELEASE |
MAA REPORTS FOURTH QUARTER AND FULL YEAR 2022 RESULTS
GERMANTOWN, TN, February 1, 2023/PRNewswire/ -- Mid-America Apartment Communities, Inc., or MAA (NYSE: MAA), today announced operating results for the quarter ended December 31, 2022.
Fourth Quarter 2022 Operating Results |
| Three months ended December 31, |
|
| Year ended December 31, |
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|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
Earnings per common share - diluted |
| $ | 1.67 |
|
| $ | 1.60 |
|
| $ | 5.48 |
|
| $ | 4.61 |
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Funds from operations (FFO) per Share - diluted |
| $ | 2.12 |
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| $ | 2.01 |
|
| $ | 8.20 |
|
| $ | 7.20 |
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Core FFO per Share - diluted |
| $ | 2.32 |
|
| $ | 1.90 |
|
| $ | 8.50 |
|
| $ | 7.01 |
|
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, “We closed 2022 with better than expected results and carry good momentum into the new year. As the broader economy adjusts to a higher interest rate environment, we believe that MAA is well positioned to capture another year of solid performance from our existing portfolio. Supported by a strong balance sheet, the company is also in position to capture new growth opportunities that we believe are likely to emerge.”
Highlights
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 twelve months ended December 31, 2022 as compared to the same periods in the prior year are summarized below:
|
| Three months ended December 31, 2022 vs. 2021 |
| Twelve months ended December 31, 2022 vs. 2021 | ||||||||||||
|
| Revenues |
| Expenses (1) |
| NOI |
| Average Effective Rent per Unit |
| Revenues |
| Expenses (2) |
| NOI |
| Average Effective Rent per Unit |
Same Store Operating Growth |
| 13.6% |
| 7.9% |
| 16.8% |
| 14.9% |
| 13.5% |
| 7.6% |
| 17.1% |
| 14.6% |
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.
3
Same Store Portfolio operating statistics for the three and twelve months ended December 31, 2022 are summarized below:
|
| Three months ended December 31, 2022 |
| Twelve months ended December 31, 2022 |
| December 31, 2022 | ||||||||
|
| Average Effective Rent per Unit |
|
| Average Physical Occupancy |
| Average Effective Rent per Unit |
|
| Average Physical Occupancy |
| Resident Turnover | ||
Same Store Operating Statistics |
| $ | 1,646 |
|
| 95.6% |
| $ | 1,565 |
|
| 95.7% |
| 46.1% |
Same Store Portfolio lease pricing for leases effective during the fourth quarter of 2022, as compared to the prior lease, increased 2.2% for leases to new move-in residents, reflecting typically slower seasonal leasing volumes, and increased 10.1% for renewing leases, which produced an increase of 5.7% for both new and renewing leases on a blended basis. The rent-to-resident-income relationship for new leases signed during the fourth quarter of 2022 remained consistent with recent trends in the range of 22%.
Same Store Portfolio lease pricing for leases effective during the year ended December 31, 2022, as compared to the prior lease, increased 13.0% for leases to new move-in residents and increased 14.8% for renewing leases, which produced an increase of 13.9% for both new and renewing leases on a blended basis.
Acquisition and Disposition Activity
During the fourth quarter of 2022, MAA closed on the pre-purchase of a multifamily community, Alta 10th, located in the Charlotte, North Carolina market. The community will be developed through a joint venture with a local developer. Approximately $10 million has been funded as of December 31, 2022, primarily related to land, with development expected to begin in the second half of 2023. During the fourth quarter of 2022, MAA also acquired a six acre land parcel in the Raleigh, North Carolina market for approximately $9 million and started development of MAA Nixie on the property. 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 fourth quarter of 2022, MAA closed on the disposition of a 396-unit multifamily community in Maryland and a 288-unit multifamily community in the Austin, Texas market for combined gross proceeds of $157.7 million, resulting in a combined gain on the sale of depreciable real estate assets of $82.8 million.
Development and Lease-up Activity
A summary of MAA’s development communities under construction as of the end of the fourth quarter of 2022 is set forth below (dollars in thousands):
|
|
| Units as of |
|
| Development Costs as of |
|
| Expected Project |
| ||||||||||||||||||||||||||||
Total |
|
| December 31, 2022 |
|
| December 31, 2022 |
|
| Completions By Year |
| ||||||||||||||||||||||||||||
Development |
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| Expected |
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| Spend |
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| Expected |
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Projects |
|
| Total |
|
| Delivered |
|
| Leased |
|
| Total |
|
| to Date |
|
| Remaining |
|
| 2023 |
|
| 2024 |
|
| 2025 |
| ||||||||||
| 6 |
|
|
| 2,310 |
|
|
| — |
|
|
| — |
|
| $ | 728,700 |
|
| $ | 291,699 |
|
| $ | 437,001 |
|
|
| 2 |
|
|
| 2 |
|
|
| 2 |
|
The expected average stabilized NOI yield on these communities is 5.6%. During the fourth quarter of 2022, MAA funded $67.0 million of costs for current and planned projects, including predevelopment activities.
A summary of the total units, cost and the average physical occupancy of MAA’s lease-up communities as of the end of the fourth quarter of 2022 is set forth below (dollars in thousands):
Total |
|
| As of December 31, 2022 |
| ||||||||||
Lease-Up |
|
| Total |
|
| Physical |
|
| Spend |
| ||||
Projects (1) |
|
| Units |
|
| Occupancy |
|
| to Date |
| ||||
| 2 |
|
|
| 694 |
|
|
| 74.6 | % |
| $ | 198,128 |
|
Property Redevelopment and Repositioning Activity
A summary of MAA’s interior redevelopment program and Smart Home technology initiative as of the end of the fourth quarter of 2022 is set forth below:
|
| As of December 31, 2022 |
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| |||||||||||||
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| Units |
|
| Units |
|
| Average Cost |
|
| Increase in Average |
|
| ||||
|
| Completed |
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| Completed |
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| per Unit |
|
| Effective Rent per Unit |
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|
| QTD |
|
| YTD |
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| YTD |
|
| YTD |
|
| ||||
Redevelopment |
|
| 1,327 |
|
|
| 6,574 |
|
| $ | 6,109 |
|
| $ | 133 |
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Smart Home |
|
| 2,921 |
|
|
| 24,029 |
|
| $ | 1,535 |
|
| $ | 25 |
| (1) |
As of December 31, 2022, MAA had completed installation of the Smart Home technology (unit entry locks, mobile control of lights and thermostat and leak monitoring) in over 71,000 units across its apartment community portfolio since the initiative began during the first quarter of 2019.
4
During the fourth quarter of 2022, MAA continued its property repositioning program to upgrade and reposition the amenity and common areas at select apartment communities. The program includes targeted plans to move all units at the properties to higher rents that are expected to deliver yields on cost averaging 8%. During the year ended December 31, 2022, work continued on properties selected for this program in 2021. For the year ended December 31, 2022, MAA spent $19.3 million on this program capturing yields on cost averaging approximately 17% between completed projects and those current projects where properties have begun repricing units to higher rents.
Capital Expenditures
A summary of MAA’s capital expenditures and Funds Available for Distribution (FAD) for the three and twelve months ended December 31, 2022 and 2021 is set forth below (dollars in millions, except per Share data):
|
| Three months ended December 31, |
|
| Year ended December 31, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
Core FFO |
| $ | 274.7 |
|
| $ | 225.2 |
|
| $ | 1,008.2 |
|
| $ | 830.6 |
|
Recurring capital expenditures |
|
| (13.9 | ) |
|
| (19.3 | ) |
|
| (98.2 | ) |
|
| (81.1 | ) |
Core adjusted FFO (Core AFFO) |
|
| 260.8 |
|
|
| 205.9 |
|
|
| 910.0 |
|
|
| 749.5 |
|
Redevelopment, revenue enhancing, commercial and other capital expenditures |
|
| (61.9 | ) |
|
| (39.1 | ) |
|
| (194.9 | ) |
|
| (154.0 | ) |
FAD |
| $ | 198.9 |
|
| $ | 166.8 |
|
| $ | 715.1 |
|
| $ | 595.5 |
|
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Core FFO per Share - diluted |
| $ | 2.32 |
|
| $ | 1.90 |
|
| $ | 8.50 |
|
| $ | 7.01 |
|
Core AFFO per Share - diluted |
| $ | 2.20 |
|
| $ | 1.74 |
|
| $ | 7.67 |
|
| $ | 6.32 |
|
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 December 31, 2022, MAA had $1.3 billion of combined cash and available capacity under MAALP’s unsecured revolving credit facility.
Dividends and distributions paid on shares of common stock and noncontrolling interests during the fourth quarter of 2022 were $148.3 million, as compared to $121.5 million for the same period in the prior year.
In January 2023, MAA physically settled its two forward sale agreements with respect to a total of 1.1 million shares of its common stock and received net proceeds of approximately $204 million.
Balance sheet highlights as of December 31, 2022 are summarized below (dollars in billions):
Total debt to adjusted total assets (1) |
| Net Debt/Adjusted EBITDAre (2) |
| Total debt outstanding |
|
| Average effective interest rate |
| Fixed rate debt as a % of total debt |
| Total debt average years to maturity |
| ||
28.4% |
| 3.71x |
| $ | 4.4 |
|
| 3.4% |
| 99.5% |
|
| 7.9 |
|
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.
ESG
As of the end of 2022, MAA’s corporate initiatives have led to significant progress in key social and environmental performance areas. We have achieved a 21.9% reduction in energy use intensity and a 30.8% reduction in GHG emissions intensity from our 2018 baseline, meeting our goal seven years before our original 2028 target, and we believe we are on track to achieve the same in indoor water use intensity. Additionally, we have updated 35% of our portfolio to maximize energy efficiency and now have 25 green-certified communities, with more in the pipeline.
We also have a number of community engagement efforts underway and have reported our progress through our annual Corporate Sustainability Report, CDP disclosure, and GRESB assessment, the latter of which we have now improved year over year since our first submission in 2020. We will continue to focus on deepening engagement, establishing new targets, and building an integrated pathway for ESG, which is an integral component of our continued resiliency and creates a positive impact for our residents, associates, and investors.
116th Consecutive Quarterly Common Dividend Declared
MAA declared its 116th consecutive quarterly common dividend, which was paid on January 31, 2023 to holders of record on January 13, 2023. The current annual dividend rate is $5.60 per common share, an increase of 12% from the immediately prior rate. 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.
5
2023 Earnings and Same Store Portfolio Guidance
MAA is providing initial 2023 guidance for Net income per diluted common share, Core FFO per Share and Core AFFO per Share, along with its expectations for growth of Property revenue, Property operating expense and NOI for the Same Store Portfolio in 2023. MAA expects to update its 2023 Net income per diluted 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 |
|
|
Earnings: |
| Full Year 2023 |
Earnings per common share - diluted |
| $5.97 to $6.37 |
Core FFO per Share - diluted |
| $8.88 to $9.28 |
Core AFFO per Share - diluted |
| $7.96 to $8.36 |
|
|
|
MAA Same Store Portfolio: |
|
|
Property revenue growth |
| 5.25% to 7.25% |
Property operating expense growth |
| 5.15% to 7.15% |
NOI growth |
| 5.30% to 7.30% |
MAA expects Core FFO for the first quarter of 2023 to be in the range of $2.14 to $2.30 per Share, or $2.22 per Share at the midpoint. MAA does not forecast Net income per diluted 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.
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 fourth quarter results on February 2, 2023, at 9:00 AM Central Time. The conference call-in number is 877-830-2598. 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 December 31, 2022, 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.
6
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:
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.
7
FINANCIAL HIGHLIGHTS |
Dollars in thousands, except per share data |
| Three months ended December 31, |
|
| Year ended December 31, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
Rental and other property revenues |
| $ | 527,965 |
|
| $ | 463,575 |
|
| $ | 2,019,866 |
|
| $ | 1,778,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income available for MAA common shareholders |
| $ | 192,699 |
|
| $ | 184,719 |
|
| $ | 633,748 |
|
| $ | 530,103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total NOI (1) |
| $ | 346,791 |
|
| $ | 296,477 |
|
| $ | 1,296,172 |
|
| $ | 1,106,917 |
|
|
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|
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|
|
|
|
|
|
|
|
| ||||
Earnings per common share: (2) |
|
|
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|
|
|
|
|
|
| ||||
Basic |
| $ | 1.67 |
|
| $ | 1.60 |
|
| $ | 5.49 |
|
| $ | 4.62 |
|
Diluted |
| $ | 1.67 |
|
| $ | 1.60 |
|
| $ | 5.48 |
|
| $ | 4.61 |
|
|
|
|
|
|
|
|
|
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|
| ||||
Funds from operations per Share - diluted: (2) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
FFO (1) |
| $ | 2.12 |
|
| $ | 2.01 |
|
| $ | 8.20 |
|
| $ | 7.20 |
|
Core FFO (1) |
| $ | 2.32 |
|
| $ | 1.90 |
|
| $ | 8.50 |
|
| $ | 7.01 |
|
Core AFFO (1) |
| $ | 2.20 |
|
| $ | 1.74 |
|
| $ | 7.67 |
|
| $ | 6.32 |
|
|
|
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|
|
|
|
|
|
|
|
|
| ||||
Dividends declared per common share |
| $ | 1.4000 |
|
| $ | 1.0875 |
|
| $ | 4.9875 |
|
| $ | 4.1625 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Dividends/Core FFO (diluted) payout ratio |
|
| 60.3 | % |
|
| 57.2 | % |
|
| 58.7 | % |
|
| 59.4 | % |
Dividends/Core AFFO (diluted) payout ratio |
|
| 63.6 | % |
|
| 62.5 | % |
|
| 65.0 | % |
|
| 65.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Consolidated interest expense |
| $ | 38,084 |
|
| $ | 39,108 |
|
| $ | 154,747 |
|
| $ | 156,881 |
|
Mark-to-market debt adjustment |
|
| 13 |
|
|
| (36 | ) |
|
| (77 | ) |
|
| (270 | ) |
Debt discount and debt issuance cost amortization |
|
| (1,528 | ) |
|
| (1,474 | ) |
|
| (5,985 | ) |
|
| (5,383 | ) |
Capitalized interest |
|
| 2,582 |
|
|
| 1,939 |
|
|
| 8,728 |
|
|
| 9,720 |
|
Total interest incurred |
| $ | 39,151 |
|
| $ | 39,537 |
|
| $ | 157,413 |
|
| $ | 160,948 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Amortization of principal on notes payable |
| $ | 358 |
|
| $ | 337 |
|
| $ | 1,401 |
|
| $ | 1,516 |
|
Dollars in thousands, except share price |
|
|
|
|
|
| ||
|
| December 31, 2022 |
|
| December 31, 2021 |
| ||
Gross Assets (1) |
| $ | 15,543,912 |
|
| $ | 15,133,343 |
|
Gross Real Estate Assets (1) |
| $ | 15,336,793 |
|
| $ | 14,865,818 |
|
Total debt |
| $ | 4,414,903 |
|
| $ | 4,516,690 |
|
Common shares and units outstanding |
|
| 118,645,269 |
|
|
| 118,542,994 |
|
Share price |
| $ | 156.99 |
|
| $ | 229.44 |
|
Book equity value |
| $ | 6,210,419 |
|
| $ | 6,184,092 |
|
Market equity value |
| $ | 18,626,121 |
|
| $ | 27,198,505 |
|
Net Debt/Adjusted EBITDAre (2) |
| 3.71x |
|
| 4.39x |
|
8
CONSOLIDATED STATEMENTS OF OPERATIONS |
Dollars in thousands, except per share data (Unaudited) |
| Three months ended December 31, |
|
| Year ended December 31, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Rental and other property revenues |
| $ | 527,965 |
|
| $ | 463,575 |
|
| $ | 2,019,866 |
|
| $ | 1,778,082 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Operating expenses, excluding real estate taxes and insurance |
|
| 106,594 |
|
|
| 100,164 |
|
|
| 435,108 |
|
|
| 404,288 |
|
Real estate taxes and insurance |
|
| 74,580 |
|
|
| 66,934 |
|
|
| 288,586 |
|
|
| 266,877 |
|
Depreciation and amortization |
|
| 138,237 |
|
|
| 135,495 |
|
|
| 542,998 |
|
|
| 533,433 |
|
Total property operating expenses |
|
| 319,411 |
|
|
| 302,593 |
|
|
| 1,266,692 |
|
|
| 1,204,598 |
|
Property management expenses |
|
| 17,034 |
|
|
| 15,210 |
|
|
| 65,463 |
|
|
| 55,732 |
|
General and administrative expenses |
|
| 14,742 |
|
|
| 14,121 |
|
|
| 58,833 |
|
|
| 52,884 |
|
Interest expense |
|
| 38,084 |
|
|
| 39,108 |
|
|
| 154,747 |
|
|
| 156,881 |
|
Gain on sale of depreciable real estate assets |
|
| (82,799 | ) |
|
| (85,913 | ) |
|
| (214,762 | ) |
|
| (220,428 | ) |
Gain on sale of non-depreciable real estate assets |
|
| — |
|
|
| (609 | ) |
|
| (809 | ) |
|
| (811 | ) |
Other non-operating expense (income) |
|
| 23,465 |
|
|
| (19,345 | ) |
|
| 42,713 |
|
|
| (33,902 | ) |
Income before income tax expense |
|
| 198,028 |
|
|
| 198,410 |
|
|
| 646,989 |
|
|
| 563,128 |
|
Income tax benefit (expense) |
|
| 458 |
|
|
| (7,790 | ) |
|
| 6,208 |
|
|
| (13,637 | ) |
Income from continuing operations before real estate joint venture activity |
|
| 198,486 |
|
|
| 190,620 |
|
|
| 653,197 |
|
|
| 549,491 |
|
Income from real estate joint venture |
|
| 450 |
|
|
| 296 |
|
|
| 1,579 |
|
|
| 1,211 |
|
Net income |
|
| 198,936 |
|
|
| 190,916 |
|
|
| 654,776 |
|
|
| 550,702 |
|
Net income attributable to noncontrolling interests |
|
| 5,315 |
|
|
| 5,275 |
|
|
| 17,340 |
|
|
| 16,911 |
|
Net income available for shareholders |
|
| 193,621 |
|
|
| 185,641 |
|
|
| 637,436 |
|
|
| 533,791 |
|
Dividends to MAA Series I preferred shareholders |
|
| 922 |
|
|
| 922 |
|
|
| 3,688 |
|
|
| 3,688 |
|
Net income available for MAA common shareholders |
| $ | 192,699 |
|
| $ | 184,719 |
|
| $ | 633,748 |
|
| $ | 530,103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Earnings per common share - basic: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income available for common shareholders |
| $ | 1.67 |
|
| $ | 1.60 |
|
| $ | 5.49 |
|
| $ | 4.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Earnings per common share - diluted: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income available for common shareholders |
| $ | 1.67 |
|
| $ | 1.60 |
|
| $ | 5.48 |
|
| $ | 4.61 |
|
SHARE AND UNIT DATA |
Shares and units in thousands |
| Three months ended December 31, |
|
| Year ended December 31, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
Net Income Shares (1) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares - basic |
|
| 115,398 |
|
|
| 115,158 |
|
|
| 115,344 |
|
|
| 114,717 |
|
Effect of dilutive securities |
|
| 251 |
|
|
| 458 |
|
|
| 239 |
|
|
| 322 |
|
Weighted average common shares - diluted |
|
| 115,649 |
|
|
| 115,616 |
|
|
| 115,583 |
|
|
| 115,039 |
|
Funds From Operations Shares And Units |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares and units - basic |
|
| 118,568 |
|
|
| 118,433 |
|
|
| 118,538 |
|
|
| 118,400 |
|
Weighted average common shares and units - diluted |
|
| 118,646 |
|
|
| 118,637 |
|
|
| 118,618 |
|
|
| 118,519 |
|
Period End Shares And Units |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Common shares at December 31, |
|
| 115,480 |
|
|
| 115,337 |
|
|
| 115,480 |
|
|
| 115,337 |
|
Operating Partnership units at December 31, |
|
| 3,165 |
|
|
| 3,206 |
|
|
| 3,165 |
|
|
| 3,206 |
|
Total common shares and units at December 31, |
|
| 118,645 |
|
|
| 118,543 |
|
|
| 118,645 |
|
|
| 118,543 |
|
9
CONSOLIDATED BALANCE SHEETS |
Dollars in thousands (Unaudited) |
|
|
|
|
|
| ||
|
| December 31, 2022 |
|
| December 31, 2021 |
| ||
Assets |
|
|
|
|
|
| ||
Real estate assets: |
|
|
|
|
|
| ||
Land |
| $ | 2,008,364 |
|
| $ | 1,977,813 |
|
Buildings and improvements and other |
|
| 12,841,947 |
|
|
| 12,454,439 |
|
Development and capital improvements in progress |
|
| 332,035 |
|
|
| 247,970 |
|
|
|
| 15,182,346 |
|
|
| 14,680,222 |
|
Less: Accumulated depreciation |
|
| (4,302,747 | ) |
|
| (3,848,161 | ) |
|
|
| 10,879,599 |
|
|
| 10,832,061 |
|
Undeveloped land |
|
| 64,312 |
|
|
| 24,015 |
|
Investment in real estate joint venture |
|
| 42,290 |
|
|
| 42,827 |
|
Real estate assets, net |
|
| 10,986,201 |
|
|
| 10,898,903 |
|
|
|
|
|
|
|
| ||
Cash and cash equivalents |
|
| 38,659 |
|
|
| 54,302 |
|
Restricted cash |
|
| 22,412 |
|
|
| 76,296 |
|
Other assets |
|
| 193,893 |
|
|
| 255,681 |
|
Total assets |
|
| 11,241,165 |
|
|
| 11,285,182 |
|
|
|
|
|
|
|
| ||
Liabilities and equity |
|
|
|
|
|
| ||
Liabilities: |
|
|
|
|
|
| ||
Unsecured notes payable |
| $ | 4,050,910 |
|
| $ | 4,151,375 |
|
Secured notes payable |
|
| 363,993 |
|
|
| 365,315 |
|
Accrued expenses and other liabilities |
|
| 615,843 |
|
|
| 584,400 |
|
Total liabilities |
|
| 5,030,746 |
|
|
| 5,101,090 |
|
|
|
|
|
|
|
| ||
Redeemable common stock |
|
| 20,671 |
|
|
| 30,185 |
|
|
|
|
|
|
|
| ||
Shareholders’ equity: |
|
|
|
|
|
| ||
Preferred stock |
|
| 9 |
|
|
| 9 |
|
Common stock |
|
| 1,152 |
|
|
| 1,151 |
|
Additional paid-in capital |
|
| 7,202,834 |
|
|
| 7,230,956 |
|
Accumulated distributions in excess of net income |
|
| (1,188,854 | ) |
|
| (1,255,807 | ) |
Accumulated other comprehensive loss |
|
| (10,052 | ) |
|
| (11,132 | ) |
Total MAA shareholders’ equity |
|
| 6,005,089 |
|
|
| 5,965,177 |
|
Noncontrolling interests - Operating Partnership units |
|
| 163,595 |
|
|
| 165,116 |
|
Total Company’s shareholders’ equity |
|
| 6,168,684 |
|
|
| 6,130,293 |
|
Noncontrolling interests - consolidated real estate entities |
|
| 21,064 |
|
|
| 23,614 |
|
Total equity |
|
| 6,189,748 |
|
|
| 6,153,907 |
|
Total liabilities and equity |
| $ | 11,241,165 |
|
| $ | 11,285,182 |
|
10
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 December 31, |
|
| Year ended December 31, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
Net income available for MAA common shareholders |
| $ | 192,699 |
|
| $ | 184,719 |
|
| $ | 633,748 |
|
| $ | 530,103 |
|
Depreciation and amortization of real estate assets |
|
| 136,469 |
|
|
| 133,634 |
|
|
| 535,835 |
|
|
| 526,220 |
|
Gain on sale of depreciable real estate assets |
|
| (82,799 | ) |
|
| (85,913 | ) |
|
| (214,762 | ) |
|
| (220,428 | ) |
Depreciation and amortization of real estate assets of real estate joint venture |
|
| 155 |
|
|
| 153 |
|
|
| 621 |
|
|
| 616 |
|
Net income attributable to noncontrolling interests |
|
| 5,315 |
|
|
| 5,275 |
|
|
| 17,340 |
|
|
| 16,911 |
|
FFO attributable to the Company |
|
| 251,839 |
|
|
| 237,868 |
|
|
| 972,782 |
|
|
| 853,422 |
|
Loss on embedded derivative in preferred shares (1) |
|
| 10,743 |
|
|
| 16,052 |
|
|
| 21,107 |
|
|
| 4,560 |
|
Gain on sale of non-depreciable real estate assets |
|
| — |
|
|
| (609 | ) |
|
| (809 | ) |
|
| (811 | ) |
Loss (gain) on investments, net of tax (1)(2) |
|
| 4,786 |
|
|
| (26,644 | ) |
|
| 35,822 |
|
|
| (40,875 | ) |
Casualty related (recoveries) charges, net (3) |
|
| (759 | ) |
|
| (480 | ) |
|
| (29,930 | ) |
|
| 1,524 |
|
Loss on debt extinguishment (1) |
|
| — |
|
|
| — |
|
|
| 47 |
|
|
| 13,391 |
|
Legal costs and settlements, net (1) |
|
| 8,000 |
|
|
| (1,451 | ) |
|
| 8,535 |
|
|
| (2,167 | ) |
COVID-19 related costs (1) |
|
| 73 |
|
|
| 390 |
|
|
| 575 |
|
|
| 1,301 |
|
Mark-to-market debt adjustment (4) |
|
| (13 | ) |
|
| 36 |
|
|
| 77 |
|
|
| 270 |
|
Core FFO |
|
| 274,669 |
|
|
| 225,162 |
|
|
| 1,008,206 |
|
|
| 830,615 |
|
Recurring capital expenditures |
|
| (13,825 | ) |
|
| (19,297 | ) |
|
| (98,168 | ) |
|
| (81,106 | ) |
Core AFFO |
|
| 260,844 |
|
|
| 205,865 |
|
|
| 910,038 |
|
|
| 749,509 |
|
Redevelopment capital expenditures |
|
| (23,755 | ) |
|
| (15,835 | ) |
|
| (101,035 | ) |
|
| (85,467 | ) |
Revenue enhancing capital expenditures |
|
| (26,472 | ) |
|
| (13,645 | ) |
|
| (65,572 | ) |
|
| (43,133 | ) |
Commercial capital expenditures |
|
| (1,938 | ) |
|
| (1,539 | ) |
|
| (4,692 | ) |
|
| (3,842 | ) |
Other capital expenditures (5) |
|
| (9,822 | ) |
|
| (8,086 | ) |
|
| (23,595 | ) |
|
| (21,561 | ) |
FAD |
| $ | 198,857 |
|
| $ | 166,760 |
|
| $ | 715,144 |
|
| $ | 595,506 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Dividends and distributions paid |
| $ | 148,306 |
|
| $ | 121,505 |
|
| $ | 554,532 |
|
| $ | 485,898 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares - diluted |
|
| 115,649 |
|
|
| 115,616 |
|
|
| 115,583 |
|
|
| 115,039 |
|
FFO weighted average common shares and units - diluted |
|
| 118,646 |
|
|
| 118,637 |
|
|
| 118,618 |
|
|
| 118,519 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Earnings per common share - diluted: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income available for common shareholders |
| $ | 1.67 |
|
| $ | 1.60 |
|
| $ | 5.48 |
|
| $ | 4.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
FFO per Share - diluted |
| $ | 2.12 |
|
| $ | 2.01 |
|
| $ | 8.20 |
|
| $ | 7.20 |
|
Core FFO per Share - diluted |
| $ | 2.32 |
|
| $ | 1.90 |
|
| $ | 8.50 |
|
| $ | 7.01 |
|
Core AFFO per Share - diluted |
| $ | 2.20 |
|
| $ | 1.74 |
|
| $ | 7.67 |
|
| $ | 6.32 |
|
11
RECONCILIATION OF NET OPERATING INCOME TO NET INCOME AVAILABLE FOR MAA COMMON SHAREHOLDERS |
Dollars in thousands |
| Three Months Ended |
|
| Year Ended |
| ||||||||||||||
|
| December 31, |
|
| September 30, |
|
| December 31, |
|
| December 31, |
|
| December 31, |
| |||||
Net Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Same Store NOI |
| $ | 332,199 |
|
| $ | 315,616 |
|
| $ | 284,425 |
|
| $ | 1,242,695 |
|
| $ | 1,061,572 |
|
Non-Same Store and Other NOI |
|
| 14,592 |
|
|
| 13,744 |
|
|
| 12,052 |
|
|
| 53,477 |
|
|
| 45,345 |
|
Total NOI |
|
| 346,791 |
|
|
| 329,360 |
|
|
| 296,477 |
|
|
| 1,296,172 |
|
|
| 1,106,917 |
|
Depreciation and amortization |
|
| (138,237 | ) |
|
| (136,879 | ) |
|
| (135,495 | ) |
|
| (542,998 | ) |
|
| (533,433 | ) |
Property management expenses |
|
| (17,034 | ) |
|
| (16,262 | ) |
|
| (15,210 | ) |
|
| (65,463 | ) |
|
| (55,732 | ) |
General and administrative expenses |
|
| (14,742 | ) |
|
| (12,188 | ) |
|
| (14,121 | ) |
|
| (58,833 | ) |
|
| (52,884 | ) |
Interest expense |
|
| (38,084 | ) |
|
| (38,637 | ) |
|
| (39,108 | ) |
|
| (154,747 | ) |
|
| (156,881 | ) |
Gain (loss) on sale of depreciable real estate assets |
|
| 82,799 |
|
|
| (1 | ) |
|
| 85,913 |
|
|
| 214,762 |
|
|
| 220,428 |
|
Gain on sale of non-depreciable real estate assets |
|
| — |
|
|
| 431 |
|
|
| 609 |
|
|
| 809 |
|
|
| 811 |
|
Other non-operating (expense) income |
|
| (23,465 | ) |
|
| (1,718 | ) |
|
| 19,345 |
|
|
| (42,713 | ) |
|
| 33,902 |
|
Income tax benefit (expense) |
|
| 458 |
|
|
| 1,256 |
|
|
| (7,790 | ) |
|
| 6,208 |
|
|
| (13,637 | ) |
Income from real estate joint venture |
|
| 450 |
|
|
| 341 |
|
|
| 296 |
|
|
| 1,579 |
|
|
| 1,211 |
|
Net income attributable to noncontrolling interests |
|
| (5,315 | ) |
|
| (3,392 | ) |
|
| (5,275 | ) |
|
| (17,340 | ) |
|
| (16,911 | ) |
Dividends to MAA Series I preferred shareholders |
|
| (922 | ) |
|
| (922 | ) |
|
| (922 | ) |
|
| (3,688 | ) |
|
| (3,688 | ) |
Net income available for MAA common shareholders |
| $ | 192,699 |
|
| $ | 121,389 |
|
| $ | 184,719 |
|
| $ | 633,748 |
|
| $ | 530,103 |
|
12
RECONCILIATION OF EBITDA, EBITDAre AND ADJUSTED EBITDAre TO NET INCOME |
Dollars in thousands |
| Three Months Ended |
|
| Year Ended |
| ||||||||||
|
| December 31, 2022 |
|
| December 31, 2021 |
|
| December 31, 2022 |
|
| December 31, 2021 |
| ||||
Net income |
| $ | 198,936 |
|
| $ | 190,916 |
|
| $ | 654,776 |
|
| $ | 550,702 |
|
Depreciation and amortization |
|
| 138,237 |
|
|
| 135,495 |
|
|
| 542,998 |
|
|
| 533,433 |
|
Interest expense |
|
| 38,084 |
|
|
| 39,108 |
|
|
| 154,747 |
|
|
| 156,881 |
|
Income tax (benefit) expense |
|
| (458 | ) |
|
| 7,790 |
|
|
| (6,208 | ) |
|
| 13,637 |
|
EBITDA |
|
| 374,799 |
|
|
| 373,309 |
|
|
| 1,346,313 |
|
|
| 1,254,653 |
|
Gain on sale of depreciable real estate assets |
|
| (82,799 | ) |
|
| (85,913 | ) |
|
| (214,762 | ) |
|
| (220,428 | ) |
Adjustments to reflect the Company’s share of EBITDAre of unconsolidated affiliates |
|
| 338 |
|
|
| 338 |
|
|
| 1,357 |
|
|
| 1,352 |
|
EBITDAre |
|
| 292,338 |
|
|
| 287,734 |
|
|
| 1,132,908 |
|
|
| 1,035,577 |
|
Loss on embedded derivative in preferred shares (1) |
|
| 10,743 |
|
|
| 16,052 |
|
|
| 21,107 |
|
|
| 4,560 |
|
Gain on sale of non-depreciable real estate assets |
|
| — |
|
|
| (609 | ) |
|
| (809 | ) |
|
| (811 | ) |
Loss (gain) on investments (1) |
|
| 6,068 |
|
|
| (33,713 | ) |
|
| 45,357 |
|
|
| (51,714 | ) |
Casualty related (recoveries) charges, net (2) |
|
| (759 | ) |
|
| (480 | ) |
|
| (29,930 | ) |
|
| 1,524 |
|
Loss on debt extinguishment (1) |
|
| — |
|
|
| — |
|
|
| 47 |
|
|
| 13,391 |
|
Legal costs and settlements, net (1) |
|
| 8,000 |
|
|
| (1,451 | ) |
|
| 8,535 |
|
|
| (2,167 | ) |
COVID-19 related costs (1) |
|
| 73 |
|
|
| 390 |
|
|
| 575 |
|
|
| 1,301 |
|
Adjusted EBITDAre |
| $ | 316,463 |
|
| $ | 267,923 |
|
| $ | 1,177,790 |
|
| $ | 1,001,661 |
|
RECONCILIATION OF NET DEBT TO UNSECURED NOTES PAYABLE AND SECURED NOTES PAYABLE |
Dollars in thousands |
|
|
|
|
|
| ||
|
| December 31, 2022 |
|
| December 31, 2021 |
| ||
Unsecured notes payable |
| $ | 4,050,910 |
|
| $ | 4,151,375 |
|
Secured notes payable |
|
| 363,993 |
|
|
| 365,315 |
|
Total debt |
|
| 4,414,903 |
|
|
| 4,516,690 |
|
Cash and cash equivalents |
|
| (38,659 | ) |
|
| (54,302 | ) |
1031(b) exchange proceeds included in Restricted cash (1) |
|
| (9,186 | ) |
|
| (64,452 | ) |
Net Debt |
| $ | 4,367,058 |
|
| $ | 4,397,936 |
|
RECONCILIATION OF GROSS ASSETS TO TOTAL ASSETS |
Dollars in thousands |
|
|
|
|
|
| ||
|
| December 31, 2022 |
|
| December 31, 2021 |
| ||
Total assets |
| $ | 11,241,165 |
|
| $ | 11,285,182 |
|
Accumulated depreciation |
|
| 4,302,747 |
|
|
| 3,848,161 |
|
Gross Assets |
| $ | 15,543,912 |
|
| $ | 15,133,343 |
|
RECONCILIATION OF GROSS REAL ESTATE ASSETS TO REAL ESTATE ASSETS, NET |
Dollars in thousands |
|
|
|
|
|
| ||
|
| December 31, 2022 |
|
| December 31, 2021 |
| ||
Real estate assets, net |
| $ | 10,986,201 |
|
| $ | 10,898,903 |
|
Accumulated depreciation |
|
| 4,302,747 |
|
|
| 3,848,161 |
|
Cash and cash equivalents |
|
| 38,659 |
|
|
| 54,302 |
|
1031(b) exchange proceeds included in Restricted cash (1) |
|
| 9,186 |
|
|
| 64,452 |
|
Gross Real Estate Assets |
| $ | 15,336,793 |
|
| $ | 14,865,818 |
|
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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. 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. 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 unconsolidated affiliates. As an owner and operator of real estate, MAA considers EBITDAre to be an important measure of performance from core operations because EBITDAre does not include various expense items that are not indicative of operating performance. While MAA’s definition of EBITDAre is in accordance with NAREIT’s definition, it may differ from the methodology utilized by other companies to calculate EBITDAre. EBITDAre should not be considered as an alternative to Net income as an indicator of operating performance.
Funds Available for Distribution (FAD)
FAD is composed of Core FFO less total capital expenditures, excluding development spending, property acquisitions, capital expenditures relating to significant casualty losses that management expects to be reimbursed by insurance proceeds and corporate related capital expenditures. 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 document, represents FFO attributable to the Company. While MAA’s definition of FFO is in accordance with NAREIT’s definition, it may differ from the methodology for calculating FFO utilized by other companies and, accordingly, may not be comparable to such other companies. FFO should not be considered as an alternative to Net income available for MAA common shareholders as an indicator of operating performance. MAA believes that FFO is helpful in understanding operating performance in that FFO excludes depreciation and amortization of real estate assets. MAA believes that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies.
Gross Assets
Gross Assets represents Total assets plus Accumulated depreciation. MAA believes that Gross Assets can be used as a helpful tool in evaluating its balance sheet positions. MAA believes that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies.
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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.
CONTACT: Investor Relations of MAA, 866-576-9689 (toll free), investor.relations@maac.com
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