GERMANTOWN, Tenn., Jan. 29, 2020 /PRNewswire/ -- Mid-America
Apartment Communities, Inc., or MAA (NYSE: MAA), today announced
operating results for the quarter and year ended December 31,
2019.
Net Income Available for Common Shareholders
For the quarter ended December 31, 2019, net income
available for MAA common shareholders was $148.7 million, or $1.30 per diluted common share, compared to
$60.4 million, or $0.53 per diluted common share, for the quarter
ended December 31, 2018. Results for the quarter ended
December 31, 2019 included $82.8
million, or $0.72 per diluted
common share, of gains related to the sale of real estate assets.
Results for the quarter ended December 31, 2018 included
$0.6 million, or $0.01 per diluted common share, of gains related
to the sale of real estate assets.
For the year ended December 31, 2019, net income available
for MAA common shareholders was $350.1
million, or $3.07 per diluted
common share, compared to $219.2
million, or $1.93 per diluted
common share, for the year ended December 31, 2018. Results
for the year ended December 31, 2019 included $17.9 million, or $0.16 per diluted common share, of non-cash
income related to the fair value adjustment of the embedded
derivative in the MAA Series I preferred shares and $93.0 million, or $0.82 per diluted common share, of gains related
to the sale of real estate assets. Results for the year ended
December 31, 2018 included $2.6
million, or $0.02 per diluted
common share, of non-cash expense related to the embedded
derivative in the preferred shares and $4.5
million, or $0.04 per diluted
common share, of gains related to the sale of real estate
assets.
Funds from Operations (FFO)
For the quarter ended December 31, 2019, FFO was
$198.2 million, or $1.68 per diluted common share and unit, or per
Share, compared to $182.9 million, or
$1.55 per Share, for the quarter
ended December 31, 2018. Results for the quarter ended
December 31, 2019 included $2.8
million, or $0.02 per Share,
of gains related to the sale of non-depreciable real estate assets.
Results for the quarter ended December 31, 2018 included
$0.7 million, or $0.01 per Share, of gains related to the sale of
non-depreciable real estate assets.
For the year ended December 31, 2019, FFO was $773.2 million, or $6.55 per Share, compared to $712.7 million, or $6.04 per Share, for the year ended
December 31, 2018. Results for the year ended
December 31, 2019 included $17.9
million, or $0.15 per Share,
of non-cash income related to the embedded derivative in the
preferred shares and $12.0 million,
or $0.10 per Share, of gains related
to the sale of non-depreciable real estate assets. Results
for the year ended December 31, 2018 included $2.6 million, or $0.02 per Share, of non-cash expense related to
the embedded derivative in the preferred shares and $4.5 million, or $0.04 per Share, of gains related to the sale of
non-depreciable real estate assets.
A reconciliation of FFO to net income available for MAA common
shareholders, and an expanded discussion of the components of FFO,
can be found later in this release.
Eric Bolton, Chairman and Chief
Executive Officer, said, "Our Sunbelt markets continue to capture
growing demand for apartment housing. Steady job growth and
positive migration trends are generating favorable leasing
conditions across our portfolio. Fourth quarter performance
was ahead of expectations and we carry solid momentum into calendar
year 2020."
Highlights
- Property revenues from the Same Store Portfolio increased 4.1%
during the fourth quarter of 2019 as compared to the same period in
the prior year, driven by a 4.3% growth in Average Effective Rent
per Unit for the Same Store Portfolio. The growth in Average
Effective Rent per Unit was a 40 basis point improvement from the
third quarter of 2019.
- Property operating expenses for the Same Store Portfolio
increased 2.5% during the fourth quarter of 2019 as compared to the
same period in the prior year.
- Net Operating Income, or NOI, from the Same Store Portfolio
increased 5.0% during the fourth quarter of 2019 as compared to the
same period in the prior year.
- Strong demand for apartment housing continues to support low
resident turnover as resident move outs for the Same Store
Portfolio for the fourth quarter of 2019 remained low at 47.1% on a
rolling twelve month basis.
- During the fourth quarter of 2019, MAA acquired one multifamily
apartment community, a newly built 271-unit property in initial
lease-up located in Greenville, South
Carolina.
- During the fourth quarter of 2019, MAA also closed on the
pre-purchase of a 264-unit multifamily apartment community
development, Jefferson Sand Lake,
located in the Orlando, Florida
market and began development of the property. In addition, MAA
began development of a new 308-unit multifamily apartment
community, Long Point, located in
Houston, Texas.
- During the fourth quarter of 2019, MAA closed on the
disposition of all five of its properties located in the
Little Rock, Arkansas market
resulting in net gains on depreciable assets of $80.0 million.
- As of the end of the fourth quarter of 2019, MAA had seven
development projects under construction, containing 2,108 units,
with a total projected cost of $489.5
million and an estimated $345.6
million remaining to be funded.
- As of the end of the fourth quarter of 2019, MAA had four
properties in their initial lease-up, and physical occupancy for
the lease-up portfolio averaged 83.6%. Two properties are expected
to stabilize in the first quarter of 2020, one property in the
second quarter of 2020 and one property in the third quarter of
2020.
- During the year ended December 31,
2019, MAA completed renovation of 8,329 units under its
redevelopment program, achieving average rental rate increases of
9.8% above non-renovated units.
Same Store Portfolio Operating Results
To ensure comparable reporting with prior periods, the Same
Store Portfolio includes properties that were stabilized and owned
by MAA at the beginning of the previous year.
The Same Store Portfolio revenue growth of 4.1% during the
fourth quarter of 2019 was primarily a result of a 4.3% increase in
Average Effective Rent per Unit, as compared to the same period in
the prior year. Rent growth for the Same Store Portfolio for
both new and renewing leases, as compared to the prior lease, on a
combined basis increased an average of 2.6% during the fourth
quarter of 2019, a 100 basis point improvement from the same period
in the prior year. Average Physical Occupancy for the Same
Store Portfolio was 95.7% for the fourth quarter of 2019, a
decrease from the 96.1% in the same period in the prior year.
Property operating expenses increased 2.5% for the fourth quarter
of 2019 as compared to the same period in the prior year, resulting
in Same Store NOI growth of 5.0% for the fourth quarter of 2019 as
compared to the same period in the prior year.
The Same Store Portfolio revenue growth of 3.4% during the year
ended December 31, 2019 was primarily a result of a 3.6%
increase in Average Effective Rent per Unit, as compared to the
prior year. Rent growth for the Same Store Portfolio for both
new and renewing leases, as compared to the prior lease, on a
combined basis increased an average of 4.4% during the year ended
December 31, 2019, a 180 basis point improvement from the
prior year. Average Physical Occupancy for the Same Store
Portfolio was 95.9% for the year ended December 31, 2019, a
slight decrease from 96.1% in the prior year. Property
operating expenses increased 2.9% for the year ended
December 31, 2019 as compared to the prior year, resulting in
Same Store NOI growth of 3.8% for the year ended December 31,
2019 as compared to the prior year.
A reconciliation of NOI, including Same Store NOI, to net income
available for MAA common shareholders, and an expanded discussion
of the components of NOI, can be found later in this release.
Development and Lease-up Activity
During the fourth quarter of 2019, MAA completed construction on
the Phase III expansion of Post Parkside at Wade, located in Raleigh, North Carolina, and the completed
expansion moved into our lease-up portfolio. As of the end of
the fourth quarter of 2019, MAA had seven development communities
under construction. Total development costs for the seven
communities are projected to be $489.5
million, of which an estimated $345.6
million remained to be funded as of the end of the fourth
quarter of 2019. The expected average stabilized NOI yield on
these communities is 6.2%. During the fourth quarter of 2019, MAA
funded $41.3 million of construction
costs on current and completed development projects. MAA
expects to complete one of these developments in the second quarter
of 2020, one in the second half of 2020, one in the first half of
2021 and the remaining four developments in the second half of
2021.
During the fourth quarter of 2019, MAA had one apartment
community, Post Centennial Park, located in Atlanta, Georgia, complete its initial
lease-up and move into MAA's stabilized portfolio. As of the
end of the fourth quarter of 2019, MAA had four apartment
communities, containing a total of 640 units, remaining in initial
lease-up: Post Parkside at Wade III, located in Raleigh, North Carolina; 1201 Midtown II,
located in Charleston, South
Carolina; Sync 36 II, located in Denver, Colorado; and The Greene, located in Greenville, South Carolina. Physical
occupancy for these lease-up projects averaged 83.6% at the end of
the fourth quarter of 2019.
Acquisition and Disposition Activity
In November 2019, MAA acquired a
new 271-unit multifamily apartment community, The Greene, located in Greenville, South Carolina. The high-end
community is located in the West End corridor of the downtown
submarket of Greenville.
In October 2019, a consolidated
real estate entity owned by MAA and a private real estate company
acquired a 25 acre land parcel located in Orlando, Florida and began development work
during the fourth quarter of 2019.
During the fourth quarter of 2019, MAA exited the Little Rock, Arkansas market after closing on
the disposition of its five multifamily properties totaling 1,368
apartment units. MAA received combined gross proceeds of
$149.6 million and recognized
combined net gains on the sale of real estate assets of $80.0
million from the sale of these apartment communities.
During the fourth quarter of 2019, MAA also closed on the
disposition of two land parcels totaling 78 acres located in the
Gulf Shores, Alabama market for
combined net proceeds of $9.4
million, resulting in combined gains on the sale of
non-depreciable real estate assets of $2.8
million.
Redevelopment Activity
MAA continued its redevelopment program at select apartment
communities throughout the portfolio. During the fourth
quarter of 2019, MAA redeveloped the interiors of 1,733 units at an
average cost of $6,402 per unit,
bringing the total units renovated during the year ended
December 31, 2019 to 8,329 at an average cost
of $5,876 per unit, achieving average rental rate
increases of approximately 9.8% above non-renovated units.
Capital Expenditures
Recurring capital expenditures totaled $14.3 million for the fourth quarter of 2019, or
approximately $0.12 per Share, as
compared to $15.9 million, or
$0.13 per Share, for the same period
in the prior year. These expenditures led to Adjusted Funds
from Operations, or AFFO, of $1.56
per Share for the fourth quarter of 2019, compared to $1.42 per Share for the same period in the prior
year.
Redevelopment, revenue enhancing, commercial and other capital
expenditures during the fourth quarter of 2019 were $27.8 million, as compared to $31.8 million for the same period in the prior
year. These expenditures led to Funds Available for Distribution,
or FAD, of $156.1 million for the
fourth quarter of 2019, compared to $135.3
million for the same period in the prior year.
Recurring capital expenditures totaled $72.8 million for the year ended
December 31, 2019, or approximately $0.62 per Share, as compared to $72.0 million, or $0.61 per Share, for the prior year. These
expenditures led to AFFO of $5.93 per
Share for the year ended December 31, 2019, compared to
$5.43 per Share for the prior
year.
Redevelopment, revenue enhancing, commercial and other capital
expenditures during the year ended December 31, 2019 were
$117.4 million, as compared to
$125.6 million for the prior year.
These expenditures led to FAD of $583.0
million for the year ended December 31, 2019, compared
to $515.1 million for the prior
year.
A reconciliation of FFO, AFFO and FAD to net income available
for MAA common shareholders, and an expanded discussion of the
components of FFO, AFFO and FAD, can be found later in this
release.
Financing Activities
In November 2019, MAA's operating
partnership, Mid-America Apartments, L.P. (referred to as MAALP or
the Operating Partnership), issued $300.0
million of 2.750% senior unsecured notes due in 2030.
In connection with the bond transaction, MAALP cash-settled
$150 million in forward interest rate
swap agreements entered into during 2019 to effectively lock the
interest rate on the planned bond issuance, which produced an
effective interest rate of 3.065% over the term of the
bonds.
During the fourth quarter of 2019, MAALP retired $170.0 million of unsecured loans before maturity
and a $17.2 million secured property
mortgage at maturity.
As of December 31, 2019, MAA had approximately $947.7
million of combined cash and available capacity under MAALP's
unsecured revolving credit facility, net of commercial paper
borrowings.
Dividends and distributions paid on shares of common stock and
noncontrolling interests during the fourth quarter of 2019 were
$113.6 million, as compared to
$108.8 million for the same period in
the prior year.
During the fourth quarter of 2019, MAA sold 146,301 shares of
common stock for gross proceeds of $19.9
million through its at-the-market share offering
program.
Balance Sheet
As of December 31, 2019:
- Total debt to adjusted total assets (as defined in the
covenants for the bonds issued by MAALP) was 31.4%;
- Total debt outstanding was $4.5
billion with an average effective interest rate of
approximately 3.8%;
- 98.4% of total debt was fixed or hedged against rising interest
rates for an average of approximately 7.6 years; and
- Unencumbered NOI was 90.2% of total NOI, as compared to 92.6%
as of December 31, 2018.
104th Consecutive Quarterly Common Dividend Declared
MAA declared its 104th consecutive quarterly common dividend,
which will be paid on January 31,
2020 to holders of record on January
15, 2020. The current annual dividend rate is
$4.00 per common share, an increase
from the prior year's annual rate of $3.84.
2020 Net Income per Diluted Common Share and Core FFO and
Core AFFO per Share Guidance
MAA is providing initial 2020 guidance for Net income per
diluted common share, as well as Core FFO per Share, and Core AFFO
per Share. FFO, Core FFO and Core AFFO are non-GAAP 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 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. MAA intends to update Net income per diluted common
share, Core FFO per Share and Core AFFO per Share guidance on a
quarterly basis.
Net income per diluted common share is expected to be in the
range of $3.02 to $3.26 per diluted common share, or $3.14 per diluted common share at the midpoint,
for the full year of 2020. Core FFO per Share for the year is
expected to be in the range of $6.38
to $6.62 per Share, or $6.50 per Share at the midpoint. This initial
guidance is based on projections of Same Store Portfolio property
revenue growth of 3.25% to 4.25% for the full year based on
continued strong occupancy, low resident turnover and steady
leasing conditions, while Same Store Portfolio operating expense
growth is expected to be in the range of 3.75% to 4.75% for the
full year. A primary driver of the operating expense growth range
is the expectation of continued increases in property real estate
taxes. As a result, Same Store NOI growth for the full year is
expected to be 3.00% to 4.00%. FFO guidance for 2020 includes an
expected effective interest rate range of 3.9% to 4.1%. MAA expects
Core FFO for the first quarter of 2020 to be in the range of
$1.53 to $1.65 per Share, or $1.59 per Share at the midpoint. MAA does not
forecast Net income per diluted share on a quarterly basis as MAA
cannot accurately predict the timing of forecasted acquisition and
disposition activity within a particular quarter (rather than
during the course of the full year).
MAA expects total recurring capital expenditures for the full
year of 2020 to be approximately $79.0
million, which would produce expected Core AFFO per Share of
$5.71 to $5.95 per Share, or $5.83 per Share at the midpoint, for the full
year of 2020.
Supplemental Material and Conference Call
Supplemental data to this release can be found under the
"Filings and Financials" navigation tab on the "For Investors" page
of our website at www.maac.com. MAA will host a conference call to
further discuss fourth quarter results on Thursday, January 30, 2020 at 9:00 AM Central Time. The conference
call-in number is 877-830-2596. You may also join the live
webcast of the conference call by accessing the "For Investors"
page of our website at www.maac.com. MAA's filings with the
Securities and Exchange Commission, or SEC, are filed under the
registrant names of Mid-America Apartment Communities, Inc. and
Mid-America Apartments, L.P.
About MAA
MAA, an S&P 500 company, is a real estate investment trust,
or REIT, focused on delivering full-cycle and superior investment
performance for shareholders through the ownership, management,
acquisition, development and redevelopment of quality apartment
communities in the Southeast, Southwest, and Mid-Atlantic regions
of the United States. As of December 31, 2019, MAA had
ownership interest in 102,104 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
concerning forecasted operating performance and results, property
acquisitions and dispositions, joint venture activity, development
and renovation activity as well as other capital expenditures,
capital raising activities, rent and expense growth, occupancy,
financing activities, and interest rate and other economic
expectations. Words such as "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "estimates," and variations of such
words and similar expressions are intended to identify such
forward-looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors, 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 market
conditions, changes in supply and/or demand, competition, uninsured
losses, changes in tax and housing laws, or other factors;
- exposure, as a multifamily focused REIT, to risks inherent in
investments in a single industry and sector;
- adverse changes in real estate markets, including, but not
limited to, the extent of future demand for multifamily units in
our significant markets, barriers of entry into new markets which
we may seek to enter in the future, limitations on our ability to
increase rental rates, competition, our ability to identify and
consummate attractive acquisitions or development projects on
favorable terms, our ability to consummate any planned dispositions
in a timely manner on acceptable terms, and our ability to reinvest
sale proceeds in a manner that generates favorable returns;
- failure of new acquisitions to achieve anticipated results or
be efficiently integrated;
- failure of development communities to be completed within
budget and on a timely basis, if at all, to lease-up as anticipated
or to achieve anticipated results;
- unexpected capital needs;
- changes in operating costs, including real estate taxes,
utilities and insurance costs;
- inability to obtain appropriate insurance coverage at
reasonable rates, or at all, or losses from catastrophes in excess
of our insurance coverage;
- ability to obtain financing at favorable rates, if at all, and
refinance existing debt as it matures;
- level and volatility of interest or capitalization rates or
capital market conditions;
- loss of hedge accounting treatment for interest rate
swaps;
- the continuation of the good credit of our interest rate swap
providers;
- price volatility, dislocations and liquidity disruptions in the
financial markets and the resulting impact on financing;
- the effect of any rating agency actions on the cost and
availability of new debt financing;
- the effect of the phase-out of the London Interbank Offered
Rate, or LIBOR, as a variable rate debt benchmark by the end of
2021 and the transition to a different benchmark interest
rate;
- significant decline in market value of real estate serving as
collateral for mortgage obligations;
- significant change in the mortgage financing market that would
cause single-family housing, either as an owned or rental product,
to become a more significant competitive product;
- our ability to continue to satisfy complex rules in order to
maintain our status as a REIT for federal income tax purposes, the
ability of MAALP to satisfy the rules to maintain its status as a
partnership for federal income tax purposes, the ability of our
taxable REIT subsidiaries to maintain their status as such for
federal income tax purposes, and our ability and the ability of our
subsidiaries to operate effectively within the limitations imposed
by these rules;
- inability to attract and retain qualified personnel;
- cyber liability or potential liability for breaches of our or
our service providers' information technology systems, or business
operations disruptions;
- potential liability for environmental contamination;
- adverse legislative or regulatory tax changes;
- legal proceedings relating to various issues, which, among
other things, could result in a class action lawsuit;
- compliance costs associated with laws requiring access for
disabled persons or similar regulatory requirements; and
- other risks identified in this release and, from time to time,
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
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
|
|
2018
|
|
Rental and other
property revenues
|
|
$
|
416,817
|
|
|
$
|
398,148
|
|
|
$
|
1,641,017
|
|
|
|
|
$
|
1,571,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for MAA common shareholders
|
|
$
|
148,667
|
|
|
$
|
60,360
|
|
|
$
|
350,123
|
|
|
|
|
$
|
219,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total NOI
(1)
|
|
$
|
267,030
|
|
|
$
|
251,434
|
|
|
$
|
1,028,172
|
|
|
|
|
$
|
976,758
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.30
|
|
|
$
|
0.53
|
|
|
$
|
3.07
|
|
|
|
|
$
|
1.93
|
|
Diluted
|
|
$
|
1.30
|
|
|
$
|
0.53
|
|
|
$
|
3.07
|
|
|
|
|
$
|
1.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations
per Share - diluted: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
(1)(3)
|
|
$
|
1.68
|
|
|
$
|
1.55
|
|
|
$
|
6.55
|
|
|
|
|
$
|
6.04
|
|
AFFO
(1)(3)
|
|
$
|
1.56
|
|
|
$
|
1.42
|
|
|
$
|
5.93
|
|
|
|
|
$
|
5.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
1.0000
|
|
|
$
|
0.9600
|
|
|
$
|
3.8800
|
|
|
|
|
$
|
3.7275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends/ FFO
(diluted) payout ratio
|
|
|
59.5
|
%
|
|
|
61.9
|
%
|
|
|
59.2
|
%
|
|
|
|
|
61.7
|
%
|
Dividends/ AFFO
(diluted) payout ratio
|
|
|
64.1
|
%
|
|
|
67.6
|
%
|
|
|
65.4
|
%
|
|
|
|
|
68.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated interest
expense
|
|
$
|
43,698
|
|
|
$
|
44,454
|
|
|
$
|
179,847
|
|
|
|
|
$
|
173,594
|
|
Mark-to-market debt
adjustment
|
|
|
34
|
|
|
|
2,207
|
|
|
|
256
|
|
|
|
|
|
10,874
|
|
Debt discount and
debt issuance cost amortization
|
|
|
(1,170)
|
|
|
|
(1,534)
|
|
|
|
(6,098)
|
|
|
|
|
|
(5,885)
|
|
Capitalized
interest
|
|
|
1,042
|
|
|
|
407
|
|
|
|
2,889
|
|
|
|
|
|
2,047
|
|
Total interest
incurred
|
|
$
|
43,604
|
|
|
$
|
45,534
|
|
|
$
|
176,894
|
|
|
|
|
$
|
180,630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
principal on notes payable
|
|
$
|
1,779
|
|
|
$
|
2,704
|
|
|
$
|
7,247
|
|
|
|
|
$
|
10,611
|
|
|
|
(1)
|
A reconciliation of
the following items and an expanded discussion of their respective
components can be found later in this release: (i) NOI to Net
income available for MAA common shareholders; and (ii) FFO and AFFO
to Net income available for MAA common shareholders.
|
(2)
|
See the "Share and
Unit Data" section for additional information.
|
(3)
|
Results for the years
ended December 31, 2019 and 2018 included $0.15 per Share of
non-cash income and $0.02 per Share of non-cash expense,
respectively, related to the fair value adjustment of the embedded
derivative in the MAA Series I preferred shares.
|
FINANCIAL
HIGHLIGHTS (CONTINUED)
|
|
Dollars in
thousands, except share price
|
|
|
|
|
|
|
|
|
|
|
December 31,
2019
|
|
|
December 31,
2018
|
|
Gross Assets
(1)
|
|
$
|
14,185,703
|
|
|
$
|
13,873,068
|
|
Gross Real Estate
Assets (1)
|
|
$
|
13,996,700
|
|
|
$
|
13,735,247
|
|
Total debt
|
|
$
|
4,454,598
|
|
|
$
|
4,528,328
|
|
Common shares and
units outstanding
|
|
|
118,313,567
|
|
|
|
117,955,568
|
|
Share
price
|
|
$
|
131.86
|
|
|
$
|
95.70
|
|
Book equity
value
|
|
$
|
6,303,590
|
|
|
$
|
6,381,603
|
|
Market equity
value
|
|
$
|
15,600,827
|
|
|
$
|
11,288,348
|
|
Net Debt/Recurring
Adjusted EBITDAre (2) (3)
|
|
4.62x
|
|
|
4.99x
|
|
|
|
(1)
|
A reconciliation of
Gross Assets to Total assets and Gross Real Estate Assets to Real
estate assets, net, along with an expanded discussion of their
components, can be found later in this release.
|
(2)
|
Recurring Adjusted
EBITDAre in this calculation represents the trailing twelve
month period for each date presented. A reconciliation of the
following items and an expanded discussion of their respective
components can be found later in this release: (i) EBITDA,
EBITDAre, Adjusted EBITDAre and Recurring Adjusted
EBITDAre to Net income; and (ii) Net Debt to Unsecured notes
payable and Secured notes payable.
|
(3)
|
Recurring Adjusted
EBITDAre for the trailing twelve months ended
December 31, 2019 included the impact of the non-cash income
related to the fair value adjustment of the embedded derivative in
the MAA Series I preferred shares. The inclusion of this
non-cash income item lowered Net Debt/Recurring Adjusted
EBITDAre by 9 basis points for the trailing twelve months
ended December 31, 2019. Recurring Adjusted EBITDAre
for the trailing twelve months ended December 31, 2018
included the impact of the non-cash expense related to the fair
value adjustment of the embedded derivative in the MAA Series I
preferred shares. The inclusion of this non-cash expense item
increased Net Debt/Recurring Adjusted EBITDAre by 1 basis
point for the trailing twelve months ended December 31,
2018.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
Dollars in
thousands, except per share data
|
|
Three months
ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental and other
property revenues
|
|
$
|
416,817
|
|
|
$
|
398,148
|
|
|
$
|
1,641,017
|
|
|
$
|
1,571,346
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expense,
excluding real estate taxes and insurance
|
|
|
91,169
|
|
|
|
91,264
|
|
|
|
377,453
|
|
|
|
371,095
|
|
Real estate taxes and
insurance
|
|
|
58,618
|
|
|
|
55,450
|
|
|
|
235,392
|
|
|
|
223,493
|
|
Depreciation and
amortization
|
|
|
125,426
|
|
|
|
121,541
|
|
|
|
496,843
|
|
|
|
489,759
|
|
Total property
operating expenses
|
|
|
275,213
|
|
|
|
268,255
|
|
|
|
1,109,688
|
|
|
|
1,084,347
|
|
Property management
expenses
|
|
|
13,816
|
|
|
|
12,054
|
|
|
|
55,011
|
|
|
|
47,633
|
|
General and
administrative expenses
|
|
|
10,885
|
|
|
|
9,063
|
|
|
|
46,121
|
|
|
|
34,786
|
|
Merger and integration
related expenses
|
|
|
—
|
|
|
|
609
|
|
|
|
—
|
|
|
|
9,112
|
|
Interest
expense
|
|
|
43,698
|
|
|
|
44,454
|
|
|
|
179,847
|
|
|
|
173,594
|
|
(Gain) loss on sale of
depreciable real estate assets
|
|
|
(80,001)
|
|
|
|
18
|
|
|
|
(80,988)
|
|
|
|
39
|
|
Gain on sale of
non-depreciable real estate assets
|
|
|
(2,787)
|
|
|
|
(662)
|
|
|
|
(12,047)
|
|
|
|
(4,532)
|
|
Other non-operating
expense (income)
|
|
|
495
|
|
|
|
631
|
|
|
|
(25,275)
|
|
|
|
(5,434)
|
|
Income before income
tax expense
|
|
|
155,498
|
|
|
|
63,726
|
|
|
|
368,660
|
|
|
|
231,801
|
|
Income tax
expense
|
|
|
(882)
|
|
|
|
(785)
|
|
|
|
(3,696)
|
|
|
|
(2,611)
|
|
Income from
continuing operations before real estate joint venture
activity
|
|
|
154,616
|
|
|
|
62,941
|
|
|
|
364,964
|
|
|
|
229,190
|
|
Income from real
estate joint venture
|
|
|
444
|
|
|
|
576
|
|
|
|
1,654
|
|
|
|
1,832
|
|
Net income
|
|
|
155,060
|
|
|
|
63,517
|
|
|
|
366,618
|
|
|
|
231,022
|
|
Net income
attributable to noncontrolling interests
|
|
|
5,471
|
|
|
|
2,235
|
|
|
|
12,807
|
|
|
|
8,123
|
|
Net income available
for shareholders
|
|
|
149,589
|
|
|
|
61,282
|
|
|
|
353,811
|
|
|
|
222,899
|
|
Dividends to MAA
Series I preferred shareholders
|
|
|
922
|
|
|
|
922
|
|
|
|
3,688
|
|
|
|
3,688
|
|
Net income available
for MAA common shareholders
|
|
$
|
148,667
|
|
|
$
|
60,360
|
|
|
$
|
350,123
|
|
|
$
|
219,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for common shareholders
|
|
$
|
1.30
|
|
|
$
|
0.53
|
|
|
$
|
3.07
|
|
|
$
|
1.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for common shareholders
|
|
$
|
1.30
|
|
|
$
|
0.53
|
|
|
$
|
3.07
|
|
|
$
|
1.93
|
|
Shares and units
in thousands
|
|
|
|
|
|
|
|
|
Three months
ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net Income Shares
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares - basic
|
|
|
113,967
|
|
|
|
113,690
|
|
|
|
113,854
|
|
|
|
113,638
|
|
Effect of dilutive
securities
|
|
|
342
|
|
|
|
190
|
|
|
|
259
|
|
|
|
198
|
|
Weighted average
common shares - diluted
|
|
|
114,309
|
|
|
|
113,880
|
|
|
|
114,113
|
|
|
|
113,836
|
|
Funds From
Operations Shares And Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares and units - basic
|
|
|
118,037
|
|
|
|
117,804
|
|
|
|
117,944
|
|
|
|
117,777
|
|
Weighted average
common shares and units - diluted
|
|
|
118,214
|
|
|
|
117,974
|
|
|
|
118,127
|
|
|
|
117,948
|
|
Period End Shares
And Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares at
December 31,
|
|
|
114,247
|
|
|
|
113,845
|
|
|
|
114,247
|
|
|
|
113,845
|
|
Operating Partnership
units at December 31,
|
|
|
4,067
|
|
|
|
4,111
|
|
|
|
4,067
|
|
|
|
4,111
|
|
Total common shares
and units at December 31,
|
|
|
118,314
|
|
|
|
117,956
|
|
|
|
118,314
|
|
|
|
117,956
|
|
|
|
(1)
|
For additional
information on the calculation of diluted common shares and
earnings per common share, please refer to the Notes to
Consolidated Financial Statements in MAA's Annual Report on Form
10-K for the year ended December 31, 2019, expected to be
filed with the SEC on or about February 20, 2020.
|
CONSOLIDATED
BALANCE SHEETS
|
|
Dollars in
thousands
|
|
|
|
|
|
|
|
|
|
|
December 31,
2019
|
|
|
December 31,
2018
|
|
Assets
|
|
|
|
|
|
|
|
|
Real estate
assets:
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
1,905,757
|
|
|
$
|
1,868,828
|
|
Buildings and
improvements and other
|
|
|
11,841,978
|
|
|
|
11,670,216
|
|
Development and
capital improvements in progress
|
|
|
116,424
|
|
|
|
59,506
|
|
|
|
|
13,864,159
|
|
|
|
13,598,550
|
|
Less: Accumulated
depreciation
|
|
|
(2,955,253)
|
|
|
|
(2,549,287)
|
|
|
|
|
10,908,906
|
|
|
|
11,049,263
|
|
Undeveloped
land
|
|
|
34,548
|
|
|
|
58,257
|
|
Investment in real
estate joint venture
|
|
|
43,674
|
|
|
|
44,181
|
|
Real estate assets,
net
|
|
|
10,987,128
|
|
|
|
11,151,701
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
20,476
|
|
|
|
34,259
|
|
Restricted
cash
|
|
|
50,065
|
|
|
|
17,414
|
|
Other
assets
|
|
|
172,781
|
|
|
|
120,407
|
|
Total
assets
|
|
$
|
11,230,450
|
|
|
$
|
11,323,781
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Unsecured notes
payable
|
|
$
|
3,828,201
|
|
|
$
|
4,053,302
|
|
Secured notes
payable
|
|
|
626,397
|
|
|
|
475,026
|
|
Accrued expenses and
other liabilities
|
|
|
472,262
|
|
|
|
413,850
|
|
Total
liabilities
|
|
|
4,926,860
|
|
|
|
4,942,178
|
|
|
|
|
|
|
|
|
|
|
Redeemable common
stock
|
|
|
14,131
|
|
|
|
9,414
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
9
|
|
|
|
9
|
|
Common
stock
|
|
|
1,140
|
|
|
|
1,136
|
|
Additional paid-in
capital
|
|
|
7,166,073
|
|
|
|
7,138,170
|
|
Accumulated
distributions in excess of net income
|
|
|
(1,085,479)
|
|
|
|
(989,263)
|
|
Accumulated other
comprehensive loss
|
|
|
(13,178)
|
|
|
|
(212)
|
|
Total MAA
shareholders' equity
|
|
|
6,068,565
|
|
|
|
6,149,840
|
|
Noncontrolling
interests - Operating Partnership units
|
|
|
214,647
|
|
|
|
220,043
|
|
Total Company's
shareholders' equity
|
|
|
6,283,212
|
|
|
|
6,369,883
|
|
Noncontrolling
interest - consolidated real estate entities
|
|
|
6,247
|
|
|
|
2,306
|
|
Total
equity
|
|
|
6,289,459
|
|
|
|
6,372,189
|
|
Total liabilities and
equity
|
|
$
|
11,230,450
|
|
|
$
|
11,323,781
|
|
RECONCILIATION OF
FFO, 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,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
Net income available
for MAA common shareholders
|
|
$
|
148,667
|
|
|
$
|
60,360
|
|
|
$
|
350,123
|
|
|
$
|
219,211
|
|
Depreciation and
amortization of real estate assets
|
|
|
123,928
|
|
|
|
120,181
|
|
|
|
490,632
|
|
|
|
484,722
|
|
(Gain) loss on sale of
depreciable real estate assets
|
|
|
(80,001)
|
|
|
|
18
|
|
|
|
(80,988)
|
|
|
|
39
|
|
Depreciation and
amortization of real estate assets of real estate
joint venture
|
|
|
153
|
|
|
|
152
|
|
|
|
618
|
|
|
|
595
|
|
Net income
attributable to noncontrolling interests
|
|
|
5,471
|
|
|
|
2,235
|
|
|
|
12,807
|
|
|
|
8,123
|
|
Funds from operations
attributable to the Company (1)
|
|
|
198,218
|
|
|
|
182,946
|
|
|
|
773,192
|
|
|
|
712,690
|
|
Recurring capital
expenditures
|
|
|
(14,320)
|
|
|
|
(15,887)
|
|
|
|
(72,781)
|
|
|
|
(71,960)
|
|
Adjusted funds from
operations (1)
|
|
|
183,898
|
|
|
|
167,059
|
|
|
|
700,411
|
|
|
|
640,730
|
|
Redevelopment capital
expenditures
|
|
|
(13,139)
|
|
|
|
(14,001)
|
|
|
|
(58,199)
|
|
|
|
(55,148)
|
|
Revenue enhancing
capital expenditures
|
|
|
(6,804)
|
|
|
|
(8,905)
|
|
|
|
(32,871)
|
|
|
|
(30,910)
|
|
Commercial capital
expenditures
|
|
|
(2,056)
|
|
|
|
(1,575)
|
|
|
|
(7,075)
|
|
|
|
(8,150)
|
|
Other capital
expenditures
|
|
|
(5,785)
|
|
|
|
(7,288)
|
|
|
|
(19,280)
|
|
|
|
(31,417)
|
|
Funds available for
distribution (1)
|
|
$
|
156,114
|
|
|
$
|
135,290
|
|
|
$
|
582,986
|
|
|
$
|
515,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and
distributions paid
|
|
$
|
113,630
|
|
|
$
|
108,808
|
|
|
$
|
453,682
|
|
|
$
|
434,928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares - diluted
|
|
|
114,309
|
|
|
|
113,880
|
|
|
|
114,113
|
|
|
|
113,836
|
|
FFO weighted average
common shares and units - diluted
|
|
|
118,214
|
|
|
|
117,974
|
|
|
|
118,127
|
|
|
|
117,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
for common shareholders
|
|
$
|
1.30
|
|
|
$
|
0.53
|
|
|
$
|
3.07
|
|
|
$
|
1.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations
per Share - diluted (2)
|
|
$
|
1.68
|
|
|
$
|
1.55
|
|
|
$
|
6.55
|
|
|
$
|
6.04
|
|
Adjusted funds from
operations per Share - diluted (2)
|
|
$
|
1.56
|
|
|
$
|
1.42
|
|
|
$
|
5.93
|
|
|
$
|
5.43
|
|
|
|
(1)
|
Results for the years
ended December 31, 2019 and 2018 included $17.9 million of non-cash
income and $2.6 million of non-cash expense, respectively, related
to the fair value adjustment of the embedded derivative in the MAA
Series I preferred shares.
|
(2)
|
Results for the years
ended December 31, 2019 and 2018 included $0.15 per Share of
non-cash income and $0.02 per Share of non-cash expense,
respectively, related to the fair value adjustment of the embedded
derivative in the MAA Series I preferred shares.
|
RECONCILIATION OF
NET OPERATING INCOME TO NET INCOME AVAILABLE FOR MAA COMMON
SHAREHOLDERS
|
|
Dollars in
thousands
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
|
December 31, 2019
|
|
|
September
30, 2019
|
|
|
December 31, 2018
|
|
|
December 31, 2019
|
|
|
December 31, 2018
|
|
Net Operating
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
NOI
|
|
$
|
247,739
|
|
|
$
|
238,137
|
|
|
$
|
235,966
|
|
|
$
|
956,075
|
|
|
$
|
921,240
|
|
Non-Same Store
NOI
|
|
|
19,291
|
|
|
|
17,956
|
|
|
|
15,468
|
|
|
|
72,097
|
|
|
|
55,518
|
|
Total NOI
|
|
|
267,030
|
|
|
|
256,093
|
|
|
|
251,434
|
|
|
|
1,028,172
|
|
|
|
976,758
|
|
Depreciation and
amortization
|
|
|
(125,426)
|
|
|
|
(124,684)
|
|
|
|
(121,541)
|
|
|
|
(496,843)
|
|
|
|
(489,759)
|
|
Property management
expenses
|
|
|
(13,816)
|
|
|
|
(13,899)
|
|
|
|
(12,054)
|
|
|
|
(55,011)
|
|
|
|
(47,633)
|
|
General and
administrative expenses
|
|
|
(10,885)
|
|
|
|
(11,485)
|
|
|
|
(9,063)
|
|
|
|
(46,121)
|
|
|
|
(34,786)
|
|
Merger and integration
expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
(609)
|
|
|
|
—
|
|
|
|
(9,112)
|
|
Interest
expense
|
|
|
(43,698)
|
|
|
|
(44,513)
|
|
|
|
(44,454)
|
|
|
|
(179,847)
|
|
|
|
(173,594)
|
|
Gain (loss) on sale of
depreciable real estate assets
|
|
|
80,001
|
|
|
|
1,000
|
|
|
|
(18)
|
|
|
|
80,988
|
|
|
|
(39)
|
|
Gain on sale of
non-depreciable real estate assets
|
|
|
2,787
|
|
|
|
—
|
|
|
|
662
|
|
|
|
12,047
|
|
|
|
4,532
|
|
Other non-operating
(expense) income
|
|
|
(495)
|
|
|
|
20,060
|
|
|
|
(631)
|
|
|
|
25,275
|
|
|
|
5,434
|
|
Income tax
expense
|
|
|
(882)
|
|
|
|
(1,491)
|
|
|
|
(785)
|
|
|
|
(3,696)
|
|
|
|
(2,611)
|
|
Income from real
estate joint venture
|
|
|
444
|
|
|
|
378
|
|
|
|
576
|
|
|
|
1,654
|
|
|
|
1,832
|
|
Net income
attributable to noncontrolling interests
|
|
|
(5,471)
|
|
|
|
(2,814)
|
|
|
|
(2,235)
|
|
|
|
(12,807)
|
|
|
|
(8,123)
|
|
Dividends to MAA
Series I preferred shareholders
|
|
|
(922)
|
|
|
|
(922)
|
|
|
|
(922)
|
|
|
|
(3,688)
|
|
|
|
(3,688)
|
|
Net income available
for MAA common shareholders
|
|
$
|
148,667
|
|
|
$
|
77,723
|
|
|
$
|
60,360
|
|
|
$
|
350,123
|
|
|
$
|
219,211
|
|
RECONCILIATION OF
EBITDA, EBITDAre, ADJUSTED EBITDAre AND RECURRING
ADJUSTED EBITDAre TO NET INCOME
|
|
Dollars in
thousands
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
|
December 31,
2019
|
|
|
December 31,
2018
|
|
|
December 31,
2019
|
|
|
December 31,
2018
|
|
Net income
|
|
$
|
155,060
|
|
|
$
|
63,517
|
|
|
$
|
366,618
|
|
|
$
|
231,022
|
|
Depreciation and
amortization
|
|
|
125,426
|
|
|
|
121,541
|
|
|
|
496,843
|
|
|
|
489,759
|
|
Interest
expense
|
|
|
43,698
|
|
|
|
44,454
|
|
|
|
179,847
|
|
|
|
173,594
|
|
Income tax
expense
|
|
|
882
|
|
|
|
785
|
|
|
|
3,696
|
|
|
|
2,611
|
|
EBITDA
|
|
|
325,066
|
|
|
|
230,297
|
|
|
|
1,047,004
|
|
|
|
896,986
|
|
(Gain) loss on sale of
depreciable real estate assets
|
|
|
(80,001)
|
|
|
|
18
|
|
|
|
(80,988)
|
|
|
|
39
|
|
Adjustments to reflect
the Company's share of EBITDAre
of unconsolidated affiliates
|
|
|
336
|
|
|
|
321
|
|
|
|
1,351
|
|
|
|
1,242
|
|
EBITDAre
|
|
|
245,401
|
|
|
|
230,636
|
|
|
|
967,367
|
|
|
|
898,267
|
|
Loss (gain) on debt
extinguishment (1)
|
|
|
193
|
|
|
|
(1,960)
|
|
|
|
253
|
|
|
|
(2,179)
|
|
Net casualty (gain)
loss and other settlement proceeds (1)
|
|
|
(1,491)
|
|
|
|
920
|
|
|
|
(3,390)
|
|
|
|
(724)
|
|
Gain on sale of
non-depreciable assets
|
|
|
(2,787)
|
|
|
|
(662)
|
|
|
|
(12,047)
|
|
|
|
(4,532)
|
|
Adjusted
EBITDAre
|
|
|
241,316
|
|
|
|
228,934
|
|
|
|
952,183
|
|
|
|
890,832
|
|
Merger and integration
expenses
|
|
|
—
|
|
|
|
609
|
|
|
|
—
|
|
|
|
9,112
|
|
Recurring Adjusted
EBITDAre (2)
|
|
$
|
241,316
|
|
|
$
|
229,543
|
|
|
$
|
952,183
|
|
|
$
|
899,944
|
|
|
|
(1)
|
Included in Other
non-operating income in the Consolidated Statements of
Operations.
|
(2)
|
Recurring Adjusted
EBITDAre for the trailing twelve months ended
December 31, 2019 included the impact of the non-cash income
related to the fair value adjustment of the embedded derivative in
the MAA Series I preferred shares. The inclusion of this
non-cash income item lowered Net Debt/Recurring Adjusted
EBITDAre by 9 basis points for the trailing twelve months
ended December 31, 2019. Recurring Adjusted
EBITDAre for the trailing twelve months ended
December 31, 2018 included the impact of the non-cash expense
related to the fair value adjustment of the embedded derivative in
the MAA Series I preferred shares. The inclusion of this
non-cash expense item increased Net Debt/Recurring Adjusted
EBITDAre by 1 basis point for the trailing twelve months
ended December 31, 2018.
|
RECONCILIATION OF
NET DEBT TO UNSECURED NOTES PAYABLE AND SECURED NOTES
PAYABLE
|
|
Dollars in
thousands
|
|
|
|
|
|
|
|
|
|
|
December 31,
2019
|
|
|
December 31,
2018
|
|
Unsecured notes
payable
|
|
$
|
3,828,201
|
|
|
$
|
4,053,302
|
|
Secured notes
payable
|
|
|
626,397
|
|
|
|
475,026
|
|
Total debt
|
|
|
4,454,598
|
|
|
|
4,528,328
|
|
Cash and cash
equivalents
|
|
|
(20,476)
|
|
|
|
(34,259)
|
|
1031(b) exchange
proceeds included in Restricted cash (1)
|
|
|
(33,843)
|
|
|
|
—
|
|
Net Debt
|
|
$
|
4,400,279
|
|
|
$
|
4,494,069
|
|
|
|
RECONCILIATION OF
GROSS ASSETS TO TOTAL ASSETS
|
|
Dollars in
thousands
|
|
|
|
|
|
|
|
|
|
|
December 31,
2019
|
|
|
December 31,
2018
|
|
Total
assets
|
|
$
|
11,230,450
|
|
|
$
|
11,323,781
|
|
Accumulated
depreciation
|
|
|
2,955,253
|
|
|
|
2,549,287
|
|
Gross
Assets
|
|
$
|
14,185,703
|
|
|
$
|
13,873,068
|
|
|
|
RECONCILIATION OF
GROSS REAL ESTATE ASSETS TO REAL ESTATE ASSETS, NET
|
|
Dollars in
thousands
|
|
|
|
|
|
|
|
|
|
|
December 31,
2019
|
|
|
December 31,
2018
|
|
Real estate assets,
net
|
|
$
|
10,987,128
|
|
|
$
|
11,151,701
|
|
Accumulated
depreciation
|
|
|
2,955,253
|
|
|
|
2,549,287
|
|
Cash and cash
equivalents
|
|
|
20,476
|
|
|
|
34,259
|
|
1031(b) exchange
proceeds included in Restricted cash (1)
|
|
|
33,843
|
|
|
|
—
|
|
Gross Real Estate
Assets
|
|
$
|
13,996,700
|
|
|
$
|
13,735,247
|
|
|
|
(1)
|
Included in
Restricted cash on 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, is composed of
EBITDAre adjusted for net gain or loss on non-depreciable
asset sales, insurance and other settlement proceeds and gain or
loss on debt extinguishment. 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.
Adjusted Funds From Operations (AFFO)
AFFO is composed of FFO less recurring capital expenditures. In
order to better align the classification of capital expenditures
with business goals, certain capital expenditures related to
commercial properties have been reclassified out of recurring
capital expenditures and revenue enhancing capital expenditures for
comparative purposes. 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 AFFO to be an important
measure of performance from operations because AFFO measures the
ability to control revenues, expenses and recurring capital
expenditures.
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 core 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 further adjusted for items that are not
considered part of MAA's core business operations such as
adjustments related to the fair value adjustment of the embedded
derivative in the MAA Series I preferred shares, adjustments for
gains or losses from an unconsolidated limited partnership, merger
and integration expenses, mark-to-market debt adjustments, loss or
gain on debt extinguishment, net casualty gain or loss and loss or
gain on sale of non-depreciable assets. 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 our 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, as defined
above, excluding the gain or loss on sale of depreciable asset
sales and plus adjustments to reflect MAA's share of
EBITDAre of unconsolidated affiliates. As an owner and
operator of real estate, MAA considers EBITDAre to be an
important measure of performance from core operations because
EBITDAre does not include various expense items that are not
indicative of operating performance. While MAA's definition of
EBITDAre is in accordance with NAREIT's definition, it may
differ from the methodology utilized by other companies to
calculate EBITDAre. EBITDAre should not be considered
as an alternative to Net income as an indicator of operating
performance.
Funds Available for Distribution (FAD)
FAD is composed of FFO less total capital expenditures,
excluding development spending and property acquisitions. FAD
should not be considered as an alternative to Net income available
for MAA common shareholders as an indicator of operating
performance. As an owner and operator of real estate, MAA
considers FAD to be an important measure of performance from core
operations because FAD measures the ability to control revenues,
expenses and total capital expenditures.
NON-GAAP FINANCIAL
MEASURES (Continued)
|
Funds From Operations (FFO)
FFO represents net income available for MAA common shareholders
(calculated in accordance with GAAP) excluding gains or losses on
disposition of operating properties and asset impairment, plus
depreciation and amortization of real estate assets, net income
attributable to noncontrolling interests, and adjustments for joint
ventures. Because noncontrolling interest is added back, FFO,
when used in this document, represents FFO attributable to the
Company. While MAA's definition of FFO is in accordance with
NAREIT's definition, it may differ from the methodology for
calculating FFO utilized by other companies and, accordingly, may
not be comparable to such other companies. FFO should not be
considered as an alternative to Net income available for MAA common
shareholders as an indicator of operating performance. MAA
believes that FFO is helpful in understanding operating performance
in that FFO excludes depreciation and amortization of real estate
assets. MAA believes that GAAP historical cost depreciation
of real estate assets is generally not correlated with changes in
the value of those assets, whose value does not diminish
predictably over time, as historical cost depreciation implies.
Gross Assets
Gross Assets represents Total assets plus Accumulated
depreciation. MAA believes that Gross Assets can be used as a
helpful tool in evaluating its balance sheet positions. MAA
believes that GAAP historical cost depreciation of real estate
assets is generally not correlated with changes in the value of
those assets, whose value does not diminish predictably over time,
as historical cost depreciation implies.
Gross Real Estate Assets
Gross Real Estate Assets represents Real estate assets, net plus
Accumulated depreciation and Cash and cash equivalents. MAA
believes that Gross Real Estate Assets can be used as a helpful
tool in evaluating its balance sheet positions. MAA believes
that GAAP historical cost depreciation of real estate assets is
generally not correlated with changes in the value of those assets,
whose value does not diminish predictably over time, as historical
cost depreciation implies.
Net Debt
Net Debt represents Unsecured notes payable and Secured notes
payable less Cash and cash equivalents. MAA believes Net Debt
is a helpful tool in evaluating its debt position.
Net Operating Income (NOI)
Net Operating Income represents Rental and other property
revenues less Total property operating expenses, excluding
depreciation, for all properties held during the period, regardless
of their status as held for sale. NOI should not be considered as
an alternative to Net income available for MAA common
shareholders. MAA believes NOI by market is a helpful tool in
evaluating the operating performance within MAA's markets because
it measures the core operations of property performance by
excluding corporate level expenses and other items not related to
property operating performance.
Recurring Adjusted EBITDAre
Recurring Adjusted EBITDAre represents Adjusted
EBITDAre further adjusted to exclude certain items that are
not considered part of MAA's core business operations such as
acquisition and merger and integration expenses. MAA believes
Recurring Adjusted EBITDAre is an important performance
measure as it adjusts for certain items that by their nature are
not comparable over periods and therefore tend to obscure actual
operating performance. MAA's definition of Recurring Adjusted
EBITDAre may differ from the methodology utilized by other
companies to calculate Recurring Adjusted EBITDAre.
Recurring Adjusted EBITDAre should not be considered as an
alternative to Net income as an indicator of operating
performance.
Same Store NOI
Same Store NOI represents Rental and other property revenues
less Total property operating expenses, excluding depreciation, for
all properties classified within the Same Store Portfolio during
the period. Same Store NOI should not be considered as an
alternative to Net income available for MAA common
shareholders. MAA believes Same Store NOI is a helpful tool
in evaluating the operating performance within MAA's markets
because it measures the core operations of property performance by
excluding corporate level expenses and other items not related to
property operating performance.
Average Effective Rent per Unit
Average Effective Rent per Unit represents the average of gross
rent amounts after the effect of leasing concessions for occupied
units plus prevalent market rates asked for unoccupied units,
divided by the total number of units. Leasing concessions represent
discounts to the current market rate. MAA believes average
effective rent is a helpful measurement in evaluating average
pricing. It does not represent actual rental revenue collected per
unit.
Average Physical Occupancy
Average Physical Occupancy represents the average of the daily
physical occupancy for the respective period.
Development Communities
Communities remain identified as development until certificates
of occupancy are obtained for all units under development. Once all
units are delivered and available for occupancy, the community
moves into the Lease-up Communities portfolio.
Lease-up Communities
New acquisitions acquired during lease-up and newly developed
communities remain in the Lease-up Communities portfolio until
stabilized. Communities are considered stabilized after
achieving at least 90% occupancy for 90 days.
Non-Same Store Portfolio
Non-Same Store Portfolio includes recent acquisitions,
communities that have been identified for disposition, communities
that have undergone a significant casualty loss, and stabilized
communities that do not meet the requirements defined by the Same
Store Portfolio.
Same Store Portfolio
MAA reviews its Same Store Portfolio at the beginning of each
calendar year, or as significant transactions warrant. Communities
are generally added into the Same Store Portfolio if they were
owned and stabilized at the beginning of the previous year.
Communities are considered stabilized after achieving at least 90%
occupancy for 90 days. Communities that have been approved by MAA's
Board of Directors for disposition are excluded from the Same Store
Portfolio. Communities that have undergone a significant
casualty loss are also excluded from the Same Store Portfolio.
Unencumbered NOI
Unencumbered NOI represents NOI generated by unencumbered assets
(as defined in MAALP's bond covenants).
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SOURCE MAA