MEMPHIS, Tenn., Feb. 3, 2016 /PRNewswire/ -- Mid-America
Apartment Communities, Inc., or MAA, (NYSE: MAA) today announced
operating results for the quarter and full year ended
December 31, 2015.
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Highlights
- Core Funds from Operations, or Core FFO, per diluted common
share and unit, or per Share, was $1.45 for the fourth quarter and $5.51 for the full year, both representing record
performance for the company.
- Same store net operating income, or NOI, for the fourth quarter
increased 7.3% as compared to the same period in the prior year,
based on a 5.4% increase in revenue and a 2.4% increase in property
operating expenses.
- Average revenue per occupied unit for the same store portfolio
increased 4.7% for the fourth quarter to $1,125, primarily driven by an increase in
average effective rent per unit of 4.4%.
- Average physical occupancy for the same store portfolio for the
fourth quarter increased 0.7% over the same period in the prior
year and physical occupancy ended the quarter at 96.5%, a fourth
quarter record.
- Resident turnover for the same store portfolio remained low for
the fourth quarter of 2015 at 52.5% on a rolling twelve month
basis.
- During the fourth quarter, the company acquired two properties,
Cityscape at Market Center II, a new 318-unit community located in
the Dallas, Texas Metropolitan
Statistical Area, or MSA, which is a phase II for an adjacent
property owned by the company, and The Denton, a new 55-unit community located in the
Kansas City, Missouri-Kansas MSA
with a 154 unit phase II new development component which the
company started during the quarter.
- MAA has a total of five development communities under
construction, containing 748 units, with a total projected cost of
approximately $117 million. An
additional $13.6 million of
construction costs were funded during the fourth quarter.
- MAA completed the construction of 220 Riverside located in
Jacksonville, Florida during the
fourth quarter. This community, and Cityscape at Market
Center II, remained in lease-up as of year-end with average
quarter-end physical occupancy of 85.3%.
- For the full year, the company completed redevelopment of 5,781
units, achieving average rental rate increases of 10.1% above
non-renovated units.
- During the fourth quarter, the company completed the
refinancing of an unsecured revolving credit facility, increasing
borrowing capacity to $750 million
and further improving terms to reflect the company's strong credit
profile.
- Also during the fourth quarter, the company's operating
partnership, Mid-America Apartments, L.P. (MAALP), issued
$400 million of new ten-year senior
unsecured notes at a coupon rate of 4.00% and issuance price of
98.990%.
- MAA ended the year with record low leverage of debt to market
cap of 32.2% and net debt to gross assets of 40.6%, a decline of
190 basis points from prior year-end. At the end of 2015,
unencumbered assets have increased to 72.8% of gross real estate
assets.
Eric Bolton, Chairman and Chief
Executive Officer, said, "Leasing trends across MAA's high-growth
Sunbelt markets remain strong and we are forecasting another year
of solid growth in net operating income and core funds from
operations. Our strategic approach to diversifying capital
across the region has the company well positioned for continued
steady revenue growth and strong full cycle performance."
Funds from Operations
For the quarter ended
December 31, 2015, FFO was $118.6
million, or $1.49 per Share,
compared to $107.4 million, or
$1.35 per Share, for the quarter
ended December 31, 2014. Core FFO, which excludes
certain non-cash or non-routine items, for the quarter ended
December 31, 2015 was $115.5
million, or $1.45 per Share,
as compared to $104.7 million, or
$1.32 per Share, for the quarter
ended December 31, 2014.
For the year ended December 31,
2015, FFO was $452.4 million,
or $5.69 per Share, compared to
$404.1 million, or $5.09 per Share, for the year ended December 31, 2014. Core FFO for the year
ended December 31, 2015 was
$438.6 million, or $5.51 per Share, as compared to $395.7 million, or $4.99 per Share, for the year ended December 31, 2014.
A reconciliation of FFO and Core FFO to net income available for
MAA common shareholders and an expanded discussion of the
components of FFO and Core FFO can be found later in this press
release.
Net Income Available for Common Shareholders
For the
quarter ended December 31, 2015, net income available for
common shareholders was $43.0
million, or $0.57 per diluted
common share, compared to $34.5
million, or $0.46 per diluted
common share, for the quarter ended December 31, 2014. Results
for the quarter ended December 31,
2014 included $1.2 million, or
$0.02 per diluted common share, of
merger and integration expenses.
For the year ended December 31,
2015, net income available for common shareholders was
$332.3 million, or $4.41 per diluted common share, compared to
$148.0 million, or $1.97 per diluted common share, for the year
ended December 31, 2014.
Results for the year ended December 31,
2015 included $190.1 million,
or $2.53 per diluted common share, of
gains related to the sale of real estate assets during the
period. Results for the year ended December 31, 2014 included $11.5 million, or $0.15 per diluted common share, of merger and
integration expenses and $48.4
million, or $0.65 per diluted
common share of gains related to the sale of real estate assets
during the period.
Fourth Quarter Same Store Operating Results
Operating
results for the Same Store Portfolio of 71,376 units for the
company's Large Market and Secondary Market portfolios are
presented below:
|
Percent Change
From
|
|
Three months
ended
|
|
Three months ended
December 31, 2014
|
|
December 31,
2015
|
|
|
|
|
|
|
|
Average
|
|
Average
|
|
|
|
|
|
|
|
Effective
|
|
Physical
|
|
Revenue
|
|
Expense
|
|
NOI
|
|
Rent per
Unit
|
|
Occupancy
|
Large
Markets
|
6.0
|
%
|
|
2.2
|
%
|
|
8.4
|
%
|
|
5.4
|
%
|
|
96.2
|
%
|
Secondary
Markets
|
4.4
|
%
|
|
2.9
|
%
|
|
5.3
|
%
|
|
2.8
|
%
|
|
96.0
|
%
|
Same Store
|
5.4
|
%
|
|
2.4
|
%
|
|
7.3
|
%
|
|
4.4
|
%
|
|
96.1
|
%
|
Total Same Store revenue growth of 5.4% during the fourth
quarter was primarily produced by a 4.7% increase in revenues per
occupied unit, mainly produced by a 4.4% increase in average
effective rent per unit, combined with a 0.7% increase in average
physical occupancy for the quarter, as compared to the same period
in the prior year. Overall physical occupancy for the
Same Store Portfolio ended the fourth quarter at 96.5%.
Operating expenses increased 2.4% for the quarter, with the largest
portion of the growth related to property taxes.
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.
Acquisition and Disposition Activity
During the fourth
quarter, MAA acquired two new communities: Cityscape at Market
Center II (formerly Elan Plano), a new 318-unit community located
in the Dallas, Texas MSA, and The
Denton, a new 55-unit community
located in the Kansas City,
Missouri-Kansas MSA which includes 31,000 square feet of
ground floor retail space supporting the multifamily asset.
During the fourth quarter, the company also acquired the land for
development of The Denton phase
II, which will consist of an additional 154 units. The
combined purchase price for all fourth quarter acquisitions was
$79.0 million, bringing the full year
purchase price for acquisition properties to $327.0 million, including land for three phase II
development properties.
For the full year, MAA received combined gross proceeds of
$354.3 million by selling 21
properties with an average age of 25 years and recognized total net
gains on the sale of real estate assets of $190.0 million. As a result of these
property sales, the company exited eleven markets included in the
Secondary Market segment of the portfolio, achieving an economic
cap rate of 5.8% and internal rates of return on invested capital
of 14.1% on a leveraged basis and 10.3% on an unleveraged
basis.
Development and Lease-up Activity
MAA has five
development communities under construction with a total projected
cost of $116.6 million, with an
expected stabilized NOI yield of 7.4%. During the fourth quarter,
MAA funded an additional $13.6
million of construction costs, with $74.3 million remaining to be funded. The
company had two communities remaining in lease-up during the fourth
quarter: 220 Riverside, located in Jacksonville, Florida, which was completed
during the fourth quarter and Cityscape at Market Center II,
located in Dallas, Texas, which
was acquired in lease-up during the fourth quarter. Physical
occupancy for the two communities averaged 85.3% at the end of the
quarter.
Redevelopment Activity
The company continues its
redevelopment program at select communities throughout the
portfolio. During the fourth quarter, MAA redeveloped a total
of 1,572 units at an average cost of $4,370 per unit, bringing total units redeveloped
during the year to 5,781 at an average cost of $4,452 per unit, and achieving average rental
rate increases of 10.1% above non-renovated units.
Capital Expenditures
Recurring capital expenditures
totaled $8.6 million for the fourth
quarter, or approximately $0.11 per
Share, as compared to $11.2 million,
or $0.14 per Share, for the same
period in 2014. These expenditures lead to Core Adjusted
Funds from Operations, or Core AFFO, of $1.34 per Share, for the fourth quarter, compared
to $1.18 per Share for the same
period in 2014, which represents a 14% increase.
Recurring capital expenditures for the portfolio totaled
$56.9 million for the year ended
December 31, 2015, or approximately
$0.71 per Share, as compared to
$56.1 million or $0.71 per Share, for the same period in
2014. These expenditures lead to Core AFFO of $4.80 per Share for the year ended December 31, 2015, compared to $4.28 per Share for the same period in 2014,
which represents a 12% increase.
Total capital expenditures for the portfolio during the fourth
quarter were $15.7 million on
existing properties, with an additional $8.5
million on redevelopment opportunities. Total capital
expenditures for the portfolio during the year ended December 31, 2015 were $88.5 million on existing properties, with an
additional $31.0 million on
redevelopment opportunities.
A reconciliation of FFO and Core AFFO to net income available
for MAA common shareholders and an expanded discussion of the
components of FFO and Core AFFO can be found later in this
release.
Financing Activity
During the fourth quarter, the
company closed on a new unsecured revolving credit facility,
replacing the current credit facility, which increased borrowing
capacity to $750.0 million and
included an option to expand to $1.5
billion at the company's request. The new facility
extends the maturity date of the credit facility to
April 2020 with one 6-month extension
option, and bears interest at LIBOR plus a spread based on an
investment ratings grid, currently at 1.00%.
Also during the fourth quarter, the company, through its
operating partnership, completed a public bond offering to
refinance 2015 debt maturities. MAALP issued $400 million of 4.00% senior unsecured notes due
in 2025, at an issue price of 98.990%. In connection with the bond
transaction, the company cash settled $200
million in forward interest rate swap agreements, entered
earlier in the year to effectively lock the interest rate on the
planned transaction, which produced an effective interest rate of
4.17% over the ten year life of the bonds.
During the fourth quarter, the company also amended the terms of
one of its three existing term loans, extending the maturity from
2017 to 2021 and reducing the interest rate to LIBOR plus a spread
of 1.10%, 25 bps lower than the prior agreement. The spread is
based on an investment grade ratings grid. The principal
amount remained unchanged at $150
million.
Balance Sheet
As of December 31, 2015,
- Total debt to total capitalization was 32.2% (based on the
December 31, 2015 closing stock price), compared to 37.2% as
of December 31, 2014,
- Total net debt to total gross assets (based on gross book value
at December 31, 2015) was 40.6%, compared to 42.5% as of
December 31, 2014,
- Total debt outstanding was $3.4
billion at an average effective interest rate of 3.7%,
- 95.9% of the total debt was fixed or hedged against rising
interest rates for an average of 5.0 years,
- Fixed charge coverage ratio (Recurring EBITDA divided by
interest expense adjusted for mark-to-market debt adjustment) was
4.47x and total net debt to Recurring EBITDA was 5.79x,
- Approximately $709.3 million
combined cash and capacity under the company's unsecured credit
facility was available, and
- Unencumbered assets increased to 72.8% of gross real estate
assets as compared to 66.9% in the prior year.
A reconciliation of EBITDA and Recurring EBITDA to consolidated
net income and an expanded discussion of the components of EBITDA
and Recurring EBITDA can be found later in this release.
88th Consecutive Quarterly Common Dividend
Declared
The company declared its 88th consecutive quarterly
common dividend at an annual rate of $3.28 per Share, which was paid on January 29, 2016 to holders of record on
January 15, 2016.
2016 Core FFO and Core AFFO per Share Guidance
The
company is providing initial Core FFO and Core AFFO guidance for
2016 based on management's current and expected views of company
activity, the apartment market, and overall economic
conditions. Guidance is based on several key assumptions,
which are summarized below and further detailed in the attached
supplement. The company plans to update Core FFO and Core
AFFO per Share guidance on a quarterly basis.
Core FFO per Share for the full year 2016 is expected to
range between $5.68 and
$5.88 per Share, representing $5.78 per Share at the midpoint. The
company's guidance includes a projection of Same Store Portfolio
NOI growth of 4% to 5%, based on expected revenue growth of 3.75%
to 4.25% and expected expense growth of 2.75% to 3.75%. The
company's revenue projections are based on expected continued
strong fundamentals producing average physical occupancy and
effective rent growth levels in-line with 2015 performance.
Guidance projections include assumed acquisition volume of
$300 to $400 million of new
multifamily assets, including both stabilized and lease-up
communities, and assumed disposition volume of $200 to $300 million of multifamily assets and
$30 to $60 million of commercial and
land assets. The company also expects to fund an additional
$50 to $60 million of new development
spending. Furthermore, guidance for 2016 includes Core FFO
dilution of $0.04 to $0.06 per share
from the asset recycling plans.
The company projects total recurring capital expenditures for
the full year of 2016 to be approximately $56 million, producing Core AFFO of $4.98 to $5.18 per Share, or $5.08 at the mid-point, representing a 6% growth
over the prior year. This performance produces expected Free
Cash Flow (defined as Core FFO less all capital expenditures on
existing communities and less all dividends paid to shareholders)
ranging from $90 million to $95
million for the full year 2016.
On a quarterly basis, Core FFO per Share for 2016 is expected to
be in a range of $1.34 to $1.44 for
the first quarter, $1.39 to $1.49 for
the second quarter, $1.41 to $1.51
for the third quarter, and $1.44 to
$1.54 per share in the fourth quarter.
Supplemental Material and Conference Call
Supplemental
data to this press release can be found on the "For Investors" page
of our website at www.maac.com. MAA will host a conference call to
further discuss fourth quarter results on Thursday, February 4, 2016, at 9:00 AM Central Time. The conference
call-in number is 866-952-7534. You may also join the live
webcast of the conference call by accessing the "For Investors"
page of our website at www.maac.com. Our filings with the
Securities and Exchange Commission, or SEC, are filed under the
registrant names of Mid-America Apartment Communities, Inc. and
Mid-America Apartments, L.P.
About MAA
MAA is a self-administered, self-managed
real estate investment trust, which owned 79,496 apartment units
throughout the Southeast and Southwest regions of the United States as of December 31,
2015. For further details, please visit the MAA website at
www.maac.com or contact Investor Relations at
investor.relations@maac.com, or via mail at MAA, 6584 Poplar Ave.,
Memphis, TN 38138, Attn:
Investor Relations.
Forward-Looking Statements
Sections of this press
release contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, with
respect to our expectations for future periods. Forward-looking
statements do not discuss historical fact, but instead include
statements related to expectations, projections, intentions or
other items related to the future. Such forward-looking statements
include, without limitation, statements concerning property
acquisitions and dispositions, joint venture activity, development
and renovation activity as well as other capital expenditures,
capital raising activities, rent and expense growth, occupancy,
financing activities, operating performance and results and
interest rate and other economic expectations. Words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," and variations of such words and similar expressions
are intended to identify such forward-looking statements. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements to be materially different from the
results of operations, financial conditions or plans expressed or
implied by such forward-looking statements. Such factors include,
among other things, unanticipated adverse business developments
affecting us, or our properties, adverse changes in the real estate
markets and general and local economies and business conditions.
Although we believe that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of
the assumptions could be inaccurate, and therefore such
forward-looking statements included in this report may not prove to
be accurate. In light of the significant uncertainties inherent in
the forward-looking statements included herein, the inclusion of
such information should not be regarded as a representation by us
or any other person that the results or conditions described in
such statements or our objectives and plans will be achieved.
The following factors, among others, could cause our future
results to differ materially from those expressed in the
forward-looking statements:
- inability to generate sufficient cash flows due to market
conditions, changes in supply and/or demand, competition, uninsured
losses, changes in tax and housing laws, or other factors;
- exposure, as a multifamily focused REIT, to risks inherent in
investments in a single industry;
- adverse changes in real estate markets, including, but not
limited to, the extent of future demand for multifamily units in
our significant markets, barriers of entry into new markets, which
we may seek to enter in the future, limitations on our ability to
increase rental rates, competition, our ability to identify and
consummate attractive acquisitions or development projects on
favorable terms, our ability to consummate any planned dispositions
in a timely manner on acceptable terms, and our ability to reinvest
sale proceeds in a manner that generates favorable returns;
- failure of new acquisitions to achieve anticipated results or
be efficiently integrated;
- failure of development communities to be completed, if at all,
within budget and on a timely basis or to lease-up as
anticipated;
- unexpected capital needs;
- changes in operating costs, including real estate taxes,
utilities and insurance costs;
- losses from catastrophes in excess of our insurance
coverage;
- ability to obtain financing at favorable rates, if at all, and
refinance existing debt as it matures;
- level and volatility of interest or capitalization rates or
capital market conditions;
- loss of hedge accounting treatment for interest rate swaps or
interest rate caps;
- the continuation of the good credit of our interest rate swap
and cap providers;
- price volatility, dislocations and liquidity disruptions in the
financial markets and the resulting impact on financing;
- the effect of any rating agency actions on the cost and
availability of new debt financing;
- significant decline in market value of real estate serving as
collateral for mortgage obligations;
- significant change in the mortgage financing market that would
cause single-family housing, either as an owned or rental product,
to become a more significant competitive product;
- our ability to continue to satisfy complex rules in order to
maintain our status as a REIT for federal income tax purposes, the
ability of our operating partnership to satisfy the rules to
maintain its status as a partnership for federal income tax
purposes, the ability of our taxable REIT subsidiaries to maintain
their status as such for federal income tax purposes, and our
ability and the ability of our subsidiaries to operate effectively
within the limitations imposed by these rules;
- inability to attract and retain qualified personnel;
- cyberliability or potential liability for breaches of our
privacy or information security systems;
- potential liability for environmental contamination;
- adverse legislative or regulatory tax changes;
- litigation and compliance costs associated with laws requiring
access for disabled persons; and
- other risks identified in this press release and, from time to
time, in other reports we file with the SEC or in other documents
that we publicly disseminate.
We undertake no obligation to publicly update or revise these
forward-looking statements to reflect events, circumstances or
changes in expectations after the date of this press release.
FINANCIAL
HIGHLIGHTS
|
|
|
|
|
|
|
Dollars in
thousands, except per share data
|
|
|
|
|
|
Three months
ended
December 31,
|
|
Year ended
December 31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Total property
revenues
|
$
|
263,337
|
|
|
$
|
253,219
|
|
|
$
|
1,042,779
|
|
|
$
|
992,178
|
|
|
|
|
|
|
|
|
|
Total NOI
|
$
|
165,796
|
|
|
$
|
156,278
|
|
|
$
|
642,134
|
|
|
$
|
598,814
|
|
|
|
|
|
|
|
|
|
Management fee
income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
154
|
|
|
|
|
|
|
|
|
|
Recurring
EBITDA
|
$
|
151,294
|
|
|
$
|
143,047
|
|
|
$
|
585,046
|
|
|
$
|
549,270
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.57
|
|
|
$
|
0.46
|
|
|
$
|
4.41
|
|
|
$
|
1.97
|
|
Diluted
|
$
|
0.57
|
|
|
$
|
0.46
|
|
|
$
|
4.41
|
|
|
$
|
1.97
|
|
|
|
|
|
|
|
|
|
Funds from operations
per share (diluted):
|
|
|
|
|
|
|
|
FFO
|
$
|
1.49
|
|
|
$
|
1.35
|
|
|
$
|
5.69
|
|
|
$
|
5.09
|
|
Core FFO
|
$
|
1.45
|
|
|
$
|
1.32
|
|
|
$
|
5.51
|
|
|
$
|
4.99
|
|
Core AFFO
|
$
|
1.34
|
|
|
$
|
1.18
|
|
|
$
|
4.80
|
|
|
$
|
4.28
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
$
|
0.82
|
|
|
$
|
0.77
|
|
|
$
|
3.13
|
|
|
$
|
2.96
|
|
|
|
|
|
|
|
|
|
Dividends/Core FFO
(diluted) payout ratio
|
56.6
|
%
|
|
58.3
|
%
|
|
56.8
|
%
|
|
59.3
|
%
|
Dividends/ Core AFFO
(diluted) payout ratio
|
61.2
|
%
|
|
65.3
|
%
|
|
65.2
|
%
|
|
69.2
|
%
|
|
|
|
|
|
|
|
|
Consolidated interest
expense
|
$
|
30,834
|
|
|
$
|
31,378
|
|
|
$
|
122,344
|
|
|
$
|
123,953
|
|
Mark-to-market debt
adjustment
|
3,901
|
|
|
5,511
|
|
|
19,955
|
|
|
25,079
|
|
Capitalized
interest
|
342
|
|
|
469
|
|
|
1,655
|
|
|
1,722
|
|
Total interest
incurred
|
$
|
35,077
|
|
|
$
|
37,358
|
|
|
$
|
143,954
|
|
|
$
|
150,754
|
|
|
|
|
|
|
|
|
|
Amortization of
principal on notes payable
|
$
|
1,934
|
|
|
$
|
2,242
|
|
|
$
|
8,244
|
|
|
$
|
6,927
|
|
FINANCIAL
HIGHLIGHTS (CONTINUED)
|
|
|
|
Dollars in
thousands, except per share data
|
|
|
|
|
As
of
|
|
December 31,
2015
|
|
December 31,
2014
|
Total gross assets
(1)
|
$
|
8,346,994
|
|
|
$
|
8,195,457
|
|
Total debt
(1)
|
$
|
3,427,568
|
|
|
$
|
3,512,699
|
|
Common shares and
units, outstanding end of period
|
79,571,567
|
|
|
79,458,827
|
|
Share price, end of
period
|
$
|
90.81
|
|
|
$
|
74.68
|
|
Book equity value,
end of period
|
$
|
3,166,073
|
|
|
$
|
3,057,722
|
|
Market equity value,
end of period
|
$
|
7,225,894
|
|
|
$
|
5,933,985
|
|
Debt to total market
capitalization ratio
|
32.2
|
%
|
|
37.2
|
%
|
Total net debt/total
gross assets
|
40.6
|
%
|
|
42.5
|
%
|
Unencumbered
Assets/Gross Real Estate Assets
|
72.8
|
%
|
|
66.9
|
%
|
Recurring EBITDA/Debt
Service
|
4.23x
|
|
|
3.75x
|
|
Fixed Charge Coverage
(2)
|
4.47x
|
|
|
3.99x
|
|
Total Net Debt
(3)/Recurring EBITDA (4)
|
5.79x
|
|
|
6.37x
|
|
|
|
|
|
(1)
|
Total gross assets
and Total debt as of December 31, 2014 include the reclassification
of certain debt issuance costs from Deferred financing costs to
Debt.
|
(2)
|
Fixed charge coverage
represents Recurring EBITDA divided by interest expense adjusted
for mark-to-market debt adjustment and any preferred
dividends.
|
(3)
|
Total Net Debt equals
Total Debt less Cash and Cash Equivalents.
|
(4)
|
Recurring EBITDA
represents the twelve months ended December 31,
2015.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
Dollars in
thousands, except per share data
|
|
|
|
|
|
|
|
|
Three months
ended
December 31,
|
|
Year ended
December 31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating
revenues:
|
|
|
|
|
|
|
|
Rental
revenues
|
$
|
241,421
|
|
|
$
|
230,482
|
|
|
$
|
952,196
|
|
|
$
|
902,177
|
|
Other property
revenues
|
21,916
|
|
|
22,737
|
|
|
90,583
|
|
|
90,001
|
|
Total property
revenues
|
263,337
|
|
|
253,219
|
|
|
1,042,779
|
|
|
992,178
|
|
Management fee
income
|
—
|
|
|
—
|
|
|
—
|
|
|
154
|
|
Total operating
revenues
|
263,337
|
|
|
253,219
|
|
|
1,042,779
|
|
|
992,332
|
|
Property operating
expenses:
|
|
|
|
|
|
|
|
Personnel
|
24,967
|
|
|
25,110
|
|
|
103,000
|
|
|
101,591
|
|
Building repairs and
maintenance
|
7,329
|
|
|
7,361
|
|
|
30,524
|
|
|
30,715
|
|
Real estate taxes and
insurance
|
31,793
|
|
|
30,291
|
|
|
129,618
|
|
|
123,419
|
|
Utilities
|
22,327
|
|
|
22,165
|
|
|
89,769
|
|
|
89,150
|
|
Landscaping
|
4,426
|
|
|
4,556
|
|
|
19,458
|
|
|
20,113
|
|
Other
Operating
|
6,699
|
|
|
7,457
|
|
|
28,276
|
|
|
28,360
|
|
Depreciation and
amortization
|
73,914
|
|
|
71,946
|
|
|
294,520
|
|
|
301,812
|
|
Total property
operating expenses
|
171,455
|
|
|
168,886
|
|
|
695,165
|
|
|
695,160
|
|
Acquisition
expense
|
622
|
|
|
1,417
|
|
|
2,777
|
|
|
2,388
|
|
Property management
expenses
|
7,884
|
|
|
8,076
|
|
|
30,990
|
|
|
32,095
|
|
General and
administrative expenses
|
6,613
|
|
|
4,844
|
|
|
25,716
|
|
|
20,909
|
|
Merger related
expenses
|
—
|
|
|
(50)
|
|
|
—
|
|
|
3,152
|
|
Integration related
expenses
|
—
|
|
|
1,255
|
|
|
—
|
|
|
8,395
|
|
Income from
continuing operations before non-operating items
|
76,763
|
|
|
68,791
|
|
|
288,131
|
|
|
230,233
|
|
Interest and other
non-property (expense) income
|
(8)
|
|
|
(307)
|
|
|
(368)
|
|
|
770
|
|
Interest
expense
|
(30,834)
|
|
|
(31,378)
|
|
|
(122,344)
|
|
|
(123,953)
|
|
Loss on debt
extinguishment
|
(218)
|
|
|
—
|
|
|
(3,602)
|
|
|
(2,586)
|
|
Net casualty (loss)
gain after insurance and other settlement proceeds
|
(13)
|
|
|
(45)
|
|
|
473
|
|
|
(476)
|
|
(Loss) gain on sale
of depreciable real estate assets excluded from discontinued
operations
|
(72)
|
|
|
395
|
|
|
189,958
|
|
|
42,649
|
|
(Loss) gain on sale
of non-depreciable real estate assets
|
—
|
|
|
(185)
|
|
|
172
|
|
|
350
|
|
Income before income
tax expense
|
45,618
|
|
|
37,271
|
|
|
352,420
|
|
|
146,987
|
|
Income tax
expense
|
(254)
|
|
|
(815)
|
|
|
(1,673)
|
|
|
(2,050)
|
|
Income from
continuing operations before joint venture activity
|
45,364
|
|
|
36,456
|
|
|
350,747
|
|
|
144,937
|
|
(Loss) gain from real
estate joint ventures
|
3
|
|
|
(10)
|
|
|
(2)
|
|
|
6,009
|
|
Income from
continuing operations
|
45,367
|
|
|
36,446
|
|
|
350,745
|
|
|
150,946
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Loss from
discontinued operations before (loss) gain on sale
|
—
|
|
|
(4)
|
|
|
—
|
|
|
(63)
|
|
Gain (loss) on sale
of discontinued operations
|
—
|
|
|
16
|
|
|
—
|
|
|
5,394
|
|
Consolidated net
income
|
45,367
|
|
|
36,458
|
|
|
350,745
|
|
|
156,277
|
|
Net income
attributable to noncontrolling interests
|
2,380
|
|
|
1,933
|
|
|
18,458
|
|
|
8,297
|
|
Net income available
for MAA common shareholders
|
$
|
42,987
|
|
|
$
|
34,525
|
|
|
$
|
332,287
|
|
|
$
|
147,980
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - basic:
|
|
|
|
|
|
|
|
Income from
continuing operations available for common shareholders
|
$
|
0.57
|
|
|
$
|
0.46
|
|
|
$
|
4.41
|
|
|
$
|
1.90
|
|
Discontinued property
operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.07
|
|
Net income available
for common shareholders
|
$
|
0.57
|
|
|
$
|
0.46
|
|
|
$
|
4.41
|
|
|
$
|
1.97
|
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted:
|
|
|
|
|
|
|
|
Income from
continuing operations available for common shareholders
|
$
|
0.57
|
|
|
$
|
0.46
|
|
|
$
|
4.41
|
|
|
$
|
1.90
|
|
Discontinued property
operations
|
—
|
|
|
—
|
|
|
—
|
|
|
0.07
|
|
Net income available
for common shareholders
|
$
|
0.57
|
|
|
$
|
0.46
|
|
|
$
|
4.41
|
|
|
$
|
1.97
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
|
0.82
|
|
|
$
|
0.77
|
|
|
$
|
3.13
|
|
|
$
|
2.96
|
|
SHARE AND UNIT
DATA
|
|
|
|
|
|
|
|
Shares and units
in thousands
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
NET INCOME
SHARES (1)
|
|
|
|
|
|
|
|
Weighted average
common shares - Basic
|
75,203
|
|
|
75,114
|
|
|
75,176
|
|
|
74,982
|
|
Weighted average
partnership units outstanding
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Effect of dilutive
securities
|
197
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average
common shares - Diluted
|
75,400
|
|
|
75,114
|
|
|
75,176
|
|
|
74,982
|
|
FUNDS FROM
OPERATIONS SHARES AND UNITS
|
|
|
|
|
|
|
|
Weighted average
common shares and units - Basic
|
79,378
|
|
|
79,308
|
|
|
79,361
|
|
|
79,188
|
|
Weighted average
common shares and units - Diluted
|
79,575
|
|
|
79,461
|
|
|
79,551
|
|
|
79,370
|
|
PERIOD END SHARES
AND UNITS
|
|
|
|
|
|
|
|
Common shares at
December 31,
|
75,409
|
|
|
75,268
|
|
|
75,409
|
|
|
75,268
|
|
Partnership units at
December 31,
|
4,163
|
|
|
4,191
|
|
|
4,163
|
|
|
4,191
|
|
Total shares and
units at December 31,
|
79,572
|
|
|
79,459
|
|
|
79,572
|
|
|
79,459
|
|
|
|
|
|
(1)
|
For additional
information on the calculation of diluted shares and earnings per
share, please refer to the Notes to Condensed Consolidated
Financial Statements in our Annual Report on Form 10-K for the year
ended December 31, 2015, expected to be filed with the SEC on
February 25, 2016.
|
FUNDS FROM
OPERATIONS
|
|
|
|
|
|
Dollars in
thousands, except per share data
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Net income available
for MAA common shareholders
|
$
|
42,987
|
|
|
$
|
34,525
|
|
|
$
|
332,287
|
|
|
$
|
147,980
|
|
Depreciation and
amortization of real estate assets
|
73,121
|
|
|
71,315
|
|
|
291,572
|
|
|
299,421
|
|
Depreciation and
amortization of real estate assets of discontinued
operations
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
Gain on sale of
discontinued operations
|
—
|
|
|
(16)
|
|
|
—
|
|
|
(5,394)
|
|
Loss (gain) on sale
of depreciable real estate assets excluded from discontinued
operations
|
72
|
|
|
(395)
|
|
|
(189,958)
|
|
|
(42,649)
|
|
Loss (gain) on
disposition within unconsolidated entities
|
—
|
|
|
10
|
|
|
(12)
|
|
|
(4,007)
|
|
Depreciation and
amortization of real estate assets of real estate joint
ventures
|
6
|
|
|
6
|
|
|
25
|
|
|
397
|
|
Net income
attributable to noncontrolling interests
|
2,380
|
|
|
1,933
|
|
|
18,458
|
|
|
8,297
|
|
Funds from operations
attributable to the Company
|
118,566
|
|
|
107,378
|
|
|
452,372
|
|
|
404,087
|
|
Acquisition
expense
|
622
|
|
|
1,417
|
|
|
2,777
|
|
|
2,388
|
|
Merger related
expenses
|
—
|
|
|
(50)
|
|
|
—
|
|
|
3,152
|
|
Integration related
expenses
|
—
|
|
|
1,255
|
|
|
—
|
|
|
8,395
|
|
Loss (gain) on sale
of non-depreciable real estate assets
|
—
|
|
|
185
|
|
|
(172)
|
|
|
(350)
|
|
Mark-to-market debt
adjustment
|
(3,901)
|
|
|
(5,511)
|
|
|
(19,955)
|
|
|
(25,079)
|
|
Loss on debt
extinguishment
|
218
|
|
|
—
|
|
|
3,602
|
|
|
3,126
|
(1)
|
Core funds from
operations attributable to the Company
|
115,505
|
|
|
104,674
|
|
|
438,624
|
|
|
395,719
|
|
Recurring capital
expenditures
|
(8,565)
|
|
|
(11,234)
|
|
|
(56,888)
|
|
|
(56,098)
|
|
Core adjusted funds
from operations
|
$
|
106,940
|
|
|
$
|
93,440
|
|
|
$
|
381,736
|
|
|
$
|
339,621
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares and units - Diluted
|
79,575
|
|
|
79,461
|
|
|
79,551
|
|
|
79,370
|
|
|
|
|
|
|
|
|
|
|
Funds from operations
per share and unit - Diluted
|
$
|
1.49
|
|
|
$
|
1.35
|
|
|
$
|
5.69
|
|
|
$
|
5.09
|
|
Core funds from
operations per share and unit - Diluted
|
$
|
1.45
|
|
|
$
|
1.32
|
|
|
$
|
5.51
|
|
|
$
|
4.99
|
|
Core adjusted funds
from operations per share and unit - Diluted
|
$
|
1.34
|
|
|
$
|
1.18
|
|
|
$
|
4.80
|
|
|
$
|
4.28
|
|
|
|
|
|
(1)
|
The loss on debt
extinguishment for the twelve months ended December 31, 2014
includes MAA's share of debt extinguishment costs incurred by its
joint venture, Mid-America Multifamily Fund II.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
Dollars in
thousands
|
|
|
|
|
December 31,
2015
|
|
December 31,
2014
|
Assets
|
|
|
|
Real estate
assets
|
|
|
|
Land
|
$
|
926,532
|
|
|
$
|
913,408
|
|
Buildings and
improvements
|
6,939,288
|
|
|
6,781,210
|
|
Furniture, fixtures
and equipment
|
228,157
|
|
|
214,742
|
|
Capital improvements
in progress
|
44,355
|
|
|
80,772
|
|
|
8,138,332
|
|
|
7,990,132
|
|
Accumulated
depreciation
|
(1,482,368)
|
|
|
(1,358,400)
|
|
|
6,655,964
|
|
|
6,631,732
|
|
Undeveloped
land
|
51,779
|
|
|
55,997
|
|
Corporate property,
net
|
8,812
|
|
|
7,988
|
|
Investments in real
estate joint ventures
|
1,811
|
|
|
1,791
|
|
Real estate assets,
net
|
6,718,366
|
|
|
6,697,508
|
|
Cash and cash
equivalents
|
37,559
|
|
|
26,653
|
|
Restricted
cash
|
26,082
|
|
|
28,181
|
|
Deferred financing
cost, net
|
5,232
|
|
|
5,996
|
|
Other
assets
|
58,935
|
|
|
61,119
|
|
Goodwill
|
1,607
|
|
|
2,321
|
|
Total
assets
|
$
|
6,847,781
|
|
|
$
|
6,821,778
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Liabilities
|
|
|
|
Secured notes
payable
|
$
|
1,286,236
|
|
|
$
|
1,589,641
|
|
Unsecured notes
payable
|
2,141,332
|
|
|
1,923,058
|
|
Accounts
payable
|
9,142
|
|
|
8,395
|
|
Fair market value of
interest rate swaps
|
10,358
|
|
|
13,392
|
|
Accrued expenses and
other liabilities
|
223,017
|
|
|
219,044
|
|
Security
deposits
|
11,623
|
|
|
10,526
|
|
Total
liabilities
|
3,681,708
|
|
|
3,764,056
|
|
Redeemable
stock
|
8,250
|
|
|
5,911
|
|
Shareholders'
equity
|
|
|
|
Common
stock
|
754
|
|
|
752
|
|
Additional paid-in
capital
|
3,627,073
|
|
|
3,619,270
|
|
Accumulated
distributions in excess of net income
|
(634,141)
|
|
|
(729,086)
|
|
Accumulated other
comprehensive loss
|
(1,589)
|
|
|
(412)
|
|
Total MAA
shareholders' equity
|
2,992,097
|
|
|
2,890,524
|
|
Noncontrolling
interest
|
165,726
|
|
|
161,287
|
|
Total
equity
|
3,157,823
|
|
|
3,051,811
|
|
Total liabilities and
shareholders' equity
|
$
|
6,847,781
|
|
|
$
|
6,821,778
|
|
NON-GAAP FINANCIAL MEASURES AND OTHER
DEFINITIONS
Average Effective Rent per Unit
Average
effective rent per unit represents the average of gross rent
amounts after the effect of leasing concessions for occupied units
plus prevalent market rates asked for unoccupied units, divided by
the total number of units. Leasing concessions represent discounts
to the current market rate. 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
quarter.
Average Total Revenue per Occupied Unit
Average total
revenue per occupied unit represents total revenue divided by the
average daily number of units that were physically occupied.
Core Adjusted Funds From Operations (Core AFFO)
Core
AFFO is composed of Core FFO less recurring capital expenditures.
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 excluding certain non-cash or non-routine items such
as acquisition, merger and integration expenses, mark-to-market
debt adjustments, loss or gain on debt extinguishment, and loss or
gain on sale of non-depreciable assets. While MAA's
definition of Core FFO is similar to others in the industry, MAA's
precise methodology for calculating Core FFO may differ from that
utilized by other REITs and, accordingly, may not be comparable to
such other REITs. Core FFO should not be considered as an
alternative to net income. MAA believes that Core FFO is
helpful in understanding operating performance in that it removes
certain items that by their nature are not comparable over periods
and therefore tend to obscure actual operating performance.
Development Portfolio
Communities remain identified as
development until certificates of occupancy are obtained for all
units under development. Once all units are delivered and available
for occupancy, the community moves into the Lease-up Portfolio.
Earnings Before Interest Taxes Depreciation and Amortization
(EBITDA)
For purposes of calculations in this document,
EBITDA is composed of net income before net gain on asset sales and
insurance and other settlement proceeds, and gain or loss on debt
extinguishment, plus depreciation, interest expense, income taxes,
and amortization of deferred financing costs. EBITDA is a
non-GAAP financial measure used as a performance measure. 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 income and expense items that are
not indicative of operating performance. EBITDA should not be
considered as an alternative to net income as an indicator of
financial performance. MAA's computation of EBITDA may differ from
the methodology utilized by other companies to calculate
EBITDA.
Effective Occupancy
Effective occupancy represents
contract rents on occupied units divided by the sum of market rents
on vacant units and contract rents on occupied units.
Free Cash Flow
Core FFO less all capital expenditures
on existing communities and less all dividends paid to
shareholders
Funds From Operations (FFO)
FFO represents net income
available for common shareholders (computed in accordance with U.S.
generally accepted accounting principles, or GAAP) excluding
extraordinary items, asset impairment, gains or losses on
disposition of real estate assets, plus net income attributable to
noncontrolling interest, depreciation of real estate, and
adjustments for joint ventures to reflect FFO on the same
basis. Because noncontrolling interest is added back, FFO,
when used in this document, represents FFO attributable to
MAA. While MAA's definition of FFO is in accordance with the
National Association of Real Estate Investment Trusts' definition,
it may differ from the methodology for calculating FFO utilized by
other REITs and, accordingly, may not be comparable to such other
REITs. FFO should not be considered as an alternative to net
income as an indicator of operating performance. MAA believes
that FFO is helpful in understanding operating performance in that
FFO excludes depreciation expense of real estate assets. MAA
believes that GAAP historical cost depreciation of real estate
assets is generally not correlated with changes in the value of
those assets, whose value does not diminish predictably over time,
as historical cost depreciation implies.
Lease-up Portfolio
New acquisitions acquired during
lease-up and newly developed communities remain in the Lease-up
Portfolio until stabilized.
Net Operating Income (NOI)
Net operating income
represents total property revenues less total property operating
expenses, excluding depreciation, for all properties held during
the period, regardless of their status as held for sale. We believe
NOI by market is a helpful tool in evaluating the operating
performance within MAA's markets because it measures the core
operations of property performance by excluding corporate level
expenses and other items not related to property operating
performance.
Other Non-Same Store Portfolio
Other Non-Same Store
Portfolio includes recent acquisitions, communities in development
or lease-up, communities that have undergone a significant casualty
loss, and commercial assets.
Recurring Earnings Before Interest Taxes Depreciation and
Amortization (Recurring EBITDA)
Recurring EBITDA represents
EBITDA excluding certain non-cash or non-routine items such as
acquisition and merger and integration expenses. MAA believes
Recurring EBITDA is an important performance measure as it adjusts
for certain items that by their nature are not comparable over
periods and therefore tend to obscure actual operating performance.
Recurring EBITDA should not be considered as an alternative to net
income as an indicator of operating performance. MAA's computation
of Recurring EBITDA may differ from the methodology utilized by
other companies to calculate Recurring EBITDA.
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 that have been approved by
the 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. Within the Same Store Portfolio communities are
designated as operating in Large or Secondary Markets:
Large Market Same Store
communities are generally those communities in markets with a
population of at least one million and at least 1% of the total
public multifamily REIT units.
Secondary Market Same
Store communities are generally those communities in markets
with either a population less than one million or less than 1% of
the total public multifamily REIT units, or both.
Stabilized Communities
Communities are considered
stabilized after achieving 90% occupancy for 90 days.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/maa-reports-fourth-quarter-results-300214743.html
SOURCE MAA