MEMPHIS, Tenn., Oct. 28, 2015 /PRNewswire/ -- Mid-America
Apartment Communities, Inc., or MAA, (NYSE: MAA) today announced
operating results for the quarter ended September 30,
2015.
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Highlights
- Core Funds from Operations, or Core FFO, per diluted common
share and unit, or per Share, was $1.38 for the third quarter; 8% above the same
period in the prior year and a record quarterly performance for the
company.
- Same store net operating income, or NOI, for the third quarter
increased 8.1% as compared to the same period in the prior year,
based on a 6.1% increase in revenue and a 3.0% increase in property
operating expenses.
- Average revenue per occupied unit for the same store portfolio
increased 5.1% to $1,123, primarily
driven by an increase in average effective rent per unit of
4.6%.
- Average physical occupancy for the quarter increased 0.9% over
the prior year and physical occupancy ended the quarter at
96.6%.
- Resident turnover for the same store portfolio remained low for
the third quarter of 2015 at 53.3% on a rolling twelve month
basis.
- During the quarter, we acquired two properties, a 252-unit
community located in the Norfolk/Hampton/Virginia
Beach, Virginia Metropolitan Statistical Area, or MSA and a
new 280-unit community located in the Kansas City, Missouri-Kansas MSA.
- During the quarter, we sold three properties containing 1,602
units. For the full year, we have sold 21 properties, recognizing
gains of $190.0 million and producing
internal rates of return on invested capital of 14.1% on a
leveraged basis.
- MAA has four development communities with a total projected
cost of approximately $120 million
under construction. An additional $10.5
million of construction costs were funded during the
quarter.
- Three communities remained in lease-up as of quarter-end, with
an average occupancy of 91.0%. Two of these properties were
acquired in lease-up and the third was a development project
completed by the company during the second quarter.
- Year-to-date, we have renovated 4,209 apartment homes under our
redevelopment program, achieving average rental rate increases of
10.6% above non-renovated homes.
- Following quarter end, we completed the refinancing of our
unsecured revolving credit facility, increasing borrowing capacity
to $750 million and further improving
terms to reflect our strong credit profile.
- The company is issuing revised guidance for the full year of
2015, with Core FFO now expected to be in the range of $5.39 per Share to $5.49 per Share for the full year.
Eric Bolton, Chairman and Chief
Executive Officer, said, "MAA's focus on diversifying capital
across the high growth Sunbelt region continues to generate strong
leasing results. Our balanced approach, aimed at deploying
capital to target a broad segment of the rental market, supported
by a strong operating platform, continues to capture solid rent
growth and high occupancy. Active capital recycling over the
past few years has improved the quality of our portfolio and has
MAA well-positioned for continued strong full cycle
performance."
Funds from Operations
For the quarter ended
September 30, 2015, FFO was $114.5
million, or $1.44 per Share,
compared to $103.8 million, or
$1.31 per Share, for the quarter
ended September 30, 2014. Core FFO, which excludes
certain non-cash or non-routine items, for the quarter ended
September 30, 2015 was $109.9
million, or $1.38 per Share,
as compared to $101.6 million, or
$1.28 per Share, for the quarter
ended September 30, 2014.
For the nine months ended September 30,
2015, FFO was $333.8 million,
or $4.20 per Share, compared to
$296.7 million, or $3.74 per Share, for the nine months ended
September 30, 2014. Core FFO
for the nine months ended September 30,
2015 was $323.1 million, or
$4.06 per Share, as compared to
$291.0 million, or $3.67 per Share, for the nine months ended
September 30, 2014.
A reconciliation of FFO and Core FFO to net income attributable
to MAA and an expanded discussion of the components of FFO and Core
FFO can be found later in this press release.
Net Income Available to Common Shareholders
For the
quarter ended September 30, 2015, net income available for
common shareholders was $91.7
million, or $1.22 per diluted
common share, compared to $67.0
million, or $0.89 per diluted
common share, for the quarter ended September 30, 2014.
Results for the quarter ended September 30, 2015 included
$54.6 million, or $0.73 per diluted common share, of gains related
to the sale of real estate assets during the period, as compared to
$35.9 million, or $0.48 per diluted common share, of for the
quarter ended September 30, 2014.
For the nine months ended September 30,
2015, net income available for common shareholders was
$289.3 million, or $3.84 per diluted common share, compared to
$113.5 million, or $1.51 per diluted common share, for the nine
months ended September 30,
2014. Results for the nine months ended September 30, 2015 included $190.2 million, or $2.53 per diluted common share, of gains related
to the sale of real estate assets during the period. Results
for the nine months ended September 30,
2014 included $10.3 million,
or $0.14 per diluted common share, of
merger and integration expenses and $48.2
million, or $0.64 per diluted
common share, of gains related to the sale of real estate assets
during the period.
Third Quarter Same Store Operating Results
Operating results for the Same Store portfolio of 71,376
apartment units for the company's Large Market and Secondary Market
portfolios are presented below:
|
Percent Change
From
|
|
Three months
ended
|
|
Three months ended
September 30, 2014
|
|
September 30,
2015
|
|
|
|
|
|
|
|
Average
|
|
Average
|
|
|
|
|
|
|
|
Effective
|
|
Physical
|
|
Revenue
|
|
Expense
|
|
NOI
|
|
Rent per
Unit
|
|
Occupancy
|
Large
Markets
|
6.5
|
%
|
|
3.6
|
%
|
|
8.5
|
%
|
|
5.6
|
%
|
|
96.5
|
%
|
Secondary
Markets
|
5.2
|
%
|
|
1.9
|
%
|
|
7.4
|
%
|
|
2.8
|
%
|
|
96.6
|
%
|
Same Store
|
6.1
|
%
|
|
3.0
|
%
|
|
8.1
|
%
|
|
4.6
|
%
|
|
96.6
|
%
|
Total Same Store revenue growth of 6.1% during the third quarter
was primarily produced by a 5.1% increase in revenues per occupied
unit, to $1,123, combined with a 0.9%
increase in average physical occupancy for the quarter, as compared
to the same period in the prior year. Overall physical
occupancy for the Same Store portfolio ended the quarter at
96.6%. Operating expenses increased 3.0% for the quarter,
with the largest portion of the growth related to utilities and
personnel expenses for the quarter.
A reconciliation of NOI, including same store NOI, to net income
attributable to MAA and an expanded discussion of the components of
NOI can be found later in this release.
Acquisition and Disposition Activity
During the third
quarter, MAA acquired two new communities: Radius, a 252-unit
community located in the Norfolk/Hampton/Virginia
Beach, Virginia MSA, and Haven at Prairie Trace, a
280-unit community located in the Kansas
City, Missouri-Kansas MSA, for a combined purchase price of
$86.6 million. These
acquisitions bring the year-to-date purchase price for new
acquisition properties to $244.4
million for five properties containing 1,409 units.
During the third quarter, the company closed on the disposition
of three additional multifamily properties: Whisperwood, a
1,008-unit community located in Columbus,
Georgia; Colonial Grand at Wilmington, a 390-unit community located in
Wilmington, North Carolina; and
Savannah Creek, a 204-unit community
located in the Memphis, Tennessee
MSA.
Year to date, 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 has exited eleven markets included in
the Secondary Market segment of the portfolio, achieving an
economic cap rate of 5.8% and internal rates of return on invested
capital of 14.1% on a leveraged basis and 10.3% on an unleveraged
basis.
Development and Lease-up Activity
MAA has four
development communities with a total projected cost of $119.5 million under construction, with an
expected stabilized NOI yield of 7.2%. During the third quarter MAA
funded an additional $10.5 million,
with $54.0 million remaining to be
funded. The company had three communities remaining in
lease-up during the quarter: Colonial Grand at Bellevue Phase II,
an expansion community located in Nashville, Tennessee, completed during the
second quarter; Retreat at West Creek, located in Richmond, Virginia, and Skysong, located in
Phoenix, Arizona, which were both
acquired in lease-up during the second quarter. Average
occupancy for the three communities was 91.0% at the end of the
quarter.
Redevelopment Activity
The company continues its
redevelopment program at select communities throughout the
portfolio. During the third quarter, MAA renovated a total of
1,777 units at an average cost of $4,596 per unit, bringing total units renovated
during the year to 4,209 at an average cost of $4,522 per unit, and achieving average rental
rate increases of 10.6% above non-renovated units.
Capital Expenditures
Recurring capital expenditures
for the portfolio totaled $15.8
million for the third quarter, or approximately $0.20 per Share, as compared to $19.2 million, or $0.24 per Share, for the same period in
2014. These expenditures resulted in Core Adjusted Funds from
Operations, or Core AFFO, of $1.18
per Share, for the third quarter, compared to $1.04 per Share for the same period in 2014,
which represents a 13% increase.
Recurring capital expenditures for the portfolio totaled
$48.3 million for the nine months
ended September 30, 2015, or
approximately $0.61 per Share, as
compared to $44.9 million or
$0.57 per Share, for the same period
in 2014. These expenditures resulted in Core Adjusted Funds
from Operations, or Core AFFO, of $3.45 per Share for the nine months ended
September 30, 2015, compared to
$3.10 per Share for the same period
in 2014.
Total capital expenditures for the portfolio during the third
quarter were $24.7 million on
existing properties, with an additional $9.7
million on redevelopment opportunities. Total capital
expenditures for the portfolio during the nine months ended
September 30, 2015 were $72.8 million on existing properties, with an
additional $22.5 million on
redevelopment opportunities.
A reconciliation of FFO and Core AFFO to net income attributable
to MAA and an expanded discussion of the components of FFO and Core
AFFO can be found later in this release.
Financing Activity
As part of the disposition plans
and continued balance sheet improvement, during the quarter, the
company paid off $35.1 million
related to two property mortgages with scheduled maturities.
Subsequent to quarter-end, the company also paid off
$184.9 million of senior unsecured
notes at their maturity date.
Subsequent to quarter-end, the company closed on a new unsecured
revolving credit facility, replacing the current credit
facility. The new credit facility, provides $750.0 million of borrowing capacity, with an
option to extend 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%.
We also amended the terms to one of the three existing terms
loans subsequent to quarter-end; extending the maturity from 2017
to 2021 and reducing the interest rate from LIBOR plus a spread of
1.35% to LIBOR plus a spread of 1.10% based on an investment grade
ratings grid. The notional amount remained unchanged at
$150 million.
Balance Sheet
As of September 30, 2015,
- Total debt to total capitalization was 34.5% (based on the
September 30, 2015 closing stock
price),
- Total net debt to total gross assets (based on gross book value
at September 30, 2015) was 39.9%,
compared to 41.3% for the same period in the prior year,
- Total debt outstanding was $3.4
billion at an average effective interest rate of 3.6%,
- 90.4% of the total debt was fixed or hedged against rising
interest rates for an average of 4.2 years,
- Fixed charge coverage ratio (Recurring EBITDA divided by
interest expense adjusted for mark-to-market debt adjustment) was
4.23x and total net debt to Recurring EBITDA was 5.76x,
- Approximately $357.6 million
combined cash and capacity was available under the company's
unsecured credit facility, and
- Unencumbered assets increased to 70.6% of gross real estate
assets as compared to 67.2% 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.
87th Consecutive Quarterly Common Dividend
Declared
Our Board of Directors declared its 87th
consecutive quarterly common dividend at an annual rate of
$3.08 per common share and unit,
which will be paid on October 30,
2015 to holders of record on October
15, 2015.
2015 Core FFO per Share Guidance
The company is
revising prior guidance for full year Core FFO, which is now
projected to be in a range of $5.39
per Share to $5.49 per Share, or
$5.44 per Share at the midpoint, an
increase from the prior guidance range of $5.25 per Share to $5.41 per Share.
Management now expects full year revenue growth from the Same
Store portfolio to be in the 5.0% to 6.0% range, while property
operating expense growth is expected to be in the 3.5% to 4.5%
growth. This growth will result in expected property NOI
growth in the range of 6.0% to 7.0%, an increase from the prior
guidance range of 4.5% to 5.5%.
The company expects total recurring capital expenditures for the
full year 2015 to be in the range of $52
million - $56 million, producing Core AFFO of $4.71 per Share to $4.81 per Share, or $4.76 per Share at the mid-point.
Additional information on our 2015 financial and earnings
guidance is included in the supplemental data accompanying this
press release.
Supplemental Material and Conference Call
Supplemental
data to this press release can be found on the "For Investors" page
of our website at www.maac.com. MAA will host a conference call to
further discuss third quarter results on Thursday, October 29, 2015, at 9:00 AM Central Time. The conference
call-in number is 866-952-7532. You may also join the live
webcast of the conference call by accessing the "For Investors"
page of our website at www.maac.com. Our filings with the
Securities and Exchange Commission are filed under the registrant
names of Mid-America Apartment Communities, Inc. and Mid-America
Apartments, L.P.
About MAA
MAA is a self-administered, self-managed
real estate investment trust, which owned 79,024 apartment units
throughout the Southeast and Southwest regions of the United States as of September 30,
2015. For further details, please visit the MAA website at
www.maac.com or contact Investor Relations at
investor.relations@maac.com, or via mail at MAA, 6584 Poplar Ave.,
Memphis, TN 38138, Attn:
Investor Relations.
Forward-Looking Statements
Sections of this press
release contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, or the
Exchange Act, with respect to our expectations for future periods.
Forward-looking statements do not discuss historical fact, but
instead include statements related to expectations, projections,
intentions or other items related to the future. Such
forward-looking statements include, without limitation, statements
concerning property acquisitions and dispositions, joint venture
activity, development and renovation activity as well as other
capital expenditures, capital raising activities, rent and expense
growth, occupancy, financing activities and interest rate and other
economic expectations. Words such as "expects," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates," and
variations of such words and similar expressions are intended to
identify such forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements to be materially different from the results of
operations, financial conditions or plans expressed or implied by
such forward-looking statements. Such factors include, among other
things, unanticipated adverse business developments affecting us,
or our properties, adverse changes in the real estate markets and
general and local economies and business conditions. Although we
believe that the assumptions underlying the forward-looking
statements contained herein are reasonable, any of the assumptions
could be inaccurate, and therefore such forward-looking statements
included in this report may not prove to be accurate. In light of
the significant uncertainties inherent in the forward-looking
statements included herein, the inclusion of such information
should not be regarded as a representation by us or any other
person that the results or conditions described in such statements
or our objectives and plans will be achieved.
The following factors, among others, could cause our future
results to differ materially from those expressed in the
forward-looking statements:
- inability to generate sufficient cash flows due to market
conditions, changes in supply and/or demand, competition, uninsured
losses, changes in tax and housing laws, or other factors;
- exposure, as a multifamily focused REIT, to risks inherent in
investments in a single industry;
- adverse changes in real estate markets, including, but not
limited to, the extent of future demand for multifamily units in
our significant markets, barriers of entry into new markets, which
we may seek to enter in the future, limitations on our ability to
increase rental rates, competition, our ability to identify and
consummate attractive acquisitions or development projects on
favorable terms, our ability to consummate any planned dispositions
in a timely manner on acceptable terms, and our ability to reinvest
sale proceeds in a manner that generates favorable returns;
- failure of new acquisitions to achieve anticipated results or
be efficiently integrated;
- failure of development communities to be completed, if at all,
within budget and on a timely basis or to lease-up as
anticipated;
- unexpected capital needs;
- changes in operating costs, including real estate taxes,
utilities and insurance costs;
- losses from catastrophes in excess of our insurance
coverage;
- ability to obtain financing at favorable rates, if at all, and
refinance existing debt as it matures;
- level and volatility of interest or capitalization rates or
capital market conditions;
- loss of hedge accounting treatment for interest rate swaps or
interest rate caps;
- the continuation of the good credit of our interest rate swap
and cap providers;
- price volatility, dislocations and liquidity disruptions in the
financial markets and the resulting impact on financing;
- the effect of any rating agency actions on the cost and
availability of new debt financing;
- significant decline in market value of real estate serving as
collateral for mortgage obligations;
- significant change in the mortgage financing market that would
cause single-family housing, either as an owned or rental product,
to become a more significant competitive product;
- our ability to continue to satisfy complex rules in order to
maintain our status as a REIT for federal income tax purposes, the
ability of our operating partnership to satisfy the rules to
maintain its status as a partnership for federal income tax
purposes, the ability of our taxable REIT subsidiaries to maintain
their status as such for federal income tax purposes, and our
ability and the ability of our subsidiaries to operate effectively
within the limitations imposed by these rules;
- inability to attract and retain qualified personnel;
- potential liability for breaches of our privacy or information
security systems;
- potential liability for environmental contamination;
- adverse legislative or regulatory tax changes;
- litigation and compliance costs associated with laws requiring
access for disabled persons; and
- other risks identified in this press release and, from time to
time, in other reports we file with the Securities and Exchange
Commission, or the SEC, or in other documents that we publicly
disseminate.
We undertake no obligation to publicly update or revise these
forward-looking statements to reflect events, circumstances or
changes in expectations after the date of this press release.
FINANCIAL
HIGHLIGHTS
|
Dollars in
thousands, except per share data
|
|
|
|
|
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Total property
revenue
|
$ 261,998
|
|
$ 249,563
|
|
$ 779,441
|
|
$ 738,959
|
|
|
|
|
|
|
|
|
Total NOI
|
$ 160,399
|
|
$ 148,681
|
|
$ 476,338
|
|
$ 443,653
|
|
|
|
|
|
|
|
|
Management &
leasing fee revenue
|
$
-
|
|
$
11
|
|
$
-
|
|
$
154
|
|
|
|
|
|
|
|
|
Recurring
EBITDA
|
$ 146,712
|
|
$ 137,302
|
|
$ 433,751
|
|
$ 406,223
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
1.22
|
|
$
0.89
|
|
$
3.84
|
|
$
1.51
|
Diluted
|
$
1.22
|
|
$
0.89
|
|
$
3.84
|
|
$
1.51
|
|
|
|
|
|
|
|
|
Funds from operations
per share (diluted):
|
|
|
|
|
|
|
|
FFO
|
$
1.44
|
|
$
1.31
|
|
$
4.20
|
|
$
3.74
|
Core FFO
|
$
1.38
|
|
$
1.28
|
|
$
4.06
|
|
$
3.67
|
Core AFFO
|
$
1.18
|
|
$
1.04
|
|
$
3.45
|
|
$
3.10
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
$ 0.7700
|
|
$ 0.7300
|
|
$ 2.3100
|
|
$ 2.1900
|
|
|
|
|
|
|
|
|
Dividends/Core FFO
(diluted) payout ratio
|
55.8%
|
|
57.0%
|
|
56.9%
|
|
59.7%
|
Dividends/Core AFFO
(diluted) payout ratio
|
65.3%
|
|
70.2%
|
|
67.0%
|
|
70.6%
|
|
|
|
|
|
|
|
|
Consolidated interest
expense
|
$ 29,342
|
|
$ 28,251
|
|
$ 88,801
|
|
$ 89,090
|
Mark-to-market debt
adjustment
|
5,321
|
|
5,328
|
|
16,053
|
|
19,568
|
Capitalized
interest
|
349
|
|
403
|
|
1,313
|
|
1,253
|
Total interest
incurred
|
$ 35,012
|
|
$ 33,982
|
|
$ 106,167
|
|
$ 109,911
|
|
|
|
|
|
|
|
|
Amortization of
principal on notes payable
|
$
1,923
|
|
$
1,562
|
|
$
6,310
|
|
$ 4,685
|
FINANCIAL
HIGHLIGHTS (CONTINUED)
|
|
Dollars in
thousands, except per share data
|
|
|
|
As
of
|
|
September 30,
2015
|
|
December 31,
2014
|
Total gross
assets
|
$
8,313,918
|
|
$
8,207,272
|
Total debt
|
$
3,425,135
|
|
$
3,524,515
|
Common shares and
units, outstanding end of period
|
79,564,446
|
|
79,458,827
|
Share price, end of
period
|
$
81.87
|
|
$
74.68
|
Book equity value,
end of period
|
$
3,178,587
|
|
$
3,057,722
|
Market equity value,
end of period
|
$
6,513,941
|
|
$
5,933,985
|
Debt to total market
capitalization ratio
|
34.5%
|
|
37.3%
|
Total net debt/total
gross assets
|
39.9%
|
|
42.6%
|
Unencumbered
Assets/Gross Real Estate Assets
|
70.6%
|
|
67.2%
|
Recurring EBITDA/Debt
Service
|
4.01x
|
|
3.75x
|
Fixed Charge
Coverage(1)
|
4.23x
|
|
3.99x
|
Total Net
Debt(2)/Recurring EBITDA (3)
|
5.76x
|
|
6.37x
|
|
|
|
|
(1) Fixed charge coverage
represents Recurring EBITDA divided by interest expense adjusted
for mark-to-market debt adjustment and any preferred
dividends.
|
(2)
Total Net Debt equals Total Debt less Cash and Cash
Equivalents.
|
|
|
(3)
Recurring EBITDA represents the twelve months ended September 30,
2015.
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
Dollars in
thousands, except per share data
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating
revenues:
|
|
|
|
|
|
|
|
Rental
revenues
|
$239,670
|
|
$226,584
|
|
$710,775
|
|
$671,695
|
Other property
revenues
|
22,328
|
|
22,979
|
|
68,666
|
|
67,264
|
Total property
revenues
|
261,998
|
|
249,563
|
|
779,441
|
|
738,959
|
Management fee
income
|
-
|
|
11
|
|
-
|
|
154
|
Total operating
revenues
|
261,998
|
|
249,574
|
|
779,441
|
|
739,113
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Property operating
expenses
|
101,599
|
|
100,882
|
|
303,103
|
|
296,408
|
Depreciation and
amortization
|
73,098
|
|
70,222
|
|
220,606
|
|
229,866
|
Acquisition
expense
|
656
|
|
13
|
|
2,155
|
|
971
|
Property management
expenses
|
7,628
|
|
7,429
|
|
23,106
|
|
24,019
|
General and
administrative expenses
|
5,879
|
|
6,511
|
|
19,103
|
|
16,065
|
Merger related
expenses
|
-
|
|
331
|
|
-
|
|
3,202
|
Integration related
expenses
|
-
|
|
147
|
|
-
|
|
7,140
|
Income from
continuing operations before non-operating items
|
73,138
|
|
64,039
|
|
211,368
|
|
161,442
|
Interest and other
non-property (expense) income
|
(179)
|
|
37
|
|
(359)
|
|
1,077
|
Interest
expense
|
(29,342)
|
|
(28,251)
|
|
(88,801)
|
|
(89,090)
|
Loss on debt
extinguishment
|
(5)
|
|
(2,586)
|
|
(3,384)
|
|
(2,586)
|
Amortization of
deferred financing costs
|
(887)
|
|
(1,000)
|
|
(2,710)
|
|
(3,485)
|
Net casualty (loss)
gain after insurance and other settlement proceeds
|
(5)
|
|
(126)
|
|
485
|
|
(431)
|
Gain on sale of
depreciable real estate assets excluded from discontinued
operations
|
54,621
|
|
36,032
|
|
190,031
|
|
42,254
|
Gain on sale of
non-depreciable real estate assets
|
-
|
|
-
|
|
172
|
|
535
|
Income before income
tax expense
|
97,341
|
|
68,145
|
|
306,802
|
|
109,716
|
Income tax
expense
|
(512)
|
|
(442)
|
|
(1,419)
|
|
(1,235)
|
Income from
continuing operations before joint venture activity
|
96,829
|
|
67,703
|
|
305,383
|
|
108,481
|
(Loss) gain from real
estate joint ventures
|
(1)
|
|
3,124
|
|
(5)
|
|
6,019
|
Income from
continuing operations
|
96,828
|
|
70,827
|
|
305,378
|
|
114,500
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Loss from discontinued
operations before (loss) gain on sale
|
-
|
|
(8)
|
|
-
|
|
(59)
|
Net casualty gain after
insurance and other settlement proceeds on discontinued
operations
|
-
|
|
3
|
|
-
|
|
-
|
(Loss) gain on sale of
discontinued operations
|
-
|
|
(103)
|
|
-
|
|
5,378
|
Consolidated net
income
|
96,828
|
|
70,719
|
|
305,378
|
|
119,819
|
Net income attributable
to noncontrolling interests
|
5,094
|
|
3,743
|
|
16,078
|
|
6,364
|
Net income available
for MAA common shareholders
|
$ 91,734
|
|
$ 66,976
|
|
$289,300
|
|
$113,455
|
|
|
|
|
|
|
|
|
Earnings per common
share - basic:
|
|
|
|
|
|
|
|
Income from continuing
operations available for common shareholders
|
$ 1.22
|
|
$ 0.89
|
|
$ 3.84
|
|
$ 1.44
|
Discontinued property
operations
|
-
|
|
-
|
|
-
|
|
0.07
|
Net income available
for common shareholders
|
$ 1.22
|
|
$ 0.89
|
|
$ 3.84
|
|
$ 1.51
|
|
|
|
|
|
|
|
|
Earnings per common
share - diluted:
|
|
|
|
|
|
|
|
Income from continuing
operations available for common shareholders
|
$ 1.22
|
|
$ 0.89
|
|
$ 3.84
|
|
$ 1.44
|
Discontinued property
operations
|
-
|
|
-
|
|
-
|
|
0.07
|
Net income available
for common shareholders
|
$ 1.22
|
|
$ 0.89
|
|
$ 3.84
|
|
$ 1.51
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$ 0.7700
|
|
$ 0.7300
|
|
$ 2.3100
|
|
$ 2.1900
|
|
|
|
|
|
|
|
|
SHARE AND UNIT
DATA
|
Shares and units
in thousands
|
|
|
|
|
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
NET INCOME
SHARES(1)
|
|
|
|
|
|
|
|
Weighted average
common shares - Basic
|
75,189
|
|
75,058
|
|
75,167
|
|
74,937
|
Weighted average
partnership units outstanding
|
—
|
|
—
|
|
—
|
|
—
|
Effect of dilutive
securities
|
—
|
|
—
|
|
—
|
|
—
|
Weighted average
common shares - Diluted
|
75,189
|
|
75,058
|
|
75,167
|
|
74,937
|
FUNDS FROM
OPERATIONS SHARES AND UNITS
|
|
|
|
|
|
|
|
Weighted average
common shares and units - Basic
|
79,374
|
|
79,263
|
|
79,355
|
|
79,148
|
Weighted average
common shares and units - Diluted
|
79,570
|
|
79,425
|
|
79,543
|
|
79,338
|
PERIOD END SHARES
AND UNITS
|
|
|
|
|
|
|
|
Common shares at
September 30,
|
75,379
|
|
75,242
|
|
75,379
|
|
75,242
|
Partnership units at
September 30,
|
4,185
|
|
4,202
|
|
4,185
|
|
4,202
|
Total shares and
units at September 30,
|
79,564
|
|
79,444
|
|
79,564
|
|
79,444
|
|
|
|
|
|
|
|
|
(1)
For additional information on the calculation of diluted shares and
earnings per share, please refer to the Notes to Condensed
Consolidated Financial Statements in our Quarterly Report on Form
10-Q for the nine months ended September 30, 2015, expected to be
filed with the SEC on October 30, 2015.
|
FUNDS FROM
OPERATIONS
|
|
Dollars in
thousands, except per share data
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Net income available
for MAA common shareholders
|
$
91,734
|
|
$
66,976
|
|
$
289,300
|
|
$
113,455
|
|
Depreciation and
amortization of real estate assets
|
72,335
|
|
69,613
|
|
218,451
|
|
228,106
|
|
Depreciation and
amortization of real estate assets of discontinued
operations
|
-
|
|
-
|
|
-
|
|
42
|
|
Loss (gain) on sale
of discontinued operations
|
-
|
|
103
|
|
-
|
|
(5,378)
|
|
Gain on sale of
depreciable real estate assets excluded from discontinued
operations
|
(54,621)
|
|
(36,032)
|
|
(190,031)
|
|
(42,254)
|
|
Gain on disposition
within unconsolidated entities
|
-
|
|
(603)
|
|
(12)
|
|
(4,017)
|
|
Depreciation and
amortization of real estate assets of real estate joint
ventures
|
6
|
|
37
|
|
19
|
|
391
|
|
Net income
attributable to noncontrolling interests
|
5,094
|
|
3,743
|
|
16,078
|
|
6,364
|
|
Funds from operations
attributable to the Company
|
114,548
|
|
103,837
|
|
333,805
|
|
296,709
|
|
Acquisition
expense
|
656
|
|
13
|
|
2,155
|
|
971
|
|
Merger related
expenses
|
-
|
|
331
|
|
-
|
|
3,202
|
|
Integration related
expenses
|
-
|
|
147
|
|
-
|
|
7,140
|
|
(Gain) on sale of
non-depreciable real estate assets
|
-
|
|
-
|
|
(172)
|
|
(535)
|
|
Mark-to-market debt
adjustment
|
(5,321)
|
|
(5,328)
|
|
(16,053)
|
|
(19,568)
|
|
Loss on debt
extinguishment
|
5
|
|
2,586
|
|
3,384
|
|
3,126
|
(1)
|
Core funds from
operations attributable to the Company
|
109,888
|
|
101,586
|
|
323,119
|
|
291,045
|
|
Recurring capital
expenditures
|
(15,814)
|
|
(19,205)
|
|
(48,310)
|
|
(44,864)
|
|
Core adjusted funds
from operations
|
$
94,074
|
|
$
82,381
|
|
$
274,809
|
|
$
246,181
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares and units - Diluted
|
79,570
|
|
79,425
|
|
79,543
|
|
79,338
|
|
|
|
|
|
|
|
|
|
|
Funds from operations
per share and unit - Diluted
|
$
1.44
|
|
$
1.31
|
|
$
4.20
|
|
$
3.74
|
|
Core funds from
operations per share and unit - Diluted
|
$
1.38
|
|
$
1.28
|
|
$
4.06
|
|
$
3.67
|
|
Core adjusted funds
from operations per share and unit - Diluted
|
$
1.18
|
|
$
1.04
|
|
$
3.45
|
|
$
3.10
|
|
|
|
|
|
|
|
|
|
|
(1) The
loss on debt extinguishment for the nine months ended September 30,
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
|
|
|
|
|
September 30,
2015
|
|
December 31,
2014
|
Assets
|
|
|
|
Real estate
assets
|
|
|
|
Land
|
$ 913,045
|
|
$ 913,408
|
Buildings and
improvements
|
6,842,089
|
|
6,781,210
|
Furniture, fixtures
and equipment
|
223,759
|
|
214,742
|
Capital improvements
in progress
|
44,645
|
|
80,772
|
|
8,023,538
|
|
7,990,132
|
Accumulated
depreciation
|
(1,410,155)
|
|
(1,358,400)
|
|
6,613,383
|
|
6,631,732
|
Undeveloped
land
|
51,779
|
|
55,997
|
Corporate property,
net
|
8,606
|
|
7,988
|
Investments in real
estate joint ventures
|
1,807
|
|
1,791
|
Real estate assets,
net
|
6,675,575
|
|
6,697,508
|
Cash and cash
equivalents
|
44,876
|
|
26,653
|
Restricted
cash
|
89,321
|
|
28,181
|
Deferred financing
cost, net
|
11,901
|
|
17,812
|
Other
assets
|
64,061
|
|
61,119
|
Goodwill
|
1,607
|
|
2,321
|
Total
assets
|
$ 6,887,341
|
|
$ 6,833,594
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Liabilities
|
|
|
|
Secured notes
payable
|
$ 1,373,654
|
|
$ 1,592,116
|
Unsecured notes
payable
|
2,051,481
|
|
1,932,399
|
Accounts
payable
|
10,509
|
|
8,395
|
Fair market value of
interest rate swaps
|
17,953
|
|
13,392
|
Accrued expenses and
other liabilities
|
243,711
|
|
219,044
|
Security
deposits
|
11,446
|
|
10,526
|
Total
liabilities
|
3,708,754
|
|
3,775,872
|
Redeemable
stock
|
7,266
|
|
5,911
|
Shareholders'
equity
|
|
|
|
Common
stock
|
754
|
|
752
|
Additional paid-in
capital
|
3,623,834
|
|
3,619,270
|
Accumulated
distributions in excess of net income
|
(614,500)
|
|
(729,086)
|
Accumulated other
comprehensive loss
|
(6,306)
|
|
(412)
|
Total MAA
shareholders' equity
|
3,003,782
|
|
2,890,524
|
Noncontrolling
interest
|
167,539
|
|
161,287
|
Total
equity
|
3,171,321
|
|
3,051,811
|
Total liabilities and
shareholders' equity
|
$ 6,887,341
|
|
$ 6,833,594
|
NON-GAAP FINANCIALS AND OTHER
DEFINITIONS
Average Effective Rent per Unit
Average effective rent
per unit represents the average of gross rent amounts after the
effect of leasing concessions for occupied units plus prevalent
market rates asked for unoccupied units, divided by the total
number of units. Leasing concessions represent discounts to the
current market rate. 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.
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 Trust's definition,
it may differ from the methodology for calculating FFO utilized by
other REITs and, accordingly, may not be comparable to such other
REITs. FFO should not be considered as an alternative to net
income. MAA believes that FFO is helpful in understanding
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
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 financial 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-third-quarter-results-300168078.html
SOURCE MAA