MAA(US:MAA)2025-05-01 20:15PART I – FINANCIAL INFORMATION Item 1. Financial Statements Presents the unaudited condensed consolidated financial statements for MAA and MAALP for the quarter ended March 31, 2025 Mid-America Apartment Communities, Inc. Financial Statements MAA reported net income of $180.8 million, a significant increase driven by a $71.9 million gain on real estate sales MAA Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Real estate assets, net | $11,505,864 | $11,515,418 | | Total assets | $11,811,957 | $11,812,369 | | Total liabilities | $5,654,062 | $5,664,705 | | Total equity | $6,133,470 | $6,125,434 | MAA Condensed Consolidated Statement of Operations Highlights (in thousands, except per share data) | Account | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Rental and other property revenues | $549,295 | $543,622 | | Net income | $186,406 | $147,610 | | Net income available for MAA common shareholders | $180,751 | $142,827 | | Earnings per common share - diluted | $1.54 | $1.22 | MAA Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $196,618 | $200,257 | | Net cash used in investing activities | ($61,405) | ($93,012) | | Net cash used in financing activities | ($122,520) | ($94,260) | Mid-America Apartments, L.P. Financial Statements MAALP's financial results mirror MAA's operationally, with key differences in the capital section detailing partner capital MAALP Condensed Consolidated Statement of Operations Highlights (in thousands, except per unit data) | Account | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Rental and other property revenues | $549,295 | $543,622 | | Net income | $186,406 | $147,610 | | Net income available for MAALP common unitholders | $185,484 | $146,688 | | Earnings per common unit - diluted | $1.54 | $1.22 | - MAALP's balance sheet is identical to MAA's in terms of total assets and liabilities, with the primary difference in the equity section, which is presented as 'Operating Partnership capital' totaling $6.13 billion25 - The cash flow statements for MAALP are identical to those of MAA, reflecting that all business operations are conducted through the Operating Partnership32 Notes to Condensed Consolidated Financial Statements Details the company's UPREIT structure, asset portfolio, debt of $5.04 billion, and a 0.6% decrease in Same Store NOI - As of March 31, 2025, the Company owned and operated 291 apartment communities and had seven development communities under construction37 Outstanding Debt Summary as of March 31, 2025 (in thousands) | Debt Type | Balance | Weighted Average Effective Rate | | :--- | :--- | :--- | | Unsecured debt | $4,681,868 | 3.8% | | Secured debt | $360,298 | 4.4% | | Total outstanding debt | $5,042,166 | 3.8% | - In March 2025, the company sold two multifamily communities for net proceeds of approximately $81 million, resulting in a gain of about $72 million92 - The company is a defendant in the 'RealPage Litigation' but believes the litigation is without merit and plans to defend itself vigorously83 Segment Net Operating Income (NOI) (in thousands) | Segment | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Same Store NOI | $332,795 | $334,644 | -0.6% | | Non-Same Store and Other NOI | $15,147 | $11,176 | +35.5% | | Total NOI | $347,942 | $345,820 | +0.6% | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a 26.6% net income increase, flat Same Store revenue, and a stable leverage profile amid market headwinds Overview and Trends Net income rose to $180.8 million due to asset sales, while Same Store revenue was flat amid challenging market conditions - Net income available for MAA common shareholders for Q1 2025 was $180.8 million, compared to $142.8 million for Q1 2024, largely due to a $71.9 million gain on asset sales101 Same Store Operating Trends - Q1 2025 vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue Growth | 0.1% | N/A | | Average Effective Rent per Unit | $1,690 | $1,699 | | Average Physical Occupancy | 95.6% | 95.3% | | Resident Turnover (TTM) | 41.5% | 44.4% | - Management believes that while elevated new supply levels are currently impacting rent growth, solid demand and an expected decline in new supply deliveries will lead to a strong rebound108 Results of Operations Total property revenues increased 1.0% to $549.3 million, driven by the Non-Same Store segment, while expenses rose 1.8% Property Revenues by Segment - Q1 2025 vs Q1 2024 (in thousands) | Segment | 2025 | 2024 | % Increase | | :--- | :--- | :--- | :--- | | Same Store | $518,825 | $518,533 | 0.1% | | Non-Same Store and Other | $30,470 | $25,089 | 21.4% | | Total | $549,295 | $543,622 | 1.0% | Property Operating Expenses by Segment - Q1 2025 vs Q1 2024 (in thousands) | Segment | 2025 | 2024 | % Increase | | :--- | :--- | :--- | :--- | | Same Store | $186,030 | $183,889 | 1.2% | | Non-Same Store and Other | $15,323 | $13,913 | 10.1% | | Total | $201,353 | $197,802 | 1.8% | - Interest expense increased by $4.8 million to $45.2 million in Q1 2025, driven by a higher average debt balance and interest rate115 Non-GAAP Financial Measures Core FFO decreased slightly to $264.3 million, while the net debt to Adjusted EBITDAre ratio remained stable at 4.0x Reconciliation to Core FFO (in thousands) | Line Item | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net income available for MAA common shareholders | $180,751 | $142,827 | | FFO attributable to common shareholders and unitholders | $264,728 | $288,436 | | Core FFO attributable to common shareholders and unitholders | $264,262 | $266,169 | Net Debt to Adjusted EBITDAre Ratio | Metric | As of March 31, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Net Debt (in thousands) | $4,986,390 | $4,937,939 | | Adjusted EBITDAre (TTM, in thousands) | $1,250,143 | $1,247,150 | | Net Debt to Adjusted EBITDAre Ratio | 4.0x | 4.0x | Liquidity and Capital Resources The company maintains a strong liquidity position with $1.0 billion in available capacity and total debt of $5.04 billion - As of March 31, 2025, the company had $1.0 billion of combined unrestricted cash and available capacity under its revolving credit facility137 - Cash flow from operations decreased by $3.6 million to $196.6 million for Q1 2025 compared to Q1 2024138 - Material cash requirements for the remainder of 2025 include $710 million in principal debt obligations, funding for seven development projects, and quarterly dividends64149151 Debt Maturity Schedule Highlights (in thousands) | Year | Total Maturity | | :--- | :--- | | 2025 | $709,538 | | 2026 | $298,937 | | 2027 | $598,317 | | 2028 | $398,063 | | 2029 | $555,977 | Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate risk, which is mitigated by using 93.9% fixed-rate debt - The company's main market risk exposure is from changes in interest rates on its borrowings156 - As of March 31, 2025, 93.9% of the company's outstanding debt carried a fixed interest rate, minimizing exposure to interest rate volatility156 - There were no material changes in the company's market risk profile during the quarter ended March 31, 2025156 Controls and Procedures Management concluded that disclosure controls and procedures for both MAA and MAALP were effective as of March 31, 2025 - For both MAA and MAALP, management concluded that disclosure controls and procedures were effective as of March 31, 2025157160 - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting158161 PART II – OTHER INFORMATION Legal Proceedings The company is involved in legal proceedings, notably the 'RealPage Litigation,' as detailed in the financial statement notes - The company incorporates by reference the disclosure regarding legal proceedings from Note 10 of the condensed consolidated financial statements163 Risk Factors No material changes were reported to the risk factors disclosed in the 2024 Annual Report on Form 10-K - No material changes to risk factors were reported for the quarter ended March 31, 2025, compared to the Annual Report on Form 10-K for the year ended December 31, 2024164 Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 8,406 shares to satisfy employee tax obligations, not as part of a public buyback program MAA Common Stock Repurchases - Q1 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 1 - Jan 31, 2025 | 8,406 | $154.86 | | Feb 1 - Feb 28, 2025 | — | — | | Mar 1 - Mar 31, 2025 | — | — | | Total | 8,406 | N/A | - The repurchased shares were surrendered by employees to satisfy statutory minimum tax obligations from vesting restricted shares, not as part of a publicly announced plan165 Other Information No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the first quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during Q1 2025168169 Exhibits This section lists all exhibits filed with the Form 10-Q, including required CEO and CFO certifications - The report includes various exhibits, such as CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, and Interactive Data Files171