MAA(US:MAA)2025-07-31 20:15PART I – FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Mid-America Apartment Communities, Inc. (MAA) and Mid-America Apartments, L.P. (MAALP) for the quarterly period ended June 30, 2025, including balance sheets, statements of operations, comprehensive income, and cash flows, followed by consolidated notes explaining accounting policies and providing detailed financial information Mid-America Apartment Communities, Inc. (MAA) Financial Statements For the six months ended June 30, 2025, MAA reported net income available to common shareholders of $288.0 million, an increase from $243.9 million in the prior year period, with total assets growing slightly to $11.84 billion from $11.81 billion at year-end 2024, and net cash provided by operating activities stable at $550.1 million MAA Condensed Consolidated Statements of Operations (in thousands) | | Three months ended June 30, | Six months ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | Rental and other property revenues | $549,902 | $546,435 | $1,099,197 | $1,090,057 | | Net income | $110,875 | $104,662 | $297,281 | $252,272 | | Net income available for MAA common shareholders | $107,205 | $101,031 | $287,956 | $243,858 | | Earnings per common share - diluted | $0.92 | $0.86 | $2.46 | $2.09 | MAA Condensed Consolidated Balance Sheets (in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Real estate assets, net | $11,542,912 | $11,515,418 | | Total assets | $11,835,597 | $11,812,369 | | Total liabilities | $5,745,197 | $5,664,705 | | Total equity | $6,069,265 | $6,125,434 | MAA Condensed Consolidated Statements of Cash Flows (in thousands) | Six months ended June 30, | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $550,067 | $549,627 | | Net cash used in investing activities | ($238,322) | ($329,828) | | Net cash used in financing activities | ($300,390) | ($198,390) | Mid-America Apartments, L.P. (MAALP) Financial Statements MAALP's financial results are nearly identical to MAA's, as it holds substantially all of the company's assets and operations, reporting net income of $297.3 million and total assets of $11.84 billion for the six months ended June 30, 2025, with the primary difference being the presentation of equity as partners' capital MAALP Condensed Consolidated Statements of Operations (in thousands) | | Three months ended June 30, | Six months ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | Rental and other property revenues | $549,902 | $546,435 | $1,099,197 | $1,090,057 | | Net income | $110,875 | $104,662 | $297,281 | $252,272 | | Net income available for MAALP common unitholders | $109,953 | $103,740 | $295,437 | $250,428 | | Earnings per common unit - diluted | $0.92 | $0.86 | $2.46 | $2.09 | MAALP Condensed Consolidated Balance Sheets (in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total assets | $11,835,597 | $11,812,369 | | Total liabilities | $5,745,216 | $5,664,724 | | Total equity | $6,069,246 | $6,125,415 | Notes to Condensed Consolidated Financial Statements The notes provide detailed information on the company's organization, accounting policies, and financial activities, including its portfolio of 291 apartment communities, an active development pipeline of 8 communities, outstanding debt of $5.05 billion, ongoing legal proceedings related to the RealPage antitrust litigation, and segment reporting showing a slight revenue decrease of 0.1% for Same Store properties and 20.2% growth for Non-Same Store properties - As of June 30, 2025, the Company owned and operated 291 apartment communities and had eight development communities under construction, totaling 2,648 apartment units once complete40 Outstanding Debt Summary (as of June 30, 2025, in thousands) | Debt Type | Balance | Weighted Average Effective Rate | Weighted Average Contract Maturity | | :--- | :--- | :--- | :--- | | Unsecured debt | $4,687,813 | 3.8% | N/A | | Fixed rate senior notes | $4,400,000 | 3.7% | 5/9/2031 | | Variable rate commercial paper | $315,000 | 4.7% | 7/6/2025 | | Secured debt | $360,330 | 4.4% | N/A | | Fixed rate property mortgages | $363,293 | 4.4% | 1/26/2049 | | Total outstanding debt | $5,048,143 | 3.8% | N/A | - The company is involved in the "RealPage Litigation," a series of class-action lawsuits alleging conspiracy to artificially inflate apartment prices, and believes the litigation is without merit, defending itself vigorously, with an accrual of $6.7 million for loss contingencies related to legal matters recorded as of June 30, 20259294 Segment Net Operating Income (NOI) (in thousands) | | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Same Store NOI | $652,407 | $662,954 | | Non-Same Store and Other NOI | $30,783 | $23,505 | | Total NOI | $683,190 | $686,459 | - In March 2025, the company sold two multifamily communities in Columbia, SC for net proceeds of approximately $81 million, resulting in a gain of about $72 million, and in June 2025, it acquired a 19-acre land parcel in Charleston, SC for approximately $9 million100102 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the financial results for the second quarter and first half of 2025, noting a 6.1% increase in net income available for common shareholders for the quarter and 18.1% for the six-month period year-over-year, a slight decrease in Same Store revenue due to a 0.5% drop in average effective rent, rising operating expenses, and a 4.0x Net Debt to Adjusted EBITDAre ratio, while highlighting strong apartment demand, stable occupancy, and a diverse portfolio Overview and Trends For Q2 2025, net income available to MAA common shareholders was $107.2 million, up from $101.0 million in Q2 2024, influenced by net casualty recoveries and non-cash gains, with market trends showing strong apartment demand, stable occupancy, and low resident turnover, despite new supply challenges, and average effective rent for the Same Store segment decreasing by 0.5% YoY to $1,690 while average physical occupancy remained stable at 95.4% - Demand for apartments remained strong in Q2 2025, driven by robust renewal pricing, solid traffic, stable occupancy, and low resident turnover, with the company believing new apartment deliveries will decline in the second half of 2025 and into 2026117 Same Store Operating Trends (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Average Effective Rent per Unit | $1,690 | $1,699 | -0.5% | | Average Physical Occupancy | 95.4% | 95.4% | 0.0% | | Resident Turnover (TTM) | 41.0% | 43.5% | -2.5 p.p. | Results of Operations For the three months ended June 30, 2025, total property revenues increased 0.6% YoY, driven by a 19.0% increase in the Non-Same Store segment offsetting a 0.3% decrease in the Same Store segment, while total property operating expenses rose 4.3%, with the Same Store segment seeing a 3.8% increase due to higher personnel, utilities, and property tax costs, and interest expense increased for both periods due to higher average debt balances Property Revenues by Segment - Q2 2025 vs Q2 2024 (in thousands) | Segment | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Same Store | $518,955 | $520,420 | (0.3)% | | Non-Same Store and Other | $30,947 | $26,015 | 19.0% | | Total | $549,902 | $546,435 | 0.6% | Property Operating Expenses by Segment - Q2 2025 vs Q2 2024 (in thousands) | Segment | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Same Store | $199,343 | $192,110 | 3.8% | | Non-Same Store and Other | $15,311 | $13,686 | 11.9% | | Total | $214,654 | $205,796 | 4.3% | - Interest expense increased by $3.8 million in Q2 2025 and $8.6 million in the first six months of 2025 compared to the same periods in 2024, due to a higher average outstanding debt balance and a rise in the effective interest rate124131 Non-GAAP Financial Measures Core Funds from Operations (Core FFO) for Q2 2025 was $257.6 million, a decrease from $266.6 million in Q2 2024, primarily due to higher operating and interest expenses, with the six-month period Core FFO at $521.9 million, down from $532.8 million, and the company's Net Debt to trailing twelve-month Adjusted EBITDAre ratio at 4.0x as of June 30, 2025 Reconciliation to Core FFO (in thousands) | | Three months ended June 30, | Six months ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | Net income available for MAA common shareholders | $107,205 | $101,031 | $287,956 | $243,858 | | FFO attributable to common shareholders and unitholders | $262,338 | $247,540 | $527,066 | $535,976 | | Core FFO attributable to common shareholders and unitholders | $257,616 | $266,646 | $521,878 | $532,815 | Net Debt to Adjusted EBITDAre Ratio | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Debt (in thousands) | $4,993,661 | $4,937,939 | | Adjusted EBITDAre (TTM, in thousands) | $1,244,417 | $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 of combined unrestricted cash and available capacity under its revolving credit facility as of June 30, 2025, expecting to meet its cash requirements over the next 12 months through operating cash flow, existing cash, and borrowing capacity, with material cash requirements including $806.6 million in debt obligations and continued funding for eight development projects with $326.2 million remaining to be spent - As of June 30, 2025, the company had $1.0 billion of combined unrestricted cash and available capacity under its revolving credit facility152 - Cash flow from operations was stable at $550.1 million for the first six months of 2025, with net cash used in investing decreasing to $238.3 million due to fewer acquisitions and proceeds from dispositions, and net cash used in financing increasing to $300.4 million, reflecting changes in commercial paper borrowings and debt issuance activity compared to the prior year153154155 - Material cash requirements include $806.6 million in debt and debt service obligations payable in the year ending Dec 31, 2025, and up to $23.2 million in capital contributions to technology-focused limited partnerships164 - The company has eight development communities under construction with total expected costs of $942.5 million, of which $326.2 million remained to be funded after June 30, 2025166 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate risk on its borrowings, which is managed by using fixed-rate debt and staggering debt maturities, with 93.8% of its outstanding debt was at fixed rates as of June 30, 2025, and no material changes in market risk since the 2024 year-end report - The company's primary market risk exposure is to changes in interest rates To mitigate this, 93.8% of its outstanding debt was at fixed rates as of June 30, 2025171 Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the disclosure controls and procedures for both MAA and MAALP as of June 30, 2025, concluding that these controls were effective for both entities, with no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the internal controls - Management of both MAA and MAALP concluded that their respective disclosure controls and procedures were effective as of June 30, 2025172175 - No changes occurred during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the internal control over financial reporting for either MAA or MAALP173176 PART II – OTHER INFORMATION Item 1. Legal Proceedings This section incorporates by reference the information on legal proceedings disclosed in Note 10 of the financial statements, which primarily discusses the ongoing RealPage antitrust litigation - The company is engaged in certain legal proceedings, with details provided in Note 10 to the condensed consolidated financial statements178 Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the risk factors from the Annual Report on Form 10-K for the year ended December 31, 2024, have occurred179 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the second quarter of 2025, the company repurchased 10,657 shares of its common stock, which were not part of a publicly announced plan but were shares surrendered by employees to satisfy tax obligations upon the vesting of restricted shares MAA Common Stock Repurchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 10,623 | $166.03 | | May 2025 | — | $— | | June 2025 | 34 | $156.65 | | Total | 10,657 | N/A | - The repurchased shares were surrendered by employees to satisfy statutory minimum tax obligations related to vesting restricted shares and were not part of the 4.0 million share repurchase program authorized in December 2015180181 Item 5. Other Information During the quarter ended June 30, 2025, no director or officer of the company adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025183184 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including charter documents, bylaws, partnership agreements, and CEO/CFO certifications required under the Sarbanes-Oxley Act Signatures The report is duly signed and authorized by David Herring, Senior Vice President and Chief Accounting Officer, on behalf of both Mid-America Apartment Communities, Inc. and Mid-America Apartments, L.P. on July 31, 2025