Tennessee (Mid-America Apartment Communities, Inc.) | 62-1543819 |
Tennessee (Mid-America Apartments, L.P.) | 62-1543816 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
6584 Poplar Avenue, Memphis, Tennessee, 38138 | ||
(Address of principal executive offices) (Zip Code) |
(901) 682-6600 | ||
(Registrant's telephone number, including area code) | ||
N/A | ||
(Former name, former address and former fiscal year, if changed since last report) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. | ||
Mid-America Apartment Communities, Inc. | YES R | NO o |
Mid-America Apartments, L.P. | YES R | NO o |
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). | ||
Mid-America Apartment Communities, Inc. | YES R | NO o |
Mid-America Apartments, L.P. | YES R | NO o |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. | ||||
Mid-America Apartment Communities, Inc. | ||||
Large accelerated filer R | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |
(Do not check if a smaller reporting company) | ||||
Mid-America Apartments, L.P. | ||||
Large accelerated filer o | Accelerated filer o | Non-accelerated filer R | Smaller reporting company o | |
(Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | ||
Mid-America Apartment Communities, Inc. | YES o | NO R |
Mid-America Apartments, L.P. | YES o | NO R |
Number of Shares Outstanding at | |
Class | July 28, 2014 |
Common Stock, $0.01 par value | 75,194.824 |
Page | ||
PART I – FINANCIAL INFORMATION | ||
Item 1. | Financial Statements. | |
Mid-America Apartment Communities, Inc. | ||
Condensed Consolidated Balance Sheets as of June 30, 2014 (Unaudited) and December 31, 2013 (Unaudited). | 4 | |
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2014 (Unaudited) and 2013 (Unaudited). | 5 | |
Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2014 (Unaudited) and 2013 (Unaudited). | 6 | |
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2014 (Unaudited) and 2013 (Unaudited). | 7 | |
Mid-America Apartments, L.P. | ||
Condensed Consolidated Balance Sheets as of June 30, 2014 (Unaudited) and December 31, 2013 (Unaudited). | 8 | |
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2014 (Unaudited) and 2013 (Unaudited). | 9 | |
Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2014 (Unaudited) and 2013 (Unaudited). | 10 | |
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2014 (Unaudited) and 2013 (Unaudited). | 11 | |
Notes to Condensed Consolidated Financial Statements (Unaudited). | 12 | |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations. | 37 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 51 |
Item 4. | Controls and Procedures. | 51 |
PART II – OTHER INFORMATION | ||
Item 1. | Legal Proceedings. | 52 |
Item 1A. | Risk Factors. | 53 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 66 |
Item 3. | Defaults Upon Senior Securities. | 66 |
Item 4. | Mine Safety Disclosures. | 66 |
Item 5. | Other Information. | 66 |
Item 6. | Exhibits. | 67 |
Signatures. | 68 | |
Exhibit Index. | 70 |
• | enhances investors' understanding of MAA and the Operating Partnership by enabling investors to view the business as a whole in the same manner that management views and operates the business; |
• | eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure in this report applies to both MAA and the Operating Partnership; and |
• | creates time and cost efficiencies through the preparation of one combined report instead of two separate reports. |
• | the consolidated financial statements in Item 1 of this report; |
• | certain accompanying notes to the financial statements, including Note 3 - Earnings per Common Share of MAA and Note 4 - Earnings per OP Unit of MAALP; and Note 10 - Shareholders' Equity of MAA and Note 11 - Partners' Capital of MAALP; |
• | the certifications of the Chief Executive Officer and Chief Financial Officer of MAA included as Exhibits 31 and 32 to this report. |
June 30, 2014 | December 31, 2013 | ||||||
Assets: | |||||||
Real estate assets: | |||||||
Land | $ | 877,368 | $ | 871,316 | |||
Buildings and improvements | 6,602,860 | 6,366,701 | |||||
Furniture, fixtures and equipment | 206,877 | 199,573 | |||||
Development and capital improvements in progress | 84,502 | 166,048 | |||||
7,771,607 | 7,603,638 | ||||||
Less accumulated depreciation | (1,258,554 | ) | (1,124,207 | ) | |||
6,513,053 | 6,479,431 | ||||||
Undeveloped land | 59,195 | 63,850 | |||||
Corporate properties, net | 8,285 | 7,523 | |||||
Investments in real estate joint ventures | 3,295 | 5,499 | |||||
Real estate assets, net | 6,583,828 | 6,556,303 | |||||
Cash and cash equivalents | 26,318 | 89,333 | |||||
Restricted cash | 64,683 | 44,361 | |||||
Deferred financing costs, net | 18,262 | 17,424 | |||||
Other assets | 51,789 | 91,637 | |||||
Goodwill | 4,106 | 4,106 | |||||
Assets held for sale | 34,135 | 38,761 | |||||
Total assets | $ | 6,783,121 | $ | 6,841,925 | |||
Liabilities and Shareholders' Equity: | |||||||
Liabilities: | |||||||
Secured notes payable | $ | 1,563,014 | $ | 1,790,935 | |||
Unsecured notes payable | 1,912,399 | 1,681,783 | |||||
Accounts payable | 15,297 | 15,067 | |||||
Fair market value of interest rate swaps | 17,997 | 20,015 | |||||
Accrued expenses and other liabilities | 201,997 | 206,190 | |||||
Security deposits | 9,808 | 9,270 | |||||
Liabilities associated with assets held for sale | — | 78 | |||||
Total liabilities | 3,720,512 | 3,723,338 | |||||
Redeemable stock | 5,407 | 5,050 | |||||
Shareholders' equity: | |||||||
Common stock, $0.01 par value per share, 100,000,000 shares authorized; 75,194,807 and 74,830,726 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively (1) | 751 | 747 | |||||
Additional paid-in capital | 3,613,221 | 3,599,549 | |||||
Accumulated distributions in excess of net income | (717,642 | ) | (653,593 | ) | |||
Accumulated other comprehensive (loss) income | (1,395 | ) | 108 | ||||
Total MAA shareholders' equity | 2,894,935 | 2,946,811 | |||||
Noncontrolling interest | 162,267 | 166,726 | |||||
Total equity | 3,057,202 | 3,113,537 | |||||
Total liabilities and equity | $ | 6,783,121 | $ | 6,841,925 |
(1) | Number of shares issued and outstanding represent total shares of common stock regardless of classification on the consolidated balance sheet. The number of shares classified as redeemable stock on the consolidated balance sheet for June 30, 2014 and December 31, 2013 are 82,511 and 83,139, respectively. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Operating revenues: | |||||||||||||||
Rental revenues | $ | 222,610 | $ | 121,128 | $ | 443,598 | $ | 238,833 | |||||||
Other property revenues | 21,883 | 10,531 | 44,285 | 20,569 | |||||||||||
Total property revenues | 244,493 | 131,659 | 487,883 | 259,402 | |||||||||||
Management fee income | 61 | 142 | 158 | 319 | |||||||||||
Total operating revenues | 244,554 | 131,801 | 488,041 | 259,721 | |||||||||||
Property operating expenses: | |||||||||||||||
Personnel | 25,183 | 14,421 | 50,092 | 28,402 | |||||||||||
Building repairs and maintenance | 7,184 | 3,874 | 13,583 | 7,003 | |||||||||||
Real estate taxes and insurance | 30,686 | 15,958 | 61,817 | 31,446 | |||||||||||
Utilities | 13,182 | 6,829 | 26,660 | 13,394 | |||||||||||
Landscaping | 5,981 | 2,835 | 11,389 | 5,701 | |||||||||||
Other operating | 15,406 | 8,904 | 31,444 | 17,396 | |||||||||||
Depreciation and amortization | 69,631 | 32,222 | 159,644 | 64,417 | |||||||||||
Total property operating expenses | 167,253 | 85,043 | 354,629 | 167,759 | |||||||||||
Acquisition expense | 947 | 489 | 958 | 499 | |||||||||||
Property management expenses | 9,579 | 5,223 | 16,590 | 10,331 | |||||||||||
General and administrative expenses | 5,212 | 3,389 | 9,554 | 6,628 | |||||||||||
Merger related expenses | 795 | 5,737 | 2,871 | 5,737 | |||||||||||
Integration related expenses | 3,151 | — | 6,993 | — | |||||||||||
Income from continuing operations before non-operating items | 57,617 | 31,920 | 96,446 | 68,767 | |||||||||||
Interest and other non-property income | 921 | 23 | 1,081 | 70 | |||||||||||
Interest expense | (30,163 | ) | (15,189 | ) | (60,839 | ) | (30,734 | ) | |||||||
Loss on debt extinguishment/modification | — | — | — | (169 | ) | ||||||||||
Amortization of deferred financing costs | (1,174 | ) | (803 | ) | (2,485 | ) | (1,607 | ) | |||||||
Net casualty (loss) gain after insurance and other settlement proceeds | (295 | ) | 439 | (305 | ) | 455 | |||||||||
Income before income tax expense | 26,906 | 16,390 | 33,898 | 36,782 | |||||||||||
Income tax expense | (523 | ) | (223 | ) | (793 | ) | (446 | ) | |||||||
Income from continuing operations before joint venture activity | 26,383 | 16,167 | 33,105 | 36,336 | |||||||||||
Gain from real estate joint ventures | 2,919 | 47 | 2,895 | 101 | |||||||||||
Income from continuing operations | 29,302 | 16,214 | 36,000 | 36,437 | |||||||||||
Discontinued operations: | |||||||||||||||
Income from discontinued operations before gain on sale | 449 | 1,697 | 865 | 3,479 | |||||||||||
Net casualty loss after insurance and other settlement proceeds on discontinued operations | (1 | ) | (4 | ) | (3 | ) | (4 | ) | |||||||
Gain on sale of discontinued operations | — | 43,121 | 5,481 | 43,121 | |||||||||||
Income before gain (loss) on sale of properties | 29,750 | 61,028 | 42,343 | 83,033 | |||||||||||
Gain on sale of depreciable real estate assets excluded from discontinued operations | 3,658 | — | 6,222 | — | |||||||||||
(Loss) gain on sale of non-depreciable real estate assets | (22 | ) | — | 535 | — | ||||||||||
Consolidated net income | 33,386 | 61,028 | 49,100 | 83,033 | |||||||||||
Net income attributable to noncontrolling interests | 1,773 | 1,939 | 2,621 | 2,764 | |||||||||||
Net income available for MAA common shareholders | $ | 31,613 | $ | 59,089 | $ | 46,479 | $ | 80,269 | |||||||
Earnings per common share - basic: | |||||||||||||||
Income from continuing operations available for common shareholders | $ | 0.42 | $ | 0.37 | $ | 0.54 | $ | 0.82 | |||||||
Discontinued property operations | — | 1.01 | 0.08 | 1.07 | |||||||||||
Net income available for common shareholders | $ | 0.42 | $ | 1.38 | $ | 0.62 | $ | 1.89 | |||||||
Earnings per common share - diluted: | |||||||||||||||
Income from continuing operations available for common shareholders | $ | 0.42 | $ | 0.36 | $ | 0.54 | $ | 0.82 | |||||||
Discontinued property operations | — | 1.01 | 0.08 | 1.05 | |||||||||||
Net income available for common shareholders | $ | 0.42 | $ | 1.37 | $ | 0.62 | $ | 1.87 | |||||||
Dividends declared per common share | $ | 0.7300 | $ | 0.6950 | $ | 1.4600 | $ | 1.3900 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Consolidated net income | $ | 33,386 | $ | 61,028 | $ | 49,100 | $ | 83,033 | |||||||
Other comprehensive income: | |||||||||||||||
Unrealized (losses) gains from the effective portion of derivative instruments | (7,403 | ) | 12,105 | (8,400 | ) | 11,926 | |||||||||
Reclassification adjustment for net losses included in net income for the effective portion of derivative instruments | 3,085 | 3,932 | 6,810 | 8,477 | |||||||||||
Total comprehensive income | 29,068 | 77,065 | 47,510 | 103,436 | |||||||||||
Less: comprehensive income attributable to noncontrolling interests | (1,542 | ) | (2,442 | ) | (2,534 | ) | (3,445 | ) | |||||||
Comprehensive income attributable to MAA | $ | 27,526 | $ | 74,623 | $ | 44,976 | $ | 99,991 | |||||||
See accompanying notes to condensed consolidated financial statements. |
Six months ended June 30, | |||||||
2014 | 2013 | ||||||
Cash flows from operating activities: | |||||||
Consolidated net income | $ | 49,100 | $ | 83,033 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Retail revenue accretion | (12 | ) | (20 | ) | |||
Depreciation and amortization | 162,099 | 68,236 | |||||
Stock compensation expense | 2,045 | 1,171 | |||||
Exercise of stock options | 9,544 | — | |||||
Redeemable stock issued | 507 | 377 | |||||
Amortization of debt premium | (14,648 | ) | (505 | ) | |||
Gain from investments in real estate joint ventures | (2,878 | ) | (101 | ) | |||
Loss on debt extinguishment | — | 169 | |||||
Derivative interest expense | 402 | 484 | |||||
Settlement of forward swaps | (3,625 | ) | — | ||||
Gain on sale of non-depreciable real estate assets | (535 | ) | — | ||||
Gain on sale of depreciable real estate assets excluded from discontinued operations | (6,222 | ) | — | ||||
Gain on sale of discontinued operations | (5,481 | ) | (43,121 | ) | |||
Net casualty loss (gain) and other settlement proceeds | 308 | (451 | ) | ||||
Changes in assets and liabilities: | |||||||
Restricted cash | 21,318 | (279 | ) | ||||
Other assets | 11,134 | (3,176 | ) | ||||
Accounts payable | 229 | 5,527 | |||||
Accrued expenses and other | 594 | (2,239 | ) | ||||
Security deposits | 526 | 277 | |||||
Net cash provided by operating activities | 224,405 | 109,382 | |||||
Cash flows from investing activities: | |||||||
Purchases of real estate and other assets | (166,388 | ) | (89,871 | ) | |||
Normal capital improvements | (43,176 | ) | (22,494 | ) | |||
Construction capital and other improvements | (3,420 | ) | (2,137 | ) | |||
Renovations to existing real estate assets | (5,901 | ) | (5,112 | ) | |||
Development | (29,393 | ) | (20,816 | ) | |||
Distributions from real estate joint ventures | 11,541 | 8,197 | |||||
Contributions to real estate joint ventures | — | (183 | ) | ||||
Proceeds from disposition of real estate assets | 125,640 | 73,089 | |||||
Funding of escrow for future acquisitions | (41,640 | ) | (11,902 | ) | |||
Net cash used in investing activities | (152,737 | ) | (71,229 | ) | |||
Cash flows from financing activities: | |||||||
Net change in credit lines | (181,183 | ) | 2,000 | ||||
Proceeds from notes payable | 396,180 | — | |||||
Principal payments on notes payable | (230,952 | ) | (2,799 | ) | |||
Payment of deferred financing costs | (3,395 | ) | (426 | ) | |||
Repurchase of common stock | (336 | ) | (673 | ) | |||
Proceeds from issuances of common shares | 575 | 24,968 | |||||
Distributions to noncontrolling interests | (6,158 | ) | (2,391 | ) | |||
Dividends paid on common shares | (109,414 | ) | (59,115 | ) | |||
Net cash used in financing activities | (134,683 | ) | (38,436 | ) | |||
Net decrease in cash and cash equivalents | (63,015 | ) | (283 | ) | |||
Cash and cash equivalents, beginning of period | 89,333 | 9,075 | |||||
Cash and cash equivalents, end of period | $ | 26,318 | $ | 8,792 | |||
Supplemental disclosure of cash flow information: | |||||||
Interest paid | $ | 75,818 | $ | 33,610 | |||
Income taxes paid | $ | 803 | $ | 1,596 | |||
Supplemental disclosure of noncash investing and financing activities: | |||||||
Conversion of units to shares of common stock | $ | 799 | $ | 444 | |||
Accrued construction in progress | $ | 8,458 | $ | 7,126 | |||
Interest capitalized | $ | 850 | $ | 872 | |||
Marked-to-market adjustment on derivative instruments | $ | 1,633 | $ | 19,916 | |||
Fair value adjustment on debt assumed | $ | 1,651 | $ | 704 | |||
Loan assumption | $ | 31,692 | $ | 18,293 |
June 30, 2014 | December 31, 2013 | ||||||
Assets: | |||||||
Real estate assets: | |||||||
Land | $ | 877,368 | $ | 871,316 | |||
Buildings and improvements | 6,602,860 | 6,366,701 | |||||
Furniture, fixtures and equipment | 206,877 | 199,573 | |||||
Development and capital improvements in progress | 84,502 | 166,048 | |||||
7,771,607 | 7,603,638 | ||||||
Less accumulated depreciation | (1,258,554 | ) | (1,124,207 | ) | |||
6,513,053 | 6,479,431 | ||||||
Undeveloped land | 59,195 | 63,850 | |||||
Corporate properties, net | 8,285 | 7,523 | |||||
Investments in real estate joint ventures | 3,295 | 5,499 | |||||
Real estate assets, net | 6,583,828 | 6,556,303 | |||||
Cash and cash equivalents | 26,318 | 89,333 | |||||
Restricted cash | 64,683 | 44,361 | |||||
Deferred financing costs, net | 18,262 | 17,424 | |||||
Other assets | 51,789 | 91,637 | |||||
Goodwill | 4,106 | 4,106 | |||||
Assets held for sale | 34,135 | 38,761 | |||||
Total assets | $ | 6,783,121 | $ | 6,841,925 | |||
Liabilities and Capital: | |||||||
Liabilities: | |||||||
Secured notes payable | $ | 1,563,014 | $ | 1,790,935 | |||
Unsecured notes payable | 1,912,399 | 1,681,783 | |||||
Accounts payable | 15,297 | 15,067 | |||||
Fair market value of interest rate swaps | 17,997 | 20,015 | |||||
Accrued expenses and other liabilities | 201,997 | 206,190 | |||||
Security deposits | 9,808 | 9,270 | |||||
Due to general partner | 19 | 19 | |||||
Liabilities associated with assets held for sale | — | 78 | |||||
Total liabilities | 3,720,531 | 3,723,357 | |||||
Redeemable units | 5,407 | 5,050 | |||||
Capital: | |||||||
General partner: 75,194,807 OP Units outstanding at June 30, 2014 and 74,830,726 OP Units outstanding at December 31, 2013 (1) | 2,896,253 | 2,946,598 | |||||
Limited partners: 4,207,126 OP Units outstanding at June 30, 2014 and 4,227,384 OP Units outstanding at December 31, 2013 (1) | 162,346 | 166,746 | |||||
Accumulated other comprehensive (loss) income | (1,416 | ) | 174 | ||||
Total capital | 3,057,183 | 3,113,518 | |||||
Total liabilities and capital | $ | 6,783,121 | $ | 6,841,925 |
(1) | Number of units outstanding represent total OP Units regardless of classification on the consolidated balance sheet. The number of units classified as redeemable units on the consolidated balance sheet at June 30, 2014 and December 31, 2013 are 82,511 and 83,139, respectively. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Operating revenues: | |||||||||||||||
Rental revenues | $ | 222,610 | $ | 121,128 | $ | 443,598 | $ | 238,833 | |||||||
Other property revenues | 21,883 | 10,531 | 44,285 | 20,569 | |||||||||||
Total property revenues | 244,493 | 131,659 | 487,883 | 259,402 | |||||||||||
Management fee income | 61 | 142 | 158 | 319 | |||||||||||
Total operating revenues | 244,554 | 131,801 | 488,041 | 259,721 | |||||||||||
Property operating expenses: | |||||||||||||||
Personnel | 25,183 | 14,421 | 50,092 | 28,402 | |||||||||||
Building repairs and maintenance | 7,184 | 3,874 | 13,583 | 7,003 | |||||||||||
Real estate taxes and insurance | 30,686 | 15,958 | 61,817 | 31,446 | |||||||||||
Utilities | 13,182 | 6,829 | 26,660 | 13,394 | |||||||||||
Landscaping | 5,981 | 2,835 | 11,389 | 5,701 | |||||||||||
Other operating | 15,406 | 8,904 | 31,444 | 17,396 | |||||||||||
Depreciation and amortization | 69,631 | 32,222 | 159,644 | 64,417 | |||||||||||
Total property operating expenses | 167,253 | 85,043 | 354,629 | 167,759 | |||||||||||
Acquisition expense | 947 | 489 | 958 | 499 | |||||||||||
Property management expenses | 9,579 | 5,223 | 16,590 | 10,331 | |||||||||||
General and administrative expenses | 5,212 | 3,389 | 9,554 | 6,628 | |||||||||||
Merger related expenses | 795 | 5,737 | 2,871 | 5,737 | |||||||||||
Integration related expenses | 3,151 | — | 6,993 | — | |||||||||||
Income from continuing operations before non-operating items | 57,617 | 31,920 | 96,446 | 68,767 | |||||||||||
Interest and other non-property income | 921 | 23 | 1,081 | 70 | |||||||||||
Interest expense | (30,163 | ) | (15,189 | ) | (60,839 | ) | (30,734 | ) | |||||||
Loss on debt extinguishment/modification | — | — | — | (169 | ) | ||||||||||
Amortization of deferred financing costs | (1,174 | ) | (803 | ) | (2,485 | ) | (1,607 | ) | |||||||
Net casualty (loss) gain after insurance and other settlement proceeds | (295 | ) | 439 | (305 | ) | 455 | |||||||||
Income before income tax expense | 26,906 | 16,390 | 33,898 | 36,782 | |||||||||||
Income tax expense | (523 | ) | (223 | ) | (793 | ) | (446 | ) | |||||||
Income from continuing operations before joint venture activity | 26,383 | 16,167 | 33,105 | 36,336 | |||||||||||
Gain from real estate joint ventures | 2,919 | 47 | 2,895 | 101 | |||||||||||
Income from continuing operations | 29,302 | 16,214 | 36,000 | 36,437 | |||||||||||
Discontinued operations: | |||||||||||||||
Income from discontinued operations before gain on sale | 449 | 1,511 | 865 | 3,081 | |||||||||||
Net casualty loss after insurance and other settlement proceeds on discontinued operations | (1 | ) | (4 | ) | (3 | ) | (4 | ) | |||||||
Gain on sale of discontinued operations | — | 31,779 | 5,481 | 31,779 | |||||||||||
Income before gain (loss) on sale of properties | 29,750 | 49,500 | 42,343 | 71,293 | |||||||||||
Gain on sale of depreciable real estate assets excluded from discontinued operations | 3,658 | — | 6,222 | — | |||||||||||
(Loss) gain on sale of non-depreciable real estate assets | (22 | ) | — | 535 | — | ||||||||||
Net income available for Mid-America Apartments, L.P. common unitholders | $ | 33,386 | $ | 49,500 | $ | 49,100 | $ | 71,293 | |||||||
Earnings per common unit - basic: | |||||||||||||||
Income from continuing operations available for common unitholders | $ | 0.42 | $ | 0.36 | $ | 0.54 | $ | 0.82 | |||||||
Income from discontinued operations available for common unitholders | — | 0.75 | 0.08 | 0.79 | |||||||||||
Net income available for common unitholders | $ | 0.42 | $ | 1.11 | $ | 0.62 | $ | 1.61 | |||||||
Earnings per common unit - diluted: | |||||||||||||||
Income from continuing operations available for common unitholders | $ | 0.42 | $ | 0.36 | $ | 0.54 | $ | 0.82 | |||||||
Income from discontinued operations available for common unitholders | — | 0.75 | 0.08 | 0.79 | |||||||||||
Net income available for common unitholders | $ | 0.42 | $ | 1.11 | $ | 0.62 | $ | 1.61 | |||||||
Distributions declared per common unit | $ | 0.7300 | $ | 0.6950 | $ | 1.4600 | $ | 1.3900 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Net income available for Mid-America Apartments, L.P. common unitholders | $ | 33,386 | $ | 49,500 | $ | 49,100 | $ | 71,293 | |||||||
Other comprehensive income: | |||||||||||||||
Unrealized (losses) gains from the effective portion of derivative instruments | (7,403 | ) | 12,105 | (8,400 | ) | 11,926 | |||||||||
Reclassification adjustment for net losses included in net income for the effective portion of derivative instruments | 3,085 | 3,932 | 6,810 | 8,477 | |||||||||||
Comprehensive income attributable to Mid-America Apartments, L.P. | $ | 29,068 | $ | 65,537 | $ | 47,510 | $ | 91,696 | |||||||
See accompanying notes to condensed consolidated financial statements. |
Six months ended June 30, | |||||||
2014 | 2013 | ||||||
Cash flows from operating activities: | |||||||
Consolidated net income | $ | 49,100 | $ | 71,293 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Retail revenue accretion | (12 | ) | (20 | ) | |||
Depreciation and amortization | 162,099 | 68,001 | |||||
Stock compensation expense | 2,045 | 1,171 | |||||
Exercise of unit options | 9,544 | — | |||||
Redeemable units issued | 507 | 377 | |||||
Amortization of debt premium | (14,648 | ) | (505 | ) | |||
Gain from investments in real estate joint ventures | (2,878 | ) | (101 | ) | |||
Loss on debt extinguishment | — | 169 | |||||
Derivative interest expense | 402 | 465 | |||||
Settlement of forward swaps | (3,625 | ) | — | ||||
Gain on sale of non-depreciable real estate assets | (535 | ) | — | ||||
Gain on sale of depreciable real estate assets excluded from discontinued operations | (6,222 | ) | — | ||||
Gain on sale of discontinued operations | (5,481 | ) | (31,779 | ) | |||
Net casualty loss (gain) and other settlement proceeds | 308 | (451 | ) | ||||
Changes in assets and liabilities: | |||||||
Restricted cash | 21,318 | (278 | ) | ||||
Other assets | 11,134 | (2,076 | ) | ||||
Accounts payable | 229 | 5,552 | |||||
Accrued expenses and other | 594 | (4,483 | ) | ||||
Security deposits | 526 | 296 | |||||
Net cash provided by operating activities | 224,405 | 107,631 | |||||
Cash flows from investing activities: | |||||||
Purchases of real estate and other assets | (166,388 | ) | (89,871 | ) | |||
Normal capital improvements | (43,176 | ) | (22,383 | ) | |||
Construction capital and other improvements | (3,420 | ) | (2,137 | ) | |||
Renovations to existing real estate assets | (5,901 | ) | (5,112 | ) | |||
Development | (29,393 | ) | (20,816 | ) | |||
Distributions from real estate joint ventures | 11,541 | 8,197 | |||||
Contributions to real estate joint ventures | — | (183 | ) | ||||
Proceeds from disposition of real estate assets | 125,640 | 56,386 | |||||
Funding of escrow for future acquisitions | (41,640 | ) | (11,902 | ) | |||
Net cash used in investing activities | (152,737 | ) | (87,821 | ) | |||
Cash flows from financing activities: | |||||||
Advances from general partner | — | 18,021 | |||||
Net change in credit lines | (181,183 | ) | 2,000 | ||||
Proceeds from notes payable | 396,180 | — | |||||
Principal payments on notes payable | (230,952 | ) | (2,799 | ) | |||
Payment of deferred financing costs | (3,395 | ) | (426 | ) | |||
Repurchase of common units | (336 | ) | (673 | ) | |||
Proceeds from issuances of common units | 575 | 24,969 | |||||
Distributions paid on common units | (115,572 | ) | (61,044 | ) | |||
Net cash used in financing activities | (134,683 | ) | (19,952 | ) | |||
Net decrease in cash and cash equivalents | (63,015 | ) | (142 | ) | |||
Cash and cash equivalents, beginning of period | 89,333 | 8,934 | |||||
Cash and cash equivalents, end of period | $ | 26,318 | $ | 8,792 | |||
Supplemental disclosure of cash flow information: | |||||||
Interest paid | $ | 75,818 | $ | 33,610 | |||
Income taxes paid | $ | 803 | $ | 1,596 | |||
Supplemental disclosure of noncash investing and financing activities: | |||||||
Accrued construction in progress | $ | 8,458 | $ | 7,126 | |||
Interest capitalized | $ | 850 | $ | 872 | |||
Marked-to-market adjustment on derivative instruments | $ | 1,633 | $ | 19,916 | |||
Fair value adjustment on debt assumed | $ | 1,651 | $ | 704 | |||
Loan assumption | $ | 31,692 | $ | 18,293 |
• | enhances a readers' understanding of MAA and the Operating Partnership by enabling the reader to view the business as a whole in the same manner that management views and operates the business; |
• | eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both MAA and the Operating Partnership. |
• | creates time and cost efficiencies through the preparation of one combined report instead of two separate reports. |
Percent Owned | Number of Units/Square Feet | |||
Multifamily: | ||||
Mid-America Multifamily Fund II, LLC (Fund II) | 33.33% | 300 | (1) | |
Belterra | 10.00% | 288 | (2) | |
McKinney | 25.00% | — | (3) | |
Commercial: | ||||
Land Title Building | 33.30% | 29,971 |
Land | $ | 469,396 | |
Buildings and improvements | 3,075,642 | ||
Furniture, fixtures and equipment | 96,377 | ||
Development and capital improvements in progress | 113,368 | ||
Undeveloped land | 58,400 | ||
Properties held for sale | 33,300 | ||
Lease intangible assets | 57,946 | ||
Cash and cash equivalents | 63,454 | ||
Restricted cash | 6,825 | ||
Deferred costs and other assets, excluding lease intangible assets | 87,713 | ||
Total assets acquired | 4,062,421 | ||
Notes payable | (1,759,550) | ||
Fair market value of interest rate swaps | (14,961) | ||
Accounts payable, accrued expenses, and other liabilities | (125,034) | ||
Total liabilities assumed, including debt | (1,899,545 | ) | |
Total purchase price | $ | 2,162,876 |
(dollars and shares in thousands, except per share amounts) | Three months ended June 30, | Six months ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Shares Outstanding | |||||||||||||||
Weighted average common shares - basic | 74,948 | 42,690 | 74,876 | 42,523 | |||||||||||
Weighted average partnership units outstanding | — | (1) | — | (1) | — | (1) | 1,711 | ||||||||
Effect of dilutive securities | — | (1) | — | (1) | 162 | 60 | |||||||||
Weighted average common shares - diluted | 74,948 | 42,690 | 75,038 | 44,294 | |||||||||||
Calculation of Earnings per Share - basic | |||||||||||||||
Income from continuing operations | $ | 29,302 | $ | 16,214 | $ | 36,000 | $ | 36,437 | |||||||
Gain on sale of depreciable assets excluded from discontinued operations | 3,658 | — | 6,222 | — | |||||||||||
(Loss) gain on sale of non-depreciable assets | (22 | ) | — | 535 | — | ||||||||||
Income from continuing operations attributable to noncontrolling interests | (1,749 | ) | (580 | ) | (2,283 | ) | (1,341 | ) | |||||||
Income from continuing operations allocated to unvested restricted shares | (64 | ) | (14 | ) | — | (32 | ) | ||||||||
Income from continuing operations available for common shareholders, adjusted | $ | 31,125 | $ | 15,620 | $ | 40,474 | $ | 35,064 | |||||||
Income from discontinued operations | $ | 448 | $ | 44,814 | $ | 6,343 | $ | 46,596 | |||||||
Income from discontinued operations attributable to noncontrolling interest | (24 | ) | (1,359 | ) | (338 | ) | (1,423 | ) | |||||||
Income from discontinued operations allocated to unvested restricted shares | (1 | ) | (39 | ) | (12 | ) | (42 | ) | |||||||
Income from discontinued operations available for common shareholders, adjusted | $ | 423 | $ | 43,416 | $ | 5,993 | $ | 45,131 | |||||||
Weighted average common shares - basic | 74,948 | 42,690 | 74,876 | 42,523 | |||||||||||
Earnings per share - basic | $ | 0.42 | $ | 1.38 | $ | 0.62 | $ | 1.89 | |||||||
Calculation of Earnings per Share - diluted | |||||||||||||||
Income from continuing operations | $ | 29,302 | $ | 16,214 | $ | 36,000 | $ | 36,437 | |||||||
Gain on sale of depreciable assets excluded from discontinued operations | 3,658 | — | 6,222 | — | |||||||||||
(Loss) gain on sale of non-depreciable assets | (22 | ) | — | 535 | — | ||||||||||
Income from continuing operations attributable to noncontrolling interests | (1,749 | ) | (1) | (623 | ) | (1) | (2,283 | ) | (1) | — | |||||
Income from continuing operations allocated to unvested restricted shares | (64 | ) | (1) | (14 | ) | (1) | — | — | |||||||
Income from continuing operations available for common shareholders, adjusted | $ | 31,125 | $ | 15,577 | $ | 40,474 | $ | 36,437 | |||||||
Income from discontinued operations | $ | 448 | $ | 44,814 | $ | 6,343 | $ | 46,596 | |||||||
Income from discontinued operations attributable to noncontrolling interest | (24 | ) | (1) | (1,722 | ) | (1) | (338 | ) | (1) | — | |||||
Income from discontinued operations allocated to unvested restricted shares | (1 | ) | (1) | (39 | ) | (1) | — | — | |||||||
Income from discontinued operations available for common shareholders, adjusted | $ | 423 | $ | 43,053 | $ | 6,005 | $ | 46,596 | |||||||
Weighted average common shares - diluted | 74,948 | 42,690 | 75,038 | 44,294 | |||||||||||
Earnings per share - diluted | $ | 0.42 | $ | 1.37 | $ | 0.62 | $ | 1.87 |
(dollars and units in thousands, except per unit amounts) | Three months ended June 30, | Six months ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Units Outstanding | |||||||||||||||
Weighted average common units - basic | 79,156 | 44,398 | 79,090 | 44,234 | |||||||||||
Effect of dilutive securities | — | (1) | — | (1) | 162 | 60 | |||||||||
Weighted average common units - diluted | 79,156 | 44,398 | 79,252 | 44,294 | |||||||||||
Calculation of Earnings per Unit - basic | |||||||||||||||
Income from continuing operations | $ | 29,302 | $ | 16,214 | $ | 36,000 | $ | 36,437 | |||||||
Gain on sale of depreciable assets excluded from discontinued operations | 3,658 | — | 6,222 | — | |||||||||||
(Loss) gain on sale of non-depreciable assets | (22 | ) | — | 535 | — | ||||||||||
Income from continuing operations allocated to unvested restricted shares | (63 | ) | (14 | ) | (79 | ) | (32 | ) | |||||||
Income from continuing operations available for common unitholders, adjusted | $ | 32,875 | $ | 16,200 | $ | 42,678 | $ | 36,405 | |||||||
Income from discontinued operations | $ | 448 | $ | 33,286 | $ | 6,343 | $ | 34,856 | |||||||
Income from discontinued operations allocated to unvested restricted shares | (1 | ) | (29 | ) | — | — | |||||||||
Income from discontinued operations available for common unitholders, adjusted | $ | 447 | $ | 33,257 | $ | 6,343 | $ | 34,856 | |||||||
Weighted average common units - basic | 79,156 | 44,398 | 79,090 | 44,234 | |||||||||||
Earnings per unit - basic: | $ | 0.42 | $ | 1.11 | $ | 0.62 | $ | 1.61 | |||||||
Calculation of Earnings per Unit - diluted | |||||||||||||||
Income from continuing operations | $ | 29,302 | $ | 16,214 | $ | 36,000 | $ | 36,437 | |||||||
Gain on sale of depreciable assets | 3,658 | — | 6,222 | — | |||||||||||
(Loss) gain on sale of non-depreciable assets | (22 | ) | — | 535 | — | ||||||||||
Income from continuing operations allocated to unvested restricted shares | (63 | ) | (1) | (14 | ) | (1) | — | — | |||||||
Income from continuing operations available for common unitholders, adjusted | $ | 32,875 | $ | 16,200 | $ | 42,757 | $ | 36,437 | |||||||
Income from discontinued operations | $ | 448 | $ | 33,286 | $ | 6,343 | $ | 34,856 | |||||||
Income from discontinued operations allocated to unvested restricted shares | (1 | ) | (1) | (29 | ) | (1) | — | — | |||||||
Income from discontinued operations available for common unitholders, adjusted | $ | 447 | $ | 33,257 | $ | 6,343 | $ | 34,856 | |||||||
Weighted average common units - diluted | 79,156 | 44,398 | 79,252 | 44,294 | |||||||||||
Earnings per unit - diluted: | $ | 0.42 | $ | 1.11 | $ | 0.62 | $ | 1.61 |
Mid-America Apartment Communities, Inc. Shareholders | |||||||||||||||||||||||
Common Stock Amount | Additional Paid-In Capital | Accumulated Distributions in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Total Equity | ||||||||||||||||||
EQUITY BALANCE DECEMBER 31, 2013 | $ | 747 | $ | 3,599,549 | $ | (653,593 | ) | $ | 108 | $ | 166,726 | $ | 3,113,537 | ||||||||||
Net income | 46,479 | 2,621 | 49,100 | ||||||||||||||||||||
Other comprehensive income - derivative instruments (cash flow hedges) | (1,503 | ) | (87 | ) | (1,590 | ) | |||||||||||||||||
Issuance and registration of common shares | 2 | 573 | 575 | ||||||||||||||||||||
Shares repurchased and retired | — | (336 | ) | (336 | ) | ||||||||||||||||||
Exercise of stock options | 2 | 9,542 | 9,544 | ||||||||||||||||||||
Shares issued in exchange for units | — | 799 | (799 | ) | — | ||||||||||||||||||
Shares issued in exchange from redeemable stock | 998 | 998 | |||||||||||||||||||||
Redeemable stock fair market value | (848 | ) | (848 | ) | |||||||||||||||||||
Adjustment for noncontrolling interest ownership in operating partnership | 51 | (51 | ) | — | |||||||||||||||||||
Amortization of unearned compensation | 2,045 | 2,045 | |||||||||||||||||||||
Dividends on common stock ($1.46 per share) | (109,680 | ) | — | (109,680 | ) | ||||||||||||||||||
Dividends on noncontrolling interest units ($1.46 per unit) | (6,143 | ) | (6,143 | ) | |||||||||||||||||||
EQUITY BALANCE JUNE 30, 2014 | $ | 751 | $ | 3,613,221 | $ | (717,642 | ) | $ | (1,395 | ) |