TABLE OF CONTENTS

Overview

1

Financial Highlights

6

Consolidated Statements of Operations

8

Share and Unit Data

9

Consolidated Balance Sheets

10

Reconciliation of Non-GAAP Financial Measures

11

Non-GAAP Financial Measures

14

Other Key Definitions

15

Portfolio Statistics

S-1

Components of Net Operating Income/Components of Same Store Portfolio Property Operating Expenses

S-3

NOI Contribution Percentage by Market

S-4

Multifamily Same Store Portfolio Comparisons

S-5

Multifamily Development Pipeline/Multifamily Redevelopment Pipeline/Multifamily Lease-up Communities/2020 Acquisition Activity/2020 Disposition Activity

S-8

Investments In Unconsolidated Real Estate Entities/Debt and Debt Covenants as of September 30, 2020

S-9

Credit Ratings/Common Stock

S-11

COVID-19 Update

S-12

Investor Relations Data

S-13

OVERVIEW

•

Property revenues from the Same Store Portfolio increased 2.1% during the third quarter of 2020 as compared to the same period in the prior year.  Results were driven by a 1.8% growth in Average Effective Rent per Unit for the Same Store Portfolio.

•

Property operating expenses for the Same Store Portfolio increased 7.2% during the third quarter of 2020 as compared to the same period in the prior year.  As expected, growth in real estate taxes, insurance expenses, and marketing costs drove the majority of the increase.  

•

Net Operating Income, or NOI, from the Same Store Portfolio decreased 1.1% during the third quarter of 2020 as compared to the same period in the prior year.

•

Resident turnover continued to decline and remained low as resident move outs for the Same Store Portfolio for the third quarter of 2020 was 45.9% on a rolling twelve month basis.

•

As of the end of the third quarter of 2020, MAA had six properties under development, representing 1,940 units once complete, with a total projected cost of $459.5 million and an estimated $195.5 million remaining to be funded.

•

As of the end of the third quarter of 2020, MAA had two properties in their initial lease-up with physical occupancy averaging 83.6%.  One property is expected to stabilize in the fourth quarter of 2020 and the other property is expected to stabilize in the second quarter of 2021.

•

During the third quarter of 2020, MAA's operating partnership, Mid-America Apartments, L.P. (referred to as MAALP or the Operating Partnership), issued $450.0 million of 10-year senior unsecured notes at a coupon of 1.7% and an issue price of 99.465%.

•

Through October 26, 2020, rent cash collections and promises to pay under lease amendments signed by residents financially impacted by COVID-19, combined, represented 99.2% of billed residential rent for the third quarter of 2020.

•

Through October 26, 2020, rent cash collections represented 98.6% of billed residential rent for October 2020.  This compares to 98.4% average cash collections of July, August and September rents through the 26^th of each such month. Rent cash collections and promises to pay under lease amendments signed by residents financially impacted by COVID-19, combined, represented 98.8% of billed residential rent for October 2020. This compares to 98.6% average combined collections and deferrals of July, August and September rents through the 26^th of each such month.

•

Through October 26, 2020, Average Physical Occupancy for the Same Store Portfolio was 95.6% for the month of October.

•

Total debt to adjusted total assets (as defined in the covenants for the bonds issued by MAALP) was 30.6%;

•

Total debt outstanding was $4.4 billion with an average effective interest rate of approximately 3.7%;

•

99.2% of total debt was fixed against rising interest rates for an average of approximately 8.0 years; and

•

Unencumbered NOI was 93.2% of total NOI.

•

the COVID-19 pandemic and measures taken or that may be taken by federal, state and local governmental authorities to combat the spread of the disease;  

•

inability to generate sufficient cash flows due to unfavorable economic and 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 and sector;

•

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 within budget and on a timely basis, if at all, to lease-up as anticipated or to achieve anticipated results;

•

unexpected capital needs;

•

changes in operating costs, including real estate taxes, utilities and insurance costs;

•

inability to obtain appropriate insurance coverage at reasonable rates, or at all, or 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;

•

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;

•

the effect of the phase-out of the London Interbank Offered Rate, or LIBOR, as a variable rate debt benchmark by the end of 2021 and the transition to a different benchmark interest rate;

•

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 MAALP 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;

•

cyber liability or potential liability for breaches of our or our service providers’ information technology systems, or business operations disruptions;

•

potential liability for environmental contamination;

•

adverse legislative or regulatory developments;

•

extreme weather, natural disasters, disease outbreak and public health events;

•

legal proceedings relating to various issues, which, among other things, could result in a class action lawsuit;

•

compliance costs associated with numerous federal, state and local laws and regulations, including those costs associated with laws requiring access for disabled persons; and

•

other risks identified in this release and in reports we file with the SEC or in other documents that we publicly disseminate.

FINANCIAL HIGHLIGHTS

Dollars in thousands, except per share data

Three months ended September 30,

Nine months ended September 30,

2020

2019

2020

2019

Rental and other property revenues

$

423,199

$

415,632

$

1,254,323

$

1,224,200

Net income available for MAA common shareholders

$

58,988

$

77,723

$

168,854

$

201,456

Total NOI ⁽¹⁾

$

253,385

$

256,093

$

773,866

$

761,142

Earnings per common share: ⁽²⁾

Basic

$

0.52

$

0.68

$

1.48

$

1.77

Diluted

$

0.52

$

0.68

$

1.47

$

1.77

Funds from operations per Share - diluted: ⁽²⁾

FFO ⁽¹⁾

$

1.58

$

1.72

$

4.66

$

4.87

Core FFO ⁽¹⁾

$

1.57

$

1.57

$

4.78

$

4.60

Core AFFO ⁽¹⁾

$

1.40

$

1.38

$

4.28

$

4.10

Dividends declared per common share

$

1.00

$

0.96

$

3.00

$

2.88

Dividends/Core FFO (diluted) payout ratio

63.7

%

61.1

%

62.8

%

62.6

%

Dividends/Core AFFO (diluted) payout ratio

71.4

%

69.6

%

70.1

%

70.2

%

Consolidated interest expense

$

41,010

$

44,513

$

126,610

$

136,149

Mark-to-market debt adjustment

(83

)

51

9

222

Debt discount and debt issuance cost amortization

(1,223

)

(1,288

)

(3,603

)

(4,928

)

Capitalized interest

1,764

754

4,783

1,847

Total interest incurred

$

41,468

$

44,030

$

127,799

$

133,290

Amortization of principal on notes payable

$

1,055

$

1,796

$

4,538

$

5,468

⁽¹⁾

A reconciliation of the following items and an expanded discussion of their respective components can be found later in this release: (i) NOI to Net income available for MAA common shareholders; and (ii) FFO, Core FFO and Core AFFO to Net income available for MAA common shareholders.

⁽²⁾

See the “Share and Unit Data” section for additional information.

FINANCIAL HIGHLIGHTS (CONTINUED)

Dollars in thousands, except share price

September 30, 2020

December 31, 2019

Gross Assets ⁽¹⁾

$

14,445,414

$

14,185,703

Gross Real Estate Assets ⁽¹⁾

$

14,263,492

$

13,996,700

Total debt

$

4,425,594

$

4,454,598

Common shares and units outstanding

118,428,070

118,313,567

Share price

$

115.95

$

131.86

Book equity value

$

6,133,096

$

6,303,590

Market equity value

$

13,731,735

$

15,600,827

Net Debt/Adjusted EBITDAre ⁽²⁾

4.66x

4.71x

⁽¹⁾

A reconciliation of Gross Assets to Total assets and Gross Real Estate Assets to Real estate assets, net, along with an expanded discussion of their components, can be found later in this release.

⁽²⁾

Adjusted EBITDAre in this calculation represents the trailing twelve month period for each date presented. A reconciliation of the following items and an expanded discussion of their respective components can be found later in this release: (i) EBITDA, EBITDAre and Adjusted EBITDAre to Net income; and (ii) Net Debt to Unsecured notes payable and Secured notes payable.

CONSOLIDATED STATEMENTS OF OPERATIONS

Dollars in thousands, except per share data

Three months ended September 30,

Nine months ended September 30,

2020

2019

2020

2019

Revenues:

Rental and other property revenues

$

423,199

$

415,632

$

1,254,323

$

1,224,200

Expenses:

Operating expenses, excluding real estate taxes and insurance

105,108

100,319

292,031

286,284

Real estate taxes and insurance

64,706

59,220

188,426

176,774

Depreciation and amortization

127,679

124,684

381,257

371,417

Total property operating expenses

297,493

284,223

861,714

834,475

Property management expenses

12,691

13,899

39,064

41,195

General and administrative expenses

11,360

10,225

35,181

32,960

Interest expense

41,010

44,513

126,610

136,149

(Gain) loss on sale of depreciable real estate assets

(20

)

(1,000

)

7

(987

)

Gain on sale of non-depreciable real estate assets

(1,366

)

—

(995

)

(9,260

)

Other non-operating (income) expense

(242

)

(18,800

)

13,647

(23,494

)

Income before income tax expense

62,273

82,572

179,095

213,162

Income tax expense

(665

)

(1,491

)

(2,532

)

(2,814

)

Income from continuing operations before real estate joint venture activity

61,608

81,081

176,563

210,348

Income from real estate joint venture

428

378

1,153

1,210

Net income

62,036

81,459

177,716

211,558

Net income attributable to noncontrolling interests

2,126

2,814

6,096

7,336

Net income available for shareholders

59,910

78,645

171,620

204,222

Dividends to MAA Series I preferred shareholders

922

922

2,766

2,766

Net income available for MAA common shareholders

$

58,988

$

77,723

$

168,854

$

201,456

Earnings per common share - basic:

Net income available for common shareholders

$

0.52

$

0.68

$

1.48

$

1.77

Earnings per common share - diluted:

Net income available for common shareholders

$

0.52

$

0.68

$

1.47

$

1.77

SHARE AND UNIT DATA

Shares and units in thousands

Three months ended September 30,

Nine months ended September 30,

2020

2019

2020

2019

Net Income Shares ⁽¹⁾

Weighted average common shares - basic

114,216

113,877

114,177

113,814

Effect of dilutive securities

252

260

310

238

Weighted average common shares - diluted

114,468

114,137

114,487

114,052

Funds From Operations Shares And Units

Weighted average common shares and units - basic

118,274

117,958

118,238

117,910

Weighted average common shares and units - diluted

118,432

118,151

118,400

118,104

Period End Shares And Units

Common shares at September 30,

114,370

114,066

114,370

114,066

Operating Partnership units at September 30,

4,058

4,074

4,058

4,074

Total common shares and units at September 30,

118,428

118,140

118,428

118,140

⁽¹⁾

For additional information on the calculation of diluted common shares and earnings per common share, please refer to the Notes to Condensed Consolidated Financial Statements in MAA’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2020, expected to be filed with the SEC on or about October 29, 2020.

CONSOLIDATED BALANCE SHEETS

Dollars in thousands

September 30, 2020

December 31, 2019

Assets

Real estate assets:

Land

$

1,909,343

$

1,905,757

Buildings and improvements and other

12,037,042

11,841,978

Development and capital improvements in progress

220,685

116,424

14,167,070

13,864,159

Less: Accumulated depreciation

(3,316,710

)

(2,955,253

)

10,850,360

10,908,906

Undeveloped land

34,548

34,548

Investment in real estate joint venture

43,467

43,674

Real estate assets, net

10,928,375

10,987,128

Cash and cash equivalents

18,407

20,476

Restricted cash

9,182

50,065

Other assets

172,740

172,781

Total assets

$

11,128,704

$

11,230,450

Liabilities and equity

Liabilities:

Unsecured notes payable

$

3,939,425

$

3,828,201

Secured notes payable

486,169

626,397

Accrued expenses and other liabilities

570,014

472,262

Total liabilities

4,995,608

4,926,860

Redeemable common stock

13,841

14,131

Shareholders’ equity:

Preferred stock

9

9

Common stock

1,140

1,140

Additional paid-in capital

7,173,391

7,166,073

Accumulated distributions in excess of net income

(1,258,072

)

(1,085,479

)

Accumulated other comprehensive loss

(12,396

)

(13,178

)

Total MAA shareholders’ equity

5,904,072

6,068,565

Noncontrolling interests - Operating Partnership units

208,072

214,647

Total Company’s shareholders’ equity

6,112,144

6,283,212

Noncontrolling interests - consolidated real estate entities

7,111

6,247

Total equity

6,119,255

6,289,459

Total liabilities and equity

$

11,128,704

$

11,230,450

RECONCILIATION OF FFO, CORE FFO, CORE AFFO AND FAD TO NET INCOME AVAILABLE FOR MAA COMMON SHAREHOLDERS

Amounts in thousands, except per share and unit data

Three months ended September 30,

Nine months ended September 30,

2020

2019

2020

2019

Net income available for MAA common shareholders

$

58,988

$

77,723

$

168,854

$

201,456

Depreciation and amortization of real estate assets

125,916

123,171

376,430

366,704

(Gain) loss on sale of depreciable real estate assets

(20

)

(1,000

)

7

(987

)

Depreciation and amortization of real estate assets of real estate joint venture

153

154

458

465

Net income attributable to noncontrolling interests

2,126

2,814

6,096

7,336

Funds from operations attributable to the Company

187,163

202,862

551,845

574,974

(Income) loss on embedded derivative in preferred shares ⁽¹⁾

(1,342

)

(15,522

)

14,603

(19,592

)

Gain on sale of non-depreciable real estate assets

(1,366

)

—

(995

)

(9,260

)

Loss (gain) from unconsolidated limited partnerships, net of tax ⁽¹⁾⁽²⁾

100

(3,493

)

(4,085

)

(3,169

)

Net casualty loss (gain) and other settlement proceeds ⁽¹⁾

511

(46

)

1,207

(1,899

)

Loss on debt extinguishment ⁽¹⁾

345

5

344

60

Non-routine legal costs and settlements ⁽¹⁾

—

1,260

40

2,276

COVID-19 related costs ⁽¹⁾

376

—

2,983

—

Mark-to-market debt adjustment ⁽³⁾

83

(51

)

(9

)

(222

)

Core funds from operations

185,870

185,015

565,933

543,168

Recurring capital expenditures

(19,720

)

(21,543

)

(59,412

)

(58,461

)

Core adjusted funds from operations

166,150

163,472

506,521

484,707

Redevelopment capital expenditures

(11,627

)

(17,789

)

(35,650

)

(45,060

)

Revenue enhancing capital expenditures

(8,135

)

(8,215

)

(24,510

)

(26,067

)

Commercial capital expenditures

(765

)

(2,563

)

(2,303

)

(5,019

)

Other capital expenditures

(6,389

)

(5,330

)

(17,065

)

(13,494

)

Funds available for distribution

$

139,234

$

129,575

$

426,993

$

395,067

Dividends and distributions paid

$

118,232

$

113,408

$

354,976

$

340,052

Weighted average common shares - diluted

114,468

114,137

114,487

114,052

FFO weighted average common shares and units - diluted

118,432

118,151

118,400

118,104

Earnings per common share - diluted:

Net income available for common shareholders

$

0.52

$

0.68

$

1.47

$

1.77

Funds from operations per Share - diluted

$

1.58

$

1.72

$

4.66

$

4.87

Core funds from operations per Share - diluted

$

1.57

$

1.57

$

4.78

$

4.60

Core adjusted funds from operations per Share - diluted

$

1.40

$

1.38

$

4.28

$

4.10

⁽¹⁾

Included in Other non-operating (income) expense in the Consolidated Statements of Operations.

⁽²⁾

For the nine months ended September 30, 2020, $4.8 million of gains from unconsolidated limited partnerships are offset by $0.7 million of income tax expense.  For the three and nine months ended September 30, 2019, $4.3 million and $4.0 million, respectively, of gains from unconsolidated limited partnerships are offset by $0.8 million of income tax expense.  

⁽³⁾

Included in Interest expense in the Consolidated Statements of Operations.

RECONCILIATION OF NET OPERATING INCOME TO NET INCOME AVAILABLE FOR MAA COMMON SHAREHOLDERS

Dollars in thousands

Three Months Ended

Nine Months Ended

September 30,

2020

June 30,

2020

September 30,

2019

September 30,

2020

September 30,

2019

Net Operating Income

Same Store NOI

$

238,702

$

242,713

$

241,362

$

730,702

$

717,216

Non-Same Store and Other NOI

14,683

12,842

14,731

43,164

43,926

Total NOI

253,385

255,555

256,093

773,866

761,142

Depreciation and amortization

(127,679

)

(127,190

)

(124,684

)

(381,257

)

(371,417

)

Property management expenses

(12,691

)

(11,730

)

(13,899

)

(39,064

)

(41,195

)

General and administrative expenses

(11,360

)

(10,557

)

(10,225

)

(35,181

)

(32,960

)

Interest expense

(41,010

)

(42,118

)

(44,513

)

(126,610

)

(136,149

)

Gain (loss) on sale of depreciable real estate assets

20

2

1,000

(7

)

987

Gain on sale of non-depreciable real estate assets

1,366

5

-

995

9,260

Other non-operating income (expense)

242

14,643

18,800

(13,647

)

23,494

Income tax expense

(665

)

(1,200

)

(1,491

)

(2,532

)

(2,814

)

Income from real estate joint venture

428

318

378

1,153

1,210

Net income attributable to noncontrolling interests

(2,126

)

(2,666

)

(2,814

)

(6,096

)

(7,336

)

Dividends to MAA Series I preferred shareholders

(922

)

(922

)

(922

)

(2,766

)

(2,766

)

Net income available for MAA common shareholders

$

58,988

$

74,140

$

77,723

$

168,854

$

201,456

RECONCILIATION OF EBITDA, EBITDAre AND ADJUSTED EBITDAre TO NET INCOME

Dollars in thousands

Three Months Ended

Twelve Months Ended

September 30, 2020

September 30, 2019

September 30, 2020

December 31, 2019

Net income

$

62,036

$

81,459

$

332,776

$

366,618

Depreciation and amortization

127,679

124,684

506,683

496,843

Interest expense

41,010

44,513

170,308

179,847

Income tax expense

665

1,491

3,414

3,696

EBITDA

231,390

252,147

1,013,181

1,047,004

Gain on sale of depreciable real estate assets

(20

)

(1,000

)

(79,994

)

(80,988

)

Adjustments to reflect the Company’s share of EBITDAre of unconsolidated affiliates

337

338

1,345

1,351

EBITDAre

231,707

251,485

934,532

967,367

(Gain) loss on embedded derivative in preferred shares ⁽¹⁾

(1,342

)

(15,522

)

16,309

(17,886

)

Gain on sale of non-depreciable real estate assets

(1,366

)

—

(3,782

)

(12,047

)

Loss (gain) from unconsolidated limited partnerships, net of tax ⁽¹⁾⁽²⁾

100

(3,493

)

(3,870

)

(2,954

)

Net casualty loss (gain) and other settlement proceeds ⁽¹⁾

511

(46

)

(284

)

(3,390

)

Loss on debt extinguishment ⁽¹⁾

345

5

537

253

Non-routine legal costs and settlements ⁽¹⁾

—

1,260

40

2,276

COVID-19 related costs ⁽¹⁾

376

—

2,983

—

Mark-to-market debt adjustment ⁽³⁾

83

(51

)

(43

)

(256

)

Adjusted EBITDAre

$

230,414

$

233,638

$

946,422

$

933,363

⁽¹⁾

Included in Other non-operating (income) expense in the Consolidated Statements of Operations.

⁽²⁾

For the three months ended September 30, 2019, $4.3 million of gains from unconsolidated limited partnerships are offset by $0.8 million of income tax expenses.  For the twelve months ended September 30, 2020, $4.7 million of gains from unconsolidated limited partnerships are offset by $0.8 million of income tax expense.  For the twelve months ended December 31, 2019, $3.9 million of gains from unconsolidated limited partnerships are offset by $0.9 million of income tax expense.  

⁽³⁾

Included in Interest expense in the Consolidated Statements of Operations.

RECONCILIATION OF NET DEBT TO UNSECURED NOTES PAYABLE AND SECURED NOTES PAYABLE

Dollars in thousands

September 30, 2020

December 31, 2019

Unsecured notes payable

$

3,939,425

$

3,828,201

Secured notes payable

486,169

626,397

Total debt

4,425,594

4,454,598

Cash and cash equivalents

(18,407

)

(20,476

)

1031(b) exchange proceeds included in Restricted cash ⁽¹⁾

—

(33,843

)

Net Debt

$

4,407,187

$

4,400,279

⁽¹⁾

Included in Restricted cash in the Consolidated Balance Sheets.

RECONCILIATION OF GROSS ASSETS TO TOTAL ASSETS

Dollars in thousands

September 30, 2020

December 31, 2019

Total assets

$

11,128,704

$

11,230,450

Accumulated depreciation

3,316,710