TABLE OF CONTENTS

Overview

1

Financial Highlights

6

Consolidated Statements of Operations/Share and Unit Data

7

Consolidated Balance Sheets

8

Reconciliation of Non-GAAP Financial Measures

9

Non-GAAP Financial Measures

13

Other Key Definitions

14

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 Interior Redevelopment Pipeline/Multifamily Lease-up Communities/2021 Acquisition Activity/2021 Disposition Activity

S-8

Debt and Debt Covenants as of June 30, 2021

S-9

2021 Guidance/Reconciliation of Net Income per Diluted Common Share to Core FFO and Core AFFO per Share Guidance

S-11

Credit Ratings/Common Stock/Investor Relations Data

S-12

OVERVIEW

Second Quarter 2021 Operating Results

Three months ended June 30,

Six months ended June 30,

2021

2020

2021

2020

Earnings per common share - diluted

$

1.88

$

0.65

$

2.28

$

0.96

Funds from operations (FFO) per Share - diluted

$

1.84

$

1.71

$

3.34

$

3.08

Core FFO per Share - diluted

$

1.69

$

1.59

$

3.33

$

3.21

•

Property revenues from the Same Store Portfolio increased 4.7% during the second quarter of 2021 as compared to the same period in the prior year, ahead of expectations and supporting an increase in full-year expectations for growth in Core FFO.    

•

That increase in Property revenues was driven by a 3.1% growth in Average Effective Rent per Unit for the Same Store Portfolio, reflecting cumulative rent growth over the past year.  In addition, higher Average Physical Occupancy and improved collections on rents and fees during the second quarter of 2021 as compared to the same period in the prior year contributed to the strong results.  

•

Positive momentum in rental pricing continues as Same Store Portfolio blended lease-over-lease pricing for both new and renewal leases effective during the second quarter of 2021 increased 8.2% as compared to the expiring leases.  

•

Additionally, Same Store Portfolio blended lease-over-lease pricing for both new and renewal leases effective for July 2021 is over 12% through July 26, 2021.

•

Various programs introduced and actions taken by MAA to assist its residents impacted by the COVID-19 pandemic continued to have a positive impact during the second quarter of 2021.  The number of MAA residents seeking rental deferral has continued to decline with only 151 residents requesting a deferral on July 2021 rents.  Through July 26, 2021, cash collections represented 99.2% of billed residential rent for the second quarter of 2021.  

•

Since the start of the COVID-19 pandemic, MAA has assisted over 8,200 residents with rent deferral plans and modifications to existing lease agreements.

•

As expected, Property operating expense growth was elevated for the Same Store Portfolio and increased 6.3% during the second quarter of 2021 as compared to the same period in the prior year when a number of normal operating activities were curtailed during the initial stages of the COVID-19 pandemic.  

•

Net Operating Income (NOI) from the Same Store Portfolio increased 3.6% during the second quarter of 2021 as compared to the same period in the prior year.

•

Resident turnover remained low as resident move outs for the Same Store Portfolio for the second quarter of 2021 was 47.1% on a rolling twelve month basis.

•

During the second quarter of 2021, MAA closed on the disposition of all four of its properties located in the Jackson, Mississippi market for gross proceeds of approximately $160 million resulting in net gains on depreciable assets of $134.8 million.

•

MAA completed redevelopment of 1,836 apartment homes during the second quarter of 2021, capturing average rental rate increases of approximately 11% above non-renovated units.  

•

MAA continues its initiative focused on installation of new Smart Home technology throughout the portfolio with 7,488 unit installations completed during the second quarter of 2021.

•

During the second quarter of 2021, MAA completed the construction of Novel Midtown in the Phoenix, Arizona market and commenced development of Novel Day Break in the Salt Lake City, Utah market and Novel West Midtown in the Atlanta, Georgia market under its third-party developer pre-purchase program.  

•

As of the end of the second quarter of 2021, MAA had eight properties under development, representing 2,654 units once complete, with a total projected cost of $627.5 million and an estimated $301.3 million remaining to be funded.

•

During the second quarter of 2021, MAA completed the initial lease-up of Copper Ridge II in the Fort Worth, Texas market.  As of the end of the second quarter of 2021, MAA had two properties in their initial lease-up with physical occupancy averaging 69.7%.  One property is expected to stabilize in the third quarter of 2021 and the other property is expected to stabilize in the second quarter of 2022.

•

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

•

Total debt outstanding was $4.6 billion with an average effective interest rate of approximately 3.5%;

•

93.9% of total debt was fixed against rising interest rates for an average of approximately 7.4 years; and

•

Unencumbered NOI was 94.6% of total NOI.

Earnings:

Full Year 2021

Earnings per common share - diluted

$3.79 to $3.99

Midpoint

$3.89

Core FFO per Share - diluted

$6.65 to $6.85

Midpoint

$6.75

Core AFFO per Share - diluted

$5.97 to $6.17

Midpoint

$6.07

MAA Same Store Portfolio:

Property revenue growth

3.75% to 4.25%

Property operating expense growth

4.25% to 4.75%

NOI growth

3.25% to 4.25%

•

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 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 or collect 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 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;

•

material 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, or refinance existing debt as it matures;

•

level and volatility of interest or capitalization rates or capital market conditions;

•

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 (LIBOR) as a variable rate debt benchmark by the end of 2021 and the transition to a different benchmark interest rate;

•

significant change in the mortgage financing market or other factors that would cause single-family housing or other alternative housing options, 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;

•

changes in the legal requirements we are subject to, or the imposition of new legal requirements, that adversely affect our operations;

•

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

•

legal proceedings or class action lawsuits;

•

impact of reputational harm caused by negative press of our actions or policies, whether or not warranted;

•

compliance costs associated with numerous federal, state and local laws and regulations; 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 June 30,

Six months ended June 30,

2021

2020

2021

2020

Rental and other property revenues

$

436,927

$

413,026

$

861,932

$

831,124

Net income available for MAA common shareholders

$

215,556

$

74,140

$

261,827

$

109,866

Total NOI ⁽¹⁾

$

268,166

$

255,555

$

530,703

$

520,481

Earnings per common share: ⁽²⁾

Basic

$

1.88

$

0.65

$

2.29

$

0.96

Diluted

$

1.88

$

0.65

$

2.28

$

0.96

Funds from operations per Share - diluted: ⁽²⁾

FFO ⁽¹⁾

$

1.84

$

1.71

$

3.34

$

3.08

Core FFO ⁽¹⁾

$

1.69

$

1.59

$

3.33

$

3.21

Core AFFO ⁽¹⁾

$

1.49

$

1.38

$

3.03

$

2.88

Dividends declared per common share

$

1.025

$

1.000

$

2.050

$

2.000

Dividends/Core FFO (diluted) payout ratio

60.7

%

62.9

%

61.6

%

62.3

%

Dividends/Core AFFO (diluted) payout ratio

68.8

%

72.5

%

67.7

%

69.4

%

Consolidated interest expense

$

38,867

$

42,118

$

78,539

$

85,600

Mark-to-market debt adjustment

(83

)

58

(166

)

92

Debt discount and debt issuance cost amortization

(1,248

)

(1,190

)

(2,508

)

(2,380

)

Capitalized interest

2,783

1,628

5,333

3,019

Total interest incurred

$

40,319

$

42,614

$

81,198

$

86,331

Amortization of principal on notes payable

$

329

$

1,743

$

844

$

3,483

⁽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.

Dollars in thousands, except share price

June 30, 2021

December 31, 2020

Gross Assets ⁽¹⁾

$

14,867,747

$

14,609,896

Gross Real Estate Assets ⁽¹⁾

$

14,639,909

$

14,407,418

Total debt

$

4,553,237

$

4,562,712

Common shares and units outstanding

118,538,877

118,431,384

Share price

$

168.42

$

126.69

Book equity value

$

6,142,359

$

6,103,805

Market equity value

$

19,964,318

$

15,004,072

Net Debt/Adjusted EBITDAre ⁽²⁾

4.75x

4.81x

⁽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 is calculated for 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 June 30,

Six months ended June 30,

2021

2020

2021

2020

Revenues:

Rental and other property revenues

$

436,927

$

413,026

$

861,932

$

831,124

Expenses:

Operating expenses, excluding real estate taxes and insurance

101,751

95,555

197,712

186,923

Real estate taxes and insurance

67,010

61,916

133,517

123,720

Depreciation and amortization

131,824

127,190

263,327

253,578

Total property operating expenses

300,585

284,661

594,556

564,221

Property management expenses

13,752

11,730

26,691

26,373

General and administrative expenses

13,114

10,557

26,093

23,821

Interest expense

38,867

42,118

78,539

85,600

(Gain) loss on sale of depreciable real estate assets

(134,828

)

(2

)

(134,828

)

27

(Gain) loss on sale of non-depreciable real estate assets

(32

)

(5

)

(32

)

371

Other non-operating (income) expense

(20,126

)

(14,643

)

(4,213

)

13,889

Income before income tax expense

225,595

78,610

275,126

116,822

Income tax expense

(2,045

)

(1,200

)

(3,044

)

(1,867

)

Income from continuing operations before real estate joint venture activity

223,550

77,410

272,082

114,955

Income from real estate joint venture

325

318

657

725

Net income

223,875

77,728

272,739

115,680

Net income attributable to noncontrolling interests

7,397

2,666

9,068

3,970

Net income available for shareholders

216,478

75,062

263,671

111,710

Dividends to MAA Series I preferred shareholders

922

922

1,844

1,844

Net income available for MAA common shareholders

$

215,556

$

74,140

$

261,827

$

109,866

Earnings per common share - basic:

Net income available for common shareholders

$

1.88

$

0.65

$

2.29

$

0.96

Earnings per common share - diluted:

Net income available for common shareholders

$

1.88

$

0.65

$

2.28

$

0.96

SHARE AND UNIT DATA

Shares and units in thousands

Three months ended June 30,

Six months ended June 30,

2021

2020

2021

2020

Net Income Shares ⁽¹⁾

Weighted average common shares - basic

114,494

114,204

114,379

114,158

Effect of dilutive securities

318

234

311

324

Weighted average common shares - diluted

114,812

114,438

114,690

114,482

Funds From Operations Shares And Units

Weighted average common shares and units - basic

118,411

118,263

118,365

118,220

Weighted average common shares and units - diluted

118,536

118,423

118,496

118,383

Period End Shares And Units

Common shares at June 30,

114,920

114,365

114,920

114,365

Operating Partnership units at June 30,

3,619

4,059

3,619

4,059

Total common shares and units at June 30,

118,539

118,424

118,539

118,424

⁽¹⁾

For additional information on the calculation of diluted common shares and earnings per common share, please refer to the Notes to Consolidated Financial Statements in MAA’s Quarterly Report on Form 10-Q for the three and six months ended June 30, 2021, expected to be filed with the SEC on or about July 29, 2021.

CONSOLIDATED BALANCE SHEETS

Dollars in thousands

June 30, 2021

December 31, 2020

Assets

Real estate assets:

Land

$

1,987,412

$

1,929,181

Buildings and improvements and other

12,246,988

12,065,244

Development and capital improvements in progress

295,645

283,477

14,530,045

14,277,902

Less: Accumulated depreciation

(3,625,627

)

(3,415,105

)

10,904,418

10,862,797

Undeveloped land

35,050

60,993

Investment in real estate joint venture

42,933

43,325

Real estate assets, net

10,982,401

10,967,115

Cash and cash equivalents

31,881

25,198

Restricted cash

11,123

10,417

Other assets

216,715

192,061

Total assets

$

11,242,120

$

11,194,791

Liabilities and equity

Liabilities:

Unsecured notes payable

$

4,187,292

$

4,077,373

Secured notes payable

365,945

485,339

Accrued expenses and other liabilities

546,524

528,274

Total liabilities

5,099,761

5,090,986

Redeemable common stock

21,692

15,397

Shareholders’ equity:

Preferred stock

9

9

Common stock

1,147

1,141

Additional paid-in capital

7,201,885

7,176,793

Accumulated distributions in excess of net income

(1,272,694

)

(1,294,182

)

Accumulated other comprehensive loss

(11,632

)

(12,128

)

Total MAA shareholders’ equity

5,918,715

5,871,633

Noncontrolling interests - Operating Partnership units

185,340

206,927

Total Company’s shareholders’ equity

6,104,055

6,078,560

Noncontrolling interests - consolidated real estate entities

16,612

9,848

Total equity

6,120,667

6,088,408

Total liabilities and equity

$

11,242,120

$

11,194,791

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 June 30,

Six months ended June 30,

2021

2020

2021

2020

Net income available for MAA common shareholders

$

215,556

$

74,140

$

261,827

$

109,866

Depreciation and amortization of real estate assets

130,031

125,668

259,783

250,514

(Gain) loss on sale of depreciable real estate assets

(134,828

)

(2

)

(134,828

)

27

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

154

153

309

305

Net income attributable to noncontrolling interests

7,397

2,666

9,068

3,970

Funds from operations attributable to the Company

218,310

202,625

396,159

364,682

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

(13,168

)

(11,693

)

1,940

15,945

(Gain) loss on sale of non-depreciable real estate assets

(32

)

(5

)

(32

)

371

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

(4,962

)

(4,262

)

(6,246

)

(4,185

)

Net casualty (gain) loss and other settlement proceeds ⁽³⁾

(595

)

(151

)

1,760

696

Loss (gain) on debt extinguishment ⁽¹⁾

—

—

37

(1

)

Non-routine legal costs and settlements ⁽¹⁾

—

—

(16

)

40

COVID-19 related costs ⁽¹⁾

109

2,411

419

2,607

Mark-to-market debt adjustment ⁽⁴⁾

83

(58

)

166

(92

)

Core funds from operations

199,745

188,867

394,187

380,063

Recurring capital expenditures

(22,847

)

(25,118

)

(35,432

)

(39,692

)

Core adjusted funds from operations

176,898

163,749

358,755

340,371

Redevelopment capital expenditures

(26,148

)

(10,075

)

(48,880

)

(24,023

)

Revenue enhancing capital expenditures

(10,907

)

(8,447

)

(18,086

)

(16,375

)

Commercial capital expenditures

(372

)

(1,143

)

(1,426

)

(1,538

)

Other capital expenditures ⁽⁵⁾

(18,429

)

(5,086

)

(24,108

)

(10,676

)

Funds available for distribution

$

121,042

$

138,998

$

266,255

$

287,759

Dividends and distributions paid

$

121,492

$

118,407

$

242,893

$

236,744

Weighted average common shares - diluted

114,812

114,438

114,690

114,482

FFO weighted average common shares and units - diluted

118,536

118,423

118,496

118,383

Earnings per common share - diluted:

Net income available for common shareholders

$

1.88

$

0.65

$

2.28

$

0.96

Funds from operations per Share - diluted

$

1.84

$

1.71

$

3.34

$

3.08

Core funds from operations per Share - diluted

$

1.69

$

1.59

$

3.33

$

3.21

Core adjusted funds from operations per Share - diluted

$

1.49

$

1.38

$

3.03

$

2.88

⁽¹⁾

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

⁽²⁾

For the three and six months ended June 30, 2021, $6.3 million and $7.9 million, respectively, of gains from unconsolidated limited partnerships are offset by $1.3 million and $1.7 million, respectively, of income tax expense.  For the three and six months ended June 30, 2020, $5.0 million and $4.9 million, respectively, of gains from unconsolidated limited partnerships are offset by $0.7 million of income tax expense.     

⁽³⁾

During the six months ended June 30, 2021, MAA incurred $37.3 million in casualty losses related to winter storm Uri (primarily building repairs, landscaping and asset write-offs).  The majority of the storm costs are expected to be reimbursed through insurance coverage.  A receivable has been recognized in Other non-operating (income) expense for the amount of the recorded losses that MAA expects to be recovered.  Additional costs related to the storm that are not expected to be recovered through insurance coverage, along with other unrelated casualty losses and recoveries, are reflected in this adjustment.  The adjustment is primarily included in Other non-operating (income) expense in the Consolidated Statements of Operations.  

⁽⁴⁾

Included in Interest expense in the Consolidated Statements of Operations.

⁽⁵⁾

During the three and six months ended June 30, 2021, MAA spent $11.9 million and $14.2 million, respectively, in reconstruction-related capital expenditures due to winter storm Uri.  

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

Dollars in thousands

Three Months Ended

Six Months Ended

June 30,

2021

March 31,

2021

June 30,

2020

June 30,

2021

June 30,

2020

Net Operating Income

Same Store NOI

$

257,071

$

252,730

$

248,034

$

509,801

$

503,068

Non-Same Store and Other NOI

11,095

9,807

7,521

20,902

17,413

Total NOI

268,166

262,537

255,555

530,703

520,481

Depreciation and amortization

(131,824

)

(131,503

)

(127,190

)

(263,327

)

(253,578

)

Property management expenses

(13,752

)

(12,939

)

(11,730

)

(26,691

)

(26,373

)

General and administrative expenses

(13,114

)

(12,979

)

(10,557

)

(26,093

)

(23,821

)

Interest expense

(38,867

)

(39,672

)

(42,118

)

(78,539

)

(85,600

)

Gain (loss) on sale of depreciable real estate assets

134,828

—

2

134,828

(27

)

Gain (loss) on sale of non-depreciable real estate assets

32

—

5

32

(371

)

Other non-operating income (expense)

20,126

(15,913

)

14,643

4,213

(13,889

)

Income tax expense

(2,045

)

(999

)

(1,200

)

(3,044

)

(1,867

)

Income from real estate joint venture

325

332

318

657

725

Net income attributable to noncontrolling interests

(7,397

)

(1,671

)

(2,666

)

(9,068

)

(3,970

)

Dividends to MAA Series I preferred shareholders

(922

)

(922

)

(922

)

(1,844

)

(1,844

)

Net income available for MAA common shareholders

$

215,556

$

46,271

$

74,140

$

261,827

$

109,866

RECONCILIATION OF EBITDA, EBITDAre AND ADJUSTED EBITDAre TO NET INCOME

Dollars in thousands

Three Months Ended

Twelve Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

December 31, 2020

Net income

$

223,875

$

77,728

$

421,075

$

264,015

Depreciation and amortization

131,824

127,190

520,591

510,842

Interest expense

38,867

42,118

160,501

167,562

Income tax expense

2,045

1,200

4,504

3,327

EBITDA

396,611

248,236

1,106,671

945,746

Gain on sale of depreciable real estate assets

(134,828

)

(2

)

(134,863

)

(9

)

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

338

336

1,353

1,349

EBITDAre

262,121

248,570

973,161

947,086

Gain on embedded derivative in preferred shares ⁽¹⁾

(13,168

)

(11,693

)

(16,567

)

(2,562

)

Gain on sale of non-depreciable real estate assets

(32

)

(5

)

(1,427

)

(1,024

)

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

(4,962

)

(4,262

)

(6,817

)

(4,757

)

Net casualty (gain) loss and other settlement proceeds ⁽³⁾

(595

)

(151

)

1,548

484

Loss on debt extinguishment ⁽¹⁾

—

—

381

344

Non-routine legal costs and settlements ⁽¹⁾

—

—

(94

)

(38

)

COVID-19 related costs ⁽¹⁾

109

2,411

1,349

3,536

Mark-to-market debt adjustment ⁽⁴⁾

83

(58

)

333

75