10-Q

美國

證券交易委員會

華盛頓特區20549

表格 10-Q


☒	根據1934年證券交易法第13或15(d)條款的季度報告。

截至2024年6月30日季度結束九月三十日， 2024

或


☐	根據1934年證券交易法第13或15(d)條款的過渡報告

過渡期從______到_____。

委員會檔案編號： 001-12762 （Mid-America Apartment Communities, Inc.）

委員會檔案編號： 333-190028-01 （Mid-America Apartments, L.P.）

MID-AMERICA APARTMENT COMMUNITIES，INC。

MID-AMERICA APARTMENTS, L.P.

（依憑章程所載的完整登記名稱）


田納西州（中美公寓社區，Inc.）	62-1543819
田納西州（美國中美公寓有限合夥）	62-1543816
(成立地或組織其他管轄區)	（聯邦稅號）

6815 Poplar Ave., 500套房, Germantown, 田納西州 38138

(主要行政辦公室的地址)（郵政編碼）

(901) 682-6600

(註冊人電話號碼，包括區號)

無可奉告

(如與上次報告不同，列明前名稱、前地址及前財政年度)

根據法案第12(b)條規定註冊的證券：


每種類別的名稱	交易標的（s）	每個註冊交易所的名稱
普通股每股面值 $0.01 (Mid-America Apartment Communities, Inc.)	「MAA」的意思是藥品商業上市申請(Marketing Authorization Application)、BLA或類似申請，相關的所有修改和補充，即申請向FDA、EMA或任何其他國家或監管權限的等效提交行政機關，旨在在一個國家或一組國家獲得藥品產品的營銷批准。	紐約證券交易所
8.50% I系列累積可贖回優先股,每股面值$0.01 (Mid-America Apartment Communities, Inc.)	MAA*I	紐約證券交易所

請以勾選方式指示登記人：（1）是否已按照1934年證券交易法第13條或第15（d）條的規定提交所有應提交的報告，並（2）是否在過去12個月（或要求登記人提交此類報告的更短期間）及過去90天內一直受到此類提交要求的約束。


Mid-America Apartment Communities, Inc.	是☒	沒有☐
Mid-America Apartments, L.P.	是☒	沒有☐

請勾選表示該登記者是否已在過去12個月內（或該登記者需要提交這些文件的較短期間）向Regulation S-t的第232.405條提出的每個互動式數據文件。


Mid-America Apartment Communities, Inc.	是☒	沒有☐
Mid-America Apartments, L.P.	是☒	沒有☐

請勾選判斷登記人是大型加速申報者、加速申報者、非加速申報者、較小型報告公司或新興成長公司。請參閱交易所法案規則120億2中"large accelerated filer"、"accelerated filer"、"smaller reporting company"和"emerging growth company"的定義。


Mid-America Apartment Communities，Inc。
大型加速歸檔人 ☒	加速提交人 ☐	非加速申報者 ☐	小型報告公司 ☐	新興成長型企業 ☐


Mid-America Apartments, L.P.
大型加速提交人 ☐	加速提交人 ☐	非加速歸檔人 ☒	小型報告公司 ☐	新興成長型企業 ☐

如果該企業為新興成長型企業，請在是否選擇不使用證交法第13(a)條所提供之符合任何新的或修訂財務會計標準的延長過渡期的方格中打勾。

    Mid-America Apartment Communities, Inc.  ☐

   

    Mid-America Apartments, L.P.  ☐

   

勾選表示申報人是否為外殼公司（定義於交易所法規第1202條）。


Mid-America Apartment Communities, Inc.	是☐	沒有 ☒
Mid-America Apartments, L.P.	是☐	沒有 ☒

請在最近可行日期指明發行人每個普通股類別的流通股數：


Mid-America Apartment Communities, Inc.	流通股數
Class A普通股	2024年10月28日
普通股，每股面值0.01美元	116,880,291

MID-AMERICA APARTMENT COMMUNITIES，INC。

MID-AMERICA APARTMENTS, L.P.


			頁面
財務報表第一部分
项目1。	基本報表。		5
	Mid-America Apartment Communities, Inc.
		2024年9月30日和2023年12月31日的精簡綜合資產負債表。	5
		2024年9月30日和2023年的三個和九個月的精簡綜合損益表。	6
		2024年9月30日和2023年的三個和九個月的精簡綜合收益表。	7
		截至2024年9月30日和2023年的總體現金流量表。	8
	Mid-America Apartments, L.P.
		截至2024年9月30日和2023年的總體資產負債表。	9
		截至2024年9月30日和2023年的綜合損益表。	10
		截至2024年9月30日和2023年的全面收益表。	11
		截至2024年9月30日和2023年的總體現金流量表。	12
	總體基本財務報表附註。		13
项目2。	管理層對財務狀況和營運結果的討論和分析。		29
项目3。	市場風險的定量和定性披露。		41
项目4。	控制項和程序。		41

其他資訊第二部分
项目1。	法律訴訟。		42
项目1A。	風險因素。		42
项目2。	未註冊出售權益證券和資金用途。		42
项目3。	上級證券違約事項。		42
项目4。	礦業安全披露。		42
项目5。	其他信息。		43
第6項。	展覽品。		44
	簽名。		45

Explanatory Note

This report combines the Quarterly Reports on Form 10-Q for the quarter ended September 30, 2024 of Mid-America Apartment Communities, Inc., a Tennessee corporation, and Mid-America Apartments, L.P., a Tennessee limited partnership, of which Mid-America Apartment Communities, Inc. is the sole general partner. Mid-America Apartment Communities, Inc. and its 97.4% owned subsidiary, Mid-America Apartments, L.P., are both required to file quarterly reports under the Securities Exchange Act of 1934, as amended.

Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to “MAA” refer only to Mid-America Apartment Communities, Inc., and not any of its consolidated subsidiaries. Unless the context otherwise requires, all references in this report to “we,” “us,” “our,” or the “Company” refer collectively to Mid-America Apartment Communities, Inc., together with its consolidated subsidiaries, including Mid-America Apartments, L.P. Unless the context otherwise requires, all references in this report to the “Operating Partnership” or “MAALP” refer to Mid-America Apartments, L.P. together with its consolidated subsidiaries. “Common stock” refers to the common stock of MAA, “preferred stock” refers to the preferred stock of MAA, and “shareholders” refers to the holders of shares of MAA’s common stock or preferred stock, as applicable. The common units of limited partnership interest in the Operating Partnership are referred to as “OP Units” and the holders of the OP Units are referred to as “common unitholders.”

As of September 30, 2024, MAA owned 116,880,291 OP Units (97.4% of the total number of OP Units). MAA conducts substantially all of its business and holds substantially all of its assets, directly or indirectly, through the Operating Partnership, and by virtue of its ownership of the OP Units and being the Operating Partnership’s sole general partner, MAA has the ability to control all of the day-to-day operations of the Operating Partnership.

We believe combining the periodic reports of MAA and the Operating Partnership, including the notes to the condensed consolidated financial statements, into this report results in the following benefits:

•

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.

MAA, an S&P 500 company, is a multifamily-focused, self-administered and self-managed real estate investment trust, or REIT. Management operates MAA and the Operating Partnership as one business. The management of the Company is comprised of individuals who are officers of MAA and employees of the Operating Partnership. We believe it is important to understand the few differences between MAA and the Operating Partnership in the context of how MAA and the Operating Partnership operate as a consolidated company. MAA and the Operating Partnership are structured as an umbrella partnership REIT, or UPREIT. MAA’s interest in the Operating Partnership entitles MAA to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to MAA’s percentage interest therein and entitles MAA to vote on substantially all matters requiring a vote of the partners. MAA’s only material asset is its ownership of limited partnership interests in the Operating Partnership (other than cash held by MAA from time to time); therefore, MAA’s primary function is acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing certain debt of the Operating Partnership from time to time. The Operating Partnership holds, directly or indirectly, all of the real estate assets. Except for net proceeds from public equity issuances by MAA, which are contributed to the Operating Partnership in exchange for limited partnership interests, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, direct or indirect incurrence of indebtedness and issuance of OP Units.

The presentation of MAA’s shareholders’ equity and the Operating Partnership’s capital are the principal areas of difference between the condensed consolidated financial statements of MAA and those of the Operating Partnership. MAA’s shareholders’ equity may include shares of preferred stock, shares of common stock, additional paid-in capital, cumulative earnings, cumulative distributions, noncontrolling interests, treasury shares, accumulated other comprehensive income or loss and redeemable common stock. The Operating Partnership’s capital may include common capital and preferred capital of the general partner (MAA), limited partners’ common capital and preferred capital, noncontrolling interests, accumulated other comprehensive income or loss and redeemable common units. Holders of OP Units (other than MAA) may require the Operating Partnership to redeem their OP Units from time to time, in which case the Operating Partnership may, at its option, pay the redemption price either in cash (in an amount per OP Unit equal, in general, to the average closing price of MAA’s common stock on the New York Stock Exchange, or NYSE, over a specified period prior to the redemption date) or by delivering one share of MAA’s common stock (subject to adjustment under specified circumstances) for each OP Unit so redeemed.

In order to highlight the material differences between MAA and the Operating Partnership, this Quarterly Report on Form 10-Q includes sections that separately present and discuss areas that are materially different between MAA and the Operating Partnership, including:

•

the condensed consolidated financial statements in Part 1, Item 1 of this report;

•

certain accompanying notes to the condensed consolidated financial statements, including Note 2 - Earnings per Common Share of MAA and Note 3 - Earnings per OP Unit of MAALP; Note 4 - MAA Equity and Note 5 - MAALP Capital; and Note 8 - Shareholders’ Equity of MAA and Note 9 - Partners’ Capital of MAALP;

•

the controls and procedures in Part 1, Item 4 of this report; and

•

the certifications included as Exhibits 31 and 32 to this report.

In the sections that combine disclosures for MAA and the Operating Partnership, this Quarterly Report on Form 10-Q refers to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership (directly or indirectly through one of its subsidiaries) is generally the entity that enters into contracts, holds assets and issues debt, management believes this presentation is appropriate for the reasons set forth above and because we operate the business through the Operating Partnership. MAA, the Operating Partnership and its subsidiaries operate as one consolidated business, but MAA, the Operating Partnership and each of its subsidiaries are separate, distinct legal entities.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Mid-America Apartment Communities, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(Dollars in thousands, except per share data)


	September 30, 2024			December 31, 2023
Assets
Real estate assets:
Land	$	2,085,464		$	2,031,403
Buildings and improvements and other		13,956,601			13,515,949
Development and capital improvements in progress		499,619			385,405
		16,541,684			15,932,757
Less: Accumulated depreciation		(5,217,893	)		(4,864,690	)
		11,323,791			11,068,067
Undeveloped land		73,861			73,861
Investment in real estate joint venture		41,693			41,977
Real estate assets, net		11,439,345			11,183,905

Cash and cash equivalents		50,232			41,314
Restricted cash		13,829			13,777
Other assets		237,525			245,507
Assets held for sale		15,321			—
Total assets	$	11,756,252		$	11,484,503

Liabilities and equity
Liabilities:
Unsecured notes payable	$	4,515,733		$	4,180,084
Secured notes payable		360,235			360,141
Accrued expenses and other liabilities		726,172			645,156
Total liabilities		5,602,140			5,185,381

Redeemable common stock		22,518			19,167

Shareholders’ equity:
Preferred stock, $0.01 par value per share, 20,000,000 shares authorized; 8.50% Series I Cumulative Redeemable Shares, liquidation preference $50.00 per share, 867,846 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		9			9
Common stock, $0.01 par value per share, 145,000,000 shares authorized; 116,880,291 and 116,694,124 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively (1)		1,166			1,168
Additional paid-in capital		7,413,674			7,399,921
Accumulated distributions in excess of net income		(1,458,816	)		(1,298,263	)
Accumulated other comprehensive loss		(7,359	)		(8,764	)
Total MAA shareholders’ equity		5,948,674			6,094,071
Noncontrolling interests - OP Units		155,562			163,128
Total Company’s shareholders’ equity		6,104,236			6,257,199
Noncontrolling interests - consolidated real estate entities		27,358			22,756
Total equity		6,131,594			6,279,955
Total liabilities and equity	$	11,756,252		$	11,484,503

(1)

Number of shares issued and outstanding represents total shares of common stock regardless of classification on the Condensed Consolidated Balance Sheets. The number of shares classified as redeemable common stock on the Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 are 141,710 and 142,546, respectively.

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartment Communities, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(Dollars in thousands, except per share data)


	Three months ended September 30,					Nine months ended September 30,
	2024			2023		2024			2023
Revenues:
Rental and other property revenues	$	551,126		$	542,042	$	1,641,183		$	1,606,221
Expenses:
Operating expenses, excluding real estate taxes and insurance		134,475			122,660		378,887			347,868
Real estate taxes and insurance		77,086			76,563		236,272			228,491
Depreciation and amortization		146,722			146,702		434,764			424,175
Total property operating expenses		358,283			345,925		1,049,923			1,000,534
Property management expenses		17,265			16,298		54,461			50,317
General and administrative expenses		12,728			13,524		42,444			43,329
Interest expense		42,726			36,651		124,352			110,655
Loss on sale of depreciable real estate assets		—			75		25			61
Gain on sale of non-depreciable real estate assets		—		—			—			(54	)
Other non-operating expense (income)		1,678			16,493		(2,604	)		(3,966	)
Income before income tax (expense) benefit		118,446			113,076		372,582			405,345
Income tax (expense) benefit		(670	)		209		(3,485	)		(3,596	)
Income from continuing operations before real estate joint venture activity		117,776			113,285		369,097			401,749
Income from real estate joint venture		454			447		1,405			1,214
Net income		118,230			113,732		370,502			402,963
Net income attributable to noncontrolling interests		3,035			3,000		9,605			10,633
Net income available for shareholders		115,195			110,732		360,897			392,330
Dividends to MAA Series I preferred shareholders		922			922		2,766			2,766
Net income available for MAA common shareholders	$	114,273		$	109,810	$	358,131		$	389,564

Earnings per common share - basic:
Net income available for MAA common shareholders	$	0.98		$	0.94	$	3.07		$	3.34

Earnings per common share - diluted:
Net income available for MAA common shareholders	$	0.98		$	0.94	$	3.07		$	3.34

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartment Communities, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(Dollars in thousands)


	Three months ended September 30,						Nine months ended September 30,
	2024			2023			2024			2023
Net income	$	118,230		$	113,732		$	370,502		$	402,963
Other comprehensive income:
Adjustment for net losses reclassified to net income from derivative instruments		428			279			1,448			835
Total comprehensive income		118,658			114,011			371,950			403,798
Comprehensive income attributable to noncontrolling interests		(3,047	)		(3,009	)		(9,648	)		(10,660	)
Comprehensive income attributable to MAA	$	115,611		$	111,002		$	362,302		$	393,138

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartment Communities, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in thousands)


	Nine months ended September 30,
Cash flows from operating activities:	2024			2023
Net income	$	370,502		$	402,963
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		435,342			424,797
Loss on sale of depreciable real estate assets		25			61
Gain on sale of non-depreciable real estate assets		—			(54	)
Gain on consolidation of third-party development		(11,033	)		—
Loss on embedded derivative in preferred shares		14,451			1,863
Stock compensation expense		12,396			12,296
Amortization of debt issuance costs, discounts and premiums		4,568			4,537
Gain on investments		(3,666	)		(745	)
Net change in operating accounts and other operating activities		36,580			26,538
Net cash provided by operating activities		859,165			872,256

Cash flows from investing activities:
Purchases of real estate and other assets		(189,104	)		(12,450	)
Capital improvements and other		(235,856	)		(261,069	)
Development costs		(255,216	)		(151,145	)
Distributions from real estate joint venture		284		—
Contributions to affiliates		(1,874	)		(7,505	)
Proceeds from sale of marketable equity securities		9,975			—
Proceeds from real estate asset dispositions		—			2,948
Net proceeds from insurance recoveries		20,203			680
Net cash used in investing activities		(651,588	)		(428,541	)

Cash flows from financing activities:
Net payments of commercial paper		(5,000	)		(20,000	)
Proceeds from notes payable		744,551			—
Principal payments on notes payable		(400,000	)		(3,861	)
Payment of deferred financing costs		(7,150	)		—
Distributions to noncontrolling interests		(13,739	)		(13,266	)
Dividends paid on common shares		(515,085	)		(488,354	)
Dividends paid on preferred shares		(2,766	)		(2,766	)
Proceeds from issuances of common shares		955			204,743
Net change in other financing activities		(373	)		(5,945	)
Net cash used in financing activities		(198,607	)		(329,449	)

Net increase in cash, cash equivalents and restricted cash		8,970			114,266
Cash, cash equivalents and restricted cash, beginning of period		55,091			61,071
Cash, cash equivalents and restricted cash, end of period	$	64,061		$	175,337

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the Condensed Consolidated Balance Sheets:


Reconciliation of cash, cash equivalents and restricted cash at period end:
Cash and cash equivalents	$	50,232	$	161,897
Restricted cash		13,829		13,440
Total cash, cash equivalents and restricted cash	$	64,061	$	175,337

Supplemental information:
Interest paid	$	126,502	$	105,640
Income taxes paid		3,273		3,824
Non-cash transactions:
Distributions on common shares/units declared and accrued	$	176,335	$	167,768
Accrued construction in progress		39,047		26,519
Interest capitalized		12,188		9,065
Conversion of OP Units to shares of common stock		3,529		894

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Condensed Consolidated Balance Sheets

(Unaudited)

(Dollars in thousands)


	September 30, 2024			December 31, 2023
Assets
Real estate assets:
Land	$	2,085,464		$	2,031,403
Buildings and improvements and other		13,956,601			13,515,949
Development and capital improvements in progress		499,619			385,405
		16,541,684			15,932,757
Less: Accumulated depreciation		(5,217,893	)		(4,864,690	)
		11,323,791			11,068,067
Undeveloped land		73,861			73,861
Investment in real estate joint venture		41,693			41,977
Real estate assets, net		11,439,345			11,183,905

Cash and cash equivalents		50,232			41,314
Restricted cash		13,829			13,777
Other assets		237,525			245,507
Assets held for sale		15,321			—
Total assets	$	11,756,252		$	11,484,503

Liabilities and capital
Liabilities:
Unsecured notes payable	$	4,515,733		$	4,180,084
Secured notes payable		360,235			360,141
Accrued expenses and other liabilities		726,172			645,156
Due to general partner		19			19
Total liabilities		5,602,159			5,185,400

Redeemable common units		22,518			19,167

Operating Partnership capital:
Preferred units, 8.50% Series I Cumulative Redeemable Units, 867,846 preferred units outstanding as of September 30, 2024 and December 31, 2023, respectively		66,840			66,840
General partner, 116,880,291 and 116,694,124 OP Units outstanding as of September 30, 2024 and December 31, 2023, respectively (1)		5,889,309			6,036,154
Limited partners, 3,075,552 and 3,143,972 OP Units outstanding as of September 30, 2024 and December 31, 2023, respectively (1)		155,562			163,128
Accumulated other comprehensive loss		(7,494	)		(8,942	)
Total operating partners’ capital		6,104,217			6,257,180
Noncontrolling interests - consolidated real estate entities		27,358			22,756
Total equity		6,131,575			6,279,936
Total liabilities and equity	$	11,756,252		$	11,484,503

(1)

Number of units outstanding represents total OP Units regardless of classification on the Condensed Consolidated Balance Sheets. The number of units classified as redeemable common units on the Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 are 141,710 and 142,546, respectively.

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Condensed Consolidated Statements of Operations

(Unaudited)

(Dollars in thousands, except per unit data)


	Three months ended September 30,					Nine months ended September 30,
	2024			2023		2024			2023
Revenues:
Rental and other property revenues	$	551,126		$	542,042	$	1,641,183		$	1,606,221
Expenses:
Operating expenses, excluding real estate taxes and insurance		134,475			122,660		378,887			347,868
Real estate taxes and insurance		77,086			76,563		236,272			228,491
Depreciation and amortization		146,722			146,702		434,764			424,175
Total property operating expenses		358,283			345,925		1,049,923			1,000,534
Property management expenses		17,265			16,298		54,461			50,317
General and administrative expenses		12,728			13,524		42,444			43,329
Interest expense		42,726			36,651		124,352			110,655
Loss on sale of depreciable real estate assets		—			75		25			61
Gain on sale of non-depreciable real estate assets		—		—			—			(54	)
Other non-operating expense (income)		1,678			16,493		(2,604	)		(3,966	)
Income before income tax (expense) benefit		118,446			113,076		372,582			405,345
Income tax (expense) benefit		(670	)		209		(3,485	)		(3,596	)
Income from continuing operations before real estate joint venture activity		117,776			113,285		369,097			401,749
Income from real estate joint venture		454			447		1,405			1,214
Net income		118,230			113,732		370,502			402,963
Distributions to MAALP Series I preferred unitholders		922			922		2,766			2,766
Net income available for MAALP common unitholders	$	117,308		$	112,810	$	367,736		$	400,197

Earnings per common unit - basic:
Net income available for MAALP common unitholders	$	0.98		$	0.94	$	3.07		$	3.34

Earnings per common unit - diluted:
Net income available for MAALP common unitholders	$	0.98		$	0.94	$	3.07		$	3.34

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(Dollars in thousands)


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Net income	$	118,230	$	113,732	$	370,502	$	402,963
Other comprehensive income:
Adjustment for net losses reclassified to net income from derivative instruments		428		279		1,448		835
Comprehensive income attributable to MAALP	$	118,658	$	114,011	$	371,950	$	403,798

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in thousands)


	Nine months ended September 30,
Cash flows from operating activities:	2024			2023
Net income	$	370,502		$	402,963
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		435,342			424,797
Loss on sale of depreciable real estate assets		25			61
Gain on sale of non-depreciable real estate assets		—			(54	)
Gain on consolidation of third-party development		(11,033	)		—
Loss on embedded derivative in preferred shares		14,451			1,863
Stock compensation expense		12,396			12,296
Amortization of debt issuance costs, discounts and premiums		4,568			4,537
Gain on investments		(3,666	)		(745	)
Net change in operating accounts and other operating activities		36,580			26,538
Net cash provided by operating activities		859,165			872,256

Cash flows from investing activities:
Purchases of real estate and other assets		(189,104	)		(12,450	)
Capital improvements and other		(235,856	)		(261,069	)
Development costs		(255,216	)		(151,145	)
Distributions from real estate joint venture		284		—
Contributions to affiliates		(1,874	)		(7,505	)
Proceeds from sale of marketable equity securities		9,975			—
Proceeds from real estate asset dispositions		—			2,948
Net proceeds from insurance recoveries		20,203			680
Net cash used in investing activities		(651,588	)		(428,541	)

Cash flows from financing activities:
Net payments of commercial paper		(5,000	)		(20,000	)
Proceeds from notes payable		744,551			—
Principal payments on notes payable		(400,000	)		(3,861	)
Payment of deferred financing costs		(7,150	)		—
Distributions paid on common units		(528,824	)		(501,620	)
Distributions paid on preferred units		(2,766	)		(2,766	)
Proceeds from issuances of common units		955			204,743
Net change in other financing activities		(373	)		(5,945	)
Net cash used in financing activities		(198,607	)		(329,449	)

Net increase in cash, cash equivalents and restricted cash		8,970			114,266
Cash, cash equivalents and restricted cash, beginning of period		55,091			61,071
Cash, cash equivalents and restricted cash, end of period	$	64,061		$	175,337

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the Condensed Consolidated Balance Sheets:


Reconciliation of cash, cash equivalents and restricted cash at period end:
Cash and cash equivalents	$	50,232	$	161,897
Restricted cash		13,829		13,440
Total cash, cash equivalents and restricted cash	$	64,061	$	175,337

Supplemental information:
Interest paid	$	126,502	$	105,640
Income taxes paid		3,273		3,824
Non-cash transactions:
Distributions on common units declared and accrued	$	176,335	$	167,768
Accrued construction in progress		39,047		26,519
Interest capitalized		12,188		9,065

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartment Communities, Inc. and Mid-America Apartments, L.P.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Organization and Summary of Significant Accounting Policies

Unless the context otherwise requires, all references to the “Company” refer collectively to Mid-America Apartment Communities, Inc., together with its consolidated subsidiaries, including Mid-America Apartments, L.P. Unless the context otherwise requires, all references to “MAA” refer only to Mid-America Apartment Communities, Inc., and not any of its consolidated subsidiaries. Unless the context otherwise requires, the references to the “Operating Partnership” or “MAALP” refer to Mid-America Apartments, L.P., together with its consolidated subsidiaries. “Common stock” refers to the common stock of MAA, “preferred stock” refers to the preferred stock of MAA, and “shareholders” refers to the holders of shares of MAA’s common stock or preferred stock, as applicable. The common units of limited partnership interests in the Operating Partnership are referred to as “OP Units,” and the holders of the OP Units are referred to as “common unitholders.”

As of September 30, 2024, MAA owned 116,880,291 OP Units (or 97.4% of the total number of OP Units). MAA conducts substantially all of its business and holds substantially all of its assets, directly or indirectly, through the Operating Partnership, and by virtue of its ownership of the OP Units and being the Operating Partnership’s sole general partner, MAA has the ability to control all of the day-to-day operations of the Operating Partnership.

Management believes combining the notes to the condensed consolidated financial statements of MAA and the Operating Partnership results in the following benefits:

•

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; and

•

creates time and cost efficiencies through the preparation of one combined set of notes instead of two separate sets.

MAA, an S&P 500 company, is a multifamily-focused, self-administered and self-managed real estate investment trust, or REIT. Management operates MAA and the Operating Partnership as one business. The management of the Company is comprised of individuals who are officers of MAA and employees of the Operating Partnership. Management believes it is important to understand the few differences between MAA and the Operating Partnership in the context of how MAA and the Operating Partnership operate as a consolidated company. MAA and the Operating Partnership are structured as an umbrella partnership REIT, or UPREIT. MAA’s interest in the Operating Partnership entitles MAA to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to MAA’s percentage interest therein and entitles MAA to vote on substantially all matters requiring a vote of the partners. MAA’s only material asset is its ownership of limited partnership interests in the Operating Partnership (other than cash held by MAA from time to time); therefore, MAA’s primary function is acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing certain debt of the Operating Partnership from time to time. The Operating Partnership holds, directly or indirectly, all of the Company’s real estate assets. Except for net proceeds from public equity issuances by MAA, which are contributed to the Operating Partnership in exchange for limited partnership interests, the Operating Partnership generates the capital required by the business through the Operating Partnership’s operations, direct or indirect incurrence of indebtedness and issuance of OP Units.

The presentations of MAA’s shareholders’ equity and the Operating Partnership’s capital are the principal areas of difference between the condensed consolidated financial statements of MAA and those of the Operating Partnership. MAA’s shareholders’ equity may include shares of preferred stock, shares of common stock, additional paid-in capital, cumulative earnings, cumulative distributions, noncontrolling interests, treasury shares, accumulated other comprehensive income or loss and redeemable common stock. The Operating Partnership’s capital may include common capital and preferred capital of the general partner (MAA), limited partners’ common capital and preferred capital, noncontrolling interests, accumulated other comprehensive income or loss and redeemable common units. Holders of OP Units (other than MAA) may require the Operating Partnership to redeem their OP Units from time to time, in which case the Operating Partnership may, at its option, pay the redemption price either in cash (in an amount per OP Unit equal, in general, to the average closing price of MAA’s common stock on the New York Stock Exchange, or NYSE, over a specified period prior to the redemption date) or by delivering one share of MAA’s common stock (subject to adjustment under specified circumstances) for each OP Unit so redeemed.

Organization of Mid-America Apartment Communities, Inc.

The Company owns, operates, acquires and selectively develops apartment communities primarily located in the Southeast, Southwest and Mid-Atlantic regions of the U.S. As of September 30, 2024, the Company owned and operated 293 apartment communities (which does not include development communities under construction) through the Operating Partnership and its subsidiaries and had an ownership interest in one apartment community through an unconsolidated real estate joint venture. As of September 30, 2024, the Company also had eight development communities under construction, totaling 2,762 apartment units once complete, and development costs of $610.4 million had been incurred through September 30, 2024 with respect to those development communities. The Company expects to complete two developments in 2024, two developments in 2025, three developments in 2026 and one development in 2027. As of September 30, 2024, 35 of the Company’s apartment communities included retail components. The Company’s apartment communities, including development communities under construction, were located across 16 states and the District of Columbia as of September 30, 2024.

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements have been prepared by the Company’s management in accordance with U.S. generally accepted accounting principles, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC. The condensed consolidated financial statements of MAA presented herein include the accounts of MAA, the Operating Partnership and all other subsidiaries in which MAA has a controlling financial interest. MAA owns, directly or indirectly, approximately 80% to 100% of all consolidated subsidiaries, including the Operating Partnership. In management’s opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included, and all such adjustments were of a normal recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation.

The Company invests in entities that may qualify as variable interest entities, or VIEs, and MAALP is considered a VIE. A VIE is a legal entity in which the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the holders of the equity investment at risk lack the power to direct the activities of a legal entity as well as the obligation to absorb its expected losses or the right to receive its expected residual returns. The Company consolidates all VIEs for which it is the primary beneficiary and uses the equity method to account for investments that qualify as VIEs but for which it is not the primary beneficiary. In determining whether the Company is the primary beneficiary of a VIE, management considers both qualitative and quantitative factors, including, but not limited to, those activities that most significantly impact the VIE’s economic performance and which party controls such activities. MAALP is classified as a VIE because the limited partners lack substantive kick-out rights and substantive participating rights, and the Company has concluded it is the primary beneficiary of MAALP. The Company uses the equity method of accounting for its investments in entities for which the Company exercises significant influence, but does not have the ability to exercise control. The factors considered in determining whether the Company has the ability to exercise significant influence or control include ownership of voting interests and participatory rights of investors (see “Investments in Unconsolidated Affiliates” below).

Noncontrolling Interests

As of September 30, 2024, the Company had two types of noncontrolling interests with respect to its consolidated subsidiaries: (1) noncontrolling interests related to the common unitholders of its Operating Partnership; and (2) noncontrolling interests related to its consolidated real estate entities. The noncontrolling interests relating to the limited partnership interests in the Operating Partnership are owned by the holders of the Class A OP Units. MAA is the sole general partner of the Operating Partnership and holds all of the outstanding Class B OP Units. Net income (after allocations to preferred ownership interests) is allocated to MAA and the noncontrolling interests based on their respective ownership percentages of the Operating Partnership. Issuance of additional Class A OP Units or Class B OP Units changes the ownership percentage of both the noncontrolling interests and MAA. The issuance of Class B OP Units generally occurs when MAA issues common stock and the issuance proceeds are contributed to the Operating Partnership in exchange for Class B OP Units equal to the number of shares of MAA’s common stock issued. At each reporting period, the allocation between total MAA shareholders’ equity and noncontrolling interests is adjusted to account for the change in the respective percentage ownership of the underlying equity of the Operating Partnership. MAA’s Board of Directors established economic rights in respect to each Class A OP Unit that were equivalent to the economic rights in respect to each share of MAA common stock. See Note 9 for additional details.

The noncontrolling interests relating to the Company’s consolidated real estate entities are owned by private real estate companies that are generally responsible for the development, construction and lease-up of the apartment communities that are owned through the consolidated real estate entities with a noncontrolling interest or through lending arrangements for third-party developments. The entities were determined to be VIE’s with the Company designated as the primary beneficiary. As a result, the accounts of the entities are consolidated by the Company. As of September 30, 2024, the consolidated assets of the Company’s consolidated real estate entities with a noncontrolling interest were $443.9 million, and consolidated liabilities were $27.3 million, net of eliminations. As of December 31, 2023, the consolidated assets of the Company’s consolidated real estate entities with a noncontrolling interest were $265.1 million, and consolidated liabilities were $12.9 million, net of eliminations.

In July 2024, the Company agreed to finance substantially all of a third party’s development of a 239-unit multifamily apartment community currently under construction located in Charlotte, North Carolina. The development was determined to be a VIE with the Company designated as the primary beneficiary, resulting in the consolidation of the development by the Company. The Company initially funded $70.5 million upon entering into the financing agreement. The initial and ongoing funding are included within “Development costs” in the Condensed Consolidated Statements of Cash Flows. This development is expected to deliver its first units in the third quarter of 2025, to be completed in the first quarter of 2026 and to reach stabilization in the fourth quarter of 2026 at a total cost of approximately $112 million. The Company has the option to purchase the development once it is stabilized.

Investments in Unconsolidated Affiliates

The Company uses the equity method to account for its investments in a real estate joint venture and six technology-focused limited partnerships that each qualify as a VIE. Management determined the Company is not the primary beneficiary in any of these investments but does have the ability to exert significant influence over the operations and financial policies of the real estate joint venture and considers its investments in the limited partnerships to be more than minor. The Company’s investment in the real estate joint venture was $41.7 million and $42.0 million as of September 30, 2024 and December 31, 2023, respectively, and is included in “Investment in real estate joint venture” in the accompanying Condensed Consolidated Balance Sheets.

The Company accounts for its investments in the technology-focused limited partnerships on a three month lag due to the timing the limited partnerships’ financial information is made available to the Company. As of September 30, 2024 and December 31, 2023, the Company’s investments in the limited partnerships were $57.1 million and $46.5 million, respectively, and are included in “Other assets” in the accompanying Condensed Consolidated Balance Sheets with any related earnings, including unrealized gains and losses on the underlying investments of the limited partnerships which are recorded at the estimated fair value, recognized in “Other non-operating expense (income)” in the accompanying Condensed Consolidated Statements of Operations. During the three months ended September 30, 2024 and 2023, the Company recognized $0.5 million and $0.6 million of income, respectively, from its investments in the limited partnerships. During the nine months ended September 30, 2024 and 2023, the Company recognized $9.0 million and $1.3 million of income, respectively, from its investments in the limited partnerships. As of September 30, 2024, the Company was committed to make additional capital contributions totaling $31.6 million if and when called by the general partners of the limited partnerships.

Marketable Equity Securities

Two of the technology-focused limited partnerships that are accounted for as investments in unconsolidated affiliates have distributed publicly traded marketable equity securities to the Company and the other limited partners. During the nine months ended September 30, 2024, the Company did not receive any marketable equity securities. During the nine months ended September 30, 2023, the Company received marketable equity securities totaling $7.7 million. The Company’s investment in marketable equity securities is measured at fair value based on the quoted share price of the securities and is included in “Other assets” in the accompanying Condensed Consolidated Balance Sheets, with any related gains and losses, including realized and unrealized gains and losses, recognized in “Other non-operating expense (income)” in the accompanying Condensed Consolidated Statements of Operations. As of September 30, 2024 and December 31, 2023, the Company’s investment in the marketable equity securities was $3.3 million and $18.6 million, respectively. During the three months ended September 30, 2024, the Company sold a portion of the marketable securities for net proceeds of $3.3 million and recognized a net realized gain on sale of $2.7 million. During the nine months ended September 30, 2024, the Company sold a portion of the marketable securities for net proceeds of $10.0 million and recognized a net realized gain on sale of $8.3 million. In addition, during the three months ended September 30, 2024 and 2023, the Company recognized $1.2 million and $7.1 million of unrealized losses, respectively, from its investment in marketable equity securities. During the nine months ended September 30, 2024 and 2023, the Company recognized $5.4 million and $0.5 million of unrealized losses, respectively, from its investment in marketable equity securities.

Revenue Recognition

The Company primarily leases multifamily residential apartments to residents under operating leases generally due on a monthly basis with terms of approximately one year or less. Rental revenues are recognized in accordance with Accounting Standards Codification (“ASC”) Topic 842, Leases, using a method that represents a straight-line basis over the term of the lease. In addition, in circumstances where a lease incentive is provided to residents, the incentive is recognized as a reduction of rental revenues on a straight-line basis over the reasonably assured lease term. Rental revenues represent approximately 94% of the Company’s total revenues and include gross rents charged less adjustments for concessions and bad debt. Approximately 5% of the Company’s total revenues represent non-lease reimbursable property revenues from its residents for utility reimbursements, which are generally recognized and due on a monthly basis as residents obtain control of the service over the term of the lease. The remaining 1% of the Company’s total revenues represents other non-lease property revenues primarily driven by nonrefundable fees and commissions, which are recognized when earned.

In accordance with ASC Topic 842, rental revenues and non-lease reimbursable property revenues meet the criteria to be aggregated into a single lease component and are reported on a combined basis in the line item “Rental revenues,” as presented in the disaggregation of the Company’s revenues in Note 11. Other non-lease property revenues are accounted for in accordance with ASC Topic 606, Revenue from Contracts with Customers, which requires revenue recognized outside of the scope of ASC Topic 842 to be recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. Other non-lease property revenues are reported in the line item “Other property revenues,” as presented in the disaggregation of the Company’s revenues in Note 11.

Leases

The Company is the lessee under certain ground, office, equipment and other operational leases, all of which are accounted for as operating leases in accordance with ASC Topic 842. The Company recognizes a right-of-use asset for the right to use the underlying asset for all leases where the Company is the lessee with terms of more than 12 months, and a related lease liability for the obligation to make lease payments. Expenses related to leases determined to be operating leases are recognized on a straight-line basis. As of September 30, 2024 and December 31, 2023, right-of-use assets recorded within “Other assets” totaled $41.0 million and $42.5 million, respectively, and related lease liabilities recorded within “Accrued expenses and other liabilities” totaled $26.5 million and $27.3 million, respectively, in the Condensed Consolidated Balance Sheets. Lease expense recognized for the periods ended September 30, 2024 and 2023 was immaterial to the Company. Cash paid for amounts included in the measurement of operating lease liabilities during the nine months ended September 30, 2024 and 2023 was also immaterial. See Note 10 for additional disclosures regarding leases.

Fair Value Measurements

The Company applies the guidance in ASC Topic 820, Fair Value Measurements and Disclosures, to the valuation of acquired real estate assets recorded at fair value, to its impairment valuation analysis of real estate assets and to its valuation and disclosure of the fair value of financial instruments, which primarily consists of marketable equity securities, indebtedness and derivative instruments. Fair value disclosures required under ASC Topic 820 for the Company’s financial instruments as well as the Company’s derivative accounting policies are summarized in Note 7 utilizing the following hierarchy:

Level 1 - Quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.

Level 2 - Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.

Level 3 - Unobservable inputs for the assets or liability.

The fair value disclosures required under ASC Topic 820 for certain long-lived assets measured at fair value on a non-recurring basis are disclosed in Note 12 following the same hierarchy described above.

2. Earnings per Common Share of MAA

Basic earnings per share is computed using the two-class method by dividing net income available to MAA common shareholders by the weighted average number of common shares outstanding during the period. All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common shareholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per share. Both the unvested restricted shares and other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis with diluted earnings per share being the more dilutive of the treasury stock or two-class methods. OP Units are included in dilutive earnings per share calculations when the units are dilutive to earnings per share.

For the three and nine months ended September 30, 2024, MAA’s diluted earnings per share was computed using the two-class method, and for the three and nine months ended September 30, 2023, MAA’s diluted earnings per share was computed using the treasury stock method, as presented below (dollars and shares in thousands, except per share amounts):


	Three months ended September 30,						Nine months ended September 30,
	2024			2023			2024			2023
Calculation of Earnings per common share - basic
Net income	$	118,230		$	113,732		$	370,502		$	402,963
Net income attributable to noncontrolling interests		(3,035	)		(3,000	)		(9,605	)		(10,633	)
Unvested restricted shares (allocation of earnings)		(53	)		(44	)		(163	)		(161	)
Dividends to MAA Series I preferred shareholders		(922	)		(922	)		(2,766	)		(2,766	)
Net income available for MAA common shareholders, adjusted	$	114,220		$	109,766		$	357,968		$	389,403

Weighted average common shares - basic		116,820			116,633			116,758			116,479
Earnings per common share - basic	$	0.98		$	0.94		$	3.07		$	3.34

Calculation of Earnings per common share - diluted
Net income	$	118,230		$	113,732		$	370,502		$	402,963
Net income attributable to noncontrolling interests (1)		(3,035	)		(3,000	)		(9,605	)		(10,633	)
Unvested restricted shares (allocation of earnings)		(53	)		—			(163	)		—
Dividends to MAA Series I preferred shareholders		(922	)		(922	)		(2,766	)		(2,766	)
Net income available for MAA common shareholders, adjusted	$	114,220		$	109,810		$	357,968		$	389,564

Weighted average common shares - basic		116,820			116,633			116,758			116,479
Effect of dilutive securities		—			78			—			134
Weighted average common shares - diluted		116,820			116,711			116,758			116,613
Earnings per common share - diluted	$	0.98		$	0.94		$	3.07		$	3.34

(1)

For the three and nine months ended September 30, 2024 and 2023, 3.1 million OP Units and 3.2 million OP Units, respectively, and their related income are not included in the diluted earnings per share calculations as they are not dilutive.

3. Earnings per OP Unit of MAALP

Basic earnings per common unit is computed using the two-class method by dividing net income available for common unitholders by the weighted average number of OP Units outstanding during the period. All outstanding unvested restricted unit awards contain rights to non-forfeitable distributions and participate in undistributed earnings with common unitholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per common unit. Diluted earnings per common unit reflects the potential dilution that could occur if securities or other contracts to issue OP Units were exercised or converted into OP Units. Both the unvested restricted unit awards and other potentially dilutive common units, and the related impact to earnings, are considered when calculating earnings per common unit on a diluted basis with diluted earnings per common unit being the more dilutive of the treasury stock or two-class methods.

For the three and nine months ended September 30, 2024, MAALP’s diluted earnings per common unit was computed using the two-class method, and for the three and nine months ended September 30, 2023, MAALP’s diluted earnings per common unit was computed using the treasury stock method, as presented below (dollars and units in thousands, except per unit amounts):


	Three months ended September 30,						Nine months ended September 30,
	2024			2023			2024			2023
Calculation of Earnings per common unit - basic
Net income	$	118,230		$	113,732		$	370,502		$	402,963
Unvested restricted units (allocation of earnings)		(53	)		(44	)		(163	)		(161	)
Distributions to MAALP Series I preferred unitholders	$	(922	)	$	(922	)	$	(2,766	)	$	(2,766	)
Net income available for MAALP common unitholders, adjusted	$	117,255		$	112,766		$	367,573		$	400,036

Weighted average common units - basic		119,900			119,787			119,865			119,635
Earnings per common unit - basic	$	0.98		$	0.94		$	3.07		$	3.34

Calculation of Earnings per common unit - diluted
Net income	$	118,230		$	113,732		$	370,502		$	402,963
Unvested restricted units (allocation of earnings)		(53	)		—			(163	)		—
Distributions to MAALP Series I preferred unitholders		(922	)		(922	)		(2,766	)		(2,766	)
Net income available for MAALP common unitholders, adjusted	$	117,255		$	112,810		$	367,573		$	400,197

Weighted average common units - basic		119,900			119,787			119,865			119,635
Effect of dilutive securities		—			78			—			134
Weighted average common units - diluted		119,900			119,865			119,865			119,769
Earnings per common unit - diluted	$	0.98		$	0.94		$	3.07		$	3.34

4. MAA Equity

Changes in MAA’s total equity and its components for the three months ended September 30, 2024 and 2023 were as follows (dollars in thousands):


	Mid-America Apartment Communities, Inc. Shareholders’ Equity
	Preferred Stock		Common Stock		Additional Paid-In Capital			Accumulated Distributions in Excess of Net Income			Accumulated Other Comprehensive Loss			Noncontrolling Interests - Operating Partnership			Noncontrolling Interests - Consolidated Real Estate Entities		Total Equity
EQUITY BALANCE JUNE 30, 2024	$	9	$	1,166	$	7,409,258		$	(1,398,993	)	$	(7,775	)	$	157,905		$	24,662	$	6,186,232
Net income		—		—		—			115,195			—			3,035			—		118,230
Other comprehensive income - derivative instruments		—		—		—			—			416			12			—		428
Issuance and registration of common shares		—		—		8			—			—			—			—		8
Shares issued in exchange for common units		—		—		926			—			—			(926	)		—		—
Redeemable stock fair market value adjustment		—		—		—			(2,282	)		—			—			—		(2,282	)
Adjustment for noncontrolling interests in Operating Partnership		—		—		(57	)		—			—			57			—		—
Amortization of unearned compensation		—		—		3,539			—			—			—			—		3,539
Dividends on preferred stock		—		—		—			(922	)		—			—			—		(922	)
Dividends on common stock ($1.4700 per share)		—		—		—			(171,814	)		—			—			—		(171,814	)
Distributions on noncontrolling interests units ($1.4700 per unit)		—		—		—			—			—			(4,521	)		—		(4,521	)
Contribution from noncontrolling interest		—		—		—			—			—			—			2,696		2,696
EQUITY BALANCE SEPTEMBER 30, 2024	$	9	$	1,166	$	7,413,674		$	(1,458,816	)	$	(7,359	)	$	155,562		$	27,358	$	6,131,594


	Mid-America Apartment Communities, Inc. Shareholders’ Equity
	Preferred Stock		Common Stock		Additional Paid-In Capital			Accumulated Distributions in Excess of Net Income			Accumulated Other Comprehensive Loss			Noncontrolling Interests - Operating Partnership			Noncontrolling Interests - Consolidated Real Estate Entities		Total Equity
EQUITY BALANCE JUNE 30, 2023	$	9	$	1,168	$	7,405,572		$	(1,235,118	)	$	(9,514	)	$	165,626		$	22,329	$	6,350,072
Net income		—		—		—			110,732			—			3,000			—		113,732
Other comprehensive income - derivative instruments		—		—		—			—			270			9			—		279
Issuance and registration of common shares		—		—		158			—			—			—			—		158
Shares repurchased and retired		—		—		(26	)		—			—			—			—		(26	)
Shares issued in exchange for common units		—		—		363			—			—			(363	)		—		—
Redeemable stock fair market value adjustment		—		—		—			3,242			—			—			—		3,242
Adjustment for noncontrolling interests in Operating Partnership		—		—		(86	)		—			—			86			—		—
Amortization of unearned compensation		—		—		4,128			—			—			—			—		4,128
Dividends on preferred stock		—		—		—			(922	)		—			—			—		(922	)
Dividends on common stock ($1.4000 per share)		—		—		—			(163,362	)		—			—			—		(163,362	)
Distributions on noncontrolling interests units ($1.4000 per unit)		—		—		—			—			—			(4,408	)		—		(4,408	)
Contribution from noncontrolling interest		—		—		—			—			—			—			696		696
EQUITY BALANCE SEPTEMBER 30, 2023	$	9	$	1,168	$	7,410,109		$	(1,285,428	)	$	(9,244	)	$	163,950		$	23,025	$	6,303,589

Changes in MAA’s total equity and its components for the nine months ended September 30, 2024 and 2023 were as follows (dollars in thousands):


	Mid-America Apartment Communities, Inc. Shareholders’ Equity
	Preferred Stock		Common Stock			Additional Paid-In Capital			Accumulated Distributions in Excess of Net Income			Accumulated Other Comprehensive Loss			Noncontrolling Interests - Operating Partnership			Noncontrolling Interests - Consolidated Real Estate Entities		Total Equity
EQUITY BALANCE DECEMBER 31, 2023	$	9	$	1,168		$	7,399,921		$	(1,298,263	)	$	(8,764	)	$	163,128		$	22,756	$	6,279,955
Net income		—		—			—			360,897			—			9,605			—		370,502
Other comprehensive income - derivative instruments		—		—			—			—			1,405			43			—		1,448
Issuance and registration of common shares		—		2			(791	)		—			—			—			—		(789	)
Shares repurchased and retired		—		(1	)		(4,973	)		—			—			—			—		(4,974	)
Shares issued in exchange for common units		—		1			3,528			—			—			(3,529	)		—		—
Shares issued in exchange for redeemable stock		—		(4	)		2,073			—			—			—			—		2,069
Redeemable stock fair market value adjustment		—		—			—			(3,325	)		—			—			—		(3,325	)
Adjustment for noncontrolling interests in Operating Partnership		—		—			47			—			—			(47	)		—		—
Amortization of unearned compensation		—		—			13,869			—			—			—			—		13,869
Dividends on preferred stock		—		—			—			(2,766	)		—			—			—		(2,766	)
Dividends on common stock ($4.4100 per share)		—		—			—			(515,359	)		—			—			—		(515,359	)
Distributions on noncontrolling interests units ($4.4100 per unit)		—		—			—			—			—			(13,638	)		—		(13,638	)
Contribution from noncontrolling interest		—		—			—			—			—			—			4,602		4,602
EQUITY BALANCE SEPTEMBER 30, 2024	$	9	$	1,166		$	7,413,674		$	(1,458,816	)	$	(7,359	)	$	155,562		$	27,358	$	6,131,594


	Mid-America Apartment Communities, Inc. Shareholders’ Equity
	Preferred Stock		Common Stock		Additional Paid-In Capital			Accumulated Distributions in Excess of Net Income			Accumulated Other Comprehensive Loss			Noncontrolling Interests - Operating Partnership			Noncontrolling Interests - Consolidated Real Estate Entities		Total Equity
EQUITY BALANCE DECEMBER 31, 2022	$	9	$	1,152	$	7,202,834		$	(1,188,854	)	$	(10,052	)	$	163,595		$	21,064	$	6,189,748
Net income		—		—		—			392,330			—			10,633			—		402,963
Other comprehensive income - derivative instruments		—		—		—			—			808			27			—		835
Issuance and registration of common shares		—		12		203,202			—			—			—			—		203,214
Shares repurchased and retired		—		—		(7,866	)		—			—			—			—		(7,866	)
Shares issued in exchange for common units		—		—		894			—			—			(894	)		—		—
Shares issued in exchange for redeemable stock		—		4		577			—			—			—			—		581
Redeemable stock fair market value adjustment		—		—		—			3,906			—			—			—		3,906
Adjustment for noncontrolling interests in Operating Partnership		—		—		(3,831	)		—			—			3,831			—		—
Amortization of unearned compensation		—		—		14,299			—			—			—			—		14,299
Dividends on preferred stock		—		—		—			(2,766	)		—			—			—		(2,766	)
Dividends on common stock ($4.2000 per share)		—		—		—			(490,044	)		—			—			—		(490,044	)
Distributions on noncontrolling interests units ($4.2000 per unit)		—		—		—			—			—			(13,242	)		—		(13,242	)
Contribution from noncontrolling interest		—		—		—			—			—			—			1,961		1,961
EQUITY BALANCE SEPTEMBER 30, 2023	$	9	$	1,168	$	7,410,109		$	(1,285,428	)	$	(9,244	)	$	163,950		$	23,025	$	6,303,589

5. MAALP Capital

Changes in MAALP’s total capital and its components for the three months ended September 30, 2024 and 2023 were as follows (dollars in thousands):


	Mid-America Apartments, L.P. Unitholders’ Capital
	General Partner			Limited Partners			Preferred Units			Accumulated Other Comprehensive Loss			Noncontrolling Interests - Consolidated Real Estate Entities		Total Partnership Capital
CAPITAL BALANCE JUNE 30, 2024	$	5,944,728		$	157,905		$	66,840		$	(7,922	)	$	24,662	$	6,186,213
Net income		114,273			3,035			922			—			—		118,230
Other comprehensive income - derivative instruments		—			—			—			428			—		428
Issuance of units		8			—			—			—			—		8
General partner units issued in exchange for limited partner units		926			(926	)		—			—			—		—
Redeemable units fair market value adjustment		(2,282	)		—			—			—			—		(2,282	)
Adjustment for limited partners’ capital at redemption value		(69	)		69			—			—			—		—
Amortization of unearned compensation		3,539			—			—			—			—		3,539
Distributions to preferred unitholders		—			—			(922	)		—			—		(922	)
Distributions to common unitholders ($1.4700 per unit)		(171,814	)		(4,521	)		—			—			—		(176,335	)
Contribution from noncontrolling interest		—			—			—			—			2,696		2,696
CAPITAL BALANCE SEPTEMBER 30, 2024	$	5,889,309		$	155,562		$	66,840		$	(7,494	)	$	27,358	$	6,131,575


	Mid-America Apartments, L.P. Unitholders’ Capital
	General Partner			Limited Partners			Preferred Units			Accumulated Other Comprehensive Loss			Noncontrolling Interests - Consolidated Real Estate Entities		Total Partnership Capital
CAPITAL BALANCE JUNE 30, 2023	$	6,104,970		$	165,626		$	66,840		$	(9,712	)	$	22,329	$	6,350,053
Net income		109,810			3,000			922			—			—		113,732
Other comprehensive income - derivative instruments		—			—			—			279			—		279
Issuance of units		158			—			—			—			—		158
Units repurchased and retired		(26	)		—			—			—			—		(26	)
General partner units issued in exchange for limited partner units		363			(363	)		—			—			—		—
Redeemable units fair market value adjustment		3,242			—			—			—			—		3,242
Adjustment for limited partners’ capital at redemption value		(95	)		95			—			—			—		—
Amortization of unearned compensation		4,128			—			—			—			—		4,128
Distributions to preferred unitholders		—			—			(922	)		—			—		(922	)
Distributions to common unitholders ($1.4000 per unit)		(163,362	)		(4,408	)		—			—			—		(167,770	)
Contribution from noncontrolling interest		—			—			—			—			696		696
CAPITAL BALANCE SEPTEMBER 30, 2023	$	6,059,188		$	163,950		$	66,840		$	(9,433	)	$	23,025	$	6,303,570

Changes in MAALP’s total capital and its components for the nine months ended September 30, 2024 and 2023 were as follows (dollars in thousands):


	Mid-America Apartments, L.P. Unitholders’ Capital
	General Partner			Limited Partners			Preferred Units			Accumulated Other Comprehensive Loss			Noncontrolling Interests - Consolidated Real Estate Entities		Total Partnership Capital
CAPITAL BALANCE DECEMBER 31, 2023	$	6,036,154		$	163,128		$	66,840		$	(8,942	)	$	22,756	$	6,279,936
Net income		358,131			9,605			2,766			—			—		370,502
Other comprehensive income - derivative instruments		—			—			—			1,448			—		1,448
Issuance of units		(789	)		—			—			—			—		(789	)
Units repurchased and retired		(4,974	)		—			—			—			—		(4,974	)
General partner units issued in exchange for limited partner units		3,529			(3,529	)		—			—			—		—
Units issued in exchange for redeemable stock		2,069			—			—			—			—		2,069
Redeemable units fair market value adjustment		(3,325	)		—			—			—			—		(3,325	)
Adjustment for limited partners’ capital at redemption value		4			(4	)		—			—			—		—
Amortization of unearned compensation		13,869			—			—			—			—		13,869
Distributions to preferred unitholders		—			—			(2,766	)		—			—		(2,766	)
Distributions to common unitholders ($4.4100 per unit)		(515,359	)		(13,638	)		—			—			—		(528,997	)
Contribution from noncontrolling interest		—			—			—			—			4,602		4,602
CAPITAL BALANCE SEPTEMBER 30, 2024	$	5,889,309		$	155,562		$	66,840		$	(7,494	)	$	27,358	$	6,131,575


	Mid-America Apartments, L.P. Unitholders’ Capital
	General Partner			Limited Partners			Preferred Units			Accumulated Other Comprehensive Loss			Noncontrolling Interests - Consolidated Real Estate Entities		Total Partnership Capital
CAPITAL BALANCE DECEMBER 31, 2022	$	5,948,498		$	163,595		$	66,840		$	(10,268	)	$	21,064	$	6,189,729
Net income		389,564			10,633			2,766			—			—		402,963
Other comprehensive income - derivative instruments		—			—			—			835			—		835
Issuance of units		203,214			—			—			—			—		203,214
Units repurchased and retired		(7,866	)		—			—			—			—		(7,866	)
General partner units issued in exchange for limited partner units		894			(894	)		—			—			—		—
Units issued in exchange for redeemable stock		581			—			—			—			—		581
Redeemable units fair market value adjustment		3,906			—			—			—			—		3,906
Adjustment for limited partners’ capital at redemption value		(3,858	)		3,858			—			—			—		—
Amortization of unearned compensation		14,299			—			—			—			—		14,299
Distributions to preferred unitholders		—			—			(2,766	)		—			—		(2,766	)
Distributions to common unitholders ($4.2000 per unit)		(490,044	)		(13,242	)		—			—			—		(503,286	)
Contribution from noncontrolling interest		—			—			—			—			1,961		1,961
CAPITAL BALANCE SEPTEMBER 30, 2023	$	6,059,188		$	163,950		$	66,840		$	(9,433	)	$	23,025	$	6,303,570

6. Borrowings

The following table summarizes the Company’s outstanding debt as of September 30, 2024 (dollars in thousands):


	Balance			Weighted Average Effective Rate			Weighted Average Contract Maturity
Unsecured debt
Fixed rate senior notes	$	4,050,000			3.6	%	1/9/2031
Variable rate commercial paper program		490,000			5.1	%	10/3/2024
Debt issuance costs, discounts and premiums		(24,267	)
Total unsecured debt	$	4,515,733			3.7	%
Secured debt
Fixed rate property mortgages	$	363,293			4.4	%	1/26/2049
Debt issuance costs		(3,058	)
Total secured debt	$	360,235			4.4	%
Total outstanding debt	$	4,875,968			3.8	%

Unsecured Revolving Credit Facility

MAALP has entered into an unsecured revolving credit facility, with a borrowing capacity of $1.25 billion and an option to expand to $2.0 billion. The revolving credit facility bears interest at an adjusted Secured Overnight Financing Rate plus a spread of 0.70% to 1.40% based on an investment grade pricing grid. The revolving credit facility has a maturity date in October 2026 with an option to extend for two additional six-month periods. As of September 30, 2024, there was no outstanding balance under the revolving credit facility, while $4.5 million of capacity was used to support outstanding letters of credit.

Unsecured Commercial Paper

MAALP has established an unsecured commercial paper program whereby MAALP may issue unsecured commercial paper notes with varying maturities not to exceed 397 days up to a maximum aggregate principal amount outstanding of $625.0 million. As of September 30, 2024, MAALP had $490.0 million of borrowings outstanding under the commercial paper program. For the three months ended September 30, 2024, the average daily borrowings outstanding under the commercial paper program were $403.8 million.

Unsecured Senior Notes

As of September 30, 2024, MAALP had $4.1 billion of publicly issued unsecured senior notes outstanding. The unsecured senior notes had maturities at issuance ranging from 5 to 30 years, with a weighted average maturity in 2031.

In January 2024, MAALP publicly issued $350.0 million in aggregate principal amount of unsecured senior notes due March 2034 with a coupon rate of 5.000% per annum and at an issue price of 99.019%. Interest is payable semi-annually in arrears on March 15 and September 15 of each year, commencing September 15, 2024. The proceeds from the sale of the notes were used to repay borrowings on the commercial paper program. The notes have an effective interest rate of 5.123%.

In May 2024, MAALP publicly issued $400.0 million in aggregate principal amount of unsecured senior notes due February 2032 with a coupon rate of 5.300% per annum and at an issue price of 99.496%. Interest is payable semi-annually in arrears on February 15 and August 15 of each year, commencing August 15, 2024. The proceeds from the sale of the notes were used to repay borrowings on the commercial paper program. The notes have an effective interest rate of 5.382%.

In June 2024, MAALP retired $400.0 million of publicly issued unsecured senior notes at maturity using available cash on hand and borrowings under the commercial paper program.

Secured Property Mortgages

As of September 30, 2024, MAALP had $363.3 million of fixed rate conventional property mortgages with a weighted average maturity in 2049.

Upcoming Debt Obligations

As of September 30, 2024, MAALP’s debt obligations over the next 12 months consist of $490.0 million of commercial paper borrowings due October 2024.

7. Financial Instruments and Derivatives

Financial Instruments Not Carried at Fair Value

Cash and cash equivalents, restricted cash and accrued expenses and other liabilities are carried at amounts that reasonably approximate their fair value due to their short term nature.

Fixed rate notes payable as of September 30, 2024 and December 31, 2023 totaled $4.4 billion and $4.0 billion, respectively, and had estimated fair values of $4.2 billion and $3.7 billion (excluding prepayment penalties) as of September 30, 2024 and December 31, 2023, respectively. The fair values of fixed rate debt are determined by using the present value of future cash outflows discounted with the applicable current market rate plus a credit spread. The carrying values of variable rate debt as of September 30, 2024 and December 31, 2023 totaled $490.0 million and $495.0 million, respectively, and the variable rate debt had estimated fair values of $490.0 million and $495.0 million as of September 30, 2024 and December 31, 2023, respectively. The fair values of variable rate debt is determined using the stated variable rate plus the current market credit spread. The variable rates reset at various maturities typically less than 30 days, and management concluded these rates reasonably estimate current market rates.

Financial Instruments Measured at Fair Value on a Recurring Basis

As of September 30, 2024, the Company had one outstanding series of cumulative redeemable preferred stock, which is referred to as the MAA Series I preferred stock (see Note 8). The Company has recognized a derivative asset related to the redemption feature embedded in the MAA Series I preferred stock. The derivative asset is valued using widely accepted valuation techniques, including a discounted cash flow analysis in which the perpetual value of the preferred shares is compared to the value of the preferred shares assuming the call option is exercised, with the value of the bifurcated call option as the difference between the two values. The analysis reflects the contractual terms of the redeemable preferred shares, which are redeemable at the Company’s option beginning on October 1, 2026 at the redemption price of $50.00 per share. The Company may use various inputs in the analysis, including trading data available of prices of the preferred shares, yields of relevant Company bond issuances and yields of relevant indices, estimated coupon yields on preferred stock instruments from REITs with similar credit ratings as MAA and treasury rates to estimate the fair value of the bifurcated call option.

The redemption feature embedded in the MAA Series I preferred stock is reported as a derivative asset in “Other assets” in the accompanying Condensed Consolidated Balance Sheets and is adjusted to its fair value at each reporting date, with a corresponding non-cash adjustment to “Other non-operating expense (income)” in the accompanying Condensed Consolidated Statements of Operations. As of September 30, 2024 and December 31, 2023, the fair value of the embedded derivative was $17.5 million and $31.9 million, respectively.

The Company has determined the majority of the inputs used to value its outstanding debt and its embedded derivative fall within Level 2 of the fair value hierarchy, and as a result, the fair value valuations of its debt and embedded derivative held as of September 30, 2024 and December 31, 2023 were classified as Level 2 in the fair value hierarchy. The fair value of the Company’s marketable equity securities discussed in Note 1 is based on quoted market prices and are classified as Level 1 in the fair value hierarchy.

Terminated Cash Flow Hedges of Interest

As of September 30, 2024, the Company had $7.5 million recorded in “Accumulated other comprehensive loss,” or AOCL, related to realized losses associated with terminated interest rate swaps that were designated as cash flow hedging instruments prior to their termination. The realized losses associated with the terminated interest rate swaps are reclassified to interest expense as interest payments are made on the Company’s debt and will continue to be reclassified to interest expense until the debt’s maturity. During the next 12 months, the Company estimates an additional $1.7 million will be reclassified to earnings as an increase to “Interest expense.”

Tabular Disclosure of the Effect of Derivative Instruments on the Condensed Consolidated Statements of Operations

The tables below present the effect of the Company’s derivative financial instruments on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands):


		Net Loss Reclassified from AOCL into Interest Expense
	Location of Loss Reclassified	Three months ended September 30,
Derivatives in Cash Flow Hedging Relationships	from AOCL into Income	2024			2023
Terminated interest rate swaps	Interest expense	$	(428	)	$	(279	)
		Nine months ended September 30,
		2024			2023
Terminated interest rate swaps	Interest expense	$	(1,448	)	$	(835	)


		Loss Recognized in Earnings on Derivative
	Location of Loss Recognized	Three months ended September 30,
Derivative Not Designated as Hedging Instrument	in Earnings on Derivative	2024			2023
Preferred stock embedded derivative	Other non-operating expense (income)	$	(18,257	)	$	(11,250	)
		Nine months ended September 30,
		2024			2023
Preferred stock embedded derivative	Other non-operating expense (income)	$	(14,451	)	$	(1,863	)

8. Shareholders’ Equity of MAA

As of September 30, 2024, 116,880,291 shares of common stock of MAA and 3,075,552 OP Units (excluding the OP Units held by MAA) were issued and outstanding, representing a total of 119,955,843 common shares and units. As of September 30, 2023, 116,686,730 shares of common stock of MAA and 3,147,780 OP Units (excluding the OP Units held by MAA) were issued and outstanding, representing a total of 119,834,510 common shares and units.

Preferred Stock

As of September 30, 2024, MAA had one outstanding series of cumulative redeemable preferred stock, which has the following characteristics:


Description	Outstanding Shares		Liquidation Preference (1)		Optional Redemption Date	Redemption Price (2)		Stated Dividend Yield			Approximate Dividend Rate
MAA Series I		867,846	$	50.00	10/1/2026	$	50.00		8.50	%	$	4.25

(1)

The total liquidation preference for the outstanding preferred stock is $43.4 million.

(2)

The redemption price is the price at which the preferred stock is redeemable, at MAA’s option, for cash.

See Note 7 for details of the valuation of the derivative asset related to the redemption feature embedded in the MAA Series I preferred stock.

Equity Forward Sale Agreements

In August 2021, MAA entered into two 18-month forward sale agreements with respect to a total of 1.1 million shares of its common stock at an initial forward sale price of $190.56 per share, which is net of issuance costs. Under the forward sale agreements, the forward sale price was subject to adjustment on a daily basis based on a floating interest rate factor equal to a specified daily rate less a spread and was decreased based on amounts related to dividends on MAA’s common stock during the term of the forward sale agreements. In January 2023, MAA settled its two forward sale agreements with respect to a total of 1.1 million shares at a forward price per share of $185.23, which is inclusive of adjustments made to reflect the then-current federal funds rate, the amount of dividends paid to holders of MAA common stock and commissions paid to sales agents, for net proceeds of $203.7 million.

At-the-Market Share Offering Program

In November 2021, MAA entered into an equity distribution agreement (as amended, the “Distribution Agreement”), by and among MAA, MAALP, those certain managers named therein (collectively, the “Managers”) and those certain forward-purchasers named therein (collectively, the “Forward Purchasers”), for the purpose of establishing a new at-the-market equity offering program (the “ATM Program”). Pursuant to the terms of the Distribution Agreement, MAA may, from time to time, issue and sell through or to the Managers, as sales agents and/or principals or as forward sellers, as agents for the Forward Purchasers, up to 4.0 million shares of its common stock.

In August 2024, MAA entered into Amendment No. 1 to the Distribution Agreement, which was entered into in order to (i) reflect the filing by MAA and MAALP of a new shelf registration statement on Form S-3ASR (Registration No. 333-279076 and Registration No. 333-258271-01, respectively), which became effective upon filing with the SEC on May 2, 2024; (ii) include certain other parties as additional Managers; (iii) include certain other parties as additional Forward Purchasers; and (iv) modify certain defined terms in the Distribution Agreement, as well as certain other administrative matters.

MAA has no obligation to issue shares through the ATM program. During the three and nine months ended September 30, 2024 and 2023, MAA did not sell any shares of common stock under its ATM program. As of September 30, 2024, 4.0 million shares remained issuable under the ATM program.

9. Partners’ Capital of MAALP

Common units of limited partnership interests in MAALP are represented by OP Units. As of September 30, 2024, there were 119,955,843 OP Units outstanding, 116,880,291, or 97.4%, of which represent Class B OP Units (common units issued to or held by MAALP’s general partner or any of its subsidiaries), which were owned by MAA, MAALP’s general partner. The remaining 3,075,552 OP Units were Class A OP Units owned by Class A limited partners. As of September 30, 2023, there were 119,834,510 OP Units outstanding, 116,686,730, or 97.4%, of which were owned by MAA and 3,147,780 of which were owned by the Class A limited partners.

MAA, as the sole general partner of MAALP, has full, complete and exclusive discretion to manage and control the business of MAALP subject to the restrictions specifically contained within MAALP’s agreement of limited partnership, or the Partnership Agreement. Unless otherwise stated in the Partnership Agreement, this power includes, but is not limited to, acquiring, leasing or disposing of any real property; constructing buildings and making other improvements to properties owned; borrowing money, modifying or extinguishing current borrowings, issuing evidence of indebtedness and securing such indebtedness by mortgage, deed of trust, pledge or other lien on MAALP’s assets; and distribution of MAALP’s cash or other assets in accordance with the Partnership Agreement. MAA can generally, at its sole discretion, issue and redeem OP Units and determine the consideration to be received or the redemption price to be paid, as applicable. The general partner may delegate these and other powers granted to it if the general partner remains in supervision of the designee.

Under the Partnership Agreement, MAALP may issue Class A OP Units and Class B OP Units. Class A OP Units are any OP Units other than Class B OP Units, while Class B OP Units are those issued to or held by MAALP’s general partner or any of its subsidiaries. In general, the limited partners do not have the power to participate in the management or control of MAALP’s business except in limited circumstances, including changes in the general partner and protective rights if the general partner acts outside of the provisions provided in the Partnership Agreement. The transferability of Class A OP Units is also limited by the Partnership Agreement.

Net income of MAALP (after allocations to preferred ownership interests) is allocated to the general partner and limited partners based on their respective ownership percentages of MAALP. Issuance or redemption of additional Class A OP Units or Class B OP Units changes the relative ownership percentage of the partners. The issuance of Class B OP Units generally occurs when MAA issues common stock and the proceeds from that issuance are contributed to MAALP in exchange for the issuance to MAA of a number of OP Units equal to the number of shares of common stock issued. Likewise, if MAA repurchases or redeems outstanding shares of common stock, MAALP generally redeems an equal number of Class B OP Units with similar terms held by MAA for a redemption price equal to the purchase price of those shares of common stock. At each reporting period, the allocation between general partner capital and limited partner capital is adjusted to account for the change in the respective percentage ownership of the underlying capital of MAALP. Holders of the Class A OP Units may require MAA to redeem their Class A OP Units, in which case MAA may, at its option, pay the redemption price either in cash (in an amount per Class A OP Unit equal, in general, to the average closing price of MAA’s common stock on the NYSE over a specified period prior to the redemption date) or by delivering one share of MAA common stock (subject to adjustment under specified circumstances) for each Class A OP Unit so redeemed.

In January 2023, MAA settled its two forward sale agreements with respect to a total of 1.1 million shares for net proceeds of $203.7 million. MAA contributed the proceeds to MAALP in exchange for the issuance of 1.1 million Class B OP Units.

As of September 30, 2024, a total of 3,075,552 Class A OP Units were outstanding and redeemable for 3,075,552 shares of MAA common stock, with an approximate value of $488.7 million, based on the closing price of MAA’s common stock on September 30, 2024 of $158.90 per share. As of September 30, 2023, a total of 3,147,780 Class A OP Units were outstanding and redeemable for 3,147,780 shares of MAA common stock, with an approximate value of $405.0 million, based on the closing price of MAA’s common stock on September 30, 2023 of $128.65 per share. MAALP pays the same per unit distributions in respect to the OP Units as the per share dividends MAA pays in respect to its common stock.

As of September 30, 2024, MAALP had one outstanding series of cumulative redeemable preferred units, or the MAALP Series I preferred units. The MAALP Series I preferred units have the same characteristics as the MAA Series I preferred stock described in Note 8. As of September 30, 2024, 867,846 units of the MAALP Series I preferred units were outstanding and owned by MAA. See Note 7 for details of the valuation of the derivative asset related to the redemption feature embedded in the MAALP Series I preferred units.

10. Commitments and Contingencies

Leases

The Company’s operating leases include a ground lease expiring in 2074 related to one of its apartment communities and an office lease expiring in 2028 related to its corporate headquarters. Both leases contain stated rent increases that are generally intended to compensate for the impact of inflation. The Company also has other commitments related to negligible office and equipment operating leases. As of September 30, 2024, the Company’s operating leases had a weighted average remaining lease term of approximately 34 years and a weighted average discount rate of approximately 4.5%.

The table below reconciles undiscounted cash flows for each of the first five years and total of the remaining years to the right-of-use lease liabilities recorded on the Condensed Consolidated Balance Sheets as of September 30, 2024 (in thousands):


	Operating Leases
2024	$	744
2025		3,000
2026		3,050
2027		3,088
2028		1,670
Thereafter		55,671
Total minimum lease payments		67,223
Net present value adjustments		(40,769	)
Right-of-use lease liabilities	$	26,454

Legal Proceedings

In late 2022 and early 2023, numerous putative class action lawsuits were filed against RealPage, Inc., a seller of revenue management software products, along with over 50 of the largest owners and operators of apartment communities in the country that have utilized these products, including the Company. The plaintiffs allege that RealPage and these multifamily housing owners and operators conspired to artificially inflate the prices of multifamily rents above competitive levels using RealPage’s revenue management software in violation of state and federal antitrust laws. The plaintiffs are seeking monetary damages and attorneys’ fees and costs and injunctive relief. On April 10, 2023, the Joint Panel on Multidistrict Litigation issued an order centralizing the cases in the U.S. District Court for the Middle District of Tennessee for coordinated or consolidated pretrial proceedings. Another lawsuit alleging violations of the District of Columbia’s antitrust laws and seeking similar relief was filed in the Superior Court of the District of Columbia in November 2023 by the District of Columbia against RealPage, Inc. and a number of large apartment community owners and operators, including the Company. The Company believes there are defenses, both factual and legal, to the allegations in these various proceedings and the Company plans to vigorously defend itself. As these proceedings are in the early stages, it is not possible for the Company to predict any outcome or estimate the amount of loss, if any, which could be associated with any adverse decision. While the Company does not believe that any of these proceedings will have a material adverse effect on its financial condition, the Company cannot give assurance that the proceedings will not have a material effect on its results of operations.

The Company is subject to various other legal proceedings and claims that arise in the ordinary course of its business operations. While the resolution of these matters cannot be predicted with certainty, management does not currently believe that these matters, either individually or in the aggregate, will have a material adverse effect on the Company’s financial condition, results of operations or cash flows in the event of a negative outcome. Matters that arise out of allegations of bodily injury, property damage and employment practices are generally covered by insurance.

As of September 30, 2024 and December 31, 2023, the Company’s accrual for loss contingencies relating to unresolved legal matters, including the cost to defend, was $13.2 million and $7.6 million in the aggregate, respectively. The accrual for loss contingencies is presented in “Accrued expenses and other liabilities” in the accompanying Condensed Consolidated Balance Sheets and in “Other non-operating expense (income)” in the accompanying Condensed Consolidated Statements of Operations.

11. Segment Information

As of September 30, 2024, the Company owned and operated 293 multifamily apartment communities (which does not include development communities under construction) in 16 different states from which it derived all significant sources of earnings and operating cash flows. The Company views each consolidated apartment community as an operating segment. The Company’s chief operating decision maker, which is the Company’s Chief Executive Officer, evaluates performance and determines resource allocations of each of the apartment communities on a Same Store and Non-Same Store and Other basis, as well as an individual apartment community basis. The Company has aggregated its operating segments into two reportable segments as management believes the apartment communities in each reportable segment generally have similar economic characteristics, facilities, services and residents.

The following reflects the two reportable segments for the Company:

•

Same Store includes communities that the Company has owned and have been stabilized for at least a full 12 months as of the first day of the calendar year.

•

Non-Same Store and Other includes recently acquired communities, communities being developed or in lease-up, communities that have been disposed of or identified for disposition, communities that have experienced a significant casualty loss and stabilized communities that do not meet the requirements to be Same Store communities. Also included in Non-Same Store and Other are non-multifamily activities and storm related expenses related to severe weather events, including hurricanes and winter storms.

On the first day of each calendar year, the Company determines the composition of its Same Store and Non-Same Store and Other reportable segments for that year as well as adjusts the previous year, which allows the Company to evaluate full period-over-period operating comparisons. Communities previously in development or lease-up are added to the Same Store segment on the first day of the calendar year after the community has been owned and stabilized for at least a full 12 months. Communities are considered stabilized when achieving 90% average physical occupancy for 90 days.

The chief operating decision maker utilizes net operating income, or NOI, in evaluating the performance of the operating segments. Total NOI represents total property revenues less total property operating expenses, excluding depreciation and amortization, for all properties held during the period regardless of their status as held for sale. Management believes that NOI is a helpful tool in evaluating the operating performance of the segments because it measures the core operations of property performance by excluding corporate level expenses and other items not directly related to property operating performance.

Revenues and NOI for each reportable segment for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):


	Three months ended September 30,						Nine months ended September 30,
	2024			2023			2024			2023
Revenues:
Same Store
Rental revenues	$	520,166		$	520,617		$	1,555,346		$	1,544,581
Other property revenues		3,367			2,893			9,356			9,346
Total Same Store revenues		523,533			523,510			1,564,702			1,553,927
Non-Same Store and Other
Rental revenues		27,213			18,414			74,640			51,943
Other property revenues		380			118			1,841			351
Total Non-Same Store and Other revenues		27,593			18,532			76,481			52,294
Total rental and other property revenues	$	551,126		$	542,042		$	1,641,183		$	1,606,221
Net Operating Income:
Same Store NOI	$	327,267		$	332,973		$	990,130		$	1,001,513
Non-Same Store and Other NOI		12,298			9,846			35,894			28,349
Total NOI		339,565			342,819			1,026,024			1,029,862
Depreciation and amortization		(146,722	)		(146,702	)		(434,764	)		(424,175	)
Property management expenses		(17,265	)		(16,298	)		(54,461	)		(50,317	)
General and administrative expenses		(12,728	)		(13,524	)		(42,444	)		(43,329	)
Interest expense		(42,726	)		(36,651	)		(124,352	)		(110,655	)
Loss on sale of depreciable real estate assets		—			(75	)		(25	)		(61	)
Gain on sale of non-depreciable real estate assets		—		—				—			54
Other non-operating (expense) income		(1,678	)		(16,493	)		2,604			3,966
Income tax (expense) benefit		(670	)		209			(3,485	)		(3,596	)
Income from real estate joint venture		454			447			1,405			1,214
Net income attributable to noncontrolling interests		(3,035	)		(3,000	)		(9,605	)		(10,633	)
Dividends to MAA Series I preferred shareholders		(922	)		(922	)		(2,766	)		(2,766	)
Net income available for MAA common shareholders	$	114,273		$	109,810		$	358,131		$	389,564

Assets for each reportable segment as of September 30, 2024 and December 31, 2023 were as follows (in thousands):


	September 30, 2024		December 31, 2023
Assets:
Same Store	$	9,739,211	$	9,893,858
Non-Same Store and Other		1,843,882		1,391,777
Corporate		173,159		198,868
Total assets	$	11,756,252	$	11,484,503

12. Real Estate Acquisitions and Dispositions

In September and May 2024, the Company closed on the acquisition of a 310-unit multifamily apartment community located in Orlando, Florida for approximately $84 million and a 306-unit multifamily apartment community located in Raleigh, North Carolina for approximately $81 million, respectively. In August and April 2024, the Company also acquired a 3-acre land parcel in Richmond, Virginia for approximately $14 million and a 13-acre land parcel in Phoenix, Arizona for approximately $11 million, respectively. During the nine months ended September 30, 2024, the Company did not dispose of any multifamily apartment communities or land parcels.

In October 2024, the Company closed on the acquisition of a 386-unit multifamily apartment community located in Dallas, Texas for approximately $106 million.

As of September 30, 2024, a 216-unit multifamily apartment community located in Charlotte, North Carolina was classified as held for sale. The criteria for classifying the community as held for sale were met during September 2024, and the property remained in the Company’s portfolio as of September 30, 2024. As a result, the assets and liabilities associated with the community were presented as “Assets held for sale” in the accompanying Condensed Consolidated Balance Sheets as of September 30, 2024. Subsequent to September 30, 2024, but prior to the filing date of this Quarterly Report on Form 10-Q, the Company closed on the disposition of the community and received net proceeds of approximately $39 million, resulting in an expected gain on the sale of depreciable real estate assets of approximately $23 million that will be recorded in the fourth quarter of 2024.

In February 2023, the Company acquired a 6-acre land parcel in Orlando, Florida for approximately $12 million. In March 2023, the Company closed on the disposition of 21 acres of land in Gulf Shores, Alabama for gross proceeds of approximately $3 million, resulting in the recognition of a negligible gain on the sale of non-depreciable real estate assets.

Certain long-lived assets are recorded at fair value when they are acquired or initially consolidated. The inputs associated with the valuation of long-lived assets are generally included in Level 2 of the fair value hierarchy.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion analyzes the financial condition and results of operations of both MAA and the Operating Partnership, of which MAA is the sole general partner and in which MAA owned a 97.4% interest as of September 30, 2024. MAA conducts all of its business through the Operating Partnership and its various subsidiaries. This discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q.

MAA, an S&P 500 company, is a multifamily-focused, self-administered and self-managed real estate investment trust, or REIT. We own, operate, acquire and selectively develop apartment communities primarily located in the Southeast, Southwest and Mid-Atlantic regions of the U.S. As of September 30, 2024, we owned and operated 293 apartment communities (which does not include development communities under construction) through the Operating Partnership and its subsidiaries, and had an ownership interest in one apartment community through an unconsolidated real estate joint venture. In addition, as of September 30, 2024, we had eight development communities under construction, and 35 of our apartment communities included retail components. Our apartment communities, including development communities under construction, were located across 16 states and the District of Columbia as of September 30, 2024.

We report in two segments, Same Store and Non-Same Store and Other. Our Same Store segment represents those apartment communities that have been owned and stabilized for at least 12 months as of the first day of the calendar year. Our Non-Same Store and Other segment includes recently acquired communities, communities being developed or in lease-up, communities that have been disposed of or identified for disposition, communities that have incurred a significant casualty loss and stabilized communities that do not meet the requirements to be Same Store communities. Also included in our Non-Same Store and Other segment are non-multifamily activities and storm-related expenses related to severe weather events, including hurricanes and winter storms. Additional information regarding the composition of our segments is included in Note 11 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Forward-Looking Statements

This and other sections of this Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, with respect to our expectations for future periods. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. Such forward-looking statements include, without limitation, statements regarding expected operating performance and results, property stabilizations, property acquisition and disposition activity, joint venture activity, development and renovation activity and other capital expenditures, and capital raising and financing activity, as well as lease pricing, revenue and expense growth, occupancy, interest rate and other economic expectations. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “forecasts,” “projects,” “assumes,” “will,” “may,” “could,” “should,” “budget,” “target,” “outlook,” “proforma,” “opportunity,” “guidance” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, as described below, which may cause our actual results, performance or achievements to be materially different from the results of operations, financial conditions or plans expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such forward-looking statements included in this Quarterly Report on Form 10-Q may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved.

The following factors, among others, could cause our actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking statements:

•

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, due to inflation and other factors;

•

inability to obtain appropriate insurance coverage at reasonable rates, or at all, losses due to uninsured risks, deductibles and self-insured retentions, or losses from catastrophes in excess of coverage limits;

•

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 impact of adverse developments affecting the U.S. or global banking industry, including bank failures and liquidity concerns, which could cause continued or worsening economic and market volatility, and regulatory responses thereto;

•

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;

•

ability to continue to satisfy complex rules in order to maintain our status as a REIT for federal income tax purposes, the ability of the Operating Partnership 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 and natural disasters;

•

disease outbreaks and other public health events and measures that are taken by federal, state and local governmental authorities in response to such outbreaks and events;

•

impact of climate change on our properties or operations;

•

legal proceedings or class action lawsuits;

•

impact of reputational harm caused by negative press or social media postings 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 Quarterly Report on Form 10-Q and in other reports we file with the Securities and Exchange Commission, or the SEC, or in other documents that we publicly disseminate.

New factors may also emerge from time to time that could have a material adverse effect on our business. Except as required by law, we undertake no obligation to publicly update or revise forward-looking statements contained in this Quarterly Report on Form 10-Q to reflect events, circumstances or changes in expectations after the date on which this Quarterly Report on Form 10-Q is filed.

Overview of the Three Months Ended September 30, 2024

For the three months ended September 30, 2024, net income available for MAA common shareholders was $114.3 million as compared to $109.8 million for the three months ended September 30, 2023. Results for the three months ended September 30, 2024 included $18.3 million of non-cash loss related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares, $11.0 million of gain on the consolidation of a third-party development and $5.7 million of net casualty related recoveries. Results for the three months ended September 30, 2023 included $11.3 million of non-cash loss related to the embedded derivative in the MAA Series I preferred shares and $6.6 million of non-cash loss from investments. Revenues for the three months ended September 30, 2024 increased 1.7% as compared to the three months ended September 30, 2023. Property operating expenses, excluding depreciation and amortization, for the three months ended September 30, 2024 increased by 6.2% as compared to the three months ended September 30, 2023. The primary drivers of these changes are discussed in the “Results of Operations” section.

Trends

During the three months ended September 30, 2024, change in revenue for our Same Store segment continued to be primarily driven by average effective rent per unit. The average effective rent per unit for our Same Store segment decreased from the prior year, down 0.4% for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. Average effective rent per unit represents the average of gross rent amounts, after the effect of leasing concessions, for occupied apartment units plus prevalent market rates asked for unoccupied apartment units, divided by the total number of units. Leasing concessions represent discounts to the current market rate. We believe average effective rent per unit is a helpful measurement in evaluating average pricing; however, it does not represent actual rental revenue collected per unit.

For the three months ended September 30, 2024, average physical occupancy for our Same Store segment was 95.7%, consistent with the three months ended September 30, 2023. Average physical occupancy is a measurement of the total number of our apartment units that are occupied by residents, and it represents the average of the daily physical occupancy for the period.

An important part of our portfolio strategy is to maintain diversity of markets, submarkets, product types and price points in the Southeast, Southwest and Mid-Atlantic regions of the U.S. We have multifamily assets in 39 defined markets, with a presence in approximately 150 submarkets and a mixture of garden-style, mid-rise and high-rise communities. This diversity helps to mitigate exposure to economic issues, including supply and demand factors, in any one geographic market or area. We believe that a well-balanced portfolio, including both urban and suburban locations, with a broad range of monthly rent price points, will provide higher performance and lower volatility throughout the full economic cycle.

Demand for apartments in our markets was strong during the third quarter of 2024, which is contributing to the steady absorption of the high volume of new supply delivered in the third quarter, which we believe has now peaked. The strong demand resulted in record low resident turnover, steady occupancy and strong renewal pricing and collections. We believe demand for apartments is primarily driven by general economic conditions in our markets and is particularly correlated to job growth, population growth, household formation and in-migration over the long term. We continue to monitor pressures surrounding housing supply, inflation trends and general economic conditions. A worsening of the current environment could contribute to uncertain rent collections going forward, suppress demand for apartments and could drive lower rent pricing on new leases and renewals than what we achieved in the three and nine months ended September 30, 2024. We continue to believe that in calendar year 2025 we will see a meaningful decline in the amount of new apartment deliveries impacting our portfolio, and we will enter a new multi-year cycle with demand outpacing supply.

Access to the financial markets remains available for high-credit rated borrowers, such as ourselves. Overall borrowing costs remain at elevated levels and we expect this trend to continue. As of September 30, 2024, we had $490.0 million of variable rate debt outstanding under our commercial paper program. Our continued exposure to elevated interest rates will be a result of additional variable rate borrowings or future financing and refinancing activities.

Results of Operations

Comparison of the three months ended September 30, 2024 to the three months ended September 30, 2023

For the three months ended September 30, 2024, we achieved net income available for MAA common shareholders of $114.3 million, a 4.1% increase as compared to the three months ended September 30, 2023, and total revenue growth of $9.1 million, representing a 1.7% increase in property revenues as compared to the three months ended September 30, 2023. The following discussion describes the primary drivers of the increase in net income available for MAA common shareholders for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

Property Revenues

The following table reflects our property revenues by segment for the three months ended September 30, 2024 and 2023 (dollars in thousands):


	Three months ended September 30,
	2024		2023		Increase		% Increase
Same Store	$	523,533	$	523,510	$	23		0.0	%
Non-Same Store and Other		27,593		18,532		9,061		48.9	%
Total	$	551,126	$	542,042	$	9,084		1.7	%

The increase in property revenues from the Non-Same Store and Other segment for the three months ended September 30, 2024 as compared to three months ended September 30, 2023 was primarily the result of increased revenues from completed development communities and recently acquired communities.

Property Operating Expenses

Property operating expenses include costs for property personnel, building repairs and maintenance, real estate taxes, insurance, utilities and other operating expenses. The following table reflects our property operating expenses by segment for the three months ended September 30, 2024 and 2023 (dollars in thousands):


	Three months ended September 30,
	2024		2023		Increase		% Increase
Same Store	$	196,266	$	190,537	$	5,729		3.0	%
Non-Same Store and Other		15,295		8,686		6,609		76.1	%
Total	$	211,561	$	199,223	$	12,338		6.2	%

The increase in property operating expenses for our Same Store segment for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 was primarily driven by increases in personnel expense of $1.6 million, utilities expense of $1.3 million, office operations expense of $1.1 million, and marketing expense of $1.0 million. The increase in property operating expenses from the Non-Same Store and Other segment for the three months ended September 30, 2024 as compared to three months ended September 30, 2023 was primarily the result of increased operating expenses from completed development communities and recently acquired communities.

Depreciation and Amortization

Depreciation and amortization expense for the three months ended September 30, 2024 was $146.7 million, consistent with the three months ended September 30, 2023.

Other Income and Expenses

Property management expenses for the three months ended September 30, 2024 were $17.3 million, an increase of $1.0 million as compared to the three months ended September 30, 2023. General and administrative expenses for the three months ended September 30, 2024 were $12.7 million, a decrease of $0.8 million as compared to the three months ended September 30, 2023.

Interest expense for the three months ended September 30, 2024 was $42.7 million, an increase of $6.1 million as compared to the three months ended September 30, 2023. The increase was due to an increase of 36 basis points in our effective interest rate and an increase in our average outstanding debt balance during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

Other non-operating expense (income) for the three months ended September 30, 2024 was $1.7 million of expense as compared to $16.5 million of expense for the three months ended September 30, 2023, a decrease of $14.8 million. The expense for the three months ended September 30, 2024 was primarily driven by $18.3 million of non-cash loss related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares, partially offset by $11.0 million of gain on the consolidation of a third-party development and $5.7 million of net casualty related recoveries. The expense for the three months ended September 30, 2023 was driven by $11.3 million of non-cash loss related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares and $6.6 million of non-cash loss from investments, partially offset by $1.5 million of interest income on cash deposits.

Comparison of the nine months ended September 30, 2024 to the nine months ended September 30, 2023

For the nine months ended September 30, 2024, we achieved net income available for MAA common shareholders of $358.1 million, a 8.1% decrease as compared to the nine months ended September 30, 2023, and total revenue growth of $35.0 million, representing a 2.2% increase in property revenues as compared to the nine months ended September 30, 2023. The following discussion describes the primary drivers of the decrease in net income available for MAA common shareholders for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Property Revenues

The following table reflects our property revenues by segment for the nine months ended September 30, 2024 and 2023 (dollars in thousands):


	Nine months ended September 30,
	2024		2023		Increase		% Increase
Same Store	$	1,564,702	$	1,553,927	$	10,775		0.7	%
Non-Same Store and Other		76,481		52,294		24,187		46.3	%
Total	$	1,641,183	$	1,606,221	$	34,962		2.2	%

The Same Store segment generated a 0.7% increase in revenues for the nine months ended September 30, 2024, primarily the result of average effective rent per unit growth of 0.6% as compared to the nine months ended September 30, 2023. The increase in property revenues from the Non-Same Store and Other segment for the nine months ended September 30, 2024 as compared to nine months ended September 30, 2023 was primarily the result of increased revenues from completed development communities and recently acquired communities.

Property Operating Expenses

Property operating expenses include costs for property personnel, building repairs and maintenance, real estate taxes, insurance, utilities and other operating expenses. The following table reflects our property operating expenses by segment for the nine months ended September 30, 2024 and 2023 (dollars in thousands):


	Nine months ended September 30,
	2024		2023		Increase		% Increase
Same Store	$	574,572	$	552,414	$	22,158		4.0	%
Non-Same Store and Other		40,587		23,945		16,642		69.5	%
Total	$	615,159	$	576,359	$	38,800		6.7	%

The increase in property operating expenses for our Same Store segment for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 was primarily driven by increases in personnel expense of $5.5 million, real estate tax expense of $4.1 million, office operations expense of $3.6 million, utilities expense of $3.3 million, insurance expense of $2.3 million, marketing expense of $1.9 million, and building repair and maintenance expense of $1.6 million.

Depreciation and Amortization

Depreciation and amortization expense for the nine months ended September 30, 2024 was $434.8 million, an increase of $10.6 million as compared to the nine months ended September 30, 2023. The increase was primarily driven by the recognition of depreciation expense associated with our completed development communities, acquisitions and capital spend activities completed after September 30, 2023 in the normal course of business through September 30, 2024.

Other Income and Expenses

Property management expenses for the nine months ended September 30, 2024 were $54.5 million, an increase of $4.1 million as compared to the nine months ended September 30, 2023. General and administrative expenses for the nine months ended September 30, 2024 were $42.4 million, a decrease of $0.9 million as compared to the nine months ended September 30, 2023.

Interest expense for the nine months ended September 30, 2024 was $124.4 million, an increase of $13.7 million as compared to the nine months ended September 30, 2023. The increase was due to an increase of 25 basis points in our effective interest rate and an increase in our average outstanding debt balance during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Other non-operating expense (income) for the nine months ended September 30, 2024 was $2.6 million of income as compared to $4.0 million of income for the nine months ended September 30, 2023, a decrease of $1.4 million. The income for the nine months ended September 30, 2024 was primarily driven by $11.0 million of gain on the consolidation of a third-party development, $9.7 million of net casualty related recoveries and $3.7 million of non-cash gain from investments, partially offset by $14.5 million of non-cash loss related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares and $8.0 million of accrued legal defense costs. The income for the nine months ended September 30, 2023 was driven by $3.0 million of interest income, $1.0 million of miscellaneous income, and $0.7 million of non-cash gain from investments, partially offset by $1.9 million of non-cash loss related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares.

Non-GAAP Financial Measures

Funds from Operations and Core Funds from Operations

Funds from operations, or FFO, a non-GAAP financial measure, represents net income available for MAA common shareholders (computed in accordance with U.S. generally accepted accounting principles, or GAAP) excluding gains or losses on disposition of operating properties, asset impairment and gain on consolidation of third-party development, plus depreciation and amortization of real estate assets, net income attributable to noncontrolling interests and adjustments for joint ventures. Because net income attributable to noncontrolling interests is added back, FFO, when used in this Quarterly Report on Form 10-Q, represents FFO attributable to common shareholders and unitholders.

FFO should not be considered as an alternative to net income available for MAA common shareholders, or any other GAAP measurement, as an indicator of operating performance or as an alternative to cash flow from operating, investing and financing activities as a measure of liquidity. Management believes that FFO is helpful to investors in understanding our operating performance, primarily because its calculation excludes depreciation and amortization expense on real estate assets and gain on sale of depreciable real estate assets. We believe that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies. While our calculation of FFO is in accordance with the National Association of Real Estate Investment Trusts’, or NAREIT’s, definition, it may differ from the methodology for calculating FFO utilized by other REITs and, accordingly, may not be comparable to such other REITs.

Core FFO represents FFO as adjusted for items that are not considered part of our core business operations such as adjustments related to the fair value of the embedded derivative in the MAA Series I preferred shares; gain or loss on sale of non-depreciable assets; gain or loss on investments, net of tax; casualty related charges (recoveries), net; gain or loss on debt extinguishment; legal costs, settlements and (recoveries), net, and mark-to-market debt adjustments. Because net income attributable to noncontrolling interests is added back to FFO, Core FFO, when used in this Quarterly Report on Form 10-Q, represents Core FFO attributable to common shareholders and unitholders.

Core FFO should not be considered as an alternative to net income available for MAA common shareholders, or any other GAAP measurement, as an indicator of operating performance or as an alternative to cash flow from operating, investing and financing activities as a measure of liquidity. Management believes that Core FFO is helpful in understanding our core operating performance between periods in that it removes certain items that by their nature are not comparable over periods and therefore tend to obscure actual operating performance from rental activities. While our definition of Core FFO may be similar to others in the industry, our methodology for calculating Core FFO may differ from that utilized by other REITs and, accordingly, may not be comparable to such other REITs.

The following table presents a reconciliation of net income available for MAA common shareholders to FFO attributable to common shareholders and unitholders and Core FFO attributable to common shareholders and unitholders for the three and nine months ended September 30, 2024 and 2023, as we believe net income available for MAA common shareholders is the most directly comparable GAAP measure (dollars in thousands):


	Three months ended September 30,						Nine months ended September 30,
	2024			2023			2024			2023
Net income available for MAA common shareholders	$	114,273		$	109,810		$	358,131		$	389,564
Depreciation and amortization of real estate assets		145,256			145,278			430,470			419,532
Loss on sale of depreciable real estate assets		—			75			25			61
MAA’s share of depreciation and amortization of real estate assets of real estate joint venture		157			153			466			456
Gain on consolidation of third-party development (1)		(11,033	)		—			(11,033	)		—
Net income attributable to noncontrolling interests		3,035			3,000			9,605			10,633
FFO attributable to common shareholders and unitholders		251,688			258,316			787,664			820,246
Loss on embedded derivative in preferred shares (1)		18,257			11,250			14,451			1,863
Gain on sale of non-depreciable real estate assets		—		—				—			(54	)
Loss (gain) on investments, net of tax (1) (2)		533			5,166			(2,873	)		(603	)
Casualty related (recoveries) charges, net (1)		(5,714	)		217			(9,664	)		588
Gain on debt extinguishment(1)		—			(57	)		—			(57	)
Legal costs, settlements and (recoveries), net (1) (3)		—			—			8,000			(1,600	)
Mark-to-market debt adjustment (4)		—			—			—			(25	)
Core FFO attributable to common shareholders and unitholders	$	264,764		$	274,892		$	797,578		$	820,358

(1)

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

(2)

For the three months ended September 30, 2024 and 2023, loss on investments is presented net of tax benefit of $0.1 million and $1.4 million, respectively. For the nine months ended September 30, 2024 and 2023, gain on investments is presented net of tax expense of $0.8 million and $0.1 million, respectively.

(3)

For the nine months ended September 30, 2024, in accordance with our accounting policies, we recognized $8.0 million of accrued legal defense costs that are expected to be incurred through July 2027.

(4)

Included in “Interest expense” in the Condensed Consolidated Statements of Operations.

Core FFO attributable to common shareholders and unitholders for the three months ended September 30, 2024 was $264.8 million, a decrease of $10.1 million as compared to the three months ended September 30, 2023, primarily as a result of increases in property operating expenses, excluding depreciation and amortization, of $12.3 million and interest expense of $6.1 million, partially offset by an increase in property revenues of $9.1 million.

Core FFO attributable to common shareholders and unitholders for the nine months ended September 30, 2024 was $797.6 million, a decrease of $22.8 million as compared to the nine months ended September 30, 2023, primarily as a result of increases in property operating expenses, excluding depreciation and amortization, of $38.8 million, interest expense of $13.7 million and property management expenses of $4.1 million, partially offset by an increase in property revenues of $35.0 million.

Net Debt, EBITDA, EBITDAre, and Adjusted EBITDAre

Net debt, a non-GAAP financial measure, represents unsecured notes payable and secured notes payable less cash and cash equivalents and 1031(b) exchange proceeds included in restricted cash. Management considers net debt a helpful tool in evaluating our debt position. Net debt should not be considered as an alternative to any GAAP measurement as an indicator of operating performance or as an alternative to cash flow from operating, investing and financing activities as a measure of liquidity.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, a non-GAAP financial measure, represents net income (computed in accordance with GAAP) plus depreciation and amortization, interest expense, and income taxes. As an owner and operator of real estate, management considers EBITDA to be an important measure of performance from core operations because EBITDA excludes various expense items that are not indicative of operating performance. EBITDA should not be considered as an alternative to net income, or any other GAAP measurement, as an indicator of operating performance or as an alternative to cash flow from operating, investing and financing activities as a measure of liquidity.

EBITDAre is composed of EBITDA adjusted for the gain or loss on sale of depreciable assets, gain on consolidation of third-party development and adjustments to reflect our share of EBITDAre of an unconsolidated affiliate. As an owner and operator of real estate, management considers EBITDAre to be an important measure of performance from core operations because EBITDAre excludes various expense items that are not indicative of operating performance. While our definition of EBITDAre is in accordance with NAREIT’s definition, it may differ from the methodology utilized by other REITs to calculate EBITDAre and, accordingly, may not be comparable to such other REITs. EBITDAre should not be considered as an alternative to net income, or any other GAAP measurement, as an indicator of operating performance or as an alternative to cash flow from operating, investing and financing activities as a measure of liquidity.

Adjusted EBITDAre is comprised of EBITDAre further adjusted for items that are not considered part of our core operations such as adjustments related to the fair value of the embedded derivative in the MAA Series I preferred shares; gain or loss on sale of non-depreciable assets; gain or loss on investments; casualty related charges (recoveries), net; gain or loss on debt extinguishment; and legal costs, settlements and (recoveries), net. As an owner and operator of real estate, management considers Adjusted EBITDAre to be an important measure of performance from core operations because Adjusted EBITDAre excludes various income and expense items that are not indicative of operating performance. Our computation of Adjusted EBITDAre may differ from the methodology utilized by other REITs to calculate Adjusted EBITDAre. Adjusted EBITDAre should not be considered as an alternative to net income, or any other GAAP measurement, as an indicator of operating performance or as an alternative to cash flow from operating, investing and financing activities as a measure of liquidity.

Management monitors its debt levels to a ratio of net debt to Adjusted EBITDAre in order to maintain our investment grade credit ratings. We believe this is an important factor in the management of our debt levels to maintain an optimal capital structure, and it is also considered in the assignment of our credit ratings. Adjusted EBITDAre is measured on a trailing twelve-month basis.

The following table presents a reconciliation of unsecured notes payable and secured notes payable to net debt as of September 30, 2024 and December 31, 2023, as we believe unsecured notes payable and secured notes payable, combined, is the most directly comparable GAAP measure (dollars in thousands):


	September 30, 2024			December 31, 2023
Unsecured notes payable	$	4,515,733		$	4,180,084
Secured notes payable		360,235			360,141
Total debt		4,875,968			4,540,225
Cash and cash equivalents		(50,232	)		(41,314	)
Net debt	$	4,825,736		$	4,498,911

The following table presents a reconciliation of net income to EBITDA, EBITDAre and Adjusted EBITDAre for the trailing twelve months ended September 30, 2024 and December 31, 2023, as we believe net income is the most directly comparable GAAP measure (dollars in thousands):


	Twelve Months Ended
	September 30, 2024			December 31, 2023
Net income	$	535,370		$	567,831
Depreciation and amortization		575,652			565,063
Interest expense		162,931			149,234
Income tax expense		4,633			4,744
EBITDA		1,278,586			1,286,872
Loss on sale of depreciable real estate assets		26			62
Gain on consolidation of third-party development (1)		(11,033	)		—
Adjustments to reflect the Company’s share of EBITDAre of an unconsolidated affiliate		1,356			1,350
EBITDAre		1,268,935			1,288,284
Gain on embedded derivative in preferred shares (1)		(5,940	)		(18,528	)
Gain on sale of non-depreciable real estate assets		—			(54	)
Gain on investments (1)		(7,369	)		(4,449	)
Casualty related (recoveries) charges, net (1)		(9,272	)		980
Gain on debt extinguishment (1)		—			(57	)
Legal costs, settlements and (recoveries), net (1) (2)		5,146			(4,454	)
Adjusted EBITDAre	$	1,251,500		$	1,261,722

(1)

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

(2)

For the twelve months ended September 30, 2024, in accordance with our accounting policies, we recognized $8.5 million of accrued legal defense costs that are expected to be incurred through July 2027.

Our net debt to Adjusted EBITDAre ratio as of September 30, 2024 was 3.9x, as compared to a ratio of 3.6x as of December 31, 2023. Adjusted EBITDAre decreased $10.2 million for the trailing twelve months ended September 30, 2024 as compared to the trailing twelve months ended December 31, 2023, while net debt increased $326.8 million as of September 30, 2024 as compared to December 31, 2023. The decrease in Adjusted EBITDAre was primarily due to increases in property operating expenses, excluding depreciation and amortization and property management expenses, partially offset by an increase in property revenues, while the increase in net debt was primarily due to an increase in unsecured notes payable, partially offset by an increase in cash and cash equivalents. The increase in unsecured notes payable was primarily driven by an increase in cash requirements to fund acquisition and development activities.

Liquidity and Capital Resources

Our cash flows from operating, investing and financing activities, as well as general economic and market conditions, are the principal factors affecting our liquidity and capital resources.

We expect that our primary uses of cash will be to fund our ongoing operating needs, to fund our ongoing capital spending requirements, which relate primarily to our development, redevelopment and property repositioning activities, to repay maturing borrowings, to fund the future acquisition of assets and to pay shareholder dividends. We expect to meet our cash requirements through net cash flows from operating activities, existing unrestricted cash and cash equivalents, borrowings under our commercial paper program and our revolving credit facility, the future issuance of debt and equity and the future disposition of assets.

We historically have had positive net cash flows from operating activities. We believe that future net cash flows generated from operating activities, existing unrestricted cash and cash equivalents, borrowing capacity under our current commercial paper program and revolving credit facility, and our ability to issue debt and equity will provide sufficient liquidity to fund the cash requirements for our business over the next 12 months and the foreseeable future.

As of September 30, 2024, we had $805.7 million of combined unrestricted cash and cash equivalents and available capacity under our revolving credit facility.

Cash Flows from Operating Activities

Net cash provided by operating activities was $859.2 million for the nine months ended September 30, 2024, a decrease of $13.1 million as compared to the nine months ended September 30, 2023. The decrease in operating cash flows was primarily driven by an increase in property operating expenses.

Cash Flows from Investing Activities

Net cash used in investing activities was $651.6 million for the nine months ended September 30, 2024, an increase of $223.0 million as compared to the nine months ended September 30, 2023. The primary drivers of the change were as follows (dollars in thousands):


	Primary drivers of cash (outflow) inflow
	during the nine months ended September 30,						(Decrease) Increase
	2024			2023			in Net Cash
Purchases of real estate and other assets	$	(189,104	)	$	(12,450	)	$	(176,654	)
Capital improvements and other		(235,856	)		(261,069	)		25,213
Development costs		(255,216	)		(151,145	)		(104,071	)
Contributions to affiliates		(1,874	)		(7,505	)		5,631
Proceeds from sale of marketable equity securities		9,975			—			9,975
Proceeds from real estate asset dispositions		—			2,948			(2,948	)
Net proceeds from insurance recoveries		20,203			680			19,523

The increase in cash outflows for purchases of real estate and other assets was driven by our acquisition activity during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. We acquired two apartment communities and two land parcels during the nine months ended September 30, 2024 while we acquired one land parcel during the nine months ended September 30, 2023. The decrease in cash outflows for capital improvements and other was primarily driven by decreased capital spend relating to our property redevelopment and repositioning activities during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. The increase in cash outflows for development costs was primarily driven by increased development activity, including financing a third party’s development of a 239-unit multifamily apartment community currently under construction located in Charlotte, North Carolina during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. The decrease in cash outflows for contributions to affiliates was driven by a lesser amount of investments made in the technology-focused limited partnerships during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. The increase in cash inflows from proceeds from sale of marketable equity securities resulted from the sale of marketable equity securities during the nine months ended September 30, 2024 as compared to no marketable securities being sold during the nine months ended September 30, 2023. The decrease in cash inflows from proceeds from real estate asset dispositions resulted from no dispositions during the nine months ended September 30, 2024 as compared to the disposition of one land parcel during the nine months ended September 30, 2023. The increase in cash inflows from net proceeds from insurance recoveries was driven by increased insurance reimbursements received for property and storm-related casualty claims during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Cash Flows from Financing Activities

Net cash used in financing activities was $198.6 million for the nine months ended September 30, 2024, a decrease of $130.8 million as compared to the nine months ended September 30, 2023. The primary drivers of the change were as follows (dollars in thousands):


	Primary drivers of cash (outflow) inflow
	during the nine months ended September 30,						Increase (Decrease)
	2024			2023			in Net Cash
Net payments of commercial paper	$	(5,000	)	$	(20,000	)	$	15,000
Proceeds from notes payable		744,551			—			744,551
Principal payments on notes payable		(400,000	)		(3,861	)		(396,139	)
Payment of deferred financing costs		(7,150	)		—			(7,150	)
Dividends paid on common shares		(515,085	)		(488,354	)		(26,731	)
Proceeds from issuances of common shares		955			204,743			(203,788	)
Net change in other financing activities		(373	)		(5,945	)		5,572

The decrease in cash outflows related to net payments of commercial paper resulted from the decrease in net borrowings of $5.0 million on our commercial paper program during the nine months ended September 30, 2024 as compared to the decrease in net borrowings of $20.0 million on our commercial paper program during the nine months ended September 30, 2023. The increase in cash inflows from proceeds from notes payable resulted from the issuance of $750.0 million of unsecured senior notes during the nine months ended September 30, 2024 as compared to no issuance of unsecured senior notes during the nine months ended September 30, 2023. The increase in cash outflows related to principal payments on notes payable resulted from the retirement of $400.0 million of unsecured senior notes during the nine months ended September 30, 2024 as compared to the retirement of $3.0 million of a secured property mortgage prior to its maturity during the nine months ended September 30, 2023. The increase in cash outflows related to payment of deferred financing costs resulted from the closing costs of $7.2 million related to the issuance of $750.0 million of unsecured senior notes during the nine months ended September 30, 2024 as compared to no payments of deferred financing costs during the nine months ended September 30, 2023. The increase in cash outflows from dividends paid on common shares primarily resulted from the increase in the dividend rate to $4.4100 per share during the nine months ended September 30, 2024 as compared to the dividend rate of $4.2000 per share during the nine months ended September 30, 2023. The decrease in cash inflows related to the proceeds from issuances of common shares resulted from the proceeds from the settlement of two forward sale agreements with respect to a total of 1.1 million shares at a forward price per share of $185.23 during the nine months ended September 30, 2023. The decrease in cash outflows from the net change in other financing activities was primarily driven by employees surrendering fewer shares of MAA common stock to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted shares during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Debt

The following schedule reflects our outstanding debt as of September 30, 2024 (dollars in thousands):


	Principal Balance			Average Years to Rate Maturity		Weighted Average Effective Rate
Unsecured debt
Fixed rate senior notes	$	4,050,000			6.3		3.6	%
Variable rate commercial paper program		490,000			0.1		5.1	%
Debt issuance costs, discounts and premiums		(24,267	)
Total unsecured debt	$	4,515,733			5.6		3.7	%
Secured debt
Fixed rate property mortgages	$	363,293			24.3		4.4	%
Debt issuance costs		(3,058	)
Total secured debt	$	360,235			24.3		4.4	%
Total debt	$	4,875,968			7.0		3.8	%

The following schedule presents the contractual maturity dates of our outstanding debt, net of debt issuance costs, discounts and premiums, as of September 30, 2024 (dollars in thousands):


	Commercial Paper (1) & Revolving Credit Facility (2)		Senior Notes		Property Mortgages		Total
2024	$	490,000	$	—	$	—	$	490,000
2025		—		399,142		—		399,142
2026		—		298,552		—		298,552
2027		—		597,924		—		597,924
2028		—		397,759		—		397,759
2029		—		556,740		—		556,740
2030		—		298,144		—		298,144
2031		—		446,138		—		446,138
2032		—		394,531		—		394,531
2033		—		—		—		—
Thereafter		—		636,803		360,235		997,038
Total	$	490,000	$	4,025,733	$	360,235	$	4,875,968

(1)

There was $490.0 million outstanding under MAALP’s unsecured commercial paper program as of September 30, 2024. Under the terms of the program, MAALP may issue up to a maximum aggregate amount outstanding at any time of $625.0 million. For the three months ended September 30, 2024, the average daily borrowings outstanding under the commercial paper program were $403.8 million.

(2)

There were no borrowings outstanding under MAALP’s $1.25 billion unsecured revolving credit facility as of September 30, 2024.

The following schedule reflects the maturities and average effective interest rates of our outstanding fixed rate debt, net of debt issuance costs, discounts and premiums, as of September 30, 2024 (dollars in thousands):


	Fixed Rate Debt		Average Effective Rate
2024	$	—		—
2025		399,142		4.2	%
2026		298,552		1.2	%
2027		597,924		3.7	%
2028		397,759		4.2	%
2029		556,740		3.7	%
2030		298,144		3.1	%
2031		446,138		1.8	%
2032		394,531		5.4	%
2033		—		—
Thereafter		997,038		4.2	%
Total	$	4,385,968		3.6	%

Unsecured Revolving Credit Facility & Commercial Paper

MAALP has entered into an unsecured revolving credit facility with a borrowing capacity of $1.25 billion and an option to expand to $2.0 billion. The revolving credit facility bears interest at an adjusted Secured Overnight Financing Rate plus a spread of 0.70% to 1.40% based on an investment grade pricing grid. The revolving credit facility has a maturity date in October 2026 with an option to extend for two additional six-month periods. As of September 30, 2024, there was no outstanding balance under the revolving credit facility, while $4.5 million of capacity was used to support outstanding letters of credit.

MAALP has established an unsecured commercial paper program, whereby it can issue unsecured commercial paper notes with varying maturities not to exceed 397 days up to a maximum aggregate principal amount outstanding of $625.0 million. As of September 30, 2024, there were $490.0 million of borrowings outstanding under the commercial paper program.

Unsecured Senior Notes

As of September 30, 2024, MAALP had $4.1 billion of publicly issued unsecured senior notes outstanding.

In June 2024, MAALP retired $400.0 million of publicly issued unsecured senior notes at maturity using available cash on hand and borrowings under the commercial paper program.

Secured Property Mortgages

MAALP maintains secured property mortgages with various life insurance companies. As of September 30, 2024, MAALP had $363.3 million of secured property mortgages outstanding.

For more information regarding our debt capital resources, see Note 6 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Equity

As of September 30, 2024, MAA owned 116,880,291 OP Units, comprising a 97.4% limited partnership interest in MAALP, while the remaining 3,075,552 outstanding OP Units were held by limited partners of MAALP other than MAA. Holders of OP Units (other than MAA) may require us to redeem their OP Units from time to time, in which case we may, at our option, pay the redemption price either in cash (in an amount per OP Unit equal, in general, to the average closing price of MAA’s common stock on the NYSE over a specified period prior to the redemption date) or by delivering one share of MAA’s common stock (subject to adjustment under specified circumstances) for each OP Unit so redeemed. MAA has registered under the Securities Act the 3,075,552 shares of its common stock that, as of September 30, 2024, were issuable upon redemption of OP Units, in order for those shares to be sold freely in the public markets.

In August 2021, we entered into two 18-month forward sale agreements with respect to a total of 1.1 million shares of our common stock at an initial forward sale price of $190.56 per share, which is net of issuance costs. In January 2023, we settled our two forward sale agreements with respect to all 1.1 million shares at a forward price per share of $185.23, which is inclusive of adjustments made to reflect the then-current federal funds rate, the amount of dividends paid to holders of MAA common stock and commissions paid to sales agents, for net proceeds of $203.7 million. We have used these proceeds primarily to fund our development and redevelopment activities.

In November 2021, we entered into an equity distribution agreement (as amended, the “Distribution Agreement”), by and among MAA, MAALP, those certain managers named therein (collectively, the “Managers”) and those certain forward-purchasers named therein (collectively, the “Forward Purchasers”), for the purpose of establishing a new at-the-market equity offering program (the “ATM Program”). Pursuant to the terms of the Distribution Agreement, we may, from time to time, issue and sell through or to the Managers, as sales agents and/or principals or as forward sellers, as agents for the Forward Purchasers, up to 4.0 million shares of our common stock.

In August 2024, we entered into Amendment No. 1 to the Distribution Agreement (the “Amendment”), which was entered into in order to (i) reflect the filing by MAA and MAALP of a new shelf registration statement on Form S-3ASR (Registration No. 333-279076 and Registration No. 333-258271-01, respectively), which became effective upon filing with the SEC on May 2, 2024; (ii) include certain other parties as additional Managers; (iii) include certain other parties as additional Forward Purchasers; and (iv) modify certain defined terms in the Distribution Agreement, as well as certain other administrative matters.

We have no obligation to issue shares through the ATM program. During the three and nine months ended September 30, 2024 and 2023, we did not sell any shares of common stock under our ATM program. As of September 30, 2024, 4.0 million shares remained issuable under the ATM program.

For more information regarding our equity capital resources, see Note 8 and Note 9 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Material Cash Requirements

As of September 30, 2024, we had $521.2 million of outstanding debt and debt service obligations payable in the year ending December 31, 2024, including the $490.0 million of commercial paper borrowings due October 2024, and $31.2 million of interest payments on fixed rate debt obligations in the year ending December 31, 2024. For a schedule of the maturity dates of our outstanding debt beyond 2024, see the “Liquidity and Capital Resources - Debt” section above. As of September 30, 2024, we also had obligations to make additional capital contributions to five technology-focused limited partnerships in which we hold equity interests. The capital contributions may be called by the general partners at any time after giving appropriate notice. As of September 30, 2024, we had committed to make additional capital contributions totaling up to $31.6 million if and when called by the general partners of the limited partnerships.

We have other material cash requirements that do not represent contractual obligations, but that we expect to incur in the ordinary course of our business.

As of September 30, 2024, we had eight development communities under construction totaling 2,762 apartment units once complete. Total expected costs for the eight development projects are $978.3 million, of which $610.4 million had been incurred through September 30, 2024. In addition, our property redevelopment and repositioning activities are ongoing, and we incur expenditures relating to recurring capital replacements, which typically include scheduled carpet replacement, new roofs, HVAC units, plumbing, concrete, masonry and other paving, pools and various exterior building improvements. For the year ending December 31, 2024, we expect that our total capital expenditures relating to our development activities, our property redevelopment and repositioning activities and recurring capital replacements will be in line with our total capital expenditures for the year ended December 31, 2023. We expect to have additional development projects in the future.

We typically declare cash dividends on MAA’s common stock on a quarterly basis, subject to approval by MAA’s Board of Directors. We expect to pay quarterly dividends at an annual rate of $5.88 per share of MAA common stock during the year ending December 31, 2024. The timing and amount of future dividends will depend on actual cash flows from operations, our financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986 and other factors as MAA’s Board of Directors deems relevant. MAA’s Board of Directors may modify our dividend policy from time to time.

For information regarding our material cash requirements as of December 31, 2023, see Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 9, 2024.

Inflation

Our resident leases at our apartment communities allow for adjustments in the rental rate at the time of renewal, which may enable us to seek rent increases. The majority of our leases are for one year or less. The short-term nature of these leases generally serves to reduce our risk to adverse effects of inflation on our revenue.

Critical Accounting Estimates

Please refer to our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 9, 2024, for discussions of our critical accounting estimates. During the three months ended September 30, 2024, we used two additional trading data inputs (i.e., yields of relevant Company bond issuances and yields of relevant indices) to estimate the fair value of the bifurcated call option in the MAA Series I preferred stock.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. Our primary market risk exposure is to changes in interest rates on our borrowings. As of September 30, 2024, 20.4% of our total market capitalization consisted of debt borrowings. Our interest rate risk objective is to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs. To achieve this objective, we manage our exposure to fluctuations in market interest rates for borrowings through the use of fixed rate debt instruments and, from time to time, interest rate swaps to effectively fix the interest rate on anticipated future debt transactions. We use our best efforts to have our debt instruments mature across multiple years, which we believe limits our exposure to interest rate changes in any one year. We do not enter into derivative instruments for trading or other speculative purposes. As of September 30, 2024, 90.0% of our outstanding debt was subject to fixed rates. We regularly review interest rate exposure on outstanding borrowings in an effort to minimize the risk of interest rate fluctuations. There have been no material changes in our market risk as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 9, 2024.

Item 4. Controls and Procedures.

Mid-America Apartment Communities, Inc.

(a) Evaluation of Disclosure Controls and Procedures

MAA is required to maintain disclosure controls and procedures, within the meaning of Exchange Act Rules 13a-15 and 15d-15. MAA’s management, with the participation of MAA’s Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of MAA’s disclosure controls and procedures as of September 30, 2024. Based on that evaluation, MAA’s Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of September 30, 2024 to ensure that information required to be disclosed by MAA in its Exchange Act filings is accurately recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to MAA’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control over Financial Reporting

There was no change to MAA’s internal control over financial reporting, within the meaning of Exchange Act Rules 13a-15 and 15d-15, that occurred during the quarter ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, MAA’s internal control over financial reporting.

Mid-America Apartments, L.P.

(a) Evaluation of Disclosure Controls and Procedures

The Operating Partnership is required to maintain disclosure controls and procedures, within the meaning of Exchange Act Rules 13a-15 and 15d-15. Management of the Operating Partnership, with the participation of the Chief Executive Officer and Chief Financial Officer of MAA, as the general partner of the Operating Partnership, carried out an evaluation of the effectiveness of the Operating Partnership’s disclosure controls and procedures as of September 30, 2024. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of MAA, as the general partner of the Operating Partnership, concluded that the disclosure controls and procedures were effective as of September 30, 2024 to ensure that information required to be disclosed by the Operating Partnership in its Exchange Act filings is accurately recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Operating Partnership’s management, including the Chief Executive Officer and Chief Financial Officer of MAA, as the general partner of the Operating Partnership, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control over Financial Reporting

There was no change to the Operating Partnership’s internal control over financial reporting, within the meaning of Exchange Act Rules 13a-15 and 15d-15, that occurred during the quarter ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

As disclosed in Note 10 to the condensed consolidated financial statements included in the Quarterly Report on Form 10-Q, we are engaged in certain legal proceedings, and the disclosure set forth in Note 10 relating to legal proceedings is incorporated herein by reference.

Item 1A. Risk Factors.

There have been no material changes to the risk factors that were discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 9, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Purchases of Equity Securities

The following table reflects repurchases of shares of MAA’s common stock during the three months ended September 30, 2024:


Period	Total Number of Shares Purchased (1)		Average Price Paid per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs (3)
July 1, 2024 - July 31, 2024		—	$	—		—		4,000,000
August 1, 2024 - August 31, 2024		—	$	—		—		4,000,000
September 1, 2024 - September 30, 2024		—	$	—		—		4,000,000
Total		—				—		4,000,000

(1)

The shares reflected in this column are shares of MAA’s common stock surrendered by employees to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted shares.

(2)

The price per share is based on the closing price of MAA’s common stock as of the date of determination of the statutory minimum for federal and state tax obligations.

(3)

This column reflects the number of shares of MAA’s common stock that are available for purchase under the 4.0 million share repurchase program authorized by MAA’s Board of Directors in December 2015.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Rule 10b5-1 Trading Arrangements

In accordance with the disclosure requirement set forth in Item 408(a) of Regulation S-K, the following table discloses any director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company who adopted any contract, instruction or written plan for the purchase or sale of the Company’s securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) (a “Rule 10b5-1 trading arrangement”) during quarter ended September 30, 2024. Each of these Rule 10b5-1 trading arrangements was adopted during an open trading window.


NAME	TITLE	ADOPTION DATE	START DATE	END DATE	NATURE OF TRADING ARRANGEMENT	AGGREGATE NUMBER OF SECURITIES
H.Eric Bolton, Jr.	CEO and Chairman of the Board of Directors	8/19/2024	1/7/2025	4/30/2025	Sale of shares of common stock	100% of net shares from vesting of restricted stock awards (gross vesting quantity: 17,834 shares)(1)
A. Clay Holder	EVP, Chief Financial Officer	8/28/2024	1/7/2025	4/30/2025	Sale of shares of common stock	25% of net shares from vesting of restricted stock awards (gross vesting quantity: 648 shares)(1)
Robert J. DelPriore	EVP, Chief Administrative Officer and General Counsel	9/6/2024	1/7/2025	4/30/2025	Sale of shares of common stock	Lesser of 5,583 shares or the number of shares necessary to generate gross proceeds of $400,000
Timothy Argo	EVP, Chief Strategy and Analysis Officer	9/4/2024	1/7/2025	4/30/2025	Sale of shares of common stock	20% of net shares from vesting of restricted stock awards (gross vesting quantity: 1,436 shares)(1)
Melanie Carpenter	EVP, Chief Human Resources Officer	9/11/2024	1/9/2025	4/30/2025	Sale of shares of common stock	100% of net shares from vesting of restricted stock awards (gross vesting quantity: 1,578 shares)(1)

(1)

Net shares are net of tax withholding.

During the quarter ended September 30, 2024, no director or officer of the Company terminated any “Rule 10b5-1 trading arrangement.”

Non-Rule 10b5-1 Trading Arrangements

During the quarter ended September 30, 2024, no director or officer of the Company adopted or terminated any “non-Rule 10b5-1 trading arrangement” as that term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits.

(a)

The following exhibits are filed as part of this report.


Exhibit Number		Exhibit Description


3.1		Composite Charter of Mid-America Apartment Communities, Inc. (Filed as Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K filed on February 24, 2017 and incorporated herein by reference)

3.2		Fifth Amended and Restated Bylaws of Mid-America Apartment Communities, Inc., dated as of December 12, 2023 (Filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on December 13, 2023 and incorporated herein by reference)

3.3		Composite Certificate of Limited Partnership of Mid-America Apartments, L.P. (Filed as Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q filed on August 1, 2019 and incorporated herein by reference)

3.4		Third Amended and Restated Agreement of Limited Partnership of Mid-America Apartments, L.P. dated as of October 1, 2013 (Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 2, 2013 and incorporated herein by reference)

3.5		First Amendment to the Third Amended and Restated Agreement of Limited Partnership of Mid-America Apartments, L.P. (Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on November 10, 2016 and incorporated herein by reference)

4.1		Indenture, dated as of May 9, 2017, by and between Mid-America Apartments, L.P. and U.S. Bank National Association (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on May 9, 2017 and incorporated herein by reference)

4.2		Eighth Supplemental Indenture, dated as of May 22, 2024, by and between Mid-America Apartments, L.P. and U.S. Bank Trust Company, National Association (Filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on May 22, 2024 and incorporated herein by reference)

31.1		MAA Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		MAA Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.3		MAALP Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.4		MAALP Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		MAA Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		MAA Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.3		MAALP Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.4		MAALP Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101		Interactive Data Files submitted pursuant to Rule 405 of Regulation S-T formatted in Inline eXtensible Business Reporting Language (Inline XBRL)

104		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.


			MID-AMERICA APARTMENT COMMUNITIES, INC.

Date:	October 31, 2024	By:	/s/ David Herring
			David Herring
			Senior Vice President and Chief Accounting Officer
			(Duly Authorized Officer)

SIGNATURES


			MID-AMERICA APARTMENTS, L.P.
		By:	Mid-America Apartment Communities, Inc., its general partner

Date:	October 31, 2024		/s/ David Herring
			David Herring
			Senior Vice President and Chief Accounting Officer
			(Duly Authorized Officer)