MID AMERICA APARTMENT COMMUNITIES INC

Previous wording

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 March 31, 2024, we owned and operated 290 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 March 31, 2024, we had five development communities under construction, and 34 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 March 31, 2024.

Current wording

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 June 30, 2024, we owned and operated 291 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 June 30, 2024, we had seven 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 June 30, 2024.

Previous wording

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 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.

Current wording

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.

Previous wording

For the three months ended March 31, 2024, net income available for MAA common shareholders was $142.8 million as compared to $135.0 million for the three months ended March 31, 2023. Results for the three months ended March 31, 2024 included $13.1 million of non-cash gain related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares. Results for the three months ended March 31, 2023 included $4.4 million of non-cash gain related to the embedded derivative in the MAA Series I preferred shares. Revenues for the three months ended March 31, 2024 increased 2.8% as compared to the three months ended March 31, 2023. Property operating expenses, excluding depreciation and amortization, for the three months ended March 31, 2024 increased by 8.2% as compared to the three months ended March 31, 2023, driven by a 5.4% increase in our Same Store segment. The primary drivers of these changes are discussed in the “Results of Operations” section.

Current wording

For the three months ended June 30, 2024, net income available for MAA common shareholders was $101.0 million as compared to $144.8 million for the three months ended June 30, 2023. Results for the three months ended June 30, 2024 included $9.3 million of non-cash loss related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares, $8.0 million of accrued legal defense costs and $0.9 million of non-cash loss from investments. Results for the three months ended June 30, 2023 included $5.0 million of non-cash gain related to the embedded derivative in the MAA Series I preferred shares and $8.3 million of non-cash gain from investments. Revenues for the three months ended June 30, 2024 increased 2.1% as compared to the three months ended June 30, 2023. Property operating expenses, excluding depreciation and amortization, for the three months ended June 30, 2024 increased by 5.9% as compared to the three months ended June 30, 2023. The primary drivers of these changes are discussed in the “Results of Operations” section.

Previous wording

During the three months ended March 31, 2024, revenue growth for our Same Store segment continued to be primarily driven by growth in average effective rent per unit. The average effective rent per unit for our Same Store segment increased from the prior year, up 1.5% for the three months ended March 31, 2024 as compared to the three months ended March 31, 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.

Current wording

During the three months ended June 30, 2024, revenue growth for our Same Store segment continued to be primarily driven by growth in average effective rent per unit. The average effective rent per unit for our Same Store segment increased from the prior year, up 0.5% for the three months ended June 30, 2024 as compared to the three months ended June 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.

Previous wording

For the three months ended March 31, 2024, average physical occupancy for our Same Store segment was 95.3%, as compared to 95.5% for the three months ended March 31, 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.

Current wording

For the three months ended June 30, 2024, average physical occupancy for our Same Store segment was 95.5%, consistent with the three months ended June 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.

Previous wording

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 perform well in economic up cycles as well as better weather economic down cycles.

Current wording

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.

Previous wording

Demand for apartments in our markets was solid during the first quarter of 2024, as evidenced by stable occupancy, high leasing traffic, low resident turnover and strong collections performance. 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 growth on new leases and renewals than what we achieved in the three months ended March 31, 2024. Current elevated supply levels are impacting rent growth performance in certain markets of our portfolio. However, with continued solid demand and the resulting steady absorption of the new supply pipeline, we continue to believe that the decline in new supply deliveries expected late this year and into 2025 will fuel a strong and quick rebound in rent performance. Inflationary pressures have driven higher operating expenses during the three months ended March 31, 2024, particularly in real estate taxes and insurance cost, and this trend may continue going forward.

Current wording

Demand for apartments in our markets was strong during the second quarter of 2024, as evidenced by solid traffic patterns and lead volumes along with stable occupancy and low resident turnover. 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 growth on new leases and renewals than what we achieved in the three and six months ended June 30, 2024. New supply delivering into several of our markets continues to be absorbed in a steady manner as the demand for apartment housing remains strong. We continue to believe that we will begin to see a decline in new apartment deliveries over the back half of this year and into 2025.

Previous wording

Access to the financial markets remains available for high-credit rated borrowers, such as ourselves. However, overall borrowing costs remain at elevated levels and we expect this trend to continue. As of March 31, 2024, we had $235.0 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 refinancing activities.

Current wording

Access to the financial markets remains available for high-credit rated borrowers, such as ourselves. However, overall borrowing costs remain at elevated levels and we expect this trend to continue. As of June 30, 2024, we had $316.0 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.

Previous wording

For the three months ended March 31, 2024, we achieved net income available for MAA common shareholders of $142.8 million, a 5.8% increase as compared to the three months ended March 31, 2023, and total revenue growth of $14.6 million, representing a 2.8% increase in property revenues as compared to the three months ended March 31, 2023. The following discussion describes the primary drivers of the increase in net income available for MAA common shareholders for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

Current wording

For the three months ended June 30, 2024, we achieved net income available for MAA common shareholders of $101.0 million, a 30.2% decrease as compared to the three months ended June 30, 2023, and total revenue growth of $11.3 million, representing a 2.1% increase in property revenues as compared to the three months ended June 30, 2023. The following discussion describes the primary drivers of the decrease in net income available for MAA common shareholders for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.

Previous wording

The Same Store segment generated a 1.4% increase in revenues for the three months ended March 31, 2024, primarily the result of average effective rent per unit growth of 1.5% as compared to the three months ended March 31, 2023, partially offset by lower average physical occupancy. The increase in property revenues from the Non-Same Store and Other segment for the three months ended March 31, 2024 as compared to three months ended March 31, 2023 was primarily the result of increased revenues from completed development communities and recently acquired communities.

Current wording

The Same Store segment generated a 0.7% increase in revenues for the three months ended June 30, 2024, primarily the result of average effective rent per unit growth of 0.5% as compared to the three months ended June 30, 2023. The increase in property revenues from the Non-Same Store and Other segment for the three months ended June 30, 2024 as compared to three months ended June 30, 2023 was primarily the result of increased revenues from completed development communities and recently acquired communities.

Previous wording

Depreciation and amortization expense for the three months ended March 31, 2024 was $143.0 million, an increase of $4.5 million as compared to the three months ended March 31, 2023. The increase was primarily driven by the recognition of depreciation expense associated with our completed development communities and capital spend activities completed after March 31, 2023 in the normal course of business through March 31, 2024.

Current wording

Depreciation and amortization expense for the three months ended June 30, 2024 was $145.0 million, an increase of $6.1 million as compared to the three months ended June 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 June 30, 2023 in the normal course of business through June 30, 2024.

Previous wording

Property management expenses for the three months ended March 31, 2024 were $20.0 million, an increase of $2.1 million as compared to the three months ended March 31, 2023. General and administrative expenses for the three months ended March 31, 2024 were $17.0 million, an increase of $1.1 million as compared to the three months ended March 31, 2023.

Current wording

Property management expenses for the three months ended June 30, 2024 were $17.2 million, an increase of $1.1 million as compared to the three months ended June 30, 2023. General and administrative expenses for the three months ended June 30, 2024 were $12.7 million, a decrease of $1.2 million as compared to the three months ended June 30, 2023.

Previous wording

Interest expense for the three months ended March 31, 2024 was $40.4 million, an increase of $3.1 million as compared to the three months ended March 31, 2023. The increase was due to an increase of 18 basis points in our effective interest rate and an increase in our average outstanding debt balance during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

Current wording

Interest expense for the three months ended June 30, 2024 was $41.3 million, an increase of $4.5 million as compared to the three months ended June 30, 2023. The increase was due to an increase in our average outstanding debt balance and an increase of 23 basis points in our effective interest rate during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.

Previous wording

The increase in property operating expenses for our Same Store segment for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily driven by increases in real estate tax expense of $3.4 million, personnel expense of $1.8 million, office operations expense of $1.5 million, insurance expense of $1.1 million, and utilities expense of $1.0 million.

Current wording

The increase in property operating expenses for our Same Store segment for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was primarily driven by increases in real estate tax expense of $3.9 million, personnel expense of $3.9 million, office operations expense of $2.4 million, insurance expense of $2.3 million, utilities expense of $1.9 million, and building repair and maintenance expense of $1.1 million.

Previous wording

Other non-operating income for the three months ended March 31, 2024 was $23.5 million of income as compared to $3.5 million of income for the three months ended March 31, 2023, an increase of $20.0 million. The income for the three months ended March 31, 2024 was driven by $13.1 million of non-cash gain related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares, $5.2 million of net non-cash gain from investments and $5.1 million in net casualty related recoveries. The income for the three months ended March 31, 2023 was driven by $4.4 million of non-cash gain related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares, partially offset by $1.0 million of net non-cash loss from investments.

Current wording

Other non-operating expense (income) for the six months ended June 30, 2024 was $4.3 million of income as compared to $20.5 million of income for the six months ended June 30, 2023, a decrease of $16.2 million. The income for the six months ended June 30, 2024 was primarily driven by $4.3 million of non-cash gain from investments, $4.0 million of net casualty related recoveries and $3.8 million of non-cash gain related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares, partially offset by $8.0 million of accrued legal defense costs. The income for the six months ended June 30, 2023 was primarily driven by $9.4 million of non-cash gain related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares and $7.3 million of non-cash gain from investments.

Previous wording

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 (recoveries) charges, net; gain or loss on debt extinguishment; legal (recoveries), costs and settlements, 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.

Current wording

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.

Previous wording

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 months ended March 31, 2024 and 2023, as we believe net income available for MAA common shareholders is the most directly comparable GAAP measure (dollars in thousands):

Current wording

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 six months ended June 30, 2024 and 2023, as we believe net income available for MAA common shareholders is the most directly comparable GAAP measure (dollars in thousands):

Previous wording

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

Current wording

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

Previous wording

For the three months ended March 31, 2024, gain on investments is presented net of tax expense of $1.1 million. For the three months ended March 31, 2023, loss on investments is presented net of tax benefit of $0.2 million.

Current wording

For the three months ended June 30, 2024, loss on investments is presented net of tax benefit of $0.2 million. For the three months ended June 30, 2023 and the six months ended June 30, 2024 and 2023, gain on investments is presented net of tax expense of $1.7 million, $0.9 million and $1.5 million, respectively.

Previous wording

Core FFO attributable to common shareholders and unitholders for the three months ended March 31, 2024 was $266.2 million, a decrease of $6.0 million as compared to the three months ended March 31, 2023, primarily as a result of increases in property operating expenses, excluding depreciation and amortization, of $15.0 million, interest expense of $3.1 million, property management expenses of $2.1 million and general and administrative expenses of $1.1 million, partially offset by an increase in property revenues of $14.6 million.

Current wording

Core FFO attributable to common shareholders and unitholders for the three months ended June 30, 2024 was $266.6 million, a decrease of $6.6 million as compared to the three months ended June 30, 2023, primarily as a result of increases in property operating expenses, excluding depreciation and amortization, of $11.5 million, interest expense of $4.5 million, and property management expenses of $1.1 million, partially offset by an increase in property revenues of $11.3 million and a decrease in general and administrative expenses of $1.2 million.

Previous wording

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 (recoveries) charges, net; gain or loss on debt extinguishment; and legal (recoveries), costs and settlements, 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.

Current wording

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.

Previous wording

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

Current wording

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

Previous wording

Our net debt to Adjusted EBITDAre ratio as of March 31, 2024 was 3.6x, consistent with our net debt to Adjusted EBITDAre ratio as of December 31, 2023. Adjusted EBITDAre decreased $3.7 million for the trailing twelve months ended March 31, 2024 as compared to the trailing twelve months ended December 31, 2023, while net debt increased $71.0 million as of March 31, 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, property management expenses and general and administrative 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.

Current wording

Our net debt to Adjusted EBITDAre ratio as of June 30, 2024 was 3.7x, as compared to a ratio of 3.6x as of December 31, 2023. Adjusted EBITDAre decreased $5.8 million for the trailing twelve months ended June 30, 2024 as compared to the trailing twelve months ended December 31, 2023, while net debt increased $139.1 million as of June 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, property management expenses and general and administrative 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.

Previous wording

As of March 31, 2024, we had $1.1 billion of combined unrestricted cash and cash equivalents and available capacity under our revolving credit facility.

Current wording

As of June 30, 2024, we had $1.0 billion of combined unrestricted cash and cash equivalents and available capacity under our revolving credit facility.

Previous wording

Net cash provided by operating activities was $200.3 million for the three months ended March 31, 2024, a decrease of $18.1 million as compared to the three months ended March 31, 2023. The decrease in operating cash flows was primarily driven by the timing of cash payments.

Current wording

Net cash provided by operating activities was $549.6 million for the six months ended June 30, 2024, a decrease of $4.5 million as compared to the six months ended June 30, 2023. The decrease in operating cash flows was primarily driven by an increase in property operating expenses.

Previous wording

Net cash used in investing activities was $93.0 million for the three months ended March 31, 2024, a decrease of $45.4 million as compared to the three months ended March 31, 2023. The primary drivers of the change were as follows (dollars in thousands):

Current wording

Net cash used in investing activities was $329.8 million for the six months ended June 30, 2024, an increase of $37.0 million as compared to the six months ended June 30, 2023. The primary drivers of the change were as follows (dollars in thousands):

Previous wording

The decrease in cash outflows for purchases of real estate and other assets was driven by our acquisition activity during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. We did not acquire any real estate assets during the three months ended March 31, 2024 while we acquired one land parcel during the three months ended March 31, 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 three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The decrease in cash outflows for development costs was primarily driven by decreased development activity during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The decrease in cash inflows from proceeds from real estate asset dispositions resulted from no dispositions of real estate assets during the three months ended March 31, 2024 as compared to the disposition of one land parcel during the three months ended March 31, 2023. The increase in cash inflows from net proceeds from insurance recoveries was driven by increased insurance reimbursements received for property-related casualty claims during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

Current wording

The increase in cash outflows for purchases of real estate and other assets was driven by our acquisition activity during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. We acquired one apartment community and one land parcel during the six months ended June 30, 2024 while we acquired one land parcel during the six months ended June 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 six months ended June 30, 2024 as compared to the six months ended June 30, 2023. The increase in cash outflows for development costs was primarily driven by increased development activity during the six months ended June 30, 2024 as compared to the six months ended June 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 six months ended June 30, 2024 as compared to no marketable securities being sold during the six months ended June 30, 2023. The increase in cash inflows from net proceeds from insurance recoveries was driven by increased insurance reimbursements received for property-related casualty claims during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Previous wording

Net cash used in financing activities was $94.3 million for the three months ended March 31, 2024, an increase of $109.3 million as compared to the three months ended March 31, 2023. The primary drivers of the change were as follows (dollars in thousands):

Current wording

Net cash used in financing activities was $198.4 million for the six months ended June 30, 2024, an increase of $39.8 million as compared to the six months ended June 30, 2023. The primary drivers of the change were as follows (dollars in thousands):

Previous wording

The increase in cash outflows related to net payments of commercial paper resulted from the decrease in net borrowings of $260.0 million on our commercial paper program during the three months ended March 31, 2024 as compared to the decrease in net borrowings of $20.0 million on our commercial paper program during the three months ended March 31, 2023. The increase in cash inflows from proceeds from notes payable resulted from the issuance of $350.0 million of unsecured senior notes during the three months ended March 31, 2024 as compared to no issuance of unsecured senior notes during the three months ended March 31, 2023. The increase in cash outflows related to payment of deferred financing costs resulted from the closing costs of $3.5 million related to the issuance of $350.0 million of unsecured senior notes during the three months ended March 31, 2024 as compared to no payments of deferred financing costs during the three months ended March 31, 2023. The increase in cash outflows from dividends paid on common shares primarily resulted from the increase in the dividend rate to $1.4700 per share during the three months ended March 31, 2024 as compared to the dividend rate of $1.4000 per share during the three months ended March 31, 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 three months ended March 31, 2023.

Current wording

The increase in cash outflows related to net payments of commercial paper resulted from the decrease in net borrowings of $179.0 million on our commercial paper program during the six months ended June 30, 2024 as compared to the decrease in net borrowings of $20.0 million on our commercial paper program during the six months ended June 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 six months ended June 30, 2024 as compared to no issuance of unsecured senior notes during the six months ended June 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 six months ended June 30, 2024. 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 six months ended June 30, 2024 as compared to no payments of deferred financing costs during the six months ended June 30, 2023. The increase in cash outflows from dividends paid on common shares primarily resulted from the increase in the dividend rate to $2.9400 per share during the six months ended June 30, 2024 as compared to the dividend rate of $2.8000 per share during the six months ended June 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 six months ended June 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 six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Previous wording

There was $235.0 million outstanding under MAALP’s unsecured commercial paper program as of March 31, 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 March 31, 2024, the average daily borrowings outstanding under the commercial paper program were $235.7 million.

Current wording

There was $316.0 million outstanding under MAALP’s unsecured commercial paper program as of June 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 June 30, 2024, the average daily borrowings outstanding under the commercial paper program were $195.5 million.

Previous wording

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 March 31, 2024, there were $235.0 million of borrowings outstanding under the commercial paper program.

Current wording

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 June 30, 2024, there were $316.0 million of borrowings outstanding under the commercial paper program.

Previous wording

As of March 31, 2024, MAA owned 116,728,052 OP Units, comprising a 97.4% limited partnership interest in MAALP, while the remaining 3,132,552 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 3,132,552 shares of its common stock that, as of March 31, 2024, were issuable upon redemption of OP Units, in order for those shares to be sold freely in the public markets.

Current wording

As of June 30, 2024, MAA owned 116,858,044 OP Units, comprising a 97.4% limited partnership interest in MAALP, while the remaining 3,093,707 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 3,093,707 shares of its common stock that, as of June 30, 2024, were issuable upon redemption of OP Units, in order for those shares to be sold freely in the public markets.

Previous wording

As of March 31, 2024, we had $745.7 million of outstanding debt and debt service obligations payable in the year ending December 31, 2024, including the $400.0 million of publicly issued unsecured senior notes maturing in June 2024, the $235.0 million of commercial paper borrowings due April 2024, and $110.7 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 March 31, 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 March 31, 2024, we had committed to make additional capital contributions totaling up to $32.8 million if and when called by the general partners of the limited partnerships.

Current wording

As of June 30, 2024, we had $392.8 million of outstanding debt and debt service obligations payable in the year ending December 31, 2024, including the $316.0 million of commercial paper borrowings due July 2024, and $76.8 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 June 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 June 30, 2024, we had committed to make additional capital contributions totaling up to $32.4 million if and when called by the general partners of the limited partnerships.

Previous wording

As of March 31, 2024, we had five development communities under construction totaling 1,970 apartment units once complete. Total expected costs for the five development projects are $647.3 million, of which $445.6 million had been incurred through March 31, 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.

Current wording

As of June 30, 2024, we had seven development communities under construction totaling 2,617 apartment units once complete. Total expected costs for the seven development projects are $866.3 million, of which $537.9 million had been incurred through June 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.

Previous wording

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. During the three months ended March 31, 2024, we experienced inflationary pressures that drove higher operating expenses, primarily in real estate taxes and insurance expenses.

Current wording

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.