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 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.

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 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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

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 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous wording

The Same Store segment generated a 1.0% increase in revenues for the six months ended June 30, 2024, primarily the result of average effective rent per unit growth of 1.0% as compared to the six months ended June 30, 2023. The increase in property revenues from the Non-Same Store and Other segment for the six months ended June 30, 2024 as compared to six months ended June 30, 2023 was primarily the result of increased revenues from completed development communities and recently acquired communities.

Current wording

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.

Previous wording

The increase in property operating expenses for our Same Store segment for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 was primarily driven by increases in personnel expense of $2.1 million, insurance expense of $1.1 million, office operations expense of $1.0 million, and utilities expense of $1.0 million. The increase in property operating expenses 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 operating expenses from completed development communities and recently acquired communities.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous wording

Other non-operating expense (income) for the three months ended June 30, 2024 was $19.2 million of expense as compared to $17.0 million of income for the three months ended June 30, 2023, a decrease of $36.2 million. The expense for the three months ended June 30, 2024 was primarily driven by $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 $1.1 million of net casualty related charges. The income for the three months ended June 30, 2023 was primarily driven by $8.3 million of non-cash gain from investments and $5.0 million of non-cash gain related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares.

Current wording

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.

Previous wording

Comparison of the six months ended June 30, 2024 to the six months ended June 30, 2023

Current wording

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

Previous wording

For the six months ended June 30, 2024, we achieved net income available for MAA common shareholders of $243.9 million, a 12.8% decrease as compared to the six months ended June 30, 2023, and total revenue growth of $25.9 million, representing a 2.4% increase in property revenues as compared to the six 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 six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Current wording

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.

Previous wording

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

Current wording

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

Previous 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.

Current wording

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.

Previous wording

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 six months ended June 30, 2024 and 2023 (dollars in thousands):

Current wording

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):

Previous 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.

Current wording

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.

Previous wording

Depreciation and amortization expense for the six months ended June 30, 2024 was $288.0 million, an increase of $10.6 million as compared to the six 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.

Current wording

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.

Previous wording

Property management expenses for the six months ended June 30, 2024 were $37.2 million, an increase of $3.2 million as compared to the six months ended June 30, 2023. General and administrative expenses for the six months ended June 30, 2024 were $29.7 million, consistent with the six months ended June 30, 2023.

Current wording

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.

Previous wording

Interest expense for the six months ended June 30, 2024 was $81.6 million, an increase of $7.6 million as compared to the six months ended June 30, 2023. The increase was due to an increase of 20 basis points in our effective interest rate and an increase in our average outstanding debt balance during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Current wording

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.

Previous 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.

Current wording

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.

Previous wording

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 and asset impairment, 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.

Current wording

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.

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 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):

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 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):

Previous 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.

Current wording

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.

Previous wording

For the three and six months ended June 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous wording

Core FFO attributable to common shareholders and unitholders for the six months ended June 30, 2024 was $532.8 million, a decrease of $12.7 million as compared to the six months ended June 30, 2023, primarily as a result of increases in property operating expenses, excluding depreciation and amortization, of $26.5 million, interest expense of $7.6 million and property management expenses of $3.2 million, partially offset by an increase in property revenues of $25.9 million.

Current wording

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.

Previous wording

EBITDAre is composed of EBITDA adjusted for the gain or loss on sale of depreciable assets 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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):

Current wording

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):

Previous 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.

Current wording

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.

Previous 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):

Current wording

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):

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

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 June 30, 2024, there were $316.0 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 September 30, 2024, there were $490.0 million of borrowings outstanding under the commercial paper program.

Previous 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.

Current wording

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.

Previous wording

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. In January 2023, MAA settled its 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.

Current wording

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.