MAA Q4 2019 Earnings Report
Key Takeaways
MAA reported a strong fourth quarter with net income available for common shareholders at $148.7 million, or $1.30 per diluted common share. FFO was $198.2 million, or $1.68 per diluted common share and unit. Property revenues from the Same Store Portfolio increased 4.1% and Net Operating Income increased 5.0%.
Property revenues from the Same Store Portfolio increased 4.1% during the fourth quarter of 2019, driven by a 4.3% growth in Average Effective Rent per Unit.
Property operating expenses for the Same Store Portfolio increased 2.5% during the fourth quarter of 2019.
Net Operating Income from the Same Store Portfolio increased 5.0% during the fourth quarter of 2019.
During the fourth quarter of 2019, MAA closed on the disposition of all five of its properties located in the Little Rock, Arkansas market resulting in net gains on depreciable assets of $80.0 million.
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Forward Guidance
MAA is providing initial 2020 guidance for Net income per diluted common share, as well as Core FFO per Share, and Core AFFO per Share.
Positive Outlook
- Net income per diluted common share is expected to be in the range of $3.02 to $3.26 per diluted common share for the full year of 2020.
- Core FFO per Share for the year is expected to be in the range of $6.38 to $6.62 per Share.
- This initial guidance is based on projections of Same Store Portfolio property revenue growth of 3.25% to 4.25% for the full year.
- Same Store Portfolio operating expense growth is expected to be in the range of 3.75% to 4.75% for the full year.
- Same Store NOI growth for the full year is expected to be 3.00% to 4.00%.
Challenges Ahead
- A primary driver of the operating expense growth range is the expectation of continued increases in property real estate taxes.
- MAA does not forecast Net income per diluted share on a quarterly basis as MAA cannot accurately predict the timing of forecasted acquisition and disposition activity within a particular quarter (rather than during the course of the full year).
- MAA expects total recurring capital expenditures for the full year of 2020 to be approximately $79.0 million.
- The effect of the phase-out of the London Interbank Offered Rate, or LIBOR, as a variable rate debt benchmark by the end of 2021 and the transition to a different benchmark interest rate.
- New factors may also emerge from time to time that could have a material adverse effect on our business.