Segment Information

9 Months Ended

Sep. 30, 2015

Notes To Financial Statements [Abstract]

Segment Information

Segment Information

As of September 30, 2015, we owned or had an ownership interest in 253 multifamily apartment communities in 15 different states from which we derived all significant sources of earnings and operating cash flows. Senior management evaluates performance and determines resource allocations by reviewing apartment communities individually and in the following reportable operating segments:

• Large market same store communities are generally communities:

◦ in markets with a population of at least 1 million and at least 1% of the total public multifamily REIT units; and

◦ that we have owned and have been stabilized for at least a full 12 months and have not been classified as held for sale.

• Secondary market same store communities are generally communities:

◦ in markets with populations of more than 1 million but less than 1% of the total public multifamily REIT units or in markets with a population of less than 1 million; and

◦ that we have owned and have been stabilized for at least a full 12 months and have not been classified as held for sale.

• Non same store communities and other includes recent acquisitions, communities in development or lease-up, communities that have been identified for disposition, and communities that have undergone a significant casualty loss. Also included in non same store communities are non multifamily activities, which represent less than 1% of our portfolio.

On the first day of each calendar year, we determine the composition of our same store operating segments for that year as well as adjust the previous year, which allows us to evaluate full period-over-period operating comparisons.  Properties in development or lease-up will be added to the same store portfolio on the first day of the calendar year after they have been owned and stabilized for at least a full 12 months. Communities are considered stabilized after achieving 90% occupancy for 90 days. Communities that have been identified for disposition are excluded from our same store portfolio.

We utilize net operating income, or NOI, a non-GAAP financial measure, in evaluating the performance of the segments.  Total NOI represents total property revenues, the most directly comparable GAAP financial measure, less total property operating expenses, excluding depreciation and amortization, for all properties held during the period regardless of their status as held for sale. We believe NOI is a helpful tool in evaluating the operating performance of our segments because it measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance.

A redevelopment community is a community with a specific plan in place to upgrade at least half of the community's units over a period of time with new finishes, fixtures, and appliances, among other upgrades.  These plans include spending a pre-defined amount of capital per unit to achieve a rent increase as a result of the upgrades.  We separately identify redevelopment communities that would cause a material distortion of normal same store operating results; however, currently there are no communities separately identified. Routine renovations occur at a property as items need to be replaced as a normal part of operations and is done with an expectation to maintain the current level of quality at the property. There is no specified plan in place for routine renovations.

Revenues and NOI for each reportable segment for the three- and nine-month periods ended September 30, 2015 and 2014 were as follows (dollars in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
Revenues
Large Market Same Store	$	149,642		$	140,452		$	438,184		$	411,851
Secondary Market Same Store	82,494			78,413			242,908			231,852
Non-Same Store and Other	29,862			30,698			98,349			95,256
Total property revenues	261,998			249,563			779,441			738,959
Management fee income	—			11			—			154
Total operating revenues	$	261,998		$	249,574		$	779,441		$	739,113
NOI
Large Market Same Store	$	91,237		$	84,084		$	266,941		$	247,256
Secondary Market Same Store	50,864			47,365			149,800			141,731
Non-Same Store and Other	18,298			17,232			59,597			54,666
Total NOI	160,399			148,681			476,338			443,653
Discontinued operations NOI included above	—			—			—			(1,102		)
Management fee income	—			11			—			154
Depreciation and amortization	(73,098		)	(70,222		)	(220,606		)	(229,866		)
Acquisition expense	(656		)	(13		)	(2,155		)	(971		)
Property management expense	(7,628		)	(7,429		)	(23,106		)	(24,019		)
General and administrative expense	(5,879		)	(6,511		)	(19,103		)	(16,065		)
Merger related expenses	—			(331		)	—			(3,202		)
Integration costs	—			(147		)	—			(7,140		)
Interest and other non-property (expense) income	(179		)	37			(359		)	1,077
Interest expense	(29,342		)	(28,251		)	(88,801		)	(89,090		)
Loss on debt extinguishment/modification	(5		)	(2,586		)	(3,384		)	(2,586		)
Amortization of deferred financing costs	(887		)	(1,000		)	(2,710		)	(3,485		)
Gain on sale of depreciable real estate assets excluded from discontinued operations	54,621			36,032			190,031			42,254
Net casualty (loss) gain after insurance and other settlement proceeds	(5		)	(126		)	485			(431		)
Income tax expense	(512		)	(442		)	(1,419		)	(1,235		)
Gain on sale of non-depreciable real estate assets	—			—			172			535
(Loss) gain from real estate joint ventures	(1		)	3,124			(5		)	6,019
Discontinued operations	—			(108		)	—			5,319
Net income attributable to noncontrolling interests	(5,094		)	(3,743		)	(16,078		)	(6,364		)
Net income attributable to MAA	$	91,734		$	66,976		$	289,300		$	113,455

Assets for each reportable segment as of September 30, 2015 and December 31, 2014, were as follows (dollars in thousands):

	September 30, 2015		December 31, 2014
Assets
Large Market Same Store	$	3,803,518	$	1,253,995
Secondary Market Same Store	1,676,365		1,003,426
Non-Same Store and Other	1,266,054		4,509,517
Corporate assets	141,404		66,656
Total assets	$	6,887,341	$	6,833,594

The decrease in the Non-Same Store and Other category, and subsequent increase in both the Large Market Same Store and Secondary Market Same Store categories, are due to the properties acquired as part of the merger with Colonial being moved out of Non-Same Store and into Same Store as the criteria noted above have been met.