Segment Information

6 Months Ended

Jun. 30, 2016

Notes To Financial Statements [Abstract]

Segment Information

Segment Information

As of June 30, 2016, we owned 256 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 of each of our apartment communities on a Large Market Same Store, Secondary Market Same Store, and Non-Same Store and Other basis, as well as an individual apartment community basis. This is consistent with the aggregation criteria under GAAP as each of our apartment communities generally has similar economic characteristics, facilities, services, and tenants. The following are the three reportable operating segments for MAA and the Operating Partnership:

• 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 that we have owned and have been stabilized for at least a full 12 months.

• 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 markets with populations of less than 1 million that we have owned and have been stabilized for at least a full 12 months.

• 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 had a significant casualty loss resulting in units not available for lease. 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, in evaluating the performance of the segments.  Total NOI represents total property revenues less total property operating expenses, excluding depreciation and amortization, for all properties held during the period regardless of their status as held for sale. 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. 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 six- month periods ended June 30, 2016 and 2015 were as follows (dollars in thousands):

	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
Revenues:
Large Market Same Store	$	160,983		$	153,068		$	319,704		$	302,894
Secondary Market Same Store	84,232			81,820			167,825			161,739
Non-Same Store and Other	27,021			24,003			53,723			52,810
Total operating revenues	$	272,236		$	258,891		$	541,252		$	517,443
NOI:
Large Market Same Store	$	99,619		$	93,325		$	197,698		$	184,695
Secondary Market Same Store	52,523			50,579			105,696			100,488
Non-Same Store and Other	17,139			14,131			34,022			30,755
Total NOI	169,281			158,035			337,416			315,938
Depreciation and amortization	(75,742		)	(74,396		)	(150,870		)	(147,508		)
Acquisition expense	(421		)	(1,159		)	(1,134		)	(1,499		)
Property management expense	(8,310		)	(6,986		)	(17,313		)	(15,478		)
General and administrative expense	(7,014		)	(6,657		)	(13,596		)	(13,224		)
Interest and other non-property income (expense)	62			29			94			(180		)
Interest expense	(32,039		)	(30,433		)	(64,250		)	(61,281		)
(Loss) gain on debt extinguishment/modification	—			(3		)	3			(3,379		)
Gain on sale of depreciable real estate assets	68			105,182			823			135,410
Net casualty gain after insurance and other settlement proceeds	1,760			510			813			490
Income tax expense	(457		)	(398		)	(745		)	(907		)
Gain on sale of non-depreciable real estate assets	543			172			2,170			172
(Loss) gain from real estate joint ventures	(101		)	(23		)	27			(4		)
Net income attributable to noncontrolling interests	(2,486		)	(7,574		)	(4,881		)	(10,984		)
Net income available for MAA common shareholders	$	45,144		$	136,299		$	88,557		$	197,566

Assets for each reportable segment as of June 30, 2016 and December 31, 2015, were as follows (dollars in thousands):

	June 30, 2016		December 31, 2015
Assets:
Large Market Same Store	$	3,713,096	$	3,768,455
Secondary Market Same Store	1,639,419		1,661,956
Non-Same Store and Other	1,461,441		1,344,833
Corporate assets	55,425		72,537
Total assets	$	6,869,381	$	6,847,781

The decrease in the Large and Secondary Market Same Store categories and the increases in the Non-Same Store category as of June 30, 2016, as compared to December 31, 2015, is due to properties identified for disposition in 2016 being removed from the Same Store categories.