Mid-America Apartment Communities, Inc.

Good morning, ladies and gentlemen. Welcome to the MAA Second Quarter 2020 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, the companies will conduct a question and answer session. As a reminder, this conference is being recorded today, July 30, 2020. I will now turn the conference over to Tim Argo, Senior Vice President, Finance for MAA.

Thank you, Ashley, and good morning, everyone. This is Tim Argo, Senior Vice President of Finance for MAA. With me are Aaron Bolton, our CEO, Al Campbell, our CFO, Rob DelPriori, our General Counsel, Tom Grimes, our COO, and Brad Hill, Executive Vice President and Head of Transactions. Before we begin with our prepared comments this morning, I want to point out that as part of the discussion, company management will be making forward-looking statements. Actual results may differ materially from our projections. We encourage you to refer to the forward-looking statements section in yesterday's earnings release and our 34-act filings with the SEC, which describe risk factors that may impact future results. These reports, along with a copy of today's prepared comments and an audio copy of this morning's call, will be available on our website. During this call, we will also discuss certain non-GAAP financial measures. A presentation of the most directly comparable GAAP financial measures as well as reconciliations of the differences between non-GAAP and comparable GAAP measures can be found in our earnings release and supplemental financial data, which are available on the For Investors page of our website at www.mac.com. I will now turn the call over to Eric.

Thanks, Tim. Results for the second quarter were ahead of expectations as strong collections drove NOI performance above our internal forecast. Due to both the high quality of our portfolio and the proactive efforts by our team to work with residents impacted by the pandemic, we expect continued solid performance with collections. Encouragingly, the trends for rent payments improved over the course of the quarter, and as Tom will touch on, the positive trends continued in July, with fewer residents seeking rent deferral arrangements. As of the 27th of the month, our cast collections for July rent were a strong 98.1%, which compares favorably to an average Q2 performance on a comparable basis at 96.4%. We are monitoring reports of increased levels of COVID cases in a number of Sunbelt markets. While we expect conditions will remain fluid and choppy across various states and markets, we are optimistic that efforts to reopen local businesses and economies will continue. Beyond the uncertainties associated with how various state and local economies will proceed to reopen, Questions associated with actions by the federal government to extend support to individuals and businesses also remain unresolved. For these reasons, we continue to feel that conditions remain too uncertain to provide updated earnings guidance. However, as outlined in our supplemental pages to the press release, we will continue to provide more detail surrounding current rent collections and leasing trends. Assuming there is no significant change in current conditions, We believe that we will continue to capture solid collections on billed rent, as well as continued low resident turnover and stable occupancy. We do expect continued pressure on rent growth, but we were encouraged with the improvement in lease over lease pricing for lease assigned in July. With a significant percentage of our leases repricing during the busy summer leasing season, It is important to keep in mind that we will carry these repriced units into early leasing season next year, and it will weigh on the cumulative performance of overall rent growth for the next three quarters or so. However, as new supply deliveries slow next year, we expect a resumption of more robust rent growth across our markets. Longer term, we believe that our Sunbelt markets will capture increasingly stronger trends in adding new employers, job growth, and new household formations. Our unique approach to diversifying across this robust region of the country with high-quality communities supported by a sophisticated operating platform will, we believe, continue to drive long-term outperformance for capital. Further, our strong balance sheet puts us in a solid position to both weather the current economic slowdown as well as opportunistically pursue compelling opportunities that emerge. In closing, I want to express my appreciation and thanks to our MAA associates for their dedication and superior service throughout this stressful second quarter. Your performance and commitment to our mission of serving our residents and all who depend on MAA during these stressful times has been absolutely incredible. And with that, I'll now turn the call over to Tom.