Come inside and see the difference 2004 Annual Report Mid-America Apartment Communities Mid-America Apartment Communities Asset quality, innovation, stability, financial strength. The difference in Mid-America. Annualized Common Shareholder Returns (March 2005) Annualized Common Shareholder Returns (March 2005) Mid-America Apartment Communities (MAA: NYSE) is a publicly traded real estate investment trust which currently owns or has an ownership interest in 38,561 apartment homes throughout the Southeast and Texas. 23.7% 20.5% 21.5% 21.3% 15.3% 18.0% MAA 3-Year NAREIT 3-Year Apartment Sector of Morgan Stanley REIT Index 3-Year MAA 5-Year NAREIT 5-Year Apartment Sector of Morgan Stanley REIT Index 5-Year 0 3 . 2 $ 2 3 . 2 $ 4 3 . 2 $ 4 3 . 2 $ 4 3 . 2 $ 4 3 . 2 $ 0 2 . 2 $ 4 1 . 2 $ 4 0 . 2 $ 0 0 . 2 $ 1 2 . 1 $ 25 20 15 10 5 0 2.5 2.0 1.5 1.0 0.5 0.0 MAA 3-Year NAREIT Apartment MAA NAREIT Apartment 3-Year Sector of 5-Year 5-Year Sector of Morgan Stanley REIT Index 3-YEAR Morgan Stanley REIT Index 5-YEAR Annual dividends paid per common share ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 94 95 96 97 98 99 00 01 02 03 04 Annual Dividends Paid Per Common Share Financial Highlights (Dollars and shares in thousands, except per share data) Net income Preferred dividend distribution Premiums and original issuance costs associated with the redemption of preferred stock(1) Net income (loss) available for common shareholders Depreciation real estate assets Net gain on insurance and other settlement proceeds Gain on disposition within unconsolidated entities Net gain on insurance and other settlement proceeds of discontinued operations Depreciation real estate assets of discontinued operations Gain on sale of discontinued operations Depreciation real estate assets of unconsolidated entities Gain on sale of non-depreciable assets Minority interest in operating partnership income Years Ended December 31, 2004 2003 2002 $ 25,198 (14,825) $ 20,206 (15,419) $ 16,141 (16,029) — 10,373 67,302 (2,683) (3,249) (526) 681 (5,825) 1,688 — 2,264 (5,987) (1,200) 56,701 (2,860) — (82) 1,022 (1,919) 2,345 — 1,360 (2,041) (1,929) 52,928 (397) — — 978 — 1,430 (45) 388 Funds from operations $ 70,025 $ 55,367 $ 53,353 Weighted average shares, diluted(2) Net income (loss) available for common shareholders, diluted(2) Weighted average shares and units, diluted Funds from operations per share and unit, diluted Funds from operations before premiums and original issuance costs associated with the redemption of preferred stock per share and unit, diluted Dividends per share Real estate owned, at cost Capital improvements in progress Investments in and advances to real estate joint ventures Total debt Shareholders’ equity and minority interest Market capitalization, shares and units Number of properties, including ownership interest and held for sale Number of apartment units, including ownership interest and held for sale 20,652 $ 0.50 23,316 $ 3.00 $ 3.00 $ 2.34 $1,862,850 $ 6,519 $ 14,143 $1,083,473 $ 388,701 $1,145,183 132 37,904 18,374 $ (0.07) 21,354 $ 2.59 $ 2.87 $ 2.34 $1,695,111 $ 7,335 $ 12,620 $ 951,941 $ 393,313 $ 939,581 127 35,734 17,561 $ (0.11) 20,613 $ 2.59 $ 2.69 $ 2.34 $1,478,793 $ 3,223 $ 15,000 $ 803,703 $ 371,576 $ 673,431 123 33,923 (1) Original issuance costs represent non-cash charges. (2) For periods where the company reported a net loss available for common shareholders, the effect of dilutive shares has been excluded from net loss available for common shareholders per common share computations as including such shares would be anti-dilutive. page one Annualized Common Shareholder Returns (March 2005) To My Fellow Shareholders 23.7% 20.5% 21.5% 21.3% 18.0% 25 20 Annualized Common Shareholder Returns (March 2005) 15.3% MAA 3-Year NAREIT 3-Year Apartment Sector of Morgan Stanley REIT Index 3-Year MAA 5-Year 15 10 Your company had a terrific year of progress in 2004. While we are proud of the 29.7% total investment return generated, we are also excited about the progress made in strengthening our operating platform, improving our asset quality and further increasing our balance sheet flexibility. The recovering economy and job market, likelihood of rising mortgage rates and continued emergence of a grow- ing demand for apartment housing, combined with new and stronger operating capabilities for our company, set the stage for what we believe will be even stron- ger results for Mid-America over the next few years. The future looks bright for your company. Apartment Sector of Morgan Stanley REIT Index 3-YEAR Apartment Sector of Morgan Stanley REIT Index 5-YEAR NAREIT 5-Year NAREIT 3-Year MAA 5-Year MAA 3-Year 5 0 NAREIT 5-Year Apartment Sector of Morgan Stanley REIT Index 5-Year Superior Performance. Mid-America had a significantly improved year of operating performance in 2004. Internal, or same store, net operating growth of 1.5%, excluding hurricane expense, was the highest level of performance we have achieved since 2001. The demand for apartment housing is improving. New growth continued with nearly $200 million of high-quality properties in major Annual dividends paid per common share growth markets added to the portfolio last year. Funds from operations for 2004 were $3.00 per share, a new record for your company. Mid-America paid a divi- dend of $2.34 per share in 2004 and has compiled a record of 44 straight quarters of paying a dividend to its shareholders. Mid-America’s 3-year, 5-year and 10-year shareholder returns continue to exceed the NAREIT Index. 2.0 2.5 1.5 1.0 0.5 Mid-America properties received more than 50 civic and industry awards in 2004 supporting the superior quality and curb appeal of your portfolio. We are recognized by the National Apartment Association as being the only apartment REIT offering the Certified Apartment Manager and National Association of Leasing Professional certifications through in-house training programs. We cur- rently have 106 Certified Apartment Manager professionals managing your portfolio of properties, a key component of our superior operating capabilities. During 2004 we successfully completed the installation of a new web-based property management system that will enable our operation to drive a higher level of revenue performance and productivity into what we do. As you can see, 00 01 02 94 95 96 98 99 03 04 0.0 97 H. Eric Bolton, Jr. 0 3 2 $ . 2 3 2 $ . 4 3 2 $ . 4 3 2 $ . 4 3 2 $ . 4 3 2 $ . 0 2 2 $ . 4 1 2 $ . 4 0 2 $ . 0 0 2 $ . 1 2 1 $ . ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 Annual Dividends Paid Per Common Share page two while Mid-America has a very solid history of financial perfor- mance, the groundwork is being laid for even better results to come. Solid Strategy. The stable and superior performance of Mid-America is in large part due to our unique strategy centered on allocating capital across three market tiers. By investing in both higher growth and more stable markets, we believe Mid-America’s portfolio is best able to generate one of the highest, risk-adjusted, returns for shareholders over the long haul. We anticipate this strategy will enable us to support our dividend, during both good times as well as weak parts of the market cycle. Mid-America’s record of strong, stable and predictable results is also tied to the fact that we are focused on the southeast and southcentral regions of the country. We believe markets across these regions will continue to generate the most robust job growth and household formation performance, over the long haul. Mid- America’s out-performance of the apartment REIT sector over the last couple of years has supported the value in this strategy and we expect that the improvements we have made over this period will enable Mid-America to remain a top-tier performer. Disciplined. Our priorities remain the same…protect the value of your real estate, strengthen dividend coverage, carefully consider new investment opportunities through realistic and con- servative underwriting, and position for an improving operating environment. By remaining committed to our priorities and disci- plined in our practices, we expect to continue to generate superior performance for our shareholders. The last couple of years of difficult operating conditions, along with a very competitive environment for property acquisitions, have certainly been a challenge. And while I’m proud of the perfor- mance that our associates have produced during this tough operating phase, I am perhaps most proud of the discipline that our manage- ment team has shown in not compromising leasing standards to easily “buy” more occupancy with a lower credit quality and resident profile. In addition, our discipline in remaining true to our long established investment criteria and avoiding a compromise of underwriting standards has been extremely important. Over-paying to simply make an acquisition is a clear recipe for disaster. We believe that our discipline will be rewarded in both a quick recovery in operating performance as market conditions strengthen and in superior return on investment in the acquisitions that we have made. Responsible. We take our responsibilities to you very seri- ously and fully appreciate the trust that you have placed with us. We are fortunate to have an outstanding group of directors on our Board. Each brings a wealth of experience, expertise and dedication to making Mid-America successful. Our commitment is to serve you in the very best manner possible and to “think like owners” as we approach the management of your company. We are, in fact, fellow owners. The members of your Board of Directors and the management team own approximately 10% of the outstanding shares of common stock and we are working to enhance the long- term value of our company for all of us. Thank you for your continued support and investment in Mid-America. See the difference H. Eric Bolton, Jr. Chairman and Chief Executive Officer page three See the difference “ We are very optimistic about the earnings upside to recapture as market conditions continue to strengthen. Because we have remained committed to maintaining the high quality and excellent condition of our properties, continued to adhere to our strict leasing and credit standards and protected the portfolio’s rent structure, we are poised to recapture a much higher level of earnings from our portfolio as market condi- tions recover and leasing conditions improve.” Tom Grimes, SVP and Director of Property Management Asset Quality—Mid-America’s apartment properties are one of the newer portfolios in the REIT sector. Through an extensive program aimed at continually assessing and addressing maintenance and capital needs of each property, the portfolio remains in top condition. We place a very high priority on curb appeal and landscaping upgrades at each property…and this focus continues to garner recognition through various civic and industry groups as evidenced by the more than 50 awards for beautification and operating excellence captured during 2004. page four Asset Quality page five Innovation page six See the difference “ Our business is very competitive. As such, we believe that consistently driving innovations and improvement into how we operate is critical to capturing continual gain in revenue performance and productivity. During 2004 we completed an extensive overhaul of our operating platform and support systems. We are excited about the new opportunities this new technology will bring to our company.” Drew Taylor, SVP and Director of Asset Management Innovation—Driven by a guiding principle to “stay one step ahead,” Mid-America is con- tinuously looking to introduce new technology into its operation. In 2004 a new web-based operating system was implemented that introduces a host of opportunities to take revenue performance to higher levels and drive more efficiencies into property operations. And it doesn’t stop there. In 2005 we plan to install additional modules that will further expand the efficiencies in accounting and reporting operations. page seven See the difference “ The market for buying high-quality apartment real estate remains very competitive. Because of our regional focus and a high degree of familiarity with the markets in the southeast- ern US, in addition to our ability to quickly underwrite and close on acquisitions, we have been successful in continuing to capture new earnings growth without compromising on our disciplined and conservative approach to investing.” Simon Wadsworth, EVP and Chief Financial Officer Stability—We believe that our shareholders are interested in a degree of stability. By remaining focused on high-quality properties, conservative underwriting, being well diversified across a stable growth region and staying constantly in touch with our proper- ties, we deliver superior performance. Our three-tier market strategy across large, middle and small markets has allowed for growth during economic upturns while also providing stability and protection during economic downturns. page eight Stability page nine Financial Strength page ten See the difference “ We have made significant progress over the last three years in improving the flexibility and strength of our balance sheet. As a result of our refinancing efforts, we ended 2004 with 81% of our debt fixed, swapped, forward swapped or capped, resulting in a 120 basis point reduction in the cost of interest over the last three years.” Al Campbell, SVP and Treasurer Financial Strength—Mid-America’s balance sheet reinforces our business strategy and is positioned to support operating and investment plans well into the future. Over the last few years we’ve taken advantage of the low interest rate environment to restructure debt to provide very low cost and flexible financing for our business. We’ve increased financial strength and flexibility by expanding agency credit facilities, which provide the low cost of agency backed borrowings, the flexibility of cross-collateralized pools and the additional capacity needed for future growth. Additionally, the combination of our diversified invest- ment strategy, fundamental operating strength and focus on growth through acquiring existing properties in lieu of new construction, provides a more stable and growing cash flow from the portfolio. This lower operating and business risk strategy further enhances financial strength. page eleven Consolidated Balance Sheets Consolidated Statements of Operations (Dollars in thousands) Assets: Real estate assets: Land Buildings and improvements Furniture, fixtures and equipment Capital improvements in progress Less accumulated depreciation Land held for future development Commercial properties, net Investments in and advances to real estate joint ventures Real estate assets, net Cash and cash equivalents Restricted cash Deferred financing costs, net Other assets Goodwill, net Assets held for sale Total assets Liabilities and Shareholders’ Equity: Liabilities: Notes payable Accounts payable Accrued expenses and other liabilities Security deposits Liabilities associated with assets held for sale Total liabilities Minority interest Shareholders’ equity: Preferred stock, $.01 par value, 20,000,000 shares authorized, $176,862,500 or $25 per share liquidation preference: 9.25% Series F Cumulative Redeemable Preferred Stock, 3,000,000 shares authorized, 474,500 shares issued and outstanding 8.625% Series G Cumulative Redeemable Preferred Stock, 400,000 shares authorized, 400,000 shares issued and outstanding 8.30% Series H Cumulative Redeemable Preferred Stock, 6,200,000 shares authorized, 6,200,000 shares issued and outstanding Common stock, $.01 par value per share, 50,000,000 shares authorized; 20,856,791 and 20,031,614 shares issued and outstanding at December 31, 2004 and December 31, 2003, respectively Additional paid-in capital Other Accumulated distributions in excess of net income Accumulated other comprehensive loss Total shareholders’ equity Total liabilities and shareholders’ equity See Form 10-K/A for related footnote disclosures. December 31, 2004 2003 $ 163,381 1,625,194 41,682 6,519 1,836,776 (399,762) 1,437,014 1,366 7,429 14,143 1,459,952 9,133 6,041 16,365 16,837 5,400 8,579 $ 142,416 1,481,854 38,812 7,335 1,670,417 (339,704) 1,330,713 1,366 7,150 12,620 1,351,849 8,795 10,728 13,185 16,214 5,762 — $1,522,307 $1,406,533 $1,083,473 767 43,381 5,821 164 1,133,606 31,376 $ 951,941 1,696 54,547 5,036 — 1,013,220 32,019 5 4 62 209 644,516 (3,252) (269,482) (14,737) 357,325 5 4 62 200 622,406 (3,711) (232,224) (25,448) 361,294 $1,522,307 $1,406,533 page twelve page thirteen Consolidated Balance Sheets Consolidated Statements of Operations (Dollars in thousands, except per share data) Operating revenues: Rental revenues Other property revenues Total property revenues Management fee income Total operating revenues Property operating expenses: Personnel Building repairs and maintenance Real estate taxes and insurance Utilities Landscaping Other operating Depreciation Total property operating expenses Property management expenses General and administrative expenses Income from continuing operations before non-operating items Interest and other non-property income Interest expense Gain (loss) on debt extinguishment Amortization of deferred financing costs Minority interest in operating partnership income Loss from investments in unconsolidated entities Net gain on insurance and other settlement proceeds Gain on dispositions within unconsolidated entities Income from continuing operations Discontinued operations: Income (loss) from discontinued operations before asset impairment, settlement proceeds and gain on sale Asset impairment on discontinued operations Net gain on insurance and other settlement proceeds on discontinued operations Gain on sale of discontinued operations Net income Preferred dividend distribution Premiums and original issuance costs associated with the redemption of preferred stock Net income (loss) available for common shareholders Weighted average shares outstanding (in thousands): Basic Effect of dilutive stock options Diluted Net income (loss) available for common shareholders Discontinued property operations Income (loss) from continuing operations available for common shareholders Earnings per share (basic): Income (loss) from continuing operations available for common shareholders Discontinued property operations Net income (loss) available for common shareholders Earnings per share (diluted): Income (loss) from continuing operations available for common shareholders Discontinued property operations Net income (loss) available for common shareholders See Form 10-K/A for related footnote disclosures. Years Ended December 31, 2004 2003 2002 $257,265 9,937 267,202 582 267,784 $227,541 8,399 235,940 822 $220,123 7,953 228,076 775 236,762 228,851 32,154 9,994 35,135 14,734 7,251 13,480 68,653 181,401 10,357 9,240 66,786 593 (50,858) 1,095 (1,753) (2,264) (287) 2,683 3,249 19,244 (197) (200) 526 5,825 25,198 14,825 — 27,485 9,119 31,331 12,117 6,462 12,178 58,074 156,766 8,435 7,235 64,326 835 (44,991) 111 (2,050) (1,360) (949) 2,860 — 18,782 (577) — 82 1,919 20,206 15,419 5,987 25,647 9,137 28,374 11,207 6,100 10,404 54,285 145,154 8,633 6,665 68,399 729 (48,381) (1,441) (2,700) (388) (532) 397 — 16,083 58 — — — 16,141 16,029 2,041 $ 10,373 $ (1,200) $ (1,929) 20,317 335 20,652 18,374 — 18,374 $ 10,373 (5,954) $ (1,200) (1,424) $ 4,419 $ (2,624) $ 0.22 0.29 $ 0.51 $ 0.21 0.29 $ 0.50 $ (0.14) 0.07 $ (0.07) $ (0.14) 0.07 $ (0.07) 17,561 — 17,561 $ (1,929) (58) $ (1,987) $ (0.11) — $ (0.11) $ (0.11) — $ (0.11) page twelve page thirteen 2004 Civic and Industry Awards THE TOWNSHIP IN HAMPTON WOODS, HAMPTON VA: Community of the Year, Richmond Apartment Association, January PATRICIA VASILOFF, THE PADDOCK CLUB, JACKSONVILLE, FL: Property Manager of the Year, First Coast Apartment Association, January TERRACES AT TOWNE LAKE, WOODSTOCK, GA: Most Beautiful Lawn in Towne, Towne Lake Council, June KIRBY STATION APARTMENTS, MEMPHIS, TN: Beautiful Business Award and Hall of Fame induction, Memphis City Beautiful Commis- sion, June ABBINGTON PLACE AT SOUTH POINTE, HUNTSVILLE, AL: Beautification Honor Roll, City of Huntsville, June THE PADDOCK CLUB, HUNTSVILLE, AL: Beautification Award, City of Huntsville, June HIDDEN CREEK, CHATTANOOGA, TN: First Place Beautification Award, Chattanooga Apartment Association, July EAGLE RIDGE APARTMENTS, BIRMINGHAM, AL: Beautification Award, Greater Birmingham Associa- tion of Home Builders Association of Apartment Homes, July EAGLE RIDGE APARTMENTS, BIRMINGHAM, AL: Best Seasonal Color Program, Greater Birmingham Association of Home Builders Associa- tion of Apartment Homes, July EAGLE RIDGE APARTMENTS, BIRMINGHAM, AL: Best Seasonal Color Program Designer, Greater Birmingham Association of Home Builders Association of Apartment Homes, July THE SAVANNAHS AT JAMES LANDING, MELBOURNE, FL: Beautification Award, City of Melbourne, August THE TOWNSHIP IN HAMPTON WOODS, HAMPTON, VA: Best Overall Merit Winner, Peninsula Apartment Council, August STONEMILL VILLAGE, LOUISVILLE, KY: Second Place Beautification Award, Louisville and Jefferson County Beautification Committee RIVERHILLS, GRENADA, MS: Civic Pride Award, Grenada County Chamber of Commerce, September THE OAKS, JACKSON, TN: Jackson City Beautiful Civic Pride Award, City of Jackson, Tenn., September POST HOUSE NORTH, JACKSON, TN: Jackson City Beautiful Civic Pride Award, City of Jackson, Tenn., September PAMELA COMBS AND TAMI LAWRENCE, COURTYARDS AT CAMPBELL, DALLAS, TX: Crime Watch Recognition Award, City of Dallas and Dallas Mayor Laura Miller, September SHENANDOAH RIDGE APARTMENTS, AUGUSTA, GA: First Place Beautification Award, The Central Savannah River Area Apartment Association, September WOODWINDS APARTMENTS, AIKEN, SC: Third Place Beautifica- tion Award, The Central Savannah River Area Apartment Association, September THE LANE AT TOWNE CROSSING, DALLAS, TX: Best Apartment Community for 2004, Mesquite, TX News Readers Choice Poll, October PEAR ORCHARD APARTMENTS, JACKSON, MS: Beautification Award, Mississippi Multifamily Council, October CROSSWINDS APARTMENTS, JACKSON, MS: Beautification Award, Mississippi Multifamily Council, October CURTIS GIBSON, CROSSWINDS, JACKSON, MS: Maintenance Technician of the Year, Mississippi Multifamily Council, October BRADFORD POINTE, AUGUSTA, GA: First Place Beautification Award, The Central Savannah River Area Apartment Association, September RANDI KALE, PEAR ORCHARD APARTMENTS, JACKSON, MS: Assistant Manager of the Year, Missis- sippi Multifamily Council, October THE COLONY AT SOUTHPARK, AIKEN, SC: Second Place Beautifica- tion Award, The Central Savannah River Area Apartment Association, September page fourteen page fifteen SONDRA CALHOUN KESSIE, PEAR ORCHARD APART- MENTS, JACKSON, MS: Leasing Consultant of the Year, Mississippi Multifamily Council, October THE VILLAGE APARTMENTS, LEXINGTON, KY: First Place Triple Crowne Beautification Award, Lexington Apartment Association, November BRADFORD CHASE APART- MENTS, JACKSON, TN: Best Landscape Award, Apartment Association of Greater Memphis, December THE RESERVE AT DEXTER LAKE, MEMPHIS, TN: Outstanding Maintenance Team of the Year, Apartment Association of Greater Memphis, December RANDY HALL, GRAND RESERVE APARTMENTS, LEXINGTON, KY: Landscape Technician of the Year, Lexington Apartment Association, November LESLIE CORNETT, THE VILLAGE APARTMENTS, LEXINGTON, KY: Leasing Specialist of the Year, Lexington Apartment Association, November GRAND RESERVE APART- MENTS, LEXINGTON, KY: Overall Team of the Year, Lexington Apartment Association, November KIM SARTIPI, THE MANSION, LEXINGTON, KY: Property Manager of the Year, Lexington Apartment Association, November MELISSA WEST, MID-AMERICA APARTMENT COMMUNITIES: Supervisor of the Year, Lexington Apartment Association, November GRAND RESERVE APART- MENTS, LEXINGTON, KY: First Place Triple Crowne Beautification Award, Lexington Apartment Association, November THE MANSION, LEXINGTON, KY: First Place Triple Crowne Beautification Award, Lexington Apartment Association, November LAKEPOINTE APARTMENTS, LEXINGTON, KY: Second Place Kentucky Derby Beautification Award, Lexington Apartment Association, November PARK PLACE APARTMENTS, SPARTANBURG, SC: Crowne Excellence Award in Landscape Design, Upper State Apartment Association, November HIGHLAND RIDGE APART- MENTS, TAYLORS, SC: Crowne Excellence Award in Floral Design, Upper State Apartment Association, November THE PADDOCK CLUB, GREENVILLE, SC: Crowne Excellence Award in Floral Design, Upper State Apartment Association, November RITA VAN PELT, GREENBROOK APARTMENTS, MEMPHIS, TN: Assistant Property Manager of the Year, Apartment Association of Greater Memphis, December BRENTWOOD DOWNS, NASHVILLE, TN: First Place Beautification Award, Greater Nashville Apartment Association, December JOHN HENRY, GREENBROOK APARTMENTS, MEMPHIS, TN: Leasing Professional of the Year, Apartment Association of Greater Memphis, December THE PADDOCK CLUB, MURFREESBORO, TN: First Place Beautification Award, Greater Nashville Apartment Association, December LORETTA WILLIAMS, GREENBROOK APARTMENTS, MEMPHIS, TN: White Glove Award, Apartment Association of Greater Memphis, December KIRBY STATION, MEMPHIS, TN: Best Landscape Award, Apartment Association of Greater Memphis, December PARK ESTATE APARTMENTS, MEMPHIS, TN: Best Landscape Award, Apartment Association of Greater Memphis, December GRANDE VIEW, NASHVILLE, TN: Best of the Best Award, Greater Nashville Apartment Association, December GINA MIZE, GREENBROOK APARTMENTS, MEMPHIS, TN: Accredited Residential Manager of the Year, Institute of Real Estate Management, Memphis Chapter, December PEAR ORCHARD APART- MENTS, JACKSON, MS: Overall Winner for the City of Ridgeland Beautification Award, City of Ridgeland and the Ridgeland Chamber of Commerce, December page fourteen page fifteen Board of Directors H. ERIC BOLTON, JR. A director since February 1997, Mr. Bolton is our Chairman of the Board of Directors, President and Chief Executive Officer. Mr. Bolton joined us in 1994 as Vice President of Development and was named Chief Operating Officer in February 1996 and promoted to President in December 1996. Mr. Bolton assumed the posi- tion of Chief Executive Officer following the retirement of George E. Cates in October 2001 and became Chairman of the Board in September 2002. GEORGE E. CATES A director since 1994, Mr. Cates served as Chairman of the Board of Directors from the time of its initial public offering in February 1994 until September 2002. Mr. Cates served as our President and Chief Executive Officer from February 1994 until his planned retire- ment in October 2001. Mr. Cates was President and Chief Executive Officer of The Cates Company from 1977 until its merger with us in February 1994. JOHN F. FLOURNOY A director since November 1997, Mr. Flournoy has been the Chairman and Chief Executive Officer of Flournoy Development Company for 38 years. Flournoy Development Company has been in multi-family housing development and construction primarily in the Southeast- ern United States for over 30 years. ROBERT F. FOGELMAN Committees: Compensation, Nominating and Corporate Governance. A director since July 1994, Mr. Fogelman has been the Presi- dent of Fogelman Investment Company, a privately owned investment firm, for more than eight years. ALAN B. GRAF, JR. Committees: Audit (Chairman). A director since June 2002, Mr. Graf is the Executive Vice President and Chief Financial Officer of FedEx Corporation, a position he has held since 1998. Prior to that time, he was Executive Vice Presi- dent and Chief Financial Officer for FedEx Express, FedEx’s predecessor, from 1991 to 1998. Mr. Graf joined FedEx in 1980. JOHN S. GRINALDS Committees: Audit, Compensation, Nominat- ing and Corporate Governance. A director since November 1997, General Grinalds became the President of The Citadel in Charleston, South Carolina in 1997. Prior to assuming the presi- dency of The Citadel, General Grinalds was the headmaster of Woodberry Forest School in Virginia. From 1989 to 1991, General Grinalds held the rank of Major General and was the commanding general of the Marine Corps Recruit Depot in San Diego, California. RALPH HORN Committees: Compensation (Chairman), Nomi- nating and Corporate Governance (Chairman). A director since April 1998, Mr. Horn was elected President, Chief Operating Officer, and a director of First Tennessee National Corpo- ration (“FTNC”), now First Horizon National Corporation, in July 1991 and Chief Executive Officer in April 1994. Mr. Horn was elected Chairman of the Board of FTNC in January 1996. Mr. Horn served as Chief Executive Officer and President of FTNC until July 2002, and as Chairman of the Board through December 2003. MICHAEL S. STARNES Committees: Audit, Compensation, Nominat- ing and Corporate Governance. A director since July 1998, Mr. Starnes founded M.S. Carriers, Inc., a truckload transportation and logistics company, in 1978 and served as Chair- man and Chief Executive Officer until its merger with Swift Transportation Co., Inc. in June 2001. Mr. Starnes served as President of M.S. Carriers, a subsidiary of Swift Transporta- tion Co., Inc., from June 2001 until his planned retirement in June 2004. SIMON R. C. WADSWORTH A director since March 1994, Mr. Wadsworth joined us in March 1994 and has served as Executive Vice President and Chief Financial Officer since that time. page sixteen Report of Independent Registered Public Accounting Firm Corporate Information The Board of Directors and Shareholders Mid-America Apartment Communities, Inc. We have audited, in accordance with the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Mid-America Apartment Communities, Inc. and subsidiaries as of December 31, 2004 and 2003, and the related consolidated statements of operations, shareholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2004 (not presented herein); and in our report dated March 8, 2005, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated financial statements is fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been derived. KPMG LLP Memphis, Tennessee March 8, 2005 Corporate headquarters Mid-America Apartment Communities, Inc. 6584 Poplar Avenue, Suite 300 Memphis, TN 38138 901-682-6600 www.maac.net Annual shareholders meeting Mid-America Apartment Communities, Inc. will hold its 2005 annual meeting of shareholders on Thursday, May 19th, at 1:00 p.m. CST at the Reserve at Dexter Lake apartments in Memphis, TN. Annual report and Form 10-K/A A copy of Mid-America’s Annual Report and Form 10-K/A for the year ended December 31, 2004, as filed with the Securities and Exchange Commission will be sent without charge upon written request to the corporate headquarters address, attention Investor Relations, and is also available on our web-site at www.maac.net. Transfer agent and registrar Wachovia Bank, N.A. 800-829-8432 Shareholders who have questions about their accounts or who wish to change ownership or address of stock; to report lost, stolen or destroyed certificates; or wish to sign up for our dividend reinvestment plan should contact Wachovia Bank. Limited partners wishing to convert units into shares should contact Mid-America directly at the corporate headquarters. Independent registered public accountants KPMG LLP, Memphis, TN General counsel Bass, Berry & Sims PLC, Memphis, TN Stock listings Mid-America’s stock is listed on the New York Stock Exchange (NYSE). Our common stock is traded under the stock symbol MAA. We have two series of publicly traded preferred stock and they are traded under the stock symbols MAA Pr F and MAA Pr H. CEO and CFO certifications As is required by Section 303A.12(a) of the NYSE’s corporate governance standards, the CEO Certification was filed without qualification to the NYSE last year. Certifications of the CEO and CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 have been filed as exhibits to Mid-America’s Form 10-K/A. The Open Arms Foundation The Open Arms Foundation is Mid-America’s cor- porate charity that provides fully-furnished two- bedroom apartment homes free of charge to families with long-term medical care needs away from their own home. The Open Arms Foundation currently offers 29 homes to families in medical crisis. m o c . s r o n n o c - n a r r u c . w w w / . c n i , s r o n n o c & n a r r u c y b d e n g i s e d Mid-America Apartment Communities, Inc. 6584 Poplar Avenue, Suite 300 Memphis, TN 38138 901.682.6600 www.maac.net