Mid-America Apartment Communities
Annual Report 2009

Plain-text annual report

WeLL positioned Mid-America Apartment communities, inc. 2009 Annual Report our portfolio of high-quality properties across the sunbelt region of the country generated record FFo results in 2009. A disciplined strategy focused on the high-grow th sunbelt region, a portfolio of quality apartment homes, a strong technology-based operating platform and a strong balance sheet has our company well positioned for the coming recovery cycle. WELL POSITIONED IN PHOENIX, AZ MID - A MERIC A A PA R T MEN T C OMMUNI T IE S, INC. is a publicly-traded real estate investment trust which owned or had an ownership interest in 147 multifamily apartment communities with 43,604 apartment homes throughout the Sunbelt region of the United States at year end. our AnnuAl ToTAl reTurn To shAreholDers over The lAsT Ten yeArs WAs 15.8% AnD represenTeD The highesT Ten-ye A r shA reholDer perforMAnce AMong All ApArTMenT reAl esTATe invesTMenT TrusTs. well positioned in nAsHVille, tn well positioned in AUstin, tX well positioned in RAleiGH, nC well positioned in AtlAntA, GA well positioned in dAllAs, tX well positioned in HoUston, tX well positioned in tAMpA, Fl 1 MAA Dallas, Texas Annual Cash Dividends Paid Annual Cash Dividends Paid (per Common Share) (per Common Share) 6 4 . 2 $ 6 4 . 2 $ 2 4 . 2 $ 8 3 . 2 $ 5 3 . 2 $ '99 '20 '01 '02 '03 '04 '05 '06 '07 '08 2005 '09 2006 2007 2008 2009 MAA 2.500 2.375 2.250 2.125 2.000 $14,441 45000 40000 35000 30000 25000 20000 15000 10000 45000 40000 35000 30000 25000 20000 15000 10000 Return on Investment Value of $10,000 Investment $43,274 $28,327 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 MAA Investment Peer Group Investment Source: SNL Equity Research Source: SNL Equity Research 2 $45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 45000 40000 35000 30000 25000 20000 15000 10000 '99 '20 '01 '02 '03 '04 '05 '06 '07 '08 '09 '99 '20 '01 '02 '03 '04 '05 '06 '07 '08 '09 To My felloW shAreholDers: At the beginning of 2009 the U.S. economy was facing a worrisome and uncertain future. Unemployment was rising, capital markets were under stress and asset values were declining. All of this combined to create a challenging environment for the apartment business and our company. We took a number of actions early in the year to best position the company for this period of uncertainty and significant economic weakness. As a result of these actions together with the solid foun- dation we built over the past several years through disciplined investing and strengthening of our balance sheet, Mid-America Apartment Communities, or MAAC, delivered superior results in 2009 that were well ahead of expectations: • Funds from Operations per diluted share and unit for the year 2009 were $3.79, an all-time high for our company. • Same store occupancy throughout last year averaged 95.6% and was well ahead of the performance captured in 2008. • Resident move-outs in 2009 were at the low- est level ever incurred in our company’s history with same store unit turnover at 58%. Employment growth projections: 2010 2011 2012 2013 Dallas National 0.5% 2.7% 3.8% 4.0% (0.7)% 1.6% 3.2% 2.9% Source: Economy.com 3 letter to shareholders We Are well positioned WiTh A unique AnD DiversifieD porTfolio sTrATegy DesigneD To conTinue To experTly exTrAcT vAlue froM MArkeTs Across The sunbelT region. nashville, Tennessee • Same store collection loss as a percent of potential rent was only 0.36%, the lowest in our company history. • Our balance sheet remained in a strong position with year-end debt to gross assets at 50% and our fixed-charge coverage ratio at 2.68 times. • We acquired $141 million of new properties in 2009 on a very attractive basis that will help drive higher shareholder value in the coming years. • And, notably, total shareholder return for the year 2009 was 39.3%, well ahead of the apart- ment REIT sector average. Most economists suggest that it will be 2011 or later before recovery in the employment markets gets underway. As a result, 2010 will be another challeng- ing year for apartment leasing. We expect continued revenue pressure as a consequence of both the pricing actions taken during 2009, and the continued weak- ness in the leasing environment. Our focus remains centered on protecting occupancy, aggressively controlling expenses, keeping our balance sheet strong and serving our residents at the high standards that define our apartment communities and company. MAA 4 Employment growth projections: 2010 2011 2012 2013 Nashville National (0.3)% (0.7)% 2.1% 3.2% 3.1% 1.6% 3.2% 2.9% Source: Economy.com Despite the expected challenges in 2010, the long- term outlook for the apartment business is arguably stronger than at any time in our company history. Demographic trends for the U.S. population suggest that the prime apartment rental age group, those between the ages of 21–35, is growing both in absolute numbers and as a percent of the overall pop- ulation such that we will see significantly higher demand for apartment housing over the next 5 to 7 years. The leading edge of this demographic wave is already emerging but has been somewhat restrained over the past couple of years as the weak employment market has driven many recent college graduates to return home, double up with a roommate, or otherwise delay establishing their own household. As the econ- omy and employ ment markets improve, this pent-up demand is expected to help fuel a strong recovery for apartment leasing. Another significant shift underway continues to be the return to a more normal and sustainable mix of house- holds that rent versus own their home. Over the last 5 letter to shareholders phoenix, Arizona few years, the aggressive financing market for single- family housing served to artificially depress the demand for apartment rentals. As the U.S. returns to an appro priate and sustainable level of allocation between owner-occupied and rental housing, we will see continued growth and recovery in the demand for apartment housing. Against this backdrop of growing demand, we are experiencing an unprecedented level of decline in the construction of new apartment properties. The lack of financing available for new apartment construction, coupled with the weaker leasing environment and MAA 6 Technology, such As our Access 24/7 Web porTAl, hAs us well positioned To cApiTAliZe on operATionAl efficiencies AnD Deliver convenienT service To our resiDenTs. decline in rent levels, simply doesn’t support construc- tion. The expectation is that it will be this way for a couple of years. These evolving supply and demand trends for apart- ment housing create an environment for apartment leasing that should be very strong over the next few years. What does all this mean for our company and why are we so optimistic about our future? Why do we believe MAAC is particularly well positioned for the coming recovery cycle for the apartment industry? Let me tell you… • The southeast and southwest regions of the U.S., where MAAC is focused, are poised to capture the strongest job growth trends in the country over the next ten years. Employers are drawn to the afford ability of the region…lower costs for land, labor, housing and taxes. • MAAC has a portfolio of high-quality properties that are generally newer and higher-end than many of the properties we compete against in our local Employment growth projections: 2010 2011 2012 2013 Phoenix National (1.7)% (0.7)% 0.8% 3.2% 3.9% 1.6% 3.2% 2.9% Source: Economy.com 7 letter to shareholders markets. We strive to serve a broad segment of the apartment market where demand is high. • Unlike past recovery cycles where unbridled new apart ment construction has sometimes led to an over supply of apartment housing in our region, we believe this particular recovery cycle will be different due to a difficult financing envi- ronment. As compared to past recovery cycles, annual new construction deliveries in the south- east and southwest are expected to be at levels significantly below anything we’ve experienced in the past 30 years. • MAAC has one of the strongest operating platforms in the region with new web-based tech- nologies and systems that create capabilities and competitive advantages that enable our property teams to drive performance in excess of market norms for the regions, particularly in our secondary markets. 70000 68000 66000 64000 Propensity to Rent by Age Group Propensity to Rent by Age Group 62000 58% 32% 25% 19% '90 '91 '92 '93 '94 '95 '96 '97 '00 '01 '02 '03 '04 '05 '06 '07 '08 20% '98 '99 '10E '12E '14E '16E '18E '20E '11E '13E '15E '17E '19E '09 Population Aged 20–30 70 68 66 64 62 60 58 56 54 ) s 0 0 0 ( l n o i t a u p o P 1990 1995 2000 2005 2010E 2015E 2020E Source: U.S. Census Bureau Source: U.S. Census Bureau Source: U.S. Census Bureau, JCHS– Source: U.S. Census Bureau, JCHS– Harvard University Harvard University 8 70000 68000 66000 64000 62000 60000 58000 56000 54000 <35 60000 35–44 58000 45–54 56000 55–64 >65 54000 MAA A B C D E 9% 11% 8% 70000 9% 68000 66000 8% 11% 64000 62000 60000 58000 56000 54000 0 10 20 30 40 50 60 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '10E '12E '14E '16E '11E '13E '15E '09 '18E '20E '17E '19E '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '10E '12E '14E '16E '18E '20E '11E '13E '15E '17E '19E '09 0 10 20 30 40 50 60 Source: U.S. Census Bureau, Green The high quAliT y of our AsseTs hAs us well positioned To ouT-perforM The coMpeTiTion in our MArkeTs. • As a result of our regional focus on markets in the southeast and southwest, we have a strong track record of success in capturing new growth opportunities in a disciplined fashion. We have an active deal flow and expect to execute on these opportunities over the next few years as the weak operating environment continues to create more stress for over-leveraged properties. • Our balance sheet is in terrific shape. The company is well positioned to support steady recovery from our exist ing properties and actively pursue new deals as well. Taken together, these factors work to create a strong recovery opportunity for MAAC as the overall economy and employment markets begin to improve. Austin, Texas 4 3 2 1 0 Austin National 1.5% 2.5% 3.9% 4.4% (0.7)% 1.6% 3.2% 2.9% Employment growth projections: 2010 2011 2012 2013 FFO Per Share/Unit FFO Per Share/Unit 3 7 . 3 $ 9 7 . 3 $ 5 5 . 3 $ 0 2 . 3 $ 3 3 . 3 $ Source: Economy.com 2005 2006 2007 2008 2009 9 letter to shareholders Our goal is to provide an investment return to share- holders that outperforms the apartment REIT sector over the long haul. Importantly, we aim to deliver this performance with lower levels of volatility and risk than are inherent in other company strategies. Our strategy is built around a practice of disciplined capital allocation and careful underwriting, with a culture and focus directed at property operations. We like to be out at the properties and we believe in supporting our on-site folks in every way we can. While a disciplined strategy, high-quality properties and superior operating capabili- ties provide a solid foundation for our performance, it’s our MAAC associates that work directly with our residents and those that support our on-site team members that really make it all come together Management Team (from left) James Andrew Taylor, EVP and Director of Asset Management; Albert M. Campbell, III, EVP and CFO; H. Eric Bolton, Jr., CEO and Chairman of successfully. the Board; Thomas L. Grimes, Jr., EVP and Director of Property Management Operations. Employment growth projections: 2010 2011 2012 2013 Raleigh National 0.6% 2.6% 3.9% 3.5% (0.7)% 1.6% 3.2% 2.9% Source: Economy.com MAA 10 raleigh, north carolina our sTrong bAlAnce sheeT hAs us well positioned To cApTure groW Th opporTuniTies in The recovering econoMy. Though the economy continues to face uncertainty and a long road to recovery, we believe MAAC remains well positioned to weather this down cycle. As we begin to look towards the future, I’m more excited about our company’s prospects than I’ve ever been in my sixteen years here at MAAC. The outlook for the apartment business is bright and we believe our company is particularly well positioned to capitalize on the coming recovery. We take our responsibilities to serve and perform for our shareholders seriously. Thank you for the trust you place in our team and for your investment in Mid-America. Sincerely, H. Eric Bolton, Jr. chairman and ceo 11 letter to shareholders 40 30 20 10 0 -10 2009 finAnciAl highlighTs Total Annual Investment Returns 1-YEAR 3-YEAR 5-YEAR 10-YEAR % 3 . 9 3 % 9 . 3 3 % 5 . 6 2 MAA PEER GROUP AVERAGE S&P 500 % 2 . 9 % 0 . 2 % 6 . 0 % 8 . 8 % 7 . 1 % 4 . 0 % 8 . 5 1 % 0 . 0 1 % 0 . 1 - recorD high ffo per shAre of $3.79 yeAr-enD physicAl occupAncy 95.1% sAMe sTore uniT Turnover 58% yeAr-enD DebT To gross AsseTs 50% yeAr-enD fixeD chArge coverAge 2.68 TiMes MAA 12 finAnciAl highlighTs (Dollars and shares in thousands, except per share data) 2009 2008 2007 years ended December 31, Net income attributable to Mid-America Apartment Communities, Inc. $ 37,211 $ 30,249 $ 39,946 Preferred dividend distribution 12,865 12,865 13,688 Premiums and original issuance costs associated with the redemption of preferred stock Net income available for common shareholders Depreciation of real estate assets Net casualty (gains) loss and other settlement proceeds Gains on dispositions within real estate joint ventures Depreciation of real estate assets of discontinued operations (Gains) loss on sales of discontinued operations Depreciation of real estate assets of real estate joint ventures Net income attributable to noncontrolling interests — 24,346 94,020 (32) — — (4,649) 970 2,010 — 589 17,384 88,555 247 (38) 706 120 953 1,822 25,669 83,532 (589) (5,388) 1,517 (9,164) 15 3,510 Funds from operations $ 116,665 $ 109,749 $ 99,102 Weighted average shares, diluted Net income available for common shareholders, diluted Weighted average shares and units, diluted Funds from operations per share and unit, diluted Dividends paid per share Real estate owned, at cost Capital improvements in progress Investments in and advances to real estate joint ventures Total debt Total equity and redeemable stock Market capitalization (shares and units) (1) 28,348 27,084 25,503 0.85 $ 0.64 $ 1.01 30,802 29,459 27,943 3.79 $ 3.73 $ 3.55 2.46 $ 2.46 $ 2.42 $ $ $ $ 2,732,218 $ 2,552,808 $ 2,343,130 $ $ 10,517 8,619 $ $ 25,268 6,824 $ $ 12,886 168 $ 1,399,596 $ 1,323,056 $ 1,264,620 $ 456,028 $ 444,422 $ 432,398 $ 1,671,036 $ 1,293,145 $ 1,358,100 Number of properties, including joint venture ownership interest (2) Number of apartment units, including joint venture ownership interest (2) 147 43,604 145 42,554 137 40,248 (1) Market capitalization includes all series of preferred shares (value based on $25 per share liquidation preference) and common shares, regardless of classifica- tion on balance sheet, and partnership units (value based on common stock equivalency). (2) Property and apartment unit totals have not been adjusted to exclude properties held for sale. 13 financials consoliDATeD bAlAnce sheeTs (Dollars in thousands, except per share data) 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 real estate joint ventures Real estate assets, net Cash and cash equivalents Restricted cash Deferred financing costs, net Other assets Goodwill Assets held for sale Total assets Liabilities and Shareholders’ Equity: Liabilities: Notes payable Accounts payable Fair market value of interest rate swaps Accrued expenses and other liabilities Security deposits Liabilities associated with assets held for sale Total liabilities Redeemable stock Shareholders’ equity: Preferred stock, $0.01 par value per share, 20,000,000 shares authorized, $155,000 or $25 per share liquidation preference; 8.30% Series H Cumulative Redeemable Preferred Stock, 6,200,000 shares authorized, 6,200,000 shares issued and outstanding Common stock, $0.01 par value per share, 50,000,000 shares authorized; 29,095,251 and 28,224,708 shares issued and outstanding at December 31, 2009 and 2008, respectively (1) Additional paid-in capital Accumulated distributions in excess of net income Accumulated other comprehensive income Total Mid-America Apartment Communities, Inc. shareholders’ equity Noncontrolling interest Total equity Total liabilities and equity December 31, 2009 2008 $ 255,425 $ 240,426 2,364,918 2,198,063 73,975 10,517 65,540 25,268 2,704,835 2,529,297 (788,260) (694,054) 1,916,575 1,835,243 1,306 8,721 8,619 1,306 7,958 6,824 1,935,221 1,851,331 13,819 561 13,369 19,731 4,106 19 9,426 414 15,681 16,840 4,106 24,157 $ 1,986,826 $ 1,921,955 $ 1,399,596 $ 1,323,056 1,702 51,160 69,528 8,789 1,234 76,961 66,982 8,705 23 595 1,530,798 1,477,533 2,802 1,805 62 290 62 282 988,642 954,127 (510,993) (464,617) (47,435) (72,885) 430,566 22,660 416,969 25,648 453,226 442,617 $ 1,986,826 $ 1,921,955 (1) Number of shares issued and outstanding represent total shares of common stock regardless of classification on the consolidated balance sheet. The number of shares classified as redeemable stock on the consolidated balance sheet for December 31, 2009, 2008 and 2007, are 58,038, 48,579 and 60,212, respectively. MAA 14 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 Acquisition expenses Property management expenses General and administrative expenses Income from continuing operations before non-operating items Interest and other non-property income Interest expense Loss on debt extinguishment Amortization of deferred financing costs Incentive fees from real estate joint ventures Net casualty (loss) gains and other settlement proceeds Gain (loss) on sale of non-depreciable assets Income from continuing operations before loss from real estate joint ventures (Loss) gain from real estate joint ventures Income from continuing operations Discontinued operations: Income from discontinued operations before gain (loss) on sale Gain (loss) on sale of discontinued operations Consolidated net income Net income attributable to noncontrolling interests Net income attributable to Mid-America Apartment Communities, Inc. Preferred dividend distributions Premiums and original issuance costs associated with the redemption of preferred stock Net income available for common shareholders Weighted average shares outstanding (in thousands): Basic Effect of dilutive securities Diluted Net income available for common shareholders Discontinued property operations years ended December 31, 2009 2008 2007 $ 357,008 21,243 $ 352,414 17,391 $ 331,640 15,770 378,251 293 369,805 206 347,410 34 378,544 370,011 347,444 47,633 14,161 45,572 22,334 9,548 20,457 96,019 255,724 950 17,220 11,320 93,330 385 (57,094) (140) (2,374) — 32 15 34,154 (816) 33,338 1,234 4,649 39,221 2,010 37,211 12,865 46,139 13,688 45,652 21,908 9,146 18,777 90,168 245,478 — 16,799 11,837 95,897 509 (62,010) (116) (2,307) — (247) (3) 31,723 (844) 30,879 1,312 (120) 32,071 1,822 30,249 12,865 42,102 12,900 42,639 20,009 8,594 16,137 84,789 227,170 — 17,918 10,808 91,548 195 (63,639) (123) (2,407) 1,019 589 534 27,716 5,330 33,046 1,246 9,164 43,456 3,510 39,946 13,688 — — 589 $ 24,346 $ 17,384 $ 25,669 28,341 7 26,943 141 25,296 207 28,348 27,084 25,503 $ 24,346 (5,883) $ 17,384 (1,192) $ 25,669 (10,410) Income from continuing operations available for common shareholders $ 18,463 $ 16,192 $ 15,259 Earnings per share—basic: Income from continuing operations available for common shareholders Discontinued property operations Net income available for common shareholders Earnings per share—diluted: Income from continuing operations available for common shareholders Discontinued property operations Net income available for common shareholders Dividends declared per common share (1) $ 0.65 0.20 $ 0.60 0.04 $ 0.60 0.41 $ 0.85 $ 0.64 $ 1.01 $ 0.65 0.20 $ 0.60 0.04 $ 0.60 0.41 $ 0.85 $ 0.64 $ 1.01 $ 2.460 $ 2.460 $ 2.430 (1) Beginning in 2006, at their regularly scheduled meetings, the Board of Directors began routinely declaring dividends for payment in the following quarter. This can result in dividends declared during a calendar year being different from dividends paid during a calendar year. Mid-America paid dividends of $2.46, $2.46 and $2.42 in 2009, 2008 and 2007, respectively. 15 financials 2009 civic AnD inDusTry AWArDs MID-AMERICA APARTMENT COMMUNITIES, INC.: BusinessTN Magazine—BusinessTN Best Places to Work in TN (6th year) MID-AMERICA APARTMENT COMMUNITIES, INC.: The Greater Lexington Apartment Assoc.—Property Management Company of the Year ABBINGTON PLACE: The City of Huntsville—Beautification Award ANSLEY VILLAGE: Middle Georgia Apartment Assoc.—Beautification Award (for age group) BRENTWOOD DOWNS: Nashville Apartment Assoc.—2nd Place Flowers CALAIS FOREST: Arkansas Apartment Assoc.—Property of the Year (201+ units) CROSSWINDS: State of MS Apartment Assoc. Awards—Property of the Year (for age group) CROSSWINDS/ANGELA SNOW: State of MS Apartment Assoc. Awards—Property Manager of the Year CROSSWINDS/CRYSTAL MCCORMICk: State of MS Apartment Assoc. Awards—Assistant Manager of the Year—State of MS GEORGETOWN GROVE : Savannah Apartment Assoc.—Landscape Beautification Award GLENN EVERS: First Coast Apartment Assoc.—Regional Manager of the Year GRAND RESERVE: Greater Lexington Apartment Assoc.—Service Team of the Year GRAND RESERVE: Greater Lexington Apartment Assoc.—2nd Place Beautification Award GRAND RESERVE/MARCUS ALExANDER: Greater Lexington Apartment Assoc.—Groundskeeper of the Year GRANDE VIEW: Nashville Apartment Assoc.—Best Flowers GREENBROOk/SAMMY BRADDOCk: Apartment Assoc. of Greater Memphis—Maintenance Tech of the Year (300+ units) HOWELL COMMONS: Upper State Apartment Assoc.—Best Landscape and Floral Design kIRBY STATION: Apartment Assoc. of Greater Memphis—Best Landscape (for group) kIRBY STATION: Apartment Assoc. of Greater Memphis—Renovation Under $1 million LAkESHORE LANDING: State of MS Apartment Assoc. Awards—Property of the Year (for age group) LAkESHORE LANDING: Mississippi Multifamily Council—Beautification Showcase Winner (for group) LAkESIDE: First Coast Apartment Assoc.—Conventional Community of the Year LAkESIDE/kRIS MILLERSCHONE: First Coast Apartment Assoc.—Maintenance Supervisor of the Year LAkESIDE/PAUL VAN VLIET: First Coast Apartment Assoc.—Groundskeeper of the Year OAkS AT WILMINGTON ISLAND: Savannah Apartment Assoc.—Platinum Award Best Overall Landscaping PARk AT HERMITAGE: Nashville Apartment Assoc.—3rd Place PARk ESTATE: Apartment Assoc. of Greater Memphis—Best Landscape (for group) PARk PLACE: Spartanburg Chamber of Commerce—2nd Place PEAR ORCHARD: Mississippi Multifamily Council—Beautification Showcase Winner (for group) PRESCOTT: Metro Atlanta Landscape and Turf Assoc.—Distinction award for seasonal color REFLECTION POINTE: Mississippi Multifamily Council—Best Entrance RESERVE AT DExTER LAkE: Apartment Assoc. of Greater Memphis—Best Landscape (for group) RESERVE AT DExTER LAkE: Apartment Assoc. of Greater Memphis—Outstanding Maintenance Team (300+ units) RESERVE AT DExTER LAkE/TONYA ANDERSON: Apartment Assoc. of Greater Memphis—Leasing Professional of the Year (300+ units) SILVERADO AT BRUSHY CREEk: PLANET—Environmental Improvement Award ST. AUGUSTINE: USSC—United States Sign Council—Overall Best of Show ST. AUGUSTINE/BRIAN CRON: First Coast Apartment Assoc.—Leasing Consultant of the Year TERRACES AT TOWNE LAkE: Metro Atlanta Landscape and Turf Assoc.—Distinction Award for Seasonal Color THE COLONY AT SOUTH PARk: The Apartment Assoc. of Greater Augusta—Property of the Year Beautification Award (for age group) THE CORNERS AT CRYSTAL LAkE/JAMIE CARROL: Triangle Apartment Assoc.—Leasing Professional of the Year THE CORNERS AT CRYSTAL LAkE/MICHAEL WEAVER: Triangle Apartment Assoc.—Service Technician of the Year THE FAIRWAYS/TERRY BACkMON: Columbia Apartment Assoc.—Maintenance Supervisor of the Year THE MANSION/JEFF MCkINNEY: Greater Lexington Apartment Assoc.—Maintenance Supervisor of the Year THE VILLAGE: Greater Lexington Apartment Assoc.—2nd Place Beautification Award THE VILLAGE/LANA MARIC: Greater Lexington Apartment Assoc.—Support Manager of the Year TPC COLUMBIA: Columbia Apartment Assoc.—Property of the Year (for age group) TPC GREENVILLE: Upper State Apartment Assoc.—Best Landscape and Floral Design TPC MURFREESBORO: Nashville Apartment Assoc.—1st Place WOODS OF POST HOUSE: City of Jackson, TN—Civic Pride Award WOODWINDS: The Apartment Assoc. of Greater Augusta—Property of the Year Beautification Award (for age group) MAA 16 corporAte inForMAtion Corporate Headquarters Mid-America Apartment Communities, Inc. 6584 Poplar Avenue Memphis, TN 38138 901-682-6600 www.maac.net Independent Registered Public Accounting Firm Ernst & Young LLP, Memphis, TN General Counsel Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Memphis, TN Annual Shareholders Meeting Mid-America Apartment Communities, Inc. will hold its 2010 Annual Meeting of Shareholders on Thursday, May 27, 2010, at 1:00 p.m. CDT at the Reserve at Dexter Lake apartments in 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 one outstanding series of publicly traded preferred stock which is traded under the stock symbol MAA Pr H. Transfer Agent and Registrar American Stock Transfer & Trust Company 866-668-6550 shareholder toll-free line www.amstock.com Shareholders who have questions about their accounts or who wish to change own- ership or address of stock; to report lost, stolen or destroyed certificates; or wish to sign up for our dividend reinvestment plan or direct stock purchase plan should contact American Stock Transfer & Trust Company at the share holder service num- ber listed above or access their account at the web-site listed above. Limited partners of Mid-America Apartments, L.P. wishing to transfer their units or convert units into shares of common stock of Mid-America Apartment Communities, Inc. should con- tact Mid-America directly at the corporate headquarters. Annual Report and Form 10-K A copy of Mid-America’s Annual Report and Form 10-K for the year ended December 31, 2009, as filed with the Securities and Exchange Commission (SEC) will be sent without charge upon written request to the corporate headquarters address, attention Investor Relations, and is also available on the Investor Relations page of our web-site at www.maac.net. Mid-America’s other SEC filings as well as our corporate governance documents are also available. CEO and CFO Certifications As is required by Section 303A.12(a) of the NYSE’s corporate governance standards, the CEO Certification has been previously filed without qualification with the NYSE. 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. The Open Arms Foundation The Open Arms Foundation is Mid-America’s award-winning corporate charity that pro- vides fully-furnished, two-bedroom apart- ment homes free of charge to families displaced from their own homes by long- term medical care needs. At the time of printing of this report, The Open Arms Foundation was providing 39 homes to families in medical crisis. In its 16-year history, the foundation has provided over 2,000 families with 100,000 nights of rest away from home. To find out more about The Open Arms Foundation please visit www.openarmshomes.com BoArd oF directors H. Eric Bolton, Jr. Chief Executive Officer and Chairman of the Board of Directors Mid-America Apartment Communities, Inc. Alan B. Graf, Jr. Executive Vice President and Chief Financial Officer FedEx Corporation Committees: Audit (chairman) Major General John S. Grinalds, USMC (Ret.) Past President The Citadel Committees: Audit Ralph Horn Past President, Chief Executive Officer and Chairman of the Board of Directors First Horizon National Corporation Committees: Compensation, Nominating and Corporate Governance (chairman) Philip W. Norwood President and Chief Executive Officer Faison Enterprises, Inc. Committees: Compensation (chairman), Nominating and Corporate Governance W. Reid Sanders Managing Partner Chickasaw Partners Committees: Audit William B. Sansom President, Chief Executive Officer and Chairman of the Board of Directors H.T. Hackney Co. Committees: Compensation, Nominating and Corporate Governance Simon R.C. Wadsworth Past Executive Vice President and Chief Financial Officer Mid-America Apartment Communities, Inc. Designed by Curran & Connors, Inc. / www.curran-connors.com MAA Mid-AMericA ApArtMent coMMunities, inc. 6584 Poplar Avenue Memphis, TN 38138 901-682-6600 www.maac.net 10% Cert no. SGS-COC-2420 

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