2010 Annual Repor t For over 17 years as a public company, Mid-America Apartment Communities has stood Rooted in disciplined capital deployment, Strengthened by sound financial practices, Proven by multiple market cycles, Guided by our founding principles. We have brought the brightest talent, the latest technology and the right locations together and have delivered the greatest 10 year returns in the multifamily REIT sector to our shareholders. Now, as we reflect on 2010, as our economy and capital markets continue to recover and rebuild, we are well positioned for growth in the new cycle. We are offering A BRIGHTER VIEW. We are MAA. 1225 South Church Street, Charlotte, North Carolina MAA: A Brighter View Mid-America Apartment Communities became MAA as the culmination of a rebranding effort unveiled March 2011. Our new identity as MAA retains a commitment to our found- ing principles while recognizing the dynamic markets and operating capabilities that define us today. Brighter Living MAA’s suite of enhanced resident services makes apartment living a smart, easy choice. Services include myMAA.com—a mobile friendly, online portal for paying rent, submit- ting and tracking service requests and keep ing up with community events. Greener Living MAA’s green program creates a socially responsible environment and a better quality of life for residents and associates. Recycling discarded carpet, installing low- flow water devices and employing water conservation practices are but a few of MAA’s green initiatives. BRIGHT Growth MAA is committed to growing our company by capturing oppor tunities that bring value to the company and enhance our portfolio. In 2010, MAA completed $272 million in acquisi- tions and committed $78 million to new development. To My Fellow Shareholders: As the economy and capital markets continue to recover, we are more optimistic about the prospects for the apartment business than at any point in our company’s history. After years of overly-aggressive mortgage financing practices, we’ve entered a correction phase with a greater percentage of households in the U.S. that will now choose to rent their housing as opposed to take on the obligations associated with owning a home. And with a significant pull- back in the availability of construction financing, the level of new apartment development is well below historic norms. Growing demand, with a limited new supply of apartment housing, should support strong leasing conditions for apartment housing over the next few years. We will eventually need a recovery in the employment markets to further fuel the demand for apartments and sustain our ability to capture higher pricing. However, as the economy slowly finds traction, I’m optimistic that the job market will continue to improve, particularly in our strong Sunbelt markets, and support a long positive cycle for apartment leasing fundamentals. Signs of recovery in apartment leasing emerged in early 2010 and the momentum accelerated over the course of the year. During 2010, rents increased just over 4% and occupancy averaged a very strong 96% across our portfolio of properties owned for a year or more. The strong performance was largely due to a significant decline in the move-out of existing residents. During 2010, resident move-outs dropped to the lowest level we’ve seen in our seventeen year history as a publicly owned company. Given the weak employment market and the trend away from home ownership, the resulting fall off in resident turnover is not surprising. We expect resident retention will remain high during the coming year. p. 8 Hue, Raleigh, North Carolina p. 9 2 0 1 0 A n n u a l R e p o r t MAA Markets: Sunbelt Regional Focus Shareholder let ter continued Represents cities where Represents cities where Mid-America owns communities Mid-America owns communities Represents cities where Represents cities where Mid-America has regional offices Mid-America has regional offices p. 10 A b r i g h t e r v i e w 60000 55000 50000 45000 40000 35000 30000 25000 20000 15000 10000 Employment Growth Projections 2011-2014 3.2% 3.1% 2.9% 2.5% 3.1% 2.4% 3.4% 2.6% During 2010, we were active in the acquisition market as we sought opportunities to create new value. The aggressive financing and construction environment, contributing to the stress in the capital markets over the last few years, began to yield some very attractive 3.5 3.5 buying opportunities in 2010 and we’re optimistic that good opportunities will continue to 3.0 3.0 be available this year. Over the course of 2010, we acquired a total of $272 million in new properties, below replacement value, at pricing that we believe will create positive cash 2.5 2.5 flow and significant new value growth over the coming years. In addition, we committed 2.0 2.0 2 . 7 % 2 . 6 % 2 . 2 % 2 . 1 % 2 . 4 % 2 . 2 % 2 . 7 % 2 . 5 % future earnings. 1.5 1.5 $78 million to new development projects that will likewise make a solid contribution to 2011 2012 2013 2014 Major Institutional Markets National MSA Average MAA Large Markets MAA Secondary Markets 1.0 1.0 To support our growth plans and ensure we are well positioned to capture strong perfor- mance from our existing properties, we were also very active in 2010 with efforts to 0.5 0.5 strengthen both the balance sheet and the operating platform of our company. 0.0 0.0 At the end of 2010, MAA’s debt to gross assets was 48.8% and our fixed charge coverage was 3.4 times. Both of these metrics are stronger than they’ve ever been in our company’s history. During 2010, we called and retired the outstanding $155 million of Series H Preferred Stock, carrying a coupon rate of 8.3%, which will help to further lower our aggregate cost of capital. $60,000 55,000 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 Return on Investment Value of $10,000 Investment MAA Investment Peer Group Investment $54,035 $31,791 p. 11 Times Square at Craig Ranch, Dallas, Texas 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: SNL Equity Research BRIGHT Communities MAA’s award winning landscapes and exceptionally maintained build- ings are well positioned throughout the Sunbelt Region. Selective reno- vation programs create value for our shareholders and enable our communities to remain competitive. Shareholder let ter continued p. 12 A b r i g h t e r v i e w Focus on Technology ✶ Our Lease Revenue Optimizer or We continue to introduce new technologies and efficiencies to our operating platform LRO system allows us to maximize rent decisions on a real-time basis by unit. designed to better meet the lifestyle and needs of our residents, while also driving more efficiency into our operations. During 2010, we rolled out a new and more cost efficient cable television service for our residents, a new 24 hour call center for our existing residents ✶ Our mobile-friendly website allows as well as those shopping for a new apartment home, and continued to improve operating potential residents to check apart- efficiencies with enhanced web-based services and advertising. ment availability in real time, view photos and get directions to any community using GPS technology. Units can be reserved and the leasing process can be initiated all online. ✶ Our online resident portal allows our residents to stay connected with their community. This resource allows them to view and pay rent online, make maintenance requests and access community news and upcom- Over the past seventeen years as a publicly owned company, we’ve experienced a number of changes in both the capital markets and in the apartment business. The financing environment continues to ebb and flow as investment capital cycles through an appetite for yield and risk tolerances. We’ve managed our balance sheet and deployed capital to take advantage of these cycles. We’ve introduced numerous changes to our operating platform to meet our customer’s desire to make greater use of the internet and changes in how they want to interact with our properties and staff. And, of course, technology continues to cre- ate more opportunity for us to capture improved efficiencies in how we execute our opera- tions. In adapting to these influences, we’ve worked to make a number of improvements that we believe position the company to out-perform in the region and markets where we ing events. invest, and to deliver superior long-term results on the capital invested. We believe that investing in real estate should be viewed as a long-term commitment. Our approach has p. 13 Skyview Ranch, Phoenix, Arizona BRIGHT Technology MAA’s real-time technology and online resources allow us to make better, more timely decisions and communicate with our residents the way they want to communicate with us. Bella Casita, Dallas, Texas BRIGHT People People are what define us. It is only through our associates that our properties are transformed into communities and our apartments into homes. Our seasoned manage- ment and talented team of on-site professionals are committed to providing top notch service for our residents and consistent returns for our shareholders. Employment Growth Projections 2011-2014 3.2% 3.1% 2.9% 2.5% 3.1% 2.4% 3.4% 2.6% 2 . 7 % 2 . 6 % 2 . 2 % 2 . 1 % 2 . 4 % 2 . 2 % 2 . 7 % 2 . 5 % 2011 2012 2013 2014 Major Institutional Markets National MSA Average MAA Large Markets MAA Secondary Markets Shareholder let ter continued 3.5 3.5 3.0 3.0 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0.0 0.0 $60,000 55,000 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 Return on Investment Value of $10,000 Investment MAA Investment Peer Group Investment $54,035 $31,791 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: SNL Equity Research focused on establishing a portfolio of investments, an operating platform and a balance sheet that are designed to generate high quality revenue, more stable cash flow and superior results for capital over the long-haul; delivering superior “full cycle performance.” Through calendar year 2010, MAA shareholders captured an annual compound ten-year total investment return of 18.4%. This result is the best performance among all publicly traded apartment REITs traded on the New York Stock Exchange. My sincere thanks and appreciation go to all our MAA associates. Our company’s ability to out-perform in this highly competitive industry is due to the hard-work, creativity and passion that our employees bring to their responsibilities to serve our residents, perform for our shareholders and to support one another. We appreciate your investment in MAA and the trust you place in our team. p. 15 2 0 1 0 A n n u a l R e p o r t 60000 55000 50000 45000 40000 35000 30000 25000 20000 15000 10000 Eric Bolton Chairman and CEO MAA Management (from left to right): Don Aldridge, Acquisitions; Thomas L. Grimes, Jr., EVP and Director of Property Management Operations; H. Eric Bolton, Jr., CEO and Chairman of the Board; Albert M. Campbell, III, EVP and CFO; James Andrew Taylor, EVP and Director of Asset Management. 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 Annual Cash Dividends Paid $2.46 $2.46 $2.46 $2.42 $2.38 $2.35 $2.34 $2.34 $2.34 $2.34 $2.32 $2.30 ✶ 96% Year-end Physical Occupancy ✶ $78 Million in New Development $2.20 $2.14 ✶ 50% Record Low Resident Turnover ✶ 48.8% Year-end Debt to Gross Assets $2.04 $2.00 ✶ $272 Million in Acquisitions ✶ 3.4 Times Year-end Fixed Charge Coverage Source: Company Data 1.50 1.75 2.00 2.25 2.50 2.75 3.00 Total Annual Shareholder Returns MAA-US Sector Average SNL US REIT Equity S&P 500 FFO Per Share/Unit* *FFO/Share for 2010 excludes non-routine items 20.7% 12.6% 18.4% 11.6% 11.2% 11.0% 7.5% $3.73 $3.79 $3.77 $3.55 $3.20 $3.33 1.8% -2.9% 3.7% 2.3% 1.4% 2005 2006 2007 2008 2009 2010 3-Year 5-Year 10-Year Source: Company Data p. 16 A b r i g h t e r v i e w Source: SNL Equity Research Annual Cash Dividends Paid 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 $2.38 0.5 $2.35 0.0 $2.34 $2.46 $2.46 $2.46 $2.42 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 Source: Company Data 1.50 1.75 2.00 2.25 2.50 2.75 3.00 BRIGHT Results 2010 again showed that our strategy aimed at a full cycle performance with lower volatility continues to provide consistent long-term returns for our share holders. $2.34 $2.34 $2.34 $2.32 $2.30 $2.20 $2.14 $2.04 $2.00 Total Annual Shareholder Returns MAA-US Sector Average SNL US REIT Equity S&P 500 FFO Per Share/Unit* *FFO/Share for 2010 excludes non-routine items 20.7% 12.6% 1.8% -2.9% Source: SNL Equity Research 18.4% 11.6% 11.2% 11.0% 7.5% $3.73 $3.79 $3.77 $3.55 $3.20 $3.33 3.7% 2.3% 1.4% 2005 2006 2007 2008 2009 2010 3-Year 5-Year 10-Year Source: Company Data 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Financial review Financial Highlights (Dollars and shares in thousands, except per share data) Years Ended December 31, 2010 2009 2008 Net income attributable to Mid-America Apartment Communities, Inc. $ 29,761 $ 37,211 $ 30,249 Preferred dividend distribution 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 properties contributed to joint ventures Gains on dispositions within real estate joint ventures Loss (gains) on sales of discontinued operations Depreciation of real estate assets of discontinued operations Depreciation of real estate assets of real estate joint ventures Net income attributable to noncontrolling interests Funds from operations Non-routine items: Premiums and original issuance costs associated with the redemption of preferred stock Asset impairment Funds from operations before non-routine items Weighted average shares, diluted Net income per share available for common shareholders, diluted Weighted average shares and units, diluted Funds from operations per share and unit, diluted Funds from operations before non-routine items per share and unit, diluted Dividends paid per share Real estate owned, at cost Capital improvements in progress Investments in real estate joint ventures Total debt Shareholders’ equity, redeemable stock and minority interest Market capitalization (shares and units)(1) Number of properties, including joint venture ownership interest(2) Number of apartment units, including joint venture ownership interest(2) p. 17 2 0 1 0 A n n u a l R e p o r t 6,549 5,149 18,063 102,000 (330) (752) — 2 — 1,896 1,114 12,865 — 24,346 94,020 (32) — — (4,649) — 970 2,010 12,865 — 17,384 88,555 247 — (38) 120 706 953 1,822 $ 121,993 $ 116,665 $ 109,749 5,149 1,914 — — — — $ 129,056 $ 116,665 $ 109,749 31,977 0.56 34,219 3.57 3.77 2.46 $ $ $ $ 28,348 0.85 30,802 3.79 3.79 2.46 $ $ $ $ 27,084 0.64 29,459 3.73 3.73 2.46 $ $ $ $ $ 2,985,447 $ 2,732,218 $ 2,552,808 $ $ 11,501 17,505 $ $ 10,517 8,619 $ $ 25,268 6,824 $ 1,500,193 $ 1,399,596 $ 1,323,056 $ 544,392 $ 456,028 $ 444,422 $ 2,353,115 $ 1,671,036 $ 1,293,145 157 46,310 147 43,604 145 42,554 (1) Market capitalization includes all series of preferred shares (value based on $25 per share liquidation preference) and common shares, regardless of classification 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. 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 p. 18 Total assets A b r i g h t e r v i e w 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, $25 per share liquidation preference; 8.30% Series H Cumulative Redeemable Preferred Stock, 6,200,000 shares authorized, 0 and 6,200,000 shares issued and outstanding at December 31, 2010 and December 31, 2009, respectively Common stock, $0.01 par value per share, 50,000,000 shares authorized; 34,871,399 and 29,095,251 shares issued and outstanding at December 31, 2010 and December 31, 2009, respectively 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, 2010 2009 $ 288,890 2,564,887 83,251 11,501 $ 255,425 2,364,918 73,975 10,517 2,948,529 (889,841) 2,704,835 (788,260) 2,058,688 1,306 8,141 17,505 2,085,640 45,942 1,514 13,713 25,133 4,106 — 1,916,575 1,306 8,721 8,619 1,935,221 13,819 561 13,369 19,731 4,106 19 $ 2,176,048 $ 1,986,826 $ 1,500,193 1,815 48,936 73,999 6,693 20 $ 1,399,596 1,702 51,160 69,528 8,789 23 1,631,656 3,764 1,530,798 2,802 — 62 348 1,142,023 (575,021) (48,847) 518,503 22,125 290 988,642 (510,993) (47,435) 430,566 22,660 540,628 453,226 $ 2,176,048 $ 1,986,826 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 Asset impairment Net casualty gains (loss) and other settlement proceeds Gain (loss) on sale of non-depreciable assets Gain on properties contributed to joint ventures Income from continuing operations before loss from real estate joint ventures Loss from real estate joint ventures Income from continuing operations Discontinued operations: Income from discontinued operations before (loss) gain on sale (Loss) gain 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 Income from continuing operations available for common shareholders 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 Years ended December 31, 2010 2009 2008 $ 369,547 32,002 $ 357,008 21,243 $ 352,414 17,391 401,549 680 378,251 293 369,805 206 402,229 378,544 370,011 51,363 15,150 45,850 24,447 10,129 27,681 104,064 278,684 2,512 18,035 12,354 90,644 837 (55,996) — (2,627) (1,914) 330 — 752 32,026 (1,149) 30,877 — (2) 30,875 1,114 29,761 6,549 5,149 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 — $ 18,063 $ 24,346 $ 17,384 31,856 121 31,977 28,341 7 28,348 26,943 141 27,084 $ 18,063 2 $ 24,346 (5,883) $ 17,384 (1,192) $ 18,065 $ 18,463 $ 16,192 $ 0.57 — $ 0.65 0.20 $ 0.60 0.04 $ 0.57 $ 0.85 $ 0.64 $ 0.56 — $ 0.65 0.20 $ 0.60 0.04 $ 0.56 $ 0.85 $ 0.64 $ 2.4725 $ 2.4600 $ 2.4600 p. 19 2 0 1 0 A n n u a l R e p o r t Corporate Information Corporate Headquarters MAA 6584 Poplar Avenue Memphis, TN 38138 901-682-6600 www.maac.com General Counsel Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Memphis, TN Independent Registered Public Accounting Firm Ernst & Young LLP, Memphis, TN Annual Shareholders Meeting MAA will hold its 2011 Annual Meeting of Shareholders on Thursday, May 26, 2011, at 1:00 p.m. CDT at the Reserve at Dexter Lake apartments in Memphis, TN. Stock Listings MAA’s common stock is listed on the New York Stock Exchange (NYSE) and is traded under the stock symbol MAA. Transfer Agent and Registrar American Stock Transfer & Trust Company 866-668-6550 shareholder toll-free line www.amstock.com p. 20 A b r i g h t e r v i e w Registered 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 enroll in our dividend reinvestment plan or direct stock purchase program should contact America Stock Transfer & Trust Company at the shareholder service number listed above or access their account at the web-site listed above. Beneficial owners who own shares held in “street name” should contact their broker or bank for all questions. Limited partners of Mid-America Apartments, L.P. wishing to transfer their units or convert units into shares of common stock of MAA should contact MAA directly at the corporate headquarters. Annual Report and Form 10-K A copy of MAA’s Annual Report and Form 10-K for the year ended December 31, 2010, 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.com. MAA’s other SEC filings as well as 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 qualifi- cation 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 MAA’s Form 10-K. The Open Arms Foundation The Open Arms Foundation is MAA’s award-winning corporate charity that provides fully-furnished, two-bedroom apartment homes free of charge to families displaced from their own homes while seeking medical treatment. In addition to rent, the Open Arms Foundation also pays for basic utilities including electricity/gas, phone, cable and internet. At the time of printing of this report, The Open Arms Foundation was providing 40 homes to fami- lies in medical crisis across 10 states. In its 17-year history, the foundation has provided 2,200 families with nearly 120,000 nights of rest away from home. To find out more about The Open Arms Foundation please visit www.maac.com. Board of Directors H. Eric Bolton, Jr. Chief Executive Officer and Chairman of the Board of Directors MAA 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 MAA M a j o r P h o t o g r a p h y J o h n R a e N Y C D e s i g n e d b y C u r r a n & C o n n o r s , I n c . / w w w . c u r r a n - c o n n o r s . c o m 6584 Poplar Avenue, Memphis, TN 38138 P: 901-682-6600 www.maac.com P R I N T E D USI N G Y 1 0 0 % WIND E N E R G Supplied by Community Energy