Mid-America Apartment Communities
Annual Report 2015

Plain-text annual report

L F , E L L I V N O S K C A J : E D I S R E V I R 0 2 2 2 0 1 5 A N N U A L R E P O R T T O M Y F E L L O W S H A R E H O L D E R S , MAA HAD A TERRIFIC YEAR OF PERFORMANCE IN 2015. SUPPORTED BY RECORD AVERAGE DAILY OCCUPANCY OF 96.1%, SAME STORE NET OPERATING INCOME INCREASED A STRONG 7.2%. Over the past several years, we’ve focused on steadily recycling capital from older properties into newer investments that we believe will help support higher long-term earnings. We saw record volume in 2015. We took advantage of the robust investor appetite for multifamily real estate and sold 21 apartment properties capturing gains of $190 million and generating a 14.1% internal rate of return on the capital invested. MAA’s balance sheet continued to gain strength during the year as our financial leverage was further reduced, fixed-charge coverage improved and our unencumbered asset base grew to 72% of total gross assets. All of these metrics are stronger than at any point in our 22-year history as a public company. MA A : 2015 Annual Report This strong performance supported a solid year of investment return for MAA shareholders with a sector-leading total shareholder return of 26.5% for calendar year 2015. Our Board of Directors recently increased MAA’s annual dividend rate to $3.28, a record-high 6.5% increase. Our earnings growth rate has continued to improve and our dividend coverage is stronger than at any point in our company history. The outlook for the apartment business remains favorable. The growing impact of the millennial generation and their propensity to rent their housing, along with the continued recovery in the economy and employment market, support a growing demand for apartments. While we continue to believe that our industry will retain its long-established cyclical tendencies, absent a material slowdown in the economy, we should continue to capture rent growth above long-term trends over the near term. Our long-term performance goals for shareholder capital and the strategy we employ remain anchored with an objective to outperform over the “full cycle.” We believe that strength and proper positioning for the down part of the cycle affords the best opportunities for meaningful value creation. It also protects against value destruction that can happen during periods of contraction. Demonstrated by our results over the past few years, we use the up cycles to build platform strength, to fine-tune our systems and take advantage of the strong leasing conditions to deliver solid performance and results. Our full-cycle strategy includes focusing on deploying capital across the high-growth Sunbelt region in a balanced and well-diversified manner. Through investing in both large and secondary markets, balanced across urban, suburban, inner loop and satellite city locations, we are able to capture a lower level of earnings volatility across the full economic cycle. Our ability to drive high-quality recurring earnings supports steady dividend growth and the opportunity to compound value over the long haul. As a consequence of our active capital recycling efforts over the past five years, we’ve meaningfully repositioned the portfolio with a higher-end product that appeals to a broad segment of the rental market. With the large-scale efficiencies and sophisticated capabilities of our operating platform and investment-grade balance sheet, we capture numerous competitive advantages. Those advantages support an ability to drive long-term investment value surpassing the performance generally associated with the pricing for apartment real estate in the markets where we operate. At its core, MAA’s ability to compound value at attractive rates over time is based on a simple principle of investing capital in apartment real estate at pricing that is at a discount to the capability of our platform to generate outperformance. We believe our full cycle performance objectives and unique strategy within the publicly-traded apartment REIT sector have been critical factors in supporting our ability to generate top-tier, long-term results for shareholders. The catalyst for these solid results not only in 2015 but over the past 22 years is the hard work and commitment that our associates bring to their roles each day at MAA in surpassing expectations of those we serve. In closing, I want to express my sincere appreciation for our Board of Directors who provide wise counsel, oversight and support to our team. In accordance with our retirement policy, Ralph Horn, our co-lead independent director who has served on our board for the past 18 years, and John Spiegel who served first the former Colonial shareholders and then the MAA shareholders for a combined 13 years, will be retiring effective with our upcoming shareholder meeting in May. All of us at MAA are grateful for their many years of dedicated service to our company and shareholders. H. Eric Bolton, Jr. Chairman and Chief Executive Officer MA A : 2015 Annual Report 1 O U R S T R A T E G Y A BALANCED PORTFOLIO SUPPORTING SUPERIOR FULL CYCLE PERFORMANCE Carefully selected to take advantage of favorable demographic trends in high growth markets, our Sunbelt locations appeal to a broad segment of apartment renters. 79,496 UNITS 254 COMMUNITIES 15 STATES C H A R L O T T E R A L E I G H ONE OF THE FASTEST GROWING CITIES IN THE COUNTRY -U.S. Census Bureau, 2015 TOP 10 CITIES FOR YOUNG ADULTS -Forbes, 2014 N A S H V I L L E TOP TEN BEST CITIES FOR BUSINESS AND CAREERS -Forbes, 2014 A U S T I N ONE OF AMERICA’S BEST CITIES FOR SINGLES -Travel + Leisure, 2016 LARGE MARKETS SECONDARY MARKETS 2 MA A : 2015 Annual Report C H A R L E S T O N TOP 10 CITIES FOR JOB CREATION -Forbes, 2015 J A C K S O N V I L L E BEST CITY TO START A BUSINESS -WalletHub, 2014 A T L A N T A TOP 10 CITIES FOR MILLENNIALS -Money, 2015 S U P E R I O R C O M P O U N D I N G P E R F O R M A N C E RETURN ON INVESTMENT VALUE OF $10,000 INVESTMENT AT DECEMBER 31 105,000 105,000 95,000 95,000 85,000 85,000 75,000 75,000 65,000 65,000 55,000 55,000 45,000 45,000 35,000 35,000 25,000 25,000 15,000 15,000 5,000 5,000 $94,872 $94,872 $56,924 $56,924 $47,903 $47,903 $20,799 $20,799 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 MAA INVESTMENT MULTIFAMILY PEERS* MSCI US REIT (RMS) S&P 500 *Multifamily Peers: AIV, AVB, CPT, EQR, ESS, PPS, UDR Source: S&P Global Market Intelligence TOTAL ANNUAL SHAREHOLDER RETURNS 1-YE AR 26.5% 26.5% 14.4% 14.4% 2.8% 2.8% 1.4% 1.4% 15-YE AR 20-YE AR MAA MAA MULTIFAMILY PEERS* MULTIFAMILY PEERS* SNL US REIT EQUITY SNL US REIT EQUITY S&P 500 S&P 500 16.2% 16.2% 11.8% 11.8% 11.5% 11.5% 5% 5% MAA MAA MULTIFAMILY PEERS* MULTIFAMILY PEERS* SNL US REIT EQUITY SNL US REIT EQUITY S&P 500 S&P 500 13.8% 13.8% 13.3% 13.3% 11.1% 11.1% 8.2% 8.2% MAA MAA MULTIFAMILY PEERS* MULTIFAMILY PEERS* SNL US REIT EQUITY SNL US REIT EQUITY S&P 500 S&P 500 *Multifamily Peers: AIV, AVB, CPT, EQR, ESS, PPS, UDR Source: S&P Global Market Intelligence MA A : 2015 Annual Report 3 C O L O N I A L R E S E R V E A T M E D I C A L D I S T R I C T : D A L L A S , T X D E L I V E R I N G S T R O N G S H A R E H O L D E R V A L U E 87 CONSECUTIVE CASH DIVIDENDS PAID ANNUAL DIVIDENDS PAID $2.30 $2.32 $2.34 $2.34 $2.34 $2.34 $2.35 $2.38 $2.42 $2.46 $2.46 $2.46 $2.51 $2.20 $2.14 $2.00 $2.04 $3.08 $2.92 $2.78 $2.64 $3.00 $2.50 $2.00 $1.50 $1.00 $1.21 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Company Data 4 MA A : 2015 Annual Report JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 1 OPERATOR ABIGAELS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K (mark one) ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2015 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-12762 (Mid-America Apartment Communities, Inc.) Commission File Number 333-190028-01 (Mid-America Apartments, L.P.) MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. (Exact name of registrant as specified in its charter) Tennessee (Mid-America Apartment Communities, Inc.) Tennessee (Mid-America Apartments, L.P.) (State or other jurisdiction of incorporation or organization) 62-1543819 62-1543816 (IRS Employer Identification Number) 6584 Poplar Avenue, Memphis, Tennessee, 38138 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code (901) 682-6600 Securities registered pursuant to Section 12(b) of the Act: Title of each class Common Stock, par value $.01 per share (Mid-America Apartment Communities, Inc.) Securities registered pursuant to Section 12(g) of the Act: None. Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Mid-America Apartment Communities, Inc. Mid-America Apartments, L.P. YES ý No o YES o No ý Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Mid-America Apartment Communities, Inc. Mid-America Apartments, L.P. YES o No ý YES o No ý Name of each exchange on which registered New York Stock Exchange Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ý No o YES ý No o Mid-America Apartment Communities, Inc. Mid-America Apartments, L.P. Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Mid-America Apartment Communities, Inc. Mid-America Apartments, L.P. YES ý No o YES ý No o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Act. (Check one) Mid-America Apartment Communities, Inc. Large accelerated filer ý Accelerated filer o Mid-America Apartments, L.P. Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company o Large accelerated filer o Non-accelerated filer ý (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Accelerated filer o Smaller reporting company o Mid-America Apartment Communities, Inc. Mid-America Apartments, L.P. YES o No ý YES o No ý The aggregate market value of the 49,831,920 shares of the registrant’s common stock held by non-affiliates of Mid-America Apartment Communities, Inc. was approximately $3,628,262,095 based on the closing price of $72.81 as reported on the New York Stock Exchange on June 30, 2015. This calculation excludes shares of common stock held by the registrant’s officers and directors and each person known by the registrant to beneficially own more than 5% of the registrant’s outstanding shares, as such persons may be deemed to be affiliates. This determination of affiliate status should not be deemed conclusive for any other purpose. As of February 19, 2016 there were 75,431,785 shares of Mid-America Apartment Communities, Inc. common stock outstanding. There is no public trading market for the partnership units of Mid-America Apartments, L.P. As a result, an aggregate market value of the partnership units of Mid- America Apartments, L.P. cannot be determined. Documents Incorporated by Reference Portions of the proxy statement for the annual shareholders meeting of Mid-America Apartment Communities, Inc. to be held on May 19, 2016 are incorporated by reference into Part III of this report. We expect to file our proxy statement within 120 days after December 31, 2015. JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 2 OPERATOR ABIGAELS MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. TABLE OF CONTENTS Item 1. 1A. 1B. 2. 3. 4. PART I Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unresolved Staff Comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mine Safety Disclosures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of PART II Equity Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Management’s Discussion and Analysis of Financial Condition and Results of Operations. . . . . . . . . . . Quantitative and Qualitative Disclosures About Market Risk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial Statements and Supplementary Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. . . . . . . . . . Controls and Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART III Directors, Executive Officers and Corporate Governance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certain Relationships and Related Transactions, and Director Independence. . . . . . . . . . . . . . . . . . . . . . Principal Accountant Fees and Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART IV Exhibits and Financial Statement Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. 7. 7A. 8. 9. 9A. 9B. 10. 11. 12. 13. 14. 15. Page 6 14 27 27 37 38 39 42 47 62 63 63 63 64 65 65 65 65 65 66 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 3 OPERATOR ABIGAELS EXPLANATORY NOTE This report combines the annual reports on Form 10-K for the year ended December 31, 2015 of Mid-America Apartment Communities, Inc., a Tennessee corporation, and Mid-America Apartments, L.P., a Tennessee limited partnership, of which Mid-America Apartment Communities, Inc. is the sole general partner. Unless the context otherwise requires, all references in this report to “MAA” refer only to Mid-America Apartment Communities, Inc., and not any of its consolidated subsidiaries. Unless the context otherwise requires, all references in this Report to “we,” “us,” “our,” or the “Company” refer collectively to Mid-America Apartment Communities, Inc., together with its consolidated subsidiaries, including Mid-America Apartments, L.P. Unless the context otherwise requires, the references in this Report to the “Operating Partnership” or “MAALP” refer to Mid-America Apartments, L.P. together with its consolidated subsidiaries. “Common stock” refers to the common stock of MAA and “shareholders” means the holders of shares of MAA’s common stock. The limited partnership interests of the Operating Partnership are referred to as “OP Units” and the holders of the OP Units are referred to as “unitholders”. This combined Form 10-K is being filed separately by MAA and MAALP. As of December 31, 2015, MAA owned 75,408,571 units (or approximately 94.8%) of the limited partnership interests of the Operating Partnership. MAA conducts substantially all of its business and holds substantially all of its assets through the Operating Partnership, and by virtue of its ownership of the OP Units and being the Operating Partnership’s sole general partner, MAA has the ability to control all of the day-to-day operations of the Operating Partnership. We believe combining the annual reports on Form 10-K of MAA and the Operating Partnership, including the notes to the consolidated financial statements, into this single report results in the following benefits: • • • enhances investors’ understanding of MAA and the Operating Partnership by enabling investors to view the business as a whole in the same manner that management views and operates the business; eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure in this report applies to both MAA and the Operating Partnership; and creates time and cost efficiencies through the preparation of one combined report instead of two separate reports. Management operates MAA and the Operating Partnership as one business. The management of the Company is comprised of individuals who are officers of MAA and employees of the Operating Partnership. We believe it is important to understand the few differences between MAA and the Operating Partnership in the context of how MAA and the Operating Partnership operate as a consolidated company. MAA and the Operating Partnership are structured as an “umbrella partnership REIT,” or UPREIT. MAA’s interest in the Operating Partnership entitles MAA to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to MAA’s percentage interest therein and entitles MAA to vote on substantially all matters requiring a vote of the partners. MAA’s only material asset is its ownership of limited partnership interests in the Operating Partnership; therefore, MAA does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time-to-time and guaranteeing certain debt of the Operating Partnership. The Operating Partnership holds, directly or indirectly, all of our real estate assets. Except for net proceeds from public equity issuances by MAA, which are contributed to the Operating Partnership in exchange for limited partnership interests, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, direct or indirect incurrence of indebtedness and issuance of partnership units. The presentation of MAA’s shareholders’ equity and the Operating Partnership’s capital are the principal areas of difference between the consolidated financial statements of MAA and those of the Operating Partnership. MAA’s shareholders’ equity may include shares of preferred stock, shares of common stock, additional paid-in capital, cumulative earnings, cumulative distributions, noncontrolling interest, preferred units, treasury shares, accumulated other comprehensive income and redeemable common units. The Operating Partnership’s capital may include common capital and preferred capital of the general partner (MAA), limited partners’ preferred capital, limited partners’ noncontrolling interest, accumulated other comprehensive income and redeemable common units. Redeemable common units represent the number of outstanding limited partnership units as of the date of the applicable balance sheet, valued at the greater of the closing market price of MAA’s common stock or the aggregate value of the individual partners’ capital balances. Holders of OP Units (other than MAA and its corporate affiliates) may require us to redeem their OP Units from time to time, in which case we may, at our option, pay the redemption price either in cash (in an 3 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 4 OPERATOR ABIGAELS amount per OP Unit equal, in general, to the average closing price of MAA’s common stock on the New York Stock Exchange over a specified period prior to the redemption date) or by delivering one share of our common stock (subject to adjustment under specified circumstances) for each OP Unit so redeemed. In order to highlight the material differences between MAA and the Operating Partnership, this Report includes sections that separately present and discuss areas that are materially different between MAA and the Operating Partnership, including: • • • • • the selected financial data in Item 6 of this Report; the consolidated financial statements in Item 8 of this report; certain accompanying notes to the financial statements, including Note 3 - Earnings per Common Share of MAA and Note 4 - Earnings per OP Unit of MAALP; Note 10 - Shareholders’ Equity of MAA and Note 11 - Partners’ Capital of MAALP; and Note 19 - Selected Quarterly Financial Information of MAA (Unaudited) and Note 20 - Selected Quarterly Financial Information of MAALP (Unaudited); the controls and procedures in Item 9A of this report; and the certifications of the Chief Executive Officer and Chief Financial Officer of MAA included as Exhibits 31 and 32 to this report. In the sections that combine disclosure for MAA and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership (directly or indirectly through one of its subsidiaries) is generally the entity that enters into contracts, holds assets and issues debt, management believes this presentation is appropriate for the reasons set forth above and because the business is one enterprise and we operate the business through the Operating Partnership. 4 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 5 OPERATOR ABIGAELS PART I RISKS ASSOCIATED WITH FORWARD LOOKING STATEMENTS We consider this and other sections of this Annual Report on Form 10-K to contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, with respect to our expectations for future periods. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. Such forward-looking statements may include, without limitation, statements concerning property acquisitions and dispositions, joint venture activity, development and renovation activity as well as other capital expenditures, capital raising activities, rent and expense growth, occupancy, financing activities and interest rate and other economic expectations. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the results of operations, financial conditions or plans expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such forward-looking statements included in this report may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. The following factors, among others, could cause our future results to differ materially from those expressed in the forward-looking statements: • • • • • • • • • • • • • • • inability to generate sufficient cash flows due to market conditions, changes in supply and/or demand, competition, uninsured losses, changes in tax and housing laws, or other factors; exposure, as a multifamily focused REIT, to risks inherent in investments in a single industry and sector; adverse changes in real estate markets, including, but not limited to, the extent of future demand for multifamily units in our significant markets, barriers of entry into new markets which we may seek to enter in the future, limitations on our ability to increase rental rates, competition, our ability to identify and consummate attractive acquisitions or development projects on favorable terms, our ability to consummate any planned dispositions in a timely manner on acceptable terms, and our ability to reinvest sale proceeds in a manner that generates favorable returns; failure of new acquisitions to achieve anticipated results or be efficiently integrated; failure of development communities to be completed, if at all, within budget and on a timely basis or to lease-up as anticipated; unexpected capital needs; changes in operating costs, including real estate taxes, utilities and insurance costs; losses from catastrophes in excess of our insurance coverage; ability to obtain financing at favorable rates, if at all, and refinance existing debt as it matures; level and volatility of interest or capitalization rates or capital market conditions; loss of hedge accounting treatment for interest rate swaps or interest rate caps; the continuation of the good credit of our interest rate swap and cap providers; price volatility, dislocations and liquidity disruptions in the financial markets and the resulting impact on financing; the effect of any rating agency actions on the cost and availability of new debt financing; significant decline in market value of real estate serving as collateral for mortgage obligations; 5 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 6 OPERATOR ABIGAELS • • • • • • • significant change in the mortgage financing market that would cause single-family housing, either as an owned or rental product, to become a more significant competitive product; our ability to continue to satisfy complex rules in order to maintain our status as a REIT for federal income tax purposes, the ability of the Operating Partnership to satisfy the rules to maintain its status as a partnership for federal income tax purposes, the ability of our taxable REIT subsidiaries to maintain their status as such for federal income tax purposes, and our ability and the ability of our subsidiaries to operate effectively within the limitations imposed by these rules; inability to attract and retain qualified personnel; potential liability for environmental contamination; adverse legislative or regulatory tax changes; litigation and compliance costs; and other risks identified in this Annual Report on Form 10-K including under the caption “Item 1A. Risk Factors” and, from time to time, in other reports we file with the Securities and Exchange Commission, or the SEC, or in other documents that we publicly disseminate. New factors may also emerge from time to time that could have a material adverse effect on our business. Except as otherwise required by law, we undertake no obligation to publicly update or revise these forward-looking statements to reflect events, circumstances or changes in expectations after the date on which this Annual Report on Form 10-K is filed. ITEM 1. BUSINESS OVERVIEW MAA is a multifamily focused, self-administered and self-managed real estate investment trust, or REIT. We own, operate, acquire and selectively develop apartment communities primarily located in the Southeast and Southwest regions of the United States. Our activities include full ownership and operation of 254 multi-family properties and partial ownership and operation of two commercial properties as of December 31, 2015, located in Alabama, Arizona, Arkansas, Florida, Georgia, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nevada, North Carolina, South Carolina, Tennessee, Texas and Virginia. As of December 31, 2015, we maintained full or partial ownership in the following properties: Multifamily: Commercial: Consolidated Properties 254 Units 79,496 Unconsolidated Properties — Units — Total Properties 254 Total Units 79,496 Consolidated Properties 1 Sq. Ft.(1) 208,037 Unconsolidated Properties 1 Sq. Ft. 29,971 Total Properties Total Sq. Ft. 2 238,008 (1) Excludes space owned by anchor tenants as well as commercial space located at multifamily communities. Our business is conducted principally through the Operating Partnership. MAA is the sole general partner of the Operating Partnership, holding 75,408,571 OP units, comprising a 94.8% partnership interest in the Operating Partnership as of December 31, 2015. MAA and MAALP were formed in Tennessee in 1993. Our offices are located at 6584 Poplar Avenue, Memphis, Tennessee 38138 and our telephone number is (901) 682-6600. As of December 31, 2015, we had 1,949 full-time employees and 40 part-time employees. 6 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 7 OPERATOR ABIGAELS REPORTING SEGMENTS As of December 31, 2015, we owned 254 multifamily apartment communities located in 15 states from which we derived all significant sources of earnings and operating cash flows. Additionally, we had partial ownership of two commercial properties in two states. Senior management evaluates performance and determines resource allocations by reviewing apartment communities individually and in the following reportable operating segments: • • Large market same store communities are generally communities in markets with a population of at least 1 million and at least 1% of the total public multifamily REIT units that we have owned and that have been stabilized for at least a full 12 months. Secondary market same store communities are generally communities in markets with populations of more than 1 million but less than 1% of the total public multifamily REIT units or markets with populations of less than 1 million that we have owned and that have been stabilized for at least a full 12 months. • Non same store communities and other includes recent acquisitions, communities in development or lease-up, communities that have been identified for disposition, and communities that have undergone a significant casualty loss. Also included in non same store communities are non-multifamily activities which represent less than 1% of our portfolio. On the first day of each calendar year, we determine the composition of our same store operating segments for that year as well as adjust the previous year, which allows us to evaluate full period-over-period operating comparisons. Properties in development or lease-up will generally be added to the same store portfolio on the first day of the calendar year after they have been owned and stabilized for at least a full 12 months. Communities are considered stabilized after achieving 90% occupancy for 90 days. Communities that have been identified for disposition are excluded from our same store portfolio. A summary of segment operating results for 2015, 2014 and 2013 is included in Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements, Note 16. Additionally, segment operating performance for such years is discussed in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, in this Annual Report on Form 10-K. BUSINESS OBJECTIVES Our primary business objectives are to protect and grow existing property values, to maintain a stable and increasing cash flow that will fund our dividends and distributions through all parts of the real estate investment cycle, and to create shareholder value by growing in a disciplined manner. To achieve these objectives, we intend to continue to pursue the following goals and strategies: • effectively and efficiently operate our existing properties with an intense property and asset management focus and a decentralized structure; • manage real estate cycles by taking an opportunistic approach to buying, selling, renovating and developing apartment communities; • • diversify investment capital across both large and secondary markets to achieve a growing and less volatile operating performance; and actively manage our capital structure to help enhance predictability of earnings to fund our dividends and distributions. 2015 HIGHLIGHTS • Core Funds From Operations, or Core FFO, which excludes certain non-routine items, grew 10% over the previous year to $5.51 per diluted share and unit. • Average revenue per occupied unit for the same store portfolio increased 4.9% for the year ended December 31, 2015 to $1,109, primarily driven by an increase in average effective rent per unit of 4.4%. • Acquired seven multifamily communities, totaling 1,782 units, and sold 21 multifamily communities, totaling 5,105 units. 7 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 8 OPERATOR ABIGAELS • • • Completed the construction of two development communities, and had five communities, totaling 748 units, under construction at the end of the year. Completed an unsecured public bond offering through the Operating Partnership. The Operating Partnership issued $400 million of ten year senior unsecured notes at a coupon rate of 4.00% and an issuance price of 98.990%. Completed the refinancing of an unsecured revolving credit facility, increasing borrowing capacity to $750 million. OPERATIONS STRATEGY Our goal is to generate return on investment collectively and in each apartment community by increasing revenues, controlling operating expenses, maintaining high occupancy levels and reinvesting in the protection and income producing capacity of each community as appropriate. The steps taken to meet these objectives include: • • • • • • • providing management information and improved customer services through technology innovations; utilizing systems to enhance property managers’ ability to optimize revenue by adjusting rental rates in response to local market conditions and individual unit amenities; implementing programs to control expenses through investment in cost-saving initiatives; analyzing individual asset productivity performances to identify best practices and improvement areas; proactively maintaining the physical condition of each property through ongoing capital investments; improving the “curb appeal” of the apartment communities through extensive landscaping and exterior improvements, and repositioning apartment communities from time-to-time to enhance or maintain market positions; aggressively managing lease expirations to align with peak leasing traffic patterns and to maximize productivity of property staffing; allocating additional capital, including capital for selective interior and exterior improvements; • • compensating employees through performance-based compensation and stock ownership programs; and • maintaining a hands-on management style and “flat” organizational structure that emphasizes property level decision making coupled with asset management and senior management’s monitoring. We believe that our decentralized operating structure capitalizes on specific market knowledge, provides greater personal accountability than a centralized structure and is beneficial in the acquisition and redevelopment processes. To support this decentralized operational structure, senior and executive management, along with various asset management functions, are proactively involved in supporting and reviewing property management through extensive reporting processes and frequent on-site visits. To maximize the amount of information shared between senior and executive management and the properties on a real time basis, we utilize a web-based property management system. The system contains property and accounting modules that allow for operating efficiencies, continued expense control, provide for various expanded revenue management practices, and improve the support provided to on-site property operations. We use a “yield management” pricing program that helps our property managers optimize rental revenues, and we also utilize purchase order and accounts payable software to provide improved controls and management information. Advances in technologies continue to drive operating efficiencies in our business and help us to better meet the changing needs of our residents. Since its launch in October 2012, our residents have been utilizing our web-based resident internet portal on our website. Our residents have the ability to conduct business with us 24 hours a day, 7 days a week. In February 2013, we completed the roll out of online leasing renewals throughout our portfolio. As a result of transforming our operations through technology, resident’s satisfaction improved, and our operating teams have become more efficient. Web-based technologies have also resulted in declining marketing and advertising costs, improved cash management, and better pricing management of our available apartments. 8 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 9 OPERATOR ABIGAELS In 2015, our website exceeded 4.4 million site visitors, which translates into an 22% year-over-year increase. We attribute this increase to the third quarter website redesign, extensive search engine optimization efforts and new mobile responsive capabilities. In the fourth quarter of 2015, we had over one million site visits to our website from mobile devices, an increase of 89% versus the fourth quarter of the prior year. ACQUISITION STRATEGY One of our growth strategies is to acquire apartment communities that are located in large or secondary markets primarily throughout the Southeast and Southwest regions of the United States. Acquisitions, along with dispositions as discussed below, help us achieve and maintain our desired product mix, geographic diversification and rebalance our portfolio. Portfolio growth allows for maximizing the efficiency of the existing overhead structure. We have extensive experience in the acquisition of multifamily communities. We will continue to evaluate opportunities that arise, and will utilize this strategy to increase the number of apartment communities in strong and growing markets. The following apartment communities and land parcels were acquired by us during the year ended December 31, 2015: Multifamily Acquisitions Location Apartment Units Year Built Closing Date Residences at Burlington Creek . . . . . . . . . . . . . . SkySong . . . . . . . . . . . . . . . . . . . . . . . Retreat at West Creek . . . . . . . . . . . . . Radius . . . . . . . . . . . . . . . . . . . . . . . . . Kansas City, Missouri-Kansas MSA Scottsdale, Arizona Richmond, Virginia Norfolk/Hampton/ Virgina Beach, Virginia MSA Haven at Prairie Trace . . . . . . . . . . . . Kansas City, Missouri-Kansas MSA Cityscape at Market Center II . . . . . . . . . . . . . . . . . . . . The Denton . . . . . . . . . . . . . . . . . . . . . Dallas, Texas Kansas City, Missouri-Kansas MSA Total Multifamily Acquisitions . . . . Land Acquisitions River’s Walk . . . . . . . . . . . . . . . . . . . . Location Charleston, South Carolina Retreat at West Creek II . . . . . . . . . . . The Denton II . . . . . . . . . . . . . . . . . . . Richmond, Virginia Kansas City, Missouri-Kansas MSA Total Land Acquisitions . . . . . . . . . . DISPOSITION STRATEGY 298 325 254 2014 2014 2015 January 15, 2015 June 11, 2015 June 15, 2015 252 2012 July 28, 2015 280 318 55 1,782 Acres 2.5 4.4 4.5 11.4 2015 July 30, 2015 2015 November 19, 2015 2014 December 17, 2015 Closing Date Q1/Q2 2015 - various October 14, 2015 December 17, 2015 We sell apartment communities and other assets that no longer meet our long-term strategy or when market conditions are favorable, and we redeploy the proceeds from those sales to acquire, develop and redevelop additional apartment communities and to rebalance our portfolio across or within geographic regions. Dispositions also allow us to realize a portion of the value created through our investments and provide additional liquidity. We are then able to redeploy the net proceeds from our dispositions in lieu of raising additional capital. When we decide to sell a community, we generally solicit competing bids from unrelated parties for these individual assets and consider the sales price and other key terms of each proposal. We also consider portfolio dispositions when such a structure is useful to maximize proceeds and efficiency of execution. During the year ended December 31, 2015, we disposed of 21 multifamily properties totaling 5,105 units and one commercial property totaling 67,735 square feet. 9 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 10 OPERATOR ABIGAELS DEVELOPMENT STRATEGY As another part of our growth strategy, we invest in a limited number of development projects. Typically our agreements are structured to minimize the construction and development risk by contracting with unrelated parties to do the work through a fixed price contract. Cost overruns generally are covered by the developer or shared on a pre-determined contractual basis. We typically manage the leasing portion of the project as units become available for lease. We may also engage in limited expansion development opportunities on existing communities in which we typically serve as the developer. While we seek opportunistic new development investments offering attractive long- term investment returns, we do not currently intend to expand into development in a significant way. We expect our investment in new development will remain a smaller component of overall growth as compared to growth through acquiring existing properties. During the year ended December 31, 2015, we incurred $38.7 million in development costs. The following multifamily projects were under development as of December 31, 2015 (dollars in thousands): Project: Station Square at Location Fredericksburg, Virginia River’s Walk Phase II . . . . . . . Charleston, Cosner’s Corner II . . . . . . . South Carolina Retreat at West Creek II . . . . . Richmond, Virginia CG at Randal Lakes Total Units Units Completed Cost to Date Budgeted Cost Estimated Cost Per Unit 120 37 $18,325 $ 19,900 $166 78 — $ 8,887 $ 14,900 $191 82 — $ 3,547 $ 15,100 $184 Phase II . . . . . . . . . . . . . . . Orlando, Florida 314 — $10,517 $ 41,300 $132 Expected Completion 1st Quarter 2016 3rd Quarter 2016 2nd Quarter 2017 2nd Quarter 2017 The Denton II . . . . . . . . . . . . . Kansas City, Missouri- Kansas MSA 154 — $ 1,039 $ 25,400 $42,315 $116,600 748 37 $165 4th Quarter 2017 REDEVELOPMENT STRATEGY In 2005 we began an initiative of upgrading a significant number of our existing apartment communities in key markets across our portfolio. We focus on both interior unit upgrades and exterior amenities above and beyond routine capital upkeep in markets that we believe continue to have the ability to support additional rent growth. During the year ended December 31, 2015, we renovated 5,781 units and exterior amenities for a total of $31.0 million. We believe that the rents received on these renovated units were approximately 10.1% above the normal market rate for similar but non-renovated units. CAPITAL STRUCTURE STRATEGY We use a combination of debt and equity sources to fund our business strategy. We maintain a capital structure, focused on maintaining flexibility and low costs, that we believe allows us to proactively source potential investment opportunities in the marketplace. We have structured our debt maturity schedule to avoid significant exposure in any given year. Our primary debt financing strategy is to access the unsecured debt markets to provide our debt capital needs, but we also maintain a limited amount of secured debt and maintain our access to both the secured and unsecured debt markets for maximum flexibility. We also believe that we have significant access to the equity capital markets. At December 31, 2015, 32.2% of our total capitalization consisted of borrowings, including 12.1% under our secured borrowings and 20.1% under our unsecured credit facilities or unsecured senior notes. We currently intend to target our total debt, net of cash held, to a range of approximately 38% to 42% of the undepreciated book value of our assets. Our charter and bylaws do not limit our debt levels and our Board of Directors can modify this policy at any time. We may also issue new equity to maintain our debt within the target range. Covenants for our unsecured senior notes limit our debt to undepreciated book value of our assets to 60%. As of December 31, 2015, our ratio of debt to undepreciated book value of our assets was approximately 41.1%. 10 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 11 OPERATOR ABIGAELS We continuously review opportunities for lowering our cost of capital and increasing our shareholder value per share. We plan to continue using unsecured debt in order to take advantage of the lower cost of capital and flexibility provided by the public bond market. We will evaluate opportunities to repurchase shares when we believe that our share price is significantly below our net present value. We also look for opportunities where we can acquire or develop apartment communities, selectively funded or partially funded by sales of equity securities, when appropriate opportunities arise. We focus on improving the net present value of our investments by generating cash flows from our portfolio of assets above the estimated total cost of debt and equity capital. We routinely make new investments when we believe it will be accretive to shareholder value over the life of the investments. On December 9, 2015, we entered into distribution agreements with J.P. Morgan Securities, LLC, BMO Capital Markets Corp. and KeyBanc Capital Markets Inc. to sell up to an aggregate of 4.0 million shares of common stock, from time-to-time in at-the-market offerings or negotiated transactions through controlled equity offering programs, or ATMs. As of December 31, 2015, there were 4.0 million shares remaining under the ATMs. The following are the issuances of common stock which have been made through these types of ATM agreements through December 31, 2015: 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Number of Shares Sold Net Proceeds 194,000 $ 11,481,292 323,700 $ 18,773,485 1,955,300 $ 103,588,759 763,000 $ 32,774,757 5,077,201 $ 274,576,677 3,303,273 $ 204,534,677 1,155,511 $ 75,863,040 365,011 $ 24,753,492 — $ — $ 13,136,996 $ 746,346,179 Net Average Sales Price $59.18 $58.00 $52.98 $42.96 $54.08 $61.92 $65.65 $67.82 — $ — $ — $ — $ $56.81 Gross Proceeds Gross Average Sales Price $ 11,705,010 $60.34 $ 19,203,481 $59.32 $ 105,554,860 $53.98 $ 33,283,213 $43.62 $ 278,468,323 $54.85 $ 207,650,656 $62.86 $ 77,019,121 $66.65 $ 25,067,009 $68.67 — $ — — $ — $ 757,951,673 $57.70 We also have a dividend and distribution reinvestment stock purchase plan, or DRSPP, which allows for the optional cash purchase of shares of common stock totaling at least $250, but not more than $5,000 in any given month, free of brokerage commissions and charges. We, in our absolute discretion, may grant waivers to allow for optional cash payments in excess of $5,000. During the year ended December 31, 2015, we issued a total of 1,622 shares through the optional cash purchase feature of the DRSPP, resulting in net proceeds of $128,687. SHARE REPURCHASE PROGRAM In 1999, MAA’s Board of Directors approved an increase in the number of shares of common stock authorized to be repurchased to 4.0 million shares. As of December 8, 2015, MAA had repurchased a total of approximately 1.9 million shares, which represented approximately 8% of the shares of common stock outstanding as of the beginning of such authorization. On December 8, 2015, MAA’s Board of Directors authorized us to repurchase up to 4.0 million shares of MAA common stock, which represented approximately 5.3% of MAA’s common stock outstanding at the time of such authorization. This December 2015 authorization replaced and superseded the 1999 authorization, under which approximately 2.1 million shares remained at the time of the December 2015 authorization. From time-to-time, we may repurchase shares under the current authorization when we believe that shareholder value would be enhanced. Factors affecting this determination include, among others, the share price and expected rates of return. No shares were repurchased from 2002 through December 8, 2015 under the prior authorization, and no shares were repurchased from December 8, 2015 through December 31, 2015 under the current authorization. COMPETITION All of our apartment communities are located in areas that include other apartment communities. Occupancy and rental rates are affected by the number of competitive apartment communities in a particular area. The owners of competing apartment communities may have greater resources than us, and the managers of these apartment 11 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 12 OPERATOR ABIGAELS communities may have more experience than our management. Moreover, single-family rental housing, manufactured housing, condominiums and the new and existing home markets provide housing alternatives to potential residents of apartment communities. Competition for new residents is generally intense across all of our markets. Some competing communities offer features that our communities do not have. Competing communities can use concessions or lower rents to obtain temporary competitive advantages. Also, some competing communities are larger or newer than our communities. The competitive position of each community is different depending upon many factors including sub-market supply and demand. In addition, other real estate investors compete with us to acquire existing properties and to develop new properties. These competitors include insurance companies, pension and investment funds, public and private real estate companies, investment companies and other public and private apartment REITs, some of which may have greater resources, or lower capital costs, than we do. We believe, however, that we are generally well-positioned to compete effectively for residents and investments. We believe our competitive advantages include: • • • • a fully integrated organization with property management, development, redevelopment, acquisition, marketing, sales and financing expertise; scalable operating and support systems, which include automated systems to meet the changing electronic needs of our residents; access to a wide variety of debt and equity capital sources; geographic diversification with a presence in approximately 40 defined Metropolitan Statistical Areas across the Southeast and Southwest regions of the United States; and significant presence in many of our major markets that allows us to be a local operating expert. • Moving forward, we plan to continue to optimize lease management, improve expense control, increase resident retention efforts and align employee incentive plans with our bottom line performance. We believe this plan of operation, coupled with the portfolio’s strengths in targeting residents across a geographically diverse platform, should position us for continued operational upside. We also make capital improvements to both our apartment communities and individual units on a regular basis in order to maintain a competitive position in each individual market. MERGER OF MAA AND COLONIAL On October 1, 2013, MAA completed its previously announced merger with Colonial Properties Trust, or Colonial. Pursuant to the merger agreement, Martha Merger Sub, LP, or OP Merger Sub, a wholly-owned indirect subsidiary of the Operating Partnership, merged with and into Colonial Realty Limited Partnership, which we refer to as Colonial LP, with Colonial LP being the surviving entity of the merger and becoming a wholly-owned indirect subsidiary of the Operating Partnership, which is referred to as the partnership merger. The partnership merger was part of the transactions contemplated by the agreement and plan of merger entered into on June 3, 2013 among MAA, the Operating Partnership, OP Merger Sub, Colonial, and Colonial LP pursuant to which MAA and Colonial also combined through a merger of Colonial with and into MAA, with MAA surviving the merger, which is referred to as the parent merger. We refer to the parent merger, together with the partnership merger, as the Merger in this Annual Report on Form 10-K. Under the terms of the merger agreement, each common share of beneficial interest in Colonial, or Colonial common share, was converted into the right to receive 0.36 of a newly issued share of MAA common stock. In addition, each limited partner interest in Colonial LP designated as a “Class A Unit” and a “Partnership Unit” under the limited partnership agreement of Colonial LP, which we refer to in this Report as Colonial LP units, issued and outstanding immediately prior to the effectiveness of the partnership merger was converted into common units in our Operating Partnership at the 0.36 conversion rate. The consolidated net assets and results of operations of Colonial are included in our consolidated financial statements from and after the closing date, October 1, 2013. 12 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 13 OPERATOR ABIGAELS ENVIRONMENTAL MATTERS As a normal part of our apartment community acquisition and development processes, we generally obtain environmental studies of the sites from outside environmental engineering firms. The purpose of these studies is to identify potential sources of contamination at the site and to assess the status of environmental regulatory compliance. These studies generally include historical reviews of the site, reviews of certain public records, preliminary investigations of the site and surrounding properties, inspection for the presence of asbestos, poly-chlorinated biphenyls, or PCBs, and underground storage tanks and the preparation and issuance of written reports. Depending on the results of these studies, more invasive procedures, such as soil sampling or ground water analysis, may be performed to investigate potential sources of contamination. These studies must be satisfactorily completed before we take ownership of an acquisition or development property; however, no assurance can be given that the studies or additional documents reviewed identify all significant environmental risks. See “Risk Factors - Risks Relating to Our Real Estate Investments and our Operations - Environmental problems are possible and can be costly.” The environmental studies we received on properties that we have acquired have not revealed any material environmental liabilities. Should any potential environmental risks or conditions be discovered during our due diligence process, the potential costs of remediation will be assessed carefully and factored into the cost of acquisition, assuming the identified risks and factors are deemed to be manageable and within reason. We are not aware of any existing conditions that we believe would be considered a material environmental liability. Nevertheless, it is possible that the studies do not reveal all environmental risks or that there are material environmental liabilities of which we are not aware. Moreover, no assurance can be given concerning future laws, ordinances or regulations, or the potential introduction of hazardous or toxic substances by neighboring properties or residents. WEBSITE ACCESS TO OUR REPORTS MAA and the Operating Partnership file combined periodic reports with the SEC. These filings are available on the SEC’s website which is http://www.sec.gov. In addition, all filings made by MAA and the Operating Partnership with the SEC may be copied or read at the SEC’s Public Reference Room at 100 F Street NE, Washington, DC 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. Additionally, a copy of this Annual Report on Form 10-K, along with our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to the aforementioned filings, are available on our website free of charge. The filings can be found on the “For Investors” page under “SEC Filings and Reports”. Our website also contains our Corporate Governance Guidelines, Code of Business Conduct and Ethics and the charters of the committees of the Board of Directors. These items can be found on the “For Investors” page under “Corporate Overview and Governance Documents”. Our website address is http://www.maac.com. Reference to our website does not constitute incorporation by reference of the information contained on the site and should not be considered part of this Annual Report on Form 10-K. All of the aforementioned materials may also be obtained free of charge by contacting our Legal Department, 6584 Poplar Avenue, Memphis, TN 38138. QUALIFICATION AS A REAL ESTATE INVESTMENT TRUST MAA has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, or the Code. To continue to qualify as a REIT, MAA must continue to meet certain tests which, among other things, generally require that our assets consist primarily of real estate assets, our income be derived primarily from real estate assets, and that we distribute at least 90% of our REIT taxable income (other than our net capital gains) to our shareholders annually. If MAA maintains its qualification as a REIT, MAA generally will not be subject to U.S. federal income taxes at the corporate level on its net income to the extent it distributes such net income to its shareholders annually. Even if MAA continues to qualify as a REIT, it will continue to be subject to certain federal, state and local taxes on its income and its property. In 2015, MAA paid total distributions of $3.08 per share of common stock to its shareholders, which was above the 90% REIT distribution requirement and was in excess of REIT taxable income. INFLATION We believe that the direct effects of inflation on our operations have been immaterial. While the impact of inflation primarily impacts our results through wage pressures, property taxes, utilities and material costs, substantially all of our leases are for a term of one year or less, which generally enables us to compensate for any inflationary effects by 13 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 14 OPERATOR ABIGAELS increasing rents on our apartments. Although an escalation in energy and food costs could have a negative impact on our residents and their ability to absorb rent increases, we do not believe this has had a material impact on our results for the year ended December 31, 2015. INSURANCE We carry comprehensive general liability coverage on our communities, with limits of liability we believe are customary within the multi-family apartment industry, to insure against liability claims and related defense costs. We also maintain insurance against the risk of direct physical damage to reimburse us on a replacement cost basis for costs incurred to repair or rebuild each property, including loss of rental income during the reconstruction period. RECENT DEVELOPMENTS On February 1, 2016, we paid off the $13.5 million remaining principal balance of the mortgage on the Colonial Village at Matthews apartment community. ITEM 1A. RISK FACTORS In addition to the other information contained in this Annual Report on Form 10-K, we have identified the following additional risks and uncertainties that may have a material adverse effect on our business prospects, financial condition or results of operations. Investors should carefully consider the risks described below before making an investment decision. Our business faces significant risks and the risks described below may not be the only risks we face. Additional risks not presently known to us or that we currently believe are immaterial may also significantly impair our business operations. If any of these risks occur, our business prospects, results of operations or financial condition could suffer, the market price of our common stock and the trading price of our debt securities could decline and you could lose all or part of your investment in our common stock or debt securities. RISKS RELATED TO OUR REAL ESTATE INVESTMENTS AND OUR OPERATIONS Developments such as another economic downturn, instability in the banking sector or a negative impact on economic growth resulting from current or future legislation or government initiatives may materially and adversely affect our financial condition and results of operations. The industry in which we operate may be adversely affected by national and international economic conditions. Although the U.S. real estate market has recently improved, certain international markets are experiencing increased levels of volatility due to a combination of factors, including, among others, political instability from ongoing geopolitical conflicts, high unemployment rates, fluctuating oil and gas prices and fiscal deficits, and these factors could contribute to another economic downturn in the U.S. If the U.S. experience another downturn in the economy, instability in the banking sector or a negative impact on economic growth resulting from changes in legislation, government tax increases, debt policy or spending restrictions, we may experience adverse effects on our occupancy levels, our rental revenues and the value of our properties, any of which could adversely affect our cash flow, financial condition and results of operations. Other economic risks which may adversely affect conditions in the markets in which we operate include the following: • local conditions, such as an oversupply of apartments or other housing available for rent, or a reduction in demand for apartments in the area; • • • low mortgage interest rates and home pricing, making alternative housing more affordable; government or builder incentives which enable home buyers to put little or no money down, making alternative housing options more attractive; and regional economic downturns which affect one or more of our geographical markets. 14 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 15 OPERATOR ABIGAELS Failure to generate sufficient cash flows could limit our ability to make payments on our debt and to pay distributions to shareholders and unitholders. Our ability to make payments on our debt and to make distributions depends on our ability to generate cash flow in excess of operating costs and capital expenditure requirements and/or to have access to the markets for debt and equity financing. Funds from operations and the value of our apartment communities may be insufficient because of factors that are beyond our control. Such events or conditions could include: • • • competition from other apartment communities; overbuilding of new apartments or oversupply of available apartments in our markets, which might adversely affect occupancy or rental rates and/or require rent concessions in order to lease apartments; conversion of condominiums and single family houses to rental use or the sale of excess for-sale condominiums and single family homes; • weakness in the overall economy which lowers job growth and the associated demand for apartment housing; • increases in operating costs (including real estate taxes, utilities and insurance premiums) due to inflation and other factors, which may not be offset by increased rental rates; • • • • inability to initially, or subsequently after lease terminations, rent apartments on favorable economic terms; failure of development communities to be completed, if at all, within budget and on a timely basis or to lease up as anticipated; changes in governmental regulations and the related costs of compliance; changes in laws including, but not limited to, tax laws and housing laws including the enactment of rent control laws or other laws regulating multifamily housing; • withdrawal of government support of apartment financing through its financial backing of the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation; • • an uninsured loss, including those resulting from a catastrophic storm, earthquake, or act of terrorism; changes in interest rate levels and the availability of financing, borrower credit standards, and down- payment requirements which could lead renters to purchase homes (if interest rates decrease and home loans are more readily available) or increase our acquisition and operating costs (if interest rates increase and financing is less readily available); and the relative illiquidity of real estate investments. • At times, we have relied on external funding sources to fully fund the payment of distributions to shareholders and our capital investment program, including our existing property developments. While we have sufficient liquidity to permit distributions at current rates through additional borrowings, if necessary, any significant and sustained deterioration in operations could result in our financial resources being insufficient to make payments on our debt and to pay distributions to shareholders at the current rate, in which event we would be required to reduce the distribution rate. Any decline in our funds from operations could adversely affect our ability to make distributions to our shareholders or to meet our loan covenants and could have a material adverse effect on our stock price or the trading price of our debt securities. We are dependent on a concentration of our investments in a single asset class, making our results of operations more vulnerable to a downturn or slowdown in the sector or other economic factors. As of December 31, 2015, substantially all of our investments are concentrated in the multifamily sector. As a result, we will be subject to risks inherent in investments in a single type of property. A downturn or slowdown in the demand for multifamily housing may have more pronounced effects on our results of operations or on the value of our assets than if we had further diversified our investments. 15 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 16 OPERATOR ABIGAELS Our operations are concentrated in the Southeast and Southwest regions of the United States; we are subject to general economic conditions in the regions in which we operate. As of December 31, 2015, approximately 34.2% of our portfolio is located in our top five markets: Atlanta, Georgia; Austin, Texas; Charlotte, North Carolina; Raleigh/Durham, North Carolina; and Dallas, Texas. In addition, our overall operations are concentrated in the Southeast and Southwest regions of the United States. Our performance could be adversely affected by economic conditions in, and other factors relating to, these geographic areas, including supply and demand for apartments in these areas, zoning and other regulatory conditions and competition from other communities and alternative forms of housing. In particular our performance is disproportionately influenced by job growth and unemployment. To the extent the aforementioned general economic conditions, job growth and unemployment in any of these markets deteriorate or any of these areas experiences natural disasters, the value of the portfolio, our results of operations and our ability to make distributions to our shareholders and pay amounts due on our debt could be materially adversely affected. Failure to succeed in new markets or sectors may have adverse consequences on our performance. We may make acquisitions outside of our existing market areas if appropriate opportunities arise. Our historical experience in our existing markets does not ensure that we will be able to operate successfully in new markets, should we choose to enter them. We may be exposed to a variety of risks if we choose to enter new markets, including an inability to accurately evaluate local market conditions, to identify appropriate acquisition opportunities, to hire and retain key personnel, and a lack of familiarity with local governmental and permitting procedures. In addition, we may abandon opportunities to enter new markets that we have begun to explore for any reason and may, as a result, fail to recover expenses already incurred. Substantial competition among apartment communities and real estate companies may adversely affect our rental revenues and development and acquisition opportunities. There are numerous other apartment communities and real estate companies, many of which have greater financial and other resources than we have, within the market area of each of our communities that compete with us for residents and development and acquisition opportunities. The number of competitive apartment communities and real estate companies in these areas could have a material effect on (1) our ability to rent our apartments and the rents charged, and (2) development and acquisition opportunities. The activities of these competitors could cause us to pay a higher price for a new property than we otherwise would have paid or may prevent us from purchasing a desired property at all, which could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt. Breaches of our privacy or information security systems through cyber-attacks, cyber-intrusions or otherwise, could materially adversely affect our business, results of operations, financial condition and/or reputation. We face risks associated with security breaches or disruptions, which could result from, among other incidents, cyber-attacks or cyber-intrusions over the Internet, malware, computer viruses or employee error or malfeasance. The risk of a security breach or disruption, particularly through cyber-attacks or cyber-intrusion, including by computer hackers, foreign governments and cyber-terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. The protection of customer and employee data and our network systems is critically important to us. Our business requires us and our service providers (including service providers engaged in providing web hosting, property management, leasing, accounting and/or payroll software/ services) to use and store personally identifiable information of our customers and employees, which may include names, addresses, phone numbers, email addresses, contact preferences, tax identification numbers, and payment account information. We also rely extensively on computer systems to process transactions and manage our business. We devote significant resources to protect our customer and employee data and our network systems. However, the security measures put in place by us and our service providers cannot provide absolute security and there can be no assurance that we will not suffer a data security incident in the future, that unauthorized parties will not gain access to sensitive data stored on our systems, that such access will not, whether temporarily or permanently, impact, interfere with or interrupt our operations, or that any such incident will be discovered in a timely manner. Our information technology infrastructure could be compromised as a result of third-party security breaches, employee error, malfeasance, faulty password management, or other irregularity, and result in persons obtaining unauthorized 16 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 17 OPERATOR ABIGAELS access to company data or accounts. Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not be detected and, in fact, may not be detected. Accordingly, we and our service providers may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us and our service providers to entirely mitigate this risk. Further, in the future, we may be required to expend additional resources to continue to enhance information security measures and/or to investigate and remediate any information security vulnerabilities. Any privacy and information incident could compromise our network systems, and the information stored by us could be accessed, misused, publicly disclosed, corrupted, lost, or stolen resulting in fraud or other harm. Moreover, if a data security incident or breach affects our systems or results in the unauthorized release of personally identifiable information, we could be materially damaged and we may be exposed to a risk of loss or litigation, possible liability and remediation costs which could result in a material adverse effect on our business, results of operations, financial condition and/or reputation and adversely affect investor confidence. We may not realize the anticipated benefits of past or future acquisitions, and the failure to integrate acquired communities and new personnel successfully could create inefficiencies. We have selectively acquired in the past, and if presented with attractive opportunities we intend to selectively acquire in the future, apartment communities that meet our investment criteria. Our acquisition activities and their success are subject to the following risks: • we may be unable to obtain financing for acquisitions on favorable terms or at all; • even if we are able to finance the acquisition, cash flow from the acquisition may be insufficient to meet our required principal and interest payments on the acquisition; • even if we enter into an acquisition agreement for an apartment community, we may be unable to complete the acquisition after incurring certain acquisition-related costs; • we may incur significant costs and divert management attention in connection with the evaluation and negotiation of potential acquisitions, including potential acquisitions that we are subsequently unable to complete; • when we acquire an apartment community, we may invest additional amounts in it with the intention of increasing profitability, and these additional investments may not produce the anticipated improvements in profitability; • we may be unable to quickly and efficiently integrate acquired apartment communities and new personnel into our existing operations, and the failure to successfully integrate such apartment communities or personnel will result in inefficiencies that could adversely affect our expected return on our investments and our overall profitability; and • we may acquire properties that are subject to liabilities or that have problems relating to environmental condition, state of title, physical condition or compliance with zoning laws, building codes or other legal requirements and in each case, our acquisition may be without any, or with only limited, recourse with respect to unknown liabilities or conditions and we may be obligated to pay substantial sums to settle or cure it, which could adversely affect our cash flow and operating results. We are subject to certain risks associated with selling apartment communities, which could limit our operational and financial flexibility. We periodically dispose of apartment communities that no longer meet our strategic objectives, but adverse market conditions may make it difficult to sell apartment communities like the ones we own. We cannot predict whether we will be able to sell any property for the price or on the terms we set, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. Furthermore, we may be required to expend funds to correct defects or to make improvements before a property can be sold. These conditions may limit our ability to dispose of 17 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 18 OPERATOR ABIGAELS properties and to change our portfolio promptly in order to meet our strategic objectives, which may in turn have a material adverse effect on our financial condition and the market value of our securities. We are also subject to the following risks in connection with sales of our apartment communities: • • a significant portion of the proceeds from our overall property sales may be held by intermediaries in order for some sales to qualify as like-kind exchanges under Section 1031 of the Code, so that any related capital gain can be deferred for federal income tax purposes. As a result, we may not have immediate access to all of the cash proceeds generated from our property sales; and federal tax laws applicable to REITs limit our ability to profit on the sale of communities, and this limitation may prevent us from selling communities when market conditions are favorable. Environmental problems are possible and can be costly. Under various federal, state and local laws, ordinances and regulations, a current or previous owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances in, on, around or under such property. Such laws often impose such liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. The presence of, or failure to remediate properly, hazardous or toxic substances may adversely affect the owner’s or operator’s ability to sell or rent the affected property or to borrow using the property as collateral. Persons who arrange for the disposal or treatment of hazardous or toxic substances may also be liable for the costs of removal or remediation of hazardous or toxic substances at a disposal or treatment facility, whether or not the facility is owned or operated by the person. Certain environmental laws impose liability for release of asbestos-containing materials into the air, and third parties may also seek recovery from owners or operators of real property for personal injury associated with asbestos-containing materials and other hazardous or toxic substances. Federal and state laws also regulate the operation and subsequent removal of certain underground storage tanks. In connection with the current or former ownership (direct or indirect), operation, management, development or control of real property, we may be considered an owner or operator of such communities or as having arranged for the disposal or treatment of hazardous or toxic substances and, therefore, may be potentially liable for removal or remediation costs, as well as certain other costs, including governmental fines, and claims for injuries to persons and property. Our current policy is to obtain a Phase I environmental study on each property we seek to acquire, which generally does not involve invasive techniques such as soil or ground water sampling, and to proceed accordingly. We cannot assure you, however, that the Phase I environmental studies or other environmental studies undertaken with respect to any of our current or future communities will reveal: • • • • all or the full extent of potential environmental liabilities; that any prior owner or operator of a property did not create any material environmental condition unknown to us; that a material environmental condition does not otherwise exist as to any one or more of such communities; or that environmental matters will not have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt. Certain environmental laws impose liability on a previous owner of property to the extent that hazardous or toxic substances were present during the prior ownership period. A transfer of the property does not relieve an owner of such liability. Thus, we may have liability with respect to communities previously sold by our predecessors or by us. There have been a number of lawsuits against owners and managers of multifamily communities alleging personal injury and property damage caused by the presence of mold in residential real estate. Some of these lawsuits have resulted in substantial monetary judgments or settlements. Insurance carriers have reacted to these liability awards by excluding mold related claims from standard policies and pricing mold endorsements separately. We have obtained a separate pollution insurance policy that covers mold-related claims and have adopted programs designed to minimize the existence of mold in any of our communities as well as guidelines for promptly addressing and resolving reports of mold. To the extent not covered by our pollution policy, the presence of mold could expose us to liability from residents and others if property damage, health concerns, or allegations thereof, arise. 18 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 19 OPERATOR ABIGAELS Losses from catastrophes may exceed our insurance coverage, which may negatively impact our results of operations and reduce the value of our properties. We carry comprehensive liability and property insurance on our communities and intend to obtain similar coverage for communities we acquire in the future. Some losses, generally of a catastrophic nature, such as losses from floods, hurricanes or earthquakes, are subject to limitations, and thus may be uninsured. We exercise our discretion in determining amounts, coverage limits and deductibility provisions of insurance, with a view to maintaining appropriate insurance on our investments at a reasonable cost and on suitable terms. If we suffer a substantial loss, our insurance coverage may not be sufficient to pay the full current market value or current replacement value of our lost investment. Inflation, changes in building codes and ordinances, environmental considerations and other factors also might make it infeasible to use insurance proceeds to replace a property after it has been damaged or destroyed. Any losses we experience that are not fully covered by our insurance may negatively impact our results of operations and may reduce the value of our properties. Increasing real estate taxes, utilities and insurance costs may negatively impact operating results. As a result of our substantial real estate holdings, the cost of real estate taxes, utilities, and insuring our apartment communities is a significant component of expense. Real estate taxes, utilities costs and insurance premiums are subject to significant increases and fluctuations, which can be widely outside of our control. If the costs associated with real estate taxes, utilities and insurance should rise, without being offset by a corresponding increase in rental rates, our results of operations could be negatively impacted, and our ability to pay our dividends and distributions and senior debt could be affected. Compliance or failure to comply with laws requiring access to our properties by disabled persons could result in substantial cost. The Americans with Disabilities Act, the Fair Housing Act of 1988 and other federal, state and local laws generally require that public accommodations be made accessible to disabled persons. Noncompliance could result in the imposition of fines by the government or the award of damages to private litigants. These laws may require us to modify our existing communities. These laws may also restrict renovations by requiring improved access to such buildings by disabled persons or may require us to add other structural features that increase our construction costs. Legislation or regulations adopted in the future may impose further burdens or restrictions on us with respect to improved access by disabled persons. We cannot ascertain the costs of compliance with these laws, which may be substantial. Development and construction risks could impact our profitability. As of December 31, 2015, we had five development communities under construction totaling 748 units. We had completed 37 units for these development projects as of December 31, 2015. Our development and construction activities are subject to the following risks: • we may be unable to obtain, or face delays in obtaining, necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations, which could result in increased development costs, could delay initial occupancy dates for all or a portion of a development community, and could require us to abandon our activities entirely with respect to a project for which we are unable to obtain permits or authorizations; • yields may be less than anticipated as a result of delays in completing projects, costs that exceed budget and/or higher than expected concessions for lease up and lower rents than pro forma; • bankruptcy of developers in our development projects could impose delays and costs on us with respect to the development of our communities and may adversely affect our financial condition and results of operations; • we may abandon development opportunities that we have already begun to explore, and we may fail to recover expenses already incurred in connection with exploring such opportunities; 19 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 20 OPERATOR ABIGAELS • we may be unable to complete construction and lease-up of a community on schedule, or incur development or construction costs that exceed our original estimates, and we may be unable to charge rents that would compensate for any increase in such costs; • occupancy rates and rents at a newly developed community may fluctuate depending on a number of factors, including market and economic conditions, preventing us from meeting our profitability goals for that community; and • when we sell to third parties communities or properties that we developed or renovated, we may be subject to warranty or construction defects that are uninsured or exceed the limit of our insurance. We may be unable to retain key employees. Our success will depend in part upon the ability to retain our key employees. There is substantial competition for qualified personnel in the real estate industry and the loss of any of our key personnel could have an adverse effect us. RISKS RELATED TO OUR INDEBTEDNESS AND FINANCING ACTIVITIES Our substantial indebtedness could adversely affect our financial condition and results of operations. As of December 31, 2015, the amount of our total debt was approximately $3.43 billion. We may incur additional indebtedness in the future in connection with, among other things, our acquisition, development and operating activities. The degree of our leverage creates significant risks, including the following: • we may be required to dedicate a substantial portion of our funds from operations to servicing our debt and our cash flow may be insufficient to make required payments of principal and interest; • we may be subject to prepayment penalties if we elect to repay our indebtedness prior to the stated maturity date; • debt service obligations will reduce funds available for distribution to our shareholders and funds available for acquisitions, development and redevelopment; • we may be more vulnerable to economic and industry downturns than our competitors that have less debt; • we may be limited in our ability to respond to changing business and economic conditions; and • we may default on our indebtedness, which could result in acceleration of those obligations, assignment of rents and leases and loss of properties to foreclosure. If any one of these events were to occur, our financial condition and results of operations could be materially and adversely affected. We may be unable to renew, repay or refinance our outstanding debt which could negatively impact our financial condition and results of operations. We are subject to the normal risks associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments of principal and interest, the risk that indebtedness on our communities, or unsecured indebtedness, will not be able to be renewed, repaid or refinanced when due or that the terms of any renewal or refinancing will not be as favorable as the existing terms of such indebtedness. If we were unable to refinance our indebtedness on acceptable terms, or at all, we might be forced to dispose of one or more of our communities on disadvantageous terms, which might result in losses to us. Such losses could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt. Furthermore, if a property is mortgaged to secure payment of indebtedness and we are unable to meet mortgage payments, the mortgagee could foreclose upon the property, appoint a receiver and receive an assignment of rents and leases or pursue other remedies, all with a consequent loss of our revenues and asset value. Foreclosures could also create taxable income without accompanying cash proceeds, thereby hindering our ability to meet the REIT distribution requirements of the Code. 20 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 21 OPERATOR ABIGAELS Rising interest rates would increase the cost of our variable rate debt. We have incurred and expect in the future to incur indebtedness that bears interest at variable rates. Accordingly, increases in interest rates would increase our interest costs, which could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt or cause us to be in default under certain debt instruments. In addition, an increase in market interest rates may lead holders of our shares of common stock to demand a higher yield on their shares from distributions by us, which could adversely affect the market price for our common stock. We may incur additional debt in the future, which may adversely impact our financial condition. We currently fund the acquisition and development of multifamily apartment communities partially through borrowings (including our revolving credit facility) as well as from other sources such as sales of communities which no longer meet our investment criteria. Our organizational documents do not contain any limitation on the amount of indebtedness that we may incur, and we may issue more debt in the future. Accordingly, subject to limitations on indebtedness set forth in various loan agreements and the indentures governing our senior notes, we could become more highly leveraged, resulting in an increase in debt service, which could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt and in an increased risk of default on our obligations. The restrictive terms of certain of our indebtedness may cause acceleration of debt payments. At December 31, 2015, we had outstanding borrowings of approximately $3.43 billion. Our indebtedness contains financial covenants as to interest coverage ratios, maximum secured debt, maintenance of unencumbered asset value, and total debt to gross assets, among others. In the event that an event of default occurs, our lenders may declare borrowings under the respective loan agreements to be due and payable immediately, which could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt. A change in United States government policy with regard to Fannie Mae and Freddie Mac could impact our financial condition. Fannie Mae and Freddie Mac are a major source of financing for multifamily real estate in the United States. We utilize loan programs sponsored by these entities as one source of capital to finance our growth and our operations. There has been ongoing discussion by the government with regard to the long term structure and viability of Fannie Mae and Freddie Mac, which could result in these agencies having their mandates changed or reduced, losing key personnel, being disbanded or reorganized by the government or otherwise discontinuing to provide liquidity for the multifamily sector. We do not know when or if Fannie Mae or Freddie Mac will restrict their support of lending to the multifamily industry or to us in particular. As of December 31, 2015, 7% of our outstanding debt was borrowed through a credit facility provided by or credit-enhanced by Fannie Mae with agency rate-based maturities ranging from 2016 through 2018. In 2015, we decreased the indebtedness outstanding on our Fannie Mae credit facilities from $436.9 million on December 31, 2014 to $240.0 million. A decision by the U.S. government to eliminate or downscale Fannie Mae or Freddie Mac or to reduce government support for multifamily housing more generally may adversely affect interest rates, capital availability, development of multifamily communities and the value of multifamily residential real estate and, as a result, may adversely affect us and our growth and operations. Failure to hedge effectively against interest rates may adversely affect results of operations. From time-to-time, we may seek to manage our exposure to interest rate volatility by using interest rate hedging arrangements, such as interest rate cap agreements and interest rate swap agreements. These agreements involve risks, such as the risk that the counterparties may fail to honor their obligations under these arrangements, that these arrangements may not be effective in reducing our exposure to interest rate changes and that a court could rule that such an agreement is not legally enforceable. Hedging may reduce overall returns on our investments. Failure to hedge effectively against interest rate changes could have a material adverse effect on us and our ability to make distributions to our shareholders and pay amounts due on our debt. 21 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 22 OPERATOR ABIGAELS A downgrade in our credit ratings could have a material adverse effect on our business, financial condition and results of operations. We have a significant amount of debt outstanding. We are currently assigned corporate credit ratings from each of the three ratings agencies based on their evaluation of our creditworthiness. These ratings are based on a number of factors, which included their assessment of our financial strength, liquidity, capital structure, asset quality, and sustainability of cash flow and earnings. If our credit ratings are downgraded or other negative action is taken, we could be required to pay additional interest and fees on our outstanding borrowings. In addition, a downgrade may adversely impact our ability to borrow secured and unsecured debt and otherwise limit our access to capital, which could adversely affect our business, financial condition and results of operations. Issuances of additional debt or equity may adversely impact our financial condition. Our capital requirements depend on numerous factors, including the occupancy and turnover rates of our apartment communities, development and capital expenditures, costs of operations and potential acquisitions. We cannot accurately predict the timing and amount of our capital requirements. If our capital requirements vary materially from our plans, we may require additional financing sooner than anticipated. Accordingly, we could become more leveraged, resulting in increased risk of default on our obligations and in an increase in our debt service requirements, both of which could adversely affect our financial condition and ability to access debt and equity capital markets in the future. If we issue additional equity securities to obtain additional financing, the interest of our existing shareholders could be diluted. RISKS RELATED TO MAA’S ORGANIZATION AND OWNERSHIP OF ITS STOCK MAA’s ownership limit restricts the transferability of its capital stock. MAA’s charter limits ownership of its capital stock by any single shareholder to 9.9% of the value of all outstanding shares of its capital stock, both common and preferred, unless approved by its Board of Directors. The charter also prohibits anyone from buying shares if the purchase would result in it losing REIT status. This could happen if a share transaction results in fewer than 100 persons owning all of its shares or in five or fewer persons, applying certain broad attribution rules of the Code, owning 50% or more of its shares. If you acquire shares in excess of the ownership limit or in violation of the ownership requirements of the Code for REITs, MAA: • will consider the transfer to be null and void; • will not reflect the transaction on its books; • may institute legal action to enjoin the transaction; • will not pay dividends or other distributions with respect to those shares; • will not recognize any voting rights for those shares; • will consider the shares held in trust for its benefit; and • will either direct you to sell the shares and turn over any profit to MAA, or MAA will redeem the shares. If MAA redeems the shares, you will be paid a price equal to the lesser of: ◦ ◦ the principal price paid for the shares by the holder, a price per share equal to the market price (as determined in the manner set forth in its charter) of the applicable capital stock, ◦ ◦ the market price (as so determined) on the date such holder would, but for the restrictions on transfers set forth in its charter, be deemed to have acquired ownership of the shares and the maximum price allowed under Tennessee Greenmail Act (such price being the average of the highest and lowest closing market price for the shares during the 30 trading days preceding the purchase of such shares or, if the holder of such shares has commenced a tender offer or has announced an intention to seek control of MAA, during the 30 trading days preceding the commencement of such tender offer or the making of such announcement). 22 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 23 OPERATOR ABIGAELS The redemption price may be paid, at MAA’s option, by delivering one common unit (subject to adjustment from time to time in the event of, among other things, stock splits, stock dividends, or recapitalizations affecting its common stock or certain mergers, consolidations or asset transfers by MAA) issued by the Operating Partnership for each Excess Share being redeemed. you may lose your power to dispose of the shares; If you acquire shares in violation of the limits on ownership described above: • • • you may be required to recognize a loss from the sale of such shares if the market price decreases. you may not recognize profit from the sale of such shares if the market price of the shares increases; and Provisions of MAA’s charter and Tennessee law may limit the ability of a third party to acquire control of MAA. Ownership Limit The 9.9% ownership limit discussed above may have the effect of precluding acquisition of control of MAA by a third party without the consent of our Board of Directors. Preferred Stock MAA’s charter authorizes our Board of Directors to issue up to 20,000,000 shares of preferred stock. The Board of Directors may establish the preferences and rights of any preferred shares issued. The issuance of preferred stock could have the effect of delaying or preventing someone from taking control of MAA, even if a change in control were in MAA shareholders’ best interests. As of December 31, 2015, no shares of preferred stock were issued and outstanding. Tennessee Anti-Takeover Statutes As a Tennessee corporation, MAA is subject to various legislative acts, which impose restrictions on and require compliance with procedures designed to protect shareholders against unfair or coercive mergers and acquisitions. These statutes may delay or prevent offers to acquire MAA and increase the difficulty of consummating any such offers, even if MAA’s acquisition would be in MAA shareholders’ best interests. Market interest rates and low trading volume may have an adverse effect on the market value of MAA’s common stock. The market price of shares of a REIT may be affected by the distribution rate on those shares, as a percentage of the price of the shares, relative to market interest rates. If market interest rates increase, prospective purchasers of MAA’s shares may expect a higher annual distribution rate. Higher interest rates would not, however, result in more funds for MAA to distribute and, in fact, would likely increase MAA’s borrowing costs and potentially decrease funds available for distribution. This could cause the market price of MAA’s common stock to go down. In addition, although MAA’s common stock is listed on The New York Stock Exchange, or NYSE, the daily trading volume of MAA’s common stock may be lower than the trading volume for other industries. As a result, MAA’s investors who desire to liquidate substantial holdings may find that they are unable to dispose of their shares in the market without causing a substantial decline in the market value of MAA’s common stock. Changes in market conditions or a failure to meet the market’s expectations with regard to our results of operations and cash distributions could adversely affect the market price of MAA’s common stock. We believe that the market value of a REIT’s equity securities is based primarily upon the market’s perception of the REIT’s growth potential and its current and potential future cash distributions, and is secondarily based upon the real estate market value of the underlying assets. For that reason, MAA’s common stock may trade at prices that are higher or lower than the net asset value per share. To the extent we retain operating cash flow for investment purposes, working capital reserves or other purposes, these retained funds, while increasing the value of our underlying assets, may not correspondingly increase the market price of MAA’s common stock. In addition, we are subject to the risk that our cash flow will be insufficient to pay distributions to MAA’s shareholders. Our failure to meet the market’s expectations with regard to future earnings and cash distributions would likely adversely affect the market price of MAA’s stock. 23 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 24 OPERATOR ABIGAELS The stock markets, including NYSE, on which MAA lists its common stock, have experienced significant price and volume fluctuations. As a result, the market price of MAA’s common stock could be similarly volatile, and investors in MAA’s common stock may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects. Among the market conditions that may affect the market price of MAA’s publicly traded securities are the following: • • • • • • • • • • • our financial condition and operating performance and the performance of other similar companies; actual or anticipated differences in our quarterly and annual operating results; changes in our revenues or earnings estimates or recommendations by securities analysts; publication of research reports about us or our industry by securities analysts; additions and departures of key personnel; inability to access the capital markets; strategic decisions by us or our competitors, such as acquisitions, dispositions, spin-offs, joint ventures, strategic investments or changes in business strategy; the issuance of additional shares of MAA’s common stock, or the perception that such sales may occur, including under MAA’s at-the-market offering programs; the reputation of REITs generally and the reputation of REITs with portfolios similar to ours; the attractiveness of the securities of REITs in comparison to securities issued by other entities (including securities issued by other real estate companies); an increase in market interest rates, which may lead prospective investors to demand a higher distribution rate in relation to the price paid for MAA’s common stock; changes in accounting principles; speculation in the press or investment community; actions by institutional shareholders or hedge funds; the passage of legislation or other regulatory developments that adversely affect us or our industry; • • • • • • In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources. general market conditions, including factors unrelated to our performance. terrorist acts; and RISKS RELATED TO THE OPERATING PARTNERSHIP’S ORGANIZATION AND OWNERSHIP OF OP UNITS The Operating Partnership’s existing unitholders have limited approval rights, which may prevent the Operating Partnership’s sole general partner, MAA, from completing a change of control transaction that may be in the best interests of all unitholders and of all the shareholders of MAA. MAA may not engage in a sale or other disposition of all or substantially all of the assets of the Operating Partnership, dissolve the Operating Partnership or, upon the occurrence of certain triggering events, take any action that would result in any unitholder realizing taxable gain, without the approval of the holders of a majority of the outstanding OP Units held by holders other than MAA or its affiliates, or Class A OP Units. The right of the holders of our Class A OP Units to vote on these transactions could limit MAA’s ability to complete a change of control transaction that might otherwise be in the best interest of all of our unitholders and all shareholders of MAA. 24 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 25 OPERATOR ABIGAELS In certain circumstances, certain of the Operating Partnership’s unitholders must approve the Operating Partnership’s sale of certain properties contributed by the unitholders. In certain circumstances as detailed in the partnership agreement of the Operating Partnership, the Operating Partnership may not sell or otherwise transfer certain properties unless a specified percentage of the limited partners who were partners in the limited partnership holding such properties at the time of its acquisition by us approves such sale or transfer. The exercise of these approval rights by the Operating Partnership’s unitholders could delay or prevent the Operating Partnership from completing a transaction that may be in the best interest of all of the Operating Partnership’s unitholders and all shareholders of MAA. MAA, its officers and directors have substantial influence over the Operating Partnership’s affairs. MAA, as the Operating Partnership’s sole general partner and acting through its officers and directors, has a substantial influence on the Operating Partnership’s affairs. MAA, its officers and directors could exercise their influence in a manner that is not in the best interest of the Operating Partnership’s unitholders. Also, MAA owns approximately 94.8% of the OP Units and as such, will have substantial influence on the outcome of substantially all matters submitted to the Operating Partnership’s unitholders for approval. Market interest rates and low trading volume may have an adverse effect on the market value of MAA’s common stock, which would affect the redemption price of the OP Units. The market price of shares of a REIT may be affected by the distribution rate on those shares, as a percentage of the price of the shares, relative to market interest rates. If market interest rates increase, prospective purchasers of MAA’s common stock may expect a higher annual distribution rate. Higher interest rates would not, however, result in more funds for MAA to distribute and, in fact, would likely increase MAA’s borrowing costs and potentially decrease funds available for distribution. This could cause the market price of MAA’s common stock to go down, which would reduce the price received upon redemption of any OP Units, or if MAA so elects, the value of MAA’s common stock received in lieu of cash upon redemption of such OP Units. In addition, although MAA’s common stock is listed on the NYSE, the daily trading volume of MAA’s shares may be lower than the trading volume for companies in other industries. As a result, MAA’s investors who desire to liquidate substantial holdings may find that they are unable to dispose of their shares in the market without causing a substantial decline in the market value of the shares. Insufficient cash flow from operations or a decline in the market price of MAA’s common stock may reduce the amount of cash available to the Operating Partnership to meet its obligations. The Operating Partnership is subject to the risk that its cash flow will be insufficient to service its debt and to pay distributions to its unitholders, which may cause MAA to not have the funds to pay distributions to its shareholders. MAA’s failure to meet the market’s expectations with regard to future results of operations and cash distributions would likely adversely affect the market price of its shares and thus potentially reduce MAA’s ability to contribute funds from issuances down to the Operating Partnership, resulting in a lower level of cash available for investment or to service our debt or to make distributions to the Operating Partnership’s unitholders. RISKS RELATED TO TAX LAWS Failure to qualify as a REIT would cause us to be taxed as a corporation, which would significantly reduce funds available for distribution to shareholders. If MAA fails to qualify as a REIT for federal income tax purposes, it will be subject to federal income tax on its taxable income at regular corporate rates (subject to any applicable alternative minimum tax). In addition, unless MAA is entitled to relief under applicable statutory provisions, it would be ineligible to make an election for treatment as a REIT for the four taxable years following the year in which MAA loses its qualification. The additional tax liability resulting from the failure to qualify as a REIT would significantly reduce or eliminate the amount of funds available for distribution to MAA’s shareholders. Furthermore, MAA would no longer be required to make distributions to its shareholders. Thus, MAA’s failure to qualify as a REIT could also impair its ability to expand its business and raise capital, and would adversely affect the value of its common stock. 25 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 26 OPERATOR ABIGAELS MAA believes that it is organized and qualified as a REIT, and MAA intends to operate in a manner that will allow it to continue to qualify as a REIT. However, MAA cannot assure you that it is qualified as a REIT, or that MAA will remain qualified in the future. This is because qualification as a REIT involves the application of highly technical and complex provisions of the Code for which there are only limited judicial and administrative interpretations and involves the determination of a variety of factual matters and circumstances not entirely within MAA’s control. In addition, future legislation, new regulations, administrative interpretations or court decisions may significantly change the tax laws or the application of the tax laws with respect to qualification as a REIT for federal income tax purposes or the federal income tax consequences of this qualification. Even if MAA qualifies as a REIT, MAA will be subject to certain federal, state and local taxes on our income and property and on taxable income that MAA does not distribute to its shareholders. In addition, MAA may hold certain assets and engage in certain activities that a REIT could not engage in directly through its taxable REIT subsidiaries, or TRSs, and those TRSs will be subject to federal income tax at regular corporate rates on their taxable incomes without the benefit of the dividends paid deduction applicable to REITs. We may incur adverse tax consequences if Colonial failed to qualify as a REIT for U.S. federal income tax purposes; and if that occurs, it may have a material adverse effect on our consolidated results of operations and financial condition. Prior to the Merger, Colonial operated in a manner intended to allow it to qualify as a REIT for U.S. federal income tax purposes under the Code. As discussed in Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on March 19, 2015, qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations and Colonial’s qualification as a REIT prior to the Merger was generally subject to the same requirements, risks and uncertainties as described in such Exhibit 99.1. Moreover, the complexity of these provisions and of the applicable Treasury Regulations that have been promulgated under the Code is greater in the case of a REIT that holds its assets through a partnership (such as we do and Colonial did prior to the Merger). The determination of various factual matters and circumstances not entirely within a REIT’s control may affect its ability to qualify as a REIT. If Colonial is determined to have lost its REIT status at any time prior to the Merger, MAA will face serious tax consequences and material tax liabilities. Because MAA owns no material assets other than its ownership interest in the Operating Partnership, the Operating Partnership and its subsidiaries would likely be required to provide cash to MAA to satisfy any such tax liabilities, which would substantially reduce the Operating Partnership’s available cash, including cash available to pay its indebtedness or make distributions to its limited partners or MAA’s shareholders because, among other things: • MAA would be required to pay U.S. federal income tax on Colonial’s prior net income at regular corporate rates for the years Colonial did not qualify for taxation as a REIT (and, for such years, Colonial would not be allowed a deduction for dividends paid to its former shareholders in computing its taxable income); • • Colonial could be subject to the federal alternative minimum tax and possibly increased state and local taxes for such periods; and unless Colonial is entitled to relief under applicable statutory provisions, neither it nor any “successor” company could elect to be taxed as a REIT until the fifth taxable year following the year during which it was disqualified. MAA is liable for any taxes payable by Colonial for any periods prior to the Merger. In addition, if Colonial failed to qualify as a REIT but we nonetheless qualified as a REIT, in the event of a taxable disposition of a former Colonial asset during the five years following the Merger we would be subject to corporate tax with respect to any built-in gain inherent in such asset as of the date of the Merger. In addition, under the “investment company” rules under Section 368 of the Code, if both MAA and Colonial were “investment companies” under such rules, the failure of either Colonial or us to have qualified as a REIT could cause the Merger to be taxable to us and our shareholders. As a result of all these factors, Colonial’s failure to have qualified as a REIT could jeopardize our qualification as a REIT and require our Operating Partnership to provide material amounts of cash to us to satisfy our additional tax liabilities and therefore have a material adverse effect on our financial condition, results of operations, business and prospects and our ability to make payments on our indebtedness or distributions to our shareholders. 26 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 27 OPERATOR ABIGAELS The Operating Partnership may fail to be treated as a partnership for federal income tax purposes. We believe that the Operating Partnership qualifies, and has so qualified since its formation, as a partnership for federal income tax purposes and not as a publicly traded partnership taxable as a corporation. No assurance can be provided, however, that the Internal Revenue Service, or IRS, will not challenge the treatment of the Operating Partnership as a partnership for federal income tax purposes or that a court would not sustain such a challenge. If the IRS were successful in treating the Operating Partnership as a corporation for federal income tax purposes, then the taxable income of the Operating Partnership would be taxable at regular corporate income tax rates. In addition, the treatment of the Operating Partnership as a corporation would cause MAA to fail to qualify as a REIT. See “Failure to qualify as a REIT would cause us to be taxed as a corporation, which would significantly reduce funds available for distribution to shareholders” above. Recent tax legislation impacts certain U.S. federal income tax rules applicable to REITs and could adversely affect our current tax positions. The recently enacted Protecting Americans from Tax Hikes Act of 2015 (the “PATH Act”) contains changes to certain aspects of the U.S. federal income tax rules applicable to us. The PATH Act is the most recent example of changes to the REIT rules, and additional legislative changes may occur that could adversely affect our current tax positions. The PATH Act modifies various rules that apply to our ownership of, and business relationship with, our TRSs and reduces the maximum allowable value of our assets attributable to TRSs from 25% to 20% which could impact our ability to enter into future investments. The PATH Act makes permanent the reduction of the recognition period (from ten years to five years) during which an entity that converted from a corporation to a REIT or was acquired by a REIT is subject to a corporate-level tax on built-in gains recognized during such period, which could influence the types of investments we enter into in the future. The PATH Act also makes multiple changes related to the Foreign Investment in Real Property Tax Act, expands prohibited transaction safe harbors and qualifying hedges, and repeals the preferential dividend rule for public REITs previously applicable to us. Lastly, the PATH Act adjusts the way we may calculate certain earnings and profits calculations to avoid double taxation at the stockholder level, and expands the types of qualifying assets and income for purposes of the REIT requirements. The provisions enacted by the PATH Act could result in changes in our tax positions or investments, and future legislative changes related to those rules described above could have a materially adverse impact on our results of operations and financial condition. ITEM 1B. UNRESOLVED STAFF COMMENTS. None. ITEM 2. PROPERTIES. We seek to acquire newer apartment communities and those with opportunities for repositioning through capital additions and management improvement located in the Southeast and Southwest regions of the United States that are primarily appealing to middle income residents with the potential for above average growth and return on investment. Approximately 65% of our apartment units are located in the Florida, Georgia, North Carolina, and Texas markets. Our strategic focus is to provide our residents high quality apartment units in attractive community settings, characterized by extensive landscaping and attention to aesthetic detail. We utilize our experience and expertise in maintenance, landscaping, marketing and management to effectively reposition many of the apartment communities we acquire to raise occupancy levels and per unit average rents. 27 The following table sets forth certain historical information for the apartment communities we owned at December 31, 2015: Property Location Birchall at Ross Bridge � � � � � � � � � � � � � Birmingham, AL CG at Riverchase Trails � � � � � � � � � � � � � Birmingham, AL CV at Trussville � � � � � � � � � � � � � � � � � � � Birmingham, AL Eagle Ridge � � � � � � � � � � � � � � � � � � � � � � Birmingham, AL CG at Traditions � � � � � � � � � � � � � � � � � � � Gulf Shores, AL Abbington Place � � � � � � � � � � � � � � � � � � � Huntsville, AL CG at Edgewater� � � � � � � � � � � � � � � � � � � Huntsville, AL TPC at Providence � � � � � � � � � � � � � � � � � Huntsville, AL CG at Madison � � � � � � � � � � � � � � � � � � � � Madison, AL TPC Montgomery � � � � � � � � � � � � � � � � � � Montgomery, AL Cypress Village � � � � � � � � � � � � � � � � � � � Orange Beach, AL CG at Liberty Park � � � � � � � � � � � � � � � � � Vestavia Hills, AL 2 8 Sky View Ranch � � � � � � � � � � � � � � � � � � � Gilbert, AZ CG at Inverness Commons � � � � � � � � � � Mesa, AZ Edge at Lyon’s Gate � � � � � � � � � � � � � � � � Phoenix, AZ Talus Ranch at Sonoran Foothills � � � � � Phoenix, AZ CG at Scottsdale � � � � � � � � � � � � � � � � � � � Scottsdale, AZ CG at OldTown Scottsdale South � � � � � Scottsdale, AZ SkySong � � � � � � � � � � � � � � � � � � � � � � � � � Scottsdale, AZ Calais Forest � � � � � � � � � � � � � � � � � � � � � � Little Rock, AR Napa Valley Apartments � � � � � � � � � � � � Little Rock, AR Palisades at Chenal Valley � � � � � � � � � � � Little Rock, AR Ridge at Chenal Valley � � � � � � � � � � � � � � Little Rock, AR Westside Creek � � � � � � � � � � � � � � � � � � � � Little Rock, AR Tiffany Oaks � � � � � � � � � � � � � � � � � � � � � � Altamonte Springs, FL Indigo Point � � � � � � � � � � � � � � � � � � � � � � Brandon, FL TPC Brandon � � � � � � � � � � � � � � � � � � � � � Brandon, FL CG at Lakewood Ranch � � � � � � � � � � � � � Bradenton, FL Preserve at Coral Square � � � � � � � � � � � � Coral Springs, FL TPC Gainesville � � � � � � � � � � � � � � � � � � � Gainesville, FL The Retreat at Magnolia Parke � � � � � � � Gainesville, FL CG at Heathrow � � � � � � � � � � � � � � � � � � � Heathrow, FL Atlantic Crossing � � � � � � � � � � � � � � � � � � Coopers Hawk � � � � � � � � � � � � � � � � � � � � Jacksonville, FL Jacksonville, FL Year Management Commenced 2011 2013 2013 1998 2013 1998 2013 1997 2013 1998 2013 2013 Reportable Segment (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (6) (5) 2009 2013 2008 2006 2013 2013 2015 1994 1996 2011 2011 1997 1996 2000 1997 2013 2004 1998 2011 2013 2011 1995 (4) (4) (4) (4) (4) (4) (6) (5) (5) (5) (5) (5) (4) (4) (4) (4) (4) (5) (5) (4) (5) (5) Approximate Rentable Area (Square Footage) 283,680 328,008 410,216 181,600 321,732 162,792 543,000 441,000 354,480 246,272 206,016 338,700 3,817,496 225,272 306,000 299,208 437,280 201,600 470,584 315,900 2,255,844 195,000 183,120 319,672 340,080 304,612 1,342,484 232,704 194,640 528,440 301,536 570,720 326,304 206,244 353,184 248,200 218,400 Number of Units 240 346 376 200 324 152 500 392 336 208 96 300 3,470 232 300 312 480 180 472 325 2,301 260 240 248 312 308 1,368 288 240 440 288 480 264 204 312 200 208 Average Unit Size (Square Footage) 1,182 948 1,091 908 993 1,071 1,086 1,125 1,055 1,184 2,146 1,129 1,100 971 1,020 959 911 1,120 997 972 980 750 763 1,289 1,090 989 981 808 811 1,201 1,047 1,189 1,236 1,011 1,132 1,241 1,050 Monthly Average Rent per Unit at December 31, 2015(1) $1,153�13 $ 861�21 $ 831�61 $ 786�18 $ 815�62 $ 638�97 $ 751�42 $ 750�88 $ 809�88 $ 813�77 $1,509�06 $1,097�03 $ 862.09 $ 967�52 $ 908�36 $ 972�68 $ 817�25 $1,143�13 $1,058�52 $1,339�74 $1,014.14 $ 727�12 $ 693�03 $1,093�86 $1,059�42 $ 801�75 $ 880.21 $ 913�87 $ 943�23 $1,079�54 $1,312�73 $1,526�60 $1,025�31 $1,103�11 $1,194�50 $1,221�74 $ 919�92 Average Occupancy Percent at December 31, 2015(2) 96�25% 96�53% 96�54% 95�00% 97�22% 96�71% 97�60% 95�66% 96�13% 99�04% 94�79% 97�00% 96.66% 97�84% 95�67% 98�08% 96�04% 98�33% 97�25% 95�08% 96.74% 97�31% 97�92% 93�55% 95�83% 96�43% 96.20% 96�18% 96�25% 94�32% 97�22% 96�25% 94�32% 97�55% 97�76% 97�00% 97�60% Monthly Effective Rent per Unit at December 31, 2015(3) $1,131�79 $ 858�07 $ 831�21 $ 777�43 $ 808�09 $ 638�31 $ 745�89 $ 741�60 $ 808�09 $ 804�52 $1,498�29 $1,089�44 $ 855.49 $ 944�19 $ 906�52 $ 953�96 $ 811�41 $1,137�58 $1,052�13 $1,253�11 $ 993.81 $ 720�79 $ 691�90 $1,082�74 $1,043�09 $ 798�34 $ 872.31 $ 913�40 $ 935�75 $1,078�10 $1,312�45 $1,524�47 $1,019�08 $1,092�11 $1,189�65 $1,213�93 $ 919�92 Year Complete 2009 1996 1996 1986 2008 1987 1990/99 1989/98 1999 1999 2008 2000 Subtotal Alabama 2007 2002 2007 2005 1999 1995 2014 Subtotal Arizona 1987 1984 2006 2012 1984/86 Subtotal Arkansas 1985 1989 1998 1999 1996 1999 2009 1997 2008 1987 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . 2 8 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S u n d a y , M a r c h 2 0 , 2 0 1 6 2 9 Location Jacksonville, FL Jacksonville, FL Jacksonville, FL Jacksonville, FL Jacksonville, FL Jacksonville, FL Jacksonville, FL Jacksonville, FL Property Hunters Ridge Deerwood � � � � � � � � � � � � Lakeside Apartments � � � � � � � � � � � � � � � Lighthouse at Fleming Island� � � � � � � � � TPC Mandarin � � � � � � � � � � � � � � � � � � � � St� Augustine at the Lake I � � � � � � � � � � � St� Augustine at the Lake II � � � � � � � � � � Tattersall at Tapestry Park � � � � � � � � � � � Woodhollow � � � � � � � � � � � � � � � � � � � � � � TPC Lakeland � � � � � � � � � � � � � � � � � � � � � Lakeland, FL CG at Town Park � � � � � � � � � � � � � � � � � � Lake Mary, FL CG at TownPark Reserve � � � � � � � � � � � � Lake Mary, FL CG at Lake Mary I&II � � � � � � � � � � � � � � Lake Mary, FL CG at Lake Mary III � � � � � � � � � � � � � � � � Lake Mary, FL Retreat at Lake Nona � � � � � � � � � � � � � � � Orlando, FL CG at Heather Glen � � � � � � � � � � � � � � � � Orlando, FL CG at Randal Lakes � � � � � � � � � � � � � � � � Orlando, FL Park Crest at Innisbrook� � � � � � � � � � � � � Palm Harbor, FL The Club at Panama Beach � � � � � � � � � � Panama City, FL CV at Twin Lakes � � � � � � � � � � � � � � � � � � Sanford, FL TPC Tallahassee � � � � � � � � � � � � � � � � � � � Tallahassee, FL Verandas at Southwood � � � � � � � � � � � � � Tallahassee, FL Belmere � � � � � � � � � � � � � � � � � � � � � � � � � � Tampa, FL Links at Carrollwood � � � � � � � � � � � � � � � Tampa, FL Village Oaks � � � � � � � � � � � � � � � � � � � � � � Tampa, FL CG at Hampton Preserve � � � � � � � � � � � � Tampa, FL CG at Seven Oaks � � � � � � � � � � � � � � � � � � Wesley Chapel, FL CG at Windermere � � � � � � � � � � � � � � � � � Windermere, FL Allure at Brookwood � � � � � � � � � � � � � � � Atlanta, GA Allure in Buckhead Village � � � � � � � � � � Atlanta, GA Sanctuary at Oglethorpe � � � � � � � � � � � � Atlanta, GA Terraces at Fieldstone � � � � � � � � � � � � � � � Conyers, GA CG at Berkeley Lake � � � � � � � � � � � � � � � Duluth, GA CG at McDaniel Farm � � � � � � � � � � � � � � Duluth, GA CG at Pleasant Hill � � � � � � � � � � � � � � � � � Duluth, GA CG at River Oaks � � � � � � � � � � � � � � � � � � Duluth, GA CG at River Plantation � � � � � � � � � � � � � � Duluth, GA Year Complete 1987 1985 2003 1998 1987 2008 2009 1986 1988/90 2002 2004 2012 2014 2006 2000 2014 2000 2000 2005 1992 2003 1984 1980 2005 2012 2004 2009 Subtotal Florida 2008 2002 1994 1999 1998 1997 1996 1992 1994 Year Management Commenced 1997 1996 2003 1998 1995 1995 2011 1997 1997 2013 2013 2013 2013 2012 2013 2013 2009 1998 2013 1997 2011 1994 1998 2008 2013 2013 2013 Reportable Segment (5) (5) (5) (5) (5) (5) (5) (5) (5) (4) (4) (6) (6) (4) (4) (6) (4) (5) (4) (5) (6) (4) (4) (4) (4) (4) (4) 2012 2012 2008 1998 2013 2013 2013 2013 2013 (4) (4) (4) (4) (4) (4) (4) (4) (4) Approximate Rentable Area (Square Footage) 295,008 346,112 556,110 334,656 319,600 118,544 307,458 379,350 502,048 535,344 77,440 348,500 139,920 421,186 523,264 435,666 461,808 283,718 417,680 329,536 341,700 202,440 213,210 279,864 515,160 301,782 283,920 12,451,396 344,463 222,756 287,500 375,092 244,260 450,925 502,000 276,264 310,416 Number of Units 336 416 501 288 400 124 279 450 464 456 80 340 132 394 448 462 432 254 460 304 300 210 230 234 486 318 280 12,002 349 228 250 316 180 425 502 216 232 Average Unit Size (Square Footage) 878 832 1,110 1,162 799 956 1,102 843 1,082 1,174 968 1,025 1,060 1,069 1,168 943 1,069 1,117 908 1,084 1,139 964 927 1,196 1,060 949 1,014 1,037 987 977 1,150 1,187 1,357 1,061 1,000 1,279 1,338 Monthly Average Rent per Unit at December 31, 2015(1) $ 892�18 $ 813�39 $1,034�08 $ 987�33 $ 812�11 $1,056�69 $1,243�64 $ 846�52 $ 843�72 $1,191�54 $1,259�16 $1,280�26 $1,323�45 $1,161�86 $1,262�90 $1,174�88 $1,117�43 $1,119�53 $ 989�56 $ 919�37 $1,045�16 $ 946�79 $1,008�17 $1,147�09 $1,132�87 $1,085�24 $1,285�74 $1,081.98 $1,384�35 $1,416�06 $1,634�89 $ 939�39 $1,163�25 $ 983�77 $ 904�57 $1,090�39 $1,101�64 Average Occupancy Percent at December 31, 2015(2) 97�62% 98�08% 97�01% 97�57% 97�50% 96�77% 96�42% 96�44% 96�12% 98�03% 100�00% 97�94% 95�45% 95�94% 97�99% 95�67% 96�99% 94�09% 97�39% 95�72% 95�67% 97�62% 96�96% 95�73% 96�09% 97�17% 98�93% 96.74% 95�99% 97�37% 96�80% 94�94% 95�00% 97�65% 98�41% 98�61% 97�41% Monthly Effective Rent per Unit at December 31, 2015(3) $ 887�02 $ 811�51 $1,024�44 $ 983�89 $ 810�99 $1,054�44 $1,233�68 $ 846�40 $ 840�24 $1,189�65 $1,259�16 $1,275�48 $1,316�58 $1,159�38 $1,256�96 $1,169�48 $ 1,111�18 $ 1,111�14 $ 985�13 $ 903�88 $1,035�35 $ 942�83 $1,007�74 $1,135�22 $1,130�90 $1,083�35 $1,285�31 $1,077.51 $1,385�98 $1,407�57 $1,614�89 $ 939�24 $1,161�17 $ 981�30 $ 903�17 $1,080�07 $1,096�90 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . 2 9 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S u n d a y , M a r c h 2 0 , 2 0 1 6 3 0 Property Location Prescott � � � � � � � � � � � � � � � � � � � � � � � � � � Duluth, GA CG at Mount Vernon � � � � � � � � � � � � � � � Dunwoody, GA Lake Lanier Club I � � � � � � � � � � � � � � � � � Gainesville, GA Lake Lanier Club II � � � � � � � � � � � � � � � � Gainesville, GA CG at Shiloh � � � � � � � � � � � � � � � � � � � � � � Kennesaw, GA Milstead Village � � � � � � � � � � � � � � � � � � � Kennesaw, GA CG at Barrett Creek � � � � � � � � � � � � � � � � Marietta, GA CG at Godley Lake � � � � � � � � � � � � � � � � � Pooler, GA CG at Godley Station � � � � � � � � � � � � � � � Pooler, GA Avala at Savannah Quarters � � � � � � � � � � Savannah, GA CG at Hammocks � � � � � � � � � � � � � � � � � � Savannah, GA CV at Greentree � � � � � � � � � � � � � � � � � � � Savannah, GA CV at Huntington � � � � � � � � � � � � � � � � � � Savannah, GA CV at Marsh Cove � � � � � � � � � � � � � � � � � Savannah, GA Georgetown Grove � � � � � � � � � � � � � � � � � Savannah, GA The Oaks at Wilmington Island � � � � � � � Savannah, GA Highlands of West Village I � � � � � � � � � � Smyrna, GA Highlands of West Village II � � � � � � � � � Smyrna, GA Terraces at Towne Lake � � � � � � � � � � � � � Woodstock, GA Haven at Prairie Trace � � � � � � � � � � � � � � Kansas City, KS Grand Reserve at Pinnacle � � � � � � � � � � � Lexington, KY Lakepointe � � � � � � � � � � � � � � � � � � � � � � � Lexington, KY The Mansion � � � � � � � � � � � � � � � � � � � � � � Lexington, KY The Village � � � � � � � � � � � � � � � � � � � � � � � Lexington, KY Stonemill Village � � � � � � � � � � � � � � � � � � Louisville, KY Crosswinds � � � � � � � � � � � � � � � � � � � � � � � Pear Orchard � � � � � � � � � � � � � � � � � � � � � � Reflection Pointe � � � � � � � � � � � � � � � � � � Lakeshore Landing � � � � � � � � � � � � � � � � � Ridgeland, MS Jackson, MS Jackson, MS Jackson, MS Year Complete 2001 1997 1998 2001 2002 1998 1999 2008 2005 2009 1997 1984 1986 1983 1997 1999 2006 2012 1999 Subtotal Georgia 2015 Subtotal Kansas 2000 1986 1989 1989 1985 Subtotal Kentucky 1989 1985 1986 1974 Subtotal Mississippi Year Management Commenced 2004 2013 2005 2005 2013 2008 2013 2013 2013 2011 2013 2013 2013 2013 1998 2006 2014 2014 1998 Reportable Segment (4) (4) (4) (4) (4) (4) (4) (5) (5) (5) (5) (5) (5) (5) (5) (5) (6) (6) (4) 2015 1999 1994 1994 1994 1994 1996 1994 1988 1994 (6) (5) (5) (5) (5) (5) (5) (5) (5) (5) Approximate Rentable Area (Square Footage) 411,648 257,091 396,288 359,950 533,358 356,190 310,088 269,568 337,272 278,016 323,708 165,288 121,128 197,212 239,800 333,846 368,504 188,000 568,264 9,028,895 257,880 257,880 432,900 90,742 138,736 182,700 324,864 1,169,942 443,160 337,263 248,344 174,244 1,203,011 Number of Units 384 213 344 313 498 310 332 288 312 256 308 194 147 188 220 306 292 188 502 8,293 280 280 370 118 184 252 384 1,308 360 389 296 196 1,241 Average Unit Size (Square Footage) 1,072 1,207 1,152 1,150 1,071 1,149 934 936 1,081 1,086 1,051 852 824 1,049 1,090 1,091 1,262 1,000 1,132 1,089 921 921 1,170 769 754 725 846 894 1,231 867 839 889 969 Monthly Average Rent per Unit at December 31, 2015(1) $ 989�39 $1,346�62 $1,001�87 $ 934�84 $ 985�98 $1,067�55 $ 987�36 $ 964�56 $ 989�83 $1,010�02 $1,160�38 $ 779�60 $ 892�07 $ 857�35 $ 956�19 $1,085�03 $1,435�76 $1,374�53 $ 903�83 $1,068.12 $1,088�79 $1,088.79 $1,007�01 $ 692�71 $ 736�47 $ 723�43 $ 803�78 $ 826.30 $ 865�67 $ 866�41 $ 885�86 $ 765�04 $ 854.82 Average Occupancy Percent at December 31, 2015(2) 95�31% 97�65% 97�38% 96�81% 96�18% 97�10% 96�08% 97�92% 96�15% 97�27% 96�43% 93�30% 100�00% 97�87% 94�55% 98�04% 93�84% 95�21% 94�22% 96.50% 95�00% 95.00% 94�86% 100�00% 99�46% 97�62% 96�61% 97.02% 96�11% 96�14% 97�97% 96�94% 96.70% Monthly Effective Rent per Unit at December 31, 2015(3) $ 986�40 $1,344�43 $ 994�94 $ 933�72 $ 983�17 $1,066�75 $ 986�61 $ 961�93 $ 976�16 $ 997�92 $1,155�94 $ 754�57 $ 883�29 $ 833�13 $ 948�76 $1,065�60 $1,431�72 $1,358�20 $ 894�67 $1,061.52 $1,037�18 $1,037.18 $ 993�41 $ 692�71 $ 732�34 $ 717�00 $ 799�47 $ 819.37 $ 847�96 $ 862�94 $ 884�17 $ 765�04 $ 848.20 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . 3 0 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S u n d a y , M a r c h 2 0 , 2 0 1 6 Year Management Commenced 2012 2015 2015 Reportable Segment (5) (6) (6) 2013 2013 2013 1997 2005 2010 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (6) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (5) (4) (4) (4) (4) (4) (4) (4) Approximate Rentable Area (Square Footage) 324,615 301,278 59,730 685,623 338,200 349,184 687,384 308,732 169,750 377,472 337,792 451,694 279,900 300,672 232,596 300,792 167,076 304,639 326,740 387,192 236,088 172,992 273,540 107,695 252,048 238,644 255,094 198,084 384,430 410,040 248,000 255,690 203,256 311,360 401,128 381,850 209,580 Average Unit Size (Square Footage) 1,005 1,011 1,086 1,014 890 1,024 953 977 875 983 832 1,006 933 1,044 923 996 1,071 863 961 949 1,093 901 970 1,267 1,068 947 959 971 1,039 1,020 992 947 941 973 1,102 1,091 998 Monthly Average Rent per Unit at December 31, 2015(1) $1,277�72 $1,220�91 $1,287�09 $1,253.44 $ 823�26 $ 877�21 $ 848.78 $ 962�42 $ 860�84 $ 889�62 $1,283�91 $1,007�79 $ 956�25 $ 917�93 $ 939�18 $ 963�62 $ 950�24 $1,263�48 $ 860�17 $ 773�51 $ 939�06 $ 822�29 $ 838�19 $1,873�79 $ 966�62 $ 930�99 $ 783�06 $ 867�54 $ 944�26 $ 777�48 $1,038�38 $ 940�05 $1,055�06 $ 935�25 $1,014�50 $1,019�56 $ 885�41 Average Occupancy Percent at December 31, 2015(2) 96�90% 93�29% 92�73% 94.97% 97�89% 97�95% 97.92% 95�25% 96�91% 96�35% 95�81% 98�44% 96�67% 96�53% 97�22% 97�02% 97�44% 95�18% 97�06% 97�30% 97�22% 97�92% 95�39% 95�29% 98�31% 97�22% 95�11% 98�53% 95�95% 99�00% 98�00% 95�93% 97�69% 96�56% 96�43% 95�71% 95�24% Monthly Effective Rent per Unit at December 31, 2015(3) $1,269�33 $1,115�64 $1,287�09 $1,203.03 $ 822�47 $ 878�68 $ 849.06 $ 952�26 $ 827�08 $ 876�03 $1,238�79 $1,006�56 $ 949�32 $ 913�77 $ 939�18 $ 957�82 $ 948�64 $1,251�57 $ 857�23 $ 772�35 $ 936�98 $ 815�67 $ 837�12 $1,863�48 $ 965�56 $ 917�50 $ 779�30 $ 867�50 $ 928�04 $ 776�92 $1,019�24 $ 937�27 $1,053�68 $ 928�28 $1,000�48 $1,012�54 $ 874�45 Number of Units 323 298 55 676 380 341 721 316 194 384 406 449 300 288 252 302 156 353 340 408 216 192 282 85 236 252 266 204 370 402 250 270 216 320 364 350 210 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . 3 1 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S u n d a y , M a r c h 2 0 , 2 0 1 6 Year Complete 2010 2014 2014 Subtotal Missouri 2009 2007 Subtotal Nevada 2007 1988 1996 2010 2008 1996 2001 2005 1998 2005 2014 1999 1998/2000 2002 1986 2000 2008 2009 1997 1996 1985 2002 2001/04 2008 1990 2008 2003 2009 2008 1997 Property Location Market Station � � � � � � � � � � � � � � � � � � � � Kansas City, MO Residences at Burlington Creek� � � � � � � Kansas City, MO The Denton (I) � � � � � � � � � � � � � � � � � � � � Kansas City, MO CG at Desert Vista � � � � � � � � � � � � � � � � � North Las Vegas, NV CG at Palm Vista � � � � � � � � � � � � � � � � � � North Las Vegas, NV 3 1 CV at Beaver Creek � � � � � � � � � � � � � � � � Apex, NC Hermitage at Beechtree � � � � � � � � � � � � � Cary, NC Waterford Forest � � � � � � � � � � � � � � � � � � � Cary, NC 1225 South Church � � � � � � � � � � � � � � � � � Charlotte, NC CG at Ayrsley � � � � � � � � � � � � � � � � � � � � � Charlotte, NC CG at Beverly Crest � � � � � � � � � � � � � � � � Charlotte, NC CG at Legacy Park � � � � � � � � � � � � � � � � � Charlotte, NC CG at Mallard Creek � � � � � � � � � � � � � � � Charlotte, NC CG at Mallard Lake � � � � � � � � � � � � � � � � Charlotte, NC CG at University Center � � � � � � � � � � � � � Charlotte, NC CR at South End � � � � � � � � � � � � � � � � � � � Charlotte, NC CV at Chancellor Park � � � � � � � � � � � � � � Charlotte, NC CV at Greystone � � � � � � � � � � � � � � � � � � � Charlotte, NC CV at South Tryon � � � � � � � � � � � � � � � � � Charlotte, NC CV at Stone Point � � � � � � � � � � � � � � � � � � Charlotte, NC CV at Timber Crest � � � � � � � � � � � � � � � � Charlotte, NC Enclave � � � � � � � � � � � � � � � � � � � � � � � � � � Charlotte, NC CG at Cornelius � � � � � � � � � � � � � � � � � � � Cornelius, NC CG at Patterson Place � � � � � � � � � � � � � � � Durham, NC CV at Woodlake � � � � � � � � � � � � � � � � � � � Durham, NC CV at Deerfield � � � � � � � � � � � � � � � � � � � Durham, NC CG at Research Park� � � � � � � � � � � � � � � � Durham, NC CG at Autumn Park � � � � � � � � � � � � � � � � Greensboro, NC CG at Huntersville � � � � � � � � � � � � � � � � � Huntersville, NC CV at Matthews � � � � � � � � � � � � � � � � � � � Matthews, NC CG at Matthews Commons � � � � � � � � � � Matthews, NC CG at Arringdon � � � � � � � � � � � � � � � � � � � Morrisville, NC CG at Brier Creek � � � � � � � � � � � � � � � � � � Raleigh, NC CG at Brier Falls � � � � � � � � � � � � � � � � � � � Raleigh, NC CG at Crabtree � � � � � � � � � � � � � � � � � � � � Raleigh, NC 3 2 Property Location Hue � � � � � � � � � � � � � � � � � � � � � � � � � � � � � Raleigh, NC CG at Trinity Commons � � � � � � � � � � � � � Raleigh, NC Preserve at Brier Creek � � � � � � � � � � � � � Raleigh, NC Providence at Brier Creek � � � � � � � � � � � Raleigh, NC Corners at Crystal Lake � � � � � � � � � � � � � Winston-Salem, NC Colonial Village at Glen Eagles � � � � � � � Winston-Salem, NC CV at Mill Creek � � � � � � � � � � � � � � � � � � Winston-Salem, NC Tanglewood � � � � � � � � � � � � � � � � � � � � � � Anderson, SC CG at Cypress Cove � � � � � � � � � � � � � � � � Charleston, SC CV at Hampton Pointe � � � � � � � � � � � � � � Charleston, SC CG at Quarterdeck � � � � � � � � � � � � � � � � � Charleston, SC CV at Westchase � � � � � � � � � � � � � � � � � � � Charleston, SC River’s Walk � � � � � � � � � � � � � � � � � � � � � � Charleston, SC The Fairways � � � � � � � � � � � � � � � � � � � � � Columbia, SC TPC Columbia � � � � � � � � � � � � � � � � � � � � Columbia, SC CV at Windsor Place � � � � � � � � � � � � � � � Goose Creek, SC Highland Ridge � � � � � � � � � � � � � � � � � � � Greenville, SC Howell Commons � � � � � � � � � � � � � � � � � � Greenville, SC TPC Greenville � � � � � � � � � � � � � � � � � � � � Greenville, SC Park Haywood � � � � � � � � � � � � � � � � � � � � Greenville, SC Spring Creek � � � � � � � � � � � � � � � � � � � � � � Greenville, SC Runaway Bay � � � � � � � � � � � � � � � � � � � � � Mt� Pleasant, SC CG at Commerce Park � � � � � � � � � � � � � � North Charleston, SC 535 Brookwood� � � � � � � � � � � � � � � � � � � � Simpsonville, SC Park Place � � � � � � � � � � � � � � � � � � � � � � � � Spartanburg, SC Farmington Village � � � � � � � � � � � � � � � � Summerville, SC CV at Waters Edge � � � � � � � � � � � � � � � � � Summerville, SC Hamilton Pointe � � � � � � � � � � � � � � � � � � � Chattanooga, TN Hidden Creek � � � � � � � � � � � � � � � � � � � � � Chattanooga, TN Steeplechase � � � � � � � � � � � � � � � � � � � � � � Chattanooga, TN Windridge � � � � � � � � � � � � � � � � � � � � � � � � Chattanooga, TN Kirby Station � � � � � � � � � � � � � � � � � � � � � Memphis, TN Lincoln on the Green � � � � � � � � � � � � � � � Memphis, TN Park Estate � � � � � � � � � � � � � � � � � � � � � � � Memphis, TN Reserve at Dexter Lake � � � � � � � � � � � � � Memphis, TN Year Complete 2009 2000/02 2004 2007 1982 1990/2000 1984 Subtotal North Carolina 1980 2001 1986 1987 1985 2013 1992 1991 1985 1984 1987 1996 1983 1985 1988 2008 2008 1987 2007 1985 Subtotal South Carolina 1989 1987 1986 1984 1978 1992 1974 2000 Year Management Commenced 2010 2013 2006 2008 1993 2013 2013 Reportable Segment (4) (4) (4) (4) (5) (5) (5) 1994 2013 2013 2013 2013 2013 1994 1997 2013 1995 1997 1997 1993 1995 1995 2013 2010 1997 2007 2013 1992 1988 1991 1997 1994 1994 1977 1998 (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) (5) Approximate Rentable Area (Square Footage) 185,744 484,176 519,300 297,037 173,520 312,170 209,660 10,666,173 146,664 304,128 314,640 218,960 258,016 248,400 213,840 378,672 213,472 134,904 275,616 231,504 158,704 179,504 177,840 306,384 254,464 195,224 309,120 187,680 4,707,736 256,310 260,400 98,712 238,728 309,043 540,132 106,764 807,340 Number of Units 208 462 450 313 240 310 220 10,836 168 264 304 230 352 270 240 336 224 168 348 208 208 208 208 312 256 184 280 204 4,972 361 300 108 174 371 618 82 740 Average Unit Size (Square Footage) 893 1,048 1,154 949 723 1,007 953 984 873 1,152 1,035 952 733 920 891 1,127 953 803 792 1,113 763 863 855 982 994 1,061 1,104 920 947 710 868 914 1,372 833 874 1,302 1,091 Monthly Average Rent per Unit at December 31, 2015(1) $1,416�45 $ 908�69 $1,063�25 $ 951�26 $ 624�23 $ 685�10 $ 629�19 $ 948.50 $ 712�13 $1,096�06 $ 993�84 $1,196�71 $ 826�62 $1,579�86 $ 733�72 $ 797�31 $ 867�22 $ 676�31 $ 708�26 $ 850�48 $ 712�88 $ 750�12 $1,230�21 $ 930�43 $ 951�31 $ 757�28 $1,041�33 $ 857�85 $ 920.97 $ 706�40 $ 701�97 $ 797�63 $1,058�58 $ 833�40 $ 775�35 $1,151�28 $ 917�07 Average Occupancy Percent at December 31, 2015(2) 93�27% 95�02% 97�56% 97�12% 95�42% 95�16% 96�82% 96.59% 93�45% 95�83% 97�37% 95�65% 96�88% 96�67% 97�92% 94�35% 96�43% 94�05% 93�97% 97�60% 97�60% 97�60% 93�75% 96�47% 96�09% 96�74% 96�07% 96�08% 96.04% 97�23% 96�33% 98�15% 97�13% 95�96% 96�44% 98�78% 96�35% Monthly Effective Rent per Unit at December 31, 2015(3) $1,403�71 $ 896�30 $1,046�13 $ 944�07 $ 613�29 $ 682�38 $ 590�85 $ 938.65 $ 706�77 $1,094�92 $ 993�84 $1,173�01 $ 816�25 $1,538�82 $ 723�30 $ 784�01 $ 867�22 $ 676�31 $ 705�24 $ 816�31 $ 708�56 $ 750�12 $1,215�55 $ 922�09 $ 951�31 $ 756�20 $1,019�45 $ 855�40 $ 910.94 $ 706�29 $ 699�68 $ 797�63 $1,057�02 $ 823�24 $ 764�19 $1,151�28 $ 907�40 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . 3 2 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S u n d a y , M a r c h 2 0 , 2 0 1 6 Year Management Commenced 1998 2011 2010 1994 2013 2015 1999 2004 1995 2010 2010 Reportable Segment (4) (4) (4) (4) (6) (6) (4) (4) (4) (4) (4) 1998 1997 2013 2013 2013 2013 2013 2013 2004 2009 2006 1995 1997 1995 2013 2013 2013 2013 2013 2010 1998 2013 1998 2006 2011 2004 (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (6) (4) (4) (4) (4) (4) (4) Approximate Rentable Area (Square Footage) 281,760 291,000 283,392 220,220 344,812 237,160 523,497 427,728 392,480 457,104 391,104 6,467,686 224,100 313,728 349,104 262,208 277,944 312,600 321,888 459,979 194,460 467,504 303,264 248,832 214,060 244,720 381,888 426,854 352,248 239,666 266,240 280,488 168,664 241,582 206,720 343,980 425,904 199,200 Number of Units 240 300 288 286 349 220 433 456 440 428 336 6,530 270 384 336 272 296 300 336 533 210 479 312 288 278 304 408 478 312 238 256 312 232 278 304 390 456 240 Average Unit Size (Square Footage) 1,174 970 984 770 988 1,078 1,209 938 892 1,068 1,164 990 830 817 1,039 964 939 1,042 958 863 926 976 972 864 770 805 936 893 1,129 1,007 1,040 899 727 869 680 882 934 830 Monthly Average Rent per Unit at December 31, 2015(1) $ 975�78 $1,105�46 $1,059�81 $1,016�57 $1,156�54 $1,246�45 $1,222�85 $ 984�44 $ 850�39 $1,508�02 $1,065�21 $ 994.32 $ 763�97 $ 988�55 $1,046�65 $ 995�76 $1,132�99 $1,129�74 $1,049�05 $ 960�62 $1,221�11 $1,281�67 $1,099�10 $ 919�03 $1,224�17 $ 828�71 $ 912�80 $ 918�76 $1,244�89 $1,079�16 $1,151�09 $1,150�03 $ 916�25 $1,237�49 $ 792�97 $1,022�38 $1,202�33 $1,004�32 Average Occupancy Percent at December 31, 2015(2) 95�42% 93�33% 97�22% 98�25% 96�56% 97�73% 92�84% 97�15% 95�00% 91�36% 96�73% 95.90% 95�19% 93�75% 95�24% 95�59% 97�64% 96�00% 97�32% 95�31% 96�67% 96�45% 96�79% 95�83% 97�84% 95�39% 96�57% 95�40% 95�83% 97�90% 96�48% 95�19% 94�83% 93�17% 97�37% 98�21% 96�05% 95�83% Monthly Effective Rent per Unit at December 31, 2015(3) $ 953�89 $1,100�51 $1,054�94 $1,016�57 $1,152�42 $1,195�02 $1,196�23 $ 983�68 $ 847�23 $1,490�24 $1,065�21 $ 985.04 $ 763�97 $ 985�05 $1,043�38 $ 985�99 $1,121�18 $1,128�08 $1,044�08 $ 955�30 $1,217�54 $1,278�54 $1,094�62 $ 916�80 $1,216�75 $ 820�05 $ 910�84 $ 913�07 $1,242�97 $1,074�79 $1,143�28 $1,146�19 $ 916�25 $1,237�49 $ 792�97 $1,022�38 $1,172�17 $1,004�32 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . 3 3 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S u n d a y , M a r c h 2 0 , 2 0 1 6 Year Complete 1999 2010 2008 1986 1996 2013 2001 2000 1987 2012 2009 Subtotal Tennessee 1980 1983 2007 2003 2013 2009 2008 1996 1996 2002 2003 1985 1977 1987 1996 1996 2011 2005 2006 2008 1986 2007 1985 2000 2008 2002 Property Location TPC Murfreesboro � � � � � � � � � � � � � � � � � Murfreesboro, TN Aventura at Indian Lake Village � � � � � � Nashville, TN Avondale at Kennesaw Farms � � � � � � � � Nashville, TN Brentwood Downs � � � � � � � � � � � � � � � � � Nashville, TN CG at Bellevue I � � � � � � � � � � � � � � � � � � � Nashville, TN CG at Bellevue II � � � � � � � � � � � � � � � � � � Nashville, TN Grand View� � � � � � � � � � � � � � � � � � � � � � � Nashville, TN Monthaven Park � � � � � � � � � � � � � � � � � � � Nashville, TN Park at Hermitage � � � � � � � � � � � � � � � � � � Nashville, TN Venue at Cool Springs � � � � � � � � � � � � � � Nashville, TN Verandas at Sam Ridley � � � � � � � � � � � � � Nashville, TN 3 3 Northwood Place � � � � � � � � � � � � � � � � � � Arlington, TX Balcones Woods � � � � � � � � � � � � � � � � � � � Austin, TX CG at Canyon Creek � � � � � � � � � � � � � � � � Austin, TX CG at Canyon Pointe � � � � � � � � � � � � � � � Austin, TX CG at Double Creek � � � � � � � � � � � � � � � � Austin, TX CG at Onion Creek � � � � � � � � � � � � � � � � � Austin, TX CG at Wells Branch � � � � � � � � � � � � � � � � Austin, TX CV at Quarry Oaks � � � � � � � � � � � � � � � � Austin, TX Grand Reserve at Sunset Valley � � � � � � Austin, TX Legacy at Western Oaks � � � � � � � � � � � � Austin, TX Silverado at Brushy Creek � � � � � � � � � � � Austin, TX Stassney Woods � � � � � � � � � � � � � � � � � � � Austin, TX The Woods on Barton Skyway � � � � � � � Austin, TX Travis Station � � � � � � � � � � � � � � � � � � � � � Austin, TX CV at Shoal Creek � � � � � � � � � � � � � � � � � Bedford, TX CV at Willow Creek � � � � � � � � � � � � � � � � Bedford, TX CG at Hebron � � � � � � � � � � � � � � � � � � � � � Carrollton, TX CG at Silverado � � � � � � � � � � � � � � � � � � � Cedar Park, TX CG at Silverado Reserve � � � � � � � � � � � � Cedar Park, TX Grand Cypress � � � � � � � � � � � � � � � � � � � � Cypress, TX Courtyards at Campbell � � � � � � � � � � � � � Dallas, TX CR at Medical District � � � � � � � � � � � � � � Dallas, TX Deer Run � � � � � � � � � � � � � � � � � � � � � � � � � Dallas, TX Grand Courtyards � � � � � � � � � � � � � � � � � � Dallas, TX Legends at Lowes Farm � � � � � � � � � � � � � Dallas, TX Watermark � � � � � � � � � � � � � � � � � � � � � � � Dallas, TX Year Management Commenced 2013 2013 2013 2013 2010 2013 2008 2003 2007 2007 2006 2014 2008 2007 2010 2013 2013 2013 2013 2010 2010 1994 2014 1998 2003 2005 2008 2013 2013 2013 2011 2014 2012 2009 1994 2004 1994 Reportable Segment (4) (4) (4) (6) (4) (4) (4) (4) (4) (4) (4) (6) (4) (4) (4) (4) (4) (6) (4) (4) (6) (4) (6) (4) (4) (4) (4) (4) (4) (4) (5) (6) (5) (5) (4) (4) (4) Number of Units 192 436 256 252 270 450 316 308 229 220 328 323 246 268 268 396 306 362 426 313 250 384 454 196 498 494 245 362 422 232 340 328 436 400 208 274 200 20,390 Approximate Rentable Area (Square Footage) 180,288 395,016 258,048 210,420 267,840 387,450 310,944 283,360 207,016 193,160 316,192 296,514 227,796 260,228 258,352 462,132 277,848 346,434 382,974 320,512 214,000 277,632 381,360 156,212 470,112 442,624 230,055 307,338 429,596 205,552 270,640 300,776 463,468 334,400 160,576 244,682 152,200 18,611,572 Average Unit Size (Square Footage) 939 906 1,008 835 992 861 984 920 904 878 964 918 926 971 964 1,167 908 957 899 1,024 856 723 840 797 944 896 939 849 1,018 886 796 917 1,063 836 772 893 761 913 Year Complete 1984 1998 2012 2013 2009 1985 1994 2000 1996 1996 1999 2014 2007 2006 2007 1997 2006 1984 1997 2009 2000 1983 2013 1983 2000 1999/2008 2009 2009 2007 1999 2009 2014 2010 2008 1984 1996 1984 Subtotal Texas Monthly Average Rent per Unit at December 31, 2015(1) $ 902�66 $1,023�78 $1,188�28 $1,188�79 $1,309�95 $ 892�08 $1,004�20 $1,036�03 $ 1,111�41 $ 996�41 $1,037�09 $1,257�12 $1,079�84 $1,065�63 $1,196�11 $1,260�11 $1,234�13 $ 951�79 $ 924�84 $1,232�88 $1,011�83 $ 760�58 $1,213�58 $ 988�78 $1,021�10 $1,027�42 $1,172�15 $ 996�11 $1,076�64 $ 942�91 $ 935�94 $1,134�88 $1,163�75 $ 990�54 $ 814�86 $1,086�92 $ 877�68 $1,053.69 Average Occupancy Percent at December 31, 2015(2) 98�96% 97�71% 94�92% 93�65% 95�56% 97�56% 95�25% 96�75% 98�69% 96�36% 97�26% 97�21% 95�12% 97�01% 93�28% 96�72% 95�42% 93�09% 96�24% 95�21% 95�20% 96�88% 95�59% 96�94% 94�98% 95�55% 95�51% 95�30% 96�68% 94�83% 96�18% 95�73% 96�79% 98�25% 95�19% 95�99% 96�50% 96.07% Monthly Effective Rent per Unit at December 31, 2015(3) $ 875�31 $1,022�86 $1,166�64 $1,180�01 $1,297�68 $ 892�07 $1,000�41 $1,036�03 $1,110�32 $ 995�50 $1,036�24 $1,257�12 $1,075�17 $1,062�83 $1,196�11 $1,246�73 $1,228�90 $ 950�82 $ 923�08 $1,199�81 $1,005�27 $ 759�28 $1,194�53 $ 978�59 $1,019�39 $1,008�17 $1,161�95 $ 992�93 $1,073�20 $ 942�91 $ 920�09 $1,130�72 $1,159�05 $ 988�04 $ 808�98 $1,084�00 $ 877�68 $1,047.63 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . 3 4 O P E R A T O R I A B G A E L S 3 4 Property Location CV at Main Park � � � � � � � � � � � � � � � � � � � Duncanville, TX CG at Bear Creek � � � � � � � � � � � � � � � � � � Euless, TX CG at Fairview � � � � � � � � � � � � � � � � � � � � Fairview, TX CR at Frisco Bridges � � � � � � � � � � � � � � � Frisco, TX La Valencia at Starwood � � � � � � � � � � � � Frisco, TX CV at Grapevine � � � � � � � � � � � � � � � � � � � Grapevine, TX Greenwood Forest � � � � � � � � � � � � � � � � � Houston, TX Legacy Pines � � � � � � � � � � � � � � � � � � � � � � Houston, TX Park Place Houston � � � � � � � � � � � � � � � � Houston, TX Ranchstone � � � � � � � � � � � � � � � � � � � � � � � Houston, TX Reserve at Woodwind Lakes � � � � � � � � � Houston, TX Retreat at Vintage Park � � � � � � � � � � � � � Houston, TX Cascade at Fall Creek � � � � � � � � � � � � � � � Humble, TX Chalet at Fall Creek � � � � � � � � � � � � � � � � Humble, TX Bella Casita � � � � � � � � � � � � � � � � � � � � � � � CG at Valley Ranch � � � � � � � � � � � � � � � � CR at Las Colinas � � � � � � � � � � � � � � � � � � Remington Hills at Las Colinas � � � � � � � CV at Oak Bend � � � � � � � � � � � � � � � � � � � Lewisville, TX Times Square at Craig Ranch � � � � � � � � McKinney, TX Venue at Stonebridge Ranch � � � � � � � � � McKinney, TX Lane at Towne Crossing � � � � � � � � � � � � � Mesquite, TX Cityscape at Market Center � � � � � � � � � � Plano, TX Highwood � � � � � � � � � � � � � � � � � � � � � � � � Plano, TX Los Rios � � � � � � � � � � � � � � � � � � � � � � � � � Plano, TX Boulder Ridge � � � � � � � � � � � � � � � � � � � � � Roanoke, TX Copper Ridge � � � � � � � � � � � � � � � � � � � � � Roanoke, TX CG at Ashton Oaks � � � � � � � � � � � � � � � � � Round Rock, TX CG at Round Rock � � � � � � � � � � � � � � � � � Round Rock, TX CV at Sierra Vista � � � � � � � � � � � � � � � � � Round Rock, TX Alamo Ranch � � � � � � � � � � � � � � � � � � � � � San Antonio, TX Bulverde Oaks � � � � � � � � � � � � � � � � � � � � San Antonio, TX Haven at Blanco � � � � � � � � � � � � � � � � � � � San Antonio, TX Stone Ranch at Westover Hills � � � � � � � San Antonio, TX Cypresswood Court � � � � � � � � � � � � � � � � Spring, TX Villages of Kirkwood � � � � � � � � � � � � � � � Stafford, TX Green Tree Place � � � � � � � � � � � � � � � � � � Woodlands, TX Irving, TX Irving, TX Irving, TX Irving, TX J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S u n d a y , M a r c h 2 0 , 2 0 1 6 Property Location Stonefield Commons � � � � � � � � � � � � � � � Charlottesville, VA Adalay Bay � � � � � � � � � � � � � � � � � � � � � � � Chesapeake, VA CV at Greenbrier � � � � � � � � � � � � � � � � � � Fredericksburg, VA Seasons at Celebrate Virginia � � � � � � � � Fredericksburg, VA Station Square at Cosner’s Corner � � � � � Fredericksburg, VA CV at Hampton Glen � � � � � � � � � � � � � � � Glen Allen, VA CV at West End � � � � � � � � � � � � � � � � � � � Glen Allen, VA CV at Tradewinds � � � � � � � � � � � � � � � � � � Hampton, VA Radius � � � � � � � � � � � � � � � � � � � � � � � � � � � Hampton, VA Township in Hampton Woods � � � � � � � � Hampton, VA CV at Waterford � � � � � � � � � � � � � � � � � � � Midlothian, VA Ashley Park � � � � � � � � � � � � � � � � � � � � � � Richmond, VA CV at Chase Gayton � � � � � � � � � � � � � � � � Richmond, VA Retreat at West Creek � � � � � � � � � � � � � � � Richmond, VA The Hamptons at Hunton Park � � � � � � � � Richmond, VA CV at Harbour Club � � � � � � � � � � � � � � � � Virginia Beach, VA Year Complete 2013 2002 1980 2011 2012 1986 1987 1988 2012 1987 1989 1988 1984 2015 2003 1988 Subtotal Virginia Total 3 5 Year Management Commenced 2014 2012 2013 2011 2013 2013 2013 2013 2015 1995 2013 2013 2013 2015 2011 2013 Reportable Segment (6) (5) (5) (6) (6) (5) (5) (5) (6) (5) (5) (5) (5) (6) (5) (5) Approximate Rentable Area (Square Footage) 209,585 246,240 216,720 481,551 268,580 177,712 156,352 280,024 234,108 248,048 288,912 194,480 311,272 255,016 309,600 193,191 4,071,391 77,424,513 Average Unit Size (Square Footage) 835 1,026 840 997 1,033 766 698 986 929 838 926 715 949 1,004 1,032 907 913 982 Number of Units 251 240 258 483 260 232 224 284 252 296 312 272 328 254 300 213 4,459 78,847 Monthly Average Rent per Unit at December 31, 2015(1) $1,377�01 $1,242�95 $ 991�62 $1,323�89 $1,304�86 $ 939�72 $ 846�22 $ 864�90 $1,330�57 $ 938�02 $ 967�40 $ 774�98 $ 919�25 $1,269�16 $1,252�35 $ 890�24 $1,086.90 $1,014.11 Average Occupancy Percent at December 31, 2015(2) 96�02% 97�08% 98�06% 96�07% 96�92% 94�83% 98�21% 98�24% 99�60% 99�32% 98�72% 98�53% 95�73% 96�06% 95�67% 96�24% 97.17% 96.07% Monthly Effective Rent per Unit at December 31, 2015(3) $1,363�47 $1,228�73 $ 986�38 $1,317�47 $1,299�47 $ 939�31 $ 839�44 $ 831�91 $1,264�84 $ 922�22 $ 965�58 $ 774�98 $ 915�59 $1,238�71 $1,240�73 $ 878�51 $1,073.36 $1,005.80 (1) Monthly average rent per unit represents the average of gross monthly rent amounts charged for occupied units plus prevalent market rents asked for unoccupied units in the property, divided by the total number of units in the property� This information is provided to represent average pricing for the period and does not represent actual rental revenue collected per unit� (2) Average Occupancy is calculated by dividing the number of units occupied at each property by the total number of units at each property� (3) Effective rent per unit is equal to the average of gross rent amounts after the effect of leasing concessions for occupied units plus prevalent market rates asked for unoccupied units in the property, divided by the total number of units in the property� Leasing concessions represent discounts to the current market rate� These discounts may be offered from time-to-time by a property for various reasons, including to assist with the initial lease-up of a newly developed property or as a response to a property’s local market economics� Concessions are not part of our standard rent offering� Concessions for the year ended December 31, 2015 were $9�1 million� As of December 31, 2015, approximately 20�05% of total leases were subject to concessions� Effective rent is provided to represent average pricing for the period and does not represent actual rental revenue collected per unit� (4) Large market same store reportable segment� (5) Secondary market same store reportable segment� (6) Non-same store reportable segment� J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . 3 5 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S u n d a y , M a r c h 2 0 , 2 0 1 6 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 36 OPERATOR ABIGAELS MORTGAGE FINANCING As of December 31, 2015, we had approximately $0.9 billion of indebtedness collateralized, secured, and outstanding as set forth below: Location Birmingham, AL Huntsville, AL Vestavia Hills, AL Altamonte Springs, FL Brandon, FL Heathrow, FL Jacksonville, FL Jacksonville, FL Lake Mary, FL Palm Harbor, FL Sanford, FL Tallahassee, FL Tampa, FL Duluth, GA Duluth, GA Dunwoody, GA Gainesville, GA Kennesaw, GA Property Eagle Ridge . . . . . . . . . . . . . . . . . . . . . . . . . . CG at Edgewater . . . . . . . . . . . . . . . . . . . . . . CG at Madison . . . . . . . . . . . . . . . . . . . . . . . Madison, AL CG at Liberty Park . . . . . . . . . . . . . . . . . . . . Tiffany Oaks . . . . . . . . . . . . . . . . . . . . . . . . . Indigo Point . . . . . . . . . . . . . . . . . . . . . . . . . . CG at Heathrow . . . . . . . . . . . . . . . . . . . . . . Lighthouse at Fleming Island . . . . . . . . . . . . Woodhollow . . . . . . . . . . . . . . . . . . . . . . . . . CG at Town Park . . . . . . . . . . . . . . . . . . . . . . Park Crest at Innisbrook . . . . . . . . . . . . . . . . CV at Twin Lakes . . . . . . . . . . . . . . . . . . . . . Verandas at Southwood . . . . . . . . . . . . . . . . Belmere . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CG at Seven Oaks . . . . . . . . . . . . . . . . . . . . . Wesley Chapel, FL Prescott . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CG at River Oaks . . . . . . . . . . . . . . . . . . . . . CG at Mount Vernon . . . . . . . . . . . . . . . . . . Lake Lanier Club II . . . . . . . . . . . . . . . . . . . CG at Shiloh . . . . . . . . . . . . . . . . . . . . . . . . . CG at Barrett Creek . . . . . . . . . . . . . . . . . . . Marietta, GA CG at Godley Station . . . . . . . . . . . . . . . . . . Highlands of West Village I . . . . . . . . . . . . . Grand Reserve at Pinnacle . . . . . . . . . . . . . . Mansion, The . . . . . . . . . . . . . . . . . . . . . . . . Village, The . . . . . . . . . . . . . . . . . . . . . . . . . Waterford Forest . . . . . . . . . . . . . . . . . . . . . . Hermitage at Beechtree . . . . . . . . . . . . . . . . CG at Beverly Crest . . . . . . . . . . . . . . . . . . . CG at Mallard Creek . . . . . . . . . . . . . . . . . . . CG at Mallard Lake . . . . . . . . . . . . . . . . . . . CV at Greystone . . . . . . . . . . . . . . . . . . . . . . CG at Patterson Place . . . . . . . . . . . . . . . . . . CG at Huntersville . . . . . . . . . . . . . . . . . . . . CV at Matthews . . . . . . . . . . . . . . . . . . . . . . Matthews, NC CG at Arringdon . . . . . . . . . . . . . . . . . . . . . . Morrisville, NC CG at Brier Creek . . . . . . . . . . . . . . . . . . . . . CG at Crabtree Valley . . . . . . . . . . . . . . . . . . CG at Trinity Commons . . . . . . . . . . . . . . . . Howell Commons . . . . . . . . . . . . . . . . . . . . . TPC Greenville . . . . . . . . . . . . . . . . . . . . . . . Park Haywood. . . . . . . . . . . . . . . . . . . . . . . . 535 Brookwood . . . . . . . . . . . . . . . . . . . . . . . Hidden Creek . . . . . . . . . . . . . . . . . . . . . . . . Lincoln on the Green . . . . . . . . . . . . . . . . . . Memphis, TN Pooler, GA Smyrna, GA Lexington, KY Lexington, KY Lexington, KY Cary, NC Cary, NC Charlotte, NC Charlotte, NC Charlotte, NC Charlotte, NC Durham, NC Huntersville, NC Raleigh, NC Raleigh, NC Raleigh, NC Greenville, SC Greenville, SC Greenville, SC Simpsonville, SC Chattanooga, TN 36 Encumbrances at December 31, 2015 Interest Rate Mortgage/Bond Principal (000’s) —(1) $ (1) 3.750% 3.750% 3.700% (1) (1) 3.700% (1) (1) 3.750% 4.430% 4.065% 2.060% (1) 3.750% (2) 3.750% 3.700% (2) 3.700% 3.750% 5.000% 3.000% (1) (1) (1) (2) (1) 3.700% 3.700% 3.700% 3.750% 3.700% 3.750% 2.630% 3.700% 3.700% 3.700% 3.400% (1) (1) (1) 27,722 22,500 17,823 —(1) —(1) 20,594 —(1) —(1) 32,938 28,419 25,044 20,345 —(1) 20,720 —(2) 11,680 15,328 —(2) 30,454 19,257 12,777 41,075 —(1) —(1) —(1) —(2) —(1) 15,496 15,630 17,642 14,180 15,361 14,843 13,587 19,319 25,490 10,532 29,725 —(1) —(1) —(1) Maturity Date (1) 6/1/2019 6/1/2019 2/27/2019 (1) (1) 2/27/2019 (1) (1) 6/1/2019 10/1/2020 7/1/2020 3/1/2016 (1) 6/1/2019 (2) 6/1/2019 2/27/2019 (2) 2/27/2019 6/1/2019 6/1/2025 5/1/2018 (1) (1) (1) (2) (1) 2/27/2019 2/27/2019 2/27/2019 6/1/2019 2/27/2019 6/1/2019 3/29/2016 2/27/2019 2/27/2019 2/27/2019 4/1/2018 (1) (1) (1) 12,889 —(1) —(1) 4.430% (1) (1) 10/1/2020 (1) (1) JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 37 OPERATOR ABIGAELS Location Property Nashville, TN Avondale at Kennesaw . . . . . . . . . . . . . . . . . Nashville, TN CG at Bellevue . . . . . . . . . . . . . . . . . . . . . . . Nashville, TN Verandas at Sam Ridley . . . . . . . . . . . . . . . . Austin, TX CG at Canyon Creek . . . . . . . . . . . . . . . . . . . Austin, TX CV at Quarry Oaks . . . . . . . . . . . . . . . . . . . . Austin, TX Legacy at Western Oaks . . . . . . . . . . . . . . . . Bedford, TX CV at Shoal Creek . . . . . . . . . . . . . . . . . . . . Bedford, TX CV at Willow Creek . . . . . . . . . . . . . . . . . . . Cypress, TX Grand Cypress . . . . . . . . . . . . . . . . . . . . . . . Dallas, TX Watermark . . . . . . . . . . . . . . . . . . . . . . . . . . Euless, TX CG at Bear Creek . . . . . . . . . . . . . . . . . . . . . Frisco, TX La Valencia at Starwood . . . . . . . . . . . . . . . . Houston, TX Legacy Pines . . . . . . . . . . . . . . . . . . . . . . . . . Irving, TX Bella Casita at Las Colinas . . . . . . . . . . . . . . Irving, TX CG at Valley Ranch . . . . . . . . . . . . . . . . . . . Lewisville, TX CV at Oakbend . . . . . . . . . . . . . . . . . . . . . . . Venue at Stonebridge Ranch . . . . . . . . . . . . . McKinney, TX CG at Round Rock . . . . . . . . . . . . . . . . . . . . CV at Sierra Vista . . . . . . . . . . . . . . . . . . . . . Stone Ranch at Westover Hills . . . . . . . . . . . Cypresswood Court . . . . . . . . . . . . . . . . . . . Green Tree Place . . . . . . . . . . . . . . . . . . . . . . Woodlands, TX CV at West End . . . . . . . . . . . . . . . . . . . . . . . Glen Allen, VA Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Round Rock, TX Round Rock, TX San Antonio, TX Spring, TX Mortgage/Bond Principal (000’s) Encumbrances at December 31, 2015 Interest Rate 4.430% 4.065% 4.430% 3.750% 3.700% 3.510% 3.700% 3.700% 3.400% (2) 17,762 22,086 21,861 15,159 26,832 29,672 22,807 26,429 16,598 —(2) 24,082 20,931 —(2) —(2) 25,044 21,667 14,767 24,484 10,900 18,499 —(2) —(2) 3.700% 4.590% (2) (2) 4.065% 3.700% 3.250% 3.700% 3.700% 5.490% (2) (2) Maturity Date 10/1/2020 7/1/2020 10/1/2020 9/14/2019 2/27/2019 2/1/2017 2/27/2019 2/27/2019 8/5/2017 (2) 2/27/2019 3/10/2018 (2) (2) 7/1/2020 2/27/2019 12/10/2017 2/27/2019 2/27/2019 3/1/2020 (2) (2) 12,611 $923,561 3.700% 2/27/2019 (1) Encumbered by a $240.0 million Fannie Mae facility, with $240.0 million available and outstanding with a variable interest rate of 0.80% on which there exists five interest rate caps totaling $125 million at an average rate of 4.60% at December 31, 2015. (2) Encumbered by a $128 million loan with an outstanding balance of $128 million and a fixed interest rate of 5.08% which matures on June 10, 2021. ITEM 3. LEGAL PROCEEDINGS. We, along with multiple other parties, are named defendants in two lawsuits arising out of alleged construction deficiencies with respect to condominium units at Regatta at James Island in Charleston, South Carolina. The Regatta at James Island property was developed and constructed by certain of Colonial’s subsidiaries prior to the Merger. The condominiums were constructed in 2006 and all 212 units were sold. The lawsuits, one filed on behalf of the condominium homeowners association and one filed by three of the unit owners (purportedly on behalf of all unit owners), were filed in South Carolina state court (Charleston County) in August 2012, against various parties involved in the development and construction of the Regatta at James Island property, including the contractors, subcontractors, architect, developer, and product manufacturers. The plaintiffs are seeking damages resulting primarily from alleged construction deficiencies, but the amount the plaintiffs seek to recover has not been disclosed. The lawsuits are currently in discovery. We are continuing to investigate the matter and evaluate our options and intend to vigorously defend ourself against these claims. No assurance can be given that the matter will be resolved favorably to us. We have included in our loss contingency an estimate of probable loss in connection with this matter, but currently cannot reasonably estimate any further possible loss, or any range of reasonably possible loss, in connection with this matter. 37 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 38 OPERATOR ABIGAELS In addition, we are subject to various other legal proceedings and claims that arise in the ordinary course of its business operations. Matters which arise out of allegations of bodily injury, property damage, and employment practices are generally covered by insurance. While the resolution of these other matters cannot be predicted with certainty, management currently believes the final outcome of such matters will not have a material adverse effect on the financial position, results of operations or cash flows of the Company. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 38 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 39 OPERATOR ABIGAELS ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. PART II MID-AMERICA APARTMENT COMMUNITIES, INC. Market Information MAA’s common stock has been listed and traded on the NYSE under the symbol “MAA” since its initial public offering in February 1994. On February 19, 2016, the reported last sale price of our common stock on the NYSE was $91.60 per share, and there were approximately 2,400 holders of record of the common stock. MAA believes it has a significantly larger number of beneficial owners of its common stock. The following table sets forth the quarterly high and low intra-day sales prices of MAA’s common stock and the dividends declared by MAA with respect to the periods indicated. Sales Prices High Low Dividends Paid Dividends Declared 2015: First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $83.50 $78.99 $84.42 $92.80 $70.67 $72.72 $72.51 $81.72 2014: First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $69.32 $73.49 $75.09 $76.83 $60.47 $67.10 $65.05 $65.54 $0.77 $0.77 $0.77 $0.77 $0.73 $0.73 $0.73 $0.73 $0.77 $0.77 $0.77 $0.82(1) $0.73 $0.73 $0.73 $0.77 (1) Generally, MAA’s Board of Directors declares dividends prior to the quarter in which they are paid. The dividend of $0.82 per share declared in the fourth quarter of 2015 was paid on January 29, 2016 to shareholders of record on January 15, 2016. MAA’s quarterly dividend rate is currently $0.82 per common share. MAA’s Board of Directors reviews and declares the dividend rate quarterly. Actual dividends made by MAA will be affected by a number of factors, including, but not limited to, the gross revenues received from our apartment communities, our operating expenses, the interest expense incurred on borrowings and unanticipated capital expenditures. MAA expects to make future quarterly distributions to shareholders; however, future distributions by MAA will be at the discretion of its Board of Directors and will depend on our actual funds from operations, our financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code (see “Business-Qualification as Real Estate Investment Trust” above) and such other factors as MAA’s Board of Directors deems relevant. Direct Stock Purchase and Distribution Reinvestment Plan We have established the DRSPP, under which holders of common stock, preferred stock and OP units can elect to automatically reinvest their distributions in shares of MAA common stock. The DRSPP also allows for the optional purchase of MAA common stock of at least $250, but not more than $5,000 in any given month, free of brokerage commissions and charges. In our absolute discretion, we may grant waivers to allow for optional cash payments in excess of $5,000. To fulfill our obligations under the DRSPP, we may either issue additional shares of common stock or repurchase common stock in the open market. We may elect to sell shares under the DRSPP at up to a 5% discount. 39 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 40 OPERATOR ABIGAELS In 2015, 2014, and 2013, we had the following issuances through our DRSPP: Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 8,562 2014 9,055 2013 10,924 —% —% —% Equity Compensation Plans The following table provides information with respect to compensation plans under which our equity securities are authorized for issuance as of December 31, 2015: Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (a)(1) Weighted Average Exercise Price of Outstanding Options Warrants and Rights (b)(1) Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (excluding securities reflected in column (a)) (c)(2) Equity compensation plans approved by security holders . . . . . . . Equity compensation plans not approved by security holders . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,112 N/A 58,112 $86.21 N/A $86.21 454,824 N/A 454,824 (1) Columns (a) and (b) do not include 187,941 shares of restricted common stock that are subject to vesting requirements which were issued through our 2004 Stock Plan or 2013 Stock Incentive Plan or 110,896 shares of common stock that have been purchased by employees through the Employee Stock Purchase Plan. (2) Column (c) includes 415,720 shares available to be issued under our 2013 Stock Incentive Plan and 39,104 shares available to be issued under our Employee Stock Purchase Plan. The outstanding options noted in the table above were issued in exchange for outstanding Colonial options in connection with the parent merger. MID-AMERICA APARTMENTS, L.P. Operating Partnership Units There is no established public trading market for the Operating Partnership’s OP Units. From time-to-time, we issue shares of MAA’s common stock in exchange for OP Units tendered to the Operating Partnership for redemption in accordance with the provisions of the Operating Partnership’s limited partnership agreement. At December 31, 2015, there were 79,571,567 OP Units outstanding in the Operating Partnership, of which 75,408,571 OP Units, or 94.8%, were owned by MAA and 4,162,996 OP Units, or 5.2% were owned by limited partners. Under the terms of the Operating Partnership’s limited partnership agreement, the limited partner holders of OP Units have the right to require the Operating Partnership to redeem all or a portion of the OP Units held by the holder in exchange for one share of MAA common stock per one OP Unit or a cash payment based on the market value of our common stock at the time of redemption, at the option of MAA. During the year ended December 31, 2015, MAA issued a total of 28,155 shares of common stock upon redemption of OP Units. 40 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 41 OPERATOR ABIGAELS COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS The following graph compares the cumulative total returns of the shareholders of MAA since December 31, 2010 with the S&P 500 Index and the FTSE NAREIT Equity REIT Index prepared by the National Association of Real Estate Investment Trusts, or NAREIT. The graph assumes that the base share price for our common stock and each index is $100 and that all dividends are reinvested. The performance graph is not necessarily indicative of future investment performance. e u l a V x e d n I 200 180 160 140 120 100 80 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 Period Ending MAA FTSE NAREIT Equity REIT Index S&P 500 MAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S&P 500 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FTSE NAREIT Equity REIT Index . . . . . . . . . Dec ‘11 Dec ‘12 Dec ‘10 Dec ‘15 $100.00 $102.50 $ 110.54 $ 108.11 $138.84 $175.58 $100.00 $ 102.11 $ 118.45 $156.82 $178.28 $180.75 $100.00 $108.29 $127.85 $131.01 $170.49 $175.94 Dec ‘13 Dec ‘14 41 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 42 OPERATOR ABIGAELS PURCHASES OF EQUITY SECURITIES The following table shows our repurchases of shares for the three-month period ended December 31, 2015: MAA Purchases of Equity Securities Period October 1, 2015 - October 31, 2015 . . . . . . . . . . November 1, 2015 - November 30, 2015 . . . . . . . December 1, 2015 - December 8, 2015 . . . . . . . . December 9, 2015 - December 31, 2015 . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total Number of Shares Purchased — — — — — Average Price Paid per Share $ — $ — $ — $ — $ — Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs — — — — — Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs(1) 2,138,000 2,138,000 2,138,000 4,000,000 4,000,000 (1) This column reflects the number of shares of MAA’s common stock available for repurchase through December 8, 2015, under the 4.0 million share repurchase program authorized by MAA’s Board of Directors in 1999. On December 8, 2015, the MAA Board of Directors authorized a new 4.0 million share repurchase program, which replaced and superseded the prior program. ITEM 6. SELECTED FINANCIAL DATA. The following tables set forth selected financial data on a historical basis for MAA and the Operating Partnership. As previously discussed, the consolidated assets, liabilities, and results of operations of Colonial are included in MAA’s selected financial data from the closing date of the parent merger, October 1, 2013, through the end of MAA’s fiscal year, December 31, 2015. Likewise, the consolidated assets, liabilities, and results of operations of Colonial LP are included in the Operating Partnership’s selected financial data from the closing date of the partnership merger, October 1, 2013, through the end of the Operating Partnership’s fiscal year, December 31, 2015. This data should be read in conjunction with the consolidated financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K. 42 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 43 OPERATOR ABIGAELS MID-AMERICA APARTMENT COMMUNITIES, INC. SELECTED FINANCIAL DATA (Dollars in thousands, except per share data) 2015 Year Ended December 31, 2013 2014 2012 2011 Operating Data: Total operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenses: Property operating expenses . . . . . . . . . . . . . . . . . . . . . . Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . Acquisition expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Property management and general and administrative expenses . . . . . . . . . . . . . . . . . . . Merger related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . Integration related expenses . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations before non-operating items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest and other non-property (expense) income . . . . . . . . . . . . Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss on debt extinguishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net casualty gain (loss) after insurance and other $1,042,779 $ 992,332 $ 635,490 $ 475,888 $ 409,782 400,645 294,520 2,777 56,706 — — 288,131 (368) (122,344) (3,602) 393,348 301,812 2,388 53,004 3,152 8,395 230,233 770 (123,953) (2,586) 253,633 186,979 1,393 38,652 32,403 5,102 117,328 466 (78,978) (426) 194,149 121,211 1,581 35,043 — — 123,904 430 (61,489) (654) 173,563 106,009 3,319 38,096 — — 88,795 802 (59,285) (755) settlement proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 473 (476) (143) (6) (619) Gain on sale of depreciable real estate assets excluded from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . Gain on sale of non-depreciable real estate assets . . . . . . . . . . . . . Income before income tax expense. . . . . . . . . . . . . . . . . . . . . . . . . Income tax expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations before joint venture activity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Loss) gain from real estate joint ventures. . . . . . . . . . . . . . . . . . . Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . Discontinued operations: Income from discontinued operations before (loss) 189,958 172 352,420 (1,673) 350,747 (2) 350,745 42,649 350 146,987 (2,050) 144,937 6,009 150,946 — — 38,247 (893) 37,354 338 37,692 — 45 62,230 (803) 61,427 (223) 61,204 gain on sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on sale of discontinued operations . . . . . . . . . . . . . . . . . Consolidated net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income attributable to noncontrolling interests . . . . . . . . . . . Net income available for MAA common shareholders . . . . . . . . . — — 350,745 18,458 $ 332,287 (63) 5,394 156,277 8,297 $ 147,980 4,743 76,844 119,279 3,998 $ 115,281 6,986 41,635 109,825 4,602 $ 105,223 Per Share Data: Weighted average shares outstanding (in thousands): Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effect of dilutive stock options and partnership units(1) . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,176 — 75,176 74,982 — 74,982 50,677 2,439 53,116 41,039 1,898 42,937 Calculation of Earnings per share - basic: Income from continuing operations, adjusted . . . . . . . . . . . . Income from discontinued operations, adjusted . . . . . . . . . . . Net income attributable to common shareholders, adjusted . . . . $ 331,515 — $ 331,515 $ 142,655 5,037 $ 147,692 $ 36,504 78,669 $ 115,173 $ 58,737 46,392 $ 105,129 Earnings per share - basic: Income from continuing operations available for common shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . Discontinued property operations . . . . . . . . . . . . . . . . . . . . . . Net income available for common shareholders . . . . . . . . . . . $ $ 4.41 — 4.41 $ $ 1.90 0.07 1.97 $ $ 0.72 1.55 2.27 $ $ 1.43 1.13 2.56 — 1,084 30,022 (727) 29,295 (593) 28,702 9,730 12,799 51,231 2,410 48,821 36,995 2,092 39,087 27,413 21,375 48,788 0.74 0.58 1.32 $ $ $ $ $ 43 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 44 OPERATOR ABIGAELS 2015 Year Ended December 31, 2013 2014 2012 2011 Calculation of Earnings per share - diluted: Income from continuing operations, adjusted . . . . . . . . . . . . Income from discontinued operations, adjusted . . . . . . . . . . . Net income attributable to common $ 331,515 — $ 142,655 5,037 $ 37,692 81,587 $ 61,204 48,621 $ 28,702 22,529 shareholders, adjusted. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 331,515 $ 147,692 $ 119,279 $ 109,825 $ 51,231 Earnings per share - diluted: Income from continuing operations available for common shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . Discontinued property operations . . . . . . . . . . . . . . . . . . . . . . Net income available for common shareholders . . . . . . . . . . . Dividends declared(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balance Sheet Data: $ $ $ 4.41 — 4.41 3.1300 $ $ $ 1.90 0.07 1.97 2.9600 $ $ $ 0.71 1.54 2.25 2.8150 $ $ $ 1.43 1.13 2.56 2.6750 $ $ $ 0.73 0.58 1.31 2.5425 Real estate owned, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . Real estate assets, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total MAA shareholders’ equity and redeemable stock. . . . . $8,217,579 $6,718,366 $6,847,781 $3,427,568 $ 165,726 $3,000,347 $8,071,187 $6,697,508 $6,821,778 $3,512,699 $ 161,287 $2,896,435 $7,694,618 $6,556,303 $6,835,012 $3,463,239 $ 166,726 $2,951,861 $3,734,544 $2,694,071 $2,745,292 $1,668,072 $ 31,058 $ 918,765 $3,396,934 $2,423,808 $2,526,128 $1,645,415 $ 25,131 $ 722,368 Other Data (at end of period): Market capitalization (shares and units)(3) . . . . . . . . . . . . . . . . Ratio of total debt to total $7,225,894 $5,933,985 $4,801,990 $ 2,852,113 $2,558,107 capitalization(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.2% 37.3% 42.0% 37.0% 39.2% Number of communities, including joint venture ownership interest(5). . . . . . . . . . . . . . . . . . . . . . . 254 268 275 166 167 Number of apartment units, including joint venture ownership interest(5) . . . . . . . . . . . . . . . . . . 79,496 82,316 83,641 49,591 49,133 (1) See Earnings per common share of MAA note in Item 8. Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements, Note 3 of this Annual Report on Form 10-K. (2) Beginning in 2006, at their regularly scheduled meetings, our 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. (3) Market capitalization includes all shares of common stock, regardless of classification on the balance sheet, as well as partnership units (value based on common stock equivalency). (4) Total capitalization is market capitalization plus total debt. (5) Property and apartment unit totals have not been adjusted to exclude properties held for sale. 44 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 45 OPERATOR ABIGAELS MID-AMERICA APARTMENTS, L.P. SELECTED FINANCIAL DATA (Dollars in thousands, except per unit data) Operating Data: 2015 Year Ended December 31, 2013 2014 2012 2011 Total operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . $1,042,779 $ 992,332 $ 635,490 $ 475,888 $ 409,782 Expenses: Property operating expenses . . . . . . . . . . . . . . . . . . . . Depreciation and amortization . . . . . . . . . . . . . . . . . . Acquisition expense . . . . . . . . . . . . . . . . . . . . . . . . . . . Property management and general and administrative expenses . . . . . . . . . . . . . . . . . . . . Merger related expenses . . . . . . . . . . . . . . . . . . . . . . . Integration related expenses . . . . . . . . . . . . . . . . . . . . 400,645 294,520 2,777 56,706 — — 393,348 301,812 2,388 53,004 3,152 8,395 253,633 186,979 1,393 38,652 32,403 5,102 194,149 121,211 1,581 35,043 — — 173,563 106,009 3,319 38,096 — — Income from continuing operations before non-operating items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest and other non-property (expense) income . . . . . . . . . Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss on debt extinguishment . . . . . . . . . . . . . . . . . . . . . . . . . . Net casualty gain (loss) after insurance and 288,131 (368) (122,344) (3,602) 230,233 770 (123,953) (2,586) 117,328 466 (78,978) (426) 123,904 430 (61,489) (654) 88,795 802 (59,285) (755) other settlement proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . 473 (476) (143) (6) (619) Gain on sale of depreciable real estate assets excluded from discontinued operations . . . . . . . . . . . . . . . . . . . . . . Gain on sale of non-depreciable real estate assets . . . . . . . . . . Income before income tax expense . . . . . . . . . . . . . . . . . . . . . Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations before joint venture activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Loss) gain from real estate joint ventures . . . . . . . . . . . . . . . Income from continuing operations . . . . . . . . . . . . . . . . . . . . . Discontinued operations: Income from discontinued operations before (loss) gain on sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on sale of discontinued operations . . . . . . . . . . . . . . Net income available for Mid-America Apartments, L.P. 189,958 172 352,420 42,649 350 146,987 (1,673) (2,050) — — 38,247 (893) — 45 62,230 (803) 350,747 144,937 37,354 (2) 6,009 338 350,745 150,946 37,692 61,427 (223) 61,204 — 1,084 30,022 (727) 29,295 (593) 28,702 — — (63) 5,394 4,332 65,520 6,201 41,635 9,087 12,799 common unitholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 350,745 $ 156,277 $ 107,544 $ 109,040 $ 50,588 Per Unit Data: Weighted average units outstanding (in thousands): Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Effect of dilutive stock options and partnership units(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation of Earnings per unit - basic: 79,361 79,188 53,075 42,911 39,051 — — 79,361 79,188 88 53,163 64 42,975 100 39,151 Income from continuing operations, adjusted . . . . . . . . . . $ 349,973 $ 150,668 $ Income from discontinued operations, adjusted . . . . . . . . Net income available for common unitholders . . . . . . . . . $ 349,973 $ 155,989 $ 107,449 $ 108,946 $ 37,659 $ 69,790 61,151 $ 47,795 — 5,321 28,681 21,876 50,557 45 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 46 OPERATOR ABIGAELS Earnings per unit - basic: Income from continuing operations available for 2015 Year Ended December 31, 2013 2014 2012 2011 common unitholders . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4.41 $ 1.90 $ 0.71 $ 1.43 $ 0.73 Income from discontinued property operations available for common unitholders . . . . . . . . . . . . . . . . Net income available for common unitholders . . . . . . . . . $ — 4.41 $ 0.07 1.97 $ 1.31 2.02 $ 1.11 2.54 $ 0.56 1.29 Calculation of Earnings per unit - diluted: Income from continuing operations, adjusted . . . . . . . . . . $ 349,973 $ 150,668 $ Income from discontinued operations, adjusted . . . . . . . . Net income available for common unitholders . . . . . . . . . $ 349,973 $ 155,989 $ 107,544 $ 109,040 $ 37,692 $ 69,852 61,204 $ 47,836 — 5,321 28,702 21,886 50,588 Earnings per unit - diluted: Income from continuing operations available for common unitholders . . . . . . . . . . . . . . . . . . . . . . . . . . $ Discontinued property operations . . . . . . . . . . . . . . . . . . . Net income available for common unitholders . . . . . . . . . $ 4.41 $ — 4.41 $ 1.90 $ 0.07 1.97 $ 0.71 $ 1.31 2.02 $ 1.43 $ 1.11 2.54 $ 0.73 0.56 1.29 Distributions declared, per unit(2) . . . . . . . . . . . . . . . . . . . . . . $ 3.1300 $ 2.9600 $ 2.8150 $ 2.6750 $ 2.5425 Balance Sheet Data: Real estate owned, at cost . . . . . . . . . . . . . . . . . . . . . . . . . $8,217,579 $8,071,187 $7,694,618 $3,721,028 $3,383,883 Real estate assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,718,366 $6,697,508 $6,556,303 $2,688,549 $2,418,198 Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,847,781 $6,821,778 $6,835,012 $2,739,502 $2,520,452 Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,427,568 $3,512,699 $3,463,239 $1,668,072 $1,645,415 Total Operating Partnership capital and redeemable units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,166,054 $3,057,703 $3,118,568 $ 943,720 $ 709,871 Other Data (at end of period): Number of communities, including joint venture ownership interest(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . 254 268 275 165 166 Number of apartment units, including joint venture ownership interest(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,496 82,316 83,641 49,335 48,877 (1) See Earnings Per OP Unit of MAALP note in Item 8. Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements, Note 4 of this Annual Report on Form 10-K. (2) Beginning in 2006, at their regularly scheduled meetings, the Board of Directors began routinely declaring distributions for payment in the following quarter. This can result in distributions declared during a calendar year being different from distributions paid during a calendar year. (3) Property and apartment unit totals have not been adjusted to exclude properties held for sale. 46 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 47 OPERATOR ABIGAELS ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion analyzes the financial condition and results of operations of both MAA and the Operating Partnership, of which MAA is the sole general partner and in which MAA owned a 94.8% limited partner interest as of December 31, 2015. MAA conducts all of its business through the Operating Partnership and the Operating Partnership’s various subsidiaries. This discussion should be read in conjunction with all of the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. CRITICAL ACCOUNTING POLICIES AND ESTIMATES A critical accounting policy is one that is both important to our financial condition and results of operations and that involves some degree of uncertainty. The following discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements and the notes thereto, which have been prepared in accordance with United States generally accepted accounting principles, or GAAP. The preparation of financial statements in conformity with GAAP requires management to make a number of estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. On an ongoing basis, we evaluate our estimates and assumptions based upon historical experience and various other factors and circumstances. We believe that our estimates and assumptions are reasonable under the circumstances; however, actual results may differ from these estimates and assumptions. We believe that the estimates and assumptions listed below are most important to the portrayal of our financial condition and results of operations because they require the greatest subjective determinations and form the basis of accounting policies deemed to be most critical. Acquisition of real estate assets We account for our acquisitions of investments in real estate in accordance with ASC 805-10, Business Combinations, which requires the fair value of the real estate acquired to be allocated to the acquired tangible assets, consisting of land, building and furniture, fixtures and equipment, and identified intangible assets, consisting of the value of in-place leases and other contracts. In calculating the fair value of acquired tangible assets, management divides forecasted net operating income (NOI) by a market capitalization rate. Management analyzed historical stabilized NOI to determine its estimate for forecasted NOI. Management estimates the market capitalization rate by analyzing the market capitalization rates for properties with comparable ages in similar sized markets. Although management’s estimates of the fair value of acquired tangible assets have been materially accurate in the past, variability of future operating performance as well as additional information becoming available could lead to the modification of the initial fair value calculation and purchase price allocation. Subsequent adjustments made to the purchase price allocation, if any, would be made within the allocation period, which typically does not exceed one year. Impairment of long-lived assets, including goodwill We account for long-lived assets in accordance with the provisions of accounting standards for the impairment or disposal of long-lived assets and evaluate our goodwill for impairment under accounting standards for goodwill and other intangible assets. We evaluate goodwill for impairment on at least an annual basis, or more frequently if a goodwill impairment indicator is identified. We periodically evaluate long-lived assets, including investments in real estate and goodwill, for indicators that would suggest that the carrying amount of the assets may not be recoverable. The judgments regarding the existence of such indicators are based on factors such as operating performance, market conditions and legal factors. If impairment indicators exist for a long-lived asset, management compares the carrying amount of the asset to an estimate of the undiscounted future cash flows expected to be generated by the asset. Management estimates future cash flows by analyzing historical cash flows generated by the asset. If impairment indicators exist for goodwill, management compares the carrying amount of the asset to an estimate of the implied fair value of the asset. Management calculates the fair value of the asset by dividing historical operating cash flows by a market capitalization rate. Management estimates the market capitalization rate by analyzing the market capitalization rates for properties with comparable ages in similarly sized markets. Historically, impairment analysis estimates have been materially accurate, which resulted in no impairment losses recognized during the years ended December 31, 2015, 2014, and 2013. 47 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 48 OPERATOR ABIGAELS Cost Capitalization Repairs and maintenance costs are expensed as incurred while significant improvements, renovations, and replacements are capitalized. The cost to complete any deferred repairs and maintenance at properties acquired by us in order to elevate the condition of the property to our standards are capitalized as incurred. The carrying costs related to development projects, including interest, property taxes, insurance and allocated direct development salary cost during the construction period, are capitalized. Management uses judgment in determining whether costs should be expensed or capitalized. Loss Contingencies The outcomes of claims, disputes and legal proceedings are subject to significant uncertainty. We record an accrual for loss contingencies when a loss is probable and the amount of the loss can be reasonably estimated. We review these accruals quarterly and make revisions based on changes in facts and circumstances. When a loss contingency is not both probable and reasonably estimable, the we do not accrue the loss. However, for material loss contingencies, if the unrecorded loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then we disclose a reasonable estimate of the possible loss, or range of loss, if such reasonable estimate can be made. If we cannot make a reasonable estimate of the possible loss, or range of loss, then that is disclosed. The assessment of whether a loss is probable or a reasonable possibility, and whether the loss or range of loss is reasonably estimable, often involve a series of complex judgments about future events. Among the factors that we consider in this assessment, including with respect to the matters disclosed in this Annual Report on Form 10-K, are the nature of existing legal proceedings and claims, the asserted or possible damages or loss contingency (if reasonably estimable), the progress of the matter, existing law and precedent, the opinions or views of legal counsel and other advisers, our experience in similar matters, the facts available to us at the time of assessment, and how we intend to respond, or have responded, to the proceeding or claim. Our assessment of these factors may change over time as individual proceedings or claims progress. For matters where we are not currently able to reasonably estimate a range of reasonably possible loss, the factors that have contributed to this determination include the following: (i) the damages sought are indeterminate; (ii) the proceedings are in the early stages; (iii) the matters involve novel or unsettled legal theories or a large or uncertain number of actual or potential cases or parties; and/or (iv) discussions with the parties in matters that are expected ultimately to be resolved through negotiation and settlement have not reached the point where we believe a reasonable estimate of loss, or range of loss, can be made. In such instances, we believe that there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss or business impact, if any. For more information regarding our significant accounting policies, see Item 8. Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements, Note 1. OVERVIEW OF THE YEAR ENDED DECEMBER 31, 2015 We experienced an increase in income from continuing operations in 2015 as increases in revenues outpaced increases in expenses. The increases in revenues came from a 6.3% increase in our large market same store segment, a 4.7% increase in our secondary market same store segment and a 1.0% increase in our non-same store and other segment. The increase in expense came from a 3.6% increase in our large market same store segment and a 3.2% increase in our secondary market same store segment, which were offset slightly by an 8.0% decrease in our non-same store and other segment. Our same store portfolio represents those communities that have been held and have been stabilized for at least twelve months. Communities excluded from the same store portfolio include recent acquisitions, communities being developed or in lease-up, communities undergoing extensive renovations, and communities identified for disposition. Additional information regarding the composition of operating segments is included in the notes to the consolidated financial statements, Note 16 - Segment Information. The drivers of these increases are discussed below in the results of operations section. On October 1, 2013, we consummated the Merger and acquired all of Colonial’s net assets. As a result of the Merger, the results of operations for 2013 include three months of results for the legacy Colonial portfolio. The results of operations for 2014 and 2015 include twelve months of results for the legacy Colonial portfolio. 48 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 49 OPERATOR ABIGAELS We have grown externally during the past three years by following our acquisition strategy to invest in large and mid-sized growing markets in the Southeast and Southwest region of the United States. Apart from the Merger, we acquired four apartment communities for our portfolio in 2013, eight in 2014 and seven in 2015. Offsetting some of this increased revenue stream were nine apartment community dispositions in 2013, eight in 2014, and 21 in 2015. The following table shows our apartment real estate assets as of December 31, 2015, 2014, and 2013: 2015 2014 2013 254 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,496 Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Development Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 748 Average Effective Monthly Rent/Unit, excluding lease-up and development . . . . $ 1,006 Occupancy, excluding lease-up and development . . . . . . . . . . . . . . . . . . . . . . . . . 95.6% 268 82,316 514 948 94.1% 275 83,641 1,461 883 94.9% $ $ Average effective monthly rent per unit is calculated as the average of monthly gross rent amounts for occupied units, after the effect of leasing concessions, plus then-prevailing market rates asked for unoccupied units, divided by the total number of units. Leasing concessions represent discounts to the current market rate. We believe average effective monthly rent is a helpful measurement in evaluating average pricing; however, it does not represent actual rental revenue collected per unit. For additional discussion of same store average rent per unit and occupancy comparisons, see the “Trends” section below. In addition to the multifamily assets detailed above, we also owned an interest in two commercial properties totaling approximately 238,000 square feet of leasable space. RESULTS OF OPERATIONS Comparison of the Year Ended December 31, 2015 to the Year Ended December 31, 2014 Property Revenues The following table shows our property revenues by segment for the years ended December 31, 2015 and December 31, 2014 (dollars in thousands): Large Market Same Store . . . . . . . . . . . . . . . . . . . . . . Secondary Market Same Store . . . . . . . . . . . . . . . . . . Same Store Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . Non-Same Store and Other . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Year ended December 31, 2015 $ 587,896 324,771 912,667 130,112 $1,042,779 Year ended December 31, 2014 $553,038 310,281 863,319 128,859 $992,178 Increase $34,858 14,490 49,348 1,253 $50,601 Percentage Increase 6.3% 4.7% 5.7% 1.0% 5.1% The increase in property revenues from our same store portfolio is primarily a result of increased average rental revenue per occupied unit of 5.5% and 3.8% for our large and secondary markets, respectively, and an increased average physical occupancy of 0.8% and 0.9% for our large and secondary markets, respectively. Property Operating Expenses Property operating expenses include costs for property personnel, building repairs and maintenance, real estate taxes and insurance, utilities, landscaping, and depreciation and amortization. The following table shows our property operating expenses by segment for the years ended December 31, 2015 and December 31, 2014 (dollars in thousands): Large Market Same Store . . . . . . . . . . . . . . . . . . . . Secondary Market Same Store . . . . . . . . . . . . . . . . Same Store Portfolio . . . . . . . . . . . . . . . . . . . . . . . . Non-Same Store and Other . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Year ended December 31, 2015 $226,611 123,782 350,393 50,252 $400,645 Year ended December 31, 2014 $218,784 119,934 338,718 54,630 $393,348 Increase/ (Decreased) $ 7,827 3,848 11,675 (4,378) $ 7,297 Percentage Increase 3.6% 3.2% 3.4% (8.0)% 1.9% 49 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 50 OPERATOR ABIGAELS The increase in property operating expenses from our large market same store group is primarily the result of increases in real estate taxes of $3.2 million, personnel expenses of $1.9 million, water expenses of approximately $1.0 million, cable expenses of $0.5 million, and waste removal expenses of $0.2 million. The increase in property operating expenses from our secondary market same store group is primarily a result of increases in other operating expenses of $1.5 million, real estate taxes of $1.1 million, and personnel expenses of $1.2 million. The decrease in property operating expenses from our non-same store and other group is primarily the result of decreases in personnel expenses of $2.4 million and utility expenses of $1.7 million. Depreciation and Amortization The following table shows our depreciation and amortization expense by segment for the years ended December 31, 2015 and December 31, 2014 (dollars in thousands): Large Market Same Store . . . . . . . . . . . . . . . . . . . . . Secondary Market Same Store . . . . . . . . . . . . . . . . . Same Store Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . Non-Same Store and Other . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Year ended December 31, 2015 $168,872 85,008 253,880 40,640 $294,520 Year ended December 31, 2014 $174,957 86,058 261,015 40,797 $301,812 Increase $ (6,085) (1,050) (7,135) (157) $ (7,292) Percentage Increase (3.5)% (1.2)% (2.7)% (0.4)% (2.4)% The decrease in depreciation and amortization expense is primarily due to a decrease of $19.4 million related to the amortization of the fair value of in-place leases and resident relationships acquired as a result of the Merger from the year ended December 31, 2014 to the year ended December 31, 2015. This decrease was partially offset by an increase in depreciation expense of $11.7 million driven by an increase in gross real estate assets from the year ended December 31, 2014 to the year ended December 31, 2015. Property Management Expenses Property management expenses for the year ended December 31, 2015 were approximately $31.0 million, a decrease of $1.1 million from the year ended December 31, 2014. The majority of the decrease was related to a decrease in state franchise taxes of $2.1 million, partially offset by an increase in insurance expense of $0.6 million, an increase in payroll expense of $0.3 million, and an increase in incentive expense $0.3 million. General and Administrative Expenses General and Administrative expenses for the year ended December 31, 2015 were approximately $25.7 million, an increase of $4.8 million from the year ended December 31, 2014. The majority of the increase was related to increases in legal fees of $2.7 million and stock option expenses of $1.6 million. Merger and Integration Related Expenses There were no merger or integration related expenses for the year ended December 31, 2015, as these expenses related primarily to severance, legal, professional, temporary systems, staffing, and facilities costs incurred for the acquisition and integration of Colonial. For the year ended December 31, 2014, merger and integration related expenses were approximately $3.2 million and $8.4 million, respectively. Interest Expense Interest expense for the year ended December 31, 2015 was approximately $122.3 million, a decrease of $1.6 million from the year ended December 31, 2014. The decrease was primarily the result of a decrease in amortization of deferred financing cost from the year ended December 31, 2014 to the year ended December 31, 2015 of approximately $0.9 million. Also, the overall debt balance decreased from $3.5 billion to $3.4 billion, a decrease of $85.1 million. The average effective interest rate remained at 3.7% and the average years to rate maturity increased from 4.4 years to 4.8 years. 50 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 51 OPERATOR ABIGAELS Dispositions of Depreciable Real Estate Assets Excluded from Discontinued Operations We recorded a gain on sale of depreciable assets excluded from discontinued operations of $190.0 million for the year ended December 31, 2015, an increase of approximately $147.3 million from the $42.6 million gain on sale of depreciable assets recorded for the year ended December 31, 2014. The increase was primarily the result of increased disposition activity. Dispositions increased from eight multifamily properties for the year ended December 31, 2014, to 21 multifamily properties for the year ended December 31, 2015. Gain from Real Estate Joint Ventures We recorded a gain from real estate joint ventures of $6.0 million during the year ended December 31, 2014 as opposed to no material gain or loss being recorded during the year ended December 31, 2015. The decrease was primarily a result of recording a $3.4 million gain for the disposition of Ansley Village by Mid-America Multifamily Fund II, or Fund II, as well as a $2.8 million gain for the promote fee received from our Fund II partner during 2014. The promote fee was received as a result of MAA achieving certain performance metrics in its management of the Fund II properties over the life of the joint venture. There were no such gains recorded during the year ended December 31, 2015. Discontinued Operations We recorded a gain on sale of discontinued operations of $5.4 million for the year ended December 31, 2014. We did not record a gain or loss on sale of discontinued operations during the year ended December 31, 2015, due to the adoption of ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which resulted in dispositions being included in the gain on sale of depreciable real estate assets excluded from discontinued operations and is discussed further below. Net Income Attributable to Noncontrolling Interests Net income attributable to noncontrolling interests for the year ended December 31, 2015 was approximately $18.5 million, an increase of $10.2 million from the year ended December 31, 2014. This increase is consistent with the increase to overall net income and is primarily a result of the items discussed above. Net Income Attributable to MAA Primarily as a result of the items discussed above, net income attributable to MAA increased by approximately $184.3 million in the year ended December 31, 2015 from the year ended December 31, 2014. Comparison of the Year Ended December 31, 2014 to the Year Ended December 31, 2013 The comparison of the year ended December 31, 2014 to the year ended December 31, 2013 shows the segment break down based on the 2014 same store portfolios. A comparison using the 2015 same store portfolio would not be comparative due to the nature of the classifications as a result of the Merger. Property Revenues The following table shows our property revenues by segment for the years ended December 31, 2014 and December 31, 2013 (dollars in thousands): Large Market Same Store . . . . . . . . . . . . . . . . . . . . . Secondary Market Same Store . . . . . . . . . . . . . . . . . Same Store Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . Non-Same Store and Other . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Year ended December 31, 2014 $252,029 246,800 498,829 493,349 $992,178 Year ended December 31, 2013 $241,194 242,464 483,658 151,185 $634,843 Increase $ 10,835 4,336 15,171 342,164 $357,335 Percentage Increase 4.5% 1.8% 3.1% 226.3% 56.3% 51 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 52 OPERATOR ABIGAELS The increase in property revenues from our same store portfolio is primarily a result of increased average effective rent per unit of 4.3% for our large market and 1.9% for our secondary markets. The increase in property revenues from our non-same store and other group is primarily due to the addition of the Colonial portfolio as a result of the Merger, which represents $275.6 million of the increase. The remaining $66.6 million of the increase was related to acquisitions other than the Merger. Property Operating Expenses Property operating expenses include costs for property personnel, property personnel bonuses, building repairs and maintenance, real estate taxes and insurance, utilities, landscaping, and depreciation and amortization. The following table shows our property operating expenses by segment for the years ended December 31, 2014 and December 31, 2013 (dollars in thousands): Large Market Same Store . . . . . . . . . . . . . . . . . . . . . Secondary Market Same Store . . . . . . . . . . . . . . . . . Same Store Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . Non-Same Store and Other . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Year ended December 31, 2014 $100,892 98,191 199,083 194,265 $393,348 Year ended December 31, 2013 $ 98,190 96,141 194,331 59,302 $253,633 Increase 2,702 $ 2,050 4,752 134,963 $139,715 Percentage Increase 2.8% 2.1% 2.4% 227.6% 55.1% The increase in property operating expenses from our same store portfolio is primarily a result of increases in real estate taxes of $3.9 million and utilities expenses of $1.3 million, offset by a decrease in insurance expenses of $1.0 million. The increase in property operating expenses from our non-same store and other group is primarily due to the addition of the Colonial portfolio as a result of the Merger, which represents $107.6 million of the increase. The remaining $27.4 million of the increase was related to acquisitions other than the Merger. Depreciation and Amortization The following table shows our depreciation and amortization expense by segment for the years ended December 31, 2014 and December 31, 2013 (dollars in thousands): Large Market Same Store . . . . . . . . . . . . . . . . . . . . . Secondary Market Same Store . . . . . . . . . . . . . . . . . Same Store Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . Non-Same Store and Other . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Year ended December 31, 2014 $ 58,356 59,697 118,053 183,759 $301,812 Year ended December 31, 2013 $ 57,712 59,339 117,051 69,928 $186,979 Increase 644 $ 358 1,002 113,831 $114,833 Percentage Increase 1.1% 0.6% 0.9% 162.8% 61.4% The increase in depreciation and amortization expense from our same store portfolio resulted from asset additions made during the normal course of business. The increase in depreciation and amortization expense from our non-same store and other group is primarily due to the addition of the Colonial portfolio as a result of the Merger. Property Management Expenses Property management expenses for the year ended December 31, 2014 were approximately $32.1 million, an increase of $9.0 million from the year ended December 31, 2013. The majority of the increase was related to increases in payroll expenses of $3.0 million, state franchise taxes of $2.7 million, software maintenance of $2.1 million, and incentive bonuses of $0.9 million as a result of the increased headcount and scope of work resulting from the Merger. General and Administrative Expenses General and Administrative expense for the year ended December 31, 2014 was approximately $20.9 million, an increase of $5.3 million from the year ended December 31, 2013. The majority of the increase was related to increases in incentive bonuses of $3.3 million and payroll expenses of $1.2 million as a result of the Merger. 52 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 53 OPERATOR ABIGAELS Merger and Integration Related Expenses Merger related expenses, primarily severance, legal, and professional costs for the acquisition of Colonial were approximately $3.2 million from the year ended December 31, 2014, a decrease of $29.3 million from the year ended December 31, 2013. We also incurred integration related expenses, primarily related to temporary systems, staffing, and facilities costs of $8.4 million for the year ended December 31, 2014, an increase of $3.3 million from the year ended December 31, 2013. Interest Expense Interest expense for the year ended December 31, 2014 was approximately $124.0 million, an increase of $45.0 million from the year ended December 31, 2013. The increase was primarily the result of an increase in our average debt outstanding from the year ended December 31, 2013 to the year ended December 31, 2014 of approximately $1.38 billion, due primarily to the assumption of Colonial’s debt as a result of the Merger. Debt Extinguishment Loss on debt extinguishment for the year ended December 31, 2014 was approximately $2.6 million, an increase of -$2.2 million from the year ended December 31, 2013. The increase was primarily the result of the prepayment of a loan for a property sold during the year ended December 31, 2014. Discontinued Operations We recorded a gain on sale of discontinued operations of $5.4 million for the year ended December 31, 2014 as compared to a $76.8 million gain for the year ended December 31, 2013. The decrease in the gain is caused by the proceeds received in 2014 being less than the proceeds received in 2013 in relation to the net book value of the properties sold and, in accordance with newly adopted ASU 2014-08, recording a gain on sale of depreciable assets excluded from discontinued operations in 2014, which is discussed further below. Dispositions of Depreciable Real Estate Assets Excluded from Discontinued Operations We recorded a gain on sale of depreciable assets excluded from discontinued operations of $42.6 million for the year ended December 31, 2014. We did not record a similar gain for the year ended December 31, 2013 because we did not dispose of any properties that were excluded from discontinued operations. Net Income Attributable to Noncontrolling Interests Net income attributable to noncontrolling interests for the year ended December 31, 2014 was approximately $8.3 million, an increase of $4.3 million from the year ended December 31, 2013. Net Income Attributable to MAA Primarily as a result of the foregoing, net income attributable to MAA increased by approximately $32.7 million in the year ended December 31, 2014 from the year ended December 31, 2013. Funds from Operations Funds from operations, or FFO, a non-GAAP financial measure, represents net income (computed in accordance with GAAP) excluding extraordinary items, net income attributable to noncontrolling interest, asset impairment, gains or losses on disposition of real estate assets, plus depreciation and amortization of real estate, and adjustments for joint ventures to reflect FFO on the same basis. Disposition of real estate assets includes, but is not limited to, sales of discontinued operations. FFO should not be considered as an alternative to net income, or any other GAAP measurement of performance, as an indicator of operating performance or as an alternative to cash flow from operating, investing, and financing activities as a measure of liquidity. Management believes that FFO is helpful to investors in understanding our operating performance primarily because its calculation excludes depreciation and amortization expense on real estate assets. We believe that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies. Our calculation of FFO may differ from the methodology for calculating FFO utilized by other REITs and, accordingly, may not be comparable to such other REITs. 53 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 54 OPERATOR ABIGAELS Core FFO, a non-GAAP financial measure, represents FFO excluding certain non-cash or non-routine items such as acquisition, merger and integration expenses, mark-to-market debt adjustments and loss or gain on debt extinguishment. While our definition of Core FFO is similar to others in our industry, our precise methodology for calculating Core FFO may differ from that utilized by other REITs and, accordingly, may not be comparable to such other REITs. Core FFO should not be considered as an alternative to net income or any other GAAP measurement of performance, as an indicator of operating performance or as an alternative to cash flow from operating, investing and financing activities as a measure of liquidity. Management believes that Core FFO is helpful in understanding our operating performance in that it removes certain items that by their nature are not comparable over periods and therefore tend to obscure actual operating performance. The following table is a reconciliation of Core FFO and FFO to consolidated net income for the years ended December 31, 2015, 2014, and 2013 (dollars in thousands): Net income available for MAA common shareholders . . . . . . . . . . . . . . . . Depreciation and amortization of real estate assets . . . . . . . . . . . . . . . . . . . Depreciation and amortization of real estate assets of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on sales of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on sale of depreciable real estate assets excluded from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on disposition within unconsolidated entities . . . . . . . . . . . . . . . . . . . Depreciation and amortization of real estate assets of real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . Funds from operations attributable to the Company . . . . . . . . . . . . . . . . . . Acquisition expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Merger Related Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Integration related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on sale of non-depreciable real estate assets . . . . . . . . . . . . . . . . . . . . Mark-to-market debt adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss on debt extinguishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Core funds from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 $ 332,287 291,572 Years ended December 31, 2014 $147,980 299,421 2013 $115,281 184,857 — — 42 (5,394) 2,703 (76,844) (189,958) (12) (42,649) (4,007)(1) — — 25 18,458 452,372 2,777 — — (172) (19,955) 3,602 $ 438,624 397 8,297 404,087 2,388 3,152 8,395 (350) (25,079) 3,126(2) $395,719 1,030 3,998 231,025 1,393 32,403 5,102 — (7,992) 426 $262,357 (1) Gain on disposition within unconsolidated entities excludes the promote fee recognized with the final liquidation of Mid-America Multifamily Fund II (Fund II). (2) The loss on debt extinguishment for the year ended year ended December 31, 2014 includes MAA’s share of debt extinguishment costs incurred by our joint venture, Mid-America Multifamily Fund II. FFO for the year ended December 31, 2015 increased approximately $48.3 million from the year ended December 31, 2014 primarily as a result of the increase in total property revenues of $50.6 million and a decrease in merger and integration related expenses of $11.5 million, which were partially offset by increases of $7.3 million in property operating expenses and $4.8 million in general and administrative expenses. FFO for the year ended December 31, 2014 increased approximately $173.1 million from the year ended December 31, 2013 primarily as a result of the increase in property revenues of $357.3 million that was partially offset by the $139.7 million increase in property operating expenses and the $45.0 million of increased interest expense. Core FFO for the year ended December 31, 2015 increased approximately $42.9 million from the year ended December 31, 2014 primarily as a result of the increase in total property revenues of $50.6 million and the decrease in interest expense, excluding the mark-to-market debt adjustment, of $6.7 million, which was partially offset by the $7.3 million increase in property operating expenses and the $4.8 million in general and administrative expenses. 54 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 55 OPERATOR ABIGAELS Core FFO for the year ended December 31, 2014 increased by approximately $133.4 million from the year ended December 31, 2013 primarily as a result of the increase in total property revenues of $357.3 million discussed above that was partially offset by the $139.7 million increase in property operating expenses and the $45.0 million of increased interest expense. TRENDS During the twelve months ended December 31, 2015, demand for apartments was strong, as it was during the twelve months ended December 31, 2014. This strength was evident on two fronts: occupancy and effective rent per unit. Same store physical occupancy ended 2015 at 96.5% and average physical occupancy for the same store portfolio was 96.1% for the year. Same store effective rent per unit continued to grow, up 4.4% in the twelve months ended December 31, 2015 as compared to the twelve months ended December 31, 2014. This compares to 3.3% growth achieved in the twelve months ended December 31, 2014 as compared to the twelve months ended December 31, 2013. An important part of our portfolio strategy is maintaining a broad diversity of markets across the Southeast and Southwest regions of the United States. The diversity of markets tends to mitigate exposure to economic issues in any one geographic market or area. We believe that a well-diversified portfolio, including both large and select secondary markets, will perform well in “up” cycles as well as weather “down” cycles better. As of December 31, 2015, we were invested in approximately 40 defined Metropolitan Statistical Areas, with approximately 65% of our multifamily assets, based on gross assets, in large markets and 35% of our multifamily assets in select secondary markets. New supply of rental units has increased in several of our key markets and multifamily permitting increased in 2015 as compared to 2014. We believe this permitting will ultimately lead to a further increase in supply but also believe the lack of new apartments in recent years combined with demand from new households will help keep supply and demand in balance in most markets. Also, we believe that more disciplined credit terms for residential mortgages should continue to favor rental demand at existing multi-family properties. Furthermore, rental competition from single family homes has not been a major competitive factor impacting our portfolio. In 2015, move outs attributable to single family rentals remained relatively consistent with prior years. We have seen significant rental competition from single family homes in only a few of our submarkets. Long term, we expect demographic trends (including the growth of prime age groups for rentals and immigration and population movement to the Southeast and Southwest) will continue to build apartment rental demand for our markets. Our focus is on maintaining strong physical occupancy while increasing pricing where possible through our revenue management system. As noted above, physical occupancy ended 2015 strong and also averaged 75 basis points higher in 2015 as compared to 2014. As we continue through the typically slower winter leasing season, the current level of physical occupancy puts us in a good position to maximize pricing in the first quarter of 2016. We continue to develop improved products, operating systems and procedures that we believe enable us to capture more revenues. The continued benefit of ancillary services (such as our cable saver and deposit saver programs), improved collections and utility reimbursements enable us to capture increased revenue. We also actively work on improving processes and products to reduce expenses, such as new web-sites and internet access for our residents that enable them to transact their business with us more simply and effectively. LIQUIDITY AND CAPITAL RESOURCES Our cash flows from operating, investing, and financing activities, as well as general economic and market conditions, are the principal factors affecting our liquidity and capital resources. The significant changes in cash from the year ended December 31, 2014 to the year ended December 31, 2015 due to operating, investing, and financing activities are as follows: Operating Activities Net cash flow provided by operating activities increased to $463.7 million for the year ended December 31, 2015 from $385.4 million for the year ended December 31, 2014. This change was a result of various items, including higher revenues, as discussed above. 55 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 56 OPERATOR ABIGAELS Investing Activities Net cash used in investing activities decreased to $136.2 million for the year ended December 31, 2015 from $203.8 million for the year ended December 31, 2014. The primary drivers of this change are as follows: Purchases of real estate and other assets . . . . . . . . . . . Proceeds from disposition of real estate assets . . . . . . Distributions from real estate joint ventures . . . . . . . . Return (funding) of escrow for future acquisitions . . . Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Primary drivers of cash (outflow)/ inflow during the year ended December 31, 2015 $(328,193) $ 358,017 6 $ $ 8 $ (38,730) 2014 $(309,174) $ 254,638 $ 15,964 $ 24,884 $ (70,788) Increase/ (Decrease) in Net Cash $ (19,019) $103,379 $ (15,958) $ (24,876) $ 32,058 Percentage Increase/ (Decrease) in Net Cash (6.2)% 40.6% (100.0)% (100.0)% 45.3% The increase in cash outflows from purchases of real estate and other assets primarily resulted from the acquisition of seven apartment communities and three land acquisitions during the year ended December 31, 2015 compared to the acquisition of eight apartment communities and no land acquisitions during the year ended December 31, 2014. Additionally, the apartment communities acquired during the year ended December 31, 2014 included debt assumptions, which reduced the amount of cash paid for these properties. The increase in proceeds from disposition of real estate assets primarily resulted from the sale of 21 apartment communities, one commercial property, and one land parcel during the year ended December 31, 2015 compared to the sale of eight apartment communities, two commercial properties, and six land parcels during the year ended December 31, 2014. The decrease in distributions from real estate joint ventures primarily resulted from the receipt of funds from the sale of two joint venture properties during the year ended December 31, 2014. No joint venture properties were sold during 2015. The decrease in cash inflows from the funding of escrow for future acquisitions resulted from the funding of two 1031(b) transactions during the year ended December 31, 2015 compared to the funding of three 1031(b) transactions and the return of escrow related to two 1031(b) transactions during the year ended December 31, 2014. The decrease in cash outflows for development resulted from the timing of development spending for two projects commencing during the year ended December 31, 2015. Financing Activities Net cash used in financing activities increased to $316.6 million for the year ended December 31, 2015 from $244.3 million for the year ended December 31, 2014. The primary drivers of this change are as follows: Net change in credit lines . . . . . . . . . . . . . . . . . . . . . . . . . . Principal payments on notes payable . . . . . . . . . . . . . . . . . Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends paid on common shares . . . . . . . . . . . . . . . . . . . Primary drivers of cash (outflow)/ inflow during the year ended December 31, 2015 $(180,900) $(279,077) $ 420 $(232,079) 2014 $(157,184) $(260,347) $ 12,245 $(219,158) (Decrease)/ Increase in Net Cash $(23,716) $(18,730) $(11,825) $(12,921) Percentage (Decrease)/ Increase in Net Cash (15.1)% (7.2)% (96.6)% (5.9)% The increase in cash outflows from the net change in credit lines from 2014 to 2015 was due to the timing of borrowings and repayments on our various lines of credit. The increase in cash outflows from principal payments on notes payable is primarily due to the fact that during 2015 we paid off the principal balance due on unsecured public bond notes payable originally issued by Colonial that matured during the year. The decrease in cash inflows from the exercise of stock options resulted from the exercise of approximately 7,000 stock options during the year ended December 31, 2015 compared to the exercise of approximately 270,000 stock options during the year ended December 31, 2014. The increase in cash outflows from dividends paid on common shares primarily resulted from the increase in the dividend rate to $0.77 per share during the year ended December 31, 2015 from $0.73 per share during the year ended December 31, 2014. 56 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 57 OPERATOR ABIGAELS Equity As of December 31, 2015, MAA owned 75,408,571 OP Units, comprising a 94.8% limited partnership interest in the Operating Partnership, while the remaining 4,162,996 outstanding OP Units were held by limited partners of the Operating Partnership. Holders of OP Units (other than MAA and its corporate affiliates) may require us to redeem their OP Units from time to time, in which case we may, at our option, pay the redemption price either in cash (in an amount per OP Unit equal, in general, to the average closing price of MAA’s common stock on the New York Stock Exchange over a specified period prior to the redemption date) or by delivering one share of our common stock (subject to adjustment under specified circumstances) for each OP Unit so redeemed. In addition, we have registered under the Securities Act of 1933, as amended, the 4,162,996 shares of our common stock, which as of December 31, 2015, were issuable upon redemption of OP Units held by the Operating Partnership’s limited partners so that those shares can be sold freely in the public markets. To the extent that additional OP Units are issued to limited partners of the Operating Partnership, we will likely register the additional shares of common stock issuable upon redemption of those OP Units under the Securities Act of 1933, as amended, so that those shares can also be sold in the public markets. If MAA issues shares of common stock upon the redemption of OP Units in the Operating Partnership, sales of substantial amounts of such shares of common stock, or the perception that these sales could occur, may adversely affect prevailing market prices for MAA common stock or may impair MAA’s ability to raise capital through the sale of common stock or other equity securities. In connection with the Merger, we issued approximately 31.9 million shares of MAA common stock and approximately 2.6 million OP Units on October 1, 2013. For more information regarding our equity capital resources, see Note 10 and Note 11 in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Debt The following schedule outlines our fixed and variable rate debt, including the impact of interest rate swaps and caps, outstanding as of December 31, 2015 (dollars in thousands): SECURED DEBT Conventional - Fixed Rate or Swapped . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conventional - Variable Rate - Capped(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total Fixed or Hedged Rate Maturity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conventional - Variable Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fair Market Value Adjustments and Debt Issuance Costs . . . . . . . . . . . . . . . . . . Total Secured Rate Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . UNSECURED DEBT Fixed Rate or Swapped . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Variable Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fair Market Value Adjustments, Debt Issuance Costs and Discounts . . . . . . . . . Total Unsecured Rate Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TOTAL DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TOTAL FIXED OR HEDGED DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Principal Balance $1,062,862 125,000 $1,187,862 65,000 $ 33,374 $1,286,236 $2,085,246 75,000 (18,914) $2,141,332 $3,427,568 $3,287,568 Average Years to Rate Maturity Effective Rate 3.4 1.1 3.2 0.1 3.2 3.0 6.1 — 9.5 5.9 4.8 5.0 4.0% 0.8% 3.6% 0.8% 3.4% 3.9% 1.2% 3.8% 3.7% 3.8% (1) The effective rate represents the average rate on the underlying variable debt until LIBOR reaches the cap rates, which average 4.6%. 57 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 58 OPERATOR ABIGAELS As of December 31, 2015, we had entered into interest rate swaps totaling a notional amount of $550.0 million. To date, these swaps have proven to be highly effective hedges. We had also entered into interest rate cap agreements totaling a notional amount of approximately $125.0 million as of December 31, 2015. The following schedule outlines the contractual maturity dates of our outstanding debt, net of fair market value adjustments, debt issuance costs and discounts, as of December 31, 2015 (in thousands): Amount Borrowed Credit Facilities 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fannie Mae Secured $ 80,000 80,000 80,000 Key Bank Unsecured $ — $ Other Secured Other Unsecured Total — — — — 77,000 $ 190,921 33,921 $ 158,964 17,959 61,005 472,496 300,829 91,667 569,205 19,932 549,273 170,452 395,182 149,730 139,918 1,500,882 1,640,800 $ 1,046,236 $ 2,066,332 $ 3,427,568 — — — 75,000 $240,000 $75,000 The following schedule details the line limits, collateralized availability and the outstanding balances, net of fair market value adjustments, debt issuance costs and discounts, of our various borrowings as of December 31, 2015 (dollars in thousands): Fannie Mae Credit Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . Other Secured Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . Unsecured Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other Unsecured Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amount Available Amount Borrowed Line Limit $ 240,000 $ 240,000 $ 240,000 1,046,236 1,046,236 1,046,236 75,000 746,722 2,066,332 2,066,332 2,066,332 $ 4,102,568 $ 4,099,290 $ 3,427,568 750,000 Average Years to Contract Maturity 1.6 3.5 4.3 6.1 5.0 The following schedule outlines the interest rate maturities of our outstanding fixed or hedged debt, net of fair market value adjustments, debt issuance costs and discounts, as of December 31, 2015 (dollars in thousands): Fixed Rate Debt Interest Rate Swaps Total Fixed Rate Balances $ 110,921 $ 128,963 141,540 569,206 170,452 1,491,581 298,949 250,956 — $ 110,921 427,912 392,496 569,206 — 170,452 — — 1,491,581 $3,162,568 $2,612,663 $549,905 Contract Rate Interest Rate Caps Total Fixed or Hedged 5.9% $ 75,000 $ 185,921 452,912 25,000 3.0% 417,496 25,000 3.6% 569,206 — 5.7% 170,452 — 4.8% 4.3% — 1,491,581 4.4% $125,000 $3,287,568 2016 . . . . . . . . . . . . . . . . . . . . . . . 2017 . . . . . . . . . . . . . . . . . . . . . . . 2018 . . . . . . . . . . . . . . . . . . . . . . . 2019 . . . . . . . . . . . . . . . . . . . . . . . 2020 . . . . . . . . . . . . . . . . . . . . . . . Thereafter . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . Unsecured Credit Facility On October 15, 2015, our Operating Partnership entered into a $750.0 million unsecured revolving credit facility agreement with KeyBank National Association and fourteen other banks. This credit facility replaced our Operating Partnership’s previous unsecured credit facility with KeyBank. Interest rate is determined using an investment grade pricing grid using LIBOR plus a spread of 0.85% to 1.55%. As of December 31, 2015, we had $75.0 million borrowed under this facility. This facility serves as our primary source of short-term liquidity and has an accordion feature that we may use to expand its capacity to $1.5 billion. 58 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 59 OPERATOR ABIGAELS Unsecured Term Loans In addition to our unsecured credit facility, we maintain three unsecured term loans. We had total borrowings of $550.0 million outstanding under these term loan agreements at December 31, 2015. The $250.0 million Wells Fargo term loan bears interest at a rate of LIBOR plus a spread of 0.90% to 1.90% based on the credit ratings of our unsecured debt. The loan matures on August 1, 2018. As of December 31, 2015, this loan was bearing interest at a rate of LIBOR plus 1.15%. The $150.0 million U.S. Bank term loan bears interest at a rate of LIBOR plus a spread of 0.90% to 1.90% based on the credit ratings of our unsecured debt. The loan matures on March 1, 2020. As of December 31, 2015, this loan was bearing interest at a rate of LIBOR plus 1.15%. The $150.0 million term loan agreement with Key Bank bears interest at a rate of LIBOR plus a spread of 0.90% to 1.75% based on the credit ratings of our unsecured debt. The loan matures on March 1, 2021. As of December 31, 2015, this loan was bearing interest at a rate of LIBOR plus 1.10%. Senior Unsecured Notes We have also issued public and private unsecured notes. As of December 31, 2015, we have approximately $1.2 billion of publicly issued bonds and $310 million of private placement notes. In October 2013 we issued $350.0 million senior notes due 2023 with a coupon of 4.30%, paid semi-annually on April 15 and October 15. In June 2014 we issued $400.0 million senior notes due 2024 with a coupon of 3.75%, paid semi-annually on June 15 and December 15. In November 2015 we issued $400.0 million senior notes due 2025 with a coupon of 4.00%, paid semi-annually on May 15 and November 15. We also assumed approximately $75.3 million in senior notes as part of the Colonial merger. As of December 31, 2015 all of these amounts remained outstanding. On July 29, 2011, we issued $135.0 million of senior unsecured notes. The notes were offered in a private placement with three maturity tranches: $50.0 million at 4.7% maturing on July 29, 2018, $72.8 million at 5.4% maturing on July 29, 2021; and $12.3 million at 5.6% maturing on July 29, 2023; all of which is outstanding at December 31, 2015. On August 31, 2012, we issued $175 million of senior unsecured notes. The notes were offered in a private placement with four tranches: $18.0 million at 3.15% maturing on November 30, 2017; $20.0 million at 3.61% maturing on November 30, 2019; $117.0 million at 4.17% maturing on November 30, 2022; and $20.0 million at 4.33% maturing on November 30, 2024, all of which is outstanding at December 31, 2015. Secured Credit Facilities We rely on the efficient operation of the financial markets to refinance debt maturities, and on rate renewals for Fannie Mae. Fannie Mae provided credit enhancement for approximately $240.0 million of our outstanding debt through our Fannie Mae Facilities, as defined below, as of December 31, 2015. The interest rate markets for Fannie Mae Discount Mortgage Backed Securities, or DMBS, which in our experience are highly liquid and highly correlated with three-month LIBOR interest rates, are also an important component of our liquidity and interest rate swap effectiveness. Prudential Mortgage Capital, a Delegated Underwriting and Servicing, or DUS, lender for Fannie Mae, markets 90-day Fannie Mae DMBS monthly, and is obligated to advance funds to us at DMBS rates plus a credit spread under the terms of the credit agreements between Prudential and us. Approximately 7.0% of our outstanding obligations at December 31, 2015 were borrowed through a credit facility credit enhanced by Fannie Mae, which we also refer to as the Fannie Mae Facility. The Fannie Mae Facility has line limit of $240.0 million, of which $240.0 million was collateralized, available to borrow, and borrowed, at December 31, 2015. Various Fannie Mae rate tranches of the Fannie Mae Facility mature from 2016 through 2018. The Fannie Mae Facility provides for both fixed and variable rate borrowings. The interest rate on the majority of the variable portion is based on the Fannie Mae DMBS rate which are credit-enhanced by Fannie Mae and are typically sold every 90 days by Prudential Mortgage Capital at interest rates approximating three-month London Interbank Offered Rate, or LIBOR, less a spread that has averaged 0.17% over the life of the Fannie Mae Facility, plus a credit enhancement fee of 0.62%. We have seen more volatility in the spread between the DMBS and three-month LIBOR since late 2007 than was historically prevalent. 59 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 60 OPERATOR ABIGAELS Secured Property Mortgages We also maintain secured property mortgages with Fannie Mae, Freddie Mac, and various life insurance companies. These mortgages are usually fixed rate and can range from 5 to 10 years in maturity. As of December 31, 2015, we have $1.0 billion of secured property mortgages. For more information regarding our debt capital resources, see Note 6 to the audited consolidated financial statements included elsewhere in the Annual Report on Form 10-K. Contractual Obligations The following table reflects our total contractual cash obligations which consist of our long-term debt, development fees and operating leases as of December 31, 2015 (dollars in thousands): Contractual Obligations(1) 2016 2017 2018 2019 2020 Thereafter Total Long-Term Debt Obligations(2) . . . . . . $197,066 $165,075 $472,947 $546,804 $383,278 $1,647,938 $3,413,108 Fixed Rate or Swapped Interest(3) . . . . 595,706 88,599 Purchase Obligations(4) . . . . . . . . . . . . 1,125 — 634 171 Operating Lease Obligations . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . $298,023 $253,845 $552,332 $617,406 $447,883 $1,841,084 $4,010,573 193,146 — — 79,353 — 32 70,597 — 5 99,410 1,125 422 64,601 — 4 (1) Fixed rate and swapped interest are shown in this table. The average interest rates of variable rate debt are shown in preceding tables. (2) Represents principal payments gross of discounts, debt issuance costs and fair market value of debt assumed. (3) Swapped interest is subject to the ineffective portion of cash flow hedges as described in Note 7 to the audited consolidated financial statements included elsewhere in the Annual Report on Form 10-K. (4) Represents development fees. Off-Balance Sheet Arrangements At December 31, 2015, and 2014, we did not have any relationships, including those with unconsolidated entities or financial partnerships, for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not engage in trading activities involving non-exchange traded contracts. As such, we are not materially exposed to any financing, liquidity, market, or credit risk that could arise if we had engaged in such relationships. We do not have any relationships or transactions with persons or entities that derive benefits from their non-independent relationships with us or our related parties other than those disclosed in Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements, Note 14. As of December 31, 2015, we had a 25.0% ownership interest in the McKinney joint venture, which consists of undeveloped land. As of December 31, 2015, we had a 33.3% ownership interest in the Land Title Building joint venture, which consists of 29,971 square feet of commercial space. Our investments in our real estate joint ventures are unconsolidated and are recorded using the equity method for the joint ventures in which we do not have a controlling interest. INSURANCE We renegotiated our primary insurance programs effective July 1, 2015. We believe that the property and casualty insurance program in place provides appropriate insurance coverage for financial protection against insurable risks such that any insurable loss experienced that can be reasonably anticipated would not have a significant impact on our liquidity, financial position or results of operation. 60 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 61 OPERATOR ABIGAELS INFLATION Our resident leases at the apartment communities allow, at the time of renewal, for adjustments in the rent payable thereunder, and thus may enable us to seek rent increases. Almost all leases are for one year or less. The short-term nature of these leases generally serves to reduce our risk to adverse effects of inflation. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS The following table provides a brief description of recent accounting pronouncements that could have a material effect on our financial statements: Date of Adoption This ASU is effective for annual periods ending after December 15, 2015; however, early adoption is permitted. Effect on the Financial Statements or Other Significant Matters We adopted this ASU on December 31, 2015. The adoption of this ASU resulted in the reclassification of $13.3 million and $11.8 million of unamortized debt issuance costs related to the company’s secured property mortgages, senior unsecured notes, and unsecured term loans from Deferred financing costs, net to a reduction in Unsecured and Secured notes payable within its consolidated balance sheets as of December 31, 2015 and 2014, respectively. This ASU is effective for annual periods ending after December 15, 2016; however, early adoption is permitted. We are currently in the process of evaluating the impact of this ASU, but do not expect the adoption of this ASU to have a material impact on our consolidated financial position or results of operations taken as a whole. Standard Accounting Standards Update (ASU) 2015-03 and ASU 2015-15, Interest -Imputation of Interest ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern Description ASU 2015-03, requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. ASU 2015-15 provides additional guidance to ASU 2015-03, which did not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. ASU 2015-15 noted that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of- credit arrangement. This ASU requires an entity’s management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. If substantial doubt exists, the entity must disclose the principal conditions or events that raised the substantial doubt, management’s evaluation of the significance of these conditions, and management’s plan for alleviating the substantial doubt about the entity’s ability to continue as a going concern. 61 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 62 OPERATOR ABIGAELS Standard ASU 2014-09, Revenue from Contracts with Customers Description This ASU establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity This ASU raises the threshold for disposals to qualify as discontinued operations. It also requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. Date of Adoption This ASU is effective for annual reporting periods beginning after December 15, 2017, as a result of a deferral of the effective date arising from the issuance of ASU 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date. Early adoption is permitted. Effect on the Financial Statements or Other Significant Matters The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. We are currently in the process of evaluating the impact of adoption of this ASU on our consolidated financial condition and results of operations taken as a whole and plan on completing this assessment in the fourth quarter of 2016, but we do not expect the impact to be material. We have not yet determined which method will be used for initial application. This ASU is effective for fiscal years beginning after December 15, 2014, and interim periods within those years; however, early adoption is permitted beginning in the first quarter of 2014. We adopted this ASU on January 1, 2014. The adoption of this ASU required us to not classify certain disposals occurring during 2014 as discontinued operations. The 2014 dispositions did not qualify for discontinued operations treatment and therefore the gains on these properties are presented as a component of continuing operations for 2014. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. Our primary market risk exposure is to changes in interest rates on our borrowings. At December 31, 2015, 32.2% of our total capitalization consisted of borrowings. Our interest rate risk objective is to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs. To achieve this objective, we manage our exposure to fluctuations in market interest rates for borrowings through the use of fixed rate debt instruments and interest rate swaps and caps, which mitigate our interest rate risk on a related financial instrument and effectively fix or cap the interest rate on a portion of our variable debt or on future refinancings. We use our best efforts to have our credit facilities, or tranches thereof, mature across multiple years, which we believe limits our exposure to interest rate changes in any one year. We do not enter into derivative instruments for trading or other speculative purposes. At December 31, 2015, approximately 95.9% of our outstanding debt was subject to fixed or capped rates after considering related derivative instruments We regularly review interest rate exposure on outstanding borrowings in an effort to minimize the risk of interest rate fluctuations. 62 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 63 OPERATOR ABIGAELS The table below provides information about our financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates. For our interest rate swaps and caps, the table presents the notional amount of the swaps and caps and the years in which they expire. Weighted average variable rates are based on rates in effect at the reporting date (dollars in thousands). 2016 2017 2018 2019 2020 Total Thereafter Total Fair Value Long-term Debt Fixed Rate . . . . . . . . . . . . . . . $127,716 Average interest rate . . . . . . Variable Rate(1) . . . . . . . . . . . $ 80,097 Average interest rate . . . . . . Interest Rate Swaps Variable to Fixed . . . . . . . . . $ Average Pay rate . . . . . . . . . Interest Rate Cap Variable to Fixed . . . . . . . . . $ 75,000 Average Pay rate . . . . . . . . . $ 93,105 $200,060 $546,768 $155,988 $1,489,026 $2,612,663 $2,646,088 4.78% 4.07% 4.14% 4.42% 4.19% 4.13% $ 80,221 $280,033 $ $224,829 $ 149,975 $ 814,905 $ 817,650 1.97% 0.82% 1.33% 0.92% 1.33% 1.23% 3.72% (250) 1.35% — $300,000 —% 1.08% $250,000 $ 2.55% $ 25,000 $ 25,000 $ 4.67% 4.50% 4.50% — $ —% — $ —% — $ —% — $ —% — $ 550,000 —% 1.75% $ (10,358) — $ 125,000 —% $ 4.60% 6 (1) Excluding the effect of interest rate swap and cap agreements. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The Reports of Independent Registered Public Accounting Firm, Consolidated Financial Statements and Selected Quarterly Financial Information are set forth on pages F-1 to F-61 of this Annual Report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. ITEM 9A. CONTROLS AND PROCEDURES. MID-AMERICA APARTMENT COMMUNITIES, INC. (a) Evaluation of Disclosure Controls and Procedures: MAA’s management, with the participation of MAA’s Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of MAA’s disclosure controls and procedures as of December 31, 2015 pursuant to Exchange Act Rule 13a-15. Based on that evaluation, MAA’s Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of December 31, 2015 to ensure that information required to be disclosed by MAA in its Exchange Act filings is accurately recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to MAA’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. (b) Management’s Report on Internal Control over Financial Reporting: MAA’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. MAA’s management, with the participation of MAA’s Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of MAA’s internal control over financial reporting as of December 31, 2015 based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial statement preparation and presentation. 63 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 64 OPERATOR ABIGAELS Based on its evaluation under the framework in Internal Control - Integrated Framework, MAA’s management concluded that MAA’s internal control over financial reporting was effective as of December 31, 2015. Ernst & Young LLP, the independent registered public accounting firm that has audited the consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on MAA’s internal control over financial reporting, which is included herein. (c) Changes in Internal Control over Financial Reporting: There was no change to MAA’s internal control over financial reporting identified in connection with the evaluation by MAA’s management referred to above that occurred during the quarter ended December 31, 2015 that has materially affected, or is reasonably likely to materially affect, MAA’s internal control over financial reporting. MID-AMERICA APARTMENTS, L.P. (a) Evaluation of Disclosure Controls and Procedures: Management of the Operating Partnership, with the participation of the Chief Executive Officer and Chief Financial Officer of MAA, as the general partner of the Operating Partnership, carried out an evaluation of the effectiveness of the Operating Partnership’s disclosure controls and procedures as of December 31, 2015 pursuant to Exchange Act Rule 15d-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of MAA, as the general partner of the Operating Partnership, concluded that the disclosure controls and procedures were effective as of December 31, 2015 to ensure that information required to be disclosed by the Operating Partnership in its Exchange Act filings is accurately recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Operating Partnership’s management, including the Chief Executive Officer and Chief Financial Officer of MAA, as the general partner of the Operating Partnership, as appropriate to allow timely decisions regarding required disclosure. (b) Management’s Report on Internal Control over Financial Reporting: Management of the Operating Partnership is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 15d-15(f) under the Exchange Act. Management of the Operating Partnership, with the participation the Chief Executive Officer and Chief Financial Officer of MAA, as the general partner of the Operating Partnership, conducted an evaluation of the effectiveness of the Operating Partnership’s internal control over financial reporting as of December 31, 2015 based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial statement preparation and presentation. Based on its evaluation under the framework in Internal Control - Integrated Framework, management of the Operating Partnership concluded that the Operating Partnership’s internal control over financial reporting was effective as of December 31, 2015. (c) Changes in Internal Control over Financial Reporting: There was no change to the Operating Partnership’s internal control over financial reporting identified in connection with the evaluation by the Operating Partnership’s management referred to above that occurred during the quarter ended December 31, 2015 that has materially affected, or is reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting. ITEM 9B. OTHER INFORMATION. None. 64 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 65 OPERATOR ABIGAELS PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. The information contained in MAA’s 2016 Proxy Statement in the sections entitled “Information About The Board of Directors and Its Committees”, “Proposal 1 - Election of Directors”, “Executive Officers” and “Section 16(a) Beneficial Ownership Reporting Compliance,” is incorporated herein by reference in response to this item. Our Board of Directors has adopted a Code of Business Conduct and Ethics applicable to all officers, directors and employees, which can be found on our website at http://www.maac.com, on the For Investors page under Governance Documents. We will provide a copy of this document to any person, without charge, upon request, by writing to the Legal Department at MAA, 6584 Poplar Avenue, Memphis, TN 38138. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the Code of Business Conduct and Ethics by posting such information on our website at the address and the locations specified above. Reference to our website does not constitute incorporation by reference of the information contained on the site and should not be considered part of this Annual Report on Form 10-K. ITEM 11. EXECUTIVE COMPENSATION. The information contained in MAA’s 2016 Proxy Statement in the sections entitled “Executive Compensation”, “Compensation Committee Interlocks and Insider Participation” and “Compensation Discussion and Analysis” is incorporated herein by reference in response to this Item 11. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. The information contained in MAA’s 2016 Proxy Statement in the sections entitled “Security Ownership of Management” and “Security Ownership of Certain Beneficial Owners,” is incorporated herein by reference in response to this Item 12. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. The information contained in MAA’s 2016 Proxy Statement in the sections entitled “Certain Relationships and Related Transactions” and “Information About The Board of Directors and Its Committees” is incorporated herein by reference in response to this Item 13. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. The information contained in MAA’s 2016 Proxy Statement in the section entitled “Proposal 3 - Ratification of Appointment of Independent Registered Public Accounting Firm,” is incorporated herein by reference in response to this Item 14. 65 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 66 OPERATOR ABIGAELS ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) The following documents are filed as part of this Annual Report on Form 10-K: PART IV 1. Management’s Report on Internal Control Over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . Reports of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial Statements of Mid-America Apartment Communities, Inc.: Consolidated Balance Sheets as of December 31, 2015, and 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Operations for the years ended December 31, 2015, 2014, and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014, and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Equity for the years ended December 31, 2015, 2014, and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Cash Flows for the years ended December 31, 2015, F-1 F-2 F-5 F-6 F-7 F-8 2014, and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-10 Financial Statements of Mid-America Apartments, L.P.: Consolidated Balance Sheets as of December 31, 2015, and 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Operations for the years ended December 31, 2015, F-12 2014, and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-13 Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014, and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-14 Consolidated Statements of Changes in Capital for the years ended December 31, 2015, 2014, and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-15 Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014, and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-16 Notes to Consolidated Financial Statements for the years ended December 31, 2015, 2014, and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-17 2. Financial Statement Schedule required to be filed by Item 8 and Paragraph (b) of this Item 15: Schedule III - Real Estate Investments and Accumulated Depreciation as of December 31, 2015 . . . . F-53 3. The exhibits required by Item 601 of Regulation S-K, except as otherwise noted, have been filed with previous reports by the registrant and are herein incorporated by reference. Exhibit Number 2.1 Exhibit Description Agreement and Plan of Merger by and among Mid-America Apartment Communities, Inc., Mid-America Apartments, L.P., Martha Merger Sub, L.P., Colonial Properties Trust, and Colonial Realty Limited Partnership, dated as of June 3, 2013 (Filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on June 3, 2013 and incorporated herein by reference). 3.1 Amended and Restated Charter of Mid-America Apartment Communities, Inc. dated as of January 10, 1994, as filed with the Tennessee Secretary of State on January 25, 1994 (Filed as Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997 and incorporated herein by reference). 66 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 67 OPERATOR ABIGAELS Exhibit Number 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 Exhibit Description Articles of Amendment to the Charter of Mid-America Apartment Communities, Inc. dated as of January 28, 1994, as filed with the Tennessee Secretary of State on January 28, 1994 (Filed as Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996 and incorporated herein by reference). Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated Charter Designating and Fixing the Rights and Preferences of a Series of Preferred Stock dated as of October 9, 1996, as filed with the Tennessee Secretary of State on October 10, 1996 (Filed as Exhibit 1 to the Registrant’s Registration Statement on Form 8-A filed with the Commission on October 11, 1996 and incorporated herein by reference). Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated Charter dated November 17, 1997, as filed with the Tennessee Secretary of State on November 18, 1997 (Filed as Exhibit 3.6 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997 and incorporated herein by reference). Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated Charter Designating and Fixing the Rights and Preferences of a Series of Shares of Preferred Stock dated as of November 17, 1997, as filed with the Tennessee Secretary of State on November 18, 1997 (Filed as Exhibit 4.1 to the Registrant’s Registration Statement on Form 8-A/A filed with the Commission on November 19, 1997 and incorporated herein by reference). Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated Charter Designating and Fixing the Rights and Preferences of a Series of Shares of Preferred Stock dated as of June 25, 1998, as filed with the Tennessee Secretary of State on June 30, 1998 (Filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form 8-A/A filed with the Commission on June 26, 1998 and incorporated herein by reference). Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated Charter Designating and Fixing the Rights and Preferences of a Series of Shares of Preferred Stock dated as of December 24, 1998, as filed with the Tennessee Secretary of State on December 30, 1998 (Filed as Exhibit 3.7 to the Registrant’s Registration Statement on Form S-3/A (File Number 333-112469) and incorporated herein by reference). Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated Charter Designating and Fixing the Rights and Preferences of a Series of Shares of Preferred Stock dated as of October 11, 2002, as filed with the Tennessee Secretary of State on October 14, 2002 (Filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form 8-A/A filed with the Commission on October 11, 2002 and incorporated herein by reference). Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated Charter Designating and Fixing the Rights and Preferences of a Series of Shares of Preferred Stock dated as of October 28, 2002, as filed with the Tennessee Secretary of State on October 28, 2002 (Filed as Exhibit 3.9 to the Registrant’s Registration Statement on Form S-3/A (File Number 333-112469) and incorporated herein by reference). Mid-America Apartment Communities, Inc. Articles of Amendment to the Amended and Restated Charter Designating and Fixing the Rights and Preferences of a Series of Shares of Preferred Stock dated as of August 7, 2003, as filed with the Tennessee Secretary of State on August 7, 2003 (Filed as Exhibit 3.10 to the Registrant’s Registration Statement on Form S-3/A (File Number 333-112469) and incorporated herein by reference). Articles of Amendment to the Charter of Mid-America Apartment Communities, Inc. dated as of May 20, 2008, as filed with the Tennessee Secretary of State on June 2, 2008 (Filed as Exhibit 99.A to the Registrant’s Proxy Statement filed on March 31, 2008 and incorporated herein by reference). 67 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 68 OPERATOR ABIGAELS Exhibit Number 3.12 3.13 3.14 3.15 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 10.1 10.2 10.3 Exhibit Description Articles of Amendment to the Charter of Mid-America Apartment Communities, Inc. dated as of May 24, 2012, as filed with the Tennessee Secretary of State on May 25, 2012 (Filed as Exhibit 3.1 to the Current Report on Form 8-K filed on May 25, 2012 and incorporated herein by reference). Third Amended and Restated Bylaws of Mid-America Apartment Communities, Inc., dated as of December 3, 2013 (Filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on December 4, 2013 and incorporated herein by reference). Composite Certificate of Limited Partnership of Mid-America Apartments, L.P. Third Amended and Restated Agreement of Limited Partnership of Mid-America Apartments, L.P. dated as of October 1, 2013 (Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 2, 2013 and incorporated herein by reference). Form of Common Share Certificate (Filed as Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997 and incorporated herein by reference). Indenture, dated as of October 16, 2013, among Mid-America Apartments, L.P., Mid-America Apartment Communities, Inc. and U.S. Bank National Association (Filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on October 16, 2013 and incorporated herein by reference). First Supplemental Indenture, dated as of October 16, 2013, among Mid-America Apartments, L.P., Mid- America Apartment Communities, Inc. and U.S. Bank National Association, including the form of 4.300% Senior Notes due 2023 (Filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on October 16, 2013 and incorporated herein by reference). Indenture governing 6.05% Senior Notes due 2016, dated December 13, 2013, by and among Mid-America Apartments, L.P., Mid-America Apartment Communities, Inc. and U.S. Bank National Association, including the form of 6.05% Senior Notes due 2016 (Filed as Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed on December 19, 2013 and incorporated herein by reference). Registration Rights Agreement related to the 6.05% Senior Notes due 2016, dated December 13, 2013, between Mid-America Apartments, L.P. and J.P. Morgan Securities LLC (Filed as Exhibit 4.9 to the Registrant’s Current Report on Form 8-K filed on December 19, 2013 and incorporated herein by reference). Form of 6.05% Senior Note due 2016 (Included in Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed on December 19, 2013 and incorporated herein by reference). Second Supplemental Indenture, dated as of June 13, 2014, among Mid-America Apartments, L.P., Mid- America Apartment Communities, Inc. and U.S. Bank national Association, including the form of 3.7500% Senior Notes due 2024 (Filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on June 13, 2014 and incorporated herein by reference. Third Supplemental Indenture, dated as of November 9, 2015, among Mid-America Apartments, L.P., Mid-America Apartment Communities, Inc. and U.S. Bank national Association, including the form of 4.000% Senior Notes due 2025 (Filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on November 9, 205 and incorporated herein by reference. Note Purchase Agreement, dated as of July 29, 2011, among Mid-America Apartments, L.P., Mid-America Apartment Communities, Inc. and the purchasers of the notes party thereto (Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on August 1, 2011 and incorporated herein by reference) Note Purchase Agreement, dated as of August 31, 2012, among Mid-America Apartments, L.P., Mid-America Apartment Communities, Inc. and the purchasers of the notes party thereto (Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 4, 2012 and incorporated herein by reference). Distribution Agreement, dated December 9, 2015, by and among Mid-America Apartment Communities, Inc., Mid-America Apartments, L.P. and J.P. Morgan Securities LLC (Filed as Exhibit 1.1 to the Registrant’s Current Report on Form 8-K filed on December 9, 2015 and incorporated herein by reference). 68 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 69 OPERATOR ABIGAELS Exhibit Number 10.4 10.5 10.6† 10.7† 10.8† 10.9† 10.10† 10.11† 10.12 10.13† 10.14 11 12.1 12.2 21 23.1 23.2 31.1 31.2 31.3 31.4 Exhibit Description Distribution Agreement, dated December 9, 2015, by and among Mid-America Apartment Communities, Inc., Mid-America Apartments, L.P. and BMO Capital Markets Corp. (Filed as Exhibit 1.2 to the Registrant’s Current Report on Form 8-K filed on December 9, 2015 and incorporated herein by reference). Distribution Agreement, dated December 9, 2015, by and among Mid-America Apartment Communities, Inc., Mid-America Apartments, L.P. and KeyBanc Capital Markets Inc. (Filed as Exhibit 1.3 to the Registrant’s Current Report on Form 8-K filed on December 9, 2015 and incorporated herein by reference). Employment Agreement between the Registrant and H. Eric Bolton, Jr. dated March 24, 2015 (Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 24, 2015 and incorporated herein by reference). Non-Qualified Deferred Compensation Plan for Outside Company Directors as Amended Effective November 20, 2010. Amended and Restated Mid-America Apartment Communities, Inc. 2013 Stock Incentive Plan (Filed as Appendix B to the Registrant’s Definitive Proxy Statement on form DEF 14A filed on April 16, 2014 and incorporated herein by reference). Non-Qualified Stock Option Agreement for Company Employees under the Mid-America Apartment Communities, Inc. 2013 Stock Incentive Plan (Filed as Exhibit 10.20 to the Registrant’s Quarterly Report on Form 10-Q filed on November 7, 2013 and incorporated herein by reference). Form of Restricted Stock Award Agreement under the Mid-America Apartment Communities, Inc. 2013 Stock Incentive Plan (Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on May 1, 2015 and incorporated herein by reference). Incentive Stock Option Agreement for Company Employees under the Mid-America Apartment Communities, Inc. 2013 Stock Incentive Plan (Filed as Exhibit 10.22 to the Registrant’s Quarterly Report on Form 10-Q filed on November 7, 2013 and incorporated herein by reference). MAA Non-Qualified Deferred Executive Compensation Retirement Plan Amended and Restated Effective January 1, 2016. Form of Change in Control and Termination Agreement (Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on May 2, 2014 and incorporated herein by reference). Amended and Restated Mid-America Apartment Communities, Inc. 2013 Stock Incentive Plan (Filed as Appendix B to the Registrant’s Definitive Proxy Statement on form DEF 14A filed on April 16, 2014 and incorporated herein by reference). Statement re: computation of per share earnings (included within this Annual Report on Form 10-K). Statement re: computation of fixed charge coverage ratio for MAA Statement re: computation of fixed charge coverage ratio for MAALP List of Subsidiaries Consent of Independent Registered Public Accounting Firm, Ernst & Young LLP for MAA Consent of Independent Registered Public Accounting Firm, Ernst & Young LLP for MAALP MAA Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 MAA Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 MAA LP Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 MAA LP Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 69 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Sunday, March 20, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 70 OPERATOR ABIGAELS Exhibit Number 32.1* 32.2* 32.3* 32.4* 101 Exhibit Description MAA Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 MAA Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 MAA LP Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 MAA LP Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 The following financial information from Mid-America Apartment Communities, Inc.’s and MAA LP’s Annual Report on Form 10-K for the period ended December 31, 2015, filed with the SEC on February 25, 2016, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets as of December 31, 2015 and December 31, 2014; (ii) the Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013; (iii) the Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013; (iv) the Consolidated Statements of Equity for the years ended December 31, 2015, 2014 and 2013; and (v) Notes to Consolidated Financial Statements (Unaudited). † Management contract or compensatory plan or arrangement. * This certification is being furnished solely to accompany this Annual Report on Form 10-K pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and is not to be incorporated by reference into any filing of MAA or MAALP, whether made before or after the date hereof, regardless of any general incorporation language in such filings. (b) Exhibits: See Item 15(a)(3) above. (c) Financial Statement Schedule: See Item 15(a)(2) above. 70 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 71 OPERATOR ABIGAELS Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MID-AMERICA APARTMENT COMMUNITIES, INC. SIGNATURES Date: February 25, 2016 /s/ H. ERIC BOLTON, JR. H. Eric Bolton, Jr. Chairman of the Board of Directors, President and Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 /s/ H. Eric Bolton, Jr. H. Eric Bolton, Jr. Chairman of the Board of Directors, President and Chief Executive Officer (Principal Executive Officer) /s/ AlBErt M. cAMPBEll, iii AlBErt M. cAMPBEll, iii Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) /s/ AlAn B. GrAF, Jr. AlAn B. GrAF, Jr. Director /s/ rAlPH Horn rAlPH Horn Director /s/ JAMEs K. loWDEr JAMEs K. loWDEr Director /s/ tHoMAs H. loWDEr tHoMAs H. loWDEr Director /s/ clAUDE B. niElsEn clAUDE B. niElsEn Director 71 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 72 OPERATOR ABIGAELS Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 /s/ PHiliP W. norWooD PHiliP W. norWooD Director /s/ W. rEiD sAnDErs W. rEiD sAnDErs Director /s/ WilliAM B. sAnsoM WilliAM B. sAnsoM Director /s/ GArY sHorB GArY sHorB Director /s/ JoHn W. sPiEGEl JoHn W. sPiEGEl Director 72 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 73 OPERATOR ABIGAELS Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SIGNATURES Date: February 25, 2016 MID-AMERICA APARTMENTS, L.P. a Tennessee Limited Partnership By: Mid-America Apartment Communities, Inc., its general partner /s/ H. ERIC BOLTON, JR. H. Eric Bolton, Jr. Chairman of the Board of Directors, President and Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant as an officer or director of Mid-America Apartment Communities, Inc., in its capacity as the general partner of the registrant and on the dates indicated. Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 /s/ H. Eric Bolton, Jr. H. Eric Bolton, Jr. Chairman of the Board of Directors, President and Chief Executive Officer (Principal Executive Officer) /s/ AlBErt M. cAMPBEll, iii AlBErt M. cAMPBEll, iii Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) /s/ AlAn B. GrAF, Jr. AlAn B. GrAF, Jr. Director /s/ rAlPH Horn rAlPH Horn Director /s/ JAMEs K. loWDEr JAMEs K. loWDEr Director /s/ tHoMAs H. loWDEr tHoMAs H. loWDEr Director 73 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. 74 OPERATOR ABIGAELS Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 Date: February 25, 2016 /s/ clAUDE B. niElsEn clAUDE B. niElsEn Director /s/ PHiliP W. norWooD PHiliP W. norWooD Director /s/ W. rEiD sAnDErs W. rEiD sAnDErs Director /s/ WilliAM B. sAnsoM WilliAM B. sAnsoM Director /s/ GArY sHorB GArY sHorB Director /s/ JoHn W. sPiEGEl JoHn W. sPiEGEl Director 74 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-1 OPERATOR ABIGAELS MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management of MAA is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined under Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934, as amended. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of MAA’s consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of MAA; (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of MAA are being made only in accordance with appropriate authorizations of management and directors of MAA; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of MAA’s assets that could have a material effect on the consolidated financial statements. Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management conducted an assessment of MAA’s internal control over financial reporting as of December 31, 2015 using the framework specified in Internal Control - Integrated Framework (2013 framework), published by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such assessment, management has concluded that MAA’s internal control over financial reporting was effective as of December 31, 2015. The effectiveness of MAA’s internal control over financial reporting as of December 31, 2015, has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is presented herein. F-1 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-2 OPERATOR ABIGAELS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON THE CONSOLIDATED FINANCIAL STATEMENTS The Board of Directors and Shareholders of Mid-America Apartment Communities, Inc. We have audited the accompanying consolidated balance sheets of Mid-America Apartment Communities, Inc. as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2015. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These consolidated financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and schedule based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Mid-America Apartment Communities, Inc. at December 31, 2015 and 2014, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. As discussed in Note 1 to the consolidated financial statements, the Company changed its method for reporting discontinued operations effective January 1, 2014. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Mid-America Apartment Communities, Inc.’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 25, 2016 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Memphis, Tennessee February 25, 2016 F-2 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-3 OPERATOR ABIGAELS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON THE CONSOLIDATED FINANCIAL STATEMENTS The Partners Mid-America Apartments, L.P. We have audited the accompanying consolidated balance sheets of Mid-America Apartments, L.P. (the “Partnership”) as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income, changes in capital, and cash flows for each of the three years in the period ended December 31, 2015. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These consolidated financial statements and schedule are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these consolidated financial statements and schedule based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Partnership’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Mid-America Apartments, L.P. at December 31, 2015 and 2014, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. As discussed in Note 1 to the consolidated financial statements, the Partnership changed its method for reporting discontinued operations effective January 1, 2014. /s/ Ernst & Young LLP Memphis, Tennessee February 25, 2016 F-3 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-4 OPERATOR ABIGAELS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING The Board of Directors and Shareholders of Mid-America Apartment Communities, Inc. We have audited Mid-America Apartment Communities, Inc.’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Mid-America Apartment Communities, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, Mid-America Apartment Communities, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Mid-America Apartment Communities, Inc. as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2015, of Mid-America Apartment Communities, Inc. and our report dated February 25, 2016, expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Memphis, Tennessee February 25, 2016 F-4 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-5 OPERATOR ABIGAELS December 31, 2015 December 31, 2014 Assets: Real estate assets: Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Furniture, fixtures and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Development and capital improvements in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 926,532 6,939,288 228,157 44,355 8,138,332 (1,482,368) 6,655,964 Undeveloped land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporate properties, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investments in real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Real estate assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,779 8,812 1,811 6,718,366 Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred financing costs, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,559 26,082 5,232 58,935 1,607 $ 6,847,781 Liabilities and equity: Liabilities: Secured notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unsecured notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fair market value of interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,286,236 2,141,332 5,922 10,358 226,237 11,623 3,681,708 $ 913,408 6,781,210 214,742 80,772 7,990,132 (1,358,400) 6,631,732 55,997 7,988 1,791 6,697,508 26,653 28,181 5,996 61,119 2,321 $ 6,821,778 $ 1,589,641 1,923,058 8,395 13,392 219,044 10,526 3,764,056 Redeemable stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,250 5,911 Shareholders’ equity: Common stock, $0.01 par value per share, 100,000,000 shares authorized; 75,408,571 and 75,267,675 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated distributions in excess of net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total MAA shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 753 3,627,074 (634,141) (1,589) 2,992,097 165,726 3,157,823 $ 6,847,781 752 3,619,270 (729,086) (412) 2,890,524 161,287 3,051,811 $ 6,821,778 (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, 2015 and December 31, 2014 are 90,844 and 87,818, respectively. F-5 MID-AMERICA APARTMENT COMMUNITIES, INC.CONSOLIDATED BALANCE SHEETSDecember 31, 2015 and 2014(Dollars in thousands, except share data)See accompanying notes to consolidated financial statements. JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-6 OPERATOR ABIGAELS 2015 2014 2013 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 and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total property operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Property management expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Merger related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Integration related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations before non-operating items . . . . . . . . . . . . . . . . . . . . Interest and other non-property (expense) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss on debt extinguishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net casualty gain (loss) after insurance and other settlement proceeds . . . . . . . . . . . . . . . Gain on sale of depreciable real estate assets excluded from discontinued operations . . . Gain on sale of non-depreciable real estate assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations before joint venture activity . . . . . . . . . . . . . . . . . . . (Loss) gain from real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Discontinued operations: (Loss) income from discontinued operations before gain on sale . . . . . . . . . . . . . . . . Net casualty gain after insurance and other settlement proceeds on discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on sale of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consolidated net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income available for MAA common shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings per common share - basic: Income from continuing operations available for common shareholders . . . . . . . . . . . Discontinued property operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income available for common shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings per common share - diluted: Income from continuing operations available for common shareholders . . . . . . . . . . . Discontinued property operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income available for common shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6 $ 952,196 $ 902,177 $ 580,963 53,880 634,843 647 635,490 90,583 1,042,779 — 1,042,779 90,001 992,178 154 992,332 103,000 30,524 129,618 89,769 19,458 28,276 294,520 695,165 2,777 30,990 25,716 — — 288,131 (368) (122,344) (3,602) 473 189,958 172 352,420 (1,673) 350,747 (2) 350,745 101,591 30,715 123,419 89,150 20,113 28,360 301,812 695,160 2,388 32,095 20,909 3,152 8,395 230,233 770 (123,953) (2,586) (476) 42,649 350 146,987 (2,050) 144,937 6,009 150,946 68,299 20,308 76,922 51,737 13,318 23,049 186,979 440,612 1,393 23,083 15,569 32,403 5,102 117,328 466 (78,978) (426) (143) — — 38,247 (893) 37,354 338 37,692 — (63) 4,650 — — 350,745 18,458 93 76,844 119,279 3,998 $ 332,287 $ 147,980 $ 115,281 — 5,394 156,277 8,297 $ $ $ $ 4.41 $ — 4.41 $ 4.41 $ — 4.41 $ 1.90 $ 0.07 1.97 $ 1.90 $ 0.07 1.97 $ 0.72 1.55 2.27 0.71 1.54 2.25 MID-AMERICA APARTMENT COMMUNITIES, INC.CONSOLIDATED STATEMENTS OF OPERATIONSYears ended December 31, 2015, 2014 and 2013(Dollars in thousands, except per share data)See accompanying notes to consolidated financial statements. JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-7 OPERATOR ABIGAELS Consolidated net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other Comprehensive Income: Unrealized (loss) gain from the effective portion of 2015 2014 $350,745 $156,277 $119,279 2013 derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,306) (12,335) 10,684 7,064 11,785 16,370 349,503 155,727 146,333 (4,890) (18,393) $331,110 $147,460 $141,443 (8,267) Reclassification adjustment for losses included in net income for the effective portion of derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . Total Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: comprehensive income attributable to noncontrolling interests . . . . . . Comprehensive income attributable to MAA . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7 MID-AMERICA APARTMENT COMMUNITIES, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEYears ended December 31, 2015, 2014 and 2013(Dollars in thousands)See accompanying notes to consolidated financial statements. JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-8 OPERATOR ABIGAELS Mid-America Apartment Communities, Inc. Shareholders EQUITY BALANCE DECEMBER 31, 2012 . . . . . . 42,243 $ 422 Comprehensive income: Common Stock Shares Amount Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other comprehensive income - derivative instruments (cash flow hedges) . . . . . . . . . . . . Issuance and registration of common shares . . . . . . . . . 32,325 (10) Shares repurchased and retired . . . . . . . . . . . . . . . . . . . 111 Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . Shares issued in exchange for units . . . . . . . . . . . . . . . . 79 Redeemable stock fair market value . . . . . . . . . . . . . . . Adjustment for Noncontrolling Interest Correction . . . Adjustment for Noncontrolling Interest Ownership in operating partnership . . . . . . . . . . . . . . . . . . . . . Amortization of unearned compensation . . . . . . . . . . . Dividends on common stock ($2.8150 per share) . . . . . Dividends on noncontrolling interest units ($2.8150 per unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated Distributions in Excess of Net Income $(603,315) Additional Paid-In Capital $1,542,999 Accumulated Other Comprehensive Income (Loss) $ (26,054) Noncontrolling Interest $ 31,058 Total Equity $ 945,110 Redeemable Stock $4,713 115,281 3,998 119,279 325 — — — 2,026,913 (702) 6,212 2,519 26,162 892 161,069 (2,519) — 355 — 19,340 2,268 (165,914) 27,054 2,188,307 (702) 6,212 — 355 — — 692 (355) (19,340) — 2,268 (165,914) (8,432) $ 166,726 (8,432) $ 3,113,537 $5,050 EQUITY BALANCE DECEMBER 31, 2013 . . . . . . 74,748 $ 747 Comprehensive income: $3,599,549 $(653,593) $ 108 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other comprehensive income - derivative instruments (cash flow hedges) . . . . . . . . . . . . Issuance and registration of common shares . . . . . . . . . Shares repurchased and retired . . . . . . . . . . . . . . . . . . . Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . Shares issued in exchange for units . . . . . . . . . . . . . . . . Shares issued in exchange for redeemable stock . . . . . . Redeemable stock fair market value . . . . . . . . . . . . . . . Adjustment for Noncontrolling Interest Ownership in operating partnership . . . . . . . . . . . . . . . . . . . . . Amortization of unearned compensation . . . . . . . . . . . Dividends on common stock ($2.9600 per share) . . . . . Dividends on noncontrolling interest units ($2.9600 per unit) . . . . . . . . . . . . . . . . . . . . . . . . . . 147,980 8,297 156,277 138 (12) 270 36 2 — 3 — 1,040 (465) 12,242 1,419 998 (144) 4,631 (985) (222,488) (520) (30) (1,419) 144 874 (998) 985 (550) 1,042 (465) 12,245 — 998 (985) — 4,631 (222,488) (12,431) (12,431) F-8 MID-AMERICA APARTMENT COMMUNITIES, INC.CONSOLIDATED STATEMENTS OF EQUITYYears ended December 31, 2015, 2014 and 2013(Dollars in thousands, except per share and per unit data) JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-9 OPERATOR ABIGAELS MID-AMERICA APARTMENT COMMUNITIES, INC. CONSOLIDATED STATEMENTS OF EQUITY Years ended December 31, 2015, 2014 and 2013 (Dollars in thousands, except per share and per unit data) Mid-America Apartment Communities, Inc. Shareholders EQUITY BALANCE DECEMBER 31, 2014 . . . . . . 75,180 $ 752 Comprehensive income: Common Stock Shares Amount Accumulated Distributions in Excess of Net Income $(729,086) Additional Paid-In Capital $3,619,270 Accumulated Other Comprehensive Income (Loss) $ (412) Noncontrolling Interest $ 161,287 Total Equity $ 3,051,811 Redeemable Stock $5,911 332,287 18,458 350,745 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other comprehensive income - derivative instruments (cash flow hedges) . . . . . . . . . . . . Issuance and registration of common shares . . . . . . . . . Shares repurchased and retired . . . . . . . . . . . . . . . . . . . Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . Shares issued in exchange for units . . . . . . . . . . . . . . . . Shares issued in exchange for redeemable stock . . . . . . Redeemable stock fair market value . . . . . . . . . . . . . . . Adjustment for Noncontrolling Interest Ownership in operating partnership . . . . . . . . . . . . . . . . . . . . . Amortization of unearned compensation . . . . . . . . . . . Dividends on common stock ($3.1300 per share) . . . . . Dividends on noncontrolling interest units ($3.1300 per unit) . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 (13) 7 28 1 — — — 621 (958) 420 1,121 — (252) 6,852 (1,415) (235,927) (1,177) (65) — (1,121) 252 924 1,415 (1,242) 622 (958) 420 — — (1,415) — 6,852 (235,927) (13,085) $ 165,726 (13,085) $3,157,823 $8,250 EQUITY BALANCE DECEMBER 31, 2015 . . . . . . 75,318 $ 753 $3,627,074 $(634,141) $ (1,589) F-9 See accompanying notes to consolidated financial statements. JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-10 OPERATOR ABIGAELS Cash flows from operating activities: Consolidated net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments to reconcile net income to net cash provided by operating activities: Retail revenue accretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stock compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Redeemable stock issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortization of debt premium and debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss (gain) from investments in real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss on debt extinguishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Derivative interest (credit) expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Settlement of forward swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on sale of non-depreciable real estate assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on sale of depreciable real estate assets excluded from discontinued operations . . . . . . . . . Gain on sale of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net casualty (gain) loss and other settlement proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changes in assets and liabilities: Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash flows from investing activities: Purchases of real estate and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Normal capital improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Construction capital and other improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Renovations to existing real estate assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distributions from real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contributions to real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from disposition of real estate assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return (funding) of escrow for future acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash acquired in connection with Colonial merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash flows from financing activities: Net change in credit lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Principal payments on notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payment of deferred financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from issuances of common shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distributions to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends paid on common shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 2014 2013 $ 350,745 $ 156,277 $ 119,279 (1,083) 294,897 6,147 924 (15,515) 6 2,855 (2,274) (1,908) (172) (189,958) — (473) 2,091 12,475 (2,578) 6,307 1,235 463,721 (328,193) (88,486) (7,848) (30,957) (38,730) 6 (32) 358,017 8 — (136,215) (180,900) 395,960 (279,077) (7,690) (958) 622 420 (12,898) (232,079) (316,600) 10,906 26,653 37,559 $ (27) 301,744 4,226 874 (21,282) (3,142) 2,586 (3,084) (3,625) (350) (42,649) (5,394) 476 (8,704) 2,013 (3,348) 7,543 1,244 385,378 (309,174) (90,201) (7,998) (21,089) (70,788) 15,964 — 254,638 24,884 — (203,764) (157,184) 396,855 (260,347) (4,992) (465) 1,042 12,245 (12,290) (219,158) (244,294) (62,680) 89,333 26,653 $ (35) 189,673 2,268 692 (5,870) (338) 426 911 9,617 — — (76,844) 50 (11,844) 59,032 (48,674) 19,890 147 258,380 (139,199) (53,439) (4,148) (11,008) (53,042) 9,768 (268) 128,978 (24,884) 63,454 (83,788) (308,000) 347,759 (11,103) (6,933) (702) 25,680 6,212 (6,550) (140,697) (94,334) 80,258 9,075 89,333 $ F-10 See accompanying notes to consolidated financial statements.MID-AMERICA APARTMENT COMMUNITIES, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSYears ended December 31, 2015, 2014 and 2013(Dollars in thousands) JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-11 OPERATOR ABIGAELS 2015 2014 2013 Supplemental disclosure of cash flow information: Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income taxes paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 140,811 2,103 $ $ 146,202 1,596 $ $ $ 83,628 803 Supplemental disclosure of noncash investing and financing activities: Conversion of units to shares of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest capitalized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Marked-to-market adjustment on derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fair value adjustment on debt assumed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase price for Colonial merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ $ $ $ $ $ $ 1,121 5,873 1,655 2,963 — — — $ $ $ $ $ $ $ 1,419 6,626 1,722 6,159 5,284 93,049 — 2,519 $ 10,165 $ 2,089 $ 26,143 $ $ 86,671 $ 707,716 $2,162,876 F-11 See accompanying notes to consolidated financial statements.MID-AMERICA APARTMENT COMMUNITIES, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSYears ended December 31, 2015, 2014 and 2013(Dollars in thousands) JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-12 OPERATOR ABIGAELS December 31, 2015 December 31, 2014 Assets: Real estate assets: Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Furniture, fixtures and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Development and capital improvements in progress . . . . . . . . . . . . . . . . . . . . . . . Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 926,532 6,939,288 228,157 44,355 8,138,332 (1,482,368) 6,655,964 Undeveloped land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporate properties, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investments in real estate joint ventures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Real estate assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,779 8,812 1,811 6,718,366 Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred financing costs, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,559 26,082 5,232 58,935 1,607 $ 6,847,781 $ 913,408 6,781,210 214,742 80,772 7,990,132 (1,358,400) 6,631,732 55,997 7,988 1,791 6,697,508 26,653 28,181 5,996 61,119 2,321 $ 6,821,778 Liabilities and Capital: Liabilities: Secured notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unsecured notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fair market value of interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Due to general partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,286,236 2,141,332 5,922 10,358 226,237 11,623 19 3,681,727 $ 1,589,641 1,923,058 8,395 13,392 219,044 10,526 19 3,764,075 Redeemable units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,250 5,911 Capital: General partner: 75,408,571 OP Units outstanding at December 31, 2015 and 75,267,675 OP Units outstanding at December 31, 2014(1) . . . . . . . . . . . . . . . . 2,993,696 2,890,858 Limited partners: 4,162,996 OP Units outstanding at December 31, 2015 and 4,191,152 OP Units outstanding at December 31, 2014(1) . . . . . . . . . . . . . . . . . Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total liabilities and capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165,726 (1,618) 3,157,804 $ 6,847,781 161,310 (376) 3,051,792 $ 6,821,778 (1) Number of units outstanding represent total OP Units regardless of classification on the consolidated balance sheet. The number of units classified as redeemable units on the consolidated balance sheet at December 31, 2015 and December 31, 2014 are 90,844 and 87,818, respectively. F-12F-12 MID-AMERICA APARTMENTS, L.P.CONSOLIDATED BALANCE SHEETSDecember 31, 2015 and 2014(Dollars in thousands, except unit data)See accompanying notes to consolidated financial statements.JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-13 OPERATOR ABIGAELS MID-AMERICA APARTMENTS, L.P. CONSOLIDATED STATEMENTS OF OPERATIONS Years ended December 31, 2015, 2014, and 2013 (Dollars in thousands, except per unit data) Operating revenues: Rental revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other property revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total property revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Management fee income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 952,196 90,583 1,042,779 — 1,042,779 $ 902,177 90,001 992,178 154 992,332 $580,963 53,880 634,843 647 635,490 2015 2014 2013 Property operating expenses: Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Building repairs and maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Real estate taxes and insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Landscaping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other operating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total property operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Property management expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Merger related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Integration related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations before non-operating items. . . . . . . . . . . . . . . . . Interest and other non-property (expense) income . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss on debt extinguishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net casualty gain (loss) after insurance and other settlement proceeds . . . . . . . . . . . Gain on sale of depreciable real estate assets excluded from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on sale of non-depreciable real estate assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income before income tax expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations before joint venture activity . . . . . . . . . . . . . . . . (Loss) gain from real estate joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Discontinued operations: (Loss) income from discontinued operations before gain on sale . . . . . . . . . . . . . Net casualty gain after insurance and other 103,000 30,524 129,618 89,769 19,458 28,276 294,520 695,165 2,777 30,990 25,716 — — 288,131 (368) (122,344) (3,602) 473 189,958 172 352,420 (1,673) 350,747 (2) 350,745 101,591 30,715 123,419 89,150 20,113 28,360 301,812 695,160 2,388 32,095 20,909 3,152 8,395 230,233 770 (123,953) (2,586) (476) 42,649 350 146,987 (2,050) 144,937 6,009 150,946 68,299 20,308 76,922 51,737 13,318 23,049 186,979 440,612 1,393 23,083 15,569 32,403 5,102 117,328 466 (78,978) (426) (143) — — 38,247 (893) 37,354 338 37,692 — (63) 4,239 settlement proceeds on discontinued operations . . . . . . . . . . . . . . . . . . . . . . . Gain on sale of discontinued operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net income available for Mid-America Apartments, L.P. common unitholders . . . . . — — $ 350,745 — 5,394 $ 156,277 93 65,520 $107,544 Earnings per common unit - basic: Income from continuing operations available for common unitholders . . . . . . . . Income from discontinued operations available for common unitholders . . . . . . Net income available for common unitholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . Earnings per common unit - diluted: Income from continuing operations available for common unitholders . . . . . . . . Income from discontinued operations available for common unitholders . . . . . . Net income available for common unitholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ $ $ $ 4.41 — 4.41 4.41 — 4.41 $ $ $ $ 1.90 0.07 1.97 1.90 0.07 1.97 $ $ $ $ 0.71 1.31 2.02 0.71 1.31 2.02 F-13 See accompanying notes to consolidated financial statements. JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-14 OPERATOR ABIGAELS MID-AMERICA APARTMENTS, L.P. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Years ended December 31, 2015, 2014, and 2013 (Dollars in thousands) Consolidated net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other comprehensive income: Unrealized (loss) gain from the effective 2015 $350,745 2014 $156,277 2013 $107,544 portion of derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,306) (12,335) 10,684 Reclassification adjustment for losses included in net income for the effective portion of derivative instruments . . . . . . . . . . Comprehensive income attributable to Mid-America Apartments, L.P. . . . . . . 7,064 $349,503 11,785 $155,727 16,370 $134,598 F-14 See accompanying notes to consolidated financial statements. JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-15 OPERATOR ABIGAELS MID-AMERICA APARTMENTS, L.P. CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL Years ended December 31, 2015, 2014, and 2013 (Dollars in thousands, except per unit data) Mid-America Apartments, L.P. Unitholders CAPITAL BALANCE DECEMBER 31, 2012 . . . . Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other comprehensive income - derivative instruments (cash flow hedges) . . . . . . . . . . . Issuance of units . . . . . . . . . . . . . . . . . . . . . . . . . . Units repurchased and retired. . . . . . . . . . . . . . . . Exercise of unit options. . . . . . . . . . . . . . . . . . . . . General partner units issued in Limited Partner General Partner $ 38,154 $ 927,734 103,565 3,979 Accumulated Other Comprehensive Income (Loss) $(26,881) — Total Partnership Capital $ 939,007 107,544 — — 161,069 2,027,237 (702) 6,212 — — 27,055 27,055 — 2,188,306 (702) — 6,212 — exchange for limited partner units . . . . . . . . . (2,519) 2,519 — Redeemable units fair market value adjustment . . . . . . . . . . . . . . . . . . . . . . . — 355 — — 355 exchange for limited partner units . . . . . . . . . (1,419) 1,419 — Adjustment for limited partners’ capital at redemption value. . . . . . . . . . . . . . . Amortization of unearned compensation . . . . . . . Distributions ($2.8150 per unit) . . . . . . . . . . . . . . CAPITAL BALANCE DECEMBER 31, 2013 . . . . Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other comprehensive income - derivative instruments (cash flow hedges) . . . . . . . . . . . Issuance of units . . . . . . . . . . . . . . . . . . . . . . . . . . Units repurchased and retired. . . . . . . . . . . . . . . . Exercise of unit options. . . . . . . . . . . . . . . . . . . . . General partner units issued in Units issued in exchange for redeemable units . . . . . . . . . . . . . . . . . . . . . . . Redeemable units fair market value adjustment . . . . . . . . . . . . . . . . . . . . . . . Adjustment for limited partners’ capital at redemption value. . . . . . . . . . . . . . . Amortization of unearned compensation . . . . . . . Distributions ($2.9600 per unit) . . . . . . . . . . . . . . CAPITAL BALANCE DECEMBER 31, 2014 . . . . Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other comprehensive income - derivative instruments (cash flow hedges) . . . . . . . . . . . Issuance of units . . . . . . . . . . . . . . . . . . . . . . . . . . Units repurchased and retired. . . . . . . . . . . . . . . . Exercise of unit options. . . . . . . . . . . . . . . . . . . . . General partner units issued in (25,505) — (8,432) 43,324 2,268 (165,914) $166,746 $2,946,598 147,980 8,297 $ — — — 174 — 17,819 2,268 (174,346) $ 3,113,518 156,277 — — — — — 1,042 (465) 12,245 (550) — — — 998 — — — (985) — (985) 985 117 — (12,431) (117) 4,631 (222,488) $161,310 $2,890,858 332,287 18,458 — — — — — 4,631 (234,919) $3,051,792 350,745 $ (376) — — — — — 622 (958) 420 (1,242) — — — exchange for limited partner units . . . . . . . . . (1,121) 1,121 — Units issued in exchange for redeemable units . . . . . . . . . . . . . . . . . . . . . . . — — — Redeemable units fair market value adjustment . . . . . . . . . . . . . . . . . . . . . . . — (1,415) — (1,415) 1,415 Adjustment for limited partners’ capital at redemption value. . . . . . . . . . . . . . . . . . . . . . . Amortization of unearned compensation . . . . . . . Distributions ($3.1300 per unit) . . . . . . . . . . . . . . CAPITAL BALANCE DECEMBER 31, 2015 . . . . 164 — (13,085) (164) 6,852 (235,927) $165,726 $2,993,696 F-15 — — — — 6,852 (249,012) $3,157,804 $ (1,618) — — — $ 8,250 Redeemable Units $ 4,713 — — 692 — — — (355) — — — $ 5,050 — — 874 — — — (998) — — — $ 5,911 — — 924 — — — — (550) 1,042 (465) 12,245 — 998 (1,242) 622 (958) 420 — — JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-16 OPERATOR ABIGAELS 2015 2014 2013 $ 350,745 $ 156,277 $ 107,544 Cash flows from operating activities: Consolidated net income                                                            Adjustments to reconcile net income to net cash provided by operating activities: Retail revenue accretion                                                             Depreciation and amortization                                                        Stock compensation expense                                                         Redeemable units issued                                                             Amortization of debt premium and debt issuance costs                                    Loss (gain) from investments in real estate joint ventures                                  Loss on debt extinguishment                                                         Derivative interest (credit) expense                                                    Settlement of forward swaps                                                         Gain on sale of non-depreciable real estate assets                                         Gain on sale of depreciable real estate assets excluded from discontinued operations            Gain on sale of discontinued operations                                                Net casualty (gain) loss and other settlement proceeds                                     Changes in assets and liabilities: Restricted cash                                                                    Other assets                                                                       Accounts payable                                                                  Accrued expenses and other                                                          Security deposits                                                                   Net cash provided by operating activities                                             Cash flows from investing activities: Purchases of real estate and other assets                                                Normal capital improvements                                                        Construction capital and other improvements                                            Renovations to existing real estate assets                                               Development                                                                      Distributions from real estate joint ventures                                             Contributions to real estate joint ventures                                               Proceeds from disposition of real estate assets                                           Return (funding) of escrow for future acquisitions                                        Cash acquired in connection with Colonial merger                                       Net cash used in investing activities                                                  Cash flows from financing activities: Advances from general partner                                                       Net change in credit lines                                                            Proceeds from notes payable                                                         Principal payments on notes payable                                                   Payment of deferred financing costs                                                   Repurchase of common units                                                         Proceeds from issuances of common units                                              Exercise of unit options                                                             Distributions paid on common units                                                   Net cash used in financing activities                                                 Net increase (decrease) in cash and cash equivalents                                    Cash and cash equivalents, beginning of period                                          Cash and cash equivalents, end of period                                               (1,083) 294,897 6,147 924 (15,515) 6 2,855 (2,274) (1,908) (172) (189,958) — (473) 2,091 12,475 (2,578) 6,307 1,235 463,721 (328,193) (88,486) (7,848) (30,957) (38,730) 6 (32) 358,017 8 — (136,215) — (180,900) 395,960 (279,077) (7,690) (958) 622 420 (244,977) (316,600) 10,906 26,653 $ 37,559 (27) 301,744 4,226 874 (21,282) (3,142) 2,586 (3,084) (3,625) (350) (42,649) (5,394) 476 (8,704) 2,013 (3,348) 7,543 1,244 385,378 (309,174) (90,201) (7,998) (21,089) (70,788) 15,964 — 254,638 24,884 — (203,764) — (157,184) 396,855 (260,347) (4,992) (465) 1,042 12,245 (231,448) (244,294) (62,680) 89,333 $ 26,653 (35) 189,437 2,268 692 (5,870) (338) 426 912 9,617 — — (65,520) 50 (11,843) 58,904 (48,641) 20,135 166 257,904 (139,199) (53,357) (4,148) (11,008) (53,042) 9,768 (268) 112,293 (24,884) 63,454 (100,391) 17,220 (308,000) 347,759 (11,103) (6,933) (702) 25,680 6,212 (147,247) (77,114) 80,399 8,934 89,333 83,628 803 $ $ $ Supplemental disclosure of cash flow information: Interest paid                                                                   Income taxes paid                                                              $ 140,811 2,103 $ $ 146,202 1,596 $ Supplemental disclosure of noncash investing and financing activities: Accrued construction in progress                                                  Interest capitalized                                                              Marked-to-market adjustment on derivative instruments                               Fair value adjustment on debt assumed                                             Loan assumption                                                               Purchase price for Colonial merger                                                $ $ $ $ $ $ 5,873 1,655 2,963 — — — 6,626 $ 1,722 $ 6,159 $ $ 5,284 $ 93,049 — $ 10,165 $ 2,089 $ 26,143 $ $ 86,671 $ 707,716 $2,162,876 F-16 MID-AMERICA APARTMENTS, L.P.CONSOLIDATED STATEMENTS OF CASH FLOWSYears ended December 31, 2015, 2014, and 2013(Dollars in thousands)See accompanying notes to consolidated financial statements.JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-17 OPERATOR ABIGAELS 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unless the context otherwise requires, all references to “we,” “us,” “our,” or the “Company” refer collectively to Mid-America Apartment Communities, Inc, together with its consolidated subsidiaries, including Mid-America Apartments, LP Unless the context otherwise requires, all references to “MAA” refers only to Mid-America Apartment Communities, Inc, and not any of its consolidated subsidiaries Unless the context otherwise requires, the references to the “Operating Partnership” or “MAALP” refer to Mid-America Apartments, LP together with its consolidated subsidiaries “Common stock” refers to the common stock of MAA and “shareholders” means the holders of shares of MAA’s common stock The limited partnership interests of the Operating Partnership are referred to as “OP Units” or “common units” and the holders of the OP Units are referred to as “unitholders” As of December 31, 2015, MAA owned 75,408,571 units (or approximately 948%) of the limited partnership interests of the Operating Partnership MAA conducts substantially all of its business and holds substantially all of its assets through the Operating Partnership, and by virtue of its ownership of the OP Units and being the Operating Partnership’s sole general partner, MAA has the ability to control all of the day-to-day operations of the Operating Partnership We believe combining the notes to the consolidated financial statements of MAA and MAALP results in the following benefits: • • enhances a readers’ understanding of MAA and the Operating Partnership by enabling the reader to view the business as a whole in the same manner that management views and operates the business; eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both MAA and the Operating Partnership Management operates MAA and the Operating Partnership as one business The management of the Company is comprised of individuals who are officers of MAA and employees of the Operating Partnership We believe it is important to understand the few differences between MAA and the Operating Partnership in the context of how MAA and the Operating Partnership operate as a consolidated company MAA and the Operating Partnership are structured as an “umbrella partnership REIT,” or UPREIT MAA’s interest in the Operating Partnership entitles MAA to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to MAA’s percentage interest therein and entitles MAA to vote on substantially all matters requiring a vote of the partners MAA’s only material asset is its ownership of limited partner interests in the Operating Partnership; therefore, MAA does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing certain debt of the Operating Partnership The Operating Partnership holds, directly or indirectly, all of our real estate assets Except for net proceeds from public equity issuances by MAA, which are contributed to the Operating Partnership in exchange for OP Units, the Operating Partnership generates the capital required by our business through the Operating Partnership’s operations, direct or indirect incurrence of indebtedness and issuance of OP units The presentation of MAA’s shareholders’ equity and the Operating Partnership’s capital are the principal areas of difference between the consolidated financial statements of MAA and those of the Operating Partnership MAA’s shareholders’ equity may include shares of preferred stock, shares of common stock, additional paid-in capital, cumulative earnings, cumulative distributions, noncontrolling interest, preferred units, treasury shares, accumulated other comprehensive income and redeemable common units The Operating Partnership’s capital may include common capital and preferred capital of the general partner (MAA), limited partners’ preferred capital, limited partners’ noncontrolling interest, accumulated other comprehensive income and redeemable common units Redeemable common units represent the number of outstanding OP Units as of the date of the applicable balance sheet, valued at the greater of the closing market price of MAA’s common stock or the aggregate value of the individual partners’ capital balances Holders of OP Units (other than MAA and its corporate affiliates) may require us to redeem their OP Units from time to time, in which case we may, at our option, pay the redemption price either in cash (in an amount per OP F-17 MID-AMERICA APARTMENT COMMUNITIES, INC. AND MID-AMERICA APARTMENTS, L.P.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended December 31, 2015, 2014, and 2013JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-18 OPERATOR ABIGAELS Unit equal, in general, to the average closing price of MAA’s common stock on the New York Stock Exchange over a specified period prior to the redemption date) or by delivering one share of our common stock (subject to adjustment under specified circumstances) for each OP Unit so redeemed Organization and Formation of Mid-America Apartment Communities, Inc. On October 1, 2013, MAA completed a merger with Colonial Properties Trust, or Colonial Pursuant to the merger agreement, Martha Merger Sub, LP, or OP Merger Sub, a wholly-owned indirect subsidiary of MAALP, merged with and into Colonial Realty Limited Partnership, or Colonial LP, with Colonial LP being the surviving entity of the merger and becoming a wholly-owned indirect subsidiary of MAALP, which is referred to as the partnership merger The partnership merger was part of the transactions contemplated by the agreement and plan of merger entered into on June 3, 2013 among MAA, our Operating Partnership, OP Merger Sub, Colonial, and Colonial LP pursuant to which MAA and Colonial combined through a merger of Colonial with and into MAA, with MAA surviving the merger, which is referred to as the parent merger We refer to the parent merger, together with the partnership merger, as the “Merger” Under the terms of the merger agreement, each Colonial common share was converted into the right to receive 036 of a newly issued share of MAA common stock In addition, each limited partner interest in Colonial LP designated as a “Class A Unit” and a “Partnership Unit” under the limited partnership agreement of Colonial LP, which we refer to in this filing as Colonial LP units, issued and outstanding immediately prior to the effectiveness of the partnership merger was converted into common units in MAALP at the 036 conversion rate The net assets and results of operations of Colonial are included in our consolidated financial statements from the closing date, October 1, 2013, going forward See further discussion surrounding the Merger in Note 2 (Business Combinations) below As of December 31, 2015, we owned and operated 254 apartment communities through the Operating Partnership As of December 31, 2015, MAA also owned a 2500% interest in an unconsolidated real estate joint venture consisting of undeveloped land and a 3330% interest in an unconsolidated real estate joint venture consisting of one commercial property As of December 31, 2015, we had five development communities under construction totaling 748 units, with 37 units completed Total expected costs for the development projects are $1166 million, of which $423 million had been incurred to date We expect to complete construction on one project by the first quarter of 2016, one project by the third quarter of 2016, two projects by the second quarter of 2017, and one project by the fourth quarter of 2017 Five of our multifamily properties include retail components with approximately 163,000 square feet of gross leasable area We also have one wholly owned commercial property, which we acquired through the Merger, with approximately 208,000 square feet of gross leasable area, excluding tenant owned anchor stores, and one unconsolidated commercial property with approximately 30,000 square feet of gross leasable area Reclassifications To provide a better presentation of operating expenses, we adjusted the presentation of certain expenses in the specified lines of the Consolidated Statements of Operations In our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, our 2014 Form 10-K, we reported approximately $13 million and $08 million in permits and fees and vehicle maintenance costs in the “Other operating” expense line for the twelve months ended December 31, 2014 and December 31, 2013, respectively These costs have been reclassified to “Building repairs and maintenance” for the twelve months ended December 31, 2014 and December 31, 2013, respectively, presented in the Consolidated Statement of Operations included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2015, or this Form 10-K In the 2014 Form 10-K, we also reported approximately $338 million and $176 million in utility costs, primarily for cable TV, trash removal, and telephone costs, in the “Other operating” expense line for the twelve months ended December 31, 2014 and December 31, 2013, respectively These costs have been reclassified to “Utilities” for the twelve months ended December 31, 2014 and December 31, 2013, respectively, presented in the Consolidated Statement of Operations included in this Form 10-K These changes have been made in order to provide better insight into how we manage our property operating expenses F-18 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-19 OPERATOR ABIGAELS In the 2014 Form 10-K, we reported approximately $365 million as “Assets held for sale, excluded from Real estate assets, net”, which included $13 million of Cash and cash equivalents These assets no longer qualify as held for sale and have been reclassified to Assets held for use within the applicable line items in the Consolidated Balance Sheet and Consolidated Statements of Cash Flows included in this Form 10-K See further discussion on the held for sale reclassification in Note 15 (Earnings from Discontinued Operations) below In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs ASU 2015-03 requires debt issuance costs to be presented in the balance sheet as a reduction of the related debt liability rather than an asset The update requires retrospective application and represents a change in accounting principle We early-adopted ASU 2015-03 as of the end of fiscal year 2015, and applied its provisions retrospectively The adoption of ASU 2015-03 resulted in the reclassification of $133 million and $118 million of unamortized debt issuance costs related to our secured property mortgages, senior unsecured notes, and unsecured term loans from “Deferred financing costs, net” to a reduction in “Unsecured notes payable”, of $117 million and $93 million, and “Secured notes payable”, of $16 million and $25 million, within our Consolidated Balance Sheets as of December 31, 2015 and 2014, respectively In the 2014 Form 10-K, we reported approximately $45 million and $31 million of “Amortization of deferred financing costs” for the years ended December 31, 2014 and 2013, respectively As a result of the adoption of the debt issuance cost guidance and to improve comparability, we also reclassified these costs to “Interest expense” for the twelve months ended December 31, 2014 and 2013, respectively, presented in the Consolidated Statement of Operations included in this Form 10-K As a result of this income statement reclassification, $45 million and $31 million of amortization of deferred financing costs for the years ended December 31, 2014 and 2013, respectively, reported in the “Depreciation and amortization” line of the Consolidated Statements of Cash Flows in the 2014 Form 10-K have been reclassified to “Amortization of debt premium and debt issuance costs” for the twelve months ended December 31, 2014 and 2013, respectively, presented in the Consolidated Statements of Cash Flows in this Form 10-K Other than these reclassifications, the adoption of ASU 2015-03 did not have an impact on our consolidated financial statements See Note 6 (Borrowings) below for further discussion Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared by our management in accordance with United States generally accepted accounting principles, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC The consolidated financial statements of MAA presented herein include the accounts of MAA, the Operating Partnership, and all other subsidiaries in which MAA has a controlling financial interest MAA owns approximately 95% to 100% of all consolidated subsidiaries The consolidated financial statements of MAALP presented herein include the accounts of MAALP and all other subsidiaries in which MAALP has a controlling financial interest MAALP owns, directly or indirectly, 100% of all consolidated subsidiaries In our opinion, all adjustments necessary for a fair presentation of the consolidated financial statements have been included, and all such adjustments were of a normal recurring nature All significant intercompany accounts and transactions have been eliminated in consolidation We invest in entities which may qualify as variable interest entities, or VIE A VIE is a legal entity in which the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the holders of the equity investment at risk lack the power to direct the activities of a legal entity as well as the obligation to absorb its expected losses or the right to receive its expected residual returns We consolidate all VIEs for which we are the primary beneficiary and use the equity method to account for investments that qualify as VIEs but for which we are not the primary beneficiary In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including but not limited to, those activities that most significantly impact the VIE’s economic performance and which party controls such activities We use the equity method of accounting for our investments in entities for which we exercise significant influence, but do not have the ability to exercise control These entities are not variable interest entities The factors considered in determining that we do not have the ability to exercise control include ownership of voting interests and participatory rights of investors F-19 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-20 OPERATOR ABIGAELS Use of Estimates Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses to prepare these financial statements and notes in conformity with GAAP Actual results could differ from those estimates Revenue Recognition and Real Estate Sales We primarily lease multifamily residential apartments under operating leases generally with terms of one year or less Rental revenues are recognized using a method that represents a straight-line basis over the term of the lease and other revenues are recorded when earned Rental income represents gross market rent less adjustments for concessions, vacancy loss and bad debt We record gains and losses on real estate sales in accordance with accounting standards governing the sale of real estate For sale transactions meeting the requirements for the full accrual method, we remove the assets and liabilities from our Consolidated Balance Sheets and record the gain or loss in the period the transaction closes Rental Costs Costs associated with rental activities, including advertising costs, are expensed as incurred Advertising expenses were approximately $135 million, $124 million, and $95 million for the years ended December 31, 2015, 2014, and 2013, respectively Discontinued Operations Prior to our January 2014 adoption of ASU No 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, properties sold during the year or those classified as held-for-sale at the end of a reporting period were classified as discontinued operations in accordance with accounting standards governing financial statement presentation Subsequent to our adoption of this ASU on January 1, 2014, only dispositions representing significant changes in operating strategy are classified as discontinued operations Once a property is classified as held-for-sale, depreciation is no longer recognized Real Estate Assets and Depreciation and Amortization Real estate assets are carried at depreciated cost Repairs and maintenance costs are expensed as incurred while significant improvements, renovations, and recurring capital replacements are capitalized Recurring capital replacements typically include scheduled carpet replacement, new roofs, HVAC units, plumbing, concrete, masonry and other paving, pools and various exterior building improvements In addition to these costs, we also capitalize salary costs directly identifiable with renovation work These expenditures extend the useful life of the property and increase the property’s fair market value The cost of interior painting, vinyl flooring and blinds are expensed as incurred Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets which range from 8 to 40 years for land improvements and buildings, 5 years for furniture, fixtures and equipment, and 3 to 5 years for computers and software Development Costs Development projects and the related carrying costs, including interest, property taxes, insurance and allocated direct development salary cost during the construction period, are capitalized and reported in the accompanying Consolidated Balance Sheets as “Development and capital improvements in progress” during the construction period Interest is capitalized in accordance with accounting standards governing the capitalization of interest Upon completion and certification for occupancy of individual buildings within a development, amounts representing the completed building’s portion of total estimated development costs for the project are transferred to “Land”, “Buildings”, and “Furniture, fixtures and equipment” as real estate held for investment Capitalization of interest, property taxes, insurance and allocated direct development salary costs cease upon the transfer The assets are depreciated over their estimated useful lives Total interest capitalized during the years ended December 31, 2015, 2014 and 2013 was approximately $17 million, $17 million, and $21 million, respectively Indirect costs other than interest that F-20 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-21 OPERATOR ABIGAELS we capitalized included capitalized salaries of $04 million, $17 million, and $04 million during the years ended December 31, 2015, 2014 and 2013, respectively, and real estate taxes of $02 million, $02 million, and $03 million during the years ended December 31, 2015, 2014 and 2013, respectively Certain costs associated with the lease-up of development projects, including cost of model units, their furnishings, signs, and “grand openings,” are capitalized and amortized over their respective estimated useful lives All other costs relating to renting development projects are expensed as incurred Acquisition of Real Estate Assets In accordance with accounting standards for business combinations, the fair value of the real estate acquired is allocated to the acquired tangible assets, consisting of land, building, furniture, fixtures and equipment, and identified intangible assets, consisting of the value of in-place leases and other contracts We allocate the purchase price to the fair value of the tangible assets of an acquired property determined by valuing the building as if it were vacant, based on management’s determination of the relative fair values of these assets Management determines the as-if-vacant fair value of a building using methods similar to those used by independent appraisers These methods include using stabilized net operating income, or NOI, and market specific capitalization and discount rates In allocating the fair value of identified intangible assets of an acquired property, the in-place leases are valued based on current rent rates and time and cost to lease a unit Management concluded that the residential leases acquired in connection with each of its property acquisitions are approximately at market rates since the residential lease terms generally do not extend beyond one year For larger, portfolio style acquisitions, like the Merger, management engages a third party valuation specialist to perform the fair value assessment, which includes an allocation of the purchase price Similar to management’s methods, the third party uses cash flow analysis as well as an income approach and a market approach to determine the fair value of assets The third party uses stabilized NOI and market specific capitalization and discount rates Management reviews the inputs used by the third party specialist as well as the allocation of the purchase price provided by the third party to ensure reasonableness and that the procedures are performed in accordance with management’s policy The initial allocation of the purchase price is based on management’s preliminary assessment, which may differ when final information becomes available Subsequent adjustments made to the initial purchase price allocation, if any, are made within the allocation period, which typically does not exceed one year For residential leases, the fair value of the in-place leases and resident relationships is then amortized over 6 months, the estimated remaining term of the resident leases For commercial leases, the fair value of in-place leases and resident relationships is amortized over the remaining term of the commercial leases The amount of lease intangibles included in Other assets totaled $61 million, $83 million, and $540 million as of December 31, 2015, 2014, and 2013, respectively Accumulated amortization for these leases totaled $23 million, $18 million, and $219 million as of December 31, 2015, 2014 and 2013, respectively The amortization recorded as depreciation and amortization expense was $50 million, $245 million, and $235 million for the years ended December 31, 2015, 2014, and 2013, respectively The estimated aggregate future amortization expense is approximately $14 million, $05 million, $04 million, $03 million, and $03 million for the years ended December 31, 2016, 2017, 2018, 2019, and 2020, respectively The Company’s policy is to expense the costs incurred to acquire properties in the period these costs are incurred Acquisition costs include appraisal fees, title fees, broker fees, and other legal costs to acquire the property These costs are recorded in our Consolidated Statement of Operations under the line “Acquisition expenses” Impairment of Long-lived Assets, including Goodwill We account for long-lived assets in accordance with the provisions of accounting standards for the impairment or disposal of long-lived assets and evaluate our goodwill for impairment under accounting standards for goodwill and other intangible assets We evaluate goodwill for impairment on at least an annual basis, or more frequently if a goodwill impairment indicator is identified We periodically evaluate long-lived assets, including investments in real estate and goodwill, for indicators that would suggest that the carrying amount of the assets may not be recoverable The judgments regarding the existence of such indicators are based on factors such as operating performance, market conditions and legal factors F-21 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-22 OPERATOR ABIGAELS Long-lived assets, such as real estate assets, equipment and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset Assets to be disposed of are separately presented on the Balance Sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated The assets and liabilities of a disposed group or a property classified as held for sale are presented separately in the appropriate asset and liability sections of the balance sheet Goodwill is tested annually for impairment and is tested for impairment more frequently if events and circumstances indicate that the asset might be impaired An impairment loss for goodwill is recognized to the extent that the carrying amount exceeds the implied fair value of goodwill This determination is made at the reporting unit level and consists of two steps First, we determine the fair value of a reporting unit and compare it to its carrying amount In the apartment industry, the primary method used for determining fair value is to divide annual operating cash flows by an appropriate capitalization rate We determine the appropriate capitalization rate by reviewing the prevailing rates in a property’s market or submarket Second, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation in accordance with accounting standards for business combinations The residual fair value after this allocation is the implied fair value of the reporting unit goodwill There has been no impairment of goodwill in the three year period ended December 31, 2015 Goodwill decreased from $23 million at December 31, 2014 to $16 million at December 31, 2015 as a result of the disposition of the Post House Jackson, Post House North, and Oaks apartment communities on April 29, 2015 Goodwill decreased from $41 million at December 31, 2013 to $23 million at December 31, 2014 as a result of the disposition of the Greenbrook apartment community on July 10, 2014 Loss Contingencies The outcomes of claims, disputes and legal proceedings are subject to significant uncertainty We record an accrual for loss contingencies when a loss is probable and the amount of the loss can be reasonably estimated We review these accruals quarterly and make revisions based on changes in facts and circumstances When a loss contingency is not both probable and reasonably estimable, we do not accrue the loss However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then we disclose a reasonable estimate of the possible loss, or range of loss, if such reasonable estimate can be made If we cannot make a reasonable estimate of the possible loss, or range of loss, then a statement to that effect is disclosed The assessment of whether a loss is probable or a reasonable possibility, and whether the loss or range of loss is reasonably estimable, often involves a series of complex judgments about future events Among the factors that we consider in this assessment, are the nature of existing legal proceedings and claims, the asserted or possible damages or loss contingency (if reasonably estimable), the progress of the matter, existing law and precedent, the opinions or views of legal counsel and other advisers, our experience in similar matters, the facts available to us at the time of assessment, and how we intend to respond, or have responded, to the proceeding or claim Our assessment of these factors may change over time as individual proceedings or claims progress For matters where we are not currently able to reasonably estimate a range of reasonably possible loss, the factors that have contributed to this determination include the following: (i) the damages sought are indeterminate; (ii) the proceedings are in the early stages; (iii) the matters involve novel or unsettled legal theories or a large or uncertain number of actual or potential cases or parties; and/or (iv) discussions with the parties in matters that are expected ultimately to be resolved through negotiation and settlement have not reached the point where we believe a reasonable estimate of loss, or range of loss, can be made In such instances, we believe that there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss or business impact, if any F-22 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-23 OPERATOR ABIGAELS Undeveloped Land Undeveloped land includes sites intended for future multifamily developments, sites for future commercial development and sites intended for residential use, which are carried at the lower of cost or fair value in accordance with GAAP and any costs incurred prior to commencement of pre-development activities are expensed as incurred Investment in Real Estate Joint Ventures Our investments in our unconsolidated real estate joint ventures are recorded using the equity method as we are able to exert significant influence, but do not have a controlling interest in any of our joint ventures Cash and Cash Equivalents We consider investments in money market accounts and certificates of deposit with original maturities of three months or less to be cash equivalents Restricted Cash Restricted cash consists of security deposits required to be held separately, escrow deposits held by lenders for property taxes, insurance, debt service, and replacement reserves, and exchanges under Section 1031(b) of the Internal Revenue Code of 1986, as amended, or the Code Section 1031(b) exchanges are treated as investing activities in the Consolidated Statement of Cash Flows Deferred Financing Costs Deferred financing costs are amortized over the terms of the related debt using a method which approximates the effective interest method If the terms of renewed or modified debt instruments are deemed to be substantially different, all unamortized financing costs associated with the modified debt are charged to earnings in the current period If the terms are not substantially different, the costs associated with the renewal are capitalized and amortized over the remaining term of the debt instrument For modifications affecting a line of credit, fees paid to a creditor and any third party costs will be capitalized and amortized over the remaining term of the new arrangement Any unamortized deferred financing costs associated with the old arrangement are either deferred and amortized over the life of the new arrangement or written off, depending upon the nature of the modification and cost The balance of any unamortized financing costs on extinguished debt is expensed upon extinguishment Other Assets Other assets consist primarily of deferred rental concessions which are recognized on a straight line basis over the life of the leases, receivables and deposits from residents, the value of derivative contracts and other prepaid expenses including prepaid insurance and prepaid interest Also included in other assets are the fair market value of in place leases, which totaled $61 million and $83 million as of December 31, 2015 and 2014, respectively Accrued Expenses and Other Liabilities Accrued expenses consist of accrued dividends payable, accrued real estate taxes, accrued interest payable, other accrued expenses payable, and unearned income Significant accruals include accrued dividends payable of $652 million and $612 million at December 31, 2015 and 2014, respectively, accrued real estate taxes of $633 million and $568 million at December 31, 2015 and 2014, respectively, and accrued interest payable of $172 million and $178 million, at December 31, 2015 and 2014, respectively Self-Insurance We are self-insured for workers’ compensation claims up to $500,000 and for general liability claims up to $100,000 Claims exceeding these amounts are insured by a third party We accrue for expected liabilities less than $500,000 for workers’ compensation based on a third party actuarial estimate of ultimate losses and we also accrue for expected general liability claims less than $100,000 based on a third party actuarial estimate of ultimate losses F-23 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-24 OPERATOR ABIGAELS Income Taxes MAA has elected to be taxed as a REIT under the Code, beginning with the taxable year ended December 31, 1994, and intends to continue to operate in such a manner The current and continuing qualification as a REIT depends on MAA’s ability to meet the various requirements imposed by the Code, which are related to organizational structure, distribution levels, diversity of stock ownership and certain restrictions with regard to owned assets and categories of income As long as MAA qualifies for taxation as a REIT, it will generally not be subject to United States Federal corporate income tax on its taxable income that is currently distributed to shareholders This treatment substantially eliminates the “double taxation” (at the corporate and shareholder levels) that generally results from an investment in a corporation Even if MAA qualifies as a REIT, it may be subject to United States Federal income and excise taxes in certain situations, such as not meeting the income distribution requirements MAA also will be required to pay a 100% tax on any net income on non-arm’s length transactions between MAA and its Taxable REIT Subsidiaries, or TRS (discussed below) In addition, MAA could also be subject to the alternative minimum tax, or AMT State and local tax laws may not conform to the United States Federal income tax treatment, and MAA and its shareholders may be subject to state or local taxation in various state or local jurisdictions, including those in which MAA transacts business or its shareholders reside Any taxes imposed on MAA would reduce its operating cash flow and net income Certain of our operations or a portion thereof, including asset management and risk management, are conducted through TRSs, which are subsidiaries of the Operating Partnership A TRS is a C-corporation that has not elected REIT status and as such is subject to United States Federal corporate income tax The TRS accounts for deferred taxes by recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized Based on this evaluation, at December 31, 2015, net of the valuation allowance, the net deferred tax assets were reduced to zero The Company recognizes liabilities for uncertain income tax positions based on a two-step process The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement The Company classifies interest related to income tax liabilities, and if applicable, penalties, as a component of Income tax expense As of December 31, 2015, we did not have any unrecognized tax benefits, and we do not believe that there will be any material changes in our unrecognized tax positions over the next 12 months The income tax expense line item shown in the Statement of Operations represents the Texas-based margin tax for all Texas properties Fair value of derivative financial instruments We utilize certain derivative financial instruments, primarily interest rate swaps and interest rate caps, during the normal course of business to manage, or hedge, the interest rate risk associated with our variable rate debt or as hedges in anticipation of future debt transactions to manage well-defined interest rate risk associated with the transaction In order for a derivative contract to be designated as a hedging instrument, changes in the hedging instrument must be highly effective at offsetting changes in the hedged item The historical correlation of the hedging instruments and the underlying hedged items are assessed before entering into the hedging relationship and on a quarterly basis thereafter, and have been found to be highly effective We measure ineffectiveness using the change in the variable cash flows method or the hypothetical derivative method for interest rate swaps and the hypothetical derivative method for interest rate caps for each reporting period through the term of the hedging instruments Any amounts determined to be ineffective are recorded in earnings if in an overhedged position The change in fair value of the interest rate swaps and the intrinsic value or fair value of interest rate caps designated as cash flow hedges are recorded to accumulated other comprehensive income in the Statement of Equity F-24 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-25 OPERATOR ABIGAELS The valuation of our derivative financial instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves The fair values of interest rate caps are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the interest rate caps The variable interest rates used in the calculation of projected receipts on the interest rate cap are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities Additionally, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements Changes in the fair values of our derivatives are primarily the result of fluctuations in interest rates See Note 7 (Derivative and Hedging Activities) and Note 8 (Fair Value Disclosure of Financial Information) for further discussion Recent Accounting Pronouncements The following table provides a brief description of recent accounting pronouncements that could have a material effect on our financial statements: Date of Adoption This ASU is effective for annual periods ending after December 15, 2015; however, early adoption is permitted Effect on the Financial Statements or Other Significant Matters We adopted this ASU on December 31, 2015 The adoption of this ASU resulted in the reclassification of $133 million and $118 million of unamortized debt issuance costs related to the company’s secured property mortgages, senior unsecured notes, and unsecured term loans from Deferred financing costs, net to a reduction in Unsecured and Secured notes payable within its Consolidated Balance Sheets as of December 31, 2015 and 2014, respectively This ASU is effective for annual periods ending after December 15, 2016; however, early adoption is permitted We are currently in the process of evaluating the impact of this ASU, but we do not expect the adoption of this ASU to have a material impact on our consolidated financial position or results of operations taken as a whole Standard Accounting Standards Update (ASU) 2015-03 and ASU 2015-15, Interest -Imputation of Interest ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern Description ASU 2015-03, requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums ASU 2015-15 provides additional guidance to ASU 2015-03, which did not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements ASU 2015-15 noted that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of- credit arrangement This ASU requires an entity’s management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued If substantial doubt exists, the entity must disclose the principal conditions or events that raised the substantial doubt, management’s evaluation of the significance of these conditions, and management’s plan for alleviating the substantial doubt about the entity’s ability to continue as a going concern F-25 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-26 OPERATOR ABIGAELS Standard ASU 2014-09, Revenue from Contracts with Customers Description This ASU establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity This ASU raises the threshold for disposals to qualify as discontinued operations It also requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation Date of Adoption This ASU is effective for annual reporting periods beginning after December 15, 2017, as a result of a deferral of the effective date arising from the issuance of ASU 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date Early adoption is permitted This ASU is effective for fiscal years beginning after December 15, 2014, and interim periods within those years; however, early adoption is permitted beginning in the first quarter of 2014 Effect on the Financial Statements or Other Significant Matters The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application We are currently in the process of evaluating the impact of adoption of this ASU on our consolidated financial condition and results of operations taken as a whole and plan on completing this assessment in the fourth quarter of 2016, but we do not expect the impact to be material We have not yet determined which method will be used for initial application We adopted this ASU on January 1, 2014 The adoption of this ASU required us to not classify certain disposals occurring during 2014 as discontinued operations The 2014 dispositions did not qualify for discontinued operations treatment and therefore the gains on these properties are presented as a component of continuing operations for 2014 2. BUSINESS COMBINATIONS Merger of MAA and Colonial On October 1, 2013, we completed the Merger with Colonial and Colonial LP As part of the Merger, we acquired 115 wholly owned apartment communities encompassing 34,370 units principally located in the Southeast and Southwest regions of the United States In addition to the apartment communities, we also acquired four commercial properties totaling approximately 806,000 square feet The additions caused us to nearly double in size as a result of the Merger The consolidated net assets and results of operations of Colonial are included in our consolidated financial statements from the closing date, October 1, 2013, going forward The total purchase price of approximately $22 billion was determined based on the number of Colonial shares and Colonial LP partnership interests outstanding as of October 1, 2013 In all cases in which MAA’s stock price was a determining factor in arriving at final consideration for the Merger, the stock price used to determine the purchase price was the opening price of MAA’s common stock on October 1, 2013 ($6256 per share) The total purchase price includes $73 million of other consideration, a majority of which relates to assumed stock compensation plans As a result of the Merger, we issued approximately 319 million shares of MAA common stock and approximately 26 million OP units The Merger has been accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their acquisition date fair values F-26 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-27 OPERATOR ABIGAELS For larger, portfolio style acquisitions, like the Merger, management engages a third party valuation specialist to assist with the fair value assessment, which includes an allocation of the purchase price Similar to management’s methods, the third party generally uses cash flow analysis as well as an income approach and a market approach to determine the fair value of assets acquired The third party uses stabilized NOI and a market specific capitalization and discount rates Management reviews the inputs used by the third party specialist as well as the allocation of the purchase price provided by the third party to ensure reasonableness and that the procedures are performed in accordance with management’s policy The allocation of the purchase price is based on management’s assessment, which may differ as more information becomes available Subsequent adjustments made to the purchase price allocation, if any, are made within the allocation period, which typically does not exceed one year The allocation of the purchase price described above requires a significant amount of judgment and represents management’s best estimate of the fair value as of the acquisition date The following final purchase price allocation was based on our valuation as well as estimates and assumptions of the acquisition date fair value of the tangible and intangible assets acquired and liabilities assumed The following table summarizes the final purchase price allocation (in thousands): Land                                                                              Buildings and improvements                                                           Furniture, fixtures and equipment                                                       Development and capital improvements in progress                                         Undeveloped land                                                                    Properties held for sale                                                                Lease intangible assets                                                                Cash and cash equivalents                                                             Restricted cash                                                                      Deferred costs and other assets, excluding lease intangible assets                              Total assets acquired                                                                  Notes payable                                                                       Fair market value of interest rate swaps                                                   Accounts payable, accrued expenses, and other liabilities                                    Total liabilities assumed, including debt                                                  Total purchase price                                                                  $ 469,396 3,080,858 96,377 113,368 58,400 33,300 57,946 63,454 6,825 86,141 4,066,065 (1,759,550) (14,961) (128,678) (1,903,189) $ 2,162,876 We incurred total merger and integration related expenses of $115 million and $375 million for the years ended December 31, 2014 and 2013, respectively These amounts were expensed as incurred and are included in the Consolidated Statement of Operations in the items titled “Merger related expenses”, primarily consisting of severance, legal, and professional costs, and “Integration related expenses”, primarily consisting of temporary systems, staffing, and facilities costs The allocation of fair values of the assets acquired and liabilities assumed has not changed from the allocation reported in Item 8 Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements, Note 2 of our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 25, 2015 3. EARNINGS PER COMMON SHARE OF MAA Basic earnings per share is computed by dividing net income available to MAA common shareholders by the weighted average number of shares outstanding during the period All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common shareholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per share Both the unvested restricted shares and other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis with our diluted earnings per share being the more dilutive of the treasury stock or two-class methods Operating partnership units are included in F-27 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-28 OPERATOR ABIGAELS dilutive earnings per share calculations when they are dilutive to earnings per share For the years ended December 31, 2015, 2014, and 2013, MAA’s basic earnings per share is computed using the two-class method, and our diluted earnings per share is computed using the more dilutive of the treasury stock method or two-class method: (dollars and shares in thousands, except per share amounts) Shares Outstanding Weighted average common shares - basic                              Weighted average partnership units outstanding                         Effect of dilutive securities                                          Weighted average common shares - diluted                             Calculation of Earnings per Share - basic Income from continuing operations                                   Income from continuing operations attributable to noncontrolling interests     Income from continuing operations allocated to unvested restricted shares     Income from continuing operations available for common shareholders, adjusted                                   Income from discontinued operations                                 Income from discontinued operations attributable to noncontrolling interest                                          Income from discontinued operations allocated to unvested restricted shares                                               Income from discontinued operations available for common shareholders, adjusted                                           Weighted average common shares - basic                              Earnings per share - basic                                          Calculation of Earnings per Share - diluted Income from continuing operations                                   Income from continuing operations attributable to noncontrolling interests     Income from continuing operations allocated to unvested restricted shares    Income from continuing operations available for common shareholders, adjusted                                           Income from discontinued operations                                 Income from discontinued operations attributable to noncontrolling interest     Income from discontinued operations allocated to unvested restricted shares     Income from discontinued operations available for common Years ended December 31, 2014 2015 2013 75,176 —(1) —(2) 75,176 74,982 —(1) —(2) 74,982 50,677 2,351 88 53,116 $ 350,745 (18,458) (772) $ 150,946 (8,013) (278) $37,692 (1,154) (34) $ 331,515 — $ $ 142,655 5,331 $ $36,504 $81,587 — — (284) (2,845) (10) (73) $ $ — 75,176 441 $ $ 5,037 74,982 197 $78,669 50,677 227 $ $ 350,745 $ 150,946 (18,458)(1) (772)(2) (8,013)(1) (278)(2) $37,692 — — $ 331,515 — $ —(1) —(2) $ 142,655 5,331 $ (284)(1) (10)(2) $37,692 $81,587 — — shareholders, adjusted                                           Weighted average common shares - diluted                             Earnings per share - diluted                                         $ $ — 75,176 441 $ $ 5,037 74,982 197 $81,587 53,116 225 $ (1) For both the years ended December 31, 2015 and 2014, 42 million OP units and their related income are not included in the diluted earnings per share calculations as they are not dilutive (2) For both the years ended December 31, 2015 and 2014, 01 million potentially dilutive securities and their related income are not included in the diluted earnings per share calculation as they are not dilutive 4. EARNINGS PER OP UNIT OF MAALP Basic earnings per OP Unit is computed by dividing net income available for common unitholders by the weighted average number of units outstanding during the period All outstanding unvested restricted unit awards contain rights to non-forfeitable distributions and participate in undistributed earnings with common unitholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per OP unit Diluted earnings per OP Unit reflects the potential dilution that could occur if securities or other contracts to issue OP Units were exercised or converted into OP Units F-28 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-29 OPERATOR ABIGAELS A reconciliation of the numerators and denominators of the basic and diluted earnings per OP unit computations for the years ended December 31, 2015, 2014, and 2013 is presented below: (dollars and units in thousands, except per unit amounts) Units Outstanding Weighted average common units - basic                               Effect of dilutive securities                                          Weighted average common units - diluted                              Years ended December 31, 2014 2015 2013 79,361 —(1) 79,361 79,188 —(1) 79,188 53,075 88 53,163 Calculation of Earnings per Unit - basic Income from continuing operations                                   $350,745 (772) Income from continuing operations allocated to unvested restricted shares    Income from continuing operations available for common $150,946 (278) $37,692 (33) unitholders, adjusted                                            $349,973 $150,668 $37,659 Income from discontinued operations                                 $ Income from discontinued operations allocated to unvested — $ 5,331 $69,852 restricted shares                                               — (10) (62) Income from discontinued operations available for common unitholders, adjusted                                            $ — $ 5,321 $69,790 Weighted average common units - basic                               Earnings per unit - basic:                                           $ 79,361 441 79,188 197 $ 53,075 202 $ Calculation of Earnings per Unit - diluted Income from continuing operations                                   $350,745 Income from continuing operations allocated to unvested restricted shares    Income from continuing operations available for common (772)(1) $150,946 (278)(1) $37,692 — unitholders, adjusted                                            $349,973 $150,668 $37,692 Income from discontinued operations                                 $ Income from discontinued operations allocated to unvested — $ 5,331 $69,852 restricted shares                                               —(1) (10)(1) — Income from discontinued operations available for common unitholders, adjusted                                            $ — $ 5,321 $69,852 Weighted average common units - diluted                              Earnings per unit - diluted:                                         $ 79,361 441 79,188 197 $ 53,163 202 $ (1) For both the years ended December 31, 2015 and 2014, 01 million potentially dilutive securities and their related income are not included in the diluted earnings per unit calculations as they are not dilutive 5. STOCK BASED COMPENSATION Overview MAA accounts for its stock based employee compensation plans in accordance with accounting standards governing stock based compensation These standards require an entity to measure the cost of employee services received in exchange for an award of an equity instrument based on the award’s fair value on the grant date and recognize the cost over the period during which the employee is required to provide service in exchange for the award, which is generally the vesting period Any liability awards issued are remeasured at each reporting period F-29 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-30 OPERATOR ABIGAELS MAA’s stock compensation plans consist of an employee stock purchase plan and a number of incentives provided to attract and retain independent directors, executive officers and key employees Incentives are currently granted under the 2013 Stock Incentive Plan, as amended, which was originally approved at the September 27, 2013 annual meeting of MAA shareholders The 2013 Stock Incentive Plan replaced the 2004 Stock Plan which had replaced the 1994 Restricted Stock and Stock Option Plan (collectively, the “Plans”) under which no further awards may be granted as of October 31, 2013 The 1994 Restricted Stock and Stock Option Plan allowed for the grant of restricted stock and stock options up to a total of 24 million shares The 2004 Stock Plan allowed for the grant of restricted stock and stock options up to a total of 500,000 shares The 2013 Stock Incentive Plan allows for the grant of restricted stock and stock options up to 625,000 shares MAA believes that such awards better align the interests of its employees with those of its shareholders Compensation expense is generally recognized for service based restricted stock awards using the straight-line method over the vesting period of the shares regardless of cliff or ratable vesting distinctions Compensation expense for market and performance based restricted stock awards is generally recognized using the accelerated amortization method with each vesting tranche valued as a separate award, with a separate vesting date, consistent with the estimated value of the award at each period end Additionally, we adjust compensation expense for estimated and actual forfeitures for all awards Compensation expense for stock options is generally recognized on a straight-line basis over the requisite service period MAA presents stock compensation expense in the Consolidated Statements of Operations on the line labeled “General and administrative expenses” Total compensation costs under the Plans were approximately $69 million, $52 million and $27 million for the years ended December 31, 2015, 2014, and 2013, respectively Of these amounts, total compensation costs capitalized under the Plans were approximately $735,000, $431,000, and $17,000 for the years ended December 31, 2015, 2014, and 2013, respectively As of December 31, 2015, the total unrecognized compensation cost related to the Plans was approximately $110 million This cost is expected to be recognized over the remaining weighted average period of 12 years Total cash paid for the settlement of plan shares totaled $10 million, $06 million, and $04 million for the years ended December 31, 2015, 2014, and 2013, respectively Information concerning grants under the Plans is listed below Restricted Stock In general, restricted stock is earned based on either a service condition, performance condition, or market condition, or a combination thereof, and vests ratably over a period from 1 year to 5 years Service based awards are earned when the employee remains employed over the requisite service period and are valued on the grant date based upon the market price of MAA common stock on the date of grant Market based awards are earned when MAA reaches a specified stock price or specified return on the stock price (price appreciation plus dividends) and are valued on the grant date using a Monte Carlo simulation Performance based awards are earned when MAA reaches certain operational goals such as FFO targets and are valued based upon the market price of MAA common stock on the date of grant as well as the probability of reaching the stated targets MAA remeasures the fair value of the performance based awards each balance sheet date with adjustments made on a cumulative basis until the award is settled and the final compensation is known The weighted average grant date fair value per share of restricted stock awards granted during the years ended December 31, 2015, 2014, and 2013, was $6835, $6240, and $6430, respectively The following is a summary of the key assumptions used in the valuation calculations for market based awards granted during the years ended December 31, 2015, 2014, and 2013: Risk free rate - minimum                                           Risk free rate - maximum                                           Dividend yield                                                    Volatility - minimum                                              Volatility - maximum                                              Service period                                                    2015 010% 105% 3932% 1541% 1604% 2014 002% 080% 4755% 1831% 2048% 2013 007% 017% 4269% 1640% 2092% 3 years 3 years 4 years F-30 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-31 OPERATOR ABIGAELS The risk free rate was based on a zero coupon risk-free rate The minimum risk free rate was based on a period of 025 years for the years ended December 31, 2015, 2014, and 2013 The maximum risk free rate was based on a period of 3 years, 3 years, and 1 year for the years ended December 31, 2015, 2014, and 2013, respectively The dividend yield was based on the closing stock price of MAA stock on the date of grant Volatility for MAA was obtained by using a blend of both historical and implied volatility calculations Historical volatility was based on the standard deviation of daily total continuous returns, and implied volatility was based on the trailing month average of daily implied volatilities interpolating between the volatilities implied by stock call option contracts that were closest to the terms shown and closest to the money The minimum volatility was based on a period of 1 year for the years ended December 31, 2015, 2014, and 2013 The maximum volatility was based on a period of 2 years, 3 years, and 2 years for the years ended December 31, 2015, 2014, and 2013, respectively The requisite service period is based on the criteria for the separate programs according to the vesting schedule Turnover is based on the historical experience for the key managers and executive officers, and is used in estimating forfeitures A summary of the status of the nonvested restricted shares as of December 31, 2015, and the changes for the year ended December 31, 2015, is presented below: Nonvested Shares Nonvested at January 1, 2015                                                    Issued                                                                      Vested                                                                      Forfeited                                                                    Nonvested at December 31, 2015                                                 Shares 145,049 93,356 (49,156) (1,308) 187,941 Weighted Average Grant-Date Fair Value $6325 7254 5808 6588 $6336 The total fair value of shares vesting during the years ended December 31, 2015, 2014, and 2013 was approximately $29 million, $27 million, and $16 million, respectively Stock Options In general, stock options are earned when the employee remains employed over the requisite service period and vest ratably over a period from 03 years to 23 years Stock options exercised result in new common shares being issued on the open market by the Company The fair value of stock option awards is determined using the Black-Scholes valuation model The weighted average grant date fair value of stock option awards granted during the year ended December 31, 2013 was $1177 per option No stock options were granted during the years ended December 31, 2015 and 2014 The following is a summary of the key assumptions used in the Black-Scholes valuation calculations for stock options granted during the year ended December 31, 2013: Term - minimum                                                                     Term - maximum                                                                    Risk free rate - minimum                                                              Risk free rate - maximum                                                              Dividend yield                                                                       Volatility - minimum                                                                 Volatility - maximum                                                                 2013 025 years 550 years 002% 155% 421% 1560% 4629% The term represents an estimate of the period of time options are expected to remain outstanding The US Treasury bill rate, which approximated the expected life of the option, was used to represent the risk-free rate The current dividend yield at the time of grant was used to estimate the dividend yield over the life of the option Volatility is based on the actual changes in the market value of MAA’s stock and is calculated using daily market value changes from the date of grant over a past period equal to the expected life of the stock options Turnover is based on the historical rate at which options are exercised, and is used in estimating forfeitures F-31 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-32 OPERATOR ABIGAELS A summary of the status of the stock options as of December 31, 2015 and the changes for the year ended December 31, 2015 is presented below: Stock Options Outstanding at January 1, 2015                                                Granted                                                                   Exercised                                                                  Expired                                                                   Outstanding at December 31, 2015                                              Options 74,454 — (7,342) (9,000) 58,112 Weighted Average Exercise Price $8233 — 5723 7687 $8621 All 58,112 options outstanding at December 31, 2015 were exercisable with a weighted average exercise price of $8621, an intrinsic value of $835,000, and a weighted average remaining term of 17 years The intrinsic value of options exercised during the year ended December 31, 2015 was $02 million Cash received from the exercise of stock options for the years ended December 31, 2015, 2014, and 2013 was $04 million, $122 million, and $62 million, respectively 6. BORROWINGS The weighted average interest rate at December 31, 2015 for the $343 billion of debt outstanding was 37%, compared to the weighted average interest rate of 37% on $351 billion of debt outstanding at December 31, 2014 Our debt consists of an unsecured credit facility, unsecured term loans, senior unsecured notes, a secured credit facility with Fannie Mae, and secured property mortgages We utilize fixed rate borrowings, interest rate swaps, and interest rate caps to manage our current and future interest rate risk More details on our borrowings can be found in the schedules presented later in this section At December 31, 2015, the Company had $650 million (after considering the impact of interest rate swap and cap agreements in effect) of conventional, secured variable rate debt outstanding at an average interest rate of 08%, $1250 million of capped conventional, secured variable rate debt at an average interest rate of 08% The interest rate on all other secured debt, totaling $11 billion, was hedged or fixed at an average interest rate of 40% Additionally, the Company had $21 billion of senior unsecured notes and term loans fixed at an average interest rate of 39% and a $750 million variable rate credit facility with an average interest rate of 12% with $75 million borrowed at December 31, 2015 Unsecured Credit Facility We also maintain a $7500 million unsecured credit facility with fourteen banks led by KeyBank National Association, or the KeyBank Facility The KeyBank Facility includes an expansion option up to $15 billion The KeyBank Facility bears an interest rate of LIBOR plus a spread of 085% to 155% based on an investment grade pricing grid and is currently bearing interest at 123% This credit line expires in April 2020 with an option to extend for an additional six months At December 31, 2015, we had $7467 million available to be borrowed under the Key Bank Line agreement with $750 million actually borrowed under this facility Approximately $33 million of the facility is used to support letters of credit Commitment fees related to this facility totaled $11 million for the year ended December 31, 2015 Unsecured Term Loans We also maintain three term loans with a syndicate of banks, led by KeyBank, Wells Fargo, and US Bank, respectively The KeyBank term loan has a balance of $150 million, matures in 2021, and has a variable interest rate of LIBOR plus a spread of 090% to 175% based on our credit ratings The Wells Fargo term loan has a balance of $250 million and matures in 2018 The US Bank term loan has a balance of $150 million and matures in 2020 Both the Wells Fargo and US Bank term loans have variable interest rates of LIBOR plus a spread of 090% to 190% based on our credit ratings Senior Unsecured Notes As of December 31, 2015, we had approximately $12 billion of publicly issued bonds and $3100 million of private placement notes These senior unsecured notes are longer term in nature and usually mature within five to twelve years F-32 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-33 OPERATOR ABIGAELS On November 2, 2015, the Operating Partnership issued $400 million in aggregate principal amount of notes, maturing on November 15, 2025 with an interest rate of 400% per annum, or the 2025 Notes The purchase price paid by the initial purchasers was 9899% of the principal amount The 2025 Notes are general unsecured senior obligations of the Operating Partnership and rank equally in right of payment with all other senior unsecured indebtedness of the Operating Partnership Interest on the 2025 Notes is payable on May 15 and November 15 of each year, beginning on May 15, 2016 The net proceeds from the offering after deducting the original issue discount of approximately $40 million and underwriting commissions and expenses of approximately $26 million were approximately $3934 million The 2025 Notes have been reflected net of discount and debt issuance costs in the Consolidated Balance Sheet In connection with the bond transaction, we cash settled $200 million in forward interest rate swap agreements, entered earlier in the year to effectively lock the interest rate on the planned transaction, which produced an effective interest rate of 417% over the ten year life of the bonds The Indentures under which certain public notes were issued, including the 2025 Notes, contain certain covenants that, among other things, limit the ability of MAALP and its subsidiaries to incur secured and unsecured indebtedness if not in pro forma compliance with the following negative covenants: (1) total leverage not to exceed 60% of adjusted total assets; (2) secured leverage not to exceed 40% of adjusted total assets; and (3) a fixed charge coverage ratio of at least 150 to 1 In addition, MAALP is required to maintain at all times unencumbered consolidated total assets of not less than 150% of the aggregate principal amount of its outstanding unsecured debt At December 31, 2015, MAALP was in compliance with each of these financial covenants Secured Credit Facility We maintain a $2400 million secured credit facility with Prudential Mortgage Capital, which is credit enhanced by Fannie Mae, or Fannie Mae Facility The Fannie Mae Facility provides for both fixed and variable rate borrowings and have Fannie Mae rate tranches with maturities from 2016 through 2018 The interest rate on the majority of the variable portion renews every 90 days and is based on the FNMA discount mortgage backed security rate on the date of renewal, which, for the Company, has historically approximated three-month LIBOR less an average of 017% over the life of the Fannie Mae Facility, plus a fee of 062% Borrowings under the Fannie Mae Facility totaled $2400 million at December 31, 2015, consisting of $500 million under a fixed portion at a rate of 47%, and the remaining $1900 million under the variable rate portion of the facility at an average rate of 08% The available borrowing capacity at December 31, 2015, was $2400 million Commitment fees related to our unused Fannie Mae Facility totaled $01 million for the year ended December 31, 2015 The Company has also entered into 5 interest rate caps totaling a notional amount of $1250 million which are designed to cap a portion of the Fannie Mae Facility These interest rate caps have maturities between 2016 and 2018 with four set at 45% and one set at 50% The Fannie Mae Facility is subject to certain borrowing base calculations that can effectively reduce the amount that may be borrowed Secured Property Mortgages At December 31, 2015, the Company had $10 billion of fixed rate conventional property mortgages with an average interest rate of 39% and an average maturity in 2019 On January 30, 2015, we paid off a $152 million mortgage associated with the Farmington Village apartment community We recorded a $02 million loss on debt extinguishment due to paying off the mortgage prior to maturity On June 1, 2015, we paid off a $255 million mortgage associated with the Colonial Grand at Wilmington apartment community The payoff was a scheduled maturity of the loan On June 15, 2015, we paid off a $101 million mortgage associated with the Reserve at Woodwind Lakes apartment community The payoff was a scheduled maturity of the loan On September 1, 2015, we paid off a $116 million mortgage associated with the Colonial Village at Timber Crest apartment community The payoff was a scheduled maturity of the loan On September 30, 2015, we paid off a $235 million mortgage associated with the Sanctuary at Oglethorpe apartment community The payoff was a scheduled maturity of the loan In addition to these payoffs, we have paid $82 million associated with property mortgage principal amortizations for the year ended December 31, 2015 F-33 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-34 OPERATOR ABIGAELS Guarantees MAA fully and unconditionally guarantees the following debt incurred by the Operating Partnership: • $2400 million of the Fannie Mae Facility, of which $2400 million has been borrowed as of December 31, 2015; and • $3100 million of senior unsecured notes, all of which has been borrowed as of December 31, 2015 Total Outstanding Debt The following table summarizes the Company’s indebtedness at December 31, 2015, (dollars in thousands): Borrowed Balance Effective Rate Contract Maturity Fixed Rate Secured Debt Individual property mortgages                                 Fannie Mae conventional credit facilities                      Total fixed rate secured debt                                 $1,012,862 50,000 1,062,862 39% 47% 3.9% 7/12/2019 3/31/2017 6/2/2019 Variable Rate Secured Debt(1) Fannie Mae conventional credit facilities                            Total variable rate secured debt                                 190,000 190,000 08% 0.8% 8/26/2017 8/26/2017 Fair market value adjustments and debt issuance costs                 Total Secured Debt                                            33,374 $1,286,236 Unsecured Debt Variable rate credit facility                                       Term loan fixed with swaps                                      Fixed rate bonds                                               Fair market value adjustments, debt issuance costs and discounts        Total Unsecured Debt                                          75,000 550,000 1,535,246 (18,914) $2,141,332 3.5% 12% 31% 42% 3.8% 3/13/2019 2/25/2019 4/15/2020 11/10/2017 9/16/2023 7/2/2025 1/26/2022 Total Outstanding Debt                                        $3,427,568 3.7% 12/22/2020 (1) Includes capped balances F-34 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-35 OPERATOR ABIGAELS The following table summarizes interest rate ranges, maturity and balance of our indebtedness, net of fair market value adjustments, debt issuance costs and discounts, at December 31, 2015 and the balance of our indebtedness, net of fair market value adjustments, debt issuance costs and discounts, at December 31, 2014 (dollars in millions): At December 31, 2015 Current Average Interest Rate Maturity Actual Interest Rates Fixed Rate: Secured                              Unsecured                            Interest rate swaps                      397% 2016-2025 177 - 621% 2016-2025 315 - 605% 421% 2017-2018 245 - 663% 419% Variable Rate:(1) Secured                              Secured interest rate caps                Unsecured                            080% 080% 123% 082% 082% 123% 2017 2017 2020 Fair market value adjustments, debt issuance costs and discounts                     Balance at December 31, 2014 $1,1295 1,3202 6250 $3,0747 835 2554 590 $ 3979 Balance $1,0629 1,5352 5500 $3,1481 650 1250 750 $ 2650 145 $ $3,4276 401 $ $3,5127 (1) Amounts are adjusted to reflect interest rate swap and cap agreements in effect at December 31, 2015, and 2014, respectively, which results in the Company paying fixed interest payments over the terms of the interest rate swaps and on changes in interest rates above the strike rate of the cap Rates and maturities for capped balances are for the underlying debt, unless the strike rate has been reached The following table includes scheduled principal repayments on the borrowings at December 31, 2015, as well as the amortization of the fair market value of debt assumed along with debt discounts and issuance costs (dollars in thousands): Year 2016                                                       2017                                                       2018                                                       2019                                                       2020                                                       Thereafter                                                  Amortization $18,989 17,157 14,663 7,044 3,361 (1,004) $60,210 Maturities $ 188,824 156,170 465,429 539,474 377,456 1,640,005 $3,367,358 Total $ 207,813 173,327 480,092 546,518 380,817 1,639,001 $3,427,568 7. DERIVATIVES AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives We are exposed to certain risks arising from both business operations and economic conditions We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities We manage economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of our debt funding and the use of derivative financial instruments Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future contractual and forecasted cash amounts, principally related to the our borrowings, the value of which are determined by changing interest rates, related cash flows and other factors F-35 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-36 OPERATOR ABIGAELS Cash Flow Hedges of Interest Rate Risk Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements To accomplish this objective, we use interest rate swaps and interest rate caps as part of our interest rate risk management strategy Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings During the years ended December 31, 2015, 2014 and 2013, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt and forecasted issuances of fixed-rate debt The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings During the years ended December 31, 2015, 2014 and 2013, we recorded ineffectiveness of $100,000 (increase to interest expense), $157,000 (increase to interest expense) and $37,000 (decrease to interest expense), respectively, mainly attributable to a mismatch in the underlying indices of the derivatives and the hedged interest payments made on our variable-rate debt and due to the designation of acquired interest rate swaps with a non-zero fair value at inception Amounts reported in “Accumulated other comprehensive income” related to derivatives designated as qualifying cash flow hedges will be reclassified to Interest expense as interest payments are made on our variable-rate or fixed- rate debt During the next twelve months, we estimate that an additional $31 million will be reclassified to earnings as an increase to Interest expense, which primarily represents the difference between our fixed interest rate swap payments and the projected variable interest rate swap payments As of December 31, 2015, we had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: Interest Rate Derivative Interest Rate Caps                                                Interest Rate Swaps                                              Number of Instruments 5 7 Notional $125,000,000 $550,000,000 The fair value of our interest rate derivatives designated as hedging instruments at December 31, 2015 included $6,000 of asset derivatives reported in Other assets and $10,358,000 of liability derivatives reported in the Fair market value of interest rate swaps in the Consolidated Balance Sheet The fair value of our interest rate derivatives designated as hedging instruments at December 31, 2014 included $72,000 of asset derivatives reported in Other Assets and $13,392,000 of liability derivatives reported in Fair market value of interest rate swaps in the Consolidated Balance Sheet As of December 31, 2014, we also reported a fair value of $6,000 in interest rate derivatives recorded in Other assets related to derivatives not designated as hedging instruments F-36 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-37 OPERATOR ABIGAELS Tabular Disclosure of the Effect of Derivative Instruments on the Statement of Operations The tables below present the effect of our derivative financial instruments on the Consolidated Statement of Operations for the years ended December 31, 2015, 2014 and 2013, respectively (dollars in thousands): Derivatives in Cash Flow Hedging Relationships 2013 Years ended December 31, Interest rate contracts      $(8,306) $ (12,335) $10,684 Interest expense $(7,064) $ (11,785) $ (16,370) Total derivatives in 2015 Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) 2013 2014 2015 Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) 2014 Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Location of Gain or (Loss Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) 2014 Interest expense $(100) $(157) 2013 $37 2015 cash flow hedging relationships         $(8,306) $ (12,335) $10,684 $(7,064) $ (11,785) $ (16,370) $(100) $(157) $37 Derivatives Not Designated as Hedging Instruments For the year ended December 31, Interest rate products                     Total                                  Location of Gain or (Loss) Recognized in Income on Derivative Interest income/(expense) Amount of Gain or (Loss) Recognized in Income on Derivative 2014 $(146) $(146) 2013 $(16) $(16) 2015 $(3) $(3) Credit-risk-related Contingent Features As of December 31, 2015, derivatives that were in a net liability position and subject to credit-risk-related contingent features had a termination value of $112 million, which includes accrued interest but excludes any adjustment for nonperformance risk These derivatives had a fair value, gross of asset positions, of $104 million at December 31, 2015 Certain of our derivative contracts contain a provision where we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on the indebtedness As of December 31, 2015, we had not breached the provisions of these agreements If we had breached these provisions, we could have been required to settle our obligations under the agreements at the termination value of $112 million Although our derivative contracts are subject to master netting arrangements, which serve as credit mitigants to both us and our counterparties under certain situations, we do not net our derivative fair values or any existing rights or obligations to cash collateral on the consolidated Balance Sheet We did not have any asset or liability derivative balances that were offsetting that would have resulted in reported net derivative balances differing from the recorded gross amount of derivative assets of $6,000 and $78,000 as of December 31, 2015 and 2014, respectively, in addition to gross recorded derivative liabilities of $10,358,000 and $13,392,000 as of December 31, 2015 and 2014, respectively F-37 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-38 OPERATOR ABIGAELS Other Comprehensive Income MAA’s other comprehensive income consists entirely of gains and losses attributable to the effective portion of our cash flow hedges The chart below shows the change in the balance for the years ended December 31, 2015, 2014, and 2013: Changes in Accumulated Other Comprehensive Income (Loss) by Component For the year ended December 31, Beginning balance                               Other comprehensive (loss) income before reclassifications                            Affected Line Item in the Consolidated Statements Of Operations Amounts reclassified from accumulated other comprehensive income (interest rate contracts)   Interest (income)/expense Net current-period other comprehensive loss (income) attributable to noncontrolling interest   Net current-period other comprehensive (loss) income attributable to MAA                           Ending balance                                  Gains and Losses on Cash Flow Hedges 2014 2013 2015 $ (412) $ 108 $(26,054) (8,306) (12,335) 10,684 7,064 11,785 16,370 65 30 (892) (1,177) $ (1,589) $ (520) (412) $ 26,162 108 See also discussions in Note 8 (Fair Value Disclosure of Financial Instruments) below 8. FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS Cash and cash equivalents, restricted cash, accounts payable, accrued expenses and other liabilities and security deposits are carried at amounts that reasonably approximate their fair value due to their short term nature We apply FASB ASC, 820 Fair Value Measurements and Disclosures, or ASC 820 ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy) Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability Fixed rate notes payable at December 31, 2015 and December 31, 2014, totaled $261 billion and $250 billion, respectively, and had estimated fair values of $271 billion and $254 billion (excluding prepayment penalties), respectively, as of December 31, 2015 and December 31, 2014 The carrying value of variable rate notes payable (excluding the effect of interest rate swap and cap agreements) at December 31, 2015 and December 31, 2014, totaled $082 billion and $102 billion, respectively, and had estimated fair values of $082 billion and $097 billion (excluding prepayment penalties), respectively, based upon observable interest rates available for the issuance of debt with similar terms and F-38 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-39 OPERATOR ABIGAELS remaining maturities as of December 31, 2015 and December 31, 2014 The valuation of our debt is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each debt instrument This analysis reflects the contractual terms of the debt, and uses observable market-based inputs, including interest rate curves and credit spreads The fair values of fixed debt are determined by using the present value of future cash outflows discounted with the applicable current market rate plus a credit spread The fair values of variable debt are determined using the stated variable rate plus the current market credit spread Our variable rates reset every 30 to 90 days and we conclude that these rates reasonably estimate current market rates We have determined that inputs used to value our debt fall within Level 2 of the fair value hierarchy and therefore our fair market valuation of debt is considered Level 2 in the fair value hierarchy Currently, we use interest rate swaps and interest rate caps (options) to manage our interest rate risk The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts) The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves The fair values of interest rate options are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps The variable interest rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities To comply with the provisions of ASC 820, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees In conjunction with the FASB’s fair value measurement guidance, we made an accounting policy election to measure the credit risk of our derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio We have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, and as a result, all of our derivatives held as of December 31, 2015 and December 31, 2014 were classified as Level 2 of the fair value hierarchy The table below presents our assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 and December 31, 2014, aggregated by the level in the fair value hierarchy within which those measurements fall Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2015 (dollars in thousands) Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Assets Derivative financial instruments              Liabilities Derivative financial instruments              $ — $ — Significant Other Observable Inputs (Level 2) $ 6 $10,358 Significant Unobservable Inputs (Level 3) Balance at December 31, 2015 $ — $ — $ 6 $10,358 F-39 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-40 OPERATOR ABIGAELS Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2014 (dollars in thousands) Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Assets Derivative financial instruments              Liabilities Derivative financial instruments              $ — $ — Significant Other Observable Inputs (Level 2) $ 78 $13,392 Significant Unobservable Inputs (Level 3) Balance at December 31, 2014 $ — $ — $ 78 $13,392 The fair value estimates presented herein are based on information available to management as of December 31, 2015 and December 31, 2014 These estimates are not necessarily indicative of the amounts we could ultimately realize See also Note 7 (Derivatives and Hedging Activities) 9. INCOME TAXES For income tax purposes, dividends paid to holders of common stock primarily consist of ordinary income, return of capital, capital gains, qualified dividends and un-recaptured Section 1250 gains, or a combination thereof For the years ended December 31, 2015, 2014 and 2013, dividends per share held for the entire year were estimated to be taxable as follows: Ordinary income                      Capital gains                         Return of capital                      Un-recaptured Section 1250 gain         2015 2014 2013 Amount $307 — — 001 $308 Percentage 997% —% —% 03% 10000% Amount $276 — 016 — $292 Percentage 9441% —% 559% —% 10000% Amount $236 017 — 025 $278 Percentage 849% 623% —% 887% 10000% We designated the per share amounts above as capital gain dividends in accordance with the requirements of the Code The difference between net income available to common shareholders for financial reporting purposes and taxable income before dividend deductions relates primarily to temporary differences such as depreciation and amortization, and deferral of gains on sold properties utilizing like kind exchanges under Internal Revenue Code, or IRC, section 1031 Merger and Restructuring As discussed in Note 2 (Business Combinations), on October 1, 2013, we completed our merger with Colonial and Colonial LP Pursuant to the merger agreement, OP Merger Sub merged with and into Colonial LP, with Colonial LP being the surviving entity of the merger and becoming a wholly-owned indirect subsidiary of MAALP We believe that this transaction constitutes a tax free merger under Code section 708 Immediately thereafter, MAA and Colonial combined through a merger of Colonial with and into MAA, with MAA surviving the merger We believe that this merger constitutes a tax free merger under Code section 368(a) As a result of the tax free merger treatment, the merger transactions did not result in the recognition of a gain to any security holder of MAA, Colonial, MAALP, or Colonial LP On October 1, 2013, MAA re-identified hedging transactions for federal income tax purposes according to Reg §11221-2(f) and all relevant state income tax purposes that were previously held by Colonial This re-identification was made because the tax identity of Colonial changed by virtue of the merger into MAA There were four hedging transactions re-identified for tax purposes, including the $50 million interest rate swap with Wells Fargo Bank, NA (“Wells Fargo”) with a fixed interest rate of 2465%, the $200 million interest rate swap with Wells Fargo with a fixed interest rate of 2576%, the $50 million interest rate swap with Wells Fargo with a fixed interest rate of 1064%, and the $100 million interest rate swap with Wells Fargo with a fixed interest rate of 1133% F-40 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-41 OPERATOR ABIGAELS Taxable REIT subsidiaries We acquired the operations of a TRS, Colonial Properties Services, Inc, or CPSI, through the Merger As a result, CPSI’s tax attributes are now included in the MAA consolidated financial statements A TRS is an entity which is not entitled to a dividends paid deduction and is subject to Federal, state, and local income taxes Formerly, CPSI provided property development, construction, leasing and management services for joint venture and third-party owned properties and administrative services to MAA and engaged in for-sale development activity CPSI also owns and operates two multifamily apartment communities We generally reimburse CPSI for payroll and other costs incurred in providing services to us All inter-company transactions are eliminated in the accompanying consolidated financial statements We also hold certain undeveloped land through another TRS, MAA Copper Ridge, Inc During the years ended December 31, 2015, 2014, and 2013, our TRSs recognized no income tax expense/(benefit) CPSI uses the liability method of accounting for income taxes Deferred income tax assets and liabilities result from temporary differences Temporary differences are differences between tax bases of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future periods The net deferred tax assets of the Company, consisting of the net deferred tax assets of CPSI and the net-loss deferred tax asset acquired by MAA from Colonial, have been fully offset by a valuation allowance We record a valuation allowance against our net deferred tax assets when we determine that based on the weight of available evidence, it is more likely than not that our net deferred tax assets will not be realized We considered the four sources of taxable income that should be considered when determining whether a valuation allowance is required (from least to most subjective): • • taxable income in prior carryback years, if carryback is permitted under the tax law; future reversals of existing taxable temporary differences (ie, offset gross deferred tax assets against gross deferred tax liabilities); tax planning strategies; and • • For the years ended December 31, 2015 and 2014, the components of CPSI’s deferred income tax assets and future taxable income exclusive of reversing temporary differences and carryforwards December 31, 2015 December 31, 2014 $ 25,627 22 14,106 28,493 3,951 $ 72,199 (145) $ (145) $ $ 72,054 (72,054) $ 25,561 18 13,923 27,215 3,974 $ 70,691 (913) $ (913) $ $ 69,778 (69,778) — $ — $ liabilities were as follows (dollars in thousands): Deferred tax assets: Real estate asset basis differences                                         Deferred revenue                                                      Deferred expenses                                                     Net operating loss carryforward                                          Accrued liabilities                                                     Deferred tax liabilities: Real estate asset basis differences                                         Net deferred tax assets, before valuation allowance                              Valuation allowance                                                      Net deferred tax assets, included in other assets                                F-41 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-42 OPERATOR ABIGAELS For the years ended December 31, 2015, 2014 and 2013, the reconciliation of income tax attributable to continuing operations for the TRSs computed at the US statutory rate to the income tax provision was as follows (dollars in thousands): December 31, 2015 December 31, 2014 December 31, 2013 Tax expense/(benefit) at US statutory rates on TRS income subject to tax                                 Effect of permanent differences and other                        (Decrease) increase in valuation allowance                       TRS income tax provision                                    $ 2,506 (730) (1,776) $ 1,802 (1,110) (692) $ — $ — $(261) 1 260 $ — At December 31, 2015 and 2014, CPSI had net operating loss, or NOL carryforwards of approximately $660 million and $631 million, respectively, for income tax purposes that expire in years 2031 to 2034 Utilization of the Company’s NOL carryforwards is subject to an annual limitation due to ownership change limitations provided by Section 382 of the Code and similar state provisions The annual limitations may result in the expiration of NOL carryforwards before utilization CPSI generated approximately $03 million of taxable income before NOL carryforwards for the period ended December 31, 2015 We had no reserve for uncertain tax positions for the years ended December 31, 2015, 2014 and 2013 If necessary, the Company accrues interest and penalties on unrecognized tax benefits as a component of income tax expense For the years ended December 31, 2015, 2014, and 2013, other expenses include estimated state franchise and other taxes, including franchise taxes in North Carolina and Tennessee The income tax expense line item shown in the Consolidated Statement of Operations represents the Texas-based margin tax for all Texas properties As of December 31, 2015, MAA held NOL carryforwards of approximately $463 million for income tax purposes that expire in years 2019 to 2031 We may use these NOLs to offset all or a portion of the taxable income generated at the REIT level Tax years 2012 through 2015 are subject to examination by the Internal Revenue Service No tax examination is currently in process 10. SHAREHOLDERS’ EQUITY OF MAA On December 31, 2015, 75,408,571 shares of common stock of MAA and 4,162,996 partnership units in the Operating Partnership were issued and outstanding, representing a total of 79,571,567 shares and units At December 31, 2014, 75,267,675 shares of common stock of MAA and 4,191,152 partnership units in the Operating Partnership were outstanding, representing a total of 79,458,827 shares and units There were 58,112 outstanding options as of December 31, 2015 compared to 74,454 outstanding options as of December 31, 2014 During the year ended December 31, 2015, 11,914 shares of our common stock were acquired from employees to satisfy minimum tax withholding obligations that arose upon vesting of restricted stock granted pursuant to approved plans During the year ended December 31, 2014, 9,270 shares were acquired for these purposes Noncontrolling Interest Noncontrolling interest in the accompanying Consolidated Financial Statements relates to the limited partnership interest in the Operating Partnership owned by the holders of the Class A limited partner units of the Operating Partnership, or Class A Units MAA is the sole general partner of the Operating Partnership and holds all of the outstanding Class B general partner units of the Operating Partnership, or Class B Units Net income is allocated to MAA and the noncontrolling interest based on their respective ownership percentages of the Operating Partnership Issuance of additional Class A Units or Class B Units changes the ownership percentage of both the noncontrolling interest and MAA The issuance of Class B Units generally occurs when MAA issues common stock and the issuance proceeds are contributed to the Operating Partnership in exchange for Class B Units equal to the number of shares of common stock issued At each reporting period, the allocation between total MAA shareholders’ equity and Noncontrolling interest is adjusted to account for the change in the respective percentage ownership of the underlying equity of the Operating Partnership F-42 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-43 OPERATOR ABIGAELS MAA’s Board of Directors established economic rights in respect to each Class A Unit that were equivalent to the economic rights in respect to each share of MAA common stock The holders of Class A Units may redeem each of their units in exchange for one share of common stock in MAA or cash, at the option of MAA At December 31, 2015, a total of 4,162,996 Class A Units were outstanding and redeemable to MAA by the holders of the units for 4,162,996 shares of MAA common stock or approximately $3780 million, based on the closing price of MAA’s common stock on December 31, 2015 of $9081 per share, at MAA’s option At December 31, 2014, a total of 4,191,152 Class A Units were outstanding and redeemable to MAA by the holders of the units for 4,191,152 shares of MAA common stock or approximately $3130 million, based on the closing price of MAA’s common stock on December 31, 2014 of $7468 per share, at MAA’s option The Operating Partnership pays the same per unit distribution in respect to the Class A Units as the per share distribution MAA pays in respect to the common stock Operating Partnership net income for 2015, 2014 and 2013 was allocated approximately 52%, 53% and 46%, respectively, to holders of Class A Units and 948%, 947% and 954%, respectively, to MAA as the holder of all Class B Units Direct Stock Purchase and Distribution Reinvestment Plan MAA has a Dividend and Distribution Reinvestment and Share Purchase Plan, or DRSPP, pursuant to which MAA’s shareholders have the ability to reinvest all or part of their distributions from MAA’s stock and holders of Class A Units have the ability to reinvest all or part of their distributions from MAALP into MAA’s common stock The DRSPP also provides the opportunity to make optional cash investments in MAA’s common stock of at least $250, but not more than $5,000 in any given month, free of brokerage commissions and charges MAA, in its absolute discretion, may grant waivers to allow for optional cash payments in excess of $5,000 To fulfill its obligations under the DRSPP, MAA may either issue additional shares of common stock or repurchase common stock in the open market MAA has registered with the SEC the offer and sale of up to 9,600,000 shares of common stock pursuant to the DRSPP MAA may elect to sell shares under the DRSPP at up to a 5% discount Shares of common stock totaling 8,562 in 2015, 9,055 in 2014, and 10,924 in 2013 were acquired by shareholders under the DRSPP MAA did not offer a discount for optional cash purchases in 2015, 2014 or 2013 At the Market Offering On December 9, 2015, we entered into distribution agreements with JP Morgan Securities, LLC, BMO Capital Markets Corp and KeyBanc Capital Markets Inc to sell up to an aggregate of 40 million shares of common stock, from time-to-time in at-the-market offerings or negotiated transactions through controlled equity offering programs, or ATMs As of December 31, 2015, there were 40 million shares remaining under the ATM program During the years ended December 31, 2015 and 2014, MAA did not sell any shares of common stock under its ATMs As of December 31, 2015, there were 40 million shares available for issuance under MAA’s ATMs Stock Repurchase Plan In 1999, MAA’s Board of Directors approved a stock repurchase plan to acquire up to a total of 40 million shares of MAA’s common stock As of December 8, 2015, MAA had repurchased and retired approximately 19 million shares of common stock for a cost of approximately $420 million at an average price per common share of $2254 No shares were repurchased in 2002 through 2015 under the plan On December 8, 2015, MAA’s Board of Directors authorized us to repurchase up to 40 million shares of MAA common stock, which represented approximately 53% of MAA’s common stock outstanding at the time of such authorization This December 2015 authorization replaced and superseded the 1999 plan, under which approximately 21 million shares remained at the time of the December 2015 authorization No shares were repurchased from December 8, 2015 through December 31, 2015 under the current authorization Exercise of Stock Options During the years ended December 31, 2015, 2014, and 2013 we issued 7,342 shares, 270,459 shares, and 110,715 shares, respectively, related to the exercise of stock options These exercises resulted in proceeds of $04 million, $122 million, and $62 million respectively F-43 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-44 OPERATOR ABIGAELS 11. PARTNERS’ CAPITAL OF MAALP Operating Partnership Units Interests in MAALP are represented by Operating Partnership Units, or OP Units As of December 31, 2015, there were 79,571,567 OP Units outstanding, 75,408,571 or 948% of which were owned by MAA, MAALP’s general partner The remaining 4,162,996 OP Units were owned by non-affiliated limited partners, or Class A Limited Partners As of December 31, 2014, there were 79,458,827 OP Units outstanding, 75,267,675 or 947% of which were owned by MAA and 4,191,152 of which were owned by the Class A Limited Partners MAA, as the sole general partner of MAALP, has full, complete and exclusive discretion to manage and control the business of the Operating Partnership subject to the restrictions specifically contained within the Partnership Agreement Unless otherwise stated in the Partnership Agreement of MAALP, this power includes, but is not limited to, acquiring, leasing, or disposing of any real property; constructing buildings and making other improvements to properties owned; borrowing money, modifying or extinguishing current borrowings, issuing evidence of indebtedness, and securing such indebtedness by mortgage, deed of trust, pledge or other lien on the Operating Partnership’s assets; and distribution of Operating Partnership cash or other assets in accordance with the Partnership Agreement MAA can generally, at its sole discretion, issue and redeem OP Units and determine the consideration to be received or the redemption price to be paid, as applicable The general partner may delegate these and other powers granted if the general partner remains in supervision of the designee Under the Partnership Agreement, the Operating Partnership may issue Class A Units and Class B Units Class A Units may only be held by limited partners who are not affiliated with MAA, in its capacity as general partner of the Operating Partnership, while Class B Units may only be held by MAA, in its capacity as general partner of the Operating Partnership, and as of December 31, 2015, a total of 4,162,996 Class A Units in the Operating Partnership were held by limited partners unaffiliated with MAA, while a total of 75,408,571 Class B Units were held by MAA In general, the limited partners do not have the power to participate in the management or control of the Operating Partnership’s business except in limited circumstances including changes in the general partner and protective rights if the general partner acts outside of the provisions provided in the Partnership Agreement The transferability of Class A Units is also limited by the Partnership Agreement Net income is allocated to the general partner and limited partners based on their respective ownership percentages of the Operating Partnership Issuance or redemption of additional Class A Units or Class B Units changes the relative ownership percentage of the partners The issuance of Class B Units generally occurs when MAA issues common stock and the proceeds from that issuance are contributed to the Operating Partnership in exchange for the issuance to MAA of a number of OP Units equal to the number of shares of common stock issued Likewise, if MAA repurchases or redeems outstanding shares of common stock, the Operating Partnership generally redeems an equal number of Class B Units with similar terms held by MAA for a redemption price equal to the purchase price of those shares of common stock At each reporting period, the allocation between general partner capital and limited partner capital is adjusted to account for the change in the respective percentage ownership of the underlying capital of the Operating Partnership Holders of the Class A Units may require MAA to redeem their Class A Units, in which case MAA may, at its option, pay the redemption price either in cash (in an amount per Class A Unit equal, in general, to the average closing price of MAA’s common stock on the New York Stock Exchange over a specified period prior to the redemption date) or by delivering one share of MAA common stock (subject to adjustment under specified circumstances) for each Class A Unit so redeemed At December 31, 2015, a total of 4,162,996 Class A Units were outstanding and redeemable for 4,162,996 shares of MAA common stock, with an approximate value of $378,041,667, based on the closing price of MAA’s common stock on December 31, 2015 of $9081 per share At December 31, 2014, a total of 4,191,152 Class A Units were outstanding and redeemable for 4,191,152 shares of MAA common stock, with an approximate value of $312,995,231, based on the closing price of MAA’s common stock on December 31, 2014 of $7468 per share The Operating Partnership pays the same per unit distribution in respect to the OP Units as the per share dividend MAA pays in respect to its common and preferred stock F-44 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-45 OPERATOR ABIGAELS 12. EMPLOYEE BENEFIT PLANS Following are details of employee benefit plans not previously discussed in Note 5 (Stock Based Compensation) 401(k) Savings Plan MAA’s 401(k) Savings Plan, or 401(k) Plan, is a defined contribution plan that satisfies the requirements of Section 401(a) and 401(k) of the Code MAA’s Board of Directors has the discretion to approve matching contributions MAA’s contributions to this plan were approximately $10 million, $09 million and $07 million for the years ended December 31, 2015, 2014 and 2013, respectively Non-Qualified Deferred Compensation Retirement Plan MAA has adopted a non-qualified deferred compensation retirement plan for key employees who are not qualified for participation in MAA’s 401(k) Plan Under the terms of the plan, employees may elect to defer a percentage of their compensation and MAA may, but is not obligated to, match a portion of their salary deferral MAA’s match to this plan for the years ended December 31, 2015, 2014 and 2013 was approximately $106,000, $82,000 and $46,000, respectively Non-Qualified Deferred Compensation Plan for Outside Company Directors In 1998, MAA established the Non-Qualified Deferred Compensation Plan for Outside Company Directors, or the Directors Deferred Compensation Plan, which allows non-employee directors to defer their director fees by having the fees held by MAA as shares of MAA’s common stock Directors can also choose to have their annual restricted stock grants issued into the Directors Deferred Compensation Plan Amounts deferred through the Directors Deferred Compensation Plan are distributed to the directors in two annual installments beginning in the first 90 days of the year following the director’s departure from the board Participating directors may choose to have the amount issued to them in shares of MAA’s common stock or paid to them as cash at the market value of MAA’s common stock as of the end of the year the director ceases to serve on the board For the years ended December 31, 2015, 2014 and 2013, directors deferred 8,466 shares, 9,415 shares and 7,173 shares of common stock, respectively, with weighted-average grant date fair values of $7862, $7063 and $6677, respectively, into the Directors Deferred Compensation Plan The shares of common stock held in the Directors Deferred Compensation Plan are classified outside of permanent equity in redeemable stock with changes in redemption amount recorded immediately to retained earnings because the directors have redemption rights not solely within the control of MAA Additionally, any shares that become mandatorily redeemable because a departed director has elected to receive a cash payout are recorded as a liability MAA did not record a liability related to mandatorily redeemable shares for the years ended December 31, 2015, 2014 and 2013 Employee Stock Ownership Plan MAA’s Employee Stock Ownership Plan, or ESOP, is a non-contributory stock bonus plan that satisfies the requirements of Section 401(a) of the Code Each of our employees is eligible to participate in the ESOP after completing one year of service Participants’ ESOP accounts will be 100% vested after three years of continuous service, with no vesting prior to that time MAA contributed 22,500 shares of common stock to the ESOP upon conclusion of the initial offering The Company did not contribute to the ESOP during 2015, 2014 or 2013 As of December 31, 2015, there were 155,309 shares outstanding with a fair value of $141 million 13. LEGAL PROCEEDINGS We, along with multiple other parties, are named defendants in two lawsuits arising out of alleged construction deficiencies with respect to condominium units at Regatta at James Island in Charleston, South Carolina The Regatta at James Island property was developed and constructed by certain of Colonial’s subsidiaries prior to the Merger The condominiums were constructed in 2006 and all 212 units were sold The lawsuits, one filed on behalf of the condominium homeowners association and one filed by three of the unit owners (purportedly on behalf of all unit owners), were filed in South Carolina state court (Charleston County) in August 2012, against various parties involved in the development and construction of the Regatta at James Island property, including the contractors, subcontractors, architect, developer, and product manufacturers The plaintiffs are seeking damages resulting primarily from alleged F-45 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-46 OPERATOR ABIGAELS construction deficiencies, but the amount the plaintiffs seek to recover has not been disclosed The lawsuits are currently in discovery We are continuing to investigate the matter and evaluate our options and intend to vigorously defend ourself against these claims No assurance can be given that the matter will be resolved favorably to us We have included in our loss contingency an estimate of probable loss in connection with this matter, but currently cannot reasonably estimate any further possible loss, or any range of reasonably possible loss, in connection with this matter In addition, we are subject to various other legal proceedings and claims that arise in the ordinary course of its business operations Matters which arise out of allegations of bodily injury, property damage, and employment practices are generally covered by insurance While the resolution of these other matters cannot be predicted with certainty, management currently believes the final outcome of such matters will not have a material adverse effect on the financial position, results of operations or cash flows of the Company Loss Contingencies See discussion of our accounting for loss contingencies in Note 1 (Organization and Summary of Significant Accounting Polices) As of December 31, 2015 and December 31, 2014, the Company’s accrual for loss contingencies was $135 million and $123 million in the aggregate, respectively 14. RELATED PARTY TRANSACTIONS At various times throughout the years ended December 31, 2014 and 2013, the Company managed the operations of certain joint venture apartment communities for a fee of 400% to 425% of the revenues of the joint venture, pursuant to management contracts with the Company’s joint ventures The Company received $154,000 and $647,000 as management fees from the joint ventures for the years ended December 31, 2014 and 2013, respectively, as compared to none for the year ended December 31, 2015 The Company also received approximately $19,000 and $93,000 in asset management fees for the years ended December 31, 2014 and 2013, respectively, as compared to none for the year ended December 31, 2015 The Company had receivables from joint ventures totaling $15,000, and $1,800,000, as of December 31, 2014 and 2013, respectively, as compared to no receivables from joint ventures at December 31, 2015 In addition to management contracts with joint ventures, the Company also receives advertising fees from a related party insurance company, Colonial Insurance Agency These fees are received for allowing Colonial Insurance Agency to sell renter’s insurance at some of the Company’s multifamily properties This agreement expired during 2015 The Company received approximately $154,000, $300,000, and $70,000 as advertising revenue for the years ended December 31, 2015, 2014 and 2013, respectively All cash management of the Company is managed by the Operating Partnership In general, cash receipts are remitted to the Operating Partnership and all cash disbursements are funded by the Operating Partnership As a result of these transactions, the Operating Partnership had a payable to its General Partner (MAA) of $19,000 at each of the years ended December 31, 2015, 2014, and 2013 The Partnership Agreement does not require that this due to/due from be settled in cash until liquidation of the Operating Partnership and therefore there is no regular settlement schedule for these amounts 15. EARNINGS FROM DISCONTINUED OPERATIONS In April 2014, the FASB issued ASU No 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity We adopted ASU 2014-08 during the period ending March 31, 2014 Due to the early adoption of ASU 2014-08, we did not classify Brookwood Mall, Colonial Village at North Arlington, Colonial Village at Vista Ridge, Greenbrook, Colonial Village at Inverness, Colonial Village at Charleston Place, Colonial Village at Huntleigh Woods, Colonial Village at Ashford Place or Colonial Promenade Huntsville, which were sold during 2014, as discontinued operations We also did not classify Vistas, Austin Chase, Fairways at Hartland, Fountain Lake, Post House Jackson, Post House North, Woodwinds, Oaks, Woods of Post House, Bradford Pointe, Huntington Chase, Westbury Creek, Colony at South Park, Paddock Park, Anatole, Bradford Chase, Sutton Place, Southland Station, Colonial Promenade Craft Farms, Colonial Grand Wilmington, Savannah Creek, or Whisperwood, which were sold during 2015, as discontinued operations As part of the Merger on October 1, 2013, we acquired the Nord du Lac commercial property Starting on October 1, 2013, the criteria for classifying this property as held for sale were met and as a result the assets and liabilities for this property were presented as held for sale in the Condensed Consolidated Balance Sheets, and the results of operations F-46 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-47 OPERATOR ABIGAELS were included within discontinued operations in the Condensed Consolidated Statement of Operations for all periods presented through the period ended March 31, 2015 Additionally, we ceased recording depreciation and amortization following the held for sale designation On May 29, 2015, after several amendments to the original sale agreement extending the closing date, the buyer elected not to purchase the property and consequently, the Nord Du Lac property no longer met the criteria to be classified as held for sale as of June 30, 2015 Approximately $341 million of real estate assets that were classified as held for sale as of March 31, 2015 was reclassified to held for use as of June 30, 2015, and included in the applicable line items in the accompanying Consolidated Balance Sheets We also reclassified the balances in the Consolidated Balance Sheets as of December 31, 2014 We measured the property to be reclassified at the lower of (1) its carrying value before being classified as held for sale, adjusted for any depreciation and amortization expense that would have been recognized had the asset been continuously classified as held for use or (2) its fair value at the date of the subsequent decision not to sell As a result of this reclassification, we recorded an additional $23 million of depreciation and amortization expense during the three months ended June 30, 2015, which represents the depreciation and amortization expense on the Nord du Lac property that would have been recognized had the property been continuously classified as held for use Additionally, the related results of operations previously recorded in discontinued operations have been included in the applicable line items of continuing operations in the accompanying Consolidated Statements of Operations for all periods presented, and thus are not presented in discontinued operations in the tables below One of the ten properties that we sold during 2014, Willow Creek, as well as all nine properties sold during 2013 have been classified as discontinued operations in the accompanying Consolidated Statements of Operations Willow Creek is included in discontinued operations because it had been designated as held for sale and was shown in discontinued operations as of December 31, 2013, and thus was not subject to ASU 2014-08 As a result of the adoption of ASU No 2014-08, the Company did not report any discontinued operations for the year ended December 31, 2015 The following is a summary of income from continuing and discontinued operations attributable to MAA and noncontrolling interest for the years ended December 31, 2015, 2014 and 2013 (dollars in thousands): Income from continuing operations: Attributable to MAA                                              Attributable to noncontrolling interest                                Income from continuing operations                                  $332,287 18,458 $350,745 $142,933 8,013 $150,946 $36,539 1,153 $37,692 2015 2014 2013 Income from discontinued operations: Attributable to MAA                                              Attributable to noncontrolling interest                                Income from discontinued operations                                 $ $ — $ — — $ 5,047 284 5,331 $78,742 2,845 $81,587 The following is a summary of earnings from discontinued operations for MAA for the years ended December 31, 2014 and 2013 (dollars in thousands): Revenues: Rental revenues                                                             Other revenues                                                              Total revenues                                                              $ Expenses: Property operating expenses                                                   Depreciation and amortization                                                 Interest expense                                                             Total expenses                                                              Income from discontinued operations before gain on sale                               2014 2013 75 10 85 74 42 32 148 (63) $12,499 1,189 13,688 5,886 2,716 436 9,038 4,650 Net gain on insurance and other settlement proceeds on discontinued operations            Gain on sale of discontinued operations                                             Income from discontinued operations                                              — 5,394 $5,331 93 76,844 $81,587 F-47 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-48 OPERATOR ABIGAELS The following is a summary of earnings from discontinued operations for MAALP for the years ended December 31, 2014 and 2013 (dollars in thousands): Revenues: Rental revenues                                                             Other revenues                                                              Total revenues                                                              $ Expenses: Property operating expenses                                                   Depreciation and amortization                                                 Interest expense                                                             Total expenses                                                              Income from discontinued operations before gain on sale                               2014 2013 75 10 85 74 42 32 148 (63) $ 11,446 1,099 12,545 5,390 2,480 436 8,306 4,239 Net gain on insurance and other settlement proceeds on discontinued operations            Gain on sale of discontinued operations                                             Income from discontinued operations                                              — 5,394 $5,331 93 65,520 $69,852 16. SEGMENT INFORMATION As of December 31, 2015, we owned or had an ownership interest in 254 multifamily apartment communities in 15 different states from which we derived all significant sources of earnings and operating cash flows Senior management evaluates performance and determines resource allocations of each of our apartment communities on a Large Market Same Store, Secondary Market Same Store, and Non-Same Store and Other basis, as well as an individual apartment community basis This is consistent with the aggregation criteria under GAAP as each of our apartment communities generally has similar economic characteristics, facilities, services, and tenants The following are the three reportable operating segments for MAA and the Operating Partnership: • • Large market same store communities are generally communities in markets with a population of at least 1 million and at least 1% of the total public multifamily REIT units that we have owned and have been stabilized for at least a full 12 months Secondary market same store communities are generally communities in markets with populations of more than 1 million but less than 1% of the total public multifamily REIT units or markets with populations of less than 1 million that we have owned and have been stabilized for at least a full 12 months • Non same store communities and other includes recent acquisitions, communities in development or lease-up, communities that have been identified for disposition, and communities that have undergone a significant casualty loss Also included in non same store communities are non multifamily activities which represent less than 1% of our portfolio On the first day of each calendar year, we determine the composition of our same store operating segments for that year as well as adjusting the previous year, which allows us to evaluate full period-over-period operating comparisons Properties in development or lease-up will be added to the same store portfolio on the first day of the calendar year after they have been owned and stabilized for at least a full 12 months Communities are considered stabilized after achieving 90% occupancy for 90 days Communities that have been identified for disposition are excluded from our same store portfolio We utilize net operating income, or NOI, in evaluating the performance of the segments Total NOI represents total property revenues less total property operating expenses, excluding depreciation and amortization, for all properties held during the period regardless of their status as held for sale We believe NOI is a helpful tool in evaluating the operating performance of our segments because it measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance A redevelopment community is a community with a specific plan in place to upgrade at least half of the community’s units over a period of time with new finishes, fixtures, and appliances, among other upgrades These plans include spending a pre-defined amount of capital per unit to achieve a rent increase as a result of the upgrades We separately identify redevelopment communities that would cause a material distortion of normal same store operating F-48 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-49 OPERATOR ABIGAELS results Routine renovations occur at a property as items need to be replaced as a normal part of operations and is done with an expectation to maintain the current level of quality at the property There is no specified plan in place for routine renovations Revenues and NOI for each reportable segment for the years ended December 31, 2015, 2014 and 2013 were as follows (dollars in thousands): Revenues Large Market Same Store                                    Secondary Market Same Store                                Non-Same Store and Other                                   Total property revenues                                   Management fee income                                     Total operating revenues                                     NOI Large Market Same Store                                    Secondary Market Same Store                                Non-Same Store and Other                                   Total NOI                                              Discontinued operations NOI included above                       Management fee income                                        Depreciation and amortization                                   Acquisition expense                                           Property management expense                                   General and administrative expense                              Merger related expenses                                        Integration costs                                              Interest and other non-property (expense) income                    Interest expense                                              Loss on debt extinguishment/modification                         Net casualty (loss) gain after insurance and other settlement proceeds   Gain on sale of depreciable real estate assets excluded from discontinued operations                                     Income tax expense                                           Gain on sale of non-depreciable real estate assets                    (Loss) gain from real estate joint ventures                          Discontinued operations                                        Net income attributable to noncontrolling interests                   Net income available to MAA common shareholders                 2015 2014 2013(1) $ 553,038 310,281 128,859 992,178 154 $ 992,332 — $ 587,896 324,771 130,112 1,042,779 $1,042,779 $ 361,285 200,989 79,860 642,134 $ 334,255 190,348 74,211 598,814 16 154 (301,812) (2,388) (32,095) (20,909) (3,152) (8,395) 770 (123,953) (2,586) (476) 42,649 (2,050) 350 6,009 5,331 (8,297) $ 147,980 — — (294,520) (2,777) (30,990) (25,716) (368) (122,344) (3,602) 473 — — 189,958 (1,673) 172 (2) — (18,458) $ 332,287 $ 241,194 242,464 151,185 634,843 647 $ 635,490 $ 142,988 147,607 98,417 389,012 (7,802) 647 (186,979) (1,393) (23,083) (15,569) (32,403) (5,102) 466 (78,978) (426) (143) — (893) — 338 81,587 (3,998) $ 115,281 (1) The 2013 column shows the segment break down based on the 2014 same store portfolios A comparison using the 2015 same store portfolio would not be comparative due to the nature of the classifications Assets for each reportable segment as of December 31, 2015 and 2014 were as follows (dollars in thousands): Assets Large Market Same Store                                              Secondary Market Same Store                                          Non-Same Store and Other                                             Corporate assets                                                      Total assets                                                            $3,768,455 1,661,956 1,344,833 72,537 $6,847,781 $ 3,867,457 1,708,389 1,189,682 56,250 $ 6,821,778 December 31, 2015 December 31, 2014 F-49 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-50 OPERATOR ABIGAELS 17. REAL ESTATE ACQUISITIONS AND DISPOSITIONS The following chart shows our acquisition activity for the year ended December 31, 2015: Community Location River’s Walk (4 outparcels)                  Charleston, South Carolina Residences at Burlington Creek              Kansas City, Missouri- Units/Acres 25 acres Date Acquired Q1/Q2 2015 - various Kansas MSA SkySong                                Scottsdale, Arizona Retreat at West Creek                      Richmond, Virginia Radius                                  Norfolk/Hampton/Virginia Beach, Virginia MSA Haven at Prairie Trace                     Kansas City, Missouri- Retreat at West Creek II                    Richmond, Virginia Cityscape at Market Center II                Dallas, Texas The Denton                              Kansas City, Missouri- Kansas MSA 298 325 254 252 January 15, 2015 June 11, 2015 June 15, 2015 July 28, 2015 280 44 acres 318 July 30, 2015 October 14, 2015 November 19, 2015 Kansas MSA 55 December 17, 2015 The Denton II                            Kansas City, Missouri- Kansas MSA 451 acres December 17, 2015 The following chart shows our disposition activity for the year ended December 31, 2015: Community Location Vistas                                  Macon, Georgia Austin Chase                             Macon, Georgia Fairways at Hartland                       Bowling Green, Kentucky Fountain Lake                            Brunswick, Georgia Westbury Creek                          Augusta, Georgia Woodwinds                              Aiken, South Carolina Colony at South Park                      Aiken, South Carolina Bradford Pointe                           Augusta, Georgia Colonial Promenade Craft Farms             Gulf Shores, Alabama Colonial Promenade Craft Farms outparcel     Gulf Shores, Alabama Anatole                                 Daytona Beach, Florida Oaks                                   Jackson, Tennessee Post House Jackson                        Jackson, Tennessee Woods of Post House                      Jackson, Tennessee Post House North                         Jackson, Tennessee Bradford Chase                           Jackson, Tennessee Sutton Place                             Memphis, Tennessee MSA Southland Station                         Warner Robbins, Georgia Huntington Chase                         Warner Robbins, Georgia Paddock Park                            Ocala, Florida Colonial Grand Wilmington                 Wilmington, North Carolina Savannah Creek                          Memphis, Tennessee MSA Whisperwood                            Columbus, Georgia Units/Sq. Ft./ Acres 144 256 240 113 120 144 184 192 67,735 sq ft 023 acres 208 100 150 122 145 148 253 304 200 480 390 204 1,008 Date Sold February 26, 2015 February 26, 2015 February 26, 2015 March 25, 2015 April 1, 2015 April 1, 2015 April 1, 2015 April 1, 2015 April 28, 2015 April 28, 2015 April 29, 2015 April 29, 2015 April 29, 2015 April 29, 2015 April 29, 2015 April 29, 2015 April 29, 2015 April 29, 2015 April 29, 2015 April 29, 2015 July 1, 2015 July 1, 2015 July 1, 2015 18. SUBSEQUENT EVENTS Financing On February 1, 2016, we paid off the $135 million remaining principal balance of the mortgage on the Colonial Village at Matthews apartment community F-50 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-51 OPERATOR ABIGAELS 19. SELECTED QUARTERLY FINANCIAL INFORMATION OF MID-AMERICA APARTMENT COMMUNITIES, INC. (UNAUDITED) (Dollars in thousands except per share data) Total operating revenues                             Income from continuing operations before non-operating items                             Interest expense                                   Gain (loss) from real estate joint ventures               Discontinued operations: Income from discontinued operations before Year Ended December 31, 2015 First $258,552 Second $258,891 Third $261,998 Fourth $263,337 $ 69,393 $ (30,848)(1) $ 19 $ 68,837 $ (30,433)(1) $ (23) $ 73,138 $ (30,229)(1) $ (1) $ 76,763 $ (30,834)(1) $ 3 gain (loss) on sale                            Gain on sale of discontinued operations              Consolidated net income                            Net income attributable to noncontrolling interest        Net income available for MAA common shareholders     — $ $ — $ 64,677 3,410 $ $ 61,267 — $ $ — $143,873 7,574 $ $136,299 — $ $ — $ 96,828 5,094 $ $ 91,734 — $ $ — $ 45,367 2,380 $ $ 42,987 Per share: Net income available per common share - basic       Net income available per common share - diluted      Dividend paid                                  $ $ $ 081 081 077 $ $ $ 181 181 077 $ $ $ 122 122 077 $ $ $ 057 057 077 Total operating revenues                             Income from continuing operations before non-operating items                             Interest expense                                   (Loss) gain from real estate joint ventures               Discontinued operations: Loss from discontinued operations before Year Ended December 31, 2014 First $244,234 Second $245,305 Third $249,574 Fourth $253,219 $ 39,311 $ (31,987)(1) $ (24) $ 58,092 $ (31,337)(1) 2,919 $ $ 64,039 $ (29,251)(1) 3,124 $ $ 68,791 $ (31,378)(1) $ (10) gain on sale                                 Gain on sale of discontinued operations              Consolidated net income                            Net income attributable to noncontrolling interest        Net income available for MAA common shareholders     (47) $ $ 5,481 $ 15,714 $ 848 $ 14,866 (4) $ $ — $ 33,386 $ 1,773 $ 31,613 (8) $ $ (103) $ 70,719 $ 3,743 $ 66,976 (4) $ $ 16 $ 36,458 $ 1,933 $ 34,525 Per share: Net income available per common share - basic       Net income available per common share - diluted      Dividend paid                                     $ $ $ 020 020 073 $ $ $ 042 042 073 $ $ $ 089 089 073 $ $ $ 046 046 073 (1) Includes Amortization of Deferred Financing Costs, previously presented separately F-51 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-52 OPERATOR ABIGAELS 20. SELECTED QUARTERLY FINANCIAL INFORMATION OF MID-AMERICA APARTMENTS, L.P. (UNAUDITED) (Dollars in thousands except per unit data) Total operating revenues                             Income from continuing operations before non-operating items                             Interest expense                                   Gain (loss) from real estate joint ventures               Discontinued operations: Income from discontinued operations before Year Ended December 31, 2015 First $258,552 Second $258,891 Third $261,998 Fourth $263,337 $ 69,393 $ (30,848)(1) $ 19 $ 68,837 $ (30,433)(1) $ (23) $ 73,138 $ (30,229)(1) $ (1) $ 76,763 $ (30,834)(1) $ 3 gain (loss) on sale                            Gain on sale of discontinued operations             Net income available for common unitholders           — $ $ — $ 64,677 — $ $ — $143,873 — $ $ — $ 96,828 — $ $ — $ 45,367 Per unit: Net income available per common unit - basic           Net income available per common unit - diluted          Distribution paid                                   Total operating revenues                             Income from continuing operations before non-operating items                             Interest expense                                   (Loss) gain from real estate joint ventures               Discontinued operations: Loss from discontinued operations before gain $ $ $ 081 081 077 $ $ $ 181 181 077 $ $ $ 122 122 077 $ $ $ 057 057 077 Year Ended December 31, 2014 First $244,234 Second $245,305 Third $249,574 Fourth $253,219 $ 39,311 $ (31,987)(1) $ (24) $ 58,092 $ (31,337)(1) 2,919 $ $ 64,039 $ (29,251)(1) 3,124 $ $ 68,791 $ (31,378)(1) $ (10) on sale                                     Gain on sale of discontinued operations              Net income available for common unitholders           $ (47) 5,481 $ $ 15,714 $ (4) — $ $ 33,386 $ (8) (103) $ $ 70,719 $ (4) 16 $ $ 36,458 Per unit: Net income available per common unit - basic           Net income available per common unit - diluted          Distribution paid                                   $ $ $ 020 020 073 $ $ $ 042 042 073 $ $ $ 089 089 073 $ $ $ 046 046 073 (1) Includes Amortization of Deferred Financing Costs, previously presented separately F-52 MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2015 (Dollars in thousands) Property Location Encumbrances Land Buildings and Fixtures Land Buildings and Fixtures Initial Cost Costs Capitalized subsequent to Acquisition $ 2,640 $ 28,842 $ — $ 848 $ Gross Amount carried at December 31, 2015(3) Buildings and Fixtures 29,690 $ Land 2,640 Total Accumulated Depreciation $ 32,330 $ (4,487) $ Date of Construction 2009 Net 27,843 Life used to compute depreciation in latest income statement(4) 1 - 40 F - 5 3 Birchall at Ross Bridge � � � � � � Birmingham, AL Colonial Grand at Riverchase Trails � � � � � � � � Birmingham, AL Colonial Village at Trussville � � � � � � � � � � � � � � Birmingham, AL Eagle Ridge � � � � � � � � � � � � � � � Birmingham, AL Colonial Grand at Traditions � � � � � � � � � � � � � � Gulf Shores, AL Abbington Place � � � � � � � � � � � � Huntsville, AL Colonial Grand at Edgewater � � � � � � � � � � � � � Huntsville, AL Paddock Club Huntsville � � � � � Huntsville, AL Colonial Grand at Madison � � � � Madison, AL Paddock Club Montgomery � � � � Montgomery, AL Cypress Village � � � � � � � � � � � � Orange Beach, AL Colonial Grand at Liberty Park � � � � � � � � � � � � Vestavia Hills, AL Edge at Lyon’s Gate � � � � � � � � � Phoenix, AZ Sky View Ranch � � � � � � � � � � � � Gilbert, AZ Talus Ranch � � � � � � � � � � � � � � � Phoenix, AZ Colonial Grand at Inverness Commons � � � � � Mesa, AZ Colonial Grand at Scottsdale � � � � � � � � � � � � � Scottsdale, AZ Colonial Grand at OldTown Scottsdale � � � � � Scottsdale, AZ SkySong � � � � � � � � � � � � � � � � � � Scottsdale, AZ Calais Forest � � � � � � � � � � � � � � � Little Rock, AR Napa Valley � � � � � � � � � � � � � � � Little Rock, AR Palisades at Chenal Valley � � � � Little Rock, AR Ridge at Chenal Valley � � � � � � � Little Rock, AR Westside Creek I & II � � � � � � � � Little Rock, AR — — — —(1) — — 27,722 — 22,500 — — 17,823 — — — — — — — — — — — — 3,761 22,079 3,402 851 3,211 524 4,943 909 3,601 965 1,290 3,922 7,901 2,668 12,741 31,813 7,667 25,162 4,724 38,673 10,152 28,934 13,190 12,238 30,977 27,182 14,577 47,701 4,219 26,255 3,612 20,273 7,820 — 1,026 960 2,560 2,626 1,271 51,627 55,748 9,244 8,642 25,234 — 11,463 — — — — — — 830 — — — — — — — — — — — — — — — — 1,575 3,761 23,654 27,415 (2,574) 24,841 2010 1 - 40 1,295 4,376 1,228 3,047 3,412 14,197 718 2,050 468 2,291 1,632 1,461 2,046 3,402 851 3,211 524 4,943 1,739 3,601 965 1,290 3,922 7,901 2,668 12,741 33,108 12,043 26,390 7,771 42,085 24,349 29,652 15,240 12,706 33,268 28,814 16,038 49,747 36,510 12,894 29,601 8,295 47,028 26,088 33,253 16,205 13,996 37,190 36,715 18,706 62,488 (3,267) (7,454) (2,834) (4,901) (3,792) (13,330) (3,053) (7,316) (1,267) (3,279) (7,460) (3,737) (15,984) 33,243 5,440 26,767 3,394 43,236 12,758 30,200 8,889 12,729 33,911 29,255 14,969 46,504 1996/97 1986 2007 1987 1990 1993 2000 1999 2008 2000 2007 2007 2005 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 929 4,219 27,184 31,403 (2,661) 28,742 2001 1 - 40 1,344 3,612 21,617 25,229 (2,099) 23,130 1999 1 - 40 2,664 296 8,401 5,247 2,266 26,917 8,286 7,820 — 1,026 960 2,560 2,626 1,271 54,291 56,044 17,645 13,889 27,500 26,917 19,749 62,111 56,044 18,671 14,849 30,060 29,543 21,020 (5,141) (834) (11,296) (8,670) (3,962) (2,375) (11,414) 56,970 55,210 7,375 6,179 26,098 27,168 9,606 2001 2014 1987 1984 2006 2012 1984/86 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . F - 5 3 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S a t u r d a y , M a r c h 1 9 , 2 0 1 6 MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2015 (Dollars in thousands) Property Location Encumbrances Land F - 5 4 Tiffany Oaks � � � � � � � � � � � � � � � Altamonte Springs, FL Indigo Point � � � � � � � � � � � � � � � Brandon, FL Paddock Club Brandon� � � � � � � Brandon, FL Colonial Grand at Lakewood Ranch � � � � � � � � Bradenton, FL Preserve at Coral Square � � � � � Coral Springs, FL Paddock Club Gainesville � � � � Gainesville, FL The Retreat at Magnolia Park � � � � � � � � � � Gainesville, FL Colonial Grand at Heathrow � � � � � � � � � � � � � � Heathrow, FL 220 Riverside � � � � � � � � � � � � � � Jacksonville, FL Atlantic Crossing � � � � � � � � � � � Jacksonville, FL Cooper’s Hawk � � � � � � � � � � � � � Jacksonville, FL Hunter’s Ridge at Deerwood � � � � � � � � � � � � � Jacksonville, FL Lakeside � � � � � � � � � � � � � � � � � � Jacksonville, FL Lighthouse at Fleming Island � � � � � � � � � � � � � � � � � Jacksonville, FL Paddock Club Mandarin � � � � � Jacksonville, FL St� Augustine � � � � � � � � � � � � � � Jacksonville, FL St� Augustine II � � � � � � � � � � � � Jacksonville, FL Tattersall at Tapestry Park � � � � Jacksonville, FL Woodhollow � � � � � � � � � � � � � � � Jacksonville, FL Paddock Club Lakeland � � � � � � Lakeland, FL Colonial Grand at —(1) —(1) — — — — — 20,594 — — — — — —(1) — — — — —(1) — Colonial Grand at Town Park Reserve � � � � � � � � � � � Lake Mary, FL Colonial Grand at Lake Mary � � � � � � � � � � � � � Lake Mary, FL CG at Lake Mary III � � � � � � � � � Lake Mary, FL Retreat at Lake Nona � � � � � � � � Orlando, FL — — — — Initial Cost Buildings and Fixtures 9,219 10,500 26,111 40,230 40,004 15,879 1,024 1,167 2,896 2,980 9,600 1,800 2,040 16,338 4,101 2,500 4,000 854 1,533 1,430 4,047 1,411 2,857 — 6,417 1,686 2,254 35,684 — 19,495 7,500 13,835 12,883 35,052 14,967 6,475 — 36,069 15,179 20,452 3,481 10,311 — — — — — — — — — — — — — — — (8) (1,033) — — Town Park � � � � � � � � � � � � � Lake Mary, FL 32,938 5,742 56,562 Costs Capitalized subsequent to Acquisition Buildings and Fixtures 6,163 3,754 5,688 Land — — — Gross Amount carried at December 31, 2015(3) Buildings and Fixtures 15,382 14,254 31,799 1,024 1,167 2,896 Land 1,697 9,188 4,347 2,980 9,600 1,800 41,927 49,192 20,226 Total 16,406 15,421 34,695 44,907 58,792 22,026 Accumulated Depreciation (10,400) (8,157) (17,936) (3,952) (19,518) (8,509) Net 6,006 7,264 16,759 40,955 39,274 13,517 Date of Construction 1985 1989 1998 1999 1996 1999 Life used to compute depreciation in latest income statement(4) 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 406 2,040 16,744 18,784 (2,688) 16,096 2009 1 - 40 1,427 40,145 1,246 3,950 6,864 9,977 5,487 2,961 7,585 13,394 611 10,222 8,836 4,101 2,500 4,000 854 1,533 1,430 4,047 1,411 2,857 — 6,417 1,678 1,221 37,111 40,145 20,741 11,450 20,699 22,860 40,539 17,928 14,060 13,394 36,680 25,401 29,288 41,212 42,645 24,741 12,304 22,232 24,290 44,586 19,339 16,917 13,394 43,097 27,079 30,509 (3,675) (342) (3,496) (7,899) (12,756) (16,129) (17,354) (8,503) (9,973) (2,373) (5,716) (16,371) (17,958) 37,537 42,303 21,245 4,405 9,476 8,161 27,232 10,836 6,944 11,021 37,381 10,708 12,551 1997 2015 2008 1987 1987 1985 2003 1998 1987 2008 2009 1986 1988/90 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1,614 5,742 58,176 63,918 (5,985) 57,933 2005 1 - 40 188 3,481 10,499 13,980 (1,102) 12,878 2004 1 - 40 3,780 1,306 7,880 33,543 7,996 41,175 1,260 — — 12,061 10,691 2,096 5,040 1,306 7,880 45,604 18,687 43,271 50,644 19,993 51,151 (4,134) (703) (5,133) 46,510 19,290 46,018 2012 2014 2006 1 - 40 1 - 40 1 - 40 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . F - 5 4 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S a t u r d a y , M a r c h 1 9 , 2 0 1 6 MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2015 (Dollars in thousands) Property Location Encumbrances Land Buildings and Fixtures Land Buildings and Fixtures Initial Cost Costs Capitalized subsequent to Acquisition Gross Amount carried at December 31, 2015(3) Buildings and Fixtures Land Total Accumulated Depreciation Net Date of Construction Life used to compute depreciation in latest income statement(4) Colonial Grand at Heather Glen � � � � � � � � � � � Orlando, FL — 4,662 56,988 F - 5 5 Colonial Grand at Randal Lakes � � � � � � � � � � � Orlando, FL Park Crest at Innisbrook� � � � � � Palm Harbor, FL The Club at Panama Beach � � � Panama City, FL Colonial Village at Twin Lakes � � � � � � � � � � � � Sanford, FL Paddock Club Tallahassee � � � � Tallahassee, FL Verandas at Southwood � � � � � � Tallahassee, FL Belmere � � � � � � � � � � � � � � � � � � � Tampa, FL Links at Carrollwood � � � � � � � � Tampa, FL Village Oaks � � � � � � � � � � � � � � � Tampa, FL Colonial Grand at Hampton Preserve � � � � � � � Tampa, FL Colonial Grand at — 28,419 — 25,044 — 20,345 —(1) — — — 5,659 6,900 898 3,091 530 3,600 852 817 2,738 50,553 26,613 14,276 47,793 4,805 25,914 7,667 7,355 19,055 6,233 69,535 Seven Oaks � � � � � � � � � � � � Wesley Chapel, FL 20,720 3,051 42,768 Colonial Grand at Windermere � � � � � � � � � � � � Windermere, FL Allure at Brookwood � � � � � � � � Atlanta, GA Allure in Buckhead Village Residential � � � � � � Atlanta, GA Sanctuary at Oglethorpe � � � � � Atlanta, GA Terraces at Fieldstone � � � � � � � � Conyers, GA Prescott � � � � � � � � � � � � � � � � � � � Duluth, GA Colonial Grand at Berkeley Lake � � � � � � � � � � Duluth, GA Colonial Grand at — — — — — —(2) — 2,711 11,168 8,633 6,875 1,284 3,840 36,710 52,758 19,844 31,441 15,819 24,011 1,960 15,707 River Oaks � � � � � � � � � � � � � Duluth, GA 11,680 4,360 13,579 Colonial Grand at River Plantation � � � � � � � � � Duluth, GA Colonial Grand at McDaniel Farm � � � � � � � � � Duluth, GA — — 2,059 19,158 3,985 32,206 — — — (5) — 950 — — 110 153 — — — — — — — — — — — — 2,403 4,662 59,391 64,053 (5,553) 58,500 2000 1 - 40 10,396 932 4,100 976 14,695 115 6,282 5,649 1,997 750 741 492 2,960 4,923 3,452 2,877 3,008 870 961 5,659 6,900 893 3,091 1,480 3,600 852 927 2,891 60,949 27,545 18,376 48,769 19,500 26,029 13,949 13,004 21,052 66,608 34,445 19,269 51,860 20,980 29,629 14,801 13,931 23,943 (2,926) (6,576) (9,512) (4,824) (11,784) (1,260) (9,790) (8,014) (5,296) 63,682 27,869 9,757 47,036 9,196 28,369 5,011 5,917 18,647 2013 2000 2000 2005 1992 2003 1984 1980 2005 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 6,233 70,285 76,518 (6,483) 70,035 2012 1 - 40 3,051 43,509 46,560 (4,045) 42,515 2004 1 - 40 2,711 11,168 8,633 6,875 1,284 3,840 37,202 55,718 24,767 34,893 18,696 27,019 39,913 66,886 33,400 41,768 19,980 30,859 (3,377) (6,650) (3,370) (9,621) (8,587) (10,837) 36,536 60,236 30,030 32,147 11,393 20,022 2009 2008 2002 1994 1999 2001 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1,960 16,577 18,537 (1,896) 16,641 1998 1 - 40 4,360 14,540 18,900 (2,105) 16,795 1992 1 - 40 1,075 2,059 20,233 22,292 (2,301) 19,991 1994 1 - 40 1,816 3,985 34,022 38,007 (3,844) 34,163 1997 1 - 40 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . F - 5 5 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S a t u r d a y , M a r c h 1 9 , 2 0 1 6 MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2015 (Dollars in thousands) Property Location Encumbrances Land Buildings and Fixtures Land Buildings and Fixtures Initial Cost Costs Capitalized subsequent to Acquisition Gross Amount carried at December 31, 2015(3) Buildings and Fixtures Land Total Accumulated Depreciation Net Date of Construction Life used to compute depreciation in latest income statement(4) Colonial Grand at Pleasant Hill � � � � � � � � � � � Duluth, GA — 6,753 32,202 Colonial Grand at Mount Vernon � � � � � � � � � � Dunwoody, GA Lake Lanier Club I � � � � � � � � � � Gainesville, GA Lake Lanier Club II � � � � � � � � � Gainesville, GA Colonial Grand at Shiloh � � � � � Kennesaw, GA Millstead Village � � � � � � � � � � � LaGrange, GA Colonial Grand at 15,328 — —(2) 30,454 — 6,861 3,560 3,150 4,864 3,100 23,748 22,611 18,383 45,893 29,240 Barrett Creek � � � � � � � � � � � Marietta, GA 19,257 5,661 26,186 Colonial Grand at Godley Station � � � � � � � � � � Pooler, GA 12,777 1,800 35,454 F - 5 6 Colonial Grand at Godley Lake � � � � � � � � � � � Pooler, GA Avala at Savannah Quarters � � � Savannah, GA Georgetown Grove � � � � � � � � � � Savannah, GA Colonial Grand at Hammocks � � � � � � � � � � � � � Savannah, GA Colonial Village at Greentree � � � � � � � � � � � � � � Savannah, GA Colonial Village at Huntington � � � � � � � � � � � � � Savannah, GA Colonial Village at Marsh Cove � � � � � � � � � � � � Savannah, GA Oaks at Wilmington Island � � � Savannah, GA Highlands of West Village I � � � � � � � � � � � � � � � Smyrna, GA Highlands of West Village II � � � � � � � � � � � � � � Smyrna, GA Terraces at Townelake � � � � � � � Woodstock, GA Haven at Praire Trace � � � � � � � � Overland Park, KS Grand Reserve at Pinnacle � � � � Lexington, KY — — — — — — — — 1,750 1,500 1,288 30,893 24,862 11,579 2,441 36,863 1,710 10,494 2,521 8,223 5,231 2,910 8,555 25,315 41,075 9,052 43,395 — — — — — — — — — — — — — — — — — 1,960 6,753 34,162 40,915 (3,725) 37,190 1996 1 - 40 1,137 4,386 2,168 1,683 192 6,861 3,560 3,150 4,864 3,100 24,885 26,997 20,551 47,576 29,432 31,746 30,557 23,701 52,440 32,532 (2,327) (10,294) (7,717) (4,874) (2,998) 29,419 20,263 15,984 47,566 29,534 1997 1998 2001 2002 1998 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1,246 5,661 27,432 33,093 (3,171) 29,922 1999 1 - 40 1,344 1,800 36,798 38,598 (3,426) 35,172 2001 1 - 40 683 818 3,130 1,750 1,500 1,288 31,576 25,680 14,709 33,326 27,180 15,997 (3,124) (4,130) (8,776) 30,202 23,050 7,221 2008 2009 1997 1 - 40 1 - 40 1 - 40 1,630 2,441 38,493 40,934 (3,607) 37,327 1997 1 - 40 611 1,710 11,105 12,815 (1,377) 11,438 1984 1 - 40 300 2,521 8,523 11,044 (931) 10,113 1986 1 - 40 472 3,049 5,231 2,910 9,027 28,364 14,258 31,274 (1,161) (9,317) 13,097 21,957 1983 1999 1 - 40 1 - 40 4,377 9,052 47,772 56,824 (1,897) 54,927 2006 1 - 40 — — — —(1) 5,358 1,331 3,500 2,024 30,338 11,918 40,614 31,525 — 1,688 — — 35 22,465 250 4,264 5,358 3,019 3,500 2,024 30,373 34,383 40,864 35,789 35,731 37,402 44,364 37,813 (1,196) (18,398) (434) (15,170) 34,535 19,004 43,930 22,643 2012 1999 2015 2000 1 - 40 1 - 40 1 - 40 1 - 40 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . F - 5 6 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S a t u r d a y , M a r c h 1 9 , 2 0 1 6 MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2015 (Dollars in thousands) Encumbrances Land Initial Cost Costs Capitalized subsequent to Acquisition Buildings and Fixtures 3,699 6,242 8,097 10,518 13,826 12,168 8,770 6,284 46,241 42,144 8,795 411 694 900 1,169 1,535 1,351 710 676 5,814 4,000 750 4,091 29,826 4,909 25,643 Land — — — — — — 138 — — — — — — Date of Construction Net Land Gross Amount carried at December 31, 2015(3) Buildings and Fixtures 6,312 9,967 13,147 20,567 19,574 21,223 17,507 9,245 46,993 411 694 900 1,169 1,535 1,351 848 676 5,814 Buildings and Fixtures 2,613 3,725 5,050 10,049 5,748 9,055 8,737 2,961 752 311 — 4,000 750 42,455 8,795 Total 6,723 10,661 14,047 21,736 21,109 22,574 18,355 9,921 52,807 46,455 9,545 Accumulated Depreciation (4,434) (6,972) (9,171) (13,554) (12,927) (14,512) (11,209) (4,138) (5,232) (1,086) — 2,289 3,689 4,876 8,182 8,182 8,062 7,146 5,783 47,575 45,369 9,545 Life used to compute depreciation in latest income statement(4) 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1986 1989 1989 1985 1989 1985 1986 1974 2010 2013/14 2014 1 - 40 1 - 40 633 4,091 30,459 34,550 (3,094) 31,456 2009 1 - 40 1,136 4,909 26,779 31,688 (2,806) 28,882 2007 1 - 40 7,491 900 4,000 4,780 1,240 34,863 8,099 20,250 22,342 52,119 — — — 4,832 1,241 963 5,352 3,235 23,562 12,432 7,491 900 4,000 9,612 2,481 35,826 13,451 23,485 45,904 64,551 43,317 14,351 27,485 55,516 67,032 (3,376) (8,341) (9,018) (4,846) (5,695) 39,941 6,010 18,467 50,670 61,337 2007 1988 1996 2010 2008 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 — —(1) —(1) — — — — — — — — — — — —(1) —(2) — — F - 5 7 Property Location Lakepointe � � � � � � � � � � � � � � � � Lexington, KY Mansion, The � � � � � � � � � � � � � � Lexington, KY Village, The � � � � � � � � � � � � � � � Lexington, KY Stonemill Village � � � � � � � � � � � Louisville, KY Crosswinds � � � � � � � � � � � � � � � � Jackson, MS Pear Orchard � � � � � � � � � � � � � � � Jackson, MS Reflection Pointe � � � � � � � � � � � Jackson, MS Lakeshore Landing � � � � � � � � � � Ridgeland, MS Market Station � � � � � � � � � � � � � Kansas City, MO Residences at Burlington Creek � � � � � � � � Kansas City, MO The Denton � � � � � � � � � � � � � � � � Kansas City, MO Colonial Grand at Desert Vista � � � � � � � � � � � � North Las Vegas, NV Colonial Grand at Palm Vista � � � � � � � � � � � � � North Las Vegas, NV Colonial Village at Beaver Creek � � � � � � � � � � � Apex, NC Hermitage at Beechtree � � � � � � Cary, NC Waterford Forest � � � � � � � � � � � � Cary, NC 1225 South Church I � � � � � � � � � Charlotte, NC Colonial Grand at Ayrsley � � � � Charlotte, NC Colonial Grand at Beverly Crest � � � � � � � � � � � Charlotte, NC Colonial Grand at 15,496 3,161 24,004 Legacy Park � � � � � � � � � � � � Charlotte, NC — 2,891 28,272 Colonial Grand at Mallard Creek � � � � � � � � � � Charlotte, NC 15,630 4,591 27,713 Colonial Grand at Mallard Lake � � � � � � � � � � � Charlotte, NC 17,642 3,250 31,389 Colonial Grand at University Center � � � � � � � Charlotte, NC — 1,620 17,499 — — — — — 1,774 3,161 25,778 28,939 (2,412) 26,527 1996 1 - 40 1,007 2,891 29,279 32,170 (2,882) 29,288 2001 1 - 40 588 4,591 28,301 32,892 (2,840) 30,052 2005 1 - 40 1,518 3,250 32,907 36,157 (3,284) 32,873 1998 1 - 40 389 1,620 17,888 19,508 (1,663) 17,845 2005 1 - 40 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . F - 5 7 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S a t u r d a y , M a r c h 1 9 , 2 0 1 6 MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2015 (Dollars in thousands) Property Colonial Reserve at Location Encumbrances Land Buildings and Fixtures Land Buildings and Fixtures Initial Cost Costs Capitalized subsequent to Acquisition Gross Amount carried at December 31, 2015(3) Buildings and Fixtures Land Total Accumulated Depreciation Net Date of Construction Life used to compute depreciation in latest income statement(4) South End � � � � � � � � � � � � � Charlotte, NC Colonial Village at Chancellor Park � � � � � � � � � Charlotte, NC Colonial Village at — — 4,628 44,282 5,311 28,016 Greystone � � � � � � � � � � � � � � Charlotte, NC 14,180 4,120 25,974 F - 5 8 Colonial Village at South Tryon � � � � � � � � � � � � Charlotte, NC Colonial Village at Stone Point � � � � � � � � � � � � � Charlotte, NC Colonial Village at Timber Crest � � � � � � � � � � � Charlotte, NC Enclave � � � � � � � � � � � � � � � � � � � Charlotte, NC Colonial Grand at Cornelius � � � � � � � � � � � � � � Cornelius, NC Colonial Grand at — — — — — 2,260 19,489 2,141 11,564 2,901 1,461 17,192 18,984 4,571 29,151 Patterson Place � � � � � � � � � Durham, NC 15,361 2,590 27,126 Colonial Village at Woodlake � � � � � � � � � � � � � � Durham, NC Colonial Village at Deerfield � � � � � � � � � � � � � � Durham, NC Colonial Grand at Research Park � � � � � � � � � � Durham, NC Colonial Grand at Autumn Park � � � � � � � � � � � Greensboro, NC Colonial Grand at — — — — 2,741 17,686 3,271 15,609 4,201 37,682 4,182 26,214 Huntersville � � � � � � � � � � � � Huntersville, NC 14,843 4,251 31,948 Colonial Village at Matthews � � � � � � � � � � � � � � Matthews, NC 13,587 3,071 21,830 Colonial Grand at Matthews Commons � � � � � Matthews, NC — 3,690 28,536 Colonial Grand at Arringdon � � � � � � � � � � � � � Morrisville, NC 19,319 6,401 31,134 — — — — — — — — — — — — — — — — — 10,826 4,628 55,108 59,736 (2,474) 57,262 2013 1 - 40 1,681 5,311 29,697 35,008 (2,753) 32,255 1999 1 - 40 1,210 4,120 27,184 31,304 (2,467) 28,837 1998/2000 1 - 40 726 804 769 353 510 2,260 20,215 22,475 (1,998) 20,477 2002 1 - 40 2,141 12,368 14,509 (1,519) 12,990 1986 1 - 40 2,901 1,461 17,961 19,337 20,862 20,798 (1,642) (1,607) 19,220 19,191 2000 2008 1 - 40 1 - 40 4,571 29,661 34,232 (3,049) 31,183 2009 1 - 40 1,174 2,590 28,300 30,890 (2,704) 28,186 1997 1 - 40 721 678 908 967 862 2,741 18,407 21,148 (1,927) 19,221 1996 1 - 40 3,271 16,287 19,558 (1,919) 17,639 1985 1 - 40 4,201 38,590 42,791 (3,865) 38,926 2002 1 - 40 4,182 27,181 31,363 (2,506) 28,857 2001/04 1 - 40 4,251 32,810 37,061 (3,255) 33,806 2008 1 - 40 2,508 3,071 24,338 27,409 (2,611) 24,798 2008 1 - 40 1,012 3,690 29,548 33,238 (2,818) 30,420 2008 1 - 40 931 6,401 32,065 38,466 (3,169) 35,297 2003 1 - 40 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . F - 5 8 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S a t u r d a y , M a r c h 1 9 , 2 0 1 6 MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2015 (Dollars in thousands) F - 5 9 Property Location Encumbrances Land Buildings and Fixtures Land Buildings and Fixtures Initial Cost Costs Capitalized subsequent to Acquisition Gross Amount carried at December 31, 2015(3) Buildings and Fixtures Land Total Accumulated Depreciation Net Date of Construction Life used to compute depreciation in latest income statement(4) Colonial Grand at Brier Creek � � � � � � � � � � � � Raleigh, NC 25,490 7,372 50,202 Colonial Grand at Brier Falls � � � � � � � � � � � � � Raleigh, NC — 6,572 48,910 Colonial Grand at Crabtree Valley � � � � � � � � � Raleigh, NC Hue � � � � � � � � � � � � � � � � � � � � � � Raleigh, NC Colonial Grand at Trinity Commons � � � � � � � Raleigh, NC Preserve at Brier Creek � � � � � � Raleigh, NC Providence at Brier Creek � � � � Raleigh, NC Corners, The � � � � � � � � � � � � � � � Winston-Salem, NC Colonial Village at Glen Eagles � � � � � � � � � � � � Winston-Salem, NC Colonial Village at Mill Creek � � � � � � � � � � � � � Winston-Salem, NC Tanglewood � � � � � � � � � � � � � � � Anderson, SC Colonial Grand at Cypress Cove � � � � � � � � � � � Charleston, SC Colonial Village at Hampton Pointe � � � � � � � � � Charleston, SC Colonial Grand at Quarterdeck � � � � � � � � � � � � Charleston, SC Colonial Village at Westchase � � � � � � � � � � � � � Charleston, SC River’s Walk � � � � � � � � � � � � � � � Charleston, SC Fairways, The � � � � � � � � � � � � � � Columbia, SC Paddock Club Columbia � � � � � � Columbia, SC Colonial Village at Windsor Place � � � � � � � � � � Goose Creek, SC Highland Ridge � � � � � � � � � � � � Greenville, SC Howell Commons � � � � � � � � � � � Greenville, SC Paddock Club Greenville � � � � � Greenville, SC 10,532 — 29,725 — — — — — — — — — — — — — — — —(1) —(1) 2,241 3,690 5,232 5,850 4,695 685 18,434 29,910 45,138 21,980 29,007 6,165 3,400 15,002 2,351 427 7,354 3,853 3,610 28,645 3,971 22,790 920 24,097 4,571 5,200 910 1,840 1,321 482 1,304 1,200 20,091 — 8,207 16,560 14,163 4,337 11,740 10,800 — — — — — (19) — — — — — — — — — — — — — — — — 867 747 925 1,550 1,477 24,178 1,424 3,453 7,372 51,069 58,441 (4,812) 53,629 2010 1 - 40 6,572 49,657 56,229 (4,611) 51,618 2008 1 - 40 2,241 3,690 5,232 5,831 4,695 685 19,359 31,460 46,615 46,158 30,431 9,618 21,600 35,150 51,847 51,989 35,126 10,303 (1,746) (4,923) (4,722) (13,195) (7,898) (7,112) 19,854 30,227 47,125 38,794 27,228 3,191 1997 2009 2000/02 2004 2007 1982 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1,276 3,400 16,278 19,678 (1,649) 18,029 1990/2000 1 - 40 546 3,486 2,351 427 7,900 7,339 10,251 7,766 (876) (5,175) 9,375 2,591 1984 1980 1 - 40 1 - 40 1,092 3,610 29,737 33,347 (2,947) 30,400 2001 1 - 40 2,123 3,971 24,913 28,884 (2,432) 26,452 1986 1 - 40 2,887 920 26,984 27,904 (2,451) 25,453 1987 1 - 40 1,476 28,810 3,831 4,548 1,277 2,678 4,439 2,369 4,571 5,200 910 1,840 1,321 482 1,304 1,200 21,567 28,810 12,038 21,108 15,440 7,015 16,179 13,169 26,138 34,010 12,948 22,948 16,761 7,497 17,483 14,369 (2,416) (1,573) (8,106) (13,117) (1,715) (4,502) (10,505) (8,159) 23,722 32,437 4,842 9,831 15,046 2,995 6,978 6,210 1985 2013 1992 1991 1985 1984 1987 1996 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . F - 5 9 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S a t u r d a y , M a r c h 1 9 , 2 0 1 6 MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2015 (Dollars in thousands) Encumbrances Land Initial Cost Buildings and Fixtures 2,925 5,374 7,269 Costs Capitalized subsequent to Acquisition Buildings and Fixtures 5,012 3,577 6,889 Land 35 (14) 12 Gross Amount carried at December 31, 2015(3) Buildings and Fixtures 7,937 8,951 14,158 360 583 1,097 Land 325 597 1,085 2,780 1,216 723 2,800 2,103 1,131 972 217 817 1,148 1,498 178 1,260 33,966 18,666 6,504 26,295 9,187 10,632 8,954 1,957 7,416 10,337 20,483 1,141 16,043 — — — — — — — — — — — — 2,147 753 851 3,374 1,197 1,979 4,326 2,877 3,350 4,462 10,385 15,864 5,047 39,413 2,780 1,216 723 2,800 2,103 1,131 972 217 817 1,148 1,498 178 3,407 34,719 19,517 9,878 27,492 11,166 14,958 11,831 5,307 11,878 20,722 36,347 6,188 55,456 Total 8,297 9,534 15,255 37,499 20,733 10,601 30,292 13,269 16,089 12,803 5,524 12,695 21,870 37,845 6,366 58,863 Accumulated Depreciation (5,736) (6,011) (9,350) (3,313) (3,769) (6,336) (7,772) (1,364) (6,593) (5,329) (3,676) (7,363) (12,916) (23,701) (4,826) (22,945) Net 2,561 3,523 5,905 34,186 16,964 4,265 22,520 11,905 9,496 7,474 1,848 5,332 8,954 14,144 1,540 35,918 Date of Construction 1983 1985 1988 2008 2008 1987 2007 1985 1989 1987 1986 1984 1978 1992 1974 2000 Life used to compute depreciation in latest income statement(4) 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 915 14,774 4,950 3,456 1,193 8,622 8,656 2,963 2,736 1,524 6,670 3,350 886 28,053 22,443 10,739 34,229 4,549 33,673 28,902 14,800 — 28,308 8,051 — — — (2) — — — — — — — — 3,143 915 17,917 18,832 (8,310) 10,522 1999 1 - 40 1,035 1,419 7,368 1,204 25,579 6,820 5,467 9,574 50,396 1,346 2,869 4,950 3,456 1,191 8,622 8,656 2,963 2,736 1,524 6,670 3,350 886 29,088 23,862 18,107 35,433 30,128 40,493 34,369 24,374 50,396 29,654 10,920 34,038 27,318 19,298 44,055 38,784 43,456 37,105 25,898 57,066 33,004 11,806 (4,350) (4,607) (12,097) (3,697) (543) (16,705) (14,612) (16,152) (4,376) (5,565) (4,826) 29,688 22,711 7,201 40,358 38,241 26,751 22,493 9,746 52,690 27,439 6,980 2010 2008 1986 1996 2015 2001 2000 1987 2012 2009 1980 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 F - 6 0 Property Location Park Haywood � � � � � � � � � � � � � Greenville, SC Spring Creek � � � � � � � � � � � � � � � Greenville, SC Runaway Bay � � � � � � � � � � � � � � Mt� Pleasant, SC Colonial Grand at Commerce Park � � � � � � � � � North Charleston, SC 535 Brookwood� � � � � � � � � � � � � Simpsonville, SC Park Place � � � � � � � � � � � � � � � � � Spartanburg, SC Farmington Village � � � � � � � � � Summerville, SC Colonial Village at Waters Edge � � � � � � � � � � � � Summerville, SC Hamilton Pointe � � � � � � � � � � � � Chattanooga, TN Hidden Creek � � � � � � � � � � � � � � Chattanooga, TN Steeplechase � � � � � � � � � � � � � � � Chattanooga, TN Windridge � � � � � � � � � � � � � � � � � Chattanooga, TN Kirby Station � � � � � � � � � � � � � � Memphis, TN Lincoln on the Green � � � � � � � � Memphis, TN Park Estate � � � � � � � � � � � � � � � � Memphis, TN Reserve at Dexter Lake � � � � � � Memphis, TN Paddock Club Murfreesboro � � � � � � � � � � � Murfreesboro, TN Aventura at Indian Lake Village � � � � � � � � � � � Nashville, TN Avondale at Kennesaw � � � � � � � Nashville, TN Brentwood Downs � � � � � � � � � � Nashville, TN Colonial Grand at Bellevue � � � Nashville, TN Colonial Grand at Bellevue (Phase II) � � � � � � Nashville, TN Grand View Nashville � � � � � � � Nashville, TN Monthaven Park � � � � � � � � � � � � Nashville, TN Park at Hermitage � � � � � � � � � � � Nashville, TN Venue at Cool Springs � � � � � � � Nashville, TN Verandas at Sam Ridley � � � � � � Nashville, TN Northwood � � � � � � � � � � � � � � � � Arlington, TX —(1) — — — 12,889 — — — — —(1) — — — —(1) — — — — 17,762 — 22,086 — — — — — 21,861 — J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . F - 6 0 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S a t u r d a y , M a r c h 1 9 , 2 0 1 6 MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2015 (Dollars in thousands) Property Location Encumbrances Land Balcones Woods � � � � � � � � � � � � Austin, TX Colonial Grand at Canyon Creek � � � � � � � � � � Austin, TX Colonial Grand at Canyon Ranch � � � � � � � � � � Austin, TX Colonial Grand at Double Creek � � � � � � � � � � � Austin, TX Colonial Grand at Onion Creek � � � � � � � � � � � Austin, TX Grand Reserve at Sunset Valley � � � � � � � � � � � Austin, TX Colonial Village at F - 6 1 Initial Cost Buildings and Fixtures 14,398 — 1,598 15,159 3,621 32,137 — — — — 3,778 20,201 3,131 29,375 4,902 33,010 3,150 11,393 Quarry Oaks � � � � � � � � � � � Austin, TX 26,832 4,621 34,461 Colonial Grand at Wells Branch � � � � � � � � � � � Austin, TX Legacy at Western Oaks � � � � � Austin, TX Silverado � � � � � � � � � � � � � � � � � � Austin, TX Stassney Woods � � � � � � � � � � � � Austin, TX Travis Station � � � � � � � � � � � � � � Austin, TX Woods, The � � � � � � � � � � � � � � � � Austin, TX Colonial Village at — 29,672 — — — — 3,094 9,100 2,900 1,621 2,281 1,405 32,283 49,339 24,009 7,501 6,169 12,769 Shoal Creek � � � � � � � � � � � � Bedford, TX 22,807 4,982 27,377 Colonial Village at Willow Creek � � � � � � � � � � � Bedford, TX Colonial Grand at Hebron � � � � Carrollton, TX Colonial Grand at 26,429 — 3,109 4,231 33,488 42,237 Silverado � � � � � � � � � � � � � � Cedar Park, TX — 3,282 24,935 Colonial Grand at Silverado Reserve � � � � � � � Cedar Park, TX Grand Cypress � � � � � � � � � � � � � Cypress, TX Courtyards at Campbell � � � � � � Dallas, TX Deer Run � � � � � � � � � � � � � � � � � � Dallas, TX — 16,598 — — 3,951 3,881 988 1,252 31,705 24,267 8,893 11,271 Costs Capitalized subsequent to Acquisition Buildings and Fixtures 11,475 Land — Gross Amount carried at December 31, 2015(3) Buildings and Fixtures 25,873 Land 1,598 Total 27,471 Accumulated Depreciation (16,712) Date of Construction 1983 Net 10,759 Life used to compute depreciation in latest income statement(4) 1 - 40 — — — — — — 294 — — — — — — — — — — — — — 1,095 3,621 33,232 36,853 (3,309) 33,544 2008 1 - 40 1,150 3,778 21,351 25,129 (2,339) 22,790 2003 1 - 40 292 799 3,131 29,667 32,798 (3,030) 29,768 2013 1 - 40 4,902 33,809 38,711 (3,437) 35,274 2009 1 - 40 3,488 3,150 14,881 18,031 (6,087) 11,944 1996 1 - 40 3,763 4,621 38,224 42,845 (3,881) 38,964 1996 1 - 40 871 (2,348) 2,770 8,615 7,526 7,855 3,388 9,100 2,900 1,621 2,281 1,405 33,154 46,991 26,779 16,116 13,695 20,624 36,542 56,091 29,679 17,737 15,976 22,029 (3,118) (6,084) (9,211) (9,615) (8,840) (8,796) 33,424 50,007 20,468 8,122 7,136 13,233 2008 2001 2003 1985 1987 1977 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1,614 4,982 28,991 33,973 (3,095) 30,878 1996 1 - 40 3,700 505 3,109 4,231 37,188 42,742 40,297 46,973 (3,652) (3,884) 36,645 43,089 1996 2011 1 - 40 1 - 40 737 3,282 25,672 28,954 (2,524) 26,430 2005 1 - 40 1,005 677 4,013 5,160 3,951 3,881 988 1,252 32,710 24,944 12,906 16,431 36,661 28,825 13,894 17,683 (3,145) (1,731) (7,793) (10,022) 33,516 27,094 6,101 7,661 2005 2008 1986 1985 1 - 40 1 - 40 1 - 40 1 - 40 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . F - 6 1 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S a t u r d a y , M a r c h 1 9 , 2 0 1 6 MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2015 (Dollars in thousands) Property Location Encumbrances Land F - 6 2 Grand Courtyard � � � � � � � � � � � Dallas, TX Legends at Lowe’s Farm � � � � � Dallas, TX Colonial Reserve at Medical District � � � � � � � � � Dallas, TX Watermark � � � � � � � � � � � � � � � � Dallas, TX Colonial Village at Main Park � � � � � � � � � � � � � Duncanville, TX Colonial Grand at Bear Creek � � � � � � � � � � � � � Euless, TX Colonial Grand at Fairview � � � Fairview, TX La Valencia at Starwood � � � � � Frisco, TX Colonial Reserve at Frisco Bridges � � � � � � � � � � Frisco, TX Colonial Village at Grapevine � � � � � � � � � � � � � Grapevine, TX Greenwood Forest � � � � � � � � � � Houston, TX Legacy Pines � � � � � � � � � � � � � � � Houston, TX Park Place (Houston) � � � � � � � � Houston, TX Ranchstone � � � � � � � � � � � � � � � � Houston, TX Reserve at Woodwind Lakes � � � � � � � � � � � � � � � � � Houston, TX Retreat at Vintage Park � � � � � � Houston, TX Cascade at Fall Creek � � � � � � � � Humble, TX Chalet at Fall Creek � � � � � � � � � Humble, TX Bella Casita � � � � � � � � � � � � � � � � Irving, TX Remington Hills � � � � � � � � � � � � Irving, TX Colonial Reserve at Las Colinas � � � � � � � � � � � � Irving, TX Colonial Grand at — — — —(2) — 24,082 — 20,931 — — — —(2) — — — — — — —(2) — — Initial Cost Buildings and Fixtures 22,240 41,091 33,779 14,438 2,730 5,016 4,050 960 1,821 10,960 6,453 2,171 3,240 30,048 35,077 26,069 1,968 34,018 2,351 3,465 2,157 2,061 1,480 1,968 8,211 3,230 2,755 2,521 4,390 29,757 23,482 19,066 15,830 14,807 19,928 40,352 19,926 20,085 26,432 21,822 3,902 40,691 — — — — — — — — — (15) — — — — — — — — — — (8) Valley Ranch � � � � � � � � � � � Irving, TX Lane at Towne Crossing � � � � � � Mesquite, TX 25,044 — 5,072 1,311 37,397 11,867 Costs Capitalized subsequent to Acquisition Buildings and Fixtures 2,620 1,341 Land — — Gross Amount carried at December 31, 2015(3) Buildings and Fixtures 24,860 42,432 2,730 5,016 Land Total 27,590 47,448 Accumulated Depreciation (8,665) (6,373) 888 2,119 4,050 960 34,667 16,557 38,717 17,517 (2,997) (6,799) Life used to compute depreciation in latest income statement(4) 1 - 40 1 - 40 1 - 40 1 - 40 Date of Construction 2000 2008 2007 2002 Net 18,925 41,075 35,720 10,718 1,204 1,821 12,164 13,985 (1,390) 12,595 1984 1 - 40 1,876 421 1,014 6,453 2,171 3,240 31,924 35,498 27,083 38,377 37,669 30,323 (3,494) (3,195) (5,045) 34,883 34,474 25,278 1998 2012 2009 1 - 40 1 - 40 1 - 40 831 1,968 34,849 36,817 (3,069) 33,748 2013 1 - 40 2,958 (159) 3,705 3,299 2,368 3,246 392 1,228 860 1,392 4,804 2,351 3,465 2,142 2,061 1,480 1,968 8,211 3,230 2,755 2,521 4,390 32,715 23,323 22,771 19,129 17,175 23,174 40,744 21,154 20,945 27,824 26,626 35,066 26,788 24,913 21,190 18,655 25,142 48,955 24,384 23,700 30,345 31,016 (3,153) (2,180) (10,576) (6,454) (5,521) (7,948) (1,124) (6,034) (6,337) (4,912) (2,609) 31,913 24,608 14,337 14,736 13,134 17,194 47,831 18,350 17,363 25,433 28,407 1985/1986 1994 1999 1996 1996 1999 2014 2007 2006 2007 1984 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 998 3,902 41,689 45,591 (3,645) 41,946 2006 1 - 40 5,970 3,481 5,072 1,303 43,367 15,348 48,439 16,651 (4,188) (6,885) 44,251 9,766 1997 1983 1 - 40 1 - 40 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . F - 6 2 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S a t u r d a y , M a r c h 1 9 , 2 0 1 6 MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2015 (Dollars in thousands) Property Colonial Village at Location Encumbrances Land Buildings and Fixtures Land Buildings and Fixtures Initial Cost Costs Capitalized subsequent to Acquisition Gross Amount carried at December 31, 2015(3) Buildings and Fixtures Land Total Accumulated Depreciation Net Date of Construction Life used to compute depreciation in latest income statement(4) Oakbend � � � � � � � � � � � � � � � Lewisville, TX 21,667 5,598 28,616 Times Square at Craig Ranch � � � � � � � � � � � � McKinney, TX — 1,130 28,058 Venue at Stonebridge Ranch � � � � � � � � � � � � � � � � � McKinney, TX 14,767 4,034 19,528 F - 6 3 Cityscape at Market Center � � � � � � � � � � Plano, TX Cityscape at Market Center II � � � � � � � � � � � � � � � Plano, TX Highwood � � � � � � � � � � � � � � � � � Plano, TX Los Rios Park � � � � � � � � � � � � � � Plano, TX Boulder Ridge � � � � � � � � � � � � � � Roanoke, TX Copper Ridge � � � � � � � � � � � � � � Roanoke, TX Colonial Grand at Ashton Oaks � � � � � � � � � � � Round Rock, TX Colonial Grand at — — — — — — — 8,626 60,407 8,268 864 3,273 3,382 4,166 50,298 7,783 28,823 26,930 — 5,511 36,241 Round Rock � � � � � � � � � � � � Round Rock, TX 24,484 4,691 45,379 Colonial Village at Sierra Vista � � � � � � � � � � � � Round Rock, TX Alamo Ranch � � � � � � � � � � � � � � San Antonio, TX Bulverde Oaks � � � � � � � � � � � � � San Antonio, TX Haven at Blanco � � � � � � � � � � � � San Antonio, TX Stone Ranch at Westover Hills � � � � � � � � � � San Antonio, TX Cypresswood Court � � � � � � � � � Spring, TX Villages at Kirkwood � � � � � � � � Stafford, TX Green Tree Place � � � � � � � � � � � Woodlands, TX Stonefield Commons � � � � � � � � Charlottesville, VA Adalay Bay � � � � � � � � � � � � � � � � Chesapeake, VA Colonial Village at Greenbrier � � � � � � � � � � � � � Fredericksburg, VA 10,900 — — — 18,499 —(2) — —(2) — — — 2,561 2,380 4,257 5,450 4,000 576 1,918 539 11,044 5,280 16,488 26,982 36,759 45,958 24,992 5,190 15,846 4,850 36,689 31,341 4,842 21,677 — — — — — — — — — — — — — — — — — — — — — — 2,246 5,598 30,862 36,460 (3,113) 33,347 1997 1 - 40 2,992 1,130 31,050 32,180 (6,079) 26,101 2009 1 - 40 247 538 20 3,915 5,005 5,835 21,358 4,034 19,775 23,809 (1,342) 22,467 2000 1 - 40 8,626 60,945 69,571 (2,481) 67,090 2013 1 - 40 8,268 864 3,273 3,382 4,166 50,318 11,698 33,828 32,765 21,358 58,586 12,562 37,101 36,147 25,524 (107) (7,422) (14,858) (12,218) (3,950) 58,479 5,140 22,243 23,929 21,574 2015 1983 2000 1999 2009 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 899 5,511 37,140 42,651 (3,655) 38,996 2009 1 - 40 1,249 4,691 46,628 51,319 (4,425) 46,894 1997 1 - 40 1,842 1,804 479 1,839 1,982 3,809 2,803 3,606 293 1,773 2,561 2,380 4,257 5,450 4,000 576 1,918 539 11,044 5,280 18,330 28,786 37,238 47,797 26,974 8,999 18,649 8,456 36,982 33,114 20,891 31,166 41,495 53,247 30,974 9,575 20,567 8,995 48,026 38,394 (1,836) (5,067) (1,119) (5,586) (5,693) (6,289) (7,615) (5,777) (1,507) (4,385) 19,055 26,099 40,376 47,661 25,281 3,286 12,952 3,218 46,519 34,009 1999 2009 2014 2010 2009 1984 1996 1984 2013 2002 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 745 4,842 22,422 27,264 (2,065) 25,199 1980 1 - 40 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . F - 6 3 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S a t u r d a y , M a r c h 1 9 , 2 0 1 6 MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2015 (Dollars in thousands) Property Seasons at Celebrate Location Encumbrances Land Buildings and Fixtures Land Buildings and Fixtures Initial Cost Costs Capitalized subsequent to Acquisition Gross Amount carried at December 31, 2015(3) Buildings and Fixtures Land Total Accumulated Depreciation Net Date of Construction Life used to compute depreciation in latest income statement(4) 6,960 32,083 7,530 38,468 14,490 70,551 85,041 (6,686) 78,355 2011 1 - 40 F - 6 4 Virginia I � � � � � � � � � � � � � � Fredericksburg, VA Station Square at Cosner’s Corner � � � � � � � � � � � � � � � � Fredericksburg, VA Colonial Village at Hampton Glen � � � � � � � � � � Glen Allen, VA Colonial Village at West End � � � � � � � � � � � � � � Glen Allen, VA Township � � � � � � � � � � � � � � � � � Hampton, VA Colonial Village at Tradewinds � � � � � � � � � � � � Hampton, VA Colonial Village at Waterford � � � � � � � � � � � � � � Midlothian, VA Ashley Park � � � � � � � � � � � � � � � Richmond, VA Colonial Village at Chase Gayton � � � � � � � � � � Richmond, VA Hamptons at Hunton Park � � � � Richmond, VA Retreat at West Creek � � � � � � � � Richmond, VA Colonial Village at Harbour Club � � � � � � � � � � � Virginia Beach, VA Radius � � � � � � � � � � � � � � � � � � � � Newport News, VA Total Residential Properties � � � � � � � � � � � � � Allure at Buckhead � � � � � � � � � � Atlanta, GA Highlands of West Village � � � � Smyrna, GA Colonial Promenade Nord du Lac � � � � � � � � � � � � Covington, LA The Denton � � � � � � � � � � � � � � � � Kansas City, MO 1225 South Church � � � � � � � � � � Charlotte, NC Bella Casita at Las Colinas � � � � � � � � � � � � Irving, TX Times Square at Craig Ranch � � � � � � � � � � � � McKinney, TX — — — 8,580 35,700 4,851 21,678 12,611 — 4,661 1,509 18,908 8,189 — — — — — — — — 5,631 15,660 6,733 4,761 6,021 4,930 7,112 3,483 5,040 29,221 13,365 29,004 35,598 36,136 14,796 36,481 — — — — — — — — — — — — 354 8,580 36,054 44,634 (2,412) 42,222 2013 1 - 40 1,059 4,851 22,737 27,588 (2,229) 25,359 1986 1 - 40 1,258 9,404 4,661 1,509 20,166 17,593 24,827 19,102 (1,882) (10,817) 22,945 8,285 1987 1987 1 - 40 1 - 40 1,348 5,631 17,008 22,639 (1,697) 20,942 1988 1 - 40 1,819 1,004 1,808 2,561 246 843 98 6,733 4,761 6,021 4,930 7,112 3,483 5,040 31,040 14,369 30,812 38,159 36,382 15,639 36,579 37,773 19,130 36,833 43,089 43,494 19,122 41,619 (3,153) (1,618) (3,108) (6,237) (542) (1,503) (389) 34,620 17,512 33,725 36,852 42,952 17,619 41,230 923,561 — — 878,643 867 2,500 6,061,011 3,465 8,446 20,116 — — 1,081,694 8 772 898,759 867 2,500 7,142,705 3,473 9,218 8,041,464 4,340 11,718 (1,479,667) (424) (370) 6,561,797 3,916 11,348 — — — —(2) — 5,810 700 43 19,138 4,439 199 46 186 253 1,310 — — 9 — — — — 242 126 1,294 5,810 700 52 46 253 19,138 4,439 441 24,948 5,139 493 (1,505) — (67) 23,443 5,139 426 312 358 (54) 304 2007 1 - 40 2,604 2,857 (279) 2,578 2009 1 - 40 1989 1988 1984 2003 2015 1988 2012 2012 2012 2010 2014 2010 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 1 - 40 J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . F - 6 4 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S a t u r d a y , M a r c h 1 9 , 2 0 1 6 MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2015 (Dollars in thousands) Initial Cost Costs Capitalized subsequent to Acquisition Location Encumbrances Land Buildings and Fixtures Land Buildings and Fixtures Gross Amount carried at December 31, 2015(3) Buildings and Fixtures Land Total Accumulated Depreciation Net Date of Construction Life used to compute depreciation in latest income statement(4) Property Total Commercial Properties � � � � � � � � � � � � � Colonial Promenade Huntsville � � � � � � � � � � � � � Huntsville, AL Colonial Grand at Randall Lakes (Phase II) � � � � � � � � Jacksonville, FL The Denton (Phase II) � � � � � � � Kansas City, MO River’s Walk (Phase II) � � � � � � Charleston, SC Station Square at Cosner’s Corner � � � � � � � � � Fredericksburg, VA Retreat at West Creek (Phase II) � � � � � � � � � � � � � � Richmond, VA F - 6 5 Total Active Development Properties � � � � � � � � � � � � � Total Properties � � � � � � � � � � � Total Land Held for Future Developments � � � Corporate Properties � � � � � � � Total Other � � � � � � � � � � � � � � � Total Real Estate Assets, net of Joint Ventures � � � � — — — — — — — 10,219 37,183 2,700 3,200 770 3,630 4,245 3,000 — — — — — — 9 — — — — — — 2,442 10,228 39,625 49,853 (2,699) 47,154 — 2,700 — 2,700 7,822 734 6,026 3,200 770 3,630 7,822 734 6,026 11,022 1,504 9,656 14,256 4,245 14,256 18,501 632 3,000 632 3,632 — (2) — — — — 2,700 11,020 1,504 9,656 18,501 3,632 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A — 923,561 17,545 906,407 — 6,098,194 — 20,125 29,470 1,113,606 17,545 926,532 29,470 7,211,800 47,015 8,138,332 (2) (1,482,368) 47,013 6,655,964 — — 51,779 — 51,779 — — — — — — — 51,779 — 51,779 25,657 25,657 — 25,657 25,657 51,779 25,657 77,436 — (16,845) (16,845) 51,779 8,812 60,591 N/A Various N/A 1-40 $ 923,561 $ 958,186 $6,098,194 $20,125 $1,139,263 $ 978,311 $7,237,457 $8,215,768 $(1,499,213) $6,716,555 (1) Encumbered by a $240�0 million Fannie Mae facility, with $240�0 million available and outstanding with a variable interest rate of 0�80% on which there exists five interest rate caps totaling $125 million at an average rate of 4�60% at December 31, 2015� (2) Encumbered by a $128 million loan with an outstanding balance of $128 million and a fixed interest rate of 5�08% which matures on June 10, 2021� (3) The aggregate cost for Federal income tax purposes was approximately $7�22 billion at December 31, 2015� The aggregate cost for book purposes exceeds the total gross amount of real estate assets for Federal income tax purposes, principally due to purchase accounting adjustments recorded under accounting principles generally accepted in the United States of America� (4) Depreciation is on a straight line basis over the estimated useful asset life which ranges from 8 to 40 years for land improvements and buildings, 5 years for furniture, fixtures and equipment, and 6 months for fair market value of residential leases� J O B N U M B E R 3 0 4 3 5 2 - 1 T Y P E P A G E N O . F - 6 5 O P E R A T O R I A B G A E L S J O B T I T L E i M d - A m e r i c a A p a r t m e n t 1 0 - K I R E V S O N I 1 S E R A L I < 1 2 3 4 5 6 7 8 > D A T E S a t u r d a y , M a r c h 1 9 , 2 0 1 6 JOB TITLE Mid-America Apartment 10-K REVISION 1 SERIAL <12345678> DATE Saturday, March 19, 2016 JOB NUMBER 304352-1 TYPE PAGE NO. F-66 OPERATOR ABIGAELS MID-AMERICA APARTMENT COMMUNITIES, INC. MID-AMERICA APARTMENTS, L.P. SCHEDULE III REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION A summary of activity for real estate investments and accumulated depreciation is as follows (dollars in thousands): Year Ended December 31, 2014 2013 2015 Real estate investments: Balance at beginning of year � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � Acquisitions(1) � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � Less: FMV of Leases included in Acquisitions� � � � � � � � � � � � � � � � � Improvement and development � � � � � � � � � � � � � � � � � � � � � � � � � � � � � Assets held for sale� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � Disposition of real estate assets(2) � � � � � � � � � � � � � � � � � � � � � � � � � � � Balance at end of year � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � Accumulated depreciation: Balance at beginning of year � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � Depreciation � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � Assets held for sale� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � Disposition of real estate assets(2) � � � � � � � � � � � � � � � � � � � � � � � � � � � Balance at end of year � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � $8,069,395 316,151 (4,438) 165,000 $7,722,181 407,889 (4,968) 186,043 — — (330,340) $8,215,768 (241,750) $8,069,395 $1,373,678 289,177 $1,138,315 276,991 — — (163,642) $1,499,213 (41,628) $1,373,678 $3,729,706 4,032,957 (51,728) 130,824 (4,897) (114,681) $7,722,181 $1,040,473 165,885 (6,164) (61,879) $1,138,315 MAA’s consolidated balance sheet at December 31, 2015, 2014, and 2013, includes accumulated depreciation of $16,845,000, $15,279,000, and $14,108,000, respectively, in the caption “Corporate properties, net”� (1) Includes non-cash activity related to acquisitions� (2) Includes assets sold, casualty losses, and removal of certain fully depreciated assets� F-66 B O A R D O F D I R E C T O R S H. ERIC BOLTON , JR . T HOM A S H. LO W DER W. REID S A NDER S Chairman of the Board of Directors and Chief Executive Officer MAA Committee: Real Estate Investment (Chairman) Past Chairman of the Board of Trustees and Chief Executive Officer Colonial Properties Trust Committee: Real Estate Investment President Sanders Properties, LLC and Sanders Investments, LLC Committees: Audit; Real Estate Investment A L A N B. GR A F, JR . Executive Vice President and Chief Financial Officer FedEx Corporation Committee: Audit (Chairman) Co-lead Independent Director R A L P H HORN Past Chairman of the Board of Directors, President and Chief Executive Officer First Horizon National Corporation Committees: Compensation; Nominating and Corporate Governance (Chairman) Co-lead Independent Director JA ME S K . LO W DER Chairman of the Board of Directors The Colonial Company MONIC A Mc GURK Senior Vice President Strategy and New Ventures Tyson Foods, Inc.* CL AUDE B. NIEL SEN Chairman of the Board of Directors and Chief Executive Officer Coca-Cola Bottling Company United, Inc. Committee: Compensation P HIL IP W. NOR W O OD Past President and Chief Executive Officer Faison Enterprises, Inc. Committees: Compensation (Chairman); Nominating and Corporate Governance; Real Estate Investment W IL L I A M B. S A N S OM Chairman of the Board of Directors, President and Chief Executive Officer H.T. Hackney Co. Committees: Compensation; Nominating and Corporate Governance GA RY SHORB Chief Executive Officer Methodist Le Bonheur Healthcare Committee: Audit JOHN W. SP IEGEL Past Vice Chairman and Chief Financial Officer SunTrust Banks, Inc. Committee: Audit *Ms. McGurk resigned from The Coca-Cola Company in March 2016 and will begin her employment with Tyson Foods, Inc. during the second quarter of 2016. S H A R E H O L D E R I N F O R M A T I O N C ORP OR AT E HE A DQUA R T ER S MAA 6584 Poplar Avenue Memphis, TN 38138 901-682-6600 www.maac.com INDEP ENDEN T REGI S T ERED P UBL IC AC C OUN T ING F IRM Ernst & Young LLP, Memphis, TN A NNUA L SH A REHOL DER S MEE T ING MAA will hold its 2016 Annual Meeting of Shareholders on Tuesday, May 17, 2016 at 11:00 a.m. CDT at their corporate headquarters located in Memphis, TN. S TO CK L I S T ING MAA’s common stock is listed on the New York Stock Exchange (NYSE) and is traded under the stock symbol MAA. SEC F IL ING S MAA’s filings with the Securities and Exchange Commission are filed under the registrant names of Mid-America Apartment Communities, Inc. and Mid-America Apartments, L.P. T R A N SF ER AGEN T A ND REGI S T R A R American Stock Transfer & Trust Company 800-937-5449 or www.amstock.com 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 American Stock Transfer & Trust Company at the shareholder service number listed above or access their account at the website 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. A NNUA L REP OR T A ND FORM 10 - K A copy of MAA’s Annual Report and Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission (SEC) will be sent without charge upon written request. Please address requests to the corporate headquarters, attention Investor Relations or email your request to investor.relations@maac.com. Other MAA SEC filings as well as corporate governance documents are also on the “For Investors” page of our website at www.maac.com. CEO A ND CFO CER T IF IC AT ION S 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 MAA’s Form 10-K. T HE OP EN A RM S FOUNDAT ION 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 provided 46 homes to families in medical crisis across 11 states. Since its formation, the foundation has helped over 2,600 families by providing more than 179,000 nights of rest. To find out more about The Open Arms Foundation please visit www.maac.com. MA A : 2015 Annual Report O U R B R I G H T E R V I E W MAA IS COMMITTED TO REMAINING TRUE TO OUR RICH TRADITION OF SERVICE TO EACH OTHER, TO OUR RESIDENTS, AND TO OUR SHAREHOLDERS. WE RESPECT THE PRIVILEGE OF PROVIDING VALUE TO THOSE WHOSE LIVES WE TOUCH. www.maac.com 

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