Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and notes appearing elsewhere in this report. Historical results and trends which might appear in the consolidated financial statements should not be interpreted as being indicative of future operations.

We consider portions of this report to be “forward-looking” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, 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 relating to the future; forward-looking statements are not guarantees of future performance, results, or events. Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, we can give no assurance our expectations will be achieved. Any statements contained herein which are not statements of historical fact should be deemed forward-looking statements. Reliance should not be placed on these forward-looking statements as these statements are subject to known and unknown risks, uncertainties, and other factors beyond our control and could differ materially from our actual results and performance.

Factors which may cause our actual results or performance to differ materially from those contemplated by forward-looking statements include, but are not limited to, the following:

•	Volatility in capital and credit markets, or other unfavorable changes in economic conditions, either nationally or regionally in one or more of the markets in which we operate, could adversely impact us;

•	Short-term leases expose us to the effects of declining market rents;

•	Competition could limit our ability to lease apartments or increase or maintain rental income;

•	We face risks associated with land holdings and related activities;

•	We could be negatively impacted by the elimination of Fannie Mae or Freddie Mac;

•	Development, redevelopment and construction risks could impact our profitability;

•	Investments through joint ventures and discretionary funds involve risks not present in investments in which we are the sole investor;

•	Competition could adversely affect our ability to acquire properties;

•	Our acquisition strategy may not produce the cash flows expected;

•	Tax matters, including failure to qualify as a REIT, could have adverse consequences;

•	Losses from catastrophes may exceed our insurance coverage;

•	A cybersecurity incident and other technology disruptions could negatively impact our business;

•	We have significant debt, which could have important adverse consequences;

•	Insufficient cash flows could limit our ability to make required payments for debt obligations or pay distributions to shareholders;

•	Issuances of additional debt may adversely impact our financial condition;

•	We may be unable to renew, repay, or refinance our outstanding debt;

•	Variable rate debt is subject to interest rate risk;

•	Failure to maintain our current credit ratings could adversely affect our cost of funds, related margins, liquidity, and access to capital markets;

•	Share ownership limits and our ability to issue additional equity securities may prevent takeovers beneficial to shareholders;

•	Our share price will fluctuate; and

•	The form, timing and/or amount of dividend distributions in future periods may vary and be impacted by economic and other considerations.

These forward-looking statements represent our estimates and assumptions as of the date of this report, and we assume no obligation to update or supplement forward-looking statements because of subsequent events.

Executive Summary

We are primarily engaged in the ownership, management, development, redevelopment, acquisition and construction of multifamily apartment communities. As of December 31, 2014, we owned interests in, operated, or were developing 181 multifamily properties comprised of 63,163 apartment homes across the United States as detailed in the following Property Portfolio table. In addition, we own other land holdings which we may develop into multifamily apartment communities in the future.

Property Operations

Our results for the year ended December 31, 2014 reflect an increase in same store revenues of 4.5% as compared to 2013. We believe this increase was due to the continuation of improving economic conditions, including job growth, favorable demographics, a manageable supply of new multifamily housing and more individuals choosing to rent versus buy as evidenced by the moderating level of homeownership rates, all of which have resulted in higher rental rates and average occupancy levels. We believe U.S. economic and employment growth is likely to continue during the remainder of 2015 and the supply of new multifamily homes, although increasing, will likely remain at manageable levels. If economic conditions were to worsen, our operating results could be adversely affected.

Construction Activity

At December 31, 2014, we had a total of 13 projects under construction to be comprised of 4,215 apartment homes, including one development project to be comprised of 266 apartment homes owned by one of the discretionary funds ("the funds") in which we currently have a 31.3% interest, with initial occupancy scheduled to occur within the next 28 months. Excluding the projects owned by one of the funds, as of December 31, 2014, we estimate the additional cost to complete the construction of 12 consolidated projects to be approximately $371.2 million.

Acquisitions

During the year ended December 31, 2014, we acquired one operating property, comprised of 276 apartment homes, located in Atlanta, Georgia for approximately $62.6 million. We also acquired two land parcels comprised of 10.5 acres of land located in Houston, Texas and Rockville, Maryland for approximately $39.4 million.

Fund Restructuring

In December 2014, the partnership agreements for each of the funds were amended, resulting in the extension of the term of each fund to December 31, 2026. In addition, our ownership interests in the funds were increased from 20% to 31.3% effective December 23, 2014.

Dispositions

During the year ended December 31, 2014, we sold five operating properties comprised of 1,847 apartment homes located in Atlanta, Georgia, Dallas, Texas, Orlando and Tampa, Florida and Charlotte, North Carolina for approximately $218.3 million and we recognized a gain of approximately $155.7 million relating to these property sales. We also sold four land holdings comprised of an aggregate of approximately 29.3 acres located adjacent to current operating and development communities in Dallas and Houston, Texas and Atlanta, Georgia for approximately $23.7 million and we recognized a gain of approximately $3.6 million relating to these land sales; we also recognized a $1.2 million impairment charge related to one of the land parcels sold in Dallas, Texas in June 2014, which represented the difference between the land holding's carrying value and the fair value based upon the sales contract. In February 2014, each of the funds sold an operating property comprised of an aggregate of 558 apartment homes; one of the operating properties was located in San Antonio, Texas and the other operating property was in Houston, Texas. Our proportionate share of the gains on these two transactions was approximately $3.6 million.

In January 2015, we sold two operating properties comprised of 1,116 apartment homes located in Tampa, Florida and Austin, Texas for approximately $114.4 million.

Future Outlook

Subject to market conditions, we intend to continue to seek opportunities to develop and acquire existing communities. We also intend to evaluate our operating property and land development portfolio and plan to continue our practice of selective dispositions as market conditions warrant and opportunities arise. We also intend to continue to strengthen our capital and liquidity positions by continuing to focus on our core fundamentals which we believe are generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs. We intend to meet our near-term liquidity requirements through a combination of cash flows generated from operations, draws on our unsecured credit facility, proceeds from property dispositions, the use of debt and equity offerings under our automatic shelf registration statement, equity issued from our ATM program, other unsecured borrowings and secured mortgages.

As of December 31, 2014, we had approximately $153.9 million in cash and cash equivalents, no balances outstanding on our $500 million unsecured line of credit and, as of the date of this filing, we had common shares having an aggregate offering price of up to $315.3 million remaining available for sale under our 2014 ATM program. We believe debt maturing in 2015 is manageable at $251.8 million, which represents approximately 9% of our total outstanding debt and includes scheduled principal amortizations of approximately $1.8 million. We believe we are well-positioned with a strong balance sheet and sufficient liquidity to cover near-term debt maturities and new development, redevelopment, and other capital funding requirements. We will, however, continue to assess and take further actions we believe are prudent to meet our objectives and capital requirements.

Property Portfolio

Our multifamily property portfolio is summarized as follows:

	December 31, 2014				December 31, 2013
	Apartment Homes		Properties		Apartment Homes		Properties
Operating Properties
Houston, Texas	8,434		24		8,752		25
Washington, D.C. Metro	6,405		19		6,083		18
Dallas, Texas	5,243		13		5,667		14
Las Vegas, Nevada	4,918		15		4,918		15
Tampa, Florida (1)	4,880		11		5,108		12
Atlanta, Georgia	3,867		12		3,943		12
Orlando, Florida	3,540		9		3,676		9
Raleigh, North Carolina	3,054		8		3,054		8
Austin, Texas (2)	3,030		9		3,030		9
Southeast Florida	2,781		8		2,520		7
Charlotte, North Carolina	2,487		11		2,894		12
Los Angeles/Orange County, California	2,481		6		2,481		6
Phoenix, Arizona	2,315		8		2,095		7
Denver, Colorado	1,941		6		1,941		6
San Diego/Inland Empire, California	1,665		5		1,665		5
Other	1,907		4		2,072		5
Total Operating Properties	58,948		168		59,899		170

	December 31, 2014				December 31, 2013
	Apartment Homes		Properties		Apartment Homes		Properties
Properties Under Construction
Denver, Colorado	691		2		424		1
Austin, Texas	614		2		614		2
Phoenix, Arizona	614		2		454		2
Los Angeles/Orange County, California	590		2		590		2
Charlotte, North Carolina	589		2		589		2
Dallas, Texas	423		1		423		1
Atlanta, Georgia	379		1		379		1
Houston, Texas	315		1		—		—
Southeast Florida	—		—		261		1
Washington, D.C. Metro	—		—		320		1
Orlando, Florida	—		—		300		1
Other (3)	—		—		75		—
Total Properties Under Construction	4,215		13		4,429		14
Total Properties	63,163		181		64,328		184
Less: Unconsolidated Joint Venture Properties (4)
Houston, Texas	2,522		8		2,840		9
Austin, Texas	1,360		4		1,360		4
Dallas, Texas	1,250		3		1,250		3
Tampa, Florida	450		1		450		1
Raleigh, North Carolina	350		1		350		1
Orlando, Florida	300		1		300		1
Washington, D.C. Metro	276		1		276		1
Charlotte, North Carolina (5)	266		1		266		1
Atlanta, Georgia	234		1		234		1
Other	270		1		510		2
Total Unconsolidated Joint Venture Properties	7,278		22		7,836		24
Total Properties Fully Consolidated	55,885		159		56,492		160

(1)	Includes an operating property consisting of 832 apartment homes which was included in properties held for sale at December 31, 2014. This property was sold in January 2015.

(2)	Includes an operating property consisting of 284 apartment homes which was included in properties held for sale at December 31, 2014. This property was sold in January 2015.

(3)	Represents the units under construction at December 31, 2013 for Phase IXB of Camden Miramar, our one student housing community, located in Corpus Christi, Texas.

(4)	Refer to Note 8, “Investments in Joint Ventures,” in the notes to Consolidated Financial Statements for further discussion of our joint venture investments.

(5)	Represents a property under development owned by one of the funds. See communities under construction below for details.

Acquisitions

During the year ended December 31, 2014, we completed the acquisition of one operating property as follows:

Acquisition of Operating Property		Location		Number of Apartment Homes		Date of Acquisition
Camden Fourth Ward		Atlanta, GA		276		10/29/2014

Dispositions

During the year ended December 31, 2014, we sold five operating properties, and each of the funds, in which we had a 20% interest at the time of sale, sold one operating property as follows:

Dispositions of Consolidated Operating Properties		Location		Number of Apartment Homes		Date of Disposition
Camden River		Atlanta, GA		352		11/10/2014
Camden Glen Lakes		Dallas, TX		424		11/18/2014
Camden Club		Orlando, FL		436		12/4/2014
Camden Lakeside		Tampa, FL		228		12/9/2014
Camden Pinehurst		Charlotte, NC		407		12/18/2014
Consolidated total				1,847

Dispositions of Unconsolidated Operating Properties		Location		Number of Apartment Homes		Date of Disposition
Camden Braun Station		San Antonio, TX		240		2/12/2014
Camden Piney Point		Houston, TX		318		2/27/2014
Unconsolidated total				558

Stabilized Communities

We generally consider a property stabilized once it reaches 90% occupancy. During the year ended December 31, 2014, stabilization was achieved at one consolidated operating property, a subsequent phase at one consolidated operating property, and two unconsolidated development properties as follows:

Stabilized Property and Location	Number of Apartment Homes		Date of Construction Completion		Date of Stabilization
Consolidated Operating Properties
Camden NoMa
Washington, DC	321		2Q14		4Q14
Camden Miramar Phase IXB (1)
Corpus Christi, TX	75		3Q14		3Q14
Consolidated total	396
Unconsolidated Operating Properties
Camden South Capitol
Washington, DC	276		3Q13		3Q14
Camden Waterford Lakes
Orlando, FL	300		1Q14		3Q14
Unconsolidated total	576

(1) Represents the completed units for Phase IXB of Camden Miramar, a subsequent phase to our one student housing community.

Completed Construction in Lease-Up

At December 31, 2014, we had two consolidated completed operating properties in lease-up as follows:

($ in millions) Property and Location	Number of Apartment Homes		Cost Incurred		% Leased at 1/25/15		Date of Construction Completion		Estimated Date of Stabilization
Consolidated Operating Properties
Camden Boca Raton
Boca Raton, FL	261		$51.7		77%		4Q14		3Q15
Camden Foothills
Scottsdale, AZ	220		44.3		51%		4Q14		3Q15
Total Consolidated	481		$96.0

Properties Under Development and Land

Our consolidated balance sheet at December 31, 2014 included approximately $527.6 million related to properties under development and land. Of this amount, approximately $411.3 million related to our projects currently under construction. In addition, we had approximately $116.3 million primarily invested in land held for future development and land holdings, which included approximately $105.7 million related to projects we expect to begin constructing during the next three years, and approximately $10.6 million invested in land holdings which we may develop in the future.

Communities Under Construction. At December 31, 2014, we had 12 consolidated properties and one property held by one of the funds, in which we currently own a 31.3% interest, in various stages of construction as follows:

($ in millions) Property and Location	Number of Apartment Homes		Estimated Cost		Cost Incurred		Included in Properties Under Development		Estimated Date of Construction Completion		Estimated Date of Stabilization
Consolidated Communities Under Construction
Camden La Frontera (1) Round Rock, TX	300		$36.0		$35.0		$6.7		1Q15		4Q15
Camden Lamar Heights (2) Austin, TX	314		47.0		45.6		16.8		1Q15		4Q15
Camden Flatirons (3) Denver, CO	424		78.0		74.2		37.6		2Q15		3Q16
Camden Paces (4) Atlanta, GA	379		110.0		98.3		47.7		3Q15		4Q16
Camden Hayden (5) Tempe, AZ	234		48.0		41.1		27.9		2Q15		3Q15
Camden Glendale Glendale, CA	303		115.0		94.8		94.8		3Q15		1Q16
Camden Gallery Charlotte, NC	323		58.0		28.9		28.9		1Q16		3Q16
Camden Chandler Chandler, AZ	380		75.0		36.4		36.4		1Q16		1Q17
Camden Victory Park Dallas, TX	423		82.0		33.2		33.2		1Q16		1Q18
The Camden Los Angeles, CA	287		145.0		61.7		61.7		4Q16		2Q17
Camden Lincoln Station Denver, CO	267		56.0		8.4		8.4		2Q17		1Q18
Camden McGowen Station Houston, TX	315		90.0		11.2		11.2		4Q17		1Q19
Total Consolidated	3,949		$940.0		$568.8		$411.3
Unconsolidated Community Under Construction
Camden Southline (6) Charlotte, NC	266		$48.0		$36.5		$36.4		3Q15		4Q15

(1)	Property in lease-up and was 64% leased at January 25, 2015.

(2)	Property in lease-up and was 51% leased at January 25, 2015.

(3)	Property in lease-up and was 40% leased at January 25, 2015.

(4)	Property in lease-up and was 24% leased at January 25, 2015.

(5)	Property in lease-up and was 12% leased at January 25, 2015.

(6)	Property owned through an unconsolidated joint venture in which we currently own a 31.3% interest.

Development Pipeline Communities. At December 31, 2014, we had the following consolidated communities undergoing development activities:

($ in millions) Property and Location	Projected Homes		Total Estimated Cost (1)		Cost to Date
Camden NoMa II
Washington, DC	405		$116.0		$22.1
Camden Shady Grove
Rockville, MD	457		115.0		31.6
Camden Buckhead
Atlanta, GA	336		80.0		20.9
Camden Conte (2)
Houston, TX	519		170.0		18.3
Camden Atlantic
Plantation, FL	286		62.0		12.8
Total	2,003		$543.0		$105.7

(1) Represents our estimate of total costs we expect to incur on these projects. However, forward-looking statements are not guarantees of future performance, results, or events. Although we believe these expectations are based upon reasonable assumptions, future events rarely develop exactly as forecasted, and estimates routinely require adjustment.

(2) The property will be developed in two phases. The estimated units, estimated cost, and cost to date represent both phases.

Land Holdings. At December 31, 2014, we had the following land holdings:

($ in millions) Location	Acres		Cost to Date
Las Vegas, NV	19.6		$4.2
Other	4.8		6.4
Total	24.4		$10.6

Geographic Diversification

At December 31, 2014 and 2013, our real estate assets by various markets, excluding depreciation, investments in joint ventures and properties held for sale, were as follows:

($ in thousands)	2014						2013
Washington, D.C. Metro	$	1,361,793			18.4%		$	1,319,513			18.7%
Houston, Texas	707,894				9.5		680,985				9.6
Los Angeles/Orange County, California	653,750				8.8		571,976				8.1
Atlanta, Georgia	585,066				7.9		498,255				7.0
Southeast Florida	551,938				7.4		514,445				7.3
Dallas, Texas	428,603				5.8		442,537				6.3
Las Vegas, Nevada	423,284				5.7		417,041				5.9
Phoenix, Arizona	404,138				5.5		310,109				4.4
Orlando, Florida	382,012				5.1		419,117				5.9
Denver, Colorado	358,854				4.8		320,631				4.5
Tampa, Florida	333,723				4.5		390,392				5.5
San Diego/Inland Empire, California	326,550				4.4		323,349				4.6
Charlotte, North Carolina	325,580				4.4		332,656				4.7
Raleigh, North Carolina	258,647				3.5		253,704				3.6
Austin, Texas	224,399				3.0		192,250				2.7
Corpus Christi, Texas	95,285				1.3		85,221				1.2
Total	$	7,421,516			100.0%		$	7,072,181			100.0%

Results of Operations

Changes in revenues and expenses related to our operating properties from period to period are due primarily to the performance of stabilized properties in the portfolio, the lease-up of newly constructed properties, acquisitions, and dispositions. Where appropriate, comparisons of income and expense for communities included in continuing operations are made on a dollars-per-weighted average apartment home basis in order to adjust for such changes in the number of apartment homes owned during each period. Selected weighted averages for the years ended December 31 are as follows:

($ in thousands)	2014				2013				2012
Average monthly property revenue per apartment home	$	1,331			$	1,270			$	1,207
Annualized total property expenses per apartment home	$	5,779			$	5,520			$	5,321
Weighted average number of operating apartment homes owned 100%	52,833				51,759				48,194
Weighted average occupancy of operating apartment homes owned 100% *	95.7		%		95.3		%		95.3		%
* Our one student housing community is excluded from this calculation.

Property-Level Operating Results (1)

The following tables present the property-level revenues and property-level expenses, excluding discontinued operations, for the year ended December 31, 2014 as compared to 2013 and for the year ended December 31, 2013 as compared to 2012:

	Apartment Homes at			Year Ended December 31,								Change
($ in thousands)	12/31/14			2014				2013				$				%
Property revenues:
Same store communities	46,069			$	730,488			$	699,027			$	31,461			4.5	%
Non-same store communities	5,386			84,440				61,761				22,679				36.7
Development and lease-up communities	4,430			3,546				—				3,546				*
Dispositions/other	—			25,504				28,063				(2,559		)		(9.1	)
Total property revenues	55,885			$	843,978			$	788,851			$	55,127			7.0	%
Property expenses:
Same store communities	46,069			$	261,000			$	251,331			$	9,669			3.8	%
Non-same store communities	5,386			32,302				22,789				9,513				41.7
Development and lease-up communities	4,430			1,191				12				1,179				*
Dispositions/other	—			10,815				11,559				(744		)		(6.4	)
Total property expenses	55,885			$	305,308			$	285,691			$	19,617			6.9	%

• Not a meaningful percentage.

(1) Same store communities are communities we owned and were stabilized since January 1, 2013. Non-same store communities are stabilized communities not owned or stabilized since January 1, 2013. Development and lease-up communities are non-stabilized communities we have acquired or developed since January 1, 2013. Dispositions/other includes operating communities sold subsequent to January 1, 2014 and also includes results from non-multifamily rental properties, below market lease amortization related to acquired communities, and expenses related to land holdings not under active development. There were no properties held for sale which were considered to be discontinued operations during the years ended December 31, 2014 or 2013.

	Apartment Homes at			Year Ended December 31,								Change
($ in thousands)	12/31/13			2013				2012				$				%
Property revenues:
Same store communities	41,150			$	624,429			$	594,255			$	30,174			5.1	%
Non-same store communities	11,479			158,359				97,950				60,409				61.7
Development and lease-up communities	3,863			—				—				—				—
Other	—			6,063				6,113				(50		)		(0.8	)
Total property revenues	56,492			$	788,851			$	698,318			$	90,533			13.0	%
Property expenses:
Same store communities	41,150			$	224,189			$	217,391			$	6,798			3.1	%
Non-same store communities	11,479			58,376				35,861				22,515				62.8
Development and lease-up communities	3,863			15				17				(2		)		(11.8	)
Other	—			3,111				3,161				(50		)		(1.6	)
Total property expenses	56,492			$	285,691			$	256,430			$	29,261			11.4	%

(1) Same store communities are communities we owned and were stabilized since January 1, 2012. Non-same store communities are stabilized communities not owned or stabilized since January 1, 2012. Development and lease-up communities are non-stabilized communities we have acquired or developed since January 1, 2012. Other includes results from non-multifamily rental properties, below market lease amortization related to acquired communities, and expenses related to land holdings not under active development. Properties held for sale and considered to be discontinued operations are excluded from the above results.

Same Store Analysis

Same store property revenues for the year ended December 31, 2014 increased approximately $31.5 million, or 4.5%, from 2013. Same store rental revenues for the year ended December 31, 2014 increased approximately $27.1 million, or 4.5%, from 2013, primarily due to a 4.0% increase in average rental rates and an increase in average occupancy for our same store portfolio from 95.3% in 2013 to 95.8% in 2014. We believe the increase to rental revenue was due to the continuation of improving economic conditions, including job growth, favorable demographics, a manageable supply of new multifamily housing and more individuals choosing to rent versus buy as evidenced by the moderating level of homeownership rates, all of which have resulted in higher rental rates and average occupancy levels. Additionally, there was a $4.4 million increase in other property revenue during the year ended December 31, 2014 as compared to 2013 primarily due to increases in miscellaneous income combined with ancillary income from our utility rebilling programs.

Same store property revenues for the year ended December 31, 2013 increased approximately $30.2 million, or 5.1%, from 2012. Same store rental revenues for the year ended December 31, 2013 increased approximately $27.3 million, or 5.3%, from 2012, primarily due to a 5.1% increase in average rental rates and a slight increase in average occupancy for our same store portfolio from 95.3% in 2012 to 95.4% in 2013. We believe the increase to rental revenue was due in part to the continuation of the improving economic conditions, favorable demographics, and a manageable supply of new multifamily housing. Additionally, there was a $2.9 million increase in other property revenue during the year ended December 31, 2013 as compared to 2012 primarily due to increases in various items of miscellaneous income combined with ancillary income from our utility rebilling programs.

Property expenses from our same store communities increased approximately $9.7 million, or 3.8%, for the year ended December 31, 2014 as compared to 2013. The increase was primarily due to a $4.3 million, or 5.7%, increase in real estate taxes as a result of higher property valuations and property tax rates at a number of our communities. The increase was also due to higher salaries and benefits primarily due to higher medical costs. The increase was also due to higher utility expenses and higher repairs and maintenance costs, and partially offset by a $1.1 million decrease in property insurance expenses due to lower self-insured losses and premiums for the year ended December 31, 2014 as compared to 2013.

Property expenses from our same store communities increased approximately $6.8 million, or 3.1%, for the year ended December 31, 2013 as compared to 2012. The increase was due to a $6.5 million, or 10.9%, increase in real estate taxes as a result of higher property valuations and property tax rates at a number of our communities. The increase was also due to a $2.5 million increase in property insurance expenses due to higher insurance premiums and claims for the year ended December 31, 2013 as compared to 2012. These increases were partially offset by lower repairs and maintenance costs and decreased medical benefit costs.

Non-same Store and Development and Lease-up Analysis

Property revenues and property expenses from non-same store and development and lease-up communities increased approximately $26.2 million and $10.7 million, respectively, for the year ended December 31, 2014 as compared to 2013. These increases in revenues and expenses in our non-same store communities for 2014 as compared to 2013 were primarily due to the acquisition of one operating property in 2014 and three operating properties in 2013. These increases were also due to revenues and expenses recognized in 2014 related to the stabilization of one operating property and 75 units at one of our consolidated operating properties in 2014, and the stabilization of three operating properties and an additional 75 units at another one of our consolidated operating properties in 2013. The increases in revenues and expenses from our development and lease-up communities for 2014 as compared to 2013 were primarily due to the completion and partial lease up of two properties in 2014 and the partial lease up of four properties which were under construction at December 31, 2014.

Property revenues and property expenses from non-same store and development and lease-up communities increased approximately $60.4 million and $22.5 million, respectively, for the year ended December 31, 2013 as compared to 2012. These increases in 2013 as compared to 2012 were primarily due to revenues and expenses recognized in 2013 related to the acquisition of seven operating properties in 2012, the acquisition of three operating properties in 2013 and the acquisition of one previously unconsolidated joint venture community in December 2012. These increases were also due to revenues and expenses recognized in 2013 related to the stabilization of four operating properties in 2012 and three operating properties and 75 units at one of our consolidated operating properties in 2013 and increases in revenues and expenses at our other non-same store communities.

The following table details the impact of the foregoing on our revenues and expenses:

		For the year ended December 31,
(in millions)		2014				2013
Revenues from acquisitions		$	12.8			$	39.3
Revenues from stabilized properties		8.6				15.7
Revenues from development and lease-up properties		3.5				—
Other		1.3				5.4
		$	26.2			$	60.4
Expenses from acquisitions		$	6.0			$	15.1
Expenses from stabilized properties		2.4				6.0
Expenses from development and lease-up properties		1.2				—
Other		1.1				1.4
		$	10.7			$	22.5

Disposition/Other Property Analysis

Disposition/other property revenues decreased approximately $2.6 million for the year ended December 31, 2014 as compared to 2013, and were relatively flat in 2013 as compared to 2012. The decrease in 2014 was primarily due to a $0.9 million decrease in revenue from dispositions due to the timing of completion of the disposition of five operating properties in 2014. The decrease was also due to a lower below market lease amortization of approximately $0.9 million due to the timing of completion of the acquisition of operating properties in 2012 and 2013. Below market leases are generally amortized over approximately six months upon completion of an acquisition, which reflects the remaining average term of acquired leases. The decrease was also due to a decrease in other income of approximately $0.8 million for the year ended December 31, 2014 resulting from our non-multifamily rental properties.

Disposition/other property expenses decreased approximately $0.7 million for the year ended December 31, 2014 as compared to 2013, and were relatively flat in 2013 as compared to 2012. The decrease in 2014 was primarily due to lower property taxes expensed on land holdings on which we initiated development activities in the fourth quarter of 2013 as we start capitalizing expenses, including property taxes, on development properties at such time.

Non-Property Income

	Year Ended December 31,								Change							Year Ended December 31,								Change
($ in thousands)	2014				2013				$				%			2013				2012				$				%
Fee and asset management	$	9,832			$	11,690			$	(1,858	)		(15.9	)%		$	11,690			$	12,345			$	(655	)		(5.3	)%
Interest and other income (loss)	842				1,217				(375		)		(30.8)			1,217				(710		)		1,927				*
Income on deferred compensation plans	3,937				8,290				(4,353		)		(52.5	)		8,290				4,772				3,518				73.7
Total non-property income	$	14,611			$	21,197			$	(6,586	)		(31.1	)%		$	21,197			$	16,407			$	4,790			29.2	%

• Not a meaningful percentage.

Fee and asset management income, which represents income related to property management of our joint ventures and third-party construction projects, decreased approximately $1.9 million for the year ended December 31, 2014 as compared to 2013 and decreased approximately $0.7 million for the year ended December 31, 2013 as compared to 2012. The decrease for 2014 as compared to 2013 was primarily due to the sale of 18 operating properties by three of our unconsolidated joint ventures in 2013 and 2014. This decrease was also due to lower construction fees resulting from a reduced level of third-party construction activities and lower development and construction fees earned due to the timing of development communities started and completed by our funds during 2013 and 2014. The decrease for 2013 as compared to 2012 was primarily due to the sale of 23 operating properties by three unconsolidated joint ventures during 2012 and 2013 and our acquisition of a previously unconsolidated joint venture community in December 2012. This decrease was partially offset by higher construction fees due to an increase in third-party construction activities.

Interest and other income (loss) decreased approximately $0.4 million for the year ended December 31, 2014 as compared to 2013 and increased approximately $1.9 million for the year ended December 31, 2013 as compared to 2012. The decrease during 2014 as compared to 2013, and the increase during 2013 as compared to 2012, were primarily due to approximately $1.0 million recognized in the second quarter of 2013 from the release of a deed restriction on a parcel of land

sold to an unaffiliated third party in 2006. The increase during 2013 as compared to 2012 was also due to losses of approximately $0.8 million recognized in 2012 relating to non-designated derivatives.

Our deferred compensation plans recognized income of approximately $3.9 million, $8.3 million and $4.8 million in 2014, 2013 and 2012, respectively. The changes were related to the performance of the investments held in the deferred compensation plans for participants and were directly offset by the expense related to these plans, as discussed below.

Other Expenses

	Year Ended December 31,								Change							Year Ended December 31,								Change
($ in thousands)	2014				2013				$				%			2013				2012				$				%
Property management	$	22,689			$	21,774			$	915			4.2	%		$	21,774			$	21,796			$	(22	)		(0.1	)%
Fee and asset management	5,341				5,756				(415		)		(7.2	)		5,756				6,631				(875		)		(13.2	)
General and administrative	51,005				40,586				10,419				25.7			40,586				37,528				3,058				8.1
Interest	93,263				98,129				(4,866		)		(5.0	)		98,129				104,246				(6,117		)		(5.9	)
Depreciation and amortization	235,634				214,395				21,239				9.9			214,395				194,673				19,722				10.1
Amortization of deferred financing costs	3,355				3,548				(193		)		(5.4	)		3,548				3,608				(60		)		(1.7	)
Expense on deferred compensation plans	3,937				8,290				(4,353		)		(52.5	)		8,290				4,772				3,518				73.7
Total other expenses	$	415,224			$	392,478			$	22,746			5.8	%		$	392,478			$	373,254			$	19,224			5.2	%

Property management expense, which represents regional supervision and accounting costs related to property operations, increased approximately $0.9 million for the year ended December 31, 2014 as compared to 2013 and was relatively flat in 2013 as compared to 2012. The increase for 2014 as compared to 2013 was primarily due to increases in salaries, benefits, and incentive compensation expenses. Property management expenses were 2.7%, 2.8%, and 3.1% of total property revenues for the years ended December 31, 2014, 2013, and 2012, respectively.

Fee and asset management expense, which represents expenses related to property management of our joint ventures and third-party construction projects, decreased approximately $0.4 million for the year ended December 31, 2014 as compared to 2013 and decreased approximately $0.9 million for the year ended December 31, 2013 as compared to 2012. The decrease for 2014 as compared to 2013 was primarily due to decreases in expenses relating to the sale of 18 operating properties by three of our unconsolidated joint ventures in 2013 and 2014. The decrease for 2014 as compared to 2013 was also due to lower expenses related to the timing of communities started and completed by the funds during 2013 and 2014.

The decrease in fee and asset management expense for 2013 as compared to 2012 was primarily due to the sale of 23 operating properties by three of our unconsolidated joint ventures in 2012 and 2013, and our acquisition of a previously unconsolidated joint venture community in December 2012. The decrease was also due to lower expenses related to management of development communities due to the timing of communities started and completed by our funds during 2012 and 2013, and lower internal acquisition costs in 2013. The decrease was partially offset by higher expenses related to an increase in third-party construction activities during 2013 as compared to 2012.

General and administrative expenses increased approximately $10.4 million during the year ended December 31, 2014 as compared to 2013 and increased approximately $3.1 million during the year ended December 31, 2013 as compared to 2012. General and administrative expenses were 6.0%, 5.1% and 5.3% of total revenues, excluding income on deferred compensation plans, for the years ended December 31, 2014, 2013 and 2012, respectively. The increase in 2014 as compared to 2013 was primarily due to approximately $10.0 million in one-time bonuses paid to employees relating to the restructuring of the funds in December 2014. Excluding this one-time bonus, general and administrative expenses were 4.8% of total revenues, excluding income on deferred compensation plans, for the year ended December 31, 2014.

The increase in general and administrative expenses in 2013 as compared to 2012 was primarily due to increases in salaries, benefits and incentive compensation expenses due to salary increases and higher deferred compensation amortization costs resulting from an increase in the value of awards granted in 2012 and 2013 as compared to the value of awards which vested during the year ended December 31, 2012. The increase was also due to increases in professional and consulting fees of approximately $1.5 million and the net costs of approximately $0.2 million relating to the retirement of an executive officer in July 2013.

Interest expense decreased approximately $4.9 million for the year ended December 31, 2014 as compared to 2013 and decreased approximately $6.1 million for the year ended December 31, 2013 as compared to 2012. The decrease in interest expense in 2014 as compared to 2013 was primarily due to higher capitalized interest in 2014 of approximately $6.4 million resulting from higher average balances in our development pipeline. The decrease was also due to the repayment of a secured note payable in April 2014, the repayment of a secured note payable in January 2013 and a net decrease in interest expense relating to the repayment in December 2013 of $200 million, 5.45% senior unsecured notes payable, which was partially offset by the concurrent issuance of $250 million, 4.27% senior unsecured notes payable. The decrease was also partially offset by an increase in interest expense relating to borrowings on our line of credit in 2014 as compared to 2013, and the issuance in September 2014 of $250 million, 3.59% senior unsecured notes payable.

The decrease in interest expense in 2013 as compared to 2012 was primarily due to the repayment of one secured and one senior unsecured notes payable in 2013 and four secured and one senior unsecured notes payable in 2012. The decrease was also due to higher capitalized interest of approximately $3.0 million during 2013 due to higher average balances in our development pipeline. These decreases were partially offset by interest expense related to a secured note payable assumed in connection with the acquisition of a previously unconsolidated joint venture in December 2012, the issuance of $350 million senior unsecured notes payable in December 2012 and the issuance of $250 million senior unsecured notes payable in December 2013.

Depreciation and amortization expense increased approximately $21.2 million during the year ended December 31, 2014 as compared to 2013 and increased approximately $19.7 million during the year ended December 31, 2013 as compared to 2012. The increase in 2014 as compared to 2013 was primarily due to the acquisition of three operating properties during 2013 and one operating property during 2014. The increase was also due to the completion of units in our development pipeline, the completion of repositions during 2013 and 2014, and increases in capital improvements placed in service during 2013 and 2014.

The increase in depreciation and amortization expense in 2013 as compared to 2012 was primarily due to the acquisition of three operating properties in 2013, the acquisition of seven operating properties in 2012, and the acquisition of a previously unconsolidated joint venture community in December 2012. The increase was also due to the completion of units in our development pipeline, the completion of repositions during 2013 and an increase in capital improvements placed in service in 2012 and 2013. These increases were partially offset by lower amortization of in-place leases relating to the acquisition of nine previously unconsolidated joint venture communities in January 2012 which were amortized through July 2012.

Our deferred compensation plans incurred expenses of approximately $3.9 million, $8.3 million and $4.8 million in 2014, 2013 and 2012, respectively. The changes were related to the performance of the investments held in the deferred compensation plans for participants and were directly offset by the income related to these plans, as discussed in non-property income, above.

Other

	Year Ended December 31,								Change				Year Ended December 31,								Change
(in thousands)	2014				2013				$				2013				2012				$
Gain on sale of operating properties, including land	$	159,289			$	698			$	158,591			$	698			$	—			$	698
Gain on acquisition of controlling interest in joint ventures	—				—				—				—				57,418				(57,418		)
Impairment associated with land holdings	(1,152		)		—				(1,152		)		—				—				—
Equity in income of joint ventures	7,023				24,865				(17,842		)		24,865				20,175				4,690
Income tax expense	(1,903		)		(1,826		)		(77		)		(1,826		)		(1,208		)		(618		)

Gain on sale of operating properties, including land, for the year ended December 31, 2014 was due to the sale of five operating properties located in Atlanta, Georgia, Dallas, Texas, Orlando and Tampa, Florida and Charlotte, North Carolina for a total gain on sale of operating properties of approximately $155.7 million. The gain was also due to the sale of approximately 29.3 acres located adjacent to current operating and development communities in Dallas and Houston, Texas and Atlanta, Georgia for a total gain on sale of land of approximately $3.6 million. The gain in 2013 was due to the sale of approximately 3.7 acres located adjacent to current development communities in Atlanta, Georgia and Houston, Texas for a total gain on sale of approximately $0.7 million.

In January 2012, we acquired the remaining 80% ownership interests in 12 previously unconsolidated joint ventures not previously owned by us, resulting in these entities being wholly-owned. In December 2012, we acquired the remaining 50% ownership interest in another previously unconsolidated joint venture. Our acquisitions resulted in a gain of approximately

$57.4 million, which represented the difference between the fair market value of our previously owned equity interests and the cost basis.

The $1.2 million impairment associated with land holdings in 2014 reflects an impairment charge to the carrying value of a disposed land parcel located in Dallas, Texas, which represented the difference between the land holding's carrying value and the fair value based upon the sales contract.

Equity in income of joint ventures decreased approximately $17.8 million for the year ended December 31, 2014 as compared to 2013, and increased approximately $4.7 million for the year ended December 31, 2013 as compared to 2012. The decrease in 2014 as compared to 2013 was primarily related to recognizing a $16.3 million proportionate share of the gain relating to the sale of 16 operating properties by two of our unconsolidated joint ventures in 2013. Additionally, as a result of achieving certain performance measures as set forth in the joint venture agreement, we recognized a promoted equity interest of approximately $5.1 million related to one of these unconsolidated joint ventures. The decrease was also due to the sale of two operating properties during the first quarter of 2014. The decrease in 2014 was partially offset by a $3.6 million proportionate gain relating to the sale of the two operating properties in the first quarter 2014. The decrease in earnings was further offset by higher rental income recognized by the stabilized operating joint venture properties during the year ended December 31, 2014 as compared to the same period in 2013.

The increase in 2013 as compared to 2012 was primarily due to recognizing a $16.3 million proportionate share of the gain relating to the sale of 16 operating properties by two of our unconsolidated joint ventures in 2013. Additionally, as a result of achieving certain performance measures as set forth in the joint venture agreement, we recognized a promoted equity interest of approximately $5.1 million related to one of these unconsolidated joint ventures. The increase was also due to an increase in earnings recognized during 2013 relating to higher rental income from the stabilized operating joint venture properties. These increases were partially offset by recognizing a $17.4 million proportionate share of the gain relating to the sale of seven operating properties by two of our unconsolidated joint ventures in 2012. These increases were also partially offset by our acquisition of a previously unconsolidated joint venture in December 2012.

We had income tax expense of approximately $1.9 million, $1.8 million, and $1.2 million for the tax years ended December 31, 2014, 2013, and 2012, respectively. The $0.6 million increase in 2013 as compared to 2012 was due to increases in taxable income related to higher construction activities conducted in a taxable REIT subsidiary and increases in state income taxes relating to certain acquisitions completed in 2012 and 2013.

Funds from Operations (“FFO”)

Management considers FFO to be an appropriate measure of the financial performance of an equity REIT. The National Association of Real Estate Investment Trusts (“NAREIT”) currently defines FFO as net income (computed in accordance with accounting principles generally accepted in the United States of America (“GAAP”)), excluding gains (or losses) associated with previously depreciated operating properties, real estate depreciation and amortization, impairments of depreciable assets, and adjustments for unconsolidated joint ventures. Our calculation of diluted FFO also assumes conversion of all potentially dilutive securities, including certain non-controlling interests, which are convertible into common shares. We consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions of operating properties, and depreciation, FFO can assist in the comparison of the operating performance of a company’s real estate investments between periods or to different companies.

To facilitate a clear understanding of our consolidated historical operating results, we believe FFO should be examined in conjunction with net income attributable to common shareholders as presented in the consolidated statements of income and comprehensive income and data included elsewhere in this report. FFO is not defined by GAAP and should not be considered an alternative to net income attributable to common shareholders as an indication of our operating performance. Additionally, FFO as disclosed by other REITs may not be comparable to our calculation.

Reconciliations of net income attributable to common shareholders to FFO for the years ended December 31 are as follows:

($ in thousands)	2014				2013				2012
Funds from operations
Net income attributable to common shareholders (1) (2)	$	292,089			$	336,364			$	283,390
Real estate depreciation and amortization, including discontinued operations	230,638				214,729				205,437
Adjustments for unconsolidated joint ventures	5,337				5,738				7,939
Gain on acquisition of controlling interests in joint ventures	—				—				(57,418		)
Gain on sale of unconsolidated joint venture properties (3)	(3,566		)		(16,277		)		(17,418		)
Gain on sale of operating properties, net of tax	(155,680		)		—				—
Gain on sale of discontinued operations, net of tax	—				(182,160		)		(115,068		)
Income allocated to non-controlling interests	9,225				9,927				6,475
Funds from operations	$	378,043			$	368,321			$	313,337
Weighted average shares – basic	88,084				87,204				83,772
Incremental shares issuable from assumed conversion of:
Common share options and awards granted	384				476				647
Common units	1,898				1,900				2,200
Weighted average shares – diluted	90,366				89,580				86,619

(1)	Net income attributable to common shareholders for the year ended December 31, 2014 includes a gain on sale of $3.6 million related to the sale of three land holdings and a $1.2 million impairment charge to the carrying value of a disposed land parcel.

(2)

Net income attributable to common shareholders for the year ended December 31, 2013 includes a gain on sale of $0.7 million related to the sale of two land holdings. Net income attributable to common shareholders also includes a promoted equity interest of approximately $5.1 million as a result of achieving certain performance measures as set forth in the joint venture agreement for one of our unconsolidated joint ventures which sold its 14 operating properties in 2013.

(3)

The gain in 2014 represents our proportionate share of the gain on sale of two operating properties sold by the funds in 2014. The gain in 2013 represents our proportionate share of the gain on sale of 16 operating properties by two of our unconsolidated joint ventures in 2013. The gain in 2012 represents our proportionate share of the gain on sale of seven operating properties by two of our unconsolidated joint ventures in 2012.

Liquidity and Capital Resources

Financial Condition and Sources of Liquidity

We intend to maintain a strong balance sheet and preserve our financial flexibility, which we believe should enhance our ability to identify and capitalize on investment opportunities as they become available. We intend to maintain what management believes is a conservative capital structure by:

•	extending and sequencing the maturity dates of our debt where practicable;

•	managing interest rate exposure using what management believes to be prudent levels of fixed and floating rate debt;

•	maintaining what management believes to be conservative coverage ratios; and

•	using what management believes to be a prudent combination of debt and equity.

Our interest expense coverage ratio, net of capitalized interest, was approximately 5.0, 4.7, and 4.0 times for the years ended December 31, 2014, 2013, and 2012, respectively. This ratio is a method for calculating the amount of operating cash flows available to cover interest expense and is calculated by dividing interest expense for the period into the sum of property revenues and expenses, non-property income, other expenses, income from discontinued operations after adding back depreciation, amortization, and interest expense from both continuing and discontinued operations. Approximately 79.5%, 77.6%, and 76.5% of our properties (based on invested capital) were unencumbered at December 31, 2014, 2013, and 2012, respectively. Our weighted average maturity of debt was approximately 6.3 years at December 31, 2014.

We also intend to continue to strengthen our capital and liquidity positions by continuing to focus on our core fundamentals which we believe are generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs.

Our primary source of liquidity is cash flow generated from operations. Other sources include availability under our unsecured credit facility, proceeds from property dispositions, the use of debt and equity offerings under our automatic shelf registration statement, equity issued from our ATM program, other unsecured borrowings and secured mortgages. We believe our liquidity and financial condition are sufficient to meet all of our reasonably anticipated cash needs during 2015 including:

•	normal recurring operating expenses;

•	current debt service requirements, including debt maturities;

•	recurring capital expenditures;

•	reposition expenditures;

•	funding of property developments, redevelopments, acquisitions, joint venture investments; and

•	the minimum dividend payments required to maintain our REIT qualification under the Code.

Factors which could increase or decrease our future liquidity include but are not limited to volatility in capital and credit markets, sources of financing, our ability to complete asset purchases, sales, or developments, the effect our debt level and changes in credit ratings could have on our costs of funds, and our ability to access capital markets.

Cash Flows

The following is a discussion of our cash flows for the years ended December 31, 2014 and 2013.

Net cash from operating activities was approximately $418.5 million during the year ended December 31, 2014 as compared to approximately $404.3 million during the year ended December 31, 2013. The increase was primarily due to growth in property revenues directly attributable to increased rental rates and higher occupancy from our same store communities and growth in non-same store revenues primarily relating to the acquisition of one operating property in 2014 and three operating properties in 2013. The increase in non-same store revenues is also related to the stabilization of one property during 2014 and three operating properties during 2013. These increases in revenues were partially offset by the increase in property expenses from our same store and non-same store communities which include the property expenses of one operating property acquired in 2014 and three operating properties acquired in 2013 and the stabilization of one property during 2014 and three operating properties during 2013. For a further discussion of our 2014 operations as compared to 2013, see “Results of Operations.” These increases in net cash from operating activities were partially offset by the disposition of 12 operating properties in 2013, and the timing of receipts in working capital accounts.

Net cash used in investing activities during the year ended December 31, 2014 totaled approximately $325.9 million as compared to approximately $259.0 million during the year ended December 31, 2013. Cash outflows for property development and capital improvements were approximately $503.3 million during 2014 as compared to approximately $356.8 million during 2013, primarily due to the addition of three development communities added in 2014 and three development communities added in the fourth quarter of 2013. The property development and capital improvements during the years ended December 31, 2014 and 2013 included the following:

		December 31,
(in millions)		2014				2013
Expenditures for new development, including land		$	342.1			$	174.7
Capitalized interest, real estate taxes, and other capitalized indirect costs		34.1				25.1
Reposition expenditures		64.4				91.4
Capital expenditures		62.7				65.6
Total		$	503.3			$	356.8

Cash outflows during the year ended December 31, 2014 also related to the acquisition of one operating property for approximately $62.3 million. Net cash used in investing activities during the year ended December 31, 2014 was partially offset by cash inflows of approximately $237.7 million from the sale of five operating properties and four land holdings in 2014, and the distributions received from our joint ventures of approximately $6.4 million relating to the sale of two operating properties in February 2014. Additional cash outflows for the year ended December 31, 2013 related to the acquisition of three operating properties for approximately $224.1 million and increases in non-real estate assets of approximately $17.5 million. Net cash used in investing activities during the year ended December 31, 2013 was partially offset by cash inflows of

approximately $329.4 million from the sale of 12 operating properties and two land holdings in 2013 and $11.3 million from distributions from our joint ventures, which included $8.8 million from two unconsolidated joint ventures relating to the sale of 16 operating properties in 2013.

Net cash provided by financing activities totaled approximately $43.5 million during the year ended December 31, 2014 as compared to net cash used in financing activities of $154.2 million during the year ended December 31, 2013. During 2014, we received net proceeds of approximately $248.1 million from the issuance in September 2014 of $250 million unsecured notes payable and net proceeds of approximately $66.2 million from the issuance of approximately 0.9 million common shares from our ATM program. The cash inflows during 2014 were partially offset by approximately $236.5 million used for distributions paid to common shareholders and non-controlling interest holders, approximately $32.3 million used to repay maturing secured mortgage notes payable, approximately $4.0 million used for principal amortization payments, and approximately $3.1 million of deferred financing costs. During 2013, we used approximately $226.1 million to repay maturing secured and unsecured notes payable and approximately $4.2 million to pay principal amortization. We also used approximately $220.1 million to pay distributions to common shareholders and non-controlling interest holders. The cash flows for the year ended December 31, 2013 were partially offset by proceeds of approximately $249.5 million relating to the issuance in December 2013 of $250 million unsecured notes payable, net proceeds of approximately $40.0 million from the issuance of 0.6 million shares from our ATM program and proceeds of approximately $2.5 million from common share options exercised during the period.

Financial Flexibility

We have a $500 million unsecured credit facility which matures in September 2015 with an option to extend at our election to September 2016. Additionally, we have the option to increase this credit facility to $750 million by either adding additional banks to the credit facility or obtaining the agreement of the existing banks in the credit facility to increase their commitments. The interest rate is based upon the London Interbank Offered Rate ("LIBOR") plus a margin which is subject to change as our credit ratings change. Advances under the line of credit may be priced at the scheduled rates, or we may enter into bid rate loans with participating banks at rates below the scheduled rates. These bid rate loans have terms of 180 days or less and may not exceed the lesser of $250 million or the remaining amount available under the line of credit. The line of credit is subject to customary financial covenants and limitations. We believe we are in compliance with all such financial covenants and limitations on the date of this filing.

Our line of credit provides us with the ability to issue up to $100 million in letters of credit. While our issuance of letters of credit does not increase our borrowings outstanding under our line of credit, it does reduce the amount available. At December 31, 2014, we had no short-term balances outstanding, no balances outstanding on our $500 million unsecured line of credit, and we had outstanding letters of credit totaling approximately $6.4 million, leaving approximately $493.6 million available under our unsecured line of credit.

We currently have an automatic shelf registration statement which allows us to offer, from time to time, common shares, preferred shares, debt securities, or warrants. Our Amended and Restated Declaration of Trust provides we may issue up to 185 million shares of beneficial interest, consisting of 175 million common shares and 10 million preferred shares. At December 31, 2014 we had approximately 86.6 million common shares outstanding, net of treasury shares and shares held in our deferred compensation arrangements, and no preferred shares outstanding.

In November 2014, we created an ATM share offering program through which we can, but have no obligation to, sell common shares having an aggregate offering price of up to $331.3 million (the "2014 ATM program"), in amounts and at times as we determine, into the existing trading market at current market prices as well as through negotiated transactions. Actual sales from time to time may depend on a variety of factors including, among others, market conditions, the trading price of our common shares, and determinations by management of the appropriate sources of funding for us. The net proceeds for the year ended December 31, 2014 were used for general corporate purposes, which included funding for development, redevelopment and capital improvement projects. We intend to use the net proceeds from the remaining 2014 ATM program for general corporate purposes, which may include reducing future borrowings under our $500 million unsecured line of credit, the repayment of other indebtedness, the redemption or other repurchase of outstanding debt or equity securities, funding for development, redevelopment and investment projects and financing for acquisitions. As of the date of this filing, we had common shares having an aggregate offering price of up to $315.3 million remaining available for sale under the 2014 ATM program.

We believe our ability to access capital markets is enhanced by our senior unsecured debt ratings by Moody’s, Fitch, and Standard and Poor's, which are currently Baa1 with stable outlook, BBB+ with positive outlook, and BBB+ with stable outlook, respectively. We believe our ability to access capital markets is also enhanced by our ability to borrow on a secured basis from various institutions including banks, Fannie Mae, Freddie Mac, or life insurance companies. However, we may not be able to maintain our current credit ratings and may not be able to borrow on a secured or unsecured basis in the future.

Future Cash Requirements and Contractual Obligations

One of our principal long-term liquidity requirements includes the repayment of maturing debt, including any future borrowings under our unsecured line of credit or other short-term borrowings. During the remainder of 2015, approximately $251.8 million of debt, which represents approximately 9% of our total outstanding debt and includes scheduled principal amortizations of approximately $1.8 million, is scheduled to mature. See Note 9, “Notes Payable,” in the notes to Consolidated Financial Statements for further discussion of scheduled maturities.

We estimate the additional cost to complete the construction of 12 consolidated projects to be approximately $371.2 million. Of this amount, we expect between approximately $250 million and $270 million will be incurred during 2015 and the remaining costs will be incurred during 2016 and 2017. Additionally, we expect to incur between approximately $80 million and $100 million of costs related to the start of new development activities, between approximately $21 million and $25 million of additional redevelopment expenditures and between approximately $61 million and $65 million of additional other capital expenditures during 2015.

We intend to meet our near-term liquidity requirements through a combination of cash flows generated from operations, draws on our unsecured credit facility or other short-term borrowings, proceeds from property dispositions, the use of debt and equity offerings under our automatic shelf registration statement, equity issued from our ATM program, other unsecured borrowings and secured mortgages. We evaluate our operating property and land development portfolio and plan to continue our practice of selective dispositions as market conditions warrant and opportunities arise.

In order for us to continue to qualify as a REIT, we are required to distribute annual dividends to our shareholders equal to a minimum of 90% of our REIT taxable income, computed without regard to the dividends paid deduction and our net capital gains. In December 2014, we announced our Board of Trust Managers had declared a quarterly dividend of $0.66 per common share, to our common shareholders of record as of December 17, 2014. The dividend was subsequently paid on January 16, 2015 and we paid equivalent amounts per unit to holders of common operating partnership units. When aggregated with previous 2014 dividends, this distribution to common shareholders and holders of the common operating partnership units equates to an annual dividend rate of $2.64 per share or unit for the year ended December 31, 2014.

In the first quarter of 2015, the Company's Board of Trust Managers increased the quarterly dividend rate from $0.66 to $0.70 per common share. Future dividend payments are paid at the discretion of the Board of Trust Managers and depend on cash flows generated from operations, the Company's financial condition and capital requirements, distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, and other factors which may be deemed relevant by our Board of Trust Managers. Assuming similar dividend distributions for the remainder of 2015, our annualized dividend rate for 2015 would be $2.80.

The following table summarizes our known contractual cash obligations as of December 31, 2014:

(in millions)	Total				2015				2016				2017				2018				2019				Thereafter
Debt maturities (1)	$	2,743.5			$	251.8			$	2.0			$	249.0			$	177.4			$	646.5			$	1,416.8
Interest payments (2)	672.5				112.1				106.4				97.4				88.5				63.4				204.7
Non-cancelable lease payments	25.7				2.4				2.7				2.7				2.5				2.3				13.1
	$	3,441.7			$	366.3			$	111.1			$	349.1			$	268.4			$	712.2			$	1,634.6

(1)	Includes scheduled principal amortizations.

(2)	Includes contractual interest payments for our senior unsecured notes and secured notes. The interest payments on certain secured notes with floating interest rates were calculated based on the interest rates in effect as of December 31, 2014.

Off-Balance Sheet Arrangements

The joint ventures in which we have an interest have been funded in part with secured, third-party debt. At December 31, 2014, our unconsolidated joint ventures had outstanding debt of approximately $523.6 million, of which our proportionate share was approximately $163.9 million. As of December 31, 2014, we had no outstanding guarantees related to the loans of our unconsolidated joint ventures.

Inflation

Substantially all of our apartment leases are for a term generally ranging from six to fifteen months. In an inflationary environment, we may realize increased rents at the commencement of new leases or upon the renewal of existing leases. We believe the short-term nature of our leases generally minimizes our risk from the adverse effects of inflation.

Critical Accounting Policies

The preparation of our financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the balance sheet date, and the amounts of revenues and expenses recognized during the reporting period. These estimates are based on historical experience and other assumptions believed to be reasonable under the circumstances. The following is a discussion of our critical accounting policies. For a discussion of all of our significant accounting policies, see Note 2 to the accompanying consolidated financial statements.

Principles of Consolidation. We may enter into various joint venture agreements with unrelated third parties to hold or develop real estate assets. We must determine for each of these joint ventures whether to consolidate the entity or account for our investment under the equity or cost basis of accounting. Investments acquired or created are evaluated based on the accounting guidance relating to variable interest entities (“VIEs”), which requires the consolidation of VIEs in which we are considered to be the primary beneficiary. If the investment is determined not to be a VIE, then the investment is evaluated for consolidation (primarily using a voting interest model) under the remaining consolidation guidance relating to real estate entities. If we are the general partner in a limited partnership, or manager of a limited liability company, we also consider the consolidation guidance relating to the rights of limited partners (non-managing members) to assess whether any rights held by the limited partners overcome the presumption of control by us. We evaluate our accounting for investments on a quarterly basis or when a reconsideration event (as defined by GAAP) with respect to our investments occurs. The analysis required to identify VIEs and primary beneficiaries is complex and requires substantial management judgment. Accordingly, we believe the decisions made to choose an appropriate accounting framework are critical.

Acquisitions of Real Estate. Upon acquisition of real estate, we determine the fair value of tangible and intangible assets, which includes land, buildings (as-if-vacant), furniture and fixtures, the value of in-place leases, including above and below market leases, and acquired liabilities. In estimating these values, we apply methods similar to those used by independent appraisers of income-producing property. Upon the acquisition of a controlling interest of an investment in an unconsolidated joint venture, such joint venture is consolidated and our initial equity investment is remeasured to fair value at the date the controlling interest is acquired. Estimates of fair value of acquired debt are based upon interest rates available for the issuance of debt with similar terms and remaining maturities. As the determination of the fair value of assets acquired and liabilities assumed is subject to significant management judgment and a change in purchase price allocations could result in a material difference in amounts recorded in our consolidated financial statements, we believe the valuation of assets acquired and liabilities assumed are critical.

Asset Impairment. Long-lived assets are reviewed for impairment annually or whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Impairment may exist if estimated future undiscounted cash flows associated with long-lived assets are not sufficient to recover the carrying value of such assets. We consider projected future discounted and undiscounted cash flows, trends, strategic decisions regarding future development plans, and other factors in our assessment of whether impairment conditions exist. While we believe our estimates of future cash flows are reasonable, different assumptions regarding a number of factors, including market rents, economic conditions, and occupancies, could significantly affect these estimates. In estimating fair value, management uses appraisals, management estimates, and discounted cash flow calculations which utilize inputs from a marketplace participant’s perspective. When impairment exists, the long-lived asset is adjusted to its fair value. In addition, we evaluate our equity investments in joint ventures and if we believe there is an other than temporary decline in market value of our investment below our carrying value, we will record an impairment charge.

The value of our properties under development depends on market conditions, including estimates of the project start date as well as estimates of demand for multifamily communities. We have reviewed market trends and other marketplace information and have incorporated this information as well as our current outlook into the assumptions we use in our impairment analyses. Due to the judgment and assumptions applied in the impairment analyses, it is possible actual results could differ substantially from those estimated.

We believe the carrying value of our operating real estate assets, properties under development, and land is currently recoverable. However, if market conditions deteriorate or if changes in our development strategy significantly affect any key assumptions used in our fair value estimates, we may need to take material charges in future periods for impairments related to existing assets. Any such material non-cash charges could have an adverse effect on our consolidated financial position and results of operations.

Cost Capitalization. Real estate assets are carried at cost plus capitalized carrying charges. Carrying charges are primarily interest and real estate taxes which are capitalized as part of properties under development. Capitalized interest is generally based on our weighted average interest rate of our unsecured debt. Expenditures directly related to the development and improvement of real estate assets are capitalized at cost as land and buildings and improvements. Indirect development costs,

including salaries and benefits and other related costs directly attributable to the development of properties, are also capitalized. We begin capitalizing development, construction, and carrying costs when the development of the future real estate asset is probable and activities necessary to get the underlying real estate ready for its intended use have been initiated. All construction and carrying costs are capitalized and reported in the balance sheet as properties under development until the apartment homes are substantially completed. Upon substantial completion of the apartment homes, the total capitalized development cost for the apartment homes and the associated land is transferred to buildings and improvements and land, respectively. Included in capitalized costs are indirect costs associated with our development and redevelopment activities. The estimates used by management require judgment, and accordingly we believe cost capitalization to be a critical accounting estimate.

Recent Accounting Pronouncements

See Note 2, "Summary of Significant Accounting Policies and Recent Accounting Pronouncements" in the notes to Consolidated Financial Statements for further discussion of recent accounting pronouncements issued during the year ended December 31, 2014.