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;

•	Potential reforms to Fannie Mae and Freddie Mac could adversely affect us;

•	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;

•	Litigation risks could affect our business;

•	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 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 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, 2015, we owned interests in, operated, or were developing 180 multifamily properties comprised of 62,649 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, 2015 reflect an increase in same store revenues of 5.2% as compared to 2014. 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 in part to 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 2016 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, 2015, we had eight projects under construction to be comprised of 2,857 apartment homes, with initial occupancy scheduled to occur within the next 23 months. As of December 31, 2015, we estimate the additional cost to complete the construction of the eight projects to be approximately $310.1 million.

Acquisitions

During the year ended December 31, 2015, we acquired three land parcels comprised of 58.1 acres of land located in Phoenix, Arizona, Los Angeles, California and Gaithersburg, Maryland for approximately $59.1 million.

Dispositions

During the year ended December 31, 2015, we sold three operating properties comprised of 1,376 apartment homes located in Austin, Texas and Tampa and Brandon, Florida for approximately $147.4 million and we recognized a gain of approximately $104.0 million relating to these property sales. We also sold two land holdings adjacent to operating properties in Dallas and Houston, Texas for approximately $1.1 million and recognized a gain of approximately $0.3 million.

Future Outlook

Subject to market conditions, we intend to continue to seek opportunities to develop, redevelop 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 expect 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 anticipate meeting our near-term liquidity requirements through a combination of one or more of the following: 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 share offering program, other unsecured borrowings, and secured mortgages.

As of December 31, 2015, we had approximately $10.6 million in cash and cash equivalents, $225.0 million outstanding on our $600 million unsecured credit facility, $19.0 million outstanding on our $40 million unsecured short-term borrowing facility 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 payments on debt maturing in 2016 are manageable at approximately $19.0 million, which represents approximately 0.7% of our total outstanding debt and consists of amounts outstanding under our unsecured short-term borrowing facility. 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, 2015						December 31, 2014
	Apartment Homes			Properties			Apartment Homes			Properties
Operating Properties
Houston, Texas	8,434			24			8,434			24
Washington, D.C. Metro	6,405			19			6,405			19
Dallas, Texas	5,243			13			5,243			13
Las Vegas, Nevada	4,918			15			4,918			15
Atlanta, Georgia	4,246			13			3,867			12
Tampa, Florida	3,788			9			4,880			11
Orlando, Florida	3,540			9			3,540			9
Austin, Texas	3,360			10			3,030			9
Raleigh, North Carolina	3,054			8			3,054			8
Los Angeles/Orange County, California	2,784			7			2,481			6
Southeast Florida	2,781			8			2,781			8
Charlotte, North Carolina	2,753			12			2,487			11
Phoenix, Arizona	2,549			9			2,315			8
Denver, Colorado	2,365			7			1,941			6
Corpus Christi, Texas	1,907			4			1,907			4
San Diego/Inland Empire, California	1,665			5			1,665			5
Total Operating Properties	59,792			172			58,948			168

	December 31, 2015						December 31, 2014
	Apartment Homes			Properties			Apartment Homes			Properties
Properties Under Construction
Washington, D.C. Metro	862			2			—			—
Dallas, Texas	423			1			423			1
Phoenix, Arizona	380			1			614			2
Charlotte, North Carolina	323			1			589			2
Houston, Texas	315			1			315			1
Los Angeles/Orange County, California	287			1			590			2
Denver, Colorado	267			1			691			2
Austin, Texas	—			—			614			2
Atlanta, Georgia	—			—			379			1
Total Properties Under Construction	2,857			8			4,215			13
Total Properties	62,649			180			63,163			181
Less: Unconsolidated Joint Venture Properties (1)
Houston, Texas	2,522			8			2,522			8
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
Corpus Christi, Texas	270			1			270			1
Charlotte, North Carolina (2)	266			1			266			1
Atlanta, Georgia	234			1			234			1
Total Unconsolidated Joint Venture Properties	7,278			22			7,278			22
Total Properties Fully Consolidated	55,371			158			55,885			159

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

(2)	Represents a property under construction at December 31, 2014. Construction was completed in 2015. See Completed Construction in Lease-up below for details.

Dispositions

During the year ended December 31, 2015, we sold three operating properties as follows:

Dispositions of Consolidated Operating Properties		Location		Number of Apartment Homes			Date of Disposition
Camden Ridgecrest		Austin, TX		284			1/15/2015
Camden Bayside		Tampa, FL		832			1/30/2015
Camden Providence Lakes		Brandon, FL		260			10/7/2015
Consolidated total				1,376

Stabilized Communities

We generally consider a property stabilized once it reaches 90% occupancy. During the year ended December 31, 2015, stabilization was achieved at five consolidated operating properties as follows:

Stabilized Property and Location	Number of Apartment Homes			Date of Construction Completion		Date of Stabilization
Camden Boca Raton
Boca Raton, FL	261			4Q14		2Q15
Camden La Frontera
Round Rock, TX	300			1Q15		2Q15
Camden Lamar Heights
Austin, TX	314			1Q15		2Q15
Camden Foothills
Scottsdale, AZ	220			4Q14		3Q15
Camden Hayden
Tempe, AZ	234			2Q15		4Q15
Consolidated total	1,329

Completed Construction in Lease-Up

At December 31, 2015, we had three consolidated completed operating properties and one unconsolidated completed operating property in lease-up as follows:

($ in millions) Property and Location	Number of Apartment Homes			Cost Incurred (1)				% Leased at 1/24/2016			Date of Construction Completion		Estimated Date of Stabilization
Consolidated Operating Properties
Camden Flatirons
Denver, CO	424			$	79.2			88	%		3Q15		2Q16
Camden Glendale
Glendale, CA	303			113.2				69			3Q15		2Q16
Camden Paces
Atlanta, GA	379			117.5				77			4Q15		3Q16
Consolidated total	1,106			$	309.9
Unconsolidated Operating Property
Camden Southline
Charlotte, NC	266			$	47.2			91	%		4Q15		1Q16

(1)	Excludes leasing costs, which are expensed as incurred.

Properties Under Development and Land

Our consolidated balance sheet at December 31, 2015 included approximately $491.1 million related to properties under development and land. Of this amount, approximately $358.4 million related to our projects currently under construction. In addition, we had approximately $132.7 million primarily invested in land held for future development and land holdings, which included approximately $126.5 million related to projects we expect to begin constructing during the next two years, and approximately $6.2 million invested in land which we may develop in the future.

Communities Under Construction. At December 31, 2015, we had eight consolidated properties 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 Chandler (1) Chandler, AZ	380			$	73.0			$	66.4			$	0.3			1Q16		4Q16
Camden Gallery Charlotte, NC	323			58.0				50.4				50.3				3Q16		1Q17
Camden Victory Park Dallas, TX	423			82.0				67.2				67.0				3Q16		1Q18
The Camden Los Angeles, CA	287			145.0				111.7				111.6				4Q16		2Q17
Camden Lincoln Station Denver, CO	267			56.0				18.2				18.2				2Q17		1Q18
Camden NoMa II Washington, DC	405			115.0				45.5				45.5				4Q17		4Q19
Camden Shady Grove Rockville, MD	457			116.0				51.4				51.4				1Q18		4Q19
Camden McGowen Station Houston, TX	315			90.0				14.1				14.1				2Q18		3Q19
Consolidated total	2,857			$	735.0			$	424.9			$	358.4

(1) Property in lease-up and was 62% leased at January 24, 2016.

Development Pipeline Communities. At December 31, 2015, we had the following consolidated communities undergoing development activities:

($ in millions) Property and Location	Projected Homes			Total Estimated Cost (1)				Cost to Date
Camden Washingtonian
Gaithersburg, MD	365			$	90.0			$	18.4
Camden North End (2)(3)
Phoenix, AZ	1,069			225.0				38.3
Camden Buckhead
Atlanta, GA	336			80.0				22.4
Camden Arts District
Los Angeles, CA	354			150.0				13.0
Camden Conte (4)
Houston, TX	519			170.0				21.0
Camden Atlantic
Plantation, FL	286			62.0				13.4
Total	2,929			$	777.0			$	126.5

(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)	Formerly known as Camden Mayo.

(3)	Will be developed in three phases. The estimated units, estimated cost, and cost to date represent all phases.

(4)	Will be developed in two phases. The estimated units, estimated cost, and cost to date represent both phases.

Land Holdings/Other. At December 31, 2015, we had the following investments in land:

($ in millions) Location	Acres			Cost to Date
Las Vegas, NV	19.6			$	4.2
Tampa, FL	4.8			1.5
Other (1)	—			0.5
Total	24.4			$	6.2

(1)	Includes development opportunities in the early phase of the development process for which we either have an option to acquire land or enter into a leasehold interest, or for which we are the buyer under a contract to purchase land.

Geographic Diversification

At December 31, 2015 and 2014, our real estate assets by various markets, excluding depreciation, investments in joint ventures and properties held for sale, were as follows:

($ in thousands)	2015							2014
Washington, D.C. Metro	$	1,433,339			18.3	%		$	1,361,793			18.4	%
Los Angeles/Orange County, California	740,976				9.5			653,750				8.8
Houston, Texas	730,576				9.3			707,894				9.5
Atlanta, Georgia	615,972				7.9			585,066				7.9
Southeast Florida	558,521				7.1			551,938				7.4
Phoenix, Arizona	478,373				6.1			404,138				5.5
Dallas, Texas	470,629				6.0			428,603				5.8
Las Vegas, Nevada	437,059				5.6			423,284				5.7
Orlando, Florida	387,547				5.0			382,012				5.1
Denver, Colorado	383,280				4.9			358,854				4.8
Charlotte, North Carolina	351,661				4.5			325,580				4.4
San Diego/Inland Empire, California	328,381				4.2			326,550				4.4
Tampa, Florida	315,643				4.0			333,723				4.5
Raleigh, North Carolina	263,185				3.4			258,647				3.5
Austin, Texas	229,306				2.9			224,399				3.0
Corpus Christi, Texas	100,208				1.3			95,285				1.3
Total	$	7,824,656			100.0	%		$	7,421,516			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:

	2015				2014				2013
Average monthly property revenue per apartment home	$	1,431			$	1,331			$	1,270
Annualized total property expenses per apartment home	$	6,186			$	5,779			$	5,520
Weighted average number of operating apartment homes owned 100%	52,006				52,833				51,759
Weighted average occupancy of operating apartment homes owned 100% *	95.7		%		95.7		%		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, 2015 as compared to 2014 and for the year ended December 31, 2014 as compared to 2013:

	Apartment Homes at			Year Ended December 31,								Change
($ in thousands)	12/31/2015			2015				2014				$				%
Property revenues:
Same store communities	47,618			$	810,293			$	770,328			$	39,965			5.2	%
Non-same store communities	3,790			59,413				30,397				29,016				95.5
Development and lease-up communities	3,963			14,548				1,295				13,253				*
Dispositions/other	—			8,674				41,958				(33,284		)		(79.3	)
Total property revenues	55,371			$	892,928			$	843,978			$	48,950			5.8	%
Property expenses:
Same store communities	47,618			$	290,161			$	276,003			$	14,158			5.1	%
Non-same store communities	3,790			22,038				11,117				10,921				98.2
Development and lease-up communities	3,963			6,069				301				5,768				*
Dispositions/other	—			3,448				17,887				(14,439		)		(80.7	)
Total property expenses	55,371			$	321,716			$	305,308			$	16,408			5.4	%

• Not a meaningful percentage.

(1)

Same store communities are communities we owned and were stabilized as of January 1, 2014. Non-same store communities are stabilized communities not owned or stabilized as of January 1, 2014. Development and lease-up communities are non-stabilized communities we have acquired or developed since January 1, 2014. Dispositions/other includes operating properties sold subsequent to January 1, 2014, operating properties held for sale and also results from non-multifamily rental properties, below market lease amortization related to acquired communities, and expenses related to land holdings not under active development.

	Apartment Homes at			Year Ended December 31,								Change
($ in thousands)	12/31/2014			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 as of January 1, 2013. Non-same store communities are stabilized communities not owned or stabilized as of 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 properties sold subsequent to January 1, 2013, operating properties held for sale and also results from non-multifamily rental properties, below market lease amortization related to acquired communities, and expenses related to land holdings not under active development.

Same Store Analysis

Same store property revenues for the year ended December 31, 2015 increased approximately $40.0 million, or 5.2%, from 2014. Same store rental revenues for the year ended December 31, 2015 increased approximately $28.6 million, or 4.3%, from 2014, primarily due to a 4.1% increase in average rental rates. 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 an $11.4 million increase in other property revenue during the year ended December 31, 2015 as compared to 2014, primarily due to increases in income from our bulk Internet rebilling program and miscellaneous fee income.

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 in part to the continuation of the 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.

Property expenses from our same store communities increased approximately $14.2 million, or 5.1%, for the year ended December 31, 2015 as compared to 2014. The increase was primarily due to a $5.8 million, or 6.6%, increase in real estate taxes as a result of increased property valuations at a number of our communities as well as increased costs associated with our bulk Internet rebilling program.

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.

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 $42.3 million and $16.7 million, respectively, for the year ended December 31, 2015 as compared to 2014. These increases in revenues and expenses in our non-same store communities for 2015 as compared to 2014 were primarily due to the stabilization of one operating property in 2014 and five operating properties in 2015, and the acquisition of one operating property in 2014. These increases in revenues and expenses from our development and lease-up communities for 2015 as compared to 2014 were primarily due to the completion and partial lease up of three properties in 2015 and the partial lease up of one property which was under construction at December 31, 2015.

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 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 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.

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

		For the year ended December 31,
(in millions)		2015				2014
Revenues from non-same store stabilized properties		$	22.3			$	8.6
Revenues from development and lease-up properties		13.3				3.5
Revenues from acquisitions		4.5				12.8
Other		2.2				1.3
		$	42.3			$	26.2
Expenses from non-same store stabilized properties		$	8.9			$	2.4
Expenses from development and lease-up properties		5.8				1.2
Expenses from acquisitions		2.2				6.0
Other		(0.2		)		1.1
		$	16.7			$	10.7

Dispositions/Other Property Analysis

Dispositions/other property revenues decreased approximately $33.3 million for the year ended December 31, 2015 as compared to 2014, and decreased approximately $2.6 million for the year ended December 31, 2014 as compared to 2013. The decrease in 2015 was primarily due to the disposition of five operating properties in 2014 and three operating properties in 2015. 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.

Dispositions/other property expenses decreased approximately $14.4 million for the year ended December 31, 2015 as compared to 2014, and decreased approximately $0.7 million for the year ended December 31, 2014 as compared to 2013. The decrease in 2015 was primarily due to the disposition of five operating properties in 2014 and three operating properties in 2015. 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)	2015				2014				$				%			2014				2013				$				%
Fee and asset management	$	6,999			$	9,832			$	(2,833	)		(28.8	)%		$	9,832			$	11,690			$	(1,858	)		(15.9	)%
Interest and other income	597				842				(245		)		(29.1	)		842				1,217				(375		)		(30.8	)
Income (loss) on deferred compensation plans	(264		)		3,937				(4,201		)		(106.7	)		3,937				8,290				(4,353		)		(52.5	)
Total non-property income	$	7,332			$	14,611			$	(7,279	)		(49.8	)%		$	14,611			$	21,197			$	(6,586	)		(31.1	)%

Fee and asset management income, which represents income related to property management of our joint ventures and fees from third-party construction projects, decreased approximately $2.8 million for the year ended December 31, 2015 as compared to 2014 and decreased approximately $1.9 million for the year ended December 31, 2014 as compared to 2013. The decrease for 2015 as compared to 2014 was primarily due to lower development and construction fees earned due to the timing of development communities started and completed by our funds during 2014 and 2015, and our increase in ownership interest in two of the funds from 20% to 31.3% effective December 23, 2014. We eliminate fee income provided by our funds to the extent of our ownership. 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.

Our deferred compensation plans recognized a loss of approximately $0.3 million in 2015 and recognized income of approximately $3.9 million and $8.3 million in 2014 and 2013, respectively. The net income (loss) for each period was related to the performance of the investments held in deferred compensation plans for participants and was directly offset by the expense (benefit) related to these plans, as discussed below.

Other Expenses

	Year Ended December 31,								Change							Year Ended December 31,								Change
($ in thousands)	2015				2014				$				%			2014				2013				$				%
Property management	$	23,761			$	22,689			$	1,072			4.7	%		$	22,689			$	21,774			$	915			4.2	%
Fee and asset management	4,742				5,341				(599		)		(11.2	)		5,341				5,756				(415		)		(7.2	)
General and administrative	46,233				51,005				(4,772		)		(9.4	)		51,005				40,586				10,419				25.7
Interest	97,312				94,906				2,406				2.5			94,906				99,784				(4,878		)		(4.9	)
Depreciation and amortization	257,082				237,346				19,736				8.3			237,346				216,288				21,058				9.7
Expense (benefit) on deferred compensation plans	(264		)		3,937				(4,201		)		(106.7	)		3,937				8,290				(4,353		)		(52.5	)
Total other expenses	$	428,866			$	415,224			$	13,642			3.3	%		$	415,224			$	392,478			$	22,746			5.8	%

Property management expense, which represents regional supervision and accounting costs related to property operations, increased approximately $1.1 million for the year ended December 31, 2015 as compared to 2014 and increased approximately $0.9 million for the year ended December 31, 2014 as compared to 2013. These increases were primarily due to increases in salaries, benefits, and incentive compensation expenses. Property management expenses were 2.7% of total property revenues for each of the years ended December 31, 2015 and 2014, and 2.8% of total property revenues for the year ended December 31, 2013.

Fee and asset management expense, which represents expenses related to property management of our joint ventures and fees from third-party construction projects, decreased approximately $0.6 million for the year ended December 31, 2015 as compared to 2014 and decreased approximately $0.4 million for the year ended December 31, 2014 as compared to 2013. The decrease for 2015 as compared to 2014 was primarily due to lower expenses directly related to lower net revenues resulting from our change in ownership interest in two of the funds effective December 23, 2014.

The decrease in fee and asset management expense 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 relating to the timing of communities started and completed by the funds during 2013 and 2014.

General and administrative expenses decreased approximately $4.8 million during the year ended December 31, 2015 as compared to 2014 and increased approximately $10.4 million during the year ended December 31, 2014 as compared to 2013. General and administrative expenses were 5.1%, 6.0% and 5.1% of total revenues, excluding income (loss) on deferred compensation plans, for the years ended December 31, 2015, 2014 and 2013, respectively. The decrease in 2015 as compared to 2014 was primarily due to approximately $10.0 million in one-time bonuses paid to employees in 2014 relating to the restructuring of the funds in December 2014. Excluding the $10.0 million one-time bonus in 2014, general and administrative expenses increased by approximately $5.2 million in 2015 as compared to 2014, which was primarily related to an increase in salaries, benefits and incentive compensation expenses, partially offset by a slight decrease in professional fees.

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.

Interest expense increased approximately $2.4 million for the year ended December 31, 2015 as compared to 2014 and decreased approximately $4.9 million for the year ended December 31, 2014 as compared to 2013. The increase in interest expense in 2015 as compared to 2014 was primarily due to increased interest expense from the issuance of $250 million, 3.68% senior unsecured note payable in September 2014, and lower capitalized interest of approximately $2.9 million during the year ended December 31, 2015, resulting from lower average balances in our development pipeline. The increase in 2015 was also due to an increase in interest expense relating to borrowings on our unsecured credit facility and unsecured short-term

borrowing facility as compared to the same period in 2014. The increase in 2015 was partially offset by the repayment of $250 million, 5.08% senior unsecured notes payable in June 2015 and the repayment of two secured notes payable in April and September of 2014.

The decrease in interest expense in 2014 as compared to 2013 was primarily due to higher capitalized interest in 2014 of approximately $6.5 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, 4.36% senior unsecured notes payable. The decrease was also partially offset by an increase in interest expense relating to borrowings on our unsecured credit facility in 2014 as compared to 2013, and the issuance in September 2014 of $250 million, 3.68% senior unsecured notes payable.

Depreciation and amortization expense increased approximately $19.7 million during the year ended December 31, 2015 as compared to 2014 and increased approximately $21.1 million during the year ended December 31, 2014 as compared to 2013. The increase in 2015 as compared to 2014 was primarily due to the completion of units in our development pipeline, the completion of repositions, increases in capital improvements placed in service during 2014 and 2015, and the acquisition of one operating property in October 2014. The increase was partially offset by a decrease in depreciation expense related to the dispositions of five operating properties in 2014 and three operating properties in 2015.

The increase in depreciation and amortization expense 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.

Our deferred compensation plans recognized a benefit of approximately $0.3 million in 2015 and recognized expenses of approximately $3.9 million and $8.3 million in 2014 and 2013, respectively. The net expense (benefit) for each period was related to the performance of the investments held in deferred compensation plans for participants and was directly offset by the income (loss) related to these plans, as discussed in the non-property income, above.

Other

	Year Ended December 31,								Change				Year Ended December 31,								Change
(in thousands)	2015				2014				$				2014				2013				$
Gain on sale of operating properties, including land	$	104,288			$	159,289			$	(55,001	)		$	159,289			$	698			$	158,591
Impairment associated with land holdings	—				(1,152		)		1,152				(1,152		)		—				(1,152		)
Equity in income of joint ventures	6,168				7,023				(855		)		7,023				24,865				(17,842		)
Income tax expense	(1,872		)		(1,903		)		31				(1,903		)		(1,826		)		(77		)

The gain on sale of operating properties, including land, for the year ended December 31, 2015 was due to the sale of three operating properties located in Austin, Texas and Tampa and Brandon, Florida for a total gain on sale of operating properties of approximately $104.0 million. The gain was also due to the sale of two land holdings adjacent to operating properties in Dallas and Houston, Texas for a total gain on sale of land of approximately $0.3 million.

The gain in 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.

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

Equity in income of joint ventures decreased approximately $0.9 million for the year ended December 31, 2015 as compared to 2014, and decreased approximately $17.8 million for the year ended December 31, 2014 as compared to 2013. The decrease in 2015 as compared to 2014 was primarily due to a $3.6 million proportionate share of the gain relating to the sale of two operating properties by the funds in 2014. The decrease was partially offset by an increase in earnings resulting from our increase in ownership interest in two of the funds from 20% to 31.3% effective December 23, 2014. The decrease was further offset by an increase in earnings resulting from higher rental income from the stabilized operating properties owned by

the funds and two operating properties owned by the funds reaching stabilization during the third quarter of 2014. In 2014 we recognized our proportionate share of losses while these two properties were in the lease-up phase of operations.

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.

Funds from Operations (“FFO”) and Adjusted FFO ("AFFO")

Management considers FFO and AFFO to be appropriate measures 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 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.

AFFO is calculated utilizing FFO less recurring capitalized expenditures which are necessary to help preserve the value of and maintain the functionality at our communities. We also consider AFFO to be a useful supplemental measure because it is frequently used by analysts and investors to evaluate a REIT's operating performance between periods or different companies. Our definition of recurring capital expenditures may differ from other REITs, and there can be no assurance our basis for computing this measure is comparable to other REITs.

To facilitate a clear understanding of our consolidated historical operating results, we believe FFO and AFFO 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 and AFFO are not defined by GAAP and should not be considered alternatives to net income attributable to common shareholders as an indication of our operating performance. Additionally, FFO and AFFO as disclosed by other REITs may not be comparable to our calculation.

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

($ in thousands)	2015				2014				2013
Funds from operations
Net income attributable to common shareholders (1) (2) (3)	$	249,315			$	292,089			$	336,364
Real estate depreciation and amortization, including discontinued operations	251,104				230,638				214,729
Adjustments for unconsolidated joint ventures	9,146				5,337				5,738
Gain on sale of unconsolidated joint venture properties (4)	—				(3,566		)		(16,277		)
Gain on sale of operating properties, net of tax	(104,015		)		(155,680		)		—
Gain on sale of discontinued operations, net of tax	—				—				(182,160		)
Income allocated to non-controlling interests	8,947				9,225				9,927
Funds from operations attributable to common shareholders	$	414,497			$	378,043			$	368,321
Less: recurring capitalized expenditures	(64,169		)		(59,854		)		(67,030		)
Adjusted funds from operations attributable to common shareholders	$	350,328			$	318,189			$	301,291
Weighted average shares – basic	89,120				88,084				87,204
Incremental shares issuable from assumed conversion of:
Common share options and awards granted	370				384				476
Common units	1,896				1,898				1,900
Weighted average shares – diluted	91,386				90,366				89,580

(1)	Net income attributable to common shareholders for the year ended December 31, 2015 includes a gain on sale of $0.3 million related to the sale of two land holdings.

(2)	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.

(3)

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.

(4)	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.

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 5.2, 5.0, and 4.6 times for the years ended December 31, 2015, 2014, and 2013, 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 and income from discontinued operations after adding back depreciation, amortization, and interest expense from both continuing and discontinued operations. Approximately 79.9%,

79.5%, and 77.6% of our properties (based on invested capital) were unencumbered at December 31, 2015, 2014, and 2013, respectively. Our weighted average maturity of debt was approximately 5.7 years at December 31, 2015.

We also expect 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 may include one or more of the following: availability under our unsecured credit facility and 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 believe our liquidity and financial condition are sufficient to meet all of our reasonably anticipated cash needs during 2016 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, the minimum REIT dividend requirements, 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, 2015 and 2014.

Net cash from operating activities was approximately $423.2 million during the year ended December 31, 2015 as compared to approximately $418.5 million during the year ended December 31, 2014. The increase was primarily due to an increase related to higher net property-level revenues partially offset by property-level expenses, primarily due to the growth in revenues directly attributable to increased rental rates from our same store communities and growth in non-same store properties primarily relating to the acquisition of one operating property in 2014, the stabilization of one operating property in 2014 and five operating properties in 2015, the completion and partial lease-up of three operating properties during the third and fourth quarters of 2015, and the partial lease-up of one property under construction at December 31, 2015. See further discussions of our operations as compared to 2014 in "Results of Operations." These increases in net cash from operating activities were partially offset by the disposition of five operating properties in 2014 and three operating properties in 2015. The decrease was also due to an approximate $10.0 million one-time bonus paid to employees in 2015 relating to the restructuring of the funds in December 2014, as well as the timing of the first interest payment relating to the $250 million, 3.68% unsecured notes issued in September 2014, which was made in the first quarter of 2015.

Net cash used in investing activities during the year ended December 31, 2015 totaled approximately $293.3 million as compared to approximately $325.9 million during the year ended December 31, 2014. Cash outflows for property development and capital improvements were approximately $425.6 million during 2015 as compared to approximately $503.3 million during 2014, primarily due to the completion of nine operating properties in 2014 and 2015, and the completion of repositions at several of our operating properties. The property development and capital improvements during the years ended December 31, 2015 and 2014 included the following:

		December 31,
(in millions)		2015				2014
Expenditures for new development, including land		$	285.8			$	342.1
Capitalized interest, real estate taxes, and other capitalized indirect costs		30.9				34.1
Reposition expenditures		35.8				64.4
Capital expenditures		73.1				62.7
Total		$	425.6			$	503.3

During the year ended December 31, 2015, cash outflows were partially offset by proceeds of approximately $145.0 million from the sale of three operating properties and two land holdings. Additional cash outflows for the year ended December 31, 2014 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.

Net cash used in financing activities totaled approximately $273.2 million during the year ended December 31, 2015 as compared to net cash provided by financing activities of $43.5 million during the year ended December 31, 2014. During 2015, we used $250.0 million to repay maturing unsecured notes payable and approximately $3.0 million to pay principal amortization payments. We also used approximately $253.1 million to pay distributions to common shareholders and non-controlling interest holders, and approximately $9.5 million to acquire the remaining non-controlling interests in two fully consolidated joint ventures. The cash flows for the year ended December 31, 2015 were partially offset by proceeds, net of payments, from our unsecured credit facility and other short-term borrowings of $244.0 million. 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, and approximately$4.0 million used for principal amortization payments.

Financial Flexibility

In August 2015, we replaced our $500 million unsecured credit facility with an amended and restated facility, which extended the maturity date from September 2015 to August 2019, with two six-month options to extend the maturity date at our election to August 2020, and increased the availability to $600 million, with the option to further increase it to $900 million by either adding additional banks to the facility or obtaining the agreement of the existing banks to increase their commitments. The interest rate on this credit facility is based upon the London Interbank Offered Rate ("LIBOR") plus a margin which is subject to change as our credit ratings change. Advances under this credit facility 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 $300 million or the remaining amount available under the credit facility. This credit facility 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 credit facility provides us with the ability to issue up to $50 million in letters of credit. While our issuance of letters of credit does not increase our borrowings outstanding under our credit facility, it does reduce the amount available. At December 31, 2015, we had approximately $225.0 million outstanding on our $600 million credit facility and we had outstanding letters of credit totaling approximately $9.4 million, leaving approximately $365.6 million available under our credit facility.

In May 2015, we entered into a $40 million unsecured short-term borrowing facility which matures in May 2016. The interest rate is based upon LIBOR plus 1.05%. At December 31, 2015, we had approximately $19.0 million outstanding on this unsecured short-term borrowing facility.

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, 2015 we had approximately 86.9 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. We intend to use the net proceeds from any future sales under the 2014 ATM program for general corporate purposes, which may include reducing future borrowings under our unsecured credit facility or other short-term borrowings, 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 positive 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 credit facility or other short-term borrowings. We believe payments on debt maturing in 2016 are manageable at approximately $19.0 million, which represents approximately 0.7% of our total outstanding debt and consists of amounts outstanding under our unsecured short-term borrowing facility. 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 the eight consolidated projects to be approximately $310.1 million. Of this amount, we expect to incur costs between approximately $190 million and $210 million during 2016 and to incur the remaining costs during 2017 and 2018. Additionally, we expect to incur costs between approximately $45 million and $55 million related to the start of new development activities, between approximately $19 million and $23 million of additional redevelopment expenditures and between approximately $62 million and $66 million of additional recurring capital expenditures during 2016.

We intend to meet our near-term liquidity requirements through a combination of one or more of the following: 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.

As a REIT we are subject to a number of organizational and operational requirements, including a requirement to distribute current dividends to our shareholders equal to a minimum of 90% of our annual taxable income. In order to minimize paying income taxes, our general policy is to distribute at least 100% of our taxable income. In December 2015, we announced our Board of Trust Managers had declared a quarterly dividend of $0.70 per common share, to our common shareholders of record as of December 17, 2015. The dividend was subsequently paid on January 15, 2016 and we paid equivalent amounts per unit to holders of common operating partnership units. When aggregated with previous 2015 dividends, this distribution to common shareholders and holders of the common operating partnership units equates to an annual dividend rate of $2.80 per share or unit for the year ended December 31, 2015.

In the first quarter of 2016, the Company's Board of Trust Managers increased the quarterly dividend rate from $0.70 to $0.75 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 2016, our annualized dividend rate for 2016 would be $3.00.

The following table summarizes our known contractual cash obligations as of December 31, 2015:

(in millions)	Total				2016				2017				2018				2019				2020				Thereafter
Debt maturities (1)	$	2,724.7			$	19.0			$	247.2			$	175.8			$	870.2			$	1.1			$	1,411.4
Interest payments (2)	588.3				112.0				102.7				93.6				67.5				57.9				154.6
Non-cancelable lease payments	24.5				2.8				2.9				2.7				2.5				2.5				11.1
Unfunded commitments under notes receivable	8.3				8.3				—				—				—				—				—
	$	3,345.8			$	142.1			$	352.8			$	272.1			$	940.2			$	61.5			$	1,577.1

(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, 2015.

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, 2015, our unconsolidated joint ventures had outstanding debt of approximately $527.0 million, of which our proportionate share was approximately $164.9 million. As of December 31, 2015, 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 of a limited partnership, or manager of a limited liability company, we also consider the consolidation guidance relating to the rights of limited partners, or non-managing members, as the case may be, to assess whether any rights held by the limited partners, or non-managing members, as the case may be, 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.

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 the 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 prepare the underlying real estate 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, 2015.