Item 16. Form 10-K Summary.

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Item 16. Form 10-K Summary.

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MID-AMERICA APARTMENT COMMUNITIES, INC.
Date:February 21, 2019/s/ H. Eric Bolton, Jr.
H. Eric Bolton, Jr. Chairman of the Board of Directors Chief Executive Officer (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date:February 21, 2019/s/ H. Eric Bolton, Jr.
H. Eric Bolton, Jr. Chairman of the Board of Directors Chief Executive Officer (Principal Executive Officer)
Date:February 21, 2019/s/ Albert M. Campbell, III
Albert M. Campbell, III Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date:February 21, 2019/s/ A. Clay Holder
A. Clay Holder Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)
Date:February 21, 2019/s/ Russell R. French
Russell R. French Director
Date:February 21, 2019/s/ Alan B. Graf, Jr.
Alan B. Graf, Jr. Director
Date:February 21, 2019/s/ Toni Jennings
Toni Jennings Director
Date:February 21, 2019/s/ James K. Lowder
James K. Lowder Director
Date:February 21, 2019/s/ Thomas H. Lowder
Thomas H. Lowder Director
Date:February 21, 2019/s/ Monica McGurk
Monica McGurk Director
Date:February 21, 2019/s/ Claude B. Nielsen
Claude B. Nielsen Director
Date:February 21, 2019/s/ Philip W. Norwood
Philip W. Norwood Director
Date:February 21, 2019/s/ W. Reid Sanders
W. Reid Sanders Director
Date:February 21, 2019/s/ Gary Shorb
Gary Shorb Director
Date:February 21, 2019/s/ David P. Stockert
David P. Stockert Director

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MID-AMERICA APARTMENTS, L.P.
a Tennessee Limited Partnership
By: Mid-America Apartment Communities, Inc., its general partner
Date:February 21, 2019/s/ H. Eric Bolton, Jr.
H. Eric Bolton, Jr. Chairman of the Board of Directors Chief Executive Officer (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant as an officer or director of Mid-America Apartment Communities, Inc., in its capacity as the general partner of the registrant and on the dates indicated.

Date:February 21, 2019/s/ H. Eric Bolton, Jr.
H. Eric Bolton, Jr. Chairman of the Board of Directors Chief Executive Officer (Principal Executive Officer)
Date:February 21, 2019/s/ Albert M. Campbell, III
Albert M. Campbell, III Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date:February 21, 2019/s/ A. Clay Holder
A. Clay Holder Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)
Date:February 21, 2019/s/ Russell R. French
Russell R. French Director
Date:February 21, 2019/s/ Alan B. Graf, Jr.
Alan B. Graf, Jr. Director
Date:February 21, 2019/s/ Toni Jennings
Toni Jennings Director
Date:February 21, 2019/s/ James K. Lowder
James K. Lowder Director
Date:February 21, 2019/s/ Thomas H. Lowder
Thomas H. Lowder Director
Date:February 21, 2019/s/ Monica McGurk
Monica McGurk Director
Date:February 21, 2019/s/ Claude B. Nielsen
Claude B. Nielsen Director
Date:February 21, 2019/s/ Philip W. Norwood
Philip W. Norwood Director
Date:February 21, 2019/s/ W. Reid Sanders
W. Reid Sanders Director
Date:February 21, 2019/s/ Gary Shorb
Gary Shorb Director
Date:February 21, 2019/s/ David P. Stockert
David P. Stockert Director

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Mid-America Apartment Communities, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Mid-America Apartment Communities, Inc. (the Company) as of December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 21, 2019 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2005.

Memphis, Tennessee

February 21, 2019

F-1

Report of Independent Registered Public Accounting Firm

To the Partners of Mid-America Apartments, L.P.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Mid-America Apartments, L.P. (the Partnership) as of December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive income, changes in capital, and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Partnership at December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on the Partnership's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Partnership's auditor since 2012.

Memphis, Tennessee

February 21, 2019

F-2

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Mid-America Apartment Communities, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Mid-America Apartment Communities, Inc.’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Mid-America Apartment Communities, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated February 21, 2019 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Memphis, Tennessee

February 21, 2019

F-3

Mid-America Apartment Communities, Inc.

Consolidated Balance Sheets

December 31, 2018 and 2017

(Dollars in thousands, except share and per share data)

December 31, 2018December 31, 2017
Assets
Real estate assets:
Land$1,868,828$1,836,417
Buildings and improvements and other11,670,21611,281,504
Development and capital improvements in progress59,506116,833
13,598,55013,234,754
Less: Accumulated depreciation(2,549,287)(2,075,071)
11,049,26311,159,683
Undeveloped land58,25757,285
Investment in real estate joint venture44,18144,956
Real estate assets, net11,151,70111,261,924
Cash and cash equivalents34,25910,750
Restricted cash17,41478,117
Other assets120,407135,807
Assets held for sale—5,321
Total assets$11,323,781$11,491,919
Liabilities and equity
Liabilities:
Unsecured notes payable$4,053,302$3,525,765
Secured notes payable475,026976,292
Accrued expenses and other liabilities413,850405,560
Total liabilities4,942,1784,907,617
Redeemable common stock9,41410,408
Shareholders' equity:
Preferred stock, $0.01 par value per share, 20,000,000 shares authorized; 8.50% Series I Cumulative Redeemable Shares, liquidation preference $50 per share, 867,846 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively.99
Common stock, $0.01 par value per share, 145,000,000 shares authorized; 113,844,267 and 113,643,166 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively (1)1,1361,134
Additional paid-in capital7,138,1707,121,112
Accumulated distributions in excess of net income(989,263)(784,500)
Accumulated other comprehensive (loss) income(212)2,157
Total MAA shareholders' equity6,149,8406,339,912
Noncontrolling interests - Operating Partnership units220,043231,676
Total Company's shareholders' equity6,369,8836,571,588
Noncontrolling interest - consolidated real estate entity2,3062,306
Total equity6,372,1896,573,894
Total liabilities and equity$11,323,781$11,491,919
(1)Number of shares issued and outstanding represents total shares of common stock regardless of classification on the Consolidated Balance Sheets. The number of shares classified as redeemable common stock on the Consolidated Balance Sheets as of December 31, 2018 and December 31, 2017 are 98,371 and 103,504, respectively.

See accompanying notes to consolidated financial statements.

F-4

Mid-America Apartment Communities, Inc.

Consolidated Statements of Operations

Years ended December 31, 2018, 2017 and 2016

(Dollars in thousands, except per share data)

201820172016
Revenues:
Rental and other property revenues$1,571,346$1,528,987$1,125,348
Expenses:
Operating expense, excluding real estate taxes and insurance371,095364,190280,572
Real estate taxes and insurance223,493212,541142,784
Depreciation and amortization489,759493,708322,958
Total property operating expenses1,084,3471,070,439746,314
Property management expenses47,63343,58834,093
General and administrative expenses34,78640,19429,040
Merger and integration related expenses9,11219,99040,823
Interest expense173,594154,751129,947
Loss (gain) on sale of depreciable real estate assets39(127,386)(80,397)
Gain on sale of non-depreciable real estate assets(4,532)(21)(2,171)
Other non-operating (income) expense(5,434)(14,353)1,839
Income before income tax expense231,801341,785225,860
Income tax expense(2,611)(2,619)(1,699)
Income from continuing operations before real estate joint venture activity229,190339,166224,161
Income from real estate joint venture1,8321,370241
Net income231,022340,536224,402
Net income attributable to noncontrolling interests8,12312,15712,180
Net income available for shareholders222,899328,379212,222
Dividends to MAA Series I preferred shareholders3,6883,688307
Net income available for MAA common shareholders$219,211$324,691$211,915
Earnings per common share - basic:
Net income available for MAA common shareholders$1.93$2.86$2.69
Earnings per common share - diluted:
Net income available for MAA common shareholders$1.93$2.86$2.69

See accompanying notes to consolidated financial statements.

F-5

Mid-America Apartment Communities, Inc.

Consolidated Statements of Comprehensive Income

Years ended December 31, 2018, 2017 and 2016

(Dollars in thousands)

201820172016
Net income$231,022$340,536$224,402
Other comprehensive (loss) income:
Unrealized (loss) gain from the effective portion of derivative instruments(751)319(1,500)
Reclassification adjustment for net (gains) losses included in net income for the effective portion of derivative instruments(1,938)7304,364
Total comprehensive income228,333341,585227,266
Less: Comprehensive income attributable to noncontrolling interests(8,036)(12,193)(12,311)
Comprehensive income attributable to MAA$220,297$329,392$214,955

See accompanying notes to consolidated financial statements.

F-6

Mid-America Apartment Communities, Inc.

Consolidated Statements of Equity

Years ended December 31, 2018, 2017 and 2016

(Dollars and shares in thousands)

Mid-America Apartment Communities, Inc. ShareholdersNoncontrolling Interests - Operating PartnershipNoncontrolling Interest - Consolidated Real Estate Entity
Preferred StockCommon StockAdditional Paid-In CapitalAccumulated Distributions in Excess of Net IncomeAccumulated Other Comprehensive (Loss) IncomeTotal EquityRedeemable Stock
SharesAmountSharesAmount
EQUITY BALANCE DECEMBER 31, 2015—$—75,318$753$3,627,074$(634,141)$(1,589)$165,726$—$3,157,823$8,250
Net income—————212,222—12,180—224,402—
Other comprehensive income - derivative instruments——————2,733131—2,864—
Issuance and registration of common shares——38,0973803,406,150——72,759—3,479,2891,240
Issuance and registration of preferred shares8689——64,824————64,833—
Shares repurchased and retired——(23)—(2,019)————(2,019)—
Shares issued in exchange for common units——23—902——(902)———
Shares issued in exchange for redeemable stock————122————122(122)
Redeemable stock fair market value adjustment—————(705)———(705)705
Adjustment for noncontrolling interests in Operating Partnership————(192)——192———
Amortization of unearned compensation————12,151————12,151—
Noncontrolling interests distribution———————(226)—(226)—
Dividends on preferred stock—————(307)———(307)—
Dividends on common stock ($3.3300 per share)—————(284,548)———(284,548)—
Dividends on noncontrolling interests units ($3.3300 per unit)———————(13,884)—(13,884)—
Acquired capital from noncontrolling interest - consolidated real estate entity————————2,3062,306—
EQUITY BALANCE DECEMBER 31, 2016868$9113,415$1,133$7,109,012$(707,479)$1,144$235,976$2,306$6,642,101$10,073
Net income—————328,379—12,157—340,536—
Other comprehensive income - derivative instruments——————1,01336—1,049—
Issuance and registration of common shares——1371615————6161,588
Issuance and registration of preferred shares————2,007————2,007—
Shares repurchased and retired——(51)—(4,782)————(4,782)—
Exercise of stock options——10—218————218—
Shares issued in exchange for common units——29—1,602——(1,602)———
Shares issued in exchange for redeemable stock————1,482————1,482(1,482)
Redeemable stock fair market value adjustment—————(229)———(229)229
Adjustment for noncontrolling interests in Operating Partnership————42——(42)———
Amortization of unearned compensation————10,916(114)———10,802—
Dividends on preferred stock—————(3,688)———(3,688)—
Dividends on common stock ($3.5325 per share)—————(401,369)———(401,369)—
Dividends on noncontrolling interests units ($3.5325 per unit)———————(14,849)—(14,849)—
EQUITY BALANCE DECEMBER 31, 2017868$9113,540$1,134$7,121,112$(784,500)$2,157$231,676$2,306$6,573,894$10,408
Net income—————222,899—8,123—231,022—
Other comprehensive loss - derivative instruments——————(2,602)(87)—(2,689)—
Issuance and registration of common shares——1421(264)————(263)1,482
Shares repurchased and retired——(34)—(2,921)————(2,921)—
Exercise of stock options——18—916————916—
Shares issued in exchange for common units——8014,443——(4,444)———
Shares issued in exchange for redeemable stock————1,915————1,915(1,915)
Redeemable stock fair market value adjustment—————561———561(561)
Adjustment for noncontrolling interests in Operating Partnership————66——(66)———
Cumulative adjustment due to adoption of ASU 2017-12———(233)233———
Amortization of unearned compensation————12,903————12,903—
Dividends on preferred stock—————(3,688)———(3,688)—
Dividends on common stock ($3.7275 per share)—————(424,302)———(424,302)—
Dividends on noncontrolling interests units ($3.7275 per unit)———————(15,159)—(15,159)—
EQUITY BALANCE DECEMBER 31, 2018868$9113,746$1,136$7,138,170$(989,263)$(212)$220,043$2,306$6,372,189$9,414

See accompanying notes to consolidated financial statements.

F-7

Mid-America Apartment Communities, Inc.

Consolidated Statements of Cash Flows

Years ended December 31, 2018, 2017 and 2016

(Dollars in thousands)

201820172016
Cash flows from operating activities:
Net income$231,022$340,536$224,402
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization490,995494,540323,283
Loss (gain) on sale of depreciable real estate assets39(127,386)(80,397)
Gain on sale of non-depreciable real estate assets(4,532)(21)(2,171)
Stock compensation expense12,44410,57011,486
Amortization of debt premium and debt issuance costs(4,990)(9,810)(9,820)
Net change in operating accounts and other9,314(47,629)18,221
Net cash provided by operating activities734,292660,800485,004
Cash flows from investing activities:
Purchases of real estate and other assets(129,487)(136,065)(339,186)
Capital improvements, development and other(254,715)(343,890)(183,977)
Distributions from real estate joint ventures775—1,778
Contributions to affiliates(2,905)(1,500)—
Proceeds from disposition of real estate assets19,982187,245296,410
Acquisition of Post Properties, net of cash acquired——(424,156)
Net cash used in investing activities(366,350)(294,210)(649,131)
Cash flows from financing activities:
Proceeds from lines of credit1,540,000805,000635,000
Repayments of lines of credit(1,490,000)(965,000)(300,000)
Proceeds from notes payable869,630597,480300,000
Principal payments on notes payable(878,610)(413,557)(146,026)
Payment of deferred financing costs(6,060)(5,358)(2,395)
Repurchase of common stock(2,921)(4,782)(2,019)
Debt prepayment and extinguishment costs(60)(1,659)(139)
Proceeds from issuances of common shares5851,557291
Exercise of stock options916432—
Distributions to noncontrolling interests(15,079)(14,654)(13,850)
Dividends paid on common shares(419,849)(395,294)(247,652)
Dividends paid on preferred shares(3,688)(3,688)(924)
Net cash (used in) provided by financing activities(405,136)(399,523)222,286
Net (decrease) increase in cash, cash equivalents and restricted cash(37,194)(32,933)58,159
Cash, cash equivalents and restricted cash, beginning of period88,867121,80063,641
Cash, cash equivalents and restricted cash, end of period$51,673$88,867$121,800
The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the Consolidated Balance Sheets:
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$34,259$10,750$33,536
Restricted cash17,41478,11788,264
Total cash, cash equivalents and restricted cash$51,673$88,867$121,800
Supplemental disclosure of cash flow information:
Interest paid$184,834$166,757$144,843
Income taxes paid2,5502,3661,582
Supplemental disclosure of noncash investing and financing activities:
Conversion of OP Units to shares of common stock$4,443$1,602$902
Accrued construction in progress8,5817,85231,491
Interest capitalized2,0477,2382,073
Mark-to-market adjustment on derivative instruments(6,436)17,8065,670
Fair value adjustment on debt assumed from the Post Properties merger——8,864
Loan assumption from the Post Properties merger——586,744
Purchase price for the Post Properties merger——4,006,586

See accompanying notes to consolidated financial statements.

F-8

Mid-America Apartments, L.P.

Consolidated Balance Sheets

December 31, 2018 and 2017

(Dollars in thousands, except unit data)

December 31, 2018December 31, 2017
Assets
Real estate assets:
Land$1,868,828$1,836,417
Buildings and improvements and other11,670,21611,281,504
Development and capital improvements in progress59,506116,833
13,598,55013,234,754
Less: Accumulated depreciation(2,549,287)(2,075,071)
11,049,26311,159,683
Undeveloped land58,25757,285
Investment in real estate joint venture44,18144,956
Real estate assets, net11,151,70111,261,924
Cash and cash equivalents34,25910,750
Restricted cash17,41478,117
Other assets120,407135,807
Assets held for sale—5,321
Total assets$11,323,781$11,491,919
Liabilities and capital
Liabilities:
Unsecured notes payable$4,053,302$3,525,765
Secured notes payable475,026976,292
Accrued expenses and other liabilities413,850405,560
Due to general partner1919
Total liabilities4,942,1974,907,636
Redeemable common units9,41410,408
Operating Partnership capital:
Preferred units, 867,846 preferred units outstanding as of December 31, 2018 and December 31, 2017, respectively66,84066,840
Common Units:
General partner, 113,844,267 and 113,643,166 OP Units outstanding as of December 31, 2018 and December 31, 2017, respectively (1)6,083,1426,270,758
Limited partners, 4,111,301 and 4,191,586 OP Units outstanding as of December 31, 2018 and December 31, 2017, respectively (1)220,043231,676
Accumulated other comprehensive (loss) income(161)2,295
Total operating partners' capital6,369,8646,571,569
Noncontrolling interest - consolidated real estate entity2,3062,306
Total capital6,372,1706,573,875
Total liabilities and capital$11,323,781$11,491,919
(1)Number of units outstanding represents total OP Units regardless of classification on the Consolidated Balance Sheets. The number of units classified as redeemable common units on the Consolidated Balance Sheets as of December 31, 2018 and December 31, 2017 are 98,371 and 103,504, respectively.

See accompanying notes to consolidated financial statements.

F-9

Mid-America Apartments, L.P.

Consolidated Statements of Operations

Years ended December 31, 2018, 2017 and 2016

(Dollars in thousands, except per unit data)

201820172016
Revenues:
Rental and other property revenues$1,571,346$1,528,987$1,125,348
Expenses:
Operating expense, excluding real estate taxes and insurance371,095364,190280,572
Real estate taxes and insurance223,493212,541142,784
Depreciation and amortization489,759493,708322,958
Total property operating expenses1,084,3471,070,439746,314
Property management expenses47,63343,58834,093
General and administrative expenses34,78640,19429,040
Merger and integration related expenses9,11219,99040,823
Interest expense173,594154,751129,947
Loss (gain) on sale of depreciable real estate assets39(127,386)(80,397)
Gain on sale of non-depreciable real estate assets(4,532)(21)(2,171)
Other non-operating (income) expense(5,434)(14,353)1,839
Income before income tax expense231,801341,785225,860
Income tax expense(2,611)(2,619)(1,699)
Income from continuing operations before real estate joint venture activity229,190339,166224,161
Income from real estate joint venture1,8321,370241
Net income231,022340,536224,402
Dividends to preferred unitholders3,6883,688307
Net income available for MAALP common unitholders$227,334$336,848$224,095
Earnings per common unit - basic:
Net income available for MAALP common unitholders$1.93$2.86$2.70
Earnings per common unit - diluted:
Net income available for MAALP common unitholders$1.93$2.86$2.70

See accompanying notes to consolidated financial statements.

F-10

Mid-America Apartments, L.P.

Consolidated Statements of Comprehensive Income

Years ended December 31, 2018, 2017 and 2016

(Dollars in thousands)

201820172016
Net income$231,022$340,536$224,402
Other comprehensive (loss) income:
Unrealized (loss) gain from the effective portion of derivative instruments(751)319(1,500)
Reclassification adjustment for net (gains) losses included in net income for the effective portion of derivative instruments(1,938)7304,364
Comprehensive income attributable to MAALP$228,333$341,585$227,266
See accompanying notes to consolidated financial statements.

F-11

Mid-America Apartments, L.P.

Consolidated Statements of Changes in Capital

Years ended December 31, 2018, 2017 and 2016

(Dollars in thousands)

Mid-America Apartments, L.P. UnitholdersNoncontrolling Interest - Consolidated Real Estate EntityTotal Partnership CapitalRedeemable Units
Limited PartnerGeneral PartnerPreferred UnitsAccumulated Other Comprehensive(Loss) Income
CAPITAL BALANCE DECEMBER 31, 2015$165,726$2,993,696$—$(1,618)$—$3,157,804$8,250
Net income12,180211,915307——224,402—
Other comprehensive income - derivative instruments———2,864—2,864—
Issuance of units72,7593,406,53064,833——3,544,1221,240
Units repurchased and retired—(2,019)———(2,019)—
General partner units issued in exchange for limited partner units(902)902—————
Units issued in exchange for redeemable units—122———122(122)
Redeemable units fair market value adjustment—(705)———(705)705
Adjustment for limited partners' capital at redemption value323(323)—————
Amortization of unearned compensation—12,151———12,151—
Noncontrolling interest distribution(226)————(226)—
Distributions to preferred unitholders——(307)——(307)—
Distributions to common unitholders ($3.3300 per unit)(13,884)(284,548)———(298,432)—
Acquired capital from noncontrolling interest - consolidated real estate entity————2,3062,306—
CAPITAL BALANCE DECEMBER 31, 2016$235,976$6,337,721$64,833$1,246$2,306$6,642,082$10,073
Net income12,157324,6913,688——340,536—
Other comprehensive income - derivative instruments———1,049—1,049—
Issuance of units—6162,007——2,6231,588
Units repurchased and retired—(4,782)———(4,782)—
Exercise of unit options—218———218—
General partner units issued in exchange for limited partner units(1,602)1,602—————
Units issued in exchange for redeemable units—1,482———1,482(1,482)
Redeemable units fair market value adjustment—(229)———(229)229
Adjustment for limited partners' capital at redemption value(6)6—————
Amortization of unearned compensation—10,802———10,802—
Distributions to preferred unitholders——(3,688)——(3,688)—
Distributions to common unitholders ($3.5325 per unit)(14,849)(401,369)———(416,218)—
CAPITAL BALANCE DECEMBER 31, 2017$231,676$6,270,758$66,840$2,295$2,306$6,573,875$10,408
Net income8,123219,2113,688——231,022—
Other comprehensive loss - derivative instruments———(2,689)—(2,689)—
Issuance of units—(264)———(264)1,482
Units repurchased and retired—(2,921)———(2,921)—
Exercise of unit options—916———916—
General partner units issued in exchange for limited partner units(4,444)4,444—————
Units issued in exchange for redeemable units—1,915———1,915(1,915)
Redeemable units fair market value adjustment—561———561(561)
Adjustment for limited partners' capital at redemption value(153)153—————
Cumulative adjustment due to adoption of ASU 2017-12—(233)—233———
Amortization of unearned compensation—12,904———12,904—
Distributions to preferred unitholders——(3,688)——(3,688)—
Distributions to common unitholders ($3.7275 per unit)(15,159)(424,302)———(439,461)—
CAPITAL BALANCE DECEMBER 31, 2018$220,043$6,083,142$66,840$(161)$2,306$6,372,170$9,414

See accompanying notes to consolidated financial statements.

F-12

Mid-America Apartments, L.P.

Consolidated Statements of Cash Flows

Years ended December 31, 2018, 2017 and 2016

(Dollars in thousands)

201820172016
Cash flows from operating activities:
Net income$231,022$340,536$224,402
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization490,995494,540323,283
Loss (gain) on sale of depreciable real estate assets39(127,386)(80,397)
Gain on sale of non-depreciable real estate assets(4,532)(21)(2,171)
Stock compensation expense12,44410,57011,486
Amortization of debt premium and debt issuance costs(4,990)(9,810)(9,820)
Net change in operating accounts and other9,314(47,629)18,221
Net cash provided by operating activities734,292660,800485,004
Cash flows from investing activities:
Purchases of real estate and other assets(129,487)(136,065)(339,186)
Capital improvements, development and other(254,715)(343,890)(183,977)
Distributions from real estate joint ventures775—1,778
Contributions to affiliates(2,905)(1,500)—
Proceeds from disposition of real estate assets19,982187,245296,410
Acquisition of Post Properties, net of cash acquired——(424,156)
Net cash used in investing activities(366,350)(294,210)(649,131)
Cash flows from financing activities:
Proceeds from lines of credit1,540,000805,000635,000
Repayments of lines of credit(1,490,000)(965,000)(300,000)
Proceeds from notes payable869,630597,480300,000
Principal payments on notes payable(878,610)(413,557)(146,026)
Payment of deferred financing costs(6,060)(5,358)(2,395)
Repurchase of common units(2,921)(4,782)(2,019)
Debt prepayment and extinguishment costs(60)(1,659)(139)
Proceeds from issuances of common units5851,557291
Exercise of unit options916432—
Distributions paid on common units(434,928)(409,948)(261,502)
Distributions paid on preferred units(3,688)(3,688)(924)
Net cash (used in) provided by financing activities(405,136)(399,523)222,286
Net (decrease) increase in cash, cash equivalents and restricted cash(37,194)(32,933)58,159
Cash, cash equivalents and restricted cash, beginning of period88,867121,80063,641
Cash, cash equivalents and restricted cash, end of period$51,673$88,867$121,800
The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the Consolidated Balance Sheets:
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$34,259$10,750$33,536
Restricted cash17,41478,11788,264
Total cash, cash equivalents and restricted cash$51,673$88,867$121,800
Supplemental disclosure of cash flow information:
Interest paid$184,834$166,757$144,843
Income taxes paid2,5502,3661,582
Supplemental disclosure of noncash investing and financing activities:
Accrued construction in progress$8,581$7,852$31,491
Interest capitalized2,0477,2382,073
Mark-to-market adjustment on derivative instruments(6,436)17,8065,670
Fair value adjustment on debt assumed from the Post Properties merger——8,864
Loan assumption from the Post Properties merger——586,744
Purchase price for the Post Properties merger——4,006,586

See accompanying notes to consolidated financial statements.

F-13

Mid-America Apartment Communities, Inc. and Mid-America Apartments, L.P.

Notes to Consolidated Financial Statements

Years ended December 31, 2018, 2017 and 2016

1.Organization and Summary of Significant Accounting Policies

Unless the context otherwise requires, all references to the "Company" refer collectively to Mid-America Apartment Communities, Inc., together with its consolidated subsidiaries, including Mid-America Apartments, L.P. Unless the context otherwise requires, all references to "MAA" refer only to Mid-America Apartment Communities, Inc., and not any of its consolidated subsidiaries. Unless the context otherwise requires, the references to the "Operating Partnership" or "MAALP" refer to Mid-America Apartments, L.P. together with its consolidated subsidiaries. "Common stock" refers to the common stock of MAA and, unless the context otherwise requires, "shareholders" refers to the holders of shares of MAA’s common stock. The common units of limited partnership interests in the Operating Partnership are referred to as "OP Units," and the holders of the OP Units are referred to as "common unitholders".

As of December 31, 2018, MAA owned 113,844,267 OP Units (or 96.5% of the total number of OP Units). MAA conducts substantially all of its business and holds substantially all of its assets, directly or indirectly, through the Operating Partnership, and by virtue of its ownership of the OP Units and being the Operating Partnership's sole general partner, MAA has the ability to control all of the day-to-day operations of the Operating Partnership.

Management believes combining the notes to the consolidated financial statements of MAA and the Operating Partnership results in the following benefits:

•enhances a readers' understanding of MAA and the Operating Partnership by enabling the reader to view the business as a whole in the same manner that management views and operates the business;
•eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both MAA and the Operating Partnership; and
•creates time and cost efficiencies through the preparation of one combined set of notes instead of two separate sets.

MAA is a multifamily focused, self-administered and self-managed real estate investment trust, or REIT. Management operates MAA and the Operating Partnership as one business. The management of the Company is comprised of individuals who are officers of MAA and employees of the Operating Partnership. Management believes it is important to understand the few differences between MAA and the Operating Partnership in the context of how MAA and the Operating Partnership operate as a consolidated company. MAA and the Operating Partnership are structured as an "umbrella partnership REIT," or UPREIT. MAA's interest in the Operating Partnership entitles MAA to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to MAA's percentage interest therein and entitles MAA to vote on substantially all matters requiring a vote of the partners. MAA's only material asset is its ownership of limited partnership interests in the Operating Partnership; therefore, MAA does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing certain debt of the Operating Partnership. The Operating Partnership holds, directly or indirectly, all of the Company's real estate assets. Except for net proceeds from public equity issuances by MAA, which are contributed to the Operating Partnership in exchange for limited partnership interests, the Operating Partnership generates the capital required by the business through the Operating Partnership's operations, direct or indirect incurrence of indebtedness and issuance of OP Units.

The presentations of MAA's shareholders' equity and the Operating Partnership's capital are the principal areas of difference between the consolidated financial statements of MAA and those of the Operating Partnership. MAA's shareholders' equity may include shares of preferred stock, shares of common stock, additional paid-in capital, cumulative earnings, cumulative distributions, noncontrolling interest, treasury shares, accumulated other comprehensive income and redeemable common stock. The Operating Partnership's capital may include common capital and preferred capital of the general partner (MAA), limited partners' common capital and preferred capital, noncontrolling interest, accumulated other comprehensive income and redeemable common units. Holders of OP Units (other than MAA and its subsidiaries) may require the Operating Partnership to redeem their OP Units from time to time, in which case the Operating Partnership may, at its option, pay the redemption price either in cash (in an amount per OP Unit equal, in general, to the average closing price of MAA's common stock on the New York Stock Exchange, or NYSE, over a specified period prior to the redemption date) or by delivering one share of MAA's common stock (subject to adjustment under specified circumstances) for each OP Unit so redeemed.

Organization of Mid-America Apartment Communities, Inc.

The Company owns, operates, acquires and selectively develops apartment communities located in the Southeast, Southwest

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and Mid-Atlantic regions of the United States. As of December 31, 2018, the Company owned and operated 303 apartment communities through the Operating Partnership and its subsidiaries and had an ownership interest in one apartment community through an unconsolidated real estate joint venture. As of December 31, 2018, the Company had three development communities under construction totaling 577 apartment units. Total expected costs for the three development projects are $118.5 million, of which $30.9 million had been incurred through December 31, 2018. The Company expects to complete two of the developments in the second half of 2019 and one development in the second half of 2020. Thirty of the Company's apartment communities include retail components with approximately 615,000 square feet of gross leasable space. The Company also has four commercial properties with approximately 260,000 square feet of combined gross leasable area. The Company’s multifamily and commercial properties are located across 17 states and the District of Columbia.

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared by the Company's management in accordance with United States generally accepted accounting principles, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC. The consolidated financial statements of MAA presented herein include the accounts of MAA, the Operating Partnership and all other subsidiaries in which MAA has a controlling financial interest. MAA owns approximately 92.5% to 100% of all consolidated subsidiaries, including the Operating Partnership. The consolidated financial statements of MAALP presented herein include the accounts of MAALP and all other subsidiaries in which MAALP has a controlling financial interest. MAALP owns, directly or indirectly, 92.5% to 100% of all consolidated subsidiaries. In management's opinion, all adjustments necessary for a fair presentation of the consolidated financial statements have been included, and all such adjustments were of a normal recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation.

The Company invests in entities which may qualify as variable interest entities, or VIEs, and MAALP is considered a VIE. A VIE is a legal entity in which the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the holders of the equity investment at risk lack the power to direct the activities of a legal entity as well as the obligation to absorb its expected losses or the right to receive its expected residual returns. MAALP is classified as a VIE, since the limited partners lack substantive kick-out rights and substantive participating rights. The Company consolidates all VIEs for which it is the primary beneficiary and uses the equity method to account for investments that qualify as VIEs but for which it is not the primary beneficiary. In determining whether the Company is the primary beneficiary of a VIE, management considers both qualitative and quantitative factors, including but not limited to, those activities that most significantly impact the VIE's economic performance and which party controls such activities. The Company uses the equity method of accounting for its investments in entities for which the Company exercises significant influence, but does not have the ability to exercise control. The factors considered in determining whether the Company has the ability to exercise control include ownership of voting interests and participatory rights of investors (see "Investment in Unconsolidated Affiliates" below).

Noncontrolling Interests

As of December 31, 2018, the Company had two types of noncontrolling interests with respect to its consolidated subsidiaries, (1) noncontrolling interests related to the common unitholders of its Operating Partnership (see below) and (2) noncontrolling interest related to its consolidated real estate entity (see "Investment in Consolidated Real Estate Entity" below). The noncontrolling interests in the accompanying consolidated financial statements relating to the limited partnership interests in the Operating Partnership are owned by the holders of the Class A OP Units. MAA is the sole general partner of the Operating Partnership and holds all of the outstanding Class B OP Units. Net income (after allocations to preferred ownership interests) is allocated to MAA and the noncontrolling interests based on their respective ownership percentages of the Operating Partnership. Issuance of additional Class A OP Units or Class B OP Units changes the ownership percentage of both the noncontrolling interests and MAA. The issuance of Class B OP Units generally occurs when MAA issues common stock and the issuance proceeds are contributed to the Operating Partnership in exchange for Class B OP Units equal to the number of shares of MAA's common stock issued. At each reporting period, the allocation between total MAA shareholders’ equity and noncontrolling interests is adjusted to account for the change in the respective percentage ownership of the underlying equity of the Operating Partnership. MAA’s Board of Directors established economic rights in respect to each Class A OP Unit that were equivalent to the economic rights in respect to each share of MAA common stock. See Note 10 for additional details.

Use of Estimates

Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses to prepare these financial statements and notes in conformity with GAAP. Actual results could differ from those estimates.

F-15

Revenue Recognition and Real Estate Sales Gain Recognition

The Company primarily leases multifamily residential apartment units under operating leases generally due on a monthly basis with terms of approximately one year or less, which are recorded as operating leases. Rental lease revenues are recognized in accordance with Accounting Standards Codification, or ASC, Topic 840, Leases, using a method that represents a straight-line basis over the term of the lease. In addition, in circumstances where a lease incentive is provided to tenants, the incentive is recognized as a reduction of lease revenue on a straight-line basis over the reasonably assured lease term. Rental income represents approximately 93% of the Company's total revenues and includes gross market rent less adjustments for concessions, vacancy loss and bad debt.

Other non-lease revenues represent the remaining 7% of the Company's total revenues and are primarily driven by utility reimbursement revenues, which are generally recognized and due on a monthly basis as tenants obtain control of the service. The Company's primary sources of reimbursement revenues are from water and cable utility services, which produced revenues of $39.1 million and $29.8 million, respectively, for the year ended December 31, 2018, revenues of $38.3 million and $30.4 million, respectively, for the year ended December 31, 2017 and revenues of $31.1 million and $31.6 million, respectively, for the year ended December 31, 2016.

Other non-lease revenues are recognized in accordance with ASC Topic 606, Revenue Recognition, as a result of the Company's January 1, 2018 adoption of Accounting Standards Update, or ASU, 2014-09, Revenue from Contracts with Customers, using the modified retrospective approach. The guidance requires that revenue (outside of the scope of lease revenue accounting rules) is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. While ASU 2014-09 requires additional disclosure regarding the nature and timing of the Company's non-lease revenue transactions, which is provided here in Note 1 as well as Note 14, the adoption of the ASU did not have a material impact on the Company's consolidated financial statements or the Company's accounting policies and did not result in an opening adjustment to retained earnings. The Company elected the available practical expedients to the ASU’s requirement for disclosure on remaining performance obligations, which allow an entity to avoid disclosing the amount of the remaining performance obligations for contracts with an original expected duration of less than one year or those that meet the practical expedient in ASC Topic 606 that permits the entity to recognize revenue as invoiced. See Note 14 for the disaggregation of the Company's revenues.

Rental Costs

Costs associated with rental activities are expensed as incurred and include advertising expenses, which were $20.2 million, $18.8 million, and $13.0 million for the years ended December 31, 2018, 2017, and 2016, respectively.

Real Estate Assets and Depreciation and Amortization

Real estate assets are carried at depreciated cost and consist of land, buildings and improvements and other and development and capital improvements in progress (see "Development Costs" below). Repairs and maintenance costs are expensed as incurred, while significant improvements, renovations, and recurring capital replacements are capitalized and depreciated over their estimated useful lives. Recurring capital replacements typically include scheduled carpet replacement, new roofs, HVAC units, plumbing, concrete, masonry and other paving, pools and various exterior building improvements. In addition to these costs, the Company also capitalizes salary costs directly identifiable with renovation work. These expenditures extend the useful life of the property and increase the property’s fair market value. The cost of interior painting and blinds are typically expensed as incurred.

Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets, which range from five to 40 years. The Consolidated Balance Sheets line "Buildings and improvements and other" includes land improvements and buildings, which have a useful life ranging from eight to 40 years, as well as furniture, fixtures and equipment, which have a useful life of five years.

Development Costs

Development projects and the related carrying costs, including interest, property taxes, insurance and allocated direct development salary cost during the construction period, are capitalized and reported in the accompanying Consolidated Balance Sheets as "Development and capital improvements in progress" during the construction period. Interest is capitalized in accordance with accounting standards governing the capitalization of interest. Upon completion and certification for occupancy of individual buildings or floors within a development, amounts representing the completed portion of total estimated development costs for the project are transferred to "Buildings and improvements and other" as real estate held for investment.

F-16

Capitalization of interest, property taxes, insurance and allocated direct development salary costs cease upon the transfer. The assets are depreciated over their estimated useful lives. Total capitalized costs (including capitalized interest, salaries and real estate taxes) during the years ended December 31, 2018, 2017 and 2016 was $4.2 million, $11.0 million and $2.7 million, respectively. Certain costs associated with the lease-up of development projects, including cost of model units, furnishings and signs, are capitalized and amortized over their respective estimated useful lives. All other costs relating to renting development projects are expensed as incurred.

Acquisition of Real Estate Assets

In accordance with ASC Topic 805, Business Combinations, most acquisitions of operating properties qualify as an asset acquisition. Accordingly, the cost of the real estate acquired, including acquisition costs, is allocated to the acquired tangible assets, consisting of land, buildings and improvements and other, and identified intangible assets, consisting of the value of in-place leases and other contracts, on a relative fair value basis. Acquisition costs include appraisal fees, title fees, broker fees and other legal costs to acquire the property.

The purchase price of an acquired property is allocated based on the relative fair value of the individual components as a proportion of the total assets acquired. The Company allocates the cost of the tangible assets of an acquired property by valuing the building as if it were vacant, based on management’s determination of the relative fair values of these assets. Management determines the as-if-vacant fair value of a building using methods similar to those used by independent appraisers. These methods include using stabilized net operating income, or NOI, and market specific capitalization and discount rates. In allocating the cost of identified intangible assets of an acquired property, the in-place leases are valued based on current rent rates and time and cost to lease a unit. Management concluded that the residential leases acquired in connection with each of its property acquisitions approximate at-market rates since the residential lease terms generally do not extend beyond one year.

For residential leases, the fair value of the in-place leases and resident relationships is amortized over six months, which represents the estimated remaining term of the tenant leases. For commercial leases, the fair value of in-place leases and resident relationships is amortized over the remaining term of the commercial leases. The net amount of these lease intangibles included in "Other assets" totaled $3.9 million and $7.1 million as of December 31, 2018, and 2017, respectively. For the accounting policy on larger, portfolio style acquisitions which qualify as business combinations (rather than asset acquisitions), see Note 2.

Impairment of Long-lived Assets

The Company accounts for long-lived assets in accordance with the provisions of accounting standards for the impairment or disposal of long-lived assets. Management periodically evaluates long-lived assets, including investments in real estate, for indicators that would suggest that the carrying amount of the assets may not be recoverable. The judgments regarding the existence of such indicators are based on factors such as operating performance, market conditions and legal factors. Long-lived assets, such as real estate assets, equipment and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are separately presented in the Consolidated Balance Sheets and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group or a property classified as held for sale are presented separately in the appropriate asset and liability sections of the Consolidated Balance Sheets.

Undeveloped Land

Undeveloped land includes sites intended for future multifamily developments, sites for future commercial development and sites intended for residential use, which are carried at the lower of cost or fair value in accordance with GAAP and any costs incurred prior to commencement of pre-development activities are expensed as incurred.

Investment in Unconsolidated Affiliates

Through its investment in a limited liability company, or the Apartment LLC, the Company together with an institutional investor indirectly owns one apartment community, Post Massachusetts Avenue, located in Washington, D.C. The Company owned a 35.0% equity interest in the unconsolidated real estate joint venture as of December 31, 2018 and provides property

F-17

and asset management services to the Apartment LLC for which it earns fees. The joint venture was determined to be a VIE, but the Company is not designated as a primary beneficiary. As a result, the Company accounts for its investment in the Apartment LLC using the equity method of accounting as the Company is able to exert significant influence over the joint venture but does not have a controlling interest. As of December 31, 2018, the Company's investment in the Apartment LLC totaled $44.2 million.

In September 2017, a subsidiary of the Operating Partnership invested in a limited partnership, Real Estate Technology Ventures, L.P. As of December 31, 2018, Operating Partnership indirectly owned 20.7% of the limited partnership. The limited partnership was determined to be a VIE, but the Company is not designated as a primary beneficiary. As a result, the Company accounts for its investment in the limited partnership using the equity method of accounting as the investment is considered more than minor. As of December 31, 2018, the Company's investment in the limited partnership totaled $3.8 million and is included in "Other assets" in the accompanying Consolidated Balance Sheet. As of December 31, 2018, the Company was committed to make additional capital contributions totaling $13.6 million if and when called by the general partner of the limited partnership and until September 2022.

Investment in Consolidated Real Estate Entity

The Company owns a 92.5% equity interest in a consolidated real estate entity that developed, constructed and operates a 359-unit apartment community in Denver, Colorado. The owner of the remaining 7.5% equity interest, a private real estate company, was generally responsible for the development and construction of the community, which was completed during the year ended December 31, 2018. The Company will continue to operate and manage the community. The entity was determined to be a VIE with the Company designated as the primary beneficiary. As a result, the accounts of the entity are consolidated by the Company. As of December 31, 2018, the consolidated assets and liabilities included buildings and improvements and other, net of accumulated depreciation, of $70.5 million; land of $14.9 million and accrued expenses and other liabilities of $1.2 million.

Cash and Cash Equivalents

Investments in money market accounts and certificates of deposit with original maturities of three months or less are considered to be cash equivalents.

Restricted Cash

Restricted cash consists of security deposits required to be held separately, escrow deposits held by lenders for property taxes, insurance, debt service and replacement reserves, and exchanges under Section 1031(b) of the Internal Revenue Code of 1986, as amended, or the Code. Section 1031(b) exchanges are presented within cash, cash equivalents and restricted cash reported in the Consolidated Statements of Cash Flows.

Other Assets

Other assets consist primarily of receivables and deposits from residents, the value of derivative contracts, deferred rental concessions, deferred financing costs relating to lines of credit and other prepaid expenses. Also included in other assets are the fair market value of in-place leases and resident relationships, net of accumulated amortization.

Accrued Expenses and Other Liabilities

Accrued expenses consist of accrued dividends payable, accrued real estate taxes, accrued interest payable, accrued loss contingencies (see Note 12), accounts payable, fair market value of interest rate swaps (see Note 7), security deposits not related to restricted cash, other accrued expenses, and unearned income. Significant accruals include accrued dividends payable of $113.2 million and $108.7 million as of December 31, 2018 and 2017, respectively; accrued real estate taxes of $123.5 million and $99.6 million as of December 31, 2018 and 2017, respectively; unearned income of $41.1 million and $40.8 million as of December 31, 2018 and 2017, respectively; accrued loss contingencies of $8.7 million and $32.1 million as of December 31, 2018 and 2017, respectively; security deposits of $18.7 million and $19.1 million as of December 31, 2018 and 2017, respectively; and accrued interest payable of $15.1 million and $18.1 million as of December 31, 2018 and 2017, respectively.

Income Taxes

MAA has elected to be taxed as a REIT under the Code and intends to continue to operate in such a manner. The current and

F-18

continuing qualification as a REIT depends on MAA's ability to meet the various requirements imposed by the Code, which are related to organizational structure, distribution levels, diversity of stock ownership and certain requirements with respect to the nature and diversity of MAA’s assets and sources of MAA’s gross income. As long as MAA qualifies for taxation as a REIT, it will generally not be subject to United States federal corporate income tax on its taxable income that is currently distributed to shareholders. This treatment substantially eliminates the "double taxation" (i.e., income taxation at both the corporate and shareholder levels) that generally results from an investment in a corporation. Even if MAA qualifies as a REIT, MAA may be subject to United States federal income and excise taxes in certain situations, such as if MAA fails to distribute timely all of its taxable income with respect to a taxable year. MAA also will be required to pay a 100% tax on any net income on non-arm’s length transactions between MAA and one of its taxable REIT subsidiaries, or TRS. Furthermore, MAA and its shareholders may be subject to state or local taxation in various state or local jurisdictions, including those in which MAA transacts business or its shareholders reside, and the applicable state and local tax laws may not conform to the United States federal income tax treatment. Any taxes imposed on MAA would reduce its operating cash flows and net income.

The Company has elected TRS status for certain of its corporate subsidiaries. As a result, the TRS incur both federal and state income taxes on any taxable income after consideration of any net operating losses. The TRS use the liability method of accounting for income taxes. Deferred income tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rate is recognized in earnings in the period of the enactment date. A valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax assets will not be realized.

The Company recognizes liabilities for uncertain income tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more likely than not to be realized upon ultimate settlement. See Note 8 for additional disclosures regarding income taxes.

Fair Value Measurements

The Company applies the guidance in ASC Topic 820, Fair Value Measurements and Disclosures, to the valuation of real estate assets recorded at fair value, if any; to its impairment valuation analysis of real estate assets; to its disclosure of the fair value of financial instruments, principally indebtedness; and to its derivative financial instruments. Fair value disclosures required under ASC Topic 820 as well as the Company's derivative accounting policies are summarized in Note 7 utilizing the following hierarchy:

Level 1 - Quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.

Level 2 - Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.

Level 3 - Unobservable inputs for the assets or liability.

Assets Held for Sale

The Randal Park land parcel that met the criteria for held for sale classification and comprised the asset held for sale balance as of December 31, 2017, was sold during the first quarter of 2018 as detailed in Note 15.

Impact of Recently Adopted Accounting Standards on Consolidated Statements of Cash Flows

Effective January 1, 2018, the Company adopted ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, which clarifies how certain types of cash receipts and cash payments are to be presented and classified in the statement of cash flows. Management determined that three of the eight transactions in the ASU are relevant to the Company and its cash flows and include debt prepayment and extinguishment costs, proceeds from the settlement of insurance claims and distributions received from equity method investees. Upon adoption of ASU 2016-15, net cash provided by operating activities increased by $1.9 million and $0.6 million, respectively, net cash used in investing activities decreased by $0.2 million and $0.5 million, respectively, and net cash used in financing activities decreased by $1.7 million and $0.1 million, respectively, in the Consolidated Statements of Cash Flows for the years ended December 31, 2017 and December 31, 2016.

The Company adopted ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, effective January 1, 2018. The ASU required restricted cash to be presented within cash and cash equivalents when reconciling the beginning and ending amounts in the statement of cash flow with retrospective adjustments to all periods presented. The Company previously

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reported the change in restricted cash within the operating and investing activities in the consolidated statement of cash flows. Upon adoption, cash, cash equivalents and restricted cash reported in the Consolidated Statements of Cash Flows for the years ended December 31, 2017 and December 31, 2016 increased by $78.1 million and $88.3 million, respectively, to reflect the restricted cash balances. Additionally, net cash provided by operating activities increased by $0.4 million and $0.3 million, respectively, for the years ended December 31, 2017 and December 31, 2016. Net cash used in investing activities decreased by $10.6 million for the year ended December 31, 2017 and increased by $61.9 million for the year ended December 31, 2016.

Recently Issued Accounting Pronouncements

In 2016, the Financial Accounting Standards Board, or FASB, issued a new lease accounting standard, ASU 2016-02, Leases (Topic 842), which amends existing accounting standards and establishes new principles, presentation and disclosure requirements for lease accounting for both the lessee and lessor. Under the new standard, lessors will use an approach that is substantially equivalent to existing guidance but aligned with the recently adopted revenue recognition standard, while lessees will be required to record most leases on the balance sheet and recognize lease expense in the income statement in a manner similar to current practice. The new standard requires a lessee to recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for all leases with terms of more than twelve months. Expenses related to leases determined to be operating leases will be recognized on a straight-line basis, while those determined to be financing leases will be recognized following a front-loaded expense profile in which interest and amortization are presented separately in the income statement.

The Company has completed its analysis of lease revenues and the impact this standard will have on the Company. Management elected to apply the modified retrospective transition approach upon adoption of ASU 2016-02 on January 1, 2019. The adoption of the new lease standard has not resulted in significant changes in the accounting for the Company's lease revenues as the Company’s residential and retail/commercial leases, where it is the lessor, will continue to be accounted for as operating leases. Management has elected available practical expedients that provide lessors an option to not separate lease and non-lease components when certain criteria are met, and instead, allows for those components to be accounted for as a single lease component.

The Company is the lessee under certain ground, office, equipment and other operating leases and is required to recognize a right-of-use asset and a corresponding lease obligation on its Consolidated Balance Sheets for those leases effective January 1, 2019. Based on its election of available practical expedients, the Company is not required to reassess the classification of existing leases; therefore, these leases will continue to be accounted for as operating leases. Upon adoption of the standard on January 1, 2019, the Company expects to recognize total right-of-use assets of approximately $43 million and related lease obligations of approximately $33 million. The guidance does require additional disclosures regarding the nature and timing of the Company's lease transactions upon adoption, which will be included in the Company's first quarter Quarterly Report on Form 10-Q filing in 2019.

  1. Business Combinations

The Company completed the merger with Post Properties, Inc., or Post Properties on December 1, 2016, acquiring 61 wholly-owned apartment communities, six apartment communities that were under development at the date of the merger and one apartment community held in an unconsolidated entity. Post Properties had operations in ten markets across the United States. In addition to the apartment communities, the Company also acquired four commercial properties. The consolidated net assets and results of operations of Post Properties are included in the Company's consolidated financial statements from the closing date going forward.

The total purchase price of approximately $4.0 billion was determined based on the number of shares of Post Properties' common stock, the number of shares of Post Properties’ 8 1/2% Series A Cumulative Redeemable Preferred Stock, and the number of units of Post Apartment Homes, L.P., or Post LP, Class A Units of limited partnership interest outstanding as of December 1, 2016, in addition to cash consideration provided by the Operating Partnership immediately prior to the merger to retire a $300.0 million unsecured term loan and a $162.0 million line of credit. The total purchase price also included $2.0 million of other consideration, a majority of which related to assumed stock compensation plans.

Each share of Post Properties common stock was converted into the right to receive 0.71 of a newly issued share of MAA common stock, including the right, if any, to receive cash in lieu of fractional shares of MAA common stock. In addition, each limited partner interest in Post LP designated as a Class A Unit automatically converted into the right to receive 0.71 of a newly issued limited partnership unit of MAALP. Also, each share of Post Properties' 8 1/2% Series A Cumulative Redeemable Preferred Stock was automatically converted into the right to receive one newly issued share of MAA's 8.50% Series I Cumulative Redeemable Preferred Stock, $0.01 par value per share, which is referred to as MAA Series I preferred stock. In all

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cases in which MAA’s common stock price was a determining factor in arriving at final consideration for the merger, the stock price used to determine the purchase price was the opening price of MAA’s common stock on December 1, 2016 ($91.41 per share). At the date of acquisition, the MAA Series I preferred stock consideration was valued at $77.02 per share, which included a $14.24 per share bifurcated call option (See Notes 7 and 9). As a result of the merger, the Company issued approximately 38.0 million shares of MAA common stock, approximately 80,000 OP Units, and 867,846 newly issued shares of MAA’s Series I preferred stock.

The merger was accounted for using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their acquisition date fair values. For larger, portfolio style acquisitions, such as the Post Properties merger, management engages a third party valuation specialist to assist with the fair value assessment, which includes an allocation of the purchase price. Similar to management's methods, the third party generally uses cash flow analysis as well as an income approach and a market approach to determine the fair value of assets acquired. The third party specialist uses stabilized NOI and market specific capitalization and discount rates. Management reviews the inputs used by the third party specialist as well as the allocation of the purchase price provided by the third party specialist to ensure reasonableness and the procedures are performed in accordance with management's policies. The allocation of the purchase price valuation described above required a significant amount of judgment and represented management's best estimate of the fair value as of the acquisition date. The following final purchase price allocation for the Post Properties merger was based on the Company's valuation as well as estimates and assumptions of the acquisition date fair value of the tangible and intangible assets acquired and liabilities assumed. The following table summarizes the final purchase price allocation as of the date of the Post Properties merger (in thousands):

December 1, 2016
Land$874,616
Buildings and improvements and other3,479,483
Development and capital improvements in progress183,881
Undeveloped land24,200
Investment in real estate joint venture44,435
Cash and cash equivalents34,292
Restricted cash3,608
Other assets94,899
Total assets acquired4,739,414
Notes payable(595,609)
Accrued expenses and other liabilities(132,906)
Total liabilities assumed, including debt(728,515)
Noncontrolling interest - consolidated real estate entity(2,306)
Total purchase price$4,008,593

The allocation of fair values of the assets acquired and liabilities assumed has not changed from the allocation reported in the Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 23, 2018. In connection with the Post Properties merger, the Company incurred total merger and integration related expenses of $9.1 million, $20.0 million, and $40.8 million for the years ended December 31, 2018, 2017 and 2016, respectively. The amounts were expensed as incurred and are included in the Consolidated Statements of Operations in "Merger and integration expenses". Merger related expenses primarily consisted of severance and professional costs, and integration related expenses primarily consisted of temporary systems, staffing, and facilities costs.

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  1. Earnings per Common Share of MAA

Basic earnings per share is computed by dividing net income available to MAA common shareholders by the weighted average number of common shares outstanding during the period. All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with shareholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per share. Both the unvested restricted shares and other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis with diluted earnings per share being the more dilutive of the treasury stock or two-class methods. OP Units are included in dilutive earnings per share calculations when the units are dilutive to earnings per share. For the years ended December 31, 2018, 2017 and 2016, MAA's basic earnings per share was computed using the two-class method and MAA's diluted earnings per share was computed using the more dilutive of the treasury stock method or the two-class method as presented below (dollars and shares in thousands, except per share amounts):

201820172016
Calculation of Earnings per common share - basic
Net income$231,022$340,536$224,402
Net income attributable to noncontrolling interests(8,123)(12,157)(12,180)
Unvested restricted stock (allocation of earnings)(291)(535)(572)
Preferred dividends(3,688)(3,688)(307)
Net income available for common shareholders, adjusted$218,920$324,156$211,343
Weighted average common shares - basic113,638113,40778,502
Earnings per common share - basic$1.93$2.86$2.69
Calculation of Earnings per common share - diluted
Net income$231,022$340,536$224,402
Net income attributable to noncontrolling interests(8,123)(1)(12,157)(1)(12,180)(1)
Preferred dividends(3,688)(3,688)(307)
Net income available for common shareholders, adjusted$219,211$324,691$211,915
Weighted average common shares - basic113,638113,40778,502
Effect of dilutive securities198280298
Weighted average common shares - diluted113,836113,68778,800
Earnings per common share - diluted$1.93$2.86$2.69

(1) For the years ended December 31, 2018, 2017 and 2016, 4.1 million, 4.2 million and 4.2 million OP Units and their related income, respectively, are not included in the diluted earnings per share calculations as they are not dilutive.

  1. Earnings per OP Unit of MAALP

Basic earnings per common unit is computed by dividing net income available for common unitholders by the weighted average number of OP Units outstanding during the period. All outstanding unvested restricted unit awards contain rights to non-forfeitable distributions and participate in undistributed earnings with common unitholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per common unit. Diluted earnings per common unit reflects the potential dilution that could occur if securities or other contracts to issue OP Units were exercised or converted into OP Units. A reconciliation of the numerators and denominators of the basic and diluted earnings per common unit computations for the years ended December 31, 2018, 2017 and 2016 is presented below (dollars and units in thousands, except per unit amounts):

201820172016
Calculation of Earnings per common unit - basic
Net income$231,022$340,536$224,402
Unvested restricted stock (allocation of earnings)(291)(535)(574)
Preferred unit distributions(3,688)(3,688)(307)
Net income available for common unitholders, adjusted$227,043$336,313$223,521
Weighted average common units - basic117,777117,61782,661
Earnings per common unit - basic$1.93$2.86$2.70
Calculation of Earnings per common unit - diluted
Net income$231,022$340,536$224,402
Preferred unit distributions(3,688)(3,688)(307)
Net income available for common unitholders, adjusted$227,334$336,848$224,095
Weighted average common units - basic117,777117,61782,661
Effect of dilutive securities198280298
Weighted average common units - diluted117,975117,89782,959
Earnings per common unit - diluted$1.93$2.86$2.70

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  1. Stock Based Compensation

Overview

MAA accounts for its stock based employee compensation plans in accordance with accounting standards governing stock based compensation. These standards require an entity to measure the cost of employee services received in exchange for an award of an equity instrument based on the award's fair value on the grant date and recognize the cost over the period during which the employee is required to provide service in exchange for the award, which is generally the vesting period. Any liability awards issued are remeasured at each reporting period.

MAA’s stock compensation plans consist of a number of incentives provided to attract and retain independent directors, executive officers and key employees. Incentives are currently granted under the Second Amended and Restated 2013 Stock Incentive Plan, or the Stock Plan, which was approved at the 2018 annual meeting of MAA shareholders. The Stock Plan allows for the grant of restricted stock and stock options up to 2,000,000 shares. MAA believes that such awards better align the interests of its employees with those of its shareholders.

Compensation expense is generally recognized for service based restricted stock awards using the straight-line method over the vesting period of the shares regardless of cliff or ratable vesting distinctions. Compensation expense for market and performance based restricted stock awards is generally recognized using the accelerated amortization method with each vesting tranche valued as a separate award, with a separate vesting date, consistent with the estimated value of the award at each period end. Additionally, compensation expense is adjusted for actual forfeitures for all awards in the period that the award was forfeited. Compensation expense for stock options is generally recognized on a straight-line basis over the requisite service period. MAA presents stock compensation expense in the Consolidated Statements of Operations in "General and administrative expenses".

Total compensation expense under the Stock Plan was $12.9 million, $10.8 million and $12.2 million for the years ended December 31, 2018, 2017 and 2016, respectively. Of these amounts, total compensation expense capitalized was $0.5 million, $0.2 million and $0.7 million for the years ended December 31, 2018, 2017 and 2016, respectively. As of December 31, 2018, the total unrecognized compensation expense was $13.5 million. This cost is expected to be recognized over the remaining weighted average period of 1.1 years. Total cash paid for the settlement of plan shares totaled $2.9 million, $4.8 million and $2.0 million for the years ended December 31, 2018, 2017 and 2016, respectively. Information concerning grants under the Stock Plan is provided below.

Restricted Stock

In general, restricted stock is earned based on either a service condition, performance condition, or market condition, or a combination thereof, and generally vests ratably over a period from 1 year to 5 years. Service based awards are earned when the employee remains employed over the requisite service period and are valued on the grant date based upon the market price of MAA common stock on the date of grant. Market based awards are earned when MAA reaches a specified stock price or specified return on the stock price (price appreciation plus dividends) and are valued on the grant date using a Monte Carlo simulation. Performance based awards are earned when MAA reaches certain operational goals such as funds from operations, or FFO, targets and are valued based upon the market price of MAA common stock on the date of grant as well as the probability of reaching the stated targets. MAA remeasures the fair value of the performance based awards each balance sheet date with adjustments made on a cumulative basis until the award is settled and the final compensation is known. The weighted average grant date fair value per share of restricted stock awards granted during the years ended December 31, 2018, 2017 and 2016, was $71.85, $84.53 and $73.20, respectively.

The following is a summary of the key assumptions used in the valuation calculations for market based awards granted during the years ended December 31, 2018, 2017 and 2016:

201820172016
Risk free rate1.61% - 2.14%0.65% - 1.57%0.49% - 1.27%
Dividend yield3.884%3.573%3.634%
Volatility15.05% - 17.18%20.43% - 21.85%18.41% - 19.45%
Requisite service period3 years3 years3 years

The risk free rate was based on a zero coupon risk-free rate. The minimum risk free rate was based on a period of 0.25 years for the years ended December 31, 2018, 2017 and 2016. The maximum risk free rate was based on a period of 3 years for the years ended December 31, 2018, 2017 and 2016. The dividend yield was based on the closing stock price of MAA stock on the

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date of grant. Volatility for MAA was obtained by using a blend of both historical and implied volatility calculations. Historical volatility was based on the standard deviation of daily total continuous returns, and implied volatility was based on the trailing month average of daily implied volatilities interpolating between the volatilities implied by stock call option contracts that were closest to the terms shown and closest to the money. The minimum volatility was based on a period of 1 year, 3 years and 2 years for the years ended December 31, 2018, 2017 and 2016, respectively. The maximum volatility was based on a period of 3 years, 1 year and 1 year for the years ended December 31, 2018, 2017 and 2016, respectively. The requisite service period is based on the criteria for the separate programs according to the vesting schedule.

A summary of the status of the nonvested restricted shares as of December 31, 2018, and the changes for the year ended December 31, 2018, is presented below:

Nonvested SharesSharesWeighted Average Grant-Date Fair Value
Nonvested as of January 1, 2018180,692$81.13
Issued115,17789.67
Vested(106,434)71.80
Forfeited(1,658)90.30
Nonvested as of December 31, 2018187,777$88.79

The total fair value of shares vested during the years ended December 31, 2018, 2017 and 2016 was $7.6 million, $10.5 million and $5.1 million, respectively.

Stock Options

Stock options are earned when the employee remains employed over the requisite service period and vest ratably over a period from 0.3 years to 2.3 years. Stock options exercised result in new common shares being issued on the open market by the Company. The fair value of stock option awards is determined using the Black-Scholes or Monte Carlo valuation models. No stock options were granted during the years ended December 31, 2018 or 2017. During the year ended December 31, 2016, 108,198 fully vested stock options were granted with a weighted average grant date fair value of $18.08 per option as a result of options exchanged in the merger with Post Properties.

The following is a summary of the key assumptions used in the Monte Carlo valuation calculations for stock options granted during the year ended December 31, 2016:

2016
Risk free rate0.64% - 2.63%
Dividend yield3.81%
Volatility21.02% - 21.57%
Expected term1.11 - 2.11 years

The U.S. Treasury bill rate was used to represent the risk-free rate based on the expected life of the option. The current dividend yield at the time of grant was used to estimate the dividend yield over the life of the option. Volatility is based on the actual changes in the market value of MAA’s stock and is calculated using daily market value changes from the date of grant over a past period equal to the expected term of the stock options. The expected term represents an estimate of the period of time the stock options are expected to remain outstanding.

A summary of the status of the stock options as of December 31, 2018 and the changes for the year ended December 31, 2018 is presented below:

Stock OptionsOptionsWeighted Average Exercise Price
Outstanding as of January 1, 2018108,438$72.93
Granted——
Exercised(17,823)51.42
Expired——
Outstanding as of December 31, 201890,615$77.16

All options outstanding as of December 31, 2018 were exercisable and had an intrinsic value of $1.7 million with a weighted average remaining term of 5.9 years. There were 17,823 options and 21,006 options exercised during the years ended December 31, 2018 and 2017 respectively. Cash received from the exercise of stock options totaled $0.9 million and $0.4 million for the years ended December 31, 2018 and 2017, respectively. During the year ended December 31, 2016, no cash was

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received from the exercise of stock options as no options were exercised.

  1. Borrowings

The following table summarizes the Company's outstanding debt as of December 31, 2018 and 2017 (dollars in thousands):

Borrowed BalanceAs of December 31, 2018
December 31, 2018December 31, 2017Weighted Average Effective RateWeighted Average Contract Maturity
Unsecured debt
Variable rate revolving credit facility$540,000$410,0003.4%4/15/2020
Fixed rate senior notes2,642,0002,292,0004.0%7/12/2025
Term loans fixed with swaps300,000550,0002.3%3/1/2022
Variable rate term loans600,000300,0003.3%1/22/2020
Fair market value adjustments, debt issuance costs and discounts(28,698)(26,235)
Total unsecured debt$4,053,302$3,525,7653.7%
Fixed rate secured debt
Individual property mortgages$476,161$882,7524.6%2/23/2031
Variable rate secured debt (1)
Credit facility$—$80,000
Fair market value adjustments and debt issuance costs(1,135)13,540
Total secured debt$475,026$976,2924.6%
Total outstanding debt$4,528,328$4,502,0573.8%

(1) Includes capped balances.

Unsecured Revolving Credit Facility

MAALP maintains a $1.0 billion unsecured credit facility with a syndicate of banks led by KeyBank National Association, or the KeyBank Facility. The KeyBank Facility includes an expansion option up to $1.5 billion. The KeyBank Facility bears an interest rate of the London Interbank Offered Rate, or LIBOR, plus a spread of 0.85% to 1.55% based on an investment grade pricing grid and, as of December 31, 2018, the interest rate was 3.42%. The KeyBank Facility expires in April 2020 with an option to extend for an additional six months. As of December 31, 2018, MAALP had $540.0 million outstanding under the KeyBank facility with another $4.2 million of additional capacity used to support outstanding letters of credit.

Senior Unsecured Notes

As of December 31, 2018, MAALP had approximately $2.4 billion in principal amount of publicly issued senior unsecured notes and $242.0 million of privately placed senior unsecured notes. The senior unsecured notes had maturities at issuance ranging from seven to twelve years, with an average of 6.5 years remaining until maturity as of December 31, 2018.

In May 2018, MAALP publicly issued $400.0 million in aggregate principal of senior unsecured notes, maturing June 2028 with an interest rate of 4.20% per annum, or the 2028 Notes. The purchase price paid by the initial purchasers was 99.403% of the principal amount. The 2028 Notes are general unsecured senior obligations of MAALP and rank equally in right of payment with all other senior unsecured indebtedness of MAALP. Interest on the 2028 Notes is payable on June 15 and December 15 of each year, beginning on December 15, 2018. The net proceeds from the offering, after deducting the original issue discount of $2.4 million and underwriting commissions and expenses of $2.6 million, were $395.0 million. The 2028 Notes have been reflected net of discount and debt issuance costs in the Consolidated Balance Sheets as of December 31, 2018. In connection with the issuance of the 2028 Notes, MAALP cash settled $200.0 million in forward interest rate swap agreements, which were entered into earlier in the year to effectively lock the interest rate on a portion of the planned transaction, resulting in an effective interest rate of 4.21% over the 10 year life of the 2028 Notes.

In July 2018, MAALP retired a $50.0 million tranche of senior unsecured private placement notes at maturity.

Unsecured Term Loans

MAALP maintains four term loans with a syndicate of banks, one led by KeyBank National Association, or KeyBank, two by Wells Fargo Bank, N.A., or Wells Fargo, and one by U.S. Bank National Association, or U.S. Bank. The KeyBank term loan has a balance of $150.0 million, matures in 2021, and has a variable interest rate of LIBOR plus a spread of 0.90% to 1.75%

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based on the Company's credit ratings. Both Wells Fargo term loans have balances of $300.0 million, mature in 2022 and 2019, respectively, and have variable interest rates of LIBOR plus spreads of 0.90% to 1.75% and 0.75% to 1.65%, respectively, based on the Company's credit ratings. The interest rate of the Wells Fargo term loan due in 2022 is fixed at 2.32% with a forward swap through the swap's maturity date, January 2020. See Note 7 for additional details on cash flow hedges of interest rate risk. The Wells Fargo term loan due in 2019 was entered into by the Company in December 2018. The U.S. Bank term loan has a balance of $150.0 million, matures in 2020, and has a variable interest rate of LIBOR plus a spread of 0.90% to 1.90% based on the Company's credit ratings.

In August 2018, MAALP retired a $250.0 million unsecured term loan with Wells Fargo at maturity.

Secured Property Mortgages

As of December 31, 2018, MAALP had $476.2 million of fixed rate conventional property mortgages with a weighted average interest rate of 4.6% and a weighted average maturity in 2031.

In December 2018, MAALP entered into a $172.0 million mortgage with a fixed rate of 4.44% associated with five apartment communities. The mortgage is scheduled to mature in January 2049.

In February 2018, MAALP retired a $38.3 million mortgage associated with an apartment community. The mortgage was scheduled to mature in May 2018.

In November 2018, MAALP retired a $350.0 million mortgage associated with eighteen apartment communities. The mortgage was scheduled to mature in February 2019.

In December 2018, MAALP retired a $179.7 million mortgage associated with five apartment communities. The mortgage was scheduled to mature in February 2019.

In addition to these retirements, MAALP paid $10.6 million associated with property mortgage principal amortizations during the year ended December 31, 2018.

Secured Credit Facility

In December 2018, MAALP retired its secured credit facility, an $80.0 million secured credit facility with Prudential Mortgage Capital, which was credit enhanced by the Federal National Mortgage Association.

Schedule of Maturities

The following table includes scheduled principal repayments on the Company's outstanding borrowings as of December 31, 2018, as well as the amortization of the fair market value of debt assumed, debt discounts and issuance costs (in thousands):

YearMaturitiesAmortizationTotal
2019$333,115$2,583$335,698
2020842,4561,291843,747
2021340,618(2,138)338,480
2022667,000(2,713)664,287
2023362,250(2,023)360,227
Thereafter1,992,018(6,129)1,985,889
$4,537,457$(9,129)$4,528,328

Guarantees

As of December 31, 2018, MAA fully and unconditionally guaranteed $242.0 million of the privately placed senior unsecured notes issued by MAALP.

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  1. Financial Instruments and Derivatives

Financial Instruments Not Carried at Fair Value

Cash and cash equivalents, restricted cash and accrued expenses and other liabilities are carried at amounts that reasonably approximate their fair value due to their short term nature.

Fixed rate notes payable as of December 31, 2018 and December 31, 2017, totaled $3.1 billion and $3.2 billion, respectively, and had estimated fair values of $3.1 billion and $3.3 billion (excluding prepayment penalties) as of December 31, 2018 and December 31, 2017, respectively. The carrying values of variable rate notes payable (excluding the effect of interest rate swap and cap agreements) as of December 31, 2018 and December 31, 2017, totaled $1.1 billion and $1.3 billion, respectively, and had estimated fair values of $1.1 billion and $1.3 billion (excluding prepayment penalties) as of December 31, 2018 and December 31, 2017, respectively. The fair values of fixed rate debt are determined by using the present value of future cash outflows discounted with the applicable current market rate plus a credit spread. The fair values of variable rate debt are determined using the stated variable rate plus the current market credit spread. The variable rates reset every 30 to 90 days, and management concluded that these rates reasonably estimate current market rates.

Financial Instruments Measured at Fair Value on a Recurring Basis

The Company uses interest rate swaps to add stability to interest expense and to manage, or hedge, its exposure to interest rate movements associated with our variable rate debt or as hedges in anticipation of future debt transactions. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

The fair value of interest rate derivative contracts designated as hedging instruments recorded in "Other assets" in the accompanying Consolidated Balance Sheets was $3.7 million and $3.6 million as of December 31, 2018 and December 31, 2017, respectively. The fair value of interest rate derivative contract liabilities recorded in "Accrued expenses and other liabilities" in the accompanying Consolidated Balance Sheets was $5.3 million and $1.3 million as of December 31, 2018 and December 31, 2017, respectively.

To comply with the provisions of ASC Topic 820, management incorporates credit valuation adjustments to appropriately reflect both its nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of the derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. Based on guidance issued by the FASB, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

The derivative asset related to the redemption feature embedded in the MAA Series I preferred stock issued in connection with the merger with Post Properties is valued using widely accepted valuation techniques, including a discounted cash flow analysis in which the perpetual value of the preferred shares is compared to the value of the preferred shares assuming the call option is exercised, with the value of the bifurcated call option as the difference between the two values. This analysis reflects the contractual terms of the redeemable preferred shares, which are redeemable at the Company's option beginning on October 1, 2026 and at the redemption price of $50 per share (see Note 9). The analysis uses observable market-based inputs, including trading data available on the preferred shares, coupon yields on preferred stock issuances from REITs with similar credit ratings as MAA and treasury rates to determine the fair value of the bifurcated call option.

The redemption feature embedded in the MAA Series I preferred stock is reported as a derivative asset in "Other assets" in the accompanying Consolidated Balance Sheets and is adjusted to its fair value at each reporting date, with a corresponding non-cash adjustment to "Other non-operating (income) expense" in the accompanying Consolidated Statements of Operations. As a result of mark-to-market adjustments of non-cash expense recorded to reflect the change in fair value of the derivative asset during the year ended December 31, 2018, the fair value of the embedded derivative asset decreased to $18.6 million as of December 31, 2018 as compared to $21.2 million as of December 31, 2017.

The Company has determined the majority of the inputs used to value its outstanding debt and derivatives, including its embedded derivative, fall within Level 2 of the fair value hierarchy, and as a result, the fair market valuation of its debt and all of its derivatives held as of December 31, 2018 and December 31, 2017 were classified as Level 2 in the fair value hierarchy. The Company’s derivative financial instruments and their related gains and losses are reported in "Net change in operating accounts and other" in the accompanying Consolidated Statements of Cash Flows.

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Cash Flow Hedges of Interest Rate Risk

As of January 1, 2018, the Company early adopted ASU 2017-12, Derivatives and Hedging (Topic 815), which clarifies hedge accounting requirements, improves disclosure of hedging arrangements and better aligns risk management activities and financial reporting for hedging relationships. The Company adopted the standard using a modified retrospective approach via the elimination of the previously recorded cumulative ineffectiveness for cash flow and net investment hedges existing at date of adoption as a cumulative-effect adjustment of $0.2 million to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings. The adoption of the ASU did not have a material impact on the consolidated financial statements or the Company's accounting policies.

The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in "Accumulated other comprehensive (loss) income" and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. In conjunction with the adoption of ASU 2017-12, as long as a hedging instrument is designated and the results of the effectiveness testing support that the instrument qualifies for hedge accounting treatment, there is no periodic measurement or recognition of ineffectiveness. Rather, the full impact of hedge gains and losses will be recognized in the period in which hedged transactions impact earnings, regardless of whether or not economic mismatches exist in the hedging relationship. Amounts reported in "Accumulated other comprehensive (loss) income" related to derivatives designated as qualifying cash flow hedges will be reclassified to interest expense as interest payments are made on the Company's variable rate or fixed rate debt. During the next twelve months, the Company estimates that an additional $2.8 million will be reclassified to earnings as a reduction to "Interest expense", which primarily represents the difference between the fixed interest rate swap payments and the projected variable interest rate swap receipts.

As of December 31, 2018, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollars in thousands):

Interest Rate DerivativeNumber of InstrumentsNotional
Interest rate swaps (1)10$600,000
(1)Includes six forward rate swaps totaling $300.0 million, which hedge the first 10 years of interest payments on debt the Company anticipates issuing in 2019. These swaps are not included in the debt discussion in Note 6.

Tabular Disclosure of the Effect of Derivative Instruments on the Statements of Operations

The tables below present the effect of the Company's derivative financial instruments on the Consolidated Statements of Operations for the years ended December 31, 2018, 2017 and 2016, respectively (in thousands):

Derivatives in Cash Flow Hedging Relationships(Loss) Gain Recognized in OCI on DerivativeLocation of Gain (Loss) Reclassified from Accumulated OC(L)I into IncomeGain (Loss) Reclassified from Accumulated OC(L)I into Interest Expense(1)
Year ended December 31,201820172016201820172016
Interest rate contracts$(751)$319$(1,500)Interest expense$1,938$(730)$(4,364)
(1)See the Consolidated Statements of Comprehensive Income for changes in accumulated other comprehensive (loss) income as these changes are presented net of the allocation to noncontrolling interests.
Derivatives Not Designated as Hedging InstrumentsLocation of (Loss) Gain Recognized in Income on Derivative(Loss) Gain Recognized in Earnings on Derivative
For the year ended December 31,201820172016
Preferred stock embedded derivativeOther non-operating (income) expense$(2,576)$8,807$—

Credit-Risk-Related Contingent Features

Certain of the Company's derivative contracts contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company's default on the indebtedness. As of December 31, 2018, the Company had not breached the provisions of these agreements. If the provisions had been breached, the Company could have been required to settle its obligations under the agreements at the termination value of $5.5 million as of December 31, 2018. Although the Company's derivative contracts are subject to master netting arrangements, which serve as credit mitigants to both the Company and its counterparties under certain situations, the Company does not net its derivative fair values or any existing rights or obligations to cash collateral in the Consolidated Balance Sheets.

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  1. Income Taxes

Due to the structure of MAA as a REIT and the nature of the operations of its operating properties, no provision for federal income taxes has been made at the MAA level. In addition, as MAALP is structured as a limited partnership, and its partners recognize their proportionate share of income or loss in their tax returns, no provision for federal income taxes has been made at the MAALP level. Historically, the Company has incurred certain state and local income, excise and franchise taxes.

Taxable REIT Subsidiaries

A TRS is an entity that is subject to federal, state and any applicable local corporate income tax without the benefit of the dividends paid deduction applicable to REITs. The Company’s TRS did not generate any material taxable income or income tax expense for the years ended December 31, 2018, 2017 and 2016. The Company’s TRS generally provide the Company with third party services (payroll and other services) for which the Company reimburses its TRS. All intercompany transactions are eliminated in the accompanying consolidated financial statements.

For the years ended December 31, 2018, 2017 and 2016, the reconciliation of income tax attributable to continuing operations for the TRS computed at the U.S. statutory rate to the income tax provision was as follows (in thousands):

201820172016
Tax expense at U.S. statutory rates on TRS income subject to tax$115$2,177$3,185
Valuation allowance127(2,177)(3,185)
TRS income tax provision$242$—$—

Income tax expense for the years ended December 31, 2018, 2017 and 2016 was $2.6 million, $2.6 million and $1.7 million, respectively, and is presented in “Income tax expense” in the accompanying Consolidated Statements of Operations. Income tax expense primarily relates to the Texas-based margin tax for all Texas apartment communities in addition to the Company’s TRS income tax provision discussed above.

The Company’s deferred tax asset and liability balances as of December 31, 2018 and 2017 were immaterial. The Company had no reserve for uncertain tax positions for the years ended December 31, 2018 and 2017, and management does not believe there will be any material changes in the Company's unrecognized tax positions over the next 12 months. If necessary, the Company accrues interest and penalties on unrecognized tax benefits as a component of income tax expense.

As of December 31, 2018 and 2017, the Company held federal NOL carryforwards of $71.5 million for income tax purposes that expire in years 2019 to 2033. Utilization of any NOL carryforwards is subject to an annual limitation due to ownership change limitations provided by Section 382 of the Code and similar state provisions. The annual limitations may result in the expiration of NOL carryforwards before utilization. The Company may use these NOLs to offset all or a portion of the taxable income generated at the REIT level. Tax years 2015 through 2018 are subject to examination by the Internal Revenue Service. No tax examination is currently in process.

For income tax purposes, dividends paid to holders of common stock primarily consist of ordinary income, return of capital, capital gains, qualified dividends and un-recaptured Section 1250 gains, or a combination thereof. For the years ended December 31, 2018, 2017 and 2016, dividends per share held for the entire year were estimated to be taxable as follows:

201820172016
AmountPercentageAmountPercentageAmountPercentage
Ordinary income$3.6699.3%$2.7980.2%$3.28100%
Capital gain0.020.6%0.318.9%——%
Un-recaptured Section 1250 gain0.010.1%0.3810.9%——%
$3.69100.00%$3.48100.00%$3.28100.00%

The Company designated the per share amounts above as capital gain dividends in accordance with the requirements of the Code. The difference between net income available to common shareholders for financial reporting purposes and taxable income before dividend deductions relates primarily to temporary differences such as depreciation and amortization and taxable gains on sold properties.

U.S. Tax Reform

In December 2017, the Tax Cuts and Jobs Act, or the Act, was enacted in the United States, requiring companies to account in

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2017 for the current and future effects of the legislative changes. As REITs are pass-through entities for the purpose of U.S. federal taxation, the legislative changes created by the Act are largely not applicable to the Company. Generally, the effects to REITs resulting from the Act include a reduction in the TRS federal statutory tax rate to 21% and a one-time inclusion in REIT taxable income of foreign subsidiary earnings. As noted above, the Company's TRS recognized no material taxable income in 2018 and 2017, and the Company has no foreign subsidiaries. Management has concluded there was no material effect to the Company’s consolidated financial statements from either a tax or financial statement perspective as a result of the Act.

  1. Shareholders' Equity of MAA

As of December 31, 2018, 113,844,267 shares of common stock of MAA and 4,111,301 OP Units (excluding the OP Units held by MAA) were issued and outstanding, representing a total of 117,955,568 common shares and units. As of December 31, 2017, 113,643,166 shares of common stock of MAA and 4,191,586 OP Units (excluding the OP Units held by MAA) were issued and outstanding, representing a total of 117,834,752 common shares and units.

Preferred Stock

As of December 31, 2018, MAA had one outstanding series of cumulative redeemable preferred stock which has the following characteristics:

DescriptionOutstanding SharesLiquidation Preference(1)Optional Redemption DateRedemption Price (2)Stated Dividend YieldApproximate Dividend Rate
Series I867,846$50.0010/1/2026$50.008.50%$4.25

(1) The total liquidation preference for the outstanding preferred stock is $43.4 million.

(2) The redemption price is the price at which the preferred stock is redeemable, at MAA's option, for cash.

Direct Stock Purchase and Distribution Reinvestment Plan

MAA has a Dividend and Distribution Reinvestment and Share Purchase Plan, or DRSPP, pursuant to which MAA’s common shareholders have the ability to reinvest all or part of their distributions from MAA into shares of MAA’s common stock and holders of Class A OP Units have the ability to reinvest all or part of their distributions from the Operating Partnership into MAA’s common stock. The DRSPP also provides the opportunity to make optional cash investments in MAA's common stock of at least $250, but not more than $5,000 in any given month, free of brokerage commissions and charges. MAA, in its absolute discretion, may grant waivers to allow for optional cash payments in excess of $5,000. To fulfill its obligations under the DRSPP, MAA may either issue additional shares of common stock or repurchase common stock in the open market. MAA currently has registered with the SEC the offer and sale of up to 1,940,500 shares of common stock pursuant to the DRSPP. MAA may elect to sell shares under the DRSPP at up to a 5% discount. Shares of MAA's common stock totaling 9,721 in 2018, 9,568 in 2017, and 7,906 in 2016 were acquired by participants under the DRSPP. MAA did not offer a discount for optional cash purchases in 2018, 2017 or 2016.

  1. Partners' Capital of MAALP

Common units of limited partnership interests in MAALP are represented by OP Units. As of December 31, 2018, there were 117,955,568 OP Units outstanding, 113,844,267, or 96.5%, of which represent Class B OP Units (common units issued to or held by MAALP's general partner or any of its subsidiaries), which were owned by MAA, MAALP's general partner. The remaining 4,111,301 OP Units were Class A OP Units owned by Class A limited partners. As of December 31, 2017, there were 117,834,752 OP Units outstanding, 113,643,166, or 96.4%, of which were owned by MAA and 4,191,586 of which were owned by the Class A limited partners.

MAA, as the sole general partner of MAALP, has full, complete and exclusive discretion to manage and control the business of MAALP subject to the restrictions specifically contained within MAALP's agreement of limited partnership, or the Partnership Agreement. Unless otherwise stated in the Partnership Agreement, this power includes, but is not limited to, acquiring, leasing, or disposing of any real property; constructing buildings and making other improvements to properties owned; borrowing money, modifying or extinguishing current borrowings, issuing evidence of indebtedness, and securing such indebtedness by mortgage, deed of trust, pledge or other lien on MAALP's assets; and distribution of MAALP's cash or other assets in accordance with the Partnership Agreement. MAA can generally, at its sole discretion, issue and redeem OP Units and determine the consideration to be received or the redemption price to be paid, as applicable. The general partner may delegate these and other powers granted if the general partner remains in supervision of the designee.

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Under the Partnership Agreement, MAALP may issue Class A OP Units and Class B OP Units. Class A OP Units are any OP Units other than Class B OP Units, while Class B OP Units are those issued to or held by MAALP's general partner or any of its subsidiaries. In general, the limited partners do not have the power to participate in the management or control of MAALP's business except in limited circumstances including changes in the general partner and protective rights if the general partner acts outside of the provisions provided in the Partnership Agreement. The transferability of Class A OP Units is also limited by the Partnership Agreement.

Net income (after allocations to preferred ownership interests) is allocated to the general partner and limited partners based on their respective ownership percentages of MAALP. Issuance or redemption of additional Class A OP Units or Class B OP Units changes the relative ownership percentage of the partners. The issuance of Class B OP Units generally occurs when MAA issues common stock and the proceeds from that issuance are contributed to MAALP in exchange for the issuance to MAA of a number of OP Units equal to the number of shares of common stock issued. Likewise, if MAA repurchases or redeems outstanding shares of common stock, MAALP generally redeems an equal number of Class B OP Units with similar terms held by MAA for a redemption price equal to the purchase price of those shares of common stock. At each reporting period, the allocation between general partner capital and limited partner capital is adjusted to account for the change in the respective percentage ownership of the underlying capital of MAALP. Holders of the Class A OP Units may require MAA to redeem their Class A OP Units, in which case MAA may, at its option, pay the redemption price either in cash (in an amount per Class A OP Unit equal, in general, to the average closing price of MAA's common stock on the NYSE over a specified period prior to the redemption date) or by delivering one share of MAA common stock (subject to adjustment under specified circumstances) for each Class A OP Unit so redeemed.

As of December 31, 2018, a total of 4,111,301 Class A OP Units were outstanding and redeemable for 4,111,301 shares of MAA common stock, with an approximate value of $393.5 million, based on the closing price of MAA’s common stock on December 31, 2018 of $95.70 per share. As of December 31, 2017, a total of 4,191,586 Class A OP Units were outstanding and redeemable for 4,191,586 shares of MAA common stock, with an approximate value of $421.5 million, based on the closing price of MAA’s common stock on December 31, 2017 of $100.56 per share. MAALP pays the same per unit distributions in respect to the OP Units as the per share dividends MAA pays in respect to its common stock.

As of December 31, 2018, MAALP had one outstanding series of cumulative redeemable preferred units, or the MAALP Series I Preferred Units. The MAALP Series I Preferred Units have the same characteristics as the MAA Series I preferred stock described in Note 8. As of December 31, 2018, 867,846 units of the MAALP Series I Preferred Units were outstanding.

  1. Employee Benefit Plans

The following provides details of the employee benefit plans not previously discussed in Note 5.

401(k) Savings Plans

MAA's 401(k) Savings Plan, or 401(k) Plan, is a defined contribution plan that satisfies the requirements of Section 401(a) and 401(k) of the Code. Subsequent to the merger with Post Properties, eligible employees of Post Properties continued to actively participate in the Post Properties 401(k) Plan, which also is a defined contribution plan that satisfies the requirements of Section 401(a) and 401(k) of the Code. MAA's Board of Directors has the discretion to approve matching contributions to these plans. MAA recognized expense from these plans of $3.2 million, $2.8 million and $2.0 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Non-Qualified Executive Deferred Compensation Retirement Plan

MAA has adopted the MAA Non-Qualified Executive Deferred Compensation Retirement Plan Amended and Restated effective January 1, 2016, or the Deferred Compensation Plan, for certain executive employees. Under the terms of the Deferred Compensation Plan, employees may elect to defer a percentage of their compensation and bonus, and MAA may, but is not obligated to, match a portion of the employees' salary deferral. MAA recognized expense on its match to the Deferred Compensation Plan for the years ended December 31, 2018, 2017 and 2016 of $0.3 million, $0.2 million and $0.1 million, respectively.

Non-Qualified Deferred Compensation Plan for Outside Company Directors

MAA has adopted the Non-Qualified Deferred Compensation Plan for Outside Company Directors as Amended effective November 20, 2010, or the Directors Deferred Compensation Plan, which allows non-employee directors to defer their director fees by having the fees held by MAA as shares of MAA's common stock. Directors can also choose to have their annual

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restricted stock grants issued into the Directors Deferred Compensation Plan. Amounts deferred through the Directors Deferred Compensation Plan are distributed to the directors in two annual installments beginning in the first 90 days of the year following the director’s departure from the board. Participating directors may choose to have the amount issued to them in shares of MAA's common stock or paid to them as cash at the market value of MAA's common stock as of the end of the year the director ceases to serve on the board.

For the years ended December 31, 2018, 2017 and 2016, directors deferred 12,240 shares, 12,293 shares and 10,166 shares of common stock, respectively, with weighted-average grant date fair values of $92.63, $101.34 and $97.99, respectively, into the Directors Deferred Compensation Plan. The shares of common stock held in the Directors Deferred Compensation Plan are classified outside of permanent equity in redeemable stock with changes in redemption amount recorded immediately to retained earnings because the directors have redemption rights not solely within the control of MAA. Additionally, any shares that become mandatorily redeemable because a departed director has elected to receive a cash payout are recorded as a liability. MAA did not record a liability related to mandatorily redeemable shares for the years ended December 31, 2018, 2017 and 2016.

Employee Stock Ownership Plan

MAA’s Employee Stock Ownership Plan, or ESOP, is a non-contributory stock bonus plan that satisfies the requirements of Section 401(a) of the Code. On December 31, 2010, the ESOP was frozen by amendment, whereby effective January 1, 2011, no additional employees became eligible for the plan, no additional contributions were made to the ESOP, and all Participants with an account balance under the ESOP became 100% vested. The Company did not contribute to the ESOP during 2018, 2017 or 2016. As of December 31, 2018, there were 139,436 shares outstanding with a fair value of $13.3 million.

  1. Commitments and Contingencies

Land and Equipment Leases

The Company has a ground lease expiring in 2074 related to one of its apartment communities acquired in the merger with Post Properties. This lease contains stated rent increases that generally compensate for the impact of inflation. The Company also has office, equipment and other operating leases. Future minimum lease payments for non-cancelable land, equipment and other operating leases as of December 31, 2018 were as follows (in thousands):

Minimum Lease Payments
2019$2,729
20202,744
20212,771
20222,767
20232,761
Thereafter68,516
Total$82,288

Legal Proceedings

In September 2010, the United States Department of Justice, or DOJ, filed suit against Post Properties (and by virtue of the merger with Post Properties, MAA) in the United States District Court for the District of Columbia alleging that certain of Post Properties’ apartments violated accessibility requirements of the Fair Housing Act, or FHA, and the Americans with Disabilities Act of 1990, or ADA. The DOJ sought, among other things, an injunction against MAA, requiring MAA to retrofit the properties and comply with FHA and ADA standards in future design and construction, as well as monetary damages and civil penalties. In October 2018, MAA and the DOJ reached an agreement in principle to settle the lawsuit. In November 2018, the settlement agreement was fully executed. In December 2018, a stipulation of dismissal of the case with prejudice was filed with the District Court, concluding the case.

In June 2016, plaintiffs Cathi Cleven and Tara Cleven, on behalf of a purported class of plaintiffs, filed a complaint against MAA and the Operating Partnership in the United States District Court for the Western District of Texas, Austin Division. In January 2017, Areli Arellano and Joe L. Martinez joined the lawsuit as additional plaintiffs. The lawsuit alleges that the Company (but not Post Properties) charged late fees at its Texas properties that violate Section 92.019 of the Texas Property Code, or Section 92.019, which provides that a landlord may not charge a tenant a late fee for failing to pay rent unless, among other things, the fee is a reasonable estimate of uncertain damages to the landlord that are incapable of precise calculation and

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result from the late payment of rent. The plaintiffs are seeking monetary damages and attorneys' fees and costs. In September 2018, the District Court certified a class proposed by the plaintiffs. Additionally, in September 2018, the District Court denied the Company’s motion for summary judgment and granted the plaintiffs’ motion for partial summary judgment. Because the District Court certified a class prior to granting the plaintiffs’ motion for partial summary judgment, the District Court’s ruling applies to the entire class. In October 2018, the Fifth Circuit Court of Appeals accepted the Company’s petition to review the District Court’s order granting class certification. The Company also intends to appeal the District Court’s order granting plaintiff’s motion for summary judgment to the Fifth Circuit Court of Appeals if permission to appeal is granted. The Company will continue to vigorously defend the action and pursue such appeals. Management estimates that the Company's maximum exposure in the lawsuit, given the recent class certification and summary judgment ruling, is $54.6 million, which includes both potential damages and attorneys' fees but excludes any prejudgment interest that may be awarded.

In April 2017, plaintiff Nathaniel Brown, on behalf of a purported class of plaintiffs, filed a complaint against the Operating Partnership, as the successor by merger to Post Properties' primary operating partnership, and MAA in the United States District Court for the Western District of Texas, Austin Division. The lawsuit alleges that Post Properties (and, following the Post Properties merger, the Operating Partnership) charged late fees at its Texas properties that violate Section 92.019. The plaintiffs are seeking monetary damages and attorneys' fees and costs. In September 2018, the District Court certified a class proposed by the plaintiff. Additionally, in September 2018, the District Court denied the Company’s motion for summary judgment and granted the plaintiff’s motion for partial summary judgment. Because the District Court certified a class prior to granting the plaintiff’s motion for partial summary judgment, the District Court’s ruling applies to the entire class. In October 2018, the Fifth Circuit Court of Appeals accepted the Company's petition to review the District Court's order granting class certification. The Company also intends to appeal the District Court’s order granting plaintiff’s motion for summary judgment to the Fifth Circuit Court of Appeals if permission to appeal is granted. The Company will continue to vigorously defend the action and pursue such appeals. Management estimates that the Company's maximum exposure in the lawsuit, given the recent class certification and summary judgment ruling, is $8.4 million, which includes both potential damages and attorneys' fees but excludes any prejudgment interest that may be awarded.

The Company is subject to various other legal proceedings and claims that arise in the ordinary course of its business operations. Matters which arise out of allegations of bodily injury, property damage and employment practices are generally covered by insurance. While the resolution of these other matters cannot be predicted with certainty, management does not currently believe that such matters, either individually or in the aggregate, will have a material adverse effect on the Company's financial condition, results of operations or cash flows in the event of a negative outcome.

Loss Contingencies

The outcomes of claims, disputes and legal proceedings are subject to significant uncertainty. The Company records an accrual for loss contingencies when a loss is probable and the amount of the loss can be reasonably estimated. The Company also accrues an estimate of defense costs expected to be incurred in connection with legal matters. Management reviews these accruals quarterly and makes revisions based on changes in facts and circumstances. When a loss contingency is not both probable and reasonably estimable, management does not accrue the loss. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then management discloses a reasonable estimate of the possible loss, or range of loss, if such reasonable estimate can be made. If the Company cannot make a reasonable estimate of the possible loss, or range of loss, then a statement to that effect is disclosed.

The assessment of whether a loss is probable or a reasonable possibility, and whether the loss or range of loss is reasonably estimable, often involves a series of complex judgments about future events. Among the factors considered in this assessment, are the nature of existing legal proceedings and claims, the asserted or possible damages or loss contingency (if reasonably estimable), the progress of the matter, existing law and precedent, the opinions or views of legal counsel and other advisers, management's experience in similar matters, the facts available to management at the time of assessment, and how the Company intends to respond, or has responded, to the proceeding or claim. Management's assessment of these factors may change over time as individual proceedings or claims progress. For matters where management is not currently able to reasonably estimate a range of reasonably possible loss, the factors that have contributed to this determination include the following: (i) the damages sought are indeterminate; (ii) the proceedings are in the early stages; (iii) the matters involve novel or unsettled legal theories or a large or uncertain number of actual or potential cases or parties; and/or (iv) discussions with the parties in matters that are ultimately expected to be resolved through negotiation and settlement have not reached the point where management believes a reasonable estimate of loss, or range of loss, can be made. The Company believes that there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss or business impact, if any.

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As of December 31, 2018 and December 31, 2017, the Company's accrual for loss contingencies relating to unresolved legal matters was $8.7 million and $32.1 million in the aggregate, respectively. The loss contingencies are presented in "Accrued expenses and other liabilities" in the accompanying Consolidated Balance Sheets.

  1. Related Party Transactions

The Company holds investments in unconsolidated affiliates accounted for under the equity method of accounting. All significant intercompany transactions were eliminated in the accompanying consolidated financial statements.

The cash management of the Company is managed by the Operating Partnership. In general, cash receipts are remitted to the Operating Partnership and all cash disbursements are funded by the Operating Partnership. As a result of these transactions, the Operating Partnership had a payable to MAA, its general partner, of $19,000 as of December 31, 2018 and December 31, 2017, respectively. The Partnership Agreement does not require the due to/due from balance to be settled in cash until liquidation of the Operating Partnership, and therefore, there is no regular settlement schedule for such amounts.

  1. Segment Information

As of December 31, 2018, the Company owned and operated 303 multifamily apartment communities in 17 different states from which it derived all significant sources of earnings and operating cash flows. The Company views each consolidated apartment community as an operating segment. The Company's chief operating decision maker, which is the Company’s Chief Executive Officer, evaluates performance and determines resource allocations of each of the apartment communities on a Same Store and Non-Same Store and Other basis, as well as an individual apartment community basis. This is consistent with the aggregation criteria under GAAP as each of the apartment communities generally has similar economic characteristics, facilities, services, and tenants. The following reflects the two reportable segments for the Company:

•Same Store communities are communities that the Company has owned and have been stabilized for at least a full 12 months as of the first day of the calendar year.
•Non-Same Store and Other includes recent acquisitions, communities in development or lease-up, communities that have been identified for disposition, and communities that have incurred a significant casualty loss. Also included in Non-Same Store and Other are non-multifamily activities.

On the first day of each calendar year, the Company determines the composition of its Same Store and Non-Same Store and Other reportable segments for that year as well as adjusts the previous year, which allows the Company to evaluate full period-over-period operating comparisons. Properties in development or lease-up are added to the Same Store portfolio on the first day of the calendar year after it has been owned and stabilized for at least a full 12 months. Communities are considered stabilized after achieving 90% occupancy for 90 days. Communities that have been identified for disposition are excluded from the Same Store portfolio.

The chief operating decision maker utilizes NOI in evaluating the performance of its operating segments. Total NOI represents total property revenues less total property operating expenses, excluding depreciation and amortization, for all properties held during the period regardless of their status as held for sale. Management believes that NOI is a helpful tool in evaluating the operating performance of the segments because it measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance.

Effective January 1, 2018, the Company revised its reportable segment presentation. The revision eliminated the distinction between large and secondary same store markets and combined the two previously reported segments into the Same Store reportable segment referred to above. The communities acquired in the merger with Post Properties became eligible for the same store designation on January 1, 2018 as the properties had been owned and stabilized for a full 12 months and are predominantly located in large markets, resulting in a more homogeneous property portfolio in terms of market dynamics. The chief operating decision maker no longer makes decisions about capital resource allocations and does not assess operating performance by large and secondary same store markets. Further, the chief operating decision maker no longer reviews financial information segregating the Company’s operating segments into large and secondary same store markets. The change in the Company’s portfolio caused the distinction between large and secondary markets to no longer be meaningful. As a result, the Company now discloses two reportable segments: Same Store and Non-Same Store and Other. There were no changes in the structure of the Company’s internal organization that prompted the change in reportable segments. Prior year amounts have been revised to conform to the current year presentation shown below.

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Revenues and NOI for each reportable segment for the years ended December 31, 2018, 2017 and 2016 were as follows (in thousands):

201820172016 (1)
Revenues:
Same Store
Rental revenues$1,340,914$1,313,836$909,688
Reimbursable property revenues89,28188,77474,814
Other property revenues11,61612,2298,219
Total Same Store revenues$1,441,811$1,414,839$992,721
Non-Same Store and Other
Rental revenues$123,112$105,865$121,964
Reimbursable property revenues5,4835,2828,733
Other property revenues9403,0011,930
Total Non-Same Store and Other revenues$129,535$114,148$132,627
Total rental and other property revenues$1,571,346$1,528,987$1,125,348
Net Operating Income:
Same Store NOI$905,756$889,176$620,567
Non-Same Store and Other NOI71,00263,08081,425
Total NOI976,758952,256701,992
Depreciation and amortization(489,759)(493,708)(322,958)
Property management expenses(47,633)(43,588)(34,093)
General and administrative expenses(34,786)(40,194)(29,040)
Merger and integration expenses(9,112)(19,990)(40,823)
Interest expense(173,594)(154,751)(129,947)
(Loss) gain on sale of depreciable real estate assets(39)127,38680,397
Gain on sale of non-depreciable real estate assets4,532212,171
Other non-operating income (expense)5,43414,353(1,839)
Income tax expense(2,611)(2,619)(1,699)
Income from real estate joint ventures1,8321,370241
Net income attributable to noncontrolling interests(8,123)(12,157)(12,180)
Dividends to MAA Series I preferred shareholders(3,688)(3,688)(307)
Net income available for MAA common shareholders$219,211$324,691$211,915

(1) The 2016 column shows the segment break down based on the 2017 Same Store portfolio. A comparison using the 2018 Same Store portfolio would not be comparative due to the nature of the segment classifications.

Assets for each reportable segment as of December 31, 2018 and 2017 were as follows (in thousands):

December 31, 2018December 31, 2017
Assets:
Same Store$9,589,141$9,864,321
Non-Same Store and Other1,565,4801,427,778
Corporate assets169,160199,820
Total assets$11,323,781$11,491,919

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  1. Real Estate Acquisitions and Dispositions

The following table reflects the Company's acquisition activity for the year ended December 31, 2018:

Multifamily AcquisitionMarketUnitsDate Acquired
Sync 36Denver, CO374April 26, 2018
Commercial AcquisitionMarketSq FtDate Acquired
Hue Retail(1)Raleigh, NC7,500August 1, 2018
Land AcquisitionMarketAcresDate Acquired
WestminsterDenver, CO10October 1, 2018
Long Point RoadHouston, TX9November 1, 2018

(1) The Company acquired the ground floor retail portion of one of its existing multifamily apartment communities.

The following table reflects the Company's disposition activity for the year ended December 31, 2018:

Land DispositionsMarketAcresDate Sold
Craft Farms ResidentialGulf Shores, AL3January 24, 2018
Randal ParkOrlando, FL34February 27, 2018
Colonial Grand at AzureLas Vegas, NV29April 19, 2018
Spring HillAtlanta, GA10July 2, 2018 and December 21, 2018
  1. Selected Quarterly Financial Information of MAA (Unaudited)

The following table reflects MAA's selected quarterly financial information for the year ended December 31, 2018 (dollars in thousands, except per share data):

Year Ended December 31, 2018
FirstSecondThirdFourth
Rental and other property revenues$386,017$390,073$397,108$398,148
Net income50,82061,98154,70463,517
Net income available for MAA common shareholders48,09758,88551,86960,360
Per share:
Earnings per common share - basic$0.42$0.52$0.46$0.53
Earnings per common share - diluted0.420.520.460.53

The following table reflects MAA's selected quarterly financial information for the year ended December 31, 2017 (dollars in thousands, except per share data):

Year Ended December 31, 2017
FirstSecondThirdFourth
Rental and other property revenues$378,908$382,791$384,550$382,738
Net income43,41650,155118,958128,007
Net income available for MAA common shareholders40,98347,393113,787122,528
Per share:
Earnings per common share - basic$0.36$0.42$1.00$1.08
Earnings per common share - diluted0.360.421.001.08

F-36

  1. Selected Quarterly Financial Information of MAALP (Unaudited)

The following table reflects MAALP's selected quarterly financial information for the year ended December 31, 2018 (dollars in thousands, except per unit data):

Year Ended December 31, 2018
FirstSecondThirdFourth
Rental and other property revenues$386,017$390,073$397,108$398,148
Net income50,82061,98154,70463,517
Net income available for MAALP common unitholders49,89861,05953,78262,595
Per unit:
Earnings per common unit - basic$0.42$0.52$0.46$0.53
Earnings per common unit - diluted0.420.520.460.53

The following table reflects MAALP's selected quarterly financial information for the year ended December 31, 2017 (dollars in thousands, except per unit data):

Year Ended December 31, 2017
FirstSecondThirdFourth
Rental and other property revenues$378,908$382,791$384,550$382,738
Net income43,41650,155118,958128,007
Net income available for MAALP common unitholders42,49449,233118,036127,085
Per unit:
Earnings per common unit - basic$0.36$0.42$1.00$1.08
Earnings per common unit - diluted0.360.421.001.08
  1. Subsequent Events

Disposition

In February 2019, MAALP closed on the disposition of a 0.4 acre land parcel located in the Atlanta, Georgia market, resulting in a net gain of $9.0 million on the sale of non-depreciable real estate assets recognized in the first quarter of 2019.

Financing

In February 2019, MAALP entered into a $191.3 million secured property mortgage with a fixed rate of 4.43%, maturing in February 2049.

F-37

Mid-America Apartment Communities, Inc. and Mid-America Apartments, L.P.

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2018

(Dollars in thousands)

Initial CostCosts Capitalized Subsequent to AcquisitionGross Amount carried as of December 31, 2018
PropertyLocationEncumbrancesLandBuildings and FixturesLandBuildings and FixturesLandBuildings and FixturesTotal (3)Accumulated Depreciation (4)NetDate of ConstructionDate Acquired
Birchall at Ross BridgeBirmingham, AL—$2,640$28,842$—$1,619$2,640$30,463$33,103$(7,815)$25,28820092011
Colonial Grand at Riverchase TrailsBirmingham, AL—3,76122,079—3,8753,76125,95429,715(6,747)22,96820102013
Colonial Village at TrussvilleBirmingham, AL—3,40231,813—2,8783,40234,69138,093(8,256)29,8371996/972013
Eagle RidgeBirmingham, AL—8517,667—4,46785112,13412,985(7,908)5,07719861998
Colonial Grand at TraditionsGulf Shores,AL—3,21125,162—2,5893,21127,75130,962(7,063)23,89920072013
Colonial Grand at EdgewaterHuntsville, AL—4,94338,673—4,3744,94343,04747,990(9,439)38,55119902013
Paddock Club at ProvidenceHuntsville, AL—90910,15283014,2691,73924,42126,160(14,497)11,66319931997
Colonial Grand at MadisonMadison, AL—3,60128,934—1,6533,60130,58734,188(7,467)26,72120002013
Cypress VillageOrange Beach, AL—1,29012,238—1,7901,29014,02815,318(3,117)12,20120082013
Colonial Grand at Liberty ParkVestavia Hills, AL—3,92230,977—5,3873,92236,36440,286(8,819)31,46720002013
Edge at Lyon's GatePhoenix, AZ—7,90127,182—2,9307,90130,11238,013(10,854)27,15920072008
Residences at FountainheadPhoenix, AZ—12,21256,705—92112,21257,62669,838(4,515)65,32320152016
Sky View RanchGilbert, AZ—2,66814,577—2,3362,66816,91319,581(5,888)13,69320072009
Talus RanchPhoenix, AZ—12,74147,701—3,87912,74151,58064,321(21,278)43,04320052006
Colonial Grand at Inverness CommonsMesa, AZ—4,21926,255—1,7554,21928,01032,229(6,523)25,70620022013
Colonial Grand at ScottsdaleScottsdale, AZ—3,61220,273—2,1923,61222,46526,077(5,301)20,77619992013
Colonial Grand at OldTown ScottsdaleScottsdale, AZ—7,82051,627—4,8437,82056,47064,290(12,886)51,4041994/952013
SkySongScottsdale, AZ——55,748—1,602—57,35057,350(5,419)51,93120142015
Calais ForestLittle Rock, AR—1,0269,244—7,8941,02617,13818,164(11,927)6,23719871994
Napa ValleyLittle Rock, AR—9608,642—5,70296014,34415,304(9,664)5,64019841996
Palisades at Chenal ValleyLittle Rock, AR—2,56025,234—3,8042,56029,03831,598(7,613)23,98520062011
Ridge at Chenal ValleyLittle Rock, AR—2,626——28,1042,62628,10430,730(4,795)25,93520122011
Westside CreekLittle Rock, AR—1,27111,463—8,6051,27120,06821,339(13,058)8,2811984/861997
Sync 36 IDenver, CO—18,88781,3171344,39719,02185,714104,735(1,670)103,06520172018
Post River NorthDenver, CO—14,50028,900—44,15714,50073,05787,557(2,527)85,03020182016
Tiffany OaksAltamonte Springs, FL—1,0249,219—5,6081,02414,82715,851(10,235)5,61619851996
Indigo PointBrandon, FL—1,16710,500—3,9851,16714,48515,652(9,125)6,52719892000
Paddock Club BrandonBrandon, FL—2,89626,111—6,6902,89632,80135,697(20,855)14,84219981997
Colonial Grand at Lakewood RanchBradenton, FL—2,98040,230—3,6182,98043,84846,828(9,961)36,86719992013
The Preserve at Coral SquareCoral Springs, FL—9,60040,004—11,0899,60051,09360,693(24,698)35,99519962004
Paddock Club GainesvilleGainesville, FL—1,80015,879—5,0811,80020,96022,760(10,315)12,44519991998
The Retreat at Magnolia ParkGainesville, FL—2,04016,338—8762,04017,21419,254(4,568)14,68620092011
Colonial Grand at HeathrowHeathrow, FL—4,10135,684—3,2964,10138,98043,081(9,198)33,88319972013
220 RiversideJacksonville, FL—2,50038,416—3,8472,50042,26344,763(3,494)41,26920152012
Atlantic CrossingJacksonville, FL—4,00019,495—1,7594,00021,25425,254(5,820)19,43420082011
Cooper's HawkJacksonville, FL—8547,500—3,89085411,39012,244(8,391)3,85319871995
Hunter's Ridge at DeerwoodJacksonville, FL—1,53313,835—5,9571,53319,79221,325(13,275)8,05019871997
LakesideJacksonville, FL—1,43012,883—8,4451,43021,32822,758(15,455)7,30319851996
Lighthouse at Fleming IslandJacksonville, FL—4,04735,052—5,5154,04740,56744,614(21,171)23,44320032003
Paddock Club MandarinJacksonville, FL—1,41114,967—3,1901,41118,15719,568(9,523)10,04519981998
St. AugustineJacksonville, FL—2,8576,475—19,9372,85726,41229,269(13,080)16,1891987/ 20081995
Tattersall at Tapestry ParkJacksonville, FL—6,41736,069—1,3366,41737,40543,822(9,701)34,12120092011
WoodhollowJacksonville, FL—1,68615,179(8)9,0491,67824,22825,906(17,118)8,78819861997
Colonial Grand at Town ParkLake Mary, FL—5,74256,562—4,2085,74260,77066,512(14,774)51,73820052013
Colonial Grand at Town Park ReserveLake Mary, FL—3,48110,311—4153,48110,72614,207(2,657)11,55020042013
Colonial Grand at Lake MaryLake Mary, FL—(1)6,34641,539—23,2906,34664,82971,175(11,864)59,31120122013
Colonial Grand at Randal LakesOrlando, FL—5,65950,553—10,9405,65961,49367,152(7,653)59,49920132013
Colonial Grand at Randal Lakes IIOrlando, FL—3,200——36,7753,20036,77539,975(1,903)38,07220132013
Retreat at Lake NonaOrlando, FL—7,88041,175—4,7207,88045,89553,775(10,388)43,38720062012
Colonial Grand at Heather GlenOrlando, FL—4,66256,988—5,5474,66262,53567,197(14,061)53,13620002013
Post Lake at Baldwin ParkOrlando, FL—18,101144,200—1,74718,101145,947164,048(12,134)151,91420112016
Post LakesideOrlando, FL—7,04652,585—3637,04652,94859,994(4,058)55,93620132016
Post ParksideOrlando, FL—5,66949,754—2,3995,66952,15357,822(4,332)53,49019992016
Park Crest at InnisbrookPalm Harbor, FL26,4836,90026,613—2,8586,90029,47136,371(10,455)25,91620002009
The Club at Panama BeachPanama City, FL—89814,276(5)3,99689318,27219,165(10,384)8,78120001998
Colonial Village at Twin LakesSanford, FL22,7783,09147,793—2,3293,09150,12253,213(11,617)41,59620052013

F-38

Initial CostCosts Capitalized Subsequent to AcquisitionGross Amount carried as of December 31, 2018
PropertyLocationEncumbrancesLandBuildings and FixturesLandBuildings and FixturesLandBuildings and FixturesTotal (3)Accumulated Depreciation (4)NetDate of ConstructionDate Acquired
Paddock Club TallahasseeTallahassee, FL—5304,80595014,7831,48019,58821,068(13,247)7,82119921997
Verandas at SouthwoodTallahassee, FL—3,60025,914—1,1083,60027,02230,622(4,260)26,36220032011
BelmereTampa, FL—8527,667—7,17285214,83915,691(10,394)5,29719841994
Links at CarrollwoodTampa, FL—8177,3551105,75392713,10814,035(8,528)5,50719801998
Post Bay at Rocky PointTampa, FL—4,54128,381—1,0174,54129,39833,939(2,378)31,56119972016
Post Harbour PlaceTampa, FL—16,296116,193—5,42216,296121,615137,911(10,385)127,52619972016
Post Hyde ParkTampa, FL—16,89195,259—3,23016,89198,489115,380(8,415)106,96519942016
Post Rocky PointTampa, FL—35,260153,102—6,85835,260159,960195,220(13,220)182,0001994-19962016
Post Soho SquareTampa, FL—5,19056,296—2045,19056,50061,690(4,290)57,40020122016
Village OaksTampa, FL—2,73819,0551532,6192,89121,67424,565(7,809)16,75620052008
Colonial Grand at Hampton PreserveTampa, FL—6,23369,535—1,5956,23371,13077,363(15,289)62,07420122013
Colonial Grand at Seven OaksWesley Chapel, FL—3,05142,768—2,6113,05145,37948,430(9,952)38,47820042013
Colonial Grand at WindermereWindermere, FL—2,71136,710—1,1972,71137,90740,618(8,096)32,52220092013
Allure at BrookwoodAtlanta, GA—(1)11,16852,758—4,80011,16857,55868,726(13,286)55,44020082012
Allure in Buckhead VillageAtlanta, GA—8,63319,844—6,2898,63326,13334,766(7,187)27,57920022012
The High Rise at Post AlexanderAtlanta, GA—8,43592,294—1528,43592,446100,881(10,258)90,62320152016
Post AlexanderAtlanta, GA—15,44073,278—1,62815,44074,90690,346(4,920)85,42620062016
Post BriarcliffAtlanta, GA—24,645114,921—2,78324,645117,704142,349(9,380)132,96919962016
Post BrookhavenAtlanta, GA—29,048106,463—5,28429,048111,747140,795(9,425)131,3701989/922016
Post ChastainAtlanta, GA—30,22382,964—1,63830,22384,602114,825(6,721)108,10419902016
Post CrossingAtlanta, GA—15,79948,054—1,73815,79949,79265,591(4,113)61,47819952016
Post GardensAtlanta, GA—17,90756,093—2,38517,90758,47876,385(5,019)71,36619962016
Post GlenAtlanta, GA—13,87851,079—2,65713,87853,73667,614(4,328)63,28619962016
Post MidtownAtlanta, GA—7,00044,000—39,8827,00083,88290,882(3,294)87,58820172016
Post ParksideAtlanta, GA—11,02534,277—99911,02535,27646,301(2,689)43,61219992016
Post Peachtree HillsAtlanta, GA—11,97455,264—35111,97455,61567,589(4,356)63,2331992-1994/20092016
Post RiversideAtlanta, GA—23,76589,369—4,10823,76593,477117,242(8,384)108,85819962016
Post SpringAtlanta, GA—18,59657,819—2,41218,59660,23178,827(5,262)73,56519992016
Post StratfordAtlanta, GA——30,051—2,091—32,14232,142(2,793)29,34919992016
Sanctuary at OglethorpeAtlanta, GA—6,87531,441—5,5126,87536,95343,828(13,085)30,74319942008
Post Centennial ParkAtlanta, GA—13,65010,950—61,12013,65072,07085,720(1,344)84,37620182016
PrescottDuluth, GA—(2)3,84024,011—4,5653,84028,57632,416(13,745)18,67120012004
Colonial Grand at Berkeley LakeDuluth, GA—1,96015,707—2,0801,96017,78719,747(4,889)14,85819982013
Colonial Grand at River OaksDuluth, GA—4,36013,579—1,9524,36015,53119,891(5,275)14,61619922013
Colonial Grand at River PlantationDuluth, GA—2,05919,158—2,0512,05921,20923,268(5,773)17,49519942013
Colonial Grand at McDaniel FarmDuluth, GA—3,98532,206—3,9513,98536,15740,142(9,744)30,39819972013
Colonial Grand at Pleasant HillDuluth, GA—6,75332,202—4,3046,75336,50643,259(9,415)33,84419962013
Colonial Grand at Mount VernonDunwoody, GA—6,86123,748—3,3426,86127,09033,951(6,144)27,80719972013
Lake Lanier ClubGainesville, GA—(2)6,71040,994—8,4196,71049,41356,123(23,407)32,7161998/20012005
Colonial Grand at ShilohKennesaw, GA—4,86445,893—4,0984,86449,99154,855(12,220)42,63520022013
Millstead VillageLaGrange, GA—3,10029,240—1,2633,10030,50333,603(6,527)27,07619982008
Colonial Grand at Barrett CreekMarietta, GA—5,66126,186—2,9325,66129,11834,779(8,050)26,72919992013
Colonial Grand at Godley StationPooler, GA9,0281,80035,454—3,4841,80038,93840,738(8,635)32,10320012013
Colonial Grand at Godley LakePooler, GA—1,75030,893—1,2491,75032,14233,892(7,473)26,41920082013
Avala at Savannah QuartersSavannah, GA—1,50024,862—2,0461,50026,90828,408(6,972)21,43620092011
Georgetown GroveSavannah, GA—1,28811,579—3,6931,28815,27216,560(10,078)6,48219971998
Colonial Grand at HammocksSavannah, GA—2,44136,863—4,3382,44141,20143,642(9,202)34,44019972013
Colonial Village at GreentreeSavannah, GA—1,71010,494—1,7391,71012,23313,943(3,430)10,51319842013
Colonial Village at HuntingtonSavannah, GA—2,5218,223—1,2762,5219,49912,020(2,374)9,64619862013
Colonial Village at Marsh CoveSavannah, GA—5,2318,555—1,3735,2319,92815,159(2,876)12,28319832013
Oaks at Wilmington IslandSavannah, GA—2,91025,315(46)4,7332,86430,04832,912(12,626)20,28619992006
Highlands of West VillageSmyrna, GA—14,41073,733—7,05614,41080,78995,199(12,206)82,9932006/122014
Haven at Prairie TraceOverland Park, KS—3,50040,614—1,2283,50041,84245,342(3,862)41,48020152015
Grand Reserve at PinnacleLexington, KY—2,02431,525—5,8752,02437,40039,424(18,490)20,93420001998
LakepointeLexington, KY—4113,699—2,7074116,4066,817(4,737)2,08019861994
The MansionLexington, KY—6946,242—3,88769410,12910,823(7,501)3,32219891994
The VillageLexington, KY—9008,097—4,77690012,87313,773(9,579)4,19419891994
Stonemill VillageLouisville, KY—1,16910,518—9,8301,16920,34821,517(14,568)6,94919851994
CrosswindsJackson, MS—1,53513,826—5,7351,53519,56121,096(13,735)7,36119891996
Pear OrchardJackson, MS—1,35112,168—8,8551,35121,02322,374(15,488)6,88619851994
Reflection PointeJackson, MS—7108,7701388,74384817,51318,361(12,444)5,91719861988
Lakeshore LandingRidgeland, MS—6766,284—3,6476769,93110,607(5,141)5,46619741994

F-39

Initial CostCosts Capitalized Subsequent to AcquisitionGross Amount carried as of December 31, 2018
PropertyLocationEncumbrancesLandBuildings and FixturesLandBuildings and FixturesLandBuildings and FixturesTotal (3)Accumulated Depreciation (4)NetDate of ConstructionDate Acquired
Market StationKansas City, MO—5,81446,241—2,3095,81448,55054,364(10,451)43,91320102012
The DentonKansas City, MO—7508,795—8347509,62910,379(716)9,66320142015
The Denton IIKansas City, MO—770——24,25877024,25825,028(695)24,33320172015
The Denton IIIKansas City, MO—4,00042,144—1,3724,00043,51647,516(4,530)42,9862013/142015
Colonial Grand at Desert VistaNorth Las Vegas, NV—4,09129,826—1,5344,09131,36035,451(7,505)27,94620092013
Colonial Grand at Palm VistaNorth Las Vegas, NV—4,90925,643—2,8294,90928,47233,381(7,116)26,26520072013
Colonial Village at Beaver CreekApex, NC—7,49134,863—2,1607,49137,02344,514(8,248)36,26620072013
Hermitage at BeechtreeCary, NC—9008,099—5,08690013,18514,085(8,663)5,42219881997
Waterford ForestCary, NC—(2)4,00020,250—3,8934,00024,14328,143(11,450)16,69319962005
1225 South Church ICharlotte, NC—9,61222,342—27,9329,61250,27459,886(9,111)50,77520102010
Colonial Grand at AyrsleyCharlotte, NC—2,48152,119—13,9862,48166,10568,586(13,604)54,98220082013
Colonial Grand at Beverly CrestCharlotte, NC—3,16124,004—2,9283,16126,93230,093(6,125)23,96819962013
Colonial Grand at Legacy ParkCharlotte, NC—2,89128,272—2,2672,89130,53933,430(7,185)26,24520012013
Colonial Grand at Mallard CreekCharlotte, NC—4,59127,713—1,8134,59129,52634,117(6,969)27,14820052013
Colonial Grand at Mallard LakeCharlotte, NC—3,25031,389—4,0033,25035,39238,642(8,411)30,23119982013
Colonial Grand at University CenterCharlotte, NC—1,62017,499—8261,62018,32519,945(4,019)15,92620052013
Colonial Reserve at South EndCharlotte, NC—4,62844,282—11,6544,62855,93660,564(6,741)53,82320132013
Colonial Village at Chancellor ParkCharlotte, NC—5,31128,016—4,2925,31132,30837,619(7,298)30,32119992013
Colonial Village at South TryonCharlotte, NC—2,26019,489—1,9532,26021,44223,702(4,998)18,70420022013
Colonial Village at Timber CrestCharlotte, NC—2,90117,192—2,4162,90119,60822,509(4,294)18,21520002013
EnclaveCharlotte, NC—1,46118,984—1,1141,46120,09821,559(3,988)17,57120082013
Post BallantyneCharlotte, NC—16,21644,817—2,06316,21646,88063,096(3,760)59,33620042016
Post Gateway PlaceCharlotte, NC—17,52857,444—2,90117,52860,34577,873(5,223)72,65020002016
Post Park at Phillips PlaceCharlotte, NC—20,86965,517—3,30420,86968,82189,690(5,683)84,00719962016
Post South EndCharlotte, NC—18,83558,795—1,48818,83560,28379,118(4,505)74,61320092016
Post Uptown PlaceCharlotte, NC—10,88830,078—1,48710,88831,56542,453(2,630)39,82320002016
Colonial Grand at CorneliusCornelius, NC—4,57129,151—1,4554,57130,60635,177(7,365)27,81220092013
Colonial Grand at Patterson PlaceDurham, NC—2,59027,126—3,0442,59030,17032,760(6,840)25,92019972013
Colonial Village at DeerfieldDurham, NC—3,27115,609—1,5103,27117,11920,390(4,695)15,69519852013
Colonial Grand at Research ParkDurham, NC—4,20137,682—2,9214,20140,60344,804(9,458)35,34620022013
Colonial Grand at HuntersvilleHuntersville, NC—4,25131,948—2,6094,25134,55738,808(8,033)30,77520082013
Colonial Village at MatthewsMatthews, NC—3,07121,830—4,6303,07126,46029,531(6,991)22,54020082013
Colonial Grand at Matthews CommonsMatthews, NC—3,69028,536—2,1473,69030,68334,373(7,088)27,28520082013
Colonial Grand at ArringdonMorrisville, NC—6,40131,134—2,9486,40134,08240,483(7,917)32,56620032013
Colonial Grand at Brier CreekRaleigh, NC—7,37250,202—2,2787,37252,48059,852(11,622)48,23020102013
Colonial Grand at Brier FallsRaleigh, NC—6,57248,910—1,8086,57250,71857,290(11,066)46,22420082013
Colonial Grand at Crabtree ValleyRaleigh, NC—2,24118,434—1,6492,24120,08322,324(4,336)17,98819972013
HueRaleigh, NC—3,69029,910—2,5393,69032,44936,139(7,630)28,50920092010
Colonial Grand at Trinity CommonsRaleigh, NC—5,23245,138—3,2405,23248,37853,610(11,612)41,9982000/022013
Post Parkside at WadeRaleigh, NC—7,19651,972—6737,19652,64559,841(4,150)55,69120112016
Post Parkside at Wade IIRaleigh, NC—9,45046,3165871,64610,03747,96257,999(5,918)52,08120172016
Preserve at Brier CreekRaleigh, NC—5,85021,980(19)25,4705,83147,45053,281(17,903)35,37820042006
Providence at Brier CreekRaleigh, NC—4,69529,007—1,8974,69530,90435,599(11,254)24,34520072008
TanglewoodAnderson, SC—4273,853—3,1204276,9737,400(5,346)2,05419801994
Colonial Grand at Cypress CoveCharleston, SC—3,61028,645—2,1983,61030,84334,453(7,287)27,16620012013
Colonial Village at Hampton PointeCharleston, SC—3,97122,790—5,0723,97127,86231,833(6,473)25,36019862013
Colonial Grand at QuarterdeckCharleston, SC—92024,097—5,84692029,94330,863(6,799)24,06419872013
Colonial Village at WestchaseCharleston, SC—4,57120,091—3,4574,57123,54828,119(6,236)21,88319852013
River's WalkCharleston, SC—8,83139,430—1,6448,83141,07449,905(4,579)45,3262013/162013
1201 MidtownCharleston, SC—11,92957,885—61411,92958,49970,428(3,592)66,83620152016
1201 Midtown IICharleston, SC—6,7505,874—15,6056,75021,47928,229(87)28,14220182016
The FairwaysColumbia, SC—9108,207—3,43591011,64212,552(8,718)3,83419921994
Paddock Club ColumbiaColumbia, SC—1,84016,560—5,1431,84021,70323,543(14,550)8,99319911997
Colonial Village at Windsor PlaceGoose Creek, SC—1,32114,163—2,9191,32117,08218,403(4,520)13,88319852013
Highland RidgeGreenville, SC—4824,337—2,7904827,1277,609(4,803)2,80619841995
Howell CommonsGreenville, SC—1,30411,740—3,9001,30415,64016,944(10,801)6,14319871997
Paddock Club GreenvilleGreenville, SC—1,20010,800—2,4271,20013,22714,427(8,894)5,53319961997
Park HaywoodGreenville, SC—3252,925354,6403607,5657,925(5,558)2,36719831993
Spring CreekGreenville, SC—5975,374(14)3,0435838,4179,000(5,995)3,00519851995
Innovation Apartment HomesGreenville, SC—4,43752,026—1,2264,43753,25257,689(4,168)53,52120152016
Runaway BayMt. Pleasant, SC—1,0857,269126,6201,09713,88914,986(9,420)5,56619881995
Colonial Grand at Commerce ParkNorth Charleston, SC—2,78033,966—2,0132,78035,97938,759(8,116)30,64320082013

F-40

Initial CostCosts Capitalized Subsequent to AcquisitionGross Amount carried as of December 31, 2018
PropertyLocationEncumbrancesLandBuildings and FixturesLandBuildings and FixturesLandBuildings and FixturesTotal (3)Accumulated Depreciation (4)NetDate of ConstructionDate Acquired
535 BrookwoodSimpsonville, SC12,0111,21618,666—1,5651,21620,23121,447(6,068)15,37920082010
Park PlaceSpartanburg, SC—7236,504—3,1777239,68110,404(6,721)3,68319871997
Farmington VillageSummerville, SC—2,80026,295—2,4652,80028,76031,560(11,008)20,55220072007
Colonial Village at Waters EdgeSummerville, SC—2,1039,187—3,7872,10312,97415,077(3,937)11,14019852013
Hamilton PointeChattanooga, TN—1,13110,632—4,9521,13115,58416,715(8,171)8,54419891992
Hidden CreekChattanooga, TN—9728,954—5,97897214,93215,904(6,635)9,26919871988
SteeplechaseChattanooga, TN—2171,957—3,3402175,2975,514(3,748)1,76619861991
WindridgeChattanooga, TN—8177,416—4,46481711,88012,697(8,087)4,61019841997
Kirby StationMemphis, TN—1,14810,337—10,6851,14821,02222,170(14,339)7,83119781994
Lincoln on the GreenMemphis, TN—1,49820,483—16,6401,49837,12338,621(26,261)12,36019921994
Park EstateMemphis, TN—1781,141—5,0901786,2316,409(4,878)1,53119741977
Reserve at Dexter LakeMemphis, TN—1,26016,0432,14741,6313,40757,67461,081(27,474)33,60720001998
Paddock Club MurfreesboroMurfreesboro, TN—91514,774—3,64991518,42319,338(9,763)9,57519991998
Acklen West EndNashville, TN—12,76158,906—45012,76159,35572,116(2,159)69,95720152017
Aventura at Indian Lake VillageNashville, TN—4,95028,053—1,6764,95029,72934,679(7,663)27,01620102011
Avondale at KennesawNashville, TN16,5523,45622,443—3,0073,45625,45028,906(7,550)21,35620082010
Brentwood DownsNashville, TN—1,19310,739(2)8,5901,19119,32920,520(12,321)8,19919861994
Charlotte at MidtownNashville, TN—7,89854,480—4857,89855,30563,203(2,791)60,41220162017
Colonial Grand at BellevueNashville, TN20,08817,27864,196(2)3,36717,27667,56384,839(11,950)72,8891996 / 20152013
Grand View NashvilleNashville, TN—2,96333,673—8,5522,96342,22545,188(20,057)25,13120011998
Monthaven ParkNashville, TN—2,73628,902—6,0332,73634,93537,671(17,762)19,90920002004
Park at HermitageNashville, TN—1,52414,800—9,0141,52423,81425,338(17,472)7,86619871995
Venue at Cool SpringsNashville, TN—6,670——51,9226,67051,92258,592(8,690)49,90220122010
Verandas at Sam RidleyNashville, TN20,3723,35028,308—2,3213,35030,62933,979(9,018)24,96120092010
Balcones WoodsAustin, TX—1,59814,398—9,1331,59823,53125,129(16,270)8,85919831997
Colonial Grand at Canyon CreekAustin, TX13,3563,62132,137—1,6863,62133,82337,444(7,986)29,45820082013
Colonial Grand at Canyon RanchAustin, TX—3,77820,201—2,1673,77822,36826,146(5,831)20,31520032013
Colonial Grand at Double CreekAustin, TX—3,13129,375—9143,13130,28933,420(7,172)26,24820132013
Colonial Grand at Onion CreekAustin, TX—4,90233,010—1,7974,90234,80739,709(8,337)31,37220092013
Grand Reserve at Sunset ValleyAustin, TX—3,15011,393—3,8193,15015,21218,362(7,409)10,95319962004
Colonial Village at Quarry OaksAustin, TX—4,62134,461—5,8804,62140,34144,962(10,509)34,45319962013
Colonial Grand at Wells BranchAustin, TX—3,09432,2832941,6243,38833,90737,295(7,568)29,72720082013
Legacy at Western OaksAustin, TX—(1)9,10049,339—4919,10049,83058,930(11,908)47,02220012009
Post Barton CreekAustin, TX—8,68321,497—9058,68322,40231,085(2,076)29,00919982016
Post Park MesaAustin, TX—4,65319,828—6744,65320,50225,155(1,668)23,48719922016
Post South LamarAustin, TX—11,54241,293—85811,54242,15153,693(4,271)49,42220112016
Post South Lamar IIAustin, TX—9,00032,800—20,0509,00052,85061,850(632)61,21820172016
Post West AustinAustin, TX—7,80548,843—1,1687,80550,01157,816(4,930)52,88620092016
SilveradoAustin, TX—2,90024,009—4,2092,90028,21831,118(12,387)18,73120032006
Stassney WoodsAustin, TX—1,6217,501—8,6551,62116,15617,777(10,362)7,41519851995
Sixty 600Austin, TX—2,2816,169—8,0192,28114,18816,469(9,227)7,24219871995
The Woods on Barton SkywayAustin, TX—1,40512,769—9,8161,40522,58523,990(10,639)13,35119771997
Colonial Village at Shoal CreekBedford, TX—4,98227,377—3,6354,98231,01235,994(7,770)28,22419962013
Colonial Village at Willow CreekBedford, TX—3,10933,488—7,4153,10940,90344,012(10,077)33,93519962013
Colonial Grand at HebronCarrollton, TX—4,23142,237—1,2774,23143,51447,745(9,268)38,47720112013
Colonial Grand at SilveradoCedar Park, TX—3,28224,935—1,3693,28226,30429,586(6,132)23,45420052013
Colonial Grand at Silverado ReserveCedar Park, TX—3,95131,705—1,9543,95133,65937,610(7,652)29,95820052013
Grand CypressCypress, TX—3,88124,267—1,3163,88125,58329,464(4,560)24,90420082013
Courtyards at CampbellDallas, TX—9888,893—4,03398812,92613,914(8,572)5,34219861998
Deer RunDallas, TX—1,25211,271—5,0181,25216,28917,541(10,942)6,59919851998
Grand CourtyardDallas, TX—2,73022,240—3,6152,73025,85528,585(11,461)17,12420002006
Legends at Lowe's FarmDallas, TX—5,01641,091—2,5985,01643,68948,705(11,336)37,36920082011
Colonial Reserve at Medical DistrictDallas, TX—4,05033,779—2,0274,05035,80639,856(7,301)32,55520072013
Post AbbeyDallas, TX—2,7114,369—1122,7114,4817,192(384)6,80819962016
Post Addison CircleDallas, TX—12,308189,419—6,63712,308196,056208,364(15,940)192,4241998-20002016
Post Cole's CornerDallas, TX—13,03014,383—1,54113,03015,92428,954(1,481)27,47319982016
Post EastsideDallas, TX—7,13458,095—8537,13458,94866,082(5,277)60,80520082016
Post GalleryDallas, TX—4,3917,910—6874,3918,59712,988(870)12,11819992016
Post HeightsDallas, TX—26,24537,922—82326,24538,74564,990(3,439)61,5511998-1999/20092016
Post Katy TrailDallas, TX—10,33332,456—62110,33333,07743,410(2,524)40,88620102016
Post LegacyDallas, TX—6,57555,277—2,2646,57557,54164,116(4,616)59,50020002016
Post MeridianDallas, TX—8,78013,654—2088,78013,86222,642(1,279)21,36319912016

F-41

Initial CostCosts Capitalized Subsequent to AcquisitionGross Amount carried as of December 31, 2018
PropertyLocationEncumbrancesLandBuildings and FixturesLandBuildings and FixturesLandBuildings and FixturesTotal (3)Accumulated Depreciation (4)NetDate of ConstructionDate Acquired
Post Sierra at Frisco BridgesDallas, TX—6,77732,553—5806,77733,13339,910(3,291)36,61920092016
Post SquareDallas, TX—13,17824,048—1,01713,17825,06538,243(2,013)36,23019962016
Post Uptown VillageDallas, TX—34,97433,213—3,46434,97436,67771,651(3,231)68,4201995/20002016
Post VineyardDallas, TX—7,9667,471—6287,9668,09916,065(691)15,37419962016
Post VintageDallas, TX—13,6218,608—70813,6219,31622,937(851)22,08619932016
Post WorthingtonDallas, TX—13,71343,268—91713,71344,18557,898(3,598)54,3001993/20082016
WatermarkDallas, TX—(2)96014,438—3,04796017,48518,445(8,672)9,77320022004
Colonial Grand at Bear CreekEuless, TX—6,45330,048—2,8746,45332,92239,375(8,561)30,81419982013
Colonial Grand at FairviewFairview, TX—2,17135,077—1,0412,17136,11838,289(7,590)30,69920122013
La Valencia at StarwoodFrisco, TX—3,24026,069—1,6773,24027,74630,986(8,144)22,84220092010
Colonial Reserve at Frisco BridgesFrisco, TX—1,96834,018—1,4451,96835,46337,431(7,350)30,08120132013
Colonial Village at GrapevineGrapevine, TX—2,35129,757—5,6692,35135,42637,777(8,355)29,4221985/862013
Greenwood ForestHouston, TX—3,46523,482—5233,46524,00527,470(4,938)22,53219942013
Legacy PinesHouston, TX—(2)2,15719,066(15)4,1842,14223,25025,392(12,252)13,14019992003
Park Place (Houston)Houston, TX—2,06115,830—3,2852,06119,11521,176(8,141)13,03519962007
Post Midtown SquareHouston, TX—19,03889,570—1,61719,03891,187110,225(7,964)102,2611999/20132016
Post 510Houston, TX—7,22733,366—2897,22733,65540,882(3,162)37,72020142016
Post Afton OaksHouston, TX—11,50365,469—3,42011,50368,88980,392(7,027)73,36520172016
RanchstoneHouston, TX—1,48014,807—2,7711,48017,57819,058(7,245)11,81319962007
Reserve at Woodwind LakesHouston, TX—1,96819,928—3,9301,96823,85825,826(10,313)15,51319992006
Retreat at Vintage ParkHouston, TX—8,21140,352—8878,21141,23949,450(4,417)45,03320142014
Yale at 6thHouston, TX—(1)13,10762,764—1,10413,10763,86876,975(2,447)74,52820152016
Cascade at Fall CreekHumble, TX—5,98540,011—2,8065,98542,81748,802(16,666)32,13620072007
Bella CasitaIrving, TX—(2)2,52126,432—2,3552,52128,78731,308(8,207)23,10120072010
Remington HillsIrving, TX—4,39021,822—11,8204,39033,64238,032(7,517)30,51519842013
Colonial Reserve at Las ColinasIrving, TX—(1)3,90240,691—1,6243,90242,31546,217(8,743)37,47420062013
Colonial Grand at Valley RanchIrving, TX22,7785,07237,397—12,1435,07249,54054,612(12,067)42,54519972013
Colonial Village at OakbendLewisville, TX—5,59828,616—4,0375,59832,65338,251(8,001)30,25019972013
Times Square at Craig RanchMcKinney, TX—1,13028,058—4,3241,13032,38233,512(9,932)23,58020092010
Venue at Stonebridge RanchMcKinney, TX—4,03419,528—1,2354,03420,76324,797(3,791)21,00620002013
Cityscape at Market CenterPlano, TX—16,894110,705—2,00416,894112,709129,603(11,590)118,0132013/152014
HighwoodPlano, TX—8647,783—3,63086411,41312,277(7,612)4,66519831998
Los Rios ParkPlano, TX—3,27328,823—6,7203,27335,54338,816(18,242)20,57420002003
Boulder RidgeRoanoke, TX—3,38226,930—6,3643,38233,29436,676(15,517)21,15919992005
Copper RidgeRoanoke, TX—4,166——21,6414,16621,77825,944(5,880)20,06420092008
Colonial Grand at Ashton OaksRound Rock, TX—5,51136,241—2,1695,51138,41043,921(8,934)34,98720092013
Colonial Grand at Round RockRound Rock, TX—4,69145,379—2,3514,69147,73052,421(10,832)41,58919972013
Colonial Village at Sierra VistaRound Rock, TX—2,56116,488—3,5762,56120,06422,625(5,118)17,50719992013
Alamo RanchSan Antonio, TX—2,38026,982—2,6772,38029,65932,039(8,533)23,50620092011
Bulverde OaksSan Antonio, TX—4,25736,759—1,2964,25738,05542,312(4,283)38,02920142014
Haven at BlancoSan Antonio, TX—5,45045,958—3,0145,45048,97254,422(11,161)43,26120102012
Stone Ranch at Westover HillsSan Antonio, TX17,5334,00024,992—2,7704,00027,76231,762(8,907)22,85520092009
Cypresswood CourtSpring, TX—(2)5765,190—5,20357610,39310,969(6,175)4,79419841994
Villages at KirkwoodStafford, TX—1,91815,846—3,1121,91818,95820,876(9,286)11,59019962004
Green Tree PlaceWoodlands, TX—(2)5394,850—3,7615398,6119,150(6,160)2,99019841994
Stonefield CommonsCharlottesville, VA—11,04436,689—87211,04437,56148,605(4,500)44,10520132014
Adalay BayChesapeake, VA—5,28031,341—3,1765,28034,51739,797(8,461)31,33620022012
Colonial Village at GreenbrierFredericksburg, VA—4,84221,677—1,6144,84223,29128,133(5,024)23,10919802013
Seasons at Celebrate VirginiaFredericksburg, VA—14,49032,083—39,59814,49071,68186,171(13,240)72,93120112011
Station Square at Cosner's CornerFredericksburg, VA—12,82551,078—1,37212,82552,45065,275(6,508)58,7672013/162013
Apartments at Cobblestone SquareFredericksburg, VA—10,99048,696—2,38910,99051,08562,075(5,428)56,64720122016
Colonial Village at Hampton GlenGlen Allen, VA—4,85121,678—2,6904,85124,36829,219(5,628)23,59119862013
Colonial Village at West EndGlen Allen, VA—4,66118,908—2,7634,66121,67126,332(4,926)21,40619872013
TownshipHampton, VA—1,5098,189—8,4391,50916,62818,137(10,777)7,36019871995
Colonial Village at WaterfordMidlothian, VA—6,73329,221—3,9036,73333,12439,857(8,040)31,81719892013
Ashley ParkRichmond, VA—4,76113,365—1,9344,76115,29920,060(4,160)15,90019882013
Colonial Village at Chase GaytonRichmond, VA—6,02129,004—3,3406,02132,34438,365(7,720)30,64519842013
Hamptons at Hunton ParkRichmond, VA—4,93035,598—5,4304,93041,02845,958(10,730)35,22820032011
Retreat at West CreekRichmond, VA—7,11236,136—1,5947,11237,73044,842(3,594)41,24820152015
Retreat at West Creek IIRichmond, VA—3,000——12,1443,00012,14415,144(555)14,58920172015
RadiusNewport News, VA—5,04036,481—2,3935,04038,87443,914(3,672)40,24220122015
Post Carlyle SquareWashington D.C.—29,728154,309—1,29229,728155,601185,329(12,256)173,0732006/132016

F-42

Initial CostCosts Capitalized Subsequent to AcquisitionGross Amount carried as of December 31, 2018
PropertyLocationEncumbrancesLandBuildings and FixturesLandBuildings and FixturesLandBuildings and FixturesTotal (3)Accumulated Depreciation (4)NetDate of ConstructionDate Acquired
Post Corners at Trinity CenterWashington D.C.—7,66470,012—1,5127,66471,52479,188(5,641)73,54719962016
Post FallsgroveWashington D.C.—17,52458,896—1,82817,52460,72478,248(4,975)73,27320032016
Post ParkWashington D.C.—5,35579,842—9365,35580,77886,133(8,316)77,81720102016
Post Pentagon RowWashington D.C.—30,452125,091—3,79230,452128,883159,335(10,510)148,82520012016
Post Tysons CornerWashington D.C.—30,77682,021—1,68930,77683,710114,486(6,679)107,80719902016
Total Residential Properties180,9791,816,7609,932,8785,2791,555,3971,822,03911,488,75313,310,792(2,512,538)10,798,254
Colonial Promenade at HuntsvilleHuntsville, AL—2,000———2,000—2,000—2,00020172013
Allure in BuckheadAtlanta, GA—8673,465—2638673,7284,595(790)3,80520122012
Highlands of West VillageSmyrna, GA—2,5008,4469081,2083,4089,65413,062(1,388)11,67420122014
The DentonKansas City, MO—7004,439—4427004,8815,581(415)5,16620142015
1225 South ChurchCharlotte, NC—43199924252441493(122)37120102010
Bella Casita at Las ColinasIrving, TX—(2)46186—15246338384(88)29620072010
Times Square at Craig RanchMcKinney, TX—2531,310—2,3972533,7073,960(608)3,35220092010
Post Rocky PointTampa, FL—3451—27234323357(50)3071994-19962016
Post Training FacilityAtlanta, GA—1,092968——1,0929682,060(164)1,89619992016
Post Riverside OfficeAtlanta, GA—9,68022,108—5,9189,68028,02637,706(2,980)34,72619962016
Post Riverside RetailAtlanta, GA—8892,340—2,2748894,6145,503(306)5,19719962016
Post Harbour PlaceTampa, FL—3864,315—2563864,5714,957(398)4,55919972016
Post Soho Square RetailTampa, FL—2684,033—62684,0394,307(454)3,85320122016
Post Parkside Atlanta RetailAtlanta, GA—4261,089—24261,0911,517(99)1,41819992016
Post Uptown Place RetailCharlotte, NC—3191,144—113191,1551,474(117)1,35719982016
Post Uptown Leasing CenterCharlotte, NC—1,2901,488—1141,2901,6022,892(118)2,77419982016
Post Park Maryland RetailWashington DC, MD—25137——25137162(10)15220072016
Post South End RetailCharlotte, NC—4701,289—1214701,4101,880(143)1,73720092016
Post Gateway Place RetailCharlotte, NC—3181,430—183181,4481,766(161)1,60520002016
Post Parkside at Wade RetailRaleigh, NC—3174,552—723174,6244,941(522)4,41920112016
Hue RetailRaleigh, NC——2,129—56—2,1852,185(30)2,15520102018
Post Parkside Orlando RetailOrlando, FL—74211,924—98374212,90713,649(1,105)12,54419992016
Post Carlyle Square RetailWashington DC, VA—1,0487,930—391,0487,9699,017(679)8,3382006/162016
Post Coles Corner RetailDallas, TX—347716—263477421,089(79)1,01019982016
Post Square RetailDallas, TX—1,5815,982—1491,5816,1317,712(562)7,15019962016
Post Worthington RetailDallas, TX—108495—94108589697(39)6581993/20082016
Post Heights RetailDallas, TX—1,0663,314—751,0663,3894,455(329)4,12619972016
Post Eastside RetailDallas, TX—68210,645—10468210,74911,431(966)10,46520082016
Post Addison Circle RetailDallas, TX—44821,386—1,19544822,58123,029(2,431)20,5981998-20002016
Post Addison Circle OfficeDallas, TX—1,3954,280—4441,3954,7246,119(641)5,4781998-20002016
Post Sierra Frisco Bridges RetailDallas, TX—7796,593—4447797,0377,816(659)7,15720092016
Post Katy Trail RetailDallas, TX—4654,883—274654,9105,375(397)4,97820102016
Post Midtown Square RetailHouston, TX—1,32716,005—891,32716,09417,421(1,350)16,0711999/20132016
Rise Condo Devel LP RetailHouston, TX——2,280—1—2,2812,281(217)2,0641999/20132016
Post Legacy RetailDallas, TX—1503,334—2021503,5363,686(289)3,39720002016
Post South Lamar RetailAustin, TX—4213,072—2094213,2813,702(291)3,41120112016
Total Commercial Properties—32,482167,95791717,90533,399185,862219,261(18,997)200,264
Post Parkside at Wade IIIRaleigh, NC—2,200——6,1342,2006,1348,334—8,334N/A2016
Post Sierra at Frisco Bridges IIDallas, TX—6,100——7,2906,1007,29013,390—13,390N/A2016
Sync 36 IIDenver, CO—5,090——6,5955,0906,59511,685—11,685N/A2018
Total Active Development Properties—13,390——20,01913,39020,01933,409—33,409
Total Properties180,9791,862,63210,100,8356,1961,593,3211,868,82811,694,63413,563,462(2,531,535)11,031,927
Total Land Held for Future Developments—58,257———58,257—58,257—58,257N/AVarious
Corporate Properties————35,088—35,08835,088(17,752)17,336VariousVarious
Total Other58,257——35,08858,25735,08893,345(17,752)75,593
Total Real Estate Assets, net of Joint Ventures$180,979$1,920,889$10,100,835$6,196$1,628,409$1,927,085$11,729,722$13,656,807$(2,549,287)$11,107,520
(1)Encumbered by a $172.1 million secured property mortgage, with a fixed interest rate of 4.44%, which matures on January 10, 2049.
(2)Encumbered by a $123.2 million loan with a fixed interest rate of 5.08%, which matures on June 10, 2021.
(3)The aggregate cost for federal income tax purposes was approximately $11.1 billion at December 31, 2018. The aggregate cost for book purposes exceeds the total gross amount of real estate assets for federal income tax purposes, principally due to purchase accounting adjustments recorded under accounting principles generally accepted in the United States of America.
(4)Depreciation is recognized on a straight-line basis over the estimated useful asset life which ranges from 8 to 40 years for land improvements and buildings, 5 years for furniture, fixtures and equipment, and six months for the fair market value of residential leases.

F-43

Mid-America Apartment Communities, Inc. and Mid-America Apartments, L.P.
Schedule III - Real Estate and Accumulated Depreciation
Years ended December 31, 2018, 2017 and 2016
A summary of activity for real estate investments and accumulated depreciation is as follows (dollars in thousands):
201820172016
Real estate investments:
Balance at beginning of year$13,292,039$12,972,170$8,215,768
Acquisitions (1)130,187127,7104,961,140
Less: FMV of leases included in acquisitions(796)(1,488)(51,588)
Improvement and development253,954322,829202,614
Assets held for sale—(5,321)—
Disposition of real estate assets (2)(18,577)(123,861)(355,764)
Balance at end of year$13,656,807$13,292,039$12,972,170
Accumulated depreciation:
Balance at beginning of year$2,075,071$1,674,801$1,499,213
Depreciation485,654463,590314,076
Assets held for sale———
Disposition of real estate assets (2)(11,438)(63,320)(138,488)
Balance at end of year$2,549,287$2,075,071$1,674,801

(1) Includes non-cash activity related to acquisitions.

(2) Includes assets sold, casualty losses, and removal of certain fully depreciated assets.

See accompanying reports of independent registered public accounting firm.

F-44

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