Edgar Filing: MID AMERICA APARTMENT COMMUNITIES INC

MAA.6.30.2014 10Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number 001-12762 (Mid-America Apartment Communities, Inc.)

Commission File Number 333-190028-01 (Mid-America Apartments, L.P.)

MID-AMERICA APARTMENT COMMUNITIES, INC.

MID-AMERICA APARTMENTS, L.P.

(Exact name of registrant as specified in its charter)



Tennessee (Mid-America Apartment Communities, Inc.)	62-1543819
Tennessee (Mid-America Apartments, L.P.)	62-1543816
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)



	6584 Poplar Avenue, Memphis, Tennessee, 38138
	(Address of principal executive offices) (Zip Code)



	(901) 682-6600
	(Registrant's telephone number, including area code)

	N/A
	(Former name, former address and former fiscal year, if changed since last report)



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Mid-America Apartment Communities, Inc.	YES R	NO o
Mid-America Apartments, L.P.	YES R	NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Mid-America Apartment Communities, Inc.	YES R	NO o
Mid-America Apartments, L.P.	YES R	NO o



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Mid-America Apartment Communities, Inc.
	Large accelerated filer R	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
			(Do not check if a smaller reporting company)
Mid-America Apartments, L.P.
	Large accelerated filer o	Accelerated filer o	Non-accelerated filer R	Smaller reporting company o
			(Do not check if a smaller reporting company)



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Mid-America Apartment Communities, Inc.	YES o	NO R
Mid-America Apartments, L.P.	YES o	NO R

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:



	Number of Shares Outstanding at
Class	July 28, 2014
Common Stock, $0.01 par value	75,194.824

MID-AMERICA APARTMENT COMMUNITIES, INC.

MID-AMERICA APARTMENTS, L.P.

TABLE OF CONTENTS



		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.
Mid-America Apartment Communities, Inc.
	Condensed Consolidated Balance Sheets as of June 30, 2014 (Unaudited) and December 31, 2013 (Unaudited).	4
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2014 (Unaudited) and 2013 (Unaudited).	5
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2014 (Unaudited) and 2013 (Unaudited).	6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2014 (Unaudited) and 2013 (Unaudited).	7
Mid-America Apartments, L.P.
	Condensed Consolidated Balance Sheets as of June 30, 2014 (Unaudited) and December 31, 2013 (Unaudited).	8
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2014 (Unaudited) and 2013 (Unaudited).	9
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2014 (Unaudited) and 2013 (Unaudited).	10
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2014 (Unaudited) and 2013 (Unaudited).	11

	Notes to Condensed Consolidated Financial Statements (Unaudited).	12
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	51
Item 4.	Controls and Procedures.	51

	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.	52
Item 1A.	Risk Factors.	53
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	66
Item 3.	Defaults Upon Senior Securities.	66
Item 4.	Mine Safety Disclosures.	66
Item 5.	Other Information.	66
Item 6.	Exhibits.	67
	Signatures.	68
	Exhibit Index.	70

Explanatory Note

This report combines the quarterly reports on Form 10-Q for the quarter ended June 30, 2014 of Mid-America Apartment Communities, Inc., a Tennessee corporation and Mid-America Apartments, L.P., a Tennessee limited partnership, of which Mid-America Apartment Communities, Inc. is the sole general partner. Mid-America Apartment Communities, Inc.and its 94.7% owned subsidiary, Mid-America Apartments, L.P., are both required to file periodic reports under the Securities Exchange Act of 1934, as amended.

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

As of June 30, 2014, MAA owned 75,194,807 units (or approximately 94.7%) of the limited partnership interests of the Operating Partnership. MAA conducts substantially all of its business and holds substantially all of its assets through the Operating Partnership, and by virtue of its ownership of the OP Units and being the Operating Partnership's sole general partner, MAA has the ability to control all of the day-to-day operations of the Operating Partnership.

We believe combining the quarterly reports on Form 10-Q of MAA and the Operating Partnership, including the notes to the consolidated financial statements, into this single report results in the following benefits:


•	enhances investors' understanding of MAA and the Operating Partnership by enabling investors to view the business as a whole in the same manner that management views and operates the business;


•	eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure in this report applies to both MAA and the Operating Partnership; and


•	creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

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

The presentation of MAA's shareholders' equity and the Operating Partnership's capital are the principal areas of difference between the consolidated financial statements of MAA and those of the Operating Partnership. MAA's shareholders' equity may include shares of preferred stock, shares of common stock, additional paid-in capital, cumulative earnings, cumulative distributions, noncontrolling interest, preferred units, treasury shares, accumulated other comprehensive income and redeemable common units. The Operating Partnership's capital may include common capital and preferred capital of the general partner (MAA), limited partners' preferred capital, limited partners' noncontrolling interest, accumulated other comprehensive income and redeemable common units. Redeemable common units represent the number of outstanding limited partnership units as of the date of the applicable balance sheet, valued at the greater of the closing market price of MAA's common stock or the aggregate value of the individual partners' capital balances. Each redeemable unit may be redeemed by the holder thereof for either cash equal to the fair market value of one share of common stock of MAA at the time of such redemption or, at the option of MAA, one share of common stock of MAA.

In order to highlight the material differences between MAA and the Operating Partnership, this report includes sections that separately present and discuss areas that are materially different between MAA and the Operating Partnership, including:


•	the consolidated financial statements in Item 1 of this report;


•	certain accompanying notes to the financial statements, including Note 3 - Earnings per Common Share of MAA and Note 4 - Earnings per OP Unit of MAALP; and Note 10 - Shareholders' Equity of MAA and Note 11 - Partners' Capital of MAALP;


•	the certifications of the Chief Executive Officer and Chief Financial Officer of MAA included as Exhibits 31 and 32 to this report.

In the sections that combine disclosure for MAA and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership (directly or indirectly through one of its subsidiaries) is generally the entity that enters into contracts, holds assets and issues debt, management believes this presentation is appropriate for the reasons set forth above and because the business is one enterprise and we operate the business through the Operating Partnership.

Mid-America Apartment Communities, Inc.

Condensed Consolidated Balance Sheets

June 30, 2014 and December 31, 2013

(Unaudited)

(Dollars in thousands, except share data)



	June 30, 2014			December 31, 2013
Assets:
Real estate assets:
Land	$	877,368		$	871,316
Buildings and improvements	6,602,860			6,366,701
Furniture, fixtures and equipment	206,877			199,573
Development and capital improvements in progress	84,502			166,048
	7,771,607			7,603,638
Less accumulated depreciation	(1,258,554		)	(1,124,207		)
	6,513,053			6,479,431

Undeveloped land	59,195			63,850
Corporate properties, net	8,285			7,523
Investments in real estate joint ventures	3,295			5,499
Real estate assets, net	6,583,828			6,556,303

Cash and cash equivalents	26,318			89,333
Restricted cash	64,683			44,361
Deferred financing costs, net	18,262			17,424
Other assets	51,789			91,637
Goodwill	4,106			4,106
Assets held for sale	34,135			38,761
Total assets	$	6,783,121		$	6,841,925

Liabilities and Shareholders' Equity:
Liabilities:
Secured notes payable	$	1,563,014		$	1,790,935
Unsecured notes payable	1,912,399			1,681,783
Accounts payable	15,297			15,067
Fair market value of interest rate swaps	17,997			20,015
Accrued expenses and other liabilities	201,997			206,190
Security deposits	9,808			9,270
Liabilities associated with assets held for sale	—			78
Total liabilities	3,720,512			3,723,338

Redeemable stock	5,407			5,050

Shareholders' equity:
Common stock, $0.01 par value per share, 100,000,000 shares authorized; 75,194,807 and 74,830,726 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively ⁽¹⁾	751			747
Additional paid-in capital	3,613,221			3,599,549
Accumulated distributions in excess of net income	(717,642		)	(653,593		)
Accumulated other comprehensive (loss) income	(1,395		)	108
Total MAA shareholders' equity	2,894,935			2,946,811
Noncontrolling interest	162,267			166,726
Total equity	3,057,202			3,113,537
Total liabilities and equity	$	6,783,121		$	6,841,925


⁽¹⁾	Number of shares issued and outstanding represent total shares of common stock regardless of classification on the consolidated balance sheet. The number of shares classified as redeemable stock on the consolidated balance sheet for June 30, 2014 and December 31, 2013 are 82,511 and 83,139, respectively.

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartment Communities, Inc.

Condensed Consolidated Statements of Operations

Three and six months ended June 30, 2014 and 2013

(Unaudited)

(Dollars in thousands, except per share data)



	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Operating revenues:
Rental revenues	$	222,610		$	121,128		$	443,598		$	238,833
Other property revenues	21,883			10,531			44,285			20,569
Total property revenues	244,493			131,659			487,883			259,402
Management fee income	61			142			158			319
Total operating revenues	244,554			131,801			488,041			259,721
Property operating expenses:
Personnel	25,183			14,421			50,092			28,402
Building repairs and maintenance	7,184			3,874			13,583			7,003
Real estate taxes and insurance	30,686			15,958			61,817			31,446
Utilities	13,182			6,829			26,660			13,394
Landscaping	5,981			2,835			11,389			5,701
Other operating	15,406			8,904			31,444			17,396
Depreciation and amortization	69,631			32,222			159,644			64,417
Total property operating expenses	167,253			85,043			354,629			167,759
Acquisition expense	947			489			958			499
Property management expenses	9,579			5,223			16,590			10,331
General and administrative expenses	5,212			3,389			9,554			6,628
Merger related expenses	795			5,737			2,871			5,737
Integration related expenses	3,151			—			6,993			—
Income from continuing operations before non-operating items	57,617			31,920			96,446			68,767
Interest and other non-property income	921			23			1,081			70
Interest expense	(30,163		)	(15,189		)	(60,839		)	(30,734		)
Loss on debt extinguishment/modification	—			—			—			(169		)
Amortization of deferred financing costs	(1,174		)	(803		)	(2,485		)	(1,607		)
Net casualty (loss) gain after insurance and other settlement proceeds	(295		)	439			(305		)	455
Income before income tax expense	26,906			16,390			33,898			36,782
Income tax expense	(523		)	(223		)	(793		)	(446		)
Income from continuing operations before joint venture activity	26,383			16,167			33,105			36,336
Gain from real estate joint ventures	2,919			47			2,895			101
Income from continuing operations	29,302			16,214			36,000			36,437
Discontinued operations:
Income from discontinued operations before gain on sale	449			1,697			865			3,479
Net casualty loss after insurance and other settlement proceeds on discontinued operations	(1		)	(4		)	(3		)	(4		)
Gain on sale of discontinued operations	—			43,121			5,481			43,121
Income before gain (loss) on sale of properties	29,750			61,028			42,343			83,033
Gain on sale of depreciable real estate assets excluded from discontinued operations	3,658			—			6,222			—
(Loss) gain on sale of non-depreciable real estate assets	(22		)	—			535			—
Consolidated net income	33,386			61,028			49,100			83,033
Net income attributable to noncontrolling interests	1,773			1,939			2,621			2,764
Net income available for MAA common shareholders	$	31,613		$	59,089		$	46,479		$	80,269

Earnings per common share - basic:
Income from continuing operations available for common shareholders	$	0.42		$	0.37		$	0.54		$	0.82
Discontinued property operations	—			1.01			0.08			1.07
Net income available for common shareholders	$	0.42		$	1.38		$	0.62		$	1.89

Earnings per common share - diluted:
Income from continuing operations available for common shareholders	$	0.42		$	0.36		$	0.54		$	0.82
Discontinued property operations	—			1.01			0.08			1.05
Net income available for common shareholders	$	0.42		$	1.37		$	0.62		$	1.87

Dividends declared per common share	$	0.7300		$	0.6950		$	1.4600		$	1.3900

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartment Communities, Inc.

Condensed Consolidated Statements of Comprehensive Income

Three and six months ended June 30, 2014 and 2013

(Unaudited)

(Dollars in thousands)



	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Consolidated net income	$	33,386		$	61,028		$	49,100		$	83,033
Other comprehensive income:
Unrealized (losses) gains from the effective portion of derivative instruments	(7,403		)	12,105			(8,400		)	11,926
Reclassification adjustment for net losses included in net income for the effective portion of derivative instruments	3,085			3,932			6,810			8,477
Total comprehensive income	29,068			77,065			47,510			103,436
Less: comprehensive income attributable to noncontrolling interests	(1,542		)	(2,442		)	(2,534		)	(3,445		)
Comprehensive income attributable to MAA	$	27,526		$	74,623		$	44,976		$	99,991

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartment Communities, Inc.

Condensed Consolidated Statements of Cash Flows

Six months ended June 30, 2014 and 2013

(Unaudited)

(Dollars in thousands)



	Six months ended June 30,
	2014			2013
Cash flows from operating activities:
Consolidated net income	$	49,100		$	83,033
Adjustments to reconcile net income to net cash provided by operating activities:
Retail revenue accretion	(12		)	(20		)
Depreciation and amortization	162,099			68,236
Stock compensation expense	2,045			1,171
Exercise of stock options	9,544			—
Redeemable stock issued	507			377
Amortization of debt premium	(14,648		)	(505		)
Gain from investments in real estate joint ventures	(2,878		)	(101		)
Loss on debt extinguishment	—			169
Derivative interest expense	402			484
Settlement of forward swaps	(3,625		)	—
Gain on sale of non-depreciable real estate assets	(535		)	—
Gain on sale of depreciable real estate assets excluded from discontinued operations	(6,222		)	—
Gain on sale of discontinued operations	(5,481		)	(43,121		)
Net casualty loss (gain) and other settlement proceeds	308			(451		)
Changes in assets and liabilities:
Restricted cash	21,318			(279		)
Other assets	11,134			(3,176		)
Accounts payable	229			5,527
Accrued expenses and other	594			(2,239		)
Security deposits	526			277
Net cash provided by operating activities	224,405			109,382
Cash flows from investing activities:
Purchases of real estate and other assets	(166,388		)	(89,871		)
Normal capital improvements	(43,176		)	(22,494		)
Construction capital and other improvements	(3,420		)	(2,137		)
Renovations to existing real estate assets	(5,901		)	(5,112		)
Development	(29,393		)	(20,816		)
Distributions from real estate joint ventures	11,541			8,197
Contributions to real estate joint ventures	—			(183		)
Proceeds from disposition of real estate assets	125,640			73,089
Funding of escrow for future acquisitions	(41,640		)	(11,902		)
Net cash used in investing activities	(152,737		)	(71,229		)
Cash flows from financing activities:
Net change in credit lines	(181,183		)	2,000
Proceeds from notes payable	396,180			—
Principal payments on notes payable	(230,952		)	(2,799		)
Payment of deferred financing costs	(3,395		)	(426		)
Repurchase of common stock	(336		)	(673		)
Proceeds from issuances of common shares	575			24,968
Distributions to noncontrolling interests	(6,158		)	(2,391		)
Dividends paid on common shares	(109,414		)	(59,115		)
Net cash used in financing activities	(134,683		)	(38,436		)
Net decrease in cash and cash equivalents	(63,015		)	(283		)
Cash and cash equivalents, beginning of period	89,333			9,075
Cash and cash equivalents, end of period	$	26,318		$	8,792

Supplemental disclosure of cash flow information:
Interest paid	$	75,818		$	33,610
Income taxes paid	$	803		$	1,596
Supplemental disclosure of noncash investing and financing activities:
Conversion of units to shares of common stock	$	799		$	444
Accrued construction in progress	$	8,458		$	7,126
Interest capitalized	$	850		$	872
Marked-to-market adjustment on derivative instruments	$	1,633		$	19,916
Fair value adjustment on debt assumed	$	1,651		$	704
Loan assumption	$	31,692		$	18,293

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Condensed Consolidated Balance Sheets

June 30, 2014 and December 31, 2013

(Dollars in thousands, except unit data)



	June 30, 2014			December 31, 2013
Assets:
Real estate assets:
Land	$	877,368		$	871,316
Buildings and improvements	6,602,860			6,366,701
Furniture, fixtures and equipment	206,877			199,573
Development and capital improvements in progress	84,502			166,048
	7,771,607			7,603,638
Less accumulated depreciation	(1,258,554		)	(1,124,207		)
	6,513,053			6,479,431

Undeveloped land	59,195			63,850
Corporate properties, net	8,285			7,523
Investments in real estate joint ventures	3,295			5,499
Real estate assets, net	6,583,828			6,556,303

Cash and cash equivalents	26,318			89,333
Restricted cash	64,683			44,361
Deferred financing costs, net	18,262			17,424
Other assets	51,789			91,637
Goodwill	4,106			4,106
Assets held for sale	34,135			38,761
Total assets	$	6,783,121		$	6,841,925

Liabilities and Capital:
Liabilities:
Secured notes payable	$	1,563,014		$	1,790,935
Unsecured notes payable	1,912,399			1,681,783
Accounts payable	15,297			15,067
Fair market value of interest rate swaps	17,997			20,015
Accrued expenses and other liabilities	201,997			206,190
Security deposits	9,808			9,270
Due to general partner	19			19
Liabilities associated with assets held for sale	—			78
Total liabilities	3,720,531			3,723,357

Redeemable units	5,407			5,050

Capital:
General partner: 75,194,807 OP Units outstanding at June 30, 2014 and 74,830,726 OP Units outstanding at December 31, 2013 ⁽¹⁾	2,896,253			2,946,598
Limited partners: 4,207,126 OP Units outstanding at June 30, 2014 and 4,227,384 OP Units outstanding at December 31, 2013 ⁽¹⁾	162,346			166,746
Accumulated other comprehensive (loss) income	(1,416		)	174
Total capital	3,057,183			3,113,518
Total liabilities and capital	$	6,783,121		$	6,841,925


⁽¹⁾	Number of units outstanding represent total OP Units regardless of classification on the consolidated balance sheet. The number of units classified as redeemable units on the consolidated balance sheet at June 30, 2014 and December 31, 2013 are 82,511 and 83,139, respectively.

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Condensed Consolidated Statements of Operations

Three and six months ended June 30, 2014 and 2013

(Unaudited)

(Dollars in thousands, except per unit data)



	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Operating revenues:
Rental revenues	$	222,610		$	121,128		$	443,598		$	238,833
Other property revenues	21,883			10,531			44,285			20,569
Total property revenues	244,493			131,659			487,883			259,402
Management fee income	61			142			158			319
Total operating revenues	244,554			131,801			488,041			259,721
Property operating expenses:
Personnel	25,183			14,421			50,092			28,402
Building repairs and maintenance	7,184			3,874			13,583			7,003
Real estate taxes and insurance	30,686			15,958			61,817			31,446
Utilities	13,182			6,829			26,660			13,394
Landscaping	5,981			2,835			11,389			5,701
Other operating	15,406			8,904			31,444			17,396
Depreciation and amortization	69,631			32,222			159,644			64,417
Total property operating expenses	167,253			85,043			354,629			167,759
Acquisition expense	947			489			958			499
Property management expenses	9,579			5,223			16,590			10,331
General and administrative expenses	5,212			3,389			9,554			6,628
Merger related expenses	795			5,737			2,871			5,737
Integration related expenses	3,151			—			6,993			—
Income from continuing operations before non-operating items	57,617			31,920			96,446			68,767
Interest and other non-property income	921			23			1,081			70
Interest expense	(30,163		)	(15,189		)	(60,839		)	(30,734		)
Loss on debt extinguishment/modification	—			—			—			(169		)
Amortization of deferred financing costs	(1,174		)	(803		)	(2,485		)	(1,607		)
Net casualty (loss) gain after insurance and other settlement proceeds	(295		)	439			(305		)	455
Income before income tax expense	26,906			16,390			33,898			36,782
Income tax expense	(523		)	(223		)	(793		)	(446		)
Income from continuing operations before joint venture activity	26,383			16,167			33,105			36,336
Gain from real estate joint ventures	2,919			47			2,895			101
Income from continuing operations	29,302			16,214			36,000			36,437
Discontinued operations:
Income from discontinued operations before gain on sale	449			1,511			865			3,081
Net casualty loss after insurance and other settlement proceeds on discontinued operations	(1		)	(4		)	(3		)	(4		)
Gain on sale of discontinued operations	—			31,779			5,481			31,779
Income before gain (loss) on sale of properties	29,750			49,500			42,343			71,293
Gain on sale of depreciable real estate assets excluded from discontinued operations	3,658			—			6,222			—
(Loss) gain on sale of non-depreciable real estate assets	(22		)	—			535			—
Net income available for Mid-America Apartments, L.P. common unitholders	$	33,386		$	49,500		$	49,100		$	71,293

Earnings per common unit - basic:
Income from continuing operations available for common unitholders	$	0.42		$	0.36		$	0.54		$	0.82
Income from discontinued operations available for common unitholders	—			0.75			0.08			0.79
Net income available for common unitholders	$	0.42		$	1.11		$	0.62		$	1.61

Earnings per common unit - diluted:
Income from continuing operations available for common unitholders	$	0.42		$	0.36		$	0.54		$	0.82
Income from discontinued operations available for common unitholders	—			0.75			0.08			0.79
Net income available for common unitholders	$	0.42		$	1.11		$	0.62		$	1.61

Distributions declared per common unit	$	0.7300		$	0.6950		$	1.4600		$	1.3900

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Condensed Consolidated Statements of Comprehensive Income

Three and six months ended June 30, 2014 and 2013

(Unaudited)

(Dollars in thousands)



	Three months ended June 30,					Six months ended June 30,
	2014			2013		2014			2013
Net income available for Mid-America Apartments, L.P. common unitholders	$	33,386		$	49,500	$	49,100		$	71,293
Other comprehensive income:
Unrealized (losses) gains from the effective portion of derivative instruments	(7,403		)	12,105		(8,400		)	11,926
Reclassification adjustment for net losses included in net income for the effective portion of derivative instruments	3,085			3,932		6,810			8,477
Comprehensive income attributable to Mid-America Apartments, L.P.	$	29,068		$	65,537	$	47,510		$	91,696

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Condensed Consolidated Statements of Cash Flows

Six months ended June 30, 2014 and 2013

(Unaudited)

(Dollars in thousands)



	Six months ended June 30,
	2014			2013
Cash flows from operating activities:
Consolidated net income	$	49,100		$	71,293
Adjustments to reconcile net income to net cash provided by operating activities:
Retail revenue accretion	(12		)	(20		)
Depreciation and amortization	162,099			68,001
Stock compensation expense	2,045			1,171
Exercise of unit options	9,544			—
Redeemable units issued	507			377
Amortization of debt premium	(14,648		)	(505		)
Gain from investments in real estate joint ventures	(2,878		)	(101		)
Loss on debt extinguishment	—			169
Derivative interest expense	402			465
Settlement of forward swaps	(3,625		)	—
Gain on sale of non-depreciable real estate assets	(535		)	—
Gain on sale of depreciable real estate assets excluded from discontinued operations	(6,222		)	—
Gain on sale of discontinued operations	(5,481		)	(31,779		)
Net casualty loss (gain) and other settlement proceeds	308			(451		)
Changes in assets and liabilities:
Restricted cash	21,318			(278		)
Other assets	11,134			(2,076		)
Accounts payable	229			5,552
Accrued expenses and other	594			(4,483		)
Security deposits	526			296
Net cash provided by operating activities	224,405			107,631
Cash flows from investing activities:
Purchases of real estate and other assets	(166,388		)	(89,871		)
Normal capital improvements	(43,176		)	(22,383		)
Construction capital and other improvements	(3,420		)	(2,137		)
Renovations to existing real estate assets	(5,901		)	(5,112		)
Development	(29,393		)	(20,816		)
Distributions from real estate joint ventures	11,541			8,197
Contributions to real estate joint ventures	—			(183		)
Proceeds from disposition of real estate assets	125,640			56,386
Funding of escrow for future acquisitions	(41,640		)	(11,902		)
Net cash used in investing activities	(152,737		)	(87,821		)
Cash flows from financing activities:
Advances from general partner	—			18,021
Net change in credit lines	(181,183		)	2,000
Proceeds from notes payable	396,180			—
Principal payments on notes payable	(230,952		)	(2,799		)
Payment of deferred financing costs	(3,395		)	(426		)
Repurchase of common units	(336		)	(673		)
Proceeds from issuances of common units	575			24,969
Distributions paid on common units	(115,572		)	(61,044		)
Net cash used in financing activities	(134,683		)	(19,952		)
Net decrease in cash and cash equivalents	(63,015		)	(142		)
Cash and cash equivalents, beginning of period	89,333			8,934
Cash and cash equivalents, end of period	$	26,318		$	8,792

Supplemental disclosure of cash flow information:
Interest paid	$	75,818		$	33,610
Income taxes paid	$	803		$	1,596
Supplemental disclosure of noncash investing and financing activities:
Accrued construction in progress	$	8,458		$	7,126
Interest capitalized	$	850		$	872
Marked-to-market adjustment on derivative instruments	$	1,633		$	19,916
Fair value adjustment on debt assumed	$	1,651		$	704
Loan assumption	$	31,692		$	18,293

See accompanying notes to condensed consolidated financial statements.

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

Notes to Condensed Consolidated Financial Statements

June 30, 2014 and 2013

(Unaudited)

1. Basis of Presentation and Principles of Consolidation and Significant Accounting Policies

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

We believe combining the notes to the consolidated financial statements 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.


•	creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

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

The presentation of MAA's shareholders' equity and the Operating Partnership's capital are the principal areas of difference between the consolidated financial statements of MAA and those of the Operating Partnership. MAA's shareholders' equity may include shares of preferred stock, shares of common stock, additional paid-in capital, cumulative earnings, cumulative distributions, noncontrolling interest, preferred units, treasury shares, accumulated other comprehensive income and redeemable common units. The Operating Partnership's capital may include common capital and preferred capital of the general partner (MAA), limited partners' preferred capital, limited partners' noncontrolling interest, accumulated other comprehensive income and redeemable common units. Redeemable common units represent the number of outstanding OP Units as of the date of the applicable balance sheet, valued for conversion at the greater of the closing market price of MAA's common stock or the aggregate value of the individual partners' capital balances. Holders of common units in the Operating Partnership (other than MAA and its entity affiliates) may require the Operating Partnership to redeem their common units, in which case the Operating Partnership may, at its option, pay the redemption price either in cash (in an amount per common 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 of time prior to the redemption date) or by delivering one share of our common stock (subject to adjustment under specified circumstances) for each common unit so redeemed.

On October 1, 2013, MAA acquired Colonial Properties Trust, or Colonial, when Colonial was merged with and into MAA, with MAA being the surviving entity of the merger, pursuant to an agreement and plan of merger, which is referred to as the parent merger or the merger, and Martha Merger Sub, LP, or OP Merger Sub, a wholly-owned indirect subsidiary of MAALP, merged with and into Colonial Realty Limited Partnership, or Colonial LP, with Colonial LP being the surviving entity of the merger and becoming a wholly-owned indirect subsidiary of MAALP, which is referred to as the partnership merger. Under the terms of the merger agreement, each Colonial common share was converted into the right to receive 0.36 of a newly issued share of MAA common stock. In addition, each limited partner interest in Colonial LP designated as a “Class A Unit” and a “Partnership Unit” under the limited partnership agreement of Colonial LP, which we refer to in this filing as Colonial LP units, issued and outstanding immediately prior to the effectiveness of the partnership merger was converted into common units in MAALP at the 0.36 conversion rate. The net assets and results of operations of Colonial are included in our consolidated financial statements from the closing date, October 1, 2013 going forward.

As of June 30, 2014, we owned and operated 269 apartment communities comprising 83,075 apartments located in 14 states principally through the Operating Partnership and we also owned an interest in the following unconsolidated real estate joint ventures:



	Percent Owned	Number of Units/Square Feet
Multifamily:
Mid-America Multifamily Fund II, LLC (Fund II)	33.33%	300	⁽¹⁾
Belterra	10.00%	288	⁽²⁾
McKinney	25.00%	—	⁽³⁾

Commercial:
Land Title Building	33.30%	29,971

⁽¹⁾ This joint venture is comprised of one apartment community.

⁽²⁾ This joint venture is not managed by MAA.

⁽³⁾ This joint venture consists of undeveloped land.

As of June 30, 2014, we had two development communities under construction totaling 514 units, with no units completed. Total expected costs for the development projects are $72.0 million, of which $38.3 million has been incurred through June 30, 2014. We expect to complete construction on the two projects by the first quarter of 2015. Four of our multifamily properties include retail components with approximately 100,000 square feet of gross leasable area. We also have three wholly owned commercial properties, which we acquired through our merger with Colonial with approximately 287,000 square feet of gross leasable area, excluding tenant owned anchor stores, and one partially owned commercial property with approximately 30,000 square feet of gross leasable area.

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements have been prepared by our management in accordance with United States generally accepted accounting principles, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC. The consolidated financial statements of MAA presented herein include the accounts of MAA, the Operating Partnership, and all other subsidiaries in which MAA has a controlling financial interest. MAA owns approximately 95% to 100% of all consolidated subsidiaries. The consolidated financial statements of MAALP presented herein include the accounts of MAALP and all other subsidiaries in which MAALP has a controlling financial interest. MAALP owns, directly or indirectly, 100% of all consolidated subsidiaries. In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included, and all such adjustments were of a normal recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation.

We invest in entities which may qualify as variable interest entities, or VIE. A VIE is a legal entity in which the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the holders of the equity investment at risk lack the power to direct the activities of a legal entity as well as the obligation to absorb its expected losses or the right to receive its expected residual returns. We consolidate all VIEs for which we are the primary beneficiary and use the equity method to account for investments that qualify as VIEs but for which we are not the primary beneficiary. In determining whether we are the primary beneficiary of a VIE, we consider qualitative and

quantitative factors, including but not limited to, those activities that most significantly impact the VIE's economic performance and which party controls such activities.

We use the equity method of accounting for our investments in entities for which we exercise significant influence, but do not have the ability to exercise control. These entities are not variable interest entities. The factors considered in determining that we do not have the ability to exercise control include ownership of voting interests and participatory rights of investors.

2. Business Combinations

Merger of MAA and Colonial

On October 1, 2013, MAA completed its merger with Colonial. As part of the merger, we acquired 115 wholly-owned apartment communities encompassing 34,370 units principally located in the Southeast and Southwest regions of the United States. In addition to the apartment communities, we also acquired four commercial properties totaling approximately 806,000 square feet. The additions have caused us to nearly double in size as a result of the merger. The net assets and results of operations of Colonial are included in our consolidated financial statements from the closing date, October 1, 2013, going forward.

The total purchase price of approximately $2.2 billion was determined based on the number of Colonial shares and Colonial OP Units outstanding as of October 1, 2013. In all cases in which MAA’s stock price was a determining factor in arriving at final consideration for the merger, the stock price used to determine the purchase price was the opening price of MAA’s common stock on October 1, 2013 ($62.56 per share). The total purchase price includes $7.3 million of other consideration, a majority of which relates to assumed stock compensation plans. As a result of the merger, we issued approximately 31.9 million shares of MAA common stock and approximately 2.6 million OP units.

The acquisition has been accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification, or ASC, 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, like the merger, management engages a third party valuation specialist to assist with the fair value assessment, which includes an allocation of the purchase price. Similar to management's methods, the third party generally uses cash flow analysis as well as an income approach and a market approach to determine the fair value of assets acquired. The third party uses stabilized NOI and a market specific capitalization and discount rates. Management reviews the inputs used by the third party specialist as well as the allocation of the purchase price provided by the third party to ensure reasonableness and that the procedures are performed in accordance with management's policy. The allocation of the purchase price is based on management’s assessment, which may differ as more information becomes available. Subsequent adjustments made to the purchase price allocation, if any, are made within the allocation period, which typically does not exceed one year.

The allocation of the purchase price described above requires a significant amount of judgment and represents the Company's best estimate of the fair value as of the acquisition date. The following purchase price allocation was based on our valuation as well as estimates and assumptions of the acquisition date fair value of the tangible and intangible assets acquired and liabilities assumed. While the current allocation of the purchase price is substantially complete, the valuation of the real estate properties and certain other assets and liabilities is in the process of being finalized. We do not expect future revisions, if any, to have a significant impact on our financial position or results of operations.

The purchase price was allocated as follows (in thousands):



Land	$	469,396
Buildings and improvements	3,075,642
Furniture, fixtures and equipment	96,377
Development and capital improvements in progress	113,368
Undeveloped land	58,400
Properties held for sale	33,300
Lease intangible assets	57,946
Cash and cash equivalents	63,454
Restricted cash	6,825
Deferred costs and other assets, excluding lease intangible assets	87,713
Total assets acquired	4,062,421

Notes payable	(1,759,550)
Fair market value of interest rate swaps	(14,961)
Accounts payable, accrued expenses, and other liabilities	(125,034)
Total liabilities assumed, including debt	(1,899,545		)

Total purchase price	$	2,162,876

We incurred merger and integration related expenses of $9.9 million for the six months ended June 30, 2014. These amounts were expensed as incurred and are included in the Consolidated Statement of Operations in the items titled Merger related expenses, primarily severance, legal, and professional costs and Integration related expenses, primarily related to temporary systems, staffing, and facilities costs.

The allocation of fair values of the assets acquired and liabilities assumed has changed from the allocation reported in Item 8. Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements, Note 2 of our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 21, 2014. The changes were based on information concerning the subject assets and liabilities that was not yet available at the time of the 10-K filing. These adjustments had no material impact on the results of operations.

3. Earnings per Common Share of MAA

Basic earnings per share is computed by dividing net income attributable to common shareholders by the weighted average number of shares outstanding during the period. All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common shareholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per share. Both the unvested restricted shares and other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis with our diluted earnings per share being the more dilutive of the treasury stock or two-class methods. Operating Partnership units are included in dilutive earnings per share calculations when they are dilutive to earnings per share. For the three and six months ended June 30, 2014 and 2013, MAA's basic earnings per share is computed using the two-class method, and our diluted earnings per share is computed using the more dilutive of the treasury stock method or two-class method:



(dollars and shares in thousands, except per share amounts)	Three months ended June 30,								Six months ended June 30,
	2014				2013				2014				2013
Shares Outstanding
Weighted average common shares - basic	74,948				42,690				74,876				42,523
Weighted average partnership units outstanding	—			⁽¹⁾	—			⁽¹⁾	—			⁽¹⁾	1,711
Effect of dilutive securities	—			⁽¹⁾	—			⁽¹⁾	162				60
Weighted average common shares - diluted	74,948				42,690				75,038				44,294

Calculation of Earnings per Share - basic
Income from continuing operations	$	29,302			$	16,214			$	36,000			$	36,437
Gain on sale of depreciable assets excluded from discontinued operations	3,658				—				6,222				—
(Loss) gain on sale of non-depreciable assets	(22		)		—				535				—
Income from continuing operations attributable to noncontrolling interests	(1,749		)		(580		)		(2,283		)		(1,341		)
Income from continuing operations allocated to unvested restricted shares	(64		)		(14		)		—				(32		)
Income from continuing operations available for common shareholders, adjusted	$	31,125			$	15,620			$	40,474			$	35,064

Income from discontinued operations	$	448			$	44,814			$	6,343			$	46,596
Income from discontinued operations attributable to noncontrolling interest	(24		)		(1,359		)		(338		)		(1,423		)
Income from discontinued operations allocated to unvested restricted shares	(1		)		(39		)		(12		)		(42		)
Income from discontinued operations available for common shareholders, adjusted	$	423			$	43,416			$	5,993			$	45,131

Weighted average common shares - basic	74,948				42,690				74,876				42,523
Earnings per share - basic	$	0.42			$	1.38			$	0.62			$	1.89

Calculation of Earnings per Share - diluted
Income from continuing operations	$	29,302			$	16,214			$	36,000			$	36,437
Gain on sale of depreciable assets excluded from discontinued operations	3,658				—				6,222				—
(Loss) gain on sale of non-depreciable assets	(22		)		—				535				—
Income from continuing operations attributable to noncontrolling interests	(1,749		)	⁽¹⁾	(623		)	⁽¹⁾	(2,283		)	⁽¹⁾	—
Income from continuing operations allocated to unvested restricted shares	(64		)	⁽¹⁾	(14		)	⁽¹⁾	—				—
Income from continuing operations available for common shareholders, adjusted	$	31,125			$	15,577			$	40,474			$	36,437

Income from discontinued operations	$	448			$	44,814			$	6,343			$	46,596
Income from discontinued operations attributable to noncontrolling interest	(24		)	⁽¹⁾	(1,722		)	⁽¹⁾	(338		)	⁽¹⁾	—
Income from discontinued operations allocated to unvested restricted shares	(1		)	⁽¹⁾	(39		)	⁽¹⁾	—				—
Income from discontinued operations available for common shareholders, adjusted	$	423			$	43,053			$	6,005			$	46,596

Weighted average common shares - diluted	74,948				42,690				75,038				44,294
Earnings per share - diluted	$	0.42			$	1.37			$	0.62			$	1.87

⁽¹⁾ Operating partnership units, other dilutive securities, and the related income with each are not included in the diluted earnings per share calculations as they were not dilutive.

4. Earnings per OP Unit of MAALP

Basic earnings per OP Unit is computed by dividing net income available for common unitholders by the weighted average number of units outstanding during the period. All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common unitholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per OP unit. Diluted earnings per OP Unit reflects the potential dilution that could occur if securities or other contracts to issue OP Units were exercised or converted into OP Units.

A reconciliation of the numerators and denominators of the basic and diluted earnings per unit computations for the three and six months ended June 30, 2014 and 2013 is presented below:



(dollars and units in thousands, except per unit amounts)	Three months ended June 30,								Six months ended June 30,
	2014				2013				2014			2013
Units Outstanding
Weighted average common units - basic	79,156				44,398				79,090			44,234
Effect of dilutive securities	—			⁽¹⁾	—			⁽¹⁾	162			60
Weighted average common units - diluted	79,156				44,398				79,252			44,294

Calculation of Earnings per Unit - basic
Income from continuing operations	$	29,302			$	16,214			$	36,000		$	36,437
Gain on sale of depreciable assets excluded from discontinued operations	3,658				—				6,222			—
(Loss) gain on sale of non-depreciable assets	(22		)		—				535			—
Income from continuing operations allocated to unvested restricted shares	(63		)		(14		)		(79		)	(32		)
Income from continuing operations available for common unitholders, adjusted	$	32,875			$	16,200			$	42,678		$	36,405

Income from discontinued operations	$	448			$	33,286			$	6,343		$	34,856
Income from discontinued operations allocated to unvested restricted shares	(1		)		(29		)		—			—
Income from discontinued operations available for common unitholders, adjusted	$	447			$	33,257			$	6,343		$	34,856

Weighted average common units - basic	79,156				44,398				79,090			44,234
Earnings per unit - basic:	$	0.42			$	1.11			$	0.62		$	1.61

Calculation of Earnings per Unit - diluted
Income from continuing operations	$	29,302			$	16,214			$	36,000		$	36,437
Gain on sale of depreciable assets	3,658				—				6,222			—
(Loss) gain on sale of non-depreciable assets	(22		)		—				535			—
Income from continuing operations allocated to unvested restricted shares	(63		)	⁽¹⁾	(14		)	⁽¹⁾	—			—
Income from continuing operations available for common unitholders, adjusted	$	32,875			$	16,200			$	42,757		$	36,437

Income from discontinued operations	$	448			$	33,286			$	6,343		$	34,856
Income from discontinued operations allocated to unvested restricted shares	(1		)	⁽¹⁾	(29		)	⁽¹⁾	—			—
Income from discontinued operations available for common unitholders, adjusted	$	447			$	33,257			$	6,343		$	34,856

Weighted average common units - diluted	79,156				44,398				79,252			44,294
Earnings per unit - diluted:	$	0.42			$	1.11			$	0.62		$	1.61

⁽¹⁾ Dilutive securities and the related income are not included in the diluted earnings per unit calculations as they were not dilutive.

5. MAA Equity

Total equity and its components for the six-month periods ended June 30, 2014 and 2013 were as follows (dollars in thousands, except per share and per unit data):



	Mid-America Apartment Communities, Inc. Shareholders
	Common Stock Amount		Additional Paid-In Capital			Accumulated Distributions in Excess of Net Income			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest			Total Equity
EQUITY BALANCE DECEMBER 31, 2013	$	747	$	3,599,549		$	(653,593	)	$	108		$	166,726		$	3,113,537
Net income						46,479						2,621			49,100
Other comprehensive income - derivative instruments (cash flow hedges)									(1,503		)	(87		)	(1,590		)
Issuance and registration of common shares	2		573												575
Shares repurchased and retired	—		(336		)										(336		)
Exercise of stock options	2		9,542												9,544
Shares issued in exchange for units	—		799									(799		)	—
Shares issued in exchange from redeemable stock			998												998
Redeemable stock fair market value						(848		)							(848		)
Adjustment for noncontrolling interest ownership in operating partnership			51									(51		)	—
Amortization of unearned compensation			2,045												2,045
Dividends on common stock ($1.46 per share)						(109,680		)				—			(109,680		)
Dividends on noncontrolling interest units ($1.46 per unit)												(6,143		)	(6,143		)
EQUITY BALANCE JUNE 30, 2014	$	751	$	3,613,221		$	(717,642	)	$	(1,395	)