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 September 30, 2013

¨ 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: 333-190028-01

MID-AMERICA APARTMENTS, L.P.

(Exact name of registrant as specified in its charter)



TENNESSEE	62-1543816
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)



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.

¨ Yes þ No

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).

þ Yes ¨ No

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.



Large accelerated filer ¬	Accelerated filer ¬
Non-accelerated filer þ (Do not check if a smaller reporting company)	Smaller reporting company ¬

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

¨ Yes þ No

MID-AMERICA APARTMENTS, L.P.

TABLE OF CONTENTS



		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Condensed Consolidated Balance Sheets as of September 30, 2013 (Unaudited) and December 31, 2012 (Unaudited).	3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2013 (Unaudited) and 2012 (Unaudited).	4
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2013 (Unaudited) and 2012 (Unaudited).	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 (Unaudited) and 2012 (Unaudited).	6
	Notes to Condensed Consolidated Financial Statements (Unaudited).	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	37
Item 4.	Controls and Procedures.	37

	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.	37
Item 1A.	Risk Factors.	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	48
Item 3.	Defaults Upon Senior Securities.	48
Item 4.	Mine Safety Disclosures.	48
Item 5.	Other Information.	48
Item 6.	Exhibits.	49
	Signatures.	50

Mid-America Apartments, L.P.

Condensed Consolidated Balance Sheets

September 30, 2013 and December 31, 2012

(Unaudited)

(Dollars in thousands, except unit data)



	September 30, 2013			December 31, 2012
Assets:
Real estate assets:
Land	$	394,848		$	386,088
Buildings and improvements	3,247,869			3,158,301
Furniture, fixtures and equipment	102,013			97,270
Development and capital improvements in progress	31,600			52,414
	3,776,330			3,694,073
Less accumulated depreciation	(1,068,873		)	(1,019,624		)
	2,707,457			2,674,449

Land held for future development	5,450			1,205
Commercial properties, net	7,664			8,058
Investments in real estate joint ventures	3,237			4,837
Real estate assets, net	2,723,808			2,688,549

Cash and cash equivalents	181,105			8,934
Restricted cash	58,579			809
Deferred financing costs, net	13,629			13,842
Other assets	47,030			29,038
Goodwill	4,106			4,106
Total assets	$	3,028,257		$	2,745,278

Liabilities and Capital:
Liabilities:
Secured notes payable	$	1,050,202		$	1,190,848
Unsecured notes payable	810,000			483,000
Accounts payable	6,962			4,553
Fair market value of interest rate swaps	9,858			21,423
Accrued expenses and other liabilities	109,271			94,467
Security deposits	6,892			6,650
Due to general partner	22			617
Total liabilities	1,993,207			1,801,558

Redeemable units	5,039			4,713

Capital:
General partner: 42,744,978 OP Units outstanding at September 30, 2013 and 42,316,398 OP Units outstanding at December 31, 2012	994,916			927,734
Limited partners: 1,701,955 OP Units outstanding at September 30, 2013 and 1,731,672 OP Units outstanding at December 31, 2012	39,783			38,154
Accumulated other comprehensive losses	(4,688		)	(26,881		)
Total capital	1,030,011			939,007
Total liabilities and capital	$	3,028,257		$	2,745,278

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 September 30, 2013 and December 31, 2012 are 80,626 and 72,786, respectively.

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Condensed Consolidated Statements of Operations

Three and nine months ended September 30, 2013 and 2012

(Unaudited)

(Dollars in thousands, except per unit data)



	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Operating revenues:
Rental revenues	$	125,522		$	113,015		$	366,191		$	323,223
Other property revenues	10,772			9,966			31,596			29,084
Total property revenues	136,294			122,981			397,787			352,307
Management fee income	146			209			465			687
Total operating revenues	136,440			123,190			398,252			352,994
Property operating expenses:
Personnel	15,085			14,156			43,791			40,966
Building repairs and maintenance	4,595			4,292			11,661			11,543
Real estate taxes and insurance	16,811			14,167			48,395			41,085
Utilities	7,580			7,381			21,108			19,678
Landscaping	2,922			2,640			8,677			7,864
Other operating	9,160			8,653			26,758			24,928
Depreciation and amortization	33,000			30,979			97,883			89,701
Total property operating expenses	89,153			82,268			258,273			235,765
Acquisition expenses	—			1,343			499			1,574
Property management expenses	5,193			5,460			15,970			16,484
General and administrative expenses	3,976			3,527			10,604			10,436
Merger related expenses	5,561			—			11,298			—
Integration related expenses	35			—			35			—
Income from continuing operations before non-operating items	32,522			30,592			101,573			88,735
Interest and other non-property income	16			89			86			343
Interest expense	(14,941		)	(14,530		)	(45,715		)	(42,437		)
(Loss) gain on debt extinguishment/modification	(218		)	—			(387		)	5
Amortization of deferred financing costs	(820		)	(971		)	(2,427		)	(2,611		)
Net casualty (loss) gain after insurance and other settlement proceeds	—			(22		)	455			(24		)
Gain on sale of non-depreciable assets	—			48			—			45
Income from continuing operations before gain (loss) from real estate joint ventures	16,559			15,206			53,585			44,056
Gain (loss) from real estate joint ventures	60			(72		)	161			(170		)
Income from continuing operations	16,619			15,134			53,746			43,886
Discontinued operations:
Income from discontinued operations before gain on sale	651			557			3,042			3,635
Net casualty (loss) gain after insurance and other settlement proceeds on discontinued operations	(1		)	99			(5		)	43
Gain on sale of discontinued operations	28,806			16,092			60,585			38,474
Consolidated net income	46,075			31,882			117,368			86,038
Net income available for Mid-America Apartments, L.P. common unitholders	$	46,075		$	31,882		$	117,368		$	86,038

Earnings per common unit - basic and diluted:
Income from continuing operations available for common unitholders	$	0.38		$	0.35		$	1.21		$	1.03
Income from discontinued property operations available for common unitholders	0.66			0.39			1.44			0.99
Net income available for common unitholders	$	1.04		$	0.74		$	2.65		$	2.02

Distributions declared per common unit	$	0.6950		$	0.6600		$	2.0850		$	1.9800

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Condensed Consolidated Statements of Comprehensive Income

Three and nine months ended September 30, 2013 and 2012

(Unaudited)

(Dollars in thousands)



	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013		2012
Consolidated net income	$	46,075		$	31,882		$	117,368	$	86,038
Other comprehensive income:
Unrealized (loss) gain from the effective portion of derivative instruments	(1,826		)	(2,903		)	10,095		(8,197		)
Reclassification adjustment for losses included in net income for the effective portion of derivative instruments	3,621			4,815			12,098		15,308
Comprehensive income attributable to Mid-America Apartments, L.P.	$	47,870		$	33,794		$	139,561	$	93,149

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Condensed Consolidated Statements of Cash Flows

Nine months ended September 30, 2013 and 2012

(Unaudited)

(Dollars in thousands)



	Nine months ended September 30,
	2013			2012
Cash flows from operating activities:
Consolidated net income	$	117,368		$	86,038
Adjustments to reconcile net income to net cash provided by operating activities:
Retail revenue accretion	(29		)	(21		)
Depreciation and amortization	101,923			97,300
Stock compensation expense	1,729			1,730
Redeemable units issued	535			428
Amortization of debt premium	(948		)	(541		)
(Gain) loss from investments in real estate joint ventures	(161		)	170
Loss on debt extinguishment	387			322
Derivative interest expense	827			590
Gain on sale of non-depreciable assets	—			(45		)
Gain on sale of discontinued operations	(60,585		)	(38,474		)
Net casualty gain and other settlement proceeds	(450		)	(19		)
Changes in assets and liabilities:
Restricted cash	(390		)	63
Other assets	(7,740		)	(4,369		)
Accounts payable	2,409			3,562
Accrued expenses and other	13,200			9,764
Security deposits	242			442
Net cash provided by operating activities	168,317			156,940
Cash flows from investing activities:
Purchases of real estate and other assets	(89,866		)	(314,909		)
Normal capital improvements	(35,451		)	(36,649		)
Construction capital and other improvements	(3,873		)	(2,561		)
Renovations to existing real estate assets	(8,616		)	(11,070		)
Development	(26,129		)	(54,242		)
Distributions from real estate joint ventures	8,311			11,880
Contributions to real estate joint ventures	(183		)	(204		)
Proceeds from disposition of real estate assets	102,204			97,113
Funding of escrow for exchange acquisitions	(57,380		)	—
Net cash used in investing activities	(110,983		)	(310,642		)
Cash flows from financing activities:
Advances from general partner	17,219			721
Net change in credit lines	177,000			(235,064		)
Proceeds from notes payable	—			271,000
Principal payments on notes payable	(8,695		)	(11,760		)
Payment of deferred financing costs	(2,655		)	(3,577		)
Repurchase of common units	(682		)	(1,863		)
Proceeds from issuances of common units	25,038			173,960
Distributions paid on common units	(92,388		)	(83,630		)
Net cash provided by financing activities	114,837			109,787
Net increase (decrease) in cash and cash equivalents	172,171			(43,915		)
Cash and cash equivalents, beginning of period	8,934			57,200
Cash and cash equivalents, end of period	$	181,105		$	13,285

Supplemental disclosure of cash flow information:
Interest paid	$	48,534		$	47,735
Supplemental disclosure of noncash investing and financing activities:
Accrued construction in progress	$	4,190		$	6,392
Interest capitalized	$	1,118		$	1,435
Marked-to-market adjustment on derivative instruments	$	21,367		$	6,521
Fair value adjustment on debt assumed	$	704		$	2,578
Debt assumed	$	18,293		$	30,290

See accompanying notes to condensed consolidated financial statements.

Mid-America Apartments, L.P.

Notes to Condensed Consolidated Financial Statements

September 30, 2013 and 2012

(Unaudited)

1. Consolidation and Basis of Presentation and Significant Accounting Policies

Consolidation and Basis of Presentation

Mid-America Apartments, L.P., or MAALP, us, we, our, or the Operating Partnership, is a Memphis, Tennessee based limited partnership formed in 1993 and currently operates pursuant to the provisions of the Second Amended and Restated Agreement of Limited Partnership, or the Partnership Agreement. MAALP's sole general partner is Mid-America Apartment Communities, Inc., or MAA, a Memphis, Tennessee-based self-administered and self-managed real estate investment trust, or REIT, that focuses on acquiring, owning and operating apartment communities mainly in the Sunbelt region of the United States. As of September 30, 2013, MAALP owned or owned interests in a total of 160 multifamily apartment communities comprising 48,343 apartments located in 13 states, including four communities comprising 1,156 apartments owned through our joint venture, Mid-America Multifamily Fund II, LLC, or Fund II. MAALP also had two development communities under construction totaling 564 units as of September 30, 2013. A total of 174 units for the development projects were completed as of September 30, 2013, and therefore have been included in the totals above. Total expected costs for the development projects are $74.0 million, of which $43.1 million has been incurred through September 30, 2013. MAALP expects to complete construction on one of the projects by the fourth quarter of 2013 and the other by the fourth quarter of 2014. Four of our properties include retail components with approximately 107,000 square feet of gross leasable area.

Effective October 1, 2013, pursuant to the Agreement and Plan of Merger, dated as of June 3, 2013, an indirect, wholly-owned subsidiary of MAALP, merged with and into Colonial Realty Limited Partnership, or Colonial LP, a Delaware limited partnership, with Colonial LP surviving the merger, which is referred to as the partnership merger. Immediately following the partnership merger, Colonial Properties Trust, or Colonial, an Alabama real estate investment trust, merged with and into MAA, with MAA surviving the merger, which is referred to as the parent merger. The partnership merger and parent merger are collectively referred to as the "Merger" in this Quarterly Report on Form 10-Q. The combined company will operate under the name "MAA" and will be run by our existing management team. For additional information, see Note 11 to the financial statements. All other footnotes contained in this Form 10-Q have been prepared as of September 30, 2013.

The accompanying unaudited condensed consolidated financial statements have been prepared by our management in accordance with United States generally accepted accounting principles, or GAAP, for interim financial information and applicable rules and regulations of the Securities and Exchange Commission, or the SEC, and our accounting policies as set forth in our December 31, 2012 annual consolidated financial statements. All significant intercompany accounts and transactions have been eliminated in consolidation. 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. The results of operations for the three- and nine-month periods ended September 30, 2013 and 2012 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with our audited financial statements and notes thereto included in MAA's Current Report on Form 8-K filed with the SEC on March 22, 2013. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the dates of the financial statements and the amounts of revenues and expenses during the reporting periods. Actual amounts realized or paid could differ from those estimates.

Interests in MAALP are represented by operating partnership units, or OP Units. As of September 30, 2013, there were 44,446,933 OP Units outstanding, 42,744,978, or 96.2%, of which were owned by MAA, our general partner. The remaining 1,701,955 OP Units were owned by nonaffiliated limited partners.

The consolidated financial statements 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.

On September 16, 2013, MAA transferred its ownership of all wholly-owned properties to MAALP in exchange for OP Units. In accordance with entities under common control guidance within ASC 805, Business Combinations, the transfer represents a change in reporting entity, and accordingly MAALP has accounted for these properties at MAA's historical bases and has retrospectively adjusted the financial statements herein as if the transfer of properties had occurred on January 1, 2012, the beginning of the earliest period presented herein. The chart below shows our historical results of operations prior to the transfer, our retrospectively restated results of operations, and the net effects of the transfer on our reported results of operations for three- and nine-month periods ended September 30, 2013 and 2012 (dollars in thousands, except per unit data):



	Three-month period ended September 30, 2013						Three-month period ended September 30, 2012
	Before Transfer		After Transfer		Change		Before Transfer		After Transfer		Change
Consolidated net income	$	38,024	$	46,075	$	8,051	$	30,604	$	31,882	$	1,278
Net income available for Mid-America Apartments, L.P. common unitholders	$	37,869	$	46,075	$	8,206	$	27,466	$	31,882	$	4,416
Comprehensive income	$	39,680	$	47,870	$	8,190	$	32,514	$	33,794	$	1,280
Earnings per common unit - basic and diluted	$	0.90	$	1.04	$	0.14	$	0.67	$	0.74	$	0.07



	Nine-month period ended September 30, 2013						Nine-month period ended September 30, 2012
	Before Transfer		After Transfer		Change		Before Transfer		After Transfer		Change
Consolidated net income	$	100,721	$	117,368	$	16,647	$	81,509	$	86,038	$	4,529
Net income available for Mid-America Apartments, L.P. common unitholders	$	100,247	$	117,368	$	17,121	$	78,088	$	86,038	$	7,950
Comprehensive income	$	122,461	$	139,561	$	17,100	$	88,621	$	93,149	$	4,528
Earnings per common unit - basic and diluted	$	2.40	$	2.65	$	0.25	$	1.94	$	2.02	$	0.08

MAALP invests in entities that 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. MAALP 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 MAALP is the primary beneficiary of a VIE, MAALP considers 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.

MAALP uses the equity method of accounting for its investments in entities for which it exercises significant influence, but does not have the ability to exercise control. These entities are not variable interest entities. The factors considered in determining that MAALP does not have the ability to exercise control include ownership of voting interests and participatory rights of investors.

Earnings per OP Unit

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. 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. For the three and nine months ended September 30, 2013 and 2012, there were no dilutive securities and therefore basic and diluted earnings per OP Unit are the same.

A reconciliation of the numerators and denominators of the basic and diluted earnings per unit computations for the three and nine months ended September 30, 2013 and 2012 is presented below:



(dollars and units in thousands, except per unit amounts)	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Units Outstanding
Weighted average common units - basic and diluted	44,445		43,220		44,331		42,532

Calculation of Earnings per Unit - basic and diluted
Income from continuing operations	$	16,619	$	15,134	$	53,746	$	43,886
Income from discontinued operations	$	29,456	$	16,748	$	63,622	$	42,152

Earnings per unit - basic and diluted:
Income from continuing operations available for common unitholders	$	0.38	$	0.35	$	1.21	$	1.03
Income from discontinued operations available for common unitholders	0.66		0.39		1.44		0.99
Net income available for common unitholders	$	1.04	$	0.74	$	2.65	$	2.02

2. Segment Information

As of September 30, 2013, MAALP owned or had an ownership interest in 160 multifamily apartment communities in 13 different states from which it derived all significant sources of earnings and operating cash flows. Senior management evaluates performance and determines resource allocations by reviewing apartment communities individually and in the following reportable operating segments:


•	Large market same store communities are generally communities:


◦	in markets with a population of at least one million and at least 1% of the total public multifamily REIT units; and


◦	that MAALP has owned and have been stabilized for at least a full 12 months and have not been classified as held for sale.


•	Secondary market same store communities are generally communities:


◦	in markets with populations of more than one million but less than 1% of the total public multifamily REIT units or in markets with a population of less than one million; and


◦	that MAALP has owned and have been stabilized for at least a full 12 months and have not been classified as held for sale.


•	Non same store communities and other includes recent acquisitions, communities in development or lease-up and communities that have been identified for disposition. Also included in non same store communities are non multifamily activities, which represent less than 1% of our portfolio.

On the first day of each calendar year, MAALP determines the composition of our same store operating segments for that year as well as adjusting the previous year, which allows MAALP to evaluate full period-over-period operating comparisons. Properties in development or lease-up will be added to the same store portfolio on the first day of the calendar year after they have been owned and stabilized for at least a full 12 months. Communities are considered stabilized after achieving 90% occupancy for 90 days. Communities that have been identified for disposition are excluded from our same store portfolio. MAALP utilizes net operating income, or NOI, in evaluating the performance of the segments. Total NOI represents total property revenues less total property operating expenses, excluding depreciation and amortization, for all properties held during the period regardless of their status as held for sale. MAALP believes NOI is a helpful tool in evaluating the operating

performance of its segments because it measures the core operations of property performance by excluding partnership level expenses and other items not related to property operating performance.

Revenues and NOI for each reportable segment for the three- and nine-month periods ended September 30, 2013 and 2012 were as follows (dollars in thousands):



	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Revenues
Large Market Same Store	$	64,823		$	61,707		$	191,246		$	181,446
Secondary Market Same Store	52,344			50,904			155,650			150,869
Non-Same Store and Other	19,127			10,370			50,891			19,992
Total property revenues	136,294			122,981			397,787			352,307
Management fee income	146			209			465			687
Total operating revenues	$	136,440		$	123,190		$	398,252		$	352,994

NOI
Large Market Same Store	$	38,159		$	35,700		$	113,707		$	105,675
Secondary Market Same Store	30,349			29,816			92,547			89,109
Non-Same Store and Other	12,471			8,681			36,165			21,665
Total NOI	80,979			74,197			242,419			216,449
Discontinued operations NOI included above	(838		)	(2,505		)	(5,022		)	(10,206		)
Management fee income	146			209			465			687
Depreciation and amortization	(33,000		)	(30,979		)	(97,883		)	(89,701		)
Acquisition expense	—			(1,343		)	(499		)	(1,574		)
Property management expense	(5,193		)	(5,460		)	(15,970		)	(16,484		)
General and administrative expense	(3,976		)	(3,527		)	(10,604		)	(10,436		)
Merger related expenses	(5,561		)	—			(11,298		)	—
Integration related expenses	(35		)	—			(35		)	—
Interest and other non-property income	16			89			86			343
Interest expense	(14,941		)	(14,530		)	(45,715		)	(42,437		)
(Loss) gain on debt extinguishment	(218		)	—			(387		)	5
Amortization of deferred financing costs	(820		)	(971		)	(2,427		)	(2,611		)
Net casualty (loss) gain and other settlement proceeds	—			(22		)	455			(24		)
Gain on sale of non-depreciable assets	—			48			—			45
Gain (loss) from real estate joint ventures	60			(72		)	161			(170		)
Discontinued operations	29,456			16,748			63,622			42,152
Net income available for Mid-America Apartments, L.P. common unitholders	$	46,075		$	31,882		$	117,368		$	86,038

Assets for each reportable segment as of September 30, 2013 and December 31, 2012, were as follows (dollars in thousands):



	September 30, 2013		December 31, 2012
Assets
Large Market Same Store	$	1,265,355	$	1,108,827
Secondary Market Same Store	806,170		654,315
Non-Same Store and Other	674,432		943,608
Corporate assets	282,300		38,528
Total assets	$	3,028,257	$	2,745,278

3. Capital

Total capital and its components for the nine-month periods ended September 30, 2013 and 2012 were as follows (dollars in thousands, except per unit data):



	MAALP Unitholders
	Limited Partner			General Partner			Accumulated Other Comprehensive Income (Loss)			Total Partnership Capital
CAPITAL BALANCE DECEMBER 31, 2012	$	38,154		$	927,734		$	(26,881	)	$	939,007
Net income	4,518			112,850						117,368
Other comprehensive income - derivative instruments (cash flow hedges)							22,193			22,193
Issuance of units				25,038						25,038
Units repurchased and retired				(682		)				(682		)
General partner units issued in exchange for limited partner units	(550		)	550						—
Redeemable units fair market value adjustment				209						209
Adjustment for limited partners' capital at redemption value	1,218			16,597						17,815
Amortization of unearned compensation				1,729						1,729
Distributions ($2.0850 per unit)	(3,557		)	(89,109		)				(92,666		)
CAPITAL BALANCE SEPTEMBER 30, 2013	$	39,783		$	994,916		$	(4,688	)	$	1,030,011



	MAALP Unitholders
	Limited Partner			General Partner			Accumulated Other Comprehensive Income (Loss)			Total Partnership Capital
CAPITAL BALANCE DECEMBER 31, 2011	$	37,079		$	739,657		$	(38,579	)	$	738,157
Net income	3,770			82,268						86,038
Other comprehensive income - derivative instruments (cash flow hedges)							7,111			7,111
Issuance of units				173,962						173,962
Units repurchased and retired				(1,863		)				(1,863		)
General partner units issued in exchange for limited partner units	(2,672		)	2,672						—
Redeemable units fair market value adjustment				(168		)				(168		)
Adjustment for limited partners capital at redemption value	3,054			(3,054		)				—
Amortization of unearned compensation				1,730						1,730
Distributions ($1.9800 per unit)	(3,667		)	(81,813		)				(85,480		)
CAPITAL BALANCE SEPTEMBER 30, 2012	$	37,564		$	913,391		$	(31,468	)	$	919,487

4. Real Estate Acquisitions

On May 1, 2013, we purchased Greenwood Forest, a 316-unit apartment community located in Greenwood Forest (Houston), Texas. This property was previously a part of Mid-America Multifamily Fund I, LLC.

On May 21, 2013, we purchased Station Square at Cosner's Corner, a 260-unit apartment community located in Fredericksburg, Virginia. As part of this purchase, we also acquired land for future development.

We did not acquire any additional properties during the three months ended September 30, 2013.

5. Discontinued Operations

The following properties have been classified as discontinued operations in the Condensed Consolidated Statements of Operations for the three- and nine-month periods ended September 30, 2013 and 2012:



Community	Number of Units	Date Sold	Location	Operating Segment
Woodbridge	188	May 15, 2013	Jacksonville, Florida	Large market same store
High Ridge	160	June 13, 2013	Athens, Georgia	Secondary market same store
TPC Jacksonville	440	June 20, 2013	Jacksonville, Florida	Large market same store
Marsh Oaks	120	August 15, 2013	Jacksonville, Florida	Large market same store
Three Oaks	240	September 11, 2013	Valdosta, Georgia	Secondary market same store
Wildwood	216	September 11, 2013	Thomasville, Georgia	Secondary market same store
Shenandoah Ridge	272	September 30, 2013	Augusta, Georgia	Secondary market same store

During the three months ended June 30, 2013, we reported the 113-unit Fountain Lake apartment community as held for sale in the Condensed Consolidated Balance Sheet and in discontinued operations in our Condensed Consolidated Statement of Operations. As of September 30, 2013, we are no longer actively marketing this community and as a result Fountain Lake was classified as held for use and therefore is not included in the discontinued operation line in the Consolidated Statement of Operations as of September 30, 2013. Fountain Lake is valued at its carrying amount before it was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the asset been continuously classified as held for use, on the Condensed Consolidated Balance Sheet.

The following is a summary of discontinued operations for the three- and nine-month periods ended September 30, 2013 and 2012 (dollars in thousands):



	Three months ended September 30,					Nine months ended September 30,
	2013			2012		2013			2012
Revenues
Rental revenues	$	1,378		$	4,551	$	8,035		$	18,003
Other revenues	119			402		620			1,689
Total revenues	1,497			4,953		8,655			19,692
Expenses
Property operating expenses	671			2,803		3,642			9,893
Depreciation and amortization	110			1,283		1,620			4,989
Interest expense	65			310		351			1,175
Total expense	846			4,396		5,613			16,057
Income from discontinued operations before gain on sale	651			557		3,042			3,635
Net (loss) gain on insurance and other settlement proceeds on discontinued operations	(1		)	99		(5		)	43
Gain on sale of discontinued operations	28,806			16,092		60,585			38,474
Income from discontinued operations	$	29,456		$	16,748	$	63,622		$	42,152

6. Partners' Capital

Interests in MAALP are represented by OP Units. As of September 30, 2013, there were 44,446,933 OP Units outstanding, 42,744,978, or 96.2%, of which were owned by MAA, our general partner. The remaining 1,701,955 OP Units were owned by nonaffiliated limited partners, or the Class A Limited Partners. As of September 30, 2012, there were 43,699,835 OP Units outstanding, 41,925,288 or 95.9% of which were owned by MAA and 1,774,547 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 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 cash or other assets in accordance with the Partnership Agreement. MAA can generally, at its sole discretion, issue OP Units and determine the consideration to be received. The general partner may delegate these and other powers granted if the general partner remains in supervision of the designee.

Under the Partnership Agreement, MAALP may issue Class A OP Units and Class B OP Units. Class A OP Units may only be held by limited partners who are not affiliated with MAA, in its capacity as general partner of MAALP, while Class B OP Units may only be held by MAA, in its capacity as general partner of MAALP, and as of September 30, 2013, a total of 1,701,955 Class A OP Units in MAALP were held by limited partners unaffiliated with MAA, while a total of 42,744,978 Class B OP Units were held by MAA. 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 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 of Class B OP Units to MAA equal to the number of common stock shares 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 New York Stock Exchange over a specified period prior to the redemption date) or by delivering one share of MAA common stock (subject to adjustment under specified circumstances) for each Class A OP Unit so redeemed.

At September 30, 2013, a total of 1,701,955 Class A OP Units were outstanding and redeemable for 1,701,955 shares of MAA common stock, or approximately $106,372,188 based on the closing price of MAA’s common stock on September 30, 2013 of $62.50 per share, at MAA’s option. At September 30, 2012, a total of 1,774,547 Class A OP Units were outstanding and redeemable for 1,774,547 shares of MAA common stock, or approximately $115,895,665 based on the closing price of MAA’s common stock on September 30, 2012 of $65.31 per share, at MAA’s option.

The Operating Partnership pays the same per unit distribution in respect to the OP Units as the per share dividend MAA pays in respect to its common and preferred stock.

On August 26, 2010, MAALP and MAA entered into sales agreements with Cantor Fitzgerald & Co., Raymond James & Associates, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated to sell up to a combined total of 6,000,000 shares of MAA common stock, from time to time in at-the-market offerings or negotiated transactions through a controlled equity offering program or ATM. We terminated this ATM program, and on February 25, 2013, MAALP and MAA entered into sales agreements with J.P. Morgan Securities LLC, BMO Capital Markets Corp., KeyBanc Capital Markets Inc. and UBS Securities LLC with materially the same terms as our sales agreements for a combined total of 4,500,000 shares of MAA common stock.

During the three months ended September 30, 2013, MAA did not issue any shares through its ATM program. During the nine months ended September 30, 2013, MAA sold 365,011 shares of common stock for net proceeds of $24.8 million through its ATM program. The gross proceeds for these issuances were $25.1 million for the nine months ended September 30, 2013. During the three- and nine-month periods ended September 30, 2012, MAA sold 812,911 shares through its ATM program for net proceeds of $53.7 million. The gross proceeds for these issuances were $54.5 million. As of September 30, 2013, there were 4,134,989 shares outstanding under the ATM. MAA contributed all proceeds from these transactions to MAALP in exchange for a number of OP Units equal to the number of shares issued by MAA.

On March 2, 2012, MAA closed on an underwritten public offering of 1,955,000 shares of common stock. UBS Investment Bank and Jeffries & Company, Inc. acted as joint bookrunning managers. This transaction resulted in net proceeds of $120 million. The gross proceeds for this offering were approximately $124.1 million. MAA had no such offerings during the three-

and nine-month periods ended September 30, 2013. MAA contributed all proceeds from this transaction to MAALP in exchange for OP Units equal to the number of shares issued.

MAALP and MAA have a Dividend and Distribution Reinvestment and Share Purchase Plan, or DRSPP, pursuant to which MAA’s shareholders and our holders of OP Units have the ability to reinvest all or part of their distributions from MAA’s common stock, preferred stock or OP Units into MAA’s common stock. The plan also provides the opportunity to make optional cash investments in common shares of at least $250, but not more than $5,000 in any given month, free of brokerage commissions and charges. MAA, in its absolute discretion, may grant waivers to allow for optional cash payments in excess of $5,000. To fulfill its obligations under the DRSPP, MAA may either issue additional shares of common stock or repurchase common stock in the open market. MAA has registered with the SEC the offer and sale of up to 7,600,000 shares of common stock pursuant to the DRSPP. MAA may elect to sell shares under the DRSPP at up to a 5% discount.

Common stock shares totaling 435 and 764 during the three- and nine-month periods ended September 30, 2013 and 122 and 451 during the three- and nine-month periods ended September 30, 2012 were acquired by shareholders under the DRSPP. The issuances resulted in gross proceeds of approximately $28,000 and $50,000 for the three- and nine-month periods ending September 30, 2013 and $8,000 and $30,000 for the three- and nine-month periods ending September 30, 2012. All funds received from these issuances were contributed by MAA to MAALP in exchange for a number of OP Units equal to the number of shares issued by MAA.

During the nine months ended September 30, 2013, 4,805 shares of MAA’s common stock were acquired from employees to satisfy minimum tax withholding obligations that arose upon vesting of restricted stock granted pursuant to approved plans. During the nine months ended September 30, 2012, 15,565 shares were acquired for these purposes. MAALP acquires OP units from MAA equal to the number of shares acquired by MAA from employees to satisfy tax withholding obligations.

7. Notes Payable

On September 30, 2013 and December 31, 2012, MAALP had total indebtedness of approximately $1.86 billion and $1.67 billion, respectively. MAALP's indebtedness as of September 30, 2013 consisted of both conventional and tax exempt debt. Borrowings were made through individual property mortgages as well as company-wide credit facilities. MAALP utilizes both secured and unsecured debt.

On March 1, 2012, MAALP entered into a $150 million unsecured term loan agreement with a syndicate of banks led by KeyBank and J.P. Morgan with a variable rate resetting monthly at LIBOR plus a spread of 1.40% to 2.15% based on a leveraged-based pricing grid and a maturity date of March 1, 2017. In July 2012, MAALP received an investment grade rating (Baa2) from Moody's rating service, which caused the variable rate to reset monthly at LIBOR plus a spread of 1.10% to 2.05% based on an investment grade ratings grid. As of September 30, 2013, the full amount was outstanding under this agreement.

On August 31, 2012, MAALP issued $175 million of Senior Unsecured Notes to be funded at three separate times. These notes were offered in a private placement with four tranches: $18 million at 3.15% maturing on November 30, 2017; $20 million at 3.61% maturing on November 30, 2019; $117 million at 4.17% maturing on November 30, 2022; and $20 million at 4.33% maturing on November 30, 2024. As of September 30, 2013, the full amount of the notes has been funded and is included in our balance sheet.

On June 14, 2013, MAALP entered into a $250 million term loan agreement with JPMorgan at a rate of LIBOR plus a spread of 1.30% on any outstanding borrowings. This agreement matures on June 14, 2014 although borrowings are only allowed to be drawn upon up until 60 days subsequent to the closing of the Merger. We had no borrowings under this agreement at September 30, 2013.

On August 7, 2013, we entered into a $500 million unsecured revolving credit facility agreement with KeyBank National Association and thirteen other banks. This agreement amends our previous unsecured credit facility with KeyBank. Interest is paid using an investment grade pricing grid using LIBOR plus a spread of 0.90% to 1.70%. As of September 30, 2013, we had $350 million borrowed under this facility.

As of September 30, 2013, approximately 35% of MAALP's outstanding debt was borrowed through secured credit facility relationships with Prudential Mortgage Capital, which are credit enhanced by the Federal National Mortgage Association, or FNMA, and Financial Federal, which are credit enhanced by the Federal Home Loan Mortgage Corporation, or Freddie Mac.

MAALP utilizes interest rate swaps and interest rate caps to help manage its current and future interest rate risk and entered into 18 interest rate swaps and 12 interest rate caps as of September 30, 2013, representing notional amounts totaling $559.0

million and $224.6 million, respectively. MAALP also held 11 non-designated interest rate caps with notional amounts totaling $63.8 million as of September 30, 2013.

The following table summarizes our outstanding debt structure as of September 30, 2013 (dollars in thousands):



	Borrowed Balance		Effective Rate		Contract Maturity
Fixed Rate Secured Debt
Individual property mortgages	$	382,817	4.7	%	3/29/2019
FNMA conventional credit facilities	50,000		4.7	%	3/31/2017
Credit facility balances with:
LIBOR-based interest rate swaps	259,000		5.3	%	7/20/2014
Total fixed rate secured debt	$	691,817	4.9	%	5/4/2017
Variable Rate Secured Debt ⁽¹⁾
FNMA conventional credit facilities	$	189,721	0.7	%	12/2/2016
FNMA tax-free credit facilities	89,217		0.9	%	7/23/2031
Freddie Mac credit facilities	64,247		0.7	%	7/1/2014
Freddie Mac mortgage	15,200		3.6	%	1/1/2016
Total variable rate secured debt	$	358,385	0.9	%	2/3/2020
Total Secured Debt	$	1,050,202	3.5	%	4/12/2018

Unsecured Debt
Variable rate credit facility	$	350,000	1.3	%	8/7/2017
Term loan fixed with swaps	150,000		2.4	%	3/1/2017
Fixed rate senior private placement bonds	310,000		4.5	%	7/27/2021
Total Unsecured Debt	$	810,000	2.7	%	1/14/2019

Total Outstanding Debt	$	1,860,202	3.2	%	8/11/2018

⁽¹⁾ Includes capped balances.

8. Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

MAALP is exposed to certain risks arising from both its business operations and economic conditions. MAALP principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. MAALP manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its debt funding and the use of derivative financial instruments. Specifically, MAALP enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future contractual and forecasted cash amounts, principally related to its borrowings, the value of which are determined by changing interest rates.

Cash Flow Hedges of Interest Rate Risk

MAALP's objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, MAALP uses interest rate swaps and interest rate caps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for MAALP making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up front premium.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three and nine months ended September 30, 2013 and 2012, such derivatives

were used to hedge the variable cash flows associated with existing variable-rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the three months ended September 30, 2013 and 2012, MAALP recorded ineffectiveness of $1,000 (increase to interest expense) and $7,000, (increase to interest expense), respectively, and during the nine months ended September 30, 2013 and 2012, MAALP recorded ineffectiveness of $26,000 (decrease to interest expense) and $40,000 (increase to interest expense), respectively, mainly attributable to a mismatch in the underlying indices of the derivatives and the hedged interest payments made on our variable-rate debt.

Amounts reported in accumulated other comprehensive income related to derivatives designated as qualifying cash flow hedges will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the next 12 months, MAALP estimates that an additional $8.9 million will be reclassified to earnings as an increase to interest expense, which primarily represents the difference between our fixed interest rate swap payments and the projected variable interest rate swap payments.

As of September 30, 2013, MAALP had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

⁽¹⁾ Includes three forward rate swaps totaling $150 million where the debt has not yet been issued. These swaps are not included in our debt discussion in MD&A or footnote 7.

Non-Designated Hedges

Derivatives not designated as hedges are not speculative and are used to manage MAALP's exposure to interest rate movements and other identified risks but do not meet the strict hedge accounting requirements of FASB ASC 815, Derivatives and Hedging. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings and resulted in a loss of $5,000 for the three months ended September 30, 2013 and a loss of $25,000 for the three months ended September 30, 2012. During the nine months ended September 30, 2013 and 2012, MAALP recognized a loss of $8,000 and $58,000, respectively, on derivatives not designated in hedging relationships.

As of September 30, 2013, MAALP had the following outstanding interest rate derivatives that were not designated as hedges:

Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet

The table below presents the fair value of MAALP's derivative financial instruments as well as their classification on the Consolidated Balance Sheet as of September 30, 2013 and December 31, 2012, respectively.

Fair Values of Derivative Instruments on the Consolidated Balance Sheet as of September 30, 2013 and

December 31, 2012 (dollars in thousands)



	Asset Derivatives					Liability Derivatives
		September 30, 2013		December 31, 2012			September 30, 2013		December 31, 2012
Derivatives designated as hedging instruments	Balance Sheet Location	Fair Value		Fair Value		Balance Sheet Location	Fair Value		Fair Value
Interest rate contracts	Other assets	$	10,681	$	245	Fair market value of interest rate swaps	$	9,858	$	21,423

Total derivatives designated as hedging instruments		$	10,681	$	245		$	9,858	$	21,423

Derivatives not designated as hedging instruments

Interest rate contracts	Other assets	$	57	$	43		$	—	$	—

Total derivatives not designated as hedging instruments		$	57	$	43		$	—	$	—

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

The table below presents the effect of our derivative financial instruments on the Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012, respectively.

Effect of Derivative Instruments on the Consolidated Statements of Operations for the

Three and Nine Months Ended September 30, 2013 and 2012 (dollars in thousands)



Derivatives in Cash Flow Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)						Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)						Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Three months ended September 30,	2013			2012				2013			2012				2013			2012



Interest rate contracts	$	(1,826	)	$	(2,903	)	Interest expense	$	(3,621	)	$	(4,815	)	Interest expense	$	(1	)	$	(7	)

Total derivatives in cash flow hedging relationships	$	(1,826	)	$	(2,903	)		$	(3,621	)	$	(4,815	)		$	(1	)	$	(7	)





Nine months ended September 30,

Interest rate contracts	$	10,095		$	(8,197	)	Interest expense	$	(12,098	)	$	(15,308	)	Interest expense	$	26		$	(40	)

Total derivatives in cash flow hedging relationships	$	10,095		$	(8,197	)		$	(12,098	)	$	(15,308	)		$	26		$	(40	)

Derivatives Not Designated as Hedging Instruments

Three months ended September 30,														Location of Gain or (Loss) Recognized in Income	2013			2012

Interest rate contracts														Interest expense	$	(5	)	$	(25	)

Total															$	(5	)	$	(25	)

Nine months ended September 30,

Interest rate contracts														Interest expense	$	(8	)	$	(58	)

Total															$	(8	)	$	(58	)

Credit-Risk-Related Contingent Features

As of September 30, 2013, derivatives that were in a net liability position and subject to credit-risk-related contingent features had a termination value of $10.2 million, which includes accrued interest but excludes any adjustment for nonperformance risk. These derivatives had a fair value, gross of asset positions, of $9.8 million at September 30, 2013.

Certain of our derivative contracts contain a provision where if we default on any of our indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then we could also be declared in default on our derivative obligations. As of September 30, 2013, we had not breached the provisions of these agreements. If we had breached these provisions, we could have been required to settle our obligations under the agreements at their termination value of $6.7 million.

Certain of our derivative contracts contain a provision where we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on the indebtedness. As of September 30, 2013, we had not breached the provisions of these agreements. If we had breached theses provisions, we could have been required to settle our obligations under the agreements at the termination value of $0.5 million.

Certain of our derivative contracts are credit enhanced by either FNMA or Freddie Mac. These derivative contracts require that our credit enhancing party maintain credit ratings above a certain level. If our credit support providers were downgraded below Baa1 by Moody’s or BBB+ by Standard & Poor’s, or S&P, we may be required to either post 100 percent collateral or settle the obligations at their termination value of $9.7 million as of September 30, 2013. Both FNMA and Freddie Mac are currently rated Aaa by Moody’s and AA+ by S&P, and therefore, the provisions of this agreement have not been breached and no collateral has been posted related to these agreements as of September 30, 2013.

Although our derivative contracts are subject to master netting arrangements, which serve as credit mitigants to both us and our counterparties under certain situations, we do not net our derivative fair values or any existing rights or obligations to cash collateral on the Consolidated Balance Sheet.

The table below presents a gross presentation, the effects of offsetting, and a net presentation of our derivatives as of September 30, 2013 and December 31, 2012. The net amounts of derivative assets or liabilities can be reconciled to the Tabular Disclosure of Fair Values of Derivative Instruments above, which also provides the location that derivative assets and liabilities are presented on the Consolidated Balance Sheet (dollars in thousands):



Offsetting of Derivative Assets
As of September 30, 2013
						Gross Amounts Not Offset in the Statement of Financial Position


	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position	Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments			Cash Collateral Received	Net Amount
Derivatives	$	10,738	—	$	10,738	$	(866	)	—	$	9,872

Offsetting of Derivative Liabilities
As of September 30, 2013
						Gross Amounts Not Offset in the Statement of Financial Position


	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position	Net Amounts of Liabilities presented in the Statement of Financial Position		Financial Instruments			Cash Collateral Posted	Net Amount
Derivatives	$	9,858	—	$	9,858	$	(866	)	—	$	8,992

Offsetting of Derivative Assets
As of December 31, 2012
						Gross Amounts Not Offset in the Statement of Financial Position


	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position	Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments			Cash Collateral Received	Net Amount
Derivatives	$	288	—	$	288	—			—	$	288

Offsetting of Derivative Liabilities
As of December 31, 2012
						Gross Amounts Not Offset in the Statement of Financial Position


	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position	Net Amounts of Liabilities presented in the Statement of Financial Position		Financial Instruments			Cash Collateral Posted	Net Amount
Derivatives	$	21,423	—	$	21,423	—			—	$	21,423

Other Comprehensive Income

MAALP's other comprehensive income consists entirely of gains and losses attributable to the effective portion of our cash flow hedges. The table below shows the change in the balance for the nine months ended September 30, 2013 and 2012:



Changes in Accumulated Other Comprehensive Income by Component
	Affected Line Item in the Consolidated Statements Of Operations	Gains and Losses on Cash Flow Hedges
		For the nine months ended September 30,
		2013			2012
Beginning balance		$	(26,881	)	$	(38,579	)
Other comprehensive income before reclassifications		10,095			(8,197		)
Amounts reclassified from accumulated other comprehensive income (interest rate contracts)	Interest expense	12,098			15,308
Net current-period other comprehensive income attributable to Mid-America Apartments, L.P.		22,193			7,111
Ending balance		$	(4,688	)	$	(31,468	)

See also discussions in "Financial Statements – Notes to Consolidated Financial Statements", Note 9.

9. Fair Value Disclosure of Financial Instruments

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

On January 1, 2008, MAALP adopted FASB ASC 820 Fair Value Measurements and Disclosures, or ASC 820. ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. MAALP's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Fixed rate notes payable at September 30, 2013 and December 31, 2012, totaled $743 million and $732 million, respectively, and had estimated fair values of $785 million and $778 million (excluding prepayment penalties), respectively, as of September 30, 2013 and December 31, 2012. The carrying value of variable rate notes payable (excluding the effect of interest rate swap and cap agreements) at September 30, 2013 and December 31, 2012, totaled $1.1 billion and $941 million,

respectively, and had estimated fair values of $1.0 billion and $860 million (excluding prepayment penalties), respectively, as of September 30, 2013 and December 31, 2012. The valuation of MAALP's debt is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each debt instrument. This analysis reflects the contractual terms of the debt, and uses observable market-based inputs, including interest rate curves and credit spreads. The fair values of fixed debt are determined by using the present value of future cash outflows discounted with the applicable current market rate plus a credit spread. The fair values of variable debt are determined using the stated variable rate plus the current market credit spread. MAALP's variable rates reset every 30 to 90 days and MAALP concludes that these rates reasonably estimate current market rates. MAALP has determined that inputs used to value its debt fall within Level 2 of the fair value hierarchy and therefore MAALP's fair market valuation of debt is considered Level 2 in the fair value hierarchy.

Currently, MAALP uses interest rate swaps and interest rate caps (options) to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

The fair values of interest rate options (caps) are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.

To comply with the provisions of ASC 820, MAALP incorporates credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, MAALP has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.

MAALP has determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, and as a result, all of our derivatives held as of September 30, 2013 and December 31, 2012 were classified as Level 2 of the fair value hierarchy.

The table below presents our assets and liabilities measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, aggregated by the level in the fair value hierarchy within which those measurements fall.

Assets and Liabilities Measured at Fair Value on a Recurring Basis at September 30, 2013

(dollars in thousands)



	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at
			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		September 30, 2013
Assets
Derivative financial instruments	$	—	$	10,738	$	—	$	10,738
Liabilities
Derivative financial instruments	$	—	$	9,858	$	—	$	9,858

Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2012

(dollars in thousands)



	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at
			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		December 31, 2012
Assets
Derivative financial instruments	$	—	$	288	$	—	$	288
Liabilities
Derivative financial instruments	$	—	$	21,423	$	—	$	21,423

The fair value estimates presented herein are based on information available to management as of September 30, 2013 and December 31, 2012. These estimates are not necessarily indicative of the amounts MAALP could ultimately realize. See also discussions in "Financial Statements – Notes to Consolidated Financial Statements", Note 8.

10. Recent Accounting Pronouncements

Impact of Recently Issued Accounting Standards

In February 2013, the FASB issued Accounting Standards Update, or ASU, No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. Under ASU 2013-02, an entity is required to provide information about the amounts reclassified out of Accumulated other comprehensive income, or AOCI, by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in the financial statements. ASU 2013-02 is effective for interim and annual periods beginning after December 15, 2012 and early adoption is permitted. We early adopted ASU 2013-02 for the annual period ended December 31, 2012. The adoption of ASU 2013-02 has not had a material impact on our consolidated financial condition or results of operations taken as a whole.

In January 2013, the FASB issued ASU No. 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. ASU 2013-01 clarifies that the scope of ASU 2011-11, Disclosures about Offsetting Assets and Liabilities, would apply to derivatives accounted for in accordance with FASB ASC 815, Derivatives and Hedging, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with ASC 210-20-45 or ASC 815-10-45 or subject to an enforceable master netting arrangement or similar agreement. This ASU is effective for fiscal years beginning on or after January 1, 2013 and interim periods within those annual periods. We adopted ASU 2013-01 during the period ended March 31, 2013. The

adoption of ASU 2013-01 has not had a material impact on our consolidated financial condition or results of operations taken as a whole.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendments change the wording, mainly for clarification, used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the Board does not intend for the amendments in this update to result in a change in the application of the requirements in ASU 2011-04. The amendments in this ASU are to be applied prospectively. The amendments are effective during interim and annual periods beginning after December 15, 2011. We adopted ASU 2011-04 for the interim and annual periods of fiscal year 2012. The adoption of ASU 2011-04 has not had a material impact on our consolidated financial condition or results of operations taken as a whole.

11. Subsequent Events

Merger with Colonial Properties Trust

On October 1, 2013, MAA completed its previously announced merger with Colonial. Pursuant to the merger agreement, Martha Merger Sub, LP, or OP Merger Sub, a wholly-owned indirect subsidiary of MAALP, merged with and into Colonial LP, with Colonial LP being the surviving entity of the merger and becoming a wholly-owned indirect subsidiary of MAALP, which is referred to as the partnership merger. The partnership merger was part of the transactions contemplated by the previously announced agreement and plan of merger entered into on June 3, 2013 among MAA, the general partner of MAALP, MAALP, OP Merger Sub, Colonial, the general partner of Colonial LP, and Colonial LP pursuant to which MAA and Colonial combined through a merger of Colonial with and into MAA, with MAA surviving the merger, which is referred to as the parent merger. 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 using the 0.36 conversion rate.

The net assets and results of operations of Colonial will be included in MAA's and MAALP's consolidated financial statements from the closing date and will be presented in MAA's and MAALP's Form 10-K filing for the year ended December 31, 2013. During the nine months ended September 30, 2013, MAALP incurred total merger related expenses of $11.3 million, which is included in the Condensed Consolidated Statement of Operations in the line item, "Merger related expenses".

MAALP is required to account for the parent merger under the Business Combinations accounting guidance, which generally requires the acquirer to record all of the assets acquired and liabilities assumed at fair value. The value of the transaction was approximately $2.2 billion, substantially all of which was based on a total of 31,916,765 additional MAA shares and 2,574,631 common units in MAALP issued on October 1, 2013 as a result of this merger, valued at $62.56 per share and unit, the opening stock price of MAA common stock on the closing date. MAALP is in the process of determining the allocation of the purchase price to the assets acquired and liabilities assumed, but as of November 7, 2013, the initial accounting for the business combination has not been completed. MAA has not yet determined the final allocations for acquired property, equipment, intangible assets, and liabilities assumed. The required disclosures will be included in MAA's and MAALP's form 10-K filing for the year ended December 31, 2013.

Acquisition Activity

On November 1, 2013, we closed on the purchase of the 251-unit Haven at Celebrate II apartment community located in Fredericksburg, Virginia.

Disposition Activity

On October 31, 2013, we closed on the sale of Whispering Pines, a 216-unit apartment community located in LaGrange, GA.

Financings

On October 1, 2013 in connection with the consummation of the Merger, MAALP assumed from Colonial LP and amended the U.S. Bank Term Loan Agreement, or the U.S. Bank Loan Agreement, with various lenders and with U.S. Bank National Association as joint lead arranger and administrative agent and with PNC Capital Markets as joint lead arranger.

On October 1, 2013, MAALP also assumed from Colonial LP and amended the Wells Fargo Term Loan Agreement, or the Wells Loan Agreement, with various lenders and with Wells Fargo Bank National Association, or Wells Fargo, as lead arranger and administrative agent.

On October 1, 2013, MAALP, Wells Fargo, and Colonial LP entered into four Novation Confirmations, pursuant to which certain swap agreements originally entered into by Colonial LP were transferred to MAALP.

On October 8, 2013, MAALP settled the three forward swaps, resulting in cash proceeds of approximately $9.6 million.

On October 16, 2013, MAALP issued and sold $350 million in aggregate principal amount of 4.300% Senior Notes due 2023 at a price of 99.047% of the principal amount.

Partnership Agreement

On October 1, 2013, MAALP executed the Third Amended and Restated Agreement of Limited Partnership, which replaced the Second Amended and Restated Agreement of Limited Partnership.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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

Forward Looking Statements

We consider this and other sections of this Quarterly Report on Form 10-Q to contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act, with respect to our expectations for future periods. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. Such forward-looking statements include, without limitation, statements concerning property acquisitions and dispositions, joint venture activity, development and renovation activity as well as other capital expenditures, capital raising activities, rent and expense growth, occupancy, financing activities and interest rate and other economic expectations and statements about the benefits of the Merger. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from the results of operations, financial conditions or plans expressed or implied by such forward-looking statements. Such factors include, among other things, unanticipated adverse business developments affecting us, or our properties, adverse changes in the real estate markets and general and local economies and business conditions. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such forward-looking statements included in this report may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved.

The following factors, among others, could cause our future results to differ materially from those expressed in the forward looking statements:


•	inability to generate sufficient cash flows due to market conditions, changes in supply and/or demand, competition, uninsured losses, changes in tax and housing laws, or other factors;


•	difficulty in integrating Colonial’s operations, systems and personnel with ours;


•	failure of new acquisitions to achieve anticipated results or be efficiently integrated;


•	failure of development communities to be completed, if at all, on a timely basis or to lease-up as anticipated;


•	inability of a joint venture to perform as expected;


•	inability to acquire additional or dispose of existing apartment units on favorable economic terms;


•	unexpected capital needs;


•	increasing real estate taxes and insurance costs;


•	losses from catastrophes in excess of MAA’s insurance coverage;


•	inability to acquire funding through the capital markets;


•	the availability of credit, including mortgage financing, and the liquidity of the debt markets, including a material deterioration of the financial condition of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation;


•	inability to replace financing with the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation should their investment in the multifamily industry decrease or cease to exist;


•	changes in interest rate levels, including that of variable rate debt, which are extensively used by MAA;


•	loss of hedge accounting treatment for interest rate swaps or interest rate caps;


•	the continuation of the good credit of MAA’s interest rate swap and cap providers;


•	inability to meet loan covenants;


•	significant decline in market value of real estate serving as collateral for mortgage obligations;


•	inability to pay required distributions to maintain MAA's REIT status due to required debt payments or otherwise;


•	significant change in the mortgage financing market that would cause single-family housing, either as an owned or rental product, to become a more significant competitive product;


•	imposition of federal taxes if MAA fails to qualify as a REIT under the Internal Revenue Code of 1986, as amended, or the Code, in any taxable year or foregone opportunities to ensure REIT status;


•	inability to attract and retain qualified personnel;


•	potential liability for environmental contamination;


•	adverse legislative or regulatory tax changes; and


•	litigation and compliance costs associated with laws requiring access for disabled persons

Critical Accounting Policies and Estimates

The following discussion and analysis of financial condition and results of operations are based upon our condensed consolidated financial statements, and the notes thereto, which have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make a number of estimates and assumptions that affect the reported amounts and disclosures in the condensed consolidated financial statements. On an ongoing basis, we evaluate our estimates and assumptions based upon historical experience and various other factors and circumstances. We believe that our estimates and assumptions are reasonable under the circumstances; however, actual results may differ from these estimates and assumptions.

We believe that the estimates and assumptions listed below are most important to the portrayal of our financial condition and results of operations because they require the greatest subjective determinations and form the basis of accounting policies deemed to be most critical. These critical accounting policies include revenue recognition, capitalization of expenditures and depreciation and amortization of assets, impairment of long-lived assets, including goodwill, acquisition of real estate assets and fair value of derivative financial instruments.

Revenue Recognition and Real Estate Sales

We lease multifamily residential apartments under operating leases primarily with terms of one year or less. Rental revenues are recognized using a method that represents a straight-line basis over the term of the lease and other revenues are recorded when earned.

We record gains and losses on real estate sales in accordance with accounting standards governing the sale of real estate. For sale transactions meeting the requirements for the full accrual method, we remove the assets and liabilities from our Consolidated Balance Sheets and record the gain or loss in the period the transaction closes. For properties contributed to our joint ventures, we record gains on the partial sale in proportion to the outside partners' interest in the joint venture.

Capitalization of expenditures and depreciation and amortization of assets

We carry real estate assets at depreciated cost. Depreciation and amortization is computed on a straight-line basis over the estimated useful lives of the related assets, which range from 8 to 40 years for land improvements and buildings, 5 years for furniture, fixtures, and equipment, 3 to 5 years for computers and software, 5 years amortization for acquired retail leases, and 6 months amortization for acquired residential leases, all of which are subjective determinations. Repairs and maintenance costs are expensed as incurred while significant improvements, renovations and replacements are capitalized.

Development costs are capitalized in accordance with accounting standards for costs and initial rental operations of real estate projects and standards for the capitalization of interest cost, real estate taxes and personnel expense.

Impairment of long-lived assets, including goodwill

We account for long-lived assets in accordance with the provisions of accounting standards for the impairment or disposal on long-lived assets and evaluate our goodwill for impairment under accounting standards for goodwill and other intangible assets. We evaluate goodwill for impairment on at least an annual basis, or more frequently if a goodwill impairment indicator is identified. We periodically evaluate long-lived assets, including investments in real estate and goodwill, for indicators that would suggest that the carrying amount of the assets may not be recoverable. The judgments regarding the existence of such indicators are based on factors such as operating performance, market conditions and legal factors.

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 by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are separately presented on the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale are presented separately in the appropriate asset and liability sections of the balance sheet.

Goodwill is tested annually for impairment and is tested for impairment more frequently if events and circumstances indicate

that the asset might be impaired. An impairment loss for goodwill is recognized to the extent that the carrying amount exceeds the implied fair value of goodwill. This determination is made at the reporting unit level and consists of two steps. First, we determine the fair value of a reporting unit and compare it to its carrying amount. In the apartment industry, the primary method used for determining fair value is to divide annual operating cash flows by an appropriate capitalization rate. We determine the appropriate capitalization rate by reviewing the prevailing rates in a property's market or submarket. Second, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit's goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation in accordance with accounting standards for business combinations. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill.

Acquisition of real estate assets

We account for our acquisitions of investments in real estate in accordance with ASC 805-10, Business Combinations, which requires the fair value of the real estate acquired to be allocated to the acquired tangible assets, consisting of land, building and furniture, fixtures and equipment, and identified intangible assets, consisting of the value of in-place leases.

We allocate the purchase price to the fair value of the tangible assets of an acquired property determined by valuing the property 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 property using methods similar to those used by independent appraisers. These methods include using stabilized NOI and market specific capitalization and discount rates.

In allocating the fair value of identified intangible assets of an acquired property, the in-place leases are valued based on current rent rates and time and cost to lease a unit. Management concluded that the residential leases acquired on each of its property acquisitions are approximately at market rates since the residential lease terms generally do not extend beyond one year.

Our policy is to expense the costs incurred to acquire properties in the period these costs occur. Acquisition costs include appraisal fees, title fees, broker fees, and other legal costs to acquire the property. These costs are recorded in our Statement of Operations under the line Acquisition expenses.

Fair value of derivative financial instruments

We utilize certain derivative financial instruments, primarily interest rate swaps and interest rate caps, during the normal course of business to manage, or hedge, the interest rate risk associated with our variable rate debt or as hedges in anticipation of future debt transactions to manage well-defined interest rate risk associated with the transaction.

In order for a derivative contract to be designated as a hedging instrument, changes in the hedging instrument must be highly effective at offsetting changes in the hedged item. The historical correlation of the hedging instruments and the underlying hedged items are assessed before entering into the hedging relationship and on a quarterly basis thereafter, and have been found to be highly effective.

We measure ineffectiveness using the change in the variable cash flows method or the hypothetical derivative method for interest rate swaps and the hypothetical derivative method for interest rate caps for each reporting period through the term of the hedging instruments. Any amounts determined to be ineffective are recorded in earnings. The change in fair value of the interest rate swaps and the intrinsic value or fair value of interest rate caps designated as cash flow hedges are recorded to accumulated other comprehensive income in the Condensed Consolidated Balance Sheets.

The valuation of our derivative financial instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The fair values of interest rate caps are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the interest rate caps. The variable interest rates used in the calculation of projected receipts on the interest rate cap are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities. Additionally, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements. Changes in the fair values of our derivatives are primarily the result of fluctuations in interest rates. See Notes 8 and 9 of the accompanying Condensed Consolidated Financial Statements.

Overview of the Three Months Ended September 30, 2013

On September 16, 2013, MAA transferred its ownership of all wholly-owned properties to MAALP in exchange for OP Units. In accordance with entities under common control guidance within ASC 805, Business Combinations, MAALP has accounted for these properties at MAA's historical bases and has retrospectively adjusted the financial statements herein as if the transfer of properties had occurred on January 1, 2012, the beginning of the earliest period presented herein. All discussions below reflect the retrospectively adjusted financial statements.

We experienced an increase in income from continuing operations before non-operating items for the three months ended September 30, 2013 over the three months ended September 30, 2012 as increases in revenues outpaced increases in property operating expenses. The increases in revenues came from a 5.0% increase in our large market same store segment, a 2.8% increase in our secondary market same store segment, both of which are driven by increased average rent per unit, and a 84.4% increase in our non-same store and other segment, which was primarily a result of acquisitions. Our same store portfolio represents those communities that have been held and have been stabilized for at least 12 months. Communities excluded from the same store portfolio would include recent acquisitions, communities being developed or in lease-up, communities undergoing extensive renovations/redevelopment, and communities approved for disposition by the Board of Directors.

As of September 30, 2013, our wholly-owned portfolio consisted of 47,187 apartment units in 156 communities, compared to 47,685 apartment units in 160 communities at September 30, 2012. For these communities, the average effective rent per apartment unit, excluding units in lease-up, increased to $891 per unit at September 30, 2013 from $854 per unit at September 30, 2012. For these same communities, overall occupancy at September 30, 2013 and 2012 was 96.3% and 96.0%, respectively. Average effective rent per unit is equal to the average of gross rent amounts after the effect of leasing concessions for occupied units plus prevalent market rates asked for unoccupied units, divided by the total number of units. Leasing concessions represent discounts to the current market rate. We believe average effective rent is a helpful measurement in evaluating average pricing. It does not represent actual rental revenue collected per unit.

Effective October 1, 2013, pursuant to the Agreement and Plan of Merger, dated as of June 3, 2013, an indirect, wholly-owned subsidiary of MAALP merged with and into Colonial LP, with Colonial LP surviving the merger, and, immediately following the partnership merger, Colonial merged with and into MAA, with MAA surviving the merger. The combined company will operate under the name "MAA" and will be run by our existing management team. For additional information, see Note 11 to the financial statements. All other footnotes contained in this Form 10-Q have been prepared as of September 30, 2013.

The following is a discussion of our consolidated financial condition and results of operations for the three- and nine-month periods ended September 30, 2013 and 2012. This discussion should be read in conjunction with all of the consolidated financial statements included in this Quarterly Report on Form 10-Q.

Results of Operations

Comparison of the Three-Month Period Ended September 30, 2013 to the Three-Month Period Ended September 30, 2012

Property revenues for the three months ended September 30, 2013 were approximately $136.3 million, an increase of approximately $13.3 million from the three months ended September 30, 2012 due to (i) a $3.1 million increase in property revenues from our large market same store group primarily as a result of an increase in average rent per unit, (ii) a $1.4 million increase in property revenues from our secondary market same store group primarily as a result of an increase in average rent per unit, and (iii) a $8.8 million increase in property revenues from our non-same store and other group, primarily as a result of acquisitions. See further discussion on revenue growth in the Trends section below.

Property operating expenses include costs for property personnel, property personnel bonuses, building repairs and maintenance, real estate taxes and insurance, utilities, landscaping and depreciation and amortization. Property operating expenses, excluding depreciation and amortization, for the three months ended September 30, 2013 were approximately $56.2 million, an increase of approximately $4.9 million from the three months ended September 30, 2012 due primarily to (i) an increase in property operating expenses of $0.7 million from our large market same store group, (ii) an increase in property operating expenses of $0.9 million from our secondary market same store group, and (iii) an increase in property operating expenses of $3.3 million from our non-same store and other group, primarily as a result of acquisitions. The increases in property operating expenses in the large market same store group and secondary market same store group are mainly the result of increases in real estate taxes. Other increases are the result of normal operating costs.

Depreciation and amortization expense for the three months ended September 30, 2013 was approximately $33.0 million, an increase of approximately $2.0 million from the three months ended September 30, 2012 primarily due to (i) an increase in depreciation and amortization expense of $0.2 million from our large market same store group, (ii) an increase of $0.3 million from our secondary market same store group, and (iii) an increase of $1.5 million from our non-same store and other group, mainly as a result of acquisitions.

Merger related expenses for the pending acquisition of Colonial for the three months ended September 30, 2013 were approximately $5.6 million. We did not incur any merger relate expenses during the three months ended September 30, 2012.

Interest expense increased by approximately $0.4 million during the three months ended September 30, 2013 compared to the three months ended September 30, 2012 primarily as a result of an increase in our average debt outstanding of approximately $71.8 million. This increase is partially offset by a decrease in the average interest rate from 3.7% to 3.2%.

We recorded a gain on sale of four properties presented in discontinued operations of $28.8 million for the three months ended September 30, 2013 and a gain on sale of five properties in discontinued operations of $16.1 million for the three months ended September 30, 2012.

Primarily as a result of the foregoing, net income available for Mid-America Apartments, L.P. common unitholders increased by approximately $14.2 million in the three months ended September 30, 2013 from the three months ended September 30, 2012.

Comparison of the Nine-Month Period Ended September 30, 2013 to the Nine-Month Period Ended September 30, 2012

Property revenues for the nine months ended September 30, 2013 were approximately $397.8 million, an increase of approximately $45.5 million from the nine months ended September 30, 2012 due to (i) a $9.8 million increase in property revenues from our large market same store group primarily as a result of an increase in average rent per unit, (ii) a $4.8 million increase in property revenues from our secondary market same store group primarily as a result of an increase in average rent per unit, and (iii) a $30.9 million increase in property revenues from our non-same store and other group, primarily as a result of acquisitions. See further discussion on revenue growth in the Trends section below.

Property operating expenses include costs for property personnel, property personnel bonuses, building repairs and maintenance, real estate taxes and insurance, utilities, landscaping and depreciation and amortization. Property operating expenses, excluding depreciation and amortization, for the nine months ended September 30, 2013 were approximately $160.4 million, an increase of approximately $14.3 million from the nine months ended September 30, 2012 due primarily to (i) an increase in property operating expenses of $1.8 million from our large market same store group, (ii) an increase in property operating expenses of $1.3 million from our secondary market same store group, and (iii) an increase in property operating expenses of $11.2 million from our non-same store and other group, primarily as a result of acquisitions. The increases in

property operating expenses in the large market same store group and secondary market same store group are mainly the result of increases in real estate taxes. Other increases are the result of normal operating costs.

Depreciation and amortization expense for the nine months ended September 30, 2013 was approximately $97.9 million, an increase of approximately $8.2 million from the nine months ended September 30, 2012 primarily due to (i) an increase in depreciation and amortization expense of $0.4 million from our large market same store group, (ii) an increase of $0.3 million from our secondary market same store group, and (iii) an increase of $7.5 million from our non-same store and other group, mainly as a result of acquisitions.

Merger related expenses for the pending acquisition of Colonial for the nine months ended September 30, 2013 were approximately $11.3 million. We did not incur any merger relate expenses during the nine months ended September 30, 2012.

Interest expense increased by approximately $3.3 million during the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012 primarily as a result of an increase in our average debt outstanding of approximately $94.3 million. This increase is partially offset by a decrease in the average interest rate from 3.7% to 3.2%.

We recorded a gain on sale of seven properties and nine properties presented in discontinued operations of $60.6 million and $38.5 million for the nine months ended September 30, 2013 and 2012, respectively.

Primarily as a result of the foregoing, net income available for Mid-America Apartments, L.P. common unitholders increased by approximately $31.3 million in the nine months ended September 30, 2013 from the nine months ended September 30, 2012.

Funds From Operations and Net Income

Funds from operations, or FFO, represents net income (computed in accordance with GAAP) excluding extraordinary items, net income attributable to noncontrolling interest, asset impairment, gains or losses on disposition of real estate assets, plus depreciation and amortization of real estate, and adjustments for joint ventures to reflect FFO on the same basis. This definition of FFO is in accordance with the National Association of Real Estate Investment Trusts, or NAREIT, definition. Disposition of real estate assets includes sales of discontinued operations.

FFO should not be considered as an alternative to net income or any other GAAP measurement of performance, as an indicator of operating performance or as an alternative to cash flow from operating, investing, and financing activities as a measure of liquidity. We believe that FFO is helpful to investors in understanding our operating performance in that such calculation excludes depreciation and amortization expense on real estate assets. We believe that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies. Our calculation of FFO may differ from the methodology for calculating FFO utilized by other REITs and, accordingly, may not be comparable to such other REITs.

The following table is a reconciliation of FFO to net income available for Mid-America Apartments, L.P. common unitholders for the three- and nine-month periods ended September 30, 2013, and 2012 (dollars in thousands):



	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Net income available for Mid-America Apartments, L.P. common unitholders	$	46,075		$	31,882		$	117,368		$	86,038
Depreciation and amortization of real estate assets	32,422			30,423			96,157			87,964
Depreciation and amortization of real estate assets of discontinued operations	110			1,184			1,620			4,945
Gain on sales of discontinued operations	(28,806		)	(16,092		)	(60,585		)	(38,474		)
Depreciation and amortization of real estate assets of real estate joint ventures	253			442			914			1,437
Funds from operations	$	50,054		$	47,839		$	155,474		$	141,910

FFO for the three- and nine-month periods ended September 30, 2013 increased by approximately $2.2 million and $13.6 million, respectively, from the three- and nine-month periods ended September 30, 2012 primarily as a result of the increases in property revenues of approximately $13.3 million and $45.5 million discussed above that were only partially offset by the $4.9 million and $14.3 million increase in property operating expenses, excluding depreciation and amortization. FFO is also

reduced by the $5.6 million and $11.3 million in merger related expenses for the three and nine months ended September 30, 2013.

Trends

During the three-month period ended September 30, 2013, rental demand for apartments was strong, as it was throughout 2012 and the first two quarters of 2013. This strength was evident on two fronts: same store physical occupancy during the quarter ended September 30, 2013 increased as compared to the quarter ended September 30, 2012, averaging 96.3% for the current quarter and 96.0% for the same quarter last year; and average pricing on both new leases and renewals signed during the three-month period ended September 30, 2013 was higher as compared to the three-month period ended June 30, 2013 and the three-month period ended September 30, 2012. We have maintained this momentum despite job formation, one of the primary drivers of apartment demand, continuing to increase at a below average pace.

An important part of our portfolio strategy is to maintain a broad diversity of markets across the Sunbelt region of the United States. The diversity of markets tends to mitigate exposure to economic issues in any one geographic market or area. We believe that a well-diversified portfolio, including both large and select secondary markets, will perform well in “up” cycles as well as weather “down” cycles better. As of September 30, 2013, we were invested in approximately 45 defined Metropolitan Statistical Areas, with 54% of our gross assets in large markets and 46% of our gross assets in select secondary markets.

New supply of rental units entering the market remained below historical new supply delivery averages, but multifamily permitting did pick up in 2012 and has continued into 2013. We believe this permitting will ultimately lead to an increase in supply, but also believe the lack of new apartments in recent years combined with demand from new households will help keep supply and demand in balance. Competition from condominiums reverting back to rental units, or new condominiums being converted to rental, was not a major factor in our portfolio because most of our submarkets have not been primary areas for condominium development. We have found the same to be true for rental competition from single family homes. We have avoided committing a significant amount of capital to markets or submarkets where most of the excessive inflation in house prices has occurred. We saw significant rental competition from condominiums or single family houses in only a few of our submarkets.

Our focus continues to be on increasing pricing where possible through our revenue management system, while maintaining strong physical occupancy. Through these efforts, same store effective monthly rent per unit for the three-month period ended September 30, 2013 increased by 3.4% from the three-month period ended September 30, 2012. With strong occupancy in place as we enter the winter leasing season, we believe we will be able to maximize the market’s pricing potential in the fourth quarter.

Overall same store revenues increased 4.0% for the three-month period ended September 30, 2013 as compared to the three-month period ended September 30, 2012. This increase was primarily due to rising rents, and helped by increases in ancillary income. Although new multifamily development is occurring, we believe the permitting data so far suggests that levels will remain below pre-recession deliveries, although there can be no assurance in this regard. Also, we believe that more sustainable credit terms for residential mortgages should work to favor rental demand at existing multi-family properties. Long term, we expect demographic trends (including the growth of prime age groups for rentals and immigration and population movement to the southeast and southwest) will continue to build apartment rental demand for our markets.

We continue to develop improved products, operating systems and procedures that we believe enable us to capture more revenues. The continued benefit of ancillary services (such as our cable saver and deposit saver programs), improved collections and utility reimbursements enable us to capture increased revenue dollars. We also actively work on improving processes and products to reduce expenses, such as new web-sites and internet access for our residents that enable them to transact their business with us more simply and effectively.

Liquidity and Capital Resources

Net cash flow provided by operating activities increased to $168.3 million for the nine months ended September 30, 2013 from $156.9 million for the nine months ended September 30, 2012. This increase is mainly a result of cash inflows from property operations resulting from a $45.5 million increase in property revenues for the nine months ended September 30, 2013 from the nine months ended September 30, 2012, which was partially offset by a $14.3 million increase in property operating expenses, excluding depreciation and amortization and other incremental operating expenses, in total over the same period. The change is also due to the timing of payments of operating liabilities.

Net cash used in investing activities was approximately $111.0 million during the nine months ended September 30, 2013 compared to $310.6 million during the nine months ended September 30, 2012. During the nine months ended September 30, 2013, we had $89.9 million in cash outflows for property acquisitions. We had $314.9 million in cash outflows for property acquisitions for the nine months ended September 30, 2012. We also had cash outflows of $35.5 million related to normal capital expenditures for the nine months ended September 30, 2013 compared to $36.6 million for the nine months ended September 30, 2012. We also had cash outflows of $26.1 million related to development activities during the nine months ended September 30, 2013 compared to approximately $54.2 million for the nine months ended September 30, 2012. In addition to acquisition costs and development costs, we had outflows of $8.6 million for renovations to existing real estate assets during the nine months ended September 30, 2013, compared to $11.1 million for the nine months ended September 30, 2012. We received approximately $102.2 million related to the disposition of five properties during the nine months ended September 30, 2013 compared to receiving approximately $97.1 million related to the disposition of four properties during the nine months ended September 30, 2012. We received approximately $8.3 million during the nine months ended September 30, 2013 as distributions from our joint ventures compared to $11.9 million for the nine months ended September 30, 2012. During the nine months ended September 30, 2013, we had approximately $57.4 million in cash outflows related to funding of escrow for exchange acquisitions. We did not have any cash outflows related to funding of escrow for future acquisitions during the nine months ended September 30, 2012.

Net cash used in financing activities was approximately $114.8 million for the nine months ended September 30, 2013, compared to $109.8 million during the nine months ended September 30, 2012. During the nine months ended September 30, 2013, we received net proceeds of approximately $25.0 million primarily from the issuance of shares of common stock through MAA's ATM program and the optional cash purchase feature of our DRSPP. During the nine months ended September 30, 2012, we received proceeds of approximately $174.0 million from the issuance of shares of MAA common stock through the March 2, 2012 public offering and the optional cash purchase feature of our DRSPP. In connection with any issuance by MAA, MAALP issues OP units to MAA equal to the number of shares issued by MAA in exchange for the net proceeds received from these transactions. We used a portion of the proceeds to fund partially the pay down of our credit lines during the nine months ended September 30, 2012. MAA currently has 4,134,989 shares remaining under MAA's ATM program. We paid down approximately $168.3 million and $24.2 million of debt in the nine months ended September 30, 2013 and 2012, respectively, primarily due to cash outflows for the reduction in outstanding debt in the FNMA credit facility.

The weighted average interest rate at September 30, 2013 for the $1.1 billion of secured debt outstanding was 3.5%, compared to the weighted average interest rate of 3.9% on $1.2 billion of secured debt outstanding at September 30, 2012. The weighted average interest rate at September 30, 2013 for the $810 million of unsecured debt was 2.7% compared to the weighted average interest rate of 3.4% on $514 million of unsecured debt outstanding at September 30, 2012. We utilize both conventional and tax exempt debt to help finance our activities. Borrowings are made through individual property mortgages as well as company-wide credit facilities and bond placements. We utilize fixed rate borrowings, interest rate swaps and interest rate caps to manage our current and future interest rate risk. More details on our borrowings can be found in the schedules presented later in this section.

On March 1, 2012, we entered into a $150 million unsecured term loan agreement with a syndicate of banks led by KeyBank and J.P. Morgan at a rate of LIBOR plus a spread of 1.40% to 2.15% based on a leveraged based pricing grid and a maturity date of March 1, 2017. We had borrowings of $150 million outstanding under this agreement at September 30, 2013. In July 2012, we received an investment grade rating (Baa2) from Moody's pricing service, which reduced the variable rate to LIBOR plus a spread of 1.10% to 2.05% based on an investment grade ratings grid.

On August 31, 2012, we issued $175 million of Senior Unsecured Notes to be funded at three separate times. The notes were offered in a private placement with four tranches: $18 million at 3.15% maturing on November 30, 2017; $20 million at 3.61% maturing on November 30, 2019; $117 million at 4.17% maturing on November 30, 2022; and $20 million at 4.33% maturing on November 30, 2024. As of September 30, 2013, the full amount of the notes has been funded and is included in our Consolidated Balance Sheet.

On June 14, 2013, we entered into a $250 million term loan agreement with JPMorgan at a rate of LIBOR plus a spread of 1.30% on any outstanding borrowings. This agreement matures on June 14, 2014 although borrowings are only allowed to be drawn upon up until 60 days subsequent to the closing of the merger with Colonial. We had no borrowings under this agreement at September 30, 2013.

Approximately 24% of our outstanding obligations at September 30, 2013 were borrowed through credit facilities with/or credit enhanced by FNMA, also referred to as the FNMA Facilities. The FNMA Facilities have a combined line limit of approximately $799.9 million, of which $453.9 million was collateralized and available to borrow at September 30, 2013. We had total borrowings outstanding under the FNMA Facilities of $453.9 million at September 30, 2013. Various tranches of the FNMA Facilities mature from 2013 through 2033. The FNMA Facilities provide for both fixed and variable rate borrowings. The interest rate on the majority of the variable portion is based on the FNMA Discount Mortgage Backed Security, or DMBS, rate, which are credit-enhanced by FNMA and are typically sold every 90 days by Prudential Mortgage Capital at interest rates approximating three-month LIBOR, less a spread that has averaged 0.17% over the life of the FNMA Facilities, plus a credit enhancement fee of 0.49% to 0.67%.

Approximately 11% of our outstanding obligations at September 30, 2013 were borrowed through a facility with/or credit enhanced by Freddie Mac, also referred to as the Freddie Mac Facility. The Freddie Mac Facility has a total line limit of $200.0 million, of which $198.2 million was collateralized and available to borrow at September 30, 2013. We had total borrowings outstanding under the Freddie Mac Facility of approximately $198.2 million at September 30, 2013. The Freddie Mac Facility matures in 2014. The interest rate on the Freddie Mac Facility renews every 30 or 90 days and is based on the Freddie Mac Reference Bill Rate on the date of renewal, which has historically approximated the equivalent one month or three month LIBOR, plus a credit enhancement fee of 0.65%. The Freddie Mac Reference Bill rate has traded consistently below LIBOR, and the historical average spread is 0.30% below LIBOR.

We also maintain a $500 million unsecured credit facility with nine banks led by KeyBank, which bears interest at one-month LIBOR plus a spread of 1.05% to 1.85% based on an investment pricing grid. This credit facility expires in November 2017 with a one year extension option. At September 30, 2013, we had $498.6 million available to be borrowed under this credit facility with $350 million borrowed. Approximately $1.4 million of this credit facility is used to support letters of credit.

Each of our credit facilities is subject to various covenants and conditions on usage, and the secured facilities are subject to periodic re-evaluation of collateral. If we were to fail to satisfy a condition to borrowing, the available credit under one or more of the facilities could not be drawn, which could adversely affect our liquidity. In the event of a reduction in real estate values, the amount of available credit could be reduced. Moreover, if we were to fail to make a payment or violate a covenant under a credit facility, one or more of our lenders could declare a default after applicable cure periods, accelerate the due date for repayment of all amounts outstanding and/or foreclose on properties securing such facilities. A default on an obligation to repay outstanding debt could also create a cross default on a separate piece of debt, whereby one or more of our lenders could accelerate the due date for repayment of all amounts outstanding and/or foreclose on properties securing the related facilities. Any such event could have a material adverse effect. We believe we were in compliance with these covenants and conditions on usage at September 30, 2013.

The following schedule details the line limits, availability, outstanding balances and contract maturities of our various borrowings as of September 30, 2013 (dollars in thousands):



	Line Limit		Amount Collateralized and/or Available		Amount Borrowed		Average Years to Contract Maturity
Fannie Mae Credit Facilities	$	799,938	$	453,938	$	453,938	6.1
Freddie Mac Credit Facilities	200,000		198,247		198,247		0.8
Other Secured Borrowings	398,017		398,017		398,017		5.4
Unsecured Credit Facility	500,000		498,637		350,000		3.9
Other Unsecured Borrowings	460,000		460,000		460,000		6.4
JPMorgan Term Loan	250,000		250,000		—		0.8
Total Debt	$	2,607,955	$	2,258,839	$	1,860,202	5.0

As of September 30, 2013, we had entered into designated interest rate swaps totaling a notional amount of $559.0 million. To date, these swaps have proven to be highly effective hedges. We also entered into interest rate cap agreements totaling a notional amount of approximately $224.6 million as of September 30, 2013. Five major banks provide approximately 96% of our derivative fair value, all of which have investment grade ratings from Moody’s and Standard & Poor's.

The following schedule outlines our variable versus fixed rate debt, including the impact of interest rate swaps and caps, outstanding as of September 30, 2013 (dollars in thousands):



	Principal Balance		Average Years to Rate Maturity	Effective Rate
SECURED DEBT
Conventional - Fixed Rate or Swapped	$	691,817	3.6	4.9	%
Conventional - Variable Rate - Capped^{(1) (2)}	213,136		2.4	0.9	%
Tax-free – Variable Rate - Capped ⁽¹⁾	89,217		2.9	0.9	%
Total Fixed or Hedged Rate Maturity	$	994,170	3.3	3.7	%
Conventional - Variable Rate	56,032		0.2	0.7	%
Total Secured Rate Maturity	$	1,050,202	3.1	3.5	%
UNSECURED DEBT
Fixed Rate or Swapped	$	460,000	6.4	3.8	%
Variable Rate	350,000		0.1	1.3	%
Total Unsecured Rate Maturity	$	810,000	3.7	2.7	%
TOTAL DEBT RATE MATURITY	$	1,860,202	3.4	3.2	%
TOTAL FIXED OR HEDGED DEBT RATE MATURITY	$	1,454,170	4.3	3.7	%


(1)	The effective rate represents the average rate on the underlying variable debt unless the cap rates are reached, which average 4.6% of LIBOR for conventional caps and 5.6% of SIFMA for tax-free caps.


(2)	Includes a $15.2 million mortgage with an embedded cap at a 7% all-in interest rate.

The following schedule outlines the contractual maturity dates of our total borrowings outstanding as of September 30, 2013 (in thousands):



	Credit Facility Amount Borrowed
Maturity	Fannie Mae Secured		Freddie Mac Secured		Key Bank Unsecured		Other Secured ⁽¹⁾		Other Unsecured		Total
2013	$	—	$	—	$	—	$	—	$	—	$	—
2014	17,936		198,247		—		34,460		—		250,643
2015	105,785		—		—		34,988		—		140,773
2016	80,000		—		—		15,200		—		95,200
2017	80,000		—		350,000		59,817		168,000		657,817
Thereafter	170,217		—		—		253,552		292,000		715,769
Total	$	453,938	$	198,247	$	350,000	$	398,017	$	460,000	$	1,860,202


(1)	Chart does not present the principal amortization of property mortgages with amortizing principal balances. The total outstanding balances for these mortgages are presented in the year of the contract's maturity. See cash obligation table below for debt maturity requirement by year including the amortization of these balances.

The following schedule outlines the interest rate maturities of our outstanding interest rate swap agreements and fixed rate debt along with our interest rate caps as of September 30, 2013 (dollars in thousands):



	Fixed		Interest		Total				Interest		Total
	Rate		Rate		Fixed Rate		Contract		Rate		Fixed or
	Debt		Swaps		Balances		Rate		Caps ⁽¹⁾		Hedged
2013	$	—	$	40,000	$	40,000	4.8	%	$	—	$	40,000
2014	34,460		144,000		178,460		5.1	%	59,494		237,954
2015	34,988		75,000		109,988		5.6

Interest Rate Derivative

Number of Instruments

Interest Rate Caps

Interest Rate Swaps ⁽¹⁾

Mid-America Apartments, L.P. 10-Q