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

The following discussion analyzes the financial condition and results of operations of both MAA and the Operating Partnership, of which MAA is the sole general partner and in which MAA owned a 97.3% interest as of December 31, 2022. MAA conducts all of its business through the Operating Partnership and its various subsidiaries. This discussion should be read in conjunction with the consolidated financial statements and notes thereto included in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results, performance or achievements may differ materially from those expressed or implied by such forward-looking statements as a result of many factors, including, but not limited to, those under the heading “Risk Factors” in this Annual Report on Form 10-K.

MAA, an S&P 500 company, is a multifamily-focused, self-administered and self-managed real estate investment trust, or REIT. We own, operate, acquire and selectively develop apartment communities primarily located in the Southeast, Southwest and Mid-Atlantic regions of the United States. As of December 31, 2022, we owned and operated 290 apartment communities (which does not include development properties under construction) through the Operating Partnership and its subsidiaries, and had an ownership interest in one apartment community through an unconsolidated real estate joint venture. In addition, as of December 31, 2022, we had six development communities under construction, and 34 of our apartment communities included retail components. Our apartment communities, including development communities under construction, were located across 16 states and the District of Columbia as of December 31, 2022.

We report in two segments, Same Store and Non-Same Store and Other. Our Same Store segment represents those apartment communities that have been owned and stabilized for at least 12 months as of the first day of the calendar year. Our Non-Same Store and Other segment includes recently acquired communities, communities being developed or in lease-up, communities identified for disposition, communities that have incurred a significant casualty loss and stabilized communities that do not meet the requirements to be Same Store communities. Also included in our Non-Same Store and Other segment are non-multifamily activities and storm related expenses related to hurricanes. Additional information regarding the composition of our segments is included in Note 13 to the consolidated financial statements included in this Annual Report on Form 10-K.

Overview

For the year ended December 31, 2022, net income available for MAA common shareholders was $633.7 million as compared to $530.1 million for the year ended December 31, 2021. Results for the year ended December 31, 2022 included $215.6 million of gain related to the sale of real estate assets and $29.9 million in net casualty gain primarily due to winter storm Uri, partially offset by $35.8 million of non-cash loss, net of tax, from investments and $21.1 million of non-cash loss related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares. Results for the year ended December 31, 2021 included $221.2 million of gain related to the sale of real estate assets and $40.9 million of non-cash gain, net of tax, from investments. Revenues for the year ended December 31, 2022 increased 13.6% as compared to the year ended December 31, 2021, driven by a 13.5% increase in our Same Store segment. Property operating expenses, excluding depreciation and amortization, for the year ended December 31, 2022 increased by 7.8% as compared to the year ended December 31, 2021, driven by a 7.6% increase in our Same Store segment. The primary drivers of these changes are discussed in the “Results of Operations” section.

Trends

During the year ended December 31, 2022, revenue growth for our Same Store segment continued to be primarily driven by growth in average effective rent per unit. The average effective rent per unit for our Same Store segment continued to increase from the prior year, up 14.6% for the year ended December 31, 2022 as compared to the year ended December 31, 2021. Average effective rent per unit represents the average of gross rent amounts, after the effect of leasing concessions, for occupied apartment units plus prevalent market rates asked for unoccupied apartment units, divided by the total number of units. Leasing concessions represent discounts to the current market rate. We believe average effective rent per unit is a helpful measurement in evaluating average pricing; however, it does not represent actual rental revenue collected per unit.

For the year ended December 31, 2022, average physical occupancy for our Same Store segment was 95.7%, as compared to 96.1% for the year ended December 31, 2021. Average physical occupancy is a measurement of the total number of our apartment units that are occupied by residents, and it represents the average of the daily physical occupancy for the period.

An important part of our portfolio strategy is to maintain diversity of markets, submarkets, product types and price points in the Southeast, Southwest and Mid-Atlantic regions of the U.S. This diversity tends to mitigate exposure to economic issues in any one geographic market or area. We believe that a well-balanced portfolio, including both urban and suburban locations, with a broad range of monthly rent price points, will perform well in economic up cycles as well as better weather economic down cycles. Through our investment in 39 defined markets, we are diversified across markets, urban and suburban submarkets, and a variety of product types and monthly rent price points.

Though demand for apartments moderated during the second half of 2022, we were able to maintain strong rent growth. We believe demand for apartments is primarily driven by general economic conditions in our markets and is particularly correlated to job

growth, population growth, household formation and in-migration. While our rent growth and rent collection trends during the year ended December 31, 2022 were strong, we continue to monitor pressures surrounding inflation trends, general economic conditions and housing supply. A worsening of the current environment could contribute to uncertain rent collections going forward and suppress demand for apartments and could drive lower rent growth on new leases and renewals than what we achieved during the year ended December 31, 2022. Current elevated supply levels could further affect rent growth for our portfolio, though we expect the demand side to continue to be more impactful over the long term. Supply chain and inflationary pressures have driven higher operating expenses during the year ended December 31, 2022, particularly in personnel, repairs and maintenance and real estate taxes, and this trend may continue going forward.

Access to the financial markets remains available for high credit rated borrowers. However, a prolonged disruption of the markets or a decline in credit and financing conditions could negatively affect our ability to access capital necessary to fund our operations or refinance maturing debt in the future. Additionally, rising interest rates could negatively impact our borrowing costs for any variable rate borrowings or refinancing activity.

Results of Operations

For the year ended December 31, 2022, we achieved net income available for MAA common shareholders of $633.7 million, a 19.6% increase as compared to the year ended December 31, 2021, and total revenue growth of $241.8 million, representing a 13.6% increase in property revenues as compared to the year ended December 31, 2021. The following discussion describes the primary drivers of the increase in net income available for MAA common shareholders for the year ended December 31, 2022 as compared to the year ended December 31, 2021. A discussion of the results of operations for the year ended December 31, 2021 as compared to the year ended December 31, 2020 is found in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 17, 2022, which is available free of charge on the SEC’s website at https://www.sec.gov and on our website at https://www.maac.com, on the “For Investors” page under “Filings and Financials—Annual Reports.”

Property Revenues

The following table reflects our property revenues by segment for the year ended December 31, 2022 (dollars in thousands):

The increase in rental revenues for our Same Store segment for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was the primary driver of total property revenue growth. The Same Store segment generated a 13.5% increase in revenues for the year ended December 31, 2022, primarily the result of average effective rent per unit growth of 14.6% as compared to the year ended December 31, 2021, partially offset by lower average physical occupancy. The increase in property revenues from the Non-Same Store and Other segment for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was primarily the result of increased revenues from recently completed development communities and acquired communities, partially offset by decreased revenues from recently disposed communities.

Property Operating Expenses

Property operating expenses include costs for property personnel, building repairs and maintenance, real estate taxes and insurance, utilities, landscaping and other operating expenses. The following table reflects our property operating expenses by segment for the year ended December 31, 2022 (dollars in thousands):

The increase in property operating expenses for our Same Store segment for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was primarily driven by increases in real estate tax expense of $15.0 million, personnel expense of $9.6 million, building repairs and maintenance of $9.2 million, utilities expense of $6.9 million, office operations expense of $4.3 million, and insurance expense of $3.1 million. The increase in property operating expenses from the Non-Same Store and Other segment for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was primarily the result of $1.8 million of storm-related expenses related to hurricanes and increased property operating expenses from recently completed development communities and acquired communities, partially offset by decreased property operating expenses from recently disposed communities.

Depreciation and Amortization

Depreciation and amortization expense for the year ended December 31, 2022 was $543.0 million, an increase of $9.6 million as compared to the year ended December 31, 2021. The increase was primarily driven by the recognition of depreciation expense associated with our recently completed development communities and capital spend activities made in the normal course of business during the year ended December 31, 2022, partially offset from decreased depreciation expense from recently disposed communities.

Other Income and Expenses

Property management expenses for the year ended December 31, 2022 were $65.5 million, an increase of $9.7 million as compared to the year ended December 31, 2021. General and administrative expenses for the year ended December 31, 2022 were $58.8 million, an increase of $5.9 million as compared to the year ended December 31, 2021.

Interest expense for the year ended December 31, 2022 was $154.7 million, a decrease of $2.1 million as compared to the year ended December 31, 2021. The decrease was primarily due to a decrease in our average outstanding debt balance during the year ended December 31, 2022 as compared to the year ended December 31, 2021.

For the year ended December 31, 2022, we disposed of four apartment communities, resulting in a gain on sale of depreciable real estate assets of $214.8 million. For the year ended December 31, 2021, we disposed of seven apartment communities, resulting in a gain on sale of depreciable real estate assets of $220.4 million. During the year ended December 31, 2022, we disposed of two land parcels resulting in a gain on sale of non-depreciable real estate assets of $0.8 million. During the year ended December 31, 2021, we disposed of five land parcels resulting in a gain on sale of non-depreciable real estate assets of $0.8 million.

Other non-operating expense (income) for the year ended December 31, 2022 was $42.7 million of expense, as compared to $33.9 million of income for the year ended December 31, 2021. The expense for the year ended December 31, 2022 was driven by $45.4 million of non-cash loss from investments, $21.1 million of non-cash loss related to the fair value adjustment of the embedded derivative in the MAA Series I preferred shares, partially offset by $29.9 million in net casualty gain primarily due to winter storm Uri. The income for the year ended December 31, 2021 was driven by $51.7 million of non-cash gain from investments, partially offset by $13.4 million in debt extinguishment costs and $4.6 million of non-cash loss related to the fair value adjustment of the embedded derivative.

Funds from Operations and Core Funds from Operations

Funds from operations, or FFO, a non-GAAP financial measure, represents net income available for MAA common shareholders (computed in accordance with the U.S. generally accepted accounting principles, or GAAP) excluding gains or losses on disposition of operating properties and asset impairment, plus depreciation and amortization of real estate assets, net income attributable to noncontrolling interests and adjustments for joint ventures. Because net income attributable to noncontrolling interests is added back, FFO, when used in this Annual Report on Form 10-K, represents FFO attributable to the Company.

FFO should not be considered as an alternative to net income available for MAA common shareholders or any other GAAP measurement, as an indicator of operating performance or as an alternative to cash flow from operating, investing and financing activities as a measure of liquidity. Management believes that FFO is helpful to investors in understanding our operating performance, primarily because its calculation excludes depreciation and amortization expense on real estate assets and gain on sale of depreciable 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. While our calculation of FFO is in accordance with the National Association of Real Estate Investment Trusts’, or NAREIT’s, definition, it may differ from the methodology for calculating FFO utilized by other REITs and, accordingly, may not be comparable to such other REITs.

Core FFO represents FFO as adjusted for items that are not considered part of our core business operations, such as adjustments related to the fair value of the embedded derivative in the MAA Series I preferred shares; gain or loss on sale of non-depreciable assets; gain or loss on investments, net of tax; casualty related (recoveries) charges, net; gain or loss on debt extinguishment; legal costs and settlements, net; COVID-19 related costs and mark-to-market debt adjustments. While our definition of Core FFO may be similar to others in the industry, our methodology for calculating Core FFO may differ from that utilized by other REITs and, accordingly, may not be comparable to such other REITs. Core FFO should not be considered as an alternative to net income available for MAA common shareholders, or any other GAAP measurement, 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 Core FFO is helpful in understanding our core operating performance between periods in that it removes certain items that by their nature are not comparable over periods and therefore tend to obscure actual operating performance from rental activities.

The following table presents a reconciliation of net income available for MAA common shareholders to FFO and Core FFO for the years ended December 31, 2022 and 2021, as we believe net income available for MAA common shareholders is the most directly comparable GAAP measure (dollars in thousands):

Year ended December 31,

Net income available for MAA common shareholders $ 633,748 $ 530,103

Depreciation and amortization of real estate assets 535,835 526,220

Gain on sale of depreciable real estate assets (214,762 ) (220,428 )

Net income attributable to noncontrolling interests 17,340 16,911

Loss on embedded derivative in preferred shares (1) 21,107 4,560

Gain on sale of non-depreciable real estate assets (809 ) (811 )

Loss (gain) on investments, net of tax (1)(2) 35,822 (40,875 )

Casualty related (recoveries) charges, net (3) (29,930 ) 1,524

Loss on debt extinguishment (1) 47 13,391

Legal costs and settlements, net (1) 8,535 (2,167 )

Mark-to-market debt adjustment (4) 77 270

(1)

Included in “Other non-operating expense (income)” in the Consolidated Statements of Operations.

(2)

For the years ended December 31, 2022 and 2021, loss (gain) on investments are presented net of tax benefit of $9.5 million and net of tax expense of $10.8 million, respectively.

(3)

During the year ended December 31, 2022, MAA incurred $5.8 million in casualty losses related to winter storm Elliot (primarily building repairs, landscaping and asset write-offs). During the year ended December 31, 2021, MAA incurred $26.0 million in casualty losses related to winter storm Uri. The majority of the storm costs are expected to be or have been reimbursed through insurance coverage. An insurance recovery was recognized in Other non-operating expense (income) in the amount of the recognized losses that MAA expects to recover. Additional costs related to the storms that are not expected to be recovered through insurance coverage, along with other unrelated casualty losses and recoveries, including the receipt of insurance proceeds that exceeded the recognized casualty losses from winter storm Uri, are reflected in Casualty related (recoveries) charges, net. For the year ended December 31, 2022, MAA recognized $29.0 million from the receipt of insurance proceeds that exceeded its casualty losses related to winter storm Uri. The adjustments are primarily included in “Other non-operating expense (income)” in the Consolidated Statements of Operations.

(4)

Included in “Interest expense” in the Consolidated Statements of Operations.

Core FFO for the year ended December 31, 2022 was $1.0 billion, an increase of $177.6 million as compared to the year ended December 31, 2021, primarily as a result of an increase in property revenues of $241.8 million, partially offset by increases in property operating expenses, excluding depreciation and amortization, of $52.5 million, property management expenses of $9.7 million and general and administrative expenses of $5.9 million.

Liquidity and Capital Resources

Overview

Our cash flows from operating, investing and financing activities, as well as general economic and market conditions, are the principal factors affecting our liquidity and capital resources.

We expect that our primary uses of cash will be to fund our ongoing operating needs, to fund our ongoing capital spending requirements, which relate primarily to our development, redevelopment and property repositioning activities, to repay maturing borrowings, to fund the future acquisition of assets and to pay shareholder dividends. We expect to meet our cash requirements through net cash flows from operating activities, existing unrestricted cash and cash equivalents, borrowings under our commercial paper program and our revolving credit facility, the future issuance of debt and equity and the future disposition of assets.

We historically have had positive net cash flows from operating activities. We believe that future net cash flows generated from operating activities, existing unrestricted cash and cash equivalents, borrowing capacity under our current commercial paper program and revolving credit facility, and our ability to issue debt and equity will provide sufficient liquidity to fund the cash requirements for our business over the next 12 months and the foreseeable future.

As of December 31, 2022, we had $1.3 billion of combined unrestricted cash and cash equivalents and available capacity under our revolving credit facility.

Cash Flows from Operating Activities

Net cash provided by operating activities was $1.1 billion for the year ended December 31, 2022 as compared to $895.0 million for the year ended December 31, 2021. The increase in operating cash flows was primarily driven by our operating performance, partially offset by the timing of cash payments.

Cash Flows from Investing Activities

Net cash used in investing activities was $405.2 million for the year ended December 31, 2022 as compared to $253.6 million for the year ended December 31, 2021. The primary drivers of the change were as follows (dollars in thousands):

The increase in cash outflows for purchases of real estate and other assets was driven by the nature of the real estate assets acquired during the year ended December 31, 2022 as compared to the year ended December 31, 2021. During the year ended December 31, 2022, we acquired two apartment communities and closed on the pre-purchase of a multifamily development community. During the year ended December 31, 2021, we closed on the pre-purchase of two multifamily development communities. The increase in cash outflows for capital improvements and other was primarily driven by increased capital spend relating to our property redevelopment and repositioning activities and recurring capital replacements, partially offset by decreased reconstruction-related capital expenditures relating to winter storm Uri during the year ended December 31, 2022 as compared to the year ended December 31, 2021. The decrease in cash outflows for development costs was driven by decreased development spend during the year ended December 31, 2022 as compared to the year ended December 31, 2021. The increase in cash outflows for contributions to affiliates was driven by investments in the technology-focused limited partnerships during the year ended December 31, 2022, while less limited partnership contributions were made during the year ended December 31, 2021. The increase in cash inflows from proceeds from real estate asset dispositions was driven by the nature and quality of the real estate assets sold during the year ended December 31, 2022 as compared to the year ended December 31, 2021. During the year ended December 31, 2022, we sold four apartment communities as compared to seven apartment communities during the year ended December 31, 2021. The increase in cash inflows from proceeds from insurance recoveries was driven by increased insurance reimbursements received for casualty claims related to winter storm Uri during the year ended December 31, 2022 as compared to the year ended December 31, 2021.

Cash Flows from Financing Activities

Net cash used in financing activities was $722.8 million for the year ended December 31, 2022 as compared to $546.4 million for the year ended December 31, 2021. The primary drivers of the change were as follows (dollars in thousands):

Acquisition of noncontrolling interests (43,070 ) — (43,070 )

The increase in cash inflows related to the net change in commercial paper resulted from the increase in net borrowings of $20.0 million on our commercial paper program during the year ended December 31, 2022 as compared to the decrease in net borrowings of $172.0 million on our commercial paper program during the year ended December 31, 2021. The decrease in cash inflows related to proceeds from notes payable primarily resulted from no issuance of unsecured senior notes during the year ended December 31, 2022 as compared to the issuance of $600.0 million of unsecured senior notes during the year ended December 31, 2021. The decrease in cash outflows from principal payments on notes payable primarily resulted from the retirement of $125.0 million of unsecured senior notes during the year ended December 31, 2022 as compared to the retirement of $222.0 million of senior unsecured private placement notes, $125.0 million of unsecured senior notes and $118.6 million of property mortgages during the year ended December 31, 2021. The increase in cash outflows from dividends paid on common shares primarily resulted from the increase in the dividend rate to $4.675 per share during the year ended December 31, 2022 as compared to the dividend rate of $4.10 per share

during the year ended December 31, 2021. The increase in cash outflows from the acquisition of noncontrolling interests resulted from the acquisition of the noncontrolling interest of a consolidated real estate entity for $43.1 million during the year ended December 31, 2022.

Debt

The following schedule reflects our outstanding debt as of December 31, 2022 (dollars in thousands):

Principal Balance Average Years to Rate Maturity Effective Rate

Unsecured debt

Variable rate commercial paper 20,000 0.1 4.7 %

Secured debt

Debt issuance costs (3,161 )

The following schedule presents the contractual maturity dates of our outstanding debt, net of debt issuance costs, discounts, premiums and fair market value adjustments as of December 31, 2022 (dollars in thousands):

(1)

There was $20.0 million outstanding under MAALP’s commercial paper program as of December 31, 2022. Under the terms of the program, MAALP may issue up to a maximum aggregate amount outstanding at any time of $625.0 million. For the year ended December 31, 2022, average daily borrowings outstanding under the commercial paper program were $34.9 million.

(2)

There were no borrowings outstanding under MAALP’s $1.25 billion unsecured revolving credit facility as of December 31, 2022.

The following schedule reflects the interest rate maturities of our outstanding fixed rate debt, net of debt issuance costs, discounts, premiums and fair market value adjustments as of December 31, 2022 (dollars in thousands):

Fixed Rate Debt Effective Rate

Unsecured Revolving Credit Facility & Commercial Paper

In July 2022, MAALP amended its unsecured revolving credit facility, increasing its borrowing capacity to $1.25 billion with an option to expand to $2.0 billion. The revolving credit facility bears interest at an adjusted Secured Overnight Financing Rate plus a spread of 0.70% to 1.40% based on an investment grade pricing grid. The revolving credit facility has a maturity date in October 2026 with an option to extend for two additional six-month periods. As of December 31, 2022,there was no outstanding balance under the revolving credit facility, while $4.3 million of capacity was used to support outstanding letters of credit.

MAALP has established an unsecured commercial paper program, whereby it can issue unsecured commercial paper notes with varying maturities not to exceed 397 days. In September 2022, MAALP amended its commercial paper program to increase the maximum aggregate principal amount of notes that may be outstanding from time to time under the program from $500.0 million to $625.0 million. As of December 31, 2022, there were $20.0 million of borrowings outstanding under the commercial paper program.

Unsecured Senior Notes

As of December 31, 2022, MAALP had $4.1 billion of publicly issued unsecured senior notes outstanding.

In September 2022, MAALP retired the remaining $125.0 million portion of its publicly issued unsecured senior notes due in December 2022.

Secured Property Mortgages

MAALP maintains secured property mortgages with various life insurance companies. As of December 31, 2022, MAALP had $367.2 million of secured property mortgages outstanding.

For more information regarding our debt capital resources, see Note 5 to the consolidated financial statements included in this Annual Report on Form 10-K.

Equity

As of December 31, 2022, MAA owned 115,480,336 OP Units, comprising a 97.3% limited partnership interest in MAALP,while the remaining 3,164,933 outstanding OP Units were held by limited partners of MAALP other than MAA. Holders of OP Units (other than MAA) may require us to redeem their OP Units from time to time, in which case we may, at our option, pay the redemption price either in cash (in an amount per OP Unit equal, in general, to the average closing price of MAA’s common stock on the NYSE over a specified period prior to the redemption date) or by delivering one share of MAA’s common stock (subject to adjustment under specified circumstances) for each OP Unit so redeemed. MAA has registered under the Securities Act the 3,164,933 shares of its common stock that, as of December 31, 2022, were issuable upon redemption of OP Units, in order for those shares to be sold freely in the public markets.

In August 2021, MAA entered into two 18-month forward sale agreements with respect to a total of 1.1 million shares of its common stock at an initial forward sale price of $190.56 per share, which is net of issuance costs. Under the forward sale agreements, the forward sale price is subject to adjustment on a daily basis based on a floating interest rate factor equal to a specified daily rate less a spread and will be decreased based on amounts related to dividends on MAA’s common stock during the term of the forward sale agreements. No shares had been settled under the forward sale agreements as of December 31, 2022. In January 2023, MAA settled its two forward sale agreements with respect to a total of 1.1 million shares at a forward price per share of $185.23, which is inclusive of adjustments made to reflect the then-current federal funds rate, the amount of dividends paid to holders of MAA common stock and commissions paid to sales agents, for net proceeds of $203.7 million. We intend to use these proceeds to fund our development and redevelopment activities, among other potential uses.

In November 2021, the Company entered into an equity distribution agreement to establish a new ATM program, replacing MAA’s previous ATM program and allowing MAA to sell shares of its common stock from time to time to or through its sales agents into the existing market at current market prices, and to enter into separate forward sales agreements to or through its forward purchasers. Under its current ATM program, MAA has the authority to issue up to an aggregate of 4.0 million shares of its common stock, at such times to be determined by MAA. MAA has no obligation to issue shares through the ATM program. During the years ended December 31, 2022 and 2021, MAA did not sell any shares of common stock under its ATM program. As of December 31, 2022, there were 4.0 million shares remaining under the current ATM program.

For more information regarding our equity capital resources, see Note 8 and Note 9 to the consolidated financial statements included in this Annual Report on Form 10-K.

Material Cash Requirements

The following table summarizes material cash requirements as of December 31, 2022 related to contractual obligations, which consist of principal and interest on our debt obligations and right-of-use lease liabilities (dollars in thousands):

(1)

Represents principal payments gross of debt issuance costs, discounts, premiums and fair market value adjustments of debt assumed.

(2)

Primarily comprised of a ground lease underlying one apartment community we own and the lease of our corporate headquarters.

As of December 31, 2022, we also had obligations, which are not reflected in the table above, to make additional capital contributions to five technology-focused limited partnerships in which we hold equity interests. The capital contributions may be called by the general partners at any time after giving appropriate notice. As of December 31, 2022, we had committed to make additional capital contributions totaling up to $45.2 million if and when called by the general partners of the limited partnerships.

We have other material cash requirements that do not represent contractual obligations, but we expect to incur in the ordinary course of our business.

As of December 31, 2022, we had six development communities under construction totaling 2,310 apartment units once complete. Total expected costs for the six development projects are $728.7 million, of which $291.7 million had been incurred through December 31, 2022. In addition, our property redevelopment and repositioning activities are ongoing, and we incur expenditures relating to recurring capital replacements, which typically include scheduled carpet replacement, new roofs, HVAC units, plumbing, concrete, masonry and other paving, pools and various exterior building improvements. For the year ending December 31, 2023, we expect that our total capital expenditures relating to our development activities, our property redevelopment and repositioning activities and recurring capital replacements will be in line with our total capital expenditures for the year ended December 31, 2022. We expect to have additional development projects in the future.

During the year ended December 31, 2022, we acquired two multifamily apartment communities for approximately $213 million, acquired four land parcels for future development for approximately $49 million, purchased the noncontrolling interest of a consolidated real estate entity for approximately $43 million and funded the pre-purchase of a multifamily community for approximately $10 million. These activities were primarily funded from the proceeds we received from the sale of four multifamily apartment communities in 2022.

We typically declare cash dividends on MAA’s common stock on a quarterly basis, subject to approval by MAA’s Board of Directors. We expect to pay quarterly dividends at an annual rate of $5.60 per share of MAA common stock during the year ending December 31, 2023. The timing and amount of future dividends will depend on actual cash flows from operations, our financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986 and other factors as MAA’s Board of Directors deems relevant. MAA’s Board of Directors may modify our dividend policy from time to time.

Inflation

Our resident leases at our apartment communities allow for adjustments in the rental rate at the time of renewal, which may enable us to seek rent increases. The majority of our leases are for one year or less. The short-term nature of these leases generally serves to reduce our risk to adverse effects of inflation on our revenue. During the year ended December 31, 2022, we experienced inflationary pressures that drove higher operating expenses, primarily in personnel, repairs and maintenance and real estate taxes.

Critical Accounting Estimates

A critical accounting estimate is one that is both important to our financial condition and results of operations and that involves some degree of uncertainty. The preceding discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements and the notes thereto, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make a number of estimates and assumptions that affect the reported amounts and disclosures in the 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 summarized below are most important to the portrayal of our financial condition and results of operations because they involve a significant level of estimation uncertainty and they have had, or are reasonably likely to have, a material impact on our financial condition or results of operations.

Acquisition of real estate assets

We account for our acquisitions of investments in real estate as asset acquisitions in accordance with Accounting Standards Codification Topic 805, Business Combinations, which requires the cost of the real estate acquired to be allocated to the individual acquired tangible assets, consisting of land, buildings and improvements and other, and identified intangible assets, consisting of the value of in-place leases and other contracts, on a relative fair value basis. In calculating the asset value of acquired tangible and intangible assets, management may use significant subjective inputs, including forecasted net operating income, or NOI, and market specific capitalization and discount rates. Management analyzes historical stabilized NOI to determine its estimate for forecasted NOI. Management estimates the market capitalization rate by analyzing the market capitalization rates for sold properties with comparable ages in similarly sized markets. Management allocates the purchase price of the asset acquisition based on the relative fair value of the individual components as a proportion of the total assets acquired.

Impairment of long-lived assets

We account for long-lived assets in accordance with the provisions of accounting standards for the impairment or disposal of long-lived assets. Management periodically evaluates long-lived assets, including investments in real estate, for indicators that would suggest that the carrying amount of the assets may not be recoverable. The judgments regarding the existence of such indicators are based on factors such as operating performance, market conditions and legal factors. Long-lived assets, such as real estate assets, equipment, right-of-use lease assets and purchased intangibles subject to amortization, are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, or an asset group. Management generally considers the individual assets of an apartment community to collectively represent an asset group. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated future undiscounted cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Management calculates the fair value of an asset by dividing estimated future annual cash flows by a market capitalization rate. No material impairment losses were recognized during the years ended December 31, 2022 and 2021.

Our impairment assessments may contain uncertainties because they require management to make assumptions and to apply judgment to estimate future undiscounted cash flows and the fair value of the assets. Key assumptions used in estimating future cash flows and the fair value of an asset include projecting an apartment community’s NOI, estimating asset useful lives, disposition dates and recurring capital expenditures, as well as selecting an appropriate market capitalization rate. Management considers its apartment communities’ historical stabilized NOI performance, local market economics and the business environment impacting our apartment communities as the basis in projecting forecasted NOI, which management believes is representative of future cash flows. Management estimates the market capitalization rate by analyzing the market capitalization rates for sold properties with comparable ages in similarly sized markets. These estimates are subjective and our ability to realize future cash flows and asset fair values is affected by factors such as ongoing maintenance and improvement of the assets, changes in economic conditions and changes in operating performance.

Valuation of embedded derivative

The redemption feature embedded in the MAA Series I preferred stock is reported as a derivative asset and is adjusted to its fair value at each reporting date, with a corresponding non-cash adjustment to the income statement. The derivative asset related to the redemption feature is valued using widely accepted valuation techniques, including a discounted cash flow analysis in which the perpetual value of the preferred shares is compared to the value of the preferred shares assuming the call option is exercised, with the value of the bifurcated call option as the difference between the two values. The analysis reflects the contractual terms of the redeemable preferred shares, which are redeemable at our option beginning on October 1, 2026 and at the redemption price of $50 per share. We use various significant inputs in the analysis, including trading data available on the preferred shares, estimated coupon yields on preferred stock instruments from REITs with similar credit ratings as MAA and treasury rates to determine the fair value of the bifurcated call option. As a result of the adjustments recorded to reflect the change in fair value of the derivative asset, the fair value of the embedded derivative asset decreased to $13.4 million as of December 31, 2022 as compared to $34.5 million as of December 31, 2021, a decrease in value of the asset of $21.1 million.

Arriving at the valuation of the embedded derivative requires a significant amount of subjective judgment by management, and the valuation of the embedded derivative is highly sensitive to changes in certain inputs in the analysis. For example, changes in the inputs of the trading data available on the preferred shares, estimated coupon yields on preferred stock instruments from REITs with similar credit ratings as MAA and treasury rates could cause the valuation of the embedded derivative to materially change from the recorded balance as of December 31, 2022. For instance, holding all other assumptions constant, a $1 decrease in the trading price of the preferred shares as of December 31, 2022 would result in a decrease in fair value of the embedded derivative asset of approximately $3 million.

Significant Accounting Policies

For more information regarding our significant accounting policies, including the accounting polices related to the critical accounting estimates discussed above as well as a brief description of recent accounting pronouncements that could have a material impact on our financial statements, see Note 1 to the consolidated financial statements included in this Annual Report on Form 10-K.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. Our primary market risk exposure is to changes in interest rates on our borrowings. As of December 31, 2022, 19.2% of our total market capitalization consisted of debt borrowings. Our interest rate risk objective is to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs. To achieve this objective, we manage our exposure to fluctuations in market interest rates for borrowings through the use of fixed rate debt instruments and from time to time interest rate swaps to effectively fix the interest rate on anticipated future debt transactions. We use our best efforts to have our debt instruments mature across multiple years, which we believe limits our exposure to interest rate changes in any one year. We do not enter into derivative instruments for trading or other speculative purposes. As of December 31, 2022, 99.5% of our outstanding debt was subject to fixed rates. We regularly review interest rate exposure on outstanding borrowings in an effort to minimize the risk of interest rate fluctuations.

Item 8. Financial Statements and Supplementary Data.

The consolidated financial statements and related financial information required to be filed are set forth on pages F-1 to F-38 of this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Mid-America Apartment Communities, Inc.

(a) Evaluation of Disclosure Controls and Procedures

MAA is required to maintain disclosure controls and procedures, within the meaning of Exchange Act Rules 13a-15 and 15d-15. MAA’s management, with the participation of MAA’s Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of MAA’s disclosure controls and procedures as of December 31, 2022. Based on that evaluation, MAA’s Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of December 31, 2022 to ensure that information required to be disclosed by MAA in its Exchange Act filings is accurately recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to MAA’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Management’s Report on Internal Control over Financial Reporting

MAA’s management is responsible for establishing and maintaining adequate internal control over financial reporting within the meaning of Exchange Act Rules 13a-15 and 15d-15. MAA’s management, with the participation of MAA’s Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of MAA’s internal control over financial reporting as of December 31, 2022 based on the framework specified in Internal Control - Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such evaluation, MAA’s management concluded that MAA’s internal control over financial reporting was effective as of December 31, 2022.

Ernst & Young LLP, the independent registered public accounting firm that has audited the consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on MAA’s internal control over financial reporting, which is included in this Annual Report on Form 10-K.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial statement preparation and presentation.

There was no change to MAA’s internal control over financial reporting, within the meaning of Exchange Act Rules 13a-15 and 15d-15, that occurred during the quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, MAA’s internal control over financial reporting.

Mid-America Apartments, L.P.

(a) Evaluation of Disclosure Controls and Procedures

The Operating Partnership is required to maintain disclosure controls and procedures, within the meaning of Exchange Act Rules 13a-15 and 15d-15. Management of the Operating Partnership, with the participation of the Chief Executive Officer and Chief Financial Officer of MAA, as the general partner of the Operating Partnership, carried out an evaluation of the effectiveness of the Operating Partnership’s disclosure controls and procedures as of December 31, 2022. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of MAA, as the general partner of the Operating Partnership, concluded that the disclosure controls and procedures were effective as of December 31, 2022 to ensure that information required to be disclosed by the Operating Partnership in its in Exchange Act filings is accurately recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Operating Partnership’s management, including the Chief Executive Officer and Chief Financial Officer of MAA, as the general partner of the Operating Partnership, as appropriate to allow timely decisions regarding required disclosure.

(b) Management’s Report on Internal Control over Financial Reporting

Management of the Operating Partnership is responsible for establishing and maintaining adequate internal control over financial reporting within the meaning of Exchange Act Rule 13a-15 and 15d-15. Management of the Operating Partnership, with the participation of the Chief Executive Officer and Chief Financial Officer of MAA, as the general partner of the Operating Partnership, conducted an evaluation of the effectiveness of the Operating Partnership’s internal control over financial reporting as of December 31, 2022 based on the framework specified in Internal Control - Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such evaluation, management of the Operating Partnership has concluded that the Operating Partnership’s internal control over financial reporting was effective as of December 31, 2022. An attestation report of the independent registered public accounting firm of the Operating Partnership will not be required as long as the Operating Partnership is a non-accelerated filer.

There was no change to the Operating Partnership’s internal control over financial reporting, within the meaning of Exchange Act Rules 13a-15 and 15d-15, that occurred during the quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

Item 9B. Other Information.

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information contained in MAA’s 2023 Proxy Statement in the sections entitled “Current Board Composition”, “Director Nominees for Election” and “Executive Officers of the Registrant” is incorporated herein by reference in response to this Item 10.

Our Board of Directors has adopted a Code of Conduct applicable to all officers, directors and employees, including the CEO, CFO and principal accounting officer, which can be found on our website at https://www.maac.com, on the “For Investors” page in the “Corporate Documents” section under “Overview—Corporate Governance”. We will provide a copy of this document to any person, without charge, upon request, by writing to the Legal Department at MAA, 6815 Poplar Avenue, Suite 500, Germantown, Tennessee 38138. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the Code of Conduct by posting such information on our website at the address and the locations specified above. Reference to our website does not constitute incorporation by reference of the information contained on the site and should not be considered part of this Annual Report on Form 10-K.

Item 11. Executive Compensation.

The information contained in MAA’s 2023 Proxy Statement in the sections entitled “Executive Compensation Tables”, “Director Compensation Table”, “Compensation Committee Interlocks and Insider Participation”, “Compensation Committee Report” and “Compensation Discussion and Analysis” is incorporated herein by reference in response to this Item 11.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information contained in MAA’s 2023 Proxy Statement in the sections entitled “Security Ownership of Management”, “Security Ownership of Certain Beneficial Owners” and “Securities Authorized for Issuance Under Equity Compensation Plans” is incorporated herein by reference in response to this Item 12.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information contained in MAA’s 2023 Proxy Statement in the sections entitled “Certain Relationships and Related Transactions” and “Indebtedness of Management” is incorporated herein by reference in response to this Item 13.

Item 14. Principal Accountant Fees and Services.

The information contained in MAA’s 2023 Proxy Statement in the section entitled “Audit and Non-Audit Fees” is incorporated herein by reference in response to this Item 14.

PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a)

The following documents are filed as part of this Annual Report on Form 10-K:

1. Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42) F-1

Financial Statements of Mid-America Apartment Communities, Inc.:

Consolidated Balance Sheets as of December 31, 2022 and 2021 F-4

Financial Statements of Mid-America Apartments, L.P.:

Consolidated Balance Sheets as of December 31, 2022 and 2021 F-9

ExhibitNumber Exhibit Description

21.1 List of Subsidiaries.

† Management contract or compensatory plan or arrangement.

* This certification is being furnished solely to accompany this Annual Report on Form 10-K pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and is not to be incorporated by reference into any filing of MAA or MAALP, whether made before or after the date hereof, regardless of any general incorporation language in such filings.

(b)

Exhibits: See Item 15(a)(3) above.

(c)

Financial Statement Schedule: See Item 15(a)(2) above.

Item 16. Form 10-K Summary.

None.

SIGNATURES

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

MID-AMERICA APARTMENT COMMUNITIES, INC.

Date: February 14, 2023 /s/ H. Eric Bolton, Jr.

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

MID-AMERICA APARTMENT COMMUNITIES, INC.

Date: February 14, 2023 /s/ H. Eric Bolton, Jr.

Date: February 14, 2023 /s/ Albert M. Campbell, III

Date: February 14, 2023 /s/ A. Clay Holder

Date: February 14, 2023 /s/ Alan B. Graf, Jr.

Alan B. Graf, Jr.Director

Date: February 14, 2023 /s/ Edith Kelly-Green

Edith Kelly-GreenDirector

Date: February 14, 2023 /s/ Toni Jennings

Toni JenningsDirector

Date: February 14, 2023 /s/ James K. Lowder

James K. LowderDirector

Date: February 14, 2023 /s/ Thomas H. Lowder

Thomas H. LowderDirector

Date: February 14, 2023 /s/ Claude B. Nielsen

Claude B. NielsenDirector

Date: February 14, 2023 /s/ Philip W. Norwood

Philip W. NorwoodDirector

Date: February 14, 2023 /s/ W. Reid Sanders

W. Reid SandersDirector

Date: February 14, 2023 /s/ Gary Shorb

Gary ShorbDirector

Date: February 14, 2023 /s/ David P. Stockert

David P. StockertDirector

SIGNATURES

MID-AMERICA APARTMENTS, L.P.

a Tennessee Limited Partnership

By: Mid-America Apartment Communities, Inc., its general partner

Date: February 14, 2023 /s/ H. Eric Bolton, Jr.

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

MID-AMERICA APARTMENTS, L.P.

a Tennessee Limited Partnership

By: Mid-America Apartment Communities, Inc., its general partner

Date: February 14, 2023 /s/ H. Eric Bolton, Jr.

Date: February 14, 2023 /s/ Albert M. Campbell, III

Date: February 14, 2023 /s/ A. Clay Holder

Date: February 14, 2023 /s/ Alan B. Graf, Jr.

Alan B. Graf, Jr.Director

Date: February 14, 2023 /s/ Edith Kelly-Green

Edith Kelly-GreenDirector

Date: February 14, 2023 /s/ Toni Jennings

Toni JenningsDirector

Date: February 14, 2023 /s/ James K. Lowder

James K. LowderDirector

Date: February 14, 2023 /s/ Thomas H. Lowder

Thomas H. LowderDirector

Date: February 14, 2023 /s/ Claude B. Nielsen

Claude B. NielsenDirector

Date: February 14, 2023 /s/ Philip W. Norwood

Philip W. NorwoodDirector

Date: February 14, 2023 /s/ W. Reid Sanders

W. Reid SandersDirector

Date: February 14, 2023 /s/ Gary Shorb

Gary ShorbDirector

Date: February 14, 2023 /s/ David P. Stockert

David P. StockertDirector

Report of Independent Registered Public Accounting Firm

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

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Mid-America Apartment Communities, Inc. (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 14, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

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

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

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Embedded Derivative

/s/ Ernst & Young LLP

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

Memphis, Tennessee

February 14, 2023

F-1

Report of Independent Registered Public Accounting Firm

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

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Mid-America Apartments, L.P. (the Operating Partnership) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, changes in capital, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Operating Partnership at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

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

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

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

Critical Audit Matter

Valuation of Embedded Derivative

/s/ Ernst & Young LLP

We have served as the Operating Partnership’s auditor since 2012.

Memphis, Tennessee

February 14, 2023

F-2

Report of Independent Registered Public Accounting Firm

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

Opinion on Internal Control Over Financial Reporting

We have audited Mid-America Apartment Communities, Inc.’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Mid-America Apartment Communities, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated February 14, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

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

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

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

Definition and Limitations of Internal Control Over Financial Reporting

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

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

/s/ Ernst & Young LLP

Memphis, Tennessee

February 14, 2023

F-3

Mid-America Apartment Communities, Inc.

Consolidated Balance Sheets

December 31, 2022 and 2021

(Dollars in thousands, except per share data)

Assets

Real estate assets:

Development and capital improvements in progress 332,035 247,970

Investment in real estate joint venture 42,290 42,827

Liabilities and equity

Liabilities:

Shareholders’ equity:

Accumulated distributions in excess of net income (1,188,854 ) (1,255,807 )

Accumulated other comprehensive loss (10,052 ) (11,132 )

Noncontrolling interests - consolidated real estate entities 21,064 23,614

(1)

Number of shares issued and outstanding represents total shares of common stock regardless of classification on the Consolidated Balance Sheets. The number of shares classified as redeemable common stock on the Consolidated Balance Sheets as of December 31, 2022 and December 31, 2021 are 136,429 and 131,559, respectively.

See accompanying notes to consolidated financial statements.

F-4

Mid-America Apartment Communities, Inc.

Consolidated Statements of Operations

Years ended December 31, 2022, 2021 and 2020

(Dollars in thousands, except per share data)

Revenues:

Expenses:

Gain on sale of depreciable real estate assets (214,762 ) (220,428 ) (9 )

Gain on sale of non-depreciable real estate assets (809 ) (811 ) (1,024 )

Net income attributable to noncontrolling interests 17,340 16,911 9,053

Dividends to MAA Series I preferred shareholders 3,688 3,688 3,688

Earnings per common share - basic:

Net income available for MAA common shareholders $ 5.49 $ 4.62 $ 2.20

Earnings per common share - diluted:

Net income available for MAA common shareholders $ 5.48 $ 4.61 $ 2.19

See accompanying notes to consolidated financial statements.

F-5

Mid-America Apartment Communities, Inc.

Consolidated Statements of Comprehensive Income

Years ended December 31, 2022, 2021 and 2020

(Dollars in thousands)

Other comprehensive income:

See accompanying notes to consolidated financial statements.

F-6

Mid-America Apartment Communities, Inc.

Consolidated Statements of Equity

Years ended December 31, 2022, 2021 and 2020

(Dollars and shares in thousands)

Mid-America Apartment Communities, Inc. Shareholders Noncontrolling

Issuance and registration of common shares — — 157 1 (209 ) — — — — (208 ) 1,629

Shares repurchased and retired — — (55 ) — (5,657 ) — — — — (5,657 ) —

Exercise of stock options — — 1 — 71 — — — — 71 —

Shares issued in exchange for common units — — 10 — 502 — — (502 ) — — —

Redeemable stock fair market value adjustment — — — — — 363 — — — 363 (363 )

Amortization of unearned compensation — — — — 16,038 — — — — 16,038 —

Dividends on preferred stock — — — — — (3,688 ) — — — (3,688 ) —

Contributions from noncontrolling interest — — — — — — — — 3,601 3,601 —

Issuance and registration of common shares — — 147 2 (431 ) — — — — (429 ) 1,657

Shares repurchased and retired — — (64 ) — (9,043 ) — — — — (9,043 ) —

Exercise of stock options — — 19 — 1,478 — — — — 1,478 —

Shares issued in exchange for common units — — 851 8 43,284 — — (43,292 ) — — —

Amortization of unearned compensation — — — — 18,152 — — — — 18,152 —

Dividends on preferred stock — — — — — (3,688 ) — — — (3,688 ) —

Contributions from noncontrolling interest — — — — — — — — 13,766 13,766 —

Issuance and registration of common shares — — 169 1 (124 ) — — — — (123 ) 1,687

Shares repurchased and retired — — (71 ) — (14,043 ) — — — — (14,043 ) —

Exercise of stock options — — — — 28 — — — — 28 —

Shares issued in exchange for common units — — 41 — 2,118 — — (2,118 ) — — —

Shares reclassified to liabilities — — — — — — — — — — (2,148 )

Amortization of unearned compensation — — — — 20,143 — — — — 20,143 —

Dividends on preferred stock — — — — — (3,688 ) — — — (3,688 ) —

Contributions from noncontrolling interest — — — — — — — — 3,370 3,370 —

See accompanying notes to consolidated financial statements.

F-7

Mid-America Apartment Communities, Inc.

Consolidated Statements of Cash Flows

Years ended December 31, 2022, 2021 and 2020

(Dollars in thousands)

Cash flows from operating activities:

Gain on sale of depreciable real estate assets (214,762 ) (220,428 ) (9 )

Gain on sale of non-depreciable real estate assets (809 ) (811 ) (1,024 )

Loss (gain) on embedded derivative in preferred shares 21,107 4,560 (2,562 )

Amortization of debt issuance costs, discounts and premiums 6,064 5,652 4,960

Cash flows from investing activities:

Distributions from real estate joint venture 538 497 349

Cash flows from financing activities:

Proceeds from revolving credit facility — — 255,000

Repayments of revolving credit facility — — (255,000 )

Payment of deferred financing costs (5,516 ) (5,940 ) (4,217 )

Dividends paid on preferred shares (3,688 ) (3,688 ) (3,688 )

Acquisition of noncontrolling interests (43,070 ) — —

Net change in other financing activities (9,563 ) (6,142 ) (1,126 )

Reconciliation of cash, cash equivalents and restricted cash at period end:

Supplemental information:

Non-cash transactions:

Conversion of OP Units to shares of common stock $ 2,118 $ 43,292 $ 502

See accompanying notes to consolidated financial statements.

F-8

Mid-America Apartments, L.P.

Consolidated Balance Sheets

December 31, 2022 and 2021

(Dollars in thousands)

Assets

Real estate assets:

Development and capital improvements in progress 332,035 247,970

Investment in real estate joint venture 42,290 42,827

Liabilities and capital

Liabilities:

Due to general partner 19 19

Operating Partnership capital:

Accumulated other comprehensive loss (10,268 ) (11,382 )

Noncontrolling interests - consolidated real estate entities 21,064 23,614

(1)

Number of units outstanding represents total OP Units regardless of classification on the Consolidated Balance Sheets. The number of units classified as redeemable common units on the Consolidated Balance Sheets as of December 31, 2022 and December 31, 2021 are 136,429 and 131,559, respectively.

See accompanying notes to consolidated financial statements.

F-9

Mid-America Apartments, L.P.

Consolidated Statements of Operations

Years ended December 31, 2022, 2021 and 2020

(Dollars in thousands, except per unit data)

Revenues:

Expenses:

Gain on sale of depreciable real estate assets (214,762 ) (220,428 ) (9 )

Gain on sale of non-depreciable real estate assets (809 ) (811 ) (1,024 )

Net loss attributable to noncontrolling interests (293 ) — —

Distributions to MAALP preferred unitholders 3,688 3,688 3,688

Earnings per common unit - basic:

Net income available for MAALP common unitholders $ 5.49 $ 4.62 $ 2.20

Earnings per common unit - diluted:

Net income available for MAALP common unitholders $ 5.48 $ 4.61 $ 2.20

See accompanying notes to consolidated financial statements.

F-10

Mid-America Apartments, L.P.

Consolidated Statements of Comprehensive Income

Years ended December 31, 2022, 2021 and 2020

(Dollars in thousands)

Other comprehensive income:

Add: Comprehensive loss attributable to noncontrolling interests 293 — —

See accompanying notes to consolidated financial statements.

F-11

Mid-America Apartments, L.P.

Consolidated Statements of Changes in Capital

Years ended December 31, 2022, 2021 and 2020

(Dollars in thousands)

Mid-America Apartments, L.P. Unitholders Noncontrolling

Other comprehensive loss - derivative instruments — — — 1,088 — 1,088 —

Units repurchased and retired — (5,657 ) — — — (5,657 ) —

Exercise of unit options — 71 — — — 71 —

Redeemable units fair market value adjustment — 363 — — — 363 (363 )

Adjustment for limited partners’ capital at redemption value 63 (63 ) — — — — —

Amortization of unearned compensation — 16,038 — — — 16,038 —

Distributions to preferred unitholders — — (3,688 ) — — (3,688 ) —

Contribution from noncontrolling interest — — — — 3,601 3,601 —

Other comprehensive income - derivative instruments — — — 1,114 — 1,114 —

Units repurchased and retired — (9,043 ) — — — (9,043 ) —

Exercise of unit options — 1,478 — — — 1,478 —

Redeemable units fair market value adjustment — (13,131 ) — — — (13,131 ) 13,131

Amortization of unearned compensation — 18,152 — — — 18,152 —

Distributions to preferred unitholders — — (3,688 ) — — (3,688 ) —

Contribution from noncontrolling interest — — — — 13,766 13,766 —

Other comprehensive income - derivative instruments — — — 1,114 — 1,114 —

Units repurchased and retired — (14,043 ) — — — (14,043 ) —

Exercise of unit options — 28 — — — 28 —

Shares reclassified to liabilities — — — — — — (2,148 )

Redeemable units fair market value adjustment — 9,053 — — — 9,053 (9,053 )

Amortization of unearned compensation — 20,143 — — — 20,143 —

Distributions to preferred unitholders — — (3,688 ) — — (3,688 ) —

Acquisition of noncontrolling interest — (37,443 ) — — (5,627 ) (43,070 ) —

Contribution from noncontrolling interest — — — — 3,370 3,370 —

See accompanying notes to consolidated financial statements.

F-12

Mid-America Apartments, L.P.

Consolidated Statements of Cash Flows

Years ended December 31, 2022, 2021 and 2020

(Dollars in thousands)

Cash flows from operating activities:

Gain on sale of depreciable real estate assets (214,762 ) (220,428 ) (9 )

Gain on sale of non-depreciable real estate assets (809 ) (811 ) (1,024 )

Loss (gain) on embedded derivative in preferred shares 21,107 4,560 (2,562 )

Amortization of debt issuance costs, discounts and premiums 6,064 5,652 4,960

Cash flows from investing activities:

Distributions from real estate joint venture 538 497 349

Cash flows from financing activities:

Proceeds from revolving credit facility — — 255,000

Repayments of revolving credit facility — — (255,000 )

Payment of deferred financing costs (5,516 ) (5,940 ) (4,217 )

Distributions paid on preferred units (3,688 ) (3,688 ) (3,688 )

Acquisition of noncontrolling interests (43,070 ) — —

Net change in other financing activities (9,563 ) (6,142 ) (1,126 )

Reconciliation of cash, cash equivalents and restricted cash at period end:

Supplemental information:

Non-cash transactions:

See accompanying notes to consolidated financial statements.

F-13

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

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021 and 2020

Organization and Summary of Significant Accounting Policies

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

As of December 31, 2022, MAA owned 115,480,336 OP Units (or 97.3% of the total number of OP Units). MAA conducts substantially all of its business and holds substantially all of its assets, directly or indirectly, through the Operating Partnership, and by virtue of its ownership of the OP Units and being the Operating Partnership’s sole general partner, MAA has the ability to control all of the day-to-day operations of the Operating Partnership.

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

•

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

•

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

•

creates time and cost efficiencies through the preparation of one combined set of notes instead of two separate sets.

MAA, an S&P 500 company, is a multifamily-focused, self-administered and self-managed real estate investment trust, or REIT. Management operates MAA and the Operating Partnership as one business. The management of the Company is comprised of individuals who are officers of MAA and employees of the Operating Partnership. Management believes it is important to understand the few differences between MAA and the Operating Partnership in the context of how MAA and the Operating Partnership operate as a consolidated company. MAA and the Operating Partnership are structured as an umbrella partnership REIT, or UPREIT. MAA’s interest in the Operating Partnership entitles MAA to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to MAA’s percentage interest therein and entitles MAA to vote on substantially all matters requiring a vote of the partners. MAA’s only material asset is its ownership of limited partnership interests in the Operating Partnership (other than cash held by MAA from time to time); therefore, MAA’s primary function is acting as the sole general partner of the Operating Partnership, issuing public equity from time to time and guaranteeing certain debt of the Operating Partnership from time to time. The Operating Partnership holds, directly or indirectly, all of the Company’s real estate assets. Except for net proceeds from public equity issuances by MAA, which are contributed to the Operating Partnership in exchange for limited partnership interests, the Operating Partnership generates the capital required by the business through the Operating Partnership’s operations, direct or indirect incurrence of indebtedness and issuance of OP Units.

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

F-14

Organization of Mid-America Apartment Communities, Inc.

The Company owns, operates, acquires and selectively develops apartment communities primarily located in the Southeast, Southwest and Mid-Atlantic regions of the U.S. As of December 31, 2022, the Company owned and operated 290 apartment communities (which does not include development communities under construction) through the Operating Partnership and its subsidiaries and had an ownership interest in one apartment community through an unconsolidated real estate joint venture. As of December 31, 2022, the Company also had six development communities under construction, totaling 2,310 apartment units once complete. Total expected costs for the six development projects are $728.7 million, of which $291.7 million had been incurred through December 31, 2022. The Company expects to complete two of these developments in 2023, two in 2024 and two in 2025. As of December 31, 2022, 34 of the Company’s apartment communities included retail components. The Company’s apartment communities, including development communities under construction, were located across 16 states and the District of Columbia as of December 31, 2022.

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared by the Company’s management in accordance with U.S. generally accepted accounting principles, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC. The consolidated financial statements of MAA presented herein include the accounts of MAA, the Operating Partnership and all other subsidiaries in which MAA has a controlling financial interest. MAA owns, directly or indirectly, approximately 80% to 100% of all consolidated subsidiaries, including the Operating Partnership. In management’s opinion, all adjustments necessary for a fair presentation of the consolidated financial statements have been included, and all such adjustments were of a normal recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation.

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

Noncontrolling Interests

As of December 31, 2022, the Company had two types of noncontrolling interests with respect to its consolidated subsidiaries: (1) noncontrolling interests related to the common unitholders of its Operating Partnership; and (2) noncontrolling interests related to its consolidated real estate entities. The noncontrolling interests relating to the limited partnership interests in the Operating Partnership are owned by the holders of the Class A OP Units. MAA is the sole general partner of the Operating Partnership and holds all of the outstanding Class B OP Units. Net income (after allocations to preferred ownership interests) is allocated to MAA and the noncontrolling interests based on their respective ownership percentages of the Operating Partnership. Issuance of additional Class A OP Units or Class B OP Units changes the ownership percentage of both the noncontrolling interests and MAA. The issuance of Class B OP Units generally occurs when MAA issues common stock and the issuance proceeds are contributed to the Operating Partnership in exchange for Class B OP Units equal to the number of shares of MAA’s common stock issued. At each reporting period, the allocation between total MAA shareholders’ equity and noncontrolling interests is adjusted to account for the change in the respective percentage ownership of the underlying equity of the Operating Partnership. MAA’s Board of Directors established economic rights in respect to each Class A OP Unit that were equivalent to the economic rights in respect to each share of MAA common stock. See Note 9 for additional details.

The noncontrolling interests relating to the Company’s five consolidated real estate entities are owned by private real estate companies that are generally responsible for the development, construction and lease-up of the apartment communities that are owned through the consolidated real estate entities with a noncontrolling interest. The entities were determined to be VIE’s with the Company designated as the primary beneficiary. As a result, the accounts of the entities are consolidated by the Company. As of December 31, 2022, the consolidated assets of the Company’s consolidated real estate entities with a noncontrolling interest were $279.6 million, and consolidated liabilities were $14.5 million. As of December 31, 2021, the consolidated assets of the Company’s consolidated real estate entities with a noncontrolling interest were $252.8 million, and consolidated liabilities were $15.9 million. During the year ended December 31, 2022, the Company paid $43.1 million to acquire the noncontrolling interest of one consolidated real estate entity.

F-15

Real Estate Assets and Depreciation and Amortization

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

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

Development Costs

Development projects and the related carrying costs, including interest, property taxes, insurance and allocated direct development salary costs during the construction period, are capitalized and reported in the accompanying Consolidated Balance Sheets as “Development and capital improvements in progress” during the construction period. Interest is capitalized in accordance with accounting standards governing the capitalization of interest. Upon completion and certification for occupancy of individual buildings or floors within a development, amounts representing the completed portion of total estimated development costs for the project are transferred to “Buildings and improvements and other” as real estate held for investment. Capitalization of interest, property taxes, insurance and allocated direct development salary costs cease upon the transfer. The assets are depreciated over their estimated useful lives. Total capitalized costs (including capitalized interest, property taxes, insurance and salaries) during the years ended December 31, 2022, 2021 and 2020 were $14.4 million, $16.6 million and $12.7 million, respectively. Certain costs associated with the lease-up of development projects, including cost of model units, furnishings and signs, are capitalized and amortized over their respective estimated useful lives. All other costs relating to renting development projects are expensed as incurred.

Acquisition of Real Estate Assets

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

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

For residential leases, the fair value of the in-place leases and resident relationships is amortized over the remaining term of the resident leases. For retail and commercial leases, the fair value of in-place leases and tenant relationships is amortized over the remaining term of the leases. The net amount of these lease intangibles included in “Other assets” were negligible as of December 31, 2022 and 2021.

Impairment of Long-lived Assets

The Company accounts for long-lived assets in accordance with the provisions of accounting standards for the impairment or disposal of long-lived assets. Management periodically evaluates long-lived assets, including investments in real estate, for indicators that would suggest that the carrying amount of the assets may not be recoverable. The judgments regarding the existence of such indicators are based on factors such as operating performance, market conditions and legal factors. Long-lived assets, such as real estate assets, equipment and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated futureundiscounted cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are separately presented in the Consolidated Balance Sheets, are reported at the lower of the carrying amount or fair value less costs

F-16

to sell and are no longer depreciated. The assets and liabilities of a disposed group or a property classified as held for sale are presented separately in the appropriate asset and liability sections of the Consolidated Balance Sheets.

Undeveloped Land

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

Cash and Cash Equivalents

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

Restricted Cash

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

Investments in Unconsolidated Affiliates

The Company uses the equity method to account for its investments in a real estate joint venture and five technology-focused limited partnerships that each qualify as a VIE. Management determined the Company is not the primary beneficiary in any of these investments but does have the ability to exert significant influence over the operations and financial policies of the real estate joint venture and considers its investments in the limited partnerships to be more than minor. The Company’s investment in the real estate joint venture was $42.3 million and $42.8 million as of December 31, 2022 and 2021, respectively.

The Company accounts for its investments in the technology-focused limited partnerships on a three month lag due to the timing the limited partnerships’ financial information is made available to the Company. As of December 31, 2022 and 2021, the Company’s investments in the limited partnerships were $36.7 million and $79.4 million, respectively, and are included in “Other assets” in the accompanying Consolidated Balance Sheets, with any related gains and losses, including unrealized gains and losses, recognized in “Other non-operating expense (income)” in the accompanying Consolidated Statements of Operations. The decrease in the Company’s investments in the limited partnerships was driven by the recognition of unrealized losses, which were primarily a result of a decrease in the valuation of an underlying investment that recently became publicly traded and the distribution of publicly traded marketable securities. During the years ended December 31, 2022, 2021 and 2020, the Company recognized $35.4 million of expense, $51.7 million of income and $5.6 million of income, respectively, from its investments in the limited partnerships. As of December 31, 2022, the Company was committed to make additional capital contributions totaling $45.2 million if and when called by the general partners of the limited partnerships.

Other Assets

Other assets consist primarily of receivables, the value of derivative contracts, right-of-use lease assets, investments in technology-focused limited partnerships, marketable equity securities, deferred rental concessions, deferred financing costs relating to the revolving credit facility and commercial paper program and other prepaid expenses. Also included in other assets are the fair market value of in-place leases and resident relationships, net of accumulated amortization.

Marketable Equity Securities

During the year ended December 31, 2022, two of the technology-focused limited partnerships that are accounted for as investments in unconsolidated affiliates distributed publicly traded marketable equity securities to the Company and the other limited partners. The Company’s investment in marketable equity securities is measured at fair value based on the quoted share price of the securities and is included in “Other assets” in the accompanying Consolidated Balance Sheets, with any related gains and losses, including unrealized gains and losses, recognized in “Other non-operating expense (income)” in the accompanying Consolidated Statements of Operations. As of December 31, 2022, the Company’s investment in the marketable equity securities was $8.0 million. During the year ended December 31, 2022, the Company recognized $10.0million of expense from its investment in marketable equity securities.

F-17

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consist of accrued dividends payable, accrued real estate taxes, unearned income, right-of-use lease liabilities, accrued payroll, security deposits, accrued interest payable, general liability and workers compensation insurance, accrued construction in progress, net deferred tax liability (see Note 7), accrued loss contingencies (see Note 11), accounts payable and other accrued expenses. The following table reflects a detail of the Company’s “Accrued expenses and other liabilities” balances as of December 31, 2022 and 2021 (dollars in thousands):

General liability and workers compensation insurance 22,624 23,851

Loss Contingencies

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

The assessment of whether a loss is probable or a reasonable possibility, and whether the loss or range of loss is reasonably estimable, often involves a series of complex judgments about future events. Among the factors considered in this assessment, are the nature of existing legal proceedings and claims, the asserted or possible damages or loss contingency (if reasonably estimable), the progress of the matter, existing law and precedent, the opinions or views of legal counsel and other advisers, management’s experience in similar matters, the facts available to management at the time of assessment, and how the Company intends to respond, or has responded, to the proceeding or claim. Management’s assessment of these factors may change over time as individual proceedings or claims progress. For matters where management is not currently able to reasonably estimate a range of reasonably possible loss, the factors that have contributed to this determination include the following: (i) the damages sought are indeterminate; (ii) the proceedings are in the early stages; (iii) the matters involve novel or unsettled legal theories or a large or uncertain number of actual or potential cases or parties; and/or (iv) discussions with the parties in matters that are ultimately expected to be resolved through negotiation and settlement have not reached the point where management believes a reasonable estimate of loss, or range of loss, can be made. The Company believes that there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss or business impact, if any. See Note 11 for additional disclosures regarding loss contingencies.

Equity Forward Sale Agreements

MAA has entered into, and in the future may enter into, forward sale agreements for the sale and issuance of shares of its common stock, either through an underwritten public offering or through MAA’s at-the-market share offering program, or ATM program. When MAA enters into a forward sale agreement, the contract requires MAA to sell its shares to a counterparty at a predetermined price at a future date, which price is subject to adjustment during the term of the contract for MAA’s anticipated dividends as well as for a daily interest factor that varies with changes in the federal funds rate. MAA generally has the ability to determine the dates and method of settlement (i.e., gross physical settlement, net share settlement or cash settlement), subject to certain conditions and the right of the counterparty to accelerate settlement under certain circumstances. The Company accounts for the shares of MAA’s common stock reserved for issuance upon settlement as equity in accordance with ASC Topic 815-40, Contracts in Entity’s Own Equity, which permits equity classification when a contract is considered indexed to its own stock and the contract requires or permits the issuing entity to settle the contract in shares (either physically or net in shares).

The guidance in ASC Topic 815-40 establishes a two-step process for evaluating whether an equity-linked financial instrument is considered indexed to its own stock by evaluating the instrument’s contingent exercise provisions and the instrument’s settlement provisions. In evaluating the forward sale agreements MAA has entered into, management concluded that (i) none of the agreements’ exercise contingencies are based on observable markets or indices besides those related to the market of MAA’s common stock price; and (ii) none of the settlement provisions preclude the agreements from being indexed to MAA’s common stock.

F-18

Before the issuance of shares of MAA’s common stock, upon physical or net share settlement of the forward sale agreements, MAA expects the shares issuable upon settlement of the forward sale agreements will be reflected in its diluted earnings per share calculations using the treasury stock method. Under this method, the number of shares of common stock used in calculating diluted earnings per share is deemed to be increased by the excess, if any, of the number of shares of common stock that would be issued upon full physical settlement of the forward sale agreements over the number of shares of common stock that could be purchased by MAA in the open market (based on the average market price during the period) using the proceeds to be received upon full physical settlement (based on the adjusted forward sale price at the end of the reporting period). When MAA physically or net share settles a forward sale agreement, the delivery of shares of common stock would result in an increase in the number of weighted average common shares outstanding and dilution to basic earnings per share. See Note 8 for additional disclosures regarding equity forward sale agreements.

Revenue Recognition

The Company primarily leases multifamily residential apartments to residents under operating leases generally due on a monthly basis with terms of approximately one year or less. Rental revenues are recognized in accordance with ASC Topic 842, Leases, using a method that represents a straight-line basis over the term of the lease. In addition, in circumstances where a lease incentive is provided to residents, the incentive is recognized as a reduction of rental revenues on a straight-line basis over the reasonably assured lease term. Rental revenues represent approximately 94% of the Company’s total revenues and include gross rents charged less adjustments for concessions and bad debt. Approximately 5% of the Company’s total revenues represent non-lease reimbursable property revenues from its residents for utility reimbursements, which are generally recognized and due on a monthly basis as residents obtain control of the service over the term of the lease. The remaining 1% of the Company’s total revenues represents other non-lease property revenues primarily driven by nonrefundable fees and commissions which are recognized when earned.

In accordance with ASC Topic 842, rental revenues and non-lease reimbursable property revenues meet the criteria to be aggregated into a single lease component and are reported on a combined basis in the line item “Rental revenues,” as presented in the disaggregation of the Company’s revenues in Note 13.Other non-lease property revenues are accounted for in accordance with ASC Topic 606, Revenue from Contracts with Customers, which requires revenue recognized outside of the scope of ASC Topic 842 to be recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. Other non-lease property revenues are reported in the line item “Other property revenues”, as presented in the disaggregation of the Company’s revenues in Note 13.

Rental Costs

Costs associated with rental activities are expensed as incurred and include advertising expenses, which were $24.4 million, $23.9 million and $23.9 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Leases

The Company is the lessee under certain ground, office, equipment and other operational leases, all of which are accounted for as operating leases in accordance with ASC Topic 842. The Company recognizes a right-of-use asset for the right to use the underlying asset for all leases where the Company is the lessee with terms of more than twelve months, and a related lease liability for the obligation to make lease payments. Expenses related to leases determined to be operating leases are recognized on a straight-line basis. As of December 31, 2022 and 2021, right-of-use assets recorded within “Other assets” totaled $44.6 million and $47.0 million, respectively, and related lease liabilities recorded within “Accrued expenses and other liabilities” totaled $28.7 million and $30.3 million, respectively, in the Consolidated Balance Sheets. Lease expense recognized for the years ended December 31, 2022, 2021 and 2020 was immaterial to the Company. Cash paid for amounts included in the measurement of operating lease liabilities during the years ended December 31, 2022 and 2021 was also immaterial. See Note 11 for additional disclosures regarding leases.

Income Taxes

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

F-19

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

The Company recognizes liabilities for uncertain income tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more likely than not to be realized upon ultimate settlement. See Note 7 for additional disclosures regarding income taxes.

Fair Value Measurements

The Company applies the guidance in ASC Topic 820, Fair Value Measurements and Disclosures, to the valuation of real estate assets recorded at fair value, to its impairment valuation analysis of real estate assets and to its valuation and disclosure of the fair value of financial instruments, which primarily consists of marketable equity securities, indebtedness and derivative instruments. Fair value disclosures required under ASC Topic 820 as well as the Company’s derivative accounting policies are summarized in Note 6 utilizing the following hierarchy:

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

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

Level 3 - Unobservable inputs for the assets or liability.

Use of Estimates

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

F-20

Earnings per Common Share of MAA

Basic earnings per share is computed using the two-class method by dividing net income available to MAA common shareholders by the weighted average number of common shares outstanding during the period. All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common shareholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per share. Both the unvested restricted shares and other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis with diluted earnings per share being the more dilutive of the treasury stock or two-class methods. OP Units are included in dilutive earnings per share calculations when the units are dilutive to earnings per share.

For the years ended December 31, 2022, 2021 and 2020, MAA’s diluted earnings per share was computed using the treasury stock method as presented below (dollars and shares in thousands, except per share amounts):

Calculation of Earnings per common share - basic 2022 2021 2020

Net income attributable to noncontrolling interests (17,340 ) (16,911 ) (9,053 )

Unvested restricted shares (allocation of earnings) (438 ) (539 ) (338 )

Dividends to MAA Series I preferred shareholders (3,688 ) (3,688 ) (3,688 )

Earnings per common share - basic $ 5.49 $ 4.62 $ 2.20

Calculation of Earnings per common share - diluted

Dividends to MAA Series I preferred shareholders (3,688 ) (3,688 ) (3,688 )

Earnings per common share - diluted $ 5.48 $ 4.61 $ 2.19

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MAA US Equity

MAA · 10-K · period ended 2022-12-31

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

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibits and Financial Statement Schedules.

Item 16. Form 10-K Summary.

MAA US Equity☆

MAA · 10-K · period ended 2022-12-31

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

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibits and Financial Statement Schedules.

Item 16. Form 10-K Summary.

MAA US Equity