Segment Information

As of September 30, 2018, the Company owned and operated 303 multifamily apartment communities in 17 different states from which it derived all significant sources of earnings and operating cash flows. The Company views each consolidated apartment community as an operating segment. The Company's chief operating decision maker, which is the Company’s Chief Executive Officer, evaluates performance and determines resource allocations of each of the apartment communities on a Same Store and Non-Same Store and Other basis, as well as an individual apartment community basis. This is consistent with the aggregation criteria under GAAP as each of the apartment communities generally has similar economic characteristics, facilities, services, and tenants. The following reflects the two reportable segments for the Company:


•	Same Store communities are communities that the Company has owned and have been stabilized for at least a full 12 months.


•	Non-Same Store and Other includes recent acquisitions, communities in development or lease-up, communities that have been identified for disposition and communities that have incurred a significant casualty loss. Also included in Non-Same Store and Other are non-multifamily activities.

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

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

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

Revenues and NOI for each reportable segment for the three and nine months ended September 30, 2018 and 2017 were as follows (in thousands):



	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Revenues:
Same Store
Rental revenues	$	337,441		$	330,137		$	1,002,401		$	983,863
Reimbursable property revenues	22,477			22,553			66,771			66,313
Other property revenues	3,133			3,145			9,229			9,586
Total Same Store revenues	$	363,051		$	355,835		$	1,078,401		$	1,059,762
Non-Same Store and Other
Rental revenues	$	32,255		$	27,047		$	89,509		$	79,543
Reimbursable property revenues	1,437			1,408			4,027			4,420
Other property revenues	365			260			1,261			2,524
Total Non-Same Store and Other revenues	$	34,057		$	28,715		$	94,797		$	86,487
Total rental and other property revenues	$	397,108		$	384,550		$	1,173,198		$	1,146,249
Net Operating Income:
Same Store NOI	$	224,290		$	220,152		$	673,840		$	661,809
Non-Same Store and Other NOI	18,078			15,219			51,484			48,019
Total NOI	242,368			235,371			725,324			709,828
Depreciation and amortization	(124,549		)	(117,928		)	(368,218		)	(374,285		)
Property management expenses	(11,303		)	(10,281		)	(35,579		)	(32,007		)
General and administrative expenses	(6,380		)	(8,361		)	(25,723		)	(30,735		)
Merger and integration expenses	(1,878		)	(4,130		)	(8,503		)	(14,498		)
Interest expense	(44,650		)	(39,940		)	(129,140		)	(115,005		)
(Loss) gain on sale of depreciable real estate assets	(23		)	58,844			(21		)	59,045
Gain (loss) on sale of non-depreciable real estate assets	959			(6		)	3,870			42
Other non-operating income	374			5,695			6,065			11,033
Income tax expense	(616		)	(641		)	(1,826		)	(1,910		)
Income from real estate joint venture	402			335			1,256			1,021
Net income attributable to noncontrolling interests	(1,913		)	(4,249		)	(5,888		)	(7,600		)
Dividends to MAA Series I preferred shareholders	(922		)	(922		)	(2,766		)	(2,766		)
Net income available for MAA common shareholders	$	51,869		$	113,787		$	158,851		$	202,163

Assets for each reportable segment as of September 30, 2018 and December 31, 2017 were as follows (in thousands):



	September 30, 2018		December 31, 2017
Assets:
Same Store	$	9,666,155	$	9,864,321
Non-Same Store and Other	1,573,962		1,427,778
Corporate assets	178,870		199,820
Total assets	$	11,418,987	$	11,491,919