<PAGE>   1

================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                            -------------------------
                                    FORM 10-Q
          [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended September 30, 1999

                                       OR

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

                     For the transition period from     to
                  Commission file numbers 1-12080 and 0-28226

                            ------------------------

                              POST PROPERTIES, INC.
                           POST APARTMENT HOMES, L.P.
             (Exact name of registrant as specified in its charter)


             GEORGIA                                     58-1550675
             GEORGIA                                     58-2053632
  (State or other jurisdiction                        (I.R.S. Employer
of incorporation or organization)                    Identification No.)


           4401 NORTHSIDE PARKWAY, SUITE 800, ATLANTA, GEORGIA 30327
              (Address of principal executive offices -- zip code)

                                 (404) 846-5000
              (Registrant's telephone number, including area code)

         Indicate by check mark whether the registrants (1) have filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) have been subject to such
filing requirements for the past 90 days.

Post Properties, Inc.         Yes   [X]   No   [ ]
Post Apartment Homes, L.P.    Yes   [X]   No   [ ]

                            ------------------------

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

     38,775,629 shares of common stock outstanding as of November 10, 1999.
          43,969,054 common units outstanding as of November 10, 1999.


================================================================================
<PAGE>   2







                              POST PROPERTIES, INC.
                           POST APARTMENT HOMES, L.P.

                                      INDEX

<TABLE>
<CAPTION>
PART I   FINANCIAL INFORMATION                                                                           PAGE
                                                                                                         ----
<S>      <C>                                                                                             <C>
         ITEM 1    FINANCIAL STATEMENTS

         POST PROPERTIES, INC.
             Consolidated Balance Sheets as of September 30, 1999 and December 31, 1998....................1
             Consolidated Statements of Operations for the three and nine months ended
                September 30, 1999 and 1998................................................................2
             Consolidated Statement of Shareholders' Equity and Accumulated Earnings for the
                nine months ended September 30, 1999.......................................................3
             Consolidated Statements of Cash Flows for the nine months ended
                September 30, 1999 and 1998................................................................4
             Notes to Consolidated Financial Statements....................................................5

         POST APARTMENT HOMES, L.P.
             Consolidated Balance Sheets as of September 30, 1999 and December 31, 1998....................9
             Consolidated Statements of Operations for the three and nine months ended
                September 30, 1999 and 1998...............................................................10
             Consolidated Statement of Partners' Equity for the nine months ended
                September 30, 1999........................................................................11
             Consolidated Statements of Cash Flows for the nine months ended
                September 30, 1999 and 1998...............................................................12
             Notes to Consolidated Financial Statements ..................................................13

         ITEM 2    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                   OPERATIONS.............................................................................17

         ITEM 3    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.............................31

PART II  OTHER INFORMATION

         ITEM 1    LEGAL PROCEEDINGS......................................................................32
         ITEM 2    CHANGES IN SECURITIES AND USE OF PROCEEDS
         ITEM 3    DEFAULTS UPON SENIOR SECURITIES
         ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDER
         ITEM 5    OTHER INFORMATION
         ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K.......................................................33

         SIGNATURES.......................................................................................34
</TABLE>



<PAGE>   3


                              POST PROPERTIES, INC.
                           CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                   SEPTEMBER 30,       DECEMBER 31,
                                                                                       1999                1998
                                                                                   -------------       ------------
                                                                                    (UNAUDITED)
<S>                                                                                <C>                 <C>
ASSETS
   Real estate:
     Land ..................................................................        $   278,035         $   252,922
     Building and improvements .............................................          1,573,988           1,379,847
     Furniture, fixtures and equipment .....................................            135,568             108,233
     Construction in progress ..............................................            477,872             480,267
     Land held for future development ......................................             16,780              33,805
                                                                                    -----------         -----------
                                                                                      2,482,243           2,255,074
     Less: accumulated depreciation ........................................           (287,841)           (247,148)
                                                                                    -----------         -----------
     Real estate assets ....................................................          2,194,402           2,007,926
   Cash and cash equivalents ...............................................              6,365              21,154
   Restricted cash .........................................................              1,775               1,348
   Deferred charges, net ...................................................             21,348              18,686
   Other assets ............................................................             33,508              17,599
                                                                                    -----------         -----------
     Total assets ..........................................................        $ 2,257,398         $ 2,066,713
                                                                                    ===========         ===========


LIABILITIES AND SHAREHOLDERS' EQUITY
   Notes payable ...........................................................        $   893,400         $   800,008
   Accrued interest payable ................................................             10,971               7,609
   Dividends and distributions payable .....................................             31,097              25,115
   Accounts payable and accrued expenses ...................................             65,183              48,214
   Security deposits and prepaid rents .....................................              8,888               8,716
                                                                                    -----------         -----------
     Total liabilities .....................................................          1,009,539             889,662
                                                                                    -----------         -----------
   Minority interest of preferred unitholders in Operating Partnership .....             70,000                  --
   Minority interest of common unitholders in Operating Partnership ........            122,786             125,365
   Commitments and contingencies
   Shareholders' equity
     Preferred stock, $.01 par value, 20,000,000 authorized:
       8 1/2% Series A Cumulative Redeemable Shares, liquidation
       preference $50 per share, 1,000,000 shares issued and outstanding ...                 10                  10
       7 5/8% Series B Cumulative Redeemable Shares, liquidation
       preference $25 per share, 2,000,000 shares issued and
       outstanding .........................................................                 20                  20
       7 5/8% Series C Cumulative Redeemable Shares, liquidation
       preference $25 per share, 2,000,000 shares issued and
       outstanding .........................................................                 20                  20
     Common stock, $.01 par value, 100,000,000 authorized,
       38,604,557 and 38,051,734 shares issued and outstanding at
       September 30, 1999 and December 31, 1998, respectively ..............                386                 380
   Additional paid-in capital ..............................................          1,054,637           1,051,256
   Accumulated earnings ....................................................                 --                  --
                                                                                    -----------         -----------
     Total shareholders' equity ............................................          1,055,073           1,051,686
                                                                                    -----------         -----------
     Total liabilities and shareholders' equity ............................        $ 2,257,398         $ 2,066,713
                                                                                    ===========         ===========
</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements.



                                      -1-
<PAGE>   4



                              POST PROPERTIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                                        SEPTEMBER 30,                      SEPTEMBER 30,
                                                              ------------------------------      ------------------------------
                                                                   1999              1998             1999              1998
<S>                                                           <C>               <C>               <C>               <C>
REVENUE:
  Rental ...................................................  $     81,162      $     71,310      $    234,845      $    202,162
  Property management - third-party ........................           795               792             2,434             2,309
  Landscape services - third-party .........................         2,244             1,765             6,479             4,945
  Interest .................................................           194                83               564               387
  Other ....................................................         3,763             3,019            10,120             9,606
                                                              ------------      ------------      ------------      ------------
      Total revenue ........................................        88,158            76,969           254,442           219,409
                                                              ------------      ------------      ------------      ------------

EXPENSES:
  Property operating and maintenance expense
     (exclusive of depreciation and amortization)  .........        29,126            25,814            83,949            73,946
  Depreciation expense .....................................        15,126            11,965            42,121            34,246
  Property management expenses - third-party ...............           755               659             2,179             1,857
  Landscape services expenses - third-party ................         1,859             1,571             5,614             4,372
  Interest expense .........................................         8,707             7,795            24,075            23,488
  Amortization of deferred loan costs ......................           407               318             1,113               876
  General and administrative ...............................         1,343             1,869             5,251             5,701
  Minority interest in consolidated property partnerships ..           209               153               485               351
                                                              ------------      ------------      ------------      ------------
       Total expense .......................................        57,532            50,144           164,787           144,837
                                                              ------------      ------------      ------------      ------------
Income before net loss on sale of assets, loss on unused
  treasury locks, minority interest of unitholders in
  Operating Partnership and extraordinary item .............        30,626            26,825            89,655            74,572
Net loss on sale of assets .................................          (246)               --            (1,337)               --
Loss on unused treasury locks ..............................            --                --                --            (1,944)
Minority interest of preferred unitholders in
  Operating Partnership ....................................          (435)               --              (435)               --
Minority interest of common unitholders in
  Operating Partnership ....................................        (3,206)           (3,022)           (9,435)           (8,434)
                                                              ------------      ------------      ------------      ------------
Income before extraordinary item ...........................        26,739            23,803            78,448            64,194
Extraordinary item, net of minority interest of
  unitholders in Operating Partnership .....................            --                --              (458)               --
                                                              ------------      ------------      ------------      ------------
Net income .................................................        26,739            23,803            77,990            64,194
Dividends to preferred shareholders ........................        (2,969)           (2,969)           (8,907)           (8,504)
                                                              ------------      ------------      ------------      ------------
Net income available to common shareholders ................  $     23,770      $     20,834      $     69,083      $     55,690
                                                              ============      ============      ============      ============

EARNINGS PER COMMON SHARE - BASIC
  Income before extraordinary item (net of preferred
    dividend) ..............................................  $       0.62      $       0.58      $       1.81      $       1.62
  Extraordinary item .......................................            --                --             (0.01)               --
                                                              ------------      ------------      ------------      ------------
  Net income available to common shareholders ..............  $       0.62      $       0.58      $       1.80      $       1.62
                                                              ============      ============      ============      ============
Weighted average common shares outstanding .................    38,574,434        36,007,167        38,361,877        34,351,747
                                                              ============      ============      ============      ============

EARNINGS PER COMMON SHARE - DILUTED
  Income before extraordinary item (net of preferred
    dividend) ..............................................  $       0.61      $       0.57      $       1.79      $       1.60
  Extraordinary item .......................................            --                --             (0.01)               --
                                                              ------------      ------------      ------------      ------------
  Net income available to common shareholders ..............          0.61              0.57      $       1.78      $       1.60
                                                              ============      ============      ============      ============
  Weighted average common shares outstanding ...............    39,122,421        36,433,862        38,827,381        34,823,164
                                                              ============      ============      ============      ============
  Dividends declared .......................................  $       0.70      $       0.65      $       2.10      $       1.95
                                                              ============      ============      ============      ============
</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements.



                                      -2-
<PAGE>   5



                              POST PROPERTIES, INC.
               CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY AND
                              ACCUMULATED EARNINGS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)





<TABLE>
<CAPTION>
                                                        PREFERRED   COMMON         PAID-IN     ACCUMULATED
                                                         SHARES     SHARES         CAPITAL        EARNINGS        TOTAL
                                                        --------   ----------     ----------   -----------      ---------
<S>                                                     <C>        <C>            <C>          <C>              <C>
SHAREHOLDERS' EQUITY AND
  ACCUMULATED EARNINGS,
  DECEMBER 31, 1998............................         $     50   $      380     $1,051,256    $       --      $1,051,686
  Proceeds from Dividend Reinvestment and
   Employee Stock Purchase Plans...............               --            6         15,667            --         15,673
  Selling costs of redeemable preferred units..               --           --         (1,750)           --         (1,750)
  Adjustment for minority interest of common
   unitholders in Operating Partnership at
   dates of capital transactions...............               --           --          1,023            --          1,023
  Net income...................................               --           --             --        77,990         77,990
  Dividends to preferred shareholders..........               --           --             --        (8,907)        (8,907)
  Dividends to common shareholders.............               --           --        (11,559)      (69,083)       (80,642)
                                                        --------   ----------     ----------    ----------      ---------
SHAREHOLDERS' EQUITY AND
  ACCUMULATED EARNINGS,
  SEPTEMBER 30, 1999...........................         $     50   $      386      $1,054,637   $       --      $1,055,073
                                                        ========   ==========      ==========   ==========      ==========
</TABLE>



























       The accompanying notes are an integral part of these consolidated
                             financial statements.



                                      -3-
<PAGE>   6


                              POST PROPERTIES, INC
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                      NINE MONTHS ENDED
                                                                                                        SEPTEMBER 30,
                                                                                                  ------------------------
                                                                                                     1999           1998
                                                                                                  ---------      ---------
   <S>                                                                                            <C>            <C>
   CASH FLOWS FROM OPERATING ACTIVITIES
   Net income ...............................................................................     $  77,990      $  64,194
   Adjustments to reconcile net income to net cash provided by operating activities:
     Net loss on sale of assets .............................................................         1,337             --
     Loss on unused treasury locks ..........................................................            --          1,944
     Minority interest of preferred unitholders in Operating Partnership ....................           435             --
     Minority interest of common unitholders in Operating Partnership .......................         9,435          8,434
     Extraordinary item, net of minority interest of unitholders in Operating Partnership ...           458             --
     Depreciation ...........................................................................        42,121         34,246
     Amortization of deferred loan costs ....................................................         1,113            876
     Other ..................................................................................            --            168
   Changes in assets, (increase) decrease in:
     Restricted cash ........................................................................          (427)           453
     Other assets ...........................................................................       (15,909)         1,830
     Deferred charges .......................................................................        (3,657)        (5,325)
   Changes in liabilities, increase (decrease) in:
     Accrued interest payable ...............................................................         3,362          3,430
     Accounts payable and accrued expenses ..................................................         5,583         (9,271)
     Security deposits and prepaid rents ....................................................           172            722
                                                                                                  ---------      ---------
   Net cash provided by operating activities ................................................       122,013        101,701
                                                                                                  ---------      ---------
   CASH FLOWS FROM INVESTING ACTIVITIES
   Construction and acquisition of real estate assets, net of payables ......................      (194,459)      (193,062)
   Net proceeds from sale of assets .........................................................        10,731             --
   Capitalized interest .....................................................................       (14,710)       (11,123)
   Payment for unused treasury locks ........................................................            --         (1,944)
   Recurring capital expenditures ...........................................................        (7,283)        (4,952)
   Corporate additions and improvements .....................................................        (6,240)        (7,772)
   Non-recurring capital expenditures .......................................................        (1,553)        (1,098)
   Revenue generating capital expenditures ..................................................        (4,178)       (11,842)
                                                                                                  ---------      ---------
   Net cash used in investing activities ....................................................      (217,692)      (231,793)
                                                                                                  ---------      ---------
   CASH FLOWS FROM FINANCING ACTIVITIES
   Payment of financing costs ...............................................................        (1,495)            --
   Debt proceeds ............................................................................       169,000        111,227
   Proceeds from sale of notes ..............................................................            --        150,000
   Proceeds from issuance of preferred units ................................................        68,250             --
   Proceeds from issuance of preferred shares ...............................................            --         48,284
   Proceeds from issuance of common shares ..................................................            --        186,893
   Debt payments ............................................................................       (75,608)      (295,108)
   Distributions to common unitholders ......................................................       (10,679)        (9,886)
   Proceeds from Dividend Reinvestment and Employee Stock Purchase Plans ....................        15,673         14,341
   Dividends paid to preferred shareholders .................................................        (8,907)        (8,504)
   Dividends paid to common shareholders ....................................................       (75,344)       (63,801)
                                                                                                  ---------      ---------
   Net cash provided by financing activities ................................................        80,890        133,446
                                                                                                  ---------      ---------
   Net (decrease) increase in cash and cash equivalents .....................................       (14,789)         3,354
   Cash and cash equivalents, beginning of period ...........................................        21,154         10,879
                                                                                                  ---------      ---------
   Cash and cash equivalents, end of period .................................................     $   6,365      $  14,233
                                                                                                  =========      =========
</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements.



                                      -4-
<PAGE>   7



POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
--------------------------------------------------------------------------------


1.  ORGANIZATION AND FORMATION OF THE COMPANY

    ORGANIZATION AND FORMATION OF THE COMPANY
    Post Properties, Inc. (the "Company"), which was incorporated on January 25,
    1984, is the successor by merger to the original Post Properties, Inc., a
    Georgia corporation which was formed in 1971. The Company was formed to
    develop, lease and manage upscale multi-family apartment communities.

    The Company elected to be taxed as a real estate investment trust ("REIT")
    for Federal income tax purposes beginning with the taxable year ended
    December 31, 1993. A REIT is a legal entity which holds real estate
    interests and, through payments of dividends to shareholders, in practical
    effect is not subject to Federal income taxes at the corporate level.

    BASIS OF PRESENTATION
    The accompanying unaudited financial statements have been prepared by the
    Company's management in accordance with generally accepted accounting
    principles for interim financial information and applicable rules and
    regulations of the Securities and Exchange Commission. Accordingly, they do
    not include all of the information and footnotes required by generally
    accepted accounting principles for complete financial statements. In the
    opinion of management, all adjustments (consisting only of normally
    recurring adjustments) considered necessary for a fair presentation have
    been included. The results of operations for the nine-month period ended
    September 30, 1999 are not necessarily indicative of the results that may be
    expected for the full year. These financial statements should be read in
    conjunction with the Company's audited financial statements and notes
    thereto included in the Post Properties, Inc. Annual Report on Form 10-K for
    the year ended December 31, 1998. Certain 1998 amounts have been
    reclassified to conform to the current year's financial statement
    presentation.

2.  NOTES PAYABLE

    Post Apartment Homes, L.P. (the "Operating Partnership") has established a
    program for the sale of up to $344,000 aggregate principal amount of
    Medium-Term Notes due three months or more from date of issue (the "MTN
    Program"). As of September 30, 1999, the Operating Partnership had $231,000
    aggregate principal amount of notes outstanding under the MTN Program.

    On July 23, 1999, the Operating Partnership issued $104 million of secured
    notes to the Federal National Mortgage Association ("FNMA"). These notes
    bear interest at 30-day LIBOR (capped at 7% for one year) plus credit
    enhancement, liquidity and service fees of .935%, mature on July 23, 2029
    and are secured by five apartment communities. The Operating Partnership has
    an option to call these notes after 10 years from the issuance date. Net
    proceeds of $101,998 were used to repay outstanding indebtedness.

    On May 7, 1999, the Operating Partnership amended its syndicated unsecured
    line of credit (the "Revolver") to increase its maximum capacity to $350
    million. Currently, $340 million of the Revolver is subscribed and available
    to the Operating Partnership. Borrowing under the Revolver bears interest at
    LIBOR plus .825% or prime minus .25%. The Revolver matures on April 30,
    2002.

    On March 30, 1999, the Operating Partnership issued $50 million of secured
    notes to an insurance company. These notes bear interest at 6.5% (with an
    effective rate of 7.3% after consideration of a terminated swap agreement),
    mature on March 1, 2009 and are secured by two apartment communities. Net
    proceeds of $49,933 were used to repay outstanding indebtedness.



                                      -5-
<PAGE>   8

POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
--------------------------------------------------------------------------------


3.  PREFERRED UNITS

    On September 3, 1999, the Operating Partnership issued $70 million of Series
    D Cumulative Redeemable Preferred Units of limited partnership interest (the
    "Series D Preferred Units") to an institutional investor in a private
    placement meeting the requirements of Regulation D promulgated under the
    Securities Act of 1933, as amended. Net proceeds to the Operating
    Partnership of approximately $68 million were used to repay outstanding
    indebtedness.

4.  EARNINGS PER SHARE

    For the three and nine months ended September 30, 1999 and 1998, a
    reconciliation of the numerator and denominator used in the computation of
    basic and diluted earnings per share is as follows:


<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED                   NINE MONTHS ENDED
                                                                SEPTEMBER 30,                        SEPTEMBER 30,
                                                       ------------------------------      ------------------------------
                                                            1999              1998              1999              1998
                                                       ------------      ------------      ------------      ------------
<S>                                                    <C>               <C>               <C>               <C>
 Basic and diluted income available to common
  Shareholders (numerator):
  Income before extraordinary item ...............     $     26,739      $     23,803      $     78,448      $     64,194
    Less: Preferred stock dividends ..............           (2,969)           (2,969)           (8,907)           (8,504)
                                                       ------------      ------------      ------------      ------------
  Income available to common shareholders
    Before extraordinary item ....................     $     23,770      $     20,834      $     69,541      $     55,690
                                                       ============      ============      ============      ============
Common shares (denominator):
  Weighted average shares outstanding - basic ......     38,574,434        36,007,167        38,361,877        34,351,747
  Incremental shares from assumed conversion
    of options ...................................          547,987           426,695           465,504           471,417
                                                       ------------      ------------      ------------      ------------
  Weighted average shares outstanding - diluted ..       39,122,421        36,433,862        38,827,381        34,823,164
                                                       ============      ============      ============      ============
</TABLE>

5.  SUPPLEMENTAL CASH FLOW INFORMATION

    Non-cash investing and financing activities for the nine months ended
    September 30, 1999 and 1998 were as follows:

    During the nine months ended September 30, 1999 and 1998, holders of 17,299
    and 750 units, respectively, in the Operating Partnership exercised their
    option to convert their units to shares of Common Stock of the Company on a
    one-for-one basis. These conversions resulted in adjustments to minority
    interest for the dilutive impact of the Dividend Reinvestment and Employee
    Stock Purchase Plans and capital transactions. The net effect of the
    conversions and adjustments was a reclassification decreasing minority
    interest and increasing shareholder's equity in the amount of $1,023 for the
    nine months ended September 30, 1999 and increasing minority interest and
    decreasing shareholders' equity in the amount of $10,518 for the nine months
    ended September 30, 1998.

6.  NEW ACCOUNTING PRONOUNCEMENT

    On June 15, 1998, the Financial Accounting Standards Board (FASB) issued
    Statement of Financial Accounting Standards No. 133, "Accounting for
    Derivative Instruments and Hedging Activities" (FAS 133). FAS 133, as
    amended by FAS 137, "Deferral of the Effective Date of FAS 133," is
    effective for all fiscal quarters of all fiscal years beginning after June
    15, 2000 (January 1, 2001 for the Company). FAS 133 requires that all
    derivative instruments be recorded on the balance sheet at their fair value.
    Changes in the fair value of derivatives are recorded each period in current
    earnings or other comprehensive income, depending on whether a derivative is
    designated as part of a hedge transaction and, if it is, the type of hedge
    transaction. Management of the Company anticipates



                                      -6-
<PAGE>   9

POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
--------------------------------------------------------------------------------


    that, due to its limited use of derivative instruments, the adoption of FAS
    133 will not have a significant effect on the Company's results of
    operations or its financial position.

7.  SEGMENT INFORMATION

    SEGMENT DESCRIPTION
    The Company adopted SFAS No. 131, "Disclosure About the Segments of an
    Enterprise and Related Information" in the fourth quarter of 1998. SFAS No.
    131 requires companies to present segment information based on the way that
    management organizes the segments within the enterprise for making operating
    decisions and assessing performance. The segment information is prepared on
    substantially the same basis as the internally reported information used by
    the Company's chief operating decision makers to manage the business.

    The Company's chief operating decision makers focus on the Company's primary
    sources of income, which are property rental operations and third party
    services. Property rental operations are broken down into four segments
    based on the various stages in the property ownership lifecycle. Third party
    services are designated as one segment. The Company's five segments are
    further described as follows:

    Property Rental Operations

    -   Fully stabilized communities - those apartment communities which have
        been stabilized (the point at which a property reaches 95% occupancy or
        one year after completion of construction) for both the current and
        prior year.

    -   Communities stabilized during 1998 - communities which reached
        stabilized occupancy in the prior year.

    -   Development and lease up communities - those communities which are in
        lease-up but were not stabilized by the beginning of the current year,
        including communities which stabilized during the current year.

    -   Sold communities - communities which were sold in the current or prior
        year.

    Third Party Services - fee income and related expenses from the Company's
    apartment community management, landscaping and corporate apartment rental
    services.

    SEGMENT PERFORMANCE MEASURE
    Management uses contribution to funds from operations ("FFO") as the
    performance measure for its segments. FFO is defined by the National
    Association of Real Estate Investment Trusts as net income available to
    common shareholders determined in accordance with generally accepted
    accounting principles ("GAAP"), excluding gains (or losses) from debt
    restructuring and sales of property, plus depreciation of real estate
    assets, and after adjustment for unconsolidated partnerships and joint
    ventures. FFO should not be considered as an alternative to net income
    (determined in accordance with GAAP) as an indicator of the Company's
    financial performance or to cash flow from operating activities (determined
    in accordance with GAAP) as a measure of the Company's liquidity, nor is it
    necessarily indicative of sufficient cash flow to fund all of the Company's
    needs.

    SEGMENT INFORMATION
    The following table reflects each segment's contribution to FFO together
    with a reconciliation of segment contribution to FFO, total FFO and income
    before extraordinary item and preferred dividends. Additionally,
    substantially all of the Company's assets relate to the Company's property
    rental operations. Asset cost, depreciation and amortization by segment are
    not presented because such information is not reported internally at the
    segment level.




                                      -7-
<PAGE>   10



POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
--------------------------------------------------------------------------------


Summarized financial information concerning the Company's reportable segments is
shown in the following tables:

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED                   NINE MONTHS ENDED
                                                              SEPTEMBER 30,                       SEPTEMBER 30,
                                                   --------------------------------   --------------------------------
                                                        1999              1998              1999              1998
                                                   --------------    --------------    --------------    -------------
<S>                                                <C>               <C>               <C>                <C>
REVENUES
Fully stabilized communities...............        $       59,945    $       58,081    $      177,231     $    171,488
Communities stabilized during 1998.........                 5,601             5,166            16,620           13,709
Development and lease-up communities.......                15,704             6,851            40,077           14,114
Sold communities...........................                    --               877               318            3,493
Third party services.......................                 3,039             2,557             8,913            7,254
Other......................................                 3,869             3,437            11,283            9,351
                                                   --------------    --------------    --------------     ------------

Consolidated revenues......................        $       88,158    $       76,969    $      254,442     $    219,409
                                                   ==============    ==============    ==============     ============

CONTRIBUTION TO FUNDS FROM OPERATIONS
Fully stabilized communities...............        $       41,225    $       39,559    $      122,298     $    116,942
Communities stabilized during 1998.........                 3,753             3,590            11,297            9,295
Development and lease-up communities.......                 9,915             3,503            24,474            6,526
Sold communities...........................                    --               720               190            3,024
Third party services.......................                   425               327             1,120            1,025
                                                   --------------    --------------    --------------     ------------

Contribution to FFO........................                55,318            47,699           159,379          136,812
                                                   --------------    --------------    --------------     ------------

Other operating income, net of expense.....                   268             1,226             2,489            2,422
Depreciation on non-real estate assets.....                  (511)             (467)           (1,409)            (939)
Minority interest in consolidated property
   Partnerships............................                  (209)             (153)             (485)            (351)
Interest expense...........................                (8,707)           (7,795)          (24,075)         (23,488)
Amortization of deferred loan costs........                  (407)             (318)           (1,113)            (876)
General and administrative.................                (1,343)           (1,869)           (5,251)          (5,701)
Dividends to preferred shareholders........                (2,969)           (2,969)           (8,907)          (8,504)
                                                   --------------    --------------    --------------     ------------

Total FFO..................................                41,440            35,354           120,628           99,375
                                                   --------------    --------------    --------------     ------------

Depreciation on real estate assets.........               (14,218)          (11,498)          (40,315)         (33,307)
Net loss on sale of assets.................                  (246)               --            (1,337)              --
Loss on unused treasury locks..............                    --                --                --           (1,944)
Minority interest of unitholders in
   Operating Partnership...................                (3,206)           (3,022)           (9,435)          (8,434)
Dividends to preferred shareholders........                 2,969             2,969             8,907            8,504
                                                   --------------    --------------       -----------     ------------

Income before extraordinary item
   and preferred dividends.................        $       26,739    $       23,803    $       78,448     $     64,194
                                                   ==============    ==============    ==============     ============
</TABLE>





                                      -8-
<PAGE>   11


                           POST APARTMENT HOMES, L.P.
                           CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                     SEPTEMBER 30,     DECEMBER 31,
                                                          1999              1998
                                                      -----------       -----------
                                                      (UNAUDITED)

<S>                                                   <C>               <C>
ASSETS
   Real estate:
     Land ......................................      $   278,035       $   252,922
     Building and improvements .................        1,573,988         1,379,847
     Furniture, fixtures and equipment .........          135,568           108,233
     Construction in progress ..................          477,872           480,267
     Land held for future development ..........           16,780            33,805
                                                      -----------       -----------

                                                        2,482,243         2,255,074
     Less: accumulated depreciation ............         (287,841)         (247,148)
                                                      -----------       -----------
     Operating real estate assets ..............        2,194,402         2,007,926
   Cash and cash equivalents ...................            6,365            21,154
   Restricted cash .............................            1,775             1,348
   Deferred charges, net .......................           21,348            18,686
   Other assets ................................           33,508            17,599
                                                      -----------       -----------

Total assets ...................................      $ 2,257,398       $ 2,066,713
                                                      ===========       ===========

LIABILITIES AND PARTNERS' EQUITY
   Notes payable ...............................      $   893,400       $   800,008
   Accrued interest payable ....................           10,971             7,609
   Distributions payable .......................           31,097            25,115
   Accounts payable and accrued expenses .......           65,183            48,214
   Security deposits and prepaid rents .........            8,888             8,716
                                                      -----------       -----------
     Total liabilities .........................        1,009,539           889,662
                                                      -----------       -----------
   Commitments and contingencies
   Partners' equity ............................        1,247,859         1,177,051
                                                      -----------       -----------
     Total liabilities and partners' equity ....      $ 2,257,398       $ 2,066,713
                                                      ===========       ===========
</TABLE>


















         The accompanying notes are an integral part of these consolidated
                             financial statements.


                                      -9-
<PAGE>   12





                           POST APARTMENT HOMES, L.P.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                          THREE MONTHS ENDED                  NINE MONTHS ENDED
                                                                             SEPTEMBER 30,                       SEPTEMBER 30,
                                                                    ----------------------------       ----------------------------
                                                                        1999            1998               1999            1998
                                                                    ------------    ------------       ------------    ------------
<S>                                                                 <C>             <C>                <C>             <C>
REVENUES
  Rental .....................................................      $     81,162    $     71,310       $    234,845    $    202,162
  Property management - third party ..........................               795             792              2,434           2,309
  Landscape services - third party ...........................             2,244           1,765              6,479           4,945
  Interest ...................................................               194              83                564             387
  Other ......................................................             3,763           3,019             10,120           9,606
                                                                    ------------    ------------       ------------    ------------
      Total revenue ..........................................            88,158          76,969            254,442         219,409
                                                                    ------------    ------------       ------------    ------------
EXPENSES
   Property operating and maintenance expense (exclusive
    of items shown separately below) .........................            29,126          25,814             83,949          73,946
  Depreciation expense .......................................            15,126          11,965             42,121          34,246
  Property management - third party ..........................               755             659              2,179           1,857
  Landscape services expense - third party ...................             1,859           1,571              5,614           4,372
  Interest expense ...........................................             8,707           7,795             24,075          23,488
  Amortization of deferred loan costs ........................               407             318              1,113             876
  General and administrative .................................             1,343           1,869              5,251           5,701
  Minority interest in consolidated property partnerships ....               209             153                485             351
                                                                    ------------    ------------       ------------    ------------
   Total expenses ............................................            57,532          50,144            164,787         144,837
                                                                    ------------    ------------       ------------    ------------
  Income before net loss on sale of assets, loss on
   unused treasury locks and extraordinary item ..............            30,626          26,825             89,655          74,572
  Net loss on sale of assets .................................              (246)             --             (1,337)             --
  Loss on unused treasury locks ..............................                --              --                 --          (1,944)
                                                                    ------------    ------------       ------------    ------------
  Income before extraordinary item ...........................            30,380          26,825             88,318          72,628
  Extraordinary item .........................................                --              --               (521)             --
                                                                    ------------    ------------       ------------    ------------
  Net income .................................................            30,380          26,825             87,797          72,628
  Distributions to preferred unitholders .....................            (3,404)         (2,969)            (9,342)         (8,504)
                                                                    ------------    ------------       ------------    ------------
  Net income available to common unitholders .................      $     26,976    $     23,856       $     78,455    $     64,124
                                                                    ============    ============       ============    ============
EARNINGS PER COMMON UNIT - BASIC
  Income before extraordinary item (net of preferred
   distributions) ............................................      $       0.62    $       0.58       $       1.81    $       1.62
  Extraordinary item .........................................                --              --              (0.01)             --
                                                                    ------------    ------------       ------------    ------------
  Net income available to common unitholders .................      $       0.62    $       0.58               1.80    $       1.62
                                                                    ============    ============       ============    ============
  Weighted average common units outstanding ..................        43,772,859      41,222,891         43,567,297      39,567,512
                                                                    ============    ============       ============    ============
EARNINGS PER COMMON UNIT- DILUTED
  Income before extraordinary item (net of preferred
   distributions) ............................................      $       0.61    $       0.57       $       1.79    $       1.60
  Extraordinary item .........................................                --              --              (0.01)             --
                                                                    ------------    ------------       ------------    ------------
  Net income available to common unitholders .................      $       0.61    $       0.57       $       1.78    $       1.60
                                                                    ============    ============       ============    ============
  Weighted average common units outstanding ..................        44,320,846      41,649,586         44,032,801      40,038,929
                                                                    ============    ============       ============    ============
   Distributions declared ....................................      $       0.70    $       0.65       $       2.10    $       1.95
                                                                    ============    ============       ============    ============
</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements.




                                      -10-
<PAGE>   13


                           POST APARTMENT HOMES, L.P.
                   CONSOLIDATED STATEMENT OF PARTNERS' EQUITY
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                              GENERAL         LIMITED
                                                              PARTNER         PARTNERS            TOTAL
                                                             ---------       -----------       -----------
<S>                                                          <C>             <C>               <C>
PARTNERS' EQUITY, DECEMBER 31, 1998 ...................      $  11,795       $ 1,165,256       $ 1,177,051
Contributions from the Company related to Dividend
Reinvestment and Employee Stock Purchase Plans ........            157            15,516            15,673
Proceeds from the sale of preferred units .............             --            68,250            68,250
Distributions to preferred unitholders ................             --            (9,342)           (9,342)
Distributions to common unitholders ...................           (916)          (90,654)          (91,570)
Net income ............................................            878            86,919            87,797
                                                             ---------       -----------       -----------
PARTNERS' EQUITY, SEPTEMBER 30, 1999 ..................      $  11,914       $ 1,235,945       $ 1,247,859
                                                             =========       ===========       ===========
</TABLE>






















         The accompanying notes are an integral part of these consolidated
                             financial statements.


                                      -11-
<PAGE>   14


                           POST APARTMENT HOMES, L.P.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   NINE MONTHS ENDED
                                                                                     SEPTEMBER 30,
                                                                               -------------------------
                                                                                  1999            1998
                                                                               ---------       ---------
<S>                                                                            <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income .............................................................      $  87,797       $  72,628
 Adjustments to reconcile net income to net cash provided
   by operating activities:
   Net loss on sale of assets ..............................................       1,337              --
   Loss on unused treasury locks ...........................................          --           1,944
   Extraordinary item .....................................................          521              --
   Depreciation ...........................................................       42,121          34,246
   Amortization of deferred loan costs ....................................        1,113             876
   Other ..................................................................           --             168
 Changes in assets, (increase) decrease in:
   Restricted cash ......................................................           (427)            453
   Other assets .........................................................        (15,909)          1,830
   Deferred charges .....................................................         (3,657)         (5,325)
 Changes in liabilities, increase (decrease) in:
   Accrued interest payable .............................................          3,362           3,430
   Accounts payable and accrued expenses ................................          5,583          (9,271)
   Security deposits and prepaid rents ..................................            172             722
                                                                               ---------       ---------
 Net cash provided by operating activities ..............................        122,013         101,701
                                                                               ---------       ---------
CASH FLOWS FROM INVESTING ACTIVITIES
 Construction and acquisition of real estate assets,
   net of payables ......................................................       (194,459)       (193,062)
 Net proceeds from sale of assets .......................................         10,731              --
 Capitalized interest ...................................................        (14,710)        (11,123)
 Payment for unused treasury locks ......................................             --          (1,944)
 Recurring capital expenditures .........................................         (7,283)         (4,952)
 Corporate additions and improvements ...................................         (6,240)         (7,772)
 Non-recurring capital expenditures .....................................         (1,553)         (1,098)
 Revenue generating capital expenditures ................................         (4,178)        (11,842)
                                                                               ---------       ---------
 Net cash used in investing activities ..................................       (217,692)       (231,793)
                                                                               ---------       ---------
CASH FLOWS FROM FINANCING ACTIVITIES
 Payment of financing costs .............................................         (1,495)             --
 Debt proceeds ..........................................................        169,000         111,227
 Proceeds from the sale of notes ........................................             --         150,000
 Proceeds from issuance of preferred units ..............................         68,250          48,284
 Proceeds from issuance of common units .................................             --         186,893
 Debt payments ..........................................................        (75,608)       (295,108)
 Proceeds from contributions from the Company related to Dividend
   Reinvestment and Employee Stock Purchase Plans ..........................      15,673          14,341
 Dividends paid to preferred unitholders ................................         (8,907)         (8,504)
 Dividends paid to common unitholders ...................................        (86,023)        (73,687)
                                                                               ---------       ---------
 Net cash provided by financing activities ..............................         80,890         133,446
                                                                               ---------       ---------
 Net (decrease) increase in cash and cash equivalents ...................        (14,789)          3,354
 Cash and cash equivalents, beginning of period .........................         21,154          10,879
                                                                               ---------       ---------
 Cash and cash equivalents, end of period ...............................      $   6,365       $  14,233
                                                                               =========       =========
</TABLE>

         The accompanying notes are an integral part of these consolidated
                             financial statements.




                                      -12-
<PAGE>   15



POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
--------------------------------------------------------------------------------


1.   ORGANIZATION AND FORMATION OF THE COMPANY

     ORGANIZATION AND FORMATION OF THE COMPANY
     Post Apartment Homes, L.P. (the "Operating Partnership"), a Georgia limited
     partnership, was formed on January 22, 1993, to conduct the business of
     developing, leasing and managing upscale multi-family apartment communities
     for Post Properties, Inc. (the "Company").

     The Company elected to be taxed as a real estate investment trust ("REIT")
     for Federal income tax purposes beginning with the taxable year ended
     December 31, 1993. A REIT is a legal entity which holds real estate
     interests and, through payments of dividends to shareholders, in practical
     effect is not subject to Federal income taxes at the corporate level.

     BASIS OF PRESENTATION
     The accompanying unaudited financial statements have been prepared by the
     Operating Partnership's management in accordance with generally accepted
     accounting principles for interim financial information and applicable
     rules and regulations of the Securities and Exchange Commission.
     Accordingly, they do not include all of the information and footnotes
     required by generally accepted accounting principles for complete financial
     statements. In the opinion of management, all adjustments (consisting only
     of normally recurring adjustments) considered necessary for a fair
     presentation have been included. The results of operations for the
     nine-month period ended September 30, 1999 are not necessarily indicative
     of the results that may be expected for the full year. These financial
     statements should be read in conjunction with the Operating Partnership's
     audited financial statements and notes thereto included in the Post
     Apartment Homes, L.P. Annual Report on Form 10-K for the year ended
     December 31, 1998. Certain 1998 amounts have been reclassified to conform
     to the current year's financial statement presentation.

2.   NOTES PAYABLE

     The Operating Partnership has established a program for the sale of up to
     $344,000 aggregate principal amount of Medium-Term Notes due three months
     or more from date of issue (the "MTN Program"). As of September 30, 1999,
     the Operating Partnership had $231,000 aggregate principal amount of notes
     outstanding under the MTN Program.

     On July 23, 1999, the Operating Partnership issued $104 million of secured
     notes to FNMA. These notes bear interest at 30-day LIBOR (capped at 7% for
     one year) plus credit enhancement, liquidity and service fees of .935%,
     mature on July 23, 2029 and are secured by five apartment communities. The
     Operating Partnership has an option to call these notes after 10 years from
     the issuance date. Net proceeds of $101,998 were used to repay outstanding
     indebtedness.

     On May 7, 1999, the Operating Partnership amended its syndicated unsecured
     line of credit (the "Revolver") to increase its maximum capacity to $350
     million. Currently, $340 million of the Revolver is subscribed and
     available to the Operating Partnership. Borrowing under the Revolver bears
     interest at LIBOR plus .825% or prime minus .25%. The Revolver matures on
     April 30, 2002.

     On March 30, 1999, the Operating Partnership issued $50 million of secured
     notes to an insurance company. These notes bear interest at 6.5% (with an
     effective rate of 7.3% after consideration of a terminated interest rate
     swap agreement) mature on March 1, 2009 and are secured by two apartment
     communities. Net proceeds of $49,933 were used to repay outstanding
     indebtedness.



                                      -13-
<PAGE>   16


POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
--------------------------------------------------------------------------------


3.   PREFERRED UNITS

     On September 3, 1999, the Operating Partnership issued $70 million of
     Series D Preferred Units to an institutional investor in a private
     placement meeting the requirements of Regulation D promulgated under the
     Securities Act of 1933, as amended. Net proceeds to the Operating
     Partnership of approximately $68 million were used to repay outstanding
     indebtedness.

4.   EARNINGS PER UNIT

     For the three and nine months ended September 30, 1999 and 1998, a
     reconciliation of the numerator and denominator used in the computation of
     basic and diluted earnings per unit is as follows:


<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED                    NINE MONTHS ENDED
                                                                 SEPTEMBER 30,                        SEPTEMBER 30,
                                                        -------------------------------       ------------------------------
                                                            1999               1998               1999              1998
                                                        ------------       ------------       -----------       ------------
<S>                                                     <C>                <C>                <C>               <C>

Basic and diluted income available to common
  Unitholders (numerator):
  Income before extraordinary item ...............      $     30,380       $     26,825       $     88,318       $     72,628
    Less: Preferred unit distributions ...........            (3,404)            (2,969)            (9,342)            (8,504)
                                                        ------------       ------------       ------------       ------------
  Income available to common unitholders
    Before extraordinary item ....................      $     26,976       $     23,856       $     78,976       $     64,124
                                                        ============       ============       ============       ============
Common units (denominator):
  Weighted average units outstanding - basic .....        43,772,859         41,222,891         43,567,297         39,567,512
  Incremental units from assumed conversion
    of options ...................................           547,987            426,695            465,504            471,417
                                                        ------------       ------------       ------------       ------------
  Weighted average units outstanding - diluted ...        44,320,846         41,649,586         44,032,801         40,038,929
                                                        ============       ============       ============       ============
</TABLE>

5.   NEW ACCOUNTING PRONOUNCEMENT

     On June 15, 1998, the Financial Accounting Standards Board (FASB) issued
     Statement of Financial Accounting Standards No. 133, "Accounting for
     Derivative Instruments and Hedging Activities" (FAS 133). FAS 133, as
     amended by FAS 137, "Deferral of the Effective Date of FAS 133," is
     effective for all fiscal quarters of all fiscal years beginning after June
     15, 2000 (January 1, 2001 for the Operating Partnership). FAS 133 requires
     that all derivative instruments be recorded on the balance sheet at their
     fair value. Changes in the fair value of derivatives are recorded each
     period in current earnings or other comprehensive income, depending on
     whether a derivative is designated as part of a hedge transaction and, if
     it is, the type of hedge transaction. Management of the Operating
     Partnership anticipates that, due to its limited use of derivative
     instruments, the adoption of FAS 133 will not have a significant effect on
     the Operating Partnership's results of operations or its financial
     position.

6.   SEGMENT INFORMATION

     SEGMENT DESCRIPTION
     The Operating Partnership adopted SFAS No. 131, "Disclosure About the
     Segments of an Enterprise and Related Information" in the fourth quarter of
     1998. SFAS No. 131 requires companies to present segment information based
     on the way that management organizes the segments within the enterprise for
     making operating decisions and assessing performance. The segment
     information is prepared on substantially the same basis as the internally



                                      -14-
<PAGE>   17

POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
--------------------------------------------------------------------------------


     reported information used by the Operating Partnership's chief operating
     decision-makers to manage the business.

     The Operating Partnership's chief operating decision-makers focus on the
     Operating Partnership's primary sources of income, which are property
     rental operations and third party services. Property rental operations are
     broken down into four segments based on the various stages in the property
     ownership lifecycle. Third party services are designated as one segment.
     The Operating Partnership's five segments are further described as follows:

     Property Rental Operations

     -    Fully stabilized communities - those apartment communities which have
          been stabilized (the point in time which a property reached 95%
          occupancy or one year after completion of construction) for both the
          current and prior year.

     -    Communities stabilized during 1998 - communities which reached
          stabilized occupancy in the prior year.

     -    Development and Lease up Communities - those communities which are in
          lease-up but were not stabilized by the beginning of the current year
          including communities which stabilized during the current year.

     -    Sold communities - communities which were sold in the current or prior
          year.

     Third Party Services - fee income and related expenses from the Operating
     Partnership's apartment community management, landscaping and corporate
     apartment rental services.

     SEGMENT PERFORMANCE MEASURE
     Management uses contribution to funds from operations ("FFO") as the
     performance measure for its segments. FFO is defined by the National
     Association of Real Estate Investment Trusts as net income available to
     common unitholders determined in accordance with generally accepted
     accounting principles ("GAAP"), excluding gains (or losses) from debt
     restructuring and sales of property, plus depreciation of real estate
     assets, and after adjustment for unconsolidated partnerships and joint
     ventures. FFO should not be considered as an alternative to net income
     (determined in accordance with GAAP) as an indicator of the Operating
     Partnership's financial performance or to cash flow from operating
     activities (determined in accordance with GAAP) as a measure of the
     Operating Partnership's liquidity, nor is it necessarily indicative of
     sufficient cash flow to fund all of the Operating Partnership's needs.

     SEGMENT INFORMATION
     The following table reflects each segment's contribution to FFO together
     with a reconciliation of segment contribution to FFO, total FFO and income
     before extraordinary item. Additionally, substantially all of the Operating
     Partnership's assets relate to the Operating Partnership's property rental
     operations. Asset cost, depreciation and amortization by segment are not
     presented because such information is not reported internally at the
     segment level.



                                      -15-
<PAGE>   18


POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
--------------------------------------------------------------------------------


Summarized financial information concerning the Operating Partnership's
reportable segments is shown in the following tables.

<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED             NINE MONTHS ENDED
                                                         SEPTEMBER 30,                   SEPTEMBER 30,
                                                    -----------------------       -------------------------
                                                      1999           1998            1999            1998
                                                    --------       --------       ---------       ---------
<S>                                                 <C>            <C>            <C>             <C>
REVENUES
Fully stabilized communities .................      $ 59,945       $ 58,081       $ 177,231       $ 171,488
Communities stabilized during 1998 ...........         5,601          5,166          16,620          13,709
Development and lease-up communities .........        15,704          6,851          40,077          14,114
Sold communities .............................            --            877             318           3,493
Third party services .........................         3,039          2,557           8,913           7,254
Other ........................................         3,869          3,437          11,283           9,351
                                                    --------       --------       ---------       ---------

Consolidated revenues ........................      $ 88,158       $ 76,969       $ 254,442       $ 219,409
                                                    ========       ========       =========       =========

CONTRIBUTION TO FUNDS FROM OPERATIONS
Fully stabilized communities .................      $ 41,225       $ 39,559       $ 122,298       $ 116,942
Communities stabilized during 1998 ...........         3,753          3,590          11,297           9,295
Development and lease-up communities .........         9,915          3,503          24,474           6,526
Sold communities .............................            --            720             190           3,024
Third party services .........................           425            327           1,120           1,025
                                                    --------       --------       ---------       ---------

Contribution to FFO ..........................        55,318         47,699         159,379         136,812
                                                    --------       --------       ---------       ---------

Other operating income, net of expense .......           703          1,226           2,924           2,422
Depreciation on non-real estate assets .......          (511)          (467)         (1,409)           (939)
Minority interest in consolidated property
partnership ..................................          (209)          (153)           (485)           (351)
Interest expense .............................        (8,707)        (7,795)        (24,075)        (23,488)
Amortization of deferred loan costs ..........          (407)          (318)         (1,113)           (876)
General and administrative ...................        (1,343)        (1,869)         (5,251)         (5,701)
Distributions to preferred unitholders .......        (3,404)        (2,969)         (9,342)         (8,504)
                                                    --------       --------       ---------       ---------

Total FFO ....................................        41,440         35,354         120,628          99,375
                                                    --------       --------       ---------       ---------

Depreciation on real estate assets ...........       (14,218)       (11,498)        (40,315)        (33,307)
Net loss on sale of assets ...................          (246)            --          (1,337)             --
Loss on unused treasury locks ................            --             --              --          (1,944)
Distributions to preferred unitholders .......         3,404          2,969           9,342           8,504
                                                    --------       --------       ---------       ---------

Income before extraordinary item and
preferred distributions ......................      $ 30,380       $ 26,825       $  88,318       $  72,628
                                                    ========       ========       =========       =========
</TABLE>





                                      -16-
<PAGE>   19


MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
--------------------------------------------------------------------------------


ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The following discussion should be read in conjunction with all of the financial
statements appearing elsewhere in this report. The following discussion is based
primarily on the Consolidated Financial Statements of Post Properties, Inc. (the
"Company") and Post Apartment Homes, L.P. (the "Operating Partnership"). Except
for the effect of minority interest in the Operating Partnership, the following
discussion with respect to the Company is the same for the Operating
Partnership.

As of September 30, 1999, there were 43,802,982 common units in the Operating
Partnership outstanding, of which 38,604,557, or 88.1%, were owned by the
Company and 5,198,425, or 11.9%, were owned by other limited partners (including
certain officers and directors of the Company). As of September 30, 1999, there
were 7,800,000 preferred units outstanding, of which 5,000,000 were owned by the
Company.

RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND
1998

The Company recorded net income available to common shareholders of $23,770 and
$69,083 for the three and nine months ended September 30, 1999, respectively.
These earnings represent increases of 14.1% and 24.0% over the corresponding
periods in 1998 primarily as a result of additional units placed in service
through the development of new communities and increases in rental rates on
existing units.

COMMUNITY OPERATIONS

The Company's net income is generated primarily from the operation of its
apartment communities. For purposes of evaluating comparative operating
performance, the Company categorizes its operating communities based on the
period each community reaches stabilized occupancy. A community is generally
considered by the Company to have achieved stabilized occupancy on the earlier
to occur of (i) attainment of 95% physical occupancy on the first day of any
month or (ii) one year after completion of construction.

As of September 30, 1999, the Company's portfolio of apartment communities
consisted of the following: (i) 68 communities which were completed and
stabilized for all of the current and prior year, (ii) seven communities which
achieved full stabilization during the prior year and (iii) 29 communities
either stabilized in the current year or presently in the development or
lease-up stages.

For communities with respect to which construction is completed and the
community has become fully operational, all property operating and maintenance
expenses are expensed as incurred and those recurring and non-recurring
expenditures relating to acquiring new assets, materially enhancing the value of
an existing asset, or substantially extending the useful life of an existing
asset are capitalized. (See "Capitalization of Fixed Assets and Community
Improvements").

Since its inception, the Company has applied an accounting policy related to
communities in the development and lease-up stage whereby substantially all
operating expenses (including pre-opening marketing expenses) are expensed as
incurred. The Company treats each unit in an apartment community separately for
cost accumulation, capitalization and expense recognition purposes. Prior to the
commencement of leasing activities, interest and other construction costs are
capitalized and reflected on the balance sheet as construction in progress. Once
a unit is placed in service, all operating expenses allocated to that unit,
including interest, are expensed as incurred. During the lease-up phase, the sum
of interest expense on completed units and other operating expenses (including
pre-opening marketing expenses)



                                      -17-
<PAGE>   20

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
--------------------------------------------------------------------------------


will typically exceed rental revenues, resulting in a "lease-up deficit," which
continues until such time as rental revenues exceed such expenses. Lease up
deficits for the three and nine months ended September 30, 1999 were $805 and
$1,901, respectively. Lease up deficits for the three and nine months ended
September 30, 1998 were $127 and $1,497, respectively.

In order to evaluate the operating performance of its communities, the Company
has presented financial information, which summarizes the operating income on a
comparative basis, for all of its operating communities combined and for
communities which have reached stabilization prior to January 1, 1998.

ALL OPERATING COMMUNITIES

The operating performance for all of the Company's apartment communities
combined for the three and nine months ended September 30, 1999 and 1998 is
summarized as follows:


<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED                   NINE MONTHS ENDED
                                                               SEPTEMBER 30,                       SEPTEMBER 30,
                                                    --------------------------------     --------------------------------
                                                       1999        1998     %CHANGE        1999        1998      %CHANGE
                                                    ---------  ----------  ---------     --------   ---------    --------
<S>                                                 <C>        <C>         <C>           <C>        <C>             <C>
Rental and other revenue:
Mature communities (1)......................        $ 59,945   $  58,081        3.2%     $177,231   $ 171,488       3.3%
Communities stabilized during 1998..........           5,601       5,166        8.4%       16,620      13,709      21.2%
Development and lease-up communities (2)....          15,704       6,851      129.2%       40,077      14,114     184.0%
Sold communities (3)........................              --         877     (100.0)%         318       3,493     (90.9)%
Other revenue (4)...........................           3,675       3,354        9.6%       10,719       8,964      19.6%
                                                    --------   ---------                 --------   ---------
                                                      84,925      74,329       14.3%      244,965     211,768      15.7%
                                                    --------   ---------                 --------   ---------
Property operating and maintenance expense
(exclusive of depreciation and amortization):
Mature communities (1)......................          18,720      18,522        1.1%       54,933      54,546       0.7%
Communities stabilized during 1998..........           1,848       1,576       17.3%        5,323       4,414      20.6%
Development and lease-up communities (2)....           5,789       3,348       72.9%       15,603       7,588     105.6%
Sold communities (3) .......................              --         157     (100.0)%         128         469     (72.7)%
Other expenses (5)..........................           2,769       2,211       25.2%        7,962       6,929      14.9%
                                                    --------   ---------                 --------   ---------
                                                      29,126      25,814       12.8%       83,949      73,946      13.5%
                                                    --------   ---------                 --------   ---------
Revenue in excess of specified expense......        $ 55,799   $  48,515       15.0%     $161,016   $ 137,822      16.8%
                                                    ========   =========                 ========   =========

Recurring capital expenditures: (6)
  Carpet....................................        $    763   $     645       18.3%     $ 2,170     $  1,849      17.4%
  Other.....................................           1,841       1,266       45.4%       5,113        3,103      64.7%
                                                    --------   ---------                 -------    ---------
  Total.....................................        $  2,604   $   1,911       36.3%     $ 7,283    $   4,952      47.1%
                                                    ========   =========                 =======    =========
Average apartment units in service..........          29,763      27,779        7.1%      29,291       27,127       8.0%
                                                    ========   =========                 =======    =========
Recurring capital expenditures per
  apartment unit............................        $     87   $      69       26.1%     $   249    $     183      36.1%
                                                    ========   =========                 =======    =========
</TABLE>


(1)  Communities which reached stabilization prior to January 1, 1998.
(2)  Communities in the "construction", "development" or "lease-up" stage during
     1998 and, therefore, not considered fully stabilized for all of the periods
     presented.
(3)  Includes one community, containing 198 units, which was sold on March 19,
     1999.
(4)  Includes revenue from furnished apartment rentals above the unfurnished
     rental rates, revenue from commercial properties and other revenue not
     directly related to property operations.



                                      -18-
<PAGE>   21

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
--------------------------------------------------------------------------------


(5)  Includes certain indirect central office operating expenses related to
     management, grounds maintenance, costs associated with furnished apartment
     rentals and operating expenses from commercial properties.
(6)  In addition to those expenses which relate to property operations, the
     Company incurs recurring and non-recurring expenditures relating to
     acquiring new assets, materially enhancing the value of an existing asset,
     or substantially extending the useful life of an existing asset, all of
     which are capitalized.

For the three and nine months ended September 30, 1999, rental and other revenue
increased $10,596, or 14.3%, and $33,197, or 15.7%, respectively, compared to
the same periods in the prior year primarily as a result of the completion of
new communities and increased rental rates for existing communities. For the
three and nine months ended September 30, 1999, property operating and
maintenance expenses increased $3,312, or 12.8%, and $10,003, or 13.5%,
respectively, compared to the same periods in the prior year, primarily as a
result of the completion of new communities.

For the three and nine months ended September 30, 1999, recurring capital
expenditures increased $693, or 36.3% ($18, or 26.1%, on a per unit apartment
basis), and $2,331, or 47.1% ($66, or 36.1%, on a per unit apartment basis),
respectively, compared to the same periods in the prior year, primarily due to
the completion of new communities and the timing of capital expenditures.















                                      -19-
<PAGE>   22


MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
--------------------------------------------------------------------------------


MATURE COMMUNITIES

The Company defines mature communities as those that have reached stabilization
prior to the beginning of the previous calendar year.

The operating performance of the 68 communities containing an aggregate of
23,462 units that were fully stabilized as of January 1, 1998, is summarized as
follows:

<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                             SEPTEMBER 30,                      SEPTEMBER 30,
                                                  -------------------------------    ----------------------------------
                                                                             %                                     %
                                                    1999        1998       CHANGE      1999           1998      CHANGE
                                                  -------     -------      -------   --------       -------     -------
<S>                                               <C>         <C>          <C>       <C>            <C>         <C>
Rental and other revenue (1) .................    $59,945     $58,081       3.2%     $177,231       $171,488      3.3%
Property operating and maintenance
   expense (exclusive of depreciation and
   amortization) (1) .........................     18,720      18,522       1.1%       54,933         54,546      0.7%
                                                  -------     -------                --------       --------
Revenue in excess of specified expense .......    $41,225     $39,559       4.2%     $122,298       $116,942      4.6%
                                                  -------     -------                --------       --------

Recurring capital expenditures: (2)
   Carpet ....................................    $   763     $   634      20.3%     $  2,159       $  1,786     20.9%
   Other .....................................      1,758       1,593      10.4%        4,831          3,371     43.3%
                                                  -------     -------                --------       --------
   Total .....................................    $ 2,521     $ 2,227      13.2%     $  6,990       $  5,157     35.5%
                                                  =======     =======                --------       --------
Recurring capital expenditures per
   apartment unit (3) ........................    $   107     $    95      12.6%     $    298       $    220     35.5%
                                                  =======     =======                ========       ========

Average economic occupancy (4) ...............       96.8%       97.2%     (0.4)%        96.5%          96.8%    (0.3)%
                                                  =======     =======                ========       ========

Average monthly rental rate per
   apartment unit (5) ........................    $   856     $   830       3.1%     $    846       $    823      2.8%
                                                  =======     =======                ========       ========

Apartment units in service ...................     23,462      23,462                $ 23,462       $ 23,462
                                                  =======     =======                ========       ========
</TABLE>

(1) Communities which reached stabilization prior to January 1, 1998.
(2)  In addition to those expenses which relate to property operations, the
     Company incurs recurring and non-recurring expenditures relating to
     acquiring new assets, materially enhancing the value of an existing asset,
     or substantially extending the useful life of an existing asset, all of
     which are capitalized.
(3)  In addition to such capitalized expenditures, the Company expensed $170 and
     $180 per unit on building maintenance (inclusive of direct salaries) and
     $49 and $52 per unit on landscaping (inclusive of direct salaries) for the
     three months ended September 30, 1999 and 1998, respectively.
(4)  Average economic occupancy is defined as gross potential rent less vacancy
     losses, model expenses and bad debt divided by gross potential rent for the
     period, expressed as a percentage. The calculation of average economic
     occupancy does not include a deduction for concessions and employee
     discounts. Average economic occupancy, including these amounts would have
     been 95.4% and 95.7% for the three months ended September 30, 1999 and
     1998, respectively. For the three months ended September 30, 1999 and 1998,
     concessions were $667 and $729, respectively, and employee discounts were
     $150 and $130, respectively.
 (5) Average monthly rental rate is defined as the average of the gross actual
     rates for occupied units and the anticipated rental rates for unoccupied
     units.

For the three and nine months ended September 30, 1999, rental and other revenue
increased $1,864, or 3.2%, and $5,743, or 3.3%, respectively, compared to the
same periods in the prior year, primarily due to increased rental rates. For the
three and nine months ended September 30, 1999, property operating and
maintenance expenses (exclusive of depreciation and amortization) increased
$198, or 1.1%, and $387, or 0.7%, respectively, compared to the same periods in
the prior year, primarily as a result of increased personnel and property tax
expenses partially offset by a decline in utilities expense as a result of water
submetering.

For the three and nine months ended September 30, 1999, recurring capital
expenditures per unit increased $12, or 12.6%, and $78, or 35.5%, respectively,
as a result of the timing of expenditures.




                                      -20-
<PAGE>   23


MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
--------------------------------------------------------------------------------


THIRD PARTY SERVICES

THIRD PARTY MANAGEMENT SERVICES

The Company provides asset management, leasing and other consulting services to
non-related owners of apartment communities through its subsidiary, RAM
Partners, Inc. ("RAM"). The operating performance of RAM for the three and nine
months ended September 30, 1999 and 1998 is summarized as follows:


<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED                     NINE MONTHS ENDED
                                                          SEPTEMBER 30,                          SEPTEMBER 30,
                                                ----------------------------------    ----------------------------------
                                                  1999        1998         %CHANGE      1999         1998        %CHANGE
                                                -------      -------       -------    -------      -------       -------

<S>                                             <C>          <C>           <C>        <C>          <C>           <C>
Property management and other revenue ....      $   795      $   792         0.4%     $ 2,434      $ 2,309         5.4%
Property management expense ..............          755          659        14.6%       2,179        1,857        17.3%
Depreciation expense .....................            7            9       (22.2)%         20           27       (25.9)%
                                                -------      -------                  -------      -------
Revenue in excess of specified expense ...      $    33      $   124       (73.4)%    $   235      $   425       (44.7)%
                                                =======      =======                  =======      =======
Average apartment units managed ..........       12,169       11,621         4.7%      12,327       11,107        11.0%
                                                =======      =======                  =======      =======
</TABLE>


The decrease in revenue in excess of specified expense for the three and nine
months ended September 30, 1999 compared to the same period in the prior year is
primarily attributable to the management of more communities in lease-up phases
as a result of turnover in management contracts.

THIRD PARTY LANDSCAPE SERVICES

The Company provides landscape maintenance, design and installation services to
non-related parties through a subsidiary, Post Landscape Group, Inc. ("Post
Landscape Group"), formerly called Post Landscape Services, Inc.

The operating performance of Post Landscape Group for the three and nine months
ended September 30, 1999 and 1998 is summarized as follows:


<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED                  NINE MONTHS ENDED
                                                           SEPTEMBER 30,                      SEPTEMBER 30,
                                                ---------------------------------   --------------------------------
                                                 1999        1998        % CHANGE    1999        1998       % CHANGE
                                                ------      ------       --------   ------      ------      --------
<S>                                             <C>         <C>          <C>        <C>         <C>         <C>
Landscape services and other revenue .....      $2,244      $1,765         27.1%    $6,479      $4,945        31.0%
Landscape services expense ...............       1,859       1,571         18.3%     5,614       4,372        28.4%
Depreciation expense .....................          78          53         47.2%       212         118        79.7%
                                                ------      ------                  ------      ------
Revenue in excess of specified expense ...      $  307      $  141        117.7%    $  653      $  455        43.5%
                                                ======      ======                  ======      ======
</TABLE>

The increase in landscape services and other revenue and landscape services
expense for the three and nine months ended September 30, 1999 compared to the
same periods in 1998 is primarily due to increases in landscape contracts. The
increase in depreciation expense is primarily due to leasehold improvements
acquired in 1998.




                                      -21-
<PAGE>   24

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
--------------------------------------------------------------------------------


OTHER EXPENSES

Depreciation expense increased $3,161, or 26.4%, and $7,875, or 23.0%,
respectively, for the three and nine months ended September 30, 1999 compared to
the same period in the prior year, primarily as a result of an increase in units
in service, additional leasehold improvements and technology expenditures.

General and administrative expense decreased $526, or 28.1%, and $450, or 7.9%,
respectively, for the three and nine months ended September 30, 1999 compared to
the same period in the prior year, primarily as a result of timing differences
in certain expense accruals and allocations.

The loss on unused treasury locks of $1,944 for the nine months ended September
30, 1998 resulted from the termination of treasury locks intended for debt
securities that were not issued by the Operating Partnership.

The extraordinary item of $458 for the nine months ended September 30, 1999, net
of minority interest portion, was due to the write off of loan costs resulting
from the early extinguishment of debt.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity
The Company's net cash provided by operating activities increased from $101,701
for the nine months ended September 30, 1998 to $122,013 for the nine months
ended September 30, 1999, principally due to increases in net income and changes
in working capital. Net cash used in investing activities decreased from
$231,793 in the nine months ended September 30, 1998 to $217,692 for the nine
months ended September 30, 1999, principally due to proceeds from the sale of
one community in March 1999 and reduced capital expenditures. The Company's net
cash provided by financing activities decreased from $133,446 for the nine
months ended September 30, 1998 to $80,890 for the nine months ended September
30, 1999, primarily due to reduced proceeds from debt and equity offerings
partially offset by reduced debt payments.

The Company has elected to be taxed as a Real Estate Investment Trust ("REIT")
under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended,
commencing with its taxable year ended December 31, 1993. REITs are subject to a
number of organizational and operational requirements, including a requirement
that they currently distribute 95% of their ordinary taxable income. The Company
generally will not be subject to Federal income tax on net income.

At September 30, 1999, the Company had total indebtedness of $893,400, an
increase of $93,392 from its total indebtedness at December 31, 1998, and cash
and cash equivalents of $6,365. At September 30, 1999, the Company's
indebtedness included approximately $179,582 in conventional mortgages payable
secured by individual communities, tax-exempt bond indebtedness of $235,880,
senior unsecured notes of $406,000, borrowings under the Revolver of $50,000 and
other unsecured lines of credit and unsecured debt of $21,938.

The Company expects to meet its short-term liquidity requirements generally
through its net cash provided by operations and borrowings under credit
arrangements and expects to meet certain of its long-term liquidity
requirements, such as scheduled debt maturities, repayment of financing of
construction and development activities, and possible property acquisitions,
through long-term secured and unsecured borrowings and the issuance of debt
securities or additional equity securities of the Company, sales of communities,
or, possibly in connection with acquisitions of land or improved properties,
units of the Operating Partnership. The Company believes that its net cash
provided by operations will be adequate and anticipates that it will continue to
be adequate to meet both operating requirements and payment of dividends by the
Company in accordance with REIT requirements in both the short and the long
term. The budgeted expenditures for improvements and renovations to certain of
the communities are expected to be funded from property operations.



                                      -22-
<PAGE>   25



MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
--------------------------------------------------------------------------------


Lines Of Credit
On May 7, 1999, the Operating Partnership amended its syndicated unsecured line
of credit (the "Revolver") increasing its maximum capacity to $350 million. At
September 30, 1999, $340 million of the Revolver was subscribed and available to
the Operating Partnership. Borrowing under the Revolver bears interest at LIBOR
plus .825% or prime minus .25%. The Revolver matures on April 30, 2002. At
September 30, 1999, there was $50,000 outstanding under its Revolver and $19,938
under its other lines of credit.

Medium Term Notes
The Operating Partnership has established a program for the sale of up to
$344,000 aggregate principal amount of Medium-Term Notes due three months or
more from date of issue (the "MTN Program"). As of September 30, 1999, the
Operating Partnership had $231,000 aggregate principle amount of notes
outstanding under the MTN Program. The Remarketed Reset Notes under this program
were repaid on April 7, 1999.

Tax Exempt Bonds
On June 29, 1995, the Company replaced the bank letters of credit providing
credit enhancement for its outstanding tax-exempt bonds. Under an agreement with
FNMA, FNMA now provides, directly or indirectly through other bank letters of
credit, credit enhancement with respect to such bonds. Under the terms of such
agreement, FNMA has provided replacement credit enhancement through 2025 for the
bond issues, aggregating $235,880, which were reissued. The agreement with FNMA
contains representations, covenants, and events of default customary to such
secured loans.

Secured Debt
On March 30, 1999, the Operating Partnership issued $50 million of secured notes
to an insurance company. These notes bear interest at 6.5% with an effective
rate of 7.3% after consideration of a terminated swap agreement, mature on March
1, 2009 and are secured by two apartment communities. Net proceeds of $49,933
were used to repay outstanding indebtedness.

On July 23, 1999, the Operating Partnership issued $104 million of secured notes
to FNMA. These notes bear interest at 30-day LIBOR (capped at 7% for one year)
plus credit enhancement, liquidity and service fees of .935%, mature on July 23,
2029 and are secured by five apartment communities. The Operating Partnership
has an option to call these notes after 10 years from the issuance date. Net
proceeds of $101,998 were used to repay outstanding indebtedness.

Conventional Floating Rate Debt
The indebtedness of $20 million relating to The Rice was repaid on August 26,
1999 using proceeds from the Revolver.







                                      -23-
<PAGE>   26
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
-------------------------------------------------------------------------------

Schedule of Indebtedness
The following table reflects the Company's indebtedness at September 30, 1999:

<TABLE>
<CAPTION>
                                                                                                          MATURITY   PRINCIPAL
             DESCRIPTION                          LOCATION                   INTEREST RATE                 DATE(1)    BALANCE
             -----------                          --------                   -------------                --------   ---------
CONVENTIONAL FIXED RATE (SECURED)
<S>                                             <C>           <C>                                         <C>        <C>
Post Hillsboro Village & The Lee Apartments ..  Nashville, TN                             9.20%           10/01/01    $  2,928
Parkwood Townhomes(TM) .......................  Dallas, TX                               7.375%           04/01/14         841
Northwestern Mutual Life .....................  Atlanta, GA                               6.50%           03/01/09      49,671
                                                                                                                      --------
                                                                                                                        53,440
                                                                                                                      --------
CONVENTIONAL FLOATING RATE (SECURED)
Addison Circle Apartment Homes
   by Post(TM)- Phase I ......................  Dallas, TX                         LIBOR + .75%           06/15/00      22,142
FNMA .........................................  Atlanta, GA                       LIBOR + .935%           07/23/29     104,000
                                                                                                                      --------
                                                                                                                       126,142
                                                                                                                      --------
TAX EXEMPT FLOATING RATE (SECURED)
Post Ashford(R)Series 1995 ...................  Atlanta, GA               "AAA" NON-AMT + .515% (2)(3)    06/01/25       9,895
Post Valley(R)Series 1995 ....................  Atlanta, GA               "AAA" NON-AMT + .515% (2)(3)    06/01/25      18,600
Post Brook(R)Series 1995 .....................  Atlanta, GA               "AAA" NON-AMT + .515% (2)(3)    06/01/25       4,300
Post Village(R)(Atlanta) Hills Series 1995 ...  Atlanta, GA               "AAA" NON-AMT + .515% (2)(3)    06/01/25       7,000
Post Mill(R)Series 1995 ......................  Atlanta, GA               "AAA" NON-AMT + .515% (2)(3)    06/01/25      12,880
Post Canyon(R)Series 1996 ....................  Atlanta, GA               "AAA" NON-AMT + .515% (2)(3)    06/01/25      16,845
Post Corners(R)Series 1996 ...................  Atlanta, GA               "AAA" NON-AMT + .515% (2)(3)    06/01/25      14,760
Post Bridge(R) ...............................  Atlanta, GA               "AAA" NON-AMT + .515% (2)(3)    06/01/25      12,450
Post Village(R)(Atlanta) Gardens .............  Atlanta, GA               "AAA" NON-AMT + .515% (2)(3)    06/01/25      14,500
Post Chase(R) ................................  Atlanta, GA               "AAA" NON-AMT + .515% (2)(3)    06/01/25      15,000
Post Walk(R) .................................  Atlanta, GA               "AAA" NON-AMT + .515% (2)(3)    06/01/25      15,000
Post Lake(R) .................................  Orlando, FL               "AAA" NON-AMT + .515% (2)(3)    06/01/25      28,500
Post Fountains at Lee Vista(R) ...............  Orlando, FL               "AAA" NON-AMT + .515% (2)(3)    06/01/25      21,500
Post Village(R) (Atlanta) Fountains
   and Meadows ...............................  Atlanta, GA               "AAA" NON-AMT + .515% (2)(3)    06/01/25      26,000

Post Court(R) ................................  Atlanta, GA               "AAA" NON-AMT + .515% (2)(3)    06/01/25      18,650
                                                                                                                      --------
                                                                                                                       235,880
                                                                                                                      --------
SENIOR NOTES (UNSECURED)
Medium Term Notes ............................  N/A                                       6.22%           12/31/99      16,000
Medium Term Notes ............................  N/A                                LIBOR + .25%           03/03/00      30,000
Northwestern Mutual Life .....................  N/A                                       8.21%           06/07/00      30,000
Medium Term Notes ............................  N/A                                       7.02%           04/02/01      37,000
Northwestern Mutual Life .....................  N/A                                       8.37%           06/07/02      20,000
Senior Notes .................................  N/A                                       7.25%           10/01/03     100,000
Medium Term Notes ............................  N/A                                       7.30%           04/01/04      13,000
Medium Term Notes ............................  N/A                                       6.69%           09/22/04      10,000
Medium Term Notes ............................  N/A                                       6.78%           09/22/05      25,000
Senior Notes .................................  N/A                                       7.50%           10/01/06      25,000
Mandatory Par Put Remarketed Securities ......  N/A                                       6.85% (4)       03/16/15     100,000
                                                                                                                      --------
                                                                                                                       406,000
                                                                                                                      --------
LINES OF CREDIT & OTHER UNSECURED DEBT
City of Phoenix ..............................  N/A                                       5.00% (6)       03/01/21       2,000
Revolver - Syndicated ........................  N/A           LIBOR + .825% or prime minus .25% (5)       04/30/02      50,000
</TABLE>


                                    - 24 -
<PAGE>   27

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
-------------------------------------------------------------------------------

<TABLE>

<S>                                                <C>       <C>                                   <C>          <C>
Revolver - Swing ...............................   N/A       LIBOR + .825% or prime minus .25%     04/21/01          5,000
Cash Management Line ...........................   N/A       LIBOR + .675% or prime minus .25%     03/31/00         14,938
                                                                                                                ----------
                                                                                                                    71,938
                                                                                                                ----------
TOTAL...........................................                                                                $  893,400
                                                                                                                ==========
</TABLE>

(1)      All of the mortgages can be prepaid at any time, subject to certain
         prepayment penalties.
(2)      Bond financed (interest rate on bonds + credit enhancement fees
         effective October 1, 1998).
(3)      These bonds are cross-collateralized. The Company has purchased an
         interest rate cap that limits the Company's exposure to increases in
         the base rate to 5%.
(4)      The annual interest rate on these securities to March 16, 2005 (the
         "Remarketing Date") is 6.85%. On the Remarketing Date, they are
         subject to mandatory tender for remarketing.
(5)      Represents stated rate. The Company may also make "money market" loans
         of up to $175,000 at rates below the stated rate. At September 30,
         1999, the outstanding balance of the Revolver consisted of "money
         market" loans with an average interest rate of 5.95%.
(6)      This loan is interest-free for the first three years, with interest at
         5.00% thereafter. Repayment is to commence on March 1, 2001 subject to
         the conditions set forth in the Agreement.

Dividend Reinvestment Plan
The Dividend Reinvestment Plan ("DRIP") is available to all shareholders of the
Company. Under the DRIP, shareholders may elect for their dividends to be used
to acquire additional shares of the Company's Common Stock directly from the
Company for 95% of the market price on the date of purchase.


                                    - 25 -
<PAGE>   28

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
-------------------------------------------------------------------------------

Current Development Activity
The Company's apartment communities under development or in initial lease-up
are summarized in the following table:

<TABLE>
<CAPTION>
                                                                       QUARTER OF       ACTUAL OR ESTIMATED    ACTUAL OR ESTIMATED
                                                          # OF        CONSTRUCTION     QUARTER FIRST UNITS    QUARTER OF STABILIZED
METROPOLITAN AREA                                         UNITS       COMMENCEMENT          AVAILABLE               OCCUPANCY
-----------------                                       ---------     ------------     --------------------   ---------------------
<S>                                                      <C>          <C>              <C>                    <C>
Atlanta, GA
Post Spring(TM)........................................       452         3Q'99                2Q'00                  2Q'01
Riverside by Post(TM)- Phase II .......................       328         3Q'96                1Q'99                  1Q'00
Parkside by Post(TM)...................................       188         1Q'99                4Q'99                  2Q'00
Post Stratford(TM).....................................       250         2Q'99                2Q'00                  1Q'01
                                                         --------
                                                            1,218
                                                         --------
Charlotte, NC
Post Uptown Place(TM)..................................       227         3Q'98                4Q'99                  3Q'00
Post Gateway Place(TM).................................       232         3Q'99                3Q'00                  2Q'01
                                                         --------
                                                              459
Tampa, FL
Post Harbour Place (TM)................................       319         4Q'98                1Q'00                  1Q'01

Dallas, TX
Post Addison Circle(TM) (II) ..........................       610         1Q'98                1Q'99                  2Q'00
Post Block 588(TM) ....................................       127         4Q'98                4Q'99                  2Q'00
Post Addison Circle(TM)(III) ..........................       264         3Q'99                3Q'00                  2Q'01
Legacy Town Center City Apartment Homes by Post .......       384         3Q'99                4Q'00                  3Q'01
Post Uptown Village(TM)(II) ...........................       196         3Q'99                2Q'00                  4Q'00
                                                         --------
                                                            1,581
                                                         --------
Houston, TX
Post Midtown Square(TM) ...............................       479         1Q'98                2Q'99                  4Q'00

Denver, CO
Post Uptown Square(TM) ................................       449         1Q'98                3Q'99                  4Q'00

Phoenix, AZ
Post Roosevelt Square(TM) .............................       410         4Q'98                1Q'00                  1Q'01

Nashville, TN
The Bennie Dillon by Post(TM) .........................        86         2Q'98                2Q'99                  4Q'99

Orlando, FL
Parkside by Post(TM) ..................................       244         1Q'99                2Q'99                  3Q'00

Washington, D.C.
Pentagon Row by Post ..................................       504         2Q'99                4Q'00                  1Q'02

Austin, TX
Post West Avenue Lofts(TM) ............................       243         3Q'99                4Q'00                  3Q'01
                                                         --------
                                                            5,992
                                                         ========
</TABLE>


                                    - 26 -
<PAGE>   29

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
-------------------------------------------------------------------------------

The Company is also currently conducting feasibility and other pre-development
studies for possible new Post(R) communities in its primary market areas.

Capitalization of Fixed Assets and Community Improvements
The Company has established a policy of capitalizing those expenditures
relating to acquiring new assets, materially enhancing the value of an existing
asset, or substantially extending the useful life of an existing asset. All
expenditures necessary to maintain a community in ordinary operating condition
are expensed as incurred. During the first five years of a community (which
corresponds to the estimated depreciable life), carpet replacements are
expensed as incurred. Thereafter, carpet replacements are capitalized.

Acquisition of assets and community improvement expenditures for the three and
nine months ended September 30, 1999 and 1998 are summarized as follows:


<TABLE>
<CAPTION>
                                                                          THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                                              SEPTEMBER 30,                     SEPTEMBER 30,
                                                                         1999             1998             1999             1998
                                                                      ---------        ---------        ---------        ---------
<S>                                                                   <C>              <C>              <C>              <C>
New community development and acquisition activity .............      $  66,266        $  49,096        $ 220,555        $ 205,960

Non-recurring capital expenditures:

  Revenue generating additions and improvements ................          2,064            4,052            4,178           11,842

  Other community additions and improvements ...................            540              210            1,553            1,098

Recurring capital expenditures:

  Carpet replacements ..........................................            763              645            2,170            1,849

  Community additions and improvements .........................          1,841            1,266            5,113            3,103

  Corporate additions and improvements .........................          3,880            3,645            6,240            7,772
                                                                      ---------        ---------        ---------        ---------
                                                                      $  75,354        $  58,914        $ 239,809        $ 231,624
                                                                      =========        =========        =========        =========
</TABLE>

INFLATION

Substantially all of the leases at the communities allow, at the time of
renewal, for adjustments in the rent payable thereunder, and thus may enable
the Company to seek increases in rents. The substantial majority of these
leases are for one year or less and the remaining leases are for up to two
years. At the expiration of a lease term, the Company's lease agreements
provide that the term will be extended unless either the Company or the lessee
gives at least sixty (60) days written notice of termination; in addition, the
Company's policy permits the earlier termination of a lease by a lessee upon
thirty (30) days written notice to the Company and the payment of one month's
additional rent as compensation for early termination. The short-term nature of
these leases generally serves to reduce the risk to the Company of the adverse
effect of inflation.

NEW ACCOUNTING PRONOUNCEMENTS

On June 15, 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (FAS 133). FAS 133, as amended by FAS 137,
"Deferral of the Effective Date of FAS 133," is effective for all fiscal
quarters of all fiscal years beginning after June 15, 2000 (January 1, 2001 for
the Company). FAS 133 requires that all derivative instruments be recorded on
the balance sheet at their fair value. Changes in the fair value derivatives
are recorded each period in current earnings or other comprehensive income,
depending on whether a derivative is designated as part of a hedge transaction
and, if it is, the type of hedge transaction. Management of the Company
anticipates that, due to its limited use of derivative instruments, the
adoption of FAS 133 will not have a significant effect on the Company's results
of operations or its financial position.


                                    - 27 -
<PAGE>   30

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
-------------------------------------------------------------------------------


YEAR 2000 ISSUE

The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. The Company's
computer equipment and software and devices with embedded technology that are
time-sensitive may recognize a date using "00" as the year 1900 rather than the
year 2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to engage in normal business activities.

The Company has created a specially formed Year 2000 project team to evaluate
and coordinate the Company's Year 2000 initiatives, which are intended to
ensure that its computer equipment and software will function properly with
respect to dates in the Year 2000 and thereafter. In addition, the Company
engaged an independent expert to review its project plan. For this purpose, the
term "computer equipment and software" includes systems that are commonly
thought of as IT systems, including property management and accounting
software, data processing, and telephone/PBX systems and other miscellaneous
systems, as well as systems that are not commonly thought of as IT systems,
such as elevators, alarm systems, or other miscellaneous systems. Both IT and
non-IT systems may contain embedded technology, which complicates the Company's
Year 2000 identification, assessment, remediation, and testing efforts. Based
upon its identification and assessment efforts, the Company has replaced or
modified, or is in the process of doing so, certain computer equipment and
software it currently uses. In addition, in the ordinary course of replacing
computer equipment and software, the Company attempts to obtain replacements
that are Year 2000 compliant. Utilizing both internal and external resources to
identify and assess needed Year 2000 remediation, the Company has completed its
Year 2000 identification, assessment, and testing efforts and anticipates that
its remediation efforts will be completed by November 30, 1999, prior to any
currently anticipated impact on its computer equipment and software. The
Company estimates that as of September 30, 1999, it had completed approximately
95% of the initiatives that it believes will be necessary to fully address
potential Year 2000 issues relating to its computer equipment and software. The
projects comprising the remaining 5% of the initiatives are in process and are
expected to be completed on or about November 30, 1999.

The Company has mailed letters to, or in some instances, made direct contact
with, its significant suppliers, contractors and third party service providers
to determine the extent to which interfaces with such entities are vulnerable
to Year 2000 issues and whether the products and services purchased from or by
such entities are Year 2000 compliant. The Company has also established
procurement policies requiring representation from significant vendors as to
whether products and services are Year 2000 compliant. Substantially all of the
responses received indicate Year 2000 compliance plans are being implemented by
these companies.

At this time, the Company estimates the aggregate cost of its Year 2000
identification, assessment, remediation and testing efforts, or costs expected
to be incurred by the Company with respect to Year 2000 issues of third parties
to be approximately $3.2 million. Expenditures related to the Company's Year
2000 initiatives will be funded from operating cash flows. As of September 30,
1999, the Company had incurred costs of approximately $2.7 million related to
its Year 2000 identification, assessment, remediation and testing efforts, all
of which relates to analysis, repair or replacement of existing software,
upgrades of existing software, or evaluation of information received from
significant suppliers, contractors and other third party service providers.
Other non-Year 2000 IT efforts have not been materially delayed or impacted by
Year 2000 initiatives. The Company presently believes that the Year 2000 issue
will not pose significant operational problems for the Company. However, if all
Year 2000 issues are not properly identified, or assessment, remediation and
testing are not effected timely with respect to Year 2000 problems that are
identified, there can be no assurance that the Year 2000 issue will not
materially adversely impact the Company's results of operations or adversely
affect the Company's relationships with suppliers, contractors or others.
Additionally, there can be no assurance that the Year 2000 issues of other
entities will not have a material adverse impact on the Company's business or
results of operations.


                                    - 28 -
<PAGE>   31

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
-------------------------------------------------------------------------------

The Company has completed a comprehensive analysis of the operational problems
and costs (including loss of revenues) that would be reasonably likely to
result from the failure by the Company and certain third parties to complete
efforts necessary to achieve Year 2000 compliance on a timely basis. The
Company has prioritized its efforts on its IT and non-IT systems and the
readiness of third parties with which the Company transacts business
electronically. Based on this analysis, the Company has not identified any
material operational problems or costs that it believes it is reasonably likely
to incur with respect to its IT or non-IT Systems or as a result of the failure
of third parties to complete efforts to achieve Year 2000 readiness. Although
the Company does not currently anticipate the failure of such systems, the
Company has established contingency plans which it will implement in the event
of the failure of certain of its IT and non-IT systems. The Company expects to
address other unforeseen operational problems associated with the Year 2000
issue on an as needed basis. The risks involved with not solving the Year 2000
issue and which are beyond the Company's ability to control include, but are
not limited to, the following: loss of local or regional electric power, loss
of telecommunications services, delays or cancellations of shipping or
transportation to major building suppliers, general deterioration of economic
conditions resulting from Year 2000 issues, and inability of banks, vendors and
other third parties with whom the Company does business to resolve Year 2000
problems.

The costs of the Company's Year 2000 identification, assessment, remediation
and testing efforts and the dates on which the Company believes it will
complete such efforts are based upon management's best estimates, which were
derived using numerous assumptions regarding future events, including the
continued availability of certain resources, third-party remediation plans, and
other factors. There can be no assurance that these estimates will prove to be
accurate, and actual results could differ materially from those currently
anticipated. Specific factors that could cause such material differences
include, but are not limited to, the availability and cost of relevant computer
codes and embedded technology, and similar uncertainties. In addition,
variability of definitions of "compliance with Year 2000" and the myriad of
different products and services, and combinations thereof, sold by the Company
may lead to claims whose impact on the Company is not currently estimable.
There can be no assurance that the aggregate cost of defending and resolving
such claims, if any, will not materially adversely affect the Company's results
of operations. Although some of the Company's agreements with suppliers and
contractors contain provisions requiring such parties to indemnify the Company
under some circumstances, there can be no assurance that such indemnification
arrangements will cover all of the Company's liabilities and costs related to
claims by third parties related to the Year 2000 issue.


                                    - 29 -
<PAGE>   32

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
-------------------------------------------------------------------------------

FUNDS FROM OPERATIONS AND CASH AVAILABLE FOR DISTRIBUTION

Historical Funds from Operations
The Company considers funds from operations ("FFO") an appropriate measure of
performance of an equity REIT. Funds from operations is defined to mean net
income (loss) available to common shareholders determined in accordance with
GAAP, excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation of real estate assets, and after adjustment for
unconsolidated partnerships and joint ventures. FFO should not be considered as
an alternative to net income (determined in accordance with GAAP) as an
indicator of the Company's financial performance or to cash flow from operating
activities (determined in accordance with GAAP) as a measure of the Company's
liquidity, nor is it necessarily indicative of sufficient cash flow to fund all
of the Company's needs. Cash available for distribution ("CAD") is defined as
FFO less capital expenditures funded by operations and loan amortization
payments. The Company believes that in order to facilitate a clear
understanding of the consolidated historical operating results of the Company,
FFO and CAD should be examined in conjunction with net income as presented in
the consolidated financial statements and data included elsewhere in this
report.

FFO and CAD for the three and nine months ended September 30, 1999 and 1998
presented on a historical basis are summarized in the following table:

Calculations of Funds from Operations and Cash Available for Distribution

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                  NINE MONTHS ENDED
                                                                         SEPTEMBER 30,                      SEPTEMBER 30,
                                                                ----------------------------        ----------------------------
                                                                   1999               1998             1999              1998
                                                                ----------        ----------        ----------        ----------
<S>                                                             <C>               <C>               <C>               <C>
Net income available to common shareholders ..............      $   23,770        $   20,834        $   69,083        $   55,690
   Extraordinary item, net of minority interest ..........              --                --               458                --
   Net loss on sale of assets ............................             246                --             1,337                --
   Minority interest of common unitholders in the
     Operating Partnership ...............................           3,206             3,022             9,435             8,434
   Loss on unused treasury locks .........................              --                --                --             1,944
                                                                ----------        ----------        ----------        ----------
Adjusted net income ......................................          27,222            23,856            80,313            66,068
   Depreciation of real estate assets (1).................          14,218            11,498            40,315            33,307
                                                                ----------        ----------        ----------        ----------
Funds from Operations (2) ................................          41,440            35,354           120,628            99,375
   Recurring capital expenditures (3) ....................          (2,604)           (1,911)           (7,283)           (4,952)
   Non-recurring capital expenditures (4) ................            (540)             (210)           (1,553)           (1,098)
   Loan amortization payments ............................             (20)              (19)              (60)              (55)
                                                                ----------        ----------        ----------        ----------
Cash Available for Distribution ..........................      $   38,276        $   33,214        $  111,732        $   93,270
                                                                ==========        ==========        ==========        ==========
Revenue generating capital expenditures (5) ..............      $    2,064        $    4,052        $    4,178        $   11,842
                                                                ==========        ==========        ==========        ==========
Cash Flow Provided By (Used In):
Operating activities .....................................      $   43,299        $   56,062        $  122,013        $  101,701
Investing activities .....................................      $  (73,110)       $  (74,079)       $ (217,692)       $ (231,793)
Financing activities .....................................      $   33,251        $   28,333        $   80,890        $  133,446
</TABLE>


                                    - 30 -
<PAGE>   33

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED                NINE MONTHS ENDED
                                                                       SEPTEMBER 30,                    SEPTEMBER 30,
                                                              -----------------------------     -----------------------------
                                                                   1999            1998             1999             1998
                                                              ------------     ------------     ------------     ------------
<S>                                                           <C>              <C>              <C>              <C>
Weighted average common shares outstanding - basic....          38,574,434       36,007,167       38,361,877       34,351,747
                                                              ============     ============     ============     ============
Weighted average common shares and units
   outstanding - basic................................          43,772,859       41,222,891       43,567,297       39,567,512
                                                              ============     ============     ============     ============
Weighted average common shares outstanding - diluted..          39,122,421       36,433,862       38,827,381       34,823,164
                                                              ============     ============     ============     ============
Weighted average common shares and units
   outstanding - diluted..............................          44,320,846       41,649,586       44,032,801       40,038,929
                                                              ============     ============     ============     ============
</TABLE>

(1)  Depreciation on real estate assets is net of the minority interest portion
     of depreciation in consolidated partnerships.
(2)  The Company uses the National Association of Real Estate Investment Trusts
     ("NAREIT") definition of FFO. FFO for any period means the Consolidated
     Net Income of the Company and its subsidiaries for such period excluding
     gains or losses from debt restructuring and sales of property plus
     depreciation of real estate assets, and after adjustment for
     unconsolidated partnerships and joint ventures, all determined on a
     consistent basis in accordance with generally accepted accounting
     principles. FFO presented herein is not necessarily comparable to FFO
     presented by other real estate companies due to the fact that not all real
     estate companies use the same definition. However, the Company's FFO is
     comparable to the FFO of real estate companies that use the current NAREIT
     definition.
(3)  Recurring capital expenditures consisted primarily of $763 and $645 of
     carpet replacement and $1,841 and $1,266 of other additions and
     improvements to existing communities for the three months ended September
     30, 1999 and 1998, respectively and $2,170 and $1,849 of carpet
     replacement and $5,113 and $3,103 of other additions and improvements to
     existing communities for the nine months ended September 30, 1999 and
     1998, respectively. Since the Company does not add back the depreciation
     of non-real estate assets in its calculation of FFO, capital expenditures
     of $3,880 and $3,645 for the three months ended September 30, 1999 and
     1998, respectively, and $6,240 and $7,772 for the nine months ended
     September 30, 1999 and 1998, respectively, are excluded from the
     calculation of CAD.
(4)  Non-recurring capital expenditures consisted of community additions and
     improvements of $540 and $210 for the three months ended September 30,
     1999 and 1998, respectively, and $1,553 and $1,098 for the nine months
     ended September 30, 1999 and 1998, respectively.
(5) Revenue generating capital expenditures is primarily comprised of major
    renovations of communities.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         There have been no material changes since December 31, 1998.


                                    - 31 -
<PAGE>   34


PART II.        OTHER INFORMATION


ITEM 1.         LEGAL PROCEEDINGS

                None

ITEM 2.         CHANGES IN SECURITIES AND USE OF PROCEEDS

                On September 3, 1999, the Operating Partnership issued $70
                million of Series D Cumulative Redeemable Preferred Units of
                limited partnership interest (the "Series D Preferred Units")
                to an institutional investor in a private placement meeting the
                requirements of Regulation D promulgated under the Securities
                Act of 1933, as amended. Net proceeds to the Operating
                Partnership of approximately $68 million were used to repay
                outstanding indebtedness.

                The Series D Preferred Units are exchangeable under certain
                circumstances, in whole but not in part, at the option of
                holders of 50% or more of the Series D Preferred Units, for 8%
                Series D Cumulative Redeemable Preferred Shares of the Company
                (the "Series D Preferred Shares), at an exchange ratio of one
                Series D Preferred Share for each Series D Preferred Unit.

ITEM 3.         DEFAULTS UPON SENIOR SECURITIES

                None

ITEM 4.         SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

                None

ITEM 5.         OTHER INFORMATION

                None


                                    - 32 -
<PAGE>   35


ITEM 6.         EXHIBITS AND REPORTS ON FORM 8-K

                (a)        Exhibits
<TABLE>
                <S>        <C>
                 3.1       Articles of Amendment to the Company's Restated Articles of Incorporation
                10.1       Fifth  Amendment to Second  Amended and  Restated  Partnership  Agreement
                           of Post  Apartment Homes, L.P.
                10.2       Registration Rights Agreement, dated September 3,
                           1999, between the Company, the Operating Partnership
                           and TMCT II, LLC
                27.1       Financial Data Schedule for the Company - Third Quarter 1999
                           (for SEC filing purposes only)
                27.2       Financial Data Schedule for the Operating Partnership - Third Quarter 1999
                           (for SEC filing purposes only)
</TABLE>

                The registrants agree to furnish a copy of all agreements
                relating to long-term debt upon request of the Commission.

                (b)        Reports on Form 8-K

                There were no reports on Form 8-K filed by either registrant
                during the three month period ended September 30, 1999.


                                    - 33 -
<PAGE>   36

SIGNATURES

Pursuant to the requirements 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.



POST PROPERTIES, INC.



     November 11, 1999                    /s/ John T. Glover
   -----------------------                --------------------------------
          (Date)                          John T. Glover, President
                                          (Principal Financial Officer)




     November 11, 1999                    /s/ R. Gregory Fox
   -----------------------                --------------------------------
          (Date)                          R. Gregory Fox
                                          Executive Vice President, Chief
                                          Accounting Officer


                                    - 34 -
<PAGE>   37


SIGNATURES

Pursuant to the requirements 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.



POST APARTMENT HOMES, L.P.
                                          By: Post GP Holdings, Inc.,
                                              as General Partner


     November 11, 1999                    /s/ John T. Glover
   -----------------------                --------------------------------
          (Date)                          John T. Glover, President
                                          (Principal Financial Officer)


     November 11, 1999                    /s/ R. Gregory Fox
   -----------------------                --------------------------------
          (Date)                          R. Gregory Fox
                                          Executive Vice President, Chief
                                          Accounting Officer


                                    - 35 -