Mid-america Apartment Communities, Inc. · NYSE:MAA
Mid-america Apartment Communities — Investor Presentation (January 2008)
25 slides from Mid-america Apartment Communities's investor presentation, Jan 7, 2008
Slide 1: Investor Update
Investor Update January 2008
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure Statements contained in this presentation, which are not historical facts, are forward-looking statements, as the term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which can cause act
Slide 3: Strong Public Company Platform
Strong Public Company Platform • Experienced Public Company – IPO January 1994 – Exclusively multifamily – $2.6billion total capitalization • High Quality Portfolio – Sunbelt - High Growth region focus – 137 communities; 40,248 units – High quality portfolio (avg age 14 yrs) • Strong Balance Sheet –
Slide 4: Focus on High Growth Region
Focus on High Growth Region • Positive demographic flows Employment Growth Projections ’07 - • Positive migration, immigration flows Annual Compounded ’11 Growth Rates • Low business/living costs • Pro-business regulatory environment National MSA Average 1.20% • Good access to global markets Sunbelt
Slide 5: Well Positioned in High Growth Region
Well Positioned in High Growth Region • MAA is uniquely positioned to capture the strong fundamentals opportunity Employment Growth Projections ’07 - ’11 of the high growth region • Diversified in different market tiers Annual Compounded Growth Rates across the region drives opportunity National MSA
Slide 6: Focus on High-Potential Sub-Markets
Focus on High-Potential Sub-Markets • Positioned in sub-markets with the most rapid growth in households and household income • Low business/living costs are a key driver of growth • High portfolio quality – Comparative ARU metric within sector is a function of regional focus and not asset quality •
Slide 7: Robust External Growth Platform
Robust External Growth Platform • Acquisitions – Extensive network – High deal flow – Competitive advantage • Fund Management – Value add investments – Monetize platform value – Higher return capital deployment • New Development/Lease-Up – Unique value add opportunities – Attractive returns – Improv
Slide 8: High Quality Portfolio
High Quality Portfolio MAA’s portfolio is newer than the sector average. Steady growth and recycling efforts continue to position MAA’s portfolio as one of the younger portfolios in the sector; solid long-term upside potential. Portfolio Age Units owned Post 10 19,222 Camden 10 53,502 Mid-America 14
Slide 9: Sophisticated Operating Platform
Sophisticated Operating Platform Collection Agency Collections • Significant re-tooling of Management Integration; real-time Delinquency reporting the operating platform Lease over the last four years Revenue Training and 24/7 training high degree of control; availability; Procedures Optimizer on-li
Slide 10: Proven Value Creation
Proven Value Creation Internal Rates of Return to equity from investments… through the full value creation cycle… have averaged 19.5%* • With extensive investment and operating experience in the region, track record supports an ability to create value for shareholders that is competitive with strate
Slide 11: Proven Value Creation
Proven Value Creation A solid record of generating value and competitive long-term investment returns to capital… Return on Invested Capital Total Shareholder Returns Trailing 12 Month EBITDA/Total Assets, Gross of Depreciation 5 Year 10 Year MAA 7.4% ESS 18.5% 16.4% CLP 7.1% AVB 24.1% 14.7% HME 7.2
Slide 12: Competitive Performance
Competitive Performance Strong Q3 Results • 11% increase in FFO • Same Store NOI up 7.1% FFO Per Share • Same Store revenues up 4.2% • Physical occupancy up 0.6%; 96.4% • Leasing traffic up 10% • New move-ins up 6% • Same store concessions down 26% • Effective pricing up 3.4% • Fixed charge coverage
Slide 13: Competitive Performance
Competitive Performance • Fundamentals are solid; guidance issued with Q3 results – Q4 • Mid-point of FFO range at $0.91, (11% + over Q4 07) • Same store NOI growth of 7% - 8% – 2007 • Mid-point of FFO range at $2.53, up 6% over prior year • Same store NOI growth for 2007 of 5 ½% to 6% compares to 2
Slide 14: Competitive Performance
Competitive Performance MAA has less exposure Supply-Threatened Number of MAA to those markets expected Markets* Communities to suffer from excess condo and single-family DC/VA area 0 on the rental encroaching product housing market S Cal/Inland 0 Empire • Supply/Demand parity in 08/09 is Miami 0 pr
Slide 15: Upside Performance Opportunity
Upside Performance Opportunity The change in the mortgage environment is likely to a positive influence on the demand for apartment rentals generate • Home ownership peaked in ’05 at 69% • Long-term historical average is 64% • Encouraged by easy credit and expectations of price inflation • Mortgage
Slide 16: Upside Performance Opportunity
Upside Performance Opportunity Move outs to buy a home declined by 300 basis points in Q3; lowest level since 2001 • “Front Door” Benefit • “Back Door” Benefit – Increased traffic – Lower turnover – Higher occupancy – Lower vacancy loss – Pricing opportunity – Lower turn expenses 16
Slide 17: Property Redevelopment
Property Redevelopment Park Estate, Memphis. Case Study - Just over 60% of units redeveloped at an investment of $8K per unit; >30% IRR Before average rent = $852 After average rent = $1,123 17
Slide 18: Property Redevelopment Upside
Property Redevelopment Upside • Up to 20,000 units to be redeveloped at roughly $5,000 per unit • Based on current performance, expect to capture an average 13% un-leveraged IRR • 3,000 units to be completed by December 2007; 3,000 units planned in 2008 • Significant opportunity to drive higher inte
Slide 19: Value of Growth Platform
Value of Growth Platform MAA’s disciplined growth plan is expected to add to value per share* from five sources NPV/share Value Creation Plan of value created $150 MM/year of 100%-owned $1.25 acquisitions $150 MM/year of Fund I acquisitions $0.90 $50 MM/year of development $1.25 $15 MM/year of redev
Slide 20: Attractive Investment Opportunity
Attractive Investment Opportunity • Strong Balance Sheet Debt + Preferred/Entity Value • Lower Risk Growth Strategy • Competitive Capacity to Support Growth • Competitive Position to Support Dividend Growth • 86% of Debt is Fixed, Swapped or Hedged Construction In Process/Entity Value Dividend ’07E
Slide 21: Attractive Investment Opportunity
Attractive Investment Opportunity • Competitive Operating Results – More robust market profile – Improved operating platform • Superior FFO Results – Steady growth – Disciplined investment protocols 21
Slide 22: Attractive Investment Opportunity
Attractive Investment Opportunity • Significant discount to average sector pricing • Spread between high-barrier and significant development platforms is too large, especially when considering relative risks • MAA’s comparative record of long-term value creation and performance for shareholders supp
Slide 23: Attractive Investment Opportunity
Attractive Investment Opportunity ü Proven Public Company Platform ü Portfolio Well Positioned ü Strong Operating Platform ü Disciplined Capital Allocation ü Solid Balance Sheet ü Strong Coverage Ratios ü Attractive Investment ü Proven Performer for Shareholders 23
Slide 24: End of Presentation
ohn te Mid-America Apartment Commun End of Presentation
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