Mid-america Apartment Communities, Inc. · NYSE:MAA
Mid-america Apartment Communities — Investor Presentation (April 2008)
23 slides from Mid-america Apartment Communities's investor presentation, Apr 1, 2008
Slide 1: Capital Markets Update
Capital Markets Update April 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 • IPO January 1994 • Exclusively Apartment Real Estate • 13-State Sunbelt Regional Focus • 40,000 Plus Units • $3 B Total Capitalization • Stable and Proven Management Team • Strong Board of Directors • 15% Annual Compounded Return 3
Slide 4: Attractive Investment Opportunity
Attractive Investment Opportunity Why MAA and Why Now? ü Solid Outlook for Apartment Operating Fundamentals; Both Near & Long Term ü MAA is Uniquely Positioned to Capitalize on These Opportunities ü Strong Value Growth Prospects From Existing Properties ü Attractive New Growth Opportunities ü Strong
Slide 5: Apartment Operating Fundamentals
Apartment Operating Fundamentals • Near Term – Stable job growth prospects; regional focus advantage – Change in mortgage financing environment; higher demand, improved retention – MAA not exposed as some others to supply concerns from (1) condo reversions, (2) single-family rental shadow supply, an
Slide 6: Well Positioned in High Growth Region
Well Positioned in High Growth Region • MAA is uniquely positioned to capture the opportunities of this high growth region Employment Growth Projections ’07 - ’11 • Diversified in three different market Annual Compounded Growth Rates tiers across the region…creates opportunity to capture the strong
Slide 7: Apartment Operating Fundamentals
Apartment Operating Fundamentals The change in the mortgage environment will drive higher levels of demand for apartments while also increasing retention of existing residents • Home ownership peaked in 2005 at 69.1%; encouraged by easy credit and expectations of price inflation • Potential benefits
Slide 8: Sophisticated Operating Platform
Sophisticated Operating Platform Collection Agency Collections Integration; real-time Management Delinquency reporting • Innovative Solutions for Lease Key Processes Revenue Training and 24/7 training high degree of control; availability; Procedures – Marketing and leasing Optimizer on-line procedur
Slide 9: Upside From Property Redevelopment
Upside From 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 2,000+ Units Completed in 2007; 3,000+ Units Planned in 9 2008
Slide 10: Strong Operating Results Continue
Strong Operating Results Continue • Q4 Same Store NOI Growth of 7.9% • Year End Occupancy - 11 Year High • Q4 Leasing Concessions Declined 38% • Same Store revenues grew by 4% • Q4 12% Growth in FFO • Q4 19% Growth in AFFO • Q4 and 2007 FFO/Share Results Are Record Performances for MAA • Move-Out Du
Slide 11: External Growth Platform
External Growth Platform • Acquisitions – Focused on newer assets – Extensive network – Competitive advantage • Fund Management – Turn-around opportunities – Monetize platform value – Higher current return • New Development/Lease-Up – Unique value add opportunities – Attractive NPV returns – Regiona
Slide 12: Value of Growth Platform
Value of Growth Platform MAA’s disciplined growth plan will 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 $0.90 acquisitions $50 MM/year of development $1.25 $15 MM/year of redevelopment $
Slide 13: Strong Balance Sheet
Strong Balance Sheet Leverage and • Debt + Preferred as % of entity value is Funding Obligations (1) Development slightly lower than avg. • Lower development funding obligations, coupled with low leverage, puts MAA in a strong competitive position • Strong dividend coverage • Strong Fixed Charge cov
Slide 14: High Quality Assets
High Quality Assets MAA’s portfolio is 20% 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 20,028 Camden 10 53,827 Mid-America 1
Slide 15: Attractive Investment Opportunity
Attractive Investment Opportunity Expectations for another solid year of performance and results in 2008 • Same store projected growth in NOI of 4.0% to 5.0% • FFO growth of 5.6% at mid-point of guidance range* • AFFO growth of 5.2% at mid- point of guidance range* • $150M of acquisitions for Mid- A
Slide 16: Improved Performance Platform
Improved Performance Platform A focus on high growth Disciplined investment High quality of Strong asset management region with an expanded protocol and capital earnings; lower and property management allocation to more robust deployment practices volatility platforms markets Combine to create more
Slide 17: Improved Performance Platform
Improved Performance Platform A balanced approach Creation of a strong A strong property to market tier allocation A re-tool of our asset management management culture in the sunbelt region operating systems platform and “hands-on” focus markets Combine to create operating results that are materiall
Slide 18: Attractive Investment Opportunity
Attractive Investment Opportunity • Significant discount to sector average pricing • Spread between bi-coastal and significant development platforms is too large, especially when considering relative risks • Achieving just sector average pricing (15.3 X) drives ~10% upside opportunity for MAA 2008 F
Slide 19: Attractive Investment Opportunity
Attractive Investment Opportunity MAA’s Regional Focus, Unique Market Strategy, Disciplined Approach To Growth and Heavy Focus on Operations Will Continue To Deliver Competitive Results • The notion that high-barrier markets will out-perform high-growth markets is “over done” in terms of expectation
Slide 20: 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 3 Year 5 Year 10 Year ESS 21.3% 20.8% 18.5% MAA 7.5% HME 7.3% MAA 17.6%
Slide 21: Summary
Summary ü Proven Public Company Platform ü Portfolio Well Positioned ü Favorable Demand Trends ü Strong Operating Platform ü Disciplined Capital Allocation ü Solid Balance Sheet ü Strong Coverage Ratios ü Attractive Value ü Attractive Yield and Inflation Protection ü Proven Performer for Shareholder
Slide 22: End of Presentation
eb Mid-America Apartment Communities End of Presentation
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MID America Apartment Communities — Investor Presentation (April 2008) on 6ix