-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A9KdUFNBQvfpnBtPAe7Fcri2O/mkWADALjPD7v5EiKCK4v+PtdywXodqE9hqGS8/ Sc+Bh8Q2zK/95d0j+DP3ug== 0000912595-03-000189.txt : 20031112 0000912595-03-000189.hdr.sgml : 20031111 20031112091547 ACCESSION NUMBER: 0000912595-03-000189 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031112 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20031112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MID AMERICA APARTMENT COMMUNITIES INC CENTRAL INDEX KEY: 0000912595 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 621543819 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12762 FILM NUMBER: 03990849 BUSINESS ADDRESS: STREET 1: 6584 POPLAR AVE STREET 2: STE 340 CITY: MEMPHIS STATE: TN ZIP: 38138 BUSINESS PHONE: 9016826600 MAIL ADDRESS: STREET 1: 6584 POPLAR AVE STREET 2: SUITE 340 CITY: MEMPHIS STATE: TN ZIP: 38138 8-K 1 invnov03.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 Form 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 November 12, 2003 Date of Report (Date of earliest event reported) MID-AMERICA APARTMENT COMMUNITIES, INC. (Exact Name of Registrant as Specified in Charter) TENNESSEE 1-12762 62-1543819 (State of Incorporation) (Commission File Number) (I.R.S. Employer Identification Number) 6584 POPLAR AVENUE, SUITE 300 MEMPHIS, TENNEESSEE 38138 (Address of principal executive offices) (901) 682-6600 (Registrant's telephone number, including area code) (Former name or address, if changed since last report) ITEM 7. Financial Statements and Exhibits Exhibit 99.1 Presentation ITEM 9. Regulation FD Disclosure On November 12, 2003, Eric Bolton, Chairman and CEO, and Simon R.C. Wadsworth, Executive Vice President and CFO will present an update to investors at a NAREIT meeting. A copy of the presentation is furnished as Exhibit 99.1 to this Current Report. 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. MID-AMERICA APARTMENT COMMUNITIES, INC. Date: November 11, 2003 /s/Simon R.C. Wadsworth Simon R.C. Wadsworth Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) EX-99 3 invn03ex.txt EXHIBIT 99.1 Mid-America Apartment Communities, Inc. Investor Update Investor Summary - - 8th largest apartment REIT: 35,233 apartments in 12 states in the Southeast and Texas - - Recession-resistant business and strategy: - Upper and upper-middle market segments - Large, mid-size and small markets - Diversified markets - No development - Quality, well-maintained properties - - Limited partnering in JVs boosts IRR Less risky and more stable business strategy - - Total debt and equity capitalization of $1.75 billion - - Less risky & more recession-resistant business strategy: - High quality well-maintained assets - Geographic diversity (45 markets) - Exited development in 2000 - before the market softened - Proven less earnings volatility than peers as AFFO grows in 2002 and 2003 YTD - - Aggressive hands-on operators Geographical diversification reduces risk [map highlights market presence in the following states] Ohio Virginia Kentucky North Carolina Tennessee Arkansas South Carolina Georgia Alabama Mississippi Texas Florida Performance
Annual Returns - ----------------------------------------------------------------------------- I yr 3 yr 5 yr Since IPO - ----------------------------------------------------------------------------- MAA 42.6% 23.1% 15.3% 14.4% Sector Median 32.7% 12.7% 13.2% 11.7%
2003 2002 2001 2000 - ------------------------------------------------------------------------------------------ Fixed charge coverage 1.77 1.67 1.64 1.58
FFO growth 2003 - ------------------------------------------------------------------------------- Mid-America* 2% Sector Median -12% Before Preferred issuance costs (-$0.28) & Debt write -up (+$0.06)
Dividend Pay-out ratios - apartment REITs
- --------------------------------------------------- Dividend payout ratios 2003* Dividend as % of AFFO Cut - --------------------------------------------------- AEC 126% Yes AIV 117% No AML 104% No ASN 106% No GBP 118% No HME 103% No MAA 107% No PPS 105% Yes SMT 94% Yes TCR 127% Yes Median, all apts 103% Source: Morgan Stanley
Strategy - - Focus on growing value for public shareholders: - Build dividend coverage - Position company for faster growth: - Asset recycling - Higher growth markets - Conserve cash - Reliable source of investor cash flow and value growth - - Grow through lower risk strategies: - Acquisition, not development - Add-on revenue sources - Improved efficiencies Strategy - - Heavy operational focus: - Maximizes value of existing assets - Leader in competitive markets - - Be low-cost provider in upper-middle market segment targets broadest market sector - - Maintain balance sheet and financial position that fits business strategy: - Appropriate leverage - Lowest cost debt sources - Build capacity to take advantage of real estate cycle Strategy - - Invest in cross-section of markets: - Smaller markets provide stability - Larger markets offer growth - Increase focus on larger markets at this point in the cycle - - Maintain focus in Southeast: - More rapid growth - Existing management and investment base High quality assets protects share value - - Portfolio continuously improved with steady capital infusion: - $300 MM of new development 1998 - 2001 - New high quality acquisitions - Continuous upgrades at existing properties - - Sold $110mm of properties 2000 - 2002; average age of 20 years,at very attractive prices - - Acquired Jefferson Pines (1999) & Los Rios (2000) in 2003 Increased earnings potential - new development Reserve at Dexter Lake Memphis, TN 740 units Grande View Nashville, TN 433 units Increased earnings potential - new development Grand Reserve Lexington, KY 370 units Kenwood Club Katy, TX 320 units Preston Hills: JV Acquisition - - Opportunity - New development with troubled lease up; motivated seller. - High quality asset located in high growth market and sub-market. - - Value Creation - Purchased at well below replacement cost. - In need of "hands on operations" to provide stronger cash flows...lease expiration management, expense control. Focus on profit improvement: - - Utility initiatives - Sub-metering of water - 3rd party billing of ancillary services (including trash pick-up) - Other initiatives recapture "lost" expenses - - Productivity: - Lease expiration management - Service tech utilization - Purchasing efficiencies and opportunities Technology - - New property management system to be installed in 2004 (MRI): - web-technology - facilitates amenity pricing - significant control improvements across 130+ sites - Improves efficiency & communication in numerous areas - - Internet-based training programs - highly effective - in-place and rapidly expanding Financing - - Slightly higher leverage than sector: - Debt: 49% of market cap, vs sector median of 46% - Preferred: 9.5% of market cap vs sector median of 8% - Refinancing (August 03) saves 4 cents/share - - Reflects lower business risk compared to sector: - No development - Stable markets - Diversified markets - Broad market appeal Positioned for successful refinancing program in 2004: - - $200 million of refinancing - $165 million of conventional refinancing: - Current rate averages 7.7% - Locked $40 million at 5.45% - $35 MM of refinancing opportunities tax-free bonds - $4MM potential savings - - Expanded Fannie Mae credit facility to $800MM - - Probable $100 million Freddie Mac credit facility - - 85% of debt is fixed, swapped, forward-swapped or capped; fixed rate maturities are laddered Strategy implementation - - Grow AFFO to improve dividend coverage over short & long term - Return to normal market environment can add 30 - 40 cents share in revenue - Expand in markets with potential for faster growth - Add assets carefully which are immediately accretive and will add to AFFO over the long term - Manage balance sheet to maintain flexibility while growing AFFO Corporate Governance - - Insiders own 10.8% of shares/units - - 7 of 9 directors are non-management - - 6 of 9 have significant public company experience - - 6 of 9 are independent - - Recent addition: Alan Graf, CFO of FedEx, Chairman of Audit Committee Current Value Assessment (Cap Rate Method) [bar chart represents the following data] Cap rate at 7.5% $30.00 Cap rate at 7.0% $35.00 - - Cap Rate Value- next 12 mths proj. NOI less 4% mgmt fee and $350/unit capital less liabilities & preferred MAA value - - Stock price is cheaper than sector average: - current dividend yield of 7.25% vs 6.3% (sector avg) - AFFO multiple of 15.1 vs 15.7 (sector avg) - - Defined goal of dividend coverage improvement: - Dividend payout ratio of AFFO only slightly above sector median (107% vs 103%) - - Balance sheet retains capacity for further accretive acquisitions - - Expansion in growth markets - - 30 to 50% of dividend not currently taxable Investment summary - - Proven performance thru the recession - - Conservative strategy - No development - Sound debt strategy - Balance sheet matched to business risk - - Committed to improvement of dividend safety - - Positioned to generate earnings growth. - - Attractive current market pricing Mid-America Apartment Communities www.maac.net -----END PRIVACY-ENHANCED MESSAGE-----