-----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, Mu5mJ0b1rRpRUu33ZWsyZQTCDx+sAUt6uAXErVQkWQ9Pp+lDlwhwU15VMVYTIsc3 MEb7Xzd5ActEEvpcB8V2QA== 0000912595-04-000148.txt : 20041117 0000912595-04-000148.hdr.sgml : 20041117 20041117111920 ACCESSION NUMBER: 0000912595-04-000148 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041117 ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041117 DATE AS OF CHANGE: 20041117 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: 041151223 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 narnov04.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 17, 2004 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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 7.01 Regulation FD Disclosure During the three day period from November 17, 2004 to November 19, 2004, Eric Bolton, Chairman and CEO, and Simon R.C. Wadsworth, Executive Vice President and CFO will present an update to investors at the NAREIT Annual Convention. A copy of the presentation is furnished as Exhibit 99.1 to this Current Report. ITEM 9.01 Financial Statements and Exhibits (c) Exhibits Exhibit Number Description -------- ------------------------------------ 99.1 Investor Update 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 17, 2004 /s/Simon R.C. Wadsworth Simon R.C. Wadsworth Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) EX-99 2 narnv04x.txt EXHIBIT 99.1 Mid-America Apartment Communities Investor Update NAREIT Annual Convention November, 2004 Safe Harbor Statement 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 actual results to differ materially from those currently anticipated, due to a number of factors, which include, but are not limited to, unfavorable changes in the apartment market, changing economic conditions, the impact of competition, acquisitions which may not achieve anticipated results and other risk factors discussed in documents filed with the Securities and Exchange Commission from time to time including the Company's Annual Report on Form 10-K and the Company's Quarterly Report on Form 10-Q. The statements in this presentation are made based upon information currently known to management and the company assumes no obligation to update or revise any of its forward-looking statements. MAA Profile >> Southeast Regional Focus Strong, steady apartment demand trends; strong job growth and migration; sun-belt region >> Effective Market Tier Strategy Creates lower volatility through full market; stable dividend and value protection >> Middle Market Product Focus Largest price point market segment; lower volatility through full market cycle >> Strong Property Operating Focus Hands-on approach to property management; heavy focus on operations and on-site execution Regionally Focused Strategy Diversified across strong and stable growth region of the count...high and steady demand for apartment housing [Map depicts the location of the Company's locations in the Southeast and Texas] Population Growth Projections 2005 - 2010: US Total 4.1% MAA Region 4.7% 2005 - 2015: US Total 8.4% MAA Region 9.3% Over the next three decades, net population change will be most evident in three states - CA, TX, FL. Source: Dept. of Commerce, Current Population Reports Regional Unemployment Rates 9/03 9/04 Northeast 5.8 5.1 South 5.8 4.9 Midwest 6.0 5.5 West 6.5 5.6 Apartment REIT Sector Position An efficient operating platform in place; meaningful opportunity for higher relative external growth performance Total Units Total Enterprise Value Scale of Operation Enterprise Total Units Value Aimco 233,362 Equity $ 17,277 Equity 203,590 Archstone $ 11,940 United Dominion 77,259 AIMCO $ 11,225 Archstone 63,839 Avalon Bay $ 7,482 Camden 51,344 United Dominion $ 5,824 Home Properties 42,224 Home Properties $ 3,810 Avalon Bay 39,019 Camden $ 3,629 Mid-America 36,712 BRE Properties $ 3,641 Post Properties 27,683 Essex Property $ 3,476 AMLI 27,014 Post Properties $ 2,629 Essex Property 26,991 Gables $ 2,439 BRE Properties 23,981 Mid-America $ 2,108 Cornerstone 22,910 Summit Properties $ 1,911 Gables 22,704 AMLI $ 1,722 Per 11/5/04 Stifel, Nicolaus Weekly Sector Scorecard Report and Bear Stearns July 2004 Apartment REIT Performance Report. Strategy Overview Early 2002 defined a plan to improve share price and 'weather the storm' of weakening market fundamentals >> Commit to the current dividend * Grow cash flow; avoid transactions that would dilute coverage >> Protect shareholder and real estate value * Resident profile, CapEx spending, stay focused on operating fundamentals >> Establish a more balanced portfolio earnings profile * Grow capital base in larger tier markets; position for full-cycle performance >> Strengthen balance sheet and operating platform to support growth * Build balance sheet flexibility, high focus on operating productivity Steady Improvement Steady progress in growing FFO while maintaining a constant dividend; expect continued FFO improvement next year as market conditions strengthen and new growth continues. [Line chart depicts the following] Dividend and FFO 2001 2002 2003 2004F 2005F FFO/share* $ 2.74 $ 2.69 $ 2.87 $ 3.00 $ 3.06 Dividend $ 2.34 $ 2.34 $ 2.34 $ 2.34 $ 2.34 * Before write-off of preferred share issuance cost ("non-cash"); Forecast per First Call. Consistent Performer 16.6% annualized return since IPO; MAA shareholder returns in the top-tier of apartment sector performance for all measurement periods [Line chart depicts the following] Total Return since February 1994: MAA vs NAREIT Index YTD IPO 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 11/9/04 MAA 100 142 143 180 192 166 182 201 259 264 395 441 Nareit 100 100 114 156 188 155 147 188 212 222 304 367 Total Return - Three Years ESS 101.9% MAA 101.4% UDR 89.1% AVB 76.0% ASN 75.2% BRE 73.4% GBP 69.5% TCT 69.3% AML 67.4% HME 65.6% SMT 64.3% CPT 53.9% AEC 52.1% EQR 50.2% PPS 28.2% TCR 24.2% AIV 10.2% Total Return - Five Years ESS 212.0% UDR 189.2% MAA 176.8% AVB 171.8% BRE 147.3% TCT 140.3% ASN 135.1% CPT 132.6% SMT 128.3% HME 125.9% GBP 120.8% AML 117.9% EQR 111.9% AEC 109.6% TCR 57.6% AIV 36.8% PPS 27.6% Source: Stifel, Nicolaus Weekly Sector Scorecard - Residential 11/5/04. Steady Improvement Expect continued steady progress in 2005 and beyond >> FFO Forecasts * 2004: $2.98 to $3.01 * 2005: $3.00 to $3.10 >> Impact from straight-line concession change * 2004: + 4 cents * 2005: - 3 cents >> Assume in 2005 * 2% to 2.5% same store NOI growth * $150 MM of acquisitions * $20 MM of dispositions * 5.5% blended average interest rate Why Buy MAA Significant FFO upside to capture from existing portfolio as market conditions improve >> Successful implementation in 2004 of new web-based property and revenue management system; strong productivity and pricing platform >> New initiative to be launched in 2005 focused on more extensive unit interior renovation opportunities; initially focused on 3,500 units >> Same store pricing power of portfolio has been protected (ARU performance: 2002 -.2%, 2003 .1%, 2004 YTD .3%) >> Leasing and credit standards have been aggressively managed and protected >> During normalized market conditions, same store portfolio generated $0.20/share of higher NOI (or $4MM) than in 2004 >> All three market tier segments (large, middle and small city markets) have up-side to capture Why Buy MAA A record of disciplined growth; extensive network in place and local knowledge of markets ensures steady deal flow >> $330 million (4,457 high quality units) acquired in the last two years at an average 6.6% cap rate * Average property age 5 years * Average $75,000 per unit; below replacement value * All in major markets: Atlanta, Dallas, Houston, South Florida, Jacksonville, Austin, Nashville >> Numerous acquisition opportunities currently under review Why Buy MAA Flexibility, coverage ratios and cost of debt have all materially improved over the last three years >> Balance sheet materially strengthened >> Equity markets accessed tactically to fund acquisitions on accretive basis through direct placements >> Improving dividend coverage has increased flexibility >> Fixed charge coverage has improved to 1.86 from 1.67 over last two years >> Agency credit facilities offer optimum debt financing (price, flexibility) >> Debt program well laddered; 10% annually Why Buy MAA Experienced and independent Board of Directors - expertise in apartment real estate, capital markets and corporate governance. >> Independent Directors * Robert Fogelman President, Fogelman Investments. 30 years of multifamily development and property management * Ralph Horn Former Chairman/CEO First Tennessee. Director - Gaylord Entertainment, Harrah's Entertainment * Mike Starnes CEO and President MS Carriers, Inc. Director - Swift Transportation Co., Union Planters Corp * John Grinalds President, The Citadel University. Retired, Major General U.S. Marine Corps * Alan Graf Executive Vice President and CFO, FedEx Corporation, Director - Nike Inc., Kimball International >> Non-Management Directors * George Cates Founder, former Chairman/CEO of MAA. 30 years multifamily experience. Director - First Tennessee * John Flournoy Chairman and CEO, Flournoy Development Company (apartments), Director - Synovus Financial >> Management Directors * Eric Bolton Chairman and CEO, 10 years with MAA, 20 years real estate experience * Simon Wadsworth Executive Vice President and CFO, 10 years with MAA Insiders own 10.1% of MAA Why Buy MAA MAA aims to deliver the highest risk-adjusted return in the sector * Business strategy is oriented towards protecting dividend, growing AFFO, not depending on major capital transactions * Avoiding inherently risky development business (operating, forecasting, business leverage, accounting risks) * Diversified portfolio across multiple market types - lower volatility through full market and interest rate cycles * Focus on stable growth region of the country - better able to battle periodic supply pressures through careful investing & aggressive operations * Focus on apartment product serving middle market renter - largest rental market segment, lower volatility * Very disciplined acquirer; significant focus on replacement value and ability to effectively compete against periodic new supply pressures * Focused "operator" - strong company culture centered on property operations Why Buy MAA Current market pricing offers a discount to underlying real estate value >> Market pricing is approximately $59,500 per unit, or 6.75% cap rate >> One of the newer portfolios in the sector at an average age of 13 years >> 4,457 units at an average price (discount to replacement) of $75,000 added in last two years >> Material shift of portfolio to lower cap rate markets over the last three years >> Recent transactions (SMT, TCR) imply values of 5.5% to 5.75% cap rates at $65,000 per unit >> Equivalent pricing of MAA drives price range of $48 to $55 per share Why Buy MAA MAA is under-priced relative to sector multiple average Stock Price As Multiple FFO AFFO MAA 13.3 16.5 All Apts. 16.5 19.4 MAA priced at sector multiple averages: $46 - $50 MAA is better positioned for dividend growth than the sector average. Dividend Payout Ratio FFO AFFO MAA 78% 97% All Apts. 86% 100% Source: Morgan Stanley 11-5-04; All Apts. is weighted average; MAA updated through Q304 release. Investment Summary Significant internal earnings growth upside + steady and disciplined external growth prospects + secure dividend + pricing upside to sector |X| Focused strategy and operation |X| Lower-risk business strategy & operation |X| Well positioned within sector |X| Consistent top performer |X| Significant earnings upside to recapture |X| Solid growth prospects |X| Disciplined approach to new growth |X| Secure dividend |X| Strong, independent board |X| Pricing upside relative to sector |X| Solid yield and value upside opportunity -----END PRIVACY-ENHANCED MESSAGE-----