EXHIBIT 99.1
Mid-America Apartment Communities
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 disclaims any duty to update forward looking
statements, including its guidance for 2004.
Ten Years of Success As A Public REIT (NYSE: MAA)
* Experienced - IPO Jan, 1994
* Focused operator - Apartment only REIT
* Total capitalization of $1.9 bill
* Publicly traded securities of $950 million
* Efficient Operation - 129 properties, 36,712 homes
* Regional Focus - Southeast and South Central US
Unique Strategy Delivers Exceptional Results
* High quality assets - young, well maintained
* Focus on broadest renter market
* Diversified markets offer proven mix of growth and stability
* Focus on stable and strong job growth region
* "Hands-on" experienced operator
* Disciplined business strategy
High Quality Assets
* Among the newer REIT portfolios (~ 14 years)
* $240 MM of acquisitions since July 2002; half in Crow Holdings JV,
average age of properties acquired is 4 years
* Continuous improvement with steady capital infusion ($600/unit)
* Sold $110mm of properties over the last 4 years; average age of 20
years at very attractive prices
* Increased credit and resident profile standards during 2003
Focus On The Largest Segment Of The Rental Market; More Stable & Lower Risks
* MAA's middle market focus caters to the largest segment of the rental
market in the SE
* Contrast - Very upper end priced product caters to a narrow, high turnover
and more volatile market segment - more exposed to new development and home
buying
* Contrast - Low end priced product generates low internal growth along with
numerous investment and operating risks
Diversified Markets Generating Good Mix Of Growth and Stability
41 Different Markets Regionally Focused and Efficiently Managed
[Pie chart depicts the following data]
Large Tier 22%
Dallas
Atlanta
Houston
Tampa
Middle Tier 42%
Austin
Memphis
Nashville
Jacksonville
Orlando
Greenville
Louisville
Small Tier 36%
Charleston
Savannah
Chattanooga
Gainesville
Tallahassee
Augusta
Little Rock
Lexington
Huntsville
Jackson, MS
Jackson, TN
Stable Growth Region
Strong demand in Southeast will continue to outpace new supply
Average annual forecasted employment growth from 3Q03 to 3Q06:
Midwest 0.58%
Northeast 0.77%
Nat'l Major Markets 1.20%
Major Southern Mkts. 1.49%
Average annual forecasted new supply growth 2005-2007:
Major Southern Mkts. 1.22%
36,712 units in 129 properties, across 12 states
Experienced "Hands-On" Operator
Superior property & operations management
* Structured property walk program; keeping "in touch" with properties,
employees and monitoring performance
* Consistent capital spending; protecting real estate quality and long-term
value
* Significant focus on productivity and process improvement; a key
differentiating factor in highly competitive industry
* Maintenance productivity programs
* Utility expense management
* Web based employee training
* New web based property and revenue management system
* Significant focus on inventory management operations
Strong Property Management Operation
New '04 inventory management program initiative will generate improved internal
growth potential
Reduce lost revenue due to inventory churn
[Circle depicting the following]
Limit turnover to 60%
Limit monthly turn exposure to no more than 10%; 8% in winter months
Limit MTM leases to less than 5%
- -----------------------
Delivery of vacant unit
- -----------------------
Strict adherence to credit and background checks
Benchmarks - 5 day turn, all market ready by Friday
New property management system for 2004
- ---------------------
"Market ready" status
- ---------------------
New regional marketing function added for 2004
New internet based marketing & leasing program for 2004
- -----------
Leased unit
- -----------
Limit preleasing to 5 business days
- -------------
Occupied unit
- -------------
[Circle loops back to beginning]
Opportunity: one day improvement in cycle = 2 cents share annually
Strategy
Improve dividend coverage, position for growth
* Protect and improve existing dividend coverage
- Remains highest priority and commitment
* Protect value - position for improving market conditions and recapture of
"normal" economics
- Will not compromise resident qualification standards
- Will not compromise capital spending and maintenance
* Grow earnings from core portfolio
- Recovering markets plus improved operating capabilities offer
significant upside
* Grow earnings productivity from new development
- Will continue to opportunistically buy new construction; no
development on MAA balance sheet
* Grow earnings through disciplined acquisitions
- Retain diversified market approach with regional focus
Disciplined Approach to Capital Deployment, Operations and Governance
* Consistent strategic and investment focus
* Extensive experience with regional focus
* Balance sheet matches strategy
* Continuously improving portfolio
* Extensive focus on cost control and productivity
* Strong corporate governance
* Major insider investment commitment
Balance Sheet Matches Strategy
Conservative Capital Structure
* Balance sheet flexibility with growth capacity
* Preferred refinancing in August '03 saves 4cents/share/yr
* '04 refinancing opportunities of $200MM with potential annual savings of
$4MM+/year
* Fixed charge coverage at a five year high
* Average interest rate = 5.4%, down 100bps in 2 years
* 82% of debt is fixed, swapped, capped or forward-swapped
* Average maturity over 10 years
* An average of 10% of debt matures annually over the next 7 years -
refinancing risk well managed
Strong Corporate Governance
Extensive public company governance, multifamily real estate and capital markets
experience
* Non-Management Directors
- George Cates
* Founder, former Chairman/CEO of MAA. 30 years multifamily
experience. Director, First Tennessee National Corp.
- 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 Flournoy
* Chairman and CEO, Flournoy Development Company, Director -
Synovas Financial.
- John Grinalds
* President, Citadel University. Retired, Major General U.S. Marine
Corps.
- Alan Graf
* Executive Vice President and CFO, FedEx Corporation, Director -
Nike Inc., Kimball International.
* 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 10.3% of MAA
Strategy Proven Successful
MAA outperforming the apartment REIT sector
Total Shareholder Return As Of 12/31/2003
MAA shareholders have received a 10-year compounded annual return of 15.3%
[Bar chart depicts the following data]
2003 3-Year 5-Year Since IPO
---- ------ ------ ---------
MS Apartment Index 26.9 10.1 14.7
Peer Group 30.5 12.4 14.4 13.2
MAA 49.7 26.1 19.5 15.3
Strategy Proven Successful
Outperforming the apartment REIT sector -
Stability, Consistency, Predictability
2003 2004
-------------------------------- -----------------------------
MAA Sector MAA Sector
--------------- --------------- ------------- --------------
AFFO growth 8.3% -15.0% (1) 3.0% 2.0% (1)
NOI growth (s-s) -4.0% -6.1% (2) 2.4% -0.6% (2)
-------------------------------- -----------------------------
(1)Source: Morgan Stanley monthly research report dated 1/23/04.
(2)Source: Green Street Advisors quarterly research report dated 12/5/03.
MAA has met or exceeded its quarterly FFO forecasts for 9 consecutive quarters
Strategy for Internal Growth
In Place and Working
* Recovering markets will add 30 cents+/share in additional revenue
* Properties have been well maintained, resident profile standards have been
protected or upgraded and thus well positioned for recovering economy and
markets
* New property and revenue management system will further enhance asset
management and pricing practices in a recovering market
* New development properties, combined with new lease up acquisitions, will
provide additional boost to earnings
New Development
Will help to boost earnings as markets recover
Lincoln on the Green, Memphis
Paddock Club, Panama City, FL
Paddock Club, Murfreesboro, TN
Kenwood Club, Houston, TX
Reserve at Dexter, Memphis, TN
Grand Reserve, Lexington, KY
Strategy For External Growth
In Place And Working
* Proven ability to acquire assets:
- Know markets, owners, brokers
- Accretive basis
- Improves portfolio earnings potential
- Improved returns through joint venture with private capital
* Disciplined capital allocation:
- Finance accretively to current earnings
- Have sold assets, repurchased stock
- Very disciplined underwriting processes
- Investor-oriented approach
Acquisitions Increasing Earnings and Value
Creating shareholder value through disciplined acquisition process, intensive
operations,portfolio efficiencies and market diversification
Legacy Pines, Houston
Lighthouse Court, Jacksonville
Los Rios Park, Dallas
Monthaven Place, Nashville
Timberglen, Dallas
Pricing Upside Potential
FFO Multiple vs. Peers Reflects Opportunity
2004 Projected FFO (Morgan Stanley) $ 2.90
Current Market Multiple 11.7
Current Share Price $34.00
Normalized concession environment $ 0.10
Normalized occupancy environment $ 0.20
Interest Rate savings $ 0.17
Higher interest rate environment (300 bps increase) ($ 0.24)
Normalized FFO Performance $ 3.13
Current Market Multiple 11.7
Market Pricing Opportunity of Normalized Earnings $36.62
Sector Average Multiple 13.5
Market Pricing Opportunity at Sector Multiple $42.25
Market Pricing Upside Opportunity of 24%
Pricing Upside Potential
Dividend Yield vs. Peers Reflects Opportunity
Current MAA annual dividend $ 2.34
Current pricing of MAA common $34.00
Current common yield 6.88%
Multifamily sector average yield 6.45%
MAA priced at sector's average dividend yield $36.28
Pending AFFO coverage of dividend "event" offers additional multiple expansion
opportunity
Pricing Upside Potential
Intrinsic Value of Company Reflects Opportunity
Current value of $41.50/share under the following assumptions -
* 10 year dividend of $2.34/share, growth (conservatively estimated at 1.3%
to 2%) after year 5
* FFO grows as dividend coverage increases, ending at 6% in last three years
(conservatively estimated at 2% to 6% growth)
* Terminal value based on current sector multiple of 13.5 of FFO
* Discount rate of 10.0% applied to 10 year cash flows
Investment Summary
* Superior total returns through all phases of cycle
* Proven out-performance in sector; stable platform
* High-quality, well-maintained properties
* Experienced hands-on operator
* Strong corporate governance
* Earnings growth plans in place and underway
* Markets recovering; long-term positive trends
* Upside pricing opportunity to sector
* Attractively priced to intrinsic value
Mid-America Apartment Communities