Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Investor Presentation (March 2004)
21 slides from Apartment Investment And Management's investor presentation, Mar 1, 2004
Slide 1: Organizational Improvements, Operating Strategies, Portfolio Activities
ORGANIZATIONAL ; PORTFOLIO IMPROVEMENTS ACTIVITIES AIMCO ‘Aewent reser ard Maragerert Comoany March 2004 OPERATING STRATEGIES
Slide 2: Discussion Subjects
Discussion Subjects 1. Organizational improvements 2. Operating Strategies 3. Portfolio Activities 4. 402003 Summary 5. 2004 Guidance 6. 2004 Sources and Uses
Slide 3: Organizational Improvements – Key Senior Executive Changes
1. Organizational Improvements — Key Senior Executive Changes © Jeff Adler — EVP - Head of Conventional Operations * Tom Herzog - SVP ~ Chief Accounting Officer © Jim Purvis - EVP - Head of Human Resources * Chief Operating Officer ~ Search Process is Underway + Expect executive in place by year-end
Slide 4: Organizational Improvements (cont'd)
1. Organizational Improvements (cont’d) — Construction Services ‘© Responsible for oversight of more complicated design and construction activities within Capital Replacement spending ~ * Oversees the construction of redevelopment properties © Monitors compliance with "Aimco physical asset standards
Slide 5: Organizational Improvements – Corporate Organization Chart
1. Organizational Improvements (cont’d) - CORPORATE ORGANIZATION CHART r T T 1
Slide 6: Organizational Improvements – Conventional Property Operations
1. Organizational Improvements (cont’d) - CONVENTIONAL PROPERTY OPERATIONS
Slide 7: Operating Strategies – Pricing
2. Operating Strategies — Pricing: Challenge * Relative effective rent levels versus main competitors declined since 1001 * While recovery began mid-2003, today Aimco is 2% or $15 /unit below competitive parity. Equals $30 milion per year Response * Effective market rent on leases initiated in the f
Slide 8: Operating Strategies – Resident Quality
2. Operating Strategies (cont’d) — Resident Quality: Challenge J © Significant variations in resident qualifications and financial stability score standards * Variations correlated with differences in property performance across a number of metrics . several Tisk factor for 2003 was 15%, with range
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Slide 10: Operating Strategies – Operating Cost Management
2. Operating Strategies (cont’d) - Operating Cost Management: Challenge Limited visibility in projecting expenses Response Detailed ground-up budgeting process implemented All communities have consistent operating expense and capital spending control log RFOs analyze not only how much we spend but h
Slide 11: Operating Strategies – Measurement and Reward System
2. Operating Strategies (cont’d) — Measurement and Reward System: Challenge * Align variable compensation with key operating metrics Response © Monthly Scorecard — Actual versus goals Measures revenue, controllable expenses, capital replacements, customer retention, renewal pricing, new lease pace,
Slide 12: The Cost to Aimco of Performing Below its Peers in 2003
2. Operating Strategies (cont’d) - The Cost to Aimco of Performing Below its Peers in 2003 © Aimco SSS NOI declined 11.3% * Peer SSS NOI declined 5.5% © Shortfall of 5.8% equals $39.4 million in NOI * $0.36 per share FFO
Slide 13: Portfolio Activities – Core and Non-Core Portfolio
3. Portfolio Activities — Core and Non-Core Portfolio © Core Portfolio. Assets in enduring locations that Aimco intends to keep long term. These assets are located in 46 markets The 46 markets give Aimco a geographically diverse portfolio. These 46 markets can further be allocated into three categor
Slide 14: Core Portfolio vs Geographically Concentrated Portfolio
3. Portfolio Activities — Core and Non-Core Portfolio (cont'd) * Case Study - Aimco Core Portfolio vs a Geographically Concentrated portfolio in preferred markets — _ Aimco’s portfolio is geographically diverse containing 46 matkets — The Concentrated portfolio is geographically concentrated in 8 ma
Slide 15: Portfolio Activities – Non-Core Portfolio
3. Portfolio Activities — Core and Non-Core Portfolio (cont'd) © Non-Core Portfolio + Assets in non enduring locations that Aimco will dispose of over the next several years — _ Non-core markets - 36 remaining markets that Aimco will exit Nine markets were exited in 2003 — _ Non-core properties in c
Slide 16: Portfolio Activities – Redevelopment
3. Portfolio Activities (cont’d) — Redevelopment © Emphasis on $2 million to $10 million redevelopments Target over 40 per year Average project timeframe - six to twelve months for exterior work, with interior work on lease expirations Threshold unlevered return 10% Funding from incremental refinanc
Slide 17: Redevelopment Case Study: Franklin Oaks
3. Portfolio Activities (cont’d) — Redevelopment Case Study Franklin Oaks (Nashville, TN) 468 unit property, “under-improved in a good location” Redevelopment commenced 4 2003, plan to complete 40 2004 Investing $4.2 million in the property ($9,000/unit) — Replace all windows, build garages, repair
Slide 18: Major Redevelopments
3. Portfolio Activities (cont’d) — Major Redevelopments Reflections and Glenbridge completed in 4Q 2003 and stabilized 1Q 2004 Flamingo complete 1Q 2004 and stabilized 10 2005 Chimney Hill complete 20 2005 and stabilized 20 2008 Expect to commence four to six major redevelopment projects in 2004 + A
Slide 19: 4Q 2003 Summary
4. 4Q 2003 Summary — FFO of $0.76 per share before impairment charges © Met First Call consensus © Within Aimco guidance AFFO of $0.58 per share © Within Aimco guidance Sequential “Same Store” NOI declined (0.6%) © Better than Aimco guidance of (1%) to (3%) “Same Store” occupancy was 91.8% * 20 bps
Slide 20: 2004 Guidance
5. 2004 Guidance — FFO before impairment $2.85 to $3.20 per share AFFO $2.10 to $2.45 per share "Same Store” N (2.0)% to 1.0% ‘Same Store” Occupancy 91.0% to 93.0% Dispositions Gross $600MM to $700MM ‘Aimco share $440MM to $560MM Acquisitions Gross $440MM to $560MM Aimco share $440MM to $560MM Activ
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Link to searchable text of slide shown above Searchable text section of graphics shown above [ LOG O] ORGANIZATIONAL IMPROVEMENTS PORTFOLIO ACTIVITIES [GRAPHIC] AIMCO Apartment Investment and Management Company March 2004 OPERATING STRATEGIES Dis cussion Subjects 1. Organizational Improvements 2. Op
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