Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — NAREIT Annual Convention November 2008
32 slides from Apartment Investment And Management's conference presentation, Nov 18, 2008
Slide 1: NAREIT Annual Convention November 2008
NAREIT Annual Convention November 2008 3400 Avenue of the Arts Costa Mesa, CA Park Towne Place Philadelphia, PA Calhoun Beach Club Minneapolis, MN Malibu Canyon Calabasas, CA
Slide 2: Forward-looking Statements and Other Information
This presentation contains forward-looking statements, including statements regarding future results and various scenarios to evaluate liquidity, coverage ratios and cash sources and uses. For purposes of analysis, this presentation includes a number of different liquidity and cash flow scenarios ba
Slide 3: Presentation Topics
About Aimco Property Operations Aimco Portfolio Quality Investment Management Business Liquidity and Balance Sheet Conclusions Appendix: 2009 Liquidity, Coverage Ratios and Sources and Uses Presentation Topics
Slide 4: Introduction to Aimco
Introduction to Aimco Aimco is a leading multifamily REIT with a demonstrated history of successfully buying, managing, redeveloping and selling multifamily properties throughout the United States Initial Public Offering completed in 1994 with $315 million capitalization. Aimco doubled in size every
Slide 5: Property Operations
Property Operations
Slide 6: Property Operations 2008 Outperformance Highlights
Property Operations 2008 Outperformance Highlights: 3Q 2008 Revenue growth of 2.3% comprised of 1.4% in rate, 0.4% in higher occupancy at 95.1%, and 0.5% higher utility reimbursements and other income Expense reductions led by lower turn costs, marketing expenses and payroll, partially offset by hig
Slide 7: Property Operations
Property Operations Property Operations Consolidate Redevelopment Operations with Conventional Property Operations Lean organization focused on the fundamentals of our business Outperform our peers by: Reevaluating our organization and staffing Refining our marketing to both new and existing custome
Slide 8: Aimco Portfolio Quality
Aimco Portfolio Quality
Slide 9: Summary of Asset Sales
Through October 31, 2008: Free Cash Flow (FCF) includes a $500 per unit deduction for capital replacements and is before debt service. FCF cap rate is calculated as the FCF earned by the properties during the 12 months prior to their sale divided by the sales price, excluding transaction costs and p
Slide 10: Conventional Sales: Non-Target Markets
Conventional Sales: Non-Target Markets Through October 31, the number of properties in non-target markets has been reduced by more than 40% Proceeds from sales of assets in non-target markets total $415 million through October 31 Exposure to the Midwest has been significantly reduced from 5.5% of co
Slide 11: Conventional Sales: Target Markets
Conventional Sales: Target Markets Proceeds from sales of assets in inferior locations within target markets total $280 million through October 31 More than half of properties sold out of target markets through October 31 were low rent properties in Texas that lacked redevelopment potential
Slide 12: Quality Sub-Markets & Properties
Quality Sub-Markets & Properties Properties sold were located in neighborhoods with 2007 average home prices of $238,000 while the properties retained are in neighborhoods with average home prices of nearly $400,000 The properties sold had average rents of $740, while rents in our retained portfolio
Slide 13: Quality Markets
Quality Markets Nearly 85% of capital is now invested in target markets, compared to 76% one year ago More than 50% of capital invested in high barrier coastal markets Conventional Asset Allocation (% NAV)
Slide 14: Investment Management Business
Investment Management Business
Slide 15: Investment Management
Investment Management Investment management activities include Portfolio Management and Asset Management Portfolio Strategy Capital Allocation Acquisitions/Dispositions Joint Ventures Tax Credit Syndications Other Transaction Activities Affiliated Partnerships Owned Portfolio Portfolio Management be
Slide 16: Investment Management
Investment Management Certain components of investment management income are recurring while others are dependent on transactions such as asset sales or debt refinancings
Slide 17: Liquidity and Balance Sheet
Liquidity and Balance Sheet
Slide 18: Liquidity is Sound
Liquidity is Sound Aimco is financed primarily with non-recourse property debt of $5.6 billion Recourse bank debt consists of: $75 million due September 2009, which has been funded by proceeds from asset sales $400 million due in March 2011 is expected to be funded incrementally over the next two- a
Slide 19: Property Debt
Property Debt Use of non-recourse property debt reduces risk to the enterprise Property debt is long term with a weighted average maturity of 9.8 years Laddered maturities reduce refunding risk Aimco refinances property debt on a routine basis in our ordinary course of business 102 loans maturing du
Slide 20: Dry Powder
Liquidity is managed, in part, by monitoring and ensuring adequate un-drawn and uncommitted liquidity ("Dry Powder") Dry Powder Sep 30, 2008 (thousands) Revolver capacity 650,000 $ Drawdown on revolver (5,100) Outstanding letters of credit (56,000) Corporate cash balance 27,000 Secured notes credit
Slide 21: Cash Sources and Uses
Cash Sources and Uses Aimco seeks to balance its sources and uses through internal means, reducing reliance on capital markets Cash needs have been identified and stress-tested Analysis has considered liquidity, coverage, debt covenants and sources and uses of cash Based on this analysis, Aimco is a
Slide 22: Cash Sources and Uses
Cash Sources and Uses When balancing sources and uses of cash, the following menu of cash-generating activities can be utilized: Net proceeds from asset sales Additional property debt financing activities Additional capital spending reductions Additional reduction of G&A and variable compensation Ad
Slide 23: Conclusions
Conclusions
Slide 24: Conclusions
Conclusions Aimco owns hard assets, brick and mortar whose replacement costs greatly exceed current values Our properties are in good markets with approximately 85% invested in the 20 largest U.S. markets and the balance in 22 other markets Our properties are well located within their markets follow
Slide 25: 2009 Liquidity, Coverage Ratios and Sources and Uses Appendix
2009 Liquidity, Coverage Ratios and Sources and Uses Appendix
Slide 26: Introduction to bank group liquidity presentation
Every year at this time, Aimco meets with the participants in Aimco's syndicated credit facility. Material from the presentation made to the bank group is also a useful follow-up to many of the items discussed in Aimco's third quarter 2008 earnings release and related earnings conference call, which
Slide 27: 2009 Base Case assumptions
As we plan for 2009, we have analyzed our liquidity, coverage ratios and sources and uses under a variety of scenarios. The Base Case for 2009 includes the assumptions described below. Please note that these assumptions are not intended as the basis for 2009 earnings guidance and are before the comp
Slide 28: 2009 Base Case Scenario - Hypothetical Results
2009 Base Case Scenario - Hypothetical Results This information is not intended as the basis for 2009 earnings guidance. These scenarios are for analytical purposes only and are based on preliminary and high-level estimates and before the completion of Aimco's full 2009 budget process. Accordingly,
Slide 29: 2009 Recession Scenario - Hypothetical Results
2009 Recession Scenario - Hypothetical Results In order to understand how changes to certain Base Case assumptions would affect our analysis, we have provided certain additional scenarios. The Recession Scenario contains all of the Base Case assumptions except NOI growth is assumed to be negative 5%
Slide 30: 2009 Additional Sales Scenario - Hypothetical Results
2009 Additional Sales Scenario - Hypothetical Results In order to understand how changes to certain Base Case assumptions would affect our analysis, we have provided certain additional scenarios. The Additional Sales Scenario contains all of the Base Case assumptions except we assume an additional $
Slide 31: 2009-2012 Sources and Uses - Assumptions
We have analyzed our sources and uses through 2012, as well as potential mitigating items that could reduce any cash deficits. In order to stress test our 2009-2012 sources and uses, we have projected 2010- 2012 based on the 2009 Base Case with the following adjustments: NOI is held flat; Redevelopm
Slide 32: 2009-2012 Sources and Uses - Hypothetical Results
2009 - 2012 Sources and Uses - Hypothetical Results In addition, preferred dividends assumed for the four year period total $224M.
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