Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Q1 2018 Earnings Presentation
89 slides from Apartment Investment And Management's earnings presentation, May 7, 2018
Slide 1: First Quarter 2018 Earnings Release and Supplemental Information
177 South Broad Locust on the Park Acquired May 1, 2018 Acquired May 1, 2018 SouthStar Lofts The Left Bank _ i Acquired May 1, 2018 Acquired May 1, 2018 One Ardmore Place Pending Acquisition Coming 2019 First Quarter 2018 Earnings Release and Supplemental Information Aimcofa»
Slide 2: Contents
Page Earnings Release Addendum A: Philadelphia Market Profile Consolidated Statements of Operations Consolidated Balance Sheets Schedule 1 – Funds From Operations and Adjusted Funds From Operations Reconciliation Schedule 2 – Funds From Operations and Adjusted Funds From Operations Information Sched
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Slide 4: Aimco Reports First Quarter Results
FIRST QUARTER Aimco Reports First Quarter Results Denver, Colorado, May 7, 2018 - Apartment Investment and Management Company (“Aimco”) (NYSE: AIV) announced today first quarter results for 2018 . Chairman and Chief Executive Officer Terry Considine comments: “Aimco had a solid first quarter. Operat
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Slide 6: Operating Results: First Quarter Same Store NOI Up 2.7%
FIRST QUARTER Year-over-Year Sequential 2018 Jan Feb Mar 1st Qtr. Operating Results: First Quarter Same Store NOI Up 2.7% Variance 4th Qtr. Variance Average Rent per Apartment Home $1,808 $1,762 2.6 % $1,802 0.3 % Other Income per Apartment Home* (3.7 %) (3.7 %) Average Revenue per Apartment Home* $
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Slide 8: Portfolio Management: Revenue Per Apartment Home Up 7% to $2,052
FIRST QUARTER 527 apartment homes, of which 201 were in the fourth tower of Park Towne Place and 215 were being constructed at Parc Mosaic. Portfolio Management: Revenue Per Apartment Home Up 7% to $2,052 Aimco’s portfolio of apartment communities is diversified across “A,” “B” and “C+” price points
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Slide 10: Acquisitions: Philadelphia Communities and Bent Tree
On May 1, 2018, Aimco completed the acquisition of four of the six apartment communities including 665 apartment homes and 153,000 square feet of office and retail space. Aimco anticipates the acquisition of the fifth apartment community during the summer of 2018 and the acquisition of the final apa
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Slide 12: Balance Sheet: Aimco Leverage
AS OF MARCH 31, 2018 Balance Sheet Aimco Leverage Aimco’s leverage strategy seeks to increase financial returns while using leverage with appropriate caution. Aimco limits risk through balance sheet structure, employing low leverage, primarily non-recourse and long-dated property debt; builds financ
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Slide 14: Leverage Ratios
FIRST QUARTER 2018 Leverage Ratios Aimco target leverage ratios are Proportionate Debt and Preferred Equity to Adjusted EBITDA below 7.0x and Adjusted EBITDA to Interest Expense and Preferred Dividends greater than 2.5x. Aimco calculates Adjusted EBITDA and Adjusted Interest Expense used in its leve
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Slide 16: 2018 Outlook
($ Amounts represent Aimco Share) YEAR-TO-DATE MARCH 31, 2018 FULL YEAR 2018 PREVIOUS FULL YEAR 2018 ($ Amounts represent Aimco Share) SECOND QUARTER 2018 2018 Outlook Net Income per share $0.52 $4.05 to $4.55 $0.36 to $0.46 Pro forma FFO per share $0.60 $2.39 to $2.49 $2.42 to $2.52 AFFO per share
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Slide 18: Earnings Conference Call Information
Earnings Conference Call Information Live Conference Call: Conference Call Replay: Tuesday, May 8, 2018 at 1:00 p.m. ET Replay available until August 8, 2018 Domestic Dial-In Number: 1-888-317-6003 Domestic Dial-In Number: 1-877-344-7529 International Dial-In Number: 1-412-317-6061 International Dia
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Slide 20: Forward-looking Statements
Forward-looking Statements This Earnings Release and Supplemental Information contain forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding projected results and specifically forecasts of second quarter and full year 2018 re
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Slide 22: Addendum A: Philadelphia Market Profile
Addendum A Philadelphia Market Profile Philadelphia is a market that Aimco knows well and Aimco is excited by the opportunity to rebalance its portfolio there by adding high quality communities in attractive submarkets. When thinking about Philadelphia, Aimco is focused primarily on the Center City
Slide 23: Philadelphia cultural scene and demographics
This educated workforce is also drawn to Philadelphia by its thriving cultural scene. Philadelphia is home to 243 museums, art galleries, theater and dance companies, and music venues in Center City, placing it third in the nation in the number of arts and cultural institutions downtown, behind only
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Slide 25: Philadelphia rent growth
These characteristics translate to a market that provides steady and consistent rent growth with lower volatility than many gateway markets. Since 2002, according to REIS, Center City has had a compound annual rate of rent growth of approximately 3.3%, placing it number three among Aimco’s target ma
Slide 26: Philadelphia supply and job growth
However, these trends have not gone unnoticed by multifamily developers, and in 2016 and 2017 Aimco saw elevated levels of supply, especially in Center City, with approximately 1,500 units delivered each year. MPF Research forecasts approximately 1,900 units in 2018 with some relief in 2019 as only
Slide 27: Existing Aimco Portfolio
Existing Aimco Portfolio Chestnut Hill Village Park Towne Place Chestnut Hall The Sterling Riverloft Acquired from Dranoff One Ardmore Place The Left Bank Locust on the Park The Victor SouthStar Lofts 777 South Broad
Slide 28: Philadelphia map
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Slide 30: Consolidated Statements of Operations
Consolidated Statements of Operations (in thousands, except per share data) (unaudited) Three Months Ended March 31, REVENUES Rental and other property revenues attributable to Real Estate $ 225,393 $ 225,228 Rental and other property revenues of partnerships served by Asset Management business 18,8
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Slide 32: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands) (unaudited) March 31, 2018 December 31, 2017 Assets Real estate $ 8,110,787 $ 7,927,753 Accumulated depreciation (2,596,457 ) (2,522,358 ) Net real estate 5,514,330 5,405,395 Cash and cash equivalents 51,894 60,498 Restricted cash 38,999 34,827 Goodwill 37,
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Slide 34: Schedule 1: FFO and AFFO Reconciliation
Supplemental Schedule 1 Funds From Operations and Adjusted Funds From Operations Reconciliation Three Months Ended March 31, 2018 Compared to Three Months Ended March 31, 2017 (in thousands, except per share data) (unaudited) Three Months Ended March 31, Net income attributable to Aimco common stock
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Slide 36: Schedule 2(a): FFO and AFFO Information
Supplemental Schedule 2(a) Funds From Operations and Adjusted Funds From Operations Information (Page 1 of 2) Three Months Ended March 31, 2018 Compared to Three Months Ended March 31, 2017 (consolidated amounts, in thousands) (unaudited) Three Months Ended March 31, Real Estate [1] Revenues, before
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Slide 38: Schedule 2(a) (continued)
Supplemental Schedule 2(a) (continued) Funds From Operations and Adjusted Funds From Operations Information (Page 2 of 2) [1] Contribution from Real Estate consists of property net operating income and other items of income or expense that relate to this portfolio, including property management expe
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Slide 40: Schedule 2(b): Partially Owned Entities
Supplemental Schedule 2(b) Partially Owned Entities Three Months Ended March 31, 2018 Compared to Three Months Ended March 31, 2017 (Proportionate amounts, in thousands) (unaudited) Noncontrolling Interests [1] Unconsolidated [2] Three Months Ended March 31, Three Months Ended March 31, Real estate
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Slide 42: Schedule 3(a): Property Net Operating Income - Real Estate
Supplemental Schedule 3(a) Property Net Operating Income - Real Estate Trailing Five Quarters (consolidated amounts, in thousands) (unaudited) Three Months Ended March 31, 2018 December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 Revenues, before utility reimbursements [1] Same Store $
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Slide 44: Schedule 3(b): NOI - Sold and Held For Sale Communities
Supplemental Schedule 3(b) Property Net Operating Income - Sold and Held For Sale Communities Trailing Five Quarters (consolidated amounts, in thousands) (unaudited) Three Months Ended March 31, 2018 December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 Sold and Held for Sale Property Ne
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Slide 46: Schedule 4: Apartment Home Summary
Supplemental Schedule 4 Apartment Home Summary As of March 31, 2018 (unaudited) Number of Apartment Communities Number of Apartment Homes Aimco Share of Apartment Homes Real Estate Portfolio: Consolidated Same Store 26,367 26,220 Redevelopment/Development 6,280 6,269 Acquisitions 1,211 1,211 Other R
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Slide 48: Schedule 5(a): Capitalization and Financial Metrics
Supplemental Schedule 5(a) Capitalization and Financial Metrics As of March 31, 2018 (dollars in thousands) (unaudited) Leverage Balances and Characteristics [1] Debt Aimco Amounts Aimco Share of Unconsolidated Partnerships Noncontrolling Interests Total Aimco Share Weighted Average Maturity (Years)
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Slide 50: Schedule 5(b): Debt Maturities
Supplemental Schedule 5(b) As of March 31, 2018 Capitalization and Financial Metrics (share, unit and dollar amounts in thousands) (unaudited) Aimco Share Non-Recourse Property Debt Amortization Maturities Total Maturities as a Percent of Total Average Rate on Maturing Debt 2018 2Q $ 19,298 $ — $ 19
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Slide 52: Schedule 6(a): Same Store Operating Results
Supplemental Schedule 6(a) Same Store Operating Results Three Months Ended March 31, 2018 Compared to Three Months Ended March 31, 2017 (proportionate amounts, in thousands, except community, home and per home data) (unaudited) Revenues, Before Utility Reimbursements [1] Expenses, Net of Utility Rei
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Slide 54: Schedule 6(b): Same Store Operating Results
Supplemental Schedule 6(b) Same Store Operating Results Three Months Ended March 31, 2018 Compared to Three Months Ended December 31, 2017 (proportionate amounts, in thousands, except community, home and per home data) (unaudited) Revenue, Before Utility Reimbursements [1] Expenses, Net of Utility R
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Slide 56: Schedule 6(c): Same Store Operating Expense Detail
Supplemental Schedule 6(c) Same Store Operating Expense Detail (proportionate amounts, in thousands) (unaudited) Quarterly Comparison 1Q 2018 % of Total 1Q 2017 $ Change % Change Operating expenses [1] $ 18,819 48.3 % $ 18,554 $ 1.4 % Real estate taxes 14,903 38.3 % 14,080 5.8 % Utility expense, net
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Slide 58: Schedule 7(a): Real Estate Portfolio Data by Market
Supplemental Schedule 7(a) Real Estate Portfolio Data by Market Three Months Ended March 31, 2018 Compared to Three Months Ended March 31, 2017 (unaudited) Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Apartment Communities Apartment Homes Aimco Share of Apartment Homes % Aimco
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Slide 60: Schedule 7(b): Real Estate Portfolio Data by Market
Supplemental Schedule 7(b) Real Estate Portfolio Data by Market Fourth Quarter 2017 Market Information (unaudited) Aimco portfolio strategy seeks predictable rent growth from a portfolio of apartment communities that is diversified across “A,” “B” and “C+” price points, averaging “B/B+” in quality,
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Slide 62: Schedule 8: Disposition and Acquisition Activity
Supplemental Schedule 8 Apartment Community Disposition and Acquisition Activity (dollars in millions, except average revenue per home) (unaudited) Real Estate Disposition and Acquisition Activity First Quarter 2018 Dispositions Number of Apartment Communities [1] Number of Apartment Homes Weighted
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Slide 64: Schedule 9: Real Estate Capital Additions Information
Supplemental Schedule 9 Real Estate Capital Additions Information Three Months Ended March 31, 2018 (consolidated amounts in thousands, except per apartment home data) (unaudited) Aimco classifies capital additions as Capital Replacements (“CR”), Capital Improvements (“CI”), Capital Enhancements (“C
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Slide 66: Schedule 10: Redevelopment Portfolio
Supplemental Schedule 10 Redevelopment Portfolio (Page 1 of 4) As of March 31, 2018 (dollars in millions, except per home information) (unaudited) Aimco executes redevelopments using a range of approaches. Aimco prefers to limit risk by executing redevelopments using a phased approach, in which it r
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Slide 68: Redevelopment Valuation Information
Supplemental Schedule 10 (Continued) Redevelopment Valuation Information (Page 2 of 4) (proportionate amounts, dollars in millions) (unaudited) Three Months Ended March 31, 2018 Occupancy Stabilized Communities Communities Under Construction or in Lease-up Total Redevelopment/Development Portfolio P
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Slide 70: Redevelopment Portfolio: Terms and Definitions
Supplemental Schedule 10 (Continued) Redevelopment Portfolio (Page 3 of 4) Terms and Definitions Estimated Net Investment - represents total estimated investment, net of tax and other credits earned by Aimco as a direct result of its redevelopment or development of the community. Total estimated inv
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Slide 72: Redevelopment Project Summaries
Supplemental Schedule 10 (Continued) Project Summaries (Page 4 of 4) Bay Parc Miami, FL The current phase of the redevelopment includes: improvements to the leasing and lobby areas; redesign of the retail space including addition of a street café; updated landscaping; and expansion of the pool deck.
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Slide 74: Glossary and Reconciliations of Non-GAAP Financial and Operating Measures
GLOSSARY AND RECONCILIATIONS OF NON-GAAP FINANCIAL AND OPERATING MEASURES This Earnings Release and Supplemental Information include certain financial and operating measures used by Aimco management that are not calculated in accordance with accounting principles generally accepted in the United Sta
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Slide 76: Glossary (continued)
95% at March 31, 2018 (inclusive of unconsolidated communities) and represents cash flows from operations that are currently available to pay fees and other amounts due under the contractual agreements. Aimco announced in April 2018, the planned third quarter sale of the Asset Management business. A
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Slide 78: Free Cash Flow definitions
FREE CASH FLOW: Free Cash Flow, as calculated for Aimco’s retained portfolio, represents an apartment community’s property net operating income, less spending for Capital Replacements. Capital Replacement spending is a measure of the cost of capital asset used during the period. Aimco believes that
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Slide 80: Guidance reconciliation of net income to FFO and AFFO per share
The following table reconciles GAAP net income per share to Pro forma FFO per share and AFFO per share, each as presented at the mid-point of Aimco’s guidance range: (dollars per share) (unaudited) Second Quarter Full Year Net income $ 0.05 $ 4.30 Depreciation, net 0.54 2.19 Gain on dispositions of
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Slide 82: Adjusted EBITDA
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (ADJUSTED EBITDA): Adjusted EBITDA represents Aimco’s share of the consolidated amount of Aimco net income, adjusted to exclude the effect of the following items for the reasons set forth below: • Adjusted Interest Expense, defi
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Slide 84: Adjusted Interest Expense and Preferred Dividends
Adjusted Interest Expense and Preferred Dividends as used in the leverage ratios on Supplemental Schedule 5(a) are calculated as follows: (in thousands) (unaudited) Three Months Ended March 31, 2018 Interest expense per consolidated statement of operations $ 47,795 Interest expense related to non-re
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Slide 86: Property Net Operating Income definitions
franchise taxes, and expenses specifically related to Aimco’s administration of its real estate partnerships, for example, services such as audit, tax and legal. Other expenses, net not allocated to Real Estate or Asset Management generally consists of risk management activities related to Aimco’s u
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Slide 88: Footnotes
represents the reclassification of utility reimbursements from revenues to property operating expenses for the purpose of evaluating segment results and as presented on Supplemental Schedule 2, Supplemental Schedule 3, and Supplemental Schedule 6. Aimco also excludes the reimbursement amounts from t
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Apartment Investment & Management — Q1 2018 Earnings Presentation on 6ix