Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Proxy Contest (October 2020)
21 slides from Apartment Investment And Management's proxy contest presentation, Oct 13, 2020
Slide 1: Aimco Unlocks Shareholder Value: Board Strategy Update
Aimco Unlocks Shareholder Value Board Strategy Update
Slide 2: Forward-looking statements
This document contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief, or expectations, including, but not limited to: statements regardi
Slide 3: Board-led strategy informed by active engagement with shareholders
Board-led strategy was informed by active and regular engagement with shareholders Shareholders looking for: Greater simplicity Greater predictability Lower leverage Greater emphasis on current income AIR results from separation of non-core development activities, ~10% of GAV1 Separation allows shar
Slide 4: AIR is the Result of the Board's Strategy to Enhance Shareholder Value
AIR is the Result of the Board’s Strategy to Enhance Shareholder Value AIR is simple and transparent, minimizes risk, increases FFO and dividends AIR is simple and transparent: Exclusively owns stabilized apartments Separated investments that are complex or take time to monetize AIR minimizes risk:
Slide 5: ~90% of Assets Continue as AIR
~90% of Assets Continue as AIR ~75% Best-in-class multifamily portfolio Best-in-class property management ~15% to de-lever AIR: Simplified and Pure-Play Business Model Aimco Today Post-Separation Multifamily Portfolio Property Management AIR ~75% to pure-play REIT providing a simple and transparent
Slide 6: AIR: Best-in-Class Portfolio and Property Operations
AIR: Best-in-Class Portfolio and Property Operations Separation creates value for shareholders Day 1 and two distinct and compelling future investment opportunities High-quality portfolio diversified by market and price point: Highest measured customer satisfaction and retention Unequalled record of
Slide 7: Unlocking Value of High-Quality Portfolio
2019 pro-forma results for AIR portfolio1 Estimated GAV as of first quarter 2020 of ~$10.4bn Value confirmed by California joint venture at a 4.2% cap rate 12 properties with estimated GAV as of first quarter 2020 of $2.47bn Valued in September 2020 at $2.4bn in sale of 39% interest The disparity be
Slide 8: Top Eight Markets Represent 90% of AIR GAV
Top Eight Markets(1)(2) Represent 90% of AIR GAV Attractive Portfolio, Diversified by Geography and Price AIR will own stabilized apartment properties in top U.S. markets focusing on properties with high land value located in submarkets with outsized growth prospects AIR will maintain a dynamic capi
Slide 9: Board Strategy Targets Opportunity to Improve FFO Multiple
Board Strategy Targets Opportunity to Improve FFO Multiple Last 3 Years: Price / NTM FFO1 Source: SNL as of 9/24/20 Multifamily peers composite includes coastal peers AVB, EQR, ESS, and UDR and is weighted by implied market capitalization; coastal peers chosen from proxy peers for comparability in g
Slide 10: Board Targeted a Lower Cost of Capital
De-levering and expected rating upgrade likely to provide enhanced access to corporate unsecured issuance at record low interest rates Joint venture pricing provides attractively priced equity An expected improved valuation would offer access to public equity capital at pricing comparable to or bett
Slide 11: AIR is Key to Higher Shareholder Returns
AIR is Key to Higher Shareholder Returns 10 AIR emphasizes its comparative advantage in property operations Operating leverage: Market rent growth: diversified portfolio of markets with outsized growth prospects levered by… Cost control: AIR will build on Aimco’s long history of successful cost cont
Slide 12: AIR has an Experienced Management Team
AIR has an Experienced Management Team 11 Chairman & CEO: Terry Considine President and General Counsel: Lisa Cohn President, Property Operations: Keith Kimmel CFO: Paul Beldin CIO: Conor Wagner AIR Senior Leadership Team: Includes 10 individuals (including those mentioned above) Is stable, averagin
Slide 13: 10% Separation Provides Opportunity to Refresh Tax Basis
10% Separation Provides Opportunity to Refresh Tax Basis 12 AIR expected to have highest tax basis as percent of GAV among peers See company press release dated September 22, 2020 Enhanced ability to manage portfolio with minimal tax friction and reduced need for stock dividends Taxpayer friendly ch
Slide 14: New Aimco Focused on development/redevelopment and value-creating investments
New Aimco 13 Focused on development/redevelopment and value-creating investments Make and realize value of investments that are complex or require time to monetize Well-capitalized to complete development underway Operating cash flow covers offsite costs, G&A, and debt service 10% net LTV1 $100 mill
Slide 15: Relationship Between Two Companies
Relationship Between Two Companies 14 Different Businesses – Independent Oversight Neither company depends on the other after the transition AIR: stabilized properties long-term ownership Aimco: complex investments short-cycle development After transition, no material intercompany transactions are e
Slide 16: Strategy Formed by Highly Qualified, Independent Board
Each Board committee is comprised of independent directors to enhance transparency Board leadership provided by multiple directors with experience in spin-offs Regular refreshment – four independent directors added in last five years – combines fresh perspectives with deep institutional knowledge We
Slide 17: Research Analyst Commentary
Research Analyst Commentary “…we believe it might be the right recipe to reset the valuation and give greater focus to the newly separated entities. If AIR can reach a multiple nearer to peers (seems probable) then current AIV shareholders will have realized about $7.50/sh in upside from Friday's cl
Slide 18: Board Strategy Builds on Aimco Success
Board Strategy Builds on Aimco Success Aimco and its Board have a long-term track record of operating performance and strategic enhancements Best-in-class Property Operations Peer-leading margins for 12 consecutive quarters For the five years ended 2019, Aimco’s same store COE CAGR was 1.0%, 120 bps
Slide 19: Strong Relative Performance
Strong Relative Performance Source: KeyBanc Capital Markets “The Leaderboard”, October 2, 2020; coastal peers chosen from proxy peers for greater comparability in geographic markets and average rent levels Aimco has outperformed the coastal peer average over long and near-term as measured by Total S
Slide 20: Progress of Board Strategy Implementation
Board, newly refreshed, elected in May with 98.5% shareholder vote Continued doing what it was hired to do – unlocking shareholder value Results: $2.4bn joint venture completed $1bn debt reduction completed $1.3bn separation of development company complete before year-end $1bn in additional debt red
Slide 21: Board-led strategy to enhance shareholder value
Board-led strategy to enhance shareholder value AIR is the result: Greater simplicity Greater predictability Lower leverage Greater emphasis on current income Refreshed tax basis AIR results from separation of non-core development activities, ~10% of GAV Continuation of the Board’s track record of c
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