Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — NAREIT Annual Convention 2011
22 slides from Apartment Investment And Management's conference presentation, Nov 15, 2011
Slide 1: NAREIT Annual Convention November 15-17, 2011
NAREIT Annual Convention November 15 - 17, 2011
Slide 2: Forward-Looking Statements and Other Information
1 Forward-Looking Statements and Other Information This presentation contains forward-looking statements within the meaning of the federal securities laws, including statements regarding projected results and specifically forecasts of 2011 through 2013 asset sales and redevelopment investment and th
Slide 3: Executive Summary
2 Aimco Record Aimco has systematically upgraded its portfolio, with rents up 37% over the last six years. Aimco focus on customer retention has lowered costs and produced competitive NOI growth. Aimco's balance sheet is strong. Aimco has simplified its business, improved its quality of earnings and
Slide 4: Aimco Record
ALM Sola, Aimco Record
Slide 5: Aimco has substantially improved its portfolio over the last six years
4 Excludes casualties and property management expenses. NOI less assumed capital replacement expenditures of $850 per unit. 12/31/2005 9/30/2011 % Change Conventional portfolio Properties 526 205 - 61% Average ownership % 81% 92% + 14% Average rents $811 $1,112 + 37% Number of markets 62 35 - 44% NO
Slide 6: Aimco's NOI growth has been competitive
5 2011E represents midpoint of Aimco and peer guidance for 2011 as reported during 4Q 2011. Average of AvalonBay, Camden, Equity Residential, Essex, Home Properties and UDR results as reported individually by SNL Financial. Property Operations Aimco's NOI growth has been competitive (1) (2) NOI grow
Slide 7: Aimco's low-turnover strategy has contributed to NOI outperformance
(2) (3) (3) 6 Aimco's low-turnover strategy has contributed to NOI outperformance Property Operations Based on information collected by YieldStar. 2011E represents midpoint of Aimco and peer guidance for 2011 as reported during 4Q 2011. Average of AvalonBay, Camden, Equity Residential, Essex, Home P
Slide 8: Aimco has operated its properties efficiently and at lower costs
7 Property Operations Aimco's focus on controlling property operating costs has produced superior expense performance. Cost reductions have been achieved across all areas of operations. One key has been higher renewal rates and lower turnover costs. 2011E peer expense growth is based on the average
Slide 9: Leverage Strategy
8 Leverage Strategy Risks of Leverage Aimco Leverage Approach Aimco Balance Sheet Entity risk Avoid recourse debt. No recourse debt, other than line of credit, which had $26M outstanding at 9/30/2011. Repricing risk Use fixed rate property loans and preferred securities. Proactively refinance nearer
Slide 10: Simplification
(1) 9 Simplification Aimco has simplified its business and lowered off-site costs Non-recurring revenue as a percentage of total revenue has been reduced by 86% from a high of 5.2% in 2008 to 0.7% in 2011. During 2011, Aimco will sell more than 100 low-ownership Affordable properties and asset manag
Slide 11: Aimco Direction
ALM Sola, Aimco Direction
Slide 12: Portfolio Transformation Continues
11 Represents portfolio metrics as of 3Q 2011, adjusted for 1) the impact of sales of lower rated Conventional properties and low-ownership Affordable properties and 2) the impact of planned partnership transactions. Results do not include future revenue or expense growth or the impact of reinvestme
Slide 13: Continued NOI Growth
12 Continued NOI Growth Remain focused on NOI contribution and low-turnover strategy Continued revenue growth: New rents increasing ~4% on a year-over-year basis during 4Q 2011. Aimco blended rents in 2H 2011 consistent with blended rents as reported by peers. Earn-in from 2011 rent increases will i
Slide 14: De-Levering the Balance Sheet
13 De-Levering the Balance Sheet Aimco will continue to finance the company primarily with long-term, fixed- rate, non-recourse, amortizing property debt and perpetual preferred securities thereby limiting entity risk, repricing risk and refunding risk. Aimco is seeking to lower financial leverage t
Slide 15: Further Simplification
14 Further Simplification Further simplify Aimco and lower off-site costs Planned acquisitions over the next two years of limited partnership interests in 28 Conventional properties will increase weighted average ownership interest in Conventional portfolio from 92% at September 30, 2011, to 98% and
Slide 16: Redevelopment Investment
15 Redevelopment of three non-earning assets located in Northern and Southern California is anticipated to begin in early 2012. Each of these properties is expected to generate rents making them strong A assets in their markets...with returns on investment substantially greater than available on acq
Slide 17: Aimco Financial Prospects
16 Aimco Financial Prospects
Slide 18: Earnings and Dividend
17 Earnings and Dividend Aimco's capacity for dividend increases is greater than peers' due to an expected higher AFFO growth rate and a current lower payout ratio, approximately 41% of AFFO compared to apartment REIT payout ratios averaging 68%(3). Data source: GreenStreetAdvisors.com as of Novembe
Slide 19: Aimco's Shares are Priced at a Discount
18 By all measures, Aimco is a stronger company today. However, when compared to peers and to historical valuations, Aimco shares trade at a greater discount than they did during 2005. Measure (1) 2005 YTD 3Q 2011 % Change Average rents $811 $1,112 + 37% NOI margin 55% 62% + 12% Free cash flow margi
Slide 20: Aimco's Shares are Priced at a Discount
19 Data Sources: SNL Financial, company reports Operating statistics for Aimco's conventional portfolio. Peer group comprised of AvalonBay, BRE, Camden, EQR, Home Properties, Mid-America Apartments, Post Properties and UDR. Colonial Properties has been excluded due to non-comparability of multi-fami
Slide 21: Appendix
Aim EoCa, Appendix
Slide 22: New lease rents continue to increase as fundamentals remain positive
21 New lease rents continue to increase as apartment fundamentals remain positive, but the rates of increase are lower than we achieved earlier in 2011. Rents are still rising. Demand has eased. Some of the slower pace can be attributed to seasonality, but some is due to a broader economic slowdown
Apartment Investment & Management — NAREIT Annual Convention 2011 on 6ix