Apartment Investment And Management Company · NYSE:AIV
Apartment Investment And Management — Q2 2018 Earnings Presentation
94 slides from Apartment Investment And Management's earnings presentation, Aug 2, 2018
Slide 1: Second Quarter 2018 Earnings Release and Supplemental Information
Broadcast Center Los Angeles, CA 279 Apartment Homes Second Quarter 2018 Earnings Release and Supplemental Information Aim cola,
Slide 2: Contents
Page Earnings Release Addendum A: Los Angeles 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 Schedu
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Slide 4: Aimco Reports Second Quarter Results
SECOND QUARTER YEAR-TO-DATE Aimco Reports Second Quarter Results Denver, Colorado, August 2, 2018 - Apartment Investment and Management Company (“Aimco”) (NYSE: AIV) announced today second quarter results for 2018 . Chairman and Chief Executive Officer Terry Considine comments: “In the second quarte
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Slide 6: Operating Results: Second Quarter Same Store NOI Up 3.2%
SECOND QUARTER YEAR-TO-DATE Year-over-Year Sequential Year-over-Year 2018 1 st Qtr. Apr May Jun 2 nd Qtr. Year-to-Date Adjusted Funds From Operations (per diluted common share) - Year-over-year, second quarter AFFO increased 6% as a result of lower Capital Replacement spending. Approximately one-thi
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Slide 8: Redevelopment and Development Update
SECOND QUARTER underway. At June 30, 2018 , 90% of the redeveloped apartment homes in the community were leased and 28 of the 136 homes still under renovation were pre-leased. During the second quarter, Aimco invested $10 million in the development of its Parc Mosaic community in Boulder, Colorado.
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Slide 10: Second Quarter Real Estate Portfolio
Second Quarter Real Estate Portfolio - For its entire portfolio, Aimco’s average monthly revenue per apartment home was $2,090 for second quarter 2018 , a 7% increase compared to second quarter 2017 . This increase is due to year-over-year growth in Same Store revenue as well as Aimco’s acquisition
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Slide 12: Leverage
Pro forma* Aimco total leverage includes Aimco share of long-term, non-recourse, property debt encumbering apartment communities in its Real Estate portfolio, outstanding borrowings under its revolving credit facility and term loan, and outstanding preferred equity. Aimco leverage excludes the non-r
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Slide 14: Liquidity
Liquidity At June 30, 2018 , Aimco held cash and restricted cash of $88 million and had the capacity to borrow $368 million under its revolving credit facility, after consideration of outstanding borrowings of $220 million and $12 million of letters of credit backed by the facility. Aimco uses its c
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Slide 16: 2018 Outlook
($ Amounts represent Aimco Share) YEAR-TO-DATE JUNE 30, 2018 FULL YEAR 2018 PREVIOUS FULL YEAR 2018 2018 Outlook Net Income per share $0.54 $4.25 to $4.33 $4.05 to $4.55 Pro forma FFO per share $1.21 $2.40 to $2.48 $2.39 to $2.49 AFFO per share $1.07 $2.09 to $2.17 $2.08 to $2.18 Select Components o
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Slide 18: Third Quarter 2018 Outlook and Conference Call Information
($ Amounts represent Aimco Share) THIRD QUARTER 2018 Net income per share $3.62 to $3.66 Pro forma FFO per share $0.58 to $0.62 AFFO per share $0.49 to $0.53 Earnings Conference Call Information Live Conference Call: Conference Call Replay: Friday, August 3, 2018 at 1:00 p.m. ET Replay available unt
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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 third quarter and full year 2018 res
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Slide 22: Addendum A: Los Angeles Market Profile
Addendum A: Los Angeles Market Profile From time to time, Aimco comments on its most important markets for investment. Los Angeles is one such market and this profile is intended to provide additional market color for the investment community. Los Angeles, the second most populous metro in the U.S.
Slide 23: Per Capita Earnings Growth
Pe r Ca pita Ea rni ings Gri ‘ow’ th 20 09 -20 16 wo oe | I oo « ot os « * oe ws oo ne ASS oo a ae oe a Sol urce e: BEA 1. 200 9 . 20! 16
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Slide 25: Home affordability in LA
Home affordability in LA is the second lowest in the nation, 9 with only 45% of metro households in owned housing. The homeownership rate falls to 26% for the neighborhood surrounding the Palazzos and Broadcast Center, as the median home price of $1.1M (vs. $538k in LA County) makes home ownership e
Slide 26: Multifamily supply in Los Angeles
Given all of LA’s positive attributes, it is no surprise that multifamily developers have increasingly allocated capital to LA, despite it being considered a relatively high barrier-to-entry market with complex land use regulations and numerous zoning and political constraints. In 2018, MPF Research
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Slide 28: Apartment Homes
* APARTMENT HOMES *
Slide 29: Los Angeles regulatory environment and Costa-Hawkins
In addition to new supply, LA faces other challenges, including state and local budget issues and a difficult regulatory environment. One issue currently in the spotlight for multifamily investors is the potential repeal of Costa-Hawkins. Costa-Hawkins is a law passed in 1995 that prohibits Californ
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Slide 31: Consolidated Statements of Operations
Consolidated Statements of Operations (in thousands, except per share data) (unaudited) Three Months Ended Six Months Ended June 30, June 30, REVENUES Rental and other property revenues attributable to Real Estate $ 231,130 $ 227,703 $ 456,523 $ 452,931 Rental and other property revenues of partners
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Slide 33: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands) (unaudited) June 30, 2018 December 31, 2017 Assets Real estate $ 8,171,651 $ 7,927,753 Accumulated depreciation (2,452,947 ) (2,522,358 ) Net real estate 5,718,704 5,405,395 Cash and cash equivalents 46,703 60,498 Restricted cash 41,117 34,827 Goodwill 37,8
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Slide 35: Schedule 1: FFO and AFFO Reconciliation
Supplemental Schedule 1 Funds From Operations and Adjusted Funds From Operations Reconciliation Three and Six Months Ended June 30, 2018 Compared to Three and Six Months Ended June 30, 2017 (in thousands, except per share data) (unaudited) Three Months Ended June 30, Six Months Ended June 30, Net in
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Slide 37: 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 and Six Months Ended June 30, 2018 Compared to Three and Six Months Ended June 30, 2017 (consolidated amounts, in thousands) (unaudited) Three Months Ended Six Months Ended June 30, Ju
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Slide 39: 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 41: Schedule 2(b): Partially Owned Entities
Supplemental Schedule 2(b) Partially Owned Entities Three and Six Months Ended June 30, 2018 Compared to Three and Six Months Ended June 30, 2017 (Proportionate amounts, in thousands) (unaudited) Noncontrolling Interests [1] Unconsolidated [2] Noncontrolling Interests [1] Unconsolidated [2] Three Mo
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Slide 43: 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 June 30, 2018 March 31, 2018 December 31, 2017 September 30, 2017 June 30, 2017 Revenues, before utility reimbursements [1] Same Store $ 1
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Slide 45: 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 June 30, 2018 March 31, 2018 December 31, 2017 September 30, 2017 June 30, 2017 Sold and Held for Sale Property Net
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Slide 47: Schedule 4: Apartment Home Summary
Supplemental Schedule 4 Apartment Home Summary As of June 30, 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 6,284 6,273 Acquisitions 1,876 1,876 Other Re
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Slide 49: Schedule 5(a): Capitalization and Financial Metrics
Supplemental Schedule 5(a) Capitalization and Financial Metrics As of June 30, 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 51: Schedule 5(b): Capitalization and Financial Metrics
Supplemental Schedule 5(b) Capitalization and Financial Metrics As of June 30, 2018 (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 3Q $ 20,464 $ — $ 20,
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Slide 53: Schedule 6(a): Same Store Operating Results
Supplemental Schedule 6(a) Same Store Operating Results Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017 (proportionate amounts, in thousands, except community, home and per home data) (unaudited) Revenues, Before Utility Reimbursements [1] Expenses, Net of Utility Reimb
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Slide 55: Schedule 6(b): Same Store Operating Results
Supplemental Schedule 6(b) Same Store Operating Results Three Months Ended June 30, 2018 Compared to Three Months Ended March 31, 2018 (proportionate amounts, in thousands, except community, home and per home data) (unaudited) Revenue, Before Utility Reimbursements [1] Expenses, Net of Utility Reimb
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Slide 57: Schedule 6(c): Same Store Operating Results
Supplemental Schedule 6(c) Same Store Operating Results Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017 (in thousands, except community, home and per home data) (unaudited) Revenue Expenses Net Operating Income Net Operating Income Margin Average Daily Occupancy During Peri
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Slide 59: Schedule 6(d): Same Store Operating Expense Detail
Supplemental Schedule 6(d) Same Store Operating Expense Detail (proportionate amounts, in thousands) (unaudited) Quarterly Comparison 2Q 2018 % of Total 2Q 2017 $ Change % Change Operating expenses [1] $ 19,818 51.6 % $ 19,307 $ 2.6 % Real estate taxes 13,989 36.3 % 13,716 2.0 % Utility expense, net
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Slide 61: Schedule 7(a): Real Estate Portfolio Data by Market
Supplemental Schedule 7(a) Real Estate Portfolio Data by Market Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017 (unaudited) Three Months Ended June 30, 2018 Three Months Ended June 30, 2017 Apartment Communities Apartment Homes Aimco Share of Apartment Homes % Aimco NOI
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Slide 63: Schedule 7(b): Real Estate Portfolio Data by Market
Supplemental Schedule 7(b) Real Estate Portfolio Data by Market First Quarter 2018 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 an
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Slide 65: 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 Second Quarter 2018 Dispositions Aimco did not sell any apartment communities from its Real Estate port
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Slide 67: Schedule 9: Real Estate Capital Additions Information
Supplemental Schedule 9 Real Estate Capital Additions Information Three and Six Months Ended June 30, 2018 (consolidated amounts in thousands, except per apartment home data) (unaudited) Aimco classifies capital additions as Capital Replacements (“CR”), Capital Improvements (“CI”), Capital Enhanceme
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Slide 69: Schedule 10: Redevelopment Portfolio
Supplemental Schedule 10 Redevelopment Portfolio (Page 1 of 4) As of June 30, 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 re
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Slide 71: Redevelopment Valuation Information
Supplemental Schedule 10 (Continued) Redevelopment Valuation Information (Page 2 of 4) (proportionate amounts, dollars in millions) (unaudited) June 30, 2018 Occupancy Stabilized Communities Communities Under Construction or in Lease-up Total Redevelopment/Development Portfolio Proportionate Propert
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Slide 73: 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 75: Project Summaries
Supplemental Schedule 10 (Continued) Project Summaries (Page 4 of 4) Anschutz Expansion Aurora, CO During the second quarter, Aimco approved the ground-up construction of a 253-apartment home community located within the University of Colorado Anschutz Medical Campus and immediately adjacent to Aimc
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Slide 77: 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 79: Glossary: Asset Management and Average Age Definitions
In accordance with GAAP, Aimco consolidated most of these partnerships and their underlying apartment communities during its ownership of its Asset Management business. Aimco’s share of the results of operations of these apartment communities was approximately 95% at June 30, 2018 (inclusive of unco
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Slide 81: 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 83: Guidance Reconciliation and Leverage Ratio Definitions
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) Third Quarter Full Year Net income $ 3.64 $ 4.29 Depreciation, net 0.56 2.20 Gain on dispositions of r
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Slide 85: Adjusted EBITDA Definition
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 87: 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 June 30, 2018 Interest expense per consolidated statement of operations $ 49,906 Interest expense related to non-rec
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Slide 89: 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 91: Real Estate Segment NOI Reconciliation
Real Estate Segment NOI Reconciliation (in thousands)(unaudited) Six Months Ended June 30, 2018 June 30, 2017 Revenues, Before Utility Reimbursements Expenses, Net of Utility Reimbursements Revenues, Before Utility Reimbursements Expenses, Net of Utility Reimbursements Total attributable to Real Est
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Slide 93: Definitions: Acquisition, Redevelopment/Development, Other Real Estate
ACQUISITION: Includes apartment communities acquired since January 1, 2017. REDEVELOPMENT/DEVELOPMENT: Includes apartment communities currently under construction that have not achieved a stabilized level of operations and those that have been completed in recent years that had not achieved and main
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Apartment Investment & Management — Q2 2018 Earnings Presentation on 6ix