Apartment Investment and Management Company (NYSE:AIV) Q3 2021 Earnings Conference Call October 29, 2021 1:00 PM ET Company Participants Lisa Cohn - President, General Counsel & Secretary Terry Considine - CEO & Director Keith Kimmel - President of Property Operations John McGrath - Executive Vice President, Co-CIO Paul Beldin - Executive VP & CFO Conference Call Participants Haendel St. Juste - Mizuho Alex Kalmus - Zelman John Pawlowski - Green Street Chandni Luthra - Goldman Sachs John Kim - BMO Capital M ...

Financial Data and Key Metrics Changes - Aimco's third quarter pro forma FFO was $0.61 per share, down $0.03 or 5% year-over-year, primarily due to lower occupancy and COVID-related impacts [25][26] - The leverage-to-EBITDA ratio on a trailing 12-month basis was reduced to 7.0x following a $1 billion leverage reduction [24] Business Line Data and Key Metrics Changes - Residential net rental income decreased by 2.5% in the third quarter, with average daily occupancy at 93.9%, down 280 basis points from the previous year [15] - Same-store revenues declined by 4.9% in the third quarter, while expenses decreased by 1.3%, leading to a 6.3% decrease in same-store net operating income year-over-year [15][16] Market Data and Key Metrics Changes - In suburban markets, occupancy was at 95.7% with residential net rental income up 60 basis points, while urban markets saw occupancy drop to 89.5% and a 7.1% decline in residential net rental income [16] - The leasing pace in urban areas improved, with a 44% year-over-year increase in leasing activity in the third quarter [17] Company Strategy and Development Direction - Aimco plans to simplify its business structure and reduce execution risk by separating into two entities, with 90% of capital focused on stabilized apartment communities and 10% on development and redevelopment [12] - The company aims to reduce leverage by $2 billion, enhancing financial flexibility and increasing FFO and dividends per share [12][24] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about recovery, noting improvements in forward-looking metrics since midsummer, including increased leasing activity and declining delinquencies [9][14] - The management team highlighted the importance of maintaining high standards for resident selection to ensure long-term stability and revenue growth [10][74] Other Important Information - Aimco announced a special dividend of $8.20 per share, consisting of 10% cash and 90% common stock, to distribute taxable gains from asset sales [27] - The company acquired Hamilton on the Bay in Miami for $90 million, which includes plans for substantial redevelopment and additional residential units [20][21] Q&A Session Summary Question: What has changed to prompt a complete shift in strategy? - Management noted that public markets increasingly value FFO, leading to a separation that allows for clearer visibility of each business's benefits [30] Question: How will the separation impact development opportunities? - Management believes there will be long-term demand for stable cash dividends, and the separation will allow for focused growth in both entities [33] Question: How are urban properties performing? - Urban properties have been impacted by local conditions, but management expects recovery as universities and offices reopen [16][17] Question: What is the rationale behind the investment in the life sciences development company? - The investment is seen as a commitment to future growth, allowing shareholders to choose their preferred business model post-separation [41] Question: How is the acquisition in Miami expected to perform? - The acquisition is anticipated to be a strong long-term investment due to its location and potential for redevelopment [43][45] Question: What is the expected timeline for the separation? - Management indicated that details regarding the separation will be publicly available soon, with discussions ongoing [52][54] Question: How does management view the current market conditions? - Management acknowledged that transaction volumes are down, but they remain optimistic about future opportunities in faster-growing markets [63][64]

Financial Performance - Rental and other property revenues for the three months ended September 30, 2020, were $215,455 thousand, a decrease of 6.0% from $229,827 thousand for the same period in 2019[16] - Net loss attributable to Aimco for the three months ended September 30, 2020, was $(25,046) thousand, compared to a net income of $2,003 thousand for the same period in 2019[16] - Comprehensive loss attributable to Aimco for the three months ended September 30, 2020, was $(25,235) thousand, compared to a comprehensive income of $1,601 thousand for the same period in 2019[17] - Net income for the three months ended September 30, 2020, was $1,979,000, compared to a net loss of $25,007,000 for the same period in 2019, indicating a significant turnaround[18] - Net income for the nine months ended September 30, 2020, was $27,366,000, a decrease from $365,261,000 in the same period in 2019[20] - For the three months ended September 30, 2020, net income was $2,095,000, a decrease from $2,037,000 in the same period of 2019[24] - The company reported a net loss of $26,348,000 for the nine months ended September 30, 2020, compared to a net income of $359,461,000 for the same period in 2019[25] Assets and Equity - Total assets increased to $7,042,129 thousand as of September 30, 2020, compared to $6,828,739 thousand at December 31, 2019, reflecting a growth of approximately 3.1%[14] - Cash and cash equivalents increased to $228,368 thousand as of September 30, 2020, from $142,902 thousand at December 31, 2019, reflecting a growth of approximately 59.9%[14] - Total Aimco Equity as of September 30, 2020, was $2,121,391,000, an increase from $1,705,459,000 as of September 30, 2019, representing a growth of approximately 24.4%[18] - The total equity as of September 30, 2020, was $2,136,797,000, compared to $1,786,074,000 as of September 30, 2019, reflecting an increase of approximately 19.6%[18] - Total partners' capital as of September 30, 2020, was $2,136,797, compared to $1,786,074 as of September 30, 2019, reflecting an increase of approximately 19.6%[24] Expenses - Total operating expenses increased to $201,686 thousand for the three months ended September 30, 2020, up from $191,200 thousand for the same period in 2019, representing an increase of approximately 5.8%[16] - Interest expense rose to $(50,519) thousand for the three months ended September 30, 2020, compared to $(42,011) thousand for the same period in 2019, indicating an increase of approximately 20.5%[16] - The company reported a bad debt expense of $3.7 million for the three months ended September 30, 2020, contributing to the overall financial impact of COVID-19[110] - Other expenses, net, increased by $13.6 million, or 339.1%, for the three months ended September 30, 2020, primarily due to costs associated with business separation[187] Cash Flow - Cash provided by operating activities was $265,876,000, compared to $278,748,000 for the nine months ended September 30, 2019[20] - Cash, cash equivalents, and restricted cash at the end of the period totaled $268,491,000, up from $93,225,000 at the end of the previous year[20] - The company reported a net increase in cash of $90,789,000 for the nine months ended September 30, 2020, compared to an increase of $20,630,000 in the same period of 2019[26] Investments and Acquisitions - The company made capital expenditures of $272,269,000, down from $292,749,000 in the same period last year[20] - The company loaned $275.0 million to a partnership owning Parkmerced Apartments, accruing interest at 10% per annum[78] - The company announced a plan to separate its business into two public entities, with approximately 90% of estimated fair value going to Apartment Income REIT (AIR) and 10% to the new Aimco[31] - The joint venture formed on September 8, 2020, involved a portfolio of 12 multi-family apartment communities valued at $2.4 billion, with an implied equity value of $1.18 billion[47] - During the nine months ended September 30, 2020, the company sold eight apartment communities for a gain of $356.9 million, with an average of 2,605 apartment homes sold[50] COVID-19 Impact - Incremental costs due to COVID-19 were estimated at $9.5 million for the three months and $22.6 million for the nine months ended September 30, 2020[110] - The impact of COVID-19 included an estimated $6.5 million in property-level impacts for the three months ended September 30, 2020[110] - The company expects bad debt to decline to approximately 30 basis points in 2021 as emergency ordinances unwind[114] - Residential rent collection for the three months ended September 30, 2020, was 95.6%, with total payments received as of October 23, 2020, at 96.7%[112][113] Shareholder Returns - Common Stock dividends for the three months ended September 30, 2020, totaled $58,065,000, a decrease from $61,034,000 in the same period of 2019[18] - Dividends paid during the three months ended September 30, 2020, were $0.41 per share, an increase from $0.39 per share in the same period of 2019; for the nine months, dividends were $1.23 compared to $2.80 in 2019[66] Future Outlook - The company expects to maintain its current or projected occupancy and rental rates despite the ongoing pandemic challenges[95] - The company expects to increase average revenue per apartment home at a rate greater than market rent growth and maintain sufficient geographic and price point diversification to limit volatility and concentration risk[138]

Apartment Investment and Management Company (NYSE:AIV) Q2 2020 Earnings Conference Call August 4, 2020 12:00 PM ET Company Participants Lisa Cohn - Executive Vice President, General Counsel and Secretary Terry Considine - Chairman and Chief Executive Officer Keith Kimmel - Executive Vice President, Property Operations Wes Powell - Executive Vice President, Redevelopment Paul Beldin - Chief Financial Officer Patti Shwayder - Senior Vice President Conference Call Participants John Kim - BMO Capital Markets Je ...