EX-99.1 2 d88560ex99-1.txt SLIDE PRESENTATION DATED JUNE 21, 2001 1 AIMCO APARTMENT INVESTMENT AND MANAGEMENT COMPANY INVESTOR CONFERENCE JUNE 2001 2 FORWARD LOOKING STATEMENT ---------------------------------------o---------------------------------------- This presentation contains information that is forward-looking, including statements regarding the Company's future financial performance. Actual results may differ materially from those described and could be affected by a variety of factors including economic conditions; changes in interest rates; governmental regulations; competition; financing risks; variations in real estate values; the failure of acquisitions to perform in accordance with expectations; possible environmental liabilities; and other risks described in our filings with the Securities and Exchange Commission. These forward-looking statements reflect management's judgment as of this date, and we assume no obligation to revise or update them to reflect future events or circumstances. [AIMCO LOGO] 3 THE AIMCO PLAN TERRY CONSIDINE CHAIRMAN AND CHIEF EXECUTIVE OFFICER [AIMCO LOGO] 4 THE AIMCO PLAN ---------------------------------------o---------------------------------------- WHAT AIMCO DOES 1. Invest In Multifamily - And Multifamily Only 2. Use Moderate Financial Leverage 3. Target Mid-Teen IRR's To Shareholders [AIMCO LOGO] 5 THE AIMCO PLAN ---------------------------------------o---------------------------------------- WHY MULTIFAMILY? Predictable Demand o Based on Long-Term Demographic Factors o Immigration o Echo Boom o Household Formations [AIMCO LOGO] 6 THE AIMCO PLAN ---------------------------------------o---------------------------------------- WHY MULTIFAMILY? Predictable Demand IMMIGRATION [CHART] (millions) 1980 14.0 1990 20.0 2000 26.8 2010 33.5 2020 38.3 2030 43.9
ACTUAL AND PROJECTED FOREIGN-BORN POPULATION (DECADE ENDING) Source: US Census Bureau [AIMCO LOGO] 7 THE AIMCO PLAN ---------------------------------------o---------------------------------------- WHY MULTIFAMILY? Predictable Demand ECHO BOOM [BAR GRAPH]
(millions) 1970 49.1 1980 67.0 1990 69.0 2000 68.1 2010 72.7 2020 76.7 2030 79.3
Young Adult (18-35) Population Source: US Census Bureau [AIMCO LOGO] 8 THE AIMCO PLAN ---------------------------------------o---------------------------------------- WHY MULTIFAMILY? Predictable Demand HOUSEHOLD FORMATIONS [BAR GRAPH]
(Millions) ---------- 1995 98 2010 115
Household Formations Will Increase To 115 Million In 2010 From 98 Million In 1995 Or 17.5% [AIMCO LOGO] 9 THE AIMCO PLAN ---------------------------------------o---------------------------------------- WHY MULTIFAMILY? Low Rate of Obsolescence o Long Useful Life o Predictable Capital Replacements o Upgrades Earn Attractive Returns [AIMCO LOGO] 10 THE AIMCO PLAN ---------------------------------------o---------------------------------------- WHY MULTIFAMILY? Impact Of Economy o Median Income o Employment Opportunities o New Building [AIMCO LOGO] 11 THE AIMCO PLAN ---------------------------------------o---------------------------------------- WHAT AIMCO DOES TO INCREASE PREDICTABILITY Geographic Diversification By Free Cash Flow (APARTMENT PROPERTIES IN 47 STATES) [CHART] Los Angeles 0.6% New York 0.6% Daytona Beach 0.6% Montgomery 0.6% Columbia 0.6% Hartford 0.7% Lafayette 0.7% Columbus 0.8% Dutchess County 0.8% San Francisco 0.8% Orange County 0.8% Tucson 0.9% Charlotte-Gastonia-Rock Hill 0.9% Salt Lake City-Ogden 1.0% Middlesex-Somerset-Hunterdon 1.1% Cincinnati 1.1% Minneapolis-St. Paul 1.1% Fort Wayne 1.2% Jacksonville 1.2% West Palm Beach-Boca Raton 1.3% Fort Lauderdale 1.3% San Antonio 1.3% Lansing-East Lansing 1.3% Nashville 1.4% Grand Rapids-Muskegon-Holland 1.4% Raleigh-Durham-Chapel Hill 1.5% Baltimore 1.6% Austin-San Marcos 1.7% San Diego 1.8% Denver 2.1% Norfolk-Virginia Beach-Newport News 2.3% Orlando 2.7% Dallas 2.7% Tampa-St. Petersburg-Clearwater 2.9% Miami 2.9% Philadelphia 3.2% Indianapolis 3.5% Houston 3.7% Atlanta 3.9% Phoenix-Mesa 4.5% Chicago 5.3% Washington 10.7% Other Markets 22.1%
[AIMCO LOGO] 12 THE AIMCO PLAN ---------------------------------------o---------------------------------------- WHAT AIMCO DOES TO INCREASE PREDICTABILITY Geographic Diversification TOP 25 MARKETS IN 17 STATES AND COMPRISE 67% OF FREE CASH FLOW [US MAP] [AIMCO LOGO] 13 THE AIMCO PLAN ---------------------------------------o---------------------------------------- WHAT AIMCO DOES TO INCREASE PREDICTABILITY Diversification by Price Point o Well Diversified From Less Than $500 To Greater Than $1000 Monthly Rents for Conventional Units # Of % Of Total Conventional FCF Conventional Units ($ Millions) FCF ------------ ------------ ------------ Average Monthly Rent > $1000 8,605 22.6 10.8% Average Monthly Rent $900-$1000 7,180 17.5 8.4% Average Monthly Rent $800-$900 12,183 24.5 11.7% Average Monthly Rent $700-$800 15,759 26.0 12.4% Average Monthly Rent $600-$700 38,355 50.4 24.1% Average Monthly Rent $500-$600 36,019 36.4 17.4% Average Monthly Rent <$500 16,292 10.8 5.2% [AIMCO LOGO] 14 THE AIMCO PLAN ---------------------------------------o---------------------------------------- WHAT AIMCO DOES TO INCREASE PREDICTABILITY Diversification By Apartment Type o Garden -- 85% Of Real Estate Free Cash Flow o Mid Rise -- 4% Of Real Estate Free Cash Flow o High Rise -- 11% Of Real Estate Free Cash Flow [AIMCO LOGO] 15 THE AIMCO PLAN ---------------------------------------o---------------------------------------- TO MAINTAIN PREDICTABILITY AIMCO DOES o NOT Invest Outside Multifamily o NOT In Technology Companies o NOT in Furniture Rental, etc. o NOT Develop Property o Low Risk-Adjusted Returns o High Real Depreciation Of New Assets o NOT Use Corporate Recourse Debt Except For Short-Term Purposes o Exposes Entire Entity Rather Than Single Asset o Exposes Preferred And Common Shareholders To Greater Entity Risk o Largely Shorter Term And Interest Only Creating Repricing And Refunding Risk [AIMCO LOGO] 16 THE AIMCO PLAN ---------------------------------------o---------------------------------------- AIMCO INVESTS ONLY WITH EXPECTED IRR >20% o Transactions Driven By Life Events And Complexity o Not Auctions Where Pricing Is Efficient o Focused On Acquisition Cost Because Low Initial Returns Hard To Overcome [AIMCO LOGO] 17 THE AIMCO PLAN ---------------------------------------o---------------------------------------- AIMCO INVESTS ONLY WITH EXPECTED IRR >20% IRR Sensitivity 3% GROWTH REQUIRED TO ACHIEVE 20% IRR @ 55% LTV AND 10.25% CAP RATE WHILE 7.75% GROWTH REQUIRED TO ACHIEVE 20% IRR @ 55% LTV AND 7.5% CAP RATE [GRAPH] [AIMCO LOGO] 18 THE AIMCO PLAN ---------------------------------------o---------------------------------------- AIMCO USES PROPERTY DEBT o Safer - Long Term (20 Years) - Fixed Rate - Fully Amortizing - Non Cross-Collateralized - Non-Recourse Beyond Property o Less Expensive - Lender Is Secured - Tax Exempt (Where Appropriate) [AIMCO LOGO] 19 THE AIMCO PLAN ---------------------------------------o---------------------------------------- AIMCO FOCUSES MANAGEMENT ON SHAREHOLDER RETURNS o Management Compensation Tied To Shareholder Returns o Management Ranked - Best Performers Receive Highest Compensation o Incentive Compensation Paid In Equity - Options - Restricted Stock o HPU Investment Program [AIMCO LOGO} 20 THE AIMCO PLAN ---------------------------------------o---------------------------------------- AIMCO HAS PRODUCED THESE RESULTS [CHART] o 18% Compounded Growth In AFFO Per Share o 21.6%* Compounded Growth In NAV Per Share *Source: Salomon Smith Barney Research [AIMCO LOGO] 21 THE AIMCO PLAN ---------------------------------------o---------------------------------------- AIMCO HAS PRODUCED THESE RESULTS [BAR CHART] 1995 $1.66 1996 $1.70 1997 $1.85 1998 $2.25 1999 $2.50 2000 $2.80 2001 $3.12
o 11% Compounded Growth o 14% Return From Cash Dividends Alone [AIMCO LOGO] 22 THE AIMCO PLAN ---------------------------------------o---------------------------------------- AIMCO HAS PRODUCED THESE RESULTS [CHART] o Five-year Compounded Total Return Of 28% o Outperformed All Major Indices [AIMCO LOGO] 23 THE AIMCO PLAN ---------------------------------------o---------------------------------------- AIMCO PROSPECTS Near Term: o Sluggish Economy Impacts Occupancy o Year To Year Comparisons Are Made Difficult Because Of Prior Year Non-Recurring Income [AIMCO LOGO] 24 THE AIMCO PLAN ---------------------------------------o---------------------------------------- AIMCO PROSPECTS Longer Term: o Improve Operations - Increase Occupancy - Reduce Turnover - Reduce Operating Costs [AIMCO LOGO] 25 THE AIMCO PLAN ---------------------------------------o---------------------------------------- AIMCO PROSPECTS Longer Term: o Redevelop And Enhance Properties o Continue Partnership Acquisitions o Sell Lowest Rated Properties o Exit Markets Without Critical Mass o Reduce Third Party Management o Make Opportunistic Acquisitions [AIMCO LOGO] 26 THE AIMCO MANAGEMENT TEAM PETER KOMPANIEZ VICE CHAIRMAN AND PRESIDENT [AIMCO LOGO] 27 THE AIMCO MANAGEMENT TEAM ---------------------------------------o---------------------------------------- PEOPLE ARE ALL - IMPORTANT o Aimco Has A Deep Bench o Combined 198 Years Experience Among Ten Senior Managers o Middle Managers Are Groomed For Increasing Responsibility o Replacements/Back-ups Are Identified For Key Positions [AIMCO LOGO] 28 THE AIMCO MANAGEMENT TEAM ---------------------------------------o---------------------------------------- EXECUTIVE MANAGEMENT -- TERRY CONSIDINE, Chairman And Chief Executive Officer -- PETER KOMPANIEZ, Vice Chairman And President -- HARRY ALCOCK, Chief Investment Officer -- JOEL F. BONDER, General Counsel And Secretary -- JOSEPH DETUNO, Redevelopment -- PATRICK J. FOYE, Partnerships -- LANCE J. GRABER, Acquisitions -- STEVEN D. IRA - Divisional Vice President And Co-Founder -- PAUL MCAULIFFE - Chief Financial Officer -- RON MONSON - Head Of Property Operations [AIMCO LOGO] 29 THE AIMCO MANAGEMENT TEAM ---------------------------------------o---------------------------------------- ORGANIZATIONAL STRUCTURE ----------------- TERRY CONSIDINE CHAIRMAN/CEO ----------------- ----------------- ---------------------- --------------------- ---------------- PETER KOMPANIEZ RON MONSON PAUL MCAULIFFE JOSEPH DETUNO VICE CHAIRMAN/ EVP HEAD OF PROPERTY EVP CHIEF FINANCIAL EVP PRESIDENT OPERATIONS OFFICER REDEVELOPMENT ----------------- ---------------------- --------------------- ---------------- ----------------- ---------------------- --------------------- ---------------- ---------------- HARRY ALCOCK PAT FOYE TOM NOVOSEL PAT HEATH MARI AKERS EVP ACQUISITIONS EVP SVP, CHIEF SVP, TREASURY SVP HUMAN ASSET MANAGEMENT PARTNERSHIPS ACCOUNTING OFFICER RESOURCES ----------------- ---------------------- --------------------- ---------------- ---------------- ----------------- ---------------------- --------------------- ---------------- PATTI FIELDING MARTHA LONG JIM WALLACE KATIE MURPHREE SVP, DEBT SVP, SERVICE CO. SVP, TAX VP, INVESTOR RELATIONS ----------------- ---------------------- --------------------- ---------------- ----------------- ---------------------- LANCE GRABER RAY BALDWIN EVP ACQUISITIONS RISK & INSURANCE ----------------- ---------------------- ----------------- JOEL BONDER EVP GENERAL COUNSEL ----------------- DIVISIONAL VICE PRESIDENTS ----------------- ---------------------- ---------------- --------------------- ---------------- SCOTT WESSON STEVE IRA CARL RUFF JIM MATHES STEVE PETERS SVP, CIO EVP, SOUTHEAST SVP, SOUTHWEST SVP, EAST VP, FAR WEST ----------------- ---------------------- ---------------- --------------------- ----------------
[AIMCO LOGO] 30 THE AIMCO MANAGEMENT TEAM ---------------------------------------o---------------------------------------- MANAGEMENT EQUITY OWNERSHIP IN AIMCO SHARES AND OP UNITS [CHART] 2.4 Million High Performance Units .9 Million OP Units 4.8 Million Common Shares o Represents Approximately 10% Of Total Common Equity Ownership o At March 31, 2001 In The Money Options Treated As Common Share Equivalents Increases Management Ownership To 11% [AIMCO LOGO] 31 PROPERTY OPERATIONS INITIATIVES RON MONSON EXECUTIVE VICE PRESIDENT HEAD OF PROPERTY OPERATIONS [AIMCO LOGO] 32 PROPERTY OPERATIONS INITIATIVES ----------------------------------------o--------------------------------------- AIMCO PROPERTY OPERATIONS SCALE
Properties Units ---------- ----- Conventional Owned 731 195,930 Affordable Owned 461 60,812 Third Party Managed 451 56,634 ----- ------- 1,643 313,376
o Currently Operate In 47 States, The District Of Columbia And Puerto Rico o Managed Through Decentralized Property Management Team Comprised Of: 7,919 Property Level Employees 563 Regional And Division Employees 724 Corporate And Service Center Employees ------ 9,206 Total Employees
o Annual Revenue Exceeds $2.1 Billion [AIMCO LOGO] 33 PROPERTY OPERATIONS INITIATIVES ----------------------------------------o--------------------------------------- FOCUS #1: INCREASED OCCUPANCY Each Point Of Improved Occupancy Adds 1,360 Occupied Units That Adds $925,000 Per Month In Rental Income Or $.11 Per Share On An Annual Basis. [CHART] MAY '01 6.7% JUN '01 6.7% JUL '01 7.7% AUG '01 8.1% SEP '01 7.4% OCT '01 7.1% NOV '01 6.2% DEC '01 5.2% JAN '02 4.9% FEB '02 5.2% MAR '02 5.7% APR '02 5.9% MAY '02 5.4% JUN '02 5.9% AVAILABLE 7.1% MTM 4.8%
We Manage Our Lease Expirations To Reduce Vacancy Loss. [AIMCO LOGO] 34 PROPERTY OPERATIONS INITIATIVES ----------------------------------------o--------------------------------------- FOCUS #2: REDUCE RESIDENT TURNOVER AIMCO Resident Turnover Rate In 2000 Was 66%. Each 1% Reduction In Resident Turnover Saves $2,100,000, Or $.02 Per Share. TURNOVER COST [CHART] Vacancy Loss 44.9% - $693 Contract Services 21.0% - $325 Supplies 2.3% - $ 35 Re-Leasing Cost 28.8% - $445 Other 3.0% - $ 47
[AIMCO LOGO] 35 PROPERTY OPERATIONS INITIATIVES ----------------------------------------o--------------------------------------- FOCUS #3: IMPROVED PRICING OF NEW LEASES Each Incremental 1% Of Rental Rate Growth Adds $6.80 Per Month To Each New Lease On Turnover, Resulting In $7,350,000 Additional Revenue, Or $.07 Per Share. Current o Pricing By Size & Floor Plan/Style o Rent Decisions Made By CM/RPM Building Toward o Priced By Unit Attributes To Capture The Character Of Each Apartment - Unit Attributes Include o View o Location o Proximity o Amenities o Rent Decisions Made By Division Pricing Experts [AIMCO LOGO] 36 PROPERTY OPERATIONS INITIATIVES ----------------------------------------o--------------------------------------- FOCUS #4: INCREASE LONG-TERM VALUE OF EACH PROPERTY THROUGH INCREASED CAPITAL REPLACEMENT SPENDING o 2000: $300 Per Door o 2001: $360 Per Door o 2002: $380 Per Door o Methodology Based On - Component Cost And Estimated Life - AIMCO Judgement - Reasonableness Check With Industry Average Published By Urban Land Institute ($384) [AIMCO LOGO] 37 PROPERTY OPERATIONS INITIATIVES ----------------------------------------o--------------------------------------- REVENUE MANAGEMENT CASE STUDY Springhill Lake Apartments -- Greenbelt, MD (2,907 Units) Effective Gross Income Improvement 1st Quarter 2001 Compared To 1st Quarter 2000 Total Overall Improvement Of 30.2% [BAR GRAPH] 1st Qtr. 2000 $5,715,276 2nd Qtr. 2000 $6,357,424 3rd Qtr. 2000 $6,995,865 4th Qtr. 2000 $7,137,880 1st Qtr. 2001 $7,438,403
[AIMCO LOGO] 38 PROPERTY OPERATIONS INITIATIVES ----------------------------------------o--------------------------------------- REVENUE MANAGEMENT CASE STUDY Springhill Lake Apartments -- Greenbelt, MD Detail Of EGI Growth Indicators [BAR GRAPH] Concessions (1,008)% Vacancy Loss (575)% Other Rental Losses (0.09) Other Income 2.8 % Bad Debt Expense (105)% Total Gross Potential 23%
[AIMCO LOGO] 39 PROPERTY OPERATIONS INITIATIVES ----------------------------------------o--------------------------------------- EXPENSE MANAGEMENT CASE STUDY Chelsea Ridge Apartments - Dutchess County, NY Case Study Of Expense Control 835 Conventional Units Acquired December 2000 45 Buildings, 100 Acres [BAR GRAPH] Annual Payroll Savings of $655,168 Reduction of 41% Dec - 00 Staff of 51 $ 1,596,540 Jun - 01 Staff of 22 $ 941,371
[AIMCO LOGO] 40 PROPERTY OPERATIONS INITIATIVES ----------------------------------------o--------------------------------------- EXPENSE MANAGEMENT CASE STUDY Chelsea Ridge Apartments - Dutchess County, NY Annual Operating Expense Savings of $748,934 or $897 per unit - Reduction of 25.1% [BAR GRAPH]
Operating Costs $2,985,000 Operating Costs $2,236,066 or $3,575 per unit or $2,678 per unit Dec-00 Jan-01
[AIMCO LOGO] 41 DIGITIZATION INITIATIVES R. SCOTT WESSON SENIOR VICE PRESIDENT CHIEF INFORMATION OFFICER [AIMCO LOGO] 42 DIGITIZATION INITIATIVES ---------------------------------------o---------------------------------------- AIMCO UTILIZES TECHNOLOGY... o When Proven, i.e. Without Development Risk o When Effective, i.e. No Technology For Technology's Sake [AIMCO LOGO] 43 DIGITIZATION INITIATIVES ---------------------------------------o---------------------------------------- AIMCO USES TECHNOLOGY WITH CUSTOMERS o "Digital Storefront" - Electronic Service Requests - Community Information (Virtual Community) - Announcements - Messaging - "Coast-to-Coast" Transfer Program o Payment Options - Pay Rent On-Line - Direct-Debit - Credit Card Acceptance [AIMCO LOGO] 44 DIGITIZATION INITIATIVES ---------------------------------------o---------------------------------------- AIMCO USES TECHNOLOGY WITH CUSTOMERS "Customer-Centric" Home Page [PICTURE] [AIMCO LOGO] 45 DIGITIZATION INITIATIVES ---------------------------------------o---------------------------------------- AIMCO USES TECHNOLOGY WITH CUSTOMERS XpressRent [PICTURE] Rent Payments Via Credit Card On-Line. [AIMCO LOGO] 46 DIGITIZATION INITIATIVES ---------------------------------------o---------------------------------------- AIMCO USES TECHNOLOGY WITH CUSTOMERS Other Features Service Requests/ Feedback Form [PICTURE] "Refer AIMCO To A Friend" Program [PICTURE] View Other Properties -- My AIMCO Pages [PICTURE] [AIMCO LOGO] 47 DIGITIZATION INITIATIVES ---------------------------------------o---------------------------------------- AIMCO USES TECHNOLOGY WITH PROSPECTIVE RESIDENTS o "Digital Storefront" - Advanced Apartment Search o Location o Amenities - Personalized Information - "XpressMove" Concept - Applications On-Line [AIMCO LOGO] 48 DIGITIZATION INITIATIVES ---------------------------------------o---------------------------------------- AIMCO USES TECHNOLOGY WITH PROSPECTIVE RESIDENTS Search The Picture List [PICTURE] Send A Quick Note To The Leasing Office [PICTURE] The Floor Plan List [PICTURE] We Leverage AIMCO's Size And Reach By Allowing Prospects To See What Other AIMCO Properties Are Within 1-30 Miles Of This Property [PICTURE] [AIMCO LOGO] 49 DIGITIZATION INITIATIVES ---------------------------------------o---------------------------------------- AIMCO USES TECHNOLOGY WITH PROSPECTIVE RESIDENTS Move-In (Checklist) Once Through The Application, Prospects Move To The XpressMove Options. From Here Prospects Can Choose What Services Prospects Would Like To Have Information On, Or Would Like Set Up (Utilities, Newspapers, Phone, Pager, Renter's Insurance, etc.). [PICTURE] [AIMCO LOGO] 50 DIGITIZATION INITIATIVES ---------------------------------------o---------------------------------------- AIMCO USES TECHNOLOGY WITH EMPLOYEES & POTENTIAL EMPLOYEES o "Paperless Pay" o Employee Self-Service o On-line Access To: - Career Opportunities - Application Process - Testing/Pre-Screening Process [AIMCO LOGO] 51 DIGITIZATION INITIATIVES ---------------------------------------o---------------------------------------- AIMCO USES TECHNOLOGY WITH MANAGEMENT o All AIMCO Communities And Management Are Connected To The Same Virtual Network o Horizon Performance Management System o AIMCO Intranet o Workflow Processes [AIMCO LOGO] 52 DIGITIZATION INITIATIVES ---------------------------------------o---------------------------------------- AIMCO USES TECHNOLOGY WITH MANAGEMENT Horizon System o Controllable Operating Expenses Report o Potential Lost Revenue Report o Management "To Do List" o Performance Indicators o "Drills Down" To Property Level o Updates Daily [AIMCO LOGO] 53 NATIONAL PURCHASING EFFORT DON MATTHEWS VICE PRESIDENT PURCHASING [AIMCO LOGO] 54 NATIONAL PURCHASING EFFORT ---------------------------------------o---------------------------------------- AIMCO SPENDING BY MAJOR CATEGORY [CHART] Utilities 15% Site Materials 24% Corp. Services 25% Site Services 35%
TOTAL: $711 Million [AIMCO LOGO] 55 NATIONAL PURCHASING EFFORT ---------------------------------------o---------------------------------------- OBJECTIVES OF IMPROVED PURCHASING o Reduced Material Costs o Reduced Service Costs o Reduced Transaction Costs [AIMCO LOGO] 56 NATIONAL PURCHASING EFFORT ---------------------------------------o---------------------------------------- MULTIPLE ROUTES TO IMPROVED PURCHASING o Technical Expertise - Understand The Value Equation Of Materials And Services o Transparency - Unbundle Costs - Exert Cost Component Control o Discovery - Survey The Marketplace - Identify Opportunity o Leverage - Standardize Spending - Commit Spending [AIMCO LOGO] 57 NATIONAL PURCHASING EFFORT ---------------------------------------o---------------------------------------- PURCHASING CASE STUDY Overview Of Maintenance, Repair And Operating ("MRO") Spend And Process o Why MRO o Discovery o Leverage o Execution [AIMCO LOGO] 58 NATIONAL PURCHASING EFFORT ---------------------------------------o---------------------------------------- AIMCO PURCHASING CASE STUDY Impact on MRO Spend [GRAPH]
Number Of Products Purchased ------------------ Unleveraged Count 227 Leveraged Count 68
o Standardization Of Spending Resulted In A Reduction Of 15% o Commitment Of Spending Resulted In An Additional Reduction Of 5% [AIMCO LOGO] 59 PARTNERSHIP ACQUISITIONS PAT FOYE EXECUTIVE VICE PRESIDENT [AIMCO LOGO] 60 PARTNERSHIP ACQUISITIONS ---------------------------------------o---------------------------------------- PARTNERSHIP ASSETS AIMCO Currently Controls 1,228 Properties Held in 1,064 Limited Partnerships PROPERTIES OWNED [BAR CHART]
Year Number of Properties ---- -------------------- 1998 1,144 1999 1,124 2000 1,249 June 2001 1,228
[AIMCO LOGO] 61 PARTNERSHIP ACQUISITIONS ---------------------------------------o---------------------------------------- PARTNERSHIP ASSETS At June 2001 Aimco Average Partnership Ownership Is 60.7% AVERAGE OWNERSHIP [BAR CHART]
Year Percentage Owned ---- ---------------- Dec. 31, 1998 26.40% Dec. 31, 1999 40.07% Dec. 31, 2000 57.05% June, 2001 60.70%
[AIMCO LOGO] 62 PARTNERSHIP ACQUISITIONS ---------------------------------------o---------------------------------------- PARTNERSHIP ASSETS LP Equity Acquired [BAR CHART]
Year Dollars in Millions ------ ------------------- 1997 $ 33 1998 $ 96 1999 $271 2000 $195 Q1 2001 $ 56
[AIMCO LOGO] 63 PARTNERSHIP ACQUISITIONS ---------------------------------------o---------------------------------------- PARTNERSHIP ASSETS Total Number Of Partnership Transactions Since 1998 -- 125,000 TOTAL NUMBER OF LPS [BAR CHART]
Year Total Number of LPs ---- ------------------- Dec. 1998 321,000 Dec. 1999 239,000 Dec. 2000 203,000 Apr. 2001 196,000
[AIMCO LOGO] 64 PARTNERSHIP ACQUISITIONS ---------------------------------------o---------------------------------------- PARTNERSHIP ASSETS Aimco Treats Partnership Assets Identically To Wholly- Owned Assets, And That Has Been Good For LPs SALES [BAR CHART]
Properties Year Sold Dollars in Millions ------ ---------- ------------------- 1998 9 $ 67 1999 49 $352 2000 60 $426 June 2001 21 $121
DISTRIBUTIONS [BAR CHART]
Year Dollars in Millions ------ ------------------- 1998 $138 1999 $182 2000 $214
[AIMCO LOGO] 65 ENHANCEMENTS AND REDEVELOPMENT JOSEPH DETUNO EXECUTIVE VICE PRESIDENT REDEVELOPMENT [AIMCO LOGO] 66 ENHANCEMENTS AND REDEVELOPMENT ---------------------------------------o---------------------------------------- OVERVIEW AIMCO Owns Numerous Properties Where AIMCO Can Invest Profitably In Redevelopment And Enhancements o Redevelopment - Significant Rental Increases o Enhancements - Rental Increase Correlates To Specific Upgrade [AIMCO LOGO] 67 ENHANCEMENTS AND REDEVELOPMENT ---------------------------------------o---------------------------------------- SCOPE REDEVELOPMENT PROPERTY ENHANCEMENT "A" Location "A" Or "B" Location "C" Condition "B+" Condition Rent Increase Focused On Rent Increase Focused On Current Class "A" Market Rents Specific Upgrade - Change Resident Profile - Kitchens & Baths - Class "A" Management - "Customize Your Home" - Design Upgrades - Storage/Garages - Amenity Upgrades - Unit Upgrades [AIMCO LOGO] 68 ENHANCEMENTS AND REDEVELOPMENT ---------------------------------------o---------------------------------------- PROCESS o Determine Potential Viability o Prepare Initial And Final Business Plans o Establish Program Requirements That Meet The Needs Of The Resident o Determine Appropriate Design Solutions That Meet Those Needs o Manage The Total Implementation Of The Redevelopment o Provide Cost Control And Accurate Reporting Of Projected Results o Avoid Risks Associated With New Development [AIMCO LOGO] 69 ENHANCEMENTS AND REDEVELOPMENT ---------------------------------------o---------------------------------------- REDEVELOPMENT PIPELINE [BAR CHART]
(In Millions) Total Redevelopment 5,512 Units Approved Construction 3,418 Units Pre-Construction 2,094 Units
[AIMCO LOGO] 70 ENHANCEMENTS AND REDEVELOPMENT ---------------------------------------o---------------------------------------- PROPERTY REDEVELOPMENT STRATEGY o Control Value At Risk To About $400 Million Annually o Returns On "New Money" >12%. [ACTUAL 13%] o Returns On "New Money"+Current Value >10% [ACTUAL 10.2%] o Leveraged IRR > 20%. [ACTUAL 21%] o Redevelopment Budget < 85% Of Replacement Cost o Earn Revenue Throughout Redevelopment Process By Managing The Takedown Of Units [AIMCO LOGO] 71 ENHANCEMENTS AND REDEVELOPMENT ---------------------------------------o---------------------------------------- PROPERTY REPOSITION Case Study: Boulder Creek [PICTURE] [AIMCO LOGO] 72 ENHANCEMENTS AND REDEVELOPMENT ---------------------------------------o---------------------------------------- PROPERTY REPOSITION CASE STUDY: RIVERLOFT [PICTURE] [AIMCO LOGO] 73 ENHANCEMENTS AND REDEVELOPMENT ---------------------------------------o---------------------------------------- PROPERTY REPOSITION CASE STUDY: THE HILLS OF ARBORETUM [PICTURE] [AIMCO LOGO] 74 ENHANCEMENTS AND REDEVELOPMENT ---------------------------------------o---------------------------------------- PROPERTY REPOSITION CASE STUDY: GRAND FLAMINGO [PICTURE] [PICTURE] [AIMCO LOGO] 75 ENHANCEMENTS AND REDEVELOPMENT ---------------------------------------o---------------------------------------- PROPERTY ENHANCEMENT CASE STUDY: KITCHEN AND BATH INITIATIVES "BUY NATIONALLY, INSTALL LOCALLY" o Objective: To Improve Kitchens And Baths For 10,000 Apartment Homes Annually For Those Properties That Can Increase Rents And Produce Unleveraged IRR Of 12% Or More o Criteria: Location Rating: 8 Or Better On A Scale Of 10 Existing Rents Are At Least $800/Month o Program Structure: Identify Properties Conduct Survey National Design Firm For Standardization Create National Buying Accounts Secure Bids By Local GCs Thru ROC's Control Quality Through On-Site Inspections [AIMCO LOGO] 76 ENHANCEMENTS AND REDEVELOPMENT ---------------------------------------o---------------------------------------- PROPERTY ENHANCEMENT STRATEGY o Understand And Address Specific Needs Of Current Residents o Seek To Enhance Bottom Line With Increase In Future Revenue o Unleveraged IRR > 12% o Revenue Stream Unaffected Because Enhancement Upon Turnover Of Units o Risk Reduction Through Testing Limited Number Of Units o Control Costs Through Continuous Budgeting And Reporting System That Tracks Costs And Income [AIMCO LOGO] 77 AFFORDABLE PORTFOLIO LANCE GRABER EXECUTIVE VICE PRESIDENT [AIMCO LOGO] 78 AFFORDABLE PORTFOLIO ---------------------------------------o---------------------------------------- PORTFOLIO OVERVIEW o Approximately 450 Properties Containing Approximately 59,000 Units o Average Aimco Ownership Is Approximately 30% With Minimal Invested Capital o Properties Located In 34 States, Puerto Rico And Washington, D.C. o Rural, Urban And Suburban Locations o Affordable Restrictions Stemming From - Project-Based And Tenant-Based Subsidies - FHA Insured Mortgages - Farmer's Home Properties - State Housing Finance Agency Bonds [AIMCO LOGO] 79 AFFORDABLE PORTFOLIO ---------------------------------------o----------------------------------------
MARKETS UNITS ------- ----- PA 6990 NY 5736 MD 4801 FL 4364 IL 3326 OH 2354 TX 2221 MO 2049 SC 1952 CA 1883 VA 1829 GA 1568 MI 1310 TN 1220 MA 1218 NC 1159 AL 1096 PR 1056 DC 1043 NJ 687 OTHER MARKETS 5673
[AIMCO LOGO] 80 INTERNAL VALUE REALIZATION OPPORTUNITIES ---------------------------------------o---------------------------------------- PORTFOLIO REALIZATION o Aimco Is Reviewing The Entire Affordable Portfolio To Establish And Implement A Strategic Plan For Each Property o Alternatives Include: - Sale - Rehabilitation Using Low Income Housing Tax Credits - Conversion To Conventional Status [AIMCO LOGO] 81 AFFORDABLE PORTFOLIO ---------------------------------------o---------------------------------------- PORTFOLIO RATIONALIZATION -- SALES o Properties Are Identified For Sale Based Upon Location Rankings o Lower Rated Properties With Non-Enduring Locations Are Listed Through Brokers With A National Presence And Expertise In Affordable Housing o 2001 Sale Activity - Closed Transactions -- 13 Properties, 1,680 Units With $9.07 Million Cash Proceeds To Aimco - Under Contract With Hard Deposit -- 25 Properties, 2,375 Units - Under Letter Of Intent -- 12 Properties, 1,243 Units - Marketing For Sale -- 71 Properties, 7,103 Units [AIMCO LOGO] 82 AFFORDABLE PORTFOLIO ---------------------------------------o---------------------------------------- PORTFOLIO RATIONALIZATION-- REHABILITATION USING LOW INCOME HOUSING TAX CREDITS o Aimco Sponsored Partnership Purchases An Affordable Property In The Aimco Portfolio o The Sale And Subsequent Rehabilitation Of The Property Generates Low Income Housing Tax Credits o The Acquisition And Rehabilitation Are Financed Through The Issuance Of Volume Cap Tax-Exempt Bonds, Mezzanine Debt And The Syndication Of The Tax Credits o Aimco Retains Property Management o Aimco Retains Control Of The Residual Value Of The Property o Income Is Generated Through Various Sources Including Disposition Fees, Development Fees, Syndication Fees, Management Fees And Property Cash Flow [AIMCO LOGO] 83 AFFORDABLE PORTFOLIO ---------------------------------------o---------------------------------------- CASE STUDY -- DARBY TOWNHOUSES BACKGROUND INFORMATION o 172-Unit Townhouse Development In Sharon Hill, Pennsylvania o Aimco Is GP With A 4.93% Interest In The Property TRANSACTION OVERVIEW o Aimco Has Contracted To Purchase The Property For $8.5 Million o Aimco Has Received A Bond Cap Allocation To Issue Tax-Exempt Bonds To Fund A First Mortgage Of $7.4 Million - The Project Will Be Syndicated To A New Low-Income Housing Tax Credit Investor With Anticipated Proceeds Of Approximately $2.5 Million [AIMCO LOGO] 84 AFFORDABLE PORTFOLIO ---------------------------------------o---------------------------------------- CASE STUDY -- DARBY TOWNHOUSES TRANSACTION OVERVIEW o A Portion Of The Proceeds Will Be Used To Fund A $1.36 Million Rehabilitation Of The Property o Aimco Is Projected - To Recover Its Entire Investment - To Receive Annual Cash Flow Of $285,000 With No Invested Capital [AIMCO LOGO] 85 AFFORDABLE PORTFOLIO ---------------------------------------o---------------------------------------- PORTFOLIO RATIONALIZATION - CONVERSION o Target Properties In Enduring Locations o Use Aimco's Redevelopment Expertise To Rehabilitate The Property o Achieve A Cost Advantage As Compared To Ground Up Development [AIMCO LOGO] 86 AFFORDABLE PORTFOLIO ---------------------------------------o---------------------------------------- PORTFOLIO RATIONALIZATION - CONVERSION Examples o Aspen Point, 120 Units Located In Arvada, Colorado - Purchased For $2.39 Million ($19,881/Unit) - Renovation Capital Of $2.37 Million ($19,771/Unit) - Total Investment Of $4.76 Million ($39,652/Unit) - Leveraged IRR In Excess Of 20% o Broadmoor Ridge, 200 Units Located in Colorado Springs, Colorado - Purchased For $2.07 Million ($10,337/Unit) - Renovation Capital Of $8.62 Million ($43,123/Unit) - Total Investment Of $10.69 Million ($53,460/Unit) - Leveraged IRR Of Approximately 21% [AIMCO LOGO] 87 ACQUISITIONS AND DISPOSITIONS HARRY ALCOCK EXECUTIVE VICE PRESIDENT CHIEF INVESTMENT OFFICER [AIMCO LOGO] 88 ACQUISITIONS ---------------------------------------o---------------------------------------- GENERAL UNDERWRITING CRITERIA o Purchase Properties Below Replacement Cost (20% Or More) o In Good Locations o Accretive To Existing Shareholders o With IRR Greater Than 20% (Based On 20-Year Hold And Standard Leverage Ratio Of 55%) [AIMCO LOGO] 89 ACQUISITIONS ---------------------------------------o---------------------------------------- TRANSACTIONS o Aimco Is An Opportunistic Buyer. As Such, Aimco Does Not Participate In Cash Auctions o Aimco Deals Typically Have Some Characteristic Other Than Absolute Price: - OP Unit Deals For Tax Deferral - Speed/Certainty Of Execution - Aimco Owns Adjacent Property - Property In Aimco's Management Portfolio [AIMCO LOGO] 90 ACQUISITIONS ---------------------------------------o---------------------------------------- ACQUISITIONS - 1998 TO PRESENT o 73 Properties Totaling 24,180 Units Purchased (Excluding Insignia, Ambassador And Oxford) 64% - 47 Properties Included OP Units 18% - 13 Closed In Advance Of Broader Marketing Process Because Of Offered Speed/Certainty 11% - 8 Properties From Managed Portfolio 4% - 3 Properties Immediately Adjacent To Existing 3% - 2 Miscellaneous Properties ---- 100% [AIMCO LOGO] 91 ACQUISITIONS ---------------------------------------o---------------------------------------- OP UNITS -- AIMCO PROPERTIES, L.P. o Aimco Is An UPREIT Or "Operating Partnership" ("OP") o OP Unit Represents Limited Partnership Interest In The OP o OP Units Receive Same Cash Distributions As Common Shareholders o After One Year, OP Units Are Convertible Into Common Shares o Aimco OP Units Are Viewed Favorably By Sellers Because - Aimco Shareholder Returns Have Exceeded Peer Group - Aimco Use Of Non Recourse Debt Is Lower Risk [AIMCO LOGO] 92 ACQUISITIONS ---------------------------------------o---------------------------------------- OP UNITS -- REGENCY/DREYFUSS CASE STUDY o Regency (In Millions): Acquisition Price $ 248.4 Funding Of Acquisition: Existing Debt 92.0 Common OP Units 35.5 Preferred OP Units 42.1 Cash 78.8 Sources Of Cash For Closing: Refinance Existing Debt At Closing $ 149.4 Less Existing Debt 92.0 --------- Source Of Cash From Refinancing 57.4 Cash From Aimco 21.4 --------- Total Cash At Closing $ 78.8
[AIMCO LOGO] 93 ACQUISITIONS ---------------------------------------o---------------------------------------- OP UNITS -- REGENCY/DREYFUSS CASE STUDY o Dreyfuss (In Millions): Acquisition Price $ 56.6 Funding Of Acquisition: Debt 33.5 Convertible Preferred OP Units 19.7 Cash 3.4
[AIMCO LOGO] 94 ACQUISITIONS ---------------------------------------o---------------------------------------- MARKETS o Markets Are Inherently Cyclical o At Any Time, Some Are Good And Some Are Bad o Based On Torto Wheaton Forecasts, Good Markets The Next Five Years Should Include: - Boston - Los Angeles - Oakland o Aimco Acquisitions Are Opportunistic o Pricing Tends To Reflect Positive Market Fundamentals o Aimco Requires 20% IRR [AIMCO LOGO] 95 ACQUISITIONS ---------------------------------------o---------------------------------------- IRR SENSITIVITY In Order To Achieve A 20% IRR Based On 20 Year Hold, 55% Leverage, 7.5% Interest Rate: o Typical Aimco Deal - 10.25% Cap Rate - 3% Free Cash Flow Growth Per Annum o Example 1 - 7.5% Cap Rate - 25% Free Cash Flow Growth For Two Years, Then 3% o Example 2 - 7.5% Cap Rate - 15% Free Cash Flow Growth For Four Years, Then 3% o Example 3 - 7.5% Cap Rate - 7.75% Free Cash Flow Growth For 20 Years [AIMCO LOGO] 96 DISPOSITIONS ---------------------------------------o---------------------------------------- OVERVIEW OF SALES PROCESS o Rank Properties By Location Quality o Sell Properties With Lowest Ranking o Use Brokers For Broad Marketing And Highest Price - Provide No Listing Prices - Sell Individual Properties, Not Portfolios o Continual Process [AIMCO LOGO] 97 DISPOSITIONS ---------------------------------------o---------------------------------------- PAST SALES ACTIVITY - 1999-2001 o Sold 103 Properties o Totaling 23,124 Units o Gross Sales Price Was $825 Million o Sold 55 Commercial Properties o Gross Sales Price Was $287 Million [AIMCO LOGO] 98 PROPERTY LEVEL DEBT OVERVIEW PATTI FIELDING SENIOR VICE PRESIDENT DEBT [AIMCO LOGO] 99 PROPERTY LEVEL DEBT OVERVIEW ---------------------------------------o--------------------------------------- AIMCO ALL PROPERTIES Mortgage Balances As Of May 31, 2001 [CHART] Conventional Properties $ 4.0 Billion Affordable Properties $ 1.3 Billion Tax Exempt Properties $ 1.2 Billion Other Properties $ 16.0 Million Total Mortgages $ 6.5 Billion
[AIMCO LOGO] 100 PROPERTY LEVEL DEBT OVERVIEW ---------------------------------------o--------------------------------------- DEBT STANDARDS o Leverage At 65% LTV Or Less o Fixed Rate o Fully Amortizing - Generally 15/15 Or 20/20 o Non Recourse [AIMCO LOGO] 101 PROPERTY LEVEL DEBT OVERVIEW ---------------------------------------o--------------------------------------- AIMCO LENDERS o Freddie Mac o Fannie Mae o Northwestern Mutual Life Insurance o J.P. Morgan o Metropolitan Life Insurance Company o Wells Fargo o Mass Mutual Life Insurance Company o General Electric Financial Assurance (GEFA) o debis Financial Services, Inc. [AIMCO LOGO] 102 MANAGING FINANCIAL RISK ---------------------------------------o--------------------------------------- AIMCO COST OF BORROWING SECURED VERSUS UNSECURED (AS OF 6/15/01) [CHART]
Interest Rate ---------------------------------- 1999 2000 2001 ---- ---- ---- 10 Year Treasury 5.68% 5.92% 5.39% Tax Exempt Bonds - LTV 55% 6.36% 6.50% 6.18% Conventional - LTV 55% 7.36% 7.72% 7.19% Interpolated 13 Year "A" Rated REIT Debt (Corporate) 7.50% 8.10% 7.78%
[AIMCO LOGO] 103 PROPERTY LEVEL DEBT OVERVIEW ---------------------------------------o--------------------------------------- 1998 TO 2001 LOAN CLOSINGS TOTAL - NOT ADJUSTED FOR AIMCO OWNERSHIP [CHART]
Millions Closed 12/31/1998 $ 631 12/31/1999 $ 726 12/31/2000 $ 813 06/30/2001 $ 683 YTD 12/31/2001 Projected Full Year $ 1,500
[AIMCO LOGO] 104 FINANCIAL OVERVIEW PAUL MCAULIFFE EXECUTIVE VICE PRESIDENT CHIEF FINANCIAL OFFICER [AIMCO LOGO] 105 FINANCIAL OVERVIEW -----------------------------------------o-------------------------------------- AIMCO EARNINGS SEGMENTS o Reduced Non-Recurring Income o Reduced Management (Service Business) Income
1999 2000 ---- ---- Real Estate 82% 85% Recurring Interest Income 4% 6% Service Businesses 7% 5% Transactions (Fees And Accretion) 7% 4%
[AIMCO LOGO] 106 FINANCIAL OVERVIEW -----------------------------------------o-------------------------------------- AIMCO EARNINGS DISCLOSURE HAS INCREASED - Consolidation Of Taxable Reit Subsidiaries - Pro Rata Consolidated Balance Sheet (Includes Aimco's Ownership Effected Share Of Unconsolidated Partnerships) - Free Cash Flow Segment Footnote Reconciled To GAAP Income Statement - NAV (Quarterly Calculation) [AIMCO LOGO] 107 FINANCIAL OVERVIEW -----------------------------------------o-------------------------------------- AIMCO LIQUIDITY o Internal Sources - $550 Million Estimated In 2001 ($458 Million In 2000) From o Cash Cushion From Operations o Property Debt Refinancing Proceeds o Sales Proceeds o External Sources - $260 Million Year-To-Date In 2001 ($223 Million In 2000) o OTEF - Effective Common Issuance Of $100 Million At $53/Share - Convertible Preferred Issuance Of $100 Million At 9% Dividend And $56/Share Price Conversion o Perpetual Preferred [AIMCO LOGO] 108 FINANCIAL OVERVIEW -----------------------------------------o-------------------------------------- AIMCO LIQUIDITY Credit Facility o $400 Million Commitment o $164 Million Available As Of June 2001 o Matures July 2004 (Including Extensions) o 11 Domestic And Foreign Participating Banks [AIMCO LOGO] 109 FINANCIAL OVERVIEW -----------------------------------------o-------------------------------------- AIMCO LIQUIDITY Cash Cushion
YEAR (MILLIONS) ---- ---------- 1999 $ 97 2000 $107 2001(E) $125
Cash Cushion Is AFFO Less Common Dividends And Principal Payments On Debt [AIMCO LOGO] 110 FINANCIAL OVERVIEW -----------------------------------------o-------------------------------------- AIMCO BALANCE SHEET HAS BEEN CONSISTENT OVER TIME Corporate Leverage And Liquidity Policies Financial Ratios o Maintain Free Cash Flow Coverage Of Interest And Preferred Dividends Of Greater Than 2.0 o Development/Redevelopment Not To Exceed 10% Of Equity o Preferred Equity Not To Exceed 15% Of Total Market Capitalization Liquidity o Line Of Credit Balance Outstanding Of No More Than Two Year's Retained Cash o Term Debt Must Be Repayable From Internal Sources Such As Cash Cushion And Property Refinancings Over Its Agreed Term Without Reliance On External Capital Events Such As Property Sales Or Equity Issuance [AIMCO LOGO] 111 FINANCIAL OVERVIEW -----------------------------------------o-------------------------------------- AIMCO BALANCE SHEET HAS BEEN CONSISTENT OVER TIME In The Past 12 Months, Aimco Has Maintained Balance Sheet Discipline While Increasing Footings By 53%
IN MILLIONS MARCH 31, 2000 SEPTEMBER 30, 2000 MARCH 31, 2001 ----------- -------------- ------------------ -------------- Mortgage Debt-Nonrecourse $2,849 43.3% $3,636 42.0% $4,308 45.3% Corporate Short-Term Debt 277 4.2 454 5.2 276 2.9 Total Debt 3,126 47.5 4,090 47.2 4,584 48.2 Perpetual Preferred Stock 316 4.8 316 3.7 379 4.0 Convertible Preferred Stock 605 9.2 687 7.9 784 8.2 Common Stock & OP Units (At Market) 2,532 38.5 3,566 41.2 3,763 39.6 Total Permanent Capital 3,453 52.5 4,569 52.8 4,926 51.8 ------ ----- ------ ----- ------ ---- Total Market Capital $6,579 100.0% $8,659 100.0% $9,510 100% ------ ----- ------ ----- ------ ---- Line of Credit Availability $ 73 $ 175 $ 164 (June) FCF To Interest 2.6:1 2.8:1 2.4:1 FCF To Interest And Preferred Dividends 2.0:1 2.1:1 2.0:1
[AIMCO LOGO] 112 FINANCIAL OVERVIEW -----------------------------------------o-------------------------------------- AIMCO COST OF CAPITAL
$ AMOUNT PERCENT OF PROSPECTIVE WEIGHTED IN MILLIONS AT 3/31/01 TOTAL COST COST ----------- ---------- ---------- ----------- -------- Taxable Property Debt $ 3,540 37.2% 7.08% 2.6% Tax Exempt Property Debt $ 768 8.1% 6.00% 0.5% Credit Facility $ 276 2.9% 6.50% 0.2% Perpetual Preferred $ 379 4.0% 10.0% 0.4% Convertible Preferred $ 784 8.2% 15.0% 1.2% Common Stock (At Market) $ 3,763 39.6% 20.0% 7.9% --------- ---------- ----------- -------- Total $ 9,510.0 100.0% --------- ---------- Weighted Average Cost Of Capital 12.9% --------
[AIMCO LOGO] 113 FINANCIAL OVERVIEW -----------------------------------------o-------------------------------------- AIMCO HAS BUILT-IN DELEVERING o Scheduled Property Debt Amortization o Preferred Stock Conversions [AIMCO LOGO] 114 FINANCIAL OVERVIEW -----------------------------------------o-------------------------------------- AIMCO HAS BUILT-IN DELEVERING Scheduled Property Debt Amortization (In Millions -- As Of 12/31/00)
2001 2002 2003 2004 ---- ---- ---- ---- Cumulative Amortization $ 80 $163 $256 $353 Annual Amortization $ 80 $ 83 $ 93 $ 97
[AIMCO LOGO] 115 FINANCIAL OVERVIEW -----------------------------------------o-------------------------------------- AIMCO HAS BUILT-IN DELEVERING Preferred Equity Conversions
Amount Date Of Conversion Security (In Millions) Redemption Price -------- ------------- ---------- ---------- TOPRS $ 32 12-99 $49.61 Class B - Pref OP 35 12-01 40.00 Class K 125 2-02 42.00 Class L 125 6-02 46.48 Class B 42 8-02 30.45 Class M 30 1-03 44.00 Class N* 100 9-03 52.50 Class O* 100 9-03 52.50 Class P* 100 3-04 56.00 ------ Subtotal 689 Various Pref OP 95 ------ Total $ 784 ======
* The N, O And P Have Early Conversion Features Based On Either Investor Achieving 20% IRR Or Meeting Share Price Thresholds [AIMCO LOGO] 116 FINANCIAL OVERVIEW -----------------------------------------o-------------------------------------- AIMCO HAS BUILT-IN DELEVERING $689 Million Of Prospective Preferred Equity Conversions
Preferred Conversions (Millions) ----------- ---------- 2001 $ 67 2002 $292 2003 $230 2004 $100
[AIMCO LOGO] 117 FINANCIAL OVERVIEW -----------------------------------------o-------------------------------------- AIMCO HAS BUILT-IN DELEVERING Over $1 Billion Aggregate Delevering
Year ($ Millions) ---- ------------ 2001 $144 2002 $375 2003 $323 2004 $197
Convertible Preferred Conversions Plus Debt Amortization
Coverage Ratios Without New Leverage 2001 2002 2003 2004 ------------------------------------ ---- ---- ---- ---- Free Cash Flow To Interest 2.6 : 1 2.6 : 1 2.8 : 1 3.0 : 1 Free Cash Flow To Interest and Preferred 2.0 : 1 2.2 : 1 2.4 : 1 2.7 : 1
[AIMCO LOGO] 118 FINANCIAL OVERVIEW -----------------------------------------o-------------------------------------- AIMCO TRADES AT LESS THAN NET ASSET VALUE
NAV (3/31/01) ------------- Total Implied Value Of Real Estate $ 9,258,129 Total Implied Value Of Service Business 442,420 Total Implied value Of Activity Based Fees 149,400 Book Value Of Other Current Assets 1,135,546 ------------- Total Assets 10,985,496 ------------- Total Liabilities 5,957,731 ------------- NET ASSET VALUE $ 5,027,765 ------------- Shares And OP Units Outstanding 99,822 ------------- NET ASSET VALUE PER SHARE $ 50.37 ------------- * A Detailed Version Of This Calculation Can Be Accessed On The Aimco Website
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