Investor Presentaiton
ECONOMIC INCOME AND EARNINGS
Aimco's primary measure of long-term financial performance is Economic Income.
Measuring Aimco shareholder value creation by the per share change in Net Asset Value (NAV) plus Cash Dividends paid, Aimco Economic
Income has compounded:
。 Since IPO through 1Q 2019(1), at 14% annually; and
。 Over the last five years, through 1Q 2019, at 10.6% annually, reflecting lower leverage and stable, full pricing for assets.
.
Aimco publishes its NAV estimate semi-annually; as of 1Q 2019: NAV = $56 per share.
Over the same 25 years, since IPO, Aimco's Total Shareholder Return has tracked Economic Income, often with a lag.
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The result, compounded annually since IPO: AIV up 11.8%; S&P 500 up 9.8%
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193 of the current S&P 500 companies have been public for 25 years. Aimco has outperformed two-thirds of these companies with a total
return 45% above the median.
ECONOMIC INCOME:
•
.
Captures the VALUE CREATED and FUTURE GROWTH expectations from investment before they are converted into earnings, and
Is Aimco's compass when deciding to ACCEPT LOWER SHORT-TERM EARNINGS in order to achieve GREATER LONG-TERM GAIN.
Aimco accepted near-term earnings dilution in 2018 when it sold its Asset Management business. 4Q 2019 will be the first quarter where the
increasing profitability of apartment operations will be apparent in year-over-year comparisons of FFO and AFFO. Using the midpoint of our
implied fourth quarter pro forma FFO guidance, adjusted for comparable capital replacement spending, we expect year-over-year
AFFO growth to accelerate to ~8%.
MORE FOCUSED EARNINGS CONTRIBUTION
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The contribution from real estate operations to Aimco
bottom line has increased steadily since the planned exit
from the affordable and asset management businesses
was announced in 2011, and is expected to be 98% of
AFFO in 2019.
$2.50
$2.00
$1.50
$1.00
Other Earnings expected in 2019, defined as contributions
from affordable, asset management, and tax related
income, are forecast to be just 2% of AFFO, or $0.05 per
share, down 90% over the same eight years.
(1)
Represents Aimco's last published Net Asset Value of $56/sh at 3/31/2019 and share price at IPO as a proxy for NAV.
$0.50
$0.00
2012
2013
2014
2015
2016
2017
2018
2019E
Core Aimco Earnings Other Earnings
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