Apartment Investment and Management Company (NYSE:AIV) Q3 2019 Earnings Conference Call - Final Transcript

Nov 01, 2019 • 01:00 pm ET


Apartment Investment and Management Company (NYSE:AIV) Q3 2019 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Aimco Third Quarter 2019 Earnings Conference Call and Webcast. [Operator Instructions]

I would now like to turn the conference over to Ms. Lisa Cohn, Executive Vice President and General Counsel. Please go ahead ma'am.

Lisa R. Cohn

Thank you and good day. During this conference call, the forward-looking statements we make are based on management's judgment, including projections related to 2019 results and 2020 expectations. These statements are subject to certain risks and uncertainties, a description of which can be found in our SEC filings. Actual results may differ materially from what may be discussed today.

We will also discuss certain non-GAAP financial measures such as AFFO and FFO. These are defined and are reconciled to the most comparable GAAP measures in the supplemental information that is part of the full earnings release published on Aimco's website.

Prepared remarks today come from Terry Considine, our Chairman and CEO; Keith Kimmel, our Executive Vice President, incharge of Property Operations; Wes Powell, our Executive Vice President, incharge of Redevelopment; and Paul Beldin, our Chief Financial Officer. Other members of management are also present, and will be available during our Q&A session, which will follow our prepared remarks.

I will now turn the call to Terry Considine. Terry?

Terry Considine

Thank you, Lisa, and good morning to all of you on this call. Thank you for your interest in Aimco. Third quarter was another strong quarter for Aimco across all our business metrics, including adjusted funds from operation, which exceeded the midpoint of guidance by $0.02 per share. In operations, Keith and his team are having an excellent 2019. So far this year, they lead all peers in same-store revenue growth, same-store expense growth, same-store net operating income growth, same-store net operating income margin, and perhaps most important, customer retention, driven by consistently improving levels of customer satisfaction and improved customer selection.

One impressive measure of their productivity, the compounded annual growth rate in controllable operating expenses has been negative for the past 12 years.

In redevelopment, Wes and his team are on track, creating value across the portfolio. For example, at Parc Mosaic in Boulder, they welcomed our first residents with rates and at a least pace ahead of underwritten expectations.

On the balance sheet, Patty and Paul took advantage of low interest rates, and placed $670 million of long-dated property loans at 3.34%. In the past few quarters, they've reduced the cost of our leverage, and in the next few, they will reduce its absolute amount.

Debt to EBITDA temporarily elevated as planned, will be a half turn less by the end of this year and a full turn less by the end of next year.

With this year's leasing mostly complete, our focus naturally turns to next year. We have already provided our preliminary outlook for 2020. We see another good year with solid growth with same-store net operating income up 3.7% to 4.1%; with AFFO per share up 6% to 8%; and economic income per share up 8% to