Executive Summary

Resilient quarter amid COVID-19: Pro forma FFO/share rose 5% YoY to $0.63 and AFFO/share rose 8% YoY to $0.55; consolidated rental revenue declined ~2% YoY on bad debt, lower commercial and waived fees . Same Store NOI fell 1.4% YoY (down 4.5% QoQ) on lower occupancy and higher bad debt, partially offset by expense control .
Collections and occupancy troughing: AIV recognized 98.4% of residential revenue in Q2 (1.6% bad debt); cash collections during Q2 were 97.2% of recognized revenue by July 31; July occupancy ran 93.8% and blended lease rates were -1.1% (new -5.6%, renewal +3.4%) with management indicating strength in DC/Boston/Denver/San Diego vs pressure in LA/Miami .
Balance sheet fortified: $1.2B of liquidity (cash/revolver), refinancing lowered weighted-average borrowing cost to 3.69%; net leverage to Adjusted EBITDAre at 8.1x with a path to targets via NOI growth and selective sales .
Guidance and catalysts: No formal 2020 financial guidance was reiterated; dividend of $0.41/share (up 5% YoY) maintained; catalysts include lease-up contribution (~$30M incremental NOI at stabilization) and transaction market activity at pricing above prior GAVs .

What Went Well and What Went Wrong

What Went Well
- Pro forma FFO/AFFO growth despite COVID-19 costs: Pro forma FFO/share +$0.03 YoY to $0.63; AFFO/share +$0.04 YoY to $0.55, driven by communities in lease-up, mezzanine loan contribution (Parkmerced accrual), lower G&A and lower capital replacement spending .
- Collections resilience and operational discipline: Recognized 98.4% of residential revenue with 97.2% collected in cash by July 31; CFO: “we feel quite good about our approach,” citing historical collection experience and collateral/credit review .
- Liquidity strengthened, maturities addressed: $689M of property financings (WA rate 2.9%, term 9.3 yrs) plus $350M term loan; liquidity $1.2B; average borrowing cost reduced to 3.69% .
Management quotes:
- CEO: “The resilient Aimco business absorbed the financial blow and is now recovering from the shock of the pandemic and the ‘lockdown’ of the economy.”
- Ops EVP: “July leasing volume exceeded last year… Our operations team has been built for times like this in mind.”
- CFO: “Pro forma FFO… up 5% y/y… after subtraction of $0.05 of COVID-related costs.”
What Went Wrong
- Occupancy and rate pressure: Same Store NOI -1.4% YoY and -4.5% QoQ; Average Daily Occupancy fell to 95.5% (from 96.9% LY), and blended lease growth slowed; July blended -1.1% .
- COVID-19 related revenues/expenses: Incremental $8.0M headwind (term loan interest, bad debt, lower commercial, waived late fees, other); plus straight-line write-offs/deferred commission impacts YTD .
- Geographic softness and regulatory risk: Greater pressure in Los Angeles (regulatory environment) and Miami (hospitality-driven employment); Prop 21 (CA rent control) re-emerging on ballot highlighted as a risk focus .

Financial Results

Per-share metrics (diluted)

Metric	Q2 2019	Q1 2020	Q2 2020
Net Income per share	$0.40	$0.04	$0.26
Nareit FFO per share	$0.56	$0.67	$0.57
Pro forma FFO per share	$0.60	$0.67	$0.63
AFFO per share	$0.51	$0.60	$0.55
Vs. Consensus	N/A (not provided)	N/A (not provided)	N/A (SPGI limit)

Consolidated revenues

Metric ($000)	Q2 2019	Q1 2020	Q2 2020
Rental and other property revenues	$224,200	$224,552	$218,808

Same Store P&L (proportionate; before/after utility reclasses as defined)

Metric ($mm)	Q2 2019	Q1 2020	Q2 2020
Revenue, before utility reimbursements	$182.8	$186.8	$180.8
Expenses, net of utility reimbursements	$48.9	$48.4	$48.7
NOI	$133.9	$138.4	$132.1

Leasing KPIs

KPI	Q2 2019	Q1 2020	Q2 2020	July 2020 (where shown)
Average Daily Occupancy	96.9%	97.6%	95.5%	93.8%
Renewal rent change	+5.2%	+5.8%	+5.1%	+3.4% (July)
New lease rent change	+2.3%	+1.7%	-2.4%	-5.6% (July)
Blended rent change	+3.8%	+3.6%	+1.8%	-1.1% (July)
Residential revenue recognized	—	—	98.4% (1.6% bad debt)	98.4% (1.6% bad debt)
Cash collection % of recognized	—	96% (April in-month)	97.2% (Q2 by 7/31)	95.8% (in-month)

Segment/portfolio breakdown (proportionate)

Segment ($mm)	Q1 2020 Revenues	Q2 2020 Revenues	Q1 2020 Expenses	Q2 2020 Expenses
Same Store	187.108	181.084	48.505	48.786
Redevelopment/Development	11.913	11.589	4.687	4.912
Acquisition & Other Real Estate	19.343	17.981	6.774	6.702

Balance sheet and liquidity

Metric	Q1 2020	Q2 2020
Weighted avg borrowing cost	—	3.69%
Liquidity (cash + revolver capacity)	~$1.2B (pro forma)	$1.2B; cash+restricted cash $428M; revolver capacity $793M
Net Leverage / Adjusted EBITDAre	7.7x	8.1x
Dividends per share (quarter)	$0.41 (declared Apr)	$0.41 (declared Jul)

Guidance Changes

Metric	Period	Previous Guidance	Current Update	Change
AFFO per share	FY 2020	$2.34–$2.44 (from 4Q19)	Not reiterated in Q2 materials	—
Same Store NOI growth	FY 2020	3.2%–4.6% (from 4Q19)	Not reiterated in Q2 materials	—
Leverage target	Ongoing	Net leverage/Adj. EBITDAre <7.0x target	Plan to reach via NOI growth and ~$350M sales; 8.1x at Q2	Maintained focus
Dividend	Quarterly	$0.41/share	$0.41/share declared (up 5% YoY)	Maintained

Note: No formal numerical 2020 guidance was reiterated in the Q2 2020 release/call; management emphasized liquidity, leverage and development lease-up milestones .

Earnings Call Themes & Trends

Topic	Q4 2019 (prior-2)	Q1 2020 (prior-1)	Q2 2020 (current)	Trend
Pandemic/Operations	—	April occupancy 96.6%, blended +4.2%; early COVID protocols and AI-enabled leasing	Occupancy down; July leasing +20% YoY; blended -1.1%; collections high; disciplined customer selection	Demand rebounding, pricing mixed
Collections/Bad debt	—	April: 96% in-month collections; 1% bad debt (new methodology)	Q2 recognized 98.4%, 1.6% bad debt; cash 97.2% by 7/31; July 95.8% cash	Elevated vs norm but manageable
Balance sheet/liquidity	Leverage above target; plan to reduce via lease-ups/sales	~$1.2B liquidity; refinancing plan in place	$1.2B liquidity; cost 3.69%; net leverage 8.1x; maturities addressed	Improved liquidity; leverage near-term higher
Redevelopment pipeline	2020 spend $250–$300M; value creation target	Paused short-cycle; continue 5 long-cycle; $30M NOI at stabilization	Updates: Parc Mosaic 84% leased; deliveries ongoing; ~$150M to complete long-cycle	Executing through COVID
Regional trends	LA/Philly supply monitored	Mixed; cautious on certain urban submarkets	LA/Miami weaker; DC/Boston/Denver/San Diego stronger; Bay Area peninsula most uncertain	Suburban > urban near-term
Regulatory/legal	—	—	CA Prop 21 rent control on ballot; broad coalition opposing	Heightened risk focus
Transaction market	Delayed some 2019/2020 sales	VA sale at $58.9M (at GAV)	Under-contract asset ~ $126M (3% above 12/31/19 GAV); demand “good and increasing”	Pricing resilient

Management Commentary

Strategic posture: “We are at or near the bottom in monthly Average Daily Occupancy… Notwithstanding all that has happened… our first half results met our pre-crisis expectations.” – Terry Considine, CEO .
Pricing/occupancy strategy: “We are playing the long game… solving to total contribution… building by building, unit by unit… not willing to compromise… resident quality.” – Keith Kimmel, EVP Ops .
Balance sheet and leverage path: “Leverage… remains above-targeted levels. We plan to reduce leverage to less than 7:1 through lease-up… and approximately $350 million of property sales.” – Paul Beldin, CFO .
Development update: “Parc Mosaic… 84% leased… 707 Leahy… 77% of delivered homes leased… The Fremont… about half of delivered homes leased.” – Wes Powell, EVP Redevelopment .

Q&A Highlights

Occupancy vs rate: Management prioritizes total contribution, tailoring strategies by market; not chasing occupancy at the expense of long-term rent roll quality .
Collections/bad debt geography: Higher delinquencies where local regulations “embolden” nonpayment; pressure greatest in Los Angeles and Miami; stronger in Northern California and Denver .
Demand recovery: July tours +20% YoY; pent-up seasonal demand; suburban outperformance vs urban, though signs of improvement in Mid-Wilshire LA .
Transactions/cap rates: Demand “lots of interest,” low rates offset turbulence; selective on pricing; sales under contract at >3% above prior GAV .
Parkmerced mezzanine: Interest accrued per agreement (10%); no cash received in Q2; accrual based on collectibility assessment and security by >$300M junior equity .

Estimates Context

Wall Street consensus for Q2 2020 EPS/Revenue: Unavailable for this recap due to S&P Global daily request limit. As a result, explicit beat/miss vs consensus cannot be provided.
Implication: Given Pro forma FFO and AFFO grew YoY despite COVID costs, and Same Store NOI declined modestly, estimate revisions may focus on near-term NOI and occupancy trough timing while recognizing balance sheet strength and lease-up contributions .

Key Takeaways for Investors

Defensive operations with resilient collections: Recognized 98.4% of residential revenue with high cash conversion; bad debt contained at 1.6% despite macro shock .
Near-term trough dynamics: Occupancy and blended pricing pressure likely persist through peak season; management sees bottoming and recovery signs in demand metrics .
Liquidity/terming are strong; path to leverage targets credible through lease-ups and measured asset sales; no near-term covenant pressure .
Development value creation intact: Lease-ups progressing; ~$30M incremental NOI at stabilization supports medium-term AFFO growth .
Geographic/regulatory dispersion matters: LA/Miami headwinds vs DC/Boston/Denver/San Diego strength; monitor CA policy (Prop 21) and urban vs suburban demand mix .
Dividend maintained ($0.41/share); payout sustainability supported by collections and liquidity, though growth hinges on occupancy recovery and lease-up pace .
Trading stance: Near-term choppiness in occupancy/rents may create volatility; focus on signs of stabilization (July/August leasing lifts), execution on sales, and cadence of lease-up NOI.

Appendix: Notable Additional Data

COVID-19 P&L headwind in Q2: $8.0M comprised of $2.6M net incremental interest (term loan), $2.5M incremental bad debt, $1.5M lower commercial revenue, $0.6M lower other income (late fee restrictions), $0.8M other .
Same Store revenue component drivers Q2: Residential rent +2.5% YoY; occupancy -1.4% pts; bad debt -1.2% pt; late fees/other -0.7% pt; commercial -0.3% pt .

APARTMENT INVESTMENT & MANAGEMENT CO (AIV)·Q2 2020 Earnings Summary