NAREIT Institutional Investor Conference
June 2004
Why ANL Today?
• Both a value and a growth company
– Visibility of organic growth over 3-5 year horizon
• Demographic focus on 55+
• Growth through internal build-out; plus future acquisition strategy
• Focus on active adult market – rent securitized by high value homes and growth of customer base
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Manufactured Housing Today In ANL Portfolio
• Community designs that value “residential appearance”:
– Curvilinear road patterns
– Larger lots/lower density
– Sidewalks and street lights
– Lots “with a view”
• Quality homes
– Average sales price >$ 100,000
– 3 bedroom models
– Garages replacing carports
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Quality Homes Made Affordable Through Manufacturing
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Communities & Subdivisions –Not Trailer Parks
Riverside Club Savanna Club
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Amenitized Communities
• Clubhouse focus
• Golf courses
• Marinas
• Fitness/Social Center
• Curvilinear streets
• Landscaping
• Quality homes provide visibility on quality of future residents
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The Manufactured Housing Sector Model
• Leasing land for residential use to tenants who have an investment in improvements to the land
• Provides a form of common interest development while maintaining single family home format
• Land lease community owners benefit from:
– Diversity of tenant base
– Lower recurring capital requirements as compared to other residential asset classes
– Lower tenant turnover as compared to other residential asset classes
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The Manufactured Housing Sector
• Consists of five public REITs, four have been public for more than one year
• Total sector market cap—$1.93B; Total sector enterprise value—$4.4B
• Sector median dividend yield – 6.03%; ANL dividend yield – 5.46%
Multifamily
Sector Sector
Median Median ANL
Total Return:
One Year 18.24% 5.94% 12.11%
Three Years 39.32% 56.22% 84.51%
Five Years 84.23% 88.68% 76.51%
Price to FFO –
16.2x 12.25x 11.96x
2004E
FFO payout 2004E 86.53% 65.36% 65.4%
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Manufactured Housing Sector
Multifamily
Sector Sector
Financial Benchmark: Median Median ANL
Coverage of interest &
2.09x 3.48x 3.90x
preferred dividends
Debt to enterprise value 46.5% 47.6% 47.0%
Return on average equity 6.1% 15.4% 10.0%
Implied cap rate 7.6% 8.3% 10.0%
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The Basics
[Financial Data as of May 28, 2004]
• UPREIT Market Cap=$150M
• Enterprise Value = $281M
• Average Daily Volume = 15,000
• Price/FFO
– 11.96x 2004E
– 11.16x 2005E
• Current yield = 5.46%
• Occupancy = 96.5% of Operational Home Sites
• Same Store NOI Growth
– 2001 = 11.1%
– 2002 = 9.3%
– 2003 = 11.1%
– 1Q04 = 11.6%
• Same Site NOI Growth
– 2003 = 4.2%
– 1Q04 = 3.1%
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Earnings
• FFO
– 2001A = $1.14
– 2002A = $1.21
– 2003A = $1.45
– 2004E = $1.40—$1.60
• AFFO
– 2001A = $1.05
– 2002A = $1.12
– 2003A = $1.33
– 2004E = $1.28 to $1.44
• FFO Payout Ratio
– 2001 = 87.7%
– 2002 = 82.6%
– 2003 = 69.0%
– 1Q04 = 61.0%
• AFFO Payout Ratio
– 2001 = 94.3%
– 2002 = 89.3%
– 2003 = 75.2%
– 1Q04 = 67.6%
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The Basics
[Financial Data as of May 28, 2004]
Total Return Results
• Last 12 Months = 12.1%
• Last 3 Years = 84.5%
• Last 5 Years = 76.5%
Return Metrics
• Return on Average Equity = 10.0%
• Return on Invested Capital = 7.8%
• Implied Cap Rate = 10.0%
Ownership
• Institutional Ownership = 18.9%
• Insider Ownership = 24.9%
Growth and Valuation
• Projected 2004 FFO Growth = 5.5%
• Price to 2004E FFO = 12.0x
• Payout of 2004E FFO = 65.4%
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Components of Capitalization
Components of Capitalization
March 31, 2004
$4,418 Line of Credit
$9,077 Floorplan
$24,371 Variable Rate Mortgages
$94,107 Fixed Rate
$167,015 Equity
Class Per Share Percent
Equity $ 20.43 55.9%
Fixed Rate $ 11.51 31.5%
Variable Rate $ 2.98 8.2%
LOC $ 0.54 1.5%
Floor Plan $ 1.11 3.0%
Total $ 36.09 100.0%
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Strength Behind the Balance Sheet
• Company led by Terry Considine – CEO/Chairman of ANL and AIV
• Strong “same store” results from core operating properties
• Beneficiary of “recession resistant” property class
• Financing using primarily fully amortizing mortgages:
– NAV increase through principal reduction
– Minimize interest rate risk
• Demographic support of asset class
• Quality asset locations
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Value & Growth Company
Value Company:
• Sustaining community operations
• Increasing NOI growth through rental increases and expense control
• Tax efficient dividend yield
• Quality Core portfolio
Growth Company:
• Ability to grow the company 50% through internal assets
• Demonstrated competency in land development and home sale operations
• Maximize operating leverage gained through community expansion
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Four Elements of the ANL Business
1. Land Lease Operations
2. Home Sales Operations
3. Land Development Operations
4. Investment Operations
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Property Management Strategy
• Improve operating results from property management business.
– Centralized financial control and uniform operating procedures.
– Localized property management decision-making and market knowledge.
Operations are supervised by three Regional Managers – Two in Florida and one in Arizona.
Large development projects have high quality, full time, on-site Project Managers.
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Home Sales Operations
• Basis of company’s current growth
• Absorption is a primary focus
• One company concept means
ANL is in control and responsible for results from development through home
purchase to on going property operations
• Increasing results:
– Professional sales staff
– Improved home product
– Improved communities
• Financing continues to be key element of home purchase
44 1998
138 1999
184 2000
237 2001
307 2002
414 2003
Home Sales
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Land Development
• Turning land into income
• Expanding communities where the value and quality is known
• Development as a core competency
• Creation of value and increased NAV through execution of development plans
• Adding one high quality home community annually
Riverside Club
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Home Site Inventory
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Investment Operations
• Current focus is on investment into development of currently held property assets
• Additional focus has been on company restructuring –investment in future operating performance and expansion ability
• Evaluate property financing and seek to use effectively to expand available funds
• High quality properties available for sale are few and far between – even fewer at good prices
• Continue to look towards discipline to “buy right”
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Building NAV
• Consistent NOI growth within stabilized communities
• Increasing absorption through focused home sales efforts
• Development of land assets
• Scheduled maturities of long term debt
• Accretive acquisition strategy
• Disposition of under performing assets and deployment of capital to development and acquisition activities
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Points of Contact
Bob Blatz
President and Chief Operating Officer Shannon Smith Chief Financial Officer 29399 US Hwy 19N, Ste 320 Clearwater, FL 33761
Phone: (727) 726-8868 – Bob ext 116/Shannon ext 124 Fax: (727) 726-6788 Email: robert.blatz@americanlandlease.com shannon.smith@americanlandlease.com
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