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The participants on today's call will be Terry Considine, our Chairman and CEO, who will provide opening remarks; Keith Kimmel, Executive Vice President, in charge of Property Operations; and Ernie Freedman, our CFO, will review second quarter results and 2012 guidance. Also in the room today are John Bezzant, Executive Vice President, Transactions; Miles Cortez, EVP and Chief Administrative Officer; and Dan Matula, EVP of Redevelopment and Construction Services. We are available to answer questions at the conclusion of our prepared remarks.I will now turn the call over to Terry Considine. Terry? Terry Considine Thank you, Lisa, and good afternoon to all of you on this call. Thank you for your interest in Aimco. Business is good. During the recently completed second quarter, Aimco continued on plan. During the second quarter, we earned FFO of $0.46 per share. That's up 10% year-over-year. And we earned AFFO of $0.34 per share, that's up 17% year-over-year. The operating team led by Keith maintained high occupancy while increasing rents, with new and renewal rents averaging 5% higher than rents on expiring leases. The 12-month leases, the hard work of Keith and his team walks in today a revenue base supporting the growth we expect over the next year. Keith's team also excelled in cost discipline, particularly in the area of labor utilization, as you can see in the 8% year-over-year decline in payroll costs. Importantly, we maintained a healthy level of capital investment and maintenance spending. Our properties are in good condition, as you can see from the rising rents they command. Our portfolio gets better and better. Its average revenue per unit was about $1,300 in the second quarter. This important measure of portfolio quality determined and paid by customers was up about 8% year-over-year, about 1/2 due to rent growth and 1/2 due to acquisition and redevelopment of higher rent properties funded by the sale of lower rated properties. Cash from the sale of lower rated properties was used to fund redevelopment activity and 3 property acquisitions. Average monthly revenue per unit for the properties sold year-to-date was about $740. Average monthly revenue per unit for our 3 acquisitions year-to-date is about $1,400, almost twice. And average un-trended monthly revenue per unit for year-to-date redevelopment starts is expected to be about $2,100, or nearly 3x the rate of the properties sold. As I said, our portfolio gets better and better.
Our redevelopment business headed by Dan Matula is ramping up, and the 5 projects we have under way are on track. We expect these projects, together with 5 others to be started later this year, to add about $2 per share in net asset value when completed over the next 2 years or so.Our balance sheet is getting stronger under Ernie's careful watch. Year-to-date through July, we reduced total leverage by more than $0.5 billion, about $600 million from redemption of preferred stocks with increases in property debt from acquisitions, including limited partner transactions almost offset by monthly amortization and asset sales. As a result, and with steady earnings growth, we reduced leverages of multiple of current quarter EBITDA from 9.5 at the start of the year to just over 8 today. We're on track to meet our target of 7:1 within the next 18 months or so. Our business strategy is simple: own and operate apartments in a cross section of large U.S. markets and upgrade our portfolio by redevelopment, selective acquisitions and sale of lower rated properties. Through this end, we've announced plans to exit the Asset Management business by sale of NAPICO later this year and to largely exit the Affordable business by sale of individual properties over the next 5 years or so. We're on track to execute both decisions. Through simplification, we expect higher quality earnings, lower overhead costs and greater transparencies. Read the rest of this transcript for free on seekingalpha.com