DENVER, Oct. 30 /PRNewswire-FirstCall/ -- Third Quarter 2009
Highlights -- Funds From Operations (FFO, as defined in the
Glossary) - FFO of $0.41 per share, before operating real estate
impairments of $0.22 per share, was within the $0.36 to $0.42 per
share guidance range. -- Property Operations - During the third
quarter, Aimco's share of total conventional and affordable
property net operating income was $145.1 million. Total
conventional and affordable property net operating income, adjusted
for property acquisitions and dispositions, was 1.2% lower than in
third quarter 2008. -- Same Store Results (as defined in the
Glossary) - When comparing third quarter 2009 to third quarter
2008, Same Store property net operating income declined 5.4%,
within the guidance range of negative 5.0% to negative 6.0%. Same
Store revenue declined 2.9% and expenses increased 1.1%. Average
daily occupancy declined 20 basis points from 95.0% for third
quarter 2008 to 94.8% for third quarter 2009, and increased 200
basis points from second quarter 2009. -- Non-Same Store Results -
Third quarter 2009 conventional redevelopment net operating income
increased 16.4% compared to third quarter 2008 and affordable
property operations, including affordable redevelopment operations,
generated net operating income growth of 6.0% during the same
period. -- Capital Markets Activity At the beginning of third
quarter 2009, Aimco had $350 million of term debt outstanding, due
first quarter 2011. During third quarter 2009, Aimco repaid $90
million of term debt with proceeds from property sales. An
additional payment of $50 million was made after quarter's end,
reducing the balance to $210 million. Aimco has focused on reducing
refunding risk by accelerating refinancing of property loans
maturing prior to 2012. At the beginning of third quarter 2009,
Aimco's share of property debt maturing during 2009 through 2011
was $221.3 million. During third quarter, through refinancing,
repayment and property sales, Aimco reduced these maturities by
$36.8 million. As of September 30, 2009, the balance of property
debt maturing through 2011 totaled $184.5 million in nine loans. Of
these loans, refunding risk has since been eliminated on all but
four loans totaling $164.0 million which are expected to be
refinanced at their maturity in 2011. -- Property Sales and Asset
Allocation - During third quarter 2009, Aimco sold 28 properties
for $366.6 million, generating $125.0 million in net proceeds to
Aimco, after distributions to limited partners, repayment of
existing property debt and transaction costs. Year-to-date through
September 30, 2009, Aimco has sold 58 properties generating net
proceeds to Aimco of $244.2 million. Aimco continues to market
properties located in its non-target markets and in lower rated
locations within its target markets. -- Dividend - Aimco's Board of
Directors declared a cash dividend of $0.10 per share on its Class
A Common Stock for the quarter ended September 30, 2009. The
dividend is payable November 30, 2009, to stockholders of record on
November 20, 2009. 2009 Outlook -- Property Operations - Aimco
remains focused on retaining existing residents and maintaining
expense control. Market rents have declined during 2009, although
the rate of decline has eased. As a result of rental rate
reductions, fourth quarter 2009 Same Store net operating income is
expected to decline 7.0% to 8.0% when compared to fourth quarter
2008. For the full year 2009, Same Store net operating income is
expected to decline 4.0% to 5.0% compared to full year 2008.
Positive net operating income results in the redevelopment and
affordable property portfolios are expected to largely offset the
declines in the Same Store results. -- Balance Sheet and Liquidity
- Aimco continues to focus on balancing sources and uses of capital
without reliance on capital markets for equity or debt, except for
the refunding of property debt. Aimco plans to meet liquidity
requirements with limited use of its bank line of credit, except to
support letters of credit. Aimco's line of credit requires
compliance with certain coverage ratios with which Aimco complies
and expects to continue to comply. Aimco leverage is 95% long term:
83% non-recourse property debt with a weighted average maturity of
8.7 years, and 12% perpetual preferred equity. On average,
approximately 5%, or $300 million, of Aimco's share of leverage is
subject to refunding in any one year. Aimco's term debt totaling
$210 million at October 30, 2009, matures in first quarter 2011,
and is expected to be repaid prior to maturity with proceeds from
property sales. -- Property Sales and Asset Allocation - Aimco
intends to sell approximately $450 million of additional non-target
conventional and affordable assets by year end to fund repayment of
its term debt due first quarter 2011. Once the term debt is repaid,
future asset sales will be used to increase Aimco's allocation of
capital to well located properties within its target markets. --
FFO Outlook - Aimco's previously provided guidance for full year
2009 FFO, before operating real estate impairments and preferred
stock redemption related gains, was a range of $1.55 to $1.75 per
share, including $0.15 per share of dilution from 2009 property
sales. Based on year-to-date financial results and our projections
for the remainder of the year, we are narrowing our full year 2009
FFO guidance to $1.61 to $1.69 per share. For the fourth quarter
2009, FFO is expected to range from $0.32 to $0.40 per share,
inclusive of dilution from 2009 asset sales. Management Comments
Chairman and Chief Executive Officer Terry Considine comments:
"Aimco properties enjoyed high occupancy and property incomes from
all portfolios taken together were stable. Same Store rents
declined from 2008; however the rate of decline eased during third
quarter. Property values appear to have stabilized after
substantial declines from their 2007 high. Proceeds from property
sales are repaying our term debt. Refunding risk has been further
reduced by extending most property debt maturities before 2012.
Business simplification has led to lower offsite costs, including
G&A expenses, and provided a substantial offset to earnings
dilution from property sales. Notwithstanding a solid quarter,
business conditions remain fragile and unpredictable. We look to
the future with optimism and also great caution." President, Chief
Investment Officer and Chief Financial Officer David Robertson
adds: "During the quarter we sold $367 million of assets, plus an
additional $124 million during October. Proceeds from these sales
were used to pay down our term debt by $140 million, leaving a $210
million balance due in early 2011. We currently have an additional
$800 million of assets either under contract or in negotiations,
and we plan to sell approximately $450 million of this amount to
repay our term debt, bringing total sales in 2009 to approximately
$1.3 billion. Any additional sales will be used to fund investments
in our existing portfolio or the acquisition of higher rated assets
in our target markets." Third quarter 2009 Financial Results In
accordance with United States Generally Accepted Accounting
Principles (GAAP), all previously reported share and per share data
have been adjusted to take into account the special dividends paid
on December 1, 2008, and January 29, 2009, which resulted in the
issuance of approximately 12.6 million and 15.6 million additional
shares of Aimco's Class A Common Stock, respectively. -- Net loss
attributable to common stockholders for the quarter was $40.5
million, compared to net income of $159.5 million for the third
quarter 2008. Lower gains on dispositions of consolidated and
unconsolidated real estate of $194.9 million, lower asset
management and tax credit revenues of $22.3 million, higher
operating real estate impairment losses of $23.3 million and higher
depreciation and amortization expense of $15.0 million were
partially offset by a decrease in income attributable to
noncontrolling interests of $45.7 million and lower general and
administrative expenses of $11.7 million. Earnings per share (EPS)
attributable to common stockholders were a loss of $0.35 on a
diluted basis, compared with earnings of $1.35 per share in third
quarter 2008. -- Funds from operations (diluted) (FFO) is a
non-GAAP financial measure defined in the glossary in the
Supplemental Information (the Glossary). FFO calculated in
accordance with the definition prescribed by the National
Association of Real Estate Investment Trusts (NAREIT) was $22.3
million, or $0.19 per share, compared with $73.0 million, or $0.60
per share, in third quarter 2008. FFO, before operating real estate
impairments and preferred stock redemption related gains, was $47.4
million, or $0.41 per share, down from $0.62 per share in third
quarter 2008. Third quarter 2009 operating real estate impairments
totaled $0.22 per share and resulted from the expected fourth
quarter sale of four specific assets. -- Adjusted funds from
operations (diluted) (AFFO; a non-GAAP financial measure defined in
the Glossary) was $28.8 million, or $0.25 per share, compared with
$49.1 million, or $0.41 per share, in third quarter 2008. AFFO
includes deductions of $0.16 and $0.21 per share for capital
replacement expenditures in third quarter 2009 and third quarter
2008, respectively. Adjusted Diluted Per Share Results* THIRD
QUARTER YEAR- TO-DATE 2009 2008 2009 2008 ---- ---- ---- ----
Earnings (loss) EPS ($0.35) $1.35 ($0.94) $2.93
-------------------- ------ ----- ------ ----- Funds from
operations FFO $0.19 $0.60 $0.95 $1.69 --------------------------
----- ----- ----- ----- FFO before operating real estate
impairments and preferred stock redemption related gains $0.41
$0.62 $1.29 $1.76 -------------------------------- ----- -----
----- ----- Adjusted funds from operations AFFO $0.25 $0.41 $0.86
$1.23 ------------------------------------ ----- ----- ----- -----
* These per share results reflect the cumulative effect of the
shares issued as part of Aimco's special dividends paid in 2008 and
on January 29, 2009. To estimate the approximate per share results
before the effect of Aimco's special dividends, multiply the
reported per share results by a factor of 1.48. Property Operations
Property operating results discussed below represent Aimco's share
of reported amounts. Conventional Real Estate Operations
Conventional real estate operations relate to Aimco's diversified
portfolio of market rate apartment communities. At the end of third
quarter 2009, this portfolio included 266 properties with 82,142
units in which Aimco had a weighted average ownership of 90%.
Average rents for the conventional real estate portfolio increased
5.6% from $987 per unit during third quarter 2008 to $1,042 per
unit during third quarter 2009. During third quarter 2009,
conventional real estate operations generated net operating income
of $127.2 million. Aimco's Same Store portfolio net operating
income was $106.1 million for third quarter 2009, down 5.4% from
third quarter 2008, while conventional redevelopment property
operations generated net operating income of $22.6 million during
the quarter, an increase of 16.4% compared to third quarter 2008.
"Same Store" Results In the third quarter 2009, the Same Store
portfolio included 195 communities with 57,968 Effective Units (see
the Glossary) based on Aimco's weighted average ownership of 91%.
Comparing Same Store results in third quarter 2009 with third
quarter 2008, total revenue decreased $5.2 million, or 2.9%. The
decrease in revenue was primarily the result of lower average daily
occupancy, down 20 basis points from 95.0% to 94.8%, and lower
average rent, down 3.5% or $36 per unit, from $1,026 per unit to
$990 per unit. Same Store expenses increased $0.8 million or 1.1%,
primarily due to higher property tax and insurance expenses,
partially offset by decreased turnover costs. Same Store Operating
Results THIRD QUARTER THIRD QUARTER Year-over-year Sequential
-------------- ------------- 2009 2008 Variance 2nd Qtr Variance
---- ---- -------- ------- -------- Same Store Operating Measures
-------------------- Average Daily Occupancy 94.8% 95.0% -0.2%
92.8% 2.0% ------------- ---- ---- ---- ---- --- Average Rent Per
Unit $990 $1,026 -3.5% $1,008 -1.8% --------------------- ----
------ ---- ------ ---- Total Same Store ($mm)
---------------------- Revenue $177.7 $182.9 -2.9% $177.3 0.2%
------- ------ ------ ---- ------ --- Expenses (71.6) (70.8) 1.1%
(68.8) 4.1% -------- ----- ------ --- ----- --- NOI $106.1 $112.1
-5.4% $108.5 -2.2% --- ------ ------ ---- ------ ---- YEAR-TO-DATE
Year-over-year -------------- 2009 2008 Variance ---- ---- --------
Same Store Operating Measures -------------------- Average Daily
Occupancy 93.7% 94.9% -1.2% ------------- ---- ---- ---- Average
Rent Per Unit $1,004 $1,021 -1.7% --------------------- ------
------ ---- Total Same Store ($mm) ---------------------- Revenue
$508.8 $519.9 -2.1% ------- ------ ------ ---- Expenses (200.1)
(200.8) -0.4% -------- ------ ------ ---- NOI $308.7 $319.1 -3.3%
--- ------ ------ ---- See Supplemental Schedules 6a through 6c for
additional information on Same Store operating results. Affordable
Real Estate Operations At the end of third quarter 2009, Aimco's
affordable real estate portfolio included 271 properties with
30,816 units in which Aimco had a weighted average ownership of
54%. During third quarter 2009, affordable property operations
generated net operating income of $17.9 million. Total affordable
property net operating income was 6.0% higher than during third
quarter 2008. Average month-end occupancy for the affordable
portfolio decreased 1.1% from 97.6% for third quarter 2008 to 96.5%
for third quarter 2009, while average rent per unit increased 3.6%
from $728 to $754 per unit. Investment Management Investment
management includes activities related to our owned portfolio of
properties as well as services provided to affiliated partnerships.
Investment management includes portfolio strategy, capital
allocation, joint ventures, tax credit syndication, acquisitions,
dispositions and other transaction activities. Within our owned
portfolio, we refer to these activities as Portfolio Management,
and their benefit is seen in property operating results and in
investment gains. For affiliated partnerships, we refer to these
activities as Asset Management for which we are separately
compensated through fees paid by third party investors. Investment
management income includes fees earned for providing asset
management services to third party investors, syndication fees and
deferred income related to tax credit activities, and portfolio
management income earned through investment gains on our owned
assets. Aimco's share of investment management income, net of tax,
was $6.0 million in the third quarter 2009 compared to $27.7
million in third quarter 2008. Income based on third quarter
transactions contributed less than 1% of third quarter FFO. See
Supplemental Schedule 11 for additional information on investment
management income. Portfolio Management Portfolio management
includes the ongoing allocation of investment capital to meet our
geographic and product type goals. Our geographic allocation
strategy focuses on the 20 largest U.S. markets as measured by
total market capitalization. We believe these markets to be deep,
relatively liquid and possessing desirable long-term growth
characteristics. These target markets are primarily coastal
markets, and also include a number of Sun Belt cities and Chicago,
Illinois. As we execute this strategy, we expect to reduce our
investment in markets outside the 20 largest markets and to
increase our investment in the 20 largest markets both by making
acquisitions and through redevelopment spending. In third quarter
2009, Aimco sold 21 conventional properties and seven affordable
properties with 6,031 and 777 units, respectively, for $366.6
million in gross proceeds (Aimco share $297.6 million). Aimco's
share of net proceeds after distributions to limited partners,
repayment of existing property debt and transaction costs was
$125.0 million. See Supplemental Schedules 6 and 7 for additional
details regarding Aimco's portfolio allocation and Supplemental
Schedule 8 for additional information on disposition activity.
Redevelopment During third quarter 2009, Aimco invested $8.6
million in conventional redevelopment projects and completed five
of the 21 projects that were active at the end of the second
quarter. Aimco also invested $9.2 million in seven tax credit
redevelopment projects during third quarter 2009. Balance Sheet and
Liquidity At the end of third quarter 2009, Aimco leverage was
provided 83% by long-term non-recourse property debt of $5.8
billion ($5.2 billion Aimco share) at a weighted average interest
rate of 5.4% and weighted average maturity of 8.7 years. Aimco's
preferred securities represented approximately 12% of Aimco's
leverage at the end of the quarter at which time Aimco had $776.2
million in perpetual preferred stock and preferred partnership
units at a weighted average rate of 7.6%. Aimco's recourse debt is
limited to its revolving credit facility and corporate term debt,
which together represented approximately 4% of Aimco's leverage at
the end of third quarter 2009. At that time, the balance on Aimco's
revolving credit facility was $15.1 million and available capacity
was $119.5 million, net of $45.4 million of letters of credit drawn
against the facility. Aimco's revolving credit facility is used for
working capital purposes and to secure letters of credit used in
the Aimco business. The balance on Aimco's corporate term debt of
$260.0 million at September 30, 2009, matures in first quarter
2011. Subsequent to quarter's end, the entire balance on the line
of credit was repaid and $50 million was repaid on the term debt.
In connection with these recourse obligations, Aimco is subject to
Debt Service and Fixed Charge Coverage covenants of 1.50:1 and
1.30:1, respectively, as defined in the Glossary. For third quarter
2009, Aimco's Debt Service and Fixed Charge Coverage ratios were
1.60:1 and 1.38:1, respectively. Aimco expects to remain in
compliance with these covenants. At September 30, 2009, Aimco had
outstanding $6.2 billion of consolidated debt, which consisted of
$5.2 billion of fixed rate property debt, $0.7 billion of floating
rate property debt and $0.3 billion of floating rate corporate
debt. In addition, Aimco had outstanding $67.0 million of floating
rate preferred stock. Aimco's floating rate property debt includes
$474.7 million of tax-exempt bonds with rates tied to the
Securities Industry and Financial Markets Association Municipal
Swap Index (SIFMA). Over the last twenty years the SIFMA rate has
moved at approximately 0.73% for a 1.00% change in LIBOR, which
reduces Aimco's FFO exposure to changes in floating interest rates.
Additionally, Aimco's FFO exposure is offset by floating rate
assets, such as cash and notes receivable. Based on Aimco's
proportionate share of quarter-end balances, Aimco estimates its
sensitivity to a 100 basis point change in LIBOR to be
approximately $0.01 per share per quarter. See Supplemental
Schedules 4 and 5 for more detail on preferred equity
characteristics and debt characteristics and activity. Dividends on
Common Stock On October 27, 2009, the Aimco Board of Directors
declared a quarterly cash dividend of $0.10 per share of Class A
Common Stock for the quarter ended September 30, 2009, payable on
November 30, 2009, to stockholders of record on November 20, 2009.
At the end of the third quarter 2009, there were approximately
116.4 million shares of Class A Common Stock outstanding. See
Supplemental Schedule 4 for additional detail on Aimco's
securities. Earnings Conference Call Please join Aimco management
for the third quarter 2009 earnings conference call to be held
Friday, October 30, 2009, at 1:00 p.m. Eastern time. Live
Conference Call Domestic Dial-In Number: 1-866-843-0890
International Dial-In Number: 1-412-317-9250 Passcode: 9147658
Webcast: http://www.aimco.com/CorporateInformation/Overview.aspx
Conference Call Replay Domestic Dial-In Number: 1-877-344-7529
International Dial-In Number: 1-412-317-0088 Passcode: 434199 The
conference call replay will be available until 9:00 a.m. Eastern
time on November 13, 2009. Webcast Replay:
http://www.aimco.com/CorporateInformation/About/Financial/news.aspx
Supplemental Information The full text of this release and the
Supplemental Information referenced in this release is available on
Aimco's Website at the link
http://www.aimco.com/CorporateInformation/About/Financial/QEarnRelease.aspx.
Forward-looking Statements This earnings release and Supplemental
Information contain forward-looking statements, including
statements regarding projected results and specifically forecasts
of fourth quarter and full year 2009 results. These forward-looking
statements are based on management's judgment as of this date and
include certain risks and uncertainties. Risks and uncertainties
include, but are not limited to, Aimco's ability to maintain
current or meet projected occupancy, rent levels and Same Store
results and Aimco's ability to close transactions necessary to
generate sales proceeds for debt repayment and other purposes, and
to generate fee income as anticipated. Actual results may differ
materially from those described in these forward-looking statements
and, in addition, will be affected by a variety of risks and
factors, some of which are beyond the control of Aimco, including,
without limitation: financing risks, including the availability and
cost of capital markets financing and the risk that our cash flows
from operations may be insufficient to meet required payments of
principal and interest; earnings may not be sufficient to maintain
compliance with debt covenants; real estate risks, including
fluctuations in real estate values and the general economic climate
in the markets in which we operate and competition for tenants in
such markets; national and local economic conditions; the terms of
governmental regulations that affect Aimco and interpretations of
those regulations; the competitive environment in which Aimco
operates; redevelopment risks, including failure of such
redevelopments to perform in accordance with projections; the
timing of acquisitions and dispositions; insurance risk; natural
disasters and severe weather such as hurricanes; litigation,
including costs associated with prosecuting or defending claims and
any adverse outcomes; energy costs; and possible environmental
liabilities, including costs, fines or penalties that may be
incurred due to necessary remediation of contamination of
properties presently owned or previously owned by Aimco. In
addition, our current and continuing qualification as a real estate
investment trust involves the application of highly technical and
complex provisions of the Internal Revenue Code and depends on our
ability to meet the various requirements imposed by the Internal
Revenue Code, through actual operating results, distribution levels
and diversity of stock ownership. Readers should carefully review
Aimco's financial statements and notes thereto, as well as the risk
factors described in Aimco's Annual Report on Form 10-K for the
year ended December 31, 2008, and the other documents Aimco files
from time to time with the Securities and Exchange Commission.
These forward-looking statements reflect management's judgment as
of this date, and Aimco assumes no obligation to revise or update
them to reflect future events or circumstances. This press release
does not constitute an offer of securities for sale. About Aimco
Aimco is a real estate investment trust headquartered in Denver,
Colorado that owns and operates a geographically diversified
portfolio of apartment communities. Aimco, through its subsidiaries
and affiliates, is one of the largest owners and operators of
apartment communities in the United States with 916 properties,
including 146,581 apartment units, and serves approximately 500,000
residents each year. Aimco's properties are located in 44 states,
the District of Columbia and Puerto Rico. Aimco common shares are
traded on the New York Stock Exchange under the ticker symbol AIV
and are included in the S&P 500. For more information about
Aimco, please visit our website at http://www.aimco.com/. GAAP
Income Statements ---------------------------- Consolidated
Statements of Income (in thousands, except per share data)
(unaudited) Three Months Nine Months Ended Ended September 30,
September 30, -------------- --------------- 2009 2008 2009 2008
---- ---- ---- ---- REVENUES: Rental and other property revenues
$307,907 $310,563 $925,363 $918,772 Property management revenues,
primarily from affiliates 1,114 1,227 4,098 4,746 Asset management
and tax credit revenues 10,325 32,624 32,469 83,651 ------ ------
------ ------ Total revenues 319,346 344,414 961,930 1,007,169
------- ------- ------- --------- OPERATING EXPENSES: Property
operating expenses 146,608 147,165 426,258 430,166 Property
management expenses 510 1,603 2,415 4,192 Investment management
expenses 4,213 7,850 12,719 18,044 Depreciation and amortization
122,362 107,374 355,680 304,668 Provision for operating real estate
impairment losses 21,676 - 24,666 - General and administrative
expenses 15,676 27,383 53,598 75,754 Other expenses, net 8,548
1,343 14,567 18,926 ----- ----- ------ ------ Total operating
expenses 319,593 292,718 889,903 851,750 ------- ------- -------
------- Operating (loss) income (247) 51,696 72,027 155,419
Interest income 1,962 5,824 7,629 17,131 Recovery of (provision
for) losses on notes receivable 1,233 (842) (452) (1,107) Interest
expense (83,179) (84,887) (256,746) (257,042) Equity in losses of
unconsolidated real estate partnerships (4,198) (1,559) (7,934)
(3,432) Impairment losses related to unconsolidated real estate
partnerships - (1,131) - (1,131) Gain on dispositions of
unconsolidated real estate and other 3,345 99,954 18,580 100,118
----- ------ ------ ------- (Loss) income before income taxes and
discontinued operations (81,084) 69,055 (166,896) 9,956 Income tax
benefit 2,410 6,062 7,195 10,862 ----- ----- ----- ------ (Loss)
income from continuing operations (78,674) 75,117 (159,701) 20,818
Income from discontinued operations, net (1) 69,118 162,269 109,945
535,862 ------ ------- ------- ------- Net (loss) income (9,556)
237,386 (49,756) 556,680 Noncontrolling interests (2): Net income
attributable to noncontrolling interests in consolidated real
estate partnerships (19,342) (46,182) (24,764) (108,145) Net income
attributable to preferred noncontrolling interests in Aimco
Operating Partnership (3) (1,743) (1,962) (4,558) (5,669) Net loss
(income) attributable to common noncontrolling interests in Aimco
Operating Partnership (3) 3,139 (15,500) 8,597 (37,819) -----
------- ----- ------- Total noncontrolling interests (17,946)
(63,644) (20,725) (151,633) ------- ------- ------- -------- Net
(loss) income attributable to Aimco (27,502) 173,742 (70,481)
405,047 Net income attributable to Aimco preferred stockholders
(12,988) (12,224) (37,631) (40,102) Net income attributable to
participating securities (4) - (1,974) - (4,488) --- ------ ---
------ Net (loss) income attributable to Aimco common stockholders
$(40,490) $159,544 $(108,112) $360,457 ======== ======== =========
======== Weighted average common shares outstanding - basic (5)
115,563 118,182 115,391 123,209 ======= ======= ======= =======
Weighted average common shares outstanding - diluted (5) 115,563
118,552 115,391 123,209 ======= ======= ======= ======= Earnings
(loss) per common share - basic and diluted (5): (Loss) income from
continuing operations attributable to Aimco common stockholders
$(0.64) $0.40 $(1.36) $(0.31) Income from discontinued operations
attributable to Aimco common stockholders 0.29 0.95 0.42 3.24 ----
---- ---- ---- Net (loss) income attributable to Aimco common
stockholders $(0.35) $1.35 $(0.94) $2.93 ====== ===== ====== =====
GAAP Income Statements (continued)
---------------------------------- Notes to Consolidated Statements
of Income (1) Income from discontinued operations consists of the
following (in thousands): Three Months Nine Months Ended Ended
September 30, September 30, -------------- -------------- 2009 2008
2009 2008 ---- ---- ---- ---- Rental and other property revenues
(6) $11,177 $82,477 $68,227 $319,282 Property operating expenses
(6) (5,825) (40,100) (37,597) (157,847) Depreciation and
amortization (2,448) (20,403) (18,698) (78,034) Provision for
operating real estate impairment losses (5,050) (3,429) (18,954)
(9,965) Other expenses, net (1,355) (4,812) (5,743) (8,087) ------
------ ------ ------ Operating (loss) income (3,501) 13,733
(12,765) 65,349 Interest income 3 534 56 1,320 Interest expense
(2,348) (15,739) (14,194) (59,531) ------ ------- ------- -------
(Loss) income before gain on dispositions of real estate and income
taxes (5,846) (1,472) (26,903) 7,138 Gain on extinguishment of debt
259 - 259 - Gain on dispositions of real estate 70,890 169,160
133,431 549,550 Income tax benefit (expense) 3,815 (5,419) 3,158
(20,826) ----- ------ ----- ------- Income from discontinued
operations, net $69,118 $162,269 $109,945 $535,862 ======= ========
======== ======== Income from discontinued operations attributable
to: Noncontrolling interests in consolidated real estate
partnerships $(32,498) $(38,125) $(56,656) $(95,867) Noncontrolling
interests in Aimco Operating Partnership (3) (2,792) (10,251)
(3,999) (36,593) ------ ------- ------ ------- Total noncontrolling
interests (35,290) (48,376) (60,655) (132,460) ------- -------
------- -------- Aimco $33,828 $113,893 $49,290 $403,402 =======
======== ======= ======== (2) Noncontrolling interests refers to
interests in consolidated partnerships held by parties other than
Aimco. (3) The Aimco Operating Partnership is AIMCO Properties,
L.P., the operating partnership in Aimco's UPREIT structure. (4)
Income attributable to participating securities represents
dividends declared and any amounts of undistributed earnings
allocable to participating securities. Participating securities
consist of unvested restricted stock and shares purchased pursuant
to officer loans, both of which are entitled to dividends similar
to common stock. (5) Weighted average share and earnings per share
amounts for the periods presented above have been retroactively
adjusted for the effect of shares of common stock issued pursuant
to the special dividends paid in 2008 and January 2009. (6) Income
from discontinued operations for the three months ended September
30, 2009, attributable to properties classified as held for sale at
September 30, 2009, includes $2.1 million of rental and other
property revenues and $0.9 million of property operating expenses
related to one wholly-owned property. GAAP Balance Sheets
------------------- Consolidated Balance Sheets (in thousands)
(unaudited) September 30, 2009 December 31, 2008 ------------------
----------------- ASSETS Buildings and improvements $7,999,462
$7,857,758 Land 2,243,403 2,232,541 Accumulated depreciation
(2,803,036) (2,506,683) ---------- ---------- Total real estate
7,439,829 7,583,616 Cash and cash equivalents 107,034 299,676
Restricted cash 246,764 255,836 Accounts receivable 61,584 90,318
Accounts receivable from affiliates 26,769 38,978 Deferred
financing costs 54,561 54,109 Notes receivable from unconsolidated
real estate partnerships 14,855 22,567 Notes receivable from
non-affiliates 143,102 139,897 Investment in unconsolidated real
estate partnerships 112,610 119,036 Other assets 204,405 198,714
Deferred income tax asset, net 33,267 28,326 Assets held for sale
29,758 610,797 ------ ------- Total assets $8,474,538 $9,441,870
========== ========== LIABILITIES AND EQUITY Property tax-exempt
bond financing $605,055 $676,339 Property loans payable 5,206,788
5,224,350 Term loans 260,000 400,000 Credit Facility 15,070 - Other
borrowings 85,683 95,981 ------ ------ Total indebtedness 6,172,596
6,396,670 Accounts payable 36,317 64,241 Accrued liabilities and
other 295,955 421,043 Deferred income 177,754 194,379 Security
deposits 38,865 40,109 Liabilities related to assets held for sale
48,153 441,578 ------ ------- Total liabilities 6,769,640 7,558,020
--------- --------- Preferred noncontrolling interests in Aimco
Operating Partnership 86,625 88,148 Preferred stock subject to
repurchase agreement 30,000 - Equity: Perpetual preferred stock
660,500 696,500 Class A Common Stock 1,164 1,162 Additional paid-in
capital 3,067,299 3,058,799 Accumulated other comprehensive loss
(1,846) (2,249) Notes due on common stock purchases (1,417) (3,607)
Distributions in excess of earnings (2,465,312) (2,335,628)
---------- ---------- Total Aimco equity 1,260,388 1,414,977
--------- --------- Noncontrolling interests in consolidated real
estate partnerships 340,581 380,725 Common noncontrolling interests
in Aimco Operating Partnership (12,696) - ------- --- Total equity
1,588,273 1,795,702 --------- --------- Total liabilities and
equity $8,474,538 $9,441,870 ========== ========== Outlook and
Forward Looking Statement Fourth Quarter and Full Year 2009
(unaudited) This earnings release and Supplemental Information
contain forward-looking statements, including statements regarding
projected results and specifically forecasts of fourth quarter and
full year 2009 results. These forward-looking statements are based
on management's judgment as of this date and include certain risks
and uncertainties. Risks and uncertainties include, but are not
limited to, Aimco's ability to maintain current or meet projected
occupancy, rent levels and Same Store results and Aimco's ability
to close transactions necessary to generate sales proceeds for debt
repayment and other purposes and to generate fee income as
anticipated. Actual results may differ materially from those
described in these forward-looking statements and, in addition,
will be affected by a variety of risks and factors, some of which
are beyond the control of Aimco, including, without limitation:
financing risks, including the availability and cost of capital
markets financing and the risk that our cash flows from operations
may be insufficient to meet required payments of principal and
interest; earnings may not be sufficient to maintain compliance
with debt covenants; real estate risks, including fluctuations in
real estate values and the general economic climate in the markets
in which Aimco operates and competition for tenants in such
markets; national and local economic conditions; the terms of
governmental regulations that affect Aimco and interpretations of
those regulations; the competitive environment in which Aimco
operates; redevelopment risks, including failure of such
redevelopments to perform in accordance with projections; the
timing of acquisitions and dispositions; insurance risk; natural
disasters and severe weather such as hurricanes; litigation,
including costs associated with prosecuting or defending claims and
any adverse outcomes; energy costs; and possible environmental
liabilities, including costs, fines or penalties that may be
incurred due to necessary remediation of contamination of
properties presently owned or previously owned by Aimco. In
addition, our current and continuing qualification as a real estate
investment trust involves the application of highly technical and
complex provisions of the Internal Revenue Code and depends on our
ability to meet the various requirements imposed by the Internal
Revenue Code, through actual operating results, distribution levels
and diversity of stock ownership. Readers should carefully review
Aimco's financial statements and notes thereto, as well as the risk
factors described in Aimco's Annual Report on Form 10-K for the
year ended December 31, 2008, and the other documents Aimco files
from time to time with the Securities and Exchange Commission.
These forward-looking statements reflect management's judgment as
of this date, and Aimco assumes no obligation to revise or update
them to reflect future events or circumstances. This press release
does not constitute an offer of securities for sale. Fourth Quarter
Full Year 2009 2009 ---------------- ------------------ GAAP
earnings per share (1)(3) -$0.58 to -$0.50 -$1.52 to -$1.44 FFO per
share (2)(3) $0.32 to $0.40 $1.61 to $1.69 2009 Same Store
operating assumptions: Weighted average daily occupancy 94.5% to
95.5% 93.5% to 94.5% NOI change - sequential -2.0% to -1.0% NOI
change - 2009 vs. 2008 -8.0% to -7.0% -5.0% to -4.0% (1) Aimco's
earnings per share guidance does not include estimates for (i)
gains on dispositions or impairment losses due to the unpredictable
timing of transactions, (ii) gains or losses on early repayment of
debt, (iii) preferred stock redemption related costs or gains or
(iv) potential future share repurchases or special dividends. (2)
FFO per share represents FFO before operating real estate
impairment losses and preferred redemption related costs or gains.
(3) The GAAP earnings per share and FFO per share amounts are
calculated based on 115.6 million weighted average common shares
(diluted) for fourth quarter 2009 and 115.4 million weighted
average common shares (diluted) for full year 2009. DATASOURCE:
Apartment Investment and Management Company CONTACT: Investor
Relations, +1-303-691-4350, , or Elizabeth Coalson, Vice President
Investor Relations, +1-303-691-4327 Web Site: http://www.aimco.com/
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