Aimco Reports Fourth Quarter 2014 Results, Provides 2015 Guidance

DENVER--()--Apartment Investment and Management Company (“Aimco”) (NYSE: AIV) announced today its fourth quarter and full year 2014 results.

“Aimco enjoyed a solid 2014. Profitability was up, with AFFO increasing 10% year-over-year. Portfolio quality was up, with average monthly revenue per apartment home increasing 14% to $1,670. Redevelopment and development projects underway are expected to create incremental net asset value equal to 35% of our investment.”

Chief Executive Officer Terry Considine comments: "Aimco enjoyed a solid 2014. Profitability was up, with AFFO increasing 10% year-over-year. Portfolio quality was up, with average monthly revenue per apartment home increasing 14% to $1,670. Redevelopment and development projects underway are expected to create incremental net asset value equal to 35% of our investment.

The Aimco balance sheet is strong: considering the equity offering earlier this year, leverage, net of cash, is both non-recourse and about 36% of Aimco's market capitalization; more than $550 million in credit is available on the Aimco line of credit; and the unencumbered pool includes properties valued at more than $1 billion. These results reflect the hard work of a motivated team, whose collaborative culture was recognized again in 2014 as a 'Top Place to Work.'

Looking forward, we expect 2015 to be another good year with steady rent growth, disciplined cost control, and solid Same Store NOI growth. Together with increased contribution from redevelopment and acquisition properties, and reduced interest expense, we expect AFFO to be up by 10% at the midpoint of guidance.

Aimco prospects reflect disciplined portfolio management. Over the past three years, we have sold 27,000 apartment homes, eliminating related property management costs and Capital Replacement spending. We have reinvested the sales proceeds to redevelop or acquire apartment homes with higher rents, higher margins and greater expected growth.

The Aimco Board of Directors considered these results and prospects in its decision to increase the dividend by 8%."

Financial Results: Full Year AFFO Up 10%

      FOURTH QUARTER       FULL YEAR
(all items per common share - diluted)       2014       2013         2014       2013  
Net income       $ 0.25       $ 0.84         $ 2.06       $ 1.40  
Funds From Operations (FFO)/ Pro forma Funds From Operations (Pro forma FFO)       $ 0.54       $ 0.57         $ 2.07       $ 2.04  
Deduct Aimco share of Capital Replacements       $ (0.11 )     $ (0.14 )       $ (0.39 )     $ (0.51 )
Adjusted Funds From Operations (AFFO)       $ 0.43       $ 0.43         $ 1.68       $ 1.53  
       

Pro forma FFO - Year-over-year, fourth quarter Pro forma FFO decreased 5%. For the quarter, strong property operating results, increased contribution from redevelopment communities, higher income tax benefit and lower interest expense were more than offset by: the loss of income from apartment communities that were sold; lower interest income as a result of repayment of notes receivable in fourth quarter 2013; lower non-recurring income; higher preferred stock dividends attributable to Aimco's second quarter 2014 offering of its Class A Preferred Stock; and costs incurred in connection with fourth quarter 2014 acquisition activity.

Adjusted Funds from Operations - Fourth quarter AFFO was flat when compared to fourth quarter 2013, as a result of lower Pro forma FFO offset by lower Capital Replacement spending associated with multi-phase capital projects started in prior years, and lower Capital Replacement spending due to the sale of approximately 9,000 apartment homes during 2014. As Aimco concentrates its investment capital in higher quality, higher price point apartment communities, free cash flow margin is increasing as Capital Replacements decline as a percentage of net operating income.

Operating Results: Fourth Quarter Conventional Same Store NOI Up 6.1%, Full Year Up 5.5%

      FOURTH QUARTER       FULL YEAR
Year-over-Year       Sequential Year-over-Year
        2014       2013       Variance       3rd Qtr.     Variance       2014       2013       Variance
Average Rent Per Apartment Home       $1,457       $1,394       4.5 %       $1,440       1.2 %       $1,428       $1,377       3.7 %
Other Income Per Apartment Home       165       160       3.1 %       177       (6.8 )%       172       159       8.2 %
Average Revenue Per Apartment Home       $1,622       $1,554       4.4 %       $1,617       0.3 %       $1,600       $1,536       4.2 %
Average Daily Occupancy       95.6 %     95.6 %     %       95.7 %     (0.1 )%       95.8 %     95.6 %     0.2 %
                                                                       
$ in Millions                                                                      
Revenue       $166.1       $159.2       4.4 %       $165.7       0.3 %       $657.2       $629.1       4.5 %
Expenses       50.9       50.6       0.6 %       54.8       (7.1 )%       213.5       208.8       2.3 %
NOI       $115.2       $108.6       6.1 %       $110.9       3.9 %       $443.7       $420.3       5.5 %
                   

Rental Rates - Aimco measures changes in rental rates by comparing, on a lease-by-lease basis, the rate on a newly executed lease to the rate on the expiring lease for that same apartment. Newly executed leases are classified either as a new lease, where a vacant apartment is leased to a new customer, or as a renewal.

2014       1st Qtr.     2nd Qtr.     3rd Qtr.       Oct       Nov       Dec     4th Qtr.     Year-to-Date
Renewal rent increases       4.9%     5.0%     5.6%       4.9%       5.1%       4.7%     4.9%     5.2%
New lease rent increases       1.0%     4.7%     6.4%       2.3%       0.4%       (0.2)%     0.9%     3.7%
Weighted average rent increases       2.8%     4.9%     6.0%       3.7%       2.8%       2.2%     2.9%     4.4%
                                       

Portfolio Management: Revenue Per Apartment Home Up 13.6% to $1,669

Aimco portfolio strategy seeks predictable rent growth from a portfolio of "A," "B" and "C+" quality market-rate apartment communities, averaging "B/B+" in quality, and diversified among the largest coastal and job growth markets in the U.S., as measured by total apartment value. Aimco target markets are primarily coastal markets, and also include several Sun Belt cities and Chicago, Illinois.

Aimco measures asset quality based on rents compared to local market average rents as reported by REIS, a third-party provider of commercial real estate performance information and analysis. Aimco defines asset quality as follows: "A" quality assets are those with rents greater than 125% of local market average; "B" quality assets are those with rents between 90% to 125% of local market average; "C+" quality assets are those with rents lower than 90% of local market average, but greater than $1,100 per month; and "C" quality assets are those with rents lower than 90% of local market average, but less than $1,100 per month.

Aimco's portfolio strategy is to sell each year the lowest-rated 5% to 10% of its portfolio and to reinvest the proceeds from such sales in redevelopment and acquisition of higher-quality apartment communities. Through this disciplined approach to capital recycling, Aimco has significantly increased the quality of its portfolio. Over the last three years, Aimco:

  • Increased its period-end Conventional portfolio average revenue per apartment home by more than 32% to $1,669. This rate of growth reflects the impact of market rent growth, and more significantly, the impact of portfolio management through dispositions, redevelopment and acquisitions.
  • Increased its Conventional portfolio free cash flow margin by 10% through the sale of lower-rent properties and reinvestment in higher-rent properties;
  • Reduced by 83% the percentage of its portfolio represented by "C" quality properties and increased by 42% the percentage of its portfolio represented by "A" quality properties; and
  • Increased to 90% the percentage of its Conventional Property Net Operating Income earned in Aimco's target markets.

As Aimco executes its portfolio strategy, it expects to continue to increase Conventional portfolio average revenue per apartment home at a rate greater than market rent growth; to increase further free cash flow margins; to sell the percentage of its portfolio represented by "C" quality properties; and to increase to 95% or more the percentage of its Conventional Property Net Operating Income earned in its target markets.

Fourth Quarter 2014 Dispositions - In the fourth quarter, Aimco sold two Conventional Apartment Communities and two Affordable Apartment Communities with 500 and 199 apartment homes, respectively, for $79.5 million in gross proceeds. Aimco's share of net sales proceeds after distributions to limited partners, repayment of existing property debt and transaction costs was $45.8 million.

Fourth Quarter 2014 Acquisitions - In the fourth quarter, Aimco acquired:

  • Saybrook Pointe Apartment Homes for $118.4 million. This is a 324 apartment home community located in San Jose, California. Revenues per apartment home average $2,240, making this a "B" quality asset for Aimco. Aimco expects to add value through property upgrades and operational improvements.
  • Tremont Apartment Homes for $25 million. This is a 78 apartment home community with 14,000 square feet of retail space in the Buckhead neighborhood of Atlanta, Georgia. Revenues per apartment home average $2,280, making this an "A" quality asset for Aimco. Aimco expects to add value through operational improvements.
  • Eastpointe Apartment Homes for $18 million. This is a 140 apartment home community located in Boulder, Colorado. This low density community, built on more than seven acres in the mid-1970s, is located in a city with strong demand for housing and public policies that discourage new supply. It is across the street from a new community hospital complex and other major employment centers. Revenues per apartment home average $1,035, making this a "B" quality asset as presently operated. Aimco plans to redevelop this community.

Also in fourth quarter, Aimco acquired 2.4 acres in the heart of downtown La Jolla, California, adjoining and overlooking La Jolla Cove and the Pacific Ocean. The property is zoned for multi-family and mixed-use purposes and is currently occupied by three small commercial buildings and a limited-service hotel, which is managed for Aimco by a third party. Aimco plans to redevelop this property and considers its current use an income-producing “land bank.” Under Aimco's agreements with the sellers of this property, terms of the transactions are confidential.

Quarter-End Portfolio - Fourth quarter 2014 Conventional portfolio average monthly revenue per apartment home was $1,669, a 13.6% increase compared to fourth quarter 2013, as a result of year-over-year Same Store monthly revenue per apartment home growth of 4.4% and the sale of Conventional Apartment Communities during 2014 with average monthly revenues per apartment home substantially lower than those of the retained portfolio and reinvestment of the sales proceeds in higher-rent apartment communities through redevelopment and acquisitions. For third quarter 2014, the most recent period for which REIS information is available, Aimco Conventional Apartment Community rents averaged 108% of local market average rents.

Redevelopment: Creating Value and Maintaining Investment Pace

During fourth quarter, Aimco invested $35.5 million in redevelopment. Construction is nearing completion at Aimco's two largest redevelopment projects: Lincoln Place, in Venice, California, and Preserve at Marin, in Corte Madera, California. As of December 31, 2014, 589 of the 767 completed apartment homes at Lincoln Place and 59 of the 72 completed apartment homes at Preserve at Marin were occupied. Aimco expects to complete construction at Lincoln Place and Preserve at Marin in first quarter 2015, on time and at a cost consistent with previous reports.

During fourth quarter, Aimco completed, as planned, the redevelopment of The Palazzo at Park La Brea. Aimco also de-leased Ocean House on Prospect, located in La Jolla, California as well as one of four towers at Park Town Place, located in Center City Philadelphia. Construction at both communities is progressing as planned.

Also during fourth quarter 2014, Aimco approved a plan to continue redevelopment of The Sterling, located in Center City Philadelphia. During the third quarter, Aimco completed the redevelopment of 69 apartment homes on three floors of the 29-story building on time, on budget and achieved rents above budget. Renovation of the common areas and commercial space is proceeding as planned and Aimco continues to expect construction to be completed in second quarter 2015 at a cost consistent with underwriting. These results led to Aimco’s decision to redevelop an additional four floors with 105 apartment homes for an additional investment of approximately $11 million.

Development: Progressing as Planned

During fourth quarter, Aimco invested $15.1 million in the development of One Canal Street, located in Boston. One Canal Street will include 310 apartment homes and 22,000 square feet of commercial space. Aimco expects completion of construction in second quarter 2016 with lease-up beginning in first quarter 2016.

Balance Sheet and Liquidity: Leverage on Target and Declining

Components of Aimco Leverage

      AS OF DECEMBER 31, 2014
$ in Millions       Amount     % of Total    

Weighted Avg.
Maturity (Yrs.)

Aimco share of long-term, non-recourse property debt       $ 3,905.0       91 %     8.1
Outstanding borrowings on revolving credit facility       112.3       3 %     3.8
Preferred securities       274.7       6 %     Perpetual
Total leverage       $ 4,292.0       100 %     n/a
       

De-Levering Activities Subsequent to Year-End

In January 2015, Aimco sold in a public offering 9,430,000 shares of Common Stock at $38.90 per share, providing net proceeds of $366.8 million. Using the proceeds from this offering, Aimco repaid in January the outstanding balance on its revolving credit facility. Also, Aimco has provided the 30-day notification required to redeem the outstanding balance of its Series A Community Reinvestment Act Preferred Stock at its liquidation preference of $27 million. Aimco expects to use the remainder of the proceeds from this offering to repay $102 million of property debt, and to fund redevelopment and property upgrades during 2015 that would otherwise have been funded with property debt on a leverage-neutral basis.

Leverage Ratios

Aimco leverage targets are: Debt and Preferred Equity to EBITDA below 7.0x; and EBITDA Coverage of Interest and Preferred Dividends greater than 2.5x. Aimco also focuses on Debt to EBITDA and EBITDA Coverage of Interest ratios. See the Glossary for definitions of these metrics.

      YEAR ENDED DECEMBER 31,
        2014     2013
Debt to EBITDA*       6.5x     7.1x
Debt and Preferred Equity to EBITDA*       7.0x     7.3x
EBITDA Coverage of Interest       2.7x     2.6x
EBITDA Coverage of Interest and Preferred Dividends       2.5x     2.5x

* The Debt to EBITDA and Debt and Preferred Equity to EBITDA ratios presented for the year ended December 31, 2014
have been adjusted on a pro-forma basis to reflect the proceeds from the January stock offering described above.

   

Future leverage reduction is expected from both earnings growth, especially as apartment communities now being redeveloped or developed are completed, and from regularly scheduled property debt amortization funded from retained earnings.

Liquidity

Aimco recourse debt at December 31, 2014, was limited to its revolving credit facility, which Aimco uses for working capital and other short-term purposes, and to secure letters of credit.

At year-end, Aimco had outstanding borrowings on its revolving credit facility of $112.3 million and available capacity of $445.9 million, net of $41.8 million of letters of credit backed by the facility. Aimco also held cash and restricted cash on hand of $118.3 million. Finally, Aimco held 15 apartment communities in its unencumbered asset pool with a total estimated fair market value exceeding $1 billion. After the public offering and de-levering activities described above, outstanding borrowings on Aimco's revolving credit facility are fully repaid, the available capacity is $558.2 million and Aimco held cash and restricted cash on hand of approximately $340 million.

Equity Activity

Dividend - As previously announced, the Aimco Board of Directors declared a quarterly cash dividend of $0.28 per share of Class A Common Stock for the quarter ended December 31, 2014, an increase of 8% compared to dividends paid during 2014. This dividend is payable on February 27, 2015, to stockholders of record on February 13, 2015.

2015 Outlook

($ Amounts represent Aimco Share)       FULL YEAR

2015

    FULL YEAR
2014
               
Net income per share       $0.48 to $0.58     $2.06
Pro forma FFO per share       $2.12 to $2.22     $2.07
AFFO per share       $1.80 to $1.90     $1.68
               
Conventional Same Store Operating Measures              
NOI change compared to prior year       4.00% to 5.50%     5.5%
Revenue change compared to prior year       3.75% to 4.50%     4.5%
Expense change compared to prior year       2.50% to 3.00%     2.3%
               
Investment Management Income              
Recurring revenues       $24M     $27.3M
Non-recurring revenues       $0M     $4.2M
               
Income Taxes              
Historic Tax Credit Benefit       $12M to $14M     $11.5M
Other Tax Benefits       $13M to $15M     $8.5M
               
Offsite Costs              
Property management expenses       $24M     $24.8M
General and administrative expenses       $43M     $44.1M
Investment management expenses       $6M     $7.3M
               
Capital Investments              
Redevelopment       $120M to $130M     $182.0M
Development       $90M to $100M     $46.9M
Property upgrades       $45M     $49.9M
Capital Replacements ($1,000 per apartment home)       $51M     $56.1M
               
Transactions              
Real estate value of property dispositions       $225M to $275M     $689.5M
Aimco net proceeds from property dispositions       $130M to $140M     $435.2M
         
     
       

FIRST
QUARTER 2015

         
Net income per share       $0.06 to $0.10
Pro forma FFO per share       $0.48 to $0.52
AFFO per share       $0.41 to $0.45
         
Conventional Same Store Operating Measures        
NOI change compared to fourth quarter 2014       -1.75% to -2.75%
NOI change compared to first quarter 2014       4.25% to 5.25%
 

2015 Pro forma FFO Reconciliation

($ Per share at the midpoint of Aimco's guidance range)          
           
2014 Pro forma FFO       $2.07
           
Conventional Same Store NOI growth (4.75% at the midpoint of guidance)       0.14  
Conventional Redevelopment NOI growth       0.10  
Affordable Property NOI growth       0.02  
Total NOI growth       0.26  
           
Impact of:          
2014 asset sales ($0.16 lost NOI, $0.07 lost interest expense)       (0.09 )
2015 asset sales ($0.09 lost NOI, $0.03 lost interest expense)       (0.06 )
2014 acquisitions ($0.10 new NOI, $0.03 new interest expense)       0.07  
Decrease in acquisition costs       0.02  
Reductions in offsite costs due to change in scale and efficiencies       0.01  
Change in interest expense       0.05  
Decrease in non-recurring revenues       (0.03 )
Decrease in recurring asset management and tax credit revenues       (0.02 )
Increase in preferred stock dividends       (0.02 )
Increase in income tax benefit       0.05  
Impact of additional shares outstanding due to January 2015 stock offering       (0.14 )
           
2015 Pro forma FFO       $2.17
     

2015 AFFO Reconciliation

($ Per share at the midpoint of Aimco's guidance range)          
           
2014 AFFO       $1.68
           
Pro forma FFO growth       0.10  
Impact of 2014 asset sales on Capital Replacement spending       0.01  
Other reduction in Capital Replacement spending       0.03  
Impact of additional shares outstanding due to January 2015 stock offering       0.03  
           
2015 AFFO       $1.85
2015 AFFO Growth       10 %
     

Earnings Conference Call Information

Live Conference Call:       Conference Call Replay:
Friday, February 6, 2015 at 1:00 p.m. ET Replay available until 9:00 a.m. ET on February 21, 2015
Domestic Dial-In Number: 1-888-317-6003 Domestic Dial-In Number: 1-877-344-7529
International Dial-In Number: 1-412-317-6061 International Dial-In Number: 1-412-317-0088
Passcode: 7817405 Passcode: 10058335
 

Live webcast and replay: http://www.aimco.com/investors/events-presentations/webcasts

 

Supplemental Information

The full text of this Earnings Release and the Supplemental Information referenced in this release are available on Aimco's website at http://www.aimco.com/investors/financial-reports/quarterly-earning-reports.

Glossary & Reconciliations of Non-GAAP Financial and Operating Measures

Financial and operating measures found in this Earnings Release and the Supplemental Information include certain financial measures used by Aimco management that are not calculated in accordance with accounting principles generally accepted in the United States, or GAAP. These measures are defined in the Glossary in the Supplemental Information and, where appropriate, reconciled to the most comparable GAAP measures.

About Aimco

Aimco is a real estate investment trust that is focused on the ownership and management of quality apartment communities located in the largest markets in the United States. Aimco is one of the country's largest owners and operators of apartments, with 203 communities in 23 states and the District of Columbia. 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 www.aimco.com.

Forward-looking Statements

This Earnings Release and Supplemental Information contain forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding projected results and specifically forecasts of: first quarter and full year 2015 results, including but not limited to: Pro forma FFO and selected components thereof; AFFO; Aimco's development and redevelopment investments, timelines and stabilized rents; the use of proceeds from its January 2015 common stock offering; and expectations regarding sales of Aimco's apartment communities and the use of proceeds thereof. 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, rental rates and property operating results; the effect of acquisitions, dispositions, developments and redevelopments; our ability to meet budgeted costs and timelines, and achieve budgeted rental rates related to our developments and redevelopments; and our ability to comply with debt covenants, including financial coverage ratios.

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; the risk that our 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 residents in such markets; national and local economic conditions, including the pace of job growth and the level of unemployment; the terms of governmental regulations that affect Aimco and interpretations of those regulations; the competitive environment in which Aimco operates; the timing of acquisitions, dispositions, developments and redevelopments; insurance risk, including the cost of insurance; 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 apartment communities presently or previously owned by Aimco. In addition, Aimco's 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 its 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 the notes thereto, as well as the section entitled “Risk Factors” in Item 1A of Aimco's Annual Report on Form 10-K for the year ended December 31, 2013, 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.

             
Consolidated Statements of Operations                              
(in thousands, except per share data) (unaudited) (Page 1 of 2)
 
Three Months Ended Year Ended
December 31, December 31,
2014   2013   2014   2013  
REVENUES
Rental and other property revenues $ 233,330 $ 238,498 $ 952,831 $ 939,231
Tax credit and asset management revenues 8,848   12,364   31,532   34,822  
Total revenues 242,178   250,862   984,363   974,053  
 
OPERATING EXPENSES
Property operating expenses 84,500 93,608 373,316 375,672
Investment management expenses 3,758 838 7,310 4,341
Depreciation and amortization 71,465 70,322 282,608 291,910
Provision for real estate impairment losses 407 1,820
General and administrative expenses 12,873 11,814 44,195 45,708
Other expenses, net 5,367   1,125   12,764   7,403  
Total operating expenses 178,370   177,707   722,013   725,034  
Operating income 63,808 73,155 262,350 249,019
Interest income 1,691 5,290 6,878 17,943
Interest expense (52,358 ) (61,323 ) (220,971 ) (237,048 )
Other, net (772 ) 7,536   (829 ) 2,723  
Income before income taxes, discontinued operations and gain on dispositions 12,369 24,658 47,428 32,637
Income tax benefit 6,937   2,146   20,047   1,959  
Income from continuing operations 19,306 26,804 67,475 34,596
Income from discontinued operations, net of tax 121,799 203,229
Gain on dispositions of real estate, net of tax 26,153     288,636    
Net income 45,459 148,603 356,111 237,825
Noncontrolling interests:

Net income attributable to noncontrolling interests in consolidated real estate partnerships

(2,643 ) (16,809 ) (24,595 ) (12,473 )
Net income attributable to preferred noncontrolling interests in Aimco OP (1,689 ) (1,605 ) (6,497 ) (6,423 )
Net income attributable to common noncontrolling interests in Aimco OP (1,875 ) (6,971 ) (15,770 ) (11,639 )
Net income attributable to noncontrolling interests (6,207 ) (25,385 ) (46,862 ) (30,535 )
Net income attributable to Aimco 39,252 123,218 309,249 207,290
Net income attributable to Aimco preferred stockholders (2,860 ) (699 ) (7,947 ) (2,804 )
Net income attributable to participating securities (123 ) (482 ) (1,082 ) (813 )
Net income attributable to Aimco common stockholders $ 36,269   $ 122,037   $ 300,220   $ 203,673  
Earnings attributable to Aimco per common share - basic and diluted:
Income from continuing operations $ 0.25   $ 0.25   $ 2.06   $ 0.29  
Net income $ 0.25   $ 0.84   $ 2.06   $ 1.40  
 
   
Consolidated Statements of Operations (continued)            
Income from Discontinued Operations (Page 2 of 2)
 
In first quarter 2014, Aimco adopted a new accounting standard which generally eliminates, on a prospective basis, the requirement that sales of individual apartment communities be presented within discontinued operations. Under this standard, the results of operations related to apartment communities sold or classified as held for sale during 2014 or subsequent periods are included in continuing operations for both the current period and prior periods, and any gain or loss on such sales is included as a separate line item below income from discontinued operations within Aimco's Consolidated Statements of Operations.
 
Income from discontinued operations for apartment communities sold prior to Aimco's January 1, 2014 adoption of the new standard consists of the following (in thousands):
 

Three Months Ended
December 31, 2013

Year Ended
December 31, 2013

Rental and other property revenues $ 6,917 $ 62,152
Property operating expenses (5,224 ) (30,695 )
Depreciation and amortization (1,914 ) (16,372 )
Recovery of real estate impairment losses   16  
Operating (loss) income (221 ) 15,101
Interest income 27 343
Interest expense (1,273 ) (13,346 )
(Loss) income before gain on dispositions of real estate and income taxes (1,467 ) 2,098
Gain on dispositions of real estate 131,805 212,459
Income tax expense (8,539 ) (11,328 )
Income from discontinued operations, net $ 121,799   $ 203,229  
Income from discontinued operations attributable to:
Noncontrolling interests in consolidated real estate partnerships $ (31,294 ) $ (31,842 )
Noncontrolling interests in Aimco OP (4,939 ) (9,248 )
Total noncontrolling interests (36,233 ) (41,090 )
Income from discontinued operations attributable to Aimco $ 85,566   $ 162,139  
 
 
Consolidated Balance Sheets
(in thousands) (unaudited)
     
December 31, 2014 December 31, 2013
ASSETS
Buildings and improvements $ 6,259,318 $ 6,332,723
Land 1,885,640   1,881,358  
Total real estate 8,144,958 8,214,081
Accumulated depreciation (2,672,179 ) (2,822,872 )
Net real estate 5,472,779 5,391,209
Cash and cash equivalents 28,971 55,751
Restricted cash 91,445 127,037
Other assets 476,727 505,416
Assets held for sale 27,106    
Total assets $ 6,097,028   $ 6,079,413  
 
LIABILITIES AND EQUITY
Non-recourse property debt $ 4,022,809 $ 4,337,785
Revolving credit facility borrowings 112,330   50,400  
Total indebtedness 4,135,139 4,388,185
Accounts payable 41,919 43,161
Accrued liabilities and other 279,077 287,595
Deferred income 81,882 107,775
Liabilities related to assets held for sale 28,969    
Total liabilities 4,566,986   4,826,716  
Preferred noncontrolling interests in Aimco OP 87,937 79,953
Equity:
Perpetual Preferred Stock 186,126 68,114
Class A Common Stock 1,464 1,459
Additional paid-in capital 3,696,143 3,701,339
Accumulated other comprehensive loss (6,456 ) (4,602 )
Distributions in excess of earnings (2,649,542 ) (2,798,853 )
Total Aimco equity 1,227,735   967,457  
Noncontrolling interests in consolidated real estate partnerships 233,296 233,008
Common noncontrolling interests in Aimco OP (18,926 ) (27,721 )
Total equity 1,442,105   1,172,744  
Total liabilities and equity $ 6,097,028   $ 6,079,413  
 

Contacts

Aimco
Elizabeth Coalson, 303-691-4350
Vice President-Investor Relations
investor@aimco.com

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