Aimco Reports Modest Results - Analyst Blog

Apartment Investment and Management Company, or Aimco (AIV), as the real estate investment trust (REIT) is popularly known, reported fiscal 2009 fourth quarter funds from operations (FFO) of $30.2 million or $0.26 per share compared to FFO loss of $28.9 million or $0.32 per share in the year-ago period.

Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

Excluding the non-recurring one-time items, FFO during the quarter was $0.36 per share. For full-year 2009, FFO before non-recurring items was $1.65 per share which was at the midpoint of the guidance provided by the company.

In the conventional real estate portfolio, Aimco had a weighted average ownership of 90%. Average rents in the conventional real estate portfolio increased 1.0% during the quarter to $1,042 per unit from $1,032 during fourth quarter 2008. Same-store revenue in the conventional portfolio decreased $5.3 million or 3.2% primarily due to lower average rent (down 4.8% or $51 per unit from $1,055 to $1,004) partially offset by higher average daily occupancy of 95.4% for fourth quarter 2009 compared to 94.7% for fourth quarter 2008.

In the affordable real estate portfolio, Aimco had a weighted average ownership of 54% during the quarter. Average occupancy decreased to 96.8% from 97.7%, while average rents increased 3.3% during the quarter to $754 per unit from $730 during fourth quarter 2008.

Aimco sold 23 conventional properties (8,113 units) and 9 affordable properties (985 units) during the quarter for $532.8 million of gross proceeds, bulk of which was used to repay debt. Also during the quarter, the company invested approximately $7.9 million in conventional redevelopment projects, and $4.7 million in 4 tax credit redevelopment projects.

At year-end 2009, Aimco had $5.7 billion of consolidated debt, including $5.0 billion of fixed-rate property debt, $0.6 billion floating rate property debt and $90 million floating rate corporate debt. During the quarter, the company repaid $170 million of term debt, utilizing proceeds from an asset sale. Subsequent to the end of the quarter, Aimco also repaid $35 million of term debt.

Currently the company has only $55 million of recourse debt maturing in the first quarter of 2011. At year-end 2009, Aimco had cash and cash equivalents of $81.3 million.

For full year 2010, Aimco expects FFO in the range of $1.25 to $1.35 per share, while for first quarter 2010, FFO is expected in the range of $0.26 to $0.30 per share. Same-store conventional net operating income during first quarter 2010 is expected to decline 5.5% to 6.5% compared to the year-earlier quarter, while same-store conventional net operating income for full year 2010 is expected to decline 2.0% to 4.0% compared to full year 2009.

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