Market Overview

Aimco Reports Second Quarter Results

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Apartment Investment and Management Company ("Aimco") (NYSE:AIV)
announced today second quarter results for 2018.

Chairman and Chief Executive Officer Terry Considine comments: "In the
second quarter, Aimco produced solid results: Same Store Net Operating
Income was up 3.2% year-over-year; Redevelopment contributed more
earnings and further value creation; and 2018 paired trades were
completed, increasing expected Free Cash Flow returns by 400 basis
points."

"We completed our exit from the affordable housing line of business,
part of a strategic plan set in 2011. Since then, Aimco has made steady
progress on other elements of the plan: selling $4.2 billion in
lower-rated communities; improving portfolio quality to $2,090 in
monthly revenue per apartment home; and reducing leverage by $1.8
billion. As a result, Net Asset Value per share more than doubled."

Chief Financial Officer Paul Beldin adds: "Second quarter 2018 AFFO of
$0.54 per share was $0.02 per share ahead of the high end of our
guidance range, and Pro forma FFO of $0.61 per share met the high end of
guidance. AFFO exceeded the midpoint of our expectations due to $0.01
per share of stronger property operating results with the remainder due
to timing-related items."

Financial Results: Second Quarter Pro
forma FFO Flat; AFFO Up 6%

 
    SECOND QUARTER     YEAR-TO-DATE
(all items per common share - diluted)     2018     2017     Variance     2018     2017     Variance
Net income     $ 0.02       $ 0.10       (80 %)     $ 0.54       $ 0.17       218 %
Funds From Operations (FFO)     $ 0.59       $ 0.61       (3 %)     $ 1.19       $ 1.19       %
Add back legal and severance costs     $ 0.02       $       %     $ 0.02       $       %
Pro forma Funds From Operations (Pro forma FFO)     $ 0.61       $ 0.61       %     $ 1.21       $ 1.19       2 %
Deduct Capital Replacements     $ (0.07 )     $ (0.10 )     (30 %)     $ (0.14 )     $ (0.17 )     (18 %)

Adjusted Funds From Operations (AFFO)

    $ 0.54       $ 0.51       6 %     $ 1.07       $ 1.02       5 %
               

Net Income (per diluted common share) - Year-over-year, second
quarter net income decreased due to higher depreciation from
redevelopments placed into service and from apartment communities
acquired during 2018 and to lower gains on the sale of real estate.

Pro forma FFO (per diluted common share) - Aimco's second quarter
Pro forma FFO was flat year-over-year. The following items contributed
to Pro forma FFO:

  • $0.02 from Same Store Property Net Operating Income growth of 3.2%,
    driven by a 3.2% increase in revenue, offset by a 3.3% increase in
    expenses; and
  • $0.03 from leasing activity related to renovated homes at
    Redevelopment communities, 2018 acquisitions, and the second quarter
    2017 reacquisition of a 47% interest in the Palazzo communities,
    offset in part by lower Property Net Operating Income from apartment
    communities sold in 2017 and 2018.

As compared to 2017, this increase of $0.05 to Pro forma FFO per share
was offset by increased interest expense on corporate borrowings
primarily related to acquisitions, increased personnel costs due to the
timing of incentive compensation costs, and lower tax benefits.

Adjusted Funds From Operations (per diluted common share)
- Year-over-year, second quarter AFFO increased 6% as a result of lower
Capital Replacement spending. Approximately one-third of the decrease in
Capital Replacement spending was due to Aimco's paired trade activity
including the sale of approximately 2,300 apartment homes in 2017 and an
additional 513 apartment homes through June 30, 2018, and the remaining
decrease is due to timing of 2018 capital spending. As Aimco
concentrates its investment capital in higher quality, higher price
point communities, Free Cash Flow margin is increasing as Capital
Replacements decline as a percentage of Net Operating Income.

Operating Results: Second Quarter Same
Store NOI Up 3.2%

 
    SECOND QUARTER     YEAR-TO-DATE
Year-over-Year   Sequential Year-over-Year
      2018   2017   Variance   1st Qtr.   Variance     2018   2017   Variance
Average Rent per Apartment Home     $1,819   $1,772   2.7 %   $1,808   0.6 %     $1,813   $1,767   2.6 %
Other Income per Apartment Home*     121   115   5.2 %   105   15.2 %     114   112   1.8 %
Average Revenue per Apartment Home*     $1,940   $1,887   2.8 %   $1,913   1.4 %     $1,927   $1,879   2.6 %
Average Daily Occupancy     96.3 %   95.9 %   0.4 %   96.3 %   %     96.3 %   95.9 %   0.4 %
                                     
$ in Millions                                    
Revenue, before utility reimbursements     $147.0   $142.4   3.2 %   $144.9   1.4 %     $291.8   $283.6   2.9 %
Expenses, net of utility reimbursements     38.5   37.3   3.3 %   38.9   (1.1 %)     77.4   75.4   2.7 %
NOI     $108.5   $105.1   3.2 %   $106.0   2.4 %     $214.4   $208.2   3.0 %
*   In 2018, Aimco changed its presentation of revenues and expenses to
reflect utilities costs net of amounts reimbursed by residents,
which were previously included in revenue. 2017 amounts have been
revised to conform to this presentation. The change in presentation
had no impact on revenue growth rates in second quarter 2018 and a
10 bps impact year-to-date.
 

Same Store 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. The table below
details changes in new and renewal lease rates.

 
2018     1st Qtr.     Apr     May     Jun     2nd Qtr.     Year-to-Date
Renewal rent increases     4.9 %     4.7 %     4.8 %     4.8 %     4.8 %     4.8 %
New lease rent increases     0.4 %     0.6 %     1.7 %     2.8 %     1.9 %     1.3 %
Weighted average rent increases     2.7 %     2.6 %     3.4 %     3.8 %     3.4 %     3.1 %
Average Daily Occupancy     96.3 %     96.4 %     96.4 %     96.1 %     96.3 %     96.3 %
                       

Redevelopment

Redevelopment is Aimco's second line of business where Aimco creates
value by repositioning communities within the Aimco portfolio. Aimco
also undertakes ground-up development when warranted by risk-adjusted
investment returns, either directly in connection with the redevelopment
of an existing apartment community or, on a more limited basis, at a new
location. Aimco invests to earn risk-adjusted returns in excess of those
expected from the apartment communities sold in paired trades to fund
the redevelopment and development. Of these two activities, Aimco favors
redevelopment because it permits adjustment of the scope and timing of
spending to align with changing market conditions and customer
preferences.

During the second quarter, Aimco invested $42 million in redevelopment
and development. In Center City, Philadelphia, Aimco continued
construction on the fourth and final tower of Park Towne Place; lease-up
is underway. At June 30, 2018, 90% of the redeveloped apartment homes in
the community were leased and 28 of the 136 homes still under renovation
were pre-leased.

During the second quarter, Aimco invested $10 million in the development
of its Parc Mosaic community in Boulder, Colorado. Aimco expects
completion of construction in late 2019 and initial occupancy in the
summer of 2019.

During the second quarter, Aimco leased 181 apartment homes at its
Redevelopment communities. At June 30, 2018, Aimco's exposure to
lease-up at active redevelopment and development projects was
approximately 419 apartment homes, of which 108 were in the fourth tower
of Park Towne Place, 215 were being constructed at Parc Mosaic, and 96
were located in three other active redevelopments.

During the third quarter, Aimco expects to exercise its option to
acquire approximately two acres of land adjacent to its 21 Fitzsimons
apartment community, located on the University of Colorado Anschutz
Medical Campus, for the development of an apartment community. Over the
next two years, Aimco expects to invest approximately $87 million to
construct 253 apartment homes and 4,600 square feet of retail space.
Aimco anticipates a stabilized net operating income yield in the low 6%
range, driven by an 80% net operating income margin due to operational
efficiencies from owning the adjacent property, and a Free Cash Flow
internal rate of return greater than 10% resulting in value creation of
at least 35%. Upon completion of the project, Aimco will own and operate
853 apartment homes on the campus. Employment on the campus has grown by
9% annually from 2015 to 2017 and exceeds 25,000 jobs today. This number
is expected to grow to 46,000 jobs over the next 12 years. Aimco has
multi-year options to acquire the balance of the land on the campus that
is zoned for multifamily, enough for an additional 600 apartment homes.

Portfolio Management: Revenue Per Apartment
Home Up 7% to $2,090

Aimco's portfolio of apartment communities is diversified across "A,"
"B" and "C+" price points, averaging "B/B+" in quality and is also
diversified across several of the largest markets in the United States.

As part of its portfolio strategy, Aimco seeks to sell up to 10% of its
portfolio annually and to reinvest the proceeds from such sales in
accretive uses such as capital enhancements, redevelopments, occasional
developments, and selective acquisitions with projected Free Cash Flow
internal rates of return higher than expected from the communities being
sold. Through this disciplined approach to capital recycling, Aimco has
significantly increased the quality and expected growth rate of its
portfolio.

 
    SECOND QUARTER
      2018     2017     Variance
Apartment Communities     138       141       (3 )
Apartment Homes     37,897       39,187       (1,290 )
Average Revenue per Apartment Home*     $ 2,090       $ 1,950       7 %
Portfolio Average Rents as a Percentage of Local Market Average Rents     112 %     113 %     (1 %)
Percentage A (2Q 2018 Average Revenue per Apartment Home $2,770)     50 %     53 %     (3 %)
Percentage B (2Q 2018 Average Revenue per Apartment Home $1,839)     35 %     33 %     2 %
Percentage C+ (2Q 2018 Average Revenue per Apartment Home $1,669)     15 %     14 %     1 %
NOI Margin     72 %     71 %     1 %
Free Cash Flow Margin     66 %     65 %     1 %
*   In 2018, Aimco changed its presentation of revenues and expenses to
reflect utilities costs net of amounts reimbursed by residents,
which were previously included in revenue. 2017 amounts have been
revised to conform to this presentation.
 

Second Quarter Real Estate Portfolio - For its entire portfolio,
Aimco's average monthly revenue per apartment home was $2,090 for second
quarter 2018, a 7% increase compared to second quarter 2017. This
increase is due to year-over-year growth in Same Store revenue as well
as Aimco's acquisition activities, lease-up of redevelopment and
acquisition properties, and sale of communities with average monthly
revenues per apartment home lower than those of the retained portfolio.

Acquisitions - Aimco evaluates potential acquisitions with an eye
for unique and opportunistic investments and funds acquisitions pursuant
to its strict paired trade discipline. As previously announced, in April
2018 Aimco agreed to acquire six communities in the Philadelphia area.
On May 1st, Aimco purchased four communities including 665 apartment
homes and 153,000 square feet of office and retail space for $308
million. The purchase of the fifth apartment community is conditioned
upon the City of Camden's approval of the transfer of the existing PILOT
tax agreement, which has not yet been received. The purchase of the
sixth apartment community is expected upon completion of construction in
the first half of 2019.

In the first quarter, Aimco purchased for $160 million Bent Tree
Apartments, a 748-apartment home community in Fairfax County, Virginia.
Since acquisition, results have exceeded underwriting, with new lease
rates increasing by 8%, 5% before capital investments, and occupancy
increasing by approximately 300 basis points to 97%.

Dispositions - On July 25, 2018, Aimco sold for $590 million its
Asset Management business and its four affordable apartment communities
located in Hunters Point. After payment of transaction costs and
repayment of property-level debt encumbering the Hunters Point apartment
communities, net proceeds to Aimco were approximately $512 million.

On July 27, 2018, Aimco sold for $170 million Chestnut Hill Village, an
821-apartment home community located in north Philadelphia.

Aimco used proceeds from the two sales to fund 2018 acquisitions,
completing the paired trades. The sale of Chestnut Hill Village
rebalanced Aimco's capital allocation to Philadelphia from a lower-rated
apartment community in north Philadelphia to communities in the more
desirable Center City and University City submarkets.

Aimco used proceeds from these sales to repay in full its revolving
credit facility and its term loan. Aimco plans to use the remaining
proceeds to reduce property-level borrowings and to fund an expected
increase in 2018 redevelopment activity.

Balance Sheet

Aimco Leverage

Aimco's leverage strategy seeks to increase financial returns while
using leverage with appropriate caution. Aimco limits risk through
balance sheet structure, employing low leverage, primarily non-recourse
and long-dated property debt; builds financial flexibility by
maintaining ample unused and available credit as well as holding
properties with substantial value unencumbered by property debt; and
uses partners' capital when it enhances financial returns or reduces
investment risk.

Aimco total leverage includes Aimco share of long-term, non-recourse,
property debt encumbering apartment communities in its Real Estate
portfolio, outstanding borrowings under its revolving credit facility
and term loan, and outstanding preferred equity. Aimco leverage excludes
the non-recourse property debt obligations of consolidated partnerships
served by its Asset Management business.

        Pro forma*
$ in Millions

June 30, 2018
Actual

June 30, 2018
Pro forma

    % of Total    

Weighted
Avg. Maturity
(Yrs.)

Aimco share of long-term, non-recourse property debt $ 3,801   $ 3,801       94 %     7.0
Term loan 250         %      
Outstanding borrowings on revolving credit facility 220         %      
Non-recourse property debt related to assets held for sale 68         %      
Preferred Equity** 226   226       6 %     40.0
Total Leverage $ 4,565   $ 4,027       100 %     8.9
Cash, restricted cash and investments in securitization trust assets (171 ) (378 )            
Net Leverage, as adjusted $ 4,394   $ 3,649              
* Aimco used the proceeds, net of transaction costs, from the sales of
its Asset Management business, its four affordable apartment
communities located in Hunters Point, and Chestnut Hill Village, to
repay outstanding borrowings on its revolving credit facility and
its term loan.
** Aimco's Preferred Equity is perpetual in nature; however, for
illustrative purposes, Aimco has computed the weighted average
maturity of its total leverage assuming a 40-year maturity for its
Preferred Equity.
 

Leverage Ratios

Aimco target leverage ratios are Proportionate Debt and Preferred Equity
to Adjusted EBITDA below 7.0x and Adjusted EBITDA to Interest Expense
and Preferred Dividends greater than 2.5x. Aimco calculates Adjusted
EBITDA, Pro forma EBITDA and Adjusted Interest Expense used in its
leverage ratios based on current quarter amounts, annualized.

 
Proportionate Debt to Pro forma EBITDA*         6.5x
Proportionate Debt and Preferred Equity to Pro forma EBITDA*         6.9x
Adjusted EBITDA to Adjusted Interest Expense         3.4x
Adjusted EBITDA to Adjusted Interest Expense and Preferred Dividends         3.1x
*   The Proportionate Debt to Pro forma EBITDA and Proportionate Debt
and Preferred Equity to Pro forma EBITDA ratios have been calculated
on a pro forma basis to reflect the impact of the July 2018
dispositions of Aimco's Asset Management business, its four
affordable apartment communities located in Hunters Point, and
Chestnut Hill Village. Pro forma EBITDA has also been adjusted to
reflect the acquisition of the four Philadelphia apartment
communities as if the transaction had closed on April 1, 2018. These
adjustments reduced the ratios of Proportionate Debt to Adjusted
EBITDA and Proportionate Debt and Preferred Equity to Adjusted
EBITDA by 0.7x.
 

Aimco expects its Proportionate Debt to Adjusted EBITDA and
Proportionate Debt and Preferred Equity to Adjusted EBITDA ratios to
decrease to 6.3x and 6.7x, respectively, before year-end.

Liquidity

At June 30, 2018, Aimco held cash and restricted cash of $88 million and
had the capacity to borrow $368 million under its revolving credit
facility, after consideration of outstanding borrowings of $220 million
and $12 million of letters of credit backed by the facility. Aimco uses
its credit facility primarily for working capital and other short-term
purposes and to secure letters of credit. After the completion of the
July dispositions, Aimco used the proceeds to repay outstanding
borrowings on the revolving credit facility and term loan. On a pro
forma basis, Aimco would have had the capacity to borrow $593 million
under its revolving credit facility and additional cash of approximately
$207 million.

Aimco also manages its financial flexibility by maintaining an
investment grade rating and holding apartment communities that are
unencumbered by property debt. At June 30, 2018, Aimco held unencumbered
apartment communities with an estimated fair market value of
approximately $2 billion.

Dividend - As previously announced, the Aimco Board of Directors
declared a quarterly cash dividend of $0.38 per share of Class A Common
Stock for the quarter ended June 30, 2018. On an annualized basis, this
represents an increase of 6% compared to the dividends paid during 2017.
This dividend is payable on August 31, 2018, to stockholders of record
on August 17, 2018.

2018 Outlook

 

($ Amounts represent Aimco Share)

   

YEAR-TO-DATE
JUNE 30, 2018

    FULL YEAR 2018    

PREVIOUS FULL
YEAR 2018

                   
Net Income per share     $0.54     $4.25 to $4.33     $4.05 to $4.55
Pro forma FFO per share     $1.21     $2.40 to $2.48     $2.39 to $2.49
AFFO per share     $1.07     $2.09 to $2.17     $2.08 to $2.18
                   
Select Components of FFO                  
Same Store Operating Measures                  
Revenue change compared to prior year     2.9%     2.50% to 3.00%     2.10% to 3.10%
Expense change compared to prior year     2.7%     2.80% to 3.40%     2.60% to 3.60%
NOI change compared to prior year     3.0%     2.20% to 3.00%     1.70% to 3.10%
                   
Other Earnings                  
Asset Management Contribution     $16M     $22M     $22M to $24M
Tax Benefits     $8M     $16M to $18M     $16M to $18M
                   
Offsite Costs                  
Property management expenses     $10M     $20M     $20M
General and administrative expenses     $25M     $44M     $44M
Total Offsite Costs     $35M     $64M     $64M
                   
Capital Investments                  
Redevelopment/Development     $88M     $160M to $200M     $120M to $200M
Capital Enhancements     $46M     $80M to $100M     $80M to $100M
                   
Transactions                  
Property dispositions     $65M     $825M     $790M to $870M
Property acquisitions [1]     $468M     $468M to $551M     $551M
                   
Portfolio Quality                  
Average revenue per apartment home     $2,090     ~$2,100     ~$2,100
                   
Balance Sheet                  
Proportionate Debt to Adjusted EBITDA [2]     6.5x     ~6.3x     ~6.3x
Proportionate Debt and Preferred Equity to Adjusted EBITDA [2]     6.9x     ~6.7x     ~6.7x
[1]  

Aimco does not predict or guide to acquisitions. The variability
in 2018 acquisitions relates to the uncertain purchase of the
previously announced Camden, New Jersey community, which is
conditioned upon the City of Camden's approval of the transfer of
the existing PILOT tax agreement.

[2] Aimco leverage ratios have been calculated on a pro forma basis to
reflect the July 2018 dispositions of Aimco's Asset Management
business, its four affordable apartment communities located in
Hunters Point, and Chestnut Hill Village. EBITDA has also been
adjusted to reflect the acquisition of the four Philadelphia
apartment communities as if the transaction had closed on April 1,
2018. These adjustments reduced the ratios of Proportionate Debt to
Adjusted EBITDA and Proportionate Debt and Preferred Equity to
Adjusted EBITDA by 0.7x.
 
 
($ Amounts represent Aimco Share)        

THIRD QUARTER 2018

           
Net income per share         $3.62 to $3.66
Pro forma FFO per share         $0.58 to $0.62
AFFO per share         $0.49 to $0.53
       

Earnings Conference Call Information

 
Live Conference Call:         Conference Call Replay:
Friday, August 3, 2018 at 1:00 p.m. ET Replay available until November 3, 2018
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: 2156813 Passcode: 10121597

Live webcast and replay: investors.aimco.com

 

Supplemental Information

The full text of this Earnings Release and the Supplemental Information
referenced in this release are available on Aimco's website at investors.aimco.com.

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 measures not defined under accounting
principles generally accepted in the United States ("GAAP"). Certain
Aimco terms and Non-GAAP measures are defined in the Glossary in the
Supplemental Information and Non-GAAP measures reconciled to the most
comparable GAAP measures.

About Aimco

Aimco is a real estate investment trust focused on the ownership and
management of quality apartment communities located in select markets in
the United States. Aimco is one of the country's largest owners and
operators of apartments, with ownership interests in 133 communities in
17 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 third quarter and full year 2018
results, including but not limited to: FFO, Pro forma FFO and selected
components thereof; AFFO; Aimco redevelopment/development investments
and projected yield on such investments, timelines and Net Operating
Income contribution; expectations regarding sales of Aimco apartment
communities and the use of proceeds thereof; and Aimco liquidity and
leverage metrics.

These forward-looking statements are based on management's judgment as
of this date, which is subject to risks and uncertainties. Risks and
uncertainties include, but are not limited to: Aimco's ability to
maintain current or meet projected occupancy, rental rate and property
operating results; the effect of acquisitions, dispositions,
redevelopments and developments; Aimco's ability to meet budgeted costs
and timelines, and achieve budgeted rental rates related to Aimco
redevelopments and developments; and Aimco's 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 Aimco's control,
including, without limitation:

  • Real estate and operating risks, including fluctuations in real estate
    values and the general economic climate in the markets in which Aimco
    operates and competition for residents in such markets; national and
    local economic conditions, including the pace of job growth and the
    level of unemployment; the amount, location and quality of competitive
    new housing supply; the timing of acquisitions, dispositions,
    redevelopments and developments; and changes in operating costs,
    including energy costs;
  • Financing risks, including the availability and cost of capital
    markets' financing; the risk that cash flows from operations may be
    insufficient to meet required payments of principal and interest; and
    the risk that earnings may not be sufficient to maintain compliance
    with debt covenants;
  • Insurance risks, including the cost of insurance, and natural
    disasters and severe weather such as hurricanes; and
  • Legal and regulatory risks, including costs associated with
    prosecuting or defending claims and any adverse outcomes; the terms of
    governmental regulations that affect Aimco and interpretations of
    those regulations; 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 Aimco's
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,
2017, 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)
 
    Three Months Ended     Six Months Ended
June 30, June 30,
2018     2017 2018     2017
REVENUES
Rental and other property revenues attributable to Real Estate $ 231,130 $ 227,703 $ 456,523 $ 452,931
Rental and other property revenues of partnerships served by Asset
Management business
19,000 18,533 37,808 37,095
Tax credit and transaction revenues 57   2,856   3,576   5,547  
Total revenues 250,187   249,092   497,907   495,573  
 
OPERATING EXPENSES
Property operating expenses attributable to Real Estate 76,031 79,082 154,318 158,708
Property operating expenses of partnerships served by Asset
Management business
9,062 8,391 18,257 17,587
Depreciation and amortization 97,485 89,155 190,033 176,323
General and administrative expenses 13,882 10,108 25,237 21,071
Other expenses, net 4,366   2,650   7,324   4,389  
Total operating expenses 200,826   189,386   395,169   378,078  
Operating income 49,361 59,706 102,738 117,495
Interest income 2,884 2,012 5,056 4,204
Interest expense (49,906 ) (46,858 ) (97,701 ) (94,740 )
Other, net 200   200   424   665  
Income before income taxes and gain on dispositions 2,539 15,060 10,517 27,624
Income tax benefit 4,395   5,023   41,783   10,008  
Income before gain on dispositions 6,934 20,083 52,300 37,632
Gain on dispositions of real estate, inclusive of related income tax 222   1,508   50,546   1,114  
Net income 7,156 21,591 102,846 38,746
Noncontrolling interests:
Net income attributable to noncontrolling interests in consolidated
real estate partnerships
(45 ) (813 ) (6,251 ) (1,764 )
Net income attributable to preferred noncontrolling interests in
Aimco OP
(1,934 ) (1,939 ) (3,871 ) (3,888 )
Net income attributable to common noncontrolling interests in Aimco
OP
(140 ) (787 ) (3,895 ) (1,344 )
Net income attributable to noncontrolling interests (2,119 ) (3,539 ) (14,017 ) (6,996 )
Net income attributable to Aimco 5,037 18,052 88,829 31,750
Net income attributable to Aimco preferred stockholders (2,149 ) (2,149 ) (4,297 ) (4,297 )
Net income attributable to participating securities (71 ) (60 ) (190 ) (119 )
Net income attributable to Aimco common stockholders $ 2,817   $ 15,843   $ 84,342   $ 27,334  
 
Net income attributable to Aimco per common share – basic and diluted $ 0.02   $ 0.10   $ 0.54   $ 0.17  
 
Weighted average common shares outstanding – basic 156,703   156,305   156,656   156,282  
 
Weighted average common shares outstanding – diluted 156,833   156,715   156,786   156,735  
 
 
Consolidated Balance Sheets
(in thousands) (unaudited)
           
June 30, 2018 December 31, 2017
Assets
Real estate $ 8,171,651 $ 7,927,753
Accumulated depreciation (2,452,947 ) (2,522,358 )
Net real estate 5,718,704 5,405,395
Cash and cash equivalents 46,703 60,498
Restricted cash 41,117 34,827
Goodwill 37,808 37,808
Other assets 327,756 234,931
Assets held for sale 94,314 17,959
Assets of partnerships served by Asset Management business [1]:
Real estate, net 216,875 224,873
Cash and cash equivalents 20,696 16,288
Restricted cash 30,055 30,928
Other assets 10,328   15,533  
Total Assets $ 6,544,356   $ 6,079,040  
 
Liabilities and Equity
Non-recourse property debt secured by Aimco Real Estate communities $ 3,810,824 $ 3,563,041
Debt issue costs (19,586 ) (17,932 )
Non-recourse property debt, net 3,791,238 3,545,109
Term loan, net 249,801 249,501
Revolving credit facility borrowings 220,170 67,160
Accrued liabilities and other 216,789 213,027
Liabilities related to assets held for sale 68,610
 
Liabilities of partnerships served by Asset Management business [1]:
Non-recourse property debt, net 224,112 227,141
Accrued liabilities and other 17,519   19,812  
Total Liabilities 4,788,239   4,321,750  
 
Preferred noncontrolling interests in Aimco OP 101,332 101,537
Equity:
Perpetual preferred stock 125,000 125,000
Class A Common Stock 1,574 1,572
Additional paid-in capital 3,887,260 3,900,042
Accumulated other comprehensive income 3,208 3,603
Distributions in excess of earnings (2,402,101 ) (2,367,073 )
Total Aimco equity 1,614,941   1,663,144  
Noncontrolling interests in consolidated real estate partnerships (2,984 ) (1,716 )
Common noncontrolling interests in Aimco OP 42,828   (5,675 )
Total equity 1,654,785   1,655,753  
Total liabilities and equity $ 6,544,356   $ 6,079,040  
[1]   On July 25, 2018, Aimco completed the sale of its Asset Management
business and derecognized these assets and liabilities. As of June
30, 2018, these amounts are classified as held for sale on Aimco's
GAAP balance sheet.

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