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Section 1: 8-K (8-K)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________________________
FORM 8-K
_____________________________________________
CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) November 1, 2018
_____________________________________________
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(Exact name of registrant as specified in its charter)
_____________________________________________
 
MARYLAND
 
1-13232
 
84-1259577
(State or other jurisdiction
 
(Commission
 
(I.R.S. Employer
of incorporation or organization)
 
File Number)
 
Identification No.)
4582 SOUTH ULSTER STREET
SUITE 1100, DENVER, CO 80237
_____________________________________________
(Address of principal executive offices)
  
(Zip Code)
 
Registrant’s telephone number, including area code: (303) 757-8101

NOT APPLICABLE
 (Former name or Former Address, if Changed Since Last Report)
_____________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company o
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the exchange act. o








ITEM 2.02.    Results of Operations and Financial Condition.

The earnings release of Apartment Investment and Management Company (“Aimco”), dated November 1, 2018, attached hereto as Exhibit 99.1 is furnished herewith. Aimco will hold its third quarter 2018 earnings conference call on November 2, 2018, at 1:00 p.m. Eastern time. You may join the conference call through an internet webcast accessed through Aimco’s website at investors.aimco.com. Alternatively, you may join the conference call by telephone by dialing 888-317-6003, or 412-317-6061 for international callers, and using passcode 7308086. If you wish to participate, please call approximately five minutes before the conference call is scheduled to begin.

If you are unable to join the live conference call, you may access the replay until February 2, 2019, by dialing 877-344-7529, or 412-317-0088 for international callers, and using passcode 10124032, or you may access the audiocast replay on Aimco’s website at investors.aimco.com. Please note that the full text of the earnings release and supplemental schedules are available through Aimco’s website at investors.aimco.com. The information contained on Aimco’s website is not incorporated by reference herein.

ITEM 9.01.     Financial Statements and Exhibits.
    
The following exhibits are furnished with this report:
Exhibit Number
Description
Third Quarter 2018 Earnings Release dated November 1, 2018

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: November 1, 2018

APARTMENT INVESTMENT AND MANAGEMENT COMPANY


/s/ Paul Beldin
___________________________________________
Paul Beldin
Executive Vice President and Chief Financial Officer



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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
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Page
 
Earnings Release
 
 
 
Consolidated Statements of Operations
 
 
 
Consolidated Balance Sheets
 
 
 
 
Schedule 1    –   Funds From Operations and Adjusted Funds From Operations Reconciliation
 
 
 
Schedule 2    –   Funds From Operations and Adjusted Funds From Operations Information
 
 
 
Schedule 3    –   Property Net Operating Income - Real Estate
 
 
 
 
Schedule 4    –   Apartment Home Summary
 
 
 
Schedule 5    –   Capitalization and Financial Metrics
 
 
 
Schedule 6    –   Same Store Operating Results
 
 
 
 
Schedule 7    –   Real Estate Portfolio Data by Market
 
 
 
Schedule 8    –   Apartment Community Disposition and Acquisition Activity
 
 
 
Schedule 9    –   Real Estate Capital Additions Information
 
 
 
Schedule 10  –   Redevelopment Portfolio
 
 
 
Glossary and Reconciliations of Non-GAAP Financial and Operating Measures



























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Aimco Reports Third Quarter Results
Denver, Colorado, November 1, 2018 - Apartment Investment and Management Company (“Aimco”) (NYSE: AIV) announced today third quarter results for 2018.
Chairman and Chief Executive Officer Terry Considine comments: “In the third quarter, Aimco produced solid results driven by a successful leasing season. Same Store revenue was up 3.1% year-over-year, driven by higher average monthly rent per apartment home of 2.9% and an increase in average daily occupancy of 30 basis points. Third quarter results set us up nicely for the balance of this year and position us well for 2019.”
“Compared to one year ago, we expect to begin the new year with approximately 30 basis points higher occupancy and 30 basis points greater earn-in contribution from our year-end rent roll, plus incremental contribution from completed redevelopment communities, including Park Towne Place, The Sterling, and Saybrook Pointe, and better than underwritten contribution from our 2018 acquisitions of Bent Tree and the Philadelphia portfolio.”
Chief Financial Officer Paul Beldin adds: “Third quarter 2018 AFFO of $0.56 per share was $0.05 per share ahead of the midpoint of our guidance range, and Pro forma FFO of $0.63 per share was $0.03 per share ahead of the midpoint of guidance. AFFO exceeded the midpoint of our expectations due to $0.02 per share from better operating results; $0.01 per share from a number of other items; and $0.02 per share from the timing of capital replacement spending, which we expect to reverse in the fourth quarter.”
“In late September, due to solid results during the summer leasing season, we increased full year 2018 guidance for Same Store revenue growth to 3.0%, the high end of our prior guidance range; Same Store NOI growth to between 2.9% and 3.1%, the midpoint of which matches the high end of our prior guidance range; and AFFO by $0.01 per share, at the midpoint. We are now increasing 2018 AFFO guidance a second time by an additional $0.02 per share, to a range of $2.14 to $2.18.”
Financial Results: Third Quarter AFFO Up 4%
 
THIRD QUARTER
 
YEAR-TO-DATE
(all items per common share - diluted)
2018
 
2017
 
Variance
 
2018
 
2017
 
Variance
Net income
$
3.61

 
$
0.11

 
3,182
%
 
$
4.15

 
$
0.29

 
1,331
%
Funds From Operations (FFO)
$
0.74

 
$
0.63

 
17
%
 
$
1.93

 
$
1.82

 
6
%
Less: Tax benefit
$
(0.13
)
 
$

 
%
 
$
(0.12
)
 
$

 
%
Add: Litigation and severance costs
$
0.02

 
$

 
%
 
$
0.03

 
$

 
%
Pro forma Funds From Operations (Pro forma FFO)
$
0.63

 
$
0.63

 
%
 
$
1.84

 
$
1.82

 
1
%
Deduct Capital Replacements
$
(0.07
)
 
$
(0.09
)
 
(22
%)
 
$
(0.20
)
 
$
(0.26
)
 
(23
%)
Adjusted Funds From Operations (AFFO)
$
0.56

 
$
0.54

 
4
%
 
$
1.64

 
$
1.56

 
5
%
Net Income (per diluted common share) - Year-over-year, third quarter net income increased primarily due to higher gains on the sale of apartment communities and the Asset Management business, partially offset by increased operating expenses.
AFFO (per diluted common share) - Aimco’s third quarter AFFO per share increased $0.02 year-over-year. Real estate operations contributed to the increase in AFFO, as follows:
$0.02 from Same Store Property Net Operating Income growth of 2.6%, driven by a 3.1% increase in revenue, offset by a 4.5% increase in expenses; and
$0.06 from leasing activity related to Redevelopment and recently acquired communities; offset by

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($0.06) in AFFO from apartment communities sold in the last twelve months.
The sale of the Asset Management business is estimated to have reduced third quarter AFFO per share by $0.03.
Operating Results: Third Quarter Same Store NOI Up 2.6%; YTD Up 2.8%
 
THIRD QUARTER
YEAR-TO-DATE
 
Year-over-Year
Sequential
Year-over-Year
 
2018
2017
Variance
2nd Qtr.
Variance
2018
2017
Variance
Average Rent per Apartment Home
$1,842
$1,790
2.9
%
$1,819
1.3
%
$1,823
$1,775
2.7
%
Other Income per Apartment Home*
124
123
0.8
%
121
2.5
%
117
115
1.7
%
Average Revenue per Apartment Home*
$1,966
$1,913
2.8
%
$1,940
1.3
%
$1,940
$1,890
2.6
%
Average Daily Occupancy
96.3
%
96.0
%
0.3
%
96.3
%
%
96.3
%
96.0
%
0.3
%
 
 
 
 
 
 
 
 
 
$ in Millions
 
 
 
 
 
 
 
 
Revenue, before utility reimbursements
$148.9
$144.4
3.1
%
$147.0
1.3
%
$440.7
$428.0
3.0
%
Expenses, net of utility reimbursements
39.0
37.4
4.5
%
38.5
1.4
%
116.5
112.7
3.3
%
NOI
$109.9
$107.0
2.6
%
$108.5
1.3
%
$324.2
$315.3
2.8
%
*
In 2018, Aimco changed its presentation of revenues and expenses to reflect utility 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 third quarter 2018 and reduced year-to-date 2018 by 10 bps.
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.
2nd Qtr.
Jul
Aug
Sep
3rd Qtr.
Year-to-Date
Renewal rent increases
4.9
%
4.8
%
4.1
%
4.3
%
4.3
%
4.2
%
4.6
%
New lease rent increases
0.4
%
1.9
%
2.4
%
2.7
%
1.4
%
2.2
%
1.7
%
Weighted average rent increases
2.7
%
3.4
%
3.4
%
3.4
%
2.7
%
3.2
%
3.2
%
Average Daily Occupancy
96.3
%
96.3
%
96.0
%
96.2
%
96.6
%
96.3
%
96.3
%
Renewal rates in the third quarter were 40 bps lower year-over-year due to the decision to increase occupancy in certain markets, including Denver and Chicago.
Redevelopment
Redevelopment is Aimco’s second line of business where Aimco creates value by repositioning communities within the Aimco portfolio. Aimco also undertakes limited ground-up development when warranted by risk-adjusted investment returns, either directly or in connection with the redevelopment of an existing apartment community. 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 third quarter, Aimco invested $37 million in redevelopment and development. In Center City, Philadelphia, Aimco substantially completed redevelopment of the vacated fourth and final tower of Park Towne Place. For the third quarter, average daily occupancy at the three completed towers was 89.1%. At September 30, 2018, the three completed towers were 95% leased and the fourth tower was 71% leased.

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Aimco also commenced the next phase of redevelopment at its Flamingo community, located in Miami Beach. This $30 million phase includes extensive redevelopment of retail, leasing, and common areas, including major enhancements to the entryway.
In September, Aimco exercised its option to acquire approximately two acres of land adjacent to its 21 Fitzsimons community, located on the University of Colorado Anschutz Medical Campus, and broke ground on the development of a 253-apartment home community. Aimco expects to invest approximately $87 million to construct the community, which is expected to be complete in the third quarter of 2020. 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 derived from owning the adjacent 600 apartment homes, and a Free Cash Flow internal rate of return greater than 10%, resulting in value creation (defined as the amount by which the completed property value exceeds the pre-redevelopment value plus redevelopment spend) of more than 35%.
During the third quarter, Aimco leased 145 apartment homes at Redevelopment communities. At September 30, 2018, Aimco’s exposure to lease-up at active redevelopment and development communities was approximately 341 apartment homes, of which 62 were in the fourth tower of Park Towne Place, 213 were being constructed at Parc Mosaic, and 66 were located in three other communities.
Subsequent to quarter end, Aimco commenced construction on the development of 58 rental townhomes on approximately four acres of land contiguous to the Elm Creek apartment community in Elmhurst, Illinois. Given the success of a similar project five years ago at the community, Aimco opportunistically purchased an adjacent land parcel in 2017. Aimco expects to achieve a stabilized net operating income yield of 7% and a Free Cash Flow internal rate of return greater than 11% on this $35 million investment. Aimco expects initial occupancy in the first quarter of 2020 and completion of construction in the second quarter of 2020.
Portfolio Management: Revenue Per Apartment Home Up 6% to $2,131
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 significantly increases the quality and expected growth rate of its portfolio.
 
THIRD QUARTER
 
2018
2017
Variance
Apartment Communities
133

141

(8
)
Apartment Homes
36,481

39,184

(2,703
)
Average Revenue per Apartment Home*
$
2,131

$
2,005

6
%
Portfolio Average Rents as a Percentage of Local Market Average Rents
113
%
112
%
1
%
Percentage A (3Q 2018 Average Revenue per Apartment Home $2,809)
51
%
53
%
(2
%)
Percentage B (3Q 2018 Average Revenue per Apartment Home $1,854)
33
%
34
%
(1
%)
Percentage C+ (3Q 2018 Average Revenue per Apartment Home $1,702)
16
%
13
%
3
%
NOI Margin
72
%
72
%
%
Free Cash Flow Margin
67
%
66
%
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.

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Third Quarter Real Estate Portfolio - For its entire portfolio, Aimco’s average monthly revenue per apartment home was $2,131 for third quarter 2018, a 6% increase compared to third 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 communities, 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. Aimco did not complete any acquisitions in the third quarter.
Year-to-date, Aimco has acquired five communities. Aimco acquired for $308 million four apartment communities in the Philadelphia area including 665 apartment homes and 153,000 square feet of office and retail space. Aimco also acquired for $160 million Bent Tree Apartments, a 748-apartment home community in Fairfax County, Virginia.
As previously announced, in April 2018 Aimco agreed to acquire six communities in the Philadelphia area, including the four that have been acquired year-to-date. During the third quarter, Aimco terminated its agreement to acquire the fifth community, The Victor, in Camden, New Jersey, due to the lack of required approvals from the City of Camden. The purchase of the sixth community is expected upon completion of construction in the first half of 2019. The rate of return expected on Aimco’s investment in the Philadelphia communities is not materially impacted by the removal of The Victor.
Dispositions - During the third quarter, Aimco sold for $590 million its Asset Management business and four affordable apartment communities located in the Hunters Point area of San Francisco. After payment of transaction costs and repayment of property-level debt encumbering the Hunters Point apartment communities, net proceeds to Aimco were $512 million.
Aimco also sold for $170 million Chestnut Hill Village, an 821-apartment home community located in north Philadelphia. Net proceeds to Aimco were $166 million.
Aimco used proceeds from the two sales to fund previously completed 2018 acquisitions, effectively 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. The acquisition communities have expected Free Cash Flow internal rates of return approximately 400 basis points higher than those of the disposition communities.
Aimco used excess proceeds from these sales to repay in full the revolving credit facility and term loan, reduce property-level borrowings, fund share repurchases, and for general corporate purposes.
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.

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Aimco total leverage includes Aimco share of long-term, non-recourse, property debt encumbering apartment communities, outstanding borrowings under its revolving credit facility, and outstanding preferred equity.
 
AS OF SEPTEMBER 30, 2018
$ in Millions
Amount
% of Total
Weighted Avg. Maturity (Yrs.)
Aimco share of long-term, non-recourse property debt
$
3,656

94
%
7.0

Preferred Equity*
226

6
%
40.0

Total Leverage
$
3,882

100
%
8.9

Cash, restricted cash and investments in securitization trust assets
(189
)
 
 
Net Leverage, as adjusted
$
3,693

 
 
*
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 Adjusted EBITDA
6.5x
Proportionate Debt and Preferred Equity to Adjusted EBITDA
6.9x
Adjusted EBITDA to Adjusted Interest Expense
3.4x
Adjusted EBITDA to Adjusted Interest Expense and Preferred Dividends
3.1x
Aimco’s Adjusted EBITDA has been adjusted on a pro forma basis to reflect the dispositions of Chestnut Hill Village, the Asset Management business, and the four Hunters Point communities during the period as if the transactions had been closed on July 1, 2018.
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.
Refinancing Activity
Entering the third quarter, Aimco had $1.6 billion in debt scheduled to mature between 2019 and 2021 and $125 million of 6.875% preferred stock callable in 2019. During third quarter, Aimco repaid $120 million of property debt. As previously announced, Aimco intends to redeem the preferred stock in May 2019. Aimco is addressing the majority of these remaining maturities and has rate-locked $620 million of non-recourse, property loans: $500 million of these loans are fixed-rate with a weighted average maturity of nine years and a weighted average interest rate of 4.17%, and $120 million of these loans have five-year terms and interest rates floating at a weighted average of 115 basis points over 30-day LIBOR. In connection with fourth quarter expected refinancing activity, Aimco expects to incur approximately $14 million of debt extinguishment costs, which will be excluded from Pro forma FFO and AFFO in fourth quarter 2018 and for the full year 2018.
Share Repurchases
Subsequent to quarter-end, Aimco repurchased 1.7 million shares of its common stock for a total of $75 million, at a weighted average price of $43.89 per share, approximately a 20% discount to Aimco’s first quarter 2018 estimated Net Asset Value per share.

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Liquidity
At September 30, 2018, Aimco held cash and restricted cash of $104 million and had the capacity to borrow $593 million under its revolving credit facility, after consideration of $7 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.
Aimco also manages its financial flexibility by maintaining an investment grade rating and holding apartment communities that are unencumbered by property debt. At September 30, 2018, Aimco held unencumbered apartment communities with an estimated fair market value of approximately $2.3 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 September 30, 2018. On an annualized basis, this represents an increase of 6% compared to the dividends paid during 2017. This dividend is payable on November 30, 2018, to stockholders of record on November 16, 2018.

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2018 Outlook

($ Amounts represent Aimco Share)
YEAR-TO-DATE SEPTEMBER 30, 2018
FULL YEAR 2018
PREVIOUS FULL YEAR 2018
 
 
 
 
 
Net Income per share
$4.15
$4.18 to $4.22
$4.26 to $4.34
Pro forma FFO per share
$1.84
$2.45 to $2.49
$2.41 to $2.49
AFFO per share
$1.64
$2.14 to $2.18
$2.10 to $2.18
 
 
 
 
Select Components of FFO
 
 
 
Same Store Operating Measures
 
 
 
Revenue change compared to prior year
3.0%
3.00%
3.00%
Expense change compared to prior year
3.3%
2.80% to 3.40%
2.80% to 3.40%
NOI change compared to prior year
2.8%
2.90% to 3.10%
2.90% to 3.10%
 
 
 
 
Other Earnings
 
 
 
Asset Management Contribution
$22M
$22M
$22M
Tax Benefits [1]
$16M
$19M to $20M
$16M to $18M
 
 
 
 
Offsite Costs
 
 
 
Property management expenses
$15M
$20M
$20M
General and administrative expenses
$37M
$48M
$44M
Total Offsite Costs
$52M
$68M
$64M
 
 
 
 
Capital Investments
 
 
 
Redevelopment/Development
$125M
$170M to $190M
$160M to $200M
Capital Enhancements
$79M
$90M to $100M
$80M to $100M
 
 
 
 
Transactions
 
 
 
Property dispositions
$825M
$825M
$825M
Property acquisitions
$468M
$468M
$468M
 
 
 
 
Portfolio Quality
 
 
 
Average revenue per apartment home
$2,131
~$2,130
~$2,100
 
 
 
 
Balance Sheet
 
 
 
Proportionate Debt to Adjusted EBITDA
6.5x
~6.3x
~6.3x
Proportionate Debt and Preferred Equity to Adjusted EBITDA
6.9x
~6.7x
~6.7x
 
 
[1]
Year-to-date 2018 tax benefits exclude the release of a $20.4 million valuation allowance released as a result of Aimco’s ability to realize its deferred tax benefits due to the sale of the Asset Management business. The release of the valuation allowance is excluded from Aimco’s calculation of Pro forma FFO and AFFO.
($ Amounts represent Aimco Share)
FOURTH QUARTER 2018
 
 
Net income per share
$0.03 to $0.07
Pro forma FFO per share
$0.61 to $0.65
AFFO per share
$0.50 to $0.54

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Earnings Conference Call Information
Live Conference Call:
Conference Call Replay:
Friday, November 2, 2018 at 1:00 p.m. ET
Replay available until February 2, 2019
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: 7308086
Passcode: 10124032
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.
Contact
Suzanne Sorkin, Vice President, Investor Relations/FP&A
Investor Relations 303-793-4661, investor@aimco.com

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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 fourth quarter and full year 2018 results, including but not limited to: FFO, Pro forma FFO and selected components thereof; AFFO; Aimco redevelopment and 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.

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10

395601318_portraita-2018q3.jpg

Consolidated Statements of Operations
 
 
 
 
 
 
 
 
(in thousands, except per share data) (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2018
 
2017
 
2018
 
2017
REVENUES
 
 
 
 
 
 
 
 
Rental and other property revenues attributable to Real Estate
 
$
234,048

 
$
233,708

 
$
690,571

 
$
686,639

Rental and other property revenues of partnerships served by Asset Management business
 
5,022

 
18,232

 
42,830

 
55,327

Tax credit and transaction revenues
 
3,411

 
2,695

 
6,987

 
8,242

Total revenues
 
242,481

 
254,635

 
740,388

 
750,208

 
 
 
 
 
 
 
 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
Property operating expenses attributable to Real Estate
 
78,254

 
81,244

 
232,572

 
239,954

Property operating expenses of partnerships served by Asset Management business
 
2,608

 
8,872

 
20,865

 
26,458

Depreciation and amortization
 
96,406

 
92,513

 
286,439

 
268,836

General and administrative expenses
 
12,479

 
10,529

 
37,196

 
31,599

Other expenses, net
 
5,780

 
2,272

 
13,624

 
6,661

Total operating expenses
 
195,527

 
195,430


590,696

 
573,508

Operating income
 
46,954

 
59,205

 
149,692

 
176,700

Interest income
 
2,712

 
2,047

 
7,768

 
6,251

Interest expense
 
(45,492
)
 
(50,682
)
 
(143,193
)
 
(145,422
)
Other, net
 
(283
)
 
6,937

 
141

 
7,602

Income before income taxes and gain (loss) on dispositions
 
3,891

 
17,507

 
14,408

 
45,131

Income tax benefit
 
27,941

 
4,870

 
69,724

 
14,878

Income before gain (loss) on dispositions
 
31,832

 
22,377

 
84,132

 
60,009

Gain (loss) on dispositions of real estate and the Asset Management business, inclusive of related income tax
 
572,085

 
(233
)
 
622,631

 
881

Net income
 
603,917

 
22,144

 
706,763

 
60,890

Noncontrolling interests:
 
 
 
 
 
 
 
 
Net income attributable to noncontrolling interests in consolidated real estate partnerships
 
(1,794
)
 
249

 
(8,045
)
 
(1,515
)
Net income attributable to preferred noncontrolling interests in Aimco OP
 
(1,934
)
 
(1,938
)
 
(5,805
)
 
(5,826
)
Net income attributable to common noncontrolling interests in Aimco OP
 
(30,198
)
 
(820
)
 
(34,093
)
 
(2,164
)
Net income attributable to noncontrolling interests
 
(33,926
)
 
(2,509
)
 
(47,943
)
 
(9,505
)
Net income attributable to Aimco
 
569,991

 
19,635

 
658,820

 
51,385

Net income attributable to Aimco preferred stockholders
 
(2,148
)
 
(2,148
)
 
(6,445
)
 
(6,445
)
Net income attributable to participating securities
 
(814
)
 
(57
)
 
(1,004
)
 
(176
)
Net income attributable to Aimco common stockholders
 
$
567,029

 
$
17,430

 
$
651,371

 
$
44,764

 
 
 
 
 
 
 
 
 
Net income attributable to Aimco per common share – basic
 
$
3.62

 
$
0.11

 
$
4.16

 
$
0.29

 
 
 
 
 
 
 
 
 
Net income attributable to Aimco per common share – diluted
 
$
3.61

 
$
0.11

 
$
4.15

 
$
0.29

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding – basic
 
156,711

 
156,306

 
156,674

 
156,290

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding – diluted
 
156,938

 
156,835

 
156,836

 
156,768

 
 
 
 
 
 
 
 
 

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11

395601318_portraita-2018q3.jpg

Consolidated Balance Sheets
(in thousands) (unaudited)
 
 
 
 
 
 
 
 
 
September 30, 2018
 
December 31, 2017
Assets
 
 
 
 
Real estate
 
$
8,269,634

 
$
7,927,753

Accumulated depreciation
 
(2,538,979
)
 
(2,522,358
)
Net real estate
 
5,730,655

 
5,405,395

Cash and cash equivalents
 
58,032

 
60,498

Restricted cash
 
46,267

 
34,827

Goodwill
 
37,808

 
37,808

Other assets
 
312,259

 
234,931

Assets held for sale
 

 
17,959

Assets of partnerships served by Asset Management business:
 
 
 
 
Real estate, net
 

 
224,873

Cash and cash equivalents
 

 
16,288

Restricted cash
 

 
30,928

Other assets
 

 
15,533

Total Assets
 
$
6,185,021

 
$
6,079,040

 
 
 
 
 
 
Liabilities and Equity
 
 
 
 
Non-recourse property debt secured by Aimco Real Estate communities
 
$
3,665,277

 
$
3,563,041

Debt issue costs
 
(18,488
)
 
(17,932
)
Non-recourse property debt, net
 
3,646,789

 
3,545,109

Term loan, net
 

 
249,501

Revolving credit facility borrowings
 

 
67,160

Accrued liabilities and other
 
242,782

 
213,027

 
 
 
 
 
 
Liabilities of partnerships served by Asset Management business:
 
 
 
 
Non-recourse property debt, net
 

 
227,141

Accrued liabilities and other
 

 
19,812

Total Liabilities
 
3,889,571

 
4,321,750

 
 
 
 
 
 
Preferred noncontrolling interests in Aimco OP
 
101,320

 
101,537

Equity:
 
 
 
 
Perpetual preferred stock
 
125,000

 
125,000

Class A Common Stock
 
1,574

 
1,572

Additional paid-in capital
 
3,888,312

 
3,900,042

Accumulated other comprehensive income
 
4,850

 
3,603

Distributions in excess of earnings
 
(1,894,054
)
 
(2,367,073
)
Total Aimco equity
 
2,125,682

 
1,663,144

Noncontrolling interests in consolidated real estate partnerships
 
(1,605
)
 
(1,716
)
Common noncontrolling interests in Aimco OP
 
70,053

 
(5,675
)
Total equity
 
2,194,130

 
1,655,753

Total liabilities and equity
 
$
6,185,021

 
$
6,079,040

 
 

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12

395601318_portraita-2018q3.jpg

Supplemental Schedule 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Funds From Operations and Adjusted Funds From Operations Reconciliation
 
 
 
 
Three and Nine Months Ended September 30, 2018 Compared to Three and Nine Months Ended September 30, 2017
(in thousands, except per share data) (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aimco believes that Economic Income (defined as Net Asset Value, or NAV, growth plus dividends) is an important measure of long-term financial performance. NAV is used by many investors because the value of company assets can be readily estimated, even for non-earning assets such as land or properties under development. NAV has the advantage of incorporating the investment decisions of thousands of real estate investors, enhancing comparability among companies that have differences in their accounting, and avoiding disparity that can result from application of GAAP to investment properties and various ownership structures. Some investors focus on multiples of AFFO and FFO. Aimco’s disclosure of AFFO and FFO complements its focus on Economic Income.
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
 
2018
 
2017
 
2018
 
2017
Net income attributable to Aimco common stockholders
 
$
567,029

 
$
17,430

 
$
651,371

 
$
44,764

Adjustments:
 
 
 
 
 
 
 
 
Real estate depreciation and amortization, net of noncontrolling partners’ interest
 
94,166

 
89,879

 
279,798

 
257,409

Gain on dispositions and other, net of noncontrolling partners’ interest
 
(624,521
)
 
(5,772
)
 
(671,761
)
 
(7,952
)
Income tax adjustments related to gain on dispositions and other
    items [1]
 
54,448

 
733

 
23,813

 
2,175

Common noncontrolling interests in Aimco OP’s share of above adjustments
 
24,130

 
(3,814
)
 
18,963

 
(11,447
)
Amounts allocable to participating securities
 
626

 
(43
)
 
529

 
(122
)
FFO Attributable to Aimco common stockholders
 
$
115,878

 
$
98,413

 
$
302,713

 
$
284,827

Tax benefit due to valuation allowance release, net of common noncontrolling interests in Aimco OP and participating securities [2]
 
(19,349
)
 

 
(19,349
)
 

Litigation costs, net of common noncontrolling interests in Aimco OP and participating securities [3]
 
2,727

 

 
4,633

 

Severance costs, net of common noncontrolling interests in Aimco OP and participating securities [4]
 
67

 

 
1,282

 

Pro forma FFO Attributable to Aimco common stockholders
 
$
99,323

 
$
98,413

 
$
289,279

 
$
284,827

Capital Replacements, net of common noncontrolling interests in Aimco OP and participating securities
 
(10,768
)
 
(14,446
)
 
(32,245
)
 
(40,752
)
AFFO Attributable to Aimco common stockholders
 
$
88,555

 
$
83,967

 
$
257,034

 
$
244,075

 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding
 
156,711

 
156,306

 
156,674

 
156,290

Dilutive common share equivalents
 
227

 
529

 
162

 
478

Total shares and dilutive share equivalents
 
156,938

 
156,835

 
156,836

 
156,768

 
 
 
 
 
 
 
 
 
 
Net income attributable to Aimco per common share – diluted
 
$
3.61

 
$
0.11

 
$
4.15

 
$
0.29

FFO per share – diluted
 
$
0.74

 
$
0.63

 
$
1.93

 
$
1.82

Pro forma FFO per share – diluted
 
$
0.63

 
$
0.63

 
$
1.84

 
$
1.82

AFFO per share – diluted
 
$
0.56

 
$
0.54

 
$
1.64

 
$
1.56

 
 
 
 
 
 
 
 
 
 
[1]
Income taxes related to gain on dispositions and other items for the three months ended September 30, 2018, includes the reversal of a $33.3 million deferred tax asset related to the first quarter 2018 intercompany transfer of assets, which was realized upon the sale of Aimco’s Asset Management business. The remaining income tax provision of $21.1 million relates to the tax on the gain on the sale. For the nine months ended September 30, 2018, income taxes related to gain on dispositions and other items includes tax on the gain on the sale of the Asset Management business, as well as tax on the gain on the sale of apartment communities during the nine months ended September 30, 2018.
[2]
Due to the sale of the Asset Management business, Aimco expects to realize its deferred tax benefits. As a result, Aimco has determined that a valuation allowance is no longer necessary. Aimco excluded the effect of the establishment of the valuation allowance from Pro forma FFO and as such has excluded the benefit from its release.
[3]
Aimco is engaged in litigation with Airbnb to protect its property right to select its residents and their neighbors. Due to the unpredictable nature of these cases and associated legal costs, Aimco excludes such costs from Pro forma FFO and AFFO.
[4]
Aimco incurred severance costs in connection with the sale of its Asset Management business. Aimco excludes such costs from Pro forma FFO because it believes these costs are closely related to the sale of the business.

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13

395601318_portraita-2018q3.jpg

Supplemental Schedule 2(a)
 
 
 
 
 
 
 
 
 
 
 
 
 
Funds From Operations and Adjusted Funds From Operations Information
 
(Page 1 of 2)
 
Three and Nine Months Ended September 30, 2018 Compared to Three and Nine Months Ended September 30, 2017
 
 
 
 
(consolidated amounts, in thousands) (unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2018
 
2017
 
2018
 
2017
Real Estate [1]
 
 
 
 
 
 
 
 
Revenues, before utility reimbursements [2]
 
 
 
 
 
 
 
 
Same Store
 
$
149,561

 
$
145,120

 
$
442,708

 
$
430,063

Redevelopment/Development
 
46,836

 
44,015

 
135,458

 
128,329

Acquisition
 
15,826

 
4,662

 
33,857

 
12,628

Other Real Estate
 
11,426

 
10,928

 
33,989

 
32,659

Total revenues, before utility reimbursements
 
223,649

 
204,725

 
646,012

 
603,679

Expenses, net of utility reimbursements [2]
 
 
 
 
 
 
 
 
Same Store
 
39,246

 
37,542

 
117,063

 
113,265

Redevelopment/Development
 
15,447

 
14,717

 
44,758

 
43,607

Acquisition
 
4,514

 
1,767

 
10,253

 
5,302

Other Real Estate
 
3,928

 
3,810

 
11,835

 
11,430

Total expenses, net of utility reimbursements
 
63,135

 
57,836

 
183,909

 
173,604

Real Estate net operating income
 
160,514

 
146,889

 
462,103

 
430,075

 
 
 
 
 
 
 
 
 
Property management expenses
 
(5,235
)
 
(5,363
)
 
(14,910
)
 
(15,437
)
Casualties
 
(712
)
 
(2,589
)
 
(2,307
)
 
(6,464
)
Other expenses, net
 
(2,657
)
 
(834
)
 
(5,543
)
 
(1,590
)
Interest expense on non-recourse property debt
 
(42,573
)
 
(42,576
)
 
(125,347
)
 
(127,992
)
Interest income
 
1,923

 
1,778

 
5,657

 
5,243

FFO related to Sold communities
 
1,146

 
12,535

 
12,085

 
36,814

Contribution from Real Estate
 
112,406

 
109,840

 
331,738

 
320,649

 
 
 
 
 
 
 
 
 
Contribution from Asset Management [3]
 
4,878

 
10,487

 
21,058

 
29,121

 
 
 
 
 
 
 
 
 
General and administrative and investment management expenses
 
(12,479
)
 
(10,529
)
 
(37,196
)
 
(31,599
)
Depreciation and amortization related to non-real estate assets
 
(2,173
)
 
(2,635
)
 
(6,553
)
 
(7,522
)
Other expenses, net
 
(2,771
)
 
(1,217
)
 
(6,077
)
 
(3,296
)
Interest expense on corporate borrowings
 
(1,954
)
 
(4,384
)
 
(9,403
)
 
(6,814
)
Historic tax credit benefit
 
3,374

 
1,533

 
4,719

 
4,629

Other tax benefits, net
 
24,867

 
4,381

 
31,711

 
11,351

Preferred dividends and distributions
 
(4,082
)
 
(4,086
)
 
(12,250
)
 
(12,271
)
Common noncontrolling interests in Aimco OP
 
(6,068
)
 
(4,634
)
 
(15,130
)
 
(13,611
)
Amounts allocated to participating securities
 
(188
)
 
(100
)
 
(475
)
 
(298
)
Aimco share of amounts associated with unconsolidated partnerships
 
383

 
521

 
1,407

 
1,505

Noncontrolling interests’ share of the above amounts
 
(315
)
 
(764
)
 
(836
)
 
(7,017
)
FFO Attributable to Aimco common stockholders
 
$
115,878

 
$
98,413

 
$
302,713

 
$
284,827

Tax benefit due to valuation allowance release, net of common noncontrolling interests in Aimco OP and participating securities [4]
 
(19,349
)
 

 
(19,349
)
 

Litigation costs, net of common noncontrolling interests in Aimco OP and participating securities [5]
 
2,727

 

 
4,633

 

Severance costs, net of common noncontrolling interests in Aimco OP and participating securities [6]
 
67

 

 
1,282

 

Pro Forma FFO Attributable to Aimco common stockholders
 
$
99,323

 
$
98,413

 
$
289,279

 
$
284,827

Capital Replacements, net of noncontrolling interests’ share
 
(10,768
)
 
(14,446
)
 
(32,245
)
 
(40,752
)
AFFO Attributable to Aimco common stockholders
 
$
88,555

 
$
83,967

 
$
257,034

 
$
244,075








Please see the following page for footnote descriptions

395601318_builcom-2018q3.jpg
14

395601318_portraita-2018q3.jpg

Supplemental Schedule 2(a) (continued)
 
 
 
 
Funds From Operations and Adjusted Funds From Operations Information
(Page 2 of 2)
 
 
 
[1]
Contribution from Real Estate consists of property net operating income and other items of income or expense that relate to this portfolio, including property management expenses, casualty losses, interest expense related to non-recourse property debt encumbering the communities in this portfolio, and interest income Aimco earns on its investment in a securitization trust that holds certain Aimco property debt.
[2]
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.
[3]
On July 25, 2018, Aimco sold its Asset Management business and interests in the partnerships served by this business. Year-to-date, unconsolidated partnerships served by the Asset Management business contributed $0.8 million to FFO, which is included in Aimco share of amounts associated with unconsolidated partnerships, bringing the proportionate contribution from Asset Management to $22 million prior to its sale.
[4]
Due to the sale of the Asset Management business, Aimco expects to realize its deferred tax benefits. As a result, Aimco has determined that a valuation allowance is no longer necessary. Aimco excluded the effect of the establishment of the valuation allowance from Pro forma FFO and as such has excluded the benefit from its release.
[5]
Aimco is engaged in litigation with Airbnb to protect Aimco’s property right to select its residents and their neighbors. Due to the unpredictable nature of these cases and associated legal costs, Aimco excludes such costs from Pro forma FFO and AFFO. The amount presented is net of noncontrolling interests share of such costs.
[6]
Aimco incurred severance costs in connection with the sale of its Asset Management business. Aimco excludes such costs from Pro forma FFO because it believes these costs are closely related to the sale of the business.

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15

395601318_landscape-2018q3.jpg


Supplemental Schedule 2(b)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Partially Owned Entities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three and Nine Months Ended September 30, 2018 Compared to Three and Nine Months Ended September 30, 2017
 
 
 
 
 
 
(Proportionate amounts, in thousands) (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling Interests [1]
 
Unconsolidated [2]
 
Noncontrolling Interests [1]
 
Unconsolidated [2]
 
 
 
Three Months Ended September 30,
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
Nine Months Ended September 30,
 
 
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues, before utility reimbursements
 
$
793

 
$
792

 
$
604

 
$
559

 
$
2,356

 
$
13,742

 
$
1,748

 
$
1,653

Expenses, net of utility reimbursements
 
280

 
254

 
155

 
193

 
809

 
4,316

 
503

 
479

 
Net operating income
 
513

 
538

 
449

 
366

 
1,547

 
9,426

 
1,245

 
1,174

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property management expenses, net
 
(34
)
 
(33
)
 
(34
)
 
(62
)
 
(100
)
 
(279
)
 
(162
)
 
(184
)
Casualties
 
13

 
(4
)
 

 

 
17

 
(49
)
 

 

Other Expense, net
 
19

 
(9
)
 

 

 
(4
)
 
(49
)
 

 

Interest expense on non-recourse property debt on Real Estate Operations
 
(182
)
 
(181
)
 
(80
)
 
(84
)
 
(541
)
 
(3,056
)
 
(244
)
 
(256
)
Interest income from securitization trust
 

 

 

 

 

 

 

 

FFO related to Sold and Held For Sale Apartment Communities
 

 
184

 

 

 
(40
)
 
577

 

 

 
Contribution from Real Estate
 
329

 
495

 
335

 
220

 
879

 
6,570

 
839

 
734

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contribution from Asset Management
 

 
118

 
48

 
301

 

 
316

 
565

 
769

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other non-property expenses, net
 
(14
)
 
151

 

 

 
(43
)
 
131

 
3

 
2

FFO
 
$
315

 
$
764

 
$
383

 
$
521

 
$
836

 
$
7,017

 
$
1,407

 
$
1,505

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total apartment communities [3]
 
9
 
4
 
 
 
 
 
 
 
 
Total apartment homes [3]
 
3,592
 
142
 
 
 
 
 
 
 
 
Noncontrolling interests’ share of consolidated apartment homes/Aimco share of unconsolidated apartment homes [3]
 
187
 
72
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
[1]
Amounts represent the noncontrolling interests’ proportionate share of consolidated amounts. The decrease from nine months ended September 30, 2017 to 2018 is primarily due to the June 30, 2017 reacquisition of the limited partners’ interest in the Palazzo joint venture.
[2]
Amounts represent Aimco’s proportionate share of the unconsolidated real estate partnerships’ operations.
 
 
 
 
 
 
 
 
[3]
Apartment community information excludes Sold Communities.
 
 
 
 
 
 
 
 


395601318_builcom-2018q3.jpg
 
16

395601318_landscape-2018q3.jpg


Supplemental Schedule 3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property Net Operating Income - Real Estate
 
 
 
 
 
 
 
 
 
 
Trailing Five Quarters
 
 
 
 
 
 
 
 
 
 
 
(consolidated amounts, in thousands) (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
 
Revenues, before utility reimbursements [1]
 
 
 
 
 
 
 
 
 
 
 
 
Same Store
 
$
149,561

 
$
147,627

 
$
145,520

 
$
145,440

 
$
145,120

 
 
Redevelopment/Development
 
46,836

 
44,854

 
43,768

 
43,365

 
44,015

 
 
Acquisition
 
15,826

 
11,488

 
6,543

 
4,846

 
4,662

 
 
Other Real Estate
 
11,426

 
11,295

 
11,268

 
11,068

 
10,928

 
 
Total revenues, before utility reimbursements
 
$
223,649

 
$
215,264

 
$
207,099

 
$
204,719

 
$
204,725

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses, net of utility reimbursements [1]
 
 
 
 
 
 
 
 
 
 
 
 
Same Store
 
$
39,246

 
$
38,692

 
$
39,125

 
$
35,746

 
$
37,542

 
 
Redevelopment/Development
 
15,447

 
15,052

 
14,259

 
15,915

 
14,717

 
 
Acquisition
 
4,514

 
3,541

 
2,197

 
1,674

 
1,767

 
 
Other Real Estate
 
3,928

 
3,894

 
4,028

 
3,648

 
3,810

 
 
Total expenses, net of utility reimbursements
 
$
63,135

 
$
61,179

 
$
59,609

 
$
56,983

 
$
57,836

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property Net Operating Income
 
 
 
 
 
 
 
 
 
 
 
 
Same Store
 
$
110,315

 
$
108,935

 
$
106,395

 
$
109,694

 
$
107,578

 
 
Redevelopment/Development
 
31,389

 
29,802

 
29,509

 
27,450

 
29,298

 
 
Acquisition
 
11,312

 
7,947

 
4,346

 
3,172

 
2,895

 
 
Other Real Estate
 
7,498

 
7,401

 
7,240

 
7,420

 
7,118

 
 
Total Property Net Operating Income
 
$
160,514

 
$
154,085

 
$
147,490

 
$
147,736

 
$
146,889

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sold Property Net Operating Income [2]
 
$
1,290

 
$
6,104

 
$
5,834

 
$
11,715

 
$
13,739

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property net operating income in the table above is presented on a consolidated basis, which includes 100% of consolidated real estate partnership results and excludes the results of unconsolidated real estate partnerships, which are accounted for using the equity method of accounting. Amounts presented also exclude the Property Net Operating Income of apartment communities served by the Asset Management business, which was sold in July 2018.
 
 
 
 
[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.
 
[2]
During 2018, Aimco sold two apartment communities located in southern Virginia, one apartment community located in suburban Maryland, one apartment community located in north Philadelphia, and four affordable apartment communities located in the Hunters Point area of San Francisco. Aimco also sold its interests in the entities owning the La Jolla Cove property.
 



395601318_builcom-2018q3.jpg
 
17

395601318_portraita-2018q3.jpg

Supplemental Schedule 4
 
 
 
 
 
 
 
 
 
 
 
 
Apartment Home Summary
 
 
 
 
As of September 30, 2018
 
 
 
 
 
(unaudited)
 
 
 
 
 
 
 
 
Number of
Apartment Communities
 
Number of
Apartment Homes
 
Aimco Share of Apartment Homes
Real Estate Portfolio:
 
 
 
 
 
 
Consolidated
 
 
 
 
 
 
 
Same Store
95

 
26,367

 
26,220

 
 
Redevelopment/Development
13

 
6,293

 
6,282

 
 
Acquisitions
6

 
1,876

 
1,876

 
 
Other Real Estate
15

 
1,803

 
1,774

 
Total Consolidated
129

 
36,339

 
36,152

 
Unconsolidated
4

 
142

 
72

 
Total Real Estate Portfolio
133

 
36,481

 
36,224

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


395601318_builcom-2018q3.jpg
18

395601318_portraita-2018q3.jpg

Supplemental Schedule 5(a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capitalization and Financial Metrics