DENVER, Aug. 1 CO-Aimco-2Q-earnings
DENVER, Aug. 1 /PRNewswire-FirstCall/ -- SUMMARY FINANCIAL RESULTS:
Apartment Investment and Management Company (Aimco) (NYSE: AIV) today
announced results for the second quarter 2008. In accordance with Generally
Accepted Accounting Principles (GAAP), all previously reported share and per
share data has been adjusted to take into account the special dividend paid on
January 30, 2008, which resulted in the issuance of approximately 4.6 million
additional shares of Aimco's Class A Common Stock.
-- Net income attributable to common stockholders for the quarter was
$242.4 million, compared with $3.0 million for the second quarter 2007.
Higher results were driven primarily by higher gains on dispositions of real
estate and other of $289.3 million, higher investment management income, net
of tax, of $20.4 million and higher property net operating income of
$6.7 million. These items were partially offset by lower income from
discontinued operations (excluding gains on dispositions of real estate) of
$40.7 million, higher interest expense of $6.8 million and higher other
expenses of $8.6 million. Earnings per share (EPS) attributable to common
stockholders was $2.76 on a diluted basis, compared with $0.03 per share in
the second quarter 2007.
-- Funds from operations (diluted) (FFO) is a non-GAAP financial measure
defined in the glossary in the Supplemental Information (the Glossary). FFO
calculated in accordance with the definition prescribed by the National
Association of Real Estate Investment Trusts (NAREIT) was $75.6 million, or
$0.83 per share, compared with $87.3 million, or $0.84 per share, in the
second quarter 2007. FFO, before impairment losses, was $81.5 million, or
$0.90 per share, which was $0.09 per share higher than the mid-point of
guidance for the quarter. Higher investment management income, net of tax,
contributed $0.16 per share to the FFO outperformance and Same Store operating
results contributed an additional $0.02 per share. Other expenses were $0.11
per share higher than expected, primarily due to: the write-off of
communication hardware and capitalized costs associated with a discontinued
technology infrastructure project; and certain litigation settlements and
reserves.
-- Adjusted funds from operations (diluted) (AFFO; a non-GAAP financial
measure defined in the Glossary) was $58.2 million, or $0.66 per share,
compared with $63.6 million, or $0.61 per share, in the second quarter 2007.
AFFO includes deductions of $0.24 and $0.23 per share for capital replacement
expenditures in the second quarter 2008 and the second quarter 2007,
respectively.
Diluted Per Share Results
SECOND QUARTER
2007
2008 Adjusted*
Earnings - EPS $2.76 $0.03
Funds from operations - FFO$0.83 $0.84
FFO before impairment losses** $0.90 $0.84
Adjusted funds from operations - AFFO $0.66 $0.61
* Adjusted to reflect January 30, 2008, special dividend, see Special
Supplement following the Outlook schedule in this earnings release for
additional details.
** During the second quarter, Aimco recognized impairment losses, net of
Minority interests in Aimco Operating Partnership, of $5.9 million.
Management Comments
Chairman and Chief Executive Officer Terry Considine comments: "Property
operations had a solid quarter with conventional same-store net operating
income growth of 4.4%. Our redevelopment and capital investments are driving
improved asset quality with more than $280 million invested in our properties
year-to-date. Through our portfolio management activities, we continue to
reallocate capital among our target markets and to improve portfolio quality.
As we look forward to the balance of 2008, we are maintaining our focus on
these core value-creating strategies."
Chief Financial Officer Tom Herzog adds: "Second quarter FFO, before
impairment losses, was $0.90 per share, or $0.09 above the mid-point of
guidance. Positive results for the quarter included higher same-store
operating results and investment management income, partially offset by
several non-recurring items, including the write-off of certain capitalized IT
project costs and litigation costs. During the second quarter and through
July, Aimco repurchased a total of 6.8 million shares of its Common Stock for
$252.9 million, or an average price of $37.01 per share. We are establishing
third quarter FFO guidance of $0.86 to $0.90 per share and increasing our full
year FFO guidance from $3.22 to $3.38 per share to $3.33 to $3.43 per share."
Property Operations
Conventional Real Estate Operations
Aimco is among the nation's largest owners and operators of market rate
apartment communities. Conventional real estate operations consist of Aimco's
diversified portfolio of market rate apartment communities. At the end of the
second quarter 2008, this portfolio included 397 properties with 114,687 units
in which Aimco had a weighted average ownership of 89%. During the second
quarter 2008, conventional real estate operations generated net operating
income of $162.7 million.
"Same Store" Results
In the second quarter 2008, the Same Store portfolio included 302
communities with 81,293 Effective Units (see the Glossary) based on Aimco's
weighted average ownership of 90% (See Supplemental Schedules 6a through 6c).
Comparing Same Store results in the second quarter 2008 with the second
quarter 2007, total revenue increased $4.6 million, or 2.1%. The increase in
revenue was primarily generated by higher average rent, up $21 per unit, or
2.3%, from $897 per unit to $918 per unit, higher occupancy, which was up 10
basis points from 94.7% to 94.8%. Same Store expenses of $90.8 million
decreased $1.2 million, or 1.3%, compared with the prior year, primarily due
to decreases in personnel and related expenses. Same Store portfolio net
operating income was $138.9 million for the second quarter 2008, up 4.4% from
the second quarter 2007.
Same Store Operating Results
SECOND QUARTER
Year-over-year Sequential
2008 2007Variance 1st Qtr Variance
Same Store Operating
Measures
Average
Physical
Occupancy 94.8% 94.7% 0.1% 94.7%0.1%
Average Rent
Per Unit$918 $897 2.3% $914 0.4%
Total Same Store
($mm)
Revenue$229.7 $225.1 2.1% $229.2 0.2%
Expenses(90.8) (92.0)-1.3%(93.5) -2.8%
NOI ($mm) $138.9$ 133.1 4.4% $135.7 2.4%
Comparing Same Store results on a sequential basis, total revenue
increased $0.5 million, or 0.2%, in the second quarter 2008 compared with the
first quarter 2008, driven by a $4 per unit increase in average rental rates
and an increase in occupancy of 10 basis points, partially offset by lower
utility reimbursements. Expenses decreased $2.7 million, or 2.8%, primarily
due to lower personnel expenses, utilities, real estate taxes and insurance,
partially offset by higher turnover costs, repairs and maintenance costs and
contract services. Net operating income increased $3.2 million, or 2.4%, on a
sequential basis.
Affordable Real Estate Operations
Aimco is among the nation's largest owners and operators of affordable
apartment communities. At the end of the second quarter 2008, Aimco's owned
affordable portfolio included 308 properties with 36,725 units in which Aimco
had an average ownership of 51%. During the second quarter 2008, affordable
property operations generated net operating income of $22.2 million. Average
month-end occupancy for the affordable portfolio increased 20 basis points
from 97.8% for the second quarter 2007 to 98.0% for the second quarter 2008,
while average rent per unit increased 3.4% from $739 to $764 per unit.
Investment Management
Investment management includes portfolio strategy, capital allocation,
joint ventures, tax credit syndication, acquisitions, dispositions and other
transaction activities. Within our owned portfolio, we refer to these
activities as Portfolio Management and their benefit is seen in property
operating results and in investment gains. For affiliated partnerships, we
refer to these activities as Asset Management for which we are separately
compensated through fees paid by third party investors.
Investment management income includes the fees earned for providing asset
management services to third party investors, syndication fees and deferred
income related to tax credit activities, and portfolio management income
earned through investment gains on our owned assets. Consolidated investment
management income, net of tax, was $29.2 million in the second quarter 2008
compared to $8.8 million in the second quarter 2007. See Supplemental
Schedule 11 for additional information on investment management income.
Portfolio Management
Portfolio management includes the ongoing allocation of investment capital
to meet our geographic and product type goals. Our geographic allocation
strategy focuses on the largest 20 U.S. markets as measured by total market
capitalization. We believe these markets to be deep, relatively liquid and
possessing desirable long-term growth characteristics. They are primarily
coastal markets, and also include a number of Sun Belt cities and Chicago,
Illinois. We may also invest in other markets on an opportunistic basis. As
we implement this strategy, we expect to reduce our investment in markets
outside the largest 20 markets and to increase our investment in the largest
20 markets both by making acquisitions and through redevelopment spending.
See Supplemental Schedules 6 and 7 for additional details regarding
Aimco's portfolio allocation.
ACQUISITIONS - During the second quarter 2008, Aimco acquired Monterey
Grove Apartments with 224 units, located in San Jose, California, for
$56.0 million, or $250,000 per unit.
DISPOSITIONS - Aimco regularly reviews its portfolio to identify
properties that do not meet its long-term investment criteria. In the second
quarter 2008, Aimco sold 40 conventional properties and one affordable
property with 12,662 and 240 units, respectively, for $921.5 million in gross
proceeds (Aimco share $787.6 million). Aimco's share of net proceeds after
repayment of existing property debt and transaction costs was $367.8 million.
Aimco's property dispositions resulted in gains on dispositions of real
estate (including gains on dispositions of unconsolidated real estate and
other and gains within discontinued operations) of $314.2 million for the
second quarter 2008, compared with gains of $24.9 million for the second
quarter 2007.
See Supplemental Schedule 8 for additional information on acquisition and
disposition activity.
Redevelopment
Aimco actively reinvests in and upgrades its portfolio through property
redevelopments. At the end of the second quarter 2008, Aimco had 44 active
conventional redevelopment projects and 18 active tax credit redevelopment
projects in process. Aimco's share of total redevelopment expenditures was
$81.3 million during the second quarter 2008. Conventional redevelopment
project expenditures totaled $61.6 million and tax credit redevelopment
project expenditures totaled $19.7 million for the quarter. Further
information on redevelopment projects is provided in Supplemental Schedule 10.
Additional Financial Information
INTEREST INCOME - Consolidated interest income was $0.7 million for the
second quarter 2008 compared with $10.1 million for the second quarter 2007.
Interest income is earned in part from money market and interest bearing
accounts as well as on notes receivable from unconsolidated partnerships and
non-affiliates. The decrease in interest income of $9.4 million is the result
of lower interest rates, the repayment of certain high yielding notes
receivable from unconsolidated partnerships in the second quarter 2007 and an
adjustment to accretion of discounted notes receivable.
DEBT ACTIVITY - During the six months ended June 30, 2008, Aimco closed
loans on 47 properties generating gross proceeds of $443.3 million at a
weighted average interest rate of 5.41%. This included refinancing
$151.2 million in existing mortgage loans. After repayment of existing
property debt, transaction costs and distributions to limited partners,
Aimco's share of net proceeds was $255.5 million.
As of June 30, 2008, Aimco had $7.4 billion of consolidated debt
outstanding, which consisted of: $5.6 billion of fixed rate mortgage debt;
$1.7 billion of floating rate property and corporate debt; and $87.8 million
of other borrowings. In addition, Aimco had $100.0 million of floating rate
preferred stock outstanding. The fixed and floating rate property debt is
primarily non-recourse. Aimco's FFO exposure to changes in floating interest
rates is mitigated by $695.3 million of tax-exempt bonds with rates tied to
the Securities Industry and Financial Markets Association Municipal Swap Index
(SIFMA) (previously named the Bond Market Association Index), which moves at
approximately 0.68% for a 1.00% change in LIBOR. Aimco's exposure is further
offset by floating rate assets, such as cash and notes receivable, and
interest capitalized on entitlement and redevelopment properties. Based on
Aimco's proportionate share of quarter-end balances (see Supplemental Schedule
3), Aimco estimates its sensitivity to a 100 basis point change in LIBOR to be
approximately $0.02 per share per quarter.
See Supplemental Schedule 5 for more detail on debt characteristics and
activity.
INTEREST EXPENSE - Consolidated interest expense was $102.4 million for
the second quarter 2008 compared with $95.6 million for the second quarter
2007. The $6.8 million increase in interest expense is the result of higher
balances on property debt, partially offset by lower weighted average interest
rates.
STOCKHOLDERS' EQUITY - During the second quarter 2008, Aimco repurchased
approximately 3.9 million shares of its Class A Common Stock at an average
price of $38.91 per share for a total cost of $152.9 million.
During the month of July 2008, Aimco repurchased approximately 2.9 million
shares of its Class A Common Stock at an average price of $34.45 per share for
a total cost of $100.0 million. Since Aimco began repurchasing shares during
the third quarter 2006, the company has repurchased approximately 21.7 million
shares, or approximately 22% of shares outstanding on June 30, 2006, at an
average price of $40.15 per share for a total cost of $869.6 million.
Although for financial statement purposes GAAP requires that historical
share repurchases be restated to reflect shares issued in connection with the
special dividend paid on January 30, 2008, the number of shares repurchased as
described above has not been adjusted.
We are currently authorized to repurchase approximately 21.3 million
additional shares. Repurchases may be made from time to time in the open
market or in privately negotiated transactions.
G&A - General and administrative expenses for the second quarter 2008 of
$27.1 million increased $3.0 million when compared with the second quarter
2007 primarily due to personnel and related costs.
Outlook
For the third quarter 2008, FFO, before impairment losses and preferred
redemption charges, is expected to be in a range from $0.86 to $0.90 per share
and we are increasing our full year FFO guidance from a range of $3.22 to
$3.38 per share to a range of $3.33 to $3.43 per share. Please refer to the
Outlook Schedule, which follows the Consolidated Financial Statements in this
release, for more detail on third quarter and full year 2008 guidance.
Dividends on Common Stock
As announced on July 18, 2008, the Aimco Board of Directors declared a
special dividend of $3.00 per share of Class A Common Stock, to be paid on
August 29, 2008, to stockholders of record on July 28, 2008. A portion of the
special dividend in the amount of $0.60 per share represents payment of the
regular dividend for the quarter ended June 30, 2008, and a portion represents
an additional dividend payment in the amount of $2.40 per share associated
with actual and projected taxable gains arising from property dispositions in
2008.
The special dividend will be payable in a combination of cash and
additional shares of Class A Common Stock. The aggregate amount of cash
payable to stockholders in the special dividend, other than cash payable in
lieu of fractional shares, is not expected to exceed $51.3 million. Subject
to this limitation on the aggregate amount of cash payable, stockholders will
have the option to make an election to receive payment of the special dividend
in cash or in shares, except that cash will be paid in lieu of fractional
shares. Stockholders who do not make an election, or elect to receive the
special dividend in all cash, will receive payment in the form of at least
$0.60 per share in cash.
A prospectus and election form will be mailed to stockholders on or about
August 4, 2008, and will describe in more detail the terms of the special
dividend, including the ability of stockholders to elect to receive the
special dividend in the form of cash or shares of Aimco's Class A Common
Stock, and a limitation on the aggregate amount of cash to be included in the
special dividend. The election must be made prior to 5:00 p.m. Eastern time
on August 20, 2008.
Aimco expects the special dividend to be a taxable dividend to its
stockholders, without regard to whether a particular stockholder receives the
dividend in the form of cash or shares. It therefore allows Aimco to satisfy
its REIT distribution requirement while preserving cash for other corporate
purposes, including share repurchases.
Share and per share amounts disclosed in the accompanying earnings release
and supplemental schedules have not been retroactively adjusted for the effect
of shares to be issued pursuant to this special dividend, as the number of
shares is not presently determinable. Such retroactive adjustments will be
reflected in earnings releases and financial information prepared subsequent
to the payment date.
Cash dividends declared on Class A Common Stock attributable to the six
months ended June 30, 2008 totaled $1.20 per share, or 100% of AFFO
(undiluted) and 74% of FFO (diluted), on a per share basis, and a 7.0% cash
yield based on the $34.06 closing price of Aimco's Class A Common Stock on
June 30, 2008. Cash dividends attributable to the six months ended June 30,
2008, include that portion of the July 2008 special dividend which represents
payment of the regular dividend for the second quarter 2008.
Earnings Conference Call
Please join Aimco management for the Second Quarter 2008 earnings
conference call to be held Friday, August 1, 2008, at 1:00 p.m. Eastern time.
You may join the conference call through an Internet audiocast by clicking on
the Webcast link on Aimco's website at
http://www.aimco.com/CorporateInformation/Overview.aspx. Alternatively, you
may join the conference call via telephone by dialing 800.860.2442, or
412.858.4600 for international callers, and indicating that you wish to join
the Apartment Investment and Management Company Second Quarter 2008 earnings
conference call. If you are unable to join the live conference call, you may
access the conference call replay for seven days by dialing 877.344.7529, or
412.317.0088 for international callers, passcode 421210, or you may access the
audiocast replay by clicking on the Webcasts link on Aimco's website at
http://www.aimco.com/CorporateInformation/About/Financial/news.aspx.
Supplemental Information
The full text of this release and the Supplemental Information referenced
in this release is available on Aimco's Website at the link
http://www.aimco.com/CorporateInformation/About/Financial/QEarnRelease.aspx.
Forward-looking Statements
This earnings release and Supplemental Information contain forward-looking
statements, including statements regarding projected results and specifically
forecasts of third quarter and full year 2008 results. These forward-looking
statements are based on management's judgment as of this date and include
certain risks and uncertainties. Risks and uncertainties include, but are not
limited to, Aimco's ability to maintain current or meet projected occupancy,
rent levels and Same Store results and Aimco's ability to close transactions
necessary to generate fee income as anticipated. Actual results may differ
materially from those described in these forward-looking statements and, in
addition, will be affected by a variety of risks and factors that are beyond
the control of Aimco including, without limitation: natural disasters and
severe weather such as hurricanes; national and local economic conditions; the
general level of interest rates; energy costs; the terms of governmental
regulations that affect Aimco and interpretations of those regulations; the
competitive environment in which Aimco operates; financing risks, including
the risk that our cash flows from operations may be insufficient to meet
required payments of principal and interest; real estate risks, including
fluctuations in real estate values and the general economic climate in the
markets in which Aimco operates and competition for tenants in such markets;
insurance risk; acquisition and development risks, including failure of such
acquisitions to perform in accordance with projections; the timing of
acquisitions and dispositions; litigation, including costs associated with
prosecuting or defending claims and any adverse outcomes; and possible
environmental liabilities, including costs, fines or penalties that may be
incurred due to necessary remediation of contamination of properties presently
owned or previously owned by Aimco. In addition, our current and continuing
qualification as a real estate investment trust involves the application of
highly technical and complex provisions of the Internal Revenue Code and
depends on our ability to meet the various requirements imposed by the
Internal Revenue Code, through actual operating results, distribution levels
and diversity of stock ownership. Readers should carefully review Aimco's
financial statements and notes thereto, as well as the risk factors described
in Aimco's Annual Report on Form 10-K for the year ended December 31, 2007,
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 any securities for sale.
About Aimco
Aimco is a real estate investment trust headquartered in Denver, Colorado
that owns and operates a geographically diversified portfolio of apartment
communities. Aimco, through its subsidiaries and affiliates, is the largest
owner and operator of apartment communities in the United States with 1,114
properties, including 188,672 apartment units, and serves approximately
750,000 residents each year. Aimco's properties are located in 46 states, the
District of Columbia and Puerto Rico. Aimco common shares are traded on the
New York Stock Exchange under the ticker symbol AIV and are included in the
S&P 500. For more information about Aimco, please visit our website at
http://www.aimco.com.
GAAP Income Statements
Consolidated Statements of Income
(in thousands, except per share data) (unaudited)
Three Months Ended Six Months Ended
June 30,June 30,
2008 2007 2008 2007
REVENUES:
Rental and other property
revenues $384,191 $372,289 $768,354 $734,645
Property management revenues,
primarily from affiliates 1,415 1,271 3,519 3,367
Asset management and tax credit
revenues 38,17515,17851,02726,808
Total revenues 423,781 388,738 822,900 764,820
OPERATING EXPENSES:
Property operating expenses 174,158 168,992 361,441 336,618
Property management expenses 1,187 2,452 2,457 3,935
Investment management expenses 5,728 5,52110,017 9,987
Depreciation and amortization120,692 110,743 239,086 221,923
General and administrative
expenses 27,06424,02448,48846,100
Other expenses (income), net 5,459(3,128) 10,297 (379)
Total operating expenses334,288 308,604 671,786 618,184
Operating income 89,49380,134 151,114 146,636
Interest income 71810,107 9,11420,154
Provision for losses on notes
receivable(534) (735) (1,693) (2,278)
Interest expense (102,365) (95,578) (203,677) (190,586)
Deficit distributions to minority
partners(1,265) (1,554) (5,276) (2,482)
Equity in (losses) earnings of
unconsolidated real estate
partnerships (843) 930(1,872) (2,055)
Real estate impairment losses(2,518) - (2,518) -
Gain on dispositions of
unconsolidated real estate and
other 139 602 129 1,695
Gain on extinguishment of debt- - -19,373
Loss before minority interests and
discontinued operations(17,175) (6,094) (54,679) (9,543)
Minority interests:
Minority interest in
consolidated real estate
partnerships (2,352) (85)4,590(3,793)
Minority interest in Aimco
Operating Partnership,
preferred [1](1,925) (1,782) (3,707) (3,564)
Minority interest in Aimco
Operating Partnership,
common [1]3,437 2,240 7,908 4,661
Total minority interests (840) 373 8,791(2,696)
Loss from continuing operations (18,015) (5,721) (45,888) (12,239)
Income from discontinued
operations, net [3] 274,05425,050 277,38156,776
Net income 256,03919,329 231,49344,537
Net income attributable to
preferred stockholders 13,67016,34627,87832,694
Net income attributable to common
stockholders $242,369$2,983 $203,615 $11,843
Weighted average common shares
outstanding [2] 87,790 100,49489,381 100,494
Weighted average common shares and
common share equivalents
outstanding [2] 87,790 100,49489,381 100,494
Earnings (loss) per common share -
basic [2]:
Loss from continuing operations
(net of income
attributable to preferred
stockholders) $(0.36) $(0.22) $(0.83) $(0.45)
Income from discontinued
operations 3.12 0.25 3.11 0.57
Net income attributable to
common stockholders$2.76 $0.03 $2.28 $0.12
Earnings (loss) per common share -
diluted [2]:
Loss from continuing operations
(net of income
attributable to preferred
stockholders) $(0.36) $(0.22) $(0.83) $(0.45)
Income from discontinued
operations 3.12 0.25 3.11 0.57
Net income attributable to
common stockholders$2.76 $0.03 $2.28 $0.12
GAAP Income Statements (continued)
Notes to Consolidated Statements of Income
[1] The Aimco Operating Partnership is AIMCO Properties, L.P., the
operating partnership in Aimco's UPREIT structure.
[2] Weighted average share, common share equivalent and earnings per share
amounts for each of the periods presented above have been
retroactively adjusted for the effect of shares of common stock issued
January 30, 2008, pursuant to the special dividend declared by Aimco's
Board of Directors on December 21, 2007.
[3] Income from discontinued operations of consolidated properties
consists of the following (in thousands):
Three Months Ended Six Months Ended
June 30,June 30,
2008 2007 2008 2007
Rental and other property revenues $36,207 $54,288 $76,661 $113,452
Property operating expenses (19,606) (25,774) (40,214) (56,990)
Depreciation and amortization (5,884) (12,662) (15,939) (26,985)
Other expenses, net (2,271)(651) (2,498) (1,885)
Operating Income 8,446 15,20118,01027,592
Interest income 39 367 340 782
Interest expense (5,383) (9,842) (12,695) (22,607)
Gain on extinguishment of debt -- -22,852
Minority interest in consolidated
real estate partnerships257 35 174(2,064)
Income before gain on
dispositions of real estate,
impairment losses, deficit
distributions to minority
partners, income taxes and
minority interest in
Aimco Operating Partnership 3,3595,761 5,82926,555
Gain on dispositions of real
estate, net of minority partners'
interest314,025 24,311 315,35039,901
Real estate impairment (losses)
recoveries, net (4,018) 60(4,018) (783)
Recovery of deficit distributions
(deficit distributions) to
minority partners 7,701 81 7,510 (321)
Income tax arising from disposals(17,149) (2,597) (17,063) (2,761)
Minority interest in Aimco
Operating Partnership (29,864) (2,566) (30,227) (5,815)
Income from discontinued
operations$274,054 $25,050 $277,381 $56,776
GAAP Balance Sheets
Consolidated Balance Sheets
(in thousands)
(unaudited)
June 30, 2008 December 31, 2007
ASSETS
Buildings and improvements $9,275,563 $8,944,353
Land2,551,108 2,542,322
Accumulated depreciation (2,962,147)(2,747,403)
NET REAL ESTATE 8,864,524 8,739,272
Cash and cash equivalents 330,163210,461
Restricted cash 316,892316,233
Accounts receivable78,439 71,463
Accounts receivable from affiliates32,420 34,958
Deferred financing costs 68,768 74,166
Notes receivable from unconsolidated
real estate partnerships 31,869 35,186
Notes receivable from non-affiliates 147,635143,054
Investment in unconsolidated real
estate partnerships 106,388117,217
Other assets 192,851207,857
Deferred income tax asset, net 11,059 14,426
Assets held for sale 145,670642,239
TOTAL ASSETS $10,326,678$10,606,532
LIABILITIES AND STOCKHOLDERS' EQUITY
Property tax-exempt bond financing $910,300 $901,985
Property loans payable 5,809,951 5,563,703
Term loans475,000475,000
Credit facility 145,000 -
Other borrowings 87,839 75,057
TOTAL INDEBTEDNESS 7,428,090 7,015,745
Accounts payable 30,931 56,792
Accrued liabilities and other 366,197449,485
Deferred income 205,494201,498
Security deposits 48,450 45,622
Liabilities related to assets held
for sale 113,723532,645
TOTAL LIABILITIES8,192,885 8,301,787
Minority interest in consolidated
real estate partnerships 415,835441,778
Minority interest in Aimco Operating
Partnership 124,337113,263
STOCKHOLDERS' EQUITY
Perpetual preferred stock 723,500723,500
Class A Common Stock 874961
Additional paid-in capital 2,740,890 3,049,417
Notes due on common stock
purchases (4,125)(5,441)
Distributions in excess of
earnings (1,867,518)(2,018,733)
TOTAL STOCKHOLDERS' EQUITY1,593,621 1,749,704
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $10,326,678$10,606,532
Outlook and Forward Looking Statement
Third Quarter and Full Year 2008
(unaudited)
This Earnings Release and Supplemental Information contain forward-looking
statements, including statements regarding projected results and specifically
forecasts of third quarter and full year 2008 results. These forward-looking
statements are based on management's judgment as of this date and include
certain risks and uncertainties. Risks and uncertainties include, but are not
limited to, Aimco's ability to maintain current or meet projected occupancy,
rent levels and Same Store results and Aimco's ability to close transactions
necessary to generate transactional income as anticipated.
Actual results may differ materially from those described in these
forward-looking statements and, in addition, will be affected by a variety of
risks and factors that are beyond the control of Aimco including, without
limitation: natural disasters and severe weather such as hurricanes; national
and local economic conditions; the general level of interest rates; energy
costs; the terms of governmental regulations that affect Aimco and
interpretations of those regulations; the competitive environment in which
Aimco operates; financing risks, including the risk that our cash flows from
operations may be insufficient to meet required payments of principal and
interest; real estate risks, including fluctuations in real estate values and
the general economic climate in local markets and competition for tenants in
such markets; insurance risk; acquisition and development risks, including
failure of such acquisitions to perform in accordance with projections; the
timing of acquisitions and dispositions; litigation, including costs
associated with prosecuting or defending claims and any adverse outcomes; and
possible environmental liabilities, including costs, fines or penalties that
may be incurred due to necessary remediation of contamination of properties
presently owned or previously owned by Aimco.
Readers should carefully review Aimco's financial statements and notes
thereto, as well as the risk factors described in Aimco's Annual Report on
Form 10-K for the year ended December 31, 2007, 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.
Third Quarter 2008 Full Year 2008
GAAP earnings per share [1][4] -$0.34 to -$0.30$1.68 to $1.78
FFO per share [2][5] $0.86 to $0.90$3.33 to $3.43
AFFO per share [5] greater than
[3] $2.40
2008 Same Store operating assumptions:
Weighted average daily occupancy 94% to 95%94% to 95%
NOI change - sequential -1.5% to -2.5%
NOI change - 2008 vs. 20072.5% to 3.5% 2.5% to 4.5%
[1] Aimco's earnings per share guidance does not include estimates for (i)
gains on dispositions or impairment losses due to the unpredictable
timing of transactions, (ii) gains or losses on early repayment of
debt, (iii) preferred stock redemption related costs or (iv) potential
future share repurchases.
[2] FFO per share represents FFO before impairment and preferred
redemption related charges.
[3] Outlook for AFFO is provided on an annual basis.
[4] The GAAP earnings per share is calculated based on 84.0 million and
86.6 million weighted average common shares (diluted) for third
quarter 2008 and full year 2008, respectively.
[5] FFO per share and AFFO per share are calculated based on 84.5 million
and 88.1 million weighted average common shares (diluted) for the
third quarter 2008 and full year 2008, respectively.
Special Supplement to Second Quarter 2008 Earnings Release
2007 Special Dividend
As announced on December 21, 2007, the Aimco Board of Directors declared a
special dividend of $2.51 per share of Class A Common Stock, paid on January
30, 2008, to stockholders of record on December 31, 2007. The special
dividend was paid in a combination of approximately $55.0 million of cash and
4.6 million additional shares of Class A Common Stock based on stockholder
elections, subject to certain limitations.
Generally Accepted Accounting Principles require that all reported per
share data, for current and prior periods, be adjusted to reflect the issuance
of the shares described above. The following table provides Aimco's results
for the three and six months ended June 30, 2007, as reported in 2007, prior
to the special dividend, and as currently reported, after the effect of the
special dividend:
Three Months Six Months
Ended Ended
June 30, June 30,
Financial Results2007 2007
Earnings - EPS, excluding special dividend $0.03 $0.12
Earnings - EPS, including special dividend $0.03 $0.12
Funds from operations - FFO, excluding
special dividend$0.88 $1.62
Funds from operations - FFO, including
special dividend$0.84 $1.55
FFO before impairment and preferred redemption
charges, excluding special dividend $0.88 $1.63
FFO before impairment and preferred redemption
charges, including special dividend $0.84 $1.55
Adjusted funds from operations - AFFO,
excluding special dividend $0.64 $1.22
Adjusted funds from operations - AFFO,
including special dividend $0.61 $1.17
Calculation of Weighted Average Shares
Earnings - EPS
Weighted average common shares - diluted,
excluding the special dividend 95,97395,972
Weighted average common shares - diluted
attributable to the special dividend4,521 4,522
Weighted average common shares - diluted,
including the special dividend100,494 100,494
Funds from operations - FFO
Weighted average common shares - diluted,
excluding the special dividend 99,20099,608
Weighted average common shares - diluted
attributable to the special dividend4,646 4,650
Weighted average common shares - diluted,
including the special dividend103,846 104,258
FFO before impairment and preferred
redemption charges
Weighted average common shares - diluted,
excluding the special dividend 99,20099,608
Weighted average common shares - diluted
attributable to the special dividend4,646 4,650
Weighted average common shares - diluted,
including the special dividend103,846 104,258
Adjusted funds from operations - AFFO
Weighted average common shares - diluted,
excluding the special dividend 99,12899,572
Weighted average common shares - diluted
attributable to the special dividend4,642 4,649
Weighted average common shares - diluted,
including the special dividend103,770 104,221
SOURCE Apartment Investment and Management Company
