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) April 30, 2015
_____________________________________________
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(Exact name of registrant as specified in its charter)
_____________________________________________
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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
_____________________________________________
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| | |
(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:
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o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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ITEM 2.02. | Results of Operations and Financial Condition. |
The earnings release of Apartment Investment and Management Company (“Aimco”), dated April 30, 2015, attached hereto as Exhibit 99.1 is furnished herewith. Aimco will hold its first quarter 2015 earnings conference call on May 1, 2015, at 1:00 p.m. Eastern time. You may join the conference call through an internet webcast accessed through Aimco's website at http://www.aimco.com/investors. Alternatively, you may join the conference call by telephone by dialing 888-317-6003, or 412-317-6061 for international callers, and using passcode 5559512. 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 9:00 a.m. Eastern time on May 16, 2015, by dialing 877-344-7529, or 412-317-0088 for international callers, and using passcode 10063555, or you may access the audiocast replay on Aimco's website at http://www.aimco.com/investors. Please note that the full text of the earnings release and supplemental schedules are available through Aimco's website at http://www.aimco.com/investors/financial-reports/quarterly-earning-reports. 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
99.1 First Quarter 2015 Earnings Release dated April 30, 2015
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: April 30, 2015
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
/s/ Ernest M. Freedman
___________________________________________
Ernest M. Freedman
Executive Vice President and Chief Financial Officer
Page
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| | Earnings Release |
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| | Consolidated Statements of Operations |
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| | Consolidated Balance Sheets |
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| | Schedule 1 – Funds From Operations and Adjusted Funds From Operations |
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| | Schedule 2 – Proportionate Adjusted Funds From Operations Presentation |
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| | Schedule 3 – Portfolio Summary |
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| | Schedule 4 – Proportionate Balance Sheet Data |
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| | Schedule 5 – Capitalization and Financial Metrics |
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| | Schedule 6 – Conventional Same Store Operating Results |
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| | Schedule 7 – Conventional Portfolio Data by Market |
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| | Schedule 8 – Apartment Community Disposition and Acquisition Activity |
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| | Schedule 9 – Capital Additions |
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| | Schedule 10 – Summary of Redevelopment and Development Activity |
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| | Glossary and Reconciliations |
Aimco Reports First Quarter 2015 Results, Raises Guidance
Denver, Colorado, April 30, 2015 - Apartment Investment and Management Company (“Aimco”) (NYSE: AIV) announced today its first quarter 2015 results and an increase in its full year 2015 earnings guidance.
Chairman and Chief Executive Officer Terry Considine comments: "Aimco made solid progress in 2015's first quarter. Operating results were ahead of guidance, notwithstanding the severe winter weather and its related costs. Portfolio quality improved with average monthly revenue per apartment home now exceeding $1,700. Construction was completed at Aimco's two large West Coast redevelopments, Lincoln Place and Preserve at Marin, and rent achievement is ahead of underwriting. Standard & Poor's upgraded its rating of the Aimco balance sheet to investment grade, BBB- with a stable outlook. The Denver Post again recognized Aimco as one of Colorado’s Top Workplaces."
Considine continues: "As announced earlier this week and considering these good facts, Aimco's Board of Directors increased the quarterly common dividend to an annual rate of $1.20 per share, which reflects an increase in Aimco's targeted AFFO payout from 60% to 65%. This higher AFFO payout target reflects the benefits of lower leverage, a higher quality portfolio and increasing quality of earnings."
Chief Financial Officer Ernie Freedman adds: "First quarter Pro forma FFO of $0.52 per share was at the high end of our guidance, primarily due to strong property operating results and higher than expected transaction income, offset somewhat by higher than anticipated casualty losses related to severe weather during the quarter and penalties incurred in connection with the voluntary early repayment of property debt to unencumber two communities. These prepayment penalties had not been anticipated in our guidance. We are increasing our full year Pro forma FFO and AFFO guidance, and operations guidance, to reflect first quarter outperformance."
Financial Results: First Quarter AFFO Up 7% Year-Over-Year
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| | | | | | | |
| FIRST QUARTER |
(all items per common share - diluted) | 2015 | | 2014 |
Net income | $ | 0.58 |
| | $ | 0.44 |
|
Funds From Operations (FFO) | $ | 0.51 |
| | $ | 0.50 |
|
Add back Aimco's share of preferred equity redemption related amounts | $ | 0.01 |
| | $ | — |
|
Pro forma Funds From Operations (Pro forma FFO) | $ | 0.52 |
| | $ | 0.50 |
|
Deduct Aimco share of Capital Replacements | $ | (0.06 | ) | | $ | (0.07 | ) |
Adjusted Funds From Operations (AFFO) | $ | 0.46 |
| | $ | 0.43 |
|
Pro forma FFO - Year-over-year, first quarter Pro forma FFO increased 4% as a result of: strong Property Net Operating Income growth; increased contribution from redevelopment communities; and higher income tax benefit attributable to the recognition of historic tax credits related to Aimco's Park Towne Place redevelopment. These increases were partially offset by: the loss of income from apartment communities that were sold; prepayment penalties incurred in first quarter 2015; and higher preferred stock dividends attributable to Aimco's second quarter 2014 offering of its Class A Preferred Stock.
Adjusted Funds from Operations - Year-over-year, first quarter AFFO increased 7% as a result of higher Pro forma FFO and lower Capital Replacement spending due to the sale of approximately 9,000 apartment homes during 2014. As Aimco concentrates its investment capital in higher-quality, higher price point apartment communities, its free cash flow margin is increasing as Capital Replacements decline as a percentage of net operating income.
Operating Results: First Quarter Conventional Same Store NOI Up 5.2%
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| FIRST QUARTER |
| Year-over-Year | Sequential |
| 2015 | 2014 | Variance | 4th Qtr. | Variance |
Average Rent Per Apartment Home | $1,471 | $1,409 | 4.4 | % | $1,464 | 0.5 | % |
Other Income Per Apartment Home | 181 | 175 | 3.4 | % | 165 | 9.7 | % |
Average Revenue Per Apartment Home | $1,652 | $1,584 | 4.3 | % | $1,629 | 1.4 | % |
Average Daily Occupancy | 95.9 | % | 95.8 | % | 0.1 | % | 95.6 | % | 0.3 | % |
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$ in Millions | | | | | |
Revenue | $172.1 | $164.8 | 4.4 | % | $169.2 | 1.7 | % |
Expenses | 57.3 | 55.7 | 2.9 | % | 52.2 | 9.8 | % |
NOI | $114.8 | $109.1 | 5.2 | % | $117.0 | (1.9 | )% |
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.
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2015 | Jan | Feb | Mar | 1st Qtr. |
Renewal rent increases | 4.2% | 5.3% | 4.8% | 4.8% |
New lease rent increases | 0.3% | 0.9% | 2.3% | 1.2% |
Weighted average rent increases | 2.1% | 2.9% | 3.5% | 2.8% |
Portfolio Management: Revenue Per Apartment Home Up 13.2% to $1,704
Aimco portfolio strategy seeks predictable rent growth from a portfolio of "A," "B" and "C+" quality apartment communities, averaging "B/B+" in quality, and diversified among the largest coastal and job growth markets in the U.S., as measured by total apartment value. Aimco target markets are primarily coastal markets, and also include several Sun Belt cities and Chicago, Illinois.
Aimco measures asset quality based on rents compared to local market average rents as reported by REIS, a third-party provider of commercial real estate performance information and analysis. Aimco defines asset quality as follows: "A" quality assets are those with rents greater than 125% of local market average; "B" quality assets are those with rents between 90% and 125% of local market average; "C+" quality assets are those with rents lower than 90% of local market average, and greater than $1,100 per month; and "C" quality assets are those with rents lower than 90% of local market average, and less than $1,100 per month. For fourth quarter 2014, the most recent period for which REIS information is available, Aimco Conventional Apartment Community rents averaged 109% of local market average rents.
Aimco's portfolio strategy is to sell each year the lowest-rated 5% to 10% of its portfolio and to reinvest the proceeds from such sales in redevelopment and acquisition of higher quality apartment communities. Through this disciplined approach to capital recycling, Aimco has significantly increased the quality of its portfolio. From December 31, 2011 to March 31, 2015, Aimco:
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• | Increased its period-end Conventional portfolio average revenue per apartment home by 35% to $1,704. This rate of growth reflects the impact of market rent growth, and more significantly, the impact of portfolio management through dispositions, redevelopment and acquisitions. |
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• | Increased its Conventional portfolio free cash flow margin by 10% through the sale of lower-rent properties and reinvestment in higher-rent properties; |
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• | Reduced by 83% the percentage of its portfolio represented by "C" quality properties and increased by 49% the percentage of its portfolio represented by "A" quality properties; and |
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• | Increased to 90% the percentage of its Conventional Property Net Operating Income earned in Aimco's target markets. |
As Aimco executes its portfolio strategy, it expects to continue to increase Conventional portfolio average revenue per apartment home at a rate greater than market rent growth; to increase further free cash flow margins; to sell the percentage of its portfolio represented by "C" quality properties; and to increase to 95% or more the percentage of its Conventional Property Net Operating Income earned in its target markets.
First Quarter 2015 Dispositions - In the first quarter, Aimco sold four Conventional Apartment Communities and two Affordable Apartment Communities with 926 and 174 apartment homes, respectively, for $147.8 million in gross proceeds. Aimco's share of net sales proceeds after distributions to limited partners, repayment of existing property debt and transaction costs was $73.3 million. Revenues per apartment home for the communities sold during first quarter averaged $1,274, 25% less than the retained portfolio average of $1,704.
Year-to-Date Acquisitions - In the first quarter, Aimco acquired for $38.3 million Mezzo Apartment Homes, a 94-apartment home community located in Atlanta, Georgia, between Midtown and Buckhead. Built in 2008, this 19-story building includes 2,800 square feet of retail space. Stabilized revenues per apartment home are expected to average $3,600, making this an "A" quality asset for Aimco.
In April, Aimco acquired for $63 million Axiom Apartment Homes located in the Kendall Square neighborhood of Cambridge, Massachusetts. Aimco has begun leasing up the newly constructed building, which includes 115 apartment homes and 3,800 square feet of retail space. Upon stabilization, revenues per apartment home are expected to average $3,550, making this an "A" quality asset for Aimco.
Quarter-End Portfolio - First quarter 2015 Conventional portfolio average monthly revenue per apartment home was $1,704, a 13.2% increase compared to first quarter 2014, as a result of year-over-year Same Store monthly revenue per apartment home growth of 4.3%, the sale of Conventional Apartment Communities with average monthly revenues per apartment home substantially lower than those of the retained portfolio, and reinvestment of the sales proceeds in higher-rent apartment communities through redevelopment and acquisitions.
Redevelopment: Lincoln Place and The Preserve at Marin Complete
During first quarter, Aimco invested $23.5 million in redevelopment and completed construction at two large redevelopment projects, Lincoln Place, in Venice, California, and The Preserve at Marin, in Corte Madera, California. As of March 31, 2015, 659 of the 795 apartment homes at Lincoln Place and 81 of the 126 apartment homes at Preserve at Marin were occupied. Construction at these projects was completed within the costs and timing revised by Aimco one year ago and rental rate achievement is above underwriting.
Development: Progressing as Planned
During first quarter, Aimco invested $17.8 million in the development of One Canal Street, located in the historic Bulfinch Triangle neighborhood of Boston’s West End. One Canal Street will include 310 apartment homes and 22,000 square feet of commercial space. Aimco expects completion of construction in second quarter 2016 with lease-up beginning in first quarter 2016.
Balance Sheet and Liquidity: Leverage on Target and Declining
Components of Aimco Leverage |
| | | | | | |
| AS OF MARCH 31, 2015 |
$ in Millions | Amount | % of Total | Weighted Avg. Maturity (Yrs.) |
Aimco share of long-term, non-recourse property debt | $ | 3,779.0 |
| 94 | % | 8.1 |
Preferred securities | 247.7 |
| 6 | % | Perpetual |
Total leverage | $ | 4,026.7 |
| 100 | % | n/a |
Leverage Ratios
Aimco leverage targets are: Debt and Preferred Equity to EBITDA below 7.0x; and EBITDA Coverage of Interest and Preferred Dividends greater than 2.5x. Aimco also focuses on Debt to EBITDA and EBITDA Coverage of Interest ratios. See the Glossary for definitions of these metrics.
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| TRAILING-TWELVE-MONTHS ENDED MARCH 31, |
| 2015 | 2014 |
Debt to EBITDA | 6.5x | 7.1x |
Debt and Preferred Equity to EBITDA | 6.9x | 7.4x |
EBITDA Coverage of Interest | 2.8x | 2.6x |
EBITDA Coverage of Interest and Preferred Dividends | 2.6x | 2.5x |
Future leverage reduction is expected from both earnings growth, especially as apartment communities now being redeveloped or developed are completed, and from regularly scheduled property debt amortization funded from retained earnings.
Liquidity
Aimco recourse debt at March 31, 2015, was limited to its revolving credit facility, which Aimco uses for working capital and other short-term purposes, and to secure letters of credit.
At quarter-end, Aimco had no outstanding borrowings on its revolving credit facility and available capacity of $562.1 million, net of $37.9 million of letters of credit backed by the facility. Aimco also held cash and restricted cash on hand of $249.4 million. Finally, Aimco held 20 apartment communities in its unencumbered asset pool with a total estimated fair market value of approximately $1.3 billion.
Equity Activity
Common Stock Offering - As previously announced, in January 2015, Aimco sold in a public offering 9,430,000 shares of Common Stock at $38.90 per share, providing net proceeds of $366.8 million. Using the proceeds from this offering, during first quarter, Aimco: repaid the outstanding balance on its revolving credit facility of $112.3 million; redeemed the outstanding balance of its Series A Community Reinvestment Act Preferred Stock at its liquidation preference of $27 million; and repaid $65.1 million of property debt, thereby unencumbering three communities. Aimco expects to use the remainder of the proceeds from this offering to repay property debt maturing during the balance of 2015 and to fund redevelopment and property upgrades during 2015 that would otherwise have been funded with property debt on a leverage-neutral basis.
Dividend - As previously announced, the Aimco Board of Directors declared a quarterly cash dividend of $0.30 per share of Class A Common Stock for the quarter ended March 31, 2015, an increase of 15% compared to the dividend for the first quarter 2014. This dividend is payable on May 29, 2015, to stockholders of record on May 15, 2015.
2015 Outlook: Guidance Raised to Reflect First Quarter Outperformance
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| | | |
($ Amounts represent Aimco Share) | FULL YEAR 2015 | PREVIOUS FULL YEAR 2015 | FULL YEAR 2014 |
| | | |
Net income per share | $0.88 to $0.98 | $0.48 to $0.58 | $2.06 |
Pro forma FFO per share | $2.14 to $2.24 | $2.12 to $2.22 | $2.07 |
AFFO per share | $1.82 to $1.92 | $1.80 to $1.90 | $1.68 |
| | | |
Conventional Same Store Operating Measures | | | |
NOI change compared to prior year | 4.50% to 5.50% | 4.00% to 5.50% | 5.5% |
Revenue change compared to prior year | 4.00% to 4.50% | 3.75% to 4.50% | 4.5% |
Expense change compared to prior year | 2.50% to 3.00% | 2.50% to 3.00% | 2.3% |
| | | |
Transactions | | | |
Real estate value of property dispositions | $250M to $300M | $225M to $275M | $689.5M |
Aimco net proceeds from property dispositions | $150M to $160M | $130M to $140M | $435.2M |
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| SECOND QUARTER 2015 |
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Net income per share | $0.08 to $0.12 |
Pro forma FFO per share | $0.51 to $0.55 |
AFFO per share | $0.42 to $0.46 |
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Conventional Same Store Operating Measures | |
NOI change compared to second quarter 2014 | 4.25% to 5.25% |
NOI change compared to first quarter 2015 | 1.50% to 2.50% |
Earnings Conference Call Information
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Live Conference Call: | Conference Call Replay: |
Friday, May 1, 2015 at 1:00 p.m. ET | Replay available until 9:00 a.m. ET on May 16, 2015 |
Domestic Dial-In Number: 1-888-317-6003 | Domestic Dial-In Number: 1-877-344-7529 |
International Dial-In Number: 1-412-317-6061 | International Dial-In Number: 1-412-317-0088 |
Passcode: 5559512 | Passcode: 10063555 |
Live webcast and replay: http://www.aimco.com/investors/events-presentations/webcasts |
Supplemental Information
The full text of this Earnings Release and the Supplemental Information referenced in this release are available on Aimco's website at http://www.aimco.com/investors/financial-reports/quarterly-earning-reports.
Glossary & Reconciliations of Non-GAAP Financial and Operating Measures
Financial and operating measures found in this Earnings Release and the Supplemental Information include certain financial measures used by Aimco management that are not calculated in accordance with accounting principles generally accepted in the United States, or GAAP. These measures are defined in the Glossary in the Supplemental Information and, where appropriate, reconciled to the most comparable GAAP measures.
About Aimco
Aimco is a real estate investment trust that is focused on the ownership and management of quality apartment communities located in the largest markets in the United States. Aimco is one of the country's largest owners and operators of apartments, with 198 communities in 23 states and the District of Columbia. Aimco common shares are traded on the New York Stock Exchange under the ticker symbol AIV, and are included in the S&P 500. For more information about Aimco, please visit our website at www.aimco.com.
Contact
Elizabeth Coalson, Vice President-Investor Relations
Investor Relations 303-691-4350, investor@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: second quarter and full year 2015 results, including but not limited to: Pro forma FFO and selected components thereof; AFFO; Aimco's redevelopment and development investments, timelines and stabilized rents; the use of proceeds from its January 2015 common stock offering; and expectations regarding sales of Aimco's apartment communities and the use of proceeds thereof. These forward-looking statements are based on management's judgment as of this date and include certain risks and uncertainties. Risks and uncertainties include, but are not limited to: Aimco's ability to maintain current or meet projected occupancy, rental rates and property operating results; the effect of acquisitions, dispositions, redevelopments and developments; our ability to meet budgeted costs and timelines, and achieve budgeted rental rates related to our developments and redevelopments; and our ability to comply with debt covenants, including financial coverage ratios.
Actual results may differ materially from those described in these forward-looking statements and, in addition, will be affected by a variety of risks and factors, some of which are beyond the control of Aimco, including, without limitation: financing risks, including the availability and cost of capital markets financing and the risk that our cash flows from operations may be insufficient to meet required payments of principal and interest; the risk that our earnings may not be sufficient to maintain compliance with debt covenants; real estate risks, including fluctuations in real estate values and the general economic climate in the markets in which we operate and competition for residents in such markets; national and local economic conditions, including the pace of job growth and the level of unemployment; the terms of governmental regulations that affect Aimco and interpretations of those regulations; the competitive environment in which Aimco operates; the timing of
acquisitions, dispositions, redevelopments and developments; insurance risk, including the cost of insurance; natural disasters and severe weather such as hurricanes; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; energy costs; and possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of apartment communities presently or previously owned by Aimco. In addition, Aimco's current and continuing qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code and depends on its ability to meet the various requirements imposed by the Internal Revenue Code, through actual operating results, distribution levels and diversity of stock ownership.
Readers should carefully review Aimco's financial statements and the notes thereto, as well as the section entitled “Risk Factors” in Item 1A of Aimco's Annual Report on Form 10-K for the year ended December 31, 2014, 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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Consolidated Statements of Operations | | | | | |
(in thousands, except per share data) (unaudited) | | | | | |
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| | Three Months Ended | |
| | March 31, | |
| | 2015 | | 2014 | |
REVENUES | | | | | |
Rental and other property revenues | | $ | 238,289 |
| | $ | 240,136 |
| |
Tax credit and asset management revenues | | 5,976 |
| | 8,788 |
| |
Total revenues | | 244,265 |
| | 248,924 |
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| | | | | |
OPERATING EXPENSES | | | | | |
Property operating expenses | | 95,492 |
| | 99,268 |
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Investment management expenses | | 1,603 |
| | 1,252 |
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Depreciation and amortization | | 74,432 |
| | 70,307 |
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General and administrative expenses | | 10,652 |
| | 10,527 |
| |
Other expenses, net | | 1,019 |
| | 2,296 |
| |
Total operating expenses | | 183,198 |
| | 183,650 |
|
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Operating income | | 61,067 |
| | 65,274 |
| |
Interest income | | 1,725 |
| | 1,730 |
| |
Interest expense | | (53,520 | ) | | (55,745 | ) | |
Other, net | | 2,264 |
| | (1,977 | ) | |
Income before income taxes and gain on dispositions | | 11,536 |
| | 9,282 |
| |
Income tax benefit | | 6,921 |
| | 2,758 |
| |
Income from continuing operations | | 18,457 |
| | 12,040 |
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Gain on dispositions of real estate, net of tax | | 85,693 |
| | 69,492 |
| |
Net income | | 104,150 |
| | 81,532 |
| |
Noncontrolling interests: | | | | | |
Net income attributable to noncontrolling interests in consolidated real estate partnerships | | (4,756 | ) | | (11,389 | ) | |
Net income attributable to preferred noncontrolling interests in Aimco OP | | (1,736 | ) | | (1,605 | ) | |
Net income attributable to common noncontrolling interests in Aimco OP | | (4,398 | ) | | (3,611 | ) | |
Net income attributable to noncontrolling interests | | (10,890 | ) | | (16,605 | ) | |
Net income attributable to Aimco | | 93,260 |
| | 64,927 |
| |
Net income attributable to Aimco preferred stockholders | | (3,522 | ) | | (454 | ) | |
Net income attributable to participating securities | | (394 | ) | | (239 | ) | |
Net income attributable to Aimco common stockholders | | $ | 89,344 |
| | $ | 64,234 |
| |
Earnings attributable to Aimco per common share - basic and diluted: | | | | | |
Income from continuing operations | | $ | 0.58 |
| | $ | 0.44 |
| |
Net income | | $ | 0.58 |
| | $ | 0.44 |
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| | | | | | | | |
Consolidated Balance Sheets |
(in thousands) (unaudited) |
| | | | |
| | March 31, 2015 | | December 31, 2014 |
ASSETS | | | | |
Buildings and improvements | | $ | 6,304,829 |
| | $ | 6,259,318 |
|
Land | | 1,883,128 |
| | 1,885,640 |
|
Total real estate | | 8,187,957 |
| | 8,144,958 |
|
Accumulated depreciation | | (2,703,934 | ) | | (2,672,179 | ) |
Net real estate | | 5,484,023 |
| | 5,472,779 |
|
Cash and cash equivalents | | 164,490 |
| | 28,971 |
|
Restricted cash | | 95,428 |
| | 91,445 |
|
Other assets | | 465,332 |
| | 476,727 |
|
Assets held for sale | | 6,180 |
| | 27,106 |
|
Total assets | | $ | 6,215,453 |
| | $ | 6,097,028 |
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| | | | |
LIABILITIES AND EQUITY | | | | |
Non-recourse property debt | | $ | 3,888,284 |
| | $ | 4,022,809 |
|
Revolving credit facility borrowings | | — |
| | 112,330 |
|
Total indebtedness | | 3,888,284 |
| | 4,135,139 |
|
Accounts payable | | 50,860 |
| | 41,919 |
|
Accrued liabilities and other | | 270,204 |
| | 279,077 |
|
Deferred income | | 76,682 |
| | 81,882 |
|
Liabilities related to assets held for sale | | 6,855 |
| | 28,969 |
|
Total liabilities | | 4,292,885 |
| | 4,566,986 |
|
Preferred noncontrolling interests in Aimco OP | | 87,942 |
| | 87,937 |
|
Equity: | | | | |
Perpetual Preferred Stock | | 159,126 |
| | 186,126 |
|
Class A Common Stock | | 1,563 |
| | 1,464 |
|
Additional paid-in capital | | 4,065,411 |
| | 3,696,143 |
|
Accumulated other comprehensive loss | | (7,009 | ) | | (6,456 | ) |
Distributions in excess of earnings | | (2,603,564 | ) | | (2,649,542 | ) |
Total Aimco equity | | 1,615,527 |
| | 1,227,735 |
|
Noncontrolling interests in consolidated real estate partnerships | | 235,750 |
| | 233,296 |
|
Common noncontrolling interests in Aimco OP | | (16,651 | ) | | (18,926 | ) |
Total equity | | 1,834,626 |
| | 1,442,105 |
|
Total liabilities and equity | | $ | 6,215,453 |
| | $ | 6,097,028 |
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| | | | | | | | | |
Supplemental Schedule 1 | | | | | |
| | | | | |
Funds From Operations and Adjusted Funds From Operations | | | | | |
(in thousands, except per share data) (unaudited) | | | | | |
| | | | | |
| | Three Months Ended March 31, | |
| | 2015 | | 2014 | |
Net income attributable to Aimco common stockholders | | $ | 89,344 |
| | $ | 64,234 |
| |
Adjustments: | | | | | |
Depreciation and amortization, net of noncontrolling partners' interest | | 72,622 |
| | 68,429 |
| |
Depreciation and amortization related to non-real estate assets, net of noncontrolling partners' interest | | (2,489 | ) | | (2,387 | ) | |
Gain on dispositions and other, net of income taxes and noncontrolling partners' interest | | (80,728 | ) | | (57,046 | ) | |
Provision for impairment losses related to depreciable real estate assets, net of noncontrolling partners' interest | | — |
| | 541 |
| |
Common noncontrolling interests in Aimco OP's share of above adjustments | | 516 |
| | (505 | ) | |
Amounts allocable to participating securities | | 41 |
| | (35 | ) | |
FFO Attributable to Aimco common stockholders | | $ | 79,306 |
| | $ | 73,231 |
| |
Preferred equity redemption related amounts, net of common noncontrolling interests in Aimco OP and participating securities | | 658 |
| | — |
| |
Pro forma FFO Attributable to Aimco common stockholders | | $ | 79,964 |
| | $ | 73,231 |
| |
Capital Replacements, net of common noncontrolling interests in Aimco OP and participating securities | | (9,130 | ) | | (11,280 | ) | |
AFFO Attributable to Aimco common stockholders | | $ | 70,834 |
| | $ | 61,951 |
| |
| | | | | |
FFO per share - diluted | | $ | 0.51 |
| | $ | 0.50 |
| |
Pro forma FFO per share - diluted | | $ | 0.52 |
| | $ | 0.50 |
| |
AFFO per share - diluted | | $ | 0.46 |
| | $ | 0.43 |
| |
| |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplemental Schedule 2(a) |
| | | | | | | | | | | | | | | |
Proportionate Adjusted Funds From Operations Presentation | | | | | | | |
Three Months Ended March 31, 2015 Compared to Three Months Ended March 31, 2014 |
(in thousands) (unaudited) |
| | Three Months Ended March 31, 2015 | | Three Months Ended March 31, 2014 |
| | Consolidated Amount | | Proportionate Share of Unconsolidated Partnerships | | Noncontrolling Interests | | Proportionate Amount | | Consolidated Amount | | Proportionate Share of Unconsolidated Partnerships | | Noncontrolling Interests | | Proportionate Amount |
Real estate operations: | | | | | | | | | | | | | | | | |
Rental and other property revenues | | | | | | | | | | | | | | | | |
Conventional Same Store | | $ | 179,331 |
| | $ | — |
| | $ | (6,976 | ) | | $ | 172,355 |
| | $ | 171,616 |
| | $ | — |
| | $ | (6,691 | ) | | $ | 164,925 |
|
Conventional Redevelopment | | 15,463 |
| | — |
| | — |
| | 15,463 |
| | 10,853 |
| | — |
| | — |
| | 10,853 |
|
Conventional Acquisition | | 6,014 |
| | — |
| | — |
| | 6,014 |
| | 485 |
| | — |
| | — |
| | 485 |
|
Other Conventional | | 9,488 |
| | 532 |
| | — |
| | 10,020 |
| | 7,587 |
| | 462 |
| | — |
| | 8,049 |
|
Total Conventional | | 210,296 |
| | 532 |
| | (6,976 | ) | | 203,852 |
| | 190,541 |
| | 462 |
| | (6,691 | ) | | 184,312 |
|
Affordable Same Store | | 21,965 |
| | — |
| | — |
| | 21,965 |
| | 21,384 |
| | — |
| | — |
| | 21,384 |
|
Other Affordable | | 2,556 |
| | 1,006 |
| | (139 | ) | | 3,423 |
| | 2,283 |
| | 999 |
| | (136 | ) | | 3,146 |
|
Total Affordable | | 24,521 |
| | 1,006 |
| | (139 | ) | | 25,388 |
| | 23,667 |
| | 999 |
| | (136 | ) | | 24,530 |
|
Property management revenues, primarily from affiliates | | 2 |
| | (58 | ) | | 146 |
| | 90 |
| | 2 |
| | (63 | ) | | 140 |
| | 79 |
|
Total rental and other property revenues | | 234,819 |
| | 1,480 |
| | (6,969 | ) | | 229,330 |
| | 214,210 |
| | 1,398 |
| | (6,687 | ) | | 208,921 |
|
| | | | | | | | | | | | | | | | |
Property operating expenses | | | | | | | | | | | | | | | | |
Conventional Same Store | | 59,553 |
| | — |
| | (2,362 | ) | | 57,191 |
| | 57,993 |
| | — |
| | (2,386 | ) | | 55,607 |
|
Conventional Redevelopment | | 6,016 |
| | — |
| | — |
| | 6,016 |
| | 4,762 |
| | — |
| | — |
| | 4,762 |
|
Conventional Acquisition | | 2,286 |
| | — |
| | — |
| | 2,286 |
| | 285 |
| | — |
| | — |
| | 285 |
|
Other Conventional | | 5,221 |
| | 187 |
| | — |
| | 5,408 |
| | 4,173 |
| | 132 |
| | — |
| | 4,305 |
|
Total Conventional | | 73,076 |
| | 187 |
| | (2,362 | ) | | 70,901 |
| | 67,213 |
| | 132 |
| | (2,386 | ) | | 64,959 |
|
Affordable Same Store | | 9,318 |
| | — |
| | — |
| | 9,318 |
| | 9,345 |
| | — |
| | — |
| | 9,345 |
|
Other Affordable | | 1,182 |
| | 434 |
| | (63 | ) | | 1,553 |
| | 1,060 |
| | 426 |
| | (60 | ) | | 1,426 |
|
Total Affordable | | 10,500 |
| | 434 |
| | (63 | ) | | 10,871 |
| | 10,405 |
| | 426 |
| | (60 | ) | | 10,771 |
|
Casualties | | 4,084 |
| | — |
| | (55 | ) | | 4,029 |
| | 4,090 |
| | — |
| | 171 |
| | 4,261 |
|
Property management expenses | | 6,005 |
| | — |
| | 3 |
| | 6,008 |
| | 6,388 |
| | — |
| | (32 | ) | | 6,356 |
|
Total property operating expenses | | 93,665 |
| | 621 |
| | (2,477 | ) | | 91,809 |
| | 88,096 |
| | 558 |
| | (2,307 | ) | | 86,347 |
|
Net real estate operations | | 141,154 |
| | 859 |
| | (4,492 | ) | | 137,521 |
| | 126,114 |
| | 840 |
| | (4,380 | ) | | 122,574 |
|
| | | | | | | | | | | | | | | | |
Amortization of deferred tax credit income | | 5,939 |
| | — |
| | — |
| | 5,939 |
| | 6,833 |
| | — |
| | — |
| | 6,833 |
|
Non-recurring revenues | | 37 |
| | — |
| | 273 |
| | 310 |
| | 1,955 |
| | — |
| | 4 |
| | 1,959 |
|
Total tax credit and asset management revenues | | 5,976 |
| | — |
| | 273 |
| | 6,249 |
| | 8,788 |
| | — |
| | 4 |
| | 8,792 |
|
| | | | | | | | | | | | | | | | |
Investment management expenses | | (1,603 | ) | | — |
| | — |
| | (1,603 | ) | | (1,252 | ) | | — |
| | — |
| | (1,252 | ) |
Depreciation and amortization related to non-real estate assets | | (2,490 | ) | | — |
| | 4 |
| | (2,486 | ) | | (2,360 | ) | | — |
| | 5 |
| | (2,355 | ) |
General and administrative expenses | | (10,652 | ) | | — |
| | — |
| | (10,652 | ) | | (10,527 | ) | | — |
| | 19 |
| | (10,508 | ) |
Other expenses, net | | (968 | ) | | (38 | ) | | 23 |
| | (983 | ) | | (2,129 | ) | | (61 | ) | | 197 |
| | (1,993 | ) |
Interest income | | 1,732 |
| | — |
| | 8 |
| | 1,740 |
| | 1,731 |
| | (12 | ) | | 16 |
| | 1,735 |
|
Interest expense | | (52,735 | ) | | (307 | ) | | 1,629 |
| | (51,413 | ) | | (50,675 | ) | | (333 | ) | | 1,666 |
| | (49,342 | ) |
Other, net of non-FFO items | | (64 | ) | | 333 |
| | 1,578 |
| | 1,847 |
| | 454 |
| | 333 |
| | (590 | ) | | 197 |
|
Income tax benefit | | 7,940 |
| | — |
| | — |
| | 7,940 |
| | 2,621 |
| | — |
| | — |
| | 2,621 |
|
FFO related to Sold and Held For Sale Apartment Communities | | 796 |
| | — |
| | 19 |
| | 815 |
| | 9,526 |
| | 31 |
| | (346 | ) | | 9,211 |
|
Preferred dividends and distributions | | (5,258 | ) | | — |
| | — |
| | (5,258 | ) | | (2,059 | ) | | — |
| | — |
| | (2,059 | ) |
Common noncontrolling interests in Aimco OP | | (4,058 | ) | | — |
| | — |
| | (4,058 | ) | | (4,116 | ) | | — |
| | — |
| | (4,116 | ) |
Amounts allocated to participating securities | | (353 | ) | | — |
| | — |
| | (353 | ) | | (274 | ) | | — |
| | — |
| | (274 | ) |
FFO | | $ | 79,417 |
| | $ | 847 |
| | $ | (958 | ) | | $ | 79,306 |
| | $ | 75,842 |
| | $ | 798 |
| | $ | (3,409 | ) | | $ | 73,231 |
|
Preferred stock redemption related amounts, net | | 658 |
| | — |
| | — |
| | 658 |
| | — |
| | — |
| | — |
| | — |
|
Pro forma FFO | | $ | 80,075 |
| | $ | 847 |
| | $ | (958 | ) | | $ | 79,964 |
| | $ | 75,842 |
| | $ | 798 |
| | $ | (3,409 | ) | | $ | 73,231 |
|
Capital Replacements | | (9,936 | ) | | — |
| | 806 |
| | (9,130 | ) | | (12,153 | ) | | — |
| | 873 |
| | (11,280 | ) |
AFFO | | $ | 70,139 |
| | $ | 847 |
| | $ | (152 | ) | | $ | 70,834 |
| | $ | 63,689 |
| | $ | 798 |
| | $ | (2,536 | ) | | $ | 61,951 |
|
|
| | | | | | | | | | | | | |
Supplemental Schedule 3 | | | | | | | | | |
| | | | | | | | | |
Portfolio Summary | | | | | | | | | |
As of March 31, 2015 | | | | | | | | | |
(unaudited) | | | | | | | | | |
| | Number of Apartment Communities | | Number of Apartment Homes | | Effective Apartment Homes | | Average Ownership | |
Conventional Same Store | | 112 |
| | 37,099 |
| | 36,198 |
| | 98 | % | |
Conventional Redevelopment | | 7 |
| | 2,886 |
| | 2,886 |
| | 100 | % | |
Conventional Acquisition | | 8 |
| | 1,306 |
| | 1,306 |
| | 100 | % | |
Other Conventional | | 14 |
| | 1,275 |
| | 1,205 |
| | 95 | % | |
Total Conventional portfolio | | 141 |
| | 42,566 |
| | 41,595 |
| | 98 | % | |
| | | | | | | | | |
Affordable Same Store [1] | | 45 |
| | 7,311 |
| | 7,311 |
| | 100 | % | |
Other Affordable [2] | | 11 |
| | 1,374 |
| | 975 |
| | 71 | % | |
Affordable Held for Sale | | 1 |
| | 84 |
| | 67 |
| | 80 | % | |
Total Affordable portfolio | | 57 |
| | 8,769 |
| | 8,353 |
| | 95 | % | |
Total portfolio | | 198 |
| | 51,335 |
| | 49,948 |
| | 97 | % | |
| | | | | | | | | |
[1] Represents Aimco's portfolio of Affordable Apartment Communities redeveloped with Low Income Housing Tax Credits, generally | |
between 2005 and 2009. Aimco expects to sell these apartment communities as the tax credit delivery or compliance periods | |
expire, which expirations occur primarily between 2015 to 2023. | |
[2] Represents Aimco's portfolio of Affordable Apartment Communities that do not meet the Same Store Apartment Community definition. | |
| |
| |
| | | | | | | | | |
|
| | | | | | | | | | | | | | | | |
Supplemental Schedule 4 | | | | | | | | |
| | | | | | | | |
Proportionate Balance Sheet Data | | | | | | | | |
As of March 31, 2015 | | | | | | | | |
| | Consolidated GAAP Balance Sheet | | Proportionate Share of Unconsolidated Partnerships | | Noncontrolling Interests | | Proportionate Balance Sheet |
ASSETS | | | | | | | | |
Real estate | | $ | 8,187,957 |
| | $ | 50,662 |
| | $ | (253,830 | ) | | $ | 7,984,789 |
|
Accumulated depreciation | | (2,703,934 | ) | | (10,408 | ) | | 79,911 |
| | (2,634,431 | ) |
Net real estate | | 5,484,023 |
| | 40,254 |
| | (173,919 | ) | | 5,350,358 |
|
Cash and cash equivalents | | 164,490 |
| | 374 |
| | (9,713 | ) | | 155,151 |
|
Restricted cash | | 95,428 |
| | 1,421 |
| | (2,586 | ) | | 94,263 |
|
Investment in unconsolidated real estate partnerships | | 15,997 |
| | (15,997 | ) | | — |
| | — |
|
Deferred financing costs, net | | 28,689 |
| | 203 |
| | (284 | ) | | 28,608 |
|
Goodwill | | 44,703 |
| | — |
| | — |
| | 44,703 |
|
Other assets | | 375,943 |
| | (749 | ) | | (159,658 | ) | | 215,536 |
|
Assets held for sale | | 6,180 |
| | — |
| | (974 | ) | | 5,206 |
|
Total assets | | $ | 6,215,453 |
| | $ | 25,506 |
| | $ | (347,134 | ) | | $ | 5,893,825 |
|
| | | | | | | | |
LIABILITIES AND EQUITY | | | | | | | | |
Non-recourse property debt | | $ | 3,888,284 |
| | $ | 24,105 |
| | $ | (133,404 | ) | | $ | 3,778,985 |
|
Deferred income [1] | | 76,682 |
| | 30 |
| | (245 | ) | | 76,467 |
|
Other liabilities | | 321,064 |
| | 1,371 |
| | (127,335 | ) | | 195,100 |
|
Liabilities related to assets held for sale | | 6,855 |
| | — |
| | (1,371 | ) | | 5,484 |
|
Total liabilities | | 4,292,885 |
| | 25,506 |
| | (262,355 | ) | | 4,056,036 |
|
Preferred noncontrolling interests in Aimco OP | | 87,942 |
| | — |
| | — |
| | 87,942 |
|
Perpetual preferred stock | | 159,126 |
| | — |
| | — |
| | 159,126 |
|
Other Aimco equity | | 1,456,401 |
| | — |
| | 150,971 |
| | 1,607,372 |
|
Noncontrolling interests in consolidated real estate partnerships | | 235,750 |
| | — |
| | (235,750 | ) | | — |
|
Common noncontrolling interests in Aimco OP | | (16,651 | ) | | — |
| | — |
| | (16,651 | ) |
Total liabilities and equity | | $ | 6,215,453 |
| | $ | 25,506 |
| | $ | (347,134 | ) | | $ | 5,893,825 |
|
|
| | | | | | | |
[1] | Deferred income represents cash received by Aimco and other amounts required by GAAP to be recognized in earnings in future periods as Aimco performs certain responsibilities under tax credit agreements or as other events occur in the future. Because Aimco does not have an obligation to settle these amounts in cash, Aimco does not include deferred income in liabilities for purposes of calculating NAV. Future earnings related to these amounts are also excluded from Aimco's calculations of NAV. |
|
| | | | | | | | | | | | | | | | | | | | | |
Supplemental Schedule 5 | | | | | | | | | | | | |
| | | | | | | | | | | | |
Capitalization and Financial Metrics | | | | | | | | (Page 1 of 2) |
As of March 31, 2015 | | | | | | | | | | | | |
(dollars in thousands) (unaudited) | | | | | | | | | | | | |
| | | | | | | | | | | | |
Non-Recourse Property Debt Balances and Characteristics |
Debt | | Consolidated | | Proportionate Share of Unconsolidated Partnerships | | Noncontrolling Interests | | Proportionate Balances | | Weighted Average Maturity (Years) | | |
Fixed rate loans payable | | $ | 3,723,209 |
| | $ | 24,105 |
| | $ | (133,404 | ) | | $ | 3,613,910 |
| | 7.9 |
| | |
Floating rate tax-exempt bonds | | 86,167 |
| | — |
| | — |
| | 86,167 |
| | 4.5 |
| | |
Fixed rate tax-exempt bonds | | 78,908 |
| | — |
| | — |
| | 78,908 |
| | 24.5 |
| | |
Total non-recourse property debt | | $ | 3,888,284 |
| | $ | 24,105 |
| | $ | (133,404 | ) | | $ | 3,778,985 |
| [1] | 8.1 |
| | |
Cash and restricted cash | | (259,918 | ) | | (1,795 | ) | | 12,299 |
| | (249,414 | ) | | | | |
Securitization Trust Assets [2] | | (61,847 | ) | | — |
| | — |
| | (61,847 | ) | | | | |
Net Debt | | $ | 3,566,519 |
| | $ | 22,310 |
| | $ | (121,105 | ) | | $ | 3,467,724 |
| | | | |
|
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
Aimco Share Non-Recourse Property Debt | | |
| | Amortization | | Maturities | | Total | | Maturities as a Percent of Total Debt | | Average Rate on Maturing Debt | |
2015 2Q | | $ | 20,176 |
| | $ | 3,944 |
| | $ | 24,120 |
| | 0.10 | % | | 5.91 | % | |
2015 3Q | | 19,553 |
| | 55,270 |
| | 74,823 |
| | 1.46 | % | | 5.22 | % | |
2015 4Q | | 19,985 |
| | 42,371 |
| | 62,356 |
| | 1.12 | % | | 5.72 | % | |
Total 2015 | | 59,714 |
| | 101,585 |
| | 161,299 |
| | 2.69 | % | | 5.46 | % | |
| | | | | | | | | | | |
2016 1Q | | 19,028 |
| | 84,604 |
| | 103,632 |
| | 2.24 | % | | 5.70 | % | |
2016 2Q | | 19,785 |
| | 1,211 |
| | 20,996 |
| | 0.03 | % | | 5.85 | % | |
2016 3Q | | 19,390 |
| | — |
| | 19,390 |
| | — | % | | — | % | |
2016 4Q | | 20,178 |
| | 247,994 |
| | 268,172 |
| | 6.56 | % | | 4.67 | % | |
Total 2016 | | 78,381 |
| | 333,809 |
| | 412,190 |
| | 8.83 | % | | 4.93 | % | |
| | | | | | | | | | | |
2017 | | 78,439 |
| | 325,912 |
| | 404,351 |
| | 8.62 | % | | 5.92 | % | |
2018 | | 74,166 |
| | 155,412 |
| | 229,578 |
| | 4.11 | % | | 4.33 | % | |
2019 | | 67,762 |
| | 542,449 |
| | 610,211 |
| | 14.35 | % | | 5.54 | % | |
2020 | | 59,838 |
| | 333,649 |
| | 393,487 |
| | 8.83 | % | | 6.26 | % | |
2021 | | 41,036 |
| | 683,565 |
| [3] | 724,601 |
| | 18.09 | % | | 5.50 | % | |
2022 | | 29,014 |
| | 233,439 |
| | 262,453 |
| | 6.18 | % | | 4.77 | % | |
2023 | | 14,079 |
| | 83,238 |
| | 97,317 |
| | 2.20 | % | | 5.13 | % | |
2024 | | 11,892 |
| | 36,514 |
| | 48,406 |
| | 0.97 | % | | 4.12 | % | |
Thereafter | | 348,060 |
| | 87,032 |
| | 435,092 |
| | 2.30 | % | | 3.15 | % | |
Total | | $ | 862,381 |
| | $ | 2,916,604 |
| | $ | 3,778,985 |
| | | | 4.87 | % | [4] |
|
| | | | | | | | | |
[1] | Represents the carrying amount of Aimco's debt at March 31, 2015, which debt had a mark-to-market liability of $233.8 million at quarter end. |
[2] | In 2011, $673.8 million of Aimco's loans payable were securitized in a trust holding only these loans. Aimco purchased for $51.5 million the subordinate positions in the trust that holds these loans. The subordinate positions have a face value of $100.9 million and a carrying amount of $61.8 million, and are included in other assets on Aimco’s Consolidated Balance Sheet at March 31, 2015. The carrying amount of these investments effectively reduces Aimco's March 31, 2015 debt balances. |
[3] | 2021 maturities include property loans that will repay substantially all of Aimco’s subordinate positions in the securitization trust discussed above. |
[4] | Represents the Money-Weighted Average Interest Rate on Aimco’s fixed and floating rate property debt, which takes into account the timing of amortization and maturities. This rate is calculated by Aimco based on the unpaid principal balance as of March 31, 2015, and all contractual debt service payments associated with each of its fixed and floating rate property loans. The Money-Weighted Average Interest Rate can be compared to market interest rates to estimate the difference between the book value of Aimco’s fixed and floating rate property debt and the market value of such debt. |
|
| | | | | | | | | | | |
Supplemental Schedule 5 (continued) | | | | | | | | |
| | | | | | | | |
Capitalization and Financial Metrics | | | | | | | | (Page 2 of 2) |
|
(share, unit and dollar amounts in thousands) (unaudited) | | | | | | |
Preferred Securities | | | | | | | | |
| | | | | | | | |
| | Shares/Units Outstanding as of March 31, 2015 | | Date First Available for Redemption by Aimco | | Coupon | | Amount |
Perpetual Preferred Stock: | | | | | | | | |
Class A | | 5,000 |
| | 5/17/2019 | | 6.875% | | $ | 125,000 |
|
Class Z | | 1,392 |
| | 7/29/2016 | | 7.000% | | 34,791 |
|
Total perpetual preferred stock | | | | | | 6.902% | | 159,791 |
|
| | | | | | | | |
Preferred Partnership Units | | 3,279 |
| | | | 7.895% | | 87,942 |
|
Total preferred securities | | | | | | 7.255% | | $ | 247,733 |
|
| | | | | | | | |
|
| | | | | | | | | | | |
Common Stock, Partnership Units and Equivalents |
| | | | | | | | | | |
| | As of | | | | |
March 31, 2015 | | | | | | | |
Class A Common Stock outstanding | | 155,524 |
| | | | | | | | |
Dilutive options and restricted stock | | 618 |
| | | | | | | | |
Total shares and dilutive share equivalents | | 156,142 |
| | | | | | | | |
Common Partnership Units and equivalents | | 7,635 |
| | | | | | | | |
Total shares, units and dilutive share equivalents | | 163,777 |
| | | | | | | | |
| | | | | | | | | | |
|
| | | | | | | | | | |
Debt Ratios | | | | | | | | | | |
| | | | Trailing Twelve Months Ended March 31, | | |
| | | | 2015 | | 2014 | | | | |
Debt to EBITDA | | 6.5x | | 7.1x | | | | |
Debt and Preferred Equity to EBITDA | | 6.9x | | 7.4x | | | | |
EBITDA Coverage of Interest | | 2.8x | | 2.6x | | | | |
EBITDA Coverage of Interest and Preferred Dividends | | 2.6x | | 2.5x | | | | |
| | | | | | | | | | |
Revolving Line of Credit Debt Coverage Covenants |
| | | | Amount | | Covenant | | | | |
Debt Service Coverage Ratio | | | | 1.85x | | 1.50x | | | | |
Fixed Charge Coverage Ratio | | | | 1.75x | | 1.40x | | | | |
| | | | | | | | | | |
Credit Ratings | | | | | | | | | | |
| | | | | | | | | | |
Standard and Poor’s [4] | | Corporate Credit Rating | | BBB- (stable) | | | | |
Fitch Ratings | | Issuer Default Rating | | BB+ (positive) | | | | |
| | |
[4] During March 2015, Standard & Poor's Rating Services upgraded Aimco to BBB- from BB+. |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplemental Schedule 6(a) |
|
Conventional Same Store Operating Results |
First Quarter 2015 Compared to First Quarter 2014 |
(in thousands, except community, home and per home data) (unaudited) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Revenue | | Expenses | | Net Operating Income | | | Operating Margin | | Average Daily Occupancy During Period | | Average Revenue per Effective Apartment Home |
| | Apartment Communities | Apartment Homes | Effective Apartment Homes | | 1Q 2015 | 1Q 2014 | Growth | | 1Q 2015 | 1Q 2014 | Growth | | 1Q 2015 | 1Q 2014 | Growth | | | 1Q 2015 | | 1Q 2015 | 1Q 2014 | | 1Q 2015 | 1Q 2014 |
Target Markets | | | | | | | | | | | | | | | | | | | | | | | | | |
Los Angeles | | 12 | 3,552 |
| 2,901 |
| | $ | 21,118 |
| $ | 19,925 |
| 6.0 | % | | $ | 5,755 |
| $ | 5,759 |
| (0.1 | )% | | $ | 15,363 |
| $ | 14,166 |
| 8.4 | % | | | 72.7% | | 95.9% | 95.8% | | $ | 2,530 |
| $ | 2,390 |
|
Orange County | | 1 | 770 |
| 770 |
| | 4,956 |
| 4,784 |
| 3.6 | % | | 1,341 |
| 1,327 |
| 1.1 | % | | 3,615 |
| 3,457 |
| 4.6 | % | | | 72.9% | | 95.1% | 96.4% | | 2,255 |
| 2,149 |
|
San Diego | | 6 | 2,032 |
| 2,032 |
| | 9,603 |
| 9,042 |
| 6.2 | % | | 2,610 |
| 2,614 |
| (0.2 | )% | | 6,993 |
| 6,428 |
| 8.8 | % | | | 72.8% | | 96.0% | 96.5% | | 1,641 |
| 1,538 |
|
Southern CA Total | | 19 | 6,354 |
| 5,703 |
| | 35,677 |
| 33,751 |
| 5.7 | % | | 9,706 |
| 9,700 |
| 0.1 | % | | 25,971 |
| 24,051 |
| 8.0 | % | | | 72.8% | | 95.8% | 96.1% | | 2,176 |
| 2,053 |
|
East Bay | | 1 | 246 |
| 246 |
| | 1,668 |
| 1,454 |
| 14.7 | % | | 526 |
| 471 |
| 11.7 | % | | 1,142 |
| 983 |
| 16.2 | % | | | 68.5% | | 95.9% | 98.1% | | 2,357 |
| 2,007 |
|
San Jose | | 1 | 224 |
| 224 |
| | 1,336 |
| 1,277 |
| 4.6 | % | | 422 |
| 428 |
| (1.4 | )% | | 914 |
| 849 |
| 7.7 | % | | | 68.4% | | 94.7% | 95.3% | | 2,099 |
| 1,995 |
|
San Francisco | | 5 | 774 |
| 774 |
| | 5,448 |
| 4,963 |
| 9.8 | % | | 1,464 |
| 1,496 |
| (2.1 | )% | | 3,984 |
| 3,467 |
| 14.9 | % | | | 73.1% | | 96.5% | 96.0% | | 2,431 |
| 2,226 |
|
Northern CA Total | | 7 | 1,244 |
| 1,244 |
| | 8,452 |
| 7,694 |
| 9.9 | % | | 2,412 |
| 2,395 |
| 0.7 | % | | 6,040 |
| 5,299 |
| 14.0 | % | | | 71.5% | | 96.1% | 96.3% | | 2,358 |
| 2,141 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Atlanta | | 5 | 1,295 |
| 1,281 |
| | 4,469 |
| 4,241 |
| 5.4 | % | | 1,648 |
| 1,583 |
| 4.1 | % | | 2,821 |
| 2,658 |
| 6.1 | % | | | 63.1% | | 93.7% | 95.2% | | 1,240 |
| 1,159 |
|
Boston | | 12 | 4,173 |
| 4,173 |
| | 17,649 |
| 16,758 |
| 5.3 | % | | 6,834 |
| 6,533 |
| 4.6 | % | | 10,815 |
| 10,225 |
| 5.8 | % | | | 61.3% | | 96.7% | 95.5% | | 1,458 |
| 1,401 |
|
Chicago | | 10 | 3,245 |
| 3,245 |
| | 14,980 |
| 14,458 |
| 3.6 | % | | 5,313 |
| 5,282 |
| 0.6 | % | | 9,667 |
| 9,176 |
| 5.4 | % | | | 64.5% | | 96.4% | 95.5% | | 1,597 |
| 1,555 |
|
Denver | | 6 | 1,317 |
| 1,278 |
| | 5,447 |
| 5,089 |
| 7.0 | % | | 1,485 |
| 1,492 |
| (0.5 | )% | | 3,962 |
| 3,597 |
| 10.1 | % | | | 72.7% | | 95.4% | 95.9% | | 1,488 |
| 1,383 |
|
Manhattan | | 8 | 230 |
| 230 |
| | 2,174 |
| 2,039 |
| 6.6 | % | | 975 |
| 954 |
| 2.2 | % | | 1,199 |
| 1,085 |
| 10.5 | % | | | 55.2% | | 98.4% | 97.6% | | 3,202 |
| 3,027 |
|
Miami | | 5 | 2,471 |
| 2,460 |
| | 16,001 |
| 15,018 |
| 6.5 | % | | 4,949 |
| 4,703 |
| 5.2 | % | | 11,052 |
| 10,315 |
| 7.1 | % | | | 69.1% | | 97.2% | 97.6% | | 2,231 |
| 2,085 |
|
Philadelphia | | 4 | 2,042 |
| 1,963 |
| | 8,570 |
| 8,314 |
| 3.1 | % | | 3,355 |
| 3,356 |
| — | % | | 5,215 |
| 4,958 |
| 5.2 | % | | | 60.9% | | 96.0% | 96.2% | | 1,515 |
| 1,467 |
|
Phoenix | | 2 | 812 |
| 812 |
| | 2,517 |
| 2,451 |
| 2.7 | % | | 892 |
| 852 |
| 4.7 | % | | 1,625 |
| 1,599 |
| 1.6 | % | | | 64.6% | | 94.5% | 92.2% | | 1,094 |
| 1,091 |
|
Seattle | | 1 | 104 |
| 104 |
| | 521 |
| 483 |
| 7.9 | % | | 206 |
| 218 |
| (5.5 | )% | | 315 |
| 265 |
| 18.9 | % | | | 60.5% | | 98.6% | 97.5% | | 1,693 |
| 1,587 |
|
Suburban New York - New Jersey | | 2 | 1,162 |
| 1,162 |
| | 5,292 |
| 5,005 |
| 5.7 | % | | 1,731 |
| 1,756 |
| (1.4 | )% | | 3,561 |
| 3,249 |
| 9.6 | % | | | 67.3% | | 96.9% | 95.7% | | 1,567 |
| 1,500 |
|
Washington - No. Va - MD | | 14 | 6,547 |
| 6,519 |
| | 28,616 |
| 28,389 |
| 0.8 | % | | 9,526 |
| 8,951 |
| 6.4 | % | | 19,090 |
| 19,438 |
| (1.8 | )% | | | 66.7% | | 95.6% | 95.4% | | 1,530 |
| 1,521 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Target Markets | | 95 | 30,996 |
| 30,174 |
| | 150,365 |
| 143,690 |
| 4.6 | % | | 49,032 |
| 47,775 |
| 2.6 | % | | 101,333 |
| 95,915 |
| 5.6 | % | | | 67.4% | | 96.0% | 95.8% | | 1,730 |
| 1,657 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other Markets | | | | | | | | | | | | | | | | | | | | | | | | | |
Baltimore | | 4 | 797 |
| 797 |
| | 3,146 |
| 3,185 |
| (1.2 | )% | | 1,225 |
| 1,167 |
| 5.0 | % | | 1,921 |
| 2,018 |
| (4.8 | )% | | | 61.1% | | 92.5% | 95.4% | | 1,422 |
| 1,396 |
|
Nashville | | 3 | 764 |
| 764 |
| | 2,868 |
| 2,652 |
| 8.1 | % | | 977 |
| 929 |
| 5.2 | % | | 1,891 |
| 1,723 |
| 9.8 | % | | | 65.9% | | 96.0% | 96.2% | | 1,304 |
| 1,203 |
|
Norfolk - Richmond | | 5 | 1,487 |
| 1,408 |
| | 4,554 |
| 4,481 |
| 1.6 | % | | 1,506 |
| 1,438 |
| 4.7 | % | | 3,048 |
| 3,043 |
| 0.2 | % | | | 66.9% | | 95.5% | 94.4% | | 1,129 |
| 1,124 |
|
Other Markets | | 5 | 3,055 |
| 3,055 |
| | 11,125 |
| 10,753 |
| 3.5 | % | | 4,548 |
| 4,370 |
| 4.1 | % | | 6,577 |
| 6,383 |
| 3.0 | % | | | 59.1% | | 95.5% | 96.6% | | 1,271 |
| 1,215 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Other Markets | | 17 | 6,103 |
| 6,024 |
| | 21,693 |
| 21,071 |
| 3.0 | % | | 8,256 |
| 7,904 |
| 4.5 | % | | 13,437 |
| 13,167 |
| 2.1 | % | | | 61.9% | | 95.2% | 95.8% | | 1,261 |
| 1,216 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Grand Total | | 112 | 37,099 |
| 36,198 |
| | $ | 172,058 |
| $ | 164,761 |
| 4.4 | % | | $ | 57,288 |
| $ | 55,679 |
| 2.9 | % | | $ | 114,770 |
| $ | 109,082 |
| 5.2 | % | | | 66.7% | | 95.9% | 95.8% | | $ | 1,652 |
| $ | 1,584 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplemental Schedule 6(b) |
|
Conventional Same Store Operating Results |
First Quarter 2015 Compared to Fourth Quarter 2014 |
(in thousands, except community, home and per home data) (unaudited) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Revenue | | Expenses | | Net Operating Income | | | Operating Margin | | Average Daily Occupancy During Period | | Average Revenue per Effective Apartment Home |
| | Apartment Communities | Apartment Homes | Effective Apartment Homes | | 1Q 2015 | 4Q 2014 | Growth | | 1Q 2015 | 4Q 2014 | Growth | | 1Q 2015 | 4Q 2014 | Growth | | | 1Q 2015 | | 1Q 2015 | 4Q 2014 | | 1Q 2015 | 4Q 2014 |
Target Markets | | | | | | | | | | | | | | | | | | | | | | | | | |
Los Angeles | | 12 | 3,552 |
| 2,901 |
| | $ | 21,118 |
| $ | 20,788 |
| 1.6 | % | | $ | 5,755 |
| $ | 5,354 |
| 7.5 | % | | $ | 15,363 |
| $ | 15,434 |
| (0.5 | )% | | | 72.7% | | 95.9% | 95.9% | | $ | 2,530 |
| $ | 2,491 |
|
Orange County | | 1 | 770 |
| 770 |
| | 4,956 |
| 4,959 |
| (0.1 | )% | | 1,341 |
| 1,218 |
| 10.1 | % | | 3,615 |
| 3,741 |
| (3.4 | )% | | | 72.9% | | 95.1% | 97.1% | | 2,255 |
| 2,211 |
|
San Diego | | 6 | 2,032 |
| 2,032 |
| | 9,603 |
| 9,497 |
| 1.1 | % | | 2,610 |
| 2,249 |
| 16.1 | % | | 6,993 |
| 7,248 |
| (3.5 | )% | | | 72.8% | | 96.0% | 96.2% | | 1,641 |
| 1,619 |
|
Southern CA Total | | 19 | 6,354 |
| 5,703 |
| | 35,677 |
| 35,244 |
| 1.2 | % | | 9,706 |
| 8,821 |
| 10.0 | % | | 25,971 |
| 26,423 |
| (1.7 | )% | | | 72.8% | | 95.8% | 96.2% | | 2,176 |
| 2,142 |
|
East Bay | | 1 | 246 |
| 246 |
| | 1,668 |
| 1,623 |
| 2.8 | % | | 526 |
| 478 |
| 10.0 | % | | 1,142 |
| 1,145 |
| (0.3 | )% | | | 68.5% | | 95.9% | 97.5% | | 2,357 |
| 2,256 |
|
San Jose | | 1 | 224 |
| 224 |
| | 1,336 |
| 1,333 |
| 0.2 | % | | 422 |
| 397 |
| 6.3 | % | | 914 |
| 936 |
| (2.4 | )% | | | 68.4% | | 94.7% | 94.3% | | 2,099 |
| 2,104 |
|
San Francisco | | 5 | 774 |
| 774 |
| | 5,448 |
| 5,377 |
| 1.3 | % | | 1,464 |
| 1,308 |
| 11.9 | % | | 3,984 |
| 4,069 |
| (2.1 | )% | | | 73.1% | | 96.5% | 97.2% | | 2,431 |
| 2,382 |
|
Northern CA Total | | 7 | 1,244 |
| 1,244 |
| | 8,452 |
| 8,333 |
| 1.4 | % | | 2,412 |
| 2,183 |
| 10.5 | % | | 6,040 |
| 6,150 |
| (1.8 | )% | | | 71.5% | | 96.1% | 96.7% | | 2,358 |
| 2,308 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Atlanta | | 5 | 1,295 |
| 1,281 |
| | 4,469 |
| 4,447 |
| 0.5 | % | | 1,648 |
| 1,580 |
| 4.3 | % | | 2,821 |
| 2,867 |
| (1.6 | )% | | | 63.1% | | 93.7% | 94.0% | | 1,240 |
| 1,230 |
|
Boston | | 12 | 4,173 |
| 4,173 |
| | 17,649 |
| 17,321 |
| 1.9 | % | | 6,834 |
| 5,997 |
| 14.0 | % | | 10,815 |
| 11,324 |
| (4.5 | )% | | | 61.3% | | 96.7% | 96.0% | | 1,458 |
| 1,441 |
|
Chicago | | 10 | 3,245 |
| 3,245 |
| | 14,980 |
| 14,844 |
| 0.9 | % | | 5,313 |
| 4,936 |
| 7.6 | % | | 9,667 |
| 9,908 |
| (2.4 | )% | | | 64.5% | | 96.4% | 96.1% | | 1,597 |
| 1,587 |
|
Denver | | 6 | 1,317 |
| 1,278 |
| | 5,447 |
| 5,350 |
| 1.8 | % | | 1,485 |
| 1,400 |
| 6.1 | % | | 3,962 |
| 3,950 |
| 0.3 | % | | | 72.7% | | 95.4% | 95.9% | | 1,488 |
| 1,455 |
|
Manhattan | | 8 | 230 |
| 230 |
| | 2,174 |
| 2,131 |
| 2.0 | % | | 975 |
| 926 |
| 5.3 | % | | 1,199 |
| 1,205 |
| (0.5 | )% | | | 55.2% | | 98.4% | 97.3% | | 3,202 |
| 3,175 |
|
Miami | | 5 | 2,471 |
| 2,460 |
| | 16,001 |
| 15,764 |
| 1.5 | % | | 4,949 |
| 4,690 |
| 5.5 | % | | 11,052 |
| 11,074 |
| (0.2 | )% | | | 69.1% | | 97.2% | 96.8% | | 2,231 |
| 2,207 |
|
Philadelphia | | 4 | 2,042 |
| 1,963 |
| | 8,570 |
| 8,420 |
| 1.8 | % | | 3,355 |
| 2,799 |
| 19.9 | % | | 5,215 |
| 5,621 |
| (7.2 | )% | | | 60.9% | | 96.0% | 96.8% | | 1,515 |
| 1,477 |
|
Phoenix | | 2 | 812 |
| 812 |
| | 2,517 |
| 2,535 |
| (0.7 | )% | | 892 |
| 823 |
| 8.4 | % | | 1,625 |
| 1,712 |
| (5.1 | )% | | | 64.6% | | 94.5% | 96.0% | | 1,094 |
| 1,084 |
|
Seattle | | 1 | 104 |
| 104 |
| | 521 |
| 504 |
| 3.4 | % | | 206 |
| 230 |
| (10.4 | )% | | 315 |
| 274 |
| 15.0 | % | | | 60.5% | | 98.6% | 93.5% | | 1,693 |
| 1,728 |
|
Suburban New York - New Jersey | | 2 | 1,162 |
| 1,162 |
| | 5,292 |
| 5,169 |
| 2.4 | % | | 1,731 |
| 1,694 |
| 2.2 | % | | 3,561 |
| 3,475 |
| 2.5 | % | | | 67.3% | | 96.9% | 95.4% | | 1,567 |
| 1,555 |
|
Washington - No. Va - MD | | 14 | 6,547 |
| 6,519 |
| | 28,616 |
| 28,036 |
| 2.1 | % | | 9,526 |
| 8,613 |
| 10.6 | % | | 19,090 |
| 19,423 |
| (1.7 | )% | | | 66.7% | | 95.6% | 94.9% | | 1,530 |
| 1,511 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Target Markets | | 95 | 30,996 |
| 30,174 |
| | 150,365 |
| 148,098 |
| 1.5 | % | | 49,032 |
| 44,692 |
| 9.7 | % | | 101,333 |
| 103,406 |
| (2.0 | )% | | | 67.4% | | 96.0% | 95.8% | | 1,730 |
| 1,707 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other Markets | | | | | | | | | | | | | | | | | | | | | | | | | |
Baltimore | | 4 | 797 |
| 797 |
| | 3,146 |
| 3,047 |
| 3.2 | % | | 1,225 |
| 1,063 |
| 15.2 | % | | 1,921 |
| 1,984 |
| (3.2 | )% | | | 61.1% | | 92.5% | 92.7% | | 1,422 |
| 1,374 |
|
Nashville | | 3 | 764 |
| 764 |
| | 2,868 |
| 2,861 |
| 0.2 | % | | 977 |
| 903 |
| 8.2 | % | | 1,891 |
| 1,958 |
| (3.4 | )% | | | 65.9% | | 96.0% | 94.5% | | 1,304 |
| 1,320 |
|
Norfolk - Richmond | | 5 | 1,487 |
| 1,408 |
| | 4,554 |
| 4,513 |
| 0.9 | % | | 1,506 |
| 1,473 |
| 2.2 | % | | 3,048 |
| 3,040 |
| 0.3 | % | | | 66.9% | | 95.5% | 95.4% | | 1,129 |
| 1,120 |
|
Other Markets | | 5 | 3,055 |
| 3,055 |
| | 11,125 |
| 10,633 |
| 4.6 | % | | 4,548 |
| 4,059 |
| 12.0 | % | | 6,577 |
| 6,574 |
| — | % | | | 59.1% | | 95.5% | 94.7% | | 1,271 |
| 1,225 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Other Markets | | 17 | 6,103 |
| 6,024 |
| | 21,693 |
| 21,054 |
| 3.0 | % | | 8,256 |
| 7,498 |
| 10.1 | % | | 13,437 |
| 13,556 |
| (0.9 | )% | | | 61.9% | | 95.2% | 94.6% | | 1,261 |
| 1,232 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Grand Total | | 112 | 37,099 |
| 36,198 |
| | $ | 172,058 |
| $ | 169,152 |
| 1.7 | % | | $ | 57,288 |
| $ | 52,190 |
| 9.8 | % | | $ | 114,770 |
| $ | 116,962 |
| (1.9 | )% | | | 66.7% | | 95.9% | 95.6% | | $ | 1,652 |
| $ | 1,629 |
|
|
| | | | | | | | | | | | | | | |
Supplemental Schedule 6(c) | | | | | | | |
| | | | | | | |
Conventional Same Store Operating Expense Detail |
(in thousands) (unaudited) | | | | | | | |
| | | | | | | |
Quarterly Comparison |
| | | | | | | |
| | 1Q 2015 | % of Total | | 1Q 2014 | $ Change | % Change |
Real estate taxes | | $ | 17,043 |
| 29.7 | % | | $ | 16,236 |
| $ | 807 |
| 5.0 | % |
Onsite payroll | | 10,369 |
| 18.1 | % | | 10,245 |
| 124 |
| 1.2 | % |
Utilities | | 12,688 |
| 22.1 | % | | 12,333 |
| 355 |
| 2.9 | % |
Repairs and maintenance | | 7,338 |
| 12.8 | % | | 6,718 |
| 620 |
| 9.2 | % |
Software, technology and other | | 3,681 |
| 6.4 | % | | 3,737 |
| (56 | ) | (1.5 | )% |
Insurance | | 2,628 |
| 4.6 | % | | 2,719 |
| (91 | ) | (3.3 | )% |
Marketing | | 1,849 |
| 3.2 | % | | 2,206 |
| (357 | ) | (16.2 | )% |
Expensed turnover costs | | 1,692 |
| 3.1 | % | | 1,485 |
| 207 |
| 13.9 | % |
Total | | $ | 57,288 |
| 100.0 | % | | $ | 55,679 |
| $ | 1,609 |
| 2.9 | % |
| | | | | | | |
Sequential Comparison |
| | | | | | | |
| | 1Q 2015 | % of Total | | 4Q 2014 | $ Change | % Change |
Real estate taxes | | $ | 17,043 |
| 29.7 | % | | $ | 16,299 |
| $ | 744 |
| 4.6 | % |
Onsite payroll | | 10,369 |
| 18.1 | % | | 9,782 |
| 587 |
| 6.0 | % |
Utilities | | 12,688 |
| 22.1 | % | | 10,500 |
| 2,188 |
| 20.8 | % |
Repairs and maintenance | | 7,338 |
| 12.8 | % | | 6,391 |
| 947 |
| 14.8 | % |
Software, technology and other | | 3,681 |
| 6.4 | % | | 3,547 |
| 134 |
| 3.8 | % |
Insurance | | 2,628 |
| 4.6 | % | | 2,072 |
| 556 |
| 26.8 | % |
Marketing | | 1,849 |
| 3.2 | % | | 1,591 |
| 258 |
| 16.2 | % |
Expensed turnover costs | | 1,692 |
| 3.1 | % | | 2,008 |
| (316 | ) | (15.7 | )% |
Total | | $ | 57,288 |
| 100.0 | % | | $ | 52,190 |
| $ | 5,098 |
| 9.8 | % |
| | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplemental Schedule 7(a) | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Conventional Portfolio Data by Market |
First Quarter 2015 Compared to First Quarter 2014 |
(unaudited) | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | Quarter Ended March 31, 2015 | | Quarter Ended March 31, 2014 |
| | Apartment Communities | | Apartment Homes | | Effective Apartment Homes | | % Aimco NOI | | Average Revenue per Effective Apartment Home | | Apartment Communities | | Apartment Homes | | Effective Apartment Homes | | % Aimco NOI | | Average Revenue per Effective Apartment Home |
Target Markets | | | | | | | | | | | | | | | | | | | | |
Los Angeles | | 13 |
| | 4,319 |
| | 3,668 |
| | 14.3 | % | | $ | 2,540 |
| | 13 |
| | 4,248 |
| | 3,597 |
| | 11.4 | % | | $ | 2,369 |
|
Orange County | | 2 |
| | 966 |
| | 966 |
| | 3.1 | % | | 2,040 |
| | 4 |
| | 1,213 |
| | 1,213 |
| | 3.5 | % | | 1,843 |
|
San Diego | | 12 |
| | 2,430 |
| | 2,360 |
| | 5.8 | % | | 1,586 |
| | 12 |
| | 2,430 |
| | 2,360 |
| | 5.6 | % | | 1,514 |
|
Southern CA Total | | 27 |
| | 7,715 |
| | 6,994 |
| | 23.2 | % | | 2,153 |
| | 29 |
| | 7,891 |
| | 7,170 |
| | 20.5 | % | | 1,975 |
|
East Bay | | 2 |
| | 413 |
| | 413 |
| | 1.2 | % | | 1,930 |
| | 2 |
| | 413 |
| | 413 |
| | 1.1 | % | | 1,712 |
|
San Jose | | 2 |
| | 548 |
| | 548 |
| | 1.6 | % | | 2,269 |
| | 1 |
| | 224 |
| | 224 |
| | 0.6 | % | | 1,993 |
|
San Francisco | | 7 |
| | 1,208 |
| | 1,208 |
| | 4.7 | % | | 2,582 |
| | 7 |
| | 1,208 |
| | 1,208 |
| | 3.1 | % | | 2,244 |
|
Northern CA Total | | 11 |
| | 2,169 |
| | 2,169 |
| | 7.5 | % | | 2,374 |
| | 10 |
| | 1,845 |
| | 1,845 |
| | 4.8 | % | | 2,066 |
|
| | | | | | | | | | | | | | | | | | | | |
Atlanta | | 8 |
| | 1,497 |
| | 1,483 |
| | 2.5 | % | | 1,305 |
| | 6 |
| | 1,325 |
| | 1,311 |
| | 2.1 | % | | 1,185 |
|
Boston | | 12 |
| | 4,173 |
| | 4,173 |
| | 8.2 | % | | 1,458 |
| | 12 |
| | 4,173 |
| | 4,173 |
| | 7.9 | % | | 1,400 |
|
Chicago | | 10 |
| | 3,245 |
| | 3,245 |
| | 7.3 | % | | 1,597 |
| | 10 |
| | 3,245 |
| | 3,245 |
| | 7.0 | % | | 1,554 |
|
Denver | | 8 |
| | 2,057 |
| | 2,018 |
| | 4.4 | % | | 1,420 |
| | 7 |
| | 1,613 |
| | 1,540 |
| | 3.2 | % | | 1,333 |
|
Manhattan | | 17 |
| | 775 |
| | 775 |
| | 2.9 | % | | 3,328 |
| | 23 |
| | 999 |
| | 999 |
| | 2.7 | % | | 2,851 |
|
Miami | | 5 |
| | 2,540 |
| | 2,529 |
| | 8.4 | % | | 2,231 |
| | 5 |
| | 2,512 |
| | 2,501 |
| | 7.9 | % | | 2,084 |
|
Philadelphia | | 6 |
| | 3,532 |
| | 3,453 |
| | 6.5 | % | | 1,664 |
| | 7 |
| | 3,888 |
| | 3,809 |
| | 7.5 | % | | 1,555 |
|
Phoenix | | 2 |
| | 812 |
| | 812 |
| | 1.2 | % | | 1,094 |
| | 5 |
| | 1,374 |
| | 1,230 |
| | 1.7 | % | | 1,016 |
|
Seattle | | 2 |
| | 239 |
| | 239 |
| | 0.6 | % | | 1,936 |
| | 2 |
| | 239 |
| | 239 |
| | 0.4 | % | | 1,767 |
|
Suburban New York - New Jersey | | 2 |
| | 1,162 |
| | 1,162 |
| | 2.7 | % | | 1,567 |
| | 2 |
| | 1,162 |
| | 1,162 |
| | 2.5 | % | | 1,499 |
|
Washington - No. Va - MD | | 14 |
| | 6,547 |
| | 6,519 |
| | 14.4 | % | | 1,530 |
| | 14 |
| | 6,547 |
| | 6,519 |
| | 14.9 | % | | 1,520 |
|
| | | | | | | | | | | | | | | | | | | | |
Total Target Markets | | 124 |
| | 36,463 |
| | 35,571 |
| | 89.8 | % | | 1,780 |
| | 132 |
| | 36,813 |
| | 35,743 |
| | 83.1 | % | | 1,664 |
|
| | | | | | | | | | | | | | | | | | | | |
Other Markets | | | | | | | | | | | | | | | | | | | | |
Baltimore | | 4 |
| | 797 |
| | 797 |
| | 1.5 | % | | 1,422 |
| | 5 |
| | 1,180 |
| | 1,066 |
| | 2.0 | % | | 1,355 |
|
Nashville | | 3 |
| | 764 |
| | 764 |
| | 1.4 | % | | 1,304 |
| | 4 |
| | 1,114 |
| | 1,114 |
| | 1.7 | % | | 1,130 |
|
Norfolk - Richmond | | 5 |
| | 1,487 |
| | 1,408 |
| | 2.3 | % | | 1,129 |
| | 6 |
| | 1,643 |
| | 1,564 |
| | 2.5 | % | | 1,109 |
|
Other Markets | | 5 |
| | 3,055 |
| | 3,055 |
| | 5.0 | % | | 1,271 |
| | 14 |
| | 8,564 |
| | 8,501 |
| | 10.7 | % | | 990 |
|
| | | | | | | | | | | | | | | | | | | | |
Total Other Markets | | 17 |
| | 6,103 |
| | 6,024 |
| | 10.2 | % | | 1,261 |
| | 29 |
| | 12,501 |
| | 12,245 |
| | 16.9 | % | | 1,050 |
|
| | | | | | | | | | | | | | | | | | | | |
Grand Total | | 141 |
| | 42,566 |
| | 41,595 |
| | 100.0 | % | | $ | 1,704 |
| | 161 |
| | 49,314 |
| | 47,988 |
| | 100.0 | % | | $ | 1,505 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplemental Schedule 7(b) | |
| |
Conventional Portfolio Data by Market | |
Fourth Quarter 2014 Market Information | |
(unaudited) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Aimco portfolio strategy seeks predictable rent growth from a portfolio of "A," "B" and "C+" quality market-rate apartment communities, averaging "B/B+" in quality, and diversified among the largest coastal and job growth markets in the U.S., as measured by total apartment value. Aimco measures asset quality based on rents compared to local market average rents as reported by REIS, a third-party provider of commercial real estate performance information and analysis. Aimco defines asset quality as follows: "A" quality assets are those with rents greater than 125% of local market average; "B" quality assets are those with rents 90% to 125% of local market average; "C+" quality assets are those with rents lower than 90% of the local market average, and greater than $1,100 per month; and "C" quality assets are those with rents lower than 90% of local market average, and less than $1,100 per month. The schedule below illustrates Aimco’s Conventional Apartment Community portfolio quality based on 4Q 2014 data, the most recent period for which third-party data is available. The portfolio data has been adjusted to remove apartment communities sold through 1Q 2015.
The average age of Aimco's portfolio as of March 31, 2015, adjusted for its sizable investment in redevelopment, is approximately 31 years. See the Glossary for further information. |
| | | | | | | | | | | | | | | | |
| | Quarter Ended December 31, 2014 | |
| | Apartment Communities | | Apartment Homes | | Effective Apartment Homes | | % Aimco NOI | | Average Rent per Effective Apartment Home [1] | | Market Rent [2] | | Percentage of Market Rent Average | | Average Age of Apartment Communities |
Target Markets | | | | | | | | | | | | | | | | |
Los Angeles | | 13 |
| | 4,319 |
| | 3,668 |
| | 13.9 | % | | $ | 2,321 |
| | $ | 1,494 |
| | 155.4 | % | | 13 |
|
Orange County | | 2 |
| | 966 |
| | 966 |
| | 3.2 | % | | 1,867 |
| | 1,648 |
| | 113.3 | % | | 10 |
|
San Diego | | 12 |
| | 2,430 |
| | 2,360 |
| | 6.0 | % | | 1,421 |
| | 1,460 |
| | 97.3 | % | | 27 |
|
Southern CA Total | | 27 |
| | 7,715 |
| | 6,994 |
| | 23.1 | % | | 1,953 |
| | 1,505 |
| | 129.8 | % | | 17 |
|
East Bay | | 2 |
| | 413 |
| | 413 |
| | 1.2 | % | | 1,673 |
| | 1,559 |
| | 107.3 | % | | 35 |
|
San Jose | | 2 |
| | 548 |
| | 548 |
| | 0.8 | % | | 2,060 |
| | 1,879 |
| | 109.6 | % | | 17 |
|
San Francisco | | 7 |
| | 1,208 |
| | 1,208 |
| | 4.5 | % | | 2,279 |
| | 2,237 |
| | 101.9 | % | | 24 |
|
Northern CA Total | | 11 |
| | 2,169 |
| | 2,169 |
| | 6.5 | % | | 2,103 |
| | 2,012 |
| | 104.5 | % | | 24 |
|
| | | | | | | | | | | | | | | | |
Atlanta | | 7 |
| | 1,403 |
| | 1,389 |
| | 2.2 | % | | 1,160 |
| | 848 |
| | 136.8 | % | | 16 |
|
Boston | | 12 |
| | 4,173 |
| | 4,173 |
| | 8.5 | % | | 1,346 |
| | 1,898 |
| | 70.9 | % | | 41 |
|
Chicago | | 10 |
| | 3,245 |
| | 3,245 |
| | 7.5 | % | | 1,385 |
| | 1,117 |
| | 124.0 | % | | 20 |
|
Denver | | 8 |
| | 2,057 |
| | 2,018 |
| | 4.1 | % | | 1,243 |
| | 986 |
| | 126.1 | % | | 21 |
|
Manhattan | | 17 |
| | 775 |
| | 775 |
| | 3.2 | % | | 3,206 |
| | 3,223 |
| | 99.5 | % | | 109 |
|
Miami | | 5 |
| | 2,530 |
| | 2,519 |
| | 8.3 | % | | 1,936 |
| | 1,196 |
| | 161.9 | % | | 25 |
|
Philadelphia | | 6 |
| | 3,537 |
| | 3,458 |
| | 7.4 | % | | 1,426 |
| | 1,124 |
| | 126.9 | % | | 31 |
|
Phoenix | | 2 |
| | 812 |
| | 812 |
| | 1.3 | % | | 961 |
| | 765 |
| | 125.6 | % | | 14 |
|
Seattle | | 2 |
| | 239 |
| | 239 |
| | 0.5 | % | | 1,687 |
| | 1,210 |
| | 139.4 | % | | 12 |
|
Suburban New York - New Jersey | | 2 |
| | 1,162 |
| | 1,162 |
| | 2.6 | % | | 1,403 |
| | 1,317 |
| | 106.5 | % | | 33 |
|
Washington - No. Va - MD | | 14 |
| | 6,547 |
| | 6,519 |
| | 14.6 | % | | 1,372 |
| | 1,563 |
| | 87.8 | % | | 44 |
|
| | | | | | | | | | | | | | | | |
Total Target Markets | | 123 |
| | 36,364 |
| | 35,472 |
| | 89.8 | % | | 1,588 |
| | 1,455 |
| | 109.1 | % | | 30 |
|
| | | | | | | | | | | | | | | | |
Other Markets | | | | | | | | | | | | | | | | |
Baltimore | | 4 |
| | 797 |
| | 797 |
| | 1.5 | % | | 1,261 |
| | 1,107 |
| | 113.9 | % | | 43 |
|
Nashville | | 3 |
| | 764 |
| | 764 |
| | 1.5 | % | | 1,120 |
| | 832 |
| | 134.6 | % | | 22 |
|
Norfolk - Richmond | | 5 |
| | 1,487 |
| | 1,408 |
| | 2.3 | % | | 959 |
| | 913 |
| | 105.0 | % | | 26 |
|
Other Markets | | 5 |
| | 3,055 |
| | 3,055 |
| | 4.9 | % | | 1,046 |
| | 1,005 |
| | 104.1 | % | | 39 |
|
| | | | | | | | | | | | | | | | |
Total Other Markets | | 17 |
| | 6,103 |
| | 6,024 |
| | 10.2 | % | | 1,063 |
| | 975 |
| | 109.0 | % | | 34 |
|
| | | | | | | | | | | | | | | | |
Grand Total | | 140 |
| | 42,467 |
| | 41,496 |
| | 100.0 | % | | $ | 1,512 |
| | $ | 1,384 |
| | 109.2 | % | | 31 |
|
| | | | | | | | | | | | | | | | |
[1] Represents rents after concessions and vacancy loss, divided by the number of Effective Apartment Homes. Does not include other rental income. |
[2] 4Q 2014 effective rents per REIS. | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplemental Schedule 8 |
|
Apartment Community Disposition and Acquisition Activity |
(dollars in millions, except average revenue per home) (unaudited) |
| | | | | | | | | | | | | | | | | | | | | | |
First Quarter 2015 Dispositions |
| | | | | | | | | | | | | | | | | | | | | | |
| | Apartment Communities | | Number of Homes | | Weighted Average Ownership | | Gross Proceeds | | NOI Cap Rate [1] | | Free Cash Flow Cap Rate [2] | | Property Debt | | Net Sales Proceeds [3] | | Aimco Gross Proceeds | | Aimco Net Proceeds | | Average Revenue per Home |
Conventional | | 4 |
| | 926 |
| | 87% | | $ | 143.8 |
| | 5.5 | % | | 4.7 | % | | $ | 56.1 |
| | $ | 72.1 |
| | $ | 129.8 |
| | $ | 71.3 |
| | $ | 1,277 |
|
Affordable | | 2 |
| | 174 |
| | 2% | | 4.0 |
| | — | % | [4] | — | % | [4] | — |
| | 3.7 |
| | 2.0 |
| | 2.0 |
| | 465 |
|
Total Dispositions | | 6 |
| | 1,100 |
| | 74% | | $ | 147.8 |
| | 5.5 | % | | 4.7 | % | | $ | 56.1 |
| | $ | 75.8 |
| | $ | 131.8 |
| | $ | 73.3 |
| | $ | 1,274 |
|
| | | | | | | | | | | | | | | | | | | | | | |
[1] NOI Cap Rate is calculated based on Aimco's share of the trailing twelve month prior to sale proportionate property NOI, less a 3.0% management fee, divided by Aimco gross proceeds, less prepayment |
penalties associated with the related property debt, if applicable. Conventional Apartment Communities sold during 2015 are primarily outside of Aimco's target markets or in less desirable locations |
within Aimco's target markets, and had average revenues per apartment home approximately 25% below Aimco's retained portfolio. Accordingly, the NOI capitalization rates for Conventional Apartment |
Communities sold during 2015 are not necessarily representative of those for Aimco's retained portfolio. |
[2] Free Cash Flow Cap Rate represents the NOI cap rate, adjusted for assumed Capital Replacements spending of $1,200 per apartment home. |
[3] Net Sales Proceeds are after repayment of existing debt, net working capital settlements, payment of transaction costs and debt prepayment penalties, if applicable. |
[4] The Affordable apartment communities sold had negative NOI and Free Cash Flow Cap Rates based on operating losses, and thus these amounts have been omitted. |
| | | | | | | | | | | | | | | | | | | | | | |
First Quarter 2015 Acquisitions |
| | | | | | | | | | | | | | | | | | | | | | |
|
On March 10, 2015, Aimco acquired for $38.3 million Mezzo Apartment Homes, a 94-apartment home community located in Atlanta, Georgia, between Midtown and Buckhead. Built in 2008, this 19-story building includes 2,800 square feet of retail space. Stabilized revenues per apartment home are expected to average $3,600, making this an "A" quality asset for Aimco. |
|
| | | | | | | | | | | | |
Supplemental Schedule 9 | | | | | | |
| | | | | | |
Capital Additions | | | | | | |
(in thousands, except per apartment home data) (unaudited) |
| | | | | | |
| | | | | | |
Aimco classifies capital additions as Capital Replacements (“CR”), Capital Improvements (“CI”), Property Upgrades, Redevelopment, Development or Casualty. Recurring capital additions are apportioned between CR and CI based on the useful life of the item under consideration and the period over which Aimco has owned the item. Under this method of classification, CR represents the portion of the item consumed during Aimco’s ownership of the item, while CI represents the portion of the item that was consumed prior to Aimco’s ownership. See the Glossary for further descriptions. |
| | | | | | |
| | Three Months Ended March 31, 2015 |
| | Conventional | | Affordable | | Total |
Capital Additions | | | | | | |
Capital Replacements | | | | | | |
Buildings and grounds | | $ | 4,191 |
| | $ | 776 |
| | $ | 4,967 |
|
Turnover capital additions | | 1,765 |
| | 224 |
| | 1,989 |
|
Capitalized site payroll and indirect costs | | 783 |
| | 20 |
| | 803 |
|
Capital Replacements | | 6,739 |
| | 1,020 |
| | 7,759 |
|
Capital Improvements | | 2,690 |
| | 154 |
| | 2,844 |
|
Property Upgrades | | 9,203 |
| | 52 |
| | 9,255 |
|
Redevelopment | | 23,475 |
| | — |
| | 23,475 |
|
Development | | 17,838 |
| | — |
| | 17,838 |
|
Casualty | | 1,329 |
| | 1,314 |
| | 2,643 |
|
Total Capital Additions [1] | | $ | 61,274 |
| | $ | 2,540 |
| | $ | 63,814 |
|
| | | | | | |
Total apartment homes | | 42,566 |
| | 9,122 |
| | 51,688 |
|
Capital Replacements per apartment home | | $ | 158 |
| | $ | 112 |
| | $ | 150 |
|
|
| | | | |
[1] Total Capital Additions reported above exclude $0.1 million, for the three months ended March 31, 2015, related to consolidated apartment communities sold or classified as held for sale at the end of the period. For the three months ended March 31, 2015, Total Capital Additions include $2.5 million of capitalized interest costs. |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplemental Schedule 10 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Summary of Redevelopment and Development Activity | | | | | | | (Page 1 of 4) | |
Three Months Ended March 31, 2015 | | | | | | | | | |
(dollars in millions, except per apartment home data) (unaudited) | | | | | | | | | | | | |
| | | |
| | | | Schedule | | Incremental Monthly Revenue per Apartment Home | | | | |
| Total Number of Apartment Homes at Completion | Estimated Net Investment | Inception-to-Date Net Investment | Construction Start | Initial Occupancy | Construction Complete | Stabilized Occupancy | | Rent | Other Income | Total | | Incremental Commercial Revenue | | Current Residential Occupancy |
Redevelopment of Operating Communities | | | | | | | | | | | | | | | |
2900 on First Apartments | 135 |
| $ | 15.2 |
| $ | 12.1 |
| 1Q 2014 | 1Q 2014 | 2Q 2015 | 1Q 2015 | | $ | 520 |
| $ | 45 |
| $ | 565 |
| | $ | 0.1 |
| | 89 | % |
Ocean House on Prospect | 53 |
| 14.8 |
| 4.8 |
| 4Q 2014 | 3Q 2015 | 4Q 2015 | 1Q 2016 | | 930 |
| 80 |
| 1,010 |
| | — |
| | n/a |
|
Park Towne | 954 |
| 60.0 |
| 11.9 |
| Multiple | 3Q 2015 | 3Q 2016 | 2Q 2016 | | 225 |
| 80 |
| 305 |
| | 0.1 |
| | 80 | % |
The Sterling | 536 |
| 36.0 |
| 26.4 |
| Multiple | Multiple | 3Q 2015 | 4Q 2015 | | 270 |
| 20 |
| 290 |
| | 0.5 |
| | 89 | % |
Subtotal | 1,678 |
| $ | 126.0 |
| $55.2 | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | Schedule | | Monthly Revenue per Apartment Home | | | | |
| Total Number of Apartment Homes at Completion | Estimated Net Investment | Inception-to-Date Net Investment | Construction Start | Initial Occupancy | Construction Complete | Stabilized Occupancy | | Rent | Other Income | Total | | Commercial Revenue | | Current Residential Occupancy |
New Development | | | | | | | | | | | | | | |
One Canal Street | 310 |
| $ | 190.0 |
| $ | 80.7 |
| 4Q 2013 | 1Q 2016 | 2Q 2016 | 2Q 2017 | | $ | 3,450 |
| $ | 415 |
| $ | 3,865 |
| | $ | 1.1 |
| | n/a |
|
| | | | | | | | | | | | | | | |
Completed This Quarter | | | | | | | | | | | | | | | |
Lincoln Place | 795 |
| $ | 360.0 |
| $ | 359.0 |
| Multiple | Multiple | 1Q 2015 | 2Q 2015 | | $ | 2,800 |
| $ | 150 |
| $ | 2,950 |
| | — |
| | 83 | % |
The Preserve at Marin | 126 |
| 124.0 |
| 123.4 |
| 4Q 2012 | 1Q 2014 | 1Q 2015 | 2Q 2015 | | 5,350 |
| 155 |
| 5,505 |
| | — |
| | 64 | % |
Subtotal | 921 |
| $ | 484.0 |
| $ | 482.4 |
| | | | | | | | | |
| | |
| | | | | | | | | | | | | | | |
Grand Total | 2,909 |
| $ | 800.0 |
| $ | 618.3 |
| | | | | | | | | | | | |
| | |
| | | | | | | | | | | | | | | |
Weighted Average Projected NOI as a % of Estimated Net Investment (Unescalated Rents) | 5.6 | % | | | | | | | | | | |
| | | | | | | | | | | | | | | |
The investment in Lincoln Place is funded in part by a $190.7 million non-recourse property loan, of which $7.8 million was available to draw at March 31, 2015. |
The investment in One Canal Street is funded in part by a $114.0 million non-recourse property loan, of which $75.6 million was available to draw at March 31, 2015. |
| | | | | | | | | | | | | | | |
See the following pages for Terms and Definitions and a Summary of Redevelopment Projects. |
|
| | | | | | | | | | | | | | | | |
Supplemental Schedule 10 (continued) | | | | | | | | | | | | | | |
Summary of Redevelopment and Development Activity | | | | | | | | (Page 2 of 4) |
| | | |
Terms and Definitions | | | |
Estimated Net Investment - represents total estimated investment, net of tax and other credits earned by Aimco as a direct result of its redevelopment or development of the community. Total estimated investment includes all capitalized costs projected to be incurred to redevelop or develop the respective community, as determined in accordance with GAAP. Where possible, Aimco makes use of tax and other available credits to reduce its invested capital, thereby maximizing investment returns. Aimco seeks historic tax and other credits related to several other communities in its redevelopment pipeline, which, if successful, Aimco will include in the net estimated investment. |
Stabilized Occupancy - period in which Aimco expects to achieve targeted physical occupancy, generally greater than 90%. |
Incremental Monthly Revenue per Apartment Home - represents the sum of the amounts by which rents and other rental income per apartment home are projected to increase compared to pre-redevelopment amounts. Projections are based on management's judgment and take into consideration factors including but not limited to: current rent and other rental income expectations; current market rents; and rental achievement to date. Aimco expects to update its projections at least annually to reflect changes in market rents and rental rate achievement. |
Commercial Revenue - represents the projected annual revenue, or incremental revenue, contribution from commercial rents attributable to the redevelopment of commercial space. |
Current Residential Occupancy - for previously vacant communities and new development, represents physical occupancy as of March 31, 2015. For operating communities, represents first quarter 2015 average daily occupancy. |
Monthly Revenue per Apartment Home - represents the sum of projected rents and other rental income on a per-apartment home basis. Projections are based on management's judgment and take into consideration factors including but not limited to: current rent and other rental income expectations; current market rents; and rental achievement to date. Aimco expects to update these projections at least annually to reflect changes in market rents and rental rate achievement. |
Weighted Average Projected NOI as a % of Estimated Net Investment (Unescalated Rents) - projected NOI takes into consideration the revenue information provided herein, as well as expectations around 1) operating costs associated with previously vacant communities and new development, and 2) net incremental changes in operating costs, if any, resulting from the redevelopment of operating communities. |
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Supplemental Schedule 10 (Continued) | |
| |
Summary of Redevelopment Projects | (Page 3 of 4) |
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| |
Community | Project Summary |
2900 on First Apartments Seattle, WA | Redevelopment includes the renovation of all apartment homes, new and/or enhanced amenities and other building interior and commercial space upgrades. All apartment home renovations have been completed and stabilized occupancy has been achieved. The fitness and amenity building will be complete by the end of May 2015. |
Ocean House on Prospect La Jolla, CA
| During 2013, Aimco acquired for $29 million this 60-apartment home community with the intent of redeveloping the community at a future date. The redevelopment of Ocean House includes renovation of all apartment homes, common areas, exteriors and amenities. During construction, Aimco expects to combine some apartment homes so that the community, at completion, will include 53 apartment homes. In order to facilitate the extensive construction activity, Aimco de-leased the building in fourth quarter 2014. Construction is underway and on schedule. |
Park Towne Place Philadelphia, PA
| In 2014, Aimco completed a multi-phase capital project at this community in anticipation of subsequent redevelopment, which is now underway. Aimco expects to redevelop Park Towne Place in several phases, the first of which includes renovating existing commercial space, upgrading common areas and amenities, and redeveloping one of the four residential towers. During construction, Aimco expects to combine some apartment homes in this 234-apartment home building so that the tower, at completion, will include 229 apartment homes. In order to facilitate the extensive construction activity, Aimco de-leased the tower in fourth quarter 2014. Construction is underway and on schedule. Aimco’s net investment in the first phase of the redevelopment of Park Towne Place is projected to be $60 million, reflecting a gross investment of $71 million, reduced by $11 million of historic tax credits. Depending on the success of this initial phase and other investment alternatives, Aimco may redevelop additional apartment homes at Park Towne Place. Should Aimco elect to redevelop the other three residential towers, its net investment, including the work described above, could be between $148 and $160 million, reflecting a gross investment of $180 to $195 million reduced by $32 to $35 million of historic tax credits. |
The Sterling Philadelphia, PA
| This redevelopment includes significant renovation of existing commercial space, upgrading common areas, and the phased redevelopment of apartment homes.
During 2014, Aimco completed the redevelopment of the first 69 apartment homes as planned, at a cost consistent with underwriting and at rents in excess of Aimco's underwriting. Based on the success of this initial phase of apartment home redevelopment, in the fourth quarter 2014, Aimco approved a project to redevelop an additional 105 apartment homes for an additional investment of approximately $11 million. Aimco expects this phase of construction to be complete in third quarter 2015, with occupancy stabilized the following quarter.
Renovation of the common areas and commercial space is proceeding as planned and Aimco continues to expect construction to be complete in second quarter 2015 at a cost consistent with underwriting.
Depending on the success of this next phase and other investment alternatives, Aimco may continue to redevelop additional apartment homes at The Sterling. Should Aimco elect to redevelop all 536 apartment homes, the total investment, including the work described above, could be between $70 and $80 million over the next several years. |
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Supplemental Schedule 10 (Continued) | |
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Summary of Redevelopment Projects | (Page 4 of 4) |
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Community | Project Summary |
One Canal Street Boston, MA | Aimco expects to invest approximately $190 million in the development of a 12-story building at One Canal Street in the historic Bulfinch Triangle neighborhood of Boston’s West End. Located near the Boston Garden, one block from North Station and adjacent to the historic North End, the site enjoys excellent access to public transit, the Government Center, Financial District, and Massachusetts General Hospital employment centers, as well as the dining, recreation, and shopping amenities of its urban core location. The building will include 310 apartment homes and 22,000 square feet of commercial space. Aimco has partnered with an experienced developer to construct the building, which Aimco will own and operate after its completion. |
Lincoln Place Venice, CA
| Lincoln Place is comprised of 795 apartment homes situated on 35-acres one mile from Venice Beach. The scope of this redevelopment included: • Redevelopment of 49 residential buildings, with 696 apartment homes, consistent with standards required by the community’s historic designation.• Construction of 11 new residential buildings with 99 apartment homes on existing vacant land.• Construction of a 5,000 square foot leasing center and a 6,100 square foot fitness center and pool area.
This redevelopment was completed in first quarter 2015. Aimco’s inception to date investment consists of a gross investment of $386 million, offset by $26 million of historic tax and other credits associated with the redevelopment. Rents achieved to date are in excess of Aimco's underwriting. |
The Preserve at Marin Corte Madera, CA
| Aimco acquired The Preserve at Marin as a vacant community in 2011, with the intent of redeveloping the 126-apartment home community.
This redevelopment was completed in first quarter 2015 and included comprehensive interior and exterior redevelopment of all seven three-story buildings, redesign of all apartment homes to feature large bay windows, modern kitchens, and upscale finishes, as well as construction of a new resident clubhouse, which includes a fitness center, business center, saltwater pool, wine bar and outdoor fire pits. Rents achieved to date are in excess of Aimco's underwriting. |
GLOSSARY AND RECONCILIATIONS OF NON-GAAP FINANCIAL AND OPERATING MEASURES
This Earnings Release and Supplemental Information include certain financial and operating measures used by Aimco management that are not calculated in accordance with accounting principles generally accepted in the United States, or GAAP. Aimco's definitions and calculations of these non-GAAP financial and operating measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. These non-GAAP financial and operating measures should not be considered an alternative to GAAP net income or any other GAAP measurement of performance and should not be considered an alternative measure of liquidity.
ACQUISITION APARTMENT COMMUNITIES: Apartment Communities acquired since January 1, 2014.
AFFORDABLE APARTMENT COMMUNITIES: Affordable Apartment Communities benefit from governmental programs intended to provide housing to people with low or moderate incomes. These programs, which are usually administered by the U.S. Department of Housing and Urban Development (HUD) or state housing finance agencies, typically provide mortgage insurance, favorable financing terms, tax credits, or rental assistance payments to the owners of the communities. Under these programs, rent adjustments are made in accordance with property-specific contracts between Aimco and HUD, with rent increases generally based on an adjustment factor set by HUD annually.
AIMCO OP: AIMCO Properties, L.P., a Delaware limited partnership, is the operating partnership in Aimco's UPREIT structure. Aimco owns approximately 95% of the common partnership units of the Aimco OP.
AIMCO PROPORTIONATE FINANCIAL INFORMATION: Non-GAAP measures representing Aimco's share of financial information discussed in this Earnings Release and Supplemental Information. Aimco's proportionate share of financial information includes Aimco's share of unconsolidated real estate partnerships and excludes noncontrolling interests in consolidated real estate partnerships. Proportionate reporting benefits the users of Aimco's financial information by providing the amount of revenues, expenses, assets and liabilities attributable only to Aimco stockholders. Aimco also refers to this measure as "Aimco's Share" of financial information. See Supplemental Schedules 2, 4 and 5 for reconciliation of Aimco's proportionate share of financial results to Aimco's consolidated financial statements.
AVERAGE AGE OF APARTMENT COMMUNITIES: Average Age of Apartment Communities is calculated by Aimco based on the year the community was originally built, adjusted for redevelopment and/or other major capital improvements that effectively reduce the age of the community. Such investments include construction of new buildings and/or amenities, replacement or modernization of mechanical, plumbing and electrical systems, and other investments that are consequential in nature.
CAPITAL ADDITIONS DEFINITIONS
CAPITAL IMPROVEMENTS (CI): CI includes all non-Redevelopment capital additions that are made to enhance the value, profitability or useful life of an asset from its original purchase condition.
CAPITAL REPLACEMENTS (CR): Unlike CI, CR does not increase the useful life of an asset from its original purchase condition. CR represents the portion of capital additions that are deemed to replace the consumed portion of acquired capital assets. CR is deducted in the calculation of AFFO.
CASUALTY CAPITAL ADDITIONS: Casualty capital additions represent capitalized costs incurred in connection with the restoration of an asset after a casualty event such as a hurricane, tornado or flood.
PROPERTY UPGRADES: Property Upgrades may include kitchen and bath remodeling; energy conservation projects; and investments in longer-lived materials designed to reduce turnover costs, such as simulated wood flooring and granite countertops. Property Upgrades differ from Redevelopment Additions in that they are generally lesser in scope and do not significantly disrupt property operations.
REDEVELOPMENT ADDITIONS: Redevelopment additions represent capital additions intended to enhance the value of the apartment community through the ability to generate higher average rental rates. Redevelopment additions may include costs related to entitlement, which enhance the value of a community through increased density, and costs related to renovation of exteriors, common areas or apartment homes.
CONVENTIONAL APARTMENT COMMUNITIES: Conventional Apartment Communities represent Aimco's portfolio of market-rate apartment communities. Aimco's portfolio strategy seeks predictable rent growth from a portfolio of "A", "B" and "C+" quality Conventional Apartment Communities, averaging "B/B+" in quality, and diversified among the largest coastal and job growth markets in the United States, as measured by apartment value.
DEBT RATIO DEFINITIONS
ADJUSTED INTEREST EXPENSE: Adjusted Interest Expense represents Aimco's proportionate share of interest expense less (i) prepayment penalties and amortization of deferred financing costs and (ii) the amount of interest income recognized by Aimco related to its investment in the subordinated tranches in a securitization trust holding primarily Aimco property debt.
DEBT TO EBITDA RATIO: The ratio of (a) Aimco's proportionate share of debt net of Aimco's proportionate share of cash and restricted cash and Aimco's investment in the subordinated tranches in a securitization trust holding primarily Aimco property debt to (b) Proportionate EBITDA.
DEBT AND PREFERRED EQUITY TO EBITDA RATIO: The ratio of (a) Aimco's proportionate share of debt net of Aimco's proportionate share of cash and restricted cash and Aimco's investment in the subordinated tranches in a securitization trust holding primarily Aimco property debt, plus Aimco's preferred stock and the preferred units of the Aimco OP to (b) Proportionate EBITDA.
DEBT SERVICE COVERAGE RATIO: As defined in Aimco's credit agreement, the ratio of (a) Earnings Before Interest, Taxes, Depreciation and Amortization, reduced by certain capital expenditure reserves (which Aimco refers to as "Compliance EBITDA"), to (b) debt service, which represents the sum of (i) Aimco's proportionate share of interest expense (excluding prepayment penalties and amortization of deferred financing costs) and (ii) debt amortization, for the four fiscal quarters preceding the date of calculation.
EBITDA COVERAGE OF INTEREST RATIO: The ratio of (a) Proportionate EBITDA to (b) Adjusted Interest Expense.
EBITDA COVERAGE OF INTEREST AND PREFERRED DIVIDENDS RATIO: The ratio of (a) Proportionate EBITDA to (b) the sum of Adjusted Interest Expense and Preferred Dividends.
FIXED CHARGE COVERAGE RATIO: As defined by Aimco's credit agreement, the ratio of (a) Compliance EBITDA to (b) fixed charges, which represent the sum of (i) Aimco's proportionate share of interest expense (excluding prepayment penalties and amortization of deferred financing costs), (ii) debt amortization and (iii) Preferred Dividends, for the four fiscal quarters preceding the date of calculation.
PREFERRED DIVIDENDS: Preferred dividends include dividends paid with respect to Aimco's Preferred Stock and the Aimco OP Preferred Partnership Units.
PROPORTIONATE EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (PROPORTIONATE EBITDA): Proportionate EBITDA is computed by adding to Aimco's Pro forma FFO (a) Aimco's proportionate share of interest expense, taxes, depreciation and amortization related to non-real estate assets, non-cash stock compensation expense and (b) Preferred Dividends.
DEFFERED TAX CREDIT INCOME: Deferred income includes $32.9 million of unamortized cash contributions received by Aimco in exchange for the allocation of tax credits and related tax benefits to investors in tax credit arrangements. These cash contributions are deferred upon receipt and amortized into earnings in future periods as Aimco delivers the tax credits and related benefits to the investors. Under existing tax credit agreements, Aimco will
receive additional cash contributions of $25.6 million, of which $5.3 million will be received during the remainder of 2015, and, on average, $5.0 million will be received each year from 2016 through 2019.
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| | | | | | | |
| | | | | March 31, 2015 |
| Deferred tax credit income balance | | $ | 32,897 |
|
| Cash contributions to be received in the future | | 25,584 |
|
| Total to be amortized | | $ | 58,481 |
|
|
| | | | | | | | | | | | | |
| | | Revenue | | Expense | | Projected Income |
| 2015 2Q - 4Q | | $ | 17,818 |
| | $ | (1,193 | ) | | $ | 16,625 |
|
| 2016 | | 18,236 |
| | (1,405 | ) | | 16,831 |
|
| 2017 | | 14,375 |
| | (1,170 | ) | | 13,205 |
|
| 2018 | | 6,879 |
| | (681 | ) | | 6,198 |
|
| 2019 | | 4,255 |
| | (535 | ) | | 3,720 |
|
| Thereafter | | 7,064 |
| | (5,162 | ) | | 1,902 |
|
| Total | | $ | 68,627 |
| | $ | (10,146 | ) | | $ | 58,481 |
|
EFFECTIVE APARTMENT HOMES: The number of actual apartment homes multiplied by Aimco's ownership interest in the apartment community as of the end of the current period. Effective Apartment Homes may be used to analyze Aimco's proportionate financial measures on a per-home basis.
FUNDS FROM OPERATIONS (FFO): FFO is a commonly used measure of REIT performance, which the National Association of Real Estate Investment Trusts (NAREIT) defines as net income, computed in accordance with GAAP, excluding gains from sales of, and impairment losses recognized with respect to, depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Aimco computes FFO for all periods presented in accordance with the guidance set forth by NAREIT.
In addition to FFO, Aimco uses PRO FORMA FUNDS FROM OPERATIONS (Pro forma FFO) and ADJUSTED FUNDS FROM OPERATIONS (AFFO) to measure performance. Pro forma FFO represents FFO as defined above, excluding preferred equity redemption related amounts (adjusted for noncontrolling interests). Preferred equity redemption related amounts (gains or losses) are items that periodically affect Aimco's operating results. Aimco excludes preferred equity redemption related amounts (gains or losses) from Pro forma FFO because such amounts are not representative of operating performance. AFFO represents Pro forma FFO reduced by Capital Replacements (also adjusted for noncontrolling interests).
FFO, Pro forma FFO and AFFO are helpful to investors in understanding Aimco's performance because they capture features particular to real estate performance by recognizing that real estate generally appreciates over time or maintains residual value to a much greater extent than do other depreciating assets such as machinery, computers or other personal property. There can be no assurance that Aimco's method for computing FFO, Pro forma FFO or AFFO is comparable with that of other real estate investment trusts.
MONEY-WEIGHTED AVERAGE INTEREST RATE: Money-Weighted Average Interest Rate represents the weighted average interest rate on Aimco’s fixed and floating rate property debt, which takes into account the timing of amortization and maturities. This rate is calculated by Aimco based on the unpaid principal balance as of March 31, 2015, and all contractual debt service payments associated with each of its fixed and floating rate property loans. The Money-Weighted Average Interest Rate can be compared to market interest rates to estimate the difference between the book value of Aimco’s fixed and floating rate property debt and the market value of such debt.
NEW LEASE AND RENEWAL 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 as either a new lease, where a vacant apartment is leased to a new customer, or a renewal of an existing lease.
OTHER AFFORDABLE APARTMENT COMMUNITIES: Affordable Apartment Communities that do not meet the Same Store Apartment Community definition.
OTHER CONVENTIONAL APARTMENT COMMUNITIES: Conventional Apartment Communities that do not meet the Same Store Apartment Community definition because they have significant rent control restrictions or have not reached and/or maintained a stabilized level of occupancy, often due to a casualty event. Results of operations of properties that are not multi-family, such as fitness centers, are included in the operating results of Other Conventional Apartment Communities.
OTHER EXPENSES, NET: Other expenses, net includes franchise taxes, risk management activities related to our unconsolidated partnerships, certain other corporate expenses and expenses specifically related to Aimco's administration of its real estate partnerships, for example, services such as audit, tax and legal.
PROPERTY NET OPERATING INCOME (NOI): NOI is defined by Aimco as total property rental and other property revenues less direct property operating expenses, including real estate taxes. NOI does not include: property management revenues, primarily from affiliates; casualties; property management expenses; depreciation; or interest expense. NOI is helpful because it helps both investors and management to understand the operating performance of real estate excluding costs associated with decisions about acquisition pricing, overhead allocations and financing arrangements. NOI is considered by many in the real estate industry to be a useful measure for determining the value of real estate. Reconciliations of NOI as presented in this Earnings Release and Supplemental Information to Aimco's consolidated GAAP amounts are provided on the following pages.
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Reconciliation of GAAP to Supplemental Schedule 6(a) Proportionate Conventional Same Store NOI Amounts |
(in thousands) (unaudited) | | | | | | | | |
| | Three Months Ended March 31, 2015 |
| | Consolidated Amounts | | Noncontrolling Interests | | Proportionate Amount | | Ownership Adjustments | | Proportionate Property Amount |
Conventional Same Store: | | | | | | | | | | |
Rental and other property revenues | | $ | 179,331 |
| | $ | (6,976 | ) | | $ | 172,355 |
| | $ | (297 | ) | | $ | 172,058 |
|
Property operating expenses | | 59,553 |
| | (2,362 | ) | | 57,191 |
| | 97 |
| | 57,288 |
|
Property NOI | | $ | 119,778 |
| | $ | (4,614 | ) | | $ | 115,164 |
| | $ | (394 | ) | | $ | 114,770 |
|
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2014 |
| | Consolidated Amounts | | Noncontrolling Interests | | Proportionate Amount | | Ownership Adjustments | | Proportionate Property Amount |
Conventional Same Store: | | | | | | | | | | |
Rental and other property revenues | | $ | 171,616 |
| | $ | (6,691 | ) | | $ | 164,925 |
| | $ | (164 | ) | | $ | 164,761 |
|
Property operating expenses | | 57,993 |
| | (2,386 | ) | | 55,607 |
| | 72 |
| | 55,679 |
|
Property NOI | | $ | 113,623 |
| | $ | (4,305 | ) | | $ | 109,318 |
| | $ | (236 | ) | | $ | 109,082 |
|
|
| | | | | | | | | | | | | | | | | | | | |
Reconciliation of GAAP to Supplemental Schedule 6(b) Proportionate Conventional Same Store NOI Amounts |
(in thousands) (unaudited) | | | | | | | | | | |
| | Three Months Ended December 31, 2014 |
| | Consolidated Amounts | | Noncontrolling Interests | | Proportionate Amount | | Ownership Adjustments | | Proportionate Property Amount |
Conventional Same Store: | | | | | | | | | | |
Rental and other property revenues | | $ | 176,709 |
| | $ | (6,905 | ) | | $ | 169,804 |
| | $ | (652 | ) | | 169,152 |
|
Property operating expenses | | 54,310 |
| | (2,225 | ) | | 52,085 |
| | 105 |
| | 52,190 |
|
Property NOI | | $ | 122,399 |
| | $ | (4,680 | ) | | $ | 117,719 |
| | $ | (757 | ) | | $ | 116,962 |
|
REDEVELOPMENT APARTMENT COMMUNITIES: Apartment communities where (a) a substantial number of available apartment homes have been vacated for major renovations or (b) renovations are complete but occupancy was not stabilized as of January 1, 2014.
SAME STORE APARTMENT COMMUNITIES: Same Store apartment communities are those that (a) are managed by Aimco, (b) have reached and maintained a stabilized level of occupancy as of January 1, 2014, and (c) are not expected to be sold within 12 months. Same Store apartment communities are classified as either Conventional or Affordable. Affordable Same Store apartment communities exclude those that are not subject to tax credit agreements, or have not reached and/or maintained a stabilized level of occupancy, often due to a casualty event.
SOLD AND HELD FOR SALE APARTMENT COMMUNITIES: Apartment communities either sold during the period or classified as held for sale at the end of the period. Results of operations and any gain or loss on sales of these apartment communities are included in continuing operations in Aimco's consolidated income statements. For purposes of highlighting results of operations related to Aimco's retained portfolio, results for Sold and Held For Sale Apartment Communities are excluded from Net Real Estate Operations and shown separately on a net basis in Aimco's Proportionate FFO presentation found in Supplemental Schedule 2.
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