XML 49 R17.htm IDEA: XBRL DOCUMENT v2.4.0.6
Business Segments
9 Months Ended
Sep. 30, 2012
Segment Reporting [Abstract]  
Business Segments
NOTE 11 — Business Segments
We have two reportable segments: conventional real estate operations and affordable real estate operations. Our conventional real estate operations consist of market-rate apartments with rents paid by the residents and included 183 properties with 57,744 units at September 30, 2012. Our affordable real estate operations consisted of 136 properties with 17,097 units at September 30, 2012, with rents that are generally paid, in whole or part, by a government agency.
Our chief executive officer, who is our chief operating decision maker, uses various generally accepted industry financial measures to assess the performance and financial condition of the business, including: Net Asset Value, which is the estimated fair value of our assets, net of liabilities and preferred equity; Funds From Operations, which represents net income or loss 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; Pro forma Funds From Operations, which is Funds From Operations excluding preferred equity redemption related amounts; Adjusted Funds From Operations, which is Pro forma Funds From Operations less spending for capital replacements, which represents our estimation of the capital additions required to maintain the value of our portfolio during our ownership period; property net operating income, which is rental and other property revenues less direct property operating expenses, including real estate taxes; proportionate property net operating income, which reflects our share of property net operating income of our consolidated and unconsolidated properties that we manage; same store property operating results; Free Cash Flow, which is net operating income less spending for Capital Replacements; Free Cash Flow internal rate of return; financial coverage ratios; and leverage as shown on our balance sheet. Our chief operating decision maker emphasizes proportionate property net operating income as a key measurement of segment profit or loss.
The following tables present the revenues, net operating income (loss) and income (loss) from continuing operations of our conventional and affordable real estate operations segments on a proportionate basis for the three and nine months ended September 30, 2012 and 2011 (in thousands):
 
Conventional
Real Estate
Operations
 
Affordable
Real Estate
Operations
 
Proportionate
Adjustments (1)
 
Corporate and
Amounts Not
Allocated to
Segments
 
Consolidated
Three Months Ended September 30, 2012:
 
 
 
 
 
 
 
 
 
Rental and other property revenues (2)
$
209,013

 
$
28,277

 
$
19,334

 
$
128

 
$
256,752

Asset management and tax credit revenues

 

 

 
10,696

 
10,696

Total revenues
209,013

 
28,277

 
19,334

 
10,824

 
267,448

Property operating expenses (2)
77,078

 
11,161

 
8,110

 
10,113

 
106,462

Investment management expenses

 

 

 
2,817

 
2,817

Depreciation and amortization (2)

 

 

 
87,444

 
87,444

Provision for real estate impairment losses (2)

 

 

 
2,453

 
2,453

General and administrative expenses

 

 

 
12,311

 
12,311

Other expenses, net

 

 

 
5,230

 
5,230

Total operating expenses
77,078

 
11,161

 
8,110

 
120,368

 
216,717

Net operating income (loss)
131,935

 
17,116

 
11,224

 
(109,544
)
 
50,731

Other items included in continuing operations

 

 

 
(46,162
)
 
(46,162
)
Income (loss) from continuing operations
$
131,935

 
$
17,116

 
$
11,224

 
$
(155,706
)
 
$
4,569

 
Conventional
Real Estate
Operations
 
Affordable
Real Estate
Operations
 
Proportionate
Adjustments (1)
 
Corporate and
Amounts Not
Allocated to
Segments
 
Consolidated
Three Months Ended September 30, 2011:
 
 
 
 
 
 
 
 
 
Rental and other property revenues (2)
$
196,411

 
$
27,073

 
$
18,897

 
$
193

 
$
242,574

Asset management and tax credit revenues

 

 

 
11,885

 
11,885

Total revenues
196,411

 
27,073

 
18,897

 
12,078

 
254,459

Property operating expenses (2)
74,447

 
10,514

 
7,925

 
13,572

 
106,458

Investment management expenses

 

 

 
2,311

 
2,311

Depreciation and amortization (2)

 

 

 
87,687

 
87,687

General and administrative expenses

 

 

 
12,741

 
12,741

Other expenses, net

 

 

 
3,838

 
3,838

Total operating expenses
74,447

 
10,514

 
7,925

 
120,149

 
213,035

Net operating income (loss)
121,964

 
16,559

 
10,972

 
(108,071
)
 
41,424

Other items included in continuing operations (3)

 

 

 
(65,695
)
 
(65,695
)
Income (loss) from continuing operations
$
121,964

 
$
16,559

 
$
10,972

 
$
(173,766
)
 
$
(24,271
)
 
Conventional
Real Estate
Operations
 
Affordable
Real Estate
Operations
 
Proportionate
Adjustments (1)
 
Corporate and
Amounts Not
Allocated to
Segments
 
Consolidated
Nine Months Ended September 30, 2012:
 
 
 
 
 
 
 
 
 
Rental and other property revenues (2)
$
613,944

 
$
84,367

 
$
61,463

 
$
381

 
$
760,155

Asset management and tax credit revenues

 

 

 
27,681

 
27,681

Total revenues
613,944

 
84,367

 
61,463

 
28,062

 
787,836

Property operating expenses (2)
224,156

 
33,075

 
24,356

 
27,928

 
309,515

Investment management expenses

 

 

 
9,445

 
9,445

Depreciation and amortization (2)

 

 

 
264,978

 
264,978

Provision for real estate impairment losses (2)

 

 

 
10,801

 
10,801

General and administrative expenses

 

 

 
37,491

 
37,491

Other expenses, net

 

 

 
11,514

 
11,514

Total operating expenses
224,156

 
33,075

 
24,356

 
362,157

 
643,744

Net operating income (loss)
389,788

 
51,292

 
37,107

 
(334,095
)
 
144,092

Other items included in continuing operations

 

 

 
(167,861
)
 
(167,861
)
Income (loss) from continuing operations
$
389,788

 
$
51,292

 
$
37,107

 
$
(501,956
)
 
$
(23,769
)
 
Conventional
Real Estate
Operations
 
Affordable
Real Estate
Operations
 
Proportionate
Adjustments (1)
 
Corporate and
Amounts Not
Allocated to
Segments
 
Consolidated
Nine Months Ended September 30, 2011:
 
 
 
 
 
 
 
 
 
Rental and other property revenues (2)
$
584,428

 
$
81,093

 
$
58,520

 
$
1,049

 
$
725,090

Asset management and tax credit revenues

 

 

 
28,772

 
28,772

Total revenues
584,428

 
81,093

 
58,520

 
29,821

 
753,862

Property operating expenses (2)
218,918

 
31,947

 
24,894

 
41,184

 
316,943

Investment management expenses

 

 

 
7,397

 
7,397

Depreciation and amortization (2)

 

 

 
259,069

 
259,069

General and administrative expenses

 

 

 
36,370

 
36,370

Other expenses, net

 

 

 
12,328

 
12,328

Total operating expenses
218,918

 
31,947

 
24,894

 
356,348

 
632,107

Net operating income (loss)
365,510

 
49,146

 
33,626

 
(326,527
)
 
121,755

Other items included in continuing operations (3)

 

 

 
(219,360
)
 
(219,360
)
Income (loss) from continuing operations
$
365,510

 
$
49,146

 
$
33,626

 
$
(545,887
)
 
$
(97,605
)
(1)
Represents adjustments for the noncontrolling interests in consolidated real estate partnerships’ share of the results of our consolidated properties and the results of consolidated properties that we do not manage, which are excluded from our measurement of segment performance but included in the related consolidated amounts, and our share of the results of operations of our unconsolidated real estate partnerships that we manage, which are included in our measurement of segment performance but excluded from the related consolidated amounts.
(2)
Proportionate property net operating income, our key measurement of segment profit or loss, excludes provision for operating real estate impairment losses, property management revenues (which are included in rental and other property revenues), property management expenses and casualty gains and losses (which are included in property operating expenses) and depreciation and amortization. Accordingly, we do not allocate these amounts to our segments.
(3)
In addition to the other items included in continuing operations presented in the table for the three and nine months ended September 30, 2011, the Aimco Operating Partnership recognized $0.8 million and $1.3 million, respectively, of interest income on its notes receivable from Aimco. These notes were repaid by Aimco during the three months ended December 31, 2011.
For the nine months ended September 30, 2012 and 2011, capital additions related to our conventional segment totaled $174.7 million and $111.2 million, respectively, and capital additions related to our affordable segment totaled $11.1 million and $12.2 million, respectively.