Earnings (Loss) per Share and Earning (Loss) per Unit

3 Months Ended

Mar. 31, 2012

Earnings (Loss) per Share and Earning (Loss) per Unit

Earnings (Loss) per Share and Earning (Loss) per Unit

NOTE 9 — Earnings (Loss) per Share and Earning (Loss) per Unit

Aimco

Aimco calculates earnings (loss) per share based on the weighted average number of shares of Common Stock, participating securities, common stock equivalents and dilutive convertible securities outstanding during the period. The following table illustrates Aimco’s calculation of basic and diluted earnings (loss) per share for the three months ended March 31, 2012 and 2011 (in thousands, except per share data):

	Three Months Ended March 31,
	2012			2011
Numerator:
Loss from continuing operations	$	(24,224	)	$	(31,671	)
Loss from continuing operations attributable to noncontrolling interests		196			7,126
Income attributable to preferred stockholders		(12,439	)		(12,456	)
Income attributable to participating securities		(119	)		(57	)
Loss from continuing operations attributable to Aimco common stockholders	$	(36,586	)	$	(37,058	)
Income from discontinued operations	$	34,871		$	4,394
(Income) loss from discontinued operations attributable to noncontrolling interests		(8,894	)		891
Income from discontinued operations attributable to Aimco common stockholders	$	25,977		$	5,285
Net income (loss)	$	10,647		$	(27,277	)
Net (income) loss attributable to noncontrolling interests		(8,698	)		8,017
Income attributable to preferred stockholders		(12,439	)		(12,456	)
Income attributable to participating securities		(119	)		(57	)
Net loss attributable to Aimco common stockholders	$	(10,609	)	$	(31,773	)
Denominator:
Denominator for basic earnings per share — weighted average number of shares of Common Stock outstanding		120,526			117,320
Effect of dilutive securities:
Dilutive potential common shares		—			—
Denominator for diluted earnings per share		120,526			117,320
Earnings (loss) per common share – basic and diluted:
Loss from continuing operations attributable to Aimco common stockholders	$	(0.30	)	$	(0.32	)
Income from discontinued operations attributable to Aimco common stockholders		0.21			0.05
Net loss attributable to Aimco common stockholders	$	(0.09	)	$	(0.27	)

The Aimco Operating Partnership

The Aimco Operating Partnership calculates earnings (loss) per unit based on the weighted average number of common OP Units and equivalents, participating securities and dilutive convertible securities outstanding during the period. The Aimco Operating Partnership considers both common OP Units and HPUs, which have identical rights to distributions and undistributed earnings, to be common units for purposes of the earnings per unit data presented below. The following table illustrates the Aimco Operating Partnership’s calculation of basic and diluted earnings (loss) per unit for the three months ended March 31, 2012 and 2011 (in thousands, except per unit data):

	Three Months Ended March 31,
	2012			2011
Numerator:
Loss from continuing operations	$	(24,224	)	$	(31,459	)
Loss from continuing operations attributable to noncontrolling interests		(699	)		6,033
Income attributable to the Partnership’s preferred unitholders		(14,109	)		(14,127	)
Income attributable to participating securities		(119	)		(57	)
Loss from continuing operations attributable to the Partnership’s common unitholders	$	(39,151	)	$	(39,610	)
Income from discontinued operations	$	34,871		$	4,394
Income from discontinued operations attributable to noncontrolling interests		(7,066	)		1,272
Income from discontinued operations attributable to the Partnership’s common unitholders	$	27,805		$	5,666
Net income (loss)	$	10,647		$	(27,065	)
(Income) loss attributable to noncontrolling interests		(7,765	)		7,305
Income attributable to the Partnership’s preferred unitholders		(14,109	)		(14,127	)
Income attributable to participating securities		(119	)		(57	)
Net loss attributable to the Partnership’s common unitholders	$	(11,346	)	$	(33,944	)
Denominator:
Denominator for basic earnings per unit — weighted average number of common units outstanding
Common OP Units		126,389			123,433
HPUs		2,340			2,340
Total common units		128,729			125,773
Effect of dilutive securities:
Dilutive potential common units		—			—
Denominator for diluted earnings per unit		128,729			125,773
Earnings (loss) per common unit – basic and diluted:
Loss from continuing operations attributable to the Partnership’s common unitholders	$	(0.30	)	$	(0.31	)
Income from discontinued operations attributable to the Partnership’s common unitholders		0.21			0.04
Net loss attributable to the Partnership’s common unitholders	$	(0.09	)	$	(0.27	)

As of March 31, 2012 and 2011, the common share or unit equivalents that could potentially dilute basic earnings per share or unit in future periods totaled 5.2 million and 7.1 million, respectively. These securities represent options to purchase shares of Common Stock, which, if exercised, would result in Aimco’s issuance of additional shares and the Aimco Operating Partnership’s issuance to Aimco of additional common OP Units equal to the number of shares purchased under the options. These securities have been excluded from the earnings (loss) per share or unit computations for the three months ended March 31, 2012 and 2011, because their effect would have been anti-dilutive. Participating securities, consisting primarily of unvested restricted shares of Common Stock, receive dividends similar to shares of Common Stock and common OP Units and totaled 0.5 million at March 31, 2012 and 2011. The effect of participating securities is included in basic and diluted earnings (loss) per share and unit computations for the periods presented above using the two-class method of allocating distributed and undistributed earnings.

Various classes of preferred OP Units of the Aimco Operating Partnership are outstanding. Depending on the terms of each class, these preferred OP Units are convertible into common OP Units or redeemable for cash or, at the Aimco Operating Partnership’s option, Common Stock, and are paid distributions varying from 1.8% to 8.8% per annum per unit, or equal to the dividends paid on Common Stock based on the conversion terms. As of March 31, 2012, a total of 3.1 million preferred OP Units were outstanding with redemption values of $82.5 million and were potentially redeemable for approximately 3.1 million shares of Common Stock (based on the period end market price), or cash at the Aimco Operating Partnership’s option. The Aimco Operating Partnership has a redemption policy that requires cash settlement of redemption requests for the preferred OP Units, subject to limited exceptions. The potential dilutive effect of these securities would have been antidilutive in the periods presented. Additionally, based on the Aimco Operating Partnership’s cash redemption policy, they may also be excluded from future earnings (loss) per share or unit computations in periods during which their effect is dilutive.