Earnings (Loss) per Share/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, 2014 and 2013 (in thousands, except per share data):



	Three Months Ended
	March 31,
	2014			2013
Numerator:
Income (loss) from continuing operations	$	12,040		$	(1,663	)
Gain on dispositions of real estate, net of tax	69,492			—
(Income) loss from continuing operations and gain on dispositions attributable to noncontrolling interests	(16,605		)	1,158
Income attributable to preferred stockholders	(454		)	(702		)
Income attributable to participating securities	(239		)	(140		)
Income (loss) from continuing operations attributable to Aimco common stockholders	$	64,234		$	(1,347	)
Income from discontinued operations	$	—		$	4,496
Loss from discontinued operations attributable to noncontrolling interests	—			1,901
Income from discontinued operations attributable to Aimco common stockholders	$	—		$	6,397
Net income	$	81,532		$	2,833
Net (income) loss attributable to noncontrolling interests	(16,605		)	3,059
Net income attributable to preferred stockholders	(454		)	(702		)
Net income attributable to participating securities	(239		)	(140		)
Net income attributable to Aimco common stockholders	$	64,234		$	5,050
Denominator:
Weighted average common shares outstanding – basic	145,473			145,169
Dilutive potential common shares	208			—
Weighted average common shares outstanding – diluted	145,681			145,169
Earnings (loss) per common share – basic and diluted:
Income (loss) from continuing operations attributable to Aimco common stockholders	$	0.44		$	(0.01	)
Income from discontinued operations attributable to Aimco common stockholders	—			0.04
Net income attributable to Aimco common stockholders	$	0.44		$	0.03

The Aimco Operating Partnership

The Aimco Operating Partnership calculates earnings (loss) per unit based on the weighted average number of common partnership 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, 2014 and 2013 (in thousands, except per unit data):



	Three Months Ended
	March 31,
	2014			2013
Numerator:
Income (loss) from continuing operations	$	12,040		$	(1,663	)
Gain on dispositions of real estate, net of tax	69,492			—
(Income) loss from continuing operations and gain on dispositions attributable to noncontrolling interests	(11,389		)	2,745
Income attributable to the Aimco Operating Partnership’s preferred unitholders	(2,059		)	(2,308		)
Income attributable to participating securities	(239		)	(140		)
Income (loss) from continuing operations attributable to the Aimco Operating Partnership’s common unitholders	$	67,845		$	(1,366	)
Income from discontinued operations	$	—		$	4,496
Loss from discontinued operations attributable to noncontrolling interests	—			2,217
Income from discontinued operations attributable to the Aimco Operating Partnership’s common unitholders	$	—		$	6,713
Net income	$	81,532		$	2,833
Net (income) loss attributable to noncontrolling interests	(11,389		)	4,962
Net income attributable to the Aimco Operating Partnership’s preferred unitholders	(2,059		)	(2,308		)
Net income attributable to participating securities	(239		)	(140		)
Net income attributable to the Aimco Operating Partnership’s common unitholders	$	67,845		$	5,347
Denominator:
Weighted average common units outstanding – basic	153,329			153,169
Dilutive potential common units	208			—
Weighted average common units outstanding – diluted	153,537			153,169
Earnings (loss) per common unit – basic and diluted:
Income (loss) from continuing operations attributable to the Aimco Operating Partnership’s common unitholders	$	0.44		$	(0.01	)
Income from discontinued operations attributable to the Aimco Operating Partnership’s common unitholders	—			0.04
Net income attributable to the Aimco Operating Partnership’s common unitholders	$	0.44		$	0.03

Aimco and the Aimco Operating Partnership

As of March 31, 2014, the common share equivalents or common partnership unit equivalents that could potentially dilute basic earnings per share or unit in future periods totaled 3.0 million. 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 partnership units equal to the number of shares purchased under the options. The effect of these securities was dilutive for the three months ended March 31, 2014, and accordingly has been included in the denominator for calculating diluted earnings per share and unit during these periods. These securities have been excluded from the earnings (loss) per share or unit computations for the three months ended March 31, 2013, because their effect would have been anti-dilutive. Participating securities, consisting of unvested restricted shares of Common Stock, receive dividends similar to shares of Common Stock and common partnership units and totaled 0.5 million and 0.6 million at March 31, 2014 and 2013, respectively. 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. As of March 31, 2014, a total of 2.9 million preferred OP Units were outstanding with an aggregate redemption value of $79.1 million and were potentially redeemable for approximately 2.6 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. Accordingly, we have excluded these securities from earnings (loss) per share and unit computations for the periods presented above, and we expect to exclude them in future periods.