UNITED STATES | |
SECURITIES AND EXCHANGE COMMISSION | |
Washington, D.C. 20549 | |
_______________________________________ | |
Form 10-Q | |
(Mark One) | |
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2016 | |
OR | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to | |
Commission File Number 1-13232 (Apartment Investment and Management Company) | |
Commission File Number 0-24497 (AIMCO Properties, L.P.) | |
Apartment Investment and Management Company | |
AIMCO Properties, L.P. | |
(Exact name of registrant as specified in its charter) | |
Maryland (Apartment Investment and Management Company) | 84-1259577 | ||
Delaware (AIMCO Properties, L.P.) | 84-1275621 | ||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||
4582 South Ulster Street, Suite 1100 | |||
Denver, Colorado | 80237 | ||
(Address of principal executive offices) | (Zip Code) | ||
(303) 757-8101 | |||
(Registrant’s telephone number, including area code) | |||
Not Applicable | |||
(Former name, former address, and former fiscal year, if changed since last report) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | |
Apartment Investment and Management Company: Yes x No o | AIMCO Properties, L.P.: Yes x No o |
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). | |
Apartment Investment and Management Company: Yes x No o | AIMCO Properties, L.P.: Yes x No o |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): | ||||
Apartment Investment and Management Company: | ||||
Large accelerated filer | x | Accelerated filer | o | |
Non-accelerated filer | o | (Do not check if a smaller reporting company) | Smaller reporting company | o |
AIMCO Properties, L.P.: | ||||
Large accelerated filer | o | Accelerated filer | x | |
Non-accelerated filer | o | (Do not check if a smaller reporting company) | Smaller reporting company | o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | ||||||||
Apartment Investment and Management Company: Yes | o | No | x | AIMCO Properties, L.P.: Yes | o | No | x |
_______________________________________________________ |
The number of shares of Apartment Investment and Management Company |
Class A Common Stock outstanding as of April 28, 2016: 156,605,152 |
The number of Partnership Common Units outstanding as of April 28, 2016: 164,407,158 |
• | We present our business as a whole, in the same manner our management views and operates the business; |
• | We eliminate duplicative disclosure and provide a more streamlined and readable presentation since a substantial portion of the disclosures apply to both Aimco and the Aimco Operating Partnership; and |
• | We save time and cost through the preparation of a single combined report rather than two separate reports. |
Page | ||
ITEM 1. | ||
Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015 (Unaudited) | ||
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2016 and 2015 (Unaudited) | ||
Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2016 and 2015 (Unaudited) | ||
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015 (Unaudited) | ||
Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015 (Unaudited) | ||
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2016 and 2015 (Unaudited) | ||
Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2016 and 2015 (Unaudited) | ||
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015 (Unaudited) | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
ITEM 1A. | ||
ITEM 2. | ||
ITEM 5. | Other Information | |
ITEM 6. | ||
ITEM 1. | Financial Statements |
March 31, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Buildings and improvements | $ | 6,525,006 | $ | 6,446,326 | |||
Land | 1,861,157 | 1,861,157 | |||||
Total real estate | 8,386,163 | 8,307,483 | |||||
Accumulated depreciation | (2,858,642 | ) | (2,778,022 | ) | |||
Net real estate | 5,527,521 | 5,529,461 | |||||
Cash and cash equivalents | 64,454 | 50,789 | |||||
Restricted cash | 90,158 | 86,956 | |||||
Other assets | 460,080 | 448,405 | |||||
Assets held for sale | — | 3,070 | |||||
Total assets | $ | 6,142,213 | $ | 6,118,681 | |||
LIABILITIES AND EQUITY | |||||||
Non-recourse property debt, net | $ | 3,811,510 | $ | 3,822,141 | |||
Revolving credit facility borrowings | 106,080 | 27,000 | |||||
Total indebtedness | 3,917,590 | 3,849,141 | |||||
Accounts payable | 37,792 | 36,123 | |||||
Accrued liabilities and other | 305,604 | 317,481 | |||||
Deferred income | 59,961 | 64,052 | |||||
Liabilities related to assets held for sale | — | 53 | |||||
Total liabilities | 4,320,947 | 4,266,850 | |||||
Preferred noncontrolling interests in Aimco Operating Partnership | 86,201 | 87,926 | |||||
Commitments and contingencies (Note 5) | |||||||
Equity: | |||||||
Perpetual Preferred Stock | 159,126 | 159,126 | |||||
Common Stock, $0.01 par value, 500,787,260 shares authorized, 156,605,152 and 156,326,416 shares issued/outstanding at March 31, 2016 and December 31, 2015, respectively | 1,566 | 1,563 | |||||
Additional paid-in capital | 4,068,196 | 4,064,659 | |||||
Accumulated other comprehensive loss | (431 | ) | (6,040 | ) | |||
Distributions in excess of earnings | (2,625,295 | ) | (2,596,917 | ) | |||
Total Aimco equity | 1,603,162 | 1,622,391 | |||||
Noncontrolling interests in consolidated real estate partnerships | 142,742 | 151,365 | |||||
Common noncontrolling interests in Aimco Operating Partnership | (10,839 | ) | (9,851 | ) | |||
Total equity | 1,735,065 | 1,763,905 | |||||
Total liabilities and equity | $ | 6,142,213 | $ | 6,118,681 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
REVENUES | |||||||
Rental and other property revenues | $ | 241,481 | $ | 238,289 | |||
Tax credit and asset management revenues | 4,758 | 5,976 | |||||
Total revenues | 246,239 | 244,265 | |||||
OPERATING EXPENSES | |||||||
Property operating expenses | 88,397 | 95,492 | |||||
Investment management expenses | 975 | 1,603 | |||||
Depreciation and amortization | 79,828 | 74,432 | |||||
General and administrative expenses | 11,935 | 10,652 | |||||
Other expenses, net | 1,570 | 1,019 | |||||
Total operating expenses | 182,705 | 183,198 | |||||
Operating income | 63,534 | 61,067 | |||||
Interest income | 1,835 | 1,725 | |||||
Interest expense | (47,634 | ) | (53,520 | ) | |||
Other, net | 77 | 2,264 | |||||
Income before income taxes and gain on dispositions | 17,812 | 11,536 | |||||
Income tax benefit | 5,886 | 6,921 | |||||
Income before gain on dispositions | 23,698 | 18,457 | |||||
Gain on dispositions of real estate, net of tax | 6,187 | 85,693 | |||||
Net income | 29,885 | 104,150 | |||||
Noncontrolling interests: | |||||||
Net income attributable to noncontrolling interests in consolidated real estate partnerships | (930 | ) | (4,756 | ) | |||
Net income attributable to preferred noncontrolling interests in Aimco Operating Partnership | (1,726 | ) | (1,736 | ) | |||
Net income attributable to common noncontrolling interests in Aimco Operating Partnership | (1,172 | ) | (4,398 | ) | |||
Net income attributable to noncontrolling interests | (3,828 | ) | (10,890 | ) | |||
Net income attributable to Aimco | 26,057 | 93,260 | |||||
Net income attributable to Aimco preferred stockholders | (2,757 | ) | (3,522 | ) | |||
Net income attributable to participating securities | (77 | ) | (394 | ) | |||
Net income attributable to Aimco common stockholders | $ | 23,223 | $ | 89,344 | |||
Net income attributable to Aimco per common share – basic and diluted (Note 7) | $ | 0.15 | $ | 0.58 | |||
Dividends declared per common share | $ | 0.33 | $ | 0.28 | |||
Weighted average common shares outstanding – basic | 155,791 | 153,821 | |||||
Weighted average common shares outstanding – diluted | 156,117 | 154,277 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Net income | $ | 29,885 | $ | 104,150 | |||
Other comprehensive income (loss): | |||||||
Unrealized losses on interest rate swaps | (674 | ) | (786 | ) | |||
Losses on interest rate swaps reclassified into interest expense from accumulated other comprehensive loss | 420 | 423 | |||||
Unrealized gains (losses) on debt securities classified as available-for-sale | 6,183 | (217 | ) | ||||
Other comprehensive income (loss) | 5,929 | (580 | ) | ||||
Comprehensive income | 35,814 | 103,570 | |||||
Comprehensive income attributable to noncontrolling interests | (4,148 | ) | (10,863 | ) | |||
Comprehensive income attributable to Aimco | $ | 31,666 | $ | 92,707 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income | $ | 29,885 | $ | 104,150 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 79,828 | 74,432 | |||||
Gain on dispositions of real estate, net of tax | (6,187 | ) | (85,693 | ) | |||
Other adjustments | (8,749 | ) | (8,495 | ) | |||
Net changes in operating assets and operating liabilities | (20,824 | ) | (19,743 | ) | |||
Net cash provided by operating activities | 73,953 | 64,651 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Purchases of real estate | (2,275 | ) | (40,800 | ) | |||
Capital expenditures | (79,576 | ) | (71,742 | ) | |||
Proceeds from dispositions of real estate | 9,601 | 133,305 | |||||
Purchases of corporate assets | (1,764 | ) | (2,167 | ) | |||
Change in restricted cash | 3,234 | 2,546 | |||||
Other investing activities | 5,209 | (699 | ) | ||||
Net cash (used in) provided by investing activities | (65,571 | ) | 20,443 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Proceeds from non-recourse property debt | 7,766 | 18,473 | |||||
Principal repayments on non-recourse property debt | (19,179 | ) | (140,858 | ) | |||
Net borrowings (repayments) on revolving credit facility | 79,080 | (112,330 | ) | ||||
Proceeds from issuance of Common Stock | — | 366,585 | |||||
Redemption of Preferred Stock | — | (27,000 | ) | ||||
Payment of dividends to holders of Preferred Stock | (2,757 | ) | (2,827 | ) | |||
Payment of dividends to holders of Common Stock | (51,523 | ) | (43,758 | ) | |||
Payment of distributions to noncontrolling interests | (6,423 | ) | (6,203 | ) | |||
Other financing activities | (1,681 | ) | (1,657 | ) | |||
Net cash provided by financing activities | 5,283 | 50,425 | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 13,665 | 135,519 | |||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 50,789 | 28,971 | |||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 64,454 | $ | 164,490 |
March 31, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Buildings and improvements | $ | 6,525,006 | $ | 6,446,326 | |||
Land | 1,861,157 | 1,861,157 | |||||
Total real estate | 8,386,163 | 8,307,483 | |||||
Accumulated depreciation | (2,858,642 | ) | (2,778,022 | ) | |||
Net real estate | 5,527,521 | 5,529,461 | |||||
Cash and cash equivalents | 64,454 | 50,789 | |||||
Restricted cash | 90,158 | 86,956 | |||||
Other assets | 460,080 | 448,405 | |||||
Assets held for sale | — | 3,070 | |||||
Total assets | $ | 6,142,213 | $ | 6,118,681 | |||
LIABILITIES AND EQUITY | |||||||
Non-recourse property debt, net | $ | 3,811,510 | $ | 3,822,141 | |||
Revolving credit facility borrowings | 106,080 | 27,000 | |||||
Total indebtedness | 3,917,590 | 3,849,141 | |||||
Accounts payable | 37,792 | 36,123 | |||||
Accrued liabilities and other | 305,604 | 317,481 | |||||
Deferred income | 59,961 | 64,052 | |||||
Liabilities related to assets held for sale | — | 53 | |||||
Total liabilities | 4,320,947 | 4,266,850 | |||||
Redeemable preferred units | 86,201 | 87,926 | |||||
Commitments and contingencies (Note 5) | |||||||
Partners’ Capital: | |||||||
Preferred units | 159,126 | 159,126 | |||||
General Partner and Special Limited Partner | 1,444,036 | 1,463,265 | |||||
Limited Partners | (10,839 | ) | (9,851 | ) | |||
Partners’ capital attributable to the Aimco Operating Partnership | 1,592,323 | 1,612,540 | |||||
Noncontrolling interests in consolidated real estate partnerships | 142,742 | 151,365 | |||||
Total partners’ capital | 1,735,065 | 1,763,905 | |||||
Total liabilities and partners’ capital | $ | 6,142,213 | $ | 6,118,681 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
REVENUES | |||||||
Rental and other property revenues | $ | 241,481 | $ | 238,289 | |||
Tax credit and asset management revenues | 4,758 | 5,976 | |||||
Total revenues | 246,239 | 244,265 | |||||
OPERATING EXPENSES | |||||||
Property operating expenses | 88,397 | 95,492 | |||||
Investment management expenses | 975 | 1,603 | |||||
Depreciation and amortization | 79,828 | 74,432 | |||||
General and administrative expenses | 11,935 | 10,652 | |||||
Other expenses, net | 1,570 | 1,019 | |||||
Total operating expenses | 182,705 | 183,198 | |||||
Operating income | 63,534 | 61,067 | |||||
Interest income | 1,835 | 1,725 | |||||
Interest expense | (47,634 | ) | (53,520 | ) | |||
Other, net | 77 | 2,264 | |||||
Income before income taxes and gain on dispositions | 17,812 | 11,536 | |||||
Income tax benefit | 5,886 | 6,921 | |||||
Income before gain on dispositions | 23,698 | 18,457 | |||||
Gain on dispositions of real estate, net of tax | 6,187 | 85,693 | |||||
Net income | 29,885 | 104,150 | |||||
Net income attributable to noncontrolling interests in consolidated real estate partnerships | (930 | ) | (4,756 | ) | |||
Net income attributable to the Aimco Operating Partnership | 28,955 | 99,394 | |||||
Net income attributable to the Aimco Operating Partnership’s preferred unitholders | (4,483 | ) | (5,258 | ) | |||
Net income attributable to participating securities | (77 | ) | (394 | ) | |||
Net income attributable to the Aimco Operating Partnership’s common unitholders | $ | 24,395 | $ | 93,742 | |||
Net income attributable to the Aimco Operating Partnership per common unit – basic and diluted (Note 7) | $ | 0.15 | $ | 0.58 | |||
Distributions declared per common unit | $ | 0.33 | $ | 0.28 | |||
Weighted average common units outstanding – basic | 163,639 | 161,461 | |||||
Weighted average common units outstanding – diluted | 163,965 | 161,917 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Net income | $ | 29,885 | $ | 104,150 | |||
Other comprehensive income (loss): | |||||||
Unrealized losses on interest rate swaps | (674 | ) | (786 | ) | |||
Losses on interest rate swaps reclassified into interest expense from accumulated other comprehensive loss | 420 | 423 | |||||
Unrealized gains (losses) on debt securities classified as available-for-sale | 6,183 | (217 | ) | ||||
Other comprehensive income (loss) | 5,929 | (580 | ) | ||||
Comprehensive income | 35,814 | 103,570 | |||||
Comprehensive income attributable to noncontrolling interests | (969 | ) | (4,756 | ) | |||
Comprehensive income attributable to the Aimco Operating Partnership | $ | 34,845 | $ | 98,814 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income | $ | 29,885 | $ | 104,150 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 79,828 | 74,432 | |||||
Gain on dispositions of real estate, net of tax | (6,187 | ) | (85,693 | ) | |||
Other adjustments | (8,749 | ) | (8,495 | ) | |||
Net changes in operating assets and operating liabilities | (20,824 | ) | (19,743 | ) | |||
Net cash provided by operating activities | 73,953 | 64,651 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Purchases of real estate | (2,275 | ) | (40,800 | ) | |||
Capital expenditures | (79,576 | ) | (71,742 | ) | |||
Proceeds from dispositions of real estate | 9,601 | 133,305 | |||||
Purchases of corporate assets | (1,764 | ) | (2,167 | ) | |||
Change in restricted cash | 3,234 | 2,546 | |||||
Other investing activities | 5,209 | (699 | ) | ||||
Net cash (used in) provided by investing activities | (65,571 | ) | 20,443 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Proceeds from non-recourse property debt | 7,766 | 18,473 | |||||
Principal repayments on non-recourse property debt | (19,179 | ) | (140,858 | ) | |||
Net borrowings (repayments) on revolving credit facility | 79,080 | (112,330 | ) | ||||
Proceeds from issuance of common partnership units to Aimco | — | 366,585 | |||||
Redemption of Preferred Units from Aimco | — | (27,000 | ) | ||||
Payment of distributions to holders of Preferred Units | (4,483 | ) | (4,563 | ) | |||
Payment of distributions to General Partner and Special Limited Partner | (51,523 | ) | (43,758 | ) | |||
Payment of distributions to Limited Partners | (2,592 | ) | (2,139 | ) | |||
Payment of distributions to noncontrolling interests | (2,105 | ) | (2,328 | ) | |||
Other financing activities | (1,681 | ) | (1,657 | ) | |||
Net cash provided by financing activities | 5,283 | 50,425 | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 13,665 | 135,519 | |||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 50,789 | 28,971 | |||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 64,454 | $ | 164,490 |
Balance, December 31, 2015 | $ | 87,926 | |
Distributions to preferred unitholders | (1,726 | ) | |
Redemption of preferred units and other | (1,725 | ) | |
Net income | 1,726 | ||
Balance, March 31, 2016 | $ | 86,201 |
Aimco Equity | Noncontrolling interests in consolidated real estate partnerships | Common noncontrolling interests in Aimco Operating Partnership | Total Equity | ||||||||||||
Balance, December 31, 2015 | $ | 1,622,391 | $ | 151,365 | $ | (9,851 | ) | $ | 1,763,905 | ||||||
Preferred stock dividends | (2,757 | ) | — | — | (2,757 | ) | |||||||||
Common dividends and distributions | (51,678 | ) | (9,592 | ) | (2,592 | ) | (63,862 | ) | |||||||
Redemptions of common OP Units | — | — | (142 | ) | (142 | ) | |||||||||
Amortization of stock-based compensation cost | 2,879 | — | — | 2,879 | |||||||||||
Stock option exercises | 174 | — | — | 174 | |||||||||||
Effect of changes in ownership for consolidated entities | (293 | ) | — | 293 | — | ||||||||||
Change in accumulated other comprehensive loss | 5,609 | 39 | 281 | 5,929 | |||||||||||
Other | 780 | — | — | 780 | |||||||||||
Net income | 26,057 | 930 | 1,172 | 28,159 | |||||||||||
Balance, March 31, 2016 | $ | 1,603,162 | $ | 142,742 | $ | (10,839 | ) | $ | 1,735,065 |
Partners’ capital attributable to the Aimco Operating Partnership | |||
Balance, December 31, 2015 | $ | 1,612,540 | |
Distributions to preferred units held by Aimco | (2,757 | ) | |
Distributions to common units held by Aimco | (51,678 | ) | |
Distributions to common units held by Limited Partners | (2,592 | ) | |
Redemption of common OP Units | (142 | ) | |
Amortization of Aimco stock-based compensation cost | 2,879 | ||
Common OP Units issued to Aimco in connection with Aimco stock option exercises | 174 | ||
Change in accumulated other comprehensive loss | 5,890 | ||
Other | 780 | ||
Net income | 27,229 | ||
Balance, March 31, 2016 | $ | 1,592,323 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Apartment communities sold | 1 | 6 | |||||
Apartment homes sold | 96 | 1,100 | |||||
(Loss) income before income taxes and gain on disposition | $ | (36 | ) | $ | 278 | ||
Gain on disposition of real estate, net of tax (1) | 6,187 | 85,693 | |||||
Income tax related to gain on disposition of real estate | 195 | — | |||||
Prepayment penalties incurred upon repayment of debt collateralized by apartment communities sold | — | 12,135 | |||||
Mark-to-market adjustment included in prepayment penalties | — | 7,705 |
(1) | We report gains on disposition net of incremental direct costs incurred in connection with the transactions, including any prepayment penalties incurred upon repayment of property debt collateralized by the apartment communities being sold. |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Beginning balance | $ | (4,938 | ) | $ | (5,273 | ) | |
Unrealized losses included in interest expense | (11 | ) | (12 | ) | |||
Losses on interest rate swaps reclassified into interest expense from accumulated other comprehensive loss | 420 | 423 | |||||
Unrealized losses included in equity and partners’ capital | (674 | ) | (786 | ) | |||
Ending balance | $ | (5,203 | ) | $ | (5,648 | ) |
March 31, 2016 | December 31, 2015 | |||||
VIEs with interests in conventional apartment communities | 12 | 13 | ||||
Conventional apartment communities held by VIEs | 16 | 17 | ||||
Apartment homes in conventional communities held by VIEs | 5,993 | 6,089 | ||||
VIEs with interests in affordable apartment communities | 62 | 62 | ||||
Affordable apartment communities held by VIEs | 48 | 48 | ||||
Apartment homes in affordable communities held by VIEs | 7,556 | 7,556 |
March 31, 2016 | December 31, 2015 | |||||||
Assets | ||||||||
Net real estate | $ | 1,190,106 | $ | 1,201,998 | ||||
Cash and cash equivalents | 34,233 | 28,118 | ||||||
Restricted cash | 42,451 | 44,813 | ||||||
Liabilities | ||||||||
Non-recourse property debt | 955,424 | 959,523 | ||||||
Accrued liabilities and other | 27,756 | 28,846 |
Conventional Real Estate Operations | Affordable Real Estate Operations | Proportionate Adjustments (1) | Corporate and Amounts Not Allocated to Segments (2) | Consolidated | |||||||||||||||
Three Months Ended March 31, 2016: | |||||||||||||||||||
Rental and other property revenues (3) | $ | 207,729 | $ | 24,910 | $ | 8,822 | $ | 20 | $ | 241,481 | |||||||||
Tax credit and asset management revenues | — | — | — | 4,758 | 4,758 | ||||||||||||||
Total revenues | 207,729 | 24,910 | 8,822 | 4,778 | 246,239 | ||||||||||||||
Property operating expenses (3) | 67,446 | 10,070 | 2,907 | 7,974 | 88,397 | ||||||||||||||
Investment management expenses | — | — | — | 975 | 975 | ||||||||||||||
Depreciation and amortization (3) | — | — | — | 79,828 | 79,828 | ||||||||||||||
General and administrative expenses | — | — | — | 11,935 | 11,935 | ||||||||||||||
Other expenses, net | — | — | — | 1,570 | 1,570 | ||||||||||||||
Total operating expenses | 67,446 | 10,070 | 2,907 | 102,282 | 182,705 | ||||||||||||||
Net operating income | 140,283 | 14,840 | 5,915 | (97,504 | ) | 63,534 | |||||||||||||
Other items included in income before gain on dispositions (4) | — | — | — | (39,836 | ) | (39,836 | ) | ||||||||||||
Income before gain on dispositions | $ | 140,283 | $ | 14,840 | $ | 5,915 | $ | (137,340 | ) | $ | 23,698 |
Conventional Real Estate Operations | Affordable Real Estate Operations | Proportionate Adjustments (1) | Corporate and Amounts Not Allocated to Segments (2) | Consolidated | |||||||||||||||
Three Months Ended March 31, 2015: | |||||||||||||||||||
Rental and other property revenues (3) | $ | 194,204 | $ | 24,232 | $ | 8,397 | $ | 11,456 | $ | 238,289 | |||||||||
Tax credit and asset management revenues | — | — | — | 5,976 | 5,976 | ||||||||||||||
Total revenues | 194,204 | 24,232 | 8,397 | 17,432 | 244,265 | ||||||||||||||
Property operating expenses (3) | 66,283 | 10,230 | 3,604 | 15,375 | 95,492 | ||||||||||||||
Investment management expenses | — | — | — | 1,603 | 1,603 | ||||||||||||||
Depreciation and amortization (3) | — | — | — | 74,432 | 74,432 | ||||||||||||||
General and administrative expenses | — | — | — | 10,652 | 10,652 | ||||||||||||||
Other expenses, net | — | — | — | 1,019 | 1,019 | ||||||||||||||
Total operating expenses | 66,283 | 10,230 | 3,604 | 103,081 | 183,198 | ||||||||||||||
Net operating income | 127,921 | 14,002 | 4,793 | (85,649 | ) | 61,067 | |||||||||||||
Other items included in income before gain on dispositions (4) | — | — | — | (42,610 | ) | (42,610 | ) | ||||||||||||
Income before gain on dispositions | $ | 127,921 | $ | 14,002 | $ | 4,793 | $ | (128,259 | ) | $ | 18,457 |
(1) | Represents adjustments for the noncontrolling interests in consolidated real estate partnerships’ share of the results of our consolidated apartment communities and the results of consolidated apartment communities 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) | Our basis for assessing segment performance excludes the results of apartment communities sold or classified as held for sale. In the segment presentation above, the current year and prior year operating results for apartment communities sold or classified as held for sale during 2016 or 2015 are presented within the Corporate and Amounts Not Allocated to Segments column. Proportionate property net operating income, our key measurement of segment profit or loss, also excludes 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 and they are presented within the Corporate and Amounts Not Allocated to Segments column. |
(3) | Proportionate property net operating income, our key measurement of segment profit or loss excludes 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. |
(4) | Other items included in income before gain on dispositions primarily consist of interest expense and income tax benefit. |
ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | operate our portfolio of desirable apartment homes with valued amenities, with a high level of focus on customer selection and customer satisfaction, and in an efficient manner that realizes the benefits of our corporate systems and local management expertise; |
• | improve our geographically diversified portfolio of apartment communities, which average “B/B+” in quality (defined under the Portfolio Management heading below) by selling lower rated apartment communities and investing the proceeds from such sales through property upgrades, redevelopment, development and acquisition of higher-quality apartment communities; |
• | provide financial leverage primarily by the use of non-recourse, long-dated, fixed-rate property debt and perpetual preferred equity, a combination which reduces our refunding and re-pricing risk and which provides a hedge against increases in interest rates; and |
• | emphasize a collaborative, respectful, and performance-oriented culture while maintaining high morale and team engagement. |
• | Conventional Same Store net operating income increased by 7.1%, consisting of revenue growth of 4.8% and expense growth of 10 basis points; |
• | Increases on renewals and new leases averaged 6.0% and 3.5%, respectively, for the three months ended March 31, 2016, for a weighted average increase of 4.6% for our conventional same store portfolio, higher than the three months ended March 31, 2015 by 180 basis points; and |
• | For the three months ended March 31, 2016, our Conventional Same Store portfolio provided 68% net operating income margins and 62% free cash flow margins. |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
% Net Operating Income in target markets | 91 | % | 87 | % | |||
Average Revenue per Effective Apartment Home | $ | 1,864 | $ | 1,704 | |||
Portfolio Average Rents as a Percentage of Local Market Average Rents | 112 | % | 109 | % | |||
Percentage A (1Q 2016 Average Revenue per Effective Apartment Home $2,367) | 48 | % | 43 | % | |||
Percentage B (1Q 2016 Average Revenue per Effective Apartment Home $1,687) | 35 | % | 36 | % | |||
Percentage C+ (1Q 2016 Average Revenue per Effective Apartment Home $1,552) | 17 | % | 19 | % | |||
Percentage C | — | % | 2 | % |
Trailing Twelve Months Ended March 31, | |||
2016 | 2015 | ||
Proportionate Debt to Adjusted EBITDA | 6.4x | 6.5x | |
Proportionate Debt plus Preferred Equity to Adjusted EBITDA | 6.8x | 6.9x | |
Adjusted EBITDA to Adjusted Interest Expense | 3.2x | 2.8x | |
Adjusted EBITDA to Adjusted Interest Expense and Preferred Dividends | 2.9x | 2.6x |
• | 111 Conventional Same Store apartment communities with 34,384 apartment homes; |
• | 8 Conventional Redevelopment and Development apartment communities with 2,962 apartment homes; |
• | 2 Conventional Acquisition apartment communities with 209 apartment homes; and |
• | 14 Other Conventional apartment communities with 2,679 apartment homes. |
• | four apartment communities with 1,142 apartment homes that were reclassified from our Conventional Acquisition portfolio as we have now owned them for the entirety of both periods presented; and |
• | two apartment communities with 443 apartment homes that were reclassified from our Conventional Redevelopment and Development portfolio upon maintaining stabilized occupancy for the entirety of both periods presented. |
Three Months Ended March 31, | ||||||||||||||
(in thousands) | 2016 | 2015 | $ Change | % Change | ||||||||||
Rental and other property revenues: | ||||||||||||||
Conventional Same Store | $ | 172,930 | $ | 164,970 | $ | 7,960 | 4.8 | % | ||||||
Conventional Redevelopment and Development | 16,609 | 13,254 | 3,355 | 25.3 | % | |||||||||
Conventional Acquisition | 1,740 | 122 | 1,618 | 1,326.2 | % | |||||||||
Other Conventional | 16,450 | 15,858 | 592 | 3.7 | % | |||||||||
Total | 207,729 | 194,204 | 13,525 | 7.0 | % | |||||||||
Property operating expenses: | ||||||||||||||
Conventional Same Store | 53,924 | 53,851 | 73 | 0.1 | % | |||||||||
Conventional Redevelopment and Development | 5,552 | 5,455 | 97 | 1.8 | % | |||||||||
Conventional Acquisition | 930 | 30 | 900 | 3,000.0 | % | |||||||||
Other Conventional | 7,040 | 6,947 | 93 | 1.3 | % | |||||||||
Total | 67,446 | 66,283 | 1,163 | 1.8 | % | |||||||||
Property net operating income: | ||||||||||||||
Conventional Same Store | 119,006 | 111,119 | 7,887 | 7.1 | % | |||||||||
Conventional Redevelopment and Development | 11,057 | 7,799 | 3,258 | 41.8 | % | |||||||||
Conventional Acquisition | 810 | 92 | 718 | 780.4 | % | |||||||||
Other Conventional | 9,410 | 8,911 | 499 | 5.6 | % | |||||||||
Total | $ | 140,283 | $ | 127,921 | $ | 12,362 | 9.7 | % |
Three Months Ended March 31, | ||||||||||||||
(in thousands) | 2016 | 2015 | $ Change | % Change | ||||||||||
Rental and other property revenues | 24,910 | 24,232 | 678 | 2.8 | % | |||||||||
Property operating expenses | 10,070 | 10,230 | (160 | ) | (1.6 | )% | ||||||||
Property net operating income | $ | 14,840 | $ | 14,002 | $ | 838 | 6.0 | % |
Three Months Ended March 31, | |||||
2016 | 2015 | ||||
NOI capitalization rate | 7.3 | % | 5.5 | % | |
FCF capitalization rate | 6.2 | % | 4.7 | % |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Net income attributable to Aimco common stockholders (1) | $ | 23,223 | $ | 89,344 | |||
Adjustments: | |||||||
Depreciation and amortization, net of noncontrolling partners’ interest | 77,978 | 72,622 | |||||
Depreciation and amortization related to non-real estate assets, net of noncontrolling partners’ interest | (2,682 | ) | (2,489 | ) | |||
Gain on dispositions and other, net of income taxes and noncontrolling partners’ interest | (5,855 | ) | (80,728 | ) | |||
Common noncontrolling interests in Aimco Operating Partnership’s share of above adjustments | (3,327 | ) | 516 | ||||
Amounts allocable to participating securities | (58 | ) | 41 | ||||
FFO Attributable to Aimco common stockholders – Diluted | $ | 89,279 | $ | 79,306 | |||
Preferred redemption related amounts, net of common noncontrolling interests in Aimco Operating Partnership and participating securities | — | 658 | |||||
Pro forma FFO Attributable to Aimco common stockholders – Diluted | $ | 89,279 | $ | 79,964 | |||
Capital Replacements, net of common noncontrolling interests in Aimco Operating Partnership and participating securities | (10,386 | ) | (9,130 | ) | |||
AFFO attributable to Aimco common stockholders – Diluted | $ | 78,893 | $ | 70,834 | |||
Weighted average common shares outstanding – diluted (2) | 156,117 | 154,277 |
(1) | Represents the numerator for calculating Aimco’s earnings per common share in accordance with GAAP. |
(2) | Represents the denominator for Aimco’s earnings per common share – diluted, calculated in accordance with GAAP, plus any additional common share equivalents that are dilutive for FFO, Pro forma FFO, and AFFO. |
• | interest, to allow investors to compare a measure of our earnings before the effects of our capital structure and indebtedness with that of other companies in the real estate industry; |
• | income taxes, to allow investors to measure our performance independent of income taxes, which may vary significantly from other companies within our industry due to leverage and tax planning strategies, among other drivers; |
• | depreciation and amortization, gains or losses on dispositions and impairment losses related to real estate, for similar reasons to those set forth in our discussion of FFO and AFFO in the preceding section; |
• | gains on dispositions of non-depreciable assets and non-cash stock-based compensation, as these are items that periodically affect our operations but that are not necessarily representative of our ability to service our debt obligations; |
• | the interest income we earn on our investment in the subordinate tranches of a securitization trust that holds certain of our property debt, as this income is being generated indirectly from our payments of principal and interest associated with the property debt held by the trust and such amounts will ultimately repay our investment in the trust; and |
• | EBITDA amounts related to our legacy asset management business, including the debt obligations and associated interest expense for the legacy asset management business, as we are not responsible for the operation of this portfolio and associated interest payments are not funded from our operations. |
• | debt prepayment penalties, which are items that, from time to time, affect our operating results, but are not representative of our scheduled interest obligations; |
• | the amortization of debt issuance costs, as these amounts have already been expended in previous periods and are not representative of our current or prospective debt service requirements; and |
• | the income we receive on our investment in the securitization trust that holds certain of our property debt, as this income is being generated indirectly from interest we pay with respect to property debt held by the trust. |
March 31, | ||||||||
2016 | 2015 | |||||||
Total indebtedness, net of debt issuance costs related to non-recourse property debt | $ | 3,917,590 | $ | 3,862,544 | ||||
Adjustments: | ||||||||
Debt issuance costs related to non-recourse property debt | 23,124 | 25,740 | ||||||
Proportionate share adjustments related to debt obligations of consolidated and unconsolidated partnerships | (138,813 | ) | (110,670 | ) | ||||
Cash and restricted cash | (154,612 | ) | (259,918 | ) | ||||
Proportionate share adjustments related to cash and restricted cash held by consolidated and unconsolidated partnerships | 1,726 | 10,504 | ||||||
Securitization trust investment and other | (72,817 | ) | (54,992 | ) | ||||
Proportionate Debt | $ | 3,576,198 | $ | 3,473,208 | ||||
Preferred stock | 159,126 | 159,126 | ||||||
Preferred OP Units | 86,201 | 87,942 | ||||||
Preferred Equity | 245,327 | 247,068 | ||||||
Proportionate Debt plus Preferred Equity | $ | 3,821,525 | $ | 3,720,276 |
Trailing Twelve Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Net income attributable to Aimco Common Stockholders | $ | 169,846 | $ | 325,328 | ||||
Adjustments: | ||||||||
Interest expense, net of noncontrolling interest | 188,790 | 212,874 | ||||||
Income tax benefit | (27,485 | ) | (25,303 | ) | ||||
Depreciation and amortization, net of noncontrolling interest | 304,236 | 279,367 | ||||||
Gains on disposition and other, net of income taxes and noncontrolling partners’ interests | (98,821 | ) | (289,040 | ) | ||||
Interest income earned on securitization trust investment | (6,188 | ) | (5,813 | ) | ||||
Other items, net | 31,502 | 40,458 | ||||||
Adjusted EBITDA | $ | 561,880 | $ | 537,871 |
Trailing Twelve Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Interest expense | $ | 193,800 | $ | 218,745 | ||||
Adjustments: | ||||||||
Proportionate share adjustments related to interest of consolidated and unconsolidated partnerships | (5,010 | ) | (5,870 | ) | ||||
Debt prepayment penalties and other non-interest items | (4,379 | ) | (10,657 | ) | ||||
Amortization of debt issuance costs | (4,305 | ) | (3,778 | ) | ||||
Interest income received on securitization trust investment | (6,188 | ) | (5,813 | ) | ||||
Adjusted Interest Expense | $ | 173,918 | $ | 192,627 | ||||
Preferred stock dividends | 11,029 | 11,015 | ||||||
Preferred stock redemption related amounts | — | (695 | ) | |||||
Preferred OP Unit distributions | 6,933 | 6,628 | ||||||
Preferred Dividends | 17,962 | 16,948 | ||||||
Adjusted Interest Expense and Preferred Dividends | $ | 191,880 | $ | 209,575 |
• | capital replacements, which represent capital additions made to replace the consumed portion of acquired capital assets; |
• | capital improvements, which are non-redevelopment capital additions that are made to enhance the value, profitability or useful life of an asset from its original purchase condition; |
• | property upgrades, which may include kitchen and bath remodeling, energy conservation projects, and investments in longer-lived materials designed to reduce turnover costs and maintenance, all of which are generally lesser in scope than redevelopment additions and do not significantly disrupt property operations; |
• | redevelopment additions, which represent capital additions intended to enhance the value of an apartment community through the ability to generate higher average rental revenues, and 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; |
• | development additions, which represent construction and related capitalized costs associated with ground-up development projects; and |
• | casualty replacements spending, which represent capitalized costs incurred in connection with the restoration of an asset after a casualty event such as a severe snow storm, hurricane, tornado, flood or fire. |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Capital replacements | $ | 8,833 | $ | 7,564 | |||
Capital improvements | 3,255 | 2,801 | |||||
Property upgrades | 11,518 | 8,924 | |||||
Redevelopment additions | 30,978 | 23,475 | |||||
Development additions | 15,616 | 17,838 | |||||
Casualty replacements | 2,106 | 2,639 | |||||
Total capital additions | 72,306 | 63,241 | |||||
Plus: additions related to apartment communities sold or held for sale | — | 676 | |||||
Plus: unallocated indirect capitalized costs and additions related to consolidated apartment communities not managed | 1,293 | 1,990 | |||||
Consolidated capital additions | 73,599 | 65,907 | |||||
Plus: net change in accrued capital spending | 5,977 | 5,835 | |||||
Capital expenditures per consolidated statement of cash flows | $ | 79,576 | $ | 71,742 |
Location | Total Apartment Homes | Estimated / Actual Net Investment | Inception-to-Date Net Investment | Stabilized Occupancy | NOI Stabilization | |||||||||||
Under Redevelopment or Development | ||||||||||||||||
One Canal | Boston | 310 | $ | 195.0 | $ | 178.2 | 3Q 2017 | 4Q 2018 | ||||||||
Park Towne Place | Philadelphia | 948 | 97.0 | 75.0 | 1Q 2017 | 2Q 2018 | ||||||||||
The Sterling | Philadelphia | 535 | 62.5 | 54.5 | 3Q 2016 | 4Q 2017 | ||||||||||
In Lease-up | ||||||||||||||||
Vivo | Cambridge | 91 | 45.0 | 43.9 | 3Q 2016 | 4Q 2017 | ||||||||||
Total / Weighted Average | 1,884 | $ | 399.5 | $ | 351.6 |
Cash distributions paid by the Aimco Operating Partnership to holders of noncontrolling interests in consolidated real estate partnerships | $ | 2,105 | |
Cash distributions paid by the Aimco Operating Partnership to preferred unitholders (1) | 4,483 | ||
Cash distributions paid by the Aimco Operating Partnership to common unitholders (2) | 54,115 | ||
Total cash distributions paid by the Aimco Operating Partnership | $ | 60,703 | |
Cash distributions paid by Aimco to holders of noncontrolling interests in consolidated real estate partnerships | $ | 2,105 | |
Cash distributions paid by Aimco to holders of common OP Units | 4,318 | ||
Cash dividends paid by Aimco to preferred stockholders | 2,757 | ||
Cash dividends paid by Aimco to common stockholders | 51,523 | ||
Total cash dividends and distributions paid by Aimco | $ | 60,703 | |
(1) | $2.8 million represented distributions to Aimco, and $1.7 million represented distributions paid to holders of OP Units. |
(2) | $51.5 million represented distributions to Aimco, and $2.6 million represented distributions paid to holders of OP Units. |
ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk |
ITEM 4. | Controls and Procedures |
ITEM 1A. | Risk Factors |
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total Number of Units Purchased | Average Price Paid per Unit | Total Number of Units Purchased as Part of Publicly Announced Plans or Programs (1) | Maximum Number of Units that May Yet Be Purchased Under the Plans or Programs (1) | |||||||
January 1 - January 31, 2016 | 4,984 | $ | 39.02 | N/A | N/A | ||||||
February 1 - February 29, 2016 | 1,306 | 38.38 | N/A | N/A | |||||||
March 1 - March 31, 2016 | 1,047 | 37.14 | N/A | N/A | |||||||
Total | 7,337 | $ | 38.64 |
(1) | The terms of the Aimco Operating Partnership’s Partnership Agreement do not provide for a maximum number of units that may be repurchased, and other than the express terms of its Partnership Agreement, the Aimco Operating Partnership has no publicly announced plans or programs of repurchase. However, whenever Aimco repurchases shares of its Common Stock, it is expected that Aimco will fund the repurchase with proceeds from a concurrent repurchase by the Aimco Operating Partnership of common partnership units held by Aimco at a price per unit that is equal to the price per share paid for its Common Stock. |
ITEM 5. | Other Information |
For | Against | Abstentions | Broker Non-Votes | |
James N. Bailey | 125,015,586 | 3,918,965 | 14,262 | 4,607,764 |
Terry Considine | 124,863,480 | 2,911,120 | 1,174,213 | 4,607,764 |
Thomas L. Keltner | 127,288,628 | 1,645,438 | 14,747 | 4,607,764 |
J. Landis Martin | 125,690,601 | 3,244,201 | 14,011 | 4,607,764 |
Robert A. Miller | 127,277,037 | 1,657,599 | 14,177 | 4,607,764 |
Kathleen M. Nelson | 127,281,838 | 1,653,477 | 13,498 | 4,607,764 |
Michael A. Stein | 126,457,084 | 2,477,113 | 14,616 | 4,607,764 |
Nina A. Tran | 127,724,056 | 1,211,873 | 12,884 | 4,607,764 |
For | Against | Abstentions | Broker Non-Votes |
118,528,564 | 14,970,528 | 57,485 | — |
For | Against | Abstentions | Broker Non-Votes |
126,349,286 | 2,514,869 | 84,658 | 4,607,764 |
ITEM 6. | Exhibits |
EXHIBIT NO. (1) | DESCRIPTION | |||
3.1 | Charter (Exhibit 3.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, is incorporated herein by this reference) | |||
3.2 | Amended and Restated Bylaws (Exhibit 3.1 to Aimco’s Current Report on Form 8-K dated January 26, 2016, is incorporated herein by this reference) | |||
10.1 | Fourth Amended and Restated Agreement of Limited Partnership of the Aimco Operating Partnership, dated as of July 29, 1994, as amended and restated as of February 28, 2007 (Exhibit 10.1 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 2006, is incorporated herein by this reference) | |||
10.2 | First Amendment to Fourth Amended and Restated Agreement of Limited Partnership of the Aimco Operating Partnership, dated as of December 31, 2007 (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated December 31, 2007, is incorporated herein by this reference) | |||
10.3 | Second Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of the Aimco Operating Partnership, dated as of July 30, 2009 (Exhibit 10.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, is incorporated herein by this reference) | |||
10.4 | Third Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of the Aimco Operating Partnership, dated as of September 2, 2010 (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated September 3, 2010, is incorporated herein by this reference) | |||
10.5 | Fourth Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of the Aimco Operating Partnership, dated as of July 26, 2011 (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated July 26, 2011, is incorporated herein by this reference) | |||
10.6 | Fifth Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of the Aimco Operating Partnership, dated as of August 24, 2011 (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated August 24, 2011, is incorporated herein by this reference) | |||
10.7 | Sixth Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of the Aimco Operating Partnership, dated as of December 31, 2011 (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated December 31, 2011, is incorporated herein by this reference) | |||
10.8 | Seventh Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of the Aimco Operating Partnership, dated as of May 13, 2014 (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated May 15, 2014, is incorporated herein by this reference) | |||
10.9 | Eighth Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of the Aimco Operating Partnership, dated as of October 31, 2014 (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated November 4, 2014, is incorporated herein by this reference) | |||
31.1 | Aimco – Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||
31.2 | Aimco – Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||
31.3 | The Aimco Operating Partnership – Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||
31.4 | The Aimco Operating Partnership – Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||
32.1 | Aimco – Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||
32.2 | The Aimco Operating Partnership – Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||
99.1 | Aimco – Agreement Regarding Disclosure of Long-Term Debt Instruments | |||
99.2 | The Aimco Operating Partnership – Agreement Regarding Disclosure of Long-Term Debt Instruments | |||
101 | XBRL (Extensible Business Reporting Language). The following materials from Aimco’s and the Aimco Operating Partnership’s combined Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2016, tagged in XBRL: (i) condensed consolidated balance sheets; (ii) condensed consolidated statements of operations; (iii) condensed consolidated statements of comprehensive income; (iv) condensed consolidated statements of cash flows; and (v) notes to condensed consolidated financial statements. | |||
(1) | Schedules and supplemental materials to the exhibits have been omitted but will be provided to the Securities and Exchange Commission upon request. |
APARTMENT INVESTMENT AND MANAGEMENT COMPANY | |
By: | /s/ PAUL BELDIN |
Paul Beldin | |
Executive Vice President and Chief Financial Officer | |
(duly authorized officer and | |
principal financial officer) | |
By: | /s/ ANDREW HIGDON |
Andrew Higdon | |
Senior Vice President and | |
Chief Accounting Officer |
AIMCO PROPERTIES, L.P. | |
By: | AIMCO-GP, Inc., its general partner |
By: | /s/ PAUL BELDIN |
Paul Beldin | |
Executive Vice President and Chief Financial Officer | |
(duly authorized officer and | |
principal financial officer) | |
By: | /s/ ANDREW HIGDON |
Andrew Higdon | |
Senior Vice President and | |
Chief Accounting Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Apartment Investment and Management Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Terry Considine | |
Terry Considine | |
Chairman and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Apartment Investment and Management Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Paul L. Beldin | |
Paul L. Beldin | |
Executive Vice President and Chief | |
Financial Officer |
1. | I have reviewed this quarterly report on Form 10-Q of AIMCO Properties, L.P.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Terry Considine | |
Terry Considine | |
Chairman and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of AIMCO Properties, L.P.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Paul L. Beldin | |
Paul L. Beldin | |
Executive Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Terry Considine | |
Terry Considine | |
Chairman and Chief Executive Officer | |
April 29, 2016 |
/s/ Paul L. Beldin | |
Paul L. Beldin | |
Executive Vice President and Chief Financial Officer | |
April 29, 2016 |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. |
/s/ Terry Considine | |
Terry Considine | |
Chairman and Chief Executive Officer | |
April 29, 2016 |
/s/ Paul L. Beldin | |
Paul L. Beldin | |
Executive Vice President and Chief Financial Officer | |
April 29, 2016 |
By: | /s/ Paul L. Beldin |
Paul L. Beldin | |
Executive Vice President and Chief Financial Officer | |
April 29, 2016 |
By: | /s/ Paul L. Beldin |
Paul L. Beldin | |
Executive Vice President and Chief Financial Officer | |
April 29, 2016 |
Document and Entity Information - shares |
3 Months Ended | |
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Mar. 31, 2016 |
Apr. 28, 2016 |
|
Entity Registrant Name | APARTMENT INVESTMENT & MANAGEMENT CO | |
Entity Central Index Key | 0000922864 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 156,605,152 | |
AIMCO PROPERTIES, L.P [Member] | ||
Entity Registrant Name | AIMCO PROPERTIES LP | |
Entity Central Index Key | 0000926660 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 164,407,158 |
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares |
Mar. 31, 2016 |
Dec. 31, 2015 |
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Statement of Financial Position [Abstract] | ||
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 500,787,260 | 500,787,260 |
Common Stock, shares issued (in shares) | 156,605,152 | 156,326,416 |
Common Stock, shares outstanding (in shares) | 156,605,152 | 156,326,416 |
Organization |
3 Months Ended |
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Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Apartment Investment and Management Company, or Aimco, is a Maryland corporation incorporated on January 10, 1994. Aimco is a self-administered and self-managed real estate investment trust, or REIT. AIMCO Properties, L.P., or the Aimco Operating Partnership, is a Delaware limited partnership formed on May 16, 1994, to conduct our business, which is focused on the ownership and management of quality apartment communities located in large coastal and job growth markets in the United States. Aimco, and through its wholly-owned subsidiaries, AIMCO-GP, Inc. and AIMCO-LP Trust, owns a majority of the ownership interests in the Aimco Operating Partnership. Aimco conducts all of its business and owns all of its assets through the Aimco Operating Partnership. Interests in the Aimco Operating Partnership that are held by limited partners other than Aimco are referred to as “OP Units.” OP Units include common partnership units, high performance partnership units and partnership preferred units, which we refer to as common OP Units, HPUs and preferred OP Units, respectively. We also refer to HPUs as common OP Unit equivalents. At March 31, 2016, after eliminations for units held by consolidated entities, the Aimco Operating Partnership had 164,450,933 common partnership units and equivalents outstanding. At March 31, 2016, Aimco owned 156,605,152 of the common partnership units (95.2% of the common partnership units and equivalents) of the Aimco Operating Partnership and Aimco had outstanding an equal number of shares of its Class A Common Stock, which we refer to as Common Stock. Except as the context otherwise requires, “we,” “our” and “us” refer to Aimco, the Aimco Operating Partnership and their consolidated subsidiaries, collectively. As of March 31, 2016, we owned an equity interest in 139 conventional apartment communities with 40,376 apartment homes and 56 affordable apartment communities with 8,685 apartment homes. Of these, we consolidated 135 conventional apartment communities with 40,234 apartment homes and 49 affordable apartment communities with 7,998 apartment homes. Conventional and affordable apartment communities generated 90% and 10%, respectively, of the proportionate property net operating income (as defined in Note 8 and excluding amounts related to apartment communities sold or classified as held for sale) during the three months ended March 31, 2016. |
Basis of Presentation and Summary of Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The balance sheets of Aimco and the Aimco Operating Partnership at December 31, 2015, have been derived from their respective audited financial statements at that date, but do not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the financial statements and notes thereto included in Aimco’s and the Aimco Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, 2015. Except where indicated, the footnotes refer to both Aimco and the Aimco Operating Partnership. Principles of Consolidation Aimco’s accompanying condensed consolidated financial statements include the accounts of Aimco, the Aimco Operating Partnership, and their consolidated subsidiaries. The Aimco Operating Partnership’s condensed consolidated financial statements include the accounts of the Aimco Operating Partnership and its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Interests in the Aimco Operating Partnership that are held by limited partners other than Aimco are reflected in Aimco’s accompanying balance sheets as noncontrolling interests in Aimco Operating Partnership. Interests in partnerships consolidated into the Aimco Operating Partnership that are held by third parties are reflected in our accompanying balance sheets as noncontrolling interests in consolidated real estate partnerships. The assets of real estate partnerships consolidated by the Aimco Operating Partnership must first be used to settle the liabilities of such consolidated real estate partnerships. These consolidated real estate partnerships’ creditors do not have recourse to the general credit of the Aimco Operating Partnership. Temporary Equity and Partners’ Capital The following table presents a reconciliation of the Aimco Operating Partnership’s Preferred OP Units from December 31, 2015 to March 31, 2016. These amounts are presented within temporary equity in Aimco’s condensed consolidated balance sheets as preferred noncontrolling interests in the Aimco Operating Partnership, and within temporary capital in the Aimco Operating Partnership’s condensed consolidated balance sheets as redeemable preferred units (in thousands).
Aimco Equity (including Noncontrolling Interests) The following table presents a reconciliation of Aimco’s consolidated permanent equity accounts from December 31, 2015 to March 31, 2016 (in thousands):
Partners’ Capital attributable to the Aimco Operating Partnership The following table presents a reconciliation of the consolidated partners’ capital balances in permanent capital that are attributable to the Aimco Operating Partnership from December 31, 2015 to March 31, 2016 (in thousands):
A separate reconciliation of noncontrolling interests in consolidated real estate partnerships and total partners’ capital for the Aimco Operating Partnership is not presented as these amounts are identical to the corresponding noncontrolling interests in consolidated real estate partnerships and total equity for Aimco, which are presented above. Use of Estimates The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes thereto. Actual results could differ from those estimates. Accounting Pronouncements Adopted in the Current Period During 2015, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Updates 2015-03 and 2015-15, which revised the presentation of debt issuance costs on the balance sheet. Under ASUs 2015-03 and 2015-15, entities generally present debt issuance costs associated with long term debt in their balance sheet as a direct deduction from the related debt liability, and debt issuance costs related to line-of-credit arrangements may continue to be deferred and presented as assets. Amortization of the deferred costs will continue to be included in interest expense. We have adopted the guidance in ASUs 2015-03 and 2015-15 effective as of January 1, 2016. We have elected to continue to reflect deferred issuance costs associated with our revolving credit facility as an asset, which is included in other assets on our condensed consolidated balance sheets. We have retrospectively applied the guidance to debt issuance costs associated with our non-recourse property debt to all prior periods, which resulted in the reclassification of $24.0 million from other assets to non-recourse property debt on our condensed consolidated balance sheet at December 31, 2015. In February 2015, the FASB issued Accounting Standards Update 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, or ASU 2015-02, which significantly changed the consolidation analysis required under GAAP for variable interest entities, or VIEs. Under this revised guidance, limited partnerships are no longer VIEs when the limited partners hold certain rights over the general partner. Alternatively, limited partnerships not previously viewed as VIEs are now considered VIEs in the absence of such rights. We adopted the guidance in ASU 2015-02 as of March 31, 2016, as more fully described in Note 6. Recent Accounting Pronouncements In March 2016, the FASB issued Accounting Standards Updated 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718), or ASU 2016-09, which is intended to simplify the accounting for share-based compensation. Under current practice, tax benefits in excess of compensation cost, or windfalls, are recorded in equity and tax deficiencies, are recorded in equity up to the amount of previous windfalls and then recognized in earnings. Under ASU 2016-09 all of the tax effects related to share-based compensation will be recognized through earnings. This change is required to be applied prospectively to all windfalls and tax deficiencies resulting from settlements that occur after the date of adoption. ASU 2016-09 also removes the requirement to delay recognition of a windfall until it reduces current taxes payable. Under the new standard, the windfall will be recorded when it arises. This change is required to be applied on a modified retrospective basis, with a cumulative effect adjustment to opening retained earnings. ASU 2016-09 is effective for public entities for reporting periods beginning after December 15, 2016, and interim periods within that reporting period. We have not yet determined the effect that ASU 2016-09 will have on our consolidated financial statements. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842), or ASU 2016-02, its final standard on lease accounting. Under ASU 2016-02, lessor accounting will be substantially similar to the current model, but aligned with certain changes to the lessee model and Accounting Standards Update 2014-09, Revenue from Contracts with Customers. Lessors will continue to classify leases as operating, direct financing, or sales-type. Lessees will be required to recognize a right-of-use asset and a lease liability for virtually all leases, with such leases classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) and finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria that are largely similar to those applied in current lease accounting. ASU 2016-02 is effective for public entities for reporting periods beginning after December 15, 2018, and interim periods within those reporting periods, with early adoption permitted. The new standard must be adopted using a modified retrospective transition, requiring application of the new guidance at the beginning of the earliest comparative period presented and provides for certain practical expedients. We have not yet determined the effect ASU 2016-02 will have on our consolidated financial statements. |
Disposals and Other Significant Transactions |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposals and Other Significant Transactions | Disposals and Other Significant Transactions Summarized information regarding apartment communities sold during the three months ended March 31, 2016 and 2015, is set forth in the table below (dollars in thousands):
During the year ended December 31, 2015, we sold 11 apartment communities with 3,855 apartment homes, inclusive of the communities sold during the three months ended March 31, 2015 detailed in the table above. For the three months ended March 31, 2015 these communities generated $4.1 million of income before income taxes and gain on disposition. In addition to the apartment communities we sold, we are currently marketing for sale certain apartment communities that are inconsistent with our long-term investment strategy. At the end of each reporting period, we evaluate whether such apartment communities meet the criteria to be classified as held for sale. As of March 31, 2016, we had no apartment communities classified as held for sale. Asset Management Business Disposition In 2012, we sold the Napico portfolio, our legacy asset management business. The transaction was primarily seller-financed, and the associated notes are scheduled to be repaid from the operation and liquidation of the Napico portfolio and are collateralized by the buyer’s interests in the portfolio. In accordance with the provisions of GAAP applicable to sales of real estate or interests therein, we have not recognized the sale and are accounting for the transaction under the profit sharing method. Until full payment has been received for the seller-financed notes or we otherwise meet the requirements to recognize a sale or partial sale for accounting purposes, we will continue to recognize the portfolio’s assets and liabilities, each condensed into single line items within other assets and accrued liabilities and other, respectively, in our consolidated balance sheets, for all dates following the transaction. Similarly, we will continue to recognize the portfolio’s results of operations, also condensed into a single line item within our consolidated statements of operations, for periods subsequent to the transaction. In January 2016, we received final payment on the first of the two seller-financed notes and as of March 31, 2016, the buyer is in compliance with the terms of the second seller-financed note. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Recurring Fair Value Measurements We measure at fair value on a recurring basis our investment in the securitization trust that holds certain of our property debt, which we classify as available for sale, or AFS, securities, and our interest rate swaps, both of which are classified within Level 2 of the GAAP fair value hierarchy. Our investments classified as AFS are presented within other assets in the accompanying consolidated balance sheets. We hold several positions in the securitization trust that pay interest currently, and we also hold the first loss position in the securitization trust, which accrues interest over the term of the investment. We are accreting the discount to the $100.9 million face value of the investments into interest income using the effective interest method over the remaining expected term of the investments, which, as of March 31, 2016, was approximately 5.2 years. Our amortized cost basis for these investments, which represents the original cost adjusted for interest accretion less interest payments received, was $69.0 million and $67.8 million at March 31, 2016 and December 31, 2015, respectively. We estimated the fair value of these investments to be $72.8 million and $65.5 million at March 31, 2016 and December 31, 2015, respectively. We estimate the fair value of these investments in accordance with GAAP using an income and market approach primarily with observable inputs, including yields and other information regarding similar types of investments, and adjusted for certain unobservable inputs specific to these investments. The fair value of the positions that pay interest currently typically moves in an inverse relationship with movements in interest rates. The fair value of the first loss position is primarily correlated to collateral quality and demand for similar subordinate commercial mortgage-backed securities. For our variable rate debt, we are sometimes required by limited partners in our consolidated real estate partnerships to limit our exposure to interest rate fluctuations by entering into interest rate swap agreements, which moderate our exposure to interest rate risk by effectively converting the interest on variable rate debt to a fixed rate. We estimate the fair value of interest rate swaps using an income approach with primarily observable inputs including information regarding the hedged variable cash flows and forward yield curves relating to the variable interest rates on which the hedged cash flows are based. The following table sets forth a summary of the changes in fair value in our interest rate swaps (in thousands):
As of March 31, 2016 and December 31, 2015, our interest rate swaps had aggregate notional amounts of $49.8 million and $49.9 million, respectively. As of March 31, 2016, these swaps had a weighted average remaining term of 4.8 years. We have designated these interest rate swaps as cash flow hedges. The fair value of these swaps is presented within accrued liabilities and other in our condensed consolidated balance sheets, and we recognize any changes in the fair value as an adjustment of accumulated other comprehensive loss within equity and partners’ capital to the extent of their effectiveness. If the forward rates at March 31, 2016 remain constant, we estimate that during the next 12 months, we would reclassify approximately $1.5 million of the unrealized losses in accumulated other comprehensive loss into earnings. If market interest rates increase above the 3.43% weighted average fixed rate under these interest rate swaps we will benefit from net cash payments due to us from our counterparty to the interest rate swaps. Fair Value Disclosures We believe that the aggregate fair value of our cash and cash equivalents, receivables and payables approximates their aggregate carrying amounts at March 31, 2016 and December 31, 2015, due to their relatively short-term nature and high probability of realization. The estimated aggregate fair value of our consolidated total indebtedness was approximately $4.1 billion and $4.0 billion at March 31, 2016 and December 31, 2015, respectively, as compared to aggregate carrying amounts of $3.9 billion and $3.8 billion, respectively. Substantially all of the difference between the fair value and the carrying value of our consolidated indebtedness relates to loans secured by apartment communities that we wholly own. We estimate the fair value of our consolidated debt using an income and market approach, including comparison of the contractual terms to observable and unobservable inputs such as market interest rate risk spreads, contractual interest rates, remaining periods to maturity, collateral quality and loan to value ratios on similarly encumbered assets within our portfolio. We classify the fair value of our consolidated debt within Level 3 of the GAAP valuation hierarchy based on the significance of certain of the unobservable inputs used to estimate their fair values. |
Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments In connection with our redevelopment, development and capital improvement activities, we have entered into various construction-related contracts and we have made commitments to complete certain projects, pursuant to financing or other arrangements. As of March 31, 2016, our commitments related to these capital activities totaled approximately $85.0 million, most of which we expect to incur during the next 12 months. In addition, for our approved redevelopment projects, we have estimated capital spending of approximately $7.0 million that was not committed pursuant to construction-related contracts or financing or other arrangements discussed above, but which we expect to incur. Our remaining commitments related to our One Canal development project will be funded in part by a non-recourse property loan, of which $20.1 million was available to draw at March 31, 2016. We have agreed to acquire a 463-home apartment community currently under construction in Northern California for $320.0 million, for which we have provided a nonrefundable deposit of $25.0 million. The acquisition is expected to close upon completion of construction in the summer of 2016. We also enter into certain commitments for future purchases of goods and services in connection with the operations of our apartment communities. Those commitments generally have terms of one year or less and reflect expenditure levels comparable to our historical expenditures. Tax Credit Arrangements We are required to manage certain consolidated real estate partnerships in compliance with various laws, regulations and contractual provisions that apply to our historic and low-income housing tax credit syndication arrangements. In some instances, noncompliance with applicable requirements could result in projected tax benefits not being realized and require a refund or reduction of investor capital contributions, which are reported as deferred income in our condensed consolidated balance sheet, until such time as our obligation to deliver tax benefits is relieved. The remaining compliance periods for our tax credit syndication arrangements range from less than one year to 10 years. We do not anticipate that any material refunds or reductions of investor capital contributions will be required in connection with these arrangements. Income Taxes On March 19, 2014, the Internal Revenue Service notified the Aimco Operating Partnership of its intent to audit the 2011 and 2012 tax years. We do not believe the audit will have any material effect on our unrecognized tax benefits, financial condition or results of operations. Legal Matters In addition to the matters described below, we are a party to various legal actions and administrative proceedings arising in the ordinary course of business, some of which are covered by our general liability insurance program, and none of which we expect to have a material adverse effect on our consolidated financial condition, results of operations or cash flows. Limited Partnerships In connection with our acquisitions of interests in real estate partnerships, we are sometimes subject to legal actions, including allegations that such activities may involve breaches of fiduciary duties to the partners of such real estate partnerships or violations of the relevant partnership agreements. We may incur costs in connection with the defense or settlement of such litigation. We believe that we comply with our fiduciary obligations and relevant partnership agreements. Although the outcome of any litigation is uncertain, we do not expect any such legal actions to have a material adverse effect on our consolidated financial condition, results of operations or cash flows. Environmental Various Federal, state and local laws subject apartment community owners or operators to liability for management, and the costs of removal or remediation, of certain potentially hazardous materials that may be present in the land or buildings of an apartment community. Potentially hazardous materials may include, among other items, polychlorinated biphenyls, petroleum-based fuels, lead-based paint, or asbestos. Such laws often impose liability without regard to fault or whether the owner or operator knew of, or was responsible for, the presence of such materials. The presence of, or the failure to manage or remediate properly, these materials may adversely affect occupancy at such apartment communities as well as the ability to sell or finance such apartment communities. In addition, governmental agencies may bring claims for costs associated with investigation and remediation actions, damages to natural resources and for potential fines or penalties in connection with such damage or with respect to the improper management of hazardous materials. Moreover, private plaintiffs may potentially make claims for investigation and remediation costs they incur or for personal injury, disease, disability or other infirmities related to the alleged presence of hazardous materials at an apartment community. In addition to potential environmental liabilities or costs associated with our current apartment communities, we may also be responsible for such liabilities or costs associated with communities we acquire or manage in the future, or apartment communities we no longer own or operate. We are engaged in discussions with the Environmental Protection Agency, or EPA, regarding contaminated groundwater in a residential area in the vicinity of an Indiana apartment community that has not been owned by us since 2008. The EPA alleges that we are liable for addressing the contamination in the residential area because a dry cleaner that operated on our former property, prior to our ownership, discharged hazardous materials into the sanitary sewers and the environment. We have undertaken a voluntary remediation of the dry cleaner contamination at our former property under the oversight of the Indiana Department of Environmental Management, or IDEM. However, IDEM has formally sought to terminate us from the voluntary remediation, and we are presently appealing that termination. Based on our review of the scientific data, we believe that the presence of hazardous materials in the separate residential area under review by the EPA is attributable to neighboring property owners (including an auto parts manufacturer), and not the dry cleaner. The EPA is now proposing to list the area on the National Priorities List (i.e., as a Superfund site), which would make the site eligible for additional Federal funding. We have filed formal comments with the EPA opposing the proposed listing. Were the site to be listed, the EPA could use the funding to further investigate and clean-up the residential area and could then seek to recoup its costs from responsible parties. Although the outcome of this process is uncertain, we do not expect the resolution to have a material adverse effect on our consolidated financial condition, results of operations or cash flows. We also have been contacted by regulators and the current owner of a property in Lake Tahoe regarding environmental issues allegedly stemming from the historic operation of a dry cleaner on the site. An entity owned by us was the former general partner of a now-dissolved company that previously owned the dry cleaner site. That entity and the current property owner have been remediating the dry cleaner site since 2009, under the oversight of the Lahontan Regional Water Quality Control Board, or Lahontan. Lahontan, recently tested domestic wells in the area and found two wells with contaminants linked to dry cleaning. We entered into an agreement with Lahontan and the current owner to pay for an alternative water connection at an insignificant cost and have fulfilled our obligations under that agreement. During September 2015, Lahontan sent us and the current owner a proposed cleanup and abatement order that, if entered, would require us and the current owner to perform additional groundwater investigation and corrective actions with respect to onsite and offsite contamination. We have filed formal comments on the proposed cleanup and abatement order and we are currently assessing potential additional legal and technical grounds for challenging and/or narrowing the scope of the proposed order. Although the outcome of this process is uncertain, we do not expect the resolution to have a material adverse effect on our consolidated financial condition, results of operations or cash flows. We have determined that our legal obligations to remove or remediate certain potentially hazardous materials may be conditional asset retirement obligations, as defined in GAAP. Except in limited circumstances where the asset retirement activities are expected to be performed in connection with a planned construction project or apartment community casualty, we believe that the fair value of our asset retirement obligations cannot be reasonably estimated due to significant uncertainties in the timing and manner of settlement of those obligations. Asset retirement obligations that are reasonably estimable as of March 31, 2016, are immaterial to our consolidated financial condition, results of operations and cash flows. |
Variable Interest Entities |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | Variable Interest Entities As discussed in Note 2, effective January 1, 2016, we have adopted the guidance in ASU 2015-02. As a result, the Aimco Operating Partnership and each of our less than wholly-owned real estate partnerships has been deemed to have the characteristics of a VIE. However, we were not required to consolidate any previously unconsolidated entities or deconsolidate any previously consolidated entities as a result of the change in classification. Accordingly, there has been no change to the recognized amounts in our condensed consolidated balance sheets and statements of operations or amounts reported in our condensed consolidated statements of cash flows. We have, however, retrospectively revised the disclosure of significant assets and liabilities of consolidated VIEs as of December 31, 2015 shown below, to include the assets and liabilities of all of the Aimco Operating Partnership’s consolidated real estate partnerships that are now designated as VIEs and did not meet the previous VIE definition. We determined that an additional 14 consolidated partnerships owning 18 apartment communities with 6,186 apartment homes are VIEs under the new standard. These VIEs had assets of $885.9 million and liabilities of $645.3 million as of December 31, 2015. Because the Aimco Operating Partnership is a VIE, all of our assets and liabilities are held through a VIE. Aimco consolidates the Aimco Operating Partnership, which is a variable interest entity, or VIE, for which Aimco is the primary beneficiary. Aimco, through the Aimco Operating Partnership, consolidates all VIEs for which we are the primary beneficiary. Generally, a VIE, is a legal entity in which the equity investors do not have the characteristics of a controlling financial interest or the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A limited partnership is considered a VIE when the majority of the limited partners unrelated to the general partner possess neither the right to remove the general partner without cause, nor certain rights to participate in the decisions that most significantly affect the financial results of the partnership. In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; and the similarity with and significance to our business activities and the business activities of the other investors. Significant judgments related to these determinations include estimates about the current and future fair values and performance of real estate held by these VIEs and general market conditions. The VIEs that own interests in conventional apartment communities typically hold between one and five apartment communities and are structured to generate a return for their partners through the operation and ultimate sale of the apartment communities. Substantially all of the VIEs that own interests in affordable apartment communities are partnerships structured to provide for the pass-through of low-income housing tax credits and deductions to their partners. The table below summarizes information regarding VIEs that are consolidated by the Aimco Operating Partnership:
Assets of the Aimco Operating Partnership’s consolidated VIEs must first be used to settle the liabilities of such consolidated VIEs. These consolidated VIEs’ creditors do not have recourse to the general credit of the Aimco Operating Partnership. Assets and liabilities of VIEs are summarized in the table below (in thousands):
In addition to the consolidated VIEs discussed above, at March 31, 2016 and December 31, 2015, our consolidated financial statements include certain interests in consolidated and unconsolidated partnerships that are part of the legacy asset management business, as discussed in Note 3. Assets and liabilities of $141.6 million and $153.7 million, respectively, related to the legacy asset management business as of March 31, 2016, are each condensed into single line items within other assets and accrued liabilities and other in our condensed consolidated balance sheets. |
Earnings per Share/Unit |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||
Earnings per Share/Unit | Earnings per Share/Unit Aimco calculates earnings per common 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 Aimco Operating Partnership calculates earnings per common 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 calculating the earnings per unit data. As of March 31, 2016, the common share equivalents or common partnership unit equivalents that could potentially dilute basic earnings per share or unit in future periods totaled 2.2 million. These securities include 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. Additionally, unvested restricted stock awards that do not meet the definition of participating securities, would result in the issuance of additional shares and common partnership units equal to the number of shares that vest. The effect of these securities was dilutive for the three months ended March 31, 2016 and 2015, and accordingly has been included in the denominator for calculating diluted earnings per share and unit during these periods. Certain of our restricted stock awards receive dividends similar to shares of Common Stock and common partnership units. These dividends are not forfeited in the event that the restricted stock does not vest. Therefore, the unvested restricted shares related to these awards are participating securities. The effect of participating securities is included in basic and diluted earnings per share and unit computations using the two-class method of allocating distributed and undistributed earnings. At March 31, 2016 and 2015, there were 0.2 million shares and 0.8 million shares of unvested participating restricted shares, respectively. 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 1.9% to 8.8% per annum per unit. As of March 31, 2016, a total of 3.2 million preferred OP Units were outstanding with an aggregate redemption value of $86.2 million and were potentially redeemable for approximately 2.1 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. Accordingly, we have excluded these securities from earnings per share and unit computations and we expect to exclude them in future periods. |
Business Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | 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 apartment communities with rents paid by the residents and included 139 apartment communities with 40,376 apartment homes at March 31, 2016. Our affordable real estate operations consisted of 56 apartment communities with 8,685 apartment homes at March 31, 2016, with rents that are generally paid, in whole or part, by a government agency. Due to the diversity of our economic ownership interests in our apartment communities, our chief executive officer, who is our chief operating decision maker, uses proportionate property net operating income to assess the operating performance of our apartment communities. Proportionate property net operating income reflects our share of rental and other property revenues less direct property operating expenses, including real estate taxes, for the consolidated and unconsolidated apartment communities that we own and manage. The following tables present the revenues, net operating income and income before gain on dispositions of our conventional and affordable real estate operations segments on a proportionate basis (excluding amounts related to apartment communities sold or classified as held for sale) for the three months ended March 31, 2016 and 2015 (in thousands):
For the three months ended March 31, 2016 and 2015, capital additions related to our conventional segment totaled $70.0 million and $61.3 million, respectively, and capital additions related to our affordable segment totaled $2.1 million and $2.6 million, respectively. |
Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The balance sheets of Aimco and the Aimco Operating Partnership at December 31, 2015, have been derived from their respective audited financial statements at that date, but do not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the financial statements and notes thereto included in Aimco’s and the Aimco Operating Partnership’s combined Annual Report on Form 10-K for the year ended December 31, 2015. Except where indicated, the footnotes refer to both Aimco and the Aimco Operating Partnership. |
Principles of Consolidation | Principles of Consolidation Aimco’s accompanying condensed consolidated financial statements include the accounts of Aimco, the Aimco Operating Partnership, and their consolidated subsidiaries. The Aimco Operating Partnership’s condensed consolidated financial statements include the accounts of the Aimco Operating Partnership and its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Interests in the Aimco Operating Partnership that are held by limited partners other than Aimco are reflected in Aimco’s accompanying balance sheets as noncontrolling interests in Aimco Operating Partnership. Interests in partnerships consolidated into the Aimco Operating Partnership that are held by third parties are reflected in our accompanying balance sheets as noncontrolling interests in consolidated real estate partnerships. The assets of real estate partnerships consolidated by the Aimco Operating Partnership must first be used to settle the liabilities of such consolidated real estate partnerships. These consolidated real estate partnerships’ creditors do not have recourse to the general credit of the Aimco Operating Partnership. |
Temporary Equity and Partners' Capital | These amounts are presented within temporary equity in Aimco’s condensed consolidated balance sheets as preferred noncontrolling interests in the Aimco Operating Partnership, and within temporary capital in the Aimco Operating Partnership’s condensed consolidated balance sheets as redeemable preferred units (in thousands). |
Use of Estimates | Use of Estimates The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes thereto. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Accounting Pronouncements Adopted in the Current Period During 2015, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Updates 2015-03 and 2015-15, which revised the presentation of debt issuance costs on the balance sheet. Under ASUs 2015-03 and 2015-15, entities generally present debt issuance costs associated with long term debt in their balance sheet as a direct deduction from the related debt liability, and debt issuance costs related to line-of-credit arrangements may continue to be deferred and presented as assets. Amortization of the deferred costs will continue to be included in interest expense. We have adopted the guidance in ASUs 2015-03 and 2015-15 effective as of January 1, 2016. We have elected to continue to reflect deferred issuance costs associated with our revolving credit facility as an asset, which is included in other assets on our condensed consolidated balance sheets. We have retrospectively applied the guidance to debt issuance costs associated with our non-recourse property debt to all prior periods, which resulted in the reclassification of $24.0 million from other assets to non-recourse property debt on our condensed consolidated balance sheet at December 31, 2015. In February 2015, the FASB issued Accounting Standards Update 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, or ASU 2015-02, which significantly changed the consolidation analysis required under GAAP for variable interest entities, or VIEs. Under this revised guidance, limited partnerships are no longer VIEs when the limited partners hold certain rights over the general partner. Alternatively, limited partnerships not previously viewed as VIEs are now considered VIEs in the absence of such rights. We adopted the guidance in ASU 2015-02 as of March 31, 2016, as more fully described in Note 6. |
Basis of Presentation and Summary of Significant Accounting Policies (Tables) |
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Reconciliation of consolidated temporary equity accounts | The following table presents a reconciliation of the Aimco Operating Partnership’s Preferred OP Units from December 31, 2015 to March 31, 2016. These amounts are presented within temporary equity in Aimco’s condensed consolidated balance sheets as preferred noncontrolling interests in the Aimco Operating Partnership, and within temporary capital in the Aimco Operating Partnership’s condensed consolidated balance sheets as redeemable preferred units (in thousands).
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Reconciliation of consolidated permanent equity accounts | The following table presents a reconciliation of Aimco’s consolidated permanent equity accounts from December 31, 2015 to March 31, 2016 (in thousands):
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Reconciliation of consolidated permanent equity accounts |
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Disposals and Other Significant Transactions (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of discontinued operations | Summarized information regarding apartment communities sold during the three months ended March 31, 2016 and 2015, is set forth in the table below (dollars in thousands):
|
Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | , both of which are classified within Level 2 of the GAAP fair value hierarchy. Our investments classified as AFS are presented within other assets in the accompanying consolidated balance sheets. We hold several positions in the securitization trust that pay interest currently, and we also hold the first loss position in the securitization trust, which accrues interest over the term of the investment. We are accreting the discount to the $100.9 million face value of the investments into interest income using the effective interest method over the remaining expected term of the investments, which, as of March 31, 2016, was approximately 5.2 years. Our amortized cost basis for these investments, which represents the original cost adjusted for interest accretion less interest payments received, was $69.0 million and $67.8 million at March 31, 2016 and December 31, 2015, respectively. We estimated the fair value of these investments to be $72.8 million and $65.5 million at March 31, 2016 and December 31, 2015, respectively. We estimate the fair value of these investments in accordance with GAAP using an income and market approach primarily with observable inputs, including yields and other information regarding similar types of investments, and adjusted for certain unobservable inputs specific to these investments. The fair value of the positions that pay interest currently typically moves in an inverse relationship with movements in interest rates. The fair value of the first loss position is primarily correlated to collateral quality and demand for similar subordinate commercial mortgage-backed securities. For our variable rate debt, we are sometimes required by limited partners in our consolidated real estate partnerships to limit our exposure to interest rate fluctuations by entering into interest rate swap agreements, which moderate our exposure to interest rate risk by effectively converting the interest on variable rate debt to a fixed rate. We estimate the fair value of interest rate swaps using an income approach with primarily observable inputs including information regarding the hedged variable cash flows and forward yield curves relating to the variable interest rates on which the hedged cash flows are based. The following table sets forth a summary of the changes in fair value in our interest rate swaps (in thousands):
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Variable Interest Entities (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Variable Interest Entities | The table below summarizes information regarding VIEs that are consolidated by the Aimco Operating Partnership:
Assets of the Aimco Operating Partnership’s consolidated VIEs must first be used to settle the liabilities of such consolidated VIEs. These consolidated VIEs’ creditors do not have recourse to the general credit of the Aimco Operating Partnership. Assets and liabilities of VIEs are summarized in the table below (in thousands):
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Business Segments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary information for the reportable segments |
|
Basis of Presentation and Summary of Significant Accounting Policies (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
| |
Increase (Decrease) in Temporary Equity [Roll Forward] | |
Balance, December 31, 2015 | $ 87,926 |
Balance, March 31, 2016 | 86,201 |
AIMCO PROPERTIES, L.P [Member] | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |
Balance, December 31, 2015 | 87,926 |
Distributions to preferred unitholders | (1,726) |
Redemption of preferred units and other | 1,725 |
Net income | (1,726) |
Balance, March 31, 2016 | $ 86,201 |
Basis of Presentation and Summary of Significant Accounting Policies (Details 3) $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
Debt Issuance Costs, Net | $ 24.0 |
Fair Value Measurements (Details) - Interest Rate Swap [Member] - Fair Value, Inputs, Level 2 [Member] - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Fair Value Assets and Liabilities Measured on Recurring Basis Fair value and input reconciliation [Roll Forward] | ||
Cash Flow Hedge Fair Value, Beginning Balance | $ (4,938) | $ 5,273 |
Unrealized losses included in interest expense | (11) | (12) |
Losses on interest rate swaps reclassified into interest expense from accumulated other comprehensive loss | 420 | 423 |
Unrealized losses included in equity and partners’ capital | (674) | (786) |
Cash Flow Hedge Fair Value, Ending Balance | $ (5,203) | $ (5,648) |
Variable Interest Entities (Details Textual) - Variable Interest Entity, Primary Beneficiary [Member] $ in Thousands |
Mar. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
community
Entity
Apartment_home
|
---|---|---|
Napico Portfolio [Member] | ||
Variable Interest Entity [Line Items] | ||
Assets | $ 141,618 | |
Liabilities | $ 153,746 | |
Accounting Standards Update 2015-02 [Member] | ||
Variable Interest Entity [Line Items] | ||
Number of consolidated variable interest entities | Entity | 14 | |
Number of Apartment Communities | community | 18 | |
Number of apartment homes in apartment communities | Apartment_home | 6,186 | |
Assets | $ 885,936 | |
Liabilities | $ 645,293 |
Earnings per Share/Unit (Details Textual) - USD ($) $ in Thousands, shares in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
Mar. 31, 2015 |
|
Earnings Per Share [Abstract] | |||
Securities Excluded from Basic Average Shares Outstanding | 2.2 | ||
Participating securities outstanding (in shares) | 0.2 | 0.8 | |
Preferred OP Units, Distributions, Low Range | 1.90% | ||
Preferred OP Units, Distributions, High Range | 8.80% | ||
Preferred OP Units Outstanding (in shares) | 3.2 | ||
Preferred noncontrolling interests in Aimco Operating Partnership | $ 86,201 | $ 87,926 | |
Number of Shares of Common Stock Required to Redeem Preferred OP Units Tendered for Redemption, if Parent Chooses to Redeem in Shares Rather than Cash (in shares) | 2.1 |
Business Segments (Details) - USD ($) $ in Thousands |
3 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|||||||||||
Summary information for the reportable segments | ||||||||||||
Rental and other property revenues (3) | $ 241,481 | $ 238,289 | ||||||||||
Tax credit and asset management revenues | 4,758 | 5,976 | ||||||||||
Total revenues | 246,239 | 244,265 | ||||||||||
Property operating expenses (3) | 88,397 | 95,492 | ||||||||||
Investment management expenses | 975 | 1,603 | ||||||||||
Depreciation and amortization | 79,828 | 74,432 | ||||||||||
General and administrative expenses | 11,935 | 10,652 | ||||||||||
Other expenses, net | 1,570 | 1,019 | ||||||||||
Total operating expenses | 182,705 | 183,198 | ||||||||||
Net operating income (loss) | 63,534 | 61,067 | ||||||||||
Other items included in income before gain on dispositions (4) | (39,836) | (42,610) | ||||||||||
Income before gain on dispositions | 23,698 | 18,457 | ||||||||||
Operating Segments [Member] | Conventional Real Estate Operations [Member] | ||||||||||||
Summary information for the reportable segments | ||||||||||||
Rental and other property revenues (3) | [1] | 207,729 | 194,204 | |||||||||
Total revenues | 207,729 | 194,204 | ||||||||||
Property operating expenses (3) | [1] | 67,446 | 66,283 | |||||||||
Total operating expenses | 67,446 | 66,283 | ||||||||||
Net operating income (loss) | 140,283 | 127,921 | ||||||||||
Income before gain on dispositions | 140,283 | 127,921 | ||||||||||
Operating Segments [Member] | Affordable Real Estate Operations [Member] | ||||||||||||
Summary information for the reportable segments | ||||||||||||
Rental and other property revenues (3) | [1] | 24,910 | 24,232 | |||||||||
Total revenues | 24,910 | 24,232 | ||||||||||
Property operating expenses (3) | [1] | 10,070 | 10,230 | |||||||||
Total operating expenses | 10,070 | 10,230 | ||||||||||
Net operating income (loss) | 14,840 | 14,002 | ||||||||||
Income before gain on dispositions | 14,840 | 14,002 | ||||||||||
Proportionate Adjustments [Member] | ||||||||||||
Summary information for the reportable segments | ||||||||||||
Rental and other property revenues (3) | [2] | 8,822 | 8,397 | |||||||||
Total revenues | [2] | 8,822 | 8,397 | |||||||||
Property operating expenses (3) | [2] | 2,907 | 3,604 | |||||||||
Total operating expenses | [2] | 2,907 | 3,604 | |||||||||
Net operating income (loss) | [2] | 5,915 | 4,793 | |||||||||
Income before gain on dispositions | [2] | 5,915 | 4,793 | |||||||||
Corporate Nonsegment And Other Reconciling Items Member [Member] | ||||||||||||
Summary information for the reportable segments | ||||||||||||
Rental and other property revenues (3) | [3] | 20 | 11,456 | |||||||||
Tax credit and asset management revenues | [3] | 4,758 | 5,976 | |||||||||
Total revenues | [3] | 4,778 | 17,432 | |||||||||
Property operating expenses (3) | [3] | 7,974 | 15,375 | |||||||||
Investment management expenses | [3] | 975 | 1,603 | |||||||||
Depreciation and amortization | [3] | 79,828 | 74,432 | [1] | ||||||||
General and administrative expenses | [3] | 11,935 | 10,652 | |||||||||
Other expenses, net | [3] | 1,570 | 1,019 | |||||||||
Total operating expenses | [3] | 102,282 | 103,081 | |||||||||
Net operating income (loss) | [3] | (97,504) | (85,649) | |||||||||
Other items included in income before gain on dispositions (4) | [3],[4] | (39,836) | (42,610) | |||||||||
Income before gain on dispositions | [3] | $ (137,340) | $ (128,259) | |||||||||
|
Business Segments (Details Textual) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016
USD ($)
Segment
Units
Property
|
Mar. 31, 2015
USD ($)
|
|
Business Segments (Textual) [Abstract] | ||
Number of reportable segments | Segment | 2 | |
Conventional Real Estate Operations [Member] | ||
Business Segments (Textual) [Abstract] | ||
Number of owned apartment communities in segments | Property | 139 | |
Number of apartment homes in apartment communities | Units | 40,376 | |
Affordable Real Estate Operations [Member] | ||
Business Segments (Textual) [Abstract] | ||
Number of owned apartment communities in segments | Property | 56 | |
Number of apartment homes in apartment communities | Units | 8,685 | |
Operating Segments [Member] | Conventional Real Estate Operations [Member] | ||
Business Segments (Textual) [Abstract] | ||
Capital additions related to segments | $ | $ 70.0 | $ 61.3 |
Operating Segments [Member] | Affordable Real Estate Operations [Member] | ||
Business Segments (Textual) [Abstract] | ||
Capital additions related to segments | $ | $ 2.1 | $ 2.6 |
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