MARYLAND (Apartment Investment and Management Company) | 1-13232 | 84-1259577 | ||
DELAWARE (AIMCO Properties, L.P.) | 0-24497 | 84-1275621 | ||
(State or other jurisdiction | (Commission | (I.R.S. Employer | ||
of incorporation or organization) | File Number) | Identification No.) |
(Address of principal executive offices) | (Zip Code) |
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o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the exchange act. o |
Exhibit Number | Description |
Unaudited pro forma condensed consolidated balance sheets and unaudited pro forma condensed consolidated statements of operations, including notes thereto, of Aimco and the Aimco Operating Partnership. |
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) |
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) |
As Reported (A) | Effect of Sale (B) | Use of Proceeds (C) | Pro Forma | ||||||||||||
ASSETS | |||||||||||||||
Real estate, net | 5,514,330 | (52,964 | ) | (B1) | — | 5,461,366 | |||||||||
Cash and cash equivalents | 51,894 | 505,944 | (B2) | (328,635 | ) | 229,203 | |||||||||
Restricted cash | 38,999 | (2,006 | ) | (B1) | — | 36,993 | |||||||||
Other assets | 371,152 | (34,337 | ) | (B3) | — | 336,815 | |||||||||
Assets of partnerships served by Asset Management business: | |||||||||||||||
Real estate, net | 220,408 | (220,408 | ) | (B1) | — | — | |||||||||
Cash and cash equivalents | 18,374 | (18,374 | ) | (B1) | — | — | |||||||||
Restricted cash | 29,764 | (29,764 | ) | (B1) | — | — | |||||||||
Other assets | 10,369 | (10,369 | ) | (B1) | — | — | |||||||||
Total assets | $ | 6,255,290 | $ | 137,722 | $ | (328,635 | ) | $ | 6,064,377 | ||||||
LIABILITIES AND EQUITY | |||||||||||||||
Non-recourse property debt secured by Real Estate communities, net | $ | 3,700,979 | $ | (68,484 | ) | (B4) | $ | — | $ | 3,632,495 | |||||
Term loan, net | 249,729 | — | (249,729 | ) | — | ||||||||||
Revolving credit facility borrowings | 78,635 | — | (78,635 | ) | — | ||||||||||
Total indebtedness associated with Real Estate portfolio | 4,029,343 | (68,484 | ) | (328,364 | ) | 3,632,495 | |||||||||
Accrued liabilities and other | 207,202 | (1,973 | ) | — | 205,229 | ||||||||||
Liabilities of partnerships served by Asset Management business: | |||||||||||||||
Non-recourse property debt, net | 225,502 | (225,502 | ) | (B1) | — | — | |||||||||
Accrued liabilities and other | 17,404 | (17,404 | ) | (B1) | — | — | |||||||||
Deferred income | 11,814 | (11,814 | ) | (B1) | — | — | |||||||||
Total liabilities | 4,491,265 | (325,177 | ) | (328,364 | ) | 3,837,724 | |||||||||
Preferred noncontrolling interests in Aimco Operating Partnership | 101,378 | — | — | 101,378 | |||||||||||
Equity: | |||||||||||||||
Perpetual Preferred Stock | 125,000 | — | — | 125,000 | |||||||||||
Common Stock, $0.01 par value, 500,787,260 shares authorized, 157,326,117 shares issued/outstanding at March 31, 2018 | 1,573 | — | — | 1,573 | |||||||||||
Additional paid-in capital | 3,885,279 | — | — | 3,885,279 | |||||||||||
Accumulated other comprehensive income | 3,544 | — | — | 3,544 | |||||||||||
Distributions in excess of earnings | (2,345,206 | ) | 442,531 | (B5) | (259 | ) | (1,902,934 | ) | |||||||
Total Aimco equity | 1,670,190 | 442,531 | (259 | ) | 2,112,462 | ||||||||||
Noncontrolling interests in consolidated real estate partnerships | (2,755 | ) | — | — | (2,755 | ) | |||||||||
Common noncontrolling interests in Aimco Operating Partnership | (4,788 | ) | 20,368 | (B5) | (12 | ) | 15,568 | ||||||||
Total equity | 1,662,647 | 462,899 | (271 | ) | 2,125,275 | ||||||||||
Total liabilities and equity | $ | 6,255,290 | $ | 137,722 | $ | (328,635 | ) | $ | 6,064,377 |
As Reported (A) | Effect of Sale (B) | Use of Proceeds (C) | Pro Forma | ||||||||||||
ASSETS | |||||||||||||||
Real estate, net | 5,514,330 | (52,964 | ) | (B1) | — | 5,461,366 | |||||||||
Cash and cash equivalents | 51,894 | 505,944 | (B2) | (328,635 | ) | 229,203 | |||||||||
Restricted cash | 38,999 | (2,006 | ) | (B1) | — | 36,993 | |||||||||
Other assets | 371,152 | (34,337 | ) | (B3) | — | 336,815 | |||||||||
Assets of partnerships served by Asset Management business: | |||||||||||||||
Real estate, net | 220,408 | (220,408 | ) | (B1) | — | — | |||||||||
Cash and cash equivalents | 18,374 | (18,374 | ) | (B1) | — | — | |||||||||
Restricted cash | 29,764 | (29,764 | ) | (B1) | — | — | |||||||||
Other assets | 10,369 | (10,369 | ) | (B1) | — | — | |||||||||
Total assets | $ | 6,255,290 | $ | 137,722 | $ | (328,635 | ) | $ | 6,064,377 | ||||||
LIABILITIES AND EQUITY | |||||||||||||||
Non-recourse property debt secured by Real Estate communities, net | $ | 3,700,979 | $ | (68,484 | ) | (B4) | $ | — | $ | 3,632,495 | |||||
Term loan, net | 249,729 | — | (249,729 | ) | — | ||||||||||
Revolving credit facility borrowings | 78,635 | — | (78,635 | ) | — | ||||||||||
Total indebtedness associated with Real Estate portfolio | 4,029,343 | (68,484 | ) | (328,364 | ) | 3,632,495 | |||||||||
Accrued liabilities and other | 207,202 | (1,973 | ) | — | 205,229 | ||||||||||
Liabilities of partnerships served by Asset Management business: | |||||||||||||||
Non-recourse property debt, net | 225,502 | (225,502 | ) | (B1) | — | — | |||||||||
Accrued liabilities and other | 17,404 | (17,404 | ) | (B1) | — | — | |||||||||
Deferred income | 11,814 | (11,814 | ) | (B1) | — | — | |||||||||
Total liabilities | 4,491,265 | (325,177 | ) | (328,364 | ) | 3,837,724 | |||||||||
Redeemable preferred units | 101,378 | — | — | 101,378 | |||||||||||
Partners’ capital: | |||||||||||||||
Preferred units | 125,000 | — | — | 125,000 | |||||||||||
General Partner and Special Limited Partner | 1,545,190 | 442,531 | (B5) | (259 | ) | 1,987,462 | |||||||||
Limited Partners | (4,788 | ) | 20,368 | (B5) | (12 | ) | 15,568 | ||||||||
Partners’ capital attributable to the Aimco Operating Partnership | 1,665,402 | 462,899 | (271 | ) | 2,128,030 | ||||||||||
Noncontrolling interests in consolidated real estate partnerships | (2,755 | ) | — | — | (2,755 | ) | |||||||||
Total partners’ capital | 1,662,647 | 462,899 | (271 | ) | 2,125,275 | ||||||||||
Total liabilities and partners’ capital | $ | 6,255,290 | $ | 137,722 | $ | (328,635 | ) | $ | 6,064,377 |
As Reported (D) | Amounts Related to Sale (E) | Other (F) | Pro Forma | ||||||||||||
REVENUES | |||||||||||||||
Rental and other property revenues attributable to Real Estate | $ | 225,393 | $ | (4,764 | ) | $ | — | $ | 220,629 | ||||||
Rental and other property revenues of partnerships served by Asset Management business | 18,808 | (18,808 | ) | — | — | ||||||||||
Tax credit and transaction revenues | 3,519 | (1,874 | ) | — | 1,645 | ||||||||||
Total revenues | 247,720 | (25,446 | ) | — | 222,274 | ||||||||||
OPERATING EXPENSES | |||||||||||||||
Property operating expenses attributable to Real Estate | 78,287 | (1,453 | ) | — | 76,834 | ||||||||||
Property operating expenses of partnerships served by Asset Management business | 9,195 | (9,195 | ) | — | — | ||||||||||
Depreciation and amortization | 92,548 | (7,753 | ) | — | 84,795 | ||||||||||
General and administrative and other expenses, net | 14,313 | (772 | ) | (E1) | — | 13,541 | |||||||||
Total operating expenses | 194,343 | (19,173 | ) | — | 175,170 | ||||||||||
Operating income | 53,377 | (6,273 | ) | — | 47,104 | ||||||||||
Interest income (expense) and other, net | (45,399 | ) | 3,627 | 2,383 | (39,389 | ) | |||||||||
Income before income taxes and gain on dispositions | 7,978 | (2,646 | ) | 2,383 | 7,715 | ||||||||||
Income tax benefit | 37,388 | (33,247 | ) | — | 4,141 | ||||||||||
Income before gain on dispositions | 45,366 | (35,893 | ) | 2,383 | 11,856 | ||||||||||
Gain (loss) on dispositions of real estate, inclusive of related income tax | 50,324 | — | — | 50,324 | |||||||||||
Net income | 95,690 | (35,893 | ) | 2,383 | 62,180 | ||||||||||
Noncontrolling interests: | |||||||||||||||
Net income attributable to noncontrolling interests in consolidated real estate partnerships | (6,206 | ) | — | — | (6,206 | ) | |||||||||
Net income attributable to preferred noncontrolling interests in Aimco Operating Partnership | (1,937 | ) | — | — | (1,937 | ) | |||||||||
Net income attributable to common noncontrolling interests in Aimco Operating Partnership | (3,755 | ) | 1,579 | (105 | ) | (2,281 | ) | ||||||||
Net income attributable to noncontrolling interests | (11,898 | ) | 1,579 | (105 | ) | (10,424 | ) | ||||||||
Net income attributable to Aimco | 83,792 | $ | (34,314 | ) | $ | 2,278 | $ | 51,756 | |||||||
Net income attributable to Aimco preferred stockholders | (2,148 | ) | — | — | (2,148 | ) | |||||||||
Net income attributable to participating securities | (119 | ) | 28 | (3 | ) | (94 | ) | ||||||||
Net income attributable to Aimco common stockholders | $ | 81,525 | $ | (34,286 | ) | $ | 2,275 | $ | 49,514 | ||||||
Net income attributable to Aimco per common share – basic and diluted | $ | 0.52 | $ | 0.32 | |||||||||||
Weighted average common shares outstanding – basic | 156,609 | 156,609 | |||||||||||||
Weighted average common shares outstanding – diluted | 156,740 | 156,740 |
As Reported (D) | Amounts Related to Sale (E) | Other (F) | Pro Forma | ||||||||||||
REVENUES | |||||||||||||||
Rental and other property revenues attributable to Real Estate | $ | 225,393 | $ | (4,764 | ) | $ | — | $ | 220,629 | ||||||
Rental and other property revenues of partnerships served by Asset Management business | 18,808 | (18,808 | ) | — | — | ||||||||||
Tax credit and transaction revenues | 3,519 | (1,874 | ) | — | 1,645 | ||||||||||
Total revenues | 247,720 | (25,446 | ) | — | 222,274 | ||||||||||
OPERATING EXPENSES | |||||||||||||||
Property operating expenses attributable to Real Estate | 78,287 | (1,453 | ) | — | 76,834 | ||||||||||
Property operating expenses of partnerships served by Asset Management business | 9,195 | (9,195 | ) | — | — | ||||||||||
Depreciation and amortization | 92,548 | (7,753 | ) | — | 84,795 | ||||||||||
General and administrative and other expenses, net | 14,313 | (772 | ) | (E1) | — | 13,541 | |||||||||
Total operating expenses | 194,343 | (19,173 | ) | — | 175,170 | ||||||||||
Operating income | 53,377 | (6,273 | ) | — | 47,104 | ||||||||||
Interest income (expense) and other, net | (45,399 | ) | 3,627 | 2,383 | (39,389 | ) | |||||||||
Income before income taxes and gain on dispositions | 7,978 | (2,646 | ) | 2,383 | 7,715 | ||||||||||
Income tax benefit | 37,388 | (33,247 | ) | — | 4,141 | ||||||||||
Income before gain on dispositions | 45,366 | (35,893 | ) | 2,383 | 11,856 | ||||||||||
Gain (loss) on dispositions of real estate, inclusive of related income tax | 50,324 | — | — | 50,324 | |||||||||||
Net income | 95,690 | (35,893 | ) | 2,383 | 62,180 | ||||||||||
Net income attributable to noncontrolling interests in consolidated real estate partnerships | (6,206 | ) | — | — | (6,206 | ) | |||||||||
Net income attributable to the Aimco Operating Partnership | 89,484 | (35,893 | ) | 2,383 | 55,974 | ||||||||||
Net income attributable to the Aimco Operating Partnership’s preferred unitholders | (4,085 | ) | — | — | (4,085 | ) | |||||||||
Net income attributable to participating securities | (125 | ) | 31 | (3 | ) | (97 | ) | ||||||||
Net income attributable to the Aimco Operating Partnership’s common unitholders | $ | 85,274 | $ | (35,862 | ) | $ | 2,380 | $ | 51,792 | ||||||
Net income attributable to the Aimco Operating Partnership per common unit – basic and diluted | $ | 0.52 | $ | 0.32 | |||||||||||
Weighted average common units outstanding – basic | 163,825 | 163,825 | |||||||||||||
Weighted average common units outstanding – diluted | 163,959 | 163,959 |
As Reported (D) | Amounts Related to Sale (E) | Other (F) | Pro Forma | ||||||||||||
REVENUES: | |||||||||||||||
Rental and other property revenues attributable to Real Estate | $ | 918,148 | $ | (18,666 | ) | $ | — | $ | 899,482 | ||||||
Rental and other property revenues of partnerships served by Asset Management business | 74,046 | (74,046 | ) | — | — | ||||||||||
Tax credit and transaction revenues | 13,243 | (10,695 | ) | — | 2,548 | ||||||||||
Total revenues | 1,005,437 | (103,407 | ) | — | 902,030 | ||||||||||
OPERATING EXPENSES: | |||||||||||||||
Property operating expenses attributable to Real Estate | 318,939 | (5,743 | ) | — | 313,196 | ||||||||||
Property operating expenses of partnerships served by Asset Management business | 35,440 | (35,440 | ) | — | — | ||||||||||
Depreciation and amortization | 366,184 | (30,278 | ) | — | 335,906 | ||||||||||
General and administrative and other expenses, net | 55,010 | (3,267 | ) | (E1) | — | 51,743 | |||||||||
Provision for real estate impairment loss | 35,881 | — | — | 35,881 | |||||||||||
Total operating expenses | 811,454 | (74,728 | ) | — | 736,726 | ||||||||||
Operating income | 193,983 | (28,679 | ) | — | 165,304 | ||||||||||
Interest income (expense) and other, net | (178,589 | ) | 13,909 | 8,849 | (155,831 | ) | |||||||||
Income (loss) before income taxes and gain on dispositions | 15,394 | (14,770 | ) | 8,849 | 9,473 | ||||||||||
Income tax benefit | 32,126 | 1,596 | — | 33,722 | |||||||||||
Income before gain on dispositions | 47,520 | (13,174 | ) | 8,849 | 43,195 | ||||||||||
Gain on dispositions of real estate, net of tax | 299,559 | — | — | 299,559 | |||||||||||
Net income | 347,079 | (13,174 | ) | 8,849 | 342,754 | ||||||||||
Noncontrolling interests: | |||||||||||||||
Net income attributable to noncontrolling interests in consolidated real estate partnerships | (9,084 | ) | — | — | (9,084 | ) | |||||||||
Net income attributable to preferred noncontrolling interests in Aimco Operating Partnership | (7,764 | ) | — | — | (7,764 | ) | |||||||||
Net income attributable to common noncontrolling interests in Aimco Operating Partnership | (14,457 | ) | 603 | (405 | ) | (14,259 | ) | ||||||||
Net income attributable to noncontrolling interests | (31,305 | ) | 603 | (405 | ) | (31,107 | ) | ||||||||
Net income attributable to Aimco | 315,774 | (12,571 | ) | 8,444 | 311,647 | ||||||||||
Net income attributable to Aimco preferred stockholders | (8,594 | ) | — | — | (8,594 | ) | |||||||||
Net income attributable to participating securities | (319 | ) | 13 | (9 | ) | (315 | ) | ||||||||
Net income attributable to Aimco common stockholders | $ | 306,861 | $ | (12,558 | ) | $ | 8,435 | $ | 302,738 | ||||||
Net income attributable to Aimco per common share – basic | $ | 1.96 | $ | 1.94 | |||||||||||
Net income attributable to Aimco per common share – diluted | $ | 1.96 | $ | 1.93 | |||||||||||
Weighted average common shares outstanding – basic | 156,323 | 156,323 | |||||||||||||
Weighted average common shares outstanding – diluted | 156,796 | 156,796 |
As Reported (D) | Amounts Related to Sale (E) | Other (F) | Pro Forma | ||||||||||||
REVENUES: | |||||||||||||||
Rental and other property revenues attributable to Real Estate | $ | 918,148 | $ | (18,666 | ) | $ | — | $ | 899,482 | ||||||
Rental and other property revenues of partnerships served by Asset Management business | 74,046 | (74,046 | ) | — | — | ||||||||||
Tax credit and transaction revenues | 13,243 | (10,695 | ) | — | 2,548 | ||||||||||
Total revenues | 1,005,437 | (103,407 | ) | — | 902,030 | ||||||||||
OPERATING EXPENSES: | |||||||||||||||
Property operating expenses attributable to Real Estate | 318,939 | (5,743 | ) | — | 313,196 | ||||||||||
Property operating expenses of partnerships served by Asset Management business | 35,440 | (35,440 | ) | — | — | ||||||||||
Depreciation and amortization | 366,184 | (30,278 | ) | — | 335,906 | ||||||||||
General and administrative and other expenses, net | 55,010 | (3,267 | ) | (E1) | — | 51,743 | |||||||||
Provision for real estate impairment loss | 35,881 | — | — | 35,881 | |||||||||||
Total operating expenses | 811,454 | (74,728 | ) | — | 736,726 | ||||||||||
Operating income | 193,983 | (28,679 | ) | — | 165,304 | ||||||||||
Interest income (expense) and other, net | (178,589 | ) | 13,909 | 8,849 | (155,831 | ) | |||||||||
Income (loss) before income taxes and gain on dispositions | 15,394 | (14,770 | ) | 8,849 | 9,473 | ||||||||||
Income tax benefit | 32,126 | 1,596 | — | 33,722 | |||||||||||
Income before gain on dispositions | 47,520 | (13,174 | ) | 8,849 | 43,195 | ||||||||||
Gain on dispositions of real estate, net of tax | 299,559 | — | — | 299,559 | |||||||||||
Net income | 347,079 | (13,174 | ) | 8,849 | 342,754 | ||||||||||
Net income attributable to noncontrolling interests in consolidated real estate partnerships | (9,084 | ) | — | — | (9,084 | ) | |||||||||
Net income attributable to the Aimco Operating Partnership | 337,995 | (13,174 | ) | 8,849 | 333,670 | ||||||||||
Net income attributable to the Aimco Operating Partnership’s preferred unitholders | (16,358 | ) | — | — | (16,358 | ) | |||||||||
Net income attributable to participating securities | (337 | ) | 14 | (9 | ) | (332 | ) | ||||||||
Net income attributable to the Aimco Operating Partnership’s common unitholders | $ | 321,300 | $ | (13,160 | ) | $ | 8,840 | $ | 316,980 | ||||||
Net income attributable to the Aimco Operating Partnership per common unit – basic | $ | 1.96 | $ | 1.94 | |||||||||||
Net income attributable to the Aimco Operating Partnership per common unit – diluted | $ | 1.96 | $ | 1.93 | |||||||||||
Weighted average common units outstanding – basic | 163,746 | 163,746 | |||||||||||||
Weighted average common units outstanding – diluted | 164,218 | 164,218 |
(A) | Reflects our consolidated balance sheet as of March 31, 2018, as presented in the historical financial statements and notes thereto in our Quarterly Report on Form 10-Q for the three months ended March 31, 2018. |
(B) | The pro forma adjustments represent the elimination of the assets and liabilities related to the partnerships served by our Asset Management business and the Hunters Point communities. These adjustments also include the receipt of proceeds of approximately $512.0 million, net of the payment of certain property-level debt paid at closing of $68.3 million and other transaction costs, which totaled approximately $78.0 million. |
(B1) | Represents the assets and liabilities transferred upon sale of our interests in the Asset Management business and the Hunters Point communities. |
(B2) | Represents net proceeds we received upon the sale of our interests in the Asset Management business and the Hunters Point communities. |
(B3) | Includes reduction of deferred tax asset recognized as a result of an intercompany transfer of assets related to the Asset Management business of $33.6 million. |
(B4) | Represents Non-recourse property debt encumbering the Hunters Point communities. This debt was repaid at closing. |
(B5) | Represents the estimated gain on sale we would have recognized upon completion of the sale transaction as if the sale occurred as of March 31, 2018, and was calculated as follows: |
Sales price | $ | 590,000 | |
Debt associated with the Asset Management business | 225,502 | ||
Less: Estimated transaction costs and other adjustments (i) | (77,968 | ) | |
Less: Portfolio basis as of 3/31/2018 | (241,044 | ) | |
Less: Deferred tax asset associated with the Asset Management business | (33,591 | ) | |
Total estimated gain (ii) | $ | 462,899 |
(i) | Amount includes payment of property level debt encumbering the Hunters Point communities of $68.3 million, which was paid at closing. |
(ii) | We are recording an estimated $469 million gain on sale from this transaction as of July 25, 2018 as a result of additional depreciation expense and changes in the basis from March 31, 2018. |
(C) | Represents use of proceeds to repay the principal balance on our revolving credit facility and term loan. |
(D) | Reflects our consolidated results of operations for the three months ended March, 31, 2018 and the year ended December 31, 2017, as presented in the historical financial statements and notes thereto in our Quarterly Report on Form 10-Q for the three months ended March 31, 2018 and our Annual Report on Form 10-K for the year ended December 31, 2017. |
(E) | Represents revenues and expenses of the communities owned by the partnerships served by our Asset Management business and the Hunters Point communities for the three months ended March 31, 2018 and the year ended December 31, 2017. |
(E1) | The adjustment to general and administrative expenses relates to compensation of team members who directly supported the Asset Management business and whose employment will end shortly after the sale. In addition to the reduction in costs reflected in the year ended December 31, 2017 pro forma adjustment, we expect additional savings of $1.1 million on an annual basis as a result of planned corporate headcount reductions and cost savings that are indirectly attributable to the sale and, therefore, excluded from the pro forma adjustment. |
(F) | Represents an adjustment made to interest expense in connection with the sale. Interest expense represents the reduction of interest expense on our term loan and revolving line of credit, which were repaid with proceeds from the sale, that would have occurred if the sale occurred on January 1, 2017. The adjustment is actual interest incurred during the periods. |