Assets Held for Sale and Discontinued Operations

3 Months Ended

Mar. 31, 2012

Assets Held for Sale and Discontinued Operations [Abstract]

Assets Held for Sale and Discontinued Operations

NOTE 3 — Assets Held for Sale and Discontinued Operations

We report as discontinued operations real estate properties that meet the definition of a component of an entity and have been sold or meet the criteria to be classified as held for sale. We include all results of these discontinued operations, less applicable income taxes, in a separate component of income on the consolidated statements of operations under the heading “income from discontinued operations, net.” This treatment resulted in the retrospective adjustment of the statement of operations for the three months ended March 31, 2011 and the balance sheet as of December 31, 2011.

We are currently marketing for sale certain real estate properties that are inconsistent with our long-term investment strategy. At the end of each reporting period, we evaluate whether such properties meet the criteria to be classified as held for sale, including whether such properties are expected to be sold within 12 months. Additionally, certain properties that do not meet all of the criteria to be classified as held for sale at the balance sheet date may nevertheless be sold and included in discontinued operations in the subsequent 12 months; thus the number of properties that may be sold during the subsequent 12 months could exceed the number classified as held for sale. At March 31, 2012 and December 31, 2011, after adjustments to classify as held for sale properties that were sold or classified as held for sale during the three months ended March 31, 2012, we had two and 12 properties with an aggregate of 376 and 1,949 units, respectively, classified as held for sale. Amounts classified as held for sale in the accompanying consolidated balance sheets as of March 31, 2012 and December 31, 2011 are as follows (in thousands):

	March 31, 2012		December 31, 2011
Real estate, net	$	10,390	$	63,211
Other assets		361		2,421
Assets held for sale	$	10,751	$	65,632
Property debt	$	11,884	$	62,864
Other liabilities		155		753
Liabilities related to assets held for sale	$	12,039	$	63,617

During the three months ended March 31, 2012 and 2011, we sold or disposed of ten properties and 12 properties with an aggregate of 1,573 units and 1,621 units, respectively. During the year ended December 31, 2011, we disposed of 67 consolidated properties with an aggregate of 10,912 units. For the three months ended March 31, 2012 and 2011, discontinued operations includes the results of operations for the periods prior to the date of disposition for all properties disposed of and for properties classified as held for sale as of March 31, 2012.

The following is a summary of the components of income from discontinued operations and the related amounts of income from discontinued operations attributable to Aimco, the Aimco Operating Partnership and noncontrolling interests for the three months ended March 31, 2012 and 2011 (in thousands):

	Three Months Ended March 31,
	2012			2011
Rental and other property revenues	$	2,936		$	24,496
Property operating expenses		(1,672	)		(12,326	)
Depreciation and amortization		(1,095	)		(7,483	)
Provision for real estate impairment losses		(321	)		(3,855	)
Operating (loss) income		(152	)		832
Interest income		54			246
Interest expense		(483	)		(4,328	)
Loss before gain on dispositions of real estate and income tax		(581	)		(3,250	)
Gain on dispositions of real estate		35,692			7,718
Income tax expense		(240	)		(74	)
Income from discontinued operations, net	$	34,871		$	4,394
(Income) loss from discontinued operations attributable to noncontrolling interests in consolidated real estate partnerships		(7,066	)		1,272
Income from discontinued operations attributable to the Aimco Operating Partnership	$	27,805		$	5,666
Income from discontinued operations attributable to noncontrolling interests in Aimco Operating Partnership		(1,828	)		(381	)
Income from discontinued operations attributable to Aimco	$	25,977		$	5,285

Gain on dispositions of real estate is reported net of incremental direct costs incurred in connection with the transactions, including any prepayment penalties incurred upon repayment of property loans collateralized by the properties being sold. Such prepayment penalties totaled $1.4 million and $0.3 million for the three months ended March 31, 2012 and 2011, respectively. We classify interest expense related to property debt within discontinued operations when the related real estate asset is sold or classified as held for sale.

In connection with properties sold or classified as held for sale during the three months ended March 31, 2012, we allocated $0.7 million of goodwill related to our conventional and affordable segments to the carrying amounts of the properties sold or classified as held for sale. Of these amounts, $0.6 million was recognized as a reduction of gain on dispositions of real estate and $0.1 million was recognized as an adjustment of impairment losses during the three months ended March 31, 2012. In connection with properties sold or classified as held for sale during the three months ended March 31, 2011, we allocated $0.8 million of goodwill related to our conventional and affordable segments to the carrying amounts of the properties sold or classified as held for sale. Of these amounts, $0.6 million was recognized as a reduction of gain on dispositions of real estate and $0.2 million was recognized as an adjustment of impairment losses during the three months ended March 31, 2011. The amounts of goodwill allocated to these properties were based on the relative fair values of the properties sold or classified as held for sale and the retained portions of the reporting units to which the goodwill was allocated.

In connection with our real estate dispositions during the three months ended March 31, 2012 and 2011, the purchasers assumed approximately $8.0 million and $4.2 million, respectively, of non-recourse property debt.