APARTMENT INVESTMENT & MANAGEMENT CO - FORM 8-K - EX-99.1 - February 8, 2012

Exhibit 99.1

 

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Page
1		Earnings Release
8		Consolidated Statements of Operations
10		Consolidated Balance Sheets
11		Schedule 1a – Funds from Operations (4Q 2011 v. 4Q 2010)
13		Schedule 1b – Funds from Operations (YTD 4Q 2011 v. YTD 4Q 2010)
15		Schedule 2 – Portfolio Summary
16		Schedule 3 – Net Asset Value Supplemental Information
18		Schedule 4 – Property Debt Information
20		Schedule 5 – Share Data
21		Schedule 6a – Conventional Same Store Operating Results (4Q 2011 v. 4Q 2010)
22		Schedule 6b – Conventional Same Store Operating Results (4Q 2011 v. 3Q 2011)
23		Schedule 6c – Conventional Same Store Operating Results (YTD 4Q 2011 v. YTD 4Q 2010)
24		Schedule 7a – Total Conventional Portfolio Data by Market (4Q 2011 v. 4Q 2010)
25		Schedule 7b – Total Conventional Portfolio Data by Market (3Q 2011)
26		Schedule 8 – Property Disposition and Acquisition Activity
27		Schedule 9 – Capital Additions
28		Glossary and Reconciliations

 

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Aimco Reports Fourth Quarter 2011 Results, 50% Increase in Dividend

Denver, Colorado, February 8, 2012 — Apartment Investment and Management Company (“Aimco”) (NYSE: AIV) announced today its fourth quarter and full year 2011 results.

Chairman and Chief Executive Officer Terry Considine comments: “2011 was a good year, and we expect 2012 will be even better. Aimco starts the year with high occupancy, low turnover and steady renewal lease rate growth. Our portfolio is increasingly concentrated in better markets, with higher rents and superior growth rates. In the coming twenty-four months, through redevelopment of three currently vacant properties, we will deliver more than 1,200 A-quality units in Coastal California. Our balance sheet is strong and we continue to reduce leverage and our cost of capital. We are off to a good start in 2012.”

Chief Financial Officer Ernie Freedman adds: “Fourth quarter Pro forma FFO of $0.42 per share exceeded the midpoint of our guidance range by $0.01 per share, primarily as a result of better than expected operating results. We expect 2012 FFO to be in a range from $1.72 to $1.82 per share, or approximately 8% higher than 2011, and we expect AFFO to increase even more, up 21%. First quarter 2012 FFO is projected to be $0.33 to $0.37 per share.”

Financial Results

2011 Pro forma FFO, Excluding One-Time Items, Up 11%, AFFO Up 5%*

 

			September 30,				September 30,				September 30,				September 30,
		FOURTH QUARTER								FULL YEAR
		2011				2010				2011				2010
Net loss per share		$	(0.19	)		$	(0.33	)		$	(0.86	)		$	(1.08	)
Funds from Operations (FFO)		$	0.43			$	0.35			$	1.52			$	1.52
Add back (deduct) Aimco’s share of preferred equity redemption related amounts		$	(0.01	)		$	0.04			$	(0.03	)		$	(0.01	)
Pro forma Funds from Operations (Pro forma FFO)		$	0.42			$	0.39			$	1.49			$	1.51
Deduct Aimco’s share of Capital Replacements		$	(0.22	)		$	(0.14	)		$	(0.62	)		$	(0.51	)
Adjusted Funds from Operations (AFFO)		$	0.20			$	0.25			$	0.87			$	1.00

 

*

2011 Pro forma FFO and AFFO of $1.49 per share and $0.87 per share, respectively, include a one-time charge of $0.15 per share related to debt prepayment penalties and write-off of deferred loan costs incurred in connection with a refinancing and securitization transaction completed during the second quarter. 2010 Pro forma FFO and AFFO of $1.51 per share and $1.00, respectively, include a net benefit of $0.03 per share related to several, mostly offsetting, one-time items during second quarter 2010. Excluding these one-time items from each period, 2011 Pro forma FFO increased 11% and AFFO increased 5% when compared to 2010. Pro forma FFO growth exceeds AFFO growth due to higher capital replacements spending in 2011.

Net loss — Net loss attributable to Aimco common stockholders for the quarter was $23.4 million, compared to net loss of $38.4 million for fourth quarter 2010. Fourth quarter 2011 net loss decreased as compared to fourth quarter 2010 primarily due to: an increase in net operating income of our properties included in continuing operations, reflecting improved operations; an increase in income from discontinued operations, net of noncontrolling interest allocations, primarily due to an increase in gains on dispositions of consolidated real estate partially offset by losses on dispositions of unconsolidated real estate; and a decrease in interest expense.

Funds from Operations — FFO and AFFO are non-GAAP financial measures and are defined in the glossary in Aimco’s Supplemental Information (the Glossary). FFO is computed in accordance with the framework prescribed by the National Association of Real Estate Investment Trusts (NAREIT). In October 2011, NAREIT revised its definition of FFO to exclude operating real estate impairments effective fourth quarter 2011. All prior period FFO results included in this press release have been restated accordingly. Fourth quarter 2011 FFO was $52.2 million, or $0.43 per share, compared to $41.4 million, or $0.35 per share, in fourth quarter 2010. Pro forma FFO, which represents FFO as prescribed by NAREIT but excludes preferred equity redemption related amounts, was $50.4 million, or $0.42 per share, compared to $45.3 million, or $0.39 per share, in fourth quarter 2010, an increase of 8%. AFFO, which represents Pro forma FFO after the deduction of Capital Replacements, was $24.3 million, or $0.20 per share, compared to $29.6 million, or $0.25 per share, in fourth quarter 2010.

 

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Property Operations

Property operating results discussed below, including property net operating income (NOI), relate to properties that Aimco owns and manages, and that are classified within continuing operations. To ensure comparability between periods, results are based on Aimco’s current period ownership. See the Glossary for property definitions and reconciliation of non-GAAP measures and Schedules 1 and 2 in the Supplemental Information for financial and statistical information for these portfolios.

Diversified Operating Portfolio — Aimco’s property operations consist primarily of Conventional, with some Affordable, real estate operations. Conventional real estate operations relate to Aimco’s diversified portfolio of market rate apartment communities and include Same Store Properties, Redevelopment Properties, Acquisition Properties and Other Properties.

Affordable real estate operations consist of Aimco’s portfolio of properties with rents that are generally paid, in whole or in part, by a government agency. Affordable properties tend to have more stable rents and higher occupancy than Conventional properties due to government rent payments and thus are less affected by market fluctuations.

2011 Total Same-Store NOI Up 5.9%

 

			xxxx				xxxx				xxxx				xxxx				xxxx				xxxx				xxxx				xxxx
		FOURTH QUARTER																FULL YEAR
		Year-over-year Variance																Year-over-year Variance
		% NOI				Revenue				Expenses				NOI				% NOI				Revenue				Expenses				NOI
Conventional Same Store			83	%			3.3	%			-1.0	%			5.8	%			81	%			2.8	%			-1.5	%			5.3	%
Affordable Same Store			12	%			3.2	%			-0.7	%			6.2	%			11	%			4.0	%			-3.8	%			10.4	%
Total Same Store			95	%			3.3	%			-1.0	%			5.9	%			92	%			2.9	%			-1.8	%			5.9	%
Other Conventional*			5	%			-11.5	%			-2.4	%			-18.9	%			6	%			-3.3	%			1.8	%			-7.7	%
Affordable Redevelopment			—				—				—				—				2	%			5.8	%			3.9	%			7.1	%
Total Portfolio			100	%			2.3	%			-1.1	%			4.3	%			100	%			2.4	%			-1.4	%			4.9	%

 

*	Negative results are due primarily to lost revenue related to properties undergoing repairs from casualty events and retail vacancy in Manhattan.

Conventional Same Store Results — In fourth quarter 2011, the Conventional Same Store portfolio included 161 communities with 56,731 units, in which Aimco had a weighted average ownership of 94%.

 

			xxxx				xxxx				xxxx				xxxx				xxxx				xxxx				xxxx				xxxx
		FOURTH QUARTER												FOURTH QUARTER								FULL YEAR
		Year-over-year												Sequential								Year-over-year
		2011				2010				Variance				3rd Qtr				Variance				2011				2010				Variance
Average Daily Occupancy			95.3	%			96.8	%			-1.5	%			95.2	%			0.1	%			95.8	%			96.2	%			-0.4	%
Average Rent Per Unit		$	1,124			$	1,076				4.5	%		$	1,108				1.4	%		$	1,111			$	1,084				2.5	%
$ in Millions
Revenue		$	189.3			$	183.1				3.3	%		$	187.7				0.8	%		$	734.3			$	714.6				2.8	%
Expenses			(65.6	)			(66.2	)			-1.0	%			(70.2	)			-6.6	%			(265.5	)			(269.4	)			-1.5	%
NOI		$	123.7			$	116.9				5.8	%		$	117.5				5.3	%		$	468.8			$	445.2				5.3	%

 

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Rental Rates Rising

Aimco measures changes in rental rates by comparing, on a lease-by-lease basis, the rate on a newly executed lease to the rate on the expiring lease for that same apartment. Newly executed leases are classified as either a new lease, where a vacant apartment is leased to a new customer, or a renewal of an existing lease. Full year 2011 results by quarter are as follows:

 

			September 30,				September 30,				September 30,				September 30,				September 30,
		FOURTH QUARTER				THIRD QUARTER				SECOND QUARTER				FIRST QUARTER				FULL YEAR
New lease			0.7	%			6.1	%			5.1	%			1.9	%			3.8	%
Renewal			5.2	%			5.6	%			3.6	%			3.0	%			4.6	%
Weighted average			3.0	%			5.8	%			4.3	%			2.5	%			4.2	%

Refer to Supplemental Schedules 6a through 6c for additional details on Conventional Same Store operating results.

Affordable Same Store Results — In fourth quarter 2011, the Affordable Same Store portfolio included 122 communities with 15,639 units, in which Aimco had a weighted average ownership of 73%. For fourth quarter 2011, average month-end occupancy for the Affordable portfolio was 97.7%, a decrease of 0.2% from fourth quarter 2010, while average rent per unit increased 3.0% from $862 to $888 per unit.

Portfolio

Aimco’s portfolio strategy focuses on B/B+ quality Conventional apartment communities located in the largest U.S. markets as measured by total apartment value. Aimco believes these markets to be deep, relatively liquid and possessing desirable long-term growth characteristics. These markets are primarily coastal markets, and also include several Sun Belt cities and Chicago, Illinois. In executing Aimco’s portfolio strategy, the company expects to reduce its investment in non-target markets and to increase its investment in target markets through redevelopment, acquisitions and increasing ownership in properties Aimco already owns through limited partnerships.

During fourth quarter 2011, net operating income generated by Conventional properties located in Aimco’s target markets accounted for 86% of total Conventional Property net operating income, an increase of 2% compared to fourth quarter 2010.

Conventional Property Rents Up 9% to $1,143

Aimco measures Conventional Property asset quality based on average rents compared to local market average rents as reported by REIS, a third-party provider of commercial real estate performance information and analysis. Aimco defines A-quality assets as those with rents greater than 125% of local market average, B-quality assets as those with rents 90% to 125% of local market average and C-quality assets as those with rents less than 90% of local market average. For third quarter 2011, the most recent period for which REIS information is available, Aimco’s Conventional Property rents averaged approximately 101% of local market average rents.

For fourth quarter 2011, average rents for the Conventional portfolio were $1,143 per unit, a 9.0% increase compared to fourth quarter 2010, as a result of year-over-year rent growth and the sale of Conventional properties during 2010 and 2011 with rents substantially lower than those of the retained portfolio.

Dispositions — In fourth quarter 2011, Aimco sold seven Conventional properties and 20 Affordable properties with 1,947 and 2,185 units, respectively, for $180.3 million in gross proceeds. Aimco’s share of net proceeds after distributions to limited partners, repayment of existing property debt and transaction costs was $71.9 million.

 

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See Supplemental Schedules 7a and 7b for additional details regarding Aimco’s Conventional portfolio quality and capital allocation, and Supplemental Schedule 8 for information related to acquisition and disposition activity.

Agreement to Sell Asset-Managed Portfolio — As of December 31, 2011, Aimco asset managed for a fee a portfolio of 147 properties with 10,184 units. During first quarter 2012, Aimco entered into an agreement to transfer asset management of this portfolio effective February 6, 2012, and to sell its minority interest in the portfolio to the new asset manager upon satisfaction of certain conditions and regulatory approvals. Aimco expects the sale of the asset-managed portfolio to close later this year, at which time Aimco will have liquidated all of its legacy asset management business.

Balance Sheet and Liquidity

Components of Aimco Leverage

 

			September 30,				September 30,				September 30,				September 30,
		AS OF DECEMBER 31, 2011
		Amount				% of Total				Weighted Avg Maturity (Yrs)				Weighted Avg Rate
Aimco leverage ($ in millions)
Aimco’s share of long-term, non-recourse property debt		$	4,730.1				86	%			8.0				5.50	%
Revolving credit facility			—				0	%			5.0				n/a
Subtotal debt		$	4,730.1				86	%			8.0				5.50	%
Preferred securities			742.2				14	%			Perpetual				7.55	%
Total leverage		$	5,472.3				100	%			n/a				5.78	%

See Supplemental Schedule 4 for additional details about Aimco’s non-recourse property debt and Supplemental Schedule 5 for information related to Aimco’s preferred securities.

Revolving Credit Facility — Aimco’s recourse debt at December 31, 2011, was limited to its revolving credit facility, which Aimco uses for working capital purposes and to secure letters of credit. As announced in fourth quarter 2011, Aimco closed on a new $500 million revolving credit facility to replace its then-existing $300 million facility. Borrowings under the revolving credit facility bear interest based on a pricing grid determined by leverage (currently either LIBOR plus 2.75% or, at Aimco’s option, a base rate equal to the Prime rate plus a spread of 1.50%). The facility matures in December 2016, inclusive of two-one-year extension options and the Debt Service and Fixed Charge Coverage covenants are unchanged from those associated with the previous facility. At the end of fourth quarter, Aimco had no outstanding borrowings on its revolving credit facility and available capacity was $469.5 million, net of $30.5 million of letters of credit backed by the facility.

Coverage Ratios — Aimco’s fourth quarter EBITDA Coverage of Interest and EBITDA Coverage of Interest and Preferred Dividends ratios were 2.18:1 and 1.78:1, compared to fourth quarter 2010 ratios of 2.07:1 and 1.68:1, respectively. Separately, in connection with its revolving credit facility, Aimco is subject to Debt Service and Fixed Charge Coverage covenants, as defined in the Glossary. For fourth quarter 2011, Aimco’s Debt Service and Fixed Charge Coverage ratios were 1.61:1 and 1:37.1, compared to covenants in place during the quarter of 1.40:1 and 1:20.1, respectively, and fourth quarter 2010 ratios of 1.57:1 and 1.33:1. In first quarter 2012, the Debt Service Coverage and Fixed Charge Coverage covenants increase to 1.50:1 and 1.30:1, respectively. Aimco expects to remain in compliance with these covenants.

Based on annualized projected fourth quarter 2012 EBITDA, Aimco expects its EBITDA Coverage of Interest and EBITDA Coverage of Interest and Preferred Dividends ratios to be approximately 2.50:1 and 2.00:1, respectively. Year-end Debt to EBITDA and Debt & Preferred Equity to EBITDA ratios are projected to be approximately 7.5:1 and 9:1, respectively.

 

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Equity Activity — During fourth quarter 2011, Aimco issued approximately 45,000 shares of Class Z Cumulative Preferred Stock through its Class Z Preferred Stock At-the-Market offering program (Class Z ATM) at $24.24 per share, equating to a yield of 7.22%, for gross proceeds to Aimco of approximately $1.1 million. We intend to accumulate the proceeds from further ATM issuances of our Class Z Preferred Stock and use them for further redemptions of outstanding preferred securities with higher rates.

Dividend — Aimco’s Board of Directors declared a cash dividend of $0.18 per share on its Class A Common Stock for the quarter ended December 31, 2011, which is a 50% increase compared to the $0.12 per share dividend paid for the prior four quarters. The dividend is payable February 29, 2012 to shareholders of record on February 21, 2012. Aimco expects to pay quarterly dividends at the increased rate during 2012.

2012 Outlook

 

		September 30,		September 30,
		FIRST QUARTER		FULL YEAR
Net loss per share		-$0.35 to -$0.31		-$1.00 to -$0.90
FFO per share		$0.33 to $0.37		$1.72 to $1.82
AFFO per share				$1.17 to $1.29
Conventional Same Store Operating Measures
NOI change compared to fourth quarter 2011		-3.5% to -2.5%
NOI change compared to same period 2011		3.0% to 4.0%		5.25% to 7.25%
Average daily occupancy				95.5% to 96.0%
Revenue change compared to 2011				4.5% to 5.5%
Expense change compared to 2011				2.5% to 3.0%
Affordable Same Store NOI change compared to 2011				0.0% to 1.0%
Total Same Store NOI change compared to 2011				4.50% - 6.25%
Asset Management and Tax Credit Activities
Recurring Revenues				$30 million
Recurring Expenses				$5 million
Non-Recurring Revenues				$6 million
Non-Recurring Expenses, including pursuit costs of $1.5 million				$3 million
Offsite Costs
Property Management Expenses				$35 million
General and Administrative Expenses				$47 million
Capital Expenditures
Conventional Redevelopment				$125 - $150 million
Property Upgrades				$30 - $40 million
Transaction Activities
Direct Real Estate Acquisitions (100% Aimco Share)				$60 million
Aimco Share of Real Estate Value of Partnership Tenders and Mergers				$160 million
Aimco Share of Gross Real Estate Dispositions				$550 to $650 million

 

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Pro forma FFO Reconciliation

 

			September 30,
		$ per Share (at the  midpoint)
2011 Pro forma FFO		$	1.49
Total Same Store NOI growth			0.24
Debt prepayment penalties and write-off of deferred loan costs incurred in connection with a refinancing and securitization transaction in 2011			0.15
Offsite costs, including G&A			0.09
Reduction in asset management and non-recurring revenues			(0.05	)
2011 and 2012 asset sales, net of reinvestment			(0.13	)
Impact of 2011 share issuances			(0.02	)
2012 Pro forma FFO		$	1.77

Earnings Conference Call

 

Live Conference Call		Conference Call Replay
Wednesday, February 8, 2012 at 1:00 p.m. EDT		Available until 9:00 a.m. EST on February 23, 2012
Domestic Dial-In Number: 1-866-843-0890		Domestic Dial-In Number: 1-877-344-7529
International Dial-In Number: 1-412-317-9250		International Dial-In Number: 1-412-317-0088
Passcode: 9327149		Passcode: 10007657

Live webcast and replay: www.aimco.com/investors/events-presentations/webcasts

Supplemental Information

The full text of this Earnings Release and the Supplemental Information referenced in this release are available on Aimco’s website www.aimco.com/investors/financial-reports/quarterly-earning-reports.

Glossary & Reconciliations of Non-GAAP Financial and Operating Measures

Financial and operating measures found in this Earnings Release and the Supplemental Information include certain financial measures used by Aimco management that are not calculated in accordance with accounting principles generally accepted in the United States, or GAAP. These measures are defined in the glossary in the Supplemental Information and, where appropriate, reconciled to the most comparable GAAP measures.

 

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Forward-looking Statements

This Earnings Release and Supplemental Information contain forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding projected results and specifically forecasts of first quarter and full year 2012 results. These forward-looking statements are based on management’s judgment as of this date and include certain risks and uncertainties. Risks and uncertainties include, but are not limited to, Aimco’s ability to maintain current or meet projected occupancy, rental rates and property operating results. Actual results may differ materially from those described in these forward-looking statements and, in addition, will be affected by a variety of risks and factors, some of which are beyond the control of Aimco, including, without limitation: financing risks, including the availability and cost of capital markets financing and the risk that our cash flows from operations may be insufficient to meet required payments of principal and interest; earnings may not be sufficient to maintain compliance with debt covenants; real estate risks, including fluctuations in real estate values and the general economic climate in the markets in which we operate and competition for residents in such markets; national and local economic conditions, including the pace of job growth and the level of unemployment; the terms of governmental regulations that affect Aimco and interpretations of those regulations; the competitive environment in which Aimco operates; the timing of acquisitions and dispositions; insurance risk, including the cost of insurance; natural disasters and severe weather such as hurricanes; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; energy costs; and possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by Aimco. In addition, our current and continuing qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code and depends on our ability to meet the various requirements imposed by the Internal Revenue Code, through actual operating results, distribution levels and diversity of stock ownership. Readers should carefully review Aimco’s financial statements and the notes thereto, as well as the section entitled “Risk Factors” in Item 1A of Aimco’s Annual Report on Form 10-K for the year ended December 31, 2010, and the other documents Aimco files from time to time with the Securities and Exchange Commission. These forward-looking statements reflect management’s judgment as of this date, and Aimco assumes no obligation to revise or update them to reflect future events or circumstances. This press release does not constitute an offer of securities for sale.

About Aimco

Aimco is a real estate investment trust that is focused on the ownership and management of quality apartment communities located in the largest markets in the United States. Aimco is one of the country’s largest owners and operators of both conventional and affordable apartments, with 518 communities serving approximately 250,000 residents in 36 states, the District of Columbia and Puerto Rico. Aimco common shares are traded on the New York Stock Exchange under the ticker symbol AIV and are included in the S&P 500. For more information about Aimco, please visit our website at www.aimco.com.

Contact

Elizabeth Coalson, Vice President Investor Relations

Investor Relations 303-691-4350, Investor@Aimco.com

 

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Consolidated Statements of Operations

(in thousands, except per share data) (unaudited)

 

			September 30,				September 30,				September 30,				September 30,
		Three Months Ended								Year Ended
		December 31,								December 31,
		2011				2010				2011				2010
REVENUES:
Rental and other property revenues		$	263,035			$	259,651			$	1,040,923			$	1,020,231
Asset management and tax credit revenues			9,889				11,422				38,661				35,630
Total revenues			272,924				271,073				1,079,584				1,055,861
OPERATING EXPENSES:
Property operating expenses			107,785				112,999				449,982				460,995
Investment management expenses			3,053				3,508				10,415				14,487
Depreciation and amortization			97,606				100,452				378,043				397,740
Provision for operating real estate impairment losses			4,182				65				4,331				65
General and administrative expenses			14,544				14,351				50,950				53,365
Other expense, net			6,082				7,760				19,576				9,697
Total operating expenses			233,252				239,135				913,297				936,349
Operating income			39,672				31,938				166,287				119,512
Interest income			2,861				3,405				10,041				10,306
Recovery of (provision for) losses on notes receivable			329				(665	)			509				(949	)
Interest expense			(71,596	)			(75,679	)			(310,780	)			(297,019	)
Equity in losses of unconsolidated real estate partnerships			(9,288	)			(11,313	)			(17,721	)			(23,112	)
(Loss) gain on dispositions of unconsolidated real estate and other, net			(2,717	)			5,265				2,398				10,631
Loss before income taxes and discontinued operations			(40,739	)			(47,049	)			(149,266	)			(180,631	)
Income tax benefit			1,509				6,255				7,166				17,101
Loss from continuing operations			(39,230	)			(40,794	)			(142,100	)			(163,530	)
Income from discontinued operations, net [1]			30,656				6,582				83,936				73,906
Net loss			(8,574	)			(34,212	)			(58,164	)			(89,624	)
Noncontrolling interests:
Net (income) loss attributable to noncontrolling interests in consolidated real estate partnerships			(4,355	)			11,506				257				13,301
Net income attributable to preferred noncontrolling interests in Aimco Operating Partnership			(1,671	)			(1,672	)			(6,683	)			(4,964	)
Net loss attributable to common noncontrolling interests in Aimco Operating Partnership			1,665				2,915				7,503				9,559
Total noncontrolling interests			(4,361	)			12,749				1,077				17,896
Net loss attributable to Aimco			(12,935	)			(21,463	)			(57,087	)			(71,728	)
Net income attributable to Aimco preferred stockholders			(10,423	)			(16,964	)			(45,852	)			(53,590	)
Net income attributable to participating securities			(53	)			—				(222	)			—
Net loss attributable to Aimco common stockholders		$	(23,411	)		$	(38,427	)		$	(103,161	)		$	(125,318	)
Weighted average common shares outstanding — basic and diluted			120,433				116,683				119,312				116,369
Earnings (loss) per common share — basic and diluted:
Loss from continuing operations attributable to Aimco common stockholders		$	(0.31	)		$	(0.35	)		$	(1.25	)		$	(1.46	)
Income from discontinued operations attributable to Aimco common stockholders			0.12				0.02				0.39				0.38
Net loss attributable to Aimco common stockholders		$	(0.19	)		$	(0.33	)		$	(0.86	)		$	(1.08	)

 

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Consolidated Statements of Operations (continued)

Notes to Consolidated Statements of Operations

[1] Income from discontinued operations consists of the following (in thousands):

 

			September 30,				September 30,				September 30,				September 30,
		Three Months Ended								Year Ended
		December 31,								December 31,
		2011				2010				2011				2010
Rental and other property revenues		$	7,172			$	26,604			$	58,925			$	131,677
Property operating expenses			(5,768	)			(14,887	)			(33,987	)			(72,676	)
Depreciation and amortization			(2,293	)			(9,407	)			(17,290	)			(39,093	)
Provision for operating real estate impairment losses			(4,086	)			(3,411	)			(15,915	)			(12,961	)
Operating (loss) income			(4,975	)			(1,101	)			(8,267	)			6,947
Interest income			222				269				1,174				1,104
Interest expense			(1,327	)			(4,713	)			(10,565	)			(22,886	)
Loss before gain on dispositions of real estate and income taxes			(6,080	)			(5,545	)			(17,658	)			(14,835	)
Gain on dispositions of real estate			43,308				20,537				108,209				94,945
Income tax expense			(6,572	)			(8,410	)			(6,615	)			(6,204	)
Income from discontinued operations, net		$	30,656			$	6,582			$	83,936			$	73,906
Income from discontinued operations attributable to:
Noncontrolling interests in consolidated real estate partnerships		$	(15,968	)		$	(4,608	)		$	(34,727	)		$	(26,061	)
Noncontrolling interests in Aimco Operating Partnership			(1,060	)			(133	)			(3,351	)			(3,207	)
Total noncontrolling interests			(17,028	)			(4,741	)			(38,078	)			(29,268	)
Income from discontinued operations attributable to Aimco		$	13,628			$	1,841			$	45,858			$	44,638

 

		9

---

 

Consolidated Balance Sheets

(in thousands) (unaudited)

 

			September 30,				September 30,
		December 31, 2011				December 31, 2010
ASSETS
Buildings and improvements		$	6,839,678			$	6,772,272
Land			2,053,975				2,040,719
Total real estate			8,893,653				8,812,991
Accumulated depreciation			(2,864,873	)			(2,659,320	)
Net real estate			6,028,780				6,153,671
Cash and cash equivalents			91,066				111,325
Restricted cash			186,717				199,190
Accounts receivable, net			41,796				49,855
Deferred financing costs, net			49,486				45,387
Notes receivable, net			111,205				116,726
Investment in unconsolidated real estate partnerships			47,790				59,282
Other assets			246,195				194,740
Deferred income tax assets, net			51,933				58,736
Assets held for sale			16,894				389,654
Total assets		$	6,871,862			$	7,378,566
LIABILITIES AND EQUITY
Non-recourse property debt		$	5,172,320			$	5,181,538
Accounts payable			32,607				27,323
Accrued liabilities and other			251,933				297,121
Deferred income			140,293				150,199
Security deposits			33,484				32,876
Liabilities related to assets held for sale			13,167				279,309
Total liabilities			5,643,804				5,968,366
Preferred noncontrolling interests in Aimco Operating Partnership			83,384				83,428
Preferred stock subject to repurchase agreement			—				20,000
Equity:
Perpetual Preferred Stock			657,114				657,601
Class A Common Stock			1,209				1,176
Additional paid-in capital			3,098,333				3,070,296
Accumulated other comprehensive loss			(6,860	)			(2,076	)
Distributions in excess of earnings			(2,841,467	)			(2,680,955	)
Total Aimco equity			908,329				1,046,042
Noncontrolling interests in consolidated real estate partnerships			270,666				291,458
Common noncontrolling interests in Aimco Operating Partnership			(34,321	)			(30,728	)
Total equity			1,144,674				1,306,772
Total liabilities and equity		$	6,871,862			$	7,378,566

 

		10

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Supplemental Schedule 1 (a)

 

Funds From Operations		(page 1 of 2)

Three Months Ended December 31, 2011 Compared to Three Months Ended December 31, 2010

(in thousands) (unaudited)

 

			0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000
		Three Months Ended December 31, 2011																Three Months Ended December 31, 2010
		Consolidated Amount				Proportionate Share of Unconsolidated Partnerships				Noncontrolling Interests				Proportionate Amount				Consolidated Amount				Proportionate Share of Unconsolidated Partnerships				Noncontrolling Interests				Proportionate Amount
Real estate operations:
Rental and other property revenues
Conventional Same Store		$	203,015			$	—			$	(13,846	)		$	189,169			$	196,521			$	—			$	(16,412	)		$	180,109
Affordable Same Store			40,753				168				(9,833	)			31,088				39,415				175				(9,484	)			30,106
Total Same Store			243,768				168				(23,679	)			220,257				235,936				175				(25,896	)			210,215
Other Conventional [1]			14,278				1,617				—				15,895				16,790				1,187				(312	)			17,665
Other Affordable			4,843				7,611				(9,948	)			2,506				6,191				3,253				(5,576	)			3,868
Property management revenues, primarily from affiliates			146				(154	)			1,289				1,281				734				(215	)			(971	)			(452	)
Total rental and other property revenues			263,035				9,242				(32,338	)			239,939				259,651				4,400				(32,755	)			231,296
Property operating expenses
Conventional Same Store			69,169				—				(5,093	)			64,076				71,194				—				(6,380	)			64,814
Affordable Same Store			17,324				120				(4,706	)			12,738				17,228				99				(4,540	)			12,787
Total Same Store			86,493				120				(9,799	)			76,814				88,422				99				(10,920	)			77,601
Other Conventional [1]			7,135				931				(1	)			8,065				7,443				776				(190	)			8,029
Other Affordable			2,609				4,724				(6,050	)			1,283				3,801				1,864				(3,443	)			2,222
Casualties			1,928				—				70				1,998				516				—				(99	)			417
Property management expenses			9,620				—				—				9,620				12,817				—				—				12,817
Total property operating expenses			107,785				5,775				(15,780	)			97,780				112,999				2,739				(14,652	)			101,086
Net real estate operations			155,250				3,467				(16,558	)			142,159				146,652				1,661				(18,103	)			130,210
Amortization of deferred tax credit income			7,876				—				—				7,876				8,078				—				—				8,078
Asset management revenues			2				—				769				771				107				—				1,747				1,854
Non-recurring revenues [2]			2,011				—				4				2,015				3,237				—				90				3,327
Total asset management and tax credit revenues			9,889				—				773				10,662				11,422				—				1,837				13,259
Investment management expenses			(3,053	)			—				—				(3,053	)			(3,508	)			—				—				(3,508	)
Depreciation and amortization related to non-real estate assets			(3,182	)			(1	)			41				(3,142	)			(3,208	)			(5	)			44				(3,169	)
General and administrative expenses			(14,544	)			(3	)			237				(14,310	)			(14,351	)			(4	)			377				(13,978	)
Other expense, net			(6,082	)			(301	)			2,059				(4,324	)			(7,760	)			(1,007	)			3,377				(5,390	)
Interest income			2,861				18				145				3,024				3,405				(56	)			626				3,975
Recovery of (provision for) losses on notes receivable			329				—				664				993				(665	)			—				(1,697	)			(2,362	)
Interest expense			(71,596	)			(2,903	)			9,010				(65,489	)			(75,679	)			(933	)			9,544				(67,068	)
Gain on disposition of non-depreciable assets			—				—				—				—				807				—				—				807
Income tax benefit			1,113				—				—				1,113				6,253				—				—				6,253
Discontinued operations, net of non-FFO items			424				—				269				693				8,147				—				(3,874	)			4,273
Preferred dividends and distributions			(14,037	)			—				—				(14,037	)			(14,346	)			—				—				(14,346	)
Preferred redemption related amounts			1,943				—				—				1,943				(4,290	)			—				—				(4,290	)
Common noncontrolling interests in Aimco Operating Partnership			(3,778	)			—				—				(3,778	)			(3,144	)			—				—				(3,144	)
Amounts allocated to participating securities			(205	)			—				—				(205	)			(148	)			—				—				(148	)
Funds From Operations			55,332				277				(3,360	)			52,249				49,587				(344	)			(7,869	)			41,374
Preferred stock redemption related amounts			(1,943	)			—				—				(1,943	)			4,290				—				—				4,290
Common noncontrolling interests in Aimco Operating Partnership			132				—				—				132				(299	)			—				—				(299	)
Amounts allocated to participating securities			7				—				—				7				(20	)			—				—				(20	)
Pro Forma Funds From Operations		$	53,528			$	277			$	(3,360	)		$	50,445			$	53,558			$	(344	)		$	(7,869	)		$	45,345
			Weighted average shares — diluted FFO												120,700				Weighted average shares — diluted FFO												117,047
			Per Share:																Per Share:
			Funds From Operations											$	0.43				Funds From Operations											$	0.35
			Pro Forma Funds From Operations											$	0.42				Pro Forma Funds From Operations											$	0.39

 

		11

---

 

Supplemental Schedule 1 (a) (continued)

 

Pro Forma Funds From Operations Reconciliation to GAAP		(page 2 of 2)

Three Months Ended December 31, 2011 Compared to Three Months Ended December 31, 2010

(in thousands) (unaudited)

 

			0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000
		Three Months Ended December 31, 2011																Three Months Ended December 31, 2010
		Consolidated Amount				Proportionate Share of Unconsolidated Partnerships				Noncontrolling Interests				Proportionate Amount				Consolidated Amount				Proportionate Share of Unconsolidated Partnerships				Noncontrolling Interests				Proportionate Amount
Pro Forma Funds From Operations		$	53,528			$	277			$	(3,360	)		$	50,445			$	53,558			$	(344	)		$	(7,869	)		$	45,345
Adjustments related to continuing operations:
Depreciation and amortization			(97,606	)			(3,224	)			9,988				(90,842	)			(100,452	)			(961	)			12,222				(89,191	)
Depreciation and amortization related to non-real estate assets			3,182				1				(41	)			3,142				3,208				5				(44	)			3,169
Provision for operating real estate impairment losses			(4,182	)			—				463				(3,719	)			(65	)			—				—				(65	)
(Loss) gain on dispositions of and impairments related to unconsolidated entities and other, net			(2,718	)			(6,342	)			5,828				(3,232	)			4,458				(10,013	)			6,097				542
Income tax benefit on impairments related to unconsolidated entities and other			396				—				—				396				1				—				—				1
Adjustments related to discontinued operations:
Depreciation and amortization			(2,293	)			—				511				(1,782	)			(9,407	)			—				3,385				(6,022	)
Depreciation and amortization related to non-real estate assets			70				—				(6	)			64				50				—				(15	)			35
Provision for operating real estate impairment losses			(4,086	)			—				985				(3,101	)			(3,411	)			—				211				(3,200	)
Gain on dispositions of real estate			43,308				—				(18,723	)			24,585				20,537				—				(2,481	)			18,056
Income tax expense arising from disposals and impairments			(6,767	)			—				—				(6,767	)			(9,333	)			—				—				(9,333	)
Total adjustments		$	(70,696	)		$	(9,565	)		$	(995	)		$	(81,256	)		$	(94,414	)		$	(10,969	)		$	19,375			$	(86,008	)
Common noncontrolling interests in Aimco Operating Partnership's share of adjustments			5,312				—				—				5,312				6,358				—				—				6,358
Amounts allocable to participating securities			145				—				—				145				168				—				—				168
Preferred stock redemption related gains			1,943				—				—				1,943				(4,290	)			—				—				(4,290	)
Equity in losses of unconsolidated real estate partnerships			(9,288	)			9,288				—				—				(11,313	)			11,313				—				—
Net (income) loss attributable to noncontrolling interests in consolidated real estate partnerships			(4,355	)			—				4,355				—				11,506				—				(11,506	)			—
Net loss attributable to Aimco common stockholders		$	(23,411	)		$	—			$	—			$	(23,411	)		$	(38,427	)		$	—			$	—			$	(38,427	)

Notes

 

[1]	The results for Other Conventional include four acquisition properties and three vacant properties, Lincoln Place, Pacific Bay Vistas (formerly Treetops), and Madera Vista for the periods presented.

 

[2]	Non-recurring revenues consisted of the following:

 

			September 30,				September 30,
		Three Months Ended December 31, 2011				Three Months Ended December 31, 2010
Promotes		$	577			$	—
Other general partner transactional fees			1,298				1,275
Tax credit syndication fees			136				1,962
Total non-recurring revenues		$	2,011			$	3,237

 

		12

---

 

Supplemental Schedule 1 (b)

 

Funds From Operations		(page 1 of 2)
Year Ended December 31, 2011 Compared to Year Ended December 31, 2010
(in thousands) (unaudited)

 

			0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000
		Year Ended December 31, 2011																Year Ended December 31, 2010
		Consolidated Amount				Proportionate Share of Unconsolidated Partnerships				Noncontrolling Interests				Proportionate Amount				Consolidated Amount				Proportionate Share of Unconsolidated Partnerships				Noncontrolling Interests				Proportionate Amount
Real estate operations:
Rental and other property revenues
Conventional Same Store		$	800,269			$	—			$	(56,987	)		$	743,282			$	778,806			$	—			$	(68,977	)		$	709,829
Affordable Same Store			161,070				661				(38,833	)			122,898				154,696				678				(37,463	)			117,911
Total Same Store			961,339				661				(95,820	)			866,180				933,502				678				(106,440	)			827,740
Other Conventional [1]			59,414				5,744				(136	)			65,022				63,715				4,730				(1,408	)			67,037
Other Affordable			18,976				38,797				(46,713	)			11,060				20,239				10,131				(17,838	)			12,532
Property management revenues, primarily from affiliates			1,194				(644	)			5,613				6,163				2,775				(733	)			3,532				5,574
Total rental and other property revenues			1,040,923				44,558				(137,056	)			948,425				1,020,231				14,806				(122,154	)			912,883
Property operating expenses
Conventional Same Store			289,241				—				(21,690	)			267,551				295,079				—				(27,485	)			267,594
Affordable Same Store			68,118				498				(18,202	)			50,414				69,798				470				(18,250	)			52,018
Total Same Store			357,359				498				(39,892	)			317,965				364,877				470				(45,735	)			319,612
Other Conventional [1]			29,118				3,345				(77	)			32,386				28,803				3,008				(736	)			31,075
Other Affordable			10,502				24,143				(28,396	)			6,249				11,444				5,928				(10,094	)			7,278
Casualties			11,601				(11	)			(24	)			11,566				7,687				21				526				8,234
Property management expenses			41,402				—				—				41,402				48,184				—				—				48,184
Total property operating expenses			449,982				27,975				(68,389	)			409,568				460,995				9,427				(56,039	)			414,383
Net real estate operations			590,941				16,583				(68,667	)			538,857				559,236				5,379				(66,115	)			498,500
Amortization of deferred tax credit income			29,080				—				—				29,080				28,819				—				—				28,819
Asset management revenues			1,507				—				3,330				4,837				528				(67	)			4,518				4,979
Non-recurring revenues [2]			8,074				—				495				8,569				6,283				—				336				6,619
Total asset management and tax credit revenues			38,661				—				3,825				42,486				35,630				(67	)			4,854				40,417
Investment management expenses			(10,415	)			—				—				(10,415	)			(14,487	)			—				—				(14,487	)
Depreciation and amortization related to non-real estate assets			(12,942	)			(4	)			159				(12,787	)			(14,380	)			(9	)			187				(14,202	)
General and administrative expenses			(50,950	)			(10	)			1,067				(49,893	)			(53,365	)			(17	)			1,418				(51,964	)
Other expense, net			(19,576	)			(417	)			7,826				(12,167	)			(9,697	)			(5,036	)			10,725				(4,008	)
Interest income			10,041				(87	)			1,182				11,136				10,306				(196	)			2,826				12,936
Recovery of (provision for) losses on notes receivable			509				—				(623	)			(114	)			(949	)			—				(3,418	)			(4,367	)
Interest expense			(310,780	)			(10,378	)			41,312				(279,846	)			(297,019	)			(3,057	)			37,752				(262,324	)
Gain on disposition of non-depreciable assets			(68	)			—				—				(68	)			806				—				—				806
Income tax benefit			6,815				—				—				6,815				17,109				—				—				17,109
Discontinued operations, net of non-FFO items			15,744				—				(1,257	)			14,487				39,170				—				(8,140	)			31,030
Preferred dividends and distributions			(56,439	)			—				—				(56,439	)			(58,808	)			—				—				(58,808	)
Preferred redemption related amounts			3,904				—				—				3,904				254				—				—				254
Common noncontrolling interests in Aimco Operating Partnership			(13,364	)			—				—				(13,364	)			(13,171	)			—				—				(13,171	)
Amounts allocated to participating securities			(778	)			—				—				(778	)			(738	)			—				—				(738	)
Funds From Operations			191,303				5,687				(15,176	)			181,814				199,897				(3,003	)			(19,911	)			176,983
Preferred stock redemption related amounts			(3,904	)			—				—				(3,904	)			(254	)			—				—				(254	)
Common noncontrolling interests in Aimco Operating Partnership			266				—				—				266				18				—				—				18
Amounts allocated to participating securities			16				—				—				16				1				—				—				1
Pro Forma Funds From Operations		$	187,681			$	5,687			$	(15,176	)		$	178,192			$	199,662			$	(3,003	)		$	(19,911	)		$	176,748
			Weighted average shares — diluted FFO												119,626				Weighted average shares — diluted FFO												116,693
			Per Share:																Per Share:
			Funds From Operations											$	1.52				Funds From Operations											$	1.52
			Pro Forma Funds From Operations											$	1.49				Pro Forma Funds From Operations											$	1.51

 

		13

---

 

Supplemental Schedule 1 (b) (continued)

 

Pro Forma Funds From Operations Reconciliation to GAAP		(page 2 of 2)
Year Ended December 31, 2011 Compared to Year Ended December 31, 2010
(in thousands) (unaudited)

 

			0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000				0000000000000000
		Year Ended December 31, 2011																Year Ended December 31, 2010
		Consolidated Amount				Proportionate Share of Unconsolidated Partnerships				Noncontrolling Interests				Proportionate Amount				Consolidated Amount				Proportionate Share of Unconsolidated Partnerships				Noncontrolling Interests				Proportionate Amount
Pro Forma Funds From Operations		$	187,681			$	5,687			$	(15,176	)		$	178,192			$	199,662			$	(3,003	)		$	(19,911	)		$	176,748
Adjustments related to continuing operations:
Depreciation and amortization			(378,043	)			(13,006	)			42,799				(348,250	)			(397,740	)			(5,564	)			44,897				(358,407	)
Depreciation and amortization related to non-real estate assets			12,942				4				(159	)			12,787				14,380				9				(187	)			14,202
Provision for operating real estate impairment losses			(4,331	)			—				463				(3,868	)			(65	)			—				—				(65	)
Gain on dispositions of and impairments related to unconsolidated entities and other, net			2,465				(10,406	)			5,706				(2,235	)			9,825				(14,554	)			3,887				(842	)
Income tax benefit (expense) on impairments or gains related to unconsolidated entities and other			351				—				—				351				(8	)			—				—				(8	)
Adjustments related to discontinued operations:
Depreciation and amortization			(17,290	)			—				3,591				(13,699	)			(39,093	)			—				9,948				(29,145	)
Depreciation and amortization related to non-real estate assets			178				—				(36	)			142				229				—				(43	)			186
Provision for operating real estate impairment losses			(15,915	)			—				3,555				(12,360	)			(12,961	)			—				1,110				(11,851	)
Gain on dispositions of real estate			108,209				—				(40,486	)			67,723				94,945				—				(26,400	)			68,545
Income tax expense arising from disposals and impairments			(6,990	)			—				—				(6,990	)			(8,385	)			—				—				(8,385	)
Total adjustments		$	(298,424	)		$	(23,408	)		$	15,433			$	(306,399	)		$	(338,873	)		$	(20,109	)		$	33,212			$	(325,770	)
Common noncontrolling interests in Aimco Operating Partnership’s share of adjustments			20,602				—				—				20,602				22,713				—				—				22,713
Amounts allocable to participating securities			540				—				—				540				737				—				—				737
Preferred stock redemption related gains			3,904				—				—				3,904				254				—				—				254
Equity in losses of unconsolidated real estate partnerships			(17,721	)			17,721				—				—				(23,112	)			23,112				—				—
Net loss attributable to noncontrolling interests in consolidated real estate partnerships			257				—				(257	)			—				13,301				—				(13,301	)			—
Net loss attributable to Aimco common stockholders		$	(103,161	)		$	—			$	—			$	(103,161	)		$	(125,318	)		$	—			$	—			$	(125,318	)

Notes

 

[1]	The results for Other Conventional include four acquisition properties and three vacant properties, Lincoln Place, Pacific Bay Vistas (formerly Treetops), and Madera Vista for the periods presented.

 

[2]	Non-recurring revenues consisted of the following:

 

			September 30,				September 30,
		Year Ended December 31, 2011				Year Ended December 31, 2010
Promotes		$	577			$	2,727
Other general partner transactional fees			6,073				3,767
Tax credit syndication fees			1,424				(211	)
Total non-recurring revenues		$	8,074			$	6,283

 

		14

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Supplemental Schedule 2

Portfolio Summary

As of December 31, 2011

(unaudited)

 

			0000000000000000				0000000000000000				0000000000000000				0000000000000000
		Number of				Number of				Effective				Average
		Properties				Units				Units				Ownership
Owned Real Estate Portfolio:
Conventional Same Store			161				56,731				53,120				94	%
Affordable Same Store			122				15,639				11,431				73	%
Total Same Store			283				72,370				64,551				89	%
Conventional Redevelopment [1]			4				1,502				1,502				100	%
Conventional Acquisition			4				142				72				51	%
Other Conventional			28				4,159				3,310				80	%
Other Affordable			50				4,973				808				16	%
Conventional Held for Sale			1				300				300				100	%
Total owned real estate portfolio			370				83,446				70,543				85	%
Total Conventional owned real estate portfolio			198				62,834				58,304				93	%
Total Affordable owned real estate portfolio			172				20,612				12,239				59	%
Fee-Managed Portfolio:
Property-Managed for third parties			1				64
Asset-Managed			147				10,184
Total fee-managed portfolio			148				10,248
Total Portfolio			518				93,694

 

[1]	At December 31, 2011 Aimco's Conventional Redevelopment portfolio included three vacant properties, Lincoln Place, Pacific Bay Vistas (formerly Treetops) and Madera Vista, and one partially occupied property, Plantation Gardens.

 

		15

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Supplemental Schedule 3

 

Net Asset Value Supplemental Information		(page 1 of 2)
(in thousands) (unaudited)

One measure of stockholder value is Net Asset Value (NAV), which is the estimated fair value of assets, net of debt and preferred equity. The information provided below is intended to assist users of Aimco's financial information in making their own estimates of Aimco's NAV. See the following page for notes to the supplemental information provided below.

Trailing Twelve Month Net Operating Income Data

 

			September 30,				September 30,				September 30,
		Proportionate Property Net Operating Income
		Conventional Same Store and Other [1]				Affordable				Total
Rental and other property revenues		$	808,304			$	133,958			$	942,262
Property operating expenses			(299,937	)			(56,663	)			(356,600	)
Property NOI			508,367				77,295				585,662
Assumed property management fee (3.0% of revenues)			(24,249	)			(4,019	)			(28,268	)
Property NOI net of assumed property management fee		$	484,118			$	73,276			$	557,394

Proportionate Balance Sheet Data

As of December 31, 2011

 

			XXXXXX				XXXXXX				XXXXXX				XXXXXX
		Consolidated GAAP Balance Sheet				Proportionate Share of Unconsolidated Partnerships				Noncontrolling Interests				Proportionate Balance Sheet
Assets
Real estate		$	8,893,653			$	79,397			$	(745,900	)		$	8,227,150
Accumulated depreciation			(2,864,873	)			(18,529	)			238,514				(2,644,888	)
Net real estate [2]			6,028,780				60,868				(507,386	)			5,582,262
Cash and cash equivalents			91,066				1,025				(36,973	)			55,118
Restricted cash			186,717				3,501				(22,645	)			167,573
Accounts receivable, net			41,796				130				(5,028	)			36,898
Notes receivable, net			111,205				—				(1,367	)			109,838
Investment in unconsolidated real estate partnerships [3]			47,790				(11,829	)			(33,123	)			2,838
Deferred financing costs, net [4]			49,486				440				(6,273	)			43,653
Goodwill [4]			61,948				—				—				61,948
Investment in management contracts [4]			566				—				—				566
Other assets [5]			235,614				200				18,406				254,220
Assets held for sale			16,894				—				844				17,738
Total assets		$	6,871,862			$	54,335			$	(593,545	)		$	6,332,652
Liabilities and Equity
Non-recourse property debt		$	5,172,320			$	40,378			$	(482,582	)		$	4,730,116
Deferred income [6]			140,293				72				—				140,365
Other liabilities			318,024				13,885				(66,946	)			264,963
Liabilities related to assets held for sale			13,167				—				—				13,167
Total liabilities			5,643,804				54,335				(549,528	)			5,148,611
Preferred noncontrolling interests in Aimco Operating Partnership [7]			83,384				—				—				83,384
Perpetual preferred stock [7]			657,114				—				—				657,114
Other Aimco equity			251,215				—				226,650				477,865
Noncontrolling interests in consolidated real estate partnerships			270,666				—				(270,666	)			—
Common noncontrolling interests in Aimco Operating Partnership			(34,321	)			—				—				(34,321	)
Total liabilities and equity		$	6,871,862			$	54,335			$	(593,545	)		$	6,332,652

 

		16

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Supplemental Schedule 3 (continued)		(page 2 of 2)

Net Asset Value Supplemental Information

(in thousands) (unaudited)

 

[1]

Proportionate Property Net Operating amounts for Other Conventional include the results of Lincoln Place and Pacific Bay Vistas, two redevelopment properties that were vacant during the period presented, and the results of Madera Vista, a vacant redevelopment property acquired during the third quarter 2011.

 

[2]	Net real estate includes three vacant redevelopment properties, Lincoln Place, Pacific Bay Vistas and Madera Vista, that have December 31, 2011 net book values of $253.1 million in total. Aimco refers to these properties collectively as part of its redevelopment pipeline.

 

[3]

Aimco’s internal NAV estimate is computed based on Aimco’s share of NOI and as such takes into account Aimco’s share of NOI attributable to unconsolidated partnerships. For this reason, investment in unconsolidated real estate partnerships is excluded from non-real estate assets in Aimco’s internal NAV computation.

 

[4]	Deferred financing costs, goodwill and investment in management contracts represent non-tangible assets for which cash has already been paid by Aimco. As such, these amounts are excluded from Aimco’s internal NAV computation.

 

[5]	Includes notes receivable from consolidated partnerships that are eliminated in the consolidated balance sheet. The noncontrolling partners’ share of amounts payable to Aimco pursuant to those notes is added to the GAAP-based amounts to arrive at the proportionate balance presented.

 

[6]

Deferred income includes $91.5 million of unamortized cash contributions received by Aimco in exchange for the sale of tax credit and related tax benefits. These cash contributions are deferred upon receipt and amortized into earnings in future periods as Aimco delivers the tax credits and related benefits to the investors. Certain of Aimco’s tax credit arrangements provide for contributions to be made in installments, which contributions are not reflected in Aimco’s consolidated financial statements until such time as the contributions are received.

Deferred income and the future earnings associated with the deferred income are excluded from Aimco’s internal estimates of NAV. However, amortization of deferred tax credit income is included in net income and, as such, FFO. Projected amortization of deferred tax credit contributions received and to be received is presented below.

 

			September 30,
		December 31, 2011
Deferred tax credit income balance		$	91,485
Contributions to be received in the future			62,172
Total to be amortized		$	153,657

 

			September 30,				September 30,				September 30,
		Amortization of Deferred Income				Estimated Income Taxes				Projected Income, net of tax
Year Ending December 31,
2012		$	28,176			$	(10,989	)		$	17,187
2013			27,710				(10,807	)			16,903
2014			26,718				(10,420	)			16,298
2015			22,753				(8,874	)			13,879
2016			17,518				(6,832	)			10,686
Thereafter			30,782				(12,004	)			18,778
Total		$	153,657			$	(59,926	)		$	93,731

 

[7]	Aimco’s internal NAV computation includes Preferred noncontrolling interests in Aimco Operating Partnership and Perpetual preferred stock as a reduction of NAV attributable to Aimco common stockholders. See Schedule 5.

 

		17

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Supplemental Schedule 4

 

Non-recourse Property Debt Information		(page 1 of 2)
As of December 31, 2011
(dollars in thousands) (unaudited)

Property Debt Balances and Characteristics

 

			XXXXXXXX				XXXXXXXX				XXXXXXXX				XXXXXXXX				XXXXXXXX				XXXXXXXX
Debt		Consolidated				Proportionate Share of Unconsolidated Partnerships				Noncontrolling Interests				Total Aimco Share				Weighted Average Maturity (years)				Weighted Average Rate
Conventional Portfolio:
Fixed rate loans payable [1]		$	4,341,566			$	—			$	(275,302	)		$	4,066,264				7.2				5.80	%
Fixed rate tax-exempt bonds			24,080				—				(3,338	)			20,742				2.5				6.14	%
Floating rate tax-exempt bonds			109,814				—				(5,278	)			104,536				8.9				0.65	%
Total property tax-exempt bond financing			133,894				—				(8,616	)			125,278				7.8				1.63	%
Total Conventional portfolio			4,475,460				—				(283,918	)			4,191,542				7.2				5.68	%
Affordable Portfolio:
Fixed rate loans payable			454,485				40,378				(153,031	)			341,832				12.5				4.67	%
Floating rate loans payable			41,136				—				(20,573	)			20,563				6.8				3.21	%
Total property loans payable			495,621				40,378				(173,604	)			362,395				12.0				4.55	%
Fixed rate tax-exempt bonds			132,033				—				(25,060	)			106,973				24.2				4.54	%
Floating rate tax-exempt bonds [2]			69,206				—				—				69,206				0.3				2.61	%
Total property tax-exempt bond financing			201,239				—				(25,060	)			176,179				16.0				3.87	%
Total Affordable portfolio			696,860				40,378				(198,664	)			538,574				13.2				4.36	%
Total non-recourse property debt		$	5,172,320			$	40,378			$	(482,582	)			4,730,116				8.0				5.50	%

 

[1]

During June 2011, $673.8 million (original principal amount) of fixed rate loans payable were securitized and Aimco purchased for $51.5 million the first loss and two mezzanine positions in the trust that holds these loans. The investments, which have a face value of $100.9 million, are presented in other assets on Aimco’s consolidated balance sheet. The weighted average interest rate on the securitized loans payable of 5.49% is reflected in the table above. The effective rate, after adjustment for the estimated interest on the investments in the securitization trust, is 5.19%.

 

[2]	Floating rate debt presented above includes $75.0 million of fixed rate debt that is effectively converted to floating rates using total rate of return swaps. At December 31, 2011, the carrying amount of this debt totaled $69.2 million, after recognition of changes in the debt’s fair value.

Aimco Share Property Debt

 

			September 30,				September 30,
		Amount				% of Total
Fixed rate property debt		$	4,535,811				95.9	%
Floating rate tax-exempt bonds			173,742				3.7	%
Floating rate loans payable			20,563				0.4	%
Total		$	4,730,116

 

			September 30,				September 30,				September 30,				September 30,				September 30,
														Maturities as a Percent				Average Rate on
		Amortization				Maturities				Total				of Total Debt				Maturing Debt
2012 Q1		$	19,643			$	2,944			$	22,587				0.06	%
2012 Q2 [3]			21,114				79,409				100,523				1.68	%			2.73	%
2012 Q3			20,635				90,183				110,818				1.91	%			6.07	%
2012 Q4			21,209				951				22,160				0.02	%			0.18	%
Total 2012			82,601				173,487				256,088				3.67	%			4.37	%
2013 Q1		$	20,664			$	77,256			$	97,920				1.63	%			5.10	%
2013 Q2			21,280				23,487				44,767				0.50	%			5.36	%
2013 Q3			20,824				124,289				145,113				2.63	%			4.96	%
2013 Q4			21,213				68,921				90,134				1.46	%			6.89	%
Total 2013			83,981				293,953				377,934				6.21	%			5.49	%
2014			83,241				222,624				305,865				4.71	%			5.50	%
2015			83,775				185,713				269,488				3.93	%			4.83	%
2016			80,974				379,250				460,224				8.02	%			5.65	%
2017			73,939				452,681				526,620				9.57	%			5.92	%
2018			68,898				210,849				279,747				4.46	%			4.67	%
2019			64,217				451,441				515,658				9.54	%			5.98	%
2020			55,783				388,266				444,049				8.21	%			6.44	%
2021 [4]			35,952				698,192				734,144				14.76	%			5.69	%
Thereafter			271,423				288,876				560,299				6.11	%			4.38	%
Total		$	984,784			$	3,745,332			$	4,730,116

 

[3]

Q2 2012 maturities include approximately $75.0 million of debt ($69.2 million at carrying amount) subject to total return swaps for which the swap maturity dates are in 2012 and the related debt maturities are beyond 2012. In the event Aimco is unable refinance the debt to which these swaps relate prior to the swap maturity dates, Aimco would have to pay a termination payment (currently $5.8 million) to the counterparties.

 

[4]

2021 maturities include $100.9 million that will effectively repay Aimco’s first loss and mezzanine positions in the securitization discussed in Note 1 above. After consideration of the repayment of these investments, Aimco’s net effective maturities exposure for 2021 is $597.3 million, or 12.9% of maturities as a percentage of total debt.

 

		18

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Supplemental Schedule 4 (continued)

 

Non-recourse Property Debt Information		(page 2 of 2)
As of December 31, 2011
(in millions) (unaudited)

Year-to-Date Property Loan Closings (Aimco Share)

 

			September 30,				September 30,				September 30,				September 30,				September 30,
		Loan				New				Net
		Amount				Loan				(Repayment)				Prior				New
Original Loan Maturity Year		Refinanced				Amount [1]				Proceeds [2]				Rate				Rate [3]
2011 [4]		$	98.7			$	89.3			$	(9.8	)			5.76	%			3.75	%
2012 [5][6]			234.6				246.0				9.0				1.94	%			4.92	%
2013 [6]			13.1				23.7				13.4				4.98	%			5.54	%
2014 [4][6]			124.4				121.5				(7.9	)			5.74	%			4.83	%
2015 [4][6]			172.7				166.4				(18.7	)			5.94	%			5.44	%
2016 [6]			35.5				47.1				10.6				5.57	%			4.94	%
2018			1.3				7.3				5.8				7.00	%			2.97	%
2020			4.3				7.3				2.0				7.90	%			4.99	%
2036			7.1				12.0				5.3				6.48	%			4.47	%
2038			14.4				17.5				3.1				5.98	%			4.47	%
2040			45.7				46.5				0.2				6.88	%			4.15	%
New loans			—				42.1				35.2				—				4.37	%
Totals		$	751.8			$	826.7			$	48.2				4.67	%			4.80	%
Net Change in Leverage from Refinancings						$	74.9
Non-refinancing Loan Repayments							(8.6	)
Principal Amortization							(78.4	)
Aimco’s FREMF 2011 K-AIV Investments [6]							(51.5	)
Repurchase of Series A Community Investment Act Preferred Stock							(20.0	)
Net Decrease in Leverage After Trust Investments and Preferred Stock Repurchase						$	(83.6	)

 

[1]	New loans typically have terms ranging from 7 to 10 years.

 

[2]	Net (Repayment) Proceeds is (inclusive of) after transaction costs, prepayment penalties and payment of distributions to noncontrolling partners.

 

[3]	The interest rates on all New Loans closed during the period are fixed.

 

[4]	As part of Aimco’s leverage strategy, Aimco reduced the sizing of these loans, resulting in net repayments in connection with the refinancing transactions.

 

[5]	$186.3 million of the Original Loans had a variable interest rate indexed to SIFMA, which was significantly less than the corresponding New Loans’ fixed rates.

 

[6]

In June 2011, Freddie Mac securitized $673.8 million (original principal amount) of Aimco’s fixed rate loans payable and Aimco purchased for $51.5 million the first loss and two mezzanine positions in the FREMF 2011 K-AIV securitization trust that holds these loans. The investments, which have a face value of $100.9 million, are presented in other assets on Aimco’s consolidated balance sheet. The effective deleveraging during the year ended December 31, 2011 resulting from these investments is reflected in the Net Decrease in Leverage shown above. The weighted average interest rate on the securitized loans payable of 5.49% is reflected in the table above. The effective rate, after adjustment for the estimated interest on the investments in the securitization trust, is 5.19%.

Debt Ratios

 

			September 30,				September 30,
		Amount				Covenant
EBITDA coverage of interest			2.18:1				n/a
EBITDA coverage of interest and preferred dividends			1.78:1				n/a
Debt service coverage ratio [1]			1.61:1				1.40:1
Fixed charge coverage ratio [1]			1.37:1				1.20:1

 

[1]	The Debt service and fixed charge coverage ratio covenants will increase to 1.50:1 and 1.30:1, respectively, for the first quarter 2012.

Credit Ratings

 

Moody’s Investor Service		Corporate Family Rating		Ba1 (stable outlook)
Standard and Poor's		Corporate Credit Rating		BB+ (stable)

 

		19

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Supplemental Schedule 5

Share Data

(in thousands) (unaudited)

Preferred Securities

 

			September 30,				September 30,				September 30,				September 30,
		Shares/Units Outstanding as of December 31, 2011				Date First Available for Redemption by Aimco				Coupon				Amount
Perpetual Preferred Stock:
Class T			6,000				7/31/2008				8.000	%		$	150,000
Class U			12,000				3/24/2009				7.750	%			300,000
Class V			2,588				9/29/2009				8.000	%			64,688
Class Y			3,450				12/21/2009				7.875	%			86,250
Class Z			869				7/29/2016				7.000	%			21,729
Series A Community Reinvestment Act [1]			—				6/30/2011				1.620	%			37,000
Total perpetual preferred stock															659,667
Preferred Partnership Units [2]			3,061								8.096	%			82,515
Total outstanding preferred securities														$	742,182

Common Stock, Partnership Units and Equivalents

 

			September 30,				September 30,				September 30,				September 30,				September 30,
		As of December 31, 2011				Three Months Ended December 31, 2011								Year Ended December 31, 2011
						EPS				FFO				EPS				FFO
Class A Common Stock outstanding			120,433				120,433				120,433				119,312				119,312
Dilutive securities:
Options and restricted stock			481				—				267				—				314
Total shares and dilutive share equivalents			120,914				120,433				120,700				119,312				119,626
Common Partnership Units and equivalents [3]			8,237
Total shares, units and dilutive share equivalents			129,151

Notes

 

[1]	Represents 74 shares at a liquidation preference per share of $500,000. The dividend rate is a variable rate per annum equal to the Three-Month LIBOR Rate plus 1.25%, calculated as of the beginning of each quarterly period.

 

[2]	Coupon is based on a weighted average of all outstanding series of Preferred Partnership Units.

 

[3]	Includes the Aimco Operating Partnership’s common OP Units and Class I High Performance Units, which are included in noncontrolling interests in Aimco Operating Partnership in our consolidated financial statements and Schedule 1.

 

		20

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Supplemental Schedule 6(a)

Conventional Same Store Operating Results

Fourth Quarter 2011 Compared to Fourth Quarter 2010

(in thousands, except site and unit data) (unaudited)

 

			00000000				00000000				00000000				00000000				00000000				00000000				00000000				00000000				00000000				00000000				00000000				00000000				00000000				00000000				00000000				00000000				00000000
										Effective				Revenue												Expenses												Net Operating Income												Operating Margin				Average Daily Occupancy During Period								Average Rental Rates During Period
		Properties				Units				Units				4Q 2011				4Q 2010				Growth				4Q 2011				4Q 2010				Growth				4Q 2011				4Q 2010				Growth				4Q 2011				4Q 2011				4Q 2010				4Q 2011				4Q 2010
Target Markets
Los Angeles			13				3,949				3,297			$	19,361			$	18,849				2.7	%		$	5,748			$	5,940				-3.2	%		$	13,613			$	12,909				5.5	%			70.3	%			95.9	%			97.3	%		$	2,050			$	1,974
Orange County			4				1,213				1,143				5,681				5,395				5.3	%			1,772				1,978				-10.4	%			3,909				3,417				14.4	%			68.8	%			96.9	%			95.7	%			1,562				1,517
San Diego			6				2,144				2,073				8,355				8,149				2.5	%			2,373				2,479				-4.3	%			5,982				5,670				5.5	%			71.6	%			94.7	%			96.1	%			1,275				1,229
Southern CA Total			23				7,306				6,513				33,397				32,393				3.1	%			9,893				10,397				-4.8	%			23,504				21,996				6.9	%			70.4	%			95.7	%			96.7