APARTMENT INVESTMENT & MANAGEMENT CO
10-Ks and 10-Qs
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Table of Contents
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
Washington, D.C. 20549
Form 10-K
| (Mark One) | ||
|
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
| For the fiscal year ended December 31, 2009 | ||
|
or
|
||
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
| For the transition period from to | ||
Commission File Number 1-13232
Apartment Investment and
Management Company
(Exact name of registrant as
specified in its charter)
|
Maryland
(State or other jurisdiction of incorporation or organization) |
84-1259577
(I.R.S. Employer Identification No.) |
|
|
4582 South Ulster Street Parkway, Suite 1100
Denver, Colorado (Address of principal executive offices) |
80237
(Zip Code) |
Registrant’s telephone number, including area code:
(303) 757-8101
Securities Registered Pursuant to Section 12(b) of the
Act:
|
Title of Each Class
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Name of Each Exchange on Which Registered
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|
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Class A Common Stock
|
New York Stock Exchange | |
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Class G Cumulative Preferred Stock
|
New York Stock Exchange | |
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Class T Cumulative Preferred Stock
|
New York Stock Exchange | |
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Class U Cumulative Preferred Stock
|
New York Stock Exchange | |
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Class V Cumulative Preferred Stock
|
New York Stock Exchange | |
|
Class Y Cumulative Preferred Stock
|
New York Stock Exchange |
Securities Registered Pursuant to Section 12(g) of the
Act: none
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined by Rule 405 of the Securities
Act. Yes
þ
No
o
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Act. Yes
o
No
þ
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days. Yes
þ
No
o
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files). Yes
o
No
o
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of
Regulation S-K
is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in
Part III of this
Form 10-K
or any amendment to this
Form 10-K.
þ
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
“large accelerated filer,” “accelerated
filer” and “smaller reporting company” in
Rule 12b-2
of the Exchange Act. (Check one):
|
Large accelerated
filer
þ
|
Accelerated filer o |
Non-accelerated
filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2
of the
Act). Yes
o
No
þ
The aggregate market value of the voting and non-voting common
stock held by non-affiliates of the registrant was approximately
$1.0 billion as of June 30, 2009. As of
February 24, 2010, there were 117,140,672 shares of
Class A Common Stock outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement to
be issued in conjunction with the registrant’s annual
meeting of stockholders to be held April 26, 2010, are
incorporated by reference into Part III of this Annual
Report.
APARTMENT
INVESTMENT AND MANAGEMENT COMPANY
TABLE OF
CONTENTS
ANNUAL
REPORT ON
FORM 10-K
For the Fiscal Year Ended December 31, 2009
For the Fiscal Year Ended December 31, 2009
1
Table of Contents
FORWARD-LOOKING
STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides
a “safe harbor” for forward-looking statements in
certain circumstances. Certain information included in this
Annual Report contains or may contain information that is
forward-looking within the meaning of the federal securities
laws, including, without limitation, statements regarding the
effect of acquisitions and redevelopments, our future financial
performance, including our ability to maintain current or meet
projected occupancy, rent levels and same store results, and the
effect of government regulations. 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 our control,
including, without limitation: financing risks, including the
availability and cost of 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; the terms of governmental regulations
that affect us and interpretations of those regulations; the
competitive environment in which we operate; 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 us. 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
our financial statements and the notes thereto, as well as the
section entitled “Risk Factors” describ
ed
in
Item 1A of this Annual Report and the other documents we
file from time to time with the Securities and Exchange
Commission.
| Item 1. | Business |
The
Company
Apartment Investment and Management Company, or Aimco, is a
Maryland corporation incorporated on January 10, 1994. We
are a self-administered and self-managed real estate investment
trust, or REIT, engaged in the acquisition, ownership,
management and redevelopment of apartment properties. We
primarily invest in the 20 largest U.S. markets, as
measured by total market capitalization, which is the total
market value of institutional-grade apartment properties in a
particular market. We define these markets as “target
markets” and they possess the following characteristics: a
high concentration of population and apartment units; geographic
and employment diversification; and historically strong returns
with reduced volatility as part of a diversified portfolio. We
are one of the largest owners and operators of apartment
properties in the United States.
We own an equity interest in, and consolidate the majority of,
the properties in our owned real estate portfolio. These
properties represent the consolidated real estate holdings in
our financial statements, which we refer to as consolidated
properties. In addition, we have an equity interest in, but do
not consolidate for financial statement purposes, certain
properties that are accounted for under the equity or cost
methods. These properties represent our investment in
unconsolidated real estate partnerships in our financial
statements, which we refer to as unconsolidated properties.
Additionally, we provide property management and asset
management services to certain properties, and in certain cases,
we may indirectly own generally less than one percent of the
operations of such
2
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properties through a partnership syndication or other fund. Our
equity holdings and managed properties are as follows as of
December 31, 2009:
| Total Portfolio | ||||||||
| Properties | Units | |||||||
|
Consolidated properties
|
426 | 95,202 | ||||||
|
Unconsolidated properties
|
77 | 8,478 | ||||||
|
Property management
|
22 | 2,095 | ||||||
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Asset management
|
345 | 29,879 | ||||||
|
Total
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870 | 135,654 | ||||||
Through our wholly-owned subsidiaries, AIMCO-GP, Inc. and
AIMCO-LP Trust, we own a majority of the ownership interests in
AIMCO Properties, L.P., which we refer to as the Aimco Operating
Partnership. As of December 31, 2009, we held an interest
of approximately 93% in the common partnership units and
equivalents of the Aimco Operating Partnership. We conduct
substantially all of our business and own substantially all of
our assets through the Aimco Operating Partnership. Interests in
the Aimco Operating Partnership that are held by limited
partners other than Aimco are referred to as
“OP Units.” OP Units include common
OP Units, partnership preferred units, or preferred
OP Units, and high performance partnership units, or High
Performance Units. Generally, after a holding period of twelve
months, holders of common OP Units may redeem such units
for cash or, at the Aimco Operating Partnership’s option,
Aimco Class A Common Stock, which we refer to as Common
Stock. At December 31, 2009, we had 116,479,791 shares
of our Common Stock outstanding and the Aimco Operating
Partnership had 8,374,233 common OP Units and equivalents
outstanding for a combined total of 124,854,024 shares of
Common Stock and OP Units outstanding (excluding preferred
OP Units).
Since our initial public offering in July 1994, we have
completed numerous transactions, including purchases of
properties and interests in entities that own or manage
properties, expanding our portfolio of owned or managed
properties from 132 properties with 29,343 apartment units to a
peak of over 2,100 properties with 379,000 apartment units. As
of December 31, 2009, our portfolio of owned
and/or
managed properties consists of 870 properties with 135,654
apartment units.
Except as the context otherwise requires, “we,”
“our,” “us” and the “Company”
refer to Aimco, the Aimco Operating Partnership and their
consolidated entities, collectively. As used herein, and except
where the context otherwise requires, “partnership”
refers to a limited partnership or a limited liability company
and “partner” refers to a limited partner in a limited
partnership or a member in a limited liability company.
Available
Information
Our Annual Report on
Form 10-K,
our Quarterly Reports on
Form 10-Q,
our Current Reports on
Form 8-K
and any amendments to any of those reports that we file with the
Securities and Exchange Commission are available free of charge
as soon as reasonably practicable through our website at
www.aimco.com
. The information contained on our website
is not incorporated into this Annual Report. Our Common Stock is
listed on the New York Stock Exchange under the symbol
“AIV.” In 2009, our chief executive officer submitted
his annual corporate governance listing standards certification
to the New York Stock Exchange, which certification was
unqualified.
Financial
Information About Industry Segments
We operate in two reportable segments: real estate (owning,
operating and redeveloping apartments) and investment management
(portfolio management and asset management, which are further
discussed in the Business Overview). For further information on
these segments, see Note 17 of the consolidated financial
statements in Item 8, and Management’s Discussion and
Analysis in Item 7.
Business
Overview
Our principal financial objective is to increase long-term
stockholder value, both as measured by Net Asset Value, which is
the estimated fair value of our assets, net of debt, or NAV, and
total shareholder return.
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Table of Contents
We strive to meet our objectives through:
| • | property operations — using scale and technology to increase the effectiveness and efficiency of attracting and retaining apartment residents; | |
| • | portfolio management — allocating capital among geographic markets and apartment property types, primarily Class B and B+ quality apartments that are well located within the 20 largest U.S. markets, through sales, redevelopment and/or acquisitions; | |
| • | managing our cost and risk of capital by using leverage that is largely long-term, laddered in maturity, non-recourse and property specific; and | |
| • | reducing our general and administrative and certain other costs through outsourcing and standardization. |
Our business is organized around two core activities: Property
Operations and Investment Management. These core activities,
along with our financial strategy, are described in more detail
below.
Property
Operations
Our portfolio is comprised of two business components:
conventional and affordable. Our conventional operations, which
provide 88% of our property net operating income and are
market-rate apartments with rents paid by the resident, include
243 properties with 74,030 units. Our affordable operations
provide 12% of our property net operating income and consist of
260 properties with 29,650 units, with rents that are
generally paid, in whole or part, by a government agency.
Affordable properties tend to have relatively more stable rents
and higher occupancy due to government rent payments and thus
are much less affected by market fluctuations.
We operate a broad range of property types, from suburban
garden-style to urban high-rise properties in 44 states,
the District of Columbia and Puerto Rico at a range of average
monthly rental rates. On average, our portfolio rents are
somewhat above the average rents in the local markets. This
diversification in geography insulates us, to some degree, from
inevitable downturns in any one market.
Our property operations currently are organized into five areas,
which are further subdivided according to our target markets. To
manage our nationwide portfolio more efficiently and to increase
the benefits from our local management expertise, we have given
direct responsibility for operations within each area to an area
operations leader with regular senior management reviews. To
enable the area operations leaders to focus on sales and
service, as well as to improve financial control and budgeting,
we have dedicated an area financial officer to support each area
operations leader, and with the exception of routine
maintenance, our specialized Construction Services group manages
all
on-site
improvements, thus reducing the need for the area operations
leaders to spend time on oversight of construction projects.
We seek to improve our oversight of property operations by:
developing better systems; standardizing business goals,
operational measurements and internal reporting; and enhancing
financial controls over field operations. Our objectives are to
focus on the areas discussed below:
| • | Customer Service. Our operating culture is focused on our residents. Our goal is to provide our residents with consistent service in clean, safe and attractive communities. We evaluate our performance through a customer satisfaction tracking system. In addition, we emphasize the quality of our on-site employees through recruiting, training and retention programs, which we believe contributes to improved customer service and leads to increased occupancy rates and enhanced operational performance. | |
| • | Resident Selection and Retention. In apartment properties, neighbors are a meaningful part of the product, together with the location of the property and the physical quality of the apartment units. Part of our property operations strategy is to focus on resident acquisition and retention — attracting and retaining credit-worthy residents who are good neighbors. We have structured goals and coaching for all of our sales personnel, a tracking system for inquiries and a standardized renewal communication program. We have standardized residential financial stability requirements and have policies and monitoring practices to maintain our resident quality. |
4
Table of Contents
| • | Revenue Management. For our conventional properties, we have a centralized revenue management system that leverages people, processes and technology to work in partnership with our area operational management teams to develop rental rate pricing. We seek to increase revenue by optimizing the balance between rental and occupancy rates. We are also focused on the automation of on-site operations, as we believe that timely and accurate collection of property performance and resident profile data will enable us to maximize revenue through better property management and leasing decisions. We have standardized policies for new and renewal pricing with timely data and analyses by floor-plan, thereby enabling us to maximize our ability to modify pricing, even in challenging sub-markets. | |
| • | Controlling Expenses. Cost controls are accomplished by local focus at the area level and by taking advantage of economies of scale at the corporate level. As a result of the size of our portfolio and our area concentrations of properties, we have the ability to spread over a large property base the fixed costs for general and administrative expenditures and certain operating functions, such as purchasing, insurance and information technology. | |
| • | Ancillary Services. We believe that our ownership and management of properties provide us with unique access to a customer base that allows us to provide additional services and thereby increase occupancy and rents, while also generating incremental revenue. We currently provide cable television, telephone services, appliance rental, and carport, garage and storage space rental at certain properties. | |
| • | Maintaining and Improving Property Quality. We believe that the physical condition and amenities of our apartment properties are important factors in our ability to maintain and increase rental rates. In 2009, we spent $70.3 million (Aimco’s share), or $723 per owned apartment unit, for Capital Replacements, which represent the share of additions that are deemed to replace the consumed portion of acquired capital assets. Additionally, we spent $53.4 million (Aimco’s share), or $549 per owned apartment unit, for Capital Improvements, which are non-redevelopment capital additions that are made to enhance the value, profitability or useful life of an asset from its original purchase condition. |
Investment
Management
Investment management includes activities related to our owned
portfolio of properties as well as services provided to
affiliated partnerships. Investment management includes
portfolio strategy, capital allocation, joint ventures, tax
credit syndication, acquisitions, dispositions and other
transaction activities. Within our owned portfolio, we refer to
these activities as Portfolio Management, and their benefit is
seen in property operating results and investment gains. For
affiliated partnerships, we refer to these activities as asset
management for which we are separately compensated through fees
paid by third party investors.
Portfolio
Management
Portfolio Management involves the ongoing allocation of
investment capital to meet our geographic and product type
goals. We target geographic balance in Aimco’s diversified
portfolio in order to optimize risk-adjusted returns and to
avoid the risk of undue concentration in any particular market.
We also seek to balance the portfolio by product type, with both
high quality properties in excellent locations and also high
land value properties that support redevelopment activities. We
intend to slightly reduce our allocation of capital to
affordable properties to 10% of our NAV.
Our geographic allocation strategy focuses on our target markets
to reduce volatility in and our dependence on particular areas
of the country. We believe our target markets are deep,
relatively liquid and possess desirable long-term growth
characteristics. They are primarily coastal markets, and also
include a number of Sun Belt cities and Chicago, Illinois. We
may also invest in other markets on an opportunistic basis. We
intend to upgrade the quality of our portfolio through the sale
of approximately 5% to 10% of our portfolio annually, with the
proceeds generally used to increase our allocation of capital to
well located properties within our target markets through
capital investments, redevelopment or acquisitions. We expect
that increased geographic focus will also add to our investment
knowledge and increase operating efficiencies based on local
economies of scale.
5
Table of Contents
Our portfolio management activities include strategic portfolio
and capital allocation decisions including transactions to buy,
sell or modify our ownership interest in properties, including
through the use of partnerships and joint ventures, and to
increase our investment in existing properties through
redevelopment. The purpose of these transactions is to adjust
Aimco’s investments to reflect our decisions regarding
target allocations to geographic markets and to investment types.
We believe redevelopment of certain properties in superior
locations provides advantages over
ground-up
development, enabling us to generate rents comparable to new
properties with lower financial risk, in less time and with
reduced delays associated with governmental permits and
authorizations. Redevelopment work also includes seeking
entitlements from local governments, which enhance the value of
our existing portfolio by increasing density, that is, the right
to add residential units to a site. We have historically
undertaken a range of redevelopment projects: from those in
which a substantial number of all available units are vacated
for significant renovations to the property, to those in which
there is significant renovation, such as exteriors, common areas
or unit improvements, typically done upon lease expirations
without the need to vacate units on any wholesale or substantial
basis. We have a specialized Redevelopment and Construction
Services group to oversee these projects.
During 2009, we increased our allocation of capital to our
target markets by disposing of 68 conventional properties
located primarily outside of our target markets or in less
desirable locations within our target markets and by investing
$66.8 million in redevelopment of conventional properties.
As of December 31, 2009, our conventional portfolio
included 243 properties with 74,030 units in 38 markets. As
of December 31, 2009, conventional properties in our target
markets comprised 88% of our NAV attributable to our
conventional properties. Our top five markets by net operating
income contribution include the metropolitan areas of
Washington, D.C.; Los Angeles, California;
“Other” Florida (which is comprised of
Ft. Lauderdale, Jacksonville, Orlando, Palm Beach County
and Tampa); Chicago, Illinois and Boston, Massachusetts.
During 2009, we invested $46.0 million in redevelopment of
affordable properties, funded primarily by proceeds from the
sale of tax credits to institutional partners. As with
conventional properties, we also seek to dispose of properties
that are inconsistent with our long-term investment and
operating strategies. During 2009, we sold 22 properties from
our affordable portfolio. As of December 31, 2009, our
affordable portfolio included 260 properties with
29,650 units.
Financial
Strategy
We are focused on maintaining a safe balance sheet, including
minimizing or eliminating our recourse debt and near term
property debt maturities as well as minimizing our cost of
capital on a risk adjusted basis. We primarily use non-recourse
and amortizing property debt with laddered maturities and
minimize reliance on corporate debt. The lower risk inherent in
non-recourse property debt permits us to operate with higher
debt leverage and a lower weighted average cost of capital. We
use floating rate property and corporate debt to provide lower
interest costs over time at a level that considers acceptable
earnings volatility.
During 2009, using proceeds from asset dispositions, we repaid
$310.0 million of our term loan, which matures in March
2011, leaving a remaining outstanding balance of
$90.0 million at December 31, 2009. We repaid an
additional $45.0 million through February 26, 2010,
leaving a remaining outstanding balance of $45.0 million.
During 2009, we also focused on reducing refunding risk by
accelerating refinancing of property loans maturing prior to
2012. At the beginning of 2009, property debt totaling
$753.0 million was scheduled to mature prior to 2012.
During 2009, through refinancing, repayment and property sales,
we reduced these maturities by 69%, or $516.3 million, and
eliminated all 2010 property debt maturities. As of
December 31, 2009, five loans totaling $236.7 million
were scheduled to mature in 2011. During January 2010, we
extended the maturity of one of these loans for
$65.0 million to 2013. We expect to refinance the remaining
four loans, totaling $171.7 million ($101.2 million
Aimco’s share), at their maturity.
As of December 31, 2009, we had a $180.0 million
revolving credit facility and borrowings available of
$136.2 million (after giving effect to $43.8 million
outstanding for undrawn letters of credit). The revolving credit
facility matures in May 2011 and has a one year extension
option, subject to certain terms.
6
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Competition
In attracting and retaining residents to occupy our properties
we compete with numerous other housing alternatives. Our
properties compete directly with other rental apartments as well
as condominiums and single-family homes that are available for
rent or purchase in the markets in which our properties are
located. Principal factors of competition include rent or price
charged, attractiveness of the location and property and quality
and breadth of services. The number of competitive properties
relative to demand in a particular area has a material effect on
our ability to lease apartment units at our properties and on
the rents we charge. In certain markets there exists oversupply
of single family homes and condominiums and a reduction of
households, both of which affect the pricing and occupancy of
our rental apartments. Additionally, we compete with other real
estate investors, including other apartment REITs, pension and
investment funds, partnerships and investment companies in
acquiring, redeveloping and managing apartment properties. This
competition affects our ability to acquire properties we want to
add to our portfolio and the price that we pay in such
acquisitions.
Taxation
We have elected to be taxed as a REIT under the Internal Revenue
Code of 1986, as amended, which we refer to as the Code,
commencing with our taxable year ended December 31, 1994,
and intend to continue to operate in such a manner. Our current
and continuing qualification as a REIT depends on our ability to
meet the various requirements imposed by the Code, which relate
to organizational structure, distribution levels, diversity of
stock ownership and certain restrictions with regard to owned
assets and categories of income. If we qualify for taxation as a
REIT, we will generally not be subject to United States Federal
corporate income tax on our taxable income that is currently
distributed to stockholders. This treatment substantially
eliminates the “double taxation” (at the corporate and
stockholder levels) that generally results from an investment in
a corporation.
Even if we qualify as a REIT, we may be subject to United States
Federal income and excise taxes in various situations, such as
on our undistributed income. We also will be required to pay a
100% tax on any net income on non-arm’s length transactions
between us and a TRS (described below) and on any net income
from sales of property that was property held for sale to
customers in the ordinary course. We and our stockholders may be
subject to state or local taxation in various state or local
jurisdictions, including those in which we transact business or
our stockholders reside. In addition, we could also be subject
to the alternative minimum tax, or AMT, on our items of tax
preference. The state and local tax laws may not conform to the
United States Federal income tax treatment. Any taxes imposed on
us reduce our operating cash flow and net income.
Certain of our operations or a portion thereof, including
property management, asset management and risk are conducted
through taxable REIT subsidiaries, each of which we refer to as
a TRS. A TRS is a C-corporation that has not elected REIT status
and, as such, is subject to United States Federal corporate
income tax. We use TRS entities to facilitate our ability to
offer certain services and activities to our residents and
investment partners, as these services and activities generally
cannot be offered directly by the REIT.
Regulation
General
Apartment properties and their owners are subject to various
laws, ordinances and regulations, including those related to
real estate broker licensing and regulations relating to
recreational facilities such as swimming pools, activity centers
and other common areas. Changes in laws increasing the potential
liability for environmental conditions existing on properties or
increasing the restrictions on discharges or other conditions,
as well as changes in laws affecting development, construction
and safety requirements, may result in significant unanticipated
expenditures, which would adversely affect our net income and
cash flows from operating activities. In addition, future
enactment of rent control or rent stabilization laws, such as
legislation that has been considered in New York, or other laws
regulating multifamily housing may reduce rental revenue or
increase operating costs in particular markets.
7
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Environmental
Various Federal, state and local laws subject property owners or
operators to liability for management, and the costs of removal
or remediation, of certain hazardous substances present on a
property. Such laws often impose liability without regard to
whether the owner or operator knew of, or was responsible for,
the release or presence of the hazardous substances. In
connection with the ownership, operation and management of
properties, we could potentially be liable for environmental
liabilities or costs associated with our properties or
properties we acquire or manage in the future. These and other
risks related to environmental matters are described in more
detail in Item 1A, “Risk Factors.”
Insurance
Our primary lines of insurance coverage are property, general
liability, and workers’ compensation. We believe that our
insurance coverages adequately insure our properties against the
risk of loss attributable to fire, earthquake, hurricane,
tornado, flood, terrorism and other perils, and adequately
insure us against other risk. Our coverage includes deductibles,
retentions and limits that are customary in the industry. We
have established loss prevention, loss mitigation, claims
handling, litigation management and loss reserving procedures to
manage our exposure.
Employees
At December 31, 2009, we had approximately
3,500 employees, of which approximately 2,800 were at the
property level, performing various
on-site
functions, with the balance managing corporate and area
operations, including investment and debt transactions, legal,
financial reporting, accounting, information systems, human
resources and other support functions. As of December 31,
2009, unions represented 115 of our employees. We have never
experienced a work stoppage and believe we maintain satisfactory
relations with our employees.
| Item 1A. | Risk Factors |
The risk factors noted in this section and other factors noted
throughout this Annual Report, describe certain risks and
uncertainties that could cause our actual results to differ
materially from those contained in any forward-looking statement.
Our
existing and future debt financing could render us unable to
operate, result in foreclosure on our properties, prevent us
from making distributions on our equity or otherwise adversely
affect our liquidity.
We are subject to the risk that our cash flow from operations
will be insufficient to make required payments of principal and
interest, and the risk that existing indebtedness may not be
refinanced or that the terms of any refinancing will not be as
favorable as the terms of existing indebtedness. If we fail to
make required payments of principal and interest on secured
debt, our lenders could foreclose on the properties and other
collateral securing such debt, which would result in loss of
income and asset value to us. As of December 31, 2009,
substantially all of the properties that we owned or controlled
were encumbered by debt. Our organizational documents do not
limit the amount of debt that we may incur, and we have
significant amounts of debt outstanding. Payments of principal
and interest may leave us with insufficient cash resources to
operate our properties or pay distributions required to be paid
in order to maintain our qualification as a REIT.
Our strategy is generally to incur debt to increase the return
on our equity while maintaining acceptable coverage ratios. For
the year ended December 31, 2009, as calculated based on
the provisions in our credit agreement, which is further
discussed in Note 7 to the consolidated financial
statements in Item 8, we had a ratio of earnings before
interest, taxes and depreciation and amortization to debt
service of 1.59:1 and a ratio of earnings to fixed charges of
1.36:1. On February 3, 2010, we and our lenders agreed to
reduce the covenant ratios of earnings before interest, taxes
and depreciation and amortization to debt service and earnings
to fixed charges from 1.50:1 and 1.30:1, respectively, to 1.40:1
and 1.20:1, respectively. We expect to remain in compliance with
these covenants.
At December 31, 2009, we had swap positions with two
financial institutions totaling $353.1 million. The related
swap agreements provide for collateral calls to maintain
specified
loan-to-value
ratios. In the event the
8
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values of the real estate properties serving as collateral under
these agreements decline, we may be required to provide
additional collateral pursuant to the swap agreements, which
would adversely affect our cash flows.
Disruptions
in the financial markets could affect our ability to obtain
financing and the cost of available financing and could
adversely affect our liquidity.
Our ability to obtain financing and the cost of such financing
depends on the overall condition of the United States credit
markets and, to an important extent in 2009, on the level of
involvement of certain government sponsored entities,
specifically, Federal Home Loan Mortgage Corporation, or Freddie
Mac, and Federal National Mortgage Association, or Fannie Mae,
in secondary credit markets. During 2009, the United States
credit markets (outside of multi-family) experienced significant
liquidity disruptions, which caused the spreads on debt
financings to widen considerably and made obtaining financing,
both non-recourse property debt and corporate borrowings, such
as our term loan or revolving credit facility, more difficult.
Further or prolonged disruptions in the credit markets could
result in Freddie Mac or Fannie Mae reducing their level of
involvement in secondary credit markets which would adversely
affect our ability to obtain non-recourse property debt
financing. Additionally, further or prolonged disruptions in the
credit markets may also affect our ability to renew our credit
facility with similar commitments when it matures in May 2012
(inclusive of a one year extension option).
If our ability to obtain financing is adversely affected, we may
be unable to satisfy scheduled maturities on existing financing
through other sources of liquidity, which could result in lender
foreclosure on the properties securing such debt and loss of
income and asset value, each of which would adversely affect our
liquidity.
Increases
in interest rates would increase our interest expense and reduce
our profitability.
As of December 31, 2009, we had approximately
$654.6 million of variable-rate indebtedness outstanding
and $67.0 million of variable rate preferred stock
outstanding. Of the total debt subject to variable interest
rates, floating rate tax-exempt bond financing was about
two-thirds, or $433.9 million. Floating rate tax-exempt
bond financing is benchmarked against the Securities Industry
and Financial Markets Association Municipal Swap Index, or
SIFMA, rate, which since 1989 has averaged 73% of the
30-day
LIBOR
rate. At December 31, 2009, we had approximately
$440.9 million in cash and cash equivalents, restricted
cash and notes receivable, the majority of which bear interest.
The effect of our interest-bearing assets would partially reduce
the effect of an increase in variable interest rates. If this
historical relationship continues, we estimate that an increase
in
30-day
LIBOR of 100 basis points (73 basis points for
tax-exempt interest rates) with constant credit risk spreads
would result in net income being reduced by $1.1 million
and income attributable to Aimco common stockholders being
reduced by $1.5 million on an annual basis.
Failure
to generate sufficient net operating income may adversely affect
our liquidity, limit our ability to fund necessary capital
expenditures or adversely affect our ability to pay
dividends.
Our ability to fund necessary capital expenditures on our
properties depends on, among other things, our ability to
generate net operating income in excess of required debt
payments. If we are unable to fund capital expenditures on our
properties, we may not be able to preserve the competitiveness
of our properties, which could adversely affect our net
operating income.
Our ability to make payments to our investors depends on our
ability to generate net operating income in excess of required
debt payments and capital expenditure requirements. Our net
operating income and liquidity may be adversely affected by
events or conditions beyond our control, including:
| • | the general economic climate; | |
| • | an inflationary environment in which the costs to operate and maintain our properties increase at a rate greater than our ability to increase rents only upon renewal of existing leases or at the inception of new leases; | |
| • | competition from other apartment communities and other housing options; |
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| • | local conditions, such as loss of jobs, unemployment rates or an increase in the supply of apartments, that might adversely affect apartment occupancy or rental rates; | |
| • | changes in governmental regulations and the related cost of compliance; | |
| • | increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents; | |
| • | changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multifamily housing; and | |
| • | changes in interest rates and the availability of financing. |
Covenant
restrictions may limit our ability to make payments to our
investors.
Some of our debt and other securities contain covenants that
restrict our ability to make distributions or other payments to
our investors unless certain financial tests or other criteria
are satisfied. Our credit facility provides, among other things,
that we may make distributions to our investors during any four
consecutive fiscal quarters in an aggregate amount that does not
exceed the greater of 95% of our Funds From Operations for such
period, subject to certain non-cash adjustments, or such amount
as may be necessary to maintain our REIT status. Our outstanding
classes of preferred stock prohibit the payment of dividends on
our Common Stock if we fail to pay the dividends to which the
holders of the preferred stock are entitled.
Because
real estate investments are relatively illiquid, we may not be
able to sell properties when appropriate.
Real estate investments are relatively illiquid and cannot
always be sold quickly. Our freedom to sell properties is also
restricted by REIT tax rules. Thus, we may not be able to change
our portfolio promptly in response to changes in economic or
other market conditions. Our ability to dispose of assets in the
future will depend on prevailing economic and market conditions,
including the cost and availability of financing. This could
have a material adverse effect on our financial condition or
results of operations.
Competition
could limit our ability to lease apartments or increase or
maintain rents.
Our apartment properties compete for residents with other
housing alternatives, including other rental apartments,
condominiums and single-family homes that are available for
rent, as well as new and existing condominiums and single-family
homes for sale. Competitive residential housing in a particular
area could adversely affect our ability to lease apartments and
to increase or maintain rental rates. The current challenges in
the credit and housing markets have increased housing inventory
that competes with our apartment properties.
Our
subsidiaries may be prohibited from making distributions and
other payments to us.
All of our properties are owned, and all of our operations are
conducted, by the Aimco Operating Partnership and our other
subsidiaries. As a result, we depend on distributions and other
payments from our subsidiaries in order to satisfy our financial
obligations and make payments to our investors. The ability of
our subsidiaries to make such distributions and other payments
depends on their earnings and cash flows and may be subject to
statutory or contractual limitations. As an equity investor in
our subsidiaries, our right to receive assets upon their
liquidation or reorganization will be effectively subordinated
to the claims of their creditors. To the extent that we are
recognized as a creditor of such subsidiaries, our claims may
still be subordinate to any security interest in or other lien
on their assets and to any of their debt or other obligations
that are senior to our claims.
Redevelopment
and construction risks could affect our
profitability.
We intend to continue to redevelop certain of our properties.
These activities are subject to the following risks:
| • | we may be unable to obtain, or experience delays in obtaining, necessary zoning, occupancy, or other required governmental or third party permits and authorizations, which could result in increased costs or the delay or abandonment of opportunities; |
10
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| • | we may incur costs that exceed our original estimates due to increased material, labor or other costs, such as litigation; | |
| • | we may be unable to complete construction and lease up of a property on schedule, resulting in increased construction and financing costs and a decrease in expected rental revenues; | |
| • | occupancy rates and rents at a property may fail to meet our expectations for a number of reasons, including changes in market and economic conditions beyond our control and the development by competitors of competing communities; | |
| • | we may be unable to obtain financing with favorable terms, or at all, for the proposed development of a property, which may cause us to delay or abandon an opportunity; | |
| • | we may abandon opportunities that we have already begun to explore for a number of reasons, including changes in local market conditions or increases in construction or financing costs, and, as a result, we may fail to recover expenses already incurred in exploring those opportunities; | |
| • | we may incur liabilities to third parties during the redevelopment process, for example, in connection with resident lease terminations, or managing existing improvements on the site prior to resident lease terminations; and | |
| • | loss of a key member of a project team could adversely affect our ability to deliver redevelopment projects on time and within our budget. |
We are
insured for certain risks, and the cost of insurance, increased
claims activity or losses resulting from casualty events may
affect our operating results and financial
condition.
We are insured for a portion of our consolidated
properties’ exposure to casualty losses resulting from
fire, earthquake, hurricane, tornado, flood and other perils,
which insurance is subject to deductibles and self-insurance
retention. We recognize casualty losses or gains based on the
net book value of the affected property and the amount of and
any related insurance proceeds. In many instances, the actual
cost to repair or replace the property may exceed its net book
value and any insurance proceeds. We also insure certain
unconsolidated properties for a portion of their exposure to
such losses. With respect to our consolidated properties, we
recognize the uninsured portion of losses as part of casualty
losses in the periods in which they are incurred. In addition,
we are self-insured for a portion of our exposure to third-party
claims related to our employee health insurance plans,
workers’ compensation coverage and general liability
exposure. With respect to our insurance obligations to
unconsolidated properties and our exposure to claims of third
parties, we establish reserves at levels that reflect our known
and estimated losses. The ultimate cost of losses and the impact
of unforeseen events may vary materially from recorded reserves,
and variances may adversely affect our operating results and
financial condition. We purchase insurance (or reinsurance where
we insure unconsolidated properties) to reduce our exposure to
losses and limit our financial losses on large individual risks.
The availability and cost of insurance are determined by market
conditions outside our control. No assurance can be made that we
will be able to obtain and maintain insurance at the same levels
and on the same terms as we do today. If we are not able to
obtain or maintain insurance in amounts we consider appropriate
for our business, or if the cost of obtaining such insurance
increases materially, we may have to retain a larger portion of
the potential loss associated with our exposures to risks.
Natural
disasters and severe weather may affect our operating results
and financial condition.
Natural disasters and severe weather such as hurricanes may
result in significant damage to our properties. The extent of
our casualty losses and loss in operating income in connection
with such events is a function of the severity of the event and
the total amount of exposure in the affected area. When we have
geographic concentration of exposures, a single catastrophe
(such as an earthquake) or destructive weather event (such as a
hurricane) affecting a region may have a significant negative
effect on our financial condition and results of operations. We
cannot accurately predict natural disasters or severe weather,
or the number and type of such events that will affect us. As a
result, our operating and financial results may vary
significantly from one period to the next. Although we
anticipate and plan for losses, there can be no assurance that
our financial results will not be adversely affected by our
exposure
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to losses arising from natural disasters or severe weather in
the future that exceed our previous experience and assumptions.
We
depend on our senior management.
Our success depends upon the retention of our senior management,
including Terry Considine, our chief executive officer. We have
a succession planning and talent development process that is
designed to identify potential replacements and develop our team
members to provide depth in the organization and a bench of
talent on which to draw. However, there are no assurances that
we would be able to find qualified replacements for the
individuals who make up our senior management if their services
were no longer available. The loss of services of one or more
members of our senior management team could have a material
adverse effect on our business, financial condition and results
of operations. We do not currently maintain key-man life
insurance for any of our employees.
If we
are not successful in our acquisition of properties, our results
of operations could be adversely affected.
The selective acquisition of properties is a component of our
strategy. However, we may not be able to complete transactions
successfully in the future. Although we seek to acquire
properties when such acquisitions increase our net income, Funds
From Operations or net asset value, such transactions may fail
to perform in accordance with our expectations. In particular,
following acquisition, the value and operational performance of
a property may be diminished if obsolescence or neighborhood
changes occur before we are able to redevelop or sell the
property.
We may
be subject to litigation associated with partnership
transactions that could increase our expenses and prevent
completion of beneficial transactions.
We have engaged in, and intend to continue to engage in, the
selective acquisition of interests in partnerships controlled by
us that own apartment properties. In some cases, we have
acquired the general partner of a partnership and then made an
offer to acquire the limited partners’ interests in the
partnership. In these transactions, we may be subject to
litigation based on claims that we, as the general partner, have
breached our fiduciary duty to our limited partners or that the
transaction violates the relevant partnership agreement or state
law. Although we intend to comply with our fiduciary obligations
and the relevant partnership agreements, we may incur additional
costs in connection with the defense or settlement of this type
of litigation. In some cases, this type of litigation may
adversely affect our desire to proceed with, or our ability to
complete, a particular transaction. Any litigation of this type
could also have a material adverse effect on our financial
condition or results of operations.
Government
housing regulations may limit the opportunities at some of our
properties and failure to comply with resident qualification
requirements may result in financial penalties and/or loss of
benefits, such as rental revenues paid by government
agencies.
We own consolidated and unconsolidated equity interests in
certain properties and manage other properties that benefit from
governmental programs intended to provide housing to people with
low or moderate incomes. These programs, which are usually
administered by the U.S. Department of Housing and Urban
Development, or HUD, or state housing finance agencies,
typically provide mortgage insurance, favorable financing terms,
tax-credit equity, or rental assistance payments to the property
owners. As a condition of the receipt of assistance under these
programs, the properties must comply with various requirements,
which typically limit rents to pre-approved amounts and impose
restrictions on resident incomes. Failure to comply with these
requirements and restrictions may result in financial penalties
or loss of benefits. We usually need to obtain the approval of
HUD in order to acquire or dispose of a significant interest in
or manage a HUD-assisted property. We may not always receive
such approval.
During 2009, 2008 and 2007, for continuing operations, our
rental revenues include $140.3 million, $132.3 million
and $121.4 million, respectively, of subsidies from
government agencies. Any loss of such benefits would adversely
affect our liquidity and results of operations.
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Laws
benefiting disabled persons may result in our incurrence of
unanticipated expenses.
Under the Americans with Disabilities Act of 1990, or ADA, all
places intended to be used by the public are required to meet
certain Federal requirements related to access and use by
disabled persons. Likewise, the Fair Housing Amendments Act of
1988, or FHAA, requires apartment properties first occupied
after March 13, 1990, to be accessible to the handicapped.
These and other Federal, state and local laws may require
modifications to our properties, or affect renovations of the
properties. Noncompliance with these laws could result in the
imposition of fines or an award of damages to private litigants
and also could result in an order to correct any non-complying
feature, which could result in substantial capital expenditures.
Although we believe that our properties are substantially in
compliance with present requirements, we may incur unanticipated
expenses to comply with the ADA and the FHAA in connection with
the ongoing operation or redevelopment of our properties.
Potential
liability or other expenditures associated with potential
environmental contamination may be costly.
Various Federal, state and local laws subject property owners or
operators to liability for management, and the costs of removal
or remediation, of certain hazardous substances present on a
property, including lead-based paint. Such laws often impose
liability without regard to whether the owner or operator knew
of, or was responsible for, the release or presence of the
hazardous substances. The presence of, or the failure to manage
or remedy properly, hazardous substances may adversely affect
occupancy at affected apartment communities and the ability to
sell or finance affected properties. In addition to the costs
associated with investigation and remediation actions brought by
government agencies, and potential fines or penalties imposed by
such agencies in connection therewith, the presence of hazardous
substances on a property could result in claims by private
plaintiffs for personal injury, disease, disability or other
infirmities. Various laws also impose liability for the cost of
removal, remediation or disposal of hazardous substances through
a licensed disposal or treatment facility. Anyone who arranges
for the disposal or treatment of hazardous substances is
potentially liable under such laws. These laws often impose
liability whether or not the person arranging for the disposal
ever owned or operated the disposal facility. In connection with
the ownership, operation and management of properties, we could
potentially be liable for environmental liabilities or costs
associated with our properties or properties we acquire or
manage in the future.
Moisture
infiltration and resulting mold remediation may be
costly.
We have been named as a defendant in lawsuits that have alleged
personal injury and property damage as a result of the presence
of mold. In addition, we are aware of lawsuits against owners
and managers of multifamily properties asserting claims of
personal injury and property damage caused by the presence of
mold, some of which have resulted in substantial monetary
judgments or settlements. We have only limited insurance
coverage for property damage loss claims arising from the
presence of mold and for personal injury claims related to mold
exposure. We have implemented policies, procedures, third-party
audits and training, and include a detailed moisture intrusion
and mold assessment during acquisition due diligence. We believe
these measures will prevent or eliminate mold exposure from our
properties and will minimize the effects that mold may have on
our residents. To date, we have not incurred any material costs
or liabilities relating to claims of mold exposure or to abate
mold conditions. Because the law regarding mold is unsettled and
subject to change, we can make no assurance that liabilities
resulting from the presence of or exposure to mold will not have
a material adverse effect on our consolidated financial
condition or results of operations.
We may
fail to qualify as a REIT.
If we fail to qualify as a REIT, we will not be allowed a
deduction for dividends paid to our stockholders in computing
our taxable income, and we will be subject to Federal income tax
at regular corporate rates, including any applicable alternative
minimum tax. This would substantially reduce our funds available
for payment to our investors. Unless entitled to relief under
certain provisions of the Code, we also would be disqualified
from taxation as a REIT for the four taxable years following the
year during which we ceased to qualify as a REIT. In addition,
our failure to qualify as a REIT would place us in default under
our primary credit facilities.
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We believe that we operate, and have always operated, in a
manner that enables us to meet the requirements for
qualification as a REIT for Federal income tax purposes. Our
continued qualification as a REIT will depend on our
satisfaction of certain asset, income, investment,
organizational, distribution, stockholder ownership and other
requirements on a continuing basis. Our ability to satisfy the
asset tests depends upon our analysis of the fair market values
of our assets, some of which are not susceptible to a precise
determination, and for which we will not obtain independent
appraisals. Our compliance with the REIT income and quarterly
asset requirements also depends upon our ability to manage
successfully the composition of our income and assets on an
ongoing basis. Moreover, the proper classification of an
instrument as debt or equity for Federal income tax purposes may
be uncertain in some circumstances, which could affect the
application of the REIT qualification requirements. Accordingly,
there can be no assurance that the Internal Revenue Service, or
the IRS, will not contend that our interests in subsidiaries or
other issuers constitutes a violation of the REIT requirements.
Moreover, future economic, market, legal, tax or other
considerations may cause us to fail to qualify as a REIT, or our
Board of Directors may determine to revoke our REIT status.
REIT
distribution requirements limit our available
cash.
As a REIT, we are subject to annual distribution requirements,
which generally limit the amount of cash we retain for other
business purposes, including amounts to fund our growth. We
generally must distribute annually at least 90% of our net REIT
taxable income, excluding any net capital gain, in order for our
distributed earnings not to be subject to corporate income tax.
We intend to make distributions to our stockholders to comply
with the requirements of the Code. However, differences in
timing between the recognition of taxable income and the actual
receipt of cash could require us to sell assets or borrow funds
on a short-term or long-term basis to meet the 90% distribution
requirement of the Code.
We
have in the past chosen, and may in the future choose, to pay
dividends in our own stock, in which case you may be required to
pay income taxes in excess of the cash dividends you
receive.
We have in the past distributed, and may in the future
distribute, taxable dividends that are payable in cash and
shares of our Common Stock. Stockholders subject to the payment
of income tax receiving such dividends will be required to
include the full amount of the dividend as taxable income to the
extent of our current and accumulated earnings and profits for
U.S. Federal income tax purposes. As a result, a
U.S. stockholder may be required to pay income taxes with
respect to such dividends in excess of the cash dividends
received. If a U.S. stockholder sells the stock it receives
as a dividend in order to pay this tax, the sales proceeds may
be less than the amount included in income with respect to the
dividend, depending on the market price of our stock at the time
of the sale. Furthermore, with respect to
non-U.S. stockholders,
we may be required to withhold U.S. tax with respect to
such dividends, including in respect of all or a portion of such
dividend that is payable in stock. In addition, if a significant
number of our stockholders determine to sell shares of our
Common Stock in order to pay taxes owed on dividends, it may put
downward pressure on the trading price of our Common Stock.
No assurance can be given that the IRS will not impose
additional requirements in the future with respect to taxable
cash/stock dividends, including on a retroactive basis, or
assert that the requirements for such taxable cash/stock
dividends have not been met.
Limits
on ownership of shares in our charter may result in the loss of
economic and voting rights by purchasers that violate those
limits.
Our charter limits ownership of our Common Stock by any single
stockholder (applying certain “beneficial ownership”
rules under the Federal securities laws) to 8.7% of our
outstanding shares of Common Stock, or 15% in the case of
certain pension trusts, registered investment companies and
Mr. Considine. Our charter also limits ownership of our
Common Stock and preferred stock by any single stockholder to
8.7% of the value of the outstanding Common Stock and preferred
stock, or 15% in the case of certain pension trusts, registered
investment companies and Mr. Considine. The charter also
prohibits anyone from buying shares of our capital stock if the
purchase would result in us losing our REIT status. This could
happen if a transaction results in fewer than 100 persons
owning all of our shares of capital stock or results in five or
fewer persons (applying certain attribution
14
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rules of the Code) owning 50% or more of the value of all of our
shares of capital stock. If anyone acquires shares in excess of
the ownership limit or in violation of the ownership
requirements of the Code for REITs:
| • | the transfer will be considered null and void; | |
| • | we will not reflect the transaction on our books; | |
| • | we may institute legal action to enjoin the transaction; | |
| • | we may demand repayment of any dividends received by the affected person on those shares; | |
| • | we may redeem the shares; | |
| • | the affected person will not have any voting rights for those shares; and | |
| • | the shares (and all voting and dividend rights of the shares) will be held in trust for the benefit of one or more charitable organizations designated by us. |
We may purchase the shares of capital stock held in trust at a
price equal to the lesser of the price paid by the transferee of
the shares or the then current market price. If the trust
transfers any of the shares of capital stock, the affected
person will receive the lesser of the price paid for the shares
or the then current market price. An individual who acquires
shares of capital stock that violate the above rules bears the
risk that the individual:
| • | may lose control over the power to dispose of such shares; | |
| • | may not recognize profit from the sale of such shares if the market price of the shares increases; | |
| • | may be required to recognize a loss from the sale of such shares if the market price decreases; and | |
| • | may be required to repay to us any distributions received from us as a result of his or her ownership of the shares. |
Our
charter may limit the ability of a third party to acquire
control of us.
The 8.7% ownership limit discussed above may have the effect of
delaying or precluding acquisition of control of us by a third
party without the consent of our Board of Directors. Our charter
authorizes our Board of Directors to issue up to
510,587,500 shares of capital stock. As of
December 31, 2009, 426,157,736 shares were classified
as Common Stock, of which 116,479,791 were outstanding, and
84,429,764 shares were classified as preferred stock, of
which 24,950,134 were outstanding. Under our charter, our Board
of Directors has the authority to classify and reclassify any of
our unissued shares of capital stock into shares of capital
stock with such preferences, conversion or other rights, voting
powers restrictions, limitations as to dividends, qualifications
or terms or conditions of redemptions as our Board of Directors
may determine. The authorization and issuance of a new class of
capital stock could have the effect of delaying or preventing
someone from taking control of us, even if a change in control
were in our stockholders’ best interests.
The
Maryland General Corporation Law may limit the ability of a
third party to acquire control of us.
As a Maryland corporation, we are subject to various Maryland
laws that may have the effect of discouraging offers to acquire
us and increasing the difficulty of consummating any such
offers, even if an acquisition would be in our
stockholders’ best interests. The Maryland General
Corporation Law, specifically the Maryland Business Combination
Act, restricts mergers and other business combination
transactions between us and any person who acquires, directly or
indirectly, beneficial ownership of shares of our stock
representing 10% or more of the voting power without our Board
of Directors’ prior approval. Any such business combination
transaction could not be completed until five years after the
person acquired such voting power, and generally only with the
approval of stockholders representing 80% of all votes entitled
to be cast and
66
2
/
3
%
of the votes entitled to be cast, excluding the interested
stockholder, or upon payment of a fair price. The Maryland
General Corporation Law, specifically the Maryland Control Share
Acquisition Act, provides generally that a person who acquires
shares of our capital stock representing 10% or more of the
voting power in electing directors will have no voting rights
unless approved by a vote of two-thirds of the shares eligible
to vote. Additionally, the Maryland General Corporation Law
provides, among other things, that the board of directors has
broad discretion in adopting stockholders’ rights plans and
has
15
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the sole power to fix the record date, time and place for
special meetings of the stockholders. To date, we have not
adopted a shareholders’ rights plan. In addition, the
Maryland General Corporation Law provides that corporations that:
| • | have at least three directors who are not officers or employees of the entity or related to an acquiring person; and | |
| • | has a class of equity securities registered under the Securities Exchange Act of 1934, as amended, |
may elect in their charter or bylaws or by resolution of the
board of directors to be subject to all or part of a special
subtitle that provides that:
| • | the corporation will have a staggered board of directors; | |
| • | any director may be removed only for cause and by the vote of two-thirds of the votes entitled to be cast in the election of directors generally, even if a lesser proportion is provided in the charter or bylaws; | |
| • | the number of directors may only be set by the board of directors, even if the procedure is contrary to the charter or bylaws; | |
| • | vacancies may only be filled by the remaining directors, even if the procedure is contrary to the charter or bylaws; and | |
| • | the secretary of the corporation may call a special meeting of stockholders at the request of stockholders only on the written request of the stockholders entitled to cast at least a majority of all the votes entitled to be cast at the meeting, even if the procedure is contrary to the charter or bylaws. |
To date, we have not made any of the elections described above.
| Item 1B. | Unresolved Staff Comments |
None.
| Item 2. | Properties |
Our portfolio includes garden style, mid-rise and high-rise
properties located in 44 states, the District of Columbia
and Puerto Rico. Our geographic allocation strategy focuses on
target markets which are grouped by region below. The following
table sets forth information on all of our properties as of
December 31, 2009 and 2008:
| 2009 | 2008 | |||||||||||||||
|
Number of
|
Number
|
Number of
|
Number
|
|||||||||||||
| Properties | of Units | Properties | of Units | |||||||||||||
|
Conventional:
|
||||||||||||||||
|
Pacific
|
37 | 10,274 | 38 | 10,504 | ||||||||||||
|
Northeast
|
62 | 18,270 | 67 | 21,221 | ||||||||||||
|
Sunbelt
|
77 | 23,546 | 106 | 31,481 | ||||||||||||
|
Chicago
|
15 | 4,633 | 19 | 5,555 | ||||||||||||
|
Total target markets
|
191 | 56,723 | 230 | 68,761 | ||||||||||||
|
Opportunistic and other markets
|
52 | 17,307 | 81 | 25,735 | ||||||||||||
|
Total conventional owned and managed
|
243 | 74,030 | 311 | 94,496 | ||||||||||||
|
Affordable owned and managed
|
260 | 29,650 | 288 | 32,836 | ||||||||||||
|
Property management
|
22 | 2,095 | 34 | 3,252 | ||||||||||||
|
Asset management
|
345 | 29,879 | 359 | 32,223 | ||||||||||||
|
Total
|
870 | 135,654 | 992 | 162,807 | ||||||||||||
At December 31, 2009, we owned an equity interest in and
consolidated 426 properties containing 95,202 apartment units,
which we refer to as “consolidated properties.” These
consolidated properties contain, on average,
16
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223 apartment units, with the largest property containing 2,113
apartment units. These properties offer residents a range of
amenities, including swimming pools, clubhouses, spas, fitness
centers and tennis courts. Many of the apartment units offer
features such as vaulted ceilings, fireplaces, washer and dryer
hook-ups,
cable television, balconies and patios. Additional information
on our consolidated properties is contained in
“Schedule III — Real Estate and Accumulated
Depreciation” in this Annual Report on
Form 10-K.
At December 31, 2009, we held an equity interest in and did
not consolidate 77 properties containing 8,478 apartment units,
which we refer to as “unconsolidated properties.” In
addition, we provided property management services for 22
properties containing 2,095 apartment units, and asset
management services for 345 properties containing 29,879
apartment units. In certain cases, we may indirectly own
generally less than one percent of the economic interest in such
properties through a partnership syndication or other fund.
Substantially all of our consolidated properties are encumbered
by property debt. At December 31, 2009, our consolidated
properties classified as held for use in our consolidated
balance sheet were encumbered by aggregate property debt
totaling $5,547.3 million having an aggregate weighted
average interest rate of 5.50%. Such property debt was
collateralized by 412 properties with a combined net book value
of $6,867.8 million. Included in the 412 properties, we had
a total of 31 property loans on 15 properties, with an aggregate
principal balance outstanding of $366.1 million, that were
each collateralized by property and cross-collateralized with
certain (but not all) other property loans within this group of
property loans (see Note 6 of the consolidated financial
statements in Item 8 for additional information about our
property debt).
| Item 3. | Legal Proceedings |
None.
| Item 4. | Submission of Matters to a Vote of Security Holders |
No matters were submitted to a vote of security holders during
the fourth quarter of 2009.
17
Table of Contents
| Item 5. | Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Our Common Stock has been listed and traded on the NYSE under
the symbol “AIV” since July 22, 1994. The
following table sets forth the quarterly high and low sales
prices of our Common Stock, as reported on the NYSE, and the
dividends declared in the periods indicated:
|
Dividends
|
||||||||||||
|
Declared
|
||||||||||||
|
Quarter Ended
|
High | Low | (per share) | |||||||||
|
2009
|
||||||||||||
|
December 31, 2009
|
$ | 17.09 | $ | 11.80 | $ | 0.20 | ||||||
|
September 30, 2009
|
15.91 | 7.36 | 0.10 | |||||||||
|
June 30, 2009
|
11.10 | 5.18 | 0.10 | |||||||||
|
March 31, 2009
|
12.89 | 4.57 | 0.00 | |||||||||
|
2008
|
||||||||||||
|
December 31, 2008(1)
|
$ | 43.67 | $ | 7.01 | $ | 3.88 | ||||||
|
September 30, 2008(1)
|
42.28 | 29.25 | 3.00 | |||||||||
|
June 30, 2008
|
41.24 | 33.33 | 0.60 | |||||||||
|
March 31, 2008
|
41.11 | 29.91 | 0.00 | |||||||||
| (1) | During 2008, our Board of Directors declared special dividends which were paid part in cash and part in shares of Common Stock as further discussed in Note 11 to the consolidated financial statements in Item 8. Our Board of Directors declared the dividends to address taxable gains from 2008 property sales. |
Our Board of Directors determines and declares our dividends. In
making a dividend determination, the Board of Directors
considers a variety of factors, including: REIT distribution
requirements; current market conditions; liquidity needs and
other uses of cash, such as for deleveraging and accretive
investment activities. The Board of Directors may adjust the
dividend amount or the frequency with which the dividend is paid
based on then prevailing facts and circumstances.
On February 24, 2010, the closing price of our Common Stock
was $16.73 per share, as reported on the NYSE, and there were
117,140,672 shares of Common Stock outstanding, held by
3,270 stockholders of record. The number of holders does not
include individuals or entities who beneficially own shares but
whose shares are held of record by a broker or clearing agency,
but does include each such broker or clearing agency as one
recordholder.
As a REIT, we are required to distribute annually to holders of
common stock at least 90% of our “real estate investment
trust taxable income,” which, as defined by the Code and
United States Department of Treasury regulations, is generally
equivalent to net taxable ordinary income.
From time to time, we may issue shares of Common Stock in
exchange for common and preferred OP Units tendered to the
Aimco Operating Partnership for redemption in accordance with
the terms and provisions of the agreement of limited partnership
of the Aimco Operating Partnership. Such shares are issued based
on an exchange ratio of one share for each common OP Unit
or the applicable conversion ratio for preferred OP Units.
The shares are generally issued in exchange for OP Units in
private transactions exempt from registration under the
Securities Act of 1933, as amended, pursuant to
Section 4(2) thereof. During the three and twelve months
ended December 31, 2009, approximately 379,400 and
518,800 shares of Common Stock were issued in exchange for
common OP Units, respectively. During the three and twelve
months ended December 31, 2009, no shares of Common Stock
were issued in exchange for preferred OP Units.
Our Board of Directors has, from time to time, authorized us to
repurchase shares of our outstanding capital stock. There were
no repurchases of our equity securities during the year ended
December 31, 2009. As of December 31, 2009, we were
authorized to repurchase approximately 19.3 million
additional shares. This authorization has no expiration date.
These repurchases may be made from time to time in the open
market or in privately negotiated transactions.
18
Table of Contents
Dividend
Payments
Our Credit Agreement includes customary covenants, including a
restriction on dividends and other restricted payments, but
permits dividends during any four consecutive fiscal quarters in
an aggregate amount of up to 95% of our Funds From Operations
for such period, subject to certain non-cash adjustments, or
such amount as may be necessary to maintain our REIT status.
Performance
Graph
The following graph compares cumulative total returns for our
Common Stock, the Standard & Poor’s 500 Total
Return Index (the “S&P 500”) and the MSCI US REIT
Index. The MSCI US REIT Index is published by Morgan Stanley
Capital International Inc., a provider of equity indices. The
indices are weighted for all companies that fit the definitional
criteria of the particular index and are calculated to exclude
companies as they are acquired and add them to the index
calculation as they become publicly traded companies. All
companies of the definitional criteria in existence at the point
in time presented are included in the index calculations. The
graph assumes the investment of $100 in our Common Stock and in
each index on December 31, 2004, and that all dividends
paid have been reinvested. The historical information set forth
below is not necessarily indicative of future performance.
Total
Return Performance
| For the Years Ended December 31, | ||||||||||||||||||||||||
| Index | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | ||||||||||||||||||
|
Aimco
|
100.00 | 106.29 | 164.95 | 113.71 | 59.71 | 85.29 | ||||||||||||||||||
|
MSCI US REIT
|
100.00 | 112.13 | 152.41 | 126.78 | 78.64 | 101.14 | ||||||||||||||||||
|
S&P 500
|
100.00 | 104.91 | 121.48 | 128.16 | 80.74 | 102.11 | ||||||||||||||||||
Source: (other than with respect to S&P 500) SNL
Financial LC, Charlottesville, VA
©
2010
The Performance Graph will not be deemed to be incorporated by
reference into any filing by the Company under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended, except to the extent that the Company specifically
incorporates the same by reference.
The information required by Item 5 with respect to
securities authorized for issuance under equity compensation
plans is incorporated by reference in Part III,
Item 12 of this Annual Report.
19
Table of Contents
| Item 6. | Selected Financial Data |
The following selected financial data is based on our audited
historical financial statements. This information should be read
in conjunction with such financial statements, including the
notes thereto, and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations”
included herein or in previous filings with the Securities and
Exchange Commission.
| For the Years Ended December 31, | ||||||||||||||||||||
| 2009 | 2008(1)(2) | 2007(2) | 2006(2) | 2005(2) | ||||||||||||||||
| (Dollar amounts in thousands, except per share data) | ||||||||||||||||||||
|
OPERATING DATA:
|
||||||||||||||||||||
|
Total revenues
|
$ | 1,195,763 | $ | 1,243,170 | $ | 1,174,457 | $ | 1,084,552 | $ | 894,060 | ||||||||||
|
Total operating expenses(3)
|
(1,085,250 | ) | (1,185,071 | ) | (989,658 | ) | (909,784 | ) | (751,516 | ) | ||||||||||
|
Operating income(3)
|
110,513 | 58,099 | 184,799 | 174,768 | 142,544 | |||||||||||||||
|
Loss from continuing operations(3)
|
(197,037 | ) | (117,878 | ) | (46,109 | ) | (42,924 | ) | (35,098 | ) | ||||||||||
|
Income from discontinued operations, net(4)
|
152,237 | 744,880 | 171,615 | 329,947 | 160,450 | |||||||||||||||
|
Net (loss) income
|
(44,800 | ) | 627,002 | 125,506 | 287,022 | 125,352 | ||||||||||||||
|
Net income attributable to noncontrolling interests
|
(19,474 | ) | (214,995 | ) | (95,595 | ) | (110,234 | ) | (54,370 | ) | ||||||||||
|
Net income attributable to preferred stockholders
|
(50,566 | ) | (53,708 | ) | (66,016 | ) | (81,132 | ) | (87,948 | ) | ||||||||||
|
Net (loss) income attributable to Aimco common stockholders
|
(114,840 | ) | 351,314 | (40,586 | ) | 93,710 | (21,223 | ) | ||||||||||||
|
Earnings (loss) per common share — basic and
diluted(5):
|
||||||||||||||||||||
|
Loss from continuing operations attributable to Aimco common
stockholders
|
$ | (1.75 | ) | $ | (2.10 | ) | $ | (1.41 | ) | $ | (1.49 | ) | $ | (1.34 | ) | |||||
|
Net (loss) income attributable to Aimco common stockholders
|
$ | (1.00 | ) | $ | 3.96 | $ | (0.43 | ) | $ | 0.98 | $ | (0.23 | ) | |||||||
|
BALANCE SHEET INFORMATION:
|
||||||||||||||||||||
|
Real estate, net of accumulated depreciation
|
$ | 6,962,361 | $ | 7,125,637 | $ | 6,901,575 | $ | 6,436,854 | $ | 5,708,319 | ||||||||||
|
Total assets
|
7,906,468 | 9,441,870 | 10,617,681 | 10,292,587 | 10,019,160 | |||||||||||||||
|
Total indebtedness
|
5,690,310 | 6,069,804 | 5,683,884 | 4,969,185 | 4,283,278 | |||||||||||||||
|
Total equity
|
1,534,703 | 1,646,749 | 2,048,546 | 2,650,182 | 3,060,969 | |||||||||||||||
|
OTHER INFORMATION:
|
||||||||||||||||||||
|
Dividends declared per common share
|
$ | 0.40 | $ | 7.48 | $ | 4.31 | $ | 2.40 | $ | 3.00 | ||||||||||
|
Total consolidated properties (end of period)
|
426 | 514 | 657 | 703 | 619 | |||||||||||||||
|
Total consolidated apartment units (end of period)
|
95,202 | 117,719 | 153,758 | 162,432 | 158,548 | |||||||||||||||
|
Total unconsolidated properties (end of period)
|
77 | 85 | 94 | 102 | 264 | |||||||||||||||
|
Total unconsolidated apartment units (end of period)
|
8,478 | 9,613 | 10,878 | 11,791 | 35,269 | |||||||||||||||
|
Units managed (end of period)(6)
|
31,974 | 35,475 | 38,404 | 42,190 | 46,667 | |||||||||||||||
| (1) | The consolidated statement of income for the year ended December 31, 2008, has been restated to reclassify impairment losses on real estate development assets within operating income. The reclassification reduced operating income by $91.1 million for the year ended December 31, 2008, and had no effect on the reported amounts of loss from continuing operations, net income, net income available to Aimco common stockholders or earnings per share. Additionally, the reclassification had no effect on the consolidated balance sheets, statements of equity or statements of cash flows. See Note 2 to the consolidated financial statements in Item 8. | |
| (2) | Certain reclassifications have been made to conform to the current financial statement presentation, including retroactive adjustments related to our January 1, 2009 adoption of the provisions of Financial Accounting Standards Board, or FASB, Statement of Financial Accounting Standards No. 141(R), or SFAS 141(R), FASB Statement of Financial Accounting Standards No. 160, or SFAS 160, and FASB Staff Position No. EITF 03-6-1, or FSP EITF 03-6-1 (see Note 2 to the consolidated financial statements in Item 8) and to reflect additional properties sold during 2009 or classified as held for sale as of December 31, 2009, as discontinued operations (see Note 13 to the consolidated financial statements in Item 8). | |
| (3) | Total operating expenses, operating income and loss from continuing operations for the year ended December 31, 2008, include a $91.1 million pre-tax provision for impairment losses on real estate development assets, which is discussed further in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7. |
20
Table of Contents
| (4) | Income from discontinued operations for the years ended December 31, 2009, 2008, 2007, 2006 and 2005 includes $221.8 million, $800.3 million, $117.6 million, $337.3 million and $162.7 million in gains on disposition of real estate, respectively. Income from discontinued operations for 2009, 2008 and 2007 is discussed further in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7. | |
| (5) | Weighted average common shares, common share equivalents, dilutive preferred securities and earnings per share amounts for each of the periods presented above have been adjusted for our application during the fourth quarter 2009 of a change in accounting, which requires the shares issued in our special dividends paid in 2008 and January 2009 to be treated as issued and outstanding on the dividend payment dates for basic purposes and as potential share equivalents for the periods between the ex-dividend dates and payment dates for diluted purposes, rather than treating the shares as issued and outstanding as of the beginning of the earliest period presented for both basic and diluted purposes. See Note 2 to the consolidated financial statements in Item 8 for further discussion of this accounting change. | |
| (6) | Units managed represents units in properties for which we provide asset management services only, although in certain cases we may indirectly own generally less than one percent of the economic interest in such properties through a partnership syndication or other fund. |
21
Table of Contents
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Executive
Overview
We are a self-administered and self-managed real estate
investment trust, or REIT, engaged in the acquisition,
ownership, management and redevelopment of apartment properties.
Our property operations are characterized by diversification of
product, location and price point. We primarily invest in the 20
largest U.S. markets, as measured by total market
capitalization, which is the total market value of
institutional-grade apartment properties in a particular market.
We define these markets as “target markets” and they
possess the following characteristics: a high concentration of
population and apartment units; geographic and employment
diversification; and historically strong returns with reduced
volatility as part of a diversified portfolio. We are one of the
largest owners and operators of apartment properties in the
United States. As of December 31, 2009, we owned or managed
870 apartment properties containing 135,654 units located
in 44 states, the District of Columbia and Puerto Rico. Our
primary sources of income and cash are rents associated with
apartment leases.
The key financial indicators that we use in managing our
business and in evaluating our financial condition and operating
performance are: NAV; Funds From Operations, or FFO; Adjusted
FFO, or AFFO, which is FFO less spending for Capital
Replacements; same store property operating results; net
operating income; Free Cash Flow, which is net operating income
less spending for Capital Replacements; financial coverage
ratios; and leverage as shown on our balance sheet. FFO and
Capital Replacements are defined and further described in the
sections captioned “Funds From Operations” and
“Capital Additions” below. The key macro-economic
factors and non-financial indicators that affect our financial
condition and operating performance are: household formations;
rates of job growth; single-family and multifamily housing
starts; interest rates; and availability and cost of financing.
Because our operating results depend primarily on income from
our properties, the supply and demand for apartments influences
our operating results. Additionally, the level of expenses
required to operate and maintain our properties and the pace and
price at which we redevelop, acquire and dispose of our
apartment properties affect our operating results. Our cost of
capital is affected by the conditions in the capital and credit
markets and the terms that we negotiate for our equity and debt
financings.
During the challenging financial and economic environment in
2009, we focused on: serving and retaining residents;
continually improving our portfolio; reducing leverage and
financial risk; and simplifying our business model.
We are focused on owning and operating B/B+ quality apartments
concentrated in our target markets. We intend to upgrade the
quality of our portfolio through the sale of approximately 5% to
10% of our portfolio annually, with the proceeds generally used
to increase our allocation of capital to well located properties
within our target markets through capital investments,
redevelopment or acquisitions.
The following discussion and analysis of the results of our
operations and financial condition should be read in conjunction
with the accompanying consolidated financial statements in
Item 8.
Results
of Operations
Overview
2009
compared to 2008
We reported net loss attributable to Aimco of $64.3 million
and net loss attributable to Aimco common stockholders of
$114.8 million for the year ended December 31, 2009,
compared to net income attributable to Aimco of
$412.0 million and net income attributable to Aimco common
stockholders of $351.3 million for the year ended
December 31, 2008, decreases of $476.3 million and
$466.1 million, respectively. These decreases were
principally due to the following items, all of which are
discussed in further detail below:
| • | a decrease in income from discontinued operations, primarily related to our sale of fewer assets in 2009 and the recognition of lower gains on sales as compared to 2008; | |
| • | a decrease in gain on dispositions of unconsolidated real estate and other, primarily due to a large gain on the sale of an interest in an unconsolidated real estate partnership in 2008; |
22
Table of Contents
| • | an increase in depreciation and amortization expense, primarily related to completed redevelopments and capital additions placed in service for partial periods during 2008 or 2009; and | |
| • | a decrease in asset management and tax credit revenues, primarily due to a reduction in promote income, which is income earned in connection with the disposition of properties owned by our consolidated joint ventures. |
The effects of these items on our operating results were
partially offset by:
| • | a decrease in earnings allocable to noncontrolling interests, primarily due to a decrease in the noncontrolling interests’ share of the decrease in gains on sales discussed above; | |
| • | a decrease in general and administrative expenses, primarily related to reductions in personnel and related expenses from our organizational restructuring activities during 2008 and 2009; and | |
| • | impairment losses on real estate development assets in 2008, for which no similar impairments were recognized in 2009. |
2008
compared to 2007
We reported net income attributable to Aimco of
$412.0 million and net income attributable to Aimco common
stockholders of $351.3 million for the year ended
December 31, 2008, compared to net income attributable to
Aimco of $29.9 million and net loss attributable to Aimco
common stockholders of $40.6 million for the year ended
December 31, 2007, increases of $382.1 million and
$391.9 million, respectively. These increases were
principally due to the following items, all of which are
discussed in further detail below:
| • | an increase in income from discontinued operations, primarily related to an increase in the number of assets sold during 2008 and our recognition of higher gains on sales as compared to 2007; | |
| • | an increase in gain on dispositions of unconsolidated real estate and other, primarily due to a large gain on the sale of an interest in an unconsolidated real estate partnership in 2008; | |
| • | an increase in net operating income associated with property operations, reflecting improved operations of our same store properties and other properties; and | |
| • | an increase in asset management and tax credit revenues, primarily due to an increase in promote income, which is income earned in connection with the disposition of properties owned by our consolidated joint ventures. |
The effects of these items on our operating results were
partially offset by:
| • | impairment losses on real estate development assets in 2008, for which no similar impairments were recognized in 2007; | |
| • | an increase in earnings allocable to noncontrolling interests, primarily due to an increase in the noncontrolling interests’ share of the increase in gains on sales discussed above; | |
| • | an increase in depreciation and amortization expense, primarily related to completed redevelopments placed in service for partial periods during 2007 or 2008; | |
| • | restructuring costs recognized during the fourth quarter of 2008; and | |
| • | an increase in provisions for losses on notes receivable, primarily due to the impairment during 2008 of our interest in Casden Properties LLC. |
The following paragraphs discuss these and other items affecting
the results of our operations in more detail.
Business
Segment Operating Results
We have two reportable segments: real estate (owning, operating
and redeveloping apartments) and investment management
(portfolio management and asset management). Our chief operating
decision maker uses various generally accepted industry
financial measures to assess the performance and financial
condition of the business,
23
Table of Contents
including: NAV; FFO; AFFO; same store property operating
results; net operating income; Free Cash Flow; financial
coverage ratios; and leverage as shown on our balance sheet. Our
chief operating decision maker emphasizes net operating income
as a key measurement of segment profit or loss. Segment net
operating income is generally defined as segment revenues less
direct segment operating expenses.
Real
Estate Segment
Our real estate segment involves the ownership and operation of
properties that generate rental and other property-related
income through the leasing of apartment units. Our real estate
segment’s net operating income also includes income from
property management services performed for unconsolidated
partnerships and unrelated parties.
The following table summarizes our real estate segment’s
net operating income for the years ended December 31, 2009,
2008 and 2007 (in thousands):
| Year Ended December 31, | ||||||||||||
| 2009 | 2008 | 2007 | ||||||||||
|
Real estate segment revenues:
|
||||||||||||
|
Rental and other property revenues
|
$ | 1,140,828 | $ | 1,137,995 | $ | 1,093,779 | ||||||
|
Property management revenues, primarily from affiliates
|
5,082 | 6,345 | 6,923 | |||||||||
| 1,145,910 | 1,144,340 | 1,100,702 | ||||||||||
|
Real estate segment expenses:
|
||||||||||||
|
Property operating expenses
|
521,161 | 526,238 | 503,890 | |||||||||
|
Property management expenses
|
2,869 | 5,385 | 6,678 | |||||||||
| 524,030 | 531,623 | 510,568 | ||||||||||
|
Real estate segment net operating income
|
$ | 621,880 | $ | 612,717 | $ | 590,134 | ||||||
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, real estate segment net operating
income increased $9.2 million, or 1.5%. This increase was
due to an increase in real estate segment revenues of
$1.6 million, or 0.1% and a decrease in real estate segment
expenses of $7.6 million, or 1.4%.
The increase in revenues from our real estate segment during the
year ended December 31, 2009, was primarily attributed to
an increase of $10.0 million in revenues related to our
conventional redevelopment properties based on more units in
service at these properties in 2009, $7.5 million in
revenues related to our affordable properties, primarily due to
higher average rents partially offset by lower physical
occupancy during 2009, and $2.3 million of revenues related
to properties acquired during the latter half of 2008.
These increases were partially offset by a $14.8 million,
or 2.0%, decrease in revenues from our conventional same store
properties, due to a decrease of 50 basis points in average
physical occupancy and lower average rent (approximately $23 per
unit). Conventional same store property revenues in our target
markets, which represented approximately 78% of our total
conventional same store revenues, decreased by 2.7% due to
decreases in average physical occupancy (80 basis points)
and average rent (approximately $31 per unit). The decrease in
revenues associated with these target markets were primarily
attributed to revenue decreases of 4.9% in our Pacific markets,
attributed to 140 basis points in lower occupancy and $73
per unit in lower rents, and 3.3% in our Sunbelt market,
attributed to 40 basis points in lower occupancy and $35
per unit in lower rents. Conventional same store revenues
related to our other markets decreased by 1.7%, due to
130 basis points in lower occupancy and $14 per unit in
lower rents.
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, the decrease in our real estate
segment expenses was primarily attributed to property management
expenses. Property management expenses related to our
consolidated properties, which are shown in the table above as a
component of property operating expenses, decreased by
$8.2 million, and property management expenses related to
our unconsolidated properties decreased by $2.5 million,
both due primarily to reductions in personnel and related costs
resulting from our organizational restructurings. These
decreases in our real estate segment expenses were partially
offset by
24
Table of Contents
increases of $0.6 million related to our conventional same
store properties, primarily due to increases in employee
compensation, insurance, repair and maintenance, and real estate
tax expenses, offset by decreases in administrative and
marketing expenses, $0.6 million related to our
conventional redevelopment properties, primarily due to more
units placed in service, $0.5 million related to our
affordable properties, primarily due to properties that were
newly consolidated in 2008 and $0.8 million related to
properties acquired during the latter half of 2008.
For the year ended December 31, 2008, compared to the year
ended December 31, 2007, real estate segment net operating
income increased $22.6 million, or 3.8%. This increase was
due to an increase in real estate segment revenues of
$43.6 million, or 4.0%, offset by an increase in real
estate segment expenses of $21.1 million, or 4.1%.
The increase in revenues from our real estate segment during the
year ended December 31, 2008, was primarily attributed to
an increase of $19.8 million in revenues from our
conventional same store properties, due to an increase of
80 basis points in average physical occupancy and higher
average rent (approximately $18 per unit), $13.0 million in
revenues related to our affordable properties, primarily due to
newly consolidated properties, and $8.8 million in revenues
related to our conventional redevelopment properties based on
more units in service and higher rental rates.
For the year ended December 31, 2008, compared to the year
ended December 31, 2007, the increase in expense was
primarily attributed to increases of $9.3 million related
to our affordable properties, primarily due to properties that
were newly consolidated, $5.2 million related to our
conventional redevelopment properties, primarily due to more
units placed in service, $3.1 million of property
management expenses related to consolidated properties, which
are shown in the table above as a component of property
operating expenses, and $0.2 million related to our
conventional same store properties, primarily due to increases
in utilities and real estate taxes, offset by decreases in
employee compensation, repairs and maintenance, and turnover
expenses. These increases in property expenses were in addition
to an increase of $4.2 million in casualty losses during
2008, primarily related to properties damaged by Tropical Storm
Fay and Hurricane Ike.
Investment
Management Segment
Our investment management segment includes activities and
services related to our owned portfolio of properties as well as
services provided to affiliated partnerships. Activities and
services that fall within investment management include
portfolio strategy, capital allocation, joint ventures, tax
credit syndication, acquisitions, dispositions and other
transaction activities. Within our owned portfolio, we refer to
these activities as “Portfolio Management,” and their
benefit is seen in property operating results and in investment
gains. For affiliated partnerships, we refer to these activities
as asset management, for which we are separately compensated
through fees paid by third party investors. The expenses of this
segment consist primarily of the costs of departments that
perform these activities. These activities are conducted in part
by our taxable subsidiaries, and the related net operating
income may be subject to income taxes.
Asset management revenue includes certain fees that were earned
in a prior period, but not recognized at that time because
collectibility was not reasonably assured. Those fees may be
recognized in a subsequent period upon occurrence of a
transaction or a high level of the probability of occurrence of
a transaction, or improvement in operations that generates
sufficient cash to pay the fees.
The following table summarizes the net operating income from our
investment management segment for the years ended
December 31, 2009, 2008 and 2007 (in thousands):
| Year Ended December 31, | ||||||||||||
| 2009 | 2008 | 2007 | ||||||||||
|
Asset management and tax credit revenues
|
$ | 52,193 | $ | 101,225 | $ | 73,755 | ||||||
|
Investment management expenses
|
15,779 | 24,784 | 20,507 | |||||||||
|
Investment segment net operating income
|
$ | 36,414 | $ | 76,441 | $ | 53,248 | ||||||
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, net operating income from
investment management decreased $40.0 million, or 52.4%.
This decrease is primarily attributable to a $42.8 million
decrease in promote income, which is income earned in connection
with the disposition of properties
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owned by our consolidated joint ventures, due to fewer related
sales in 2009 and a $7.6 million decrease in other general
partner transactional fees, partially offset by a
$9.0 million decrease in investment management expenses,
primarily due to reductions in personnel and related costs from
our organizational restructurings and a reduction in transaction
costs, and a $3.9 million increase in revenues associated
with our affordable housing tax credit syndication business,
including syndication fees and other revenue earned in
connection with these arrangements.
For the year ended December 31, 2008, compared to the year
ended December 31, 2007, net operating income from
investment management increased $23.2 million, or 43.6%.
This increase is primarily attributable to a $30.7 million
increase in promote income, which is income earned in connection
with the disposition of properties owned by our consolidated
joint ventures, and a $9.2 million increase in other
general partner transactional fees. These increases are offset
by a decrease of $7.4 million in asset management fees, a
decrease of $5.0 million in revenues associated with our
affordable housing tax credit syndication business, including
syndication fees and other revenue earned in connection with
these arrangements, and an increase of $4.3 million in
investment management expenses, inclusive of $3.5 million
in deferred acquisition costs.
Other
Operating Expenses (Income)
Depreciation
and Amortization
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, depreciation and amortization
increased $51.4 million, or 13.1%. This increase primarily
consists of depreciation related to properties acquired during
the latter part of 2008, completed redevelopments and other
capital projects recently placed in service.
For the year ended December 31, 2008, compared to the year
ended December 31, 2007, depreciation and amortization
increased $45.5 million, or 13.1%. This increase reflects
depreciation of $65.3 million for newly acquired
properties, completed redevelopments and other capital projects
recently placed in service. This increase was partially offset
by a decrease of $25.7 million in depreciation adjustments
necessary to reduce the carrying amount of buildings and
improvements to their estimated disposition value, or zero in
the case of a planned demolition, primarily due to a property
that became fully depreciated during 2007.
Provision
for Operating Real Estate Impairment Losses
Real estate and other long-lived assets to be held and used are
stated at cost, less accumulated depreciation and amortization,
unless the carrying amount of the asset is not recoverable. If
events or circumstances indicate that the carrying amount of a
property may not be recoverable, we make an assessment of its
recoverability by comparing the carrying amount to our estimate
of the undiscounted future cash flows, excluding interest
charges, of the property. If the carrying amount exceeds the
estimated aggregate undiscounted future cash flows, we recognize
an impairment loss to the extent the carrying amount exceeds the
estimated fair value of the property.
For the years ended December 31, 2009 and 2007, we
recognized impairment losses of $2.3 million and
$1.1 million, respectively, related to properties
classified as held for use as of December 31, 2009. We
recognized no such impairment losses during the year ended
December 31, 2008.
Provision
for Impairment Losses on Real Estate Development
Assets
In connection with the preparation of our 2008 annual financial
statements, we assessed the recoverability of our investment in
our Lincoln Place property, located in Venice, California. Based
upon the decline in land values in Southern California during
2008 and the expected timing of our redevelopment efforts, we
determined that the total carrying amount of the property was no
longer probable of full recovery and, accordingly, during the
three months ended December 31, 2008, recognized an
impairment loss of $85.4 million ($55.6 million net of
tax).
Similarly, we assessed the recoverability of our investment in
Pacific Bay Vistas (formerly Treetops), a vacant property
located in San Bruno, California, and determined that the
carrying amount of the property was no longer probable of full
recovery and, accordingly, we recognized an impairment loss of
$5.7 million for this property during the three months
ended December 31, 2008.
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The impairments discussed above totaled $91.1 million and
are included in provisions for impairment losses on real estate
development assets in our consolidated statement of income for
the year ended December 31, 2009 included in Item 8.
We recognized no similar impairments on real estate development
assets during the years ended December 31, 2009 or 2007.
General
and Administrative Expenses
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, general and administrative
expenses decreased $29.6 million, or 29.8%. This decrease
is primarily attributable to reductions in personnel and related
expenses associated with our organizational restructurings (see
Note 3 to the consolidated financial statements in
Item 8), pursuant to which we eliminated approximately 400,
or 36%, of our offsite positions between December 31, 2008
and December 31, 2009.
For the year ended December 31, 2008, compared to the year
ended December 31, 2007, general and administrative
expenses increased $8.5 million, or 9.4%. This increase is
primarily attributable to higher personnel and related expenses
of $6.1 million and an increase of $1.5 million in
information technology communications costs.
Other
Expenses, Net
Other expenses, net includes franchise taxes, risk management
activities, partnership administration expenses and certain
non-recurring items.
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, other expenses, net decreased by
$4.7 million. The decrease is primarily attributable to a
$5.4 million write-off during 2008 of certain
communications hardware and capitalized costs in 2008, and a
$5.3 million reduction in expenses of our self insurance
activities, including a decrease in casualty losses on less than
wholly owned properties from 2008 to 2009. These decreases are
partially offset by an increase of $4.3 million in costs
related to certain litigation matters.
For the year ended December 31, 2008, compared to the year
ended December 31, 2007, other expenses, net increased by
$3.2 million. The increase includes a $5.4 million
write-off of certain communications hardware and capitalized
costs during 2008 and a $1.2 million write-off of
redevelopment costs associated with a change in the planned use
of a property during 2008. The net unfavorable change also
reflects $3.6 million of income recognized in 2007 related
to the transfer of certain property rights to an unrelated
party. These increases were partially offset by a
$3.7 million reduction in expenses of our self insurance
activities (net of costs in 2008 related to Tropical Storm Fay
and Hurricane Ike) and a net decrease of $1.7 million in
costs related to certain litigation matters.
Restructuring
Costs
For the year ended December 31, 2009, we recognized
restructuring costs of $11.2 million, as compared to
$22.8 million in the year ended December 31, 2008,
related to our organizational restructurings, which are further
discussed in Note 3 to the consolidated financial
statements in Item 8. We recognized no restructuring costs
during the year ended December 31, 2007.
Interest
Income
Interest income consists primarily of interest on notes
receivable from non-affiliates and unconsolidated real estate
partnerships, interest on cash and restricted cash accounts, and
accretion of discounts on certain notes receivable from
unconsolidated real estate partnerships. Transactions that
result in accretion occur infrequently and thus accretion income
may vary from period to period.
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, interest income decreased
$10.6 million, or 53.1%. Interest income decreased by
$8.8 million due to lower interest rates on notes
receivable, cash and restricted cash balances and lower average
balances and by $4.1 million due to a decrease in accretion
income related to our note receivable from Casden Properties LLC
for which we ceased accretion following impairment of the note
in 2008. These decreases were partially offset by a
$2.3 million increase in
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accretion income related to other notes during the year ended
December 31, 2008, resulting from a change in the timing
and amount of collection.
For the year ended December 31, 2008, as compared to the
year ended December 31, 2007, interest income decreased
$23.3 million, or 53.9%. Interest income decreased by
$16.0 million due to lower interest rates on notes
receivable, cash and restricted cash balances and lower average
balances. Interest income also decreased by $5.8 million
due to an adjustment of accretion on certain discounted notes
during the year ended December 31, 2008, resulting from a
change in the estimated timing and amount of collection, and by
$1.5 million for accretion income recognized during the
year ended December 31, 2007, related to the prepayment of
principal on certain discounted loans collateralized by
properties in West Harlem in New York City.
Provision
for Losses on Notes Receivable
During the years ended December 31, 2009, 2008 and 2007, we
recognized net provisions for losses on notes receivable of
$21.5 million, $17.6 million and $2.0 million,
respectively. The provisions for losses on notes receivable for
the years ended December 31, 2009 and 2008, primarily
consist of impairments related to our investment in Casden
Properties LLC, which are discussed further below.
As part of the March 2002 acquisition of Casden Properties,
Inc., we invested $50.0 million for a 20% passive interest
in Casden Properties LLC, an entity organized to acquire,
re-entitle and develop land parcels in Southern California.
Based upon the profit allocation agreement, we account for this
investment as a note receivable and through 2008 were amortizing
the discounted value of the investment to the $50.0 million
previously estimated to be collectible, through January 2,
2009, the initial dissolution date of the entity. In 2009, the
managing member extended the dissolution date. In connection
with the preparation of our 2008 annual financial statements and
as a result of a decline in land values in Southern California,
we determined our recorded investment amount was not fully
recoverable, and accordingly recognized an impairment loss of
$16.3 million ($10.0 million net of tax) during the
three months ended December 31, 2008. In connection with
the preparation of our 2009 annual financial statements and as a
result of continued declines in land values in Southern
California, we determined our then recorded investment amount
was not fully recoverable, and accordingly recognized an
impairment loss of $20.7 million ($12.4 million net of
tax) during the three months ended December 31, 2009.
In addition to the impairments related to Casden Properties LLC
discussed above, we recognized provisions for losses on notes
receivable totaling $0.8 million, $1.3 million and
$2.0 million during the years ended December 31, 2009,
2008 and 2007, respectively.
Interest
Expense
For the years ended December 31, 2009 and December 31,
2008, interest expense, which includes the amortization of
deferred financing costs, totaled $324.2 million and
$324.1 million, respectively. Interest expense increased by
$15.0 million due to a reduction in redevelopment activity
during 2009, which resulted in a reduction in capitalized
interest. In addition, interest expense increased by
$1.2 million due to an increase in prepayment penalties
associated with refinancing activities, from $2.8 million
in 2008 to $4.0 million in 2009, and by $3.3 million
related to non-recourse property loans, from $311.2 million
to $314.5 million, primarily due to higher average interest
rates partially offset by lower average balances during 2009.
These increases in interest expense were substantially offset by
decreases in corporate interest expense. Interest expense
related to corporate debt, which is primarily floating rate,
decreased by $19.4 million, from $34.8 million to
$15.4 million, primarily due to lower average balances and
interest rates during 2009.
For the year ended December 31, 2008, compared to the year
ended December 31, 2007, interest expense increased
$11.1 million, or 3.5%. Interest expense related to
non-recourse property loans increased by $17.1 million,
from $294.1 million to $311.2 million, primarily due
to higher average balances partially offset by lower average
interest rates during 2008. In addition, interest expense
increased by $4.4 million, due to a decrease in capitalized
interest from $29.1 million in 2007 to $24.7 million
in 2008, resulting from more units in service and lower interest
rates. These increases were partially offset by a decrease in
interest expense related to corporate debt, which is primarily
floating rate and which decreased by $10.4 million, from
$45.2 million to $34.8 million, primarily due to lower
average balances and interest rates during 2008.
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Equity
in Losses of Unconsolidated Real Estate
Partnerships
Equity in losses of unconsolidated real estate partnerships
includes our share of net losses of our unconsolidated real
estate partnerships and is primarily driven by depreciation
expense in excess of the net operating income recognized by such
partnerships.
During the years ended December 31, 2009, 2008 and 2007, we
recognized equity in losses of unconsolidated real estate
partnerships of $12.0 million, $4.6 million and
$3.3 million, respectively. The $7.4 million increase
in our equity in losses from 2008 to 2009 was primarily due to
our sale in late 2008 of an interest in an unconsolidated real
estate partnership that generated $3.0 million of equity in
earnings during the year ended December 31, 2008, and our
sale during 2009 of our interest in an unconsolidated group
purchasing organization which resulted in a decrease of equity
in earnings of approximately $1.2 million. The increase in
equity in losses also includes additional losses recognized
during 2009 related to the underlying investment properties of
certain tax credit syndications we consolidated during 2009 and
2008.
Impairment
Losses Related to Unconsolidated Real Estate
Partnerships
Impairment losses related to unconsolidated real estate
partnerships includes our share of impairment losses recognized
by our unconsolidated real estate partnerships. For the year
ended December 31, 2009, compared to the year ended
December 31, 2008, impairment losses related to
unconsolidated real estate partnerships decreased
$2.3 million, and for the year ended December 31,
2008, compared to the year ended December 31, 2007,
impairment losses related to unconsolidated real estate
partnerships increased $2.7 million. This decrease and
increase are primarily attributable to impairment losses
recognized by unconsolidated partnerships on their underlying
real estate properties during 2008.
Gain
on Dispositions of Unconsolidated Real Estate and
Other
Gain on dispositions of unconsolidated real estate and other
includes our share of gains related to dispositions of real
estate by unconsolidated real estate partnerships, gains on
disposition of interests in unconsolidated real estate
partnerships, gains on dispositions of land and other
non-depreciable assets and costs related to asset disposal
activities. Changes in the level of gains recognized from period
to period reflect the changing level of disposition activity
from period to period. Additionally, gains on properties sold
are determined on an individual property basis or in the
aggregate for a group of properties that are sold in a single
transaction, and are not comparable period to period.
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, gain on dispositions of
unconsolidated real estate and other decreased
$77.4 million. This decrease is primarily attributable to a
gain of $98.4 million on our disposition in 2008 of
interests in two unconsolidated real estate partnerships. This
decrease was partially offset by $18.7 million of gains on
the disposition of interests in unconsolidated partnerships
during 2009. Gains recognized in 2009 consist of
$8.6 million related to our receipt in 2009 of additional
proceeds related to our disposition during 2008 of one of the
partnership interests discussed above (see Note 3 to the
consolidated financials statements in Item 8),
$4.0 million from the disposition of our interest in a
group purchasing organization (see Note 3 to the
consolidated financial statements in Item 8), and
$6.1 million from our disposition in 2009 of interests in
unconsolidated real estate partnerships.
For the year ended December 31, 2008, compared to the year
ended December 31, 2007, gain on dispositions of
unconsolidated real estate and other increased
$75.4 million. This increase is primarily attributable to a
$98.4 million net gain on the disposition of interests in
two unconsolidated real estate partnerships during the year
ended December 31, 2008. During 2007, we recognized a
$6.0 million non-refundable option and extension fee
resulting from the termination of rights under an option
agreement to sell the North and Central towers of our Flamingo
South Beach property, approximately $6.4 million of net
gains on dispositions of land parcels and our share of gains on
dispositions of properties by unconsolidated real estate
partnerships in 2007, and a $10.6 million gain on debt
extinguishment related to properties in the VMS partnership (see
Note 3 to the consolidated financial statements in
Item 8).
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Income
Tax Benefit
Certain of our operations or a portion thereof, such as property
management, asset management and risk management, are conducted
through, and certain of our properties are owned by, taxable
REIT subsidiaries, each of which we refer to as a TRS. A TRS is
a C-corporation that has not elected REIT status and, as such,
is subject to United States Federal corporate income tax. We use
TRS entities to facilitate our ability to offer certain services
and conduct certain activities that generally cannot be offered
directly by the REIT. We also use TRS entities to hold
investments in certain properties. Income taxes related to the
results of continuing operations of our TRS entities are
included in income tax benefit in our consolidated statements of
income.
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, income tax benefit decreased by
$34.5 million. This decrease was primarily attributed to
$36.1 million of income tax benefit recognized in 2008
related to the impairments of our Lincoln Place property and our
investment in Casden Properties LLC, both of which are owned
through TRS entities, partially offset by $8.1 million of
income tax benefit recognized in 2009 related to the impairment
of our investment in Casden Properties LLC.
For the year ended December 31, 2008, compared to the year
ended December 31, 2007, income tax benefit increased by
$33.4 million. This increase was primarily attributed to
$36.1 million of income tax benefit recognized in 2008
related to the impairments of our Lincoln Place property and our
investment in Casden Properties LLC.
Income
from Discontinued Operations, Net
The results of operations for properties sold during the period
or designated as held for sale at the end of the period are
generally required to be classified as discontinued operations
for all periods presented. The components of net earnings that
are classified as discontinued operations include all
property-related revenues and operating expenses, depreciation
expense recognized prior to the classification as held for sale,
property-specific interest expense and debt extinguishment gains
and losses to the extent there is secured debt on the property.
In addition, any impairment losses on assets held for sale and
the net gain or loss on the eventual disposal of properties held
for sale are reported in discontinued operations.
For the years ended December 31, 2009 and 2008, income from
discontinued operations totaled $152.2 million and
$744.9 million, respectively. The $592.7 million
decrease in income from discontinued operations was principally
due to a $541.2 million decrease in gain on dispositions of
real estate, net of income taxes, primarily attributable to
fewer properties sold in 2009 as compared to 2008, and a
$111.8 million decrease in operating income (inclusive of a
$27.1 million increase in real estate impairment losses),
partially offset by a $58.8 million decrease in interest
expense.
For the years ended December 31, 2008 and 2007, income from
discontinued operations totaled $744.9 million and
$171.6 million, respectively. The $573.3 million
increase in income from discontinued operations was principally
due to a $641.7 million increase in gain on dispositions of
real estate, net of income taxes, primarily attributable to more
properties sold in 2008 as compared to 2007 and a
$27.9 million decrease in interest expense. These increases
were partially offset by a $66.1 million decrease in
operating income (inclusive of a $22.0 million increase in
real estate impairment losses) and a $31.6 million decrease
related to a 2007 gain on debt extinguishment related to
properties in the VMS partnership.
During the year ended December 31, 2009, we sold 89
consolidated properties for gross proceeds of $1.3 billion
and net proceeds of $432.7 million, resulting in a net gain
on sale of approximately $216.0 million (which is net of
$5.8 million of related income taxes). During the year
ended December 31, 2008, we sold 151 consolidated
properties for gross proceeds of $2.4 billion and net
proceeds of $1.1 billion, resulting in a net gain on sale
of approximately $757.2 million (which is net of
$43.1 million of related income taxes). During the year
ended December 31, 2007, we sold 73 consolidated properties
for gross proceeds of $480.0 million and net proceeds of
$203.8 million, resulting in a net gain on sale of
approximately $115.5 million (which is net of
$2.1 million of related income taxes).
For the years ended December 31, 2009, 2008 and 2007,
income from discontinued operations includes the operating
results of the properties sold or classified as held for sale as
of December 31, 2009.
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Changes in the level of gains recognized from period to period
reflect the changing level of our disposition activity from
period to period. Additionally, gains on properties sold are
determined on an individual property basis or in the aggregate
for a group of properties that are sold in a single transaction,
and are not comparable period to period (see Note 13 of the
consolidated financial statements in Item 8 for additional
information on discontinued operations).
Noncontrolling
Interests in Consolidated Real Estate Partnerships
Noncontrolling interests in consolidated real estate
partnerships reflects the non-Aimco partners’, or
noncontrolling partners’, share of operating results of
consolidated real estate partnerships. This generally includes
the noncontrolling partners’ share of property management
fees, interest on notes and other amounts eliminated in
consolidation that we charge to such partnerships. As discussed
in Note 2 to the consolidated financial statements in
Item 8, we adopted the provisions of SFAS 160, which
are now codified in the Financial Accounting Standards
Board’s Accounting Standards Codification, or FASB ASC,
Topic 810, effective January 1, 2009. Prior to our adoption
of SFAS 160, we generally did not recognize a benefit for
the noncontrolling interest partners’ share of partnership
losses for partnerships that have deficit noncontrolling
interest balances and we generally recognized a charge to our
earnings for distributions paid to noncontrolling partners for
partnerships that had deficit noncontrolling interest balances.
Under the updated provisions of FASB ASC Topic 810, we are
required to attribute losses to noncontrolling interests even if
such attribution would result in a deficit noncontrolling
interest balance and we are no longer required to recognize a
charge to our earnings for distributions paid to noncontrolling
partners for partnerships that have deficit noncontrolling
interest balances.
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, net earnings attributed to
noncontrolling interests in consolidated real estate
partnerships decreased by $133.2 million. This decrease is
primarily attributable to a reduction of $108.7 million
related to the noncontrolling interests in consolidated real
estate partnerships’ share of gains on dispositions of real
estate, due primarily to fewer sales in 2009 as compared to
2008, $5.5 million of losses allocated to noncontrolling
interests in 2009 that we would not have allocated to the
noncontrolling interest partners in 2008 because to do so would
have resulted in deficits in their noncontrolling interest
balances, and approximately $3.8 million related to deficit
distribution charges recognized as a reduction to our earnings
in 2008, for which we did not recognize similar charges in 2009
based on the change in accounting discussed above. These
decreases are in addition to the noncontrolling interest
partners’ share of increased losses of our consolidated
real estate partnerships in 2009 as compared to 2008.
For the year ended December 31, 2008, compared to the year
ended December 31, 2007, net income attributed to
noncontrolling interests in consolidated real estate
partnerships increased by $63.6 million. This increase is
primarily attributable to an increase of $106.5 million
related to the noncontrolling interests in consolidated real
estate partnerships’ share of gains on dispositions of real
estate, due primarily to more sales in 2008 as compared to 2007,
partially offset by increases of $42.9 million in net
recoveries of deficit distributions.
As discussed in Note 2 to the consolidated financial
statements in Item 8, during the first quarter 2010, we
will adopt new accounting guidance related to accounting for
variable interest entities. This change in accounting guidance
may result in our consolidation of certain previously
unconsolidated entities as well as our deconsolidation of
certain we currently consolidate. At this time, we have not yet
determined the effect this accounting change will have on our
consolidated financial statements.
Noncontrolling
Interests in Aimco Operating Partnership
Noncontrolling interests in Aimco Operating Partnership consist
of common OP Units, High Performance Units and preferred
OP Units. We allocate the Aimco Operating
Partnership’s income or loss to the holders of common
OP Units and High Performance Units based on the weighted
average number of common OP Units and High Performance
Units outstanding during the period. Holders of the preferred
OP Units participate in the Aimco Operating
Partnership’s income or loss only to the extent of their
preferred distributions.
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, the effect on our earnings of
income or loss attributable to noncontrolling interests in the
Aimco Operating Partnership changed favorably by
$62.3 million. This favorable change is attributable to a
decrease of $50.8 million related to the
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noncontrolling interests in the Aimco Operating
Partnership’s share of income from discontinued operations
(net of noncontrolling interests in consolidated real estate
partnerships), due primarily to larger gains on sales in 2008
relative to 2009 and $11.5 million in deficit distribution
charges recognized during 2008 due to distributions in excess of
the positive balance in noncontrolling interest. These changes
were also affected by a decrease in the noncontrolling interests
in the Aimco Operating Partnership’s effective ownership
interest from 2008 to 2009.
For the year ended December 31, 2008, compared to the year
ended December 31, 2007, the effect on our earnings of
income or loss attributable to noncontrolling interests in the
Aimco Operating Partnership changed unfavorably by
$55.8 million. This unfavorable change is attributable to
an increase of $48.1 million related to the noncontrolling
interests in the Aimco Operating Partnership’s share of
income from discontinued operations (net of noncontrolling
interests in consolidated real estate partnerships), due
primarily to larger gains on sales in 2008 relative to 2007,
$11.5 million in deficit distribution charges recognized
during 2008 due to distributions in excess of the positive
balance in noncontrolling interest, and a $0.5 million
increase in distributions to holders of preferred OP Units.
These unfavorable changes were partially offset by a
$4.3 million increase in noncontrolling interests in the
Aimco Operating Partnership’s share of losses from
continuing operations (net of noncontrolling interests in
consolidated real estate partnerships) in 2008 as compared to
2007.
Critical
Accounting Policies and Estimates
We prepare our consolidated financial statements in accordance
with accounting principles generally accepted in the United
States of America, or GAAP, which requires us to make estimates
and assumptions. We believe that the following critical
accounting policies involve our more significant judgments and
estimates used in the preparation of our consolidated financial
statements.
Impairment
of Long-Lived Assets
Real estate and other long-lived assets to be held and used are
stated at cost, less accumulated depreciation and amortization,
unless the carrying amount of the asset is not recoverable. If
events or circumstances indicate that the carrying amount of a
property may not be recoverable, we make an assessment of its
recoverability by comparing the carrying amount to our estimate
of the undiscounted future cash flows, excluding interest
charges, of the property. If the carrying amount exceeds the
estimated aggregate undiscounted future cash flows, we recognize
an impairment loss to the extent the carrying amount exceeds the
estimated fair value of the property.
From time to time, we have non-revenue producing properties that
we hold for future redevelopment. We assess the recoverability
of the carrying amount of these redevelopment properties by
comparing our estimate of undiscounted future cash flows based
on the expected service potential of the redevelopment property
upon completion to the carrying amount. In certain instances, we
use a probability-weighted approach to determine our estimate of
undiscounted future cash flows when alternative courses of
action are under consideration. As discussed in
Provision for
Impairment Losses on Real Estate Development Assets
within
the preceding discussion of our Results of Operations, during
2008 we recognized impairment losses on our Lincoln Place and
Pacific Bay Vistas properties of $85.4 million
($55.6 million net of tax) and $5.7 million,
respectively.
Real estate investments are subject to varying degrees of risk.
Several factors may adversely affect the economic performance
and value of our real estate investments. These factors include:
| • | the general economic climate; | |
| • | competition from other apartment communities and other housing options; | |
| • | local conditions, such as loss of jobs or an increase in the supply of apartments, that might adversely affect apartment occupancy or rental rates; | |
| • | changes in governmental regulations and the related cost of compliance; |
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| • | increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents; | |
| • | changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multifamily housing; and | |
| • | changes in interest rates and the availability of financing. |
Any adverse changes in these and other factors could cause an
impairment in our long-lived assets, including real estate and
investments in unconsolidated real estate partnerships. In
addition to the impairments of Lincoln Place and Pacific Bay
Vistas discussed above, based on periodic tests of
recoverability of long-lived assets, for the years ended
December 31, 2009 and 2007, we recorded net impairment
losses of $2.3 million and $1.1 million, respectively,
related to properties classified as held for use, and during the
year ended December 31, 2008, we recorded no additional
impairments related to properties held for use.
Notes
Receivable and Interest Income Recognition
Notes receivable from unconsolidated real estate partnerships
consist primarily of notes receivable from partnerships in which
we are the general partner. Notes receivable from non-affiliates
consist of notes receivable from unrelated third parties. The
ultimate repayment of these notes is subject to a number of
variables, including the performance and value of the underlying
real estate and the claims of unaffiliated mortgage lenders. Our
notes receivable include loans extended by us that we carry at
the face amount plus accrued interest, which we refer to as
“par value notes,” and loans extended by predecessors,
some of whose positions we generally acquired at a discount,
which we refer to as “discounted notes.”
We record interest income on par value notes as earned in
accordance with the terms of the related loan agreements. We
discontinue the accrual of interest on such notes when the notes
are impaired, as discussed below, or when there is otherwise
significant uncertainty as to the collection of interest. We
record income on such nonaccrual loans using the cost recovery
method, under which we apply cash receipts first to the recorded
amount of the loan; thereafter, any additional receipts are
recognized as income.
We recognize interest income on discounted notes receivable
based upon whether the amount and timing of collections are both
probable and reasonably estimable. We consider collections to be
probable and reasonably estimable when the borrower has closed
transactions or has entered into certain pending transactions
(which include real estate sales, refinancings, foreclosures and
rights offerings) that provide a reliable source of repayment.
In such instances, we recognize accretion income, on a
prospective basis using the effective interest method over the
estimated remaining term of the loans, equal to the difference
between the carrying amount of the discounted notes and the
estimated collectible value. We record income on all other
discounted notes using the cost recovery method. Accretion
income recognized in any given period is based on our ability to
complete transactions to monetize the notes receivable and the
difference between the carrying value and the estimated
collectible amount of the notes; therefore, accretion income
varies on a period by period basis and could be lower or higher
than in prior periods.
Provision
for Losses on Notes Receivable
We assess the collectibility of notes receivable on a periodic
basis, which assessment consists primarily of an evaluation of
cash flow projections of the borrower to determine whether
estimated cash flows are sufficient to repay principal and
interest in accordance with the contractual terms of the note.
We recognize impairments on notes receivable when it is probable
that principal and interest will not be received in accordance
with the contractual terms of the loan. The amount of the
impairment to be recognized generally is based on the fair value
of the partnership’s real estate that represents the
primary source of loan repayment. In certain instances where
other sources of cash flow are available to repay the loan, the
impairment is measured by discounting the estimated cash flows
at the loan’s original effective interest rate.
During the years ended December 31, 2009, 2008 and 2007 we
recorded net provisions for losses on notes receivable of
$21.5 million, $17.6 million and $2.0 million,
respectively. As discussed in
Provision for Losses on Notes
Receivable
within the preceding discussion of our Results of
Operations, provisions for losses on notes receivable in 2009
and 2008 include impairment losses of $20.7 million
($12.4 million net of tax) and $16.3 million
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Table of Contents
($10.0 million net of tax), respectively, on our investment
in Casden Properties LLC, which we account for as a note
receivable. We will continue to evaluate the collectibility of
these notes, and we will adjust related allowances in the future
due to changes in market conditions and other factors.
Capitalized
Costs
We capitalize costs, including certain indirect costs, incurred
in connection with our capital additions activities, including
redevelopment and construction projects, other tangible property
improvements and replacements of existing property components.
Included in these capitalized costs are payroll costs associated
with time spent by site employees in connection with the
planning, execution and control of all capital additions
activities at the property level. We characterize as
“indirect costs” an allocation of certain department
costs, including payroll, at the area operations and corporate
levels that clearly relate to capital additions activities. We
capitalize interest, property taxes and insurance during periods
in which redevelopment and construction projects are in
progress. We charge to expense as incurred costs that do not
relate to capital additions activities, including ordinary
repairs, maintenance, resident turnover costs and general and
administrative expenses (see
Capital Additions and Related
Depreciation
in Note 2 to the consolidated financial
statements in Item 8).
For the years ended December 31, 2009, 2008 and 2007, for
continuing and discontinued operations, we capitalized
$9.8 million, $25.7 million and $30.8 million of
interest costs, respectively, and $40.0 million,
$78.1 million and $78.1 million of site payroll and
indirect costs, respectively. The reduction is primarily due to
a reduced level of redevelopment activities.
Funds
From Operations
FFO is a non-GAAP financial measure that we believe, when
considered with the financial statements determined in
accordance with GAAP, is helpful to investors in understanding
our performance because it captures features particular to real
estate performance by recognizing that real estate generally
appreciates over time or maintains residual value to a much
greater extent than do other depreciable assets such as
machinery, computers or other personal property. The Board of
Governors of the National Association of Real Estate Investment
Trusts, or NAREIT, defines FFO as net income (loss), computed in
accordance with GAAP, excluding gains from sales of depreciable
property, plus depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures.
Adjustments for unconsolidated partnerships and joint ventures
are calculated to reflect FFO on the same basis. We compute FFO
for all periods presented in accordance with the guidance set
forth by NAREIT’s April 1, 2002, White Paper, which we
refer to as the White Paper. We calculate FFO attributable to
Aimco common stockholders (diluted) by subtracting redemption or
repurchase related preferred stock issuance costs and dividends
on preferred stock and adding back dividends/distributions on
dilutive preferred securities and premiums or discounts on
preferred stock redemptions or repurchases. FFO should not be
considered an alternative to net income or net cash flows from
operating activities, as determined in accordance with GAAP, as
an indication of our performance or as a measure of liquidity.
FFO is not necessarily indicative of cash available to fund
future cash needs. In addition, although FFO is a measure used
for comparability in assessing the performance of REITs, there
can be no assurance that our basis for computing FFO is
comparable with that of other REITs.
In addition to FFO, we compute an alternate measure of FFO,
which we refer to as Proforma FFO and which is FFO attributable
to Aimco common stockholders (diluted), excluding operating real
estate impairments and preferred stock redemption related
amounts (adjusted for the noncontrolling interests). Both
operating real estate impairment losses and preferred stock
redemption related amounts are recurring items that affect our
operating results. We exclude operating real estate impairment
losses, net of related income tax benefits and noncontrolling
interests, from our calculation of Proforma FFO because we
believe the inclusion of such losses in FFO is inconsistent with
the treatment of gains on the disposition of operating real
estate, which are not included in FFO. We exclude preferred
redemption related amounts (gains or losses) from our
calculation of Proforma FFO because such amounts are not
representative of our operating results. Similar to FFO, we
believe Proforma FFO is helpful to investors in understanding
our performance because it captures features particular to real
estate performance by recognizing that real estate generally
appreciates over time or maintains residual value to a much
greater extent than do other depreciating assets such as
machinery, computers or other personal property. Not all REITs
present an
34
Table of Contents
alternate measure of FFO similar to our Proforma FFO measure and
there can be no assurance our basis for calculating Proforma FFO
is comparable to those of other REITs.
For the years ended December 31, 2009, 2008 and 2007, our
FFO and Proforma FFO are calculated as follows (in thousands):
| 2009 | 2008 | 2007 | ||||||||||
|
Net (loss) income attributable to Aimco common
stockholders(1)
|
$ | (114,840 | ) | $ | 351,314 | $ | (40,586 | ) | ||||
|
Adjustments:
|
||||||||||||
|
Depreciation and amortization
|
444,413 | 392,999 | 347,491 | |||||||||
|
Depreciation and amortization related to non-real estate assets
|
(16,667 | ) | (17,372 | ) | (20,159 | ) | ||||||
|
Depreciation of rental property related to noncontrolling
partners and unconsolidated entities(2)
|
(40,852 | ) | (29,872 | ) | (15,888 | ) | ||||||
|
Gain on dispositions of unconsolidated real estate and other
|
(22,494 | ) | (99,864 | ) | (24,470 | ) | ||||||
|
Income tax expense (benefit) arising from disposition of
unconsolidated real estate and other
|
1,582 | (433 | ) | (17 | ) | |||||||
|
Add back portion of gain on dispositions of unconsolidated real
estate and other that relates to non-depreciable assets and debt
extinguishment gain
|
7,783 | 1,669 | 17,956 | |||||||||
|
Deficit distributions to noncontrolling partners(3)
|
— | 37,680 | 29,210 | |||||||||
|
Discontinued operations:
|
||||||||||||
|
Gain on dispositions of real estate, net of noncontrolling
partners’ interest(2)
|
(164,281 | ) | (617,906 | ) | (63,923 | ) | ||||||
|
Depreciation of rental property, net of noncontrolling
partners’ interest(2)
|
45,836 | 109,043 | 114,586 | |||||||||
|
(Recovery of deficit distributions) deficit distributions to
noncontrolling partners, net(3)
|
— | (30,354 | ) | 9,550 | ||||||||
|
Income tax expense arising from disposals
|
5,788 | 43,146 | 2,135 | |||||||||
|
Noncontrolling interests in Aimco Operating Partnership’s
share of above adjustments(4)
|
(19,509 | ) | 21,667 | (36,830 | ) | |||||||
|
Preferred stock dividends
|
52,215 | 55,190 | 63,381 | |||||||||
|
Preferred stock redemption related (gains) costs
|
(1,649 | ) | (1,482 | ) | 2,635 | |||||||
|
Amounts allocable to participating securities(5)
|
— | 6,985 | 4,481 | |||||||||
|
FFO
|
$ | 177,325 | $ | 222,410 | $ | 389,552 | ||||||
|
Preferred stock dividends
|
(52,215 | ) | (55,190 | ) | (63,381 | ) | ||||||
|
Preferred stock redemption related gains (costs)
|
1,649 | 1,482 | (2,635 | ) | ||||||||
|
Amounts allocable to participating securities(5)
|
(773 | ) | (6,985 | ) | (4,481 | ) | ||||||
|
Dividends/distributions on dilutive preferred securities
|
— | 4,292 | 1,442 | |||||||||
|
FFO attributable to Aimco common stockholders —
diluted
|
$ | 125,986 | $ | 166,009 | $ | 320,497 | ||||||
|
Operating real estate impairment losses, continuing operations,
net of noncontrolling partners’ interest(6)
|
2,012 | 1,131 | 1,080 | |||||||||
|
Operating real estate impairment losses, discontinued
operations, net of noncontrolling partners’ interest(6)
|
61,313 | 26,285 | 5,430 | |||||||||
|
Income tax benefit on impairment losses
|
(4,075 | ) | (511 | ) | — | |||||||
|
Preferred stock redemption related (gains) costs(7)
|
(1,649 | ) | (1,482 | ) | 2,635 | |||||||
|
Noncontrolling interests in Aimco Operating Partnership’s
share of above adjustments
|
(4,304 | ) | (2,474 | ) | (850 | ) | ||||||
|
Amounts allocable to participating securities(5)
|
(448 | ) | — | — | ||||||||
|
Dividends/distributions on dilutive preferred securities
|
— | — | 426 | |||||||||
|
Proforma FFO attributable to Aimco common
stockholders — diluted
|
$ | 178,835 | $ | 188,958 | $ | 329,218 | ||||||
|
FFO attributable to Aimco common stockholders —
diluted
|
||||||||||||
|
Weighted average number of common shares, common share
equivalents and dilutive preferred securities outstanding(8):
|
||||||||||||
|
Common shares and equivalents(9)
|
115,563 | 89,827 | 97,055 | |||||||||
|
Dilutive preferred securities
|
— | 1,490 | 457 | |||||||||
|
Total
|
115,563 | 91,317 | 97,512 | |||||||||
|
Proforma FFO attributable to Aimco common
stockholders — diluted
|
||||||||||||
|
Weighted average number of common shares, common share
equivalents and dilutive preferred securities outstanding(8):
|
||||||||||||
|
Common shares and equivalents(9)
|
115,563 | 89,827 | 97,055 | |||||||||
|
Dilutive preferred securities
|
— | 1,490 | 580 | |||||||||
|
Total
|
115,563 | 91,317 | 97,635 | |||||||||
Notes:
| (1) | Represents the numerator for calculating basic earnings per common share in accordance with GAAP (see Note 14 to the consolidated financial statements in Item 8). | |
| (2) | “Noncontrolling partners” refers to noncontrolling partners in our consolidated real estate partnerships. |
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| (3) | Prior to adoption of SFAS 160 (see Note 2 to the consolidated financial statements in Item 8), we recognized deficit distributions to noncontrolling partners as charges in our income statement when cash was distributed to a noncontrolling partner in a consolidated partnership in excess of the positive balance in such partner’s noncontrolling interest balance. We recorded these charges for GAAP purposes even though there was no economic effect or cost. Deficit distributions to noncontrolling partners occurred when the fair value of the underlying real estate exceeded its depreciated net book value because the underlying real estate had appreciated or maintained its value. As a result, the recognition of expense for deficit distributions to noncontrolling partners represented, in substance, either (a) our recognition of depreciation previously allocated to the noncontrolling partner or (b) a payment related to the noncontrolling partner’s share of real estate appreciation. Based on White Paper guidance that requires real estate depreciation and gains to be excluded from FFO, we added back deficit distributions and subtracted related recoveries in our reconciliation of net income to FFO. Subsequent to our adoption of SFAS 160, effective January 1, 2009, we may reduce the balance of noncontrolling interests below zero in such situations and we are no longer required to recognize such charges in our income statement. | |
| (4) | During the years ended December 31, 2009, 2008 and 2007, the Aimco Operating Partnership had 6,534,140, 7,191,199, and 7,367,400 common OP Units outstanding and 2,344,719, 2,367,629 and 2,379,084 High Performance Units outstanding. | |
| (5) | Amounts allocable to participating securities represent dividends declared and any amounts of undistributed earnings allocable to participating securities. See Note 2 and Note 14 to the consolidated financial statements in Item 8 for further information regarding participating securities. | |
| (6) | On October 1, 2003, NAREIT clarified its definition of FFO to include operating real estate impairment losses, which previously had been added back to calculate FFO. Although Aimco’s presentation conforms with the NAREIT definition, Aimco considers such approach to be inconsistent with the treatment of gains on dispositions of operating real estate, which are not included in FFO. | |
| (7) | In accordance with the Securities and Exchange Commission’s July 31, 2003 interpretation of the Emerging Issues Task Force Topic D-42, Aimco includes preferred stock redemption related charges or gains in FFO. As a result, FFO for the years ended December 31, 2009, 2008 and 2007 includes redemption discounts, net of issuance costs, of $1.6 million and $1.5 million and a redemption premium of $2.6 million, respectively. | |
| (8) | Weighted average common shares, common share equivalents, dilutive preferred securities for each of the periods presented above have been adjusted for our application during the fourth quarter 2009 of a change in GAAP, which requires the shares issued in our special dividends paid in 2008 and January 2009 to be treated as issued and outstanding on the dividend payment dates for basic purposes and as potential share equivalents for the periods between the ex-dividend dates and the payment dates for diluted purposes, rather than treating the shares as issued and outstanding as of the beginning of the earliest period presented for both basic and diluted purposes. The change in accounting treatment had no effect on diluted weighted average shares outstanding for the year ended December 31, 2009. The change in accounting treatment reduced diluted weighted average shares outstanding by 32.7 million and 46.5 million for the years ended December 31, 2008 and 2007, respectively. | |
| (9) | Represents the denominator for earnings per common share — diluted, calculated in accordance with GAAP, plus common share equivalents that are dilutive for FFO. |
Liquidity
and Capital Resources
Liquidity is the ability to meet present and future financial
obligations. Our primary source of liquidity is cash flow from
our operations. Additional sources are proceeds from property
sales and proceeds from refinancings of existing property loans
and borrowings under new property loans.
Our principal uses for liquidity include normal operating
activities, payments of principal and interest on outstanding
debt, capital additions, dividends paid to stockholders and
distributions paid to noncontrolling interest partners,
repurchases of shares of our Common Stock, and acquisitions of,
and investments in, properties. We use our cash and cash
equivalents and our cash provided by operating activities to
meet short-term liquidity needs. In the event that our cash and
cash equivalents and cash provided by operating activities are
not sufficient to cover our
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Table of Contents
short-term liquidity demands, we have additional means, such as
short-term borrowing availability and proceeds from property
sales and refinancings, to help us meet our short-term liquidity
demands. We may use our revolving credit facility for general
corporate purposes and to fund investments on an interim basis.
We expect to meet our long-term liquidity requirements, such as
debt maturities and property acquisitions, through long-term
borrowings, primarily secured, the issuance of equity securities
(including OP Units), the sale of properties and cash
generated from operations.
The state of credit markets and related effect on the overall
economy may have an adverse affect on our liquidity, both
through increases in interest rates and credit risk spreads, and
access to financing. As further discussed in Item 7A,
Quantitative and Qualitative Disclosures About Market Risk, we
are subject to interest rate risk associated with certain
variable rate liabilities, preferred stock and assets. Based on
our net variable rate liabilities, preferred stock and assets
outstanding at December 31, 2009, we estimate that a 1.0%
increase in
30-day
LIBOR
with constant credit risk spreads would reduce our income
attributable to Aimco common stockholders by approximately
$1.5 million on an annual basis. Although base interest
rates have generally decreased relative to their levels prior to
the disruptions in the financial markets, the tightening of
credit markets has affected the credit risk spreads charged over
base interest rates on, and the availability of, property loan
financing. For future refinancing activities, our liquidity and
cost of funds may be affected by increases in base interest
rates or higher credit risk spreads. If timely property
financing options are not available for maturing debt, we may
consider alternative sources of liquidity, such as reductions in
certain capital spending or proceeds from asset dispositions.
As further discussed in Note 2 to our consolidated
financial statements in Item 8, we use total rate of return
swaps as a financing product to lower our cost of borrowing
through conversion of fixed rate tax-exempt bonds payable and
fixed rate notes payable to variable interest rates indexed to
the SIFMA rate for tax-exempt bonds payable and the
30-day
LIBOR
rate for notes payable, plus a credit risk spread. The cost of
financing through these arrangements is generally lower than the
fixed rate on the debt. As of December 31, 2009, we had
total rate of return swap positions with two financial
institutions with notional amounts totaling $353.1 million.
Swaps with notional amounts of $307.9 million and
$45.2 million had maturity dates in May 2012 and October
2012, respectively.
The total rate of return swaps require specified
loan-to-value
ratios. In the event the values of the real estate properties
serving as collateral under these agreements decline or if we
sell properties in the collateral pool with low
loan-to-value
ratios, certain of our consolidated subsidiaries have an
obligation to pay down the debt or provide additional collateral
pursuant to the swap agreements, which may adversely affect our
cash flows. The obligation to provide collateral is limited to
these subsidiaries and is non-recourse to Aimco. At
December 31, 2009, these subsidiaries were not required to
provide cash collateral based on the
loan-to-value
ratios of the real estate properties serving as collateral under
these agreements.
We periodically evaluate counterparty credit risk associated
with these arrangements. At the current time, we have concluded
we do not have material exposure. In the event a counterparty
were to default under these arrangements, loss of the net
interest benefit we generally receive under these arrangements,
which is equal to the difference between the fixed rate we
receive and the variable rate we pay, may adversely affect our
operating cash flows.
See
Derivative Financial Instruments
in Note 2 to
the consolidated financial statements in Item 8 for
additional discussion of these arrangements, including the
current swap maturity dates.
As of December 31, 2009, the amount available under our
$180.0 million revolving credit facility was
$136.2 million (after giving effect to $43.8 million
outstanding for undrawn letters of credit). Our total
outstanding term loan of $90.0 million at December 31,
2009, matures in March 2011. We repaid an additional
$45.0 million on the term loan through February 26,
2010, leaving a remaining outstanding balance of
$45.0 million. Additionally, we have limited obligations to
fund redevelopment commitments during the year ending
December 31, 2010, and no development commitments.
At December 31, 2009, we had $81.3 million in cash and
cash equivalents, a decrease of $218.4 million from
December 31, 2008. At December 31, 2009, we had
$220.0 million of restricted cash, primarily consisting of
reserves and escrows held by lenders for bond sinking funds,
capital additions, property taxes and insurance. In addition,
cash, cash equivalents and restricted cash are held by
partnerships that are not presented on a consolidated
37
Table of Contents
basis. The following discussion relates to changes in cash due
to operating, investing and financing activities, which are
presented in our consolidated statements of cash flows in
Item 8.
Operating
Activities
For the year ended December 31, 2009, our net cash provided
by operating activities of $233.8 million was primarily
related to operating income from our consolidated properties,
which is affected primarily by rental rates, occupancy levels
and operating expenses related to our portfolio of properties,
in excess of payments of operating accounts payable and accrued
liabilities, including amounts related to our organizational
restructuring. Cash provided by operating activities decreased
$206.6 million compared with the year ended
December 31, 2008, primarily due to a $159.3 million
decrease in operating income related to consolidated properties
included in discontinued operations, which was attributable to
property sales in 2009 and 2008, a $42.8 million decrease
in promote income, which is generated by the disposition of
properties by consolidated real estate partnerships, and an
increase in payments on operating accounts payable and accrued
expenses, including payments related to our restructuring
accrual, in 2009 as compared to 2008.
Investing
Activities
For the year ended December 31, 2009, our net cash provided
by investing activities of $630.3 million consisted
primarily of proceeds from disposition of real estate and
partnership interests, partially offset by capital expenditures.
Although we hold all of our properties for investment, we sell
properties when they do not meet our investment criteria or are
located in areas that we believe do not justify our continued
investment when compared to alternative uses for our capital.
During the year ended December 31, 2009, we sold 89
consolidated properties. These properties were sold for an
aggregate sales price of $1.3 billion, or
$1.2 billion, after the payment of transaction costs and
debt prepayment penalties. The $1.2 billion is inclusive of
promote income and debt assumed by buyers. Net cash proceeds
from property sales were used primarily to repay term debt and
for other corporate purposes.
Capital
Additions
We classify all capital additions as Capital Replacements (which
we refer to as CR), Capital Improvements (which we refer to as
CI), casualties or redevelopment. Additions other than casualty
or redevelopment capital additions are apportioned between CR
and CI based on the useful life of the capital item under
consideration and the period we have owned the property.
CR represents the share of capital additions that are deemed to
replace the portion of acquired capital assets that was consumed
during the period we have owned the asset. CI represents the
share of additions that are made to enhance the value,
profitability or useful life of an asset as compared to its
original purchase condition. CR and CI exclude capital additions
for casualties and redevelopment. Casualty additions represent
capitalized costs incurred in connection with casualty losses
and are associated with the restoration of the asset. A portion
of the restoration costs may be reimbursed by insurance carriers
subject to deductibles associated with each loss. Redevelopment
additions represent additions that substantially upgrade the
property.
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Table of Contents
The table below details our share of actual spending, on both
consolidated and unconsolidated real estate partnerships, for
CR, CI, casualties and redevelopment for the year ended
December 31, 2009, on a per unit and total dollar basis (in
thousands, except per unit amounts). Per unit numbers for CR and
CI are based on approximately 97,196 average units for the year,
including 81,135 conventional units and 16,061 affordable units.
Average units are weighted for the portion of the period that we
owned an interest in the property, represent ownership-adjusted
effective units, and exclude non-managed units.
|
Aimco’s Share of
|
||||||||
| Additions | Per Effective Unit | |||||||
|
Capital Replacements Detail:
|
||||||||
|
Building and grounds
|
$ | 32,876 | $ | 338 | ||||
|
Turnover related
|
30,298 | 312 | ||||||
|
Capitalized site payroll and indirect costs
|
7,076 | 73 | ||||||
|
Our share of Capital Replacements
|
$ | 70,250 | $ | 723 | ||||
|
Capital Replacements:
|
||||||||
|
Conventional
|
$ | 64,675 | $ | 797 | ||||
|
Affordable
|
5,575 | $ | 347 | |||||
|
Our share of Capital Replacements
|
70,250 | $ | 723 | |||||
|
Capital Improvements:
|
||||||||
|
Conventional
|
47,634 | $ | 587 | |||||
|
Affordable
|
5,755 | $ | 358 | |||||
|
Our share of Capital Improvements
|
53,389 | $ | 549 | |||||
|
Casualties:
|
||||||||
|
Conventional
|
17,724 | |||||||
|
Affordable
|
1,872 | |||||||
|
Our share of casualties
|
19,596 | |||||||
|
Redevelopment:
|
||||||||
|
Conventional projects
|
66,768 | |||||||
|
Tax credit projects(1)
|
46,066 | |||||||
|
Our share of redevelopment
|
112,834 | |||||||
|
Our share of capital additions
|
256,069 | |||||||
|
Plus noncontrolling partners’ share of consolidated
additions
|
20,062 | |||||||
|
Less our share of unconsolidated additions
|
(687 | ) | ||||||
|
Total capital additions
|
$ | 275,444 | ||||||
| (1) | Redevelopment additions on tax credit projects are substantially funded from tax credit investor contributions. |
Included in the above additions for CI, casualties and
redevelopment, was approximately $34.6 million of our share
of capitalized site payroll and indirect costs related to these
activities for the year ended December 31, 2009.
We generally fund capital additions with cash provided by
operating activities, working capital and property sales as
discussed below.
Financing
Activities
For the year ended December 31, 2009, net cash used in
financing activities of $1.1 billion was primarily
attributed to debt principal payments, dividends paid to common
and preferred stockholders and distributions to noncontrolling
interests, partially offset by proceeds from property loans.
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Property
Debt
At December 31, 2009 and 2008, we had $5.6 billion and
$6.3 billion, respectively, in consolidated property debt
outstanding, which included $29.2 million and
$759.3 million, respectively, of property debt classified
within liabilities related to assets held for sale. During the
year ended December 31, 2009, we refinanced or closed
property loans on 55 properties generating $788.1 million
of proceeds from borrowings with a weighted average interest
rate of 5.78%. Our share of the net proceeds after repayment of
existing debt, payment of transaction costs and distributions to
limited partners, was $132.3 million. We used these total
net proceeds for capital expenditures and other corporate
purposes. We intend to continue to refinance property debt
primarily as a means of extending current and near term
maturities and to finance certain capital projects.
Term
Loans and Credit Facility
We have an Amended and Restated Senior Secured Credit Agreement,
as amended, with a syndicate of financial institutions, which we
refer to as the Credit Agreement.
As of December 31, 2009, the Credit Agreement consisted of
aggregate commitments of $270.0 million, comprised of our
$90.0 million outstanding balance on the term loan and
$180.0 million of revolving loan commitments. The term loan
bears interest at LIBOR plus 1.5%, or at our option, a base rate
equal to the prime rate, and matures March 2011. Borrowings
under the revolving credit facility bear interest based on a
pricing grid determined by leverage (either at LIBOR plus 4.25%
with a LIBOR floor of 2.00% or, at our option, a base rate equal
to the Prime rate plus a spread of 3.00%). The revolving credit
facility matures May 1, 2011, and may be extended for an
additional year, subject to certain conditions, including
payment of a 45.0 basis point fee on the total revolving
commitments and repayment of the remaining term loan balance by
February 1, 2011.
At December 31, 2009, the term loan had an outstanding
principal balance of $90.0 million and an interest rate of
1.73%. We repaid $45.0 million on the term loan through
February 26, 2010, leaving a remaining outstanding balance
of $45.0 million. At December 31, 2009, we had no
outstanding borrowings under the revolving credit facility. The
amount available under the revolving credit facility at
December 31, 2009, was $136.2 million (after giving
effect to $43.8 million outstanding for undrawn letters of
credit issued under the revolving credit facility). The proceeds
of revolving loans are generally permitted to be used to fund
working capital and for other corporate purposes.
Fair
Value Measurements
We have entered into total rate of return swaps on various fixed
rate secured tax-exempt bonds payable and fixed rate notes
payable to convert these borrowings from a fixed rate to a
variable rate and provide an efficient financing product to
lower our cost of borrowing. We designate total rate of return
swaps as hedges of the risk of overall changes in the fair value
of the underlying borrowings. At each reporting period, we
estimate the fair value of these borrowings and the total rate
of return swaps and recognize any changes therein as an
adjustment of interest expense.
Our method used to calculate the fair value of the total rate of
return swaps generally results in changes in fair value that are
equal to the changes in fair value of the related borrowings,
which is consistent with our hedging strategy. We believe that
these financial instruments are highly effective in offsetting
the changes in fair value of the related borrowings during the
hedging period, and accordingly, changes in the fair value of
these instruments have no material impact on our liquidity,
results of operations or capital resources.
During the year ended December 31, 2009, changes in the
fair values of these financial instruments resulted in increases
of $5.2 million in the carrying amount of the hedged
borrowings and equal decreases in accrued liabilities and other
for total rate of return swaps. At December 31, 2009, the
cumulative recognized changes in the fair value of these
financial instruments resulted in a $24.3 million reduction
in the carrying amount of the hedged borrowings offset by an
equal increase in accrued liabilities and other for total rate
of return swaps. The cumulative changes in the fair values of
the hedged borrowings and related swaps reflect the recent
uncertainty in the credit markets which has decreased demand and
increased pricing for similar debt instruments.
40
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During the year ended December 31, 2009, we received net
cash receipts of $19.4 million under the total return
swaps, which positively affected our liquidity. To the extent
interest rates increase above the fixed rates on the underlying
borrowings, our obligations under the total return swaps will
negatively affect our liquidity. At December 31, 2009, we
were not required to provide cash collateral pursuant to the
total rate of return swaps. In the event the values of the real
estate properties serving as collateral under these agreements
decline, we may be required to provide additional collateral
pursuant to the swap agreements, which would adversely affect
our liquidity.
See Note 2 to the consolidated financial statements in
Item 8 for more information on our total rate of return
swaps and related borrowings.
Equity
Transactions
During the year ended December 31, 2009, we paid cash
dividends or distributions totaling $52.2 million,
$95.3 million and $28.5 million to preferred
stockholders, common stockholders and noncontrolling interests
in the Aimco Operating Partnership, respectively. Additionally,
we paid dividends totaling $149.0 million to common
stockholders through the issuance of approximately
15.5 million shares. During the year ended
December 31, 2009, we paid distributions of
$91.9 million to noncontrolling interests in consolidated
real estate partnerships.
During the year ended December 31, 2009, we repurchased
12 shares, or $6.0 million in liquidation preference,
of CRA Preferred Stock for $4.2 million.
We and the Aimco Operating Partnership have a shelf registration
statement that provides for the issuance of debt and equity
securities by Aimco and debt securities by the Aimco Operating
Partnership.
Contractual
Obligations
This table summarizes information contained elsewhere in this
Annual Report regarding payments due under contractual
obligations and commitments as of December 31, 2009
(amounts in thousands):
|
Less than
|
More than
|
|||||||||||||||||||
| Total | One Year | 1-3 Years | 3-5 Years | 5 Years | ||||||||||||||||
|
Scheduled long-term debt maturities(1)
|
$ | 5,600,310 | $ | 105,294 | $ | 660,733 | $ | 868,615 | $ | 3,965,668 | ||||||||||
|
Scheduled long-term debt maturities related to properties
classified as held for sale(1)
|
29,177 | 519 | 11,206 | 868 | 16,584 | |||||||||||||||
|
Term loan(1)(2)
|
90,000 | — | 90,000 | — | — | |||||||||||||||
|
Redevelopment and other construction commitments
|
4,795 | 4,795 | — | — | — | |||||||||||||||
|
Leases for space occupied(3)
|
24,888 | 7,345 | 10,856 | 4,859 | 1,828 | |||||||||||||||
|
Other obligations(4)
|
4,605 | 4,605 | — | — | — | |||||||||||||||
|
Total
|
$ | 5,753,775 | $ | 122,558 | $ | 772,795 | $ | 874,342 | $ | 3,984,080 | ||||||||||
| (1) | Scheduled debt maturities presented above include amortization and the maturities in 2010 consist primarily of amortization. The scheduled maturities presented above exclude related interest amounts. Refer to Note 6 in the consolidated financial statements in Item 8 for a description of average interest rates associated with our debt. | |
| (2) | After payments of $45.0 million through February 26, 2010, the term loan had an outstanding balance of $45.0 million. | |
| (3) | Inclusive of leased space that has been abandoned as part of our organizational restructuring in 2008 (see Restructuring Costs in Note 3 to the consolidated financial statements in Item 8). | |
| (4) | Represents a commitment to fund $4.6 million in second mortgage loans on certain properties in West Harlem, New York City. |
In addition to the amounts presented in the table above, at
December 31, 2009, we had $690.5 million of
outstanding preferred stock outstanding with annual dividend
yields ranging from 1.5% (variable) to 9.4%, and
41
Table of Contents
$85.7 million of preferred units of the Aimco Operating
Partnership outstanding with annual distribution yields ranging
from 5.9% to 9.5%.
Additionally, we may enter into commitments to purchase goods
and services in connection with the operations of our
properties. Those commitments generally have terms of one year
or less and reflect expenditure levels comparable to our
historical expenditures.
Future
Capital Needs
In addition to the items set forth in “Contractual
Obligations” above, we expect to fund any future
acquisitions, additional redevelopment projects, capital
improvements and capital replacement principally with proceeds
from property sales (including tax-free exchange proceeds),
short-term borrowings, debt and equity financing (including tax
credit equity) and operating cash flows.
Off-Balance
Sheet Arrangements
We own general and limited partner interests in unconsolidated
real estate partnerships, in which our total ownership interests
typically range from less than 1% to 50% and in some instances
may exceed 50%. There are no lines of credit, side agreements,
or any other derivative financial instruments related to or
between our unconsolidated real estate partnerships and us and
no material exposure to financial guarantees. Accordingly, our
maximum risk of loss related to these unconsolidated real estate
partnerships is limited to the aggregate carrying amount of our
investment in the unconsolidated real estate partnerships and
any outstanding notes receivable as reported in our consolidated
financial statements (see Note 4 of the consolidated
financial statements in Item 8 for additional information
about our investments in unconsolidated real estate
partnerships).
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk |
Our primary market risk exposure relates to changes in base
interest rates, credit risk spreads and availability of credit.
We are not subject to any other material market rate or price
risks. We use predominantly long-term, fixed-rate non-recourse
property debt in order to avoid the refunding and repricing
risks of short-term borrowings. We use short-term debt financing
and working capital primarily to fund short-term uses and
acquisitions and generally expect to refinance such borrowings
with cash from operating activities, property sales proceeds,
long-term debt or equity financings. We use total
rate-of-return
swaps to obtain the benefit of variable rates on certain of our
fixed rate debt instruments. We make limited use of other
derivative financial instruments and we do not use them for
trading or other speculative purposes.
We had $654.6 million of floating rate debt and
$67.0 million of floating rate preferred stock outstanding
at December 31, 2009. Of the total floating rate debt, the
major components were floating rate tax-exempt bond financing
($433.9 million), floating rate secured notes
($122.2 million) and a term loan ($90.0 million). At
December 31, 2009, we had approximately $440.9 million
in cash and cash equivalents, restricted cash and notes
receivable, the majority of which bear interest. The effect of
our interest-bearing assets would partially reduce the effect of
an increase in variable interest rates. Historically, changes in
tax-exempt interest rates have been at a ratio of less than 1:1
with changes in taxable interest rates. Floating rate tax-exempt
bond financing is benchmarked against the SIFMA rate, which
since 1989 has averaged 73% of the
30-day
LIBOR
rate. If the historical relationship continues, on an annual
basis, we estimate that an increase in
30-day
LIBOR
of 100 basis points (73 basis points for tax-exempt
interest rates) with constant credit risk spreads would result
in net income and our net income attributable to Aimco common
stockholders being reduced by $1.1 million and
$1.5 million, respectively.
We estimate the fair value for our debt instruments using
present value techniques that include income and market
valuation approaches with market rates for debt with the same or
similar terms. Present value calculations vary depending on the
assumptions used, including the discount rate and estimates of
future cash flows. In many cases, the fair value estimates may
not be realizable in immediate settlement of the instruments.
The estimated aggregate fair value of our consolidated debt
(including amounts reported in liabilities related to assets
held for sale) was approximately $5.7 billion and
$6.7 billion at December 31, 2009 and 2008,
respectively. The combined carrying value of our consolidated
debt (including amounts reported in liabilities related to
assets held for sale) was approximately $5.7 billion and
$6.8 billion at December 31, 2009 and 2008,
respectively. See Note 6 and Note 7 to
42
Table of Contents
the consolidated financial statements in Item 8 for further
details on our consolidated debt. Refer to
Derivative
Financial Instruments
in Note 2 to the consolidated
financial statements in Item 8 for further discussion
regarding certain of our fixed rate debt that is subject to
total rate of return swap instruments. If market rates for our
fixed-rate debt were higher by 100 basis points with
constant credit risk spreads, the estimated fair value of our
debt discussed above would have decreased from $5.7 billion
to $5.4 billion. If market rates for our debt discussed
above were lower by 100 basis points with constant credit
risk spreads, the estimated fair value of our fixed-rate debt
would have increased from $5.7 billion to $6.1 billion.
At December 31, 2009, we had swap positions with two
financial institutions totaling $353.1 million. The related
swap agreements provide for collateral calls to maintain
specified
loan-to-value
ratios. In the event the values of the real estate properties
serving as collateral under these agreements decline, we may be
required to provide additional collateral pursuant to the swap
agreements, which would adversely affect our cash flows. At
December 31, 2009, we were not required to provide cash
collateral based on the
loan-to-value
ratios of the real estate properties serving as collateral under
these agreements.
| Item 8. | Financial Statements and Supplementary Data |
The independent registered public accounting firm’s report,
consolidated financial statements and schedule listed in the
accompanying index are filed as part of this report and
incorporated herein by this reference. See “Index to
Financial Statements” on
page F-1
of this Annual Report.
| Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure |
None.
| Item 9A. | Controls and Procedures |
Disclosure
Controls and Procedures
Our management, with the participation of our chief executive
officer and chief financial officer, has evaluated the
effectiveness of our disclosure controls and procedures (as
defined in
Rules 13a-15(e)
and
15d-15(e)
under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) as of the end of the period covered
by this report. Based on such evaluation, our chief executive
officer and chief financial officer have concluded that, as of
the end of such period, our disclosure controls and procedures
are effective.
Management’s
Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining
adequate internal control over financial reporting. Internal
control over financial reporting is defined in
Rule 13a-15(f)
and
15d-15(f)
under the Exchange Act as a process designed by, or under the
supervision of, our principal executive and principal financial
officers and effected by our Board of Directors, management and
other personnel to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles and includes those
policies and procedures that:
| • | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; | |
| • | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and | |
| • | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Projections of any evaluation of effectiveness to future periods
are subject to the risks that controls may become inadequate
because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
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Table of Contents
Management assessed the effectiveness of our internal control
over financial reporting as of December 31, 2009. In making
this assessment, management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission
(COSO) in
Internal Control-Integrated Framework
.
Based on their assessment, management concluded that, as of
December 31, 2009, our internal control over financial
reporting is effective.
Our independent registered public accounting firm has issued an
attestation report on our internal control over financial
reporting.
Changes
in Internal Control over Financial Reporting
There has been no change in our internal control over financial
reporting (as defined in
Rules 13a-15(f)
and
15d-15(f)
under the Exchange Act) during the fourth quarter of 2009 that
has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.
44
Table of Contents
Report of
Independent Registered Public Accounting Firm
Stockholders and Board of Directors Apartment Investment and
Management Company
We have audited Apartment Investment and Management
Company’s (the “Company”) internal control over
financial reporting as of December 31, 2009, based on
criteria established in Internal Control — Integrated
Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (the COSO criteria). The Company’s
management is responsible for maintaining effective internal
control over financial reporting, and for its assessment of the
effectiveness of internal control over financial reporting
included in the accompanying Management’s Report on
Internal Control Over Financial Reporting. Our responsibility is
to express an opinion on the Company’s internal control
over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control
over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of
internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the
design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we
considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a
process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s
internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of
management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the
company’s assets that could have a material effect on the
financial statements.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as
of December 31, 2009, based on the COSO criteria.
We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the
consolidated balance sheets of the Company as of
December 31, 2009 and 2008, and the related consolidated
statements of income, equity, and cash flows for each of the
three years in the period ended December 31, 2009, and our
report dated February 26, 2010 expressed an unqualified
opinion thereon.
/s/
Ernst &
Young LLP
Denver, Colorado
February 26, 2010
45
Table of Contents
| Item 9B. | Other Information |
None.
| Item 10. | Directors, Executive Officers and Corporate Governance |
The information required by this item is presented under the
captions “Board of Directors and Executive Officers,”
“Corporate Governance Matters — Code of
Ethics,” “Other Matters — Section 16(a)
Beneficial Ownership Reporting Compliance,” “Corporate
Governance Matters — Nominating and Corporate
Governance Committee,” “Corporate Governance
Matters — Audit Committee” and “Corporate
Governance Matters — Audit Committee Financial
Expert” in the proxy statement for our 2010 annual meeting
of stockholders and is incorporated herein by reference.
| Item 11. | Executive Compensation |
The information required by this item is presented under the
captions “Compensation Discussion &
Analysis,” “Compensation and Human Resources Committee
Report to Stockholders,” “Summary Compensation
Table,” “Grants of Plan-Based Awards in 2009,”
“Outstanding Equity Awards at Fiscal Year End 2009,”
“Option Exercises and Stock Vested in 2009,”
“Potential Payments Upon Termination or Change in
Control” and “Corporate Governance Matters —
Director Compensation” in the proxy statement for our 2010
annual meeting of stockholders and is incorporated herein by
reference.
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
The information required by this item is presented under the
captions “Security Ownership of Certain Beneficial Owners
and Management” and “Securities Authorized for
Issuance Under Equity Compensation Plans” in the proxy
statement for our 2010 annual meeting of stockholders and is
incorporated herein by reference.
| Item 13. | Certain Relationships and Related Transactions, and Director Independence |
The information required by this item is presented under the
caption “Certain Relationships and Related
Transactions” and “Corporate Governance
Matters — Independence of Directors” in the proxy
statement for our 2010 annual meeting of stockholders and is
incorporated herein by reference.
| Item 14. | Principal Accountant Fees and Services |
The information required by this item is presented under the
caption “Principal Accountant Fees and Services” in
the proxy statement for our 2010 annual meeting of stockholders
and is incorporated herein by reference.
46
Table of Contents
| Item 15. | Exhibits and Financial Statement Schedules |
(a)(1) The financial statements listed in the Index
to Financial Statements on
Page F-1
of this report are filed as part of this report and incorporated
herein by reference.
(a)(2) The financial statement schedule listed in the
Index to Financial Statements on
Page F-1
of this report is filed as part of this report and incorporated
herein by reference.
(a)(3) The Exhibit Index is incorporated herein
by reference.
INDEX TO
EXHIBITS (1)(2)
|
Exhibit No.
|
Description
|
|||
| 3 | .1 | Charter (Exhibit 3.1 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 2008, is incorporated herein by this reference) | ||
| 3 | .2 | Amended and Restated Bylaws (Exhibit 3.2 to Aimco’s Current Report on Form 8-K dated February 4, 2010, is incorporated herein by this reference) | ||
| 10 | .1 | Fourth Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 29, 1994, as amended and restated as of February 28, 2007 (Exhibit 10.1 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 2006, is incorporated herein by this reference) | ||
| 10 | .2 | First Amendment to Fourth Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of December 31, 2007 (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated December 31, 2007, is incorporated herein by this reference) | ||
| 10 | .3 | Second Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 30, 2009 (Exhibit 10.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, is incorporated herein by this reference) | ||
| 10 | .4 | Amended and Restated Secured Credit Agreement, dated as of November 2, 2004, by and among Aimco, AIMCO Properties, L.P., AIMCO/Bethesda Holdings, Inc., and NHP Management Company as the borrowers and Bank of America, N.A., Keybank National Association, and the Lenders listed therein (Exhibit 4.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004, is incorporated herein by this reference) | ||
| 10 | .5 | First Amendment to Amended and Restated Secured Credit Agreement, dated as of June 16, 2005, by and among Aimco, AIMCO Properties, L.P., AIMCO/Bethesda Holdings, Inc., and NHP Management Company as the borrowers and Bank of America, N.A., Keybank National Association, and the Lenders listed therein (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated June 16, 2005, is incorporated herein by this reference) | ||
| 10 | .6 | Second Amendment to Amended and Restated Senior Secured Credit Agreement, dated as of March 22, 2006, by and among Aimco, AIMCO Properties, L.P., and AIMCO/Bethesda Holdings, Inc., as the borrowers, and Bank of America, N.A., Keybank National Association, and the lenders listed therein (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated March 22, 2006, is incorporated herein by this reference) | ||
| 10 | .7 | Third Amendment to Senior Secured Credit Agreement, dated as of August 31, 2007, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., and AIMCO/Bethesda Holdings, Inc., as the Borrowers, the pledgors and guarantors named therein, Bank of America, N.A., as administrative agent and Bank of America, N.A., Keybank National Association and the other lenders listed therein (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated August 31, 2007, is incorporated herein by this reference) | ||
47
Table of Contents
|
Exhibit No.
|
Description
|
|||
| 10 | .8 | Fourth Amendment to Senior Secured Credit Agreement, dated as of September 14, 2007, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., and AIMCO/Bethesda Holdings, Inc., as the Borrowers, the pledgors and guarantors named therein, Bank of America, N.A., as administrative agent and Bank of America, N.A., Keybank National Association and the other lenders listed therein (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated September 14, 2007, is incorporated herein by this reference) | ||
| 10 | .9 | Fifth Amendment to Senior Secured Credit Agreement, dated as of September 9, 2008, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., and AIMCO/Bethesda Holdings, Inc., as the Borrowers, the pledgors and guarantors named therein, Bank of America, N.A., as administrative agent and Bank of America, N.A., Keybank National Association and the other lenders listed therein (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated September 11, 2008, is incorporated herein by this reference) | ||
| 10 | .10 | Sixth Amendment to Senior Secured Credit Agreement, dated as of May 1, 2009, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., and AIMCO/Bethesda Holdings, Inc., as the Borrowers, the pledgors and guarantors named therein, Bank of America, N.A., as administrative agent and Bank of America, N.A., Keybank National Association and the other lenders listed therein (Exhibit 10.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2009, is incorporated herein by this reference) | ||
| 10 | .11 | Seventh Amendment to Senior Secured Credit Agreement, dated as of August 4, 2009, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., and AIMCO/Bethesda Holdings, Inc., as the Borrowers, the pledgors and guarantors named therein and the lenders party thereto (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated August 6, 2009, is incorporated herein by this reference) | ||
| 10 | .12 | Eighth Amendment to Senior Secured Credit Agreement, dated as of February 3, 2010, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., and AIMCO/Bethesda Holdings, Inc., as the Borrowers, the pledgors and guarantors named therein and the lenders party thereto (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated February 5, 2010, is incorporated herein by this reference) | ||
| 10 | .13 | Master Indemnification Agreement, dated December 3, 2001, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., XYZ Holdings LLC, and the other parties signatory thereto (Exhibit 2.3 to Aimco’s Current Report on Form 8-K, dated December 6, 2001, is incorporated herein by this reference) | ||
| 10 | .14 | Tax Indemnification and Contest Agreement, dated December 3, 2001, by and among Apartment Investment and Management Company, National Partnership Investments, Corp., and XYZ Holdings LLC and the other parties signatory thereto (Exhibit 2.4 to Aimco’s Current Report on Form 8-K, dated December 6, 2001, is incorporated herein by this reference) | ||
| 10 | .15 | Limited Liability Company Agreement of AIMCO JV Portfolio #1, LLC dated as of December 30, 2003 by and among AIMCO BRE I, LLC, AIMCO BRE II, LLC and SRV-AJVP#1, LLC (Exhibit 10.54 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 2003, is incorporated herein by this reference) | ||
| 10 | .16 | Employment Contract executed on December 29, 2008, by and between AIMCO Properties, L.P. and Terry Considine (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated December 29, 2008, is incorporated herein by this reference) * | ||
| 10 | .17 | Apartment Investment and Management Company 1997 Stock Award and Incentive Plan (October 1999) (Exhibit 10.26 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 1999, is incorporated herein by this reference) * | ||
| 10 | .18 | Form of Restricted Stock Agreement (1997 Stock Award and Incentive Plan) (Exhibit 10.11 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1997, is incorporated herein by this reference) * | ||
48
Table of Contents
|
Exhibit No.
|
Description
|
|||
| 10 | .19 | Form of Incentive Stock Option Agreement (1997 Stock Award and Incentive Plan) (Exhibit 10.42 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 1998, is incorporated herein by this reference) * | ||
| 10 | .20 | 2007 Stock Award and Incentive Plan (incorporated by reference to Appendix A to Aimco’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on March 20, 2007) * | ||
| 10 | .21 | Form of Restricted Stock Agreement (Exhibit 10.2 to Aimco’s Current Report on Form 8-K, dated April 30, 2007, is incorporated herein by this reference) * | ||
| 10 | .22 | Form of Non-Qualified Stock Option Agreement (Exhibit 10.3 to Aimco’s Current Report on Form 8-K, dated April 30, 2007, is incorporated herein by this reference) * | ||
| 10 | .23 | 2007 Employee Stock Purchase Plan (incorporated by reference to Appendix B to Aimco’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on March 20, 2007) * | ||
| 21 | .1 | List of Subsidiaries | ||
| 23 | .1 | Consent of Independent Registered Public Accounting Firm | ||
| 31 | .1 | Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
| 31 | .2 | Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
| 32 | .1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
| 32 | .2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
| 99 | .1 | Agreement re: disclosure of long-term debt instruments | ||
| (1) | Schedule and supplemental materials to the exhibits have been omitted but will be provided to the Securities and Exchange Commission upon request. | |
| (2) | The file reference number for all exhibits is 001-13232, and all such exhibits remain available pursuant to the Records Control Schedule of the Securities and Exchange Commission. | |
| * | Management contract or compensatory plan or arrangement |
49
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Apartment Investment
And
Management Company
Management Company
| By: |
/s/
Terry
Considine
|
Terry Considine
Chairman of the Board and
Chief Executive Officer
Date:
February 26, 2010
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated.
|
Signature
|
Title
|
Date
|
||||
|
/s/
Terry
Considine
|
Chairman of the Board and
Chief Executive Officer (principal executive officer) |
February 26, 2010 | ||||
|
/s/
Ernest
M. Freedman
|
Executive Vice President and
Chief Financial Officer (principal financial officer) |
February 26, 2010 | ||||
|
/s/
Paul
Beldin
|
Senior Vice President and
Chief Accounting Officer (principal accounting officer) |
February 26, 2010 | ||||
|
/s/
James
N. Bailey
|
Director | February 26, 2010 | ||||
|
/s/
Richard
S. Ellwood
|
Director | February 26, 2010 | ||||
|
/s/
Thomas
L. Keltner
|
Director | February 26, 2010 | ||||
|
/s/
J.
Landis Martin
|
Director | February 26, 2010 | ||||
|
/s/
Robert
A. Miller
|
Director | February 26, 2010 | ||||
|
/s/
Michael
A. Stein
|
Director | February 26, 2010 | ||||
50
Table of Contents
(This page
intentionally left blank)
APARTMENT
INVESTMENT AND MANAGEMENT COMPANY
INDEX TO
FINANCIAL STATEMENTS
| Page | ||||
|
Financial Statements:
|
||||
| F-2 | ||||
| F-3 | ||||
| F-4 | ||||
| F-5 | ||||
| F-6 | ||||
| F-8 | ||||
|
Financial Statement Schedule:
|
||||
| F-53 | ||||
|
All other schedules are omitted because they are not applicable
or the required information is shown in the financial statements
or notes thereto.
|
||||
F-1
Table of Contents
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Stockholders and Board of Directors Apartment Investment and
Management Company
We have audited the accompanying consolidated balance sheets of
Apartment Investment and Management Company (the
“Company”) as of December 31, 2009 and 2008, and
the related consolidated statements of income, equity and cash
flows for each of the three years in the period ended
December 31, 2009. Our audits also included the financial
statement schedule listed in the accompanying Index to Financial
Statements. These financial statements and schedule are the
responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of the Company at December 31, 2009 and
2008, and the consolidated results of its operations and its
cash flows for each of the three years in the period ended
December 31, 2009, in conformity with United States
generally accepted accounting principles. Also, in our opinion,
the related financial statement schedule, when considered in
relation to the basic financial statements taken as a whole,
presents fairly, in all material respects the information set
forth therein.
The consolidated financial statements include retroactive
adjustments to reflect the adoption in 2009 of Statement of
Financial Accounting Standards No. 160, Noncontrolling
Interests in Consolidated Financial Statements, an amendment to
ARB 51 (codified in FASB ASC 810), Statement of Financial
Accounting Standards No. 141(R), Business
Combinations — a replacement of FASB Statement No 141
(codified in FASB ASC 805), FASB Staff Position
No. EITF 03-6-1,
Determining Whether Instruments Granted in Share-Based Payment
Transactions are Participating Securities (codified in FASB ASC
260), and FASB Accounting Standards Update
No. 2010-01,
Accounting for Distributions to Shareholders with Components of
Stock and Cash (codified in FASB ASC 505). Further, the Company
retrospectively adjusted the 2008 and 2007 consolidated
financial statements to reflect real estate assets that meet the
definition of a component and have been sold or meet the
criteria to be classified as held for sale at December 31,
2009 pursuant to Statement of Financial Accounting Standards
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets (codified in FASB ASC 360), through
December 31, 2009. As discussed in Note 2 to the
consolidated financial statements, the consolidated statement of
income for the year ended December 31, 2008 has been
restated to reclassify provisions for impairment losses on real
estate development assets into operating income.
We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the
Company’s internal control over financial reporting as of
December 31, 2009, based on criteria established in
Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission
and our report dated February 26, 2010 expressed an
unqualified opinion thereon.
/s/
ERNST &
YOUNG LLP
Denver, Colorado
February 26, 2010
F-2
Table of Contents
APARTMENT
INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED BALANCE SHEETS
As of December 31, 2009 and 2008
(In thousands, except share data)
CONSOLIDATED BALANCE SHEETS
As of December 31, 2009 and 2008
(In thousands, except share data)
| 2009 | 2008 | |||||||
|
ASSETS
|
||||||||
|
Real estate:
|
||||||||
|
Buildings and improvements
|
$ | 7,479,480 | $ | 7,278,734 | ||||
|
Land
|
2,183,927 | 2,167,574 | ||||||
|
Total real estate
|
9,663,407 | 9,446,308 | ||||||
|
Less accumulated depreciation
|
(2,701,046 | ) | (2,320,671 | ) | ||||
|
Net real estate
|
6,962,361 | 7,125,637 | ||||||
|
Cash and cash equivalents
|
81,260 | 299,676 | ||||||
|
Restricted cash
|
220,037 | 253,315 | ||||||
|
Accounts receivable, net
|
59,822 | 90,318 | ||||||
|
Accounts receivable from affiliates, net
|
23,744 | 38,978 | ||||||
|
Deferred financing costs, net
|
52,725 | 51,568 | ||||||
|
Notes receivable from unconsolidated real estate partnerships,
net
|
14,295 | 22,567 | ||||||
|
Notes receivable from non-affiliates, net
|
125,269 | 139,897 | ||||||
|
Investment in unconsolidated real estate partnerships
|
105,324 | 119,036 | ||||||
|
Other assets
|
185,890 | 198,713 | ||||||
|
Deferred income tax assets, net
|
42,015 | 28,326 | ||||||
|
Assets held for sale
|
33,726 | 1,073,839 | ||||||
|
Total assets
|
$ | 7,906,468 | $ | 9,441,870 | ||||
| LIABILITIES AND EQUITY | ||||||||
|
Property tax-exempt bond financing
|
$ | 574,926 | $ | 629,499 | ||||
|
Property loans payable
|
4,972,327 | 4,944,324 | ||||||
|
Term loans
|
90,000 | 400,000 | ||||||
|
Other borrowings
|
53,057 | 95,981 | ||||||
|
Total indebtedness
|
5,690,310 | 6,069,804 | ||||||
|
Accounts payable
|
29,819 | 64,241 | ||||||
|
Accrued liabilities and other
|
286,328 | 569,996 | ||||||
|
Deferred income
|
182,485 | 193,810 | ||||||
|
Security deposits
|
35,764 | 37,244 | ||||||
|
Liabilities related to assets held for sale
|
30,403 | 771,878 | ||||||
|
Total liabilities
|
6,255,109 | 7,706,973 | ||||||
|
Preferred noncontrolling interests in Aimco Operating Partnership
|
86,656 | 88,148 | ||||||
|
Preferred stock subject to repurchase agreement (Note 11)
|
30,000 | — | ||||||
|
Commitments and contingencies (Note 8)
|
— | — | ||||||
|
Equity:
|
||||||||
|
Perpetual Preferred Stock (Note 11)
|
660,500 | 696,500 | ||||||
|
Class A Common Stock, $0.01 par value,
426,157,736 shares authorized, 116,479,791 and
100,631,881 shares issued and outstanding, at
December 31, 2009 and 2008, respectively
|
1,165 | 1,006 | ||||||
|
Additional paid-in capital
|
3,072,665 | 2,910,002 | ||||||
|
Accumulated other comprehensive loss
|
(1,138 | ) | (2,249 | ) | ||||
|
Notes due on common stock purchases
|
(1,392 | ) | (3,607 | ) | ||||
|
Distributions in excess of earnings
|
(2,492,082 | ) | (2,335,628 | ) | ||||
|
Total Aimco equity
|
1,239,718 | 1,266,024 | ||||||
|
Noncontrolling interests in consolidated real estate partnerships
|
316,177 | 380,725 | ||||||
|
Common noncontrolling interests in Aimco Operating Partnership
|
(21,192 | ) | — | |||||
|
Total equity
|
1,534,703 | 1,646,749 | ||||||
|
Total liabilities and equity
|
$ | 7,906,468 | $ | 9,441,870 | ||||
See notes to consolidated financial statements.
F-3
Table of Contents
APARTMENT
INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31, 2009, 2008 and 2007
(In thousands, except per share data)
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31, 2009, 2008 and 2007
(In thousands, except per share data)
| 2009 | 2008 | 2007 | ||||||||||
|
(as restated
|
||||||||||||
| see Note 2) | ||||||||||||
|
REVENUES:
|
||||||||||||
|
Rental and other property revenues
|
$ | 1,140,828 | $ | 1,137,995 | $ | 1,093,779 | ||||||
|
Property management revenues, primarily from affiliates
|
5,082 | 6,345 | 6,923 | |||||||||
|
Asset management and tax credit revenues
|
49,853 | 98,830 | 73,755 | |||||||||
|
Total revenues
|
1,195,763 | 1,243,170 | 1,174,457 | |||||||||
|
OPERATING EXPENSES:
|
||||||||||||
|
Property operating expenses
|
521,161 | 526,238 | 503,890 | |||||||||
|
Property management expenses
|
2,869 | 5,385 | 6,678 | |||||||||
|
Investment management expenses
|
15,779 | 24,784 | 20,507 | |||||||||
|
Depreciation and amortization
|
444,413 | 392,999 | 347,491 | |||||||||
|
Provision for operating real estate impairment losses
|
2,329 | — | 1,080 | |||||||||
|
Provision for impairment losses on real estate development assets
|
— | 91,138 | — | |||||||||
|
General and administrative expenses
|
69,567 | 99,157 | 90,674 | |||||||||
|
Other expenses, net
|
17,891 | 22,568 | 19,338 | |||||||||
|
Restructuring costs
|
11,241 | 22,802 | — | |||||||||
|
Total operating expenses
|
1,085,250 | 1,185,071 | 989,658 | |||||||||
|
Operating income
|
110,513 | 58,099 | 184,799 | |||||||||
|
Interest income
|
9,341 | 19,914 | 43,222 | |||||||||
|
Provision for losses on notes receivable, net
|
(21,549 | ) | (17,577 | ) | (2,010 | ) | ||||||
|
Interest expense
|
(324,160 | ) | (324,118 | ) | (313,038 | ) | ||||||
|
Equity in losses of unconsolidated real estate partnerships
|
(12,025 | ) | (4,601 | ) | (3,347 | ) | ||||||
|
Impairment losses related to unconsolidated real estate
partnerships
|
(322 | ) | (2,661 | ) | — | |||||||
|
Gain on dispositions of unconsolidated real estate and other
|
22,494 | 99,864 | 24,470 | |||||||||
|
Loss before income taxes and discontinued operations
|
(215,708 | ) | (171,080 | ) | (65,904 | ) | ||||||
|
Income tax benefit
|
18,671 | 53,202 | 19,795 | |||||||||
|
Loss from continuing operations
|
(197,037 | ) | (117,878 | ) | (46,109 | ) | ||||||
|
Income from discontinued operations, net
|
152,237 | 744,880 | 171,615 | |||||||||
|
Net (loss) income
|
(44,800 | ) | 627,002 | 125,506 | ||||||||
|
Noncontrolling interests:
|
||||||||||||
|
Net income attributable to noncontrolling interests in
consolidated real estate partnerships
|
(22,541 | ) | (155,727 | ) | (92,165 | ) | ||||||
|
Net income attributable to preferred noncontrolling interests in
Aimco Operating Partnership
|
(6,288 | ) | (7,646 | ) | (7,128 | ) | ||||||
|
Net loss (income) attributable to common noncontrolling
interests in Aimco Operating Partnership
|
9,355 | (51,622 | ) | 3,698 | ||||||||
|
Total noncontrolling interests
|
(19,474 | ) | (214,995 | ) | (95,595 | ) | ||||||
|
Net (loss) income attributable to Aimco
|
(64,274 | ) | 412,007 | 29,911 | ||||||||
|
Net income attributable to Aimco preferred stockholders
|
(50,566 | ) | (53,708 | ) | (66,016 | ) | ||||||
|
Net income attributable to participating securities
|
— | (6,985 | ) | (4,481 | ) | |||||||
|
Net (loss) income attributable to Aimco common stockholders
|
$ | (114,840 | ) | $ | 351,314 | $ | (40,586 | ) | ||||
|
Earnings (loss) per common share — basic and diluted:
|
||||||||||||
|
Loss from continuing operations attributable to Aimco common
stockholders
|
$ | (1.75 | ) | $ | (2.10 | ) | $ | (1.41 | ) | |||
|
Income from discontinued operations attributable to Aimco common
stockholders
|
0.75 | 6.06 | 0.98 | |||||||||
|
Net (loss) income attributable to Aimco common stockholders
|
$ | (1.00 | ) | $ | 3.96 | $ | (0.43 | ) | ||||
|
Weighted average common shares outstanding — basic and
diluted
|
114,301 | 88,690 | 95,107 | |||||||||
|
Dividends declared per common share
|
$ | 0.40 | $ | 7.48 | $ | 4.31 | ||||||
See notes to consolidated financial statements.
F-4
Table of Contents
APARTMENT
INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED
STATEMENTS OF EQUITY
For the Years Ended December 31, 2009, 2008 and 2007
(In thousands)
For the Years Ended December 31, 2009, 2008 and 2007
(In thousands)
|
Accumulated
|
Notes Due
|
|||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock |
Additional
|
Other
|
on Common
|
Distributions in
|
Total
|
||||||||||||||||||||||||||||||||||||||
|
Shares
|
Shares
|
Paid-in
|
Comprehensive
|
Stock
|
Excess of
|
Aimco
|
Noncontrolling
|
Total
|
||||||||||||||||||||||||||||||||||||
| Issued | Amount | Issued | Amount | Capital | Loss | Purchases | Earnings | Equity | Interests | Equity | ||||||||||||||||||||||||||||||||||
|
Balances at December 31, 2006
|
26,845 | $ | 823,500 | 96,820 | $ | 968 | $ | 3,095,564 | $ | (134 | ) | $ | (4,714 | ) | $ | (1,575,292 | ) | $ | 2,339,892 | $ | 310,289 | $ | 2,650,181 | |||||||||||||||||||||
|
Redemption of Preferred Stock and preferred partnership units
|
(1,905 | ) | (100,000 | ) | — | — | 635 | — | — | (2,635 | ) | (102,000 | ) | — | (102,000 | ) | ||||||||||||||||||||||||||||
|
Cumulative effect of change in accounting principle —
adoption of FIN 48
|
— | — | — | — | — | — | — | (764 | ) | (764 | ) | (81 | ) | (845 | ) | |||||||||||||||||||||||||||||
|
Redemption of Aimco Operating Partnership units for Common Stock
|
— | — | 471 | 5 | 27,848 | — | — | — | 27,853 | (27,810 | ) | 43 | ||||||||||||||||||||||||||||||||
|
Repurchases of Common Stock and common partnership units
|
— | — | (7,456 | ) | (75 | ) | (325,747 | ) | — | — | — | (325,822 | ) | (2,181 | ) | (328,003 | ) | |||||||||||||||||||||||||||
|
Repayment of notes receivable from officers
|
— | — | — | — | — | — | 1,659 | — | 1,659 | — | 1,659 | |||||||||||||||||||||||||||||||||
|
Officer and employee stock awards and purchases, net
|
— | — | 313 | 3 | 2,555 | — | (2,386 | ) | — | 172 | — | 172 | ||||||||||||||||||||||||||||||||
|
Stock options exercised
|
— | — | 1,403 | 14 | 53,705 | — | — | — | 53,719 | — | 53,719 | |||||||||||||||||||||||||||||||||
|
Amortization of stock option and restricted stock compensation
cost
|
— | — | — | — | 19,224 | — | — | — | 19,224 | — | 19,224 | |||||||||||||||||||||||||||||||||
|
Issuance of Aimco Operating Partnership units
|
— | — | — | — | — | — | — | — | — | 2,998 | 2,998 | |||||||||||||||||||||||||||||||||
|
Contributions from noncontrolling interests
|
— | — | — | — | — | — | — | — | — | 203,552 | 203,552 | |||||||||||||||||||||||||||||||||
|
Adjustment to noncontrolling interests from VMS transactions
(Note 3)
|
— | — | — | — | — | — | — | — | — | 62,820 | 62,820 | |||||||||||||||||||||||||||||||||
|
Adjustment to noncontrolling interests from consolidation of
entities
|
— | — | — | — | — | — | — | — | — | 91,219 | 91,219 | |||||||||||||||||||||||||||||||||
|
Reversal of excess income tax benefits related to stock-based
compensation and other
|
— | — | — | — | (751 | ) | — | — | — | (751 | ) | — | (751 | ) | ||||||||||||||||||||||||||||||
|
Change in accumulated other comprehensive income
|
— | — | — | — | — | (550 | ) | — | — | (550 | ) | 365 | (185 | ) | ||||||||||||||||||||||||||||||
|
Net income
|
— | — | — | — | — | — | — | 29,911 | 29,911 | 88,467 | 118,378 | |||||||||||||||||||||||||||||||||
|
Common dividends and distributions
|
— | — | — | — | — | — | — | (406,121 | ) | (406,121 | ) | (252,887 | ) | (659,008 | ) | |||||||||||||||||||||||||||||
|
Preferred Stock dividends
|
— | — | — | — | — | — | — | (64,817 | ) | (64,817 | ) | — | (64,817 | ) | ||||||||||||||||||||||||||||||
|
Balances at December 31, 2007
|
24,940 | 723,500 | 91,551 | 915 | 2,873,033 | (684 | ) | (5,441 | ) | (2,019,718 | ) | 1,571,605 | 476,751 | 2,048,356 | ||||||||||||||||||||||||||||||
|
Repurchase of Preferred Stock
|
— | (27,000 | ) | — | — | 678 | — | — | 1,482 | (24,840 | ) | — | (24,840 | ) | ||||||||||||||||||||||||||||||
|
Redemption of Aimco Operating Partnership units for Common Stock
|
— | — | 114 | 1 | 4,181 | — | — | — | 4,182 | (4,182 | ) | — | ||||||||||||||||||||||||||||||||
|
Repurchases of Common Stock and common partnership units
|
— | — | (13,919 | ) | (139 | ) | (473,393 | ) | — | — | — | (473,532 | ) | (3,192 | ) | (476,724 | ) | |||||||||||||||||||||||||||
|
Repayment of notes receivable from officers
|
— | — | — | — | — | — | 1,458 | — | 1,458 | — | 1,458 | |||||||||||||||||||||||||||||||||
|
Officer and employee stock awards and purchases, net
|
— | — | 106 | 1 | 651 | — | 376 | — | 1,028 | — | 1,028 | |||||||||||||||||||||||||||||||||
|
Amortization of stock option and restricted stock compensation
cost
|
— | — | — | — | 17,603 | — | — | — | 17,603 | — | 17,603 | |||||||||||||||||||||||||||||||||
|
Common Stock issued pursuant to Special Dividend
|
— | — | 22,780 | 228 | 487,249 | — | — | — | 487,477 | — | 487,477 | |||||||||||||||||||||||||||||||||
|
Contributions from noncontrolling interests
|
— | — | — | — | — | — | — | — | — | 6,854 | 6,854 | |||||||||||||||||||||||||||||||||
|
Adjustment to noncontrolling interests from consolidation of
entities
|
— | — | — | — | — | — | — | — | — | 14,969 | 14,969 | |||||||||||||||||||||||||||||||||
|
Change in accumulated other comprehensive income
|
— | — | — | — | — | (1,565 | ) | — | — | (1,565 | ) | 190 | (1,375 | ) | ||||||||||||||||||||||||||||||
|
Net income
|
— | — | — | — | — | — | — | 412,007 | 412,007 | 207,349 | 619,356 | |||||||||||||||||||||||||||||||||
|
Common dividends and distributions
|
— | — | — | — | — | — | — | (674,185 | ) | (674,185 | ) | (318,014 | ) | (992,199 | ) | |||||||||||||||||||||||||||||
|
Preferred Stock dividends
|
— | — | — | — | — | — | — | (55,214 | ) | (55,214 | ) | — | (55,214 | ) | ||||||||||||||||||||||||||||||
|
Balances at December 31, 2008
|
24,940 | 696,500 | 100,632 | 1,006 | 2,910,002 | (2,249 | ) | (3,607 | ) | (2,335,628 | ) | 1,266,024 | 380,725 | 1,646,749 | ||||||||||||||||||||||||||||||
|
Repurchase of Preferred Stock
|
— | (6,000 | ) | — | — | 151 | — | — | 1,800 | (4,049 | ) | — | (4,049 | ) | ||||||||||||||||||||||||||||||
|
Reclassification of preferred stock to temporary equity
|
— | (30,000 | ) | — | — | — | — | — | — | (30,000 | ) | — | (30,000 | ) | ||||||||||||||||||||||||||||||
|
Redemption or Conversion of Aimco Operating Partnership units
for Common Stock
|
— | — | 527 | 5 | 7,080 | — | — | — | 7,085 | (7,085 | ) | — | ||||||||||||||||||||||||||||||||
|
Repurchases of Common Stock and common partnership units
|
— | — | — | — | — | — | — | — | — | (980 | ) | (980 | ) | |||||||||||||||||||||||||||||||
|
Repayment of notes receivable from officers
|
— | — | — | — | — | — | 763 | — | 763 | — | 763 | |||||||||||||||||||||||||||||||||
|
Common Stock issued pursuant to special dividends
|
— | — | 15,548 | 156 | 148,590 | — | — | — | 148,746 | — | 148,746 | |||||||||||||||||||||||||||||||||
|
Officer and employee stock awards and
|
||||||||||||||||||||||||||||||||||||||||||||
|
purchases, net
|
— | — | (227 | ) | (2 | ) | (1,476 | ) | — | 1,452 | — | (26 | ) | — | (26 | ) | ||||||||||||||||||||||||||||
|
Amortization of stock option and restricted stock compensation
cost
|
— | — | — | — | 8,007 | — | — | — | 8,007 | — | 8,007 | |||||||||||||||||||||||||||||||||
|
Expense for dividends on forfeited shares and other OP Unit
distributions
|
— | — | — | — | 311 | — | — | 2,917 | 3,228 | (990 | ) | 2,238 | ||||||||||||||||||||||||||||||||
|
Contributions from noncontrolling interests
|
— | — | — | — | — | — | — | — | — | 5,535 | 5,535 | |||||||||||||||||||||||||||||||||
|
Adjustment to noncontrolling interests from consolidation of
entities
|
— | — | — | — | — | — | — | — | — | (1,151 | ) | (1,151 | ) | |||||||||||||||||||||||||||||||
|
Change in accumulated other comprehensive income
|
— | — | — | — | — | 1,111 | — | — | 1,111 | 297 | 1,408 | |||||||||||||||||||||||||||||||||
|
Net income
|
— | — | — | — | — | — | — | (64,274 | ) | (64,274 | ) | 13,186 | (51,088 | ) | ||||||||||||||||||||||||||||||
|
Common dividends and distributions
|
— | — | — | — | — | — | — | (46,202 | ) | (46,202 | ) | (94,552 | ) | (140,754 | ) | |||||||||||||||||||||||||||||
|
Preferred Stock dividends
|
— | — | — | — | — | — | — | (50,695 | ) | (50,695 | ) | — | (50,695 | ) | ||||||||||||||||||||||||||||||
|
Balances at December 31, 2009
|
24,940 | $ | 660,500 | 116,480 | $ | 1,165 | $ | 3,072,665 | $ | (1,138 | ) | $ | (1,392 | ) | $ | (2,492,082 | ) | $ | 1,239,718 | $ | 294,985 | $ | 1,534,703 | |||||||||||||||||||||
See notes to consolidated financial statements.
F-5
Table of Contents
APARTMENT
INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2009, 2008 and 2007
(In thousands)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2009, 2008 and 2007
(In thousands)
| 2009 | 2008 | 2007 | ||||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
|
Net (loss) income
|
$ | (44,800 | ) | $ | 627,002 | $ | 125,506 | |||||
|
Adjustments to reconcile net (loss) income to net cash provided
by operating activities:
|
||||||||||||
|
Depreciation and amortization
|
444,413 | 392,999 | 347,491 | |||||||||
|
Equity in losses of unconsolidated real estate partnerships
|
12,025 | 4,601 | 3,347 | |||||||||
|
Provision for impairment losses on real estate development assets
|
— | 91,138 | — | |||||||||
|
Provision for operating real estate impairment losses
|
2,329 | — | 1,080 | |||||||||
|
Gain on dispositions of unconsolidated real estate and other
|
(22,494 | ) | (99,864 | ) | (24,470 | ) | ||||||
|
Income tax benefit
|
(18,671 | ) | (53,202 | ) | (19,795 | ) | ||||||
|
Stock-based compensation expense
|
6,666 | 13,833 | 14,921 | |||||||||
|
Amortization of deferred loan costs and other
|
10,845 | 9,950 | 7,916 | |||||||||
|
Distributions of earnings from unconsolidated entities
|
4,893 | 14,619 | 4,239 | |||||||||
|
Discontinued operations:
|
||||||||||||
|
Depreciation and amortization
|
51,155 | 122,549 | 152,446 | |||||||||
|
Gain on disposition of real estate
|
(221,793 | ) | (800,335 | ) | (117,627 | ) | ||||||
|
Other adjustments to income from discontinued operations
|
53,975 | 67,214 | (24,063 | ) | ||||||||
|
Changes in operating assets and operating liabilities:
|
||||||||||||
|
Accounts receivable
|
27,067 | 4,848 | 7,453 | |||||||||
|
Other assets
|
2,440 | 57,155 | (9,751 | ) | ||||||||
|
Accounts payable, accrued liabilities and other
|
(74,238 | ) | (12,139 | ) | 14,249 | |||||||
|
Total adjustments
|
278,612 | (186,634 | ) | 357,436 | ||||||||
|
Net cash provided by operating activities
|
233,812 | 440,368 | 482,942 | |||||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
|
Purchases of real estate
|
— | (112,655 | ) | (201,434 | ) | |||||||
|
Capital expenditures
|
(300,344 | ) | (665,233 | ) | (689,719 | ) | ||||||
|
Proceeds from dispositions of real estate
|
875,931 | 2,060,344 | 431,863 | |||||||||
|
Change in funds held in escrow from tax-free exchanges
|
— | 345 | 25,863 | |||||||||
|
Proceeds from sale of interests and distributions from real
estate partnerships
|
25,067 | 94,277 | 198,998 | |||||||||
|
Purchases of partnership interests and other assets
|
(6,842 | ) | (28,121 | ) | (86,204 | ) | ||||||
|
Originations of notes receivable
|
(5,778 | ) | (6,911 | ) | (10,812 | ) | ||||||
|
Proceeds from repayment of notes receivable
|
5,264 | 8,929 | 14,370 | |||||||||
|
Other investing activities
|
36,956 | (6,106 | ) | 45,476 | ||||||||
|
Net cash provided by (used in) investing activities
|
630,254 | 1,344,869 | (271,599 | ) | ||||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
|
Proceeds from property loans
|
772,443 | 949,549 | 1,552,048 | |||||||||
|
Principal repayments on property loans
|
(1,076,318 | ) | (1,291,543 | ) | (850,484 | ) | ||||||
|
Proceeds from tax-exempt bond financing
|
15,727 | 50,100 | 82,350 | |||||||||
|
Principal repayments on tax-exempt bond financing
|
(157,862 | ) | (217,361 | ) | (70,029 | ) | ||||||
|
(Payments on) borrowings under term loans
|
(310,000 | ) | (75,000 | ) | 75,000 | |||||||
|
Net repayments on revolving credit facility
|
— | — | (140,000 | ) | ||||||||
|
Proceeds from (payments on) other borrowings
|
(40,085 | ) | 21,367 | (8,468 | ) | |||||||
|
Repurchases and redemptions of preferred stock
|
(4,200 | ) | (24,840 | ) | (102,000 | ) | ||||||
|
Repurchases of Class A Common Stock
|
— | (502,296 | ) | (307,382 | ) | |||||||
|
Proceeds from Class A Common Stock option exercises
|
— | 481 | 53,719 | |||||||||
|
Payment of Class A Common Stock dividends
|
(95,335 | ) | (212,286 | ) | (230,806 | ) | ||||||
|
Payment of preferred stock dividends
|
(52,215 | ) | (55,215 | ) | (67,100 | ) | ||||||
|
Payment of distributions to noncontrolling interests
|
(120,361 | ) | (330,582 | ) | (198,090 | ) | ||||||
|
Other financing activities
|
(14,276 | ) | (8,396 | ) | (19,464 | ) | ||||||
|
Net cash used in financing activities
|
(1,082,482 | ) | (1,696,022 | ) | (230,706 | ) | ||||||
|
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(218,416 | ) | 89,215 | (19,363 | ) | |||||||
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
299,676 | 210,461 | 229,824 | |||||||||
|
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$ | 81,260 | $ | 299,676 | $ | 210,461 | ||||||
See notes to consolidated financial statements.
F-6
Table of Contents
APARTMENT
INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2009, 2008 and 2007
(In thousands)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2009, 2008 and 2007
(In thousands)
| 2009 | 2008 | 2007 | ||||||||||
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||||||
|
Interest paid
|
$ | 348,341 | $ | 434,645 | $ | 452,324 | ||||||
|
Cash paid for income taxes
|
4,560 | 13,780 | 2,994 | |||||||||
|
Non-cash transactions associated with the acquisition of real
estate and interests in unconsolidated real estate partnerships:
|
||||||||||||
|
Secured debt assumed in connection with purchase of real estate
|
— | — | 16,000 | |||||||||
|
Issuance of OP Units for interests in unconsolidated real estate
partnerships and acquisitions of real estate
|
— | — | 2,998 | |||||||||
|
Non-cash transactions associated with the disposition of real
estate:
|
||||||||||||
|
Secured debt assumed in connection with the disposition of real
estate
|
314,265 | 157,394 | 27,929 | |||||||||
|
Issuance of notes receivable connection with the disposition of
real estate
|
3,605 | 10,372 | — | |||||||||
|
Non-cash transactions associated with consolidation of real
estate partnerships:
|
||||||||||||
|
Real estate, net
|
6,058 | 25,830 | 56,877 | |||||||||
|
Investments in and notes receivable primarily from affiliated
entities
|
4,326 | 4,497 | 84,545 | |||||||||
|
Restricted cash and other assets
|
(1,682 | ) | 5,483 | 8,545 | ||||||||
|
Secured debt
|
2,031 | 22,036 | 41,296 | |||||||||
|
Accounts payable, accrued and other liabilities
|
6,769 | 14,020 | 48,602 | |||||||||
|
Other non-cash transactions:
|
||||||||||||
|
Redemption of common OP Units for Class A Common Stock
|
7,085 | 4,182 | 27,810 | |||||||||
|
Conversion of preferred OP Units for Class A Common Stock
|
— | — | 43 | |||||||||
|
(Cancellation) origination of notes receivable from officers for
Class A Common Stock purchases, net
|
(1,452 | ) | (385 | ) | 2,386 | |||||||
|
Common stock issued pursuant to special dividends (Note 11)
|
(148,746 | ) | (487,477 | ) | — | |||||||
See notes to consolidated financial statements.
F-7
Table of Contents
APARTMENT
INVESTMENT AND MANAGEMENT COMPANY
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2009
Apartment Investment and Management Company, or Aimco, is a
Maryland corporation incorporated on January 10, 1994. We
are a self-administered and self-managed real estate investment
trust, or REIT, engaged in the acquisition, ownership,
management and redevelopment of apartment properties. As of
December 31, 2009, we owned or managed a real estate
portfolio of 870 apartment properties containing 135,654
apartment units located in 44 states, the District of
Columbia and Puerto Rico. We are one of the largest owners and
operators of apartment properties in the United States.
As of December 31, 2009, we:
| • | owned an equity interest in and consolidated 95,202 units in 426 properties (which we refer to as “consolidated properties”), of which 93,098 units were also managed by us; | |
| • | owned an equity interest in and did not consolidate 8,478 units in 77 properties (which we refer to as “unconsolidated properties”), of which 3,594 units were also managed by us; and | |
| • | provided services for or managed 31,974 units in 367 properties, primarily pursuant to long-term agreements (including 29,879 units in 345 properties for which we provide asset management services only, and not also property management services). In certain cases, we may indirectly own generally less than one percent of the operations of such properties through a partnership syndication or other fund. |
Through our wholly-owned subsidiaries, AIMCO-GP, Inc. and
AIMCO-LP Trust, we own a majority of the ownership interests in
AIMCO Properties, L.P., which we refer to as the Aimco Operating
Partnership. As of December 31, 2009, we held an interest
of approximately 93% in the common partnership units and
equivalents of the Aimco Operating Partnership. We conduct
substantially all of our business and own substantially all of
our assets through the Aimco Operating Partnership. Interests in
the Aimco Operating Partnership that are held by limited
partners other than Aimco are referred to as
“OP Units.” OP Units include common
OP Units, partnership preferred units, or preferred
OP Units, and high performance partnership units, or High
Performance Units. The Aimco Operating Partnership’s income
is allocated to holders of common OP Units based on the
weighted average number of common OP Units outstanding
during the period. The Aimco Operating Partnership records the
issuance of common OP Units and the assets acquired in
purchase transactions based on the market price of Aimco
Class A Common Stock (which we refer to as Common Stock) at
the date of closing of the transaction. The holders of the
common OP Units and Class I High Performance Units
receive distributions, prorated from the date of issuance, in an
amount equivalent to the dividends paid to holders of Common
Stock. Holders of common OP Units may redeem such units for
cash or, at the Aimco Operating Partnership’s option,
Common Stock. During 2009, 2008 and 2007, the weighted average
ownership interest in the Aimco Operating Partnership held by
the common OP Unit holders was approximately 7%, 10% and
9%, respectively. Preferred OP Units entitle the holders
thereof to a preference with respect to distributions or upon
liquidation. At December 31, 2009, 116,479,791 shares
of our Common Stock were outstanding and the Aimco Operating
Partnership had 8,374,233 common OP Units and equivalents
outstanding for a combined total of 124,854,024 shares of
Common Stock and OP Units outstanding (excluding preferred
OP Units).
Except as the context otherwise requires, “we,”
“our,” “us” and the “Company”
refer to Aimco, the Aimco Operating Partnership and their
consolidated entities, collectively.
Principles
of Consolidation
The accompanying consolidated financial statements include the
accounts of Aimco, the Aimco Operating Partnership, and their
consolidated entities. We consolidate all variable interest
entities for which we are the primary beneficiary. Generally, we
consolidate real estate partnerships and other entities that are
not variable
F-8
Table of Contents
interest entities when we own, directly or indirectly, a
majority voting interest in the entity or are otherwise able to
control the entity. All significant intercompany balances and
transactions have been eliminated in consolidation.
Interests in the Aimco Operating Partnership that are held by
limited partners other than Aimco are reflected in the
accompanying balance sheets as noncontrolling interests in Aimco
Operating Partnership. Interests in partnerships consolidated
into the Aimco Operating Partnership that are held by third
parties are reflected in the accompanying balance sheets as
noncontrolling interests in consolidated real estate
partnerships. The assets of consolidated real estate
partnerships owned or controlled by us generally are not
available to pay creditors of Aimco or the Aimco Operating
Partnership.
As used herein, and except where the context otherwise requires,
“partnership” refers to a limited partnership or a
limited liability company and “partner” refers to a
partner in a limited partnership or a member in a limited
liability company.
Variable
Interest Entities
We consolidate all variable interest entities for which we are
the primary beneficiary. Generally, a variable interest entity,
or VIE, is an entity with one or more of the following
characteristics: (a) the total equity investment at risk is
not sufficient to permit the entity to finance its activities
without additional subordinated financial support; (b) as a
group, the holders of the equity investment at risk lack
(i) the ability to make decisions about an entity’s
activities through voting or similar rights, (ii) the
obligation to absorb the expected losses of the entity, or
(iii) the right to receive the expected residual returns of
the entity; or (c) the equity investors have voting rights
that are not proportional to their economic interests and
substantially all of the entity’s activities either
involve, or are conducted on behalf of, an investor that has
disproportionately few voting rights. The primary beneficiary
generally is the entity that will receive a majority of the
VIE’s expected losses, receive a majority of the VIE’s
expected residual returns, or both.
In determining whether we are the primary beneficiary of a VIE,
we consider qualitative and quantitative factors, including, but
not limited to: the amount and characteristics of our
investment; the obligation or likelihood for us or other
investors to provide financial support; our and the other
investors’ ability to control or significantly influence
key decisions for the VIE; and the similarity with and
significance to the business activities of us and the other
investors. Significant judgments related to these determinations
include estimates about the current and future fair values and
performance of real estate held by these VIEs and general market
conditions.
As of December 31, 2009, we were the primary beneficiary
of, and therefore consolidated, 90 VIEs, which owned 67
apartment properties with 9,652 units. Real estate with a
carrying amount of $769.4 million collateralized
$474.3 million of debt of those VIEs. The creditors of the
consolidated VIEs do not have recourse to our general credit. As
of December 31, 2009, we also held variable interests in
120 VIEs for which we were not the primary beneficiary. Those
VIEs consist primarily of partnerships that are engaged,
directly or indirectly, in the ownership and management of 172
apartment properties with 9,566 units. We are involved with
those VIEs as an equity holder, lender, management agent, or
through other contractual relationships. At December 31,
2009, our maximum exposure to loss as a result of our
involvement with unconsolidated VIEs is limited to our recorded
investments in and receivables from those VIEs totaling
$107.5 million and our contractual obligation to advance
funds to certain VIEs totaling $4.6 million. We may be
subject to additional losses to the extent of any financial
support that we voluntarily provide in the future. Additionally,
the provision of financial support in the future may require us
to consolidate a VIE.
In December 2009, the FASB issued Accounting Standards Update
2009-17,
Improvements to Financial Reporting by Enterprises Involved
with Variable Interest Entities,
or ASU
2009-17,
which is effective for fiscal years beginning after
November 15, 2009. ASU
2009-17,
which modifies the guidance in FASB ASC Topic 810, introduces a
more qualitative approach to evaluating VIEs for consolidation
and requires a company to perform an analysis to determine
whether its variable interests give it a controlling financial
interest in a VIE. This analysis identifies the primary
beneficiary of a VIE as the entity that has (a) the power
to direct the activities of the VIE that most significantly
impact the VIE’s economic performance, and (b) the
obligation to absorb losses or the right to receive benefits
that could potentially be significant to the VIE. In determining
whether it has the power to direct the activities of the VIE
that most significantly affect the VIE’s performance, ASU
2009-17
requires a company to
F-9
Table of Contents
assess whether it has an implicit financial responsibility to
ensure that a VIE operates as designed, requires continuous
reassessment of primary beneficiary status rather than periodic,
event-driven assessments as previously required, and
incorporates expanded disclosure requirements.
Our adoption of ASU
2009-17
during 2010 may result in changes in our conclusions
regarding whether we are required to consolidate certain
unconsolidated real estate partnerships that are VIEs. As of
December 31, 2009, in addition to the unconsolidated VIEs
discussed above, we held insignificant partnership interests in
VIEs that own approximately 250 properties. We hold general
and/or
limited partner interests generally ranging from less than 1% to
5% and our recorded investment in these entities is typically
limited to accounts receivable from our provision of property
management and asset management services to these partnerships.
We may be required to consolidate some of these VIEs if we
conclude that we control the activities that are significant to
the VIEs’ economic performance. Additionally, we may be
required to deconsolidate certain VIEs that we currently
consolidate if we conclude we do not control the activities that
are significant to such VIEs’ economic performance. We have
not yet completed our evaluation of ASU
2009-17
and
therefore have not determined the effect our adoption of ASU
2009-17
will
have on our consolidated financial statements.
Acquisition
of Real Estate Assets and Related Depreciation and
Amortization
We capitalize the purchase price and incremental direct costs
associated with the acquisition of properties as the cost of the
assets acquired. We allocate the cost of acquired properties to
tangible assets and identified intangible assets based on their
fair values. We determine the fair value of tangible assets,
such as land, building, furniture, fixtures and equipment, on an
“as-if vacant” basis, generally using internal
valuation techniques that consider comparable market
transactions, discounted cash flow techniques, replacement costs
and other available information. We determine the fair value of
identified intangible assets (or liabilities), which typically
relate to in-place leases, using internal valuation techniques
that consider the terms of the in-place leases, current market
data for comparable leases, and our experience in leasing
similar properties. The intangible assets or liabilities related
to in-place leases are comprised of:
| 1. | The value of the above- and below-market leases in-place. An asset or liability is recognized based on the difference between (a) the contractual amounts to be paid pursuant to the in-place leases and (b) our estimate of fair market lease rates for the corresponding in-place leases, measured over the period, including estimated lease renewals for below-market leases, that the leases are expected to remain in effect. | |
| 2. | The estimated unamortized portion of avoided leasing commissions and other costs that ordinarily would be incurred to acquire the in-place leases. | |
| 3. | The value associated with vacant units during the absorption period (estimates of lost rental revenue during the expected lease-up periods based on current market demand and stabilized occupancy levels). |
The values of the above- and below-market leases are amortized
to rental revenue over the expected remaining terms of the
associated leases. Other intangible assets related to in-place
leases are amortized to depreciation and amortization over the
expected remaining terms of the associated leases. Amortization
is adjusted, as necessary, to reflect any early lease
terminations that were not anticipated in determining
amortization periods.
Depreciation for all tangible real estate assets is calculated
using the straight-line method over their estimated useful
lives. Acquired buildings and improvements are depreciated over
a composite life of 14 to 52 years, based on the age,
condition and other physical characteristics of the property. As
discussed under
Impairment of Long Lived Assets
below, we
may adjust depreciation of properties that are expected to be
disposed of or demolished prior to the end of their useful
lives. Furniture, fixtures and equipment associated with
acquired properties are depreciated over five years.
At December 31, 2009 and 2008, deferred income in our
consolidated balance sheets includes below-market lease amounts
totaling $31.8 million and $36.2 million,
respectively, which are net of accumulated amortization of
$21.0 million and $16.6 million, respectively.
Additions to below-market leases resulting from acquisitions
during the year ended December 31, 2007 totaled
$18.9 million, and there were no such additions during the
years ended December 31, 2009 or 2008. During the years
ended December 31, 2009, 2008 and 2007, we included
amortization of below-market leases of $4.4 million,
$4.4 million and $4.6 million, respectively, in rental
and other property
F-10
Table of Contents
revenues in our consolidated statements of income. During the
year ended December 31, 2008, we revised the estimated fair
value of assets acquired and liabilities assumed in acquisitions
completed in 2007, resulting in a $4.7 million reduction of
below-market lease values and a corresponding reduction in
buildings and improvements. At December 31, 2009, our
below-market leases had a weighted average amortization period
of 7.1 years and estimated aggregate amortization for each
of the five succeeding years as follows (in millions):
| 2010 | 2011 | 2012 | 2013 | 2014 | ||||||||||||||||
|
Estimated amortization
|
$ | 3.9 | $ | 3.6 | $ | 3.2 | $ | 2.8 | $ | 2.5 | ||||||||||
Capital
Additions and Related Depreciation
We capitalize costs, including certain indirect costs, incurred
in connection with our capital additions activities, including
redevelopment and construction projects, other tangible property
improvements, and replacements of existing property components.
Included in these capitalized costs are payroll costs associated
with time spent by site employees in connection with the
planning, execution and control of all capital additions
activities at the property level. We characterize as
“indirect costs” an allocation of certain department
costs, including payroll, at the area operations and corporate
levels that clearly relate to capital additions activities. We
capitalize interest, property taxes and insurance during periods
in which redevelopment and construction projects are in
progress. We charge to expense as incurred costs that do not
relate to capital expenditure activities, including ordinary
repairs, maintenance, resident turnover costs and general and
administrative expenses.
We depreciate capitalized costs using the straight-line method
over the estimated useful life of the related component or
improvement, which is generally five, 15 or 30 years. All
capitalized site payroll and indirect costs are allocated
proportionately, based on direct costs, among capital projects
and depreciated over the estimated useful lives of such projects.
Certain homogeneous items that are purchased in bulk on a
recurring basis, such as carpeting and appliances, are
depreciated using group methods that reflect the average
estimated useful life of the items in each group. Except in the
case of property casualties, where the net book value of lost
property is written off in the determination of casualty gains
or losses, we generally do not recognize any loss in connection
with the replacement of an existing property component because
normal replacements are considered in determining the estimated
useful lives used in connection with our composite and group
depreciation methods.
For the years ended December 31, 2009, 2008 and 2007, for
continuing and discontinued operations, we capitalized
$9.8 million, $25.7 million and $30.8 million,
respectively, of interest costs, and $40.0 million,
$78.1 million and $78.1 million, respectively, of site
payroll and indirect costs, respectively.
Impairment
of Long-Lived Assets
Our real estate and other long-lived assets classified as held
for use are stated at cost, less accumulated depreciation and
amortization, unless the carrying amounts are not recoverable.
If events or circumstances indicate that the carrying amount of
a property may not be recoverable, we make an assessment of its
recoverability by comparing the carrying amount to our estimate
of the undiscounted future cash flows, excluding interest
charges, of the property. If the carrying amount exceeds the
aggregate undiscounted future cash flows, we recognize an
impairment loss to the extent the carrying amount exceeds the
estimated fair value of the property.
In connection with the preparation of our 2008 annual financial
statements, we assessed the recoverability of our investment in
our Lincoln Place property, located in Venice, California. Based
upon the declines in land values in Southern California during
2008 and the expected timing of our redevelopment efforts, we
determined that the total carrying amount of the property was no
longer probable of full recovery and, accordingly, during the
three months ended December 31, 2008, recognized an
impairment loss of $85.4 million ($55.6 million net of
tax).
Similarly, we assessed the recoverability of our investment in
Pacific Bay Vistas (formerly Treetops), a vacant property
located in San Bruno, California, and determined that the
carrying amount of the property was no longer probable of full
recovery and, accordingly, we recognized an impairment loss of
$5.7 million for this property during the three months
ended December 31, 2008.
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In addition to the impairments of Lincoln Place and Pacific Bay
Vistas, based on periodic tests of recoverability of long-lived
assets, for the years ended December 31, 2009 and 2007, we
recorded real estate impairment losses of $2.3 million and
$1.1 million, respectively, related to properties
classified as held for use. For the year ended December 31,
2008, we recorded no similar impairment losses related to
properties classified as held for use.
We report impairment losses or recoveries related to properties
sold or classified as held for sale in discontinued operations.
Our tests of recoverability address real estate assets that do
not currently meet all conditions to be classified as held for
sale, but are expected to be disposed of prior to the end of
their estimated useful lives. If an impairment loss is not
required to be recorded, the recognition of depreciation is
adjusted prospectively, as necessary, to reduce the carrying
amount of the real estate to its estimated disposition value
over the remaining period that the real estate is expected to be
held and used. We also may adjust depreciation prospectively to
reduce to zero the carrying amount of buildings that we plan to
demolish in connection with a redevelopment project. These
depreciation adjustments, after adjustments for noncontrolling
interests, decreased net income available to Aimco common
stockholders by $18.3 million, $10.7 million and
$33.8 million, and resulted in decreases in basic and
diluted earnings per share of $0.16, $0.12 and $0.35, for the
years ended December 31, 2009, 2008 and 2007, respectively.
Cash
Equivalents
We classify highly liquid investments with an original maturity
of three months or less as cash equivalents.
Restricted
Cash
Restricted cash includes capital replacement reserves,
completion repair reserves, bond sinking fund amounts and tax
and insurance escrow accounts held by lenders.
Accounts
Receivable and Allowance for Doubtful Accounts
Accounts receivable are generally comprised of amounts
receivable from residents, amounts receivable from
non-affiliated real estate partnerships for which we provide
property management and other services and other miscellaneous
receivables from non-affiliated entities. We evaluate
collectibility of accounts receivable from residents and
establish an allowance, after the application of security
deposits and other anticipated recoveries, for accounts greater
than 30 days past due for current residents and all
receivables due from former residents. Accounts receivable from
residents are stated net of allowances for doubtful accounts of
approximately $1.4 million and $3.3 million as of
December 31, 2009 and 2008, respectively.
We evaluate collectibility of accounts receivable from
non-affiliated entities and establish an allowance for amounts
that are considered to be uncollectible. Accounts receivable
relating to non-affiliated entities are stated net of allowances
for doubtful accounts of approximately $5.4 million and
$5.0 million as of December 31, 2009 and 2008,
respectively.
Accounts
Receivable and Allowance for Doubtful Accounts from
Affiliates
Accounts receivable from affiliates are generally comprised of
receivables related to property management and other services
provided to unconsolidated real estate partnerships in which we
have an ownership interest. We evaluate collectibility of
accounts receivable balances from affiliates on a periodic
basis, and establish an allowance for the amounts deemed to be
uncollectible. Accounts receivable from affiliates are stated
net of allowances for doubtful accounts of approximately
$1.9 million and $2.8 million as of December 31,
2009 and 2008, respectively.
Deferred
Costs
We defer lender fees and other direct costs incurred in
obtaining new financing and amortize the amounts over the terms
of the related loan agreements. Amortization of these costs is
included in interest expense.
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We defer leasing commissions and other direct costs incurred in
connection with successful leasing efforts and amortize the
costs over the terms of the related leases. Amortization of
these costs is included in depreciation and amortization.
Notes
Receivable from Unconsolidated Real Estate Partnerships and
Non-Affiliates and Related Interest Income and Provision for
Losses
Notes receivable from unconsolidated real estate partnerships
consist primarily of notes receivable from partnerships in which
we are the general partner but do not consolidate the
partnership. The ultimate repayment of these notes and those
from non-affiliates is subject to a number of variables,
including the performance and value of the underlying real
estate property and the claims of unaffiliated mortgage lenders.
Our notes receivable include loans extended by us that we carry
at the face amount plus accrued interest, which we refer to as
“par value notes,” and loans extended by predecessors
whose positions we generally acquired at a discount, which we
refer to as “discounted notes.”
We record interest income on par value notes as earned in
accordance with the terms of the related loan agreements. We
discontinue the accrual of interest on such notes when the notes
are impaired, as discussed below, or when there is otherwise
significant uncertainty as to the collection of interest. We
record income on such nonaccrual loans using the cost recovery
method, under which we apply cash receipts first to the recorded
amount of the loan; thereafter, any additional receipts are
recognized as income.
We recognize interest income on discounted notes receivable
based upon whether the amount and timing of collections are both
probable and reasonably estimable. We consider collections to be
probable and reasonably estimable when the borrower has closed
or entered into certain pending transactions (which include real
estate sales, refinancings, foreclosures and rights offerings)
that provide a reliable source of repayment. In such instances,
we recognize accretion income, on a prospective basis using the
effective interest method over the estimated remaining term of
the loans, equal to the difference between the carrying amount
of the discounted notes and the estimated collectible value. We
record income on all other discounted notes using the cost
recovery method.
We assess the collectibility of notes receivable on a periodic
basis, which assessment consists primarily of an evaluation of
cash flow projections of the borrower to determine whether
estimated cash flows are sufficient to repay principal and
interest in accordance with the contractual terms of the note.
We recognize impairments on notes receivable when it is probable
that principal and interest will not be received in accordance
with the contractual terms of the loan. The amount of the
impairment to be recognized generally is based on the fair value
of the partnership’s real estate that represents the
primary source of loan repayment. In certain instances where
other sources of cash flow are available to repay the loan, the
impairment is measured by discounting the estimated cash flows
at the loan’s original effective interest rate. See
Note 5 for further discussion of Notes Receivable.
Investments
in Unconsolidated Real Estate Partnerships
We own general and limited partner interests in real estate
partnerships that own apartment properties. We generally account
for investments in real estate partnerships that we do not
consolidate under the equity method. Under the equity method,
our share of the earnings or losses of the entity for the
periods being presented is included in equity in earnings
(losses) from unconsolidated real estate partnerships, except
for our share of impairments and property disposition gains
related to such entities, which we report separately in the
consolidated statements of income. Certain investments in real
estate partnerships that were acquired in business combinations
were determined to have insignificant value at the acquisition
date and are accounted for under the cost method. Any
distributions received from such partnerships are recognized as
income when received.
The excess of the cost of the acquired partnership interests
over the historical carrying amount of partners’ equity or
deficit is ascribed generally to the fair values of land and
buildings owned by the partnerships. We amortize the excess cost
related to the buildings over the estimated useful lives of the
buildings. Such amortization is recorded as a component of
equity in earnings (losses) of unconsolidated real estate
partnerships.
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Intangible
Assets
At December 31, 2009 and 2008, other assets included
goodwill associated with our real estate segment of
$71.8 million and $81.9 million, respectively. We
perform an annual impairment test of goodwill that compares the
fair value of reporting units with their carrying amounts,
including goodwill. We determined that our goodwill was not
impaired in 2009, 2008 or 2007.
During the year ended December 31, 2009, we allocated
$10.1 million of goodwill related to our real estate
segment to the carrying amounts of the properties sold or
classified as held for sale. 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
as allocated. During 2008 and 2007, we did not allocate any
goodwill to properties sold or classified as held for sale as
real estate properties were not considered businesses under then
applicable accounting principles generally accepted in the
United States of America, or GAAP.
Other assets also includes intangible assets for purchased
management contracts with finite lives that we amortize on a
straight-line basis over terms ranging from five to
20 years and intangible assets for in-place leases as
discussed under
Acquisition of Real Estate Assets and Related
Depreciation and Amortization.
Capitalized
Software Costs
Purchased software and other costs related to software developed
for internal use are capitalized during the application
development stage and are amortized using the straight-line
method over the estimated useful life of the software, generally
five years. We write-off the costs of software development
projects when it is no longer probable that the software will be
completed and placed in service. For the years ended
December 31, 2009, 2008 and 2007, we capitalized software
development costs totaling $5.6 million, $20.9 million
and $11.9 million, respectively. At December 31, 2009
and 2008, other assets included $29.7 million and
$35.7 million of net capitalized software, respectively.
During the years ended December 31, 2009, 2008 and 2007, we
recognized amortization of capitalized software of
$11.5 million, $10.0 million and $10.8 million,
respectively, which is included in depreciation and amortization
in our consolidated statements of income.
During the year ended December 31, 2008, we reassessed our
approach to communication technology needs at our properties,
which resulted in the discontinuation of an infrastructure
project and a $5.4 million write-off of related hardware
and capitalized internal and consulting costs included in other
assets. The write-off, which is net of sales proceeds, is
included in other expenses, net. During the year ended
December 31, 2008, we additionally recorded a
$1.6 million write-off of certain software and hardware
assets that are no longer consistent with our information
technology strategy. This write-off is included in depreciation
and amortization. During the year ended December 31, 2007,
we abandoned certain internal-use software development projects
and recorded a $4.2 million write-off of the capitalized
costs of such projects in depreciation and amortization. There
were no similar write-offs during the year ended
December 31, 2009.
Noncontrolling
Interests in Consolidated Real Estate Partnerships
We report the unaffiliated partners’ interests in our
consolidated real estate partnerships as noncontrolling
interests in consolidated real estate partnerships.
Noncontrolling interests in consolidated real estate
partnerships represent the noncontrolling partners’ share
of the underlying net assets of our consolidated real estate
partnerships. Prior to 2009, when these consolidated real estate
partnerships made cash distributions to partners in excess of
the carrying amount of the noncontrolling interest, we generally
recorded a charge equal to the amount of such excess
distribution, even though there was no economic effect or cost.
These charges are reported in the consolidated statements of
income for the years ended December 31, 2008 and 2007
within noncontrolling interests in consolidated real estate
partnerships. Also prior to 2009, we allocated the
noncontrolling partners’ share of partnership losses to
noncontrolling partners to the extent of the carrying amount of
the noncontrolling interest. We generally recorded a charge when
the noncontrolling partners’ share of partnership losses
exceed the carrying amount of the noncontrolling interest, even
though there is no economic effect or cost. These charges are
reported in the consolidated statements of income within
noncontrolling interests in consolidated real estate
partnerships. We did not record charges for distributions or
losses in certain limited instances where the noncontrolling
partner had a
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legal obligation and financial capacity to contribute additional
capital to the partnership. For the years ended
December 31, 2008 and 2007, we recorded charges for
partnership losses resulting from depreciation of approximately
$9.0 million and $12.2 million, respectively that were
not allocated to noncontrolling partners because the losses
exceeded the carrying amount of the noncontrolling interest.
Noncontrolling interests in consolidated real estate
partnerships consist primarily of equity interests held by
limited partners in consolidated real estate partnerships that
have finite lives. The terms of the related partnership
agreements generally require the partnership to be liquidated
following the sale of the partnership’s real estate. As the
general partner in these partnerships, we ordinarily control the
execution of real estate sales and other events that could lead
to the liquidation, redemption or other settlement of
noncontrolling interests. The aggregate carrying amount of
noncontrolling interests in consolidated real estate
partnerships is approximately $316.2 million at
December 31, 2009. The aggregate fair value of these
interests varies based on the fair value of the real estate
owned by the partnerships. Based on the number of classes of
finite-life noncontrolling interests, the number of properties
in which there is direct or indirect noncontrolling ownership,
complexities in determining the allocation of liquidation
proceeds among partners and other factors, we believe it is
impracticable to determine the total required payments to the
noncontrolling interests in an assumed liquidation at
December 31, 2009. As a result of real estate depreciation
that is recognized in our financial statements and appreciation
in the fair value of real estate that is not recognized in our
financial statements, we believe that the aggregate fair value
of our noncontrolling interests exceeds their aggregate carrying
amount. As a result of our ability to control real estate sales
and other events that require payment of noncontrolling
interests and our expectation that proceeds from real estate
sales will be sufficient to liquidate related noncontrolling
interests, we anticipate that the eventual liquidation of these
noncontrolling interests will not have an adverse impact on our
financial condition.
Revenue
Recognition
Our properties have operating leases with apartment residents
with terms generally of 12 months or less. We recognize
rental revenue related to these leases, net of any concessions,
on a straight-line basis over the term of the lease. We
recognize revenues from property management, asset management,
syndication and other services when the related fees are earned
and are realized or realizable.
Advertising
Costs
We generally expense all advertising costs as incurred to
property operating expense. For the years ended
December 31, 2009, 2008 and 2007, for both continuing and
discontinued operations, total advertising expense was
$25.0 million, $36.0 million and $38.0 million,
respectively.
Insurance
We believe that our insurance coverages insure our properties
adequately against the risk of loss attributable to fire,
earthquake, hurricane, tornado, flood, and other perils. In
addition, we have insurance coverage for substantial portions of
our property, workers’ compensation, health, and general
liability exposures. Losses are accrued based upon our estimates
of the aggregate liability for uninsured losses incurred using
certain actuarial assumptions followed in the insurance industry
and based on our experience.
Stock-Based
Compensation
We recognize all stock-based employee compensation, including
grants of employee stock options, in the consolidated financial
statements based on the grant date fair value and recognize
compensation cost, which is net of estimates for expected
forfeitures, ratably over the awards’ requisite service
period. See Note 12 for further discussion of our
stock-based compensation.
Tax
Credit Arrangements
We sponsor certain partnerships that own and operate apartment
properties that qualify for tax credits under Section 42 of
the Internal Revenue Code of 1986, as amended, which we refer to
as the Code, and for the U.S. Department of Housing and
Urban Development, or HUD, subsidized rents under HUD’s
Section 8 program.
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These partnerships acquire, develop and operate qualifying
affordable housing properties and are structured to provide for
the pass-through of tax credits and deductions to their
partners. The tax credits are generally realized ratably over
the first ten years of the tax credit arrangement and are
subject to the partnership’s compliance with applicable
laws and regulations for a period of 15 years. Typically,
we are the general partner with a legal ownership interest of
one percent or less. We market limited partner interests of at
least 99 percent to unaffiliated institutional investors
(which we refer to as tax credit investors or investors) and
receive a syndication fee from each investor upon such
investor’s admission to the partnership. At inception, each
investor agrees to fund capital contributions to the
partnerships. We agree to perform various services to the
partnerships in exchange for fees over the expected duration of
the tax credit service period. The related partnership
agreements generally require adjustment of each tax credit
investor’s required capital contributions if actual tax
benefits to such investor differ from projected amounts.
We have determined that the partnerships in these arrangements
are variable interest entities and, where we are general
partner, we are generally the primary beneficiary that is
required to consolidate the partnerships. When the contractual
arrangements obligate us to deliver tax benefits to the
investors, and entitle us through fee arrangements to receive
substantially all available cash flow from the partnerships, we
account for these partnerships as wholly owned subsidiaries.
Capital contributions received by the partnerships from tax
credit investors represent, in substance, consideration that we
receive in exchange for our obligation to deliver tax credits
and other tax benefits to the investors, and the receipts are
recognized as revenue in our consolidated financial statements
when our obligation to the investors is relieved upon delivery
of the expected tax benefits.
In summary, our accounting treatment recognizes the income or
loss generated by the underlying real estate based on our
economic interest in the partnerships. Proceeds received in
exchange for the transfer of the tax credits are recognized as
revenue proportionately as the tax benefits are delivered to the
tax credit investors and our obligation is relieved. Syndication
fees and related costs are recognized in income upon completion
of the syndication effort. We recognize syndication fees in
amounts determined based on a market rate analysis of fees for
comparable services, which generally fell within a range of 10%
to 15% of investor contributions during the periods presented.
Other direct and incremental costs incurred in structuring these
arrangements are deferred and amortized over the expected
duration of the arrangement in proportion to the recognition of
related income. Investor contributions in excess of recognized
revenue are reported as deferred income in our consolidated
balance sheets.
During the years ended December 31, 2008 and 2007, we
recognized syndication fee income of $3.4 million and
$13.8 million, respectively. We recognized no syndication
fee income during the year ended December 31, 2009. During
the years ended December 31, 2009, 2008 and 2007 we
recognized revenue associated with the delivery of tax benefits
of $36.6 million, $29.4 million and
$24.0 million, respectively. At December 31, 2009 and
2008, $148.1 million and $159.6 million, respectively, of
investor contributions in excess of the recognized revenue were
included in deferred income in our consolidated balance sheets.
Discontinued
Operations
We classify certain properties and related assets and
liabilities as held for sale when they meet certain criteria.
The operating results of such properties as well as those
properties sold during the periods presented are included in
discontinued operations in both current periods and all
comparable periods presented. Depreciation is not recorded on
properties once they have been classified as held for sale;
however, depreciation expense recorded prior to classification
as held for sale is included in discontinued operations. The net
gain on sale and any impairment losses are presented in
discontinued operations when recognized. See Note 13 for
additional information regarding discontinued operations.
Derivative
Financial Instruments
We primarily use long-term, fixed-rate and
self-amortizing
non-recourse debt to avoid, among other things, risk related to
fluctuating interest rates. For our variable rate debt, we are
sometimes required by our lenders to limit our exposure to
interest rate fluctuations by entering into interest rate swap
or cap agreements. The interest rate swap agreements moderate
our exposure to interest rate risk by effectively converting the
interest on variable rate debt to a fixed rate. The interest
rate cap agreements effectively limit our exposure to interest
rate risk by providing a
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ceiling on the underlying variable interest rate. The fair
values of the interest rate swaps are reflected as assets or
liabilities in the balance sheet, and periodic changes in fair
value are included in interest expense or equity, as
appropriate. These interest rate caps are not material to our
financial position or results of operations.
As of December 31, 2009 and 2008, we had interest rate
swaps with aggregate notional amounts of $52.3 million and
$27.2 million, and recorded fair values of
$1.6 million and $2.6 million, respectively, reflected
in accrued liabilities and other in our consolidated balance
sheets. At December 31, 2009, these interest rate swaps had
a weighted average term of 11.1 years. We have designated
these interest rate swaps as cash flow hedges and recognize any
changes in their fair value as an adjustment of accumulated
other comprehensive income within equity to the extent of their
effectiveness. For the year ended December 31, 2009, we
recognized changes in fair value of $1.0 million, of which
$1.4 million resulted in an adjustment to accumulated other
comprehensive loss within consolidated equity. For the year
ended December 31, 2008, we recognized changes in fair
value of $2.2 million, of which $2.1 million resulted
in an adjustment to accumulated other comprehensive loss within
consolidated equity. We recognized $0.4 million and less
than $0.1 million of ineffectiveness as an adjustment of
interest expense during the years ended December 31, 2009
and 2008, respectively, and we recognized no ineffectiveness
during the year ended December 31, 2007. Our consolidated
comprehensive loss for the year ended December 31, 2009
totaled $43.4 million and our comprehensive income for the
years ended December 31, 2008 and 2007, totaled
$624.9 million and $124.8 million, respectively,
before the effects of noncontrolling interests. If the forward
rates at December 31, 2009 remain constant, we estimate
that during the next twelve months, we would reclassify into
earnings approximately $1.5 million of the unrealized
losses in accumulated other comprehensive income.
We have entered into total rate of return swaps on various fixed
rate secured tax-exempt bonds payable and fixed rate notes
payable to convert these borrowings from a fixed rate to a
variable rate and provide an efficient financing product to
lower our cost of borrowing. In exchange for our receipt of a
fixed rate generally equal to the underlying borrowing’s
interest rate, the total rate of return swaps require that we
pay a variable rate, equivalent to the Securities Industry and
Financial Markets Association Municipal Swap Index, or SIFMA,
rate for tax-exempt bonds payable and the
30-day
LIBOR
rate for notes payable, plus a risk spread. These swaps
generally have a second or third lien on the property
collateralized by the related borrowings and the obligations
under certain of these swaps are cross-collateralized with
certain of the other swaps with a particular counterparty. The
underlying borrowings are generally callable at our option, with
no prepayment penalty, with 30 days advance notice, and the
swaps generally have a term of less than five years. The total
rate of return swaps have a contractually defined termination
value generally equal to the difference between the fair value
and the counterparty’s purchased value of the underlying
borrowings, which may require payment by us or to us for such
difference. Accordingly, we believe fluctuations in the fair
value of the borrowings from the inception of the hedging
relationship generally will be offset by a corresponding
fluctuation in the fair value of the total rate of return swaps.
We designate total rate of return swaps as hedges of the risk of
overall changes in the fair value of the underlying borrowings.
At each reporting period, we estimate the fair value of these
borrowings and the total rate of return swaps and recognize any
changes therein as an adjustment of interest expense. We
evaluate the effectiveness of these fair value hedges at the end
of each reporting period and recognize an adjustment of interest
expense as a result of any ineffectiveness.
Borrowings payable subject to total rate of return swaps with
aggregate outstanding principal balances of $352.7 million
and $421.7 million at December 31, 2009 and 2008,
respectively, are reflected as variable rate borrowings in
Note 6. Due to changes in the estimated fair values of
these debt instruments and the corresponding total rate of
return swaps, we increased property loans payable by
$5.2 million for the year ended December 31, 2009, and
reduced property loans payable by $20.1 million and
$9.4 million for the years ended December 31, 2008 and
2007, respectively, with offsetting adjustments to accrued
liabilities, resulting in no net effect on net income. Refer to
Fair Value Measurements
for further discussion of fair
value measurements related to these arrangements. During 2009,
2008 and 2007, we determined these hedges were fully effective
and accordingly we made no adjustments to interest expense for
ineffectiveness.
At December 31, 2009, the weighted average fixed receive
rate under the total return swaps was 6.8% and the weighted
average variable pay rate was 1.0%, based on the applicable
SIFMA and
30-day
LIBOR
rates effective as
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of that date. Further information related to our total return
swaps as of December 31, 2009 is as follows (dollars in
millions):
|
Weighted Average Swap
|
||||||||||||||||||||
|
Weighted
|
Swap
|
Variable Pay Rate at
|
||||||||||||||||||
|
Debt
|
Year of Debt
|
Average Debt
|
Swap Notional
|
Maturity
|
December 31,
|
|||||||||||||||
|
Principal
|
Maturity | Interest Rate | Amount | Date | 2009 | |||||||||||||||
| $ | 45.2 | 2012 | 7.5 | % | $ | 45.2 | 2012 | 1.6 | % | |||||||||||
| 24.0 | 2015 | 6.9 | % | 24.0 | 2012 | 1.0 | % | |||||||||||||
| 14.2 | 2018 | 7.3 | % | 14.2 | 2012 | 1.0 | % | |||||||||||||
| 42.8 | 2025 | 7.0 | % | 42.8 | 2012 | 1.0 | % | |||||||||||||
| 93.0 | 2031 | 7.4 | % | 93.0 | 2012 | 1.0 | % | |||||||||||||
| 108.7 | 2036 | 6.2 | % | 109.1 | 2012 | 0.7 | % | |||||||||||||
| 12.3 | 2038 | 5.5 | % | 12.3 | 2012 | 0.9 | % | |||||||||||||
| 12.5 | 2048 | 6.5 | % | 12.5 | 2012 | 0.9 | % | |||||||||||||
| $ | 352.7 | $ | 353.1 | |||||||||||||||||
Fair
Value Measurements
Beginning in 2008, we applied the FASB’s revised accounting
provisions related to fair value measurements, which are
codified in FASB ASC Topic 820. These revised provisions define
fair value as the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, establish a
hierarchy that prioritizes the information used in developing
fair value estimates and require disclosure of fair value
measurements by level within the fair value hierarchy. The
hierarchy gives the highest priority to quoted prices in active
markets (Level 1 measurements) and the lowest priority to
unobservable data (Level 3 measurements), such as the
reporting entity’s own data. We adopted the revised fair
value measurement provisions that apply to recurring and
nonrecurring fair value measurements of financial assets and
liabilities effective January 1, 2008, and the provisions
that apply to the remaining fair value measurements effective
January 1, 2009, and at those times determined no
transition adjustments were required.
The valuation hierarchy is based upon the transparency of inputs
to the valuation of an asset or liability as of the measurement
date and includes three levels defined as follows:
|
Level 1 —
|
Unadjusted quoted prices for identical and unrestricted assets or liabilities in active markets | |
|
Level 2 —
|
Quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument | |
|
Level 3 —
|
Unobservable inputs that are significant to the fair value measurement |
A financial instrument’s categorization within the
valuation hierarchy is based upon the lowest level of input that
is significant to the fair value measurement.
Following are descriptions of the valuation methodologies used
for our significant assets or liabilities measured at fair value
on a recurring or nonrecurring basis. Although some of the
valuation methodologies use observable market inputs in limited
instances, the majority of inputs we use are unobservable and
are therefore classified within Level 3 of the valuation
hierarchy.
Provisions
for Real Estate Impairment Losses
If events or circumstances indicate that the carrying amount of
a property may not be recoverable, we make an assessment of its
recoverability by comparing the carrying amount to our estimate
of the undiscounted future cash flows, excluding interest
charges, of the property. If the carrying amount exceeds the
aggregate undiscounted future cash flows, we recognize an
impairment loss to the extent the carrying amount exceeds the
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estimated fair value of the property, for properties classified
as held for use, and estimated fair value of the property, less
estimated selling costs, for properties classified as held for
sale.
We estimate the fair value of real estate using income and
market valuation techniques using information such as broker
estimates, purchase prices for recent transactions on comparable
assets and net operating income capitalization analyses using
observable and unobservable inputs such as capitalization rates,
asset quality grading, geographic location analysis, and local
supply and demand observations. For certain properties
classified as held for sale, we may also recognize the
impairment loss based on the contract sale price, which we
believe is representative of fair value, less estimated selling
costs.
Notes
Receivable
We assess the collectibility of notes receivable on a periodic
basis, which assessment consists primarily of an evaluation of
cash flow projections of the borrower to determine whether
estimated cash flows are sufficient to repay principal and
interest in accordance with the contractual terms of the note.
We recognize impairments on notes receivable when it is probable
that principal and interest will not be received in accordance
with the contractual terms of the loan. The amount of the
impairment to be recognized generally is based on the fair value
of the real estate, which represents the primary source of loan
repayment. The fair value of real estate is estimated through
income and market valuation approaches using information such as
broker estimates, purchase prices for recent transactions on
comparable assets and net operating income capitalization
analyses using observable and unobservable inputs such as
capitalization rates, asset quality grading, geographic location
analysis, and local supply and demand observations.
Interest
Rate Swaps
We estimate the fair value of interest rate swaps using an
income approach with primarily observable inputs, including
information regarding the hedged variable cash flows and forward
yield curves relating to the variable interest rates on which
the hedged cash flows are based.
Total
Rate of Return Swaps
Our total rate of return swaps have contractually-defined
termination values generally equal to the difference between the
fair value and the counterparty’s purchased value of the
underlying borrowings. Upon termination, we are required to pay
the counterparty the difference if the fair value is less than
the purchased value, and the counterparty is required to pay us
the difference if the fair value is greater than the purchased
value. The underlying borrowings are generally callable, at our
option, at face value prior to maturity and with no prepayment
penalty. Due to our control of the call features in the
underlying borrowings, we believe the inherent value of any
differential between the fixed and variable cash payments due
under the swaps would be significantly discounted by a market
participant willing to purchase or assume any rights and
obligations under these contracts.
The swaps are generally cross-collateralized with other swap
contracts with the same counterparty and do not allow transfer
or assignment, thus there is no alternate or secondary market
for these instruments. Accordingly, our assumptions about the
fair value that a willing market participant would assign in
valuing these instruments are based on a hypothetical market in
which the highest and best use of these contracts is in-use in
combination with the related borrowings, similar to how we use
the contracts. Based on these assumptions, we believe the
termination value, or exit value, of the swaps approximates the
fair value that would be assigned by a willing market
participant. We calculate the termination value using a market
approach by reference to estimates of the fair value of the
underlying borrowings, which are discussed below, and an
evaluation of potential changes in the credit quality of the
counterparties to these arrangements. We compare our estimates
of the fair value of the swaps and related borrowings to the
valuations provided by the counterparties on a quarterly basis.
Our method for calculating fair value of the swaps generally
results in changes in fair value equal to the changes in fair
value of the related borrowings. Accordingly, we believe these
instruments are highly effective in offsetting the changes in
fair value of the borrowings during the hedging period.
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Table of Contents
Changes
in Fair Value of Borrowings Subject to Total Rate of Return
Swaps
We recognize changes in the fair value of certain borrowings
subject to total rate of return swaps, which we have designated
as fair value hedges.
We estimate the fair value of debt instruments using an income
and market approach, including comparison of the contractual
terms to observable and unobservable inputs such as market
interest rate risk spreads, collateral quality and
loan-to-value
ratios on similarly encumbered assets within our portfolio.
These borrowings are collateralized and non-recourse to us;
therefore, we believe changes in our credit rating will not
materially affect a market participant’s estimate of the
borrowings’ fair value.
The methods described above may produce a fair value calculation
that may not be indicative of net realizable value or reflective
of future fair values. Furthermore, although we believe our
valuation methods are appropriate and consistent with other
market participants, the use of different methodologies or
assumptions to determine the fair value of certain assets and
liabilities could result in a different estimate of fair value
at the reporting date.
The table below presents amounts at December 31, 2009, 2008
and 2007 (and the changes in fair value between such dates) for
significant items measured in our consolidated balance sheets at
fair value (in thousands). Certain of these fair value
measurements are based on significant unobservable inputs
classified within Level 3 of the valuation hierarchy. When
a determination is made to classify a fair value measurement
within Level 3 of the valuation hierarchy, the
determination is based upon the significance of the unobservable
factors to the overall fair value measurement. However,
Level 3 fair value measurements typically include, in
addition to the unobservable or Level 3 components,
observable components that can be validated to observable
external sources; accordingly, the changes in fair value in the
table below are due in part to observable factors that are part
of the valuation methodology.
| Level 2 | Level 3 | |||||||||||||||
|
Changes in Fair
|
||||||||||||||||
|
Value of Debt
|
||||||||||||||||
|
Interest
|
Instruments Subject
|
|||||||||||||||
|
Rate
|
Total rate of
|
to Total Rate of
|
||||||||||||||
| Swaps | return swaps | Return Swaps | Total | |||||||||||||
|
Fair value at December 31, 2007
|
$ | (371 | ) | $ | (9,420 | ) | $ | 9,420 | $ | (371 | ) | |||||
|
Unrealized gains (losses) included in earnings(1)(2)
|
(47 | ) | (20,075 | ) | 20,075 | (47 | ) | |||||||||
|
Realized gains (losses) included in earnings
|
— | — | — | — | ||||||||||||
|
Unrealized gains (losses) included in equity
|
(2,139 | ) | — | — | (2,139 | ) | ||||||||||
|
Fair value at December 31, 2008
|
$ | (2,557 | ) | $ | (29,495 | ) | $ | 29,495 | $ | (2,557 | ) | |||||
|
Unrealized gains (losses) included in earnings(1)(2)
|
(447 | ) | 5,188 | (5,188 | ) | (447 | ) | |||||||||
|
Realized gains (losses) included in earnings
|
— | — | — | — | ||||||||||||
|
Unrealized gains (losses) included in equity
|
1,408 | — | — | 1,408 | ||||||||||||
|
Fair value at December 31, 2009
|
$ | (1,596 | ) | $ | (24,307 | ) | $ | 24,307 | $ | (1,596 | ) | |||||
| (1) | Unrealized gains (losses) relate to periodic revaluations of fair value and have not resulted from the settlement of a swap position. | |
| (2) | Included in interest expense in the accompanying condensed consolidated statements of income. |
In addition to the amounts in the table above, during the years
ended December 31, 2009, 2008 and 2007, we recognized
$56.9 million, $118.6 million and $6.5 million,
respectively, of provisions for real estate impairment losses
(including amounts in discontinued operations) to reduce the
carrying amounts of certain real estate properties to their
estimated fair value (or fair value less estimated costs to
sell) and provisions for losses on notes receivable of
$21.5 million, $17.6 million and $2.0 million,
respectively, based on our estimates of the fair value of the
real estate properties that represent the primary source of
repayment. Based on the significance of the
F-20
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unobservable inputs used in our methods for estimating the fair
values for these amounts, we classify these fair value
measurements within Level 3 of the valuation hierarchy.
Disclosures
Regarding Fair Value of Financial Instruments
We believe that the aggregate fair value of our cash and cash
equivalents, receivables, payables and short-term secured debt
approximates their aggregate carrying value at December 31,
2009, due to their relatively short-term nature and high
probability of realization. We estimate fair value for our notes
receivable and debt instruments using present value techniques
that include income and market valuation approaches using
observable inputs such as market rates for debt with the same or
similar terms and unobservable inputs such as collateral quality
and
loan-to-value
ratios on similarly encumbered assets. Present value
calculations vary depending on the assumptions used, including
the discount rate and estimates of future cash flows. In many
cases, the fair value estimates may not be realizable in
immediate settlement of the instruments. The estimated aggregate
fair value of our notes receivable was approximately
$126.1 million and $161.6 million at December 31,
2009 and 2008, respectively. See Note 5 for further
information on notes receivable. The estimated aggregate fair
value of our consolidated debt (including amounts reported in
liabilities related to assets held for sale) was approximately
$5.7 billion and $6.7 billion at December 31,
2009 and 2008, respectively. The combined carrying amount of our
consolidated debt (including amounts reported in liabilities
related to assets held for sale) was approximately
$5.7 billion and $6.8 billion at December 31,
2009 and 2008, respectively. See Note 6 and Note 7 for
further details on our consolidated debt. Refer to
Derivative
Financial Instruments
for further discussion regarding
certain of our fixed rate debt that is subject to total rate of
return swap instruments.
Income
Taxes
We have elected to be taxed as a REIT under the Code commencing
with our taxable year ended December 31, 1994, and intend
to continue to operate in such a manner. Our current and
continuing qualification as a REIT depends on our ability to
meet the various requirements imposed by the Code, which are
related to organizational structure, distribution levels,
diversity of stock ownership and certain restrictions with
regard to owned assets and categories of income. If we qualify
for taxation as a REIT, we will generally not be subject to
United States Federal corporate income tax on our taxable income
that is currently distributed to stockholders. This treatment
substantially eliminates the “double taxation” (at the
corporate and stockholder levels) that generally results from an
investment in a corporation.
Even if we qualify as a REIT, we may be subject to United States
Federal income and excise taxes in various situations, such as
on our undistributed income. We also will be required to pay a
100% tax on any net income on non-arms length transactions
between us and a TRS (described below) and on any net income
from sales of property that was property held for sale to
customers in the ordinary course. We and our stockholders may be
subject to state or local taxation in various state or local
jurisdictions, including those in which we transact business or
our stockholders reside. In addition, we could also be subject
to the alternative minimum tax, or AMT, on our items of tax
preference. The state and local tax laws may not conform to the
United States Federal income tax treatment. Any taxes imposed on
us reduce our operating cash flow and net income.
Certain of our operations or a portion thereof, including
property management, asset management and risk, are conducted
through taxable REIT subsidiaries, which are subsidiaries of the
Aimco Operating Partnership, and each of which we refer to as a
TRS. A TRS is a C-corporation that has not elected REIT status
and as such is subject to United States Federal corporate income
tax. We use TRS entities to facilitate our ability to offer
certain services and activities to our residents, as these
services and activities generally cannot be offered directly by
the REIT. We also use TRS entities to hold investments in
certain properties.
For our TRS entities, deferred income taxes result from
temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts
used for Federal income tax purposes, and are measured using the
enacted tax rates and laws that are expected to be in effect
when the differences reverse. We reduce deferred tax assets by
recording a valuation allowance when we determine based on
available evidence that it is more likely than not that the
assets will not be realized. We recognize the tax consequences
associated with
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intercompany transfers between the REIT and TRS entities when
the related assets are sold to third parties, impaired or
otherwise disposed of for financial reporting purposes.
In March 2008, we were notified by the Internal Revenue Service
that it intended to examine the 2006 Federal tax return for the
Aimco Operating Partnership. During June 2008, the IRS issued
AIMCO-GP, Inc., the general and tax matters partner of the Aimco
Operating Partnership, a summary report including the IRS’s
proposed adjustments to the Aimco Operating Partnership’s
2006 Federal tax return. In addition, in May 2009, we were
notified by the IRS that it intended to examine the 2007 Federal
tax return for the Aimco Operating Partnership. During November
2009, the IRS issued AIMCO-GP, Inc. a summary report including
the IRS’s proposed adjustments to the Aimco Operating
Partnership’s 2007 Federal tax return. We do not expect the
2006 or 2007 proposed adjustments to have any material effect on
our unrecognized tax benefits, financial condition or results of
operations.
Concentration
of Credit Risk
Financial instruments that potentially could subject us to
significant concentrations of credit risk consist principally of
notes receivable and total rate of return swaps. As discussed in
Note 5, a significant portion of our notes receivable at
December 31, 2009, are collateralized by properties in the
West Harlem area of New York City. There are no other
significant concentrations of credit risk with respect to our
notes receivable due to the large number of partnerships that
are borrowers under the notes and the geographic diversity of
the properties that collateralize the notes.
At December 31, 2009, we had total rate of return swap
positions with two financial institutions totaling
$353.1 million. The swap positions with one counterparty
are comprised of $340.9 million of fixed rate debt
effectively converted to variable rates using total rate of
return swaps, including $295.7 million of tax-exempt bonds
indexed to SIFMA and $45.2 million of taxable second
mortgage notes indexed to LIBOR. Additionally, the swap
agreements with this counterparty provide for collateral calls
to maintain specified
loan-to-value
ratios. As of December 31, 2009, we were not required to
provide cash collateral pursuant to the total rate of return
swaps. We have one swap position with another counterparty that
is comprised of $12.2 million of fixed rate tax-exempt
bonds indexed to SIFMA. We periodically evaluate counterparty
credit risk associated with these arrangements. At the current
time, we have concluded we do not have material exposure. In the
event either counterparty were to default under these
arrangements, loss of the net interest benefit we generally
receive under these arrangements, which is equal to the
difference between the fixed rate we receive and the variable
rate we pay, may adversely impact our results of operations and
operating cash flows. In the event the values of the real estate
properties serving as collateral under these agreements decline,
we may be required to provide additional collateral pursuant to
the swap agreements, which may adversely affect our cash flows.
FASB
Accounting Standards Codification
In June 2009, the Financial Accounting Standards Board, or FASB,
issued Statement of Financial Accounting Standards No. 168,
The FASB Accounting Standards Codification and the Hierarchy
of Generally Accepted Accounting Principles — a
replacement of FASB Statement No. 162,
or
SFAS 168, which is effective for financial statements
issued for interim and annual periods ending after
September 15, 2009. Upon the effective date of
SFAS 168, the FASB Accounting Standards Codification, or
the FASB ASC, became the single source of authoritative GAAP
recognized by the FASB to be applied by nongovernmental
entities. Rules and interpretive releases of the Securities and
Exchange Commission, or SEC, under authority of federal
securities laws are also sources of authoritative GAAP for SEC
registrants. The FASB ASC superseded all then-existing non-SEC
accounting and reporting standards, and all other
non-grandfathered non-SEC accounting literature not included in
the FASB ASC is now non-authoritative. Subsequent to the
effective date of SFAS 168, the FASB will issue Accounting
Standards Updates that serve to update the FASB ASC.
Business
Combinations
We adopted the provisions of FASB Statement of Financial
Accounting Standards No. 141(R),
Business
Combinations — a replacement of FASB Statement
No. 141
, or SFAS 141(R), which are codified in
FASB ASC Topic 805, effective January 1, 2009. These
provisions apply to all transactions or events in which an
entity obtains
F-22
Table of Contents
control of one or more businesses, including those effected
without the transfer of consideration, for example by contract
or through a lapse of minority veto rights. These provisions
require the acquiring entity in a business combination to
recognize the full fair value of assets acquired and liabilities
assumed in the transaction (whether a full or partial
acquisition); establish the acquisition-date fair value as the
measurement objective for all assets acquired and liabilities
assumed; and require expensing of most transaction and
restructuring costs.
We believe most operating real estate assets meet the revised
definition of a business. Accordingly, beginning in 2009, we
expense transaction costs associated with acquisitions of
operating real estate or interests therein when we consolidate
the asset. The FASB did not provide implementation guidance
regarding the treatment of acquisition costs incurred prior to
December 31, 2008, for acquisitions that did not close
until 2009. The SEC indicated any of the following three
transition methods were acceptable, provided that the method
chosen is disclosed and applied consistently:
| 1) | expense acquisition costs in 2008 when it is probable that the acquisition will not close in 2008; | |
| 2) | expense acquisition costs January 1, 2009; or | |
| 3) | give retroactive treatment to the acquisition costs January 1, 2009, by retroactively adjusting prior periods to record acquisition costs in the prior periods in which they were incurred. |
We elected to apply the third method and accordingly have
retroactively adjusted our results of operations for the year
ended December 31, 2008, by $3.5 million, which also
resulted in a corresponding reduction to our December 31,
2008 equity balance. This retroactive adjustment is reflected in
investment management expenses in our accompanying consolidated
statements of income and reduced basic and diluted earnings per
share amounts by $0.04 for the year ended December 31, 2008.
Noncontrolling
Interests
Effective January 1, 2009, we adopted the provisions of
FASB Statement of Financial Accounting Standards No. 160,
Noncontrolling Interests in Consolidated Financial
Statements — an amendment of ARB No. 51
, or
SFAS 160, which are codified in FASB ASC Topic 810. These
provisions clarified that a noncontrolling interest in a
subsidiary is an ownership interest in a consolidated entity,
which should be reported as equity in the parent’s
consolidated financial statements. These provisions require
disclosure, on the face of the consolidated income statements,
of the amounts of consolidated net income and other
comprehensive income attributable to controlling and
noncontrolling interests, eliminating the past practice of
reporting amounts of income attributable to noncontrolling
interests as an adjustment in arriving at consolidated net
income. These provisions also require us to attribute to
noncontrolling interests their share of losses even if such
attribution results in a deficit noncontrolling interest balance
within our equity accounts, and in some instances, recognize a
gain or loss in net income when a subsidiary is deconsolidated.
In connection with our retrospective application of these
provisions, we reclassified into our consolidated equity
accounts the historical balances related to noncontrolling
interests in consolidated real estate partnerships and the
portion of noncontrolling interests in the Aimco Operating
Partnership related to the Aimco Operating Partnership’s
common OP Units and High Performance Units. At
December 31, 2008, the carrying amount of noncontrolling
interests in consolidated real estate partnerships was
$380.7 million and the carrying amount for noncontrolling
interests in Aimco Operating Partnership attributable to common
OP Units and High Performance Units was zero, due to cash
distributions in excess of the positive balances related to
those noncontrolling interests.
Beginning in 2009, we no longer record a charge related to cash
distributions to noncontrolling interests in excess of the
carrying amount of such noncontrolling interests, and we
attribute losses to noncontrolling interests even if such
attribution results in a deficit noncontrolling interest balance
within our equity accounts. The following table illustrates the
pro forma amounts of loss from continuing operations,
discontinued operations and net loss that would have been
attributed to Aimco common stockholders for the year ended
December 31, 2009, had we applied
F-23
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the accounting provisions related to noncontrolling interests
prior to their amendment by SFAS 160 (in thousands, except
per share amounts):
|
Year Ended
|
||||
|
December 31,
|
||||
| 2009 | ||||
|
Loss from continuing operations attributable to Aimco common
stockholders
|
$ | (225,957 | ) | |
|
Income from discontinued operations attributable to Aimco common
stockholders
|
91,044 | |||
|
Net loss attributable to Aimco common stockholders
|
$ | (134,913 | ) | |
|
Basic and diluted earnings (loss) per common share:
|
||||
|
Loss from continuing operations attributable to Aimco common
stockholders
|
$ | (1.98 | ) | |
|
Income from discontinued operations attributable to Aimco common
stockholders
|
0.80 | |||
|
Net loss attributable to Aimco common stockholders
|
$ | (1.18 | ) | |
The following table presents a reconciliation of preferred
noncontrolling interests in the Aimco Operating Partnership,
which are generally redeemable at the holders’ option and
may be settled in cash or, at the Aimco Operating
Partnership’s discretion, shares of Common Stock and are
included in temporary equity in our consolidated balance sheet,
for the years ending December 31, 2009, 2008 and 2007.
| 2009 | 2008 | 2007 | ||||||||||
|
Balance at January 1
|
$ | 88,148 | $ | 89,716 | $ | 90,120 | ||||||
|
Net income attributable to preferred noncontrolling interests in
the Aimco Operating Partnership
|
6,288 | 7,646 | 7,128 | |||||||||
|
Distributions attributable to preferred noncontrolling interests
in the Aimco Operating Partnership
|
(6,806 | ) | (7,486 | ) | (7,489 | ) | ||||||
|
Conversion of preferred units into Common Stock
|
— | — | (43 | ) | ||||||||
|
Purchases of preferred units
|
(1,725 | ) | (976 | ) | — | |||||||
|
Other
|
751 | (752 | ) | — | ||||||||
|
Balance at December 31
|
$ | 86,656 | $ | 88,148 | $ | 89,716 | ||||||
The effects on our equity of changes in our ownership interest
in the Aimco Operating Partnership are reflected in our
consolidated statement of equity as redemptions of Aimco
Operating Partnership units for Common Stock and repurchases of
common partnership units.
Changes in our ownership interest in consolidated real estate
partnerships generally consist of our purchase of an additional
interest in or the sale of our entire interest in a consolidated
real estate partnership. Our purchase of additional interests in
consolidated real estate partnerships had no direct effect on
equity attributable to Aimco during the years ended
December 31, 2008 and 2007, and did not have a significant
effect on equity attributable to Aimco during the year ended
December 31, 2009. The effect on our equity of sales of our
entire interest in consolidated real estate partnerships is
reflected in our consolidated financial statements as sales of
real estate and accordingly the effect on our equity is
reflected as gains on disposition of real estate, less the
amounts of such gains attributable to noncontrolling interests,
within consolidated net (loss) income attributable to Aimco
common stockholders.
Earnings
per Share
We calculate earnings per share based on the weighted average
number of shares of Common Stock, common stock equivalents,
participating securities and other potentially dilutive
securities outstanding during the period (see Note 14).
Effective January 1, 2009, we adopted the provisions of
FASB Statement of Position
No. EITF 03-6-1,
Determining Whether Instruments Granted in Share-Based
Payment Transactions are Participating Securities
, or FSP
EITF 03-6-1,
which are codified in FASB ASC Topic 260. FSP
EITF 03-6-1
clarified that unvested share-based
F-24
Table of Contents
payment awards that participate in dividends similar to shares
of common stock or common partnership units should be treated as
participating securities. FSP
EITF 03-6-1
affects our computation of basic and diluted earnings per share
for unvested restricted stock awards and shares purchased
pursuant to officer stock loans, which serve as collateral for
such loans, both of which entitle the holders to dividends.
Refer to Note 14, which details our calculation of earnings
per share and the effect of our retroactive application of FSP
EITF 03-6-1
on our earnings per share.
In December 2009, we adopted the provisions of FASB Accounting
Standards Update
2010-01,
Accounting for Distributions to Shareholders with Components
of Stock and Cash
, or ASU
2010-01,
which are codified in FASB ASC Topic 505. ASU
2010-01
requires that for distributions with components of cash and
stock, the portion distributed in stock should be accounted for
prospectively as a stock issuance with no retroactive adjustment
to basic and diluted earnings per share. In accordance with ASU
2010-01,
we
retrospectively revised the accounting treatment of our special
dividends paid during 2008 and 2009, resulting in changes in the
number of weighted average shares outstanding and earnings per
share amounts for the years ended December 31, 2008 and
2007, as compared to the amounts previously reported.
The following table illustrates the effects of these changes in
accounting treatment on our basic and diluted weighted average
shares outstanding and on net income (loss) attributable to
Aimco common stockholders per common share for the years ended
December 31, 2008 and 2007:
| 2008 | 2007 | |||||||
|
Weighted average shares outstanding — basic and
diluted:
|
||||||||
|
As previously reported
|
121,213 | 140,137 | ||||||
|
Reduction in weighted average shares outstanding
|
(32,523 | ) | (45,030 | ) | ||||
|
As currently reported
|
88,690 | 95,107 | ||||||
|
Net income (loss) attributable to Aimco common stockholders per
common share — basic and diluted:
|
||||||||
|
As previously reported
|
$ | 2.98 | $ | (0.26 | ) | |||
|
Effect of reduction in weighted average shares outstanding
|
1.06 | (0.12 | ) | |||||
|
Effect of participating securities allocations
|
(0.08 | ) | (0.05 | ) | ||||
|
As currently reported
|
$ | 3.96 | $ | (0.43 | ) | |||
Use of
Estimates
The preparation of our consolidated financial statements in
conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts included in the
financial statements and accompanying notes thereto. Actual
results could differ from those estimates.
Restatement
to Reclassify Impairment Losses on Real Estate Development
Assets
Our consolidated statement of income for the year ended
December 31, 2008, has been restated to reclassify the
provision for impairment losses on real estate development
assets into operating income. The reclassification reduced
operating income by $91.1 million for the year ended
December 31, 2008, and had no effect on the reported
amounts of loss before income taxes and discontinued operations,
loss from continuing operations, net income, net income
available to Aimco common stockholders or earnings per share.
Additionally, the reclassification had no effect on the
consolidated balance sheet at December 31, 2008, or the
consolidated statements of equity and cash flows for the year
ended December 31, 2008.
Reclassifications
Certain items included in the 2008 and 2007 financial statements
have been reclassified to conform to the current presentation.
F-25
Table of Contents
Subsequent
Events
Our management evaluated subsequent events through the time this
Annual Report on
Form 10-K
was filed.
Real
Estate Acquisitions
During the year ended December 31, 2009, we did not acquire
any real estate properties.
During the year ended December 31, 2008, we acquired three
conventional properties with a total of 470 units, located
in San Jose, California, Brighton, Massachusetts and
Seattle, Washington. The aggregate purchase price of
$111.5 million, excluding transaction costs, was funded
using $39.0 million in proceeds from property loans,
$41.9 million in tax-free exchange proceeds (provided by
2008 real estate dispositions) and the remainder in cash.
During the year ended December 31, 2007, we completed the
acquisition of 16 conventional properties with approximately
1,300 units for an aggregate purchase price of
approximately $217.0 million, excluding transaction costs.
Of the 16 properties acquired, ten are located in New York City,
New York, two in Daytona Beach, Florida, one in Park Forest,
Illinois, one in Poughkeepsie, New York, one in Redwood City,
California, and one in North San Diego, California. The
purchases were funded with cash, tax-free exchange proceeds, new
debt and the assumption of existing debt.
Acquisitions
of Partnership Interests
During the year ended December 31, 2009, we did not acquire
a significant amount of limited partnership interests. During
the years ended December 31, 2008 and 2007, we acquired
limited partnership interests in 22 and 50 partnerships,
respectively, in which our affiliates served as general partner.
In connection with such acquisitions, we paid cash of
approximately $2.0 million and $47.4 million,
including transaction costs. The cost of the acquisitions was
approximately $2.4 million and $43.6 million in excess
of the carrying amount of noncontrolling interest in such
limited partnerships, which excess we generally assigned to real
estate.
Disposition
of Unconsolidated Real Estate and Other
During the year ended December 31, 2009, we recognized
$22.5 million in gains on disposition of unconsolidated
real estate and other. Gains recognized in 2009 primarily
consist of $8.6 million related to our receipt in 2009 of
additional proceeds related to our disposition during 2008 of
one of the partnership interests (discussed below),
$4.0 million from the disposition of our interest in a
group purchasing organization (discussed further below),
$6.1 million from our disposition of interests in
unconsolidated real estate partnerships and our share of gains
recognized by our unconsolidated partnerships on the sale of
real estate and $3.8 million related to various other
transactions.
During the year ended December 31, 2008, we recognized
$99.9 million in gains on disposition of unconsolidated
real estate and other, which primarily consisted of a
$98.4 million gain recognized on the disposal of our
interests in unconsolidated real estate partnerships that owned
two properties with 671 units.
Casualty
Loss Related to Tropical Storm Fay and Hurricane
Ike
During 2008, Tropical Storm Fay and Hurricane Ike caused severe
damage to certain of our properties located primarily in Florida
and Texas, respectively. We incurred total losses of
approximately $33.9 million, including property damage
replacement costs and
clean-up
costs. After consideration of estimated third party insurance
proceeds and the noncontrolling interest partners’ share of
losses for consolidated real estate partnerships, the net effect
of these casualties on net income available to Aimco common
stockholders was a loss of approximately $5.0 million.
Sale
of Interest in Group Purchasing Organization
During 2009, we sold our interest in an unconsolidated group
purchasing organization to an unrelated entity for
$5.9 million, resulting in the recognition of a gain on
sale of $4.0 million, which is included in gain on
disposition of
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unconsolidated real estate and other in our consolidated
statement of income for the year ended December 31, 2009.
This gain was partially offset by a $1.0 million provision
for income tax. We also have a note receivable from another
principal in the group purchasing organization, which is
collateralized by its equity interest in the entity. In
connection with the sale of our interest, we reevaluated
collectibility of the note receivable and reversed
$1.4 million of previously recognized impairment losses,
which is reflected in provision for losses on notes receivable,
net in our consolidated statement of income for the year ended
December 31, 2009. As of December 31, 2009, the
carrying amount of the note receivable, which is due for
repayment in 2010, totaled $1.6 million.
Restructuring
Costs
In connection with 2008 property sales and an expected reduction
in redevelopment and transactional activities, during the three
months ended December 31, 2008, we initiated an
organizational restructuring program that included reductions in
workforce and related costs, reductions in leased corporate
facilities and abandonment of certain redevelopment projects and
business pursuits. This restructuring effort resulted in a
restructuring charge of $22.8 million, which consisted of:
severance costs of $12.9 million; unrecoverable lease
obligations of $6.4 million related to space that we will
no longer use; and the write-off of deferred transaction costs
totaling $3.5 million associated with certain acquisitions
and redevelopment opportunities that we will no longer pursue.
We completed the workforce reductions by March 31, 2009.
During 2009, in connection with continued repositioning of our
portfolio, we completed additional organizational restructuring
activities that included reductions in workforce and related
costs and the abandonment of additional leased corporate
facilities and redevelopment projects.
Our 2009 restructuring activities resulted in a restructuring
charge of $11.2 million, which consisted of severance costs
and personnel related costs of $7.0 million; unrecoverable
lease obligations of $2.6 million related to space that we
will no longer use; the write-off of deferred costs totaling
$0.9 million associated with certain redevelopment
opportunities that we will no longer pursue; and
$0.7 million in other costs.
As of December 31, 2009, the remaining accruals associated
with our restructuring activity are $6.9 million for
estimated unrecoverable lease obligations, which will be paid
over the remaining terms of the affected leases, and
$4.7 million for severance and personnel related costs,
which are anticipated to be paid during the first quarter 2010.
Transactions
Involving VMS National Properties Joint Venture
In January 2007, VMS National Properties Joint Venture, or VMS,
a consolidated real estate partnership in which we held a 22%
equity interest, refinanced property loans secured by its 15
apartment properties. The existing loans had an aggregate
carrying amount of $110.0 million and an aggregate face
amount of $152.2 million. The $42.2 million difference
between the face amount and carrying amount resulted from a 1997
bankruptcy settlement in which the lender agreed to reduce the
principal amount of the loans subject to VMS’s compliance
with the terms of the restructured loans. Because the reduction
in the loan amount was contingent on future compliance,
recognition of the inherent debt extinguishment gain was
deferred. Upon refinancing of the loans in January 2007, the
existing lender accepted the reduced principal amount in full
satisfaction of the loans, and VMS recognized the
$42.2 million debt extinguishment gain in earnings.
During the year ended December 31, 2007, VMS sold eight
properties to third parties for an aggregate gain of
$22.7 million. Additionally, VMS contributed its seven
remaining properties to wholly-owned subsidiaries of Aimco in
exchange for consideration totaling $230.1 million,
consisting primarily of cash of $21.3 million, common
OP Units with a fair value of $9.8 million, the
assumption of $168.0 million in property debt, and the
assumption of $30.9 million in mortgage participation
liabilities. This total consideration included
$50.7 million related to our 22% equity interest in VMS.
Exclusive of our share, the consideration paid for the seven
properties exceeded the carrying amount of the noncontrolling
interest in such properties by $44.9 million. This excess
consideration is reflected in our consolidated balance sheet as
an increase in the carrying amount of the seven properties.
Approximately $31.6 million of the $42.2 million debt
extinguishment gain related to the property loans that were
secured by the eight properties sold to third parties and two
properties we acquired from VMS but
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Table of Contents
subsequently sold and is reported in discontinued operations for
the year ended December 31, 2007. The remaining
$10.6 million portion of the debt extinguishment gain
related to the property loans that were secured by the five VMS
properties we purchased and continue to own and is reported in
our continuing operations as gain on dispositions of
unconsolidated real estate and other. Although 78% of the equity
interests in VMS were held by unrelated noncontrolling partners,
no noncontrolling interest share of the gains on debt
extinguishment and sale of the properties was recognized in our
earnings. As required by then applicable GAAP, we had in prior
years recognized the noncontrolling partners’ share of VMS
losses in excess of the noncontrolling partners’ capital
contributions. The amounts of those previously recognized losses
exceeded the noncontrolling partners’ share of the gains on
debt extinguishment and sale of the properties; accordingly, the
noncontrolling interests in such gains recognized in our
earnings was limited to the noncontrolling interests in the
Aimco Operating Partnership. For the year ended
December 31, 2007, the aggregate effect of the gains on
extinguishment of VMS debt and sale of VMS properties was to
decrease loss from continuing operations attributable to Aimco
common stockholders by $9.7 million ($0.10 per diluted
share) and decrease net loss attributable to Aimco common
stockholders by $59.0 million ($0.62 per diluted share).
During the three months ended December 31, 2007, VMS
distributed its remaining cash, consisting primarily of
undistributed proceeds from the sale of its 15 properties
(including properties sold to us). Of the $42.4 million of
cash distributed to the unrelated limited partners,
$21.3 million represents the cash consideration we
contributed in exchange for the purchase of seven properties and
is presented in purchases of partnership interests and other
assets in the consolidated statement of cash flows for the year
ended December 31, 2007. The remainder of the cash
distributed to the unrelated limited partners is presented in
payment of distributions to noncontrolling interest in the
consolidated statement of cash flows.
Palazzo
Joint Venture
In December 2007, we entered into a joint venture agreement with
a third party investor which provides for the co-ownership of
three multi-family properties with 1,382 units located in
West Los Angeles. Under the agreement, we contributed three
wholly-owned properties, The Palazzo at Park La Brea, The
Palazzo East at Park La Brea and The Villas at Park
La Brea to the partnership, which we refer to as Palazzo,
at a value of $726.0 million, or approximately $525,000 per
unit. Palazzo had existing property debt of approximately
$296.0 million and an implied equity value of approximately
$430.0 million. We received $202.0 million from the
investor in exchange for an approximate 47% interest in Palazzo,
of which approximately $7.9 million was used to fund
escrows for capital improvements and various operating
requirements. We own the remaining interests in Palazzo,
including a managing interest, and will operate the properties
in exchange for a property management fee and certain other fees
over the term of the partnership.
We determined Palazzo is a VIE and that we are the primary
beneficiary who should consolidate this partnership. We deferred
recognition of a gain on this transaction and recognized the
consideration received as an increase in noncontrolling
interests in consolidated real estate partnerships.
We owned general and limited partner interests in unconsolidated
real estate partnerships owning approximately 77, 85 and 94
properties at December 31, 2009, 2008 and 2007,
respectively. We acquired these interests through various
transactions, including large portfolio acquisitions and offers
to individual limited partners. Our total ownership interests in
these unconsolidated real estate partnerships typically ranges
from less than 1% to 50% and in some instances may exceed 50%.
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Table of Contents
The following table provides selected combined financial
information for the unconsolidated real estate partnerships in
which we had investments accounted for under the equity method
as of and for the years ended December 31, 2009, 2008 and
2007 (in thousands):
| 2009 | 2008 | 2007 | ||||||||||
|
Real estate, net of accumulated depreciation
|
$ | 95,226 | $ | 122,788 | $ | 133,544 | ||||||
|
Total assets
|
122,543 | 155,444 | 165,567 | |||||||||
|
Secured and other notes payable
|
101,678 | 122,859 | 124,406 | |||||||||
|
Total liabilities
|
145,637 | 175,681 | 180,222 | |||||||||
|
Partners’ deficit
|
(23,094 | ) | (20,237 | ) | (14,655 | ) | ||||||
|
Rental and other property revenues
|
55,366 | 69,392 | 73,672 | |||||||||
|
Property operating expenses
|
(34,497 | ) | (42,863 | ) | (45,998 | ) | ||||||
|
Depreciation expense
|
(10,302 | ) | (12,640 | ) | (13,965 | ) | ||||||
|
Interest expense
|
(11,103 | ) | (17,182 | ) | (17,194 | ) | ||||||
|
Gain on sale
|
8,482 | 5,391 | 59 | |||||||||
|
Net income (loss)
|
6,622 | 1,398 | (4,845 | ) | ||||||||
As a result of our acquisition of interests in unconsolidated
real estate partnerships at a cost in excess of the historical
carrying amount of the partnerships’ net assets, our
aggregate investment in these partnerships at December 31,
2009 and 2008 of $105.3 million and $119.0 million,
respectively, exceeds our share of the underlying historical
partners’ deficit of the partnerships by approximately
$109.5 million and $122.9 million, respectively.
The following table summarizes our notes receivable at
December 31, 2009 and 2008 (in thousands):
| 2009 | 2008 | |||||||||||||||||||||||
|
Unconsolidated
|
Unconsolidated
|
|||||||||||||||||||||||
|
Real Estate
|
Non-
|
Real Estate
|
Non-
|
|||||||||||||||||||||
| Partnerships | Affiliates | Total | Partnerships | Affiliates | Total | |||||||||||||||||||
|
Par value notes
|
$ | 11,353 | $ | 20,862 | $ | 32,215 | $ | 18,855 | $ | 19,253 | $ | 38,108 | ||||||||||||
|
Discounted notes
|
5,095 | 141,468 | 146,563 | 8,575 | 138,387 | 146,962 | ||||||||||||||||||
|
Allowance for loan losses
|
(2,153 | ) | (37,061 | ) | (39,214 | ) | (4,863 | ) | (17,743 | ) | (22,606 | ) | ||||||||||||
|
Total notes receivable
|
$ | 14,295 | $ | 125,269 | $ | 139,564 | $ | 22,567 | $ | 139,897 | $ | 162,464 | ||||||||||||
|
Face value of discounted notes
|
$ | 37,709 | $ | 155,848 | $ | 193,557 | $ | 39,333 | $ | 148,790 | $ | 188,123 | ||||||||||||
Included in notes receivable from unconsolidated real estate
partnerships at December 31, 2009 and 2008, are
$2.4 million and $4.2 million, respectively, in notes
that were secured by interests in real estate or interests in
real estate partnerships. We earn interest on these secured
notes receivable at various annual interest rates averaging
12.0%.
Included in the notes receivable from non-affiliates at
December 31, 2009 and 2008, are $102.2 million and
$95.8 million, respectively, in notes that were secured by
interests in real estate or interests in real estate
partnerships. We earn interest on these secured notes receivable
at various annual interest rates ranging between 4.0% and 12.0%
and averaging 4.7%.
Notes receivable from non-affiliates at December 31, 2009
and 2008, include notes receivable totaling $87.4 million
and $85.6 million, respectively, from 31 entities (the
“borrowers”) that are wholly owned by a single
individual. We originated these notes in November 2006 pursuant
to a loan agreement that provides for total funding of
approximately $110.0 million, including $16.4 million
for property improvements and an interest reserve, of which
$4.6 million had not been funded as of December 31,
2009. The notes mature in November 2016, bear interest at LIBOR
plus 2.0%, are partially guaranteed by the owner of the
borrowers, and are collateralized by second mortgages on 87
buildings containing 1,597 residential units and 42 commercial
spaces in West Harlem,
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New York City. In conjunction with the loan agreement, we
entered into a purchase option and put agreement with the
borrowers under which we may purchase some or all of the
buildings and, subject to achieving specified increases in
rental income, the borrowers may require us to purchase the
buildings (see Note 8). We determined that the stated
interest rate on the notes on the date the loan was originated
was a below-market interest rate and recorded a
$19.4 million discount to reflect the estimated fair value
of the notes based on an estimated market interest rate of LIBOR
plus 4.0%. The discount was determined to be attributable to our
real estate purchase option, which we recorded separately in
other assets. Accretion of this discount, which is included in
interest income in our consolidated statements of income,
totaled $0.9 million in 2009, $0.7 million in 2008 and
$1.9 million in 2007, inclusive of a $1.5 million
adjustment of accretion recognized upon the repayment of a
portion of the outstanding principal balance in 2007. The value
of the purchase option asset will be included in the cost of
properties acquired pursuant to the option or otherwise be
charged to expense. We determined that the borrowers are VIEs
and, based on qualitative and quantitative analysis, determined
that the individual who owns the borrowers and partially
guarantees the notes is the primary beneficiary.
As part of the March 2002 acquisition of Casden Properties,
Inc., we invested $50.0 million for a 20% passive interest
in Casden Properties LLC, an entity organized to acquire,
re-entitle and develop land parcels in Southern California.
Based upon the profit allocation agreement, we account for this
investment as a note receivable and through 2008 were amortizing
the discounted value of the investment to the $50.0 million
previously estimated to be collectible, through January 2,
2009, the initial dissolution date of the entity. In 2009, the
managing member extended the dissolution date. In connection
with the preparation of our 2008 annual financial statements and
as a result of a decline in land values in Southern California,
we determined our recorded investment amount was not fully
recoverable, and accordingly recognized an impairment loss of
$16.3 million ($10.0 million net of tax) during the
three months ended December 31, 2008. In connection with
the preparation of our 2009 annual financial statements and as a
result of continued declines in land values in Southern
California, we determined our then recorded investment amount
was not fully recoverable, and accordingly recognized an
impairment loss of $20.7 million ($12.4 million net of
tax) during the three months ended December 31, 2009.
Interest income from total non-impaired par value and certain
discounted notes for the years ended December 31, 2009,
2008 and 2007 totaled $5.7 million, $7.8 million and
$11.7 million, respectively. For the years ended
December 31, 2009, 2008 and 2007, we recognized accretion
income on certain discounted notes of $0.1 million,
$1.4 million and $8.1 million, respectively.
The activity in the allowance for loan losses in total for both
par value notes and discounted notes for the years ended
December 31, 2009 and 2008, is as follows (in thousands):
| 2009 | 2008 | |||||||
|
Balance at beginning of year
|
$ | (22,606 | ) | $ | (6,435 | ) | ||
|
Provisions for losses on notes receivable
|
(2,231 | ) | (1,673 | ) | ||||
|
Recoveries of losses on notes receivable
|
1,422 | 417 | ||||||
|
Provisions for impairment loss on investment in Casden
Properties LLC
|
(20,740 | ) | (16,321 | ) | ||||
|
Net reductions due to consolidation of real estate partnerships
and property dispositions
|
4,941 | 1,406 | ||||||
|
Balance at end of year
|
$ | (39,214 | ) | $ | (22,606 | ) | ||
During the years ended December 31, 2009 and 2008, we
determined that an allowance for loan losses of
$1.2 million and $3.6 million, respectively, was
required on certain of our par value notes that had carrying
amounts of $3.8 million and $11.4 million,
respectively. The average recorded investment in the impaired
par value notes for the years ended December 31, 2009 and
2008, was $7.6 million and $9.0 million, respectively.
The remaining $28.4 million in par value notes receivable
at December 31, 2009, is estimated to be collectible and,
therefore, interest income on these par value notes is
recognized as it is earned.
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Table of Contents
As of December 31, 2009 and 2008, we determined that an
allowance for loan losses of $1.0 million and
$2.7 million, respectively, was required on certain of our
discounted notes (excluding the note related to Casden
Properties LLC discussed above) that had carrying values of
$1.6 million and $5.4 million, respectively. The
average recorded investment in the impaired discounted notes for
the years ended December 31, 2009 and 2008, was
$3.5 million and $4.9 million, respectively.
The following table summarizes our property tax-exempt bond
financings related to properties classified as held for use at
December 31, 2009 and 2008, the majority of which is
non-recourse to us (in thousands):
|
Weighted Average
|
||||||||||||
| Interest Rate | Principal Outstanding | |||||||||||
| 2009 | 2009 | 2008 | ||||||||||
|
Fixed rate property tax-exempt bonds payable
|
5.10% | $ | 140,995 | $ | 131,530 | |||||||
|
Variable rate property tax-exempt bonds payable
|
0.90% | 433,931 | 497,969 | |||||||||
|
Total
|
$ | 574,926 | $ | 629,499 | ||||||||
Fixed rate property tax-exempt bonds payable mature at various
dates through December 2049. Variable rate property tax-exempt
bonds payable mature at various dates through June 2038.
Principal and interest on these bonds are generally payable in
semi-annual installments with balloon payments due at maturity.
Certain of our property tax-exempt bonds at December 31,
2009, are remarketed periodically by a remarketing agent to
maintain a variable yield. If the remarketing agent is unable to
remarket the bonds, then the remarketing agent can put the bonds
to us. We believe that the likelihood of this occurring is
remote. At December 31, 2009, our property tax-exempt bond
financings related to properties classified as held for use were
secured by 39 properties with a combined net book value of
$837.7 million. As discussed in Note 2, certain fixed
rate property tax-exempt bonds payable have been converted to
variable rates using total rate of return swaps and are
presented above as variable rate debt at their carrying amounts,
or fair value.
The following table summarizes our property loans payable
related to properties classified as held for use at
December 31, 2009 and 2008, the majority of which are
non-recourse to us (in thousands):
|
Weighted Average
|
||||||||||||
| Interest Rate | Principal Outstanding | |||||||||||
| 2009 | 2009 | 2008 | ||||||||||
|
Fixed rate property notes payable
|
6.01% | $ | 4,850,136 | $ | 4,662,584 | |||||||
|
Variable rate property notes payable
|
2.46% | 75,877 | 223,561 | |||||||||
|
Secured notes credit facility
|
1.02% | 46,314 | 58,179 | |||||||||
|
Total
|
$ | 4,972,327 | $ | 4,944,324 | ||||||||
Fixed rate property notes payable mature at various dates
through August 2053. Variable rate property notes payable mature
at various dates through November 2030. Principal and interest
are generally payable monthly or in monthly interest-only
payments with balloon payments due at maturity. At
December 31, 2009, our property notes payable related to
properties classified as held for use were secured by 373
properties with a combined net book value of
$6,030.1 million. As discussed in Note 2, certain
fixed rate secured notes payable have been converted to variable
rates using total rate of return swaps and are presented above
as variable rate debt at their carrying amounts, or fair value.
At December 31, 2009, we had a secured revolving credit
facility with a major life company that provided for borrowings
of up to $200.0 million. In January 2010, the credit
facility was modified to reduce allowed borrowings to the then
outstanding amount of $46.3 million. The primary function
of the facility is to secure short-term fully pre-payable
non-recourse loans for a period of less than three years. The
interest rate on the notes provided through the facility is
30-day
LIBOR
plus 0.78%. Each loan under the facility is treated as a
separate borrowing and is secured by a specific property. None
of the facility loans are cross-collateralized or
cross-defaulted. This facility matures in October 2010, and has
two one-year extension options for a $500,000 fee per extension.
At December 31,
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2009, outstanding borrowings of $46.3 million related to
properties classified as held for use are included in 2012
maturities below based on the extension options.
Our consolidated debt instruments generally contain covenants
common to the type of facility or borrowing, including financial
covenants establishing minimum debt service coverage ratios and
maximum leverage ratios. At December 31, 2009, we were in
compliance with all financial covenants pertaining to our
consolidated debt instruments.
Other borrowings totaled $53.1 million and
$96.0 million at December 31, 2009 and 2008,
respectively. At December 31, 2009, other borrowings
includes $44.6 million in fixed rate obligations with
interest rates ranging from zero to 10.0% and $8.5 million
in variable rate obligations bearing interest at the prime rate
plus 1.75%. The maturity dates for other borrowings range from
2010 to 2039, although certain amounts are due upon occurrence
of specified events, such as property sales.
As of December 31, 2009, the scheduled principal
amortization and maturity payments for our property tax-exempt
bonds, property notes payable and other borrowings related to
properties in continuing operations are as follows (in
thousands):
| Amortization | Maturities | Total | ||||||||||
|
2010
|
$ | 101,945 | $ | 3,349 | $ | 105,294 | ||||||
|
2011
|
106,962 | 237,796 | 344,758 | |||||||||
|
2012
|
110,269 | 205,706 | 315,975 | |||||||||
|
2013
|
108,946 | 386,421 | 495,367 | |||||||||
|
2014
|
105,701 | 267,547 | 373,248 | |||||||||
|
Thereafter
|
3,965,668 | |||||||||||
| $ | 5,600,310 | |||||||||||
We have an Amended and Restated Senior Secured Credit Agreement,
as amended, with a syndicate of financial institutions, which we
refer to as the Credit Agreement. In addition to Aimco, the
Aimco Operating Partnership and an Aimco subsidiary are also
borrowers under the Credit Agreement.
As of December 31, 2009, the Credit Agreement consisted of
aggregate commitments of $270.0 million, comprised of the
$90.0 million outstanding balance on the term loan and
$180.0 million of revolving loan commitments. The term loan
bears interest at LIBOR plus 1.5%, or at our option, a base rate
equal to the prime rate, and matures March 2011. Borrowings
under the revolving credit facility bear interest based on a
pricing grid determined by leverage (either at LIBOR plus 4.25%
with a LIBOR floor of 2.00% or, at our option, a base rate equal
to the Prime rate plus a spread of 3.00%). The revolving credit
facility matures May 1, 2011, and may be extended for an
additional year, subject to certain conditions, including
payment of a 45.0 basis point fee on the total revolving
commitments and repayment of the remaining term loan balance by
February 1, 2011. Pursuant to the Credit Agreement, while
any balance under the term loan is outstanding, repurchases of
our Common Stock are permitted with 50% of net asset sale
proceeds if the other 50% of such net asset sale proceeds are
applied to repay the term loan. The Credit Agreement permits us
to increase revolving commitments by up to $320.0 million,
subject to our obtaining such commitments from eligible lenders.
The Credit Agreement includes customary financial covenants,
including the maintenance of specified ratios with respect to
total indebtedness to gross asset value, total secured
indebtedness to gross asset value, aggregate recourse
indebtedness to gross asset value, variable rate debt to total
indebtedness, debt service coverage and fixed charge coverage;
the maintenance of a minimum adjusted tangible net worth; and
limitations regarding the amount of cross-collateralized debt.
The Credit Agreement includes other customary covenants,
including a restriction on distributions and other restricted
payments, but permits distributions during any four consecutive
fiscal quarters in an aggregate amount of up to 95% of our funds
from operations for such period, subject to certain non-cash
adjustments, or such amount as may be necessary to maintain our
REIT status. We were in compliance with all such covenants as of
December 31, 2009.
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The lenders under the Credit Agreement may accelerate any
outstanding loans if, among other things: we fail to make
payments when due (subject to applicable grace periods);
material defaults occur under other debt agreements; certain
bankruptcy or insolvency events occur; material judgments are
entered against us; we fail to comply with certain covenants,
such as the requirement to deliver financial information or the
requirement to provide notices regarding material events
(subject to applicable grace periods in some cases);
indebtedness is incurred in violation of the covenants; or
prohibited liens arise.
At December 31, 2009, the term loan had an outstanding
principal balance of $90.0 million and an interest rate of
1.73%. We repaid $45.0 million of the term loan through
February 26, 2010, leaving a remaining outstanding balance
of $45.0 million. At December 31, 2009, we had no
outstanding borrowings under the revolving credit facility. The
amount available under the revolving credit facility at
December 31, 2009, was $136.2 million (after giving
effect to $43.8 million outstanding for undrawn letters of
credit issued under the revolving credit facility). The proceeds
of revolving loans are generally permitted to be used to fund
working capital and for other corporate purposes.
On February 3, 2010, we entered into an Eighth Amendment to
our Credit Agreement, which provides for a reduction in the
minimum threshold for our debt service coverage and fixed charge
coverage ratios and an increase in the maximum threshold for our
secured indebtedness ratio.
Commitments
In connection with our redevelopment and capital improvement
activities, we have commitments of approximately
$4.8 million related to construction projects that are
expected to be completed during 2010. Additionally, we enter
into certain commitments for future purchases of goods and
services in connection with the operations of our properties.
Those commitments generally have terms of one year or less and
reflect expenditure levels comparable to our historical
expenditures.
As discussed in Note 5, we have committed to fund an
additional $4.6 million in loans on certain properties in
West Harlem in New York City. In certain circumstances, the
obligor under these notes has the ability to put properties to
us, which would result in a cash payment between $30.0 and
$97.5 million and the assumption of approximately
$119.0 million in property debt. The ability to exercise
the put and the amount of cash payment required upon exercise is
dependent upon the achievement of specified thresholds by the
current owner of the properties.
As discussed in Note 11, we have a potential obligation to
repurchase $30.0 million in liquidation preference of our
Series A Community Reinvestment Act Preferred Stock for
$21.0 million.
Tax
Credit Arrangements
We are required to manage certain consolidated real estate
partnerships in compliance with various laws, regulations and
contractual provisions that apply to our historic and low-income
housing tax credit syndication arrangements. In some instances,
noncompliance with applicable requirements could result in
projected tax benefits not being realized and require a refund
or reduction of investor capital contributions, which are
reported as deferred income in our consolidated balance sheet,
until such time as our obligation to deliver tax benefits is
relieved. The remaining compliance periods for our tax credit
syndication arrangements range from less than one year to
15 years. We do not anticipate that any material refunds or
reductions of investor capital contributions will be required in
connection with these arrangements.
Legal
Matters
In addition to the matters described below, we are a party to
various legal actions and administrative proceedings arising in
the ordinary course of business, some of which are covered by
our general liability insurance program, and none of which we
expect to have a material adverse effect on our consolidated
financial condition, results of operations or cash flows.
F-33
Table of Contents
Limited
Partnerships
In connection with our acquisitions of interests in real estate
partnerships and our role as general partner in certain real
estate partnerships, we are sometimes subject to legal actions,
including allegations that such activities may involve breaches
of fiduciary duties to the partners of such real estate
partnerships or violations of the relevant partnership
agreements. We may incur costs in connection with the defense or
settlement of such litigation. We believe that we comply with
our fiduciary obligations and relevant partnership agreements.
Although the outcome of any litigation is uncertain, we do not
expect any such legal actions to have a material adverse effect
on our consolidated financial condition, results of operations
or cash flows.
Environmental
Various Federal, state and local laws subject property owners or
operators to liability for management, and the costs of removal
or remediation, of certain hazardous substances present on a
property, including lead-based paint. Such laws often impose
liability without regard to whether the owner or operator knew
of, or was responsible for, the release or presence of the
hazardous substances. The presence of, or the failure to manage
or remedy properly, hazardous substances may adversely affect
occupancy at affected apartment communities and the ability to
sell or finance affected properties. In addition to the costs
associated with investigation and remediation actions brought by
government agencies, and potential fines or penalties imposed by
such agencies in connection therewith, the presence of hazardous
substances on a property could result in claims by private
plaintiffs for personal injury, disease, disability or other
infirmities. Various laws also impose liability for the cost of
removal, remediation or disposal of hazardous substances through
a licensed disposal or treatment facility. Anyone who arranges
for the disposal or treatment of hazardous substances is
potentially liable under such laws. These laws often impose
liability whether or not the person arranging for the disposal
ever owned or operated the disposal facility. In connection with
the ownership, operation and management of properties, we could
potentially be liable for environmental liabilities or costs
associated with our properties or properties we acquire or
manage in the future.
We have determined that our legal obligations to remove or
remediate hazardous substances may be conditional asset
retirement obligations, as defined in GAAP. Except in limited
circumstances where the asset retirement activities are expected
to be performed in connection with a planned construction
project or property casualty, we believe that the fair value of
our asset retirement obligations cannot be reasonably estimated
due to significant uncertainties in the timing and manner of
settlement of those obligations. Asset retirement obligations
that are reasonably estimable as of December 31, 2009, are
immaterial to our consolidated financial condition, results of
operations and cash flows.
Mold
We have been named as a defendant in lawsuits that have alleged
personal injury and property damage as a result of the presence
of mold. In addition, we are aware of lawsuits against owners
and managers of multifamily properties asserting claims of
personal injury and property damage caused by the presence of
mold, some of which have resulted in substantial monetary
judgments or settlements. We have only limited insurance
coverage for property damage loss claims arising from the
presence of mold and for personal injury claims related to mold
exposure. We have implemented policies, procedures, third-party
audits and training, and include a detailed moisture intrusion
and mold assessment during acquisition due diligence. We believe
these measures will prevent or eliminate mold exposure from our
properties and will minimize the effects that mold may have on
our residents. To date, we have not incurred any material costs
or liabilities relating to claims of mold exposure or to abate
mold conditions. Because the law regarding mold is unsettled and
subject to change, we can make no assurance that liabilities
resulting from the presence of or exposure to mold will not have
a material adverse effect on our consolidated financial
condition, results of operations or cash flows.
Operating
Leases
We are obligated under office space and equipment non-cancelable
operating leases. In addition, we sublease certain of our office
space to tenants under non-cancelable subleases. Approximate
minimum annual rentals under
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operating leases and approximate minimum payments to be received
under annual subleases are as follows (in thousands):
|
Operating Lease
|
Sublease
|
|||||||
| Obligations | Receivables | |||||||
|
2010
|
$ | 7,345 | $ | 818 | ||||
|
2011
|
5,800 | 185 | ||||||
|
2012
|
5,056 | 64 | ||||||
|
2013
|
2,594 | 12 | ||||||
|
2014
|
2,265 | — | ||||||
|
Thereafter
|
1,828 | — | ||||||
|
Total
|
$ | 24,888 | $ | 1,079 | ||||
Substantially all of the office space subject to the operating
leases described above are for the use of our corporate offices
and area operations. Rent expense recognized totaled
$7.7 million, $10.2 million and $9.8 million for
the years ended December 31, 2009, 2008 and 2007,
respectively. Sublease receipts that offset rent expense totaled
approximately $0.7 million, $0.7 million and
$1.3 million for the years ended December 31, 2009,
2008 and 2007, respectively.
As discussed in Note 3, during the years ended
December 31, 2009 and 2008, we commenced restructuring
activities pursuant to which we vacated certain leased office
space for which we remain obligated. In connection with the
restructurings, we accrued amounts representing the estimated
fair value of certain lease obligations related to space we are
no longer using, reduced by estimated sublease amounts. At
December 31, 2009, approximately $6.9 million related
to the above operating lease obligations was included in accrued
liabilities related to these estimates.
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Deferred income taxes reflect the net effects of temporary
differences between the carrying amounts of assets and
liabilities of the taxable REIT subsidiaries for financial
reporting purposes and the amounts used for income tax purposes.
Significant components of our deferred tax liabilities and
assets are as follows (in thousands):
| 2009 | 2008 | |||||||
|
Deferred tax liabilities:
|
||||||||
|
Partnership differences
|
$ | 32,565 | $ | 47,635 | ||||
|
Depreciation
|
2,474 | 2,477 | ||||||
|
Deferred revenue
|
14,862 | 7,757 | ||||||
|
Other
|
— | 11 | ||||||
|
Total deferred tax liabilities
|
$ | 49,901 | $ | 57,880 | ||||
|
Deferred tax assets:
|
||||||||
|
Net operating, capital and other loss carryforwards
|
$ | 37,164 | $ | 7,183 | ||||
|
Provision for impairments on real estate assets
|
33,321 | 33,321 | ||||||
|
Receivables
|
3,094 | 5,530 | ||||||
|
Accrued liabilities
|
9,272 | 23,504 | ||||||
|
Accrued interest expense
|
— | 2,220 | ||||||
|
Intangibles — management contracts
|
1,911 | 3,789 | ||||||
|
Tax credit carryforwards
|
6,949 | 8,521 | ||||||
|
Equity compensation
|
1,463 | 1,983 | ||||||
|
Other
|
929 | 155 | ||||||
|
Total deferred tax assets
|
94,103 | 86,206 | ||||||
|
Valuation allowance
|
(2,187 | ) | — | |||||
|
Net deferred income tax assets
|
$ | 42,015 | $ | 28,326 | ||||
As of December 31, 2009, we determined a valuation
allowance for our deferred tax assets was necessary for certain
state net operating losses based on a determination that it was
more likely than not that such assets will not be realized prior
to their expiration.
A reconciliation of the beginning and ending balance of our
unrecognized tax benefits is presented below:
| 2009 | 2008 | 2007 | ||||||||||
|
Balance at January 1
|
$ | 3,080 | $ | 2,965 | $ | 3,118 | ||||||
|
Reductions as a result of the lapse of applicable statutes
|
— | — | (189 | ) | ||||||||
|
Additions based on tax positions related to the prior year
|
— | 115 | 36 | |||||||||
|
Reductions based on tax positions related to the prior year
|
(1 | ) | — | — | ||||||||
|
Balance at December 31
|
$ | 3,079 | $ | 3,080 | $ | 2,965 | ||||||
We do not anticipate any material changes in existing
unrecognized tax benefits during the next 12 months.
Because the statute of limitations has not yet elapsed, our
Federal income tax returns for the year ended December 31,
2006, and subsequent years and certain of our State income tax
returns for the year ended December 31, 2004, and
subsequent years are currently subject to examination by the
Internal Revenue Service or other tax authorities. As discussed
in Note 2, the IRS has issued us summary reports including
its proposed adjustments to the Aimco Operating
Partnership’s 2007 and 2006 Federal tax returns. We do not
expect the proposed adjustments to have any material effect on
our unrecognized tax benefits, financial condition or results of
operations. Our policy is to include interest and penalties
related to income taxes in income taxes in our consolidated
statements of income.
In accordance with the accounting requirements for stock-based
compensation, our deferred tax assets at December 31, 2008,
are net of $3.6 million of excess tax benefits from
employee stock option exercises and vested
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Table of Contents
restricted stock awards. As of December 31, 2009, we had no
such excess tax benefits from employee stock option exercises
and vested restricted stock awards.
The cost of land and depreciable property, net of accumulated
depreciation, for federal income tax purposes was approximately
$4.6 billion.
Significant components of the provision (benefit) for income
taxes are as follows and are classified within income tax
benefit in continuing operations and income from discontinued
operations, net in our statements of income for the years ended
December 31, 2009, 2008 and 2007 (in thousands):
| 2009 | 2008 | 2007 | ||||||||||
|
Current:
|
||||||||||||
|
Federal
|
$ | (1,910 | ) | $ | 8,678 | $ | 20 | |||||
|
State
|
3,992 | 2,415 | 1,938 | |||||||||
|
Total current
|
2,082 | 11,093 | 1,958 | |||||||||
|
Deferred:
|
||||||||||||
|
Federal
|
(17,320 | ) | (22,115 | ) | (17,816 | ) | ||||||
|
State
|
(3,988 | ) | (2,386 | ) | (1,833 | ) | ||||||
|
Total deferred
|
(21,308 | ) | (24,501 | ) | (19,649 | ) | ||||||
|
Total benefit
|
$ | (19,226 | ) | $ | (13,408 | ) | $ | (17,691 | ) | |||
|
Classification:
|
||||||||||||
|
Continuing operations
|
$ | (18,671 | ) | $ | (53,202 | ) | $ | (19,795 | ) | |||
|
Discontinued operations
|
$ | (555 | ) | $ | 39,794 | $ | 2,104 | |||||
Consolidated losses subject to tax, consisting of pretax income
or loss of our taxable REIT subsidiaries and gains or loss on
certain property sales that are subject to income tax under
section 1374 of the Internal Revenue Code, for the years
ended December 31, 2009, 2008 and 2007 totaled
$40.6 million, $81.8 million and $41.5 million,
respectively. The reconciliation of income tax attributable to
continuing and discontinued operations computed at the
U.S. statutory rate to income tax benefit is shown below
(dollars in thousands):
| 2009 | 2008 | 2007 | ||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||
|
Tax at U.S. statutory rates on consolidated loss subject to tax
|
$ | (14,221 | ) | 35.0 | % | $ | (28,632 | ) | 35.0 | % | $ | (14,508 | ) | 35.0 | % | |||||||||
|
State income tax, net of Federal tax benefit
|
(2,183 | ) | 5.4 | % | 29 | — | 106 | (0.3 | )% | |||||||||||||||
|
Effect of permanent differences
|
127 | (0.3 | )% | 215 | (0.3 | )% | (306 | ) | 0.7 | % | ||||||||||||||
|
Tax effect of intercompany transfers of assets between the REIT
and taxable REIT subsidiaries(1)
|
(4,759 | ) | 11.7 | % | 15,059 | (18.4 | )% | — | — | |||||||||||||||
|
Write-off of excess tax basis
|
(377 | ) | 0.9 | % | (79 | ) | 0.1 | % | (2,983 | ) | 7.2 | % | ||||||||||||
|
Increase in valuation allowance
|
2,187 | (5.4 | )% | — | — | — | — | |||||||||||||||||
| $ | (19,226 | ) | 47.3 | % | $ | (13,408 | ) | 16.4 | % | $ | (17,691 | ) | 42.6 | % | ||||||||||
| (1) | Includes the effect of assets contributed by the Aimco Operating Partnership to taxable REIT subsidiaries, for which deferred tax expense or benefit was recognized upon the sale or impairment of the asset by the taxable REIT subsidiary. |
Income taxes paid totaled approximately $4.6 million,
$13.8 million and $3.0 million in the years ended
December 31, 2009, 2008 and 2007, respectively.
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At December 31, 2009, we had net operating loss
carryforwards, or NOLs, of approximately $60.6 million for
income tax purposes that expire in years 2027 to 2029. Subject
to certain separate return limitations, we may use these NOLs to
offset all or a portion of taxable income generated by our
taxable REIT subsidiaries. We generated approximately
$45.9 million of NOLs during the year ended
December 31, 2009, as a result of losses from our taxable
REIT subsidiaries. The deductibility of intercompany interest
expense with our taxable REIT subsidiaries is subject to certain
intercompany limitations based upon taxable income as required
under Section 163(j) of the Code. As of December 31,
2009, interest carryovers of approximately $24.6 million,
limited by Section 163(j) of the Code, are available
against U.S. Federal tax without expiration. The deferred
tax asset related to these interest carryovers is approximately
$9.6 million. Additionally, our low-income housing and
rehabilitation tax credit carryforwards as of December 31,
2009, were approximately $7.4 million for income tax
purposes that expire in years 2012 to 2028.
For income tax purposes, dividends paid to holders of Common
Stock primarily consist of ordinary income, return of capital,
capital gains, qualified dividends and unrecaptured
Section 1250 gains, or a combination thereof. For the years
ended December 31, 2009, 2008 and 2007, dividends per share
held for the entire year were estimated to be taxable as follows:
| 2009(1)(2) | 2008(3) | 2007(4) | ||||||||||||||||||||||
| Amount | Percentage | Amount | Percentage | Amount | Percentage | |||||||||||||||||||
|
Ordinary income
|
$ | — | — | $ | — | — | $ | 0.78 | 18 | % | ||||||||||||||
|
Capital gains
|
0.10 | 26 | % | 4.77 | 64 | % | 2.31 | 54 | % | |||||||||||||||
|
Qualified dividends
|
0.06 | 14 | % | 0.03 | — | 0.10 | 2 | % | ||||||||||||||||
|
Unrecaptured Section 1250 gain
|
0.24 | 60 | % | 2.68 | 36 | % | 1.12 | 26 | % | |||||||||||||||
| $ | 0.40 | 100 | % | $ | 7.48 | 100 | % | $ | 4.31 | 100 | % | |||||||||||||
| (1) | On December 18, 2009, our Board of Directors declared a quarterly cash dividend of $0.10 per common share for the quarter ended December 31, 2009, that was paid on January 29, 2010, to stockholders of record on December 31, 2009. Pursuant to certain provisions in the Code, this dividend was deemed paid by us and received by our shareholders in 2009. | |
| (2) | The Company has designated the per share amounts above as capital gain dividends in accordance with the requirements under the Code. | |
| (3) | On December 18, 2008, our Board of Directors declared a special dividend of $2.08 per common share for the quarter ended December 31, 2008, that was paid on January 29, 2009, to stockholders of record on December 29, 2008. A portion of the special dividend represented an early payment of the regular quarterly dividend of $0.60 per share that would otherwise have been paid in February 2009. Pursuant to certain provisions in the Code, this dividend was deemed paid by us and received by our shareholders in 2008. | |
| (4) | On December 21, 2007, our Board of Directors declared a special dividend of $2.51 per common share for the quarter ended December 31, 2007, that was paid on January 30, 2008, to stockholders of record on December 31, 2007. A portion of the special dividend represented an early payment of the regular quarterly dividend of $0.60 per share that would otherwise have been paid in February 2008. Pursuant to certain provisions in the Code, this dividend was deemed paid by us and received by our shareholders in 2007. |
In December 2008, October 2008, July 2008, and December 2007,
the Aimco Operating Partnership declared special distributions
payable on January 29, 2009, December 1, 2008,
August 29, 2008 and January 30, 2008, respectively, to
holders of record of common OP Units and High Performance
Units on December 29, 2008, October 27, 2008,
July 28, 2008 and December 31, 2007, respectively. The
special distributions were paid on common OP Units and High
Performance Units in the amounts listed below. The Aimco
Operating Partnership distributed to us common OP Units
equal to the number of shares we issued pursuant to our
corresponding special dividends (discussed in
Note 11) in addition to approximately $0.60 per unit
in cash. Holders of common OP Units other than us and
holders of High Performance Units received the distribution
entirely in cash.
F-38
Table of Contents
|
January 2009
|
December 2008
|
August 2008
|
January 2008
|
|||||||||||||
|
Aimco Operating Partnership
|
Special
|
Special
|
Special
|
Special
|
||||||||||||
|
Special Distributions
|
Distribution | Distribution | Distribution | Distribution | ||||||||||||
|
Distribution per unit
|
$ | 2.08 | $ | 1.80 | $ | 3.00 | $ | 2.51 | ||||||||
|
Total distribution
|
$ | 230.1 million | $ | 176.6 million | $ | 285.5 million | $ | 257.2 million | ||||||||
|
Common OP Units and High Performance Units outstanding on record
date
|
110,654,142 | 98,136,520 | 95,151,333 | 102,478,510 | ||||||||||||
|
Common OP Units held by Aimco
|
101,169,951 | 88,650,980 | 85,619,144 | 92,795,891 | ||||||||||||
|
Total distribution on Aimco common OP Units
|
$ | 210.4 million | $ | 159.6 million | $ | 256.9 million | $ | 232.9 million | ||||||||
|
Cash distribution to Aimco
|
$ | 60.6 million | $ | 53.2 million | $ | 51.4 million | $ | 55.0 million | ||||||||
|
Portion of distribution paid to Aimco through issuance of common
OP Units
|
$ | 149.8 million | $ | 106.4 million | $ | 205.5 million | $ | 177.9 million | ||||||||
|
Common OP Units issued to Aimco pursuant to distributions
|
15,627,330 | 12,572,267 | 5,731,310 | 4,594,074 | ||||||||||||
|
Cash distributed to common OP Unit and High Performance Unit
holders other than Aimco
|
$ | 19.7 million | $ | 17.0 million | $ | 28.6 million | $ | 24.3 million | ||||||||
Preferred
OP Units
Various classes of preferred OP Units of the Aimco
Operating Partnership are outstanding. Depending on the terms of
each class, these preferred OP Units are convertible into
common OP Units or redeemable for cash, or at the Aimco
Operating Partnership’s option, Common Stock, and are paid
distributions varying from 5.9% to 9.6% per annum per unit, or
equal to the dividends paid on Common Stock based on the
conversion terms. As of December 31, 2009 and 2008, a total
of 3.1 million and 3.2 million preferred OP Units
were outstanding with redemption values of $85.7 million
and $88.1 million, respectively. At December 31, 2009
and 2008, a total of 3.1 million and 3.1 million of
these preferred OP Units with redemption values of
$82.8 million and $85.2 million, respectively, were
redeemable into approximately 5.2 million and
7.4 million shares of Common Stock, respectively, or cash
at the Aimco Operating Partnership’s option.
During the years ended December 31, 2009 and 2008,
approximately 68,200 and 38,400 preferred OP Units,
respectively, were tendered for redemption in exchange for cash.
During the years ended December 31, 2009 and 2008, no
preferred OP Units were tendered for redemption in exchange
for shares of Common Stock. The Aimco Operating Partnership has
a redemption policy that requires cash settlement of redemption
requests for the redeemable preferred OP Units, subject to
limited exceptions.
Common
OP Units
In 2007, we completed tender offers for limited partnership
interests resulting in the issuance of approximately 55,400
common OP Units. Approximately 55,100 of the common
OP Units issued in 2007 were to unrelated limited partners
in VMS in connection with our purchase of seven properties from
the partnership, as discussed in Note 3. In 2009 and 2008,
we did not issue a significant number of common OP Units in
connection with tender offers for limited partners.
During the years ended December 31, 2009 and 2008,
approximately 64,000 and 50,000 common OP Units,
respectively, were redeemed in exchange for cash, and
approximately 519,000 and 114,000 common OP Units,
respectively, were redeemed in exchange for shares of Common
Stock.
High
Performance Units
From 1998 through 2005, the Aimco Operating Partnership issued
various classes of High Performance Units, or HPUs. These HPUs
were issued to limited liability companies owned by certain
members of our senior
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Table of Contents
management (and independent directors in the case of
Class I HPUs only) in exchange for cash in amounts that we
determined, with the assistance of a nationally recognized
independent valuation expert, to be the fair value of the HPUs.
The terms of the HPUs provide for the issuance, following a
measurement period of generally three years of an increased
number of HPUs depending on the degree, if any, to which certain
financial performance benchmarks are achieved over the
applicable measurement period. The holders of HPUs at the
conclusion of the measurement period receive the same amount of
distributions that are paid to holders of an equivalent number
of the Aimco Operating Partnership’s outstanding common
OP Units. At December 31, 2009 and 2008, 2,344,719
Class I HPUs, the sole class of HPUs to meet the
performance benchmarks, were outstanding. The minimum
performance benchmarks were not achieved for HPU Classes II
through IX. Accordingly, those HPUs had only nominal value at
the conclusion of the related measurement period and were
reacquired by the Aimco Operating Partnership and cancelled.
Preferred
Stock
At December 31, 2009 and 2008, we had the following classes
of preferred stock outstanding:
|
Balance
|
||||||||||||||||||||
|
Annual Dividend
|
December 31, | |||||||||||||||||||
|
Redemption
|
Rate Per Share
|
2009
|
2008
|
|||||||||||||||||
|
Perpetual:
|
Date(1) | (paid quarterly) | (thousands) | (thousands) | ||||||||||||||||
|
Class G Cumulative Preferred Stock, $0.01 par value,
4,050,000 shares authorized, 4,050,000 shares issued
and outstanding(2)
|
07/15/2008 | 9.3750 | % | $ | 101,000 | $ | 101,000 | |||||||||||||
|
Class T Cumulative Preferred Stock, $0.01 par value,
6,000,000 shares authorized, 6,000,000 shares issued
and outstanding
|
07/31/2008 | 8.000 | % | 150,000 | 150,000 | |||||||||||||||
|
Class U Cumulative Preferred Stock, $0.01 par value,
8,000,000 shares authorized, 8,000,000 shares issued
and outstanding
|
03/24/2009 | 7.750 | % | 200,000 | 200,000 | |||||||||||||||
|
Class V Cumulative Preferred Stock, $0.01 par value,
3,450,000 shares authorized, 3,450,000 shares issued
and outstanding
|
09/29/2009 | 8.000 | % | 86,250 | 86,250 | |||||||||||||||
|
Class Y Cumulative Preferred Stock, $0.01 par value,
3,450,000 shares authorized, 3,450,000 shares issued
and outstanding
|
12/21/2009 | 7.875 | % | 86,250 | 86,250 | |||||||||||||||
|
Series A Community Reinvestment Act Preferred Stock,
$0.01 par value per share, 240 shares authorized, 134
and 146 shares issued and outstanding(3)
|
06/30/2011 | (3 | ) | 67,000 | 73,000 | |||||||||||||||
|
Total
|
$ | 690,500 | $ | 696,500 | ||||||||||||||||
|
Less preferred stock subject to repurchase agreement(4)
|
(30,000 | ) | — | |||||||||||||||||
|
Preferred stock per consolidated balance sheets
|
$ | 660,500 | $ | 696,500 | ||||||||||||||||
| (1) | All classes of preferred stock are redeemable at our option on and after the dates specified. | |
| (2) | Includes 10,000 shares held by a consolidated subsidiary that are eliminated in consolidation. | |
| (3) | During 2006, we sold 200 shares of our Series A Community Reinvestment Act Perpetual Preferred Stock, $0.01 par value per share, or the CRA Preferred Stock, with a liquidation preference of $500,000 per share, for net proceeds of $97.5 million. For the period from the date of original issuance through March 31, 2015, the dividend rate is a variable rate per annum equal to the Three-Month LIBOR Rate (as defined in the articles supplementary designating the CRA Preferred Stock) plus 1.25%, calculated as of the beginning of each quarterly dividend period. The rate at December 31, 2009 and 2008, was 1.54% and 5.01%, respectively. Upon liquidation, holders of the CRA Preferred Stock are entitled to a preference of $500,000 per share, plus an amount equal to accumulated, accrued and unpaid dividends, whether or not earned or declared. The CRA Preferred Stock ranks prior to our Common Stock and on the same level as our outstanding shares of preferred stock with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up. The CRA Preferred Stock is not redeemable prior to June 30, 2011, except in limited circumstances related to REIT qualification. On and after June 30, 2011, the CRA Preferred Stock is redeemable for cash, in whole or from time to time in part, at our option, at a price per share equal to the liquidation preference, plus accumulated, accrued and unpaid dividends, if any, to the redemption date. | |
| (4) | In June 2009, we entered into an agreement to repurchase $36.0 million in liquidation preference of our CRA Preferred Stock at a 30% discount to the liquidation preference. Pursuant to this agreement, in June 2009, we |
F-40
Table of Contents
| repurchased 12 shares, or $6.0 million in liquidation preference, of CRA Preferred Stock for $4.2 million, and the holder of the CRA Preferred Stock may require us to repurchase an additional 60 shares, or $30.0 million in liquidation preference, of CRA Preferred Stock over the next three years, for $21.0 million. If required, these additional repurchases will be for up to $10.0 million in liquidation preference in May 2010, 2011 and 2012. Based on the holder’s ability to require us to repurchase an additional 60 shares of CRA Preferred Stock pursuant to this agreement, $30.0 million in liquidation preference of CRA Preferred Stock, or the maximum redemption value of such preferred stock, is classified within temporary equity in our consolidation balance sheet at December 31, 2009. |
In connection with our June 2009 CRA Preferred Stock repurchase
discussed above, we reflected the $1.8 million excess of
the carrying value over the repurchase price, offset by
$0.2 million of issuance costs previously recorded as a
reduction of additional paid-in capital, as a reduction of net
income attributable to preferred stockholders for the year ended
December 31, 2009.
During 2008, we repurchased 54 shares, or
$27.0 million in liquidation preference, of our CRA
Preferred Stock for cash totaling $24.8 million. We
reflected the $2.2 million excess of the carrying value
over the redemption price, offset by $0.7 million of
issuance costs previously recorded as a reduction of additional
paid-in capital, as a reduction of net income attributable to
preferred stockholders for purposes of calculating earnings per
share for the year ended December 31, 2008.
All classes of preferred stock are pari passu with each other
and are senior to our Common Stock. The holders of each class of
preferred stock are generally not entitled to vote on matters
submitted to stockholders. Dividends on all shares of preferred
stock are subject to declaration by our Board of Directors. All
of the above outstanding classes of preferred stock have a
liquidation preference per share of $25, with the exception of
the CRA Preferred Stock, which has a liquidation preference per
share of $500,000.
The dividends paid on each class of preferred stock classified
as equity in the years ended December 31, 2009, 2008 and
2007 are as follows (in thousands, except per share data):
| 2009 | 2008 | 2007 | ||||||||||||||||||||||
|
Amount
|
Total
|
Amount
|
Total
|
Amount
|
Total
|
|||||||||||||||||||
|
Per
|
Amount
|
Per
|
Amount
|
Per
|
Amount
|
|||||||||||||||||||
|
Class of Preferred Stock
|
Share(1) | Paid | Share(1) | Paid | Share(1) | Paid | ||||||||||||||||||
|
Perpetual:
|
||||||||||||||||||||||||
|
Class G
|
$ | 2.34 | $ | 9,492 | $ | 2.34 | $ | 9,492 | $ | 2.34 | $ | 9,492 | ||||||||||||
|
Class T
|
2.00 | 12,000 | 2.00 | 12,000 | 2.00 | 12,000 | ||||||||||||||||||
|
Class U
|
1.94 | 15,500 | 1.94 | 15,500 | 1.94 | 15,500 | ||||||||||||||||||
|
Class V
|
2.00 | 6,900 | 2.00 | 6,900 | 2.00 | 6,900 | ||||||||||||||||||
|
Class Y
|
1.97 | 6,792 | 1.97 | 6,792 | 1.97 | 6,792 | ||||||||||||||||||
|
Series A CRA
|
10,841 | (2) | 1,531 | 24,381 | (3) | 4,531 | 41,661 | 8,316 | ||||||||||||||||
| 52,215 | 55,215 | 59,000 | ||||||||||||||||||||||
|
Convertible:
|
||||||||||||||||||||||||
|
Class W
|
— | — | — | — | 4.25 | (4) | 8,100 | |||||||||||||||||
| — | — | 8,100 | ||||||||||||||||||||||
|
Total
|
$ | 52,215 | $ | 55,215 | $ | 67,100 | ||||||||||||||||||
| (1) | Amounts per share are calculated based on the number of preferred shares outstanding either at the end of each year or as of conversion, redemption or repurchase date, as noted. | |
| (2) | Amount per share is based on 134 shares outstanding for the entire period. 12 shares were repurchased in June 2009 and received $6,509 in dividends through the date of purchase. | |
| (3) | Amount per share is based on 146 shares outstanding for the entire period. 54 shares were repurchased in September 2008 and received $17,980 in dividends through the date of purchase. |
F-41
Table of Contents
| (4) | For the period from January 1, 2007, to the date of redemption. |
Common
Stock
In December 2008, October 2008, July 2008 and December 2007, in
connection with the Aimco Operating Partnership’s special
distributions discussed in Note 10, our Board of Directors
declared corresponding special dividends payable on
January 29, 2009, December 1, 2008, August 29,
2008 and January 30, 2008, respectively, to holders of
record of our Common Stock on December 29, 2008,
October 27, 2008, July 28, 2008 and December 31,
2007, respectively. A portion of the special dividends in the
amounts of $0.60 per share represents payment of the regular
dividend for the quarters ended December 31, 2008,
September 30, 2008, June 30, 2008 and
December 31, 2007, respectively, and the remaining amount
per share represents an additional dividend associated with
taxable gains from property dispositions. Portions of the
special dividends were paid through the issuance of shares of
Common Stock. The table below summarizes information regarding
these special dividends.
|
January 2009
|
December 2008
|
August 2008
|
January 2008
|
|||||||||||||
|
Special
|
Special
|
Special
|
Special
|
|||||||||||||
|
Aimco Special Dividends
|
Dividend | Dividend | Dividend | Dividend | ||||||||||||
|
Dividend per share
|
$ | 2.08 | $ | 1.80 | $ | 3.00 | $ | 2.51 | ||||||||
|
Outstanding shares of Common Stock on the record date
|
101,169,951 | 88,650,980 | 85,619,144 | 92,795,891 | ||||||||||||
|
Total dividend
|
$ | 210.4 million | $ | 159.6 million | $ | 256.9 million | $ | 232.9 million | ||||||||
|
Portion of dividend paid in cash
|
$ | 60.6 million | $ | 53.2 million | $ | 51.4 million | $ | 55.0 million | ||||||||
|
Portion of dividend paid through issuance of shares
|
$ | 149.8 million | $ | 106.4 million | $ | 205.5 million | $ | 177.9 million | ||||||||
|
Shares issued pursuant to dividend
|
15,627,330 | 12,572,267 | 5,731,310 | 4,594,074 | ||||||||||||
|
Average share price on determination date
|
$ | 9.58 | $ | 8.46 | $ | 35.84 | $ | 38.71 | ||||||||
|
Amounts after elimination of the effects of shares of Common
Stock held by consolidated subsidiaries:
|
||||||||||||||||
|
Outstanding shares of Common Stock on the record date
|
100,642,817 | 88,186,456 | 85,182,665 | 92,379,751 | ||||||||||||
|
Total dividend
|
$ | 209.3 million | $ | 158.7 million | $ | 255.5 million | $ | 231.9 million | ||||||||
|
Portion of dividend paid in cash
|
$ | 60.3 million | $ | 52.9 million | $ | 51.1 million | $ | 54.8 million | ||||||||
|
Portion of dividend paid through issuance of shares
|
$ | 149.0 million | $ | 105.8 million | $ | 204.4 million | $ | 177.1 million | ||||||||
|
Shares issued pursuant to dividend
|
15,548,996 | 12,509,657 | 5,703,265 | 4,573,735 | ||||||||||||
As discussed in Note 2, during December 2009, we adopted
the provisions of ASU
2010-01,
which relate to accounting for dividends with components of cash
and stock. In prior periods, we treated the shares of stock
issued in our special dividends similar to stock dividends, with
a reclassification within consolidated equity at the beginning
of the earliest period presented. In connection with our
adoption of ASU
2010-01,
we
retrospectively adjusted our consolidated balance sheet at
December 31, 2008, by increasing accrued liabilities and
other by $149.0 million, representing the portion of our
special dividend declared in December 2008 that was paid in
January 2009 through the issuance of common stock.
During 2008, we issued approximately 17,000 shares of
Common Stock to certain non-executive officers who purchased the
shares at market prices. In exchange for the shares purchased,
the officers executed notes payable totaling $0.6 million.
No shares were issued under similar arrangements during 2009.
These notes, which are 25% recourse to the borrowers, have a
10-year
maturity and bear interest either at a fixed rate of 6% annually
or a floating rate based on the
30-day
LIBOR
plus 3.85%, which is subject to an annual interest rate cap of
typically 7.25%. Total payments in 2009 and 2008 on all notes
from officers were $0.8 million and $1.5 million,
respectively. In 2009 and 2008, we reacquired approximately
94,000 and 31,000 shares of Common Stock from officers in
exchange for the cancellation of related notes totaling
$1.5 million and $1.0 million, respectively.
F-42
Table of Contents
In addition, in 2009 and 2008, we issued approximately 378,000
and 225,000 restricted shares of Common Stock, respectively, to
certain officers and employees. The restricted stock was
recorded at the fair market value of the Common Stock on the
date of issuance. These shares of restricted Common Stock may
not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of and are subject to a risk of forfeiture
prior to the expiration of the applicable vesting period
(ratably over a period of four years).
In 2008 and 2007, we purchased in the open market approximately
13.9 million and 7.5 million shares of Common Stock,
respectively, at an average price per share of approximately
$34.02 and $43.70, respectively. During 2009, we did not
repurchase any shares of Common Stock on the open market.
Registration
Statements
We and the Aimco Operating Partnership have a shelf registration
statement that provides for the issuance of debt and equity
securities by Aimco and debt securities by the Aimco Operating
Partnership.
Stock
Award and Incentive Plan
We adopted the Apartment Investment and Management Company 1997
Stock Award and Incentive Plan, or the 1997 Plan, to attract and
retain officers, key employees and independent directors. The
1997 Plan reserved for issuance a maximum of 20 million
shares, which may be in the form of incentive stock options,
non-qualified stock options and restricted stock, or other types
of awards as authorized under the 1997 Plan. The 1997 Plan
expired on April 24, 2007. On April 30, 2007, the 2007
Stock Award and Incentive Plan, or the 2007 Plan, was approved
as successor to the 1997 Plan. The 2007 Plan reserves for
issuance a maximum of 4.1 million shares, which may be in
the form of incentive stock options, non-qualified stock options
and restricted stock, or other types of awards as authorized
under the 2007 Plan. Pursuant to the anti-dilution provisions of
the 2007 Plan, the number of shares reserved for issuance has
been adjusted to reflect the special dividends discussed in
Note 11. At December 31, 2009 there were approximately
1.7 million shares available to be granted under the 2007
Plan. The 2007 Plan is administered by the Compensation and
Human Resources Committee of the Board of Directors. In the case
of stock options, the exercise price of the options granted may
not be less than the fair market value of Common Stock at the
date of grant. The term of the options is generally ten years
from the date of grant. The options typically vest over a period
of one to four or five years from the date of grant. We
generally issue new shares upon exercise of options. Restricted
stock awards typically vest over a period of three to five years.
Refer to Stock-Based Compensation in Note 2 for discussion
of our accounting policy related to stock-based compensation.
We estimated the fair value of our options using a Black-Scholes
closed-form valuation model using the assumptions set forth in
the table below. For options granted in 2009 and 2008, the
expected term of the options was based on historical option
exercises and post-vesting terminations. For options granted in
2007, the expected term of the options reflects the average of
the vesting period and the contractual term for the options,
with the exception of a grant of approximately 0.6 million
options to an executive during 2007, for which the expected term
used was equal to the vesting period of five years. Expected
volatility reflects the historical volatility of our Common
Stock during the historical period commensurate with the
expected term of the options that ended on the date of grant.
The expected dividend yield reflects expectations regarding cash
dividend amounts per share paid on our Common Stock during the
expected term of the option and the risk-free interest rate
reflects the annualized yield of a zero
F-43
Table of Contents
coupon U.S. Treasury security with a term equal to the
expected term of the option. The weighted average fair value of
options and our valuation assumptions for the years ended
December 31, 2009, 2008 and 2007 were as follows:
| 2009 | 2008 | 2007 | ||||||||||
|
Weighted average grant-date fair value
|
$ | 2.47 | $ | 4.34 | $ | 6.28 | ||||||
|
Assumptions:
|
||||||||||||
|
Risk-free interest rate
|
2.26 | % | 3.12 | % | 4.70 | % | ||||||
|
Expected dividend yield
|
8.00 | % | 6.02 | % | 4.94 | % | ||||||
|
Expected volatility
|
45.64 | % | 24.02 | % | 21.66 | % | ||||||
|
Weighted average expected life of options
|
6.9 years | 6.5 years | 5.6 years | |||||||||
The following table summarizes activity for our outstanding
stock options for the years ended December 31, 2009, 2008
and 2007 (numbers of options in thousands):
| 2009(1) | 2008(1) | 2007(1) | ||||||||||||||||||||||
|
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||
|
Average
|
Average
|
Average
|
||||||||||||||||||||||
|
Number
|
Exercise
|
Number
|
Exercise
|
Number
|
Exercise
|
|||||||||||||||||||
| of Options | Price | of Options | Price | of Options | Price | |||||||||||||||||||
|
Outstanding at beginning of year
|
10,344 | $ | 31.01 | 8,555 | $ | 39.57 | 8,598 | $ | 39.36 | |||||||||||||||
|
Granted
|
965 | 8.92 | 980 | 39.77 | 955 | 57.25 | ||||||||||||||||||
|
Exercised
|
— | — | (14 | ) | 37.45 | (1,403 | ) | 38.29 | ||||||||||||||||
|
Forfeited
|
(2,436 | ) | 32.03 | (1,423 | ) | 38.75 | (26 | ) | 37.83 | |||||||||||||||
|
Adjustment to outstanding options pursuant to special dividends
|
— | n/a | 2,246 | n/a | 431 | n/a | ||||||||||||||||||
|
Outstanding at end of year
|
8,873 | $ | 28.22 | 10,344 | $ | 31.01 | 8,555 | $ | 39.57 | |||||||||||||||
|
Exercisable at end of year
|
6,840 | $ | 29.65 | 7,221 | $ | 29.51 | 6,417 | $ | 37.75 | |||||||||||||||
| (1) | In connection with the special dividends discussed in Note 11, effective on the record date of each dividend, the number of options and exercise prices of all outstanding awards were adjusted pursuant to the anti-dilution provisions of the applicable plans based on the market price of our stock on the ex-dividend dates of the related special dividends. The adjustment to the number of outstanding options is reflected in the table separate from the other activity during the periods at the weighted average exercise price for those outstanding options. The exercise prices for options granted, exercised and forfeited in the table above reflect the actual exercise prices at the time of the related activity. The number and weighted average exercise price for options outstanding and exercisable at the end of year reflect the adjustments for the applicable special dividends. The adjustment of the awards pursuant to the special dividends is considered a modification of the awards, but did not result in a change in the fair value of any awards and therefore did not result in a change in total compensation to be recognized over the remaining term of the awards. |
The intrinsic value of a stock option represents the amount by
which the current price of the underlying stock exceeds the
exercise price of the option. Options outstanding at
December 31, 2009, had an aggregate intrinsic value of
$5.7 million and a weighted average remaining contractual
term of 4.4 years. Options exercisable at December 31,
2008, had no aggregate intrinsic value and a weighted average
remaining contractual term of 5.7 years. No stock options
were exercised during the year ended 2009. The intrinsic value
of stock options exercised during the years ended
December 31, 2008 and 2007, was less than $0.1 million
and $28.9 million, respectively. We may realize tax
benefits in connection with the exercise of options by employees
of our taxable subsidiaries. As no stock options were exercised
during the year ended December 31, 2009, we realized no
related tax benefits.
F-44
Table of Contents
The following table summarizes activity for restricted stock
awards for the years ended December 31, 2009, 2008 and 2007
(numbers of shares in thousands):
| 2009 | 2008 | 2007 | ||||||||||||||||||||||
|
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||
|
Average
|
Average
|
Average
|
||||||||||||||||||||||
|
Number of
|
Grant-Date
|
Number of
|
Grant-Date
|
Number of
|
Grant-Date
|
|||||||||||||||||||
| Shares | Fair Value | Shares | Fair Value | Shares | Fair Value | |||||||||||||||||||
|
Unvested at beginning of year
|
893 | $ | 40.33 | 960 | $ | 46.08 | 1,088 | $ | 40.11 | |||||||||||||||
|
Granted
|
378 | 8.92 | 248 | 39.85 | 308 | 60.13 | ||||||||||||||||||
|
Vested
|
(418 | ) | 34.42 | (377 | ) | 43.45 | (387 | ) | 40.31 | |||||||||||||||
|
Forfeited
|
(533 | ) | 28.57 | (128 | ) | 46.85 | (49 | ) | 47.43 | |||||||||||||||
|
Issued pursuant to special dividends(1)
|
138 | 9.58 | 190 | 22.51 | — | — | ||||||||||||||||||
|
Unvested at end of year
|
458 | $ | 24.23 | 893 | $ | 40.33 | 960 | $ | 46.08 | |||||||||||||||
| (1) | This represents shares of restricted stock issued to holders of restricted stock pursuant to the special dividends discussed in Note 11. The weighted average grant-date fair value for these shares represents the price of our stock on the determination date for each dividend. The issuance of the additional shares of restricted stock resulted in no incremental compensation expense. |
The aggregate fair value of shares that vested during the years
ended December 31, 2009, 2008 and 2007 was
$3.1 million, $16.5 million and $19.5 million,
respectively.
Total compensation cost recognized for restricted stock and
stock option awards was $8.0 million, $17.6 million
and $19.2 million for the years ended December 31,
2009, 2008 and 2007, respectively. Of these amounts,
$1.3 million, $3.8 million and $4.3 million,
respectively, were capitalized. At December 31, 2009, total
unvested compensation cost not yet recognized was
$10.1 million. We expect to recognize this compensation
over a weighted average period of approximately 1.5 years.
Employee
Stock Purchase Plan
Under the terms of our employee stock purchase plan, eligible
employees may authorize payroll deductions up to 15% of their
base compensation to purchase shares of our Common Stock at a
five percent discount from its fair value on the last day of the
calendar quarter during which payroll deductions are made. In
2009, 2008 and 2007, 20,076, 8,926 and 3,751 shares were
purchased under this plan at an average price of $8.82, $23.86
and $44.67, respectively. No compensation cost is recognized in
connection with this plan.
401(k)
Plan
We provide a 401(k) defined-contribution employee savings plan.
Employees who have completed 30 days of service and are
age 18 or older are eligible to participate. For the period
from January 1, 2009 through January 29, 2009, and
during the years ended December 31, 2008 and 2007, our
matching contributions were made in the following manner:
(1) a 100% match on the first 3% of the participant’s
compensation; and (2) a 50% match on the next 2% of the
participant’s compensation. On December 31, 2008, we
suspended employer matching contributions effective
January 29, 2009. We may reinstate employer matching
contributions at any time. We incurred costs in connection with
this plan of approximately $0.6 million, $5.2 million
and $5.2 million in 2009, 2008 and 2007, respectively.
We report as discontinued operations real estate assets 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 income under the heading
“income from discontinued operations, net.” This
treatment resulted in the retrospective adjustment of 2008 and
2007 financial statement amounts.
F-45
Table of Contents
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 December 31, 2009 and 2008,
we had four and 93 properties, with an aggregate of 845 and
23,348 units, classified as held for sale, respectively.
Amounts classified as held for sale in the accompanying
consolidated balance sheets are as follows (in thousands):
|
December 31,
|
December 31,
|
|||||||
| 2009 | 2008 | |||||||
|
Real estate, net
|
$ | 32,773 | $ | 1,059,362 | ||||
|
Other assets
|
953 | 14,477 | ||||||
|
Assets held for sale
|
$ | 33,726 | $ | 1,073,839 | ||||
|
Property debt
|
$ | 29,177 | $ | 759,327 | ||||
|
Other liabilities
|
1,226 | 12,551 | ||||||
|
Liabilities related to assets held for sale
|
$ | 30,403 | $ | 771,878 | ||||
During the years ended December 31, 2009, 2008 and 2007, we
sold 89, 151 and 73 consolidated properties with an aggregate
22,503, 37,202 and 11,588 units, respectively. For the
years ended December 31, 2009, 2008 and 2007, discontinued
operations includes the results of operations for the periods
prior to the date of sale for all properties sold or classified
as held for sale as of December 31, 2009.
The following is a summary of the components of income from
discontinued operations for the years ended December 31,
2009, 2008 and 2007 (in thousands):
| 2009 | 2008 | 2007 | ||||||||||
|
Rental and other property revenues
|
$ | 152,812 | $ | 463,232 | $ | 599,183 | ||||||
|
Property operating expenses
|
(77,267 | ) | (228,423 | ) | (295,741 | ) | ||||||
|
Depreciation and amortization
|
(51,155 | ) | (122,549 | ) | (152,446 | ) | ||||||
|
Provision for operating real estate impairment losses
|
(54,530 | ) | (27,420 | ) | (5,430 | ) | ||||||
|
Other expenses, net
|
(9,750 | ) | (12,892 | ) | (7,550 | ) | ||||||
|
Operating (loss) income
|
(39,890 | ) | 71,948 | 138,016 | ||||||||
|
Interest income
|
112 | 1,747 | 3,747 | |||||||||
|
Interest expense
|
(30,592 | ) | (89,356 | ) | (117,268 | ) | ||||||
|
Gain on extinguishment of debt
|
259 | — | 31,597 | |||||||||
|
(Loss) income before gain on dispositions of real estate and
income taxes
|
(70,111 | ) | (15,661 | ) | 56,092 | |||||||
|
Gain on dispositions of real estate
|
221,793 | 800,335 | 117,627 | |||||||||
|
Income tax benefit (expense)
|
555 | (39,794 | ) | (2,104 | ) | |||||||
|
Income from discontinued operations, net
|
$ | 152,237 | $ | 744,880 | $ | 171,615 | ||||||
|
Income from discontinued operation attributable to:
|
||||||||||||
|
Noncontrolling interests in consolidated real estate partnerships
|
$ | (60,008 | ) | $ | (149,383 | ) | $ | (68,360 | ) | |||
|
Noncontrolling interests in Aimco Operating Partnership
|
(6,891 | ) | (57,732 | ) | (9,592 | ) | ||||||
|
Total noncontrolling interests
|
(66,899 | ) | (207,115 | ) | (77,952 | ) | ||||||
|
Aimco
|
$ | 85,338 | $ | 537,765 | $ | 93,663 | ||||||
Gain on dispositions of real estate is reported net of
incremental direct costs incurred in connection with the
transaction, including any prepayment penalties incurred upon
repayment of property loans collateralized by the
F-46
Table of Contents
property being sold. Such prepayment penalties totaled
$29.0 million, $64.9 million and $12.6 million
for the years ended December 31, 2009, 2008 and 2007,
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. As discussed in
Note 2, during the year ended December 31, 2009, we
allocated $10.1 million of goodwill related to our real
estate segment to the carrying amounts of the properties sold or
classified as held for sale. Of these amounts, $8.7 million
was reflected as a reduction of gain on dispositions of real
estate and $1.4 million was reflected as an adjustment of
impairment losses.
We calculate earnings per share based on the weighted average
number of shares of Common Stock, participating securities,
common stock equivalents and dilutive convertible securities
outstanding during the period. The following table illustrates
the calculation of basic and diluted earnings per share for the
years ended December 31, 2009, 2008 and 2007 (in thousands,
except per share data):
| 2009 | 2008 | 2007 | ||||||||||
|
Numerator:
|
||||||||||||
|
Loss from continuing operations
|
$ | (197,037 | ) | $ | (117,878 | ) | $ | (46,109 | ) | |||
|
Loss (income) from continuing operations attributable to
noncontrolling interests
|
47,425 | (7,880 | ) | (17,643 | ) | |||||||
|
Income attributable to preferred stockholders
|
(50,566 | ) | (53,708 | ) | (66,016 | ) | ||||||
|
Income attributable to participating securities
|
— | (6,985 | ) | (4,481 | ) | |||||||
|
Loss from continuing operations attributable to Aimco common
stockholders
|
$ | (200,178 | ) | $ | (186,451 | ) | $ | (134,249 | ) | |||
|
Income from discontinued operations
|
$ | 152,237 | $ | 744,880 | $ | 171,615 | ||||||
|
Income from discontinued operations attributable to
noncontrolling interests
|
(66,899 | ) | (207,115 | ) | (77,952 | ) | ||||||
|
Income from discontinued operations attributable to Aimco common
stockholders
|
$ | 85,338 | $ | 537,765 | $ | 93,663 | ||||||
|
Net (loss) income
|
$ | (44,800 | ) | $ | 627,002 | $ | 125,506 | |||||
|
Net income attributable to noncontrolling interests
|
(19,474 | ) | (214,995 | ) | (95,595 | ) | ||||||
|
Income attributable to preferred stockholders
|
(50,566 | ) | (53,708 | ) | (66,016 | ) | ||||||
|
Income attributable to participating securities
|
— | (6,985 | ) | (4,481 | ) | |||||||
|
Net (loss) income attributable to Aimco common stockholders
|
$ | (114,840 | ) | $ | 351,314 | $ | (40,586 | ) | ||||
|
Denominator:
|
||||||||||||
|
Denominator for basic earnings per share — weighted
average number of shares of Common Stock outstanding
|
114,301 | 88,690 | 95,107 | |||||||||
|
Effect of dilutive securities:
|
||||||||||||
|
Dilutive potential common shares
|
— | — | — | |||||||||
|
Denominator for diluted earnings per share
|
114,301 | 88,690 | 95,107 | |||||||||
|
Earnings (loss) per common share
—
basic and
diluted:
|
||||||||||||
|
Loss from continuing operations attributable to Aimco common
stockholders
|
$ | (1.75 | ) | $ | (2.10 | ) | $ | (1.41 | ) | |||
|
Income from discontinued operations attributable to Aimco common
stockholders
|
0.75 | 6.06 | 0.98 | |||||||||
|
Net (loss) income attributable to Aimco common stockholders
|
$ | (1.00 | ) | $ | 3.96 | $ | (0.43 | ) | ||||
F-47
Table of Contents
As discussed in Note 2, earnings (loss) per common share
for the years ended December 31, 2008 and 2007 have been
retroactively adjusted for the effect of our adoption of FSP
EITF 03-6-1
and FASB ASU
2010-01.
As of December 31, 2009, 2008 and 2007, the common share
equivalents that could potentially dilute basic earnings per
share in future periods totaled 8.9 million,
9.2 million and 8.1 million, respectively. These
securities, representing stock options, have been excluded from
the earnings per share computations for the years ended
December 31, 2009, 2008 and 2007, because their effect
would have been anti-dilutive.
Participating securities, consisting of unvested restricted
stock and shares purchased pursuant to officer loans, receive
dividends similar to shares of Common Stock and totaled
0.5 million, 1.0 million and 1.2 million at
December 31, 2009, 2008 and 2007, respectively. The effect
of participating securities is reflected in basic and diluted
earnings per share computations for the periods presented above
using the two-class method of allocating distributed and
undistributed earnings. During the year ended December 31,
2009, the adjustment to compensation expense recognized related
to cumulative dividends on forfeited shares of restricted stock
exceeded the amount of dividends declared related to
participating securities. Accordingly, distributed earnings
attributed to participating securities during 2009 were reduced
to zero for purposes of calculating earnings per share using the
two-class method.
As discussed in Note 10, the Aimco Operating Partnership
has various classes of preferred OP units, which may be redeemed
at the holders’ option. The Aimco Operating Partnership may
redeem these units for cash or at its option, shares of Common
Stock. During the periods presented, no common share equivalents
related to these preferred OP units have been included in
earnings per share computations because their effect was
antidilutive.
Summarized unaudited consolidated quarterly information for 2009
and 2008 is provided below (in thousands, except per share
amounts).
| Quarter(1) | ||||||||||||||||
|
2009
|
First | Second | Third | Fourth | ||||||||||||
|
Total revenues
|
$ | 297,501 | $ | 299,059 | $ | 296,396 | $ | 302,807 | ||||||||
|
Total operating expenses
|
(265,851 | ) | (264,524 | ) | (276,891 | ) | (277,984 | ) | ||||||||
|
Operating income
|
31,650 | 34,535 | 19,505 | 24,823 | ||||||||||||
|
Loss from continuing operations
|
(35,344 | ) | (43,488 | ) | (54,659 | ) | (63,546 | ) | ||||||||
|
Income from discontinued operations, net
|
2,773 | 35,860 | 45,102 | 68,502 | ||||||||||||
|
Net (loss) income
|
(32,571 | ) | (7,628 | ) | (9,557 | ) | 4,956 | |||||||||
|
Loss attributable to Aimco common stockholders
|
(37,698 | ) | (29,924 | ) | (40,490 | ) | (6,728 | ) | ||||||||
|
Loss per common share — basic and diluted:
|
||||||||||||||||
|
Loss from continuing operations attributable to Aimco common
stockholders
|
$ | (0.33 | ) | $ | (0.39 | ) | $ | (0.46 | ) | $ | (0.57 | ) | ||||
|
Net loss attributable to Aimco common stockholders
|
$ | (0.34 | ) | $ | (0.26 | ) | $ | (0.34 | ) | $ | (0.06 | ) | ||||
|
Weighted average common shares outstanding(2)
|
110,262 | 115,510 | 115,563 | 115,871 | ||||||||||||
|
Weighted average common shares and common share equivalents
outstanding(2)
|
110,262 | 115,510 | 115,563 | 115,871 | ||||||||||||
F-48
Table of Contents
| Quarter(1) | ||||||||||||||||
|
2008
|
First | Second | Third | Fourth | ||||||||||||
|
Total revenues
|
$ | 296,362 | $ | 321,278 | $ | 321,274 | $ | 304,256 | ||||||||
|
Total operating expenses(3)
|
(258,269 | ) | (263,740 | ) | (273,586 | ) | (389,476 | ) | ||||||||
|
Operating income (loss)(3)
|
38,093 | 57,538 | 47,688 | (85,220 | ) | |||||||||||
|
(Loss) income from continuing operations(3)
|
(33,247 | ) | (19,627 | ) | 75,722 | (140,726 | ) | |||||||||
|
Income from discontinued operations, net
|
9,587 | 362,581 | 161,667 | 211,045 | ||||||||||||
|
Net (loss) income
|
(23,660 | ) | 342,954 | 237,389 | 70,319 | |||||||||||
|
Net (loss) income attributable to Aimco common stockholders
|
(38,857 | ) | 239,119 | 158,313 | (9,898 | ) | ||||||||||
|
Earnings (loss) per common share — basic and diluted:
|
||||||||||||||||
|
(Loss) income from continuing operations attributable to Aimco
common stockholders
|
$ | (0.49 | ) | $ | (0.48 | ) | $ | 0.56 | $ | (1.60 | ) | |||||
|
Net (loss) income attributable to Aimco common stockholders
|
$ | (0.43 | ) | $ | 2.72 | $ | 1.84 | $ | (0.11 | ) | ||||||
|
Weighted average common shares outstanding(2)
|
89,465 | 87,790 | 85,992 | 91,515 | ||||||||||||
|
Weighted average common shares and common share equivalents
outstanding(2)
|
89,465 | 87,790 | 86,297 | 91,515 | ||||||||||||
| (1) | Certain reclassifications have been made to 2009 and 2008 quarterly amounts to conform to the full year 2009 presentation, primarily related to treatment of discontinued operations and newly adopted accounting standards (see Note 2). | |
| (2) | As discussed in Note 2, in December 2009, we adopted the provisions of ASU 2010-01, which resulted in reductions in the number of weighted average common shares and common share equivalents outstanding, as compared to the amounts previously reported. | |
| (3) | Total operating expenses, operating income (loss) and (loss) income from continuing operations for the quarter ended December 31, 2008, includes a $91.1 million provision for impairment losses on real estate development assets, which is discussed further in Note 2. |
We earn revenue from affiliated real estate partnerships. These
revenues include fees for property management services,
partnership and asset management services, risk management
services and transactional services such as refinancing,
construction supervisory and disposition (including promote
income, which is income earned in connection with the
disposition of properties owned by certain of our consolidated
joint ventures). In addition, we are reimbursed for our costs in
connection with the management of the unconsolidated real estate
partnerships. These fees and reimbursements for the years ended
December 31, 2009, 2008 and 2007 totaled
$18.5 million, $72.5 million and $42.1 million,
respectively. The total accounts receivable due from affiliates
was $23.7 million, net of allowance for doubtful accounts
of $3.4 million, at December 31, 2009, and
$39.0 million, net of allowance for doubtful accounts of
$2.8 million, at December 31, 2008.
Additionally, we earn interest income on notes from real estate
partnerships in which we are the general partner and hold either
par value or discounted notes. During the years ended
December 31, 2009 and 2008, we did not recognize a
significant amount of interest income on par value notes from
unconsolidated real estate partnerships. Interest income earned
on par value notes from unconsolidated real estate partnerships
totaled $8.1 million for the year ended December 31,
2007. Accretion income recognized on discounted notes from
affiliated real estate partnerships totaled $0.1 million,
$1.4 million and $8.1 million for the years ended
December 31, 2009, 2008 and 2007, respectively. See
Note 5 for additional information on notes receivable from
unconsolidated real estate partnerships.
F-49
Table of Contents
Our chief operating decision maker uses various generally
accepted industry financial measures to assess the performance
and financial conditions of the business, including: Net Asset
Value, which is the estimated fair value of our assets, net of
debt, or NAV; Funds From Operations, or FFO; Adjusted FFO, or
AFFO, which is FFO less spending for Capital Replacements; same
store property operating results; net operating income; Free
Cash Flow which is net operating income less spending for
Capital Replacements; financial coverage ratios; and leverage as
shown on our balance sheet. Our chief operating decision maker
emphasizes net operating income as a key measurement of segment
profit or loss. Segment net operating income is generally
defined as segment revenues less direct segment operating
expenses.
We have two reportable segments: real estate and investment
management.
Real
Estate Segment
Our real estate segment owns and operates properties that
generate rental and other property-related income through the
leasing of apartment units to a diverse base of residents. Our
real estate segment’s net operating income also includes
income from property management services performed for
unconsolidated partnerships and unrelated parties.
Investment
Management Segment
Our investment management segment includes portfolio strategy,
capital allocation, joint ventures, tax credit syndication,
acquisitions, dispositions and other transaction activities. The
expenses of this segment consist primarily of the costs of
departments that perform these activities. These activities are
conducted in part by our taxable subsidiaries, and the related
net operating income may be subject to income taxes. Our
investment management segment’s operating results also
include gains on dispositions of non-depreciable assets,
accretion of loan discounts resulting from transactional
activities and certain other income in arriving at income (loss)
from continuing operations for the segment.
The following tables present the revenues, net operating income
(loss) and income (loss) from continuing operations of our real
estate and investment management segments for the years ended
December 31, 2009, 2008 and 2007 (in thousands):
|
Corporate
|
||||||||||||||||
|
Not Allocated
|
||||||||||||||||
|
Investment
|
to Segments
|
|||||||||||||||
|
Real Estate
|
Management
|
and Certain
|
||||||||||||||
| Segment | Segment | Eliminations | Total | |||||||||||||
|
Year Ended December 31, 2009:
|
||||||||||||||||
|
Rental and other property revenues
|
$ | 1,140,828 | $ | — | $ | — | $ | 1,140,828 | ||||||||
|
Property management revenues, primarily from affiliates
|
5,082 | — | — | 5,082 | ||||||||||||
|
Asset management and tax credit revenues
|
— | 52,193 | (2,340 | ) | 49,853 | |||||||||||
|
Total revenues
|
1,145,910 | 52,193 | (2,340 | ) | 1,195,763 | |||||||||||
|
Property operating expenses
|
521,161 | — | — | 521,161 | ||||||||||||
|
Property management expenses
|
2,869 | — | — | 2,869 | ||||||||||||
|
Investment management expenses
|
— | 15,779 | — | 15,779 | ||||||||||||
|
Depreciation and amortization(1)
|
— | — | 444,413 | 444,413 | ||||||||||||
|
Provision for operating real estate impairment losses
|
— | — | 2,329 | 2,329 | ||||||||||||
|
General and administrative expenses
|
— | — | 69,567 | 69,567 | ||||||||||||
|
Other expenses, net
|
— | — | 17,891 | 17,891 | ||||||||||||
|
Restructuring costs
|
— | — | 11,241 | 11,241 | ||||||||||||
|
Total operating expenses
|
524,030 | 15,779 | 545,441 | 1,085,250 | ||||||||||||
|
Net operating income (loss)
|
621,880 | 36,414 | (547,781 | ) | 110,513 | |||||||||||
|
Other items included in continuing operations(2)
|
— | 1,659 | (309,209 | ) | (307,550 | ) | ||||||||||
|
Income (loss) from continuing operations
|
$ | 621,880 | $ | 38,073 | $ | (856,990 | ) | $ | (197,037 | ) | ||||||
F-50
Table of Contents
|
Corporate
|
||||||||||||||||
|
Not Allocated to
|
||||||||||||||||
|
Investment
|
Segments and
|
|||||||||||||||
|
Real Estate
|
Management
|
Certain
|
||||||||||||||
| Segment | Segment | Eliminations | Total | |||||||||||||
|
Year Ended December 31, 2008:
|
||||||||||||||||
|
Rental and other property revenues
|
$ | 1,137,995 | $ | — | $ | — | $ | 1,137,995 | ||||||||
|
Property management revenues, primarily from affiliates
|
6,345 | — | — | 6,345 | ||||||||||||
|
Asset management and tax credit revenues
|
— | 101,225 | (2,395 | ) | 98,830 | |||||||||||
|
Total revenues
|
1,144,340 | 101,225 | (2,395 | ) | 1,243,170 | |||||||||||
|
Property operating expenses
|
526,238 | — | — | 526,238 | ||||||||||||
|
Property management expenses
|
5,385 | — | — | 5,385 | ||||||||||||
|
Investment management expenses
|
— | 24,784 | — | 24,784 | ||||||||||||
|
Depreciation and amortization(1)
|
— | — | 392,999 | 392,999 | ||||||||||||
|
Provision for impairment losses on real estate development assets
|
— | — | 91,138 | 91,138 | ||||||||||||
|
General and administrative expenses
|
— | — | 99,157 | 99,157 | ||||||||||||
|
Other expenses, net
|
— | — | 22,568 | 22,568 | ||||||||||||
|
Restructuring costs
|
— | — | 22,802 | 22,802 | ||||||||||||
|
Total operating expenses
|
531,623 | 24,784 | 628,664 | 1,185,071 | ||||||||||||
|
Net operating income (loss)
|
612,717 | 76,441 | (631,059 | ) | 58,099 | |||||||||||
|
Other items included in continuing operations(2)
|
— | (2,227 | ) | (173,750 | ) | (175,977 | ) | |||||||||
|
Income (loss) from continuing operations
|
$ | 612,717 | $ | 74,214 | $ | (804,809 | ) | $ | (117,878 | ) | ||||||
|
Investment
|
Corporate
|
|||||||||||||||
|
Real Estate
|
Management
|
Not Allocated
|
||||||||||||||
| Segment | Segment | to Segments | Total | |||||||||||||
|
Year Ended December 31, 2007:
|
||||||||||||||||
|
Rental and other property revenues
|
$ | 1,093,779 | $ | — | $ | — | $ | 1,093,779 | ||||||||
|
Property management revenues, primarily from affiliates
|
6,923 | — | — | 6,923 | ||||||||||||
|
Asset management and tax credit revenues
|
— | 73,755 | — | 73,755 | ||||||||||||
|
Total revenues
|
1,100,702 | 73,755 | — | 1,174,457 | ||||||||||||
|
Property operating expenses
|
503,890 | — | — | 503,890 | ||||||||||||
|
Property management expenses
|
6,678 | — | — | 6,678 | ||||||||||||
|
Investment management expenses
|
— | 20,507 | — | 20,507 | ||||||||||||
|
Depreciation and amortization(1)
|
— | — | 347,491 | 347,491 | ||||||||||||
|
Provision for operating real estate impairment losses
|
— | — | 1,080 | 1,080 | ||||||||||||
|
General and administrative expenses
|
— | — | 90,674 | 90,674 | ||||||||||||
|
Other expenses, net
|
— | — | 19,338 | 19,338 | ||||||||||||
|
Total operating expenses
|
510,568 | 20,507 | 458,583 | 989,658 | ||||||||||||
|
Net operating income (loss)
|
590,134 | 53,248 | (458,583 | ) | 184,799 | |||||||||||
|
Other items included in continuing operations(2)
|
— | 7,305 | (238,213 | ) | (230,908 | ) | ||||||||||
|
Income (loss) from continuing operations
|
$ | 590,134 | $ | 60,553 | $ | (696,796 | ) | $ | (46,109 | ) | ||||||
F-51
Table of Contents
| (1) | Our chief operating decision maker assesses the performance of real estate using, among other measures, net operating income, excluding depreciation and amortization. Accordingly, we do not allocate depreciation and amortization to the real estate segment. | |
| (2) | Other items in continuing operations for the investment management segment include accretion income recognized on discounted notes receivable, other income items and income taxes associated with transactional activities. Other items in continuing operations not allocated to segments include: (i) interest income and expense; (ii) provisions for losses on notes receivable; (iii) equity in losses of unconsolidated real estate partnerships and impairment losses related to unconsolidated real estate partnerships; and (iv) gain on dispositions of unconsolidated real estate and other. |
During the years ended December 31, 2009, 2008 and 2007,
for continuing operations, our rental revenues include
$140.3 million, $132.3 million and
$121.4 million, respectively, of subsidies from government
agencies, which represented 12.2%, 11.6% and 11.0%,
respectively, of our real estate segment revenues.
The assets of our reportable segments are as follows (in
thousands):
| 2009 | 2008 | |||||||
|
Total assets for reportable segments(1)
|
$ | 7,683,449 | $ | 9,074,131 | ||||
|
Corporate and other assets
|
223,019 | 367,739 | ||||||
|
Total consolidated assets
|
$ | 7,906,468 | $ | 9,441,870 | ||||
| (1) | Total assets for reportable segments primarily relate to the real estate segment. |
Our capital additions primarily relate to the real estate
segment and totaled $275.4 million, $665.2 million and
$689.7 million for the years ended December 31, 2009,
2008 and 2007, respectively.
F-52
Table of Contents
APARTMENT
INVESTMENT AND MANAGEMENT COMPANY
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2009
(In Thousands Except Unit Data)
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2009
(In Thousands Except Unit Data)
|
(2)
|
||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
(3)
|
December 31, 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
Cost
|
Total
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
(1)
|
Capitalized
|
Accumulated
|
Cost
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Property
|
Date
|
Year
|
Number
|
Buildings and
|
Subsequent to
|
Buildings and
|
(5)
|
Depreciation
|
Net of
|
|||||||||||||||||||||||||||||||||||||||||
|
Property Name
|
Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Continuing Operations:
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
Conventional Properties:
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
100 Forest Place
|
High Rise | Dec-97 | OakPark, IL | 1987 | 234 | 2,664 | 18,815 | 4,493 | 2,664 | 23,308 | 25,972 | (8,692 | ) | 17,280 | 27,761 | |||||||||||||||||||||||||||||||||||
|
1582 First Avenue
|
High Rise | Mar-05 | New York, NY | 1900 | 17 | 4,250 | 752 | 224 | 4,281 | 945 | 5,226 | (249 | ) | 4,977 | 2,671 | |||||||||||||||||||||||||||||||||||
|
173 E. 90th Street
|
High Rise | May-04 | New York, NY | 1910 | 72 | 11,773 | 4,535 | 1,445 | 12,067 | 5,686 | 17,753 | (1,365 | ) | 16,388 | 8,772 | |||||||||||||||||||||||||||||||||||
|
182-188
Columbus Avenue
|
Mid Rise | Feb-07 | New York, NY | 1910 | 32 | 17,187 | 3,300 | 3,690 | 19,123 | 5,054 | 24,177 | (992 | ) | 23,185 | 13,471 | |||||||||||||||||||||||||||||||||||
|
204-206 West
133rd Street
|
Mid Rise | Jun-07 | New York, NY | 1910 | 44 | 3,291 | 1,450 | 1,921 | 4,352 | 2,310 | 6,662 | (303 | ) | 6,359 | 3,132 | |||||||||||||||||||||||||||||||||||
|
2232-2240
Seventh Avenue
|
Mid Rise | Jun-07 | New York, NY | 1910 | 24 | 2,863 | 3,785 | 1,477 | 3,366 | 4,759 | 8,125 | (517 | ) | 7,608 | 2,972 | |||||||||||||||||||||||||||||||||||
|
2247-2253
Seventh Avenue
|
Mid Rise | Jun-07 | New York, NY | 1910 | 35 | 6,787 | 3,335 | 1,464 | 7,356 | 4,230 | 11,586 | (586 | ) | 11,000 | 5,483 | |||||||||||||||||||||||||||||||||||
|
2252-2258
Seventh Avenue
|
Mid Rise | Jun-07 | New York, NY | 1910 | 35 | 3,623 | 4,504 | 1,814 | 4,318 | 5,623 | 9,941 | (772 | ) | 9,169 | 5,125 | |||||||||||||||||||||||||||||||||||
|
2300-2310
Seventh Avenue
|
Mid Rise | Jun-07 | New York, NY | 1910 | 63 | 8,623 | 6,964 | 5,260 | 10,417 | 10,430 | 20,847 | (1,441 | ) | 19,406 | 9,896 | |||||||||||||||||||||||||||||||||||
|
236 — 238 East 88th Street
|
High Rise | Jan-04 | New York, NY | 1900 | 43 | 8,751 | 2,914 | 1,295 | 8,820 | 4,140 | 12,960 | (1,155 | ) | 11,805 | 6,879 | |||||||||||||||||||||||||||||||||||
|
237-239
Ninth Avenue
|
High Rise | Mar-05 | New York, NY | 1900 | 36 | 8,430 | 1,866 | 770 | 8,494 | 2,572 | 11,066 | (614 | ) | 10,452 | 5,227 | |||||||||||||||||||||||||||||||||||
|
240 West 73rd Street, LLC
|
High Rise | Sep-04 | New York, NY | 1900 | 200 | 68,006 | 12,140 | 3,563 | 68,109 | 15,600 | 83,709 | (2,827 | ) | 80,882 | 30,286 | |||||||||||||||||||||||||||||||||||
|
2484 Seventh Avenue
|
Mid Rise | Jun-07 | New York, NY | 1921 | 23 | 2,384 | 1,726 | 468 | 2,601 | 1,977 | 4,578 | (243 | ) | 4,335 | 2,472 | |||||||||||||||||||||||||||||||||||
|
2900 on First Apartments
|
Mid Rise | Oct-08 | Seattle, WA | 1989 | 135 | 19,015 | 17,518 | 330 | 19,071 | 17,792 | 36,863 | (860 | ) | 36,003 | 20,719 | |||||||||||||||||||||||||||||||||||
|
306 East 89th Street
|
High Rise | Jul-04 | New York, NY | 1930 | 20 | 2,659 | 1,006 | 167 | 2,681 | 1,151 | 3,832 | (350 | ) | 3,482 | 1,908 | |||||||||||||||||||||||||||||||||||
|
311 & 313 East 73rd Street
|
Mid Rise | Mar-03 | New York, NY | 1904 | 34 | 5,635 | 1,609 | 546 | 5,678 | 2,112 | 7,790 | (940 | ) | 6,850 | 2,761 | |||||||||||||||||||||||||||||||||||
|
322-324
East
61st Street
|
High Rise | Mar-05 | New York, NY | 1900 | 40 | 6,319 | 2,224 | 681 | 6,372 | 2,852 | 9,224 | (707 | ) | 8,517 | 3,691 | |||||||||||||||||||||||||||||||||||
|
3400 Avenue of the Arts
|
Mid Rise | Mar-02 | Costa Mesa, CA | 1987 | 770 | 55,223 | 65,506 | 73,301 | 57,240 | 136,790 | 194,030 | (31,750 | ) | 162,280 | 119,869 | |||||||||||||||||||||||||||||||||||
|
452 East 78th Street
|
High Rise | Jan-04 | New York, NY | 1900 | 12 | 1,966 | 608 | 278 | 1,982 | 870 | 2,852 | (242 | ) | 2,610 | 1,600 | |||||||||||||||||||||||||||||||||||
|
464-466
Amsterdam &
200-210 W. 83rd
Street
|
Mid Rise | Feb-07 | New York, NY | 1910 | 72 | 23,677 | 7,101 | 3,881 | 25,552 | 9,107 | 34,659 | (1,241 | ) | 33,418 | 19,679 | |||||||||||||||||||||||||||||||||||
|
510 East 88th Street
|
High Rise | Jan-04 | New York, NY | 1900 | 20 | 3,137 | 1,002 | 278 | 3,163 | 1,254 | 4,417 | (307 | ) | 4,110 | 2,634 | |||||||||||||||||||||||||||||||||||
|
514-516
East
88th Street
|
High Rise | Mar-05 | New York, NY | 1900 | 36 | 6,230 | 2,168 | 556 | 6,282 | 2,672 | 8,954 | (618 | ) | 8,336 | 4,607 | |||||||||||||||||||||||||||||||||||
|
656 St. Nicholas Avenue
|
Mid Rise | Jun-07 | New York, NY | 1920 | 31 | 2,731 | 1,636 | 2,774 | 3,576 | 3,565 | 7,141 | (467 | ) | 6,674 | 2,374 | |||||||||||||||||||||||||||||||||||
|
759 St. Nicholas Avenue
|
Mid Rise | Oct-07 | New York, NY | 1920 | 9 | 682 | 535 | 587 | 1,013 | 791 | 1,804 | (84 | ) | 1,720 | 545 | |||||||||||||||||||||||||||||||||||
|
865 Bellevue
|
Garden | Jul-00 | Nashville, TN | 1972 | 326 | 3,558 | 12,037 | 27,055 | 3,558 | 39,092 | 42,650 | (11,840 | ) | 30,810 | 19,184 | |||||||||||||||||||||||||||||||||||
|
Arbors (Grovetree), The
|
Garden | Oct-97 | Tempe, AZ | 1967 | 200 | 1,092 | 6,208 | 2,940 | 1,092 | 9,148 | 10,240 | (4,038 | ) | 6,202 | 6,743 | |||||||||||||||||||||||||||||||||||
|
Arbours Of Hermitage, The
|
Garden | Jul-00 | Hermitage, TN | 1972 | 350 | 3,217 | 12,023 | 6,795 | 3,217 | 18,818 | 22,035 | (8,527 | ) | 13,508 | 10,258 | |||||||||||||||||||||||||||||||||||
|
Atriums of Plantation
|
Mid Rise | Aug-98 | Plantation, FL | 1979 | 210 | 1,807 | 10,385 | 2,833 | 1,807 | 13,218 | 15,025 | (5,151 | ) | 9,874 | 5,780 | |||||||||||||||||||||||||||||||||||
|
Auburn Glen
|
Garden | Dec-06 | Jacksonville, FL | 1974 | 251 | 7,483 | 8,191 | 3,202 | 7,670 | 11,206 | 18,876 | (2,098 | ) | 16,778 | 9,912 | |||||||||||||||||||||||||||||||||||
|
BaLaye
|
Garden | Apr-06 | Tampa, FL | 2002 | 324 | 10,329 | 28,800 | 969 | 10,608 | 29,490 | 40,098 | (4,187 | ) | 35,911 | 23,012 | |||||||||||||||||||||||||||||||||||
|
Bank Lofts
|
High Rise | Apr-01 | Denver, CO | 1920 | 117 | 3,525 | 9,045 | 1,668 | 3,525 | 10,713 | 14,238 | (4,668 | ) | 9,570 | 7,242 | |||||||||||||||||||||||||||||||||||
|
Bay Parc Plaza
|
High Rise | Sep-04 | Miami, FL | 2000 | 471 | 22,680 | 41,847 | 4,097 | 22,680 | 45,944 | 68,624 | (6,612 | ) | 62,012 | 46,294 | |||||||||||||||||||||||||||||||||||
|
Bay Ridge at Nashua
|
Garden | Jan-03 | Nashua, NH | 1984 | 412 | 3,352 | 40,713 | 6,895 | 3,262 | 47,698 | 50,960 | (10,541 | ) | 40,419 | 40,766 | |||||||||||||||||||||||||||||||||||
|
Bayberry Hill Estates
|
Garden | Aug-02 | Framingham, MA | 1971 | 424 | 18,915 | 35,945 | 8,744 | 18,916 | 44,688 | 63,604 | (14,036 | ) | 49,568 | 35,250 | |||||||||||||||||||||||||||||||||||
|
Bayhead Village
|
Garden | Oct-00 | Indianapolis, IN | 1978 | 202 | 1,411 | 5,139 | 3,482 | 1,411 | 8,621 | 10,032 | (3,400 | ) | 6,632 | 2,728 | |||||||||||||||||||||||||||||||||||
|
Boston Lofts
|
High Rise | Apr-01 | Denver, CO | 1890 | 158 | 3,447 | 20,589 | 3,188 | 3,447 | 23,777 | 27,224 | (9,855 | ) | 17,369 | 14,559 | |||||||||||||||||||||||||||||||||||
|
Boulder Creek
|
Garden | Jul-94 | Boulder, CO | 1972 | 221 | 755 | 7,730 | 17,156 | 755 | 24,886 | 25,641 | (11,913 | ) | 13,728 | 12,031 | |||||||||||||||||||||||||||||||||||
|
Brandywine
|
Garden | Jul-94 | St. Petersburg, FL | 1971 | 477 | 1,437 | 12,725 | 8,763 | 1,437 | 21,488 | 22,925 | (13,782 | ) | 9,143 | 21,124 | |||||||||||||||||||||||||||||||||||
|
Breakers, The
|
Garden | Oct-98 | Daytona Beach, FL | 1985 | 208 | 1,008 | 5,507 | 3,257 | 1,008 | 8,764 | 9,772 | (3,856 | ) | 5,916 | 6,378 | |||||||||||||||||||||||||||||||||||
|
Broadcast Center
|
Garden | Mar-02 | Los Angeles, CA | 1990 | 279 | 27,603 | 41,244 | 29,066 | 29,407 | 68,506 | 97,913 | (15,963 | ) | 81,950 | 55,875 | |||||||||||||||||||||||||||||||||||
|
Buena Vista
|
Mid Rise | Jan-06 | Pasadena, CA | 1973 | 92 | 9,693 | 6,818 | 1,126 | 9,693 | 7,944 | 17,637 | (768 | ) | 16,869 | 10,607 | |||||||||||||||||||||||||||||||||||
F-53
Table of Contents
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December 31, 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||
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Cost
|
Total
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
(1)
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Capitalized
|
Accumulated
|
Cost
|
|||||||||||||||||||||||||||||||||||||||||||||||
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Property
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Date
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Year
|
Number
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Buildings and
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Subsequent to
|
Buildings and
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(5)
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Depreciation
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Net of
|
|||||||||||||||||||||||||||||||||||||||||
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Property Name
|
Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Burke Shire Commons
|
Garden | Mar-01 | Burke, VA | 1986 | 360 | 4,867 | 23,617 | 3,860 | 4,867 | 27,477 | 32,344 | (10,304 | ) | 22,040 | 46,100 | |||||||||||||||||||||||||||||||||||
|
Calhoun Beach Club
|
High Rise | Dec-98 | Minneapolis, MN | 1928 | 332 | 11,708 | 73,334 | 45,743 | 11,708 | 119,077 | 130,785 | (40,408 | ) | 90,377 | 49,119 | |||||||||||||||||||||||||||||||||||
|
Canterbury Green
|
Garden | Dec-99 | Fort Wayne, IN | 1979 | 1,988 | 13,659 | 73,115 | 25,704 | 13,659 | 98,819 | 112,478 | (45,994 | ) | 66,484 | 53,200 | |||||||||||||||||||||||||||||||||||
|
Canyon Terrace
|
Garden | Mar-02 | Saugus, CA | 1984 | 130 | 7,300 | 6,602 | 5,909 | 7,508 | 12,303 | 19,811 | (3,593 | ) | 16,218 | 11,750 | |||||||||||||||||||||||||||||||||||
|
Carriage Hill
|
Garden | Jul-00 | East Lansing, MI | 1972 | 143 | 1,957 | 7,912 | 2,053 | 1,957 | 9,965 | 11,922 | (5,434 | ) | 6,488 | 5,360 | |||||||||||||||||||||||||||||||||||
|
Casa del Mar at Baymeadows
|
Garden | Oct-06 | Jacksonville, FL | 1984 | 144 | 4,902 | 10,562 | 1,403 | 5,039 | 11,828 | 16,867 | (1,752 | ) | 15,115 | 9,434 | |||||||||||||||||||||||||||||||||||
|
Cedar Rim
|
Garden | Apr-00 | Newcastle, WA | 1980 | 104 | 761 | 5,218 | 17,174 | 761 | 22,392 | 23,153 | (9,405 | ) | 13,748 | 7,857 | |||||||||||||||||||||||||||||||||||
|
Center Square
|
High Rise | Oct-99 | Doylestown, PA | 1975 | 350 | 582 | 4,190 | 3,532 | 582 | 7,722 | 8,304 | (3,104 | ) | 5,200 | 15,159 | |||||||||||||||||||||||||||||||||||
|
Charleston Landing
|
Garden | Sep-00 | Brandon, FL | 1985 | 300 | 7,488 | 8,656 | 7,711 | 7,488 | 16,367 | 23,855 | (5,745 | ) | 18,110 | 13,101 | |||||||||||||||||||||||||||||||||||
|
Chesapeake Landing I
|
Garden | Sep-00 | Aurora, IL | 1986 | 416 | 15,800 | 16,875 | 4,931 | 15,800 | 21,806 | 37,606 | (7,748 | ) | 29,858 | 24,630 | |||||||||||||||||||||||||||||||||||
|
Chesapeake Landing II
|
Garden | Mar-01 | Aurora, IL | 1987 | 184 | 1,969 | 7,980 | 3,308 | 1,969 | 11,288 | 13,257 | (4,730 | ) | 8,527 | 10,241 | |||||||||||||||||||||||||||||||||||
|
Chestnut Hall
|
High Rise | Oct-06 | Philadelphia, PA | 1923 | 315 | 12,047 | 14,299 | 4,653 | 12,338 | 18,661 | 30,999 | (3,996 | ) | 27,003 | 18,690 | |||||||||||||||||||||||||||||||||||
|
Chestnut Hill
|
Garden | Apr-00 | Philadelphia, PA | 1963 | 821 | 6,463 | 49,315 | 48,996 | 6,463 | 98,311 | 104,774 | (36,814 | ) | 67,960 | 51,444 | |||||||||||||||||||||||||||||||||||
|
Chimneys of Cradle Rock
|
Garden | Jun-04 | Columbia, MD | 1979 | 198 | 2,234 | 8,107 | 578 | 2,040 | 8,879 | 10,919 | (2,284 | ) | 8,635 | 16,737 | |||||||||||||||||||||||||||||||||||
|
Citrus Grove
|
Garden | Jun-98 | Redlands, CA | 1985 | 198 | 1,118 | 6,642 | 2,186 | 1,118 | 8,828 | 9,946 | (3,983 | ) | 5,963 | 3,261 | |||||||||||||||||||||||||||||||||||
|
Colonnade Gardens
|
Garden | Oct-97 | Phoenix, AZ | 1973 | 196 | 766 | 4,346 | 2,912 | 766 | 7,258 | 8,024 | (3,615 | ) | 4,409 | 1,625 | |||||||||||||||||||||||||||||||||||
|
Colony at Kenilworth
|
Garden | Oct-99 | Towson, MD | 1966 | 383 | 2,403 | 18,798 | 10,801 | 2,403 | 29,599 | 32,002 | (14,784 | ) | 17,218 | 24,443 | |||||||||||||||||||||||||||||||||||
|
Columbus Avenue
|
Mid Rise | Sep-03 | New York, NY | 1880 | 59 | 35,472 | 9,450 | 3,599 | 35,527 | 12,994 | 48,521 | (4,970 | ) | 43,551 | 25,826 | |||||||||||||||||||||||||||||||||||
|
Country Lakes I
|
Garden | Apr-01 | Naperville, IL | 1982 | 240 | 8,512 | 10,832 | 3,300 | 8,512 | 14,132 | 22,644 | (5,213 | ) | 17,431 | 14,557 | |||||||||||||||||||||||||||||||||||
|
Country Lakes II
|
Garden | May-97 | Naperville, IL | 1986 | 400 | 5,165 | 29,430 | 5,921 | 5,165 | 35,351 | 40,516 | (14,200 | ) | 26,316 | 24,893 | |||||||||||||||||||||||||||||||||||
|
Creekside
|
Garden | Jan-00 | Denver, CO | 1974 | 328 | 2,953 | 12,697 | 5,028 | 3,189 | 17,489 | 20,678 | (7,788 | ) | 12,890 | 14,359 | |||||||||||||||||||||||||||||||||||
|
Creekside
|
Garden | Mar-02 | Simi Valley, CA | 1985 | 397 | 24,595 | 18,818 | 6,775 | 25,245 | 24,943 | 50,188 | (8,109 | ) | 42,079 | 40,670 | |||||||||||||||||||||||||||||||||||
|
Crescent at West Hollywood, The
|
Mid Rise | Mar-02 | West Hollywood, CA | 1982 | 130 | 15,382 | 10,215 | 14,817 | 15,765 | 24,649 | 40,414 | (9,223 | ) | 31,191 | 24,195 | |||||||||||||||||||||||||||||||||||
|
Defoors Crossing
|
Garden | Jan-06 | Atlanta, GA | 1987 | 60 | 348 | 957 | 392 | 348 | 1,349 | 1,697 | (1,213 | ) | 484 | — | |||||||||||||||||||||||||||||||||||
|
Douglaston Villas and Townhomes
|
Garden | Aug-99 | Altamonte Springs, FL | 1979 | 234 | 1,666 | 9,353 | 7,460 | 1,666 | 16,813 | 18,479 | (6,381 | ) | 12,098 | 10,512 | |||||||||||||||||||||||||||||||||||
|
Elm Creek
|
Mid Rise | Dec-97 | Elmhurst, IL | 1986 | 372 | 5,534 | 30,830 | 17,422 | 5,635 | 48,151 | 53,786 | (18,347 | ) | 35,439 | 35,154 | |||||||||||||||||||||||||||||||||||
|
Evanston Place
|
High Rise | Dec-97 | Evanston, IL | 1988 | 189 | 3,232 | 25,546 | 4,398 | 3,232 | 29,944 | 33,176 | (10,325 | ) | 22,851 | 21,645 | |||||||||||||||||||||||||||||||||||
|
Fairlane East
|
Garden | Jan-01 | Dearborn, MI | 1973 | 244 | 6,550 | 11,711 | 5,136 | 6,550 | 16,847 | 23,397 | (8,610 | ) | 14,787 | 10,200 | |||||||||||||||||||||||||||||||||||
|
Farmingdale
|
Mid Rise | Oct-00 | Darien, IL | 1975 | 240 | 11,763 | 15,174 | 9,177 | 11,763 | 24,351 | 36,114 | (9,406 | ) | 26,708 | 17,732 | |||||||||||||||||||||||||||||||||||
|
Ferntree
|
Garden | Mar-01 | Phoenix, AZ | 1968 | 219 | 2,078 | 13,752 | 3,195 | 2,079 | 16,946 | 19,025 | (6,327 | ) | 12,698 | 7,058 | |||||||||||||||||||||||||||||||||||
|
Fisherman’s Village
|
Garden | Jan-06 | Indianapolis, IN | 1982 | 328 | 2,156 | 9,936 | 2,685 | 2,156 | 12,621 | 14,777 | (7,059 | ) | 7,718 | 6,350 | |||||||||||||||||||||||||||||||||||
|
Fishermans Wharf
|
Garden | Nov-96 | Clute, TX | 1981 | 360 | 1,257 | 7,584 | 5,428 | 1,257 | 13,012 | 14,269 | (5,704 | ) | 8,565 | 6,930 | |||||||||||||||||||||||||||||||||||
|
Flamingo Towers
|
High Rise | Sep-97 | Miami Beach, FL | 1960 | 1,127 | 32,191 | 38,399 | 217,720 | 32,239 | 256,071 | 288,310 | (91,197 | ) | 197,113 | 118,890 | |||||||||||||||||||||||||||||||||||
|
Forestlake Apartments
|
Garden | Mar-07 | Daytona Beach, FL | 1982 | 120 | 3,691 | 4,320 | 496 | 3,860 | 4,647 | 8,507 | (623 | ) | 7,884 | 4,735 | |||||||||||||||||||||||||||||||||||
|
Four Quarters Habitat
|
Garden | Jan-06 | Miami, FL | 1976 | 336 | 2,383 | 17,199 | 14,503 | 2,379 | 31,706 | 34,085 | (11,365 | ) | 22,720 | 11,698 | |||||||||||||||||||||||||||||||||||
|
Foxchase
|
Garden | Dec-97 | Alexandria, VA | 1947 | 2,113 | 15,419 | 96,062 | 31,800 | 15,496 | 127,785 | 143,281 | (55,566 | ) | 87,715 | 184,131 | |||||||||||||||||||||||||||||||||||
|
Georgetown
|
Garden | Aug-02 | Framingham, MA | 1964 | 207 | 12,351 | 13,168 | 2,091 | 12,351 | 15,259 | 27,610 | (4,535 | ) | 23,075 | 12,775 | |||||||||||||||||||||||||||||||||||
|
Glen at Forestlake, The
|
Garden | Mar-07 | Daytona Beach, FL | 1982 | 26 | 897 | 862 | 182 | 933 | 1,008 | 1,941 | (125 | ) | 1,816 | 1,039 | |||||||||||||||||||||||||||||||||||
|
Glenbridge Manors
|
Garden | Sep-03 | Cincinnati, OH | 1978 | 274 | 1,030 | 17,447 | 14,108 | 1,031 | 31,554 | 32,585 | (7,012 | ) | 25,573 | 16,820 | |||||||||||||||||||||||||||||||||||
|
Granada
|
Mid Rise | Aug-02 | Framingham, MA | 1958 | 72 | 4,577 | 4,058 | 854 | 4,577 | 4,912 | 9,489 | (2,043 | ) | 7,446 | 4,275 | |||||||||||||||||||||||||||||||||||
|
Grand Pointe
|
Garden | Dec-99 | Columbia, MD | 1974 | 325 | 2,715 | 16,771 | 5,264 | 2,715 | 22,035 | 24,750 | (8,144 | ) | 16,606 | 16,987 | |||||||||||||||||||||||||||||||||||
|
Greens
|
Garden | Jul-94 | Chandler, AZ | 2000 | 324 | 2,303 | 713 | 27,244 | 2,303 | 27,957 | 30,260 | (12,346 | ) | 17,914 | 12,855 | |||||||||||||||||||||||||||||||||||
|
Greenspoint at Paradise Valley
|
Garden | Jan-00 | Phoenix, AZ | 1985 | 336 | 3,042 | 13,223 | 12,350 | 3,042 | 25,573 | 28,615 | (11,541 | ) | 17,074 | 16,287 | |||||||||||||||||||||||||||||||||||
|
Hampden Heights
|
Garden | Jan-00 | Denver, CO | 1973 | 376 | 3,224 | 12,905 | 5,893 | 3,453 | 18,569 | 22,022 | (8,681 | ) | 13,341 | 13,830 | |||||||||||||||||||||||||||||||||||
|
Harbour, The
|
Garden | Mar-01 | Melbourne, FL | 1987 | 162 | 4,108 | 3,563 | 5,774 | 4,108 | 9,337 | 13,445 | (3,026 | ) | 10,419 | — | |||||||||||||||||||||||||||||||||||
|
Heritage Park at Alta Loma
|
Garden | Jan-01 | Alta Loma, CA | 1986 | 232 | 1,200 | 6,428 | 3,456 | 1,200 | 9,884 | 11,084 | (3,560 | ) | 7,524 | 7,264 | |||||||||||||||||||||||||||||||||||
|
Heritage Park Escondido
|
Garden | Oct-00 | Escondido, CA | 1986 | 196 | 1,055 | 7,565 | 1,325 | 1,055 | 8,890 | 9,945 | (4,118 | ) | 5,827 | 7,299 | |||||||||||||||||||||||||||||||||||
|
Heritage Park Livermore
|
Garden | Oct-00 | Livermore, CA | 1988 | 167 | 1,039 | 9,170 | 1,343 | 1,039 | 10,513 | 11,552 | (4,639 | ) | 6,913 | 7,432 | |||||||||||||||||||||||||||||||||||
|
Heritage Park Montclair
|
Garden | Mar-01 | Montclair, CA | 1985 | 144 | 690 | 4,149 | 1,206 | 690 | 5,355 | 6,045 | (1,873 | ) | 4,172 | 4,620 | |||||||||||||||||||||||||||||||||||
F-54
Table of Contents
|
(2)
|
||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
(3)
|
December 31, 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
Cost
|
Total
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
(1)
|
Capitalized
|
Accumulated
|
Cost
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Property
|
Date
|
Year
|
Number
|
Buildings and
|
Subsequent to
|
Buildings and
|
(5)
|
Depreciation
|
Net of
|
|||||||||||||||||||||||||||||||||||||||||
|
Property Name
|
Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Heritage Village Anaheim
|
Garden | Oct-00 | Anaheim, CA | 1986 | 196 | 1,832 | 8,541 | 1,609 | 1,832 | 10,150 | 11,982 | (4,777 | ) | 7,205 | 8,858 | |||||||||||||||||||||||||||||||||||
|
Hidden Cove
|
Garden | Jul-98 | Escondido, CA | 1985 | 334 | 3,043 | 17,615 | 6,980 | 3,043 | 24,595 | 27,638 | (10,158 | ) | 17,480 | 31,006 | |||||||||||||||||||||||||||||||||||
|
Hidden Cove II
|
Garden | Jul-07 | Escondido, CA | 1986 | 118 | 12,730 | 6,530 | 5,473 | 12,849 | 11,884 | 24,733 | (1,806 | ) | 22,927 | 11,586 | |||||||||||||||||||||||||||||||||||
|
Hidden Harbour
|
Garden | Oct-02 | Melbourne, FL | 1985 | 216 | 1,444 | 7,590 | 4,798 | 1,444 | 12,388 | 13,832 | (3,471 | ) | 10,361 | — | |||||||||||||||||||||||||||||||||||
|
Highcrest Townhomes
|
Town Home | Jan-03 | Woodridge, IL | 1968 | 176 | 3,045 | 13,452 | 1,368 | 3,045 | 14,820 | 17,865 | (6,091 | ) | 11,774 | 10,876 | |||||||||||||||||||||||||||||||||||
|
Highland Ridge
|
Garden | Sep-04 | Atlanta, GA | 1984 | 219 | 1,225 | 6,174 | 5,145 | 1,242 | 11,302 | 12,544 | (4,605 | ) | 7,939 | 6,100 | |||||||||||||||||||||||||||||||||||
|
Hillcreste
|
Garden | Mar-02 | Century City, CA | 1989 | 315 | 33,755 | 47,216 | 25,906 | 35,862 | 71,015 | 106,877 | (21,022 | ) | 85,855 | 57,610 | |||||||||||||||||||||||||||||||||||
|
Hillmeade
|
Garden | Nov-94 | Nashville, TN | 1985 | 288 | 2,872 | 16,069 | 13,564 | 2,872 | 29,633 | 32,505 | (16,923 | ) | 15,582 | 18,376 | |||||||||||||||||||||||||||||||||||
|
Homestead
|
Garden | Apr-05 | East Lansing, MI | 1986 | 168 | 1,565 | 8,200 | 761 | 1,566 | 8,960 | 10,526 | (3,878 | ) | 6,648 | 3,372 | |||||||||||||||||||||||||||||||||||
|
Horizons West Apartments
|
Mid Rise | Dec-06 | Pacifica, CA | 1970 | 78 | 8,763 | 6,376 | 1,610 | 8,887 | 7,862 | 16,749 | (1,059 | ) | 15,690 | 5,377 | |||||||||||||||||||||||||||||||||||
|
Hunt Club
|
Garden | Sep-00 | Gaithersburg, MD | 1986 | 336 | 17,859 | 13,149 | 3,598 | 17,859 | 16,747 | 34,606 | (6,372 | ) | 28,234 | 32,160 | |||||||||||||||||||||||||||||||||||
|
Hunt Club
|
Garden | Mar-01 | Austin, TX | 1987 | 384 | 10,342 | 11,920 | 8,537 | 10,342 | 20,457 | 30,799 | (9,758 | ) | 21,041 | 16,499 | |||||||||||||||||||||||||||||||||||
|
Hunter’s Chase
|
Garden | Jan-01 | Midlothian, VA | 1985 | 320 | 7,935 | 7,915 | 3,259 | 7,935 | 11,174 | 19,109 | (3,398 | ) | 15,711 | 16,407 | |||||||||||||||||||||||||||||||||||
|
Hunter’s Crossing
|
Garden | Apr-01 | Leesburg, VA | 1967 | 164 | 2,244 | 7,763 | 4,079 | 2,244 | 11,842 | 14,086 | (6,371 | ) | 7,715 | 6,940 | |||||||||||||||||||||||||||||||||||
|
Hunters Glen IV
|
Garden | Oct-99 | Plainsboro, NJ | 1976 | 264 | 2,709 | 14,420 | 4,819 | 2,709 | 19,239 | 21,948 | (9,525 | ) | 12,423 | 20,191 | |||||||||||||||||||||||||||||||||||
|
Hunters Glen V
|
Garden | Oct-99 | Plainsboro, NJ | 1977 | 304 | 3,283 | 17,337 | 5,211 | 3,283 | 22,548 | 25,831 | (11,087 | ) | 14,744 | 24,194 | |||||||||||||||||||||||||||||||||||
|
Hunters Glen VI
|
Garden | Oct-99 | Plainsboro, NJ | 1977 | 328 | 2,787 | 15,501 | 6,075 | 2,787 | 21,576 | 24,363 | (11,389 | ) | 12,974 | 25,182 | |||||||||||||||||||||||||||||||||||
|
Hyde Park Tower
|
High Rise | Oct-04 | Chicago, IL | 1990 | 155 | 4,683 | 14,928 | 1,931 | 4,731 | 16,811 | 21,542 | (2,913 | ) | 18,629 | 13,781 | |||||||||||||||||||||||||||||||||||
|
Independence Green
|
Garden | Jan-06 | Farmington Hills, MI | 1960 | 981 | 10,293 | 24,586 | 20,189 | 10,156 | 44,912 | 55,068 | (13,065 | ) | 42,003 | 27,758 | |||||||||||||||||||||||||||||||||||
|
Indian Oaks
|
Garden | Mar-02 | Simi Valley, CA | 1986 | 254 | 23,927 | 15,801 | 3,489 | 24,523 | 18,694 | 43,217 | (5,884 | ) | 37,333 | 33,171 | |||||||||||||||||||||||||||||||||||
|
Island Club
|
Garden | Oct-00 | Oceanside, CA | 1986 | 592 | 18,027 | 28,654 | 11,220 | 18,027 | 39,874 | 57,901 | (15,731 | ) | 42,170 | 64,973 | |||||||||||||||||||||||||||||||||||
|
Island Club (Beville)
|
Garden | Oct-00 | Daytona Beach, FL | 1986 | 204 | 6,086 | 8,571 | 2,135 | 6,087 | 10,705 | 16,792 | (4,444 | ) | 12,348 | 8,440 | |||||||||||||||||||||||||||||||||||
|
Key Towers
|
High Rise | Apr-01 | Alexandria, VA | 1964 | 140 | 1,526 | 7,050 | 3,849 | 1,526 | 10,899 | 12,425 | (4,859 | ) | 7,566 | 10,868 | |||||||||||||||||||||||||||||||||||
|
Lakeside
|
Garden | Oct-99 | Lisle, IL | 1972 | 568 | 5,840 | 27,937 | 28,127 | 5,840 | 56,064 | 61,904 | (22,153 | ) | 39,751 | 29,375 | |||||||||||||||||||||||||||||||||||
|
Lakeside at Vinings Mountain
|
Garden | Jan-00 | Atlanta, GA | 1983 | 220 | 2,109 | 11,863 | 15,149 | 2,109 | 27,012 | 29,121 | (10,884 | ) | 18,237 | 9,666 | |||||||||||||||||||||||||||||||||||
|
Lakeside Place
|
Garden | Oct-99 | Houston, TX | 1976 | 734 | 6,160 | 34,151 | 15,942 | 6,160 | 50,093 | 56,253 | (21,654 | ) | 34,599 | 26,955 | |||||||||||||||||||||||||||||||||||
|
Lamplighter Park
|
Garden | Apr-00 | Bellevue, WA | 1967 | 174 | 2,225 | 9,272 | 4,150 | 2,225 | 13,422 | 15,647 | (6,442 | ) | 9,205 | 10,576 | |||||||||||||||||||||||||||||||||||
|
Latrobe
|
High Rise | Jan-03 | Washington, DC | 1980 | 175 | 3,459 | 9,103 | 15,543 | 3,459 | 24,646 | 28,105 | (10,353 | ) | 17,752 | 22,192 | |||||||||||||||||||||||||||||||||||
|
Lazy Hollow
|
Garden | Apr-05 | Columbia, MD | 1979 | 178 | 2,424 | 12,181 | 956 | 2,424 | 13,137 | 15,561 | (5,520 | ) | 10,041 | 7,867 | |||||||||||||||||||||||||||||||||||
|
Leahy Square
|
Garden | Apr-07 | Redwood City, CA | 1973 | 110 | 15,352 | 7,909 | 1,755 | 15,444 | 9,572 | 25,016 | (1,631 | ) | 23,385 | 15,185 | |||||||||||||||||||||||||||||||||||
|
Lewis Park
|
Garden | Jan-06 | Carbondale, IL | 1972 | 269 | 1,407 | 12,193 | 3,183 | 1,404 | 15,379 | 16,783 | (8,520 | ) | 8,263 | 3,981 | |||||||||||||||||||||||||||||||||||
|
Lincoln Place Garden
|
Garden | Oct-04 | Venice, CA | 1951 | 692 | 43,979 | 10,439 | 86,174 | 42,894 | 97,698 | 140,592 | (1,691 | ) | 138,901 | 65,000 | |||||||||||||||||||||||||||||||||||
|
Lodge at Chattahoochee, The
|
Garden | Oct-99 | Sandy Springs, GA | 1970 | 312 | 2,320 | 16,370 | 21,615 | 2,320 | 37,985 | 40,305 | (15,095 | ) | 25,210 | 11,087 | |||||||||||||||||||||||||||||||||||
|
Los Arboles
|
Garden | Sep-97 | Chandler, AZ | 1985 | 232 | 1,662 | 9,504 | 3,197 | 1,662 | 12,701 | 14,363 | (5,741 | ) | 8,622 | 8,086 | |||||||||||||||||||||||||||||||||||
|
Malibu Canyon
|
Garden | Mar-02 | Calabasas, CA | 1986 | 698 | 66,257 | 53,438 | 34,982 | 69,834 | 84,843 | 154,677 | (30,295 | ) | 124,382 | 97,604 | |||||||||||||||||||||||||||||||||||
|
Maple Bay
|
Garden | Dec-99 | Virginia Beach, VA | 1971 | 414 | 2,598 | 16,141 | 29,935 | 2,598 | 46,076 | 48,674 | (15,809 | ) | 32,865 | 33,548 | |||||||||||||||||||||||||||||||||||
|
Mariners Cove
|
Garden | Mar-02 | San Diego, CA | 1984 | 500 | — | 66,861 | 7,271 | — | 74,132 | 74,132 | (18,728 | ) | 55,404 | 5,813 | |||||||||||||||||||||||||||||||||||
|
Meadow Creek
|
Garden | Jul-94 | Boulder, CO | 1972 | 332 | 1,435 | 24,532 | 6,358 | 1,435 | 30,890 | 32,325 | (13,197 | ) | 19,128 | 24,071 | |||||||||||||||||||||||||||||||||||
|
Merrill House
|
High Rise | Jan-00 | Falls Church, VA | 1962 | 159 | 1,836 | 10,831 | 5,863 | 1,836 | 16,694 | 18,530 | (4,452 | ) | 14,078 | 15,600 | |||||||||||||||||||||||||||||||||||
|
Mesa Royale
|
Garden | Jul-94 | Mesa, AZ | 1985 | 152 | 832 | 4,569 | 9,585 | 832 | 14,154 | 14,986 | (5,290 | ) | 9,696 | — | |||||||||||||||||||||||||||||||||||
|
Montecito
|
Garden | Jul-94 | Austin, TX | 1985 | 268 | 1,268 | 6,896 | 4,958 | 1,267 | 11,855 | 13,122 | (6,165 | ) | 6,957 | 996 | |||||||||||||||||||||||||||||||||||
|
Monterey Grove
|
Garden | Jun-08 | San Jose, CA | 1999 | 224 | 34,175 | 21,939 | 2,072 | 34,325 | 23,861 | 58,186 | (1,806 | ) | 56,380 | 35,000 | |||||||||||||||||||||||||||||||||||
|
Oak Park Village
|
Garden | Oct-00 | Lansing, MI | 1973 | 618 | 10,048 | 16,771 | 7,340 | 10,048 | 24,111 | 34,159 | (12,777 | ) | 21,382 | 23,487 | |||||||||||||||||||||||||||||||||||
|
Ocean Oaks
|
Garden | May-98 | Port Orange, FL | 1988 | 296 | 2,132 | 12,855 | 3,242 | 2,132 | 16,097 | 18,229 | (6,492 | ) | 11,737 | 10,295 | |||||||||||||||||||||||||||||||||||
|
One Lytle Place
|
High Rise | Jan-00 | Cincinnati ,OH | 1980 | 231 | 2,662 | 21,800 | 12,551 | 2,662 | 34,351 | 37,013 | (12,139 | ) | 24,874 | 15,450 | |||||||||||||||||||||||||||||||||||
|
Pacific Bay Vistas
|
Garden | Mar-01 | San Bruno, CA | 1987 | 308 | 3,703 | 62,460 | 22,184 | 22,994 | 65,353 | 88,347 | (55,442 | ) | 32,905 | — | |||||||||||||||||||||||||||||||||||
|
Pacifica Park
|
Garden | Jul-06 | Pacifica, CA | 1977 | 104 | 12,770 | 6,579 | 3,183 | 12,970 | 9,562 | 22,532 | (2,205 | ) | 20,327 | 11,260 | |||||||||||||||||||||||||||||||||||
|
Palazzo at Park La Brea, The
|
Mid Rise | Feb-04 | Los Angeles, CA | 2002 | 521 | 47,822 | 125,464 | 8,804 | 48,362 | 133,728 | 182,090 | (30,135 | ) | 151,955 | 125,554 | |||||||||||||||||||||||||||||||||||
|
Palazzo East at Park La Brea, The
|
Mid Rise | Mar-05 | Los Angeles, CA | 2005 | 611 | 61,004 | 136,503 | 22,142 | 72,578 | 147,071 | 219,649 | (26,968 | ) | 192,681 | 150,000 | |||||||||||||||||||||||||||||||||||
F-55
Table of Contents
|
(2)
|
||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
(3)
|
December 31, 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
Cost
|
Total
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
(1)
|
Capitalized
|
Accumulated
|
Cost
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Property
|
Date
|
Year
|
Number
|
Buildings and
|
Subsequent to
|
Buildings and
|
(5)
|
Depreciation
|
Net of
|
|||||||||||||||||||||||||||||||||||||||||
|
Property Name
|
Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Paradise Palms
|
Garden | Jul-94 | Phoenix, AZ | 1985 | 129 | 647 | 3,515 | 6,959 | 647 | 10,474 | 11,121 | (5,539 | ) | 5,582 | 6,400 | |||||||||||||||||||||||||||||||||||
|
Park at Cedar Lawn, The
|
Garden | Nov-96 | Galveston, TX | 1985 | 192 | 1,025 | 2,521 | 3,585 | 1,025 | 6,106 | 7,131 | (2,539 | ) | 4,592 | — | |||||||||||||||||||||||||||||||||||
|
Park Towne Place
|
High Rise | Apr-00 | Philadelphia, PA | 1959 | 959 | 10,451 | 47,301 | 54,589 | 10,451 | 101,890 | 112,341 | (23,850 | ) | 88,491 | 86,343 | |||||||||||||||||||||||||||||||||||
|
Parktown Townhouses
|
Garden | Oct-99 | Deer Park, TX | 1968 | 309 | 2,570 | 12,052 | 9,410 | 2,570 | 21,462 | 24,032 | (8,186 | ) | 15,846 | 5,618 | |||||||||||||||||||||||||||||||||||
|
Parkway
|
Garden | Mar-00 | Williamsburg, VA | 1971 | 148 | 386 | 2,834 | 2,754 | 386 | 5,588 | 5,974 | (3,284 | ) | 2,690 | 9,273 | |||||||||||||||||||||||||||||||||||
|
Pathfinder Village
|
Garden | Jan-06 | Fremont, CA | 1973 | 246 | 19,595 | 14,838 | 8,147 | 19,595 | 22,985 | 42,580 | (3,163 | ) | 39,417 | 19,348 | |||||||||||||||||||||||||||||||||||
|
Peachtree Park
|
Garden | Jan-96 | Atlanta, GA | 1962 | 303 | 4,683 | 11,713 | 9,900 | 4,683 | 21,613 | 26,296 | (9,890 | ) | 16,406 | 9,543 | |||||||||||||||||||||||||||||||||||
|
Peak at Vinings Mountain, The
|
Garden | Jan-00 | Atlanta, GA | 1980 | 280 | 2,651 | 13,660 | 17,606 | 2,651 | 31,266 | 33,917 | (12,410 | ) | 21,507 | 10,412 | |||||||||||||||||||||||||||||||||||
|
Peakview Place
|
Garden | Jan-00 | Englewood, CO | 1975 | 296 | 3,440 | 18,734 | 4,547 | 3,440 | 23,281 | 26,721 | (15,330 | ) | 11,391 | 12,711 | |||||||||||||||||||||||||||||||||||
|
Pebble Point
|
Garden | Oct-02 | Indianapolis, IN | 1980 | 220 | 1,790 | 6,883 | 2,612 | 1,790 | 9,495 | 11,285 | (4,526 | ) | 6,759 | 5,430 | |||||||||||||||||||||||||||||||||||
|
Peppertree
|
Garden | Mar-02 | Cypress, CA | 1971 | 136 | 7,835 | 5,224 | 2,778 | 8,030 | 7,807 | 15,837 | (2,743 | ) | 13,094 | 15,750 | |||||||||||||||||||||||||||||||||||
|
Pine Lake Terrace
|
Garden | Mar-02 | Garden Grove, CA | 1971 | 111 | 3,975 | 6,035 | 2,094 | 4,125 | 7,979 | 12,104 | (2,531 | ) | 9,573 | 12,000 | |||||||||||||||||||||||||||||||||||
|
Pine Shadows
|
Garden | May-98 | Tempe, AZ | 1983 | 272 | 2,095 | 11,899 | 3,725 | 2,095 | 15,624 | 17,719 | (7,375 | ) | 10,344 | 7,500 | |||||||||||||||||||||||||||||||||||
|
Pines, The
|
Garden | Oct-98 | Palm Bay, FL | 1984 | 216 | 603 | 3,318 | 2,716 | 603 | 6,034 | 6,637 | (2,415 | ) | 4,222 | 1,937 | |||||||||||||||||||||||||||||||||||
|
Plantation Gardens
|
Garden | Oct-99 | Plantation ,FL | 1971 | 372 | 3,773 | 19,443 | 6,204 | 3,773 | 25,647 | 29,420 | (10,871 | ) | 18,549 | 24,141 | |||||||||||||||||||||||||||||||||||
|
Post Ridge
|
Garden | Jul-00 | Nashville, TN | 1972 | 150 | 1,883 | 6,712 | 3,517 | 1,883 | 10,229 | 12,112 | (4,456 | ) | 7,656 | 6,042 | |||||||||||||||||||||||||||||||||||
|
Ramblewood
|
Garden | Dec-99 | Wyoming, MI | 1973 | 1,708 | 8,607 | 61,082 | 1,930 | 8,661 | 62,958 | 71,619 | (12,161 | ) | 59,458 | 34,944 | |||||||||||||||||||||||||||||||||||
|
Ravensworth Towers
|
High Rise | Jun-04 | Annandale, VA | 1974 | 219 | 3,455 | 17,157 | 2,272 | 3,455 | 19,429 | 22,884 | (9,501 | ) | 13,383 | 20,685 | |||||||||||||||||||||||||||||||||||
|
Reflections
|
Garden | Sep-00 | Virginia Beach, VA | 1987 | 480 | 15,988 | 13,684 | 5,255 | 15,988 | 18,939 | 34,927 | (7,638 | ) | 27,289 | 39,451 | |||||||||||||||||||||||||||||||||||
|
Reflections
|
Garden | Oct-00 | West Palm Beach, FL | 1986 | 300 | 5,504 | 9,984 | 4,113 | 5,504 | 14,097 | 19,601 | (5,272 | ) | 14,329 | 9,190 | |||||||||||||||||||||||||||||||||||
|
Reflections
|
Garden | Oct-02 | Casselberry, FL | 1984 | 336 | 3,906 | 10,491 | 4,233 | 3,906 | 14,724 | 18,630 | (4,662 | ) | 13,968 | 10,700 | |||||||||||||||||||||||||||||||||||
|
Regency Oaks
|
Garden | Oct-99 | Fern Park, FL | 1965 | 343 | 1,832 | 9,905 | 8,398 | 1,832 | 18,303 | 20,135 | (10,017 | ) | 10,118 | 11,134 | |||||||||||||||||||||||||||||||||||
|
Remington at Ponte Vedra Lakes
|
Garden | Dec-06 | Ponte Vedra Beach, FL | 1986 | 344 | 18,576 | 18,650 | 2,242 | 18,795 | 20,673 | 39,468 | (3,586 | ) | 35,882 | 24,695 | |||||||||||||||||||||||||||||||||||
|
River Club
|
Garden | Apr-05 | Edgewater, NJ | 1998 | 266 | 30,578 | 30,638 | 1,910 | 30,579 | 32,547 | 63,126 | (6,208 | ) | 56,918 | 39,373 | |||||||||||||||||||||||||||||||||||
|
River Reach
|
Garden | Sep-00 | Naples, FL | 1986 | 556 | 17,728 | 18,337 | 6,365 | 17,728 | 24,702 | 42,430 | (10,002 | ) | 32,428 | 23,452 | |||||||||||||||||||||||||||||||||||
|
Riverbend Village
|
Garden | Jul-01 | Arlington, TX | 1983 | 201 | 893 | 4,128 | 4,963 | 893 | 9,091 | 9,984 | (3,967 | ) | 6,017 | — | |||||||||||||||||||||||||||||||||||
|
Riverloft
|
High Rise | Oct-99 | Philadelphia, PA | 1910 | 184 | 2,120 | 11,287 | 31,118 | 2,120 | 42,405 | 44,525 | (15,462 | ) | 29,063 | 19,951 | |||||||||||||||||||||||||||||||||||
|
Riverside
|
High Rise | Apr-00 | Alexandria ,VA | 1973 | 1,222 | 10,433 | 65,474 | 76,986 | 10,433 | 142,460 | 152,893 | (59,333 | ) | 93,560 | 96,289 | |||||||||||||||||||||||||||||||||||
|
Rosewood
|
Garden | Mar-02 | Camarillo, CA | 1976 | 152 | 12,128 | 8,060 | 2,407 | 12,430 | 10,165 | 22,595 | (3,320 | ) | 19,275 | 17,900 | |||||||||||||||||||||||||||||||||||
|
Royal Crest Estates
|
Garden | Aug-02 | Fall River, MA | 1974 | 216 | 5,832 | 12,044 | 1,953 | 5,832 | 13,997 | 19,829 | (5,694 | ) | 14,135 | 12,161 | |||||||||||||||||||||||||||||||||||
|
Royal Crest Estates
|
Garden | Aug-02 | Warwick, RI | 1972 | 492 | 22,433 | 24,095 | 5,296 | 22,433 | 29,391 | 51,824 | (12,162 | ) | 39,662 | 37,890 | |||||||||||||||||||||||||||||||||||
|
Royal Crest Estates
|
Garden | Aug-02 | Marlborough, MA | 1970 | 473 | 25,178 | 28,786 | 3,835 | 25,178 | 32,621 | 57,799 | (13,594 | ) | 44,205 | 35,400 | |||||||||||||||||||||||||||||||||||
|
Royal Crest Estates
|
Garden | Aug-02 | North Andover, MA | 1970 | 588 | 51,292 | 36,808 | 9,632 | 51,292 | 46,440 | 97,732 | (18,797 | ) | 78,935 | 60,305 | |||||||||||||||||||||||||||||||||||
|
Royal Crest Estates
|
Garden | Aug-02 | Nashua, NH | 1970 | 902 | 68,231 | 45,562 | 11,187 | 68,231 | 56,749 | 124,980 | (25,003 | ) | 99,977 | 50,667 | |||||||||||||||||||||||||||||||||||
|
Runaway Bay
|
Garden | Oct-00 | Lantana, FL | 1987 | 404 | 5,934 | 16,052 | 7,643 | 5,934 | 23,695 | 29,629 | (7,842 | ) | 21,787 | 21,644 | |||||||||||||||||||||||||||||||||||
|
Runaway Bay
|
Garden | Jul-02 | Pinellas Park, FL | 1986 | 192 | 1,884 | 7,045 | 1,831 | 1,884 | 8,876 | 10,760 | (2,402 | ) | 8,358 | 9,004 | |||||||||||||||||||||||||||||||||||
|
Sandpiper Cove
|
Garden | Dec-97 | Boynton Beach, FL | 1987 | 416 | 3,511 | 21,396 | 7,141 | 3,511 | 28,537 | 32,048 | (11,039 | ) | 21,009 | 29,425 | |||||||||||||||||||||||||||||||||||
|
Savannah Trace
|
Garden | Mar-01 | Schaumburg, IL | 1986 | 368 | 13,960 | 20,731 | 4,001 | 13,960 | 24,732 | 38,692 | (8,502 | ) | 30,190 | 22,282 | |||||||||||||||||||||||||||||||||||
|
Scandia
|
Garden | Oct-00 | Indianapolis, IN | 1977 | 444 | 10,540 | 9,852 | 12,780 | 10,539 | 22,633 | 33,172 | (11,260 | ) | 21,912 | 19,163 | |||||||||||||||||||||||||||||||||||
|
Scotchollow
|
Garden | Jan-06 | San Mateo, CA | 1971 | 418 | 49,474 | 17,756 | 7,733 | 49,473 | 25,490 | 74,963 | (3,128 | ) | 71,835 | 49,605 | |||||||||||||||||||||||||||||||||||
|
Scottsdale Gateway I
|
Garden | Oct-97 | Tempe, AZ | 1965 | 124 | 591 | 3,359 | 8,017 | 591 | 11,376 | 11,967 | (4,075 | ) | 7,892 | 5,800 | |||||||||||||||||||||||||||||||||||
|
Scottsdale Gateway II
|
Garden | Oct-97 | Tempe, AZ | 1976 | 487 | 2,458 | 13,927 | 23,353 | 2,458 | 37,280 | 39,738 | (15,204 | ) | 24,534 | 5,087 | |||||||||||||||||||||||||||||||||||
|
Shadow Creek
|
Garden | May-98 | Mesa, AZ | 1984 | 266 | 2,016 | 11,886 | 3,790 | 2,016 | 15,676 | 17,692 | (7,685 | ) | 10,007 | — | |||||||||||||||||||||||||||||||||||
|
Shenandoah Crossing
|
Garden | Sep-00 | Fairfax, VA | 1984 | 640 | 18,492 | 57,197 | 7,499 | 18,492 | 64,696 | 83,188 | (27,715 | ) | 55,473 | 69,724 | |||||||||||||||||||||||||||||||||||
|
Signal Pointe
|
Garden | Oct-99 | Winter Park, FL | 1971 | 368 | 2,382 | 11,359 | 21,447 | 2,382 | 32,806 | 35,188 | (10,480 | ) | 24,708 | 18,596 | |||||||||||||||||||||||||||||||||||
|
Signature Point
|
Garden | Nov-96 | League City, TX | 1994 | 304 | 2,810 | 17,579 | 2,810 | 2,810 | 20,389 | 23,199 | (6,784 | ) | 16,415 | 10,823 | |||||||||||||||||||||||||||||||||||
|
Springwoods at Lake Ridge
|
Garden | Jul-02 | Woodbridge, VA | 1984 | 180 | 5,587 | 7,284 | 1,278 | 5,587 | 8,562 | 14,149 | (1,944 | ) | 12,205 | 14,502 | |||||||||||||||||||||||||||||||||||
|
Spyglass at Cedar Cove
|
Garden | Sep-00 | Lexington Park, MD | 1985 | 152 | 3,241 | 5,094 | 2,479 | 3,241 | 7,573 | 10,814 | (3,237 | ) | 7,577 | 10,300 | |||||||||||||||||||||||||||||||||||
|
Stafford
|
High Rise | Oct-02 | Baltimore, MD | 1889 | 96 | 706 | 4,032 | 3,131 | 562 | 7,307 | 7,869 | (3,524 | ) | 4,345 | 4,315 | |||||||||||||||||||||||||||||||||||
|
Steeplechase
|
Garden | Sep-00 | Largo, MD | 1986 | 240 | 3,675 | 16,111 | 3,301 | 3,675 | 19,412 | 23,087 | (7,106 | ) | 15,981 | 23,600 | |||||||||||||||||||||||||||||||||||
F-56
Table of Contents
|
(2)
|
||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
(3)
|
December 31, 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
Cost
|
Total
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
(1)
|
Capitalized
|
Accumulated
|
Cost
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Property
|
Date
|
Year
|
Number
|
Buildings and
|
Subsequent to
|
Buildings and
|
(5)
|
Depreciation
|
Net of
|
|||||||||||||||||||||||||||||||||||||||||
|
Property Name
|
Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Steeplechase
|
Garden | Jul-02 | Plano, TX | 1985 | 368 | 7,056 | 10,510 | 6,974 | 7,056 | 17,484 | 24,540 | (5,158 | ) | 19,382 | 13,987 | |||||||||||||||||||||||||||||||||||
|
Sterling Apartment Homes, The
|
Garden | Oct-99 | Philadelphia, PA | 1962 | 535 | 8,871 | 55,364 | 17,358 | 8,871 | 72,722 | 81,593 | (30,782 | ) | 50,811 | 77,915 | |||||||||||||||||||||||||||||||||||
|
Stone Creek Club
|
Garden | Sep-00 | Germantown, MD | 1984 | 240 | 13,593 | 9,347 | 2,948 | 13,593 | 12,295 | 25,888 | (6,743 | ) | 19,145 | 24,900 | |||||||||||||||||||||||||||||||||||
|
Summit Creek
|
Garden | May-98 | Austin, TX | 1985 | 164 | 1,211 | 6,037 | 2,591 | 1,211 | 8,628 | 9,839 | (3,285 | ) | 6,554 | 5,670 | |||||||||||||||||||||||||||||||||||
|
Sun Lake
|
Garden | May-98 | Lake Mary, FL | 1986 | 600 | 4,551 | 25,543 | 30,903 | 4,551 | 56,446 | 60,997 | (20,010 | ) | 40,987 | 35,727 | |||||||||||||||||||||||||||||||||||
|
Sun River Village
|
Garden | Oct-99 | Tempe ,AZ | 1981 | 334 | 2,367 | 13,303 | 3,888 | 2,367 | 17,191 | 19,558 | (8,524 | ) | 11,034 | 10,569 | |||||||||||||||||||||||||||||||||||
|
Talbot Woods
|
Garden | Sep-04 | Middleboro, MA | 1972 | 121 | 5,852 | 4,719 | 2,026 | 5,852 | 6,745 | 12,597 | (2,150 | ) | 10,447 | 6,203 | |||||||||||||||||||||||||||||||||||
|
Tamarac Village
|
Garden | Apr-00 | Denver, CO | 1979 | 564 | 3,928 | 23,491 | 8,089 | 4,223 | 31,285 | 35,508 | (16,205 | ) | 19,303 | 18,389 | |||||||||||||||||||||||||||||||||||
|
Tamarind Bay
|
Garden | Jan-00 | St. Petersburg, FL | 1980 | 200 | 1,091 | 6,310 | 4,987 | 1,091 | 11,297 | 12,388 | (5,368 | ) | 7,020 | 6,925 | |||||||||||||||||||||||||||||||||||
|
Tar River Estates
|
Garden | Oct-99 | Greenville, NC | 1969 | 220 | 1,558 | 14,298 | 3,740 | 1,558 | 18,038 | 19,596 | (7,601 | ) | 11,995 | 3,960 | |||||||||||||||||||||||||||||||||||
|
Tatum Gardens
|
Garden | May-98 | Phoenix, AZ | 1985 | 128 | 1,323 | 7,155 | 1,928 | 1,323 | 9,083 | 10,406 | (4,706 | ) | 5,700 | 7,403 | |||||||||||||||||||||||||||||||||||
|
The Bluffs at Pacifica
|
Garden | Oct-06 | Pacifica, CA | 1963 | 64 | 7,975 | 4,131 | 7,635 | 8,108 | 11,633 | 19,741 | (1,067 | ) | 18,674 | 6,428 | |||||||||||||||||||||||||||||||||||
|
Tierra Palms
|
Garden | Jan-06 | Norwalk, CA | 1970 | 144 | 6,441 | 6,807 | 609 | 6,441 | 7,416 | 13,857 | (855 | ) | 13,002 | 10,777 | |||||||||||||||||||||||||||||||||||
|
Timbertree
|
Garden | Oct-97 | Phoenix, AZ | 1979 | 387 | 2,292 | 13,000 | 6,209 | 2,292 | 19,209 | 21,501 | (9,830 | ) | 11,671 | 4,510 | |||||||||||||||||||||||||||||||||||
|
Towers Of Westchester Park, The
|
High Rise | Jan-06 | College Park, MD | 1972 | 303 | 15,198 | 22,029 | 4,504 | 15,198 | 26,533 | 41,731 | (3,946 | ) | 37,785 | 27,667 | |||||||||||||||||||||||||||||||||||
|
Township At Highlands
|
Town Home | Nov-96 | Centennial, CO | 1985 | 161 | 1,615 | 9,773 | 6,118 | 1,536 | 15,970 | 17,506 | (6,955 | ) | 10,551 | 16,640 | |||||||||||||||||||||||||||||||||||
|
Twin Lake Towers
|
High Rise | Oct-99 | Westmont, IL | 1969 | 399 | 3,268 | 18,763 | 23,625 | 3,268 | 42,388 | 45,656 | (15,984 | ) | 29,672 | 9,255 | |||||||||||||||||||||||||||||||||||
|
Twin Lakes
|
Garden | Apr-00 | Palm Harbor, FL | 1986 | 262 | 2,062 | 12,850 | 4,584 | 2,062 | 17,434 | 19,496 | (7,652 | ) | 11,844 | 10,604 | |||||||||||||||||||||||||||||||||||
|
Vantage Pointe
|
Mid Rise | Aug-02 | Swampscott, MA | 1987 | 96 | 4,749 | 10,089 | 1,351 | 4,749 | 11,440 | 16,189 | (3,498 | ) | 12,691 | 7,385 | |||||||||||||||||||||||||||||||||||
|
Verandahs at Hunt Club
|
Garden | Jul-02 | Apopka, FL | 1985 | 210 | 2,271 | 7,724 | 2,974 | 2,271 | 10,698 | 12,969 | (2,641 | ) | 10,328 | 11,070 | |||||||||||||||||||||||||||||||||||
|
Views at Vinings Mountain, The
|
Garden | Jan-06 | Atlanta, GA | 1983 | 180 | 610 | 5,026 | 12,209 | 610 | 17,235 | 17,845 | (7,559 | ) | 10,286 | 13,757 | |||||||||||||||||||||||||||||||||||
|
Villa Del Sol
|
Garden | Mar-02 | Norwalk, CA | 1972 | 120 | 7,294 | 4,861 | 2,512 | 7,476 | 7,191 | 14,667 | (2,670 | ) | 11,997 | 13,500 | |||||||||||||||||||||||||||||||||||
|
Village Crossing
|
Garden | May-98 | West Palm Beach, FL | 1986 | 189 | 1,618 | 8,188 | 2,941 | 1,618 | 11,129 | 12,747 | (5,497 | ) | 7,250 | 7,000 | |||||||||||||||||||||||||||||||||||
|
Village Green
|
Garden | Oct-02 | Altamonte Springs, FL | 1970 | 164 | 608 | 6,618 | 2,514 | 608 | 9,132 | 9,740 | (4,386 | ) | 5,354 | 6,510 | |||||||||||||||||||||||||||||||||||
|
Village in the Woods
|
Garden | Jan-00 | Cypress, TX | 1983 | 530 | 3,457 | 15,787 | 10,230 | 3,457 | 26,017 | 29,474 | (12,765 | ) | 16,709 | 19,451 | |||||||||||||||||||||||||||||||||||
|
Village of Pennbrook
|
Garden | Oct-98 | Levittown, PA | 1969 | 722 | 10,229 | 38,222 | 13,539 | 10,229 | 51,761 | 61,990 | (22,047 | ) | 39,943 | 48,419 | |||||||||||||||||||||||||||||||||||
|
Villages of Baymeadows
|
Garden | Oct-99 | Jacksonville, FL | 1972 | 904 | 4,859 | 33,957 | 53,735 | 4,859 | 87,692 | 92,551 | (40,263 | ) | 52,288 | 38,050 | |||||||||||||||||||||||||||||||||||
|
Villas at Park La Brea, The
|
Garden | Mar-02 | Los Angeles, CA | 2002 | 250 | 8,621 | 48,871 | 3,603 | 8,630 | 52,465 | 61,095 | (12,802 | ) | 48,293 | 30,564 | |||||||||||||||||||||||||||||||||||
|
Vista Del Lagos
|
Garden | Dec-97 | Chandler, AZ | 1986 | 200 | 804 | 4,952 | 3,442 | 804 | 8,394 | 9,198 | (3,431 | ) | 5,767 | 11,783 | |||||||||||||||||||||||||||||||||||
|
Waterford Village
|
Garden | Aug-02 | Bridgewater, MA | 1971 | 588 | 28,585 | 28,102 | 5,591 | 29,110 | 33,168 | 62,278 | (15,640 | ) | 46,638 | 40,542 | |||||||||||||||||||||||||||||||||||
|
Waterways Village
|
Garden | Jun-97 | Aventura, FL | 1991 | 180 | 4,504 | 11,064 | 3,683 | 4,504 | 14,747 | 19,251 | (6,456 | ) | 12,795 | 7,145 | |||||||||||||||||||||||||||||||||||
|
Waverly Apartments
|
Garden | Aug-08 | Brighton, MA | 1970 | 103 | 7,696 | 11,347 | 1,188 | 7,920 | 12,311 | 20,231 | (723 | ) | 19,508 | 12,000 | |||||||||||||||||||||||||||||||||||
|
West Winds
|
Garden | Oct-02 | Orlando, FL | 1985 | 272 | 2,324 | 11,481 | 3,030 | 2,324 | 14,511 | 16,835 | (4,829 | ) | 12,006 | 12,776 | |||||||||||||||||||||||||||||||||||
|
Westway Village
|
Garden | May-98 | Houston, TX | 1979 | 326 | 2,921 | 11,384 | 3,172 | 2,921 | 14,556 | 17,477 | (6,586 | ) | 10,891 | 7,677 | |||||||||||||||||||||||||||||||||||
|
Wexford Village
|
Garden | Aug-02 | Worcester, MA | 1974 | 264 | 6,339 | 17,939 | 2,082 | 6,339 | 20,021 | 26,360 | (7,250 | ) | 19,110 | 13,924 | |||||||||||||||||||||||||||||||||||
|
Willow Bend
|
Garden | May-98 | Rolling Meadows, IL | 1985 | 328 | 2,717 | 15,437 | 26,391 | 2,717 | 41,828 | 44,545 | (13,960 | ) | 30,585 | 19,876 | |||||||||||||||||||||||||||||||||||
|
Willow Park on Lake Adelaide
|
Garden | Oct-99 | Altamonte Springs, FL | 1972 | 185 | 1,225 | 7,357 | 3,266 | 1,224 | 10,624 | 11,848 | (5,611 | ) | 6,237 | 6,804 | |||||||||||||||||||||||||||||||||||
|
Wilson Acres
|
Garden | Apr-06 | Greenville, NC | 1979 | 146 | 1,175 | 3,943 | 962 | 1,485 | 4,595 | 6,080 | (866 | ) | 5,214 | 2,743 | |||||||||||||||||||||||||||||||||||
|
Windrift
|
Garden | Mar-01 | Oceanside, CA | 1987 | 404 | 24,960 | 17,590 | 18,667 | 24,960 | 36,257 | 61,217 | (15,443 | ) | 45,774 | 28,999 | |||||||||||||||||||||||||||||||||||
|
Windrift
|
Garden | Oct-00 | Orlando, FL | 1987 | 288 | 3,696 | 10,029 | 5,495 | 3,696 | 15,524 | 19,220 | (5,710 | ) | 13,510 | 17,094 | |||||||||||||||||||||||||||||||||||
|
Windsor Crossing
|
Garden | Mar-00 | Newport News, VA | 1978 | 156 | 307 | 2,110 | 1,992 | 131 | 4,278 | 4,409 | (2,102 | ) | 2,307 | 2,153 | |||||||||||||||||||||||||||||||||||
|
Windsor Park
|
Garden | Mar-01 | Woodbridge, VA | 1987 | 220 | 4,279 | 15,970 | 2,172 | 4,279 | 18,142 | 22,421 | (6,430 | ) | 15,991 | 13,444 | |||||||||||||||||||||||||||||||||||
|
Woodcreek
|
Garden | Oct-02 | Mesa, AZ | 1985 | 432 | 2,426 | 15,886 | 4,487 | 2,426 | 20,373 | 22,799 | (10,400 | ) | 12,399 | 19,449 | |||||||||||||||||||||||||||||||||||
|
Woods of Burnsville
|
Garden | Nov-04 | Burnsville, MN | 1984 | 400 | 3,954 | 18,125 | 2,694 | 3,954 | 20,819 | 24,773 | (7,429 | ) | 17,344 | 16,580 | |||||||||||||||||||||||||||||||||||
|
Woods of Inverness
|
Garden | Oct-99 | Houston, TX | 1983 | 272 | 2,146 | 10,978 | 3,860 | 2,146 | 14,838 | 16,984 | (7,194 | ) | 9,790 | 5,878 | |||||||||||||||||||||||||||||||||||
|
Woods Of Williamsburg
|
Garden | Jan-06 | Williamsburg, VA | 1976 | 125 | 798 | 3,657 | 873 | 798 | 4,530 | 5,328 | (3,309 | ) | 2,019 | 1,189 | |||||||||||||||||||||||||||||||||||
|
Yacht Club at Brickell
|
High Rise | Dec-03 | Miami, FL | 1998 | 357 | 31,363 | 32,214 | 4,297 | 31,363 | 36,511 | 67,874 | (5,900 | ) | 61,974 | 37,804 | |||||||||||||||||||||||||||||||||||
F-57
Table of Contents
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(2)
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| Initial Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
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(3)
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December 31, 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||
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Cost
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Total
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(1)
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Capitalized
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Accumulated
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Cost
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Property
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Date
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Year
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Number
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Buildings and
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Subsequent to
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Buildings and
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(5)
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Depreciation
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Net of
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Property Name
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Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Yorktown Apartments
|
High Rise | Dec-99 | Lombard, IL | 1973 | 364 | 2,971 | 18,163 | 16,098 | 3,055 | 34,177 | 37,232 | (10,538 | ) | 26,694 | 22,626 | |||||||||||||||||||||||||||||||||||
|
Total Conventional Properties:
|
71,881 | 1,998,409 | 3,931,734 | 2,197,399 | 2,055,178 | 6,072,364 | 8,127,542 | (2,163,859 | ) | 5,963,683 | 4,792,048 | |||||||||||||||||||||||||||||||||||||||
|
Affordable Properties:
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
All Hallows
|
Garden | Jan-06 | San Francisco, CA | 1976 | 157 | 1,348 | 29,770 | 20,124 | 1,338 | 49,904 | 51,242 | (15,590 | ) | 35,652 | 21,219 | |||||||||||||||||||||||||||||||||||
|
Alliance Towers
|
High Rise | Mar-02 | Alliance, OH | 1971 | 101 | 530 | 1,934 | 756 | 530 | 2,690 | 3,220 | (745 | ) | 2,475 | 2,234 | |||||||||||||||||||||||||||||||||||
|
Arvada House
|
High Rise | Nov-04 | Arvada, CO | 1977 | 88 | 641 | 3,314 | 1,746 | 405 | 5,296 | 5,701 | (1,304 | ) | 4,397 | 4,152 | |||||||||||||||||||||||||||||||||||
|
Ashland Manor
|
High Rise | Mar-02 | Toledo, OH | 1977 | 189 | 205 | 455 | 363 | 205 | 818 | 1,023 | (667 | ) | 356 | 561 | |||||||||||||||||||||||||||||||||||
|
Baldwin Oaks
|
Mid Rise | Oct-99 | Parsippany ,NJ | 1980 | 251 | 746 | 8,516 | 1,998 | 746 | 10,514 | 11,260 | (6,245 | ) | 5,015 | 12,972 | |||||||||||||||||||||||||||||||||||
|
Baldwin Towers
|
High Rise | Jan-06 | Pittsburgh, PA | 1983 | 99 | 398 | 5,256 | 202 | 398 | 5,458 | 5,856 | (4,002 | ) | 1,854 | 1,458 | |||||||||||||||||||||||||||||||||||
|
Bannock Arms
|
Garden | Mar-02 | Boise, ID | 1978 | 66 | 275 | 1,139 | 571 | 275 | 1,710 | 1,985 | (575 | ) | 1,410 | 1,406 | |||||||||||||||||||||||||||||||||||
|
Bayview
|
Garden | Jun-05 | San Francisco, CA | 1976 | 146 | 1,023 | 15,265 | 16,548 | 582 | 32,254 | 32,836 | (9,118 | ) | 23,718 | 12,520 | |||||||||||||||||||||||||||||||||||
|
Beacon Hill
|
High Rise | Mar-02 | Hillsdale, MI | 1980 | 198 | 1,380 | 7,044 | 6,599 | 1,093 | 13,930 | 15,023 | (3,236 | ) | 11,787 | 4,616 | |||||||||||||||||||||||||||||||||||
|
Bedford House
|
Mid Rise | Mar-02 | Falmouth, KY | 1979 | 48 | 230 | 919 | 310 | 230 | 1,229 | 1,459 | (434 | ) | 1,025 | 1,084 | |||||||||||||||||||||||||||||||||||
|
Benjamin Banneker Plaza
|
Mid Rise | Jan-06 | Chester, PA | 1976 | 70 | 79 | 3,862 | 670 | 79 | 4,532 | 4,611 | (2,890 | ) | 1,721 | 1,538 | |||||||||||||||||||||||||||||||||||
|
Berger Apartments
|
Mid Rise | Mar-02 | New Haven, CT | 1981 | 144 | 1,152 | 4,657 | 2,229 | 1,152 | 6,886 | 8,038 | (2,080 | ) | 5,958 | 1,061 | |||||||||||||||||||||||||||||||||||
|
Biltmore Towers
|
High Rise | Mar-02 | Dayton, OH | 1980 | 230 | 1,813 | 6,411 | 13,073 | 1,813 | 19,484 | 21,297 | (8,817 | ) | 12,480 | 10,648 | |||||||||||||||||||||||||||||||||||
|
Blakewood
|
Garden | Oct-05 | Statesboro, GA | 1973 | 42 | 316 | 882 | 373 | 316 | 1,255 | 1,571 | (1,085 | ) | 486 | 698 | |||||||||||||||||||||||||||||||||||
|
Bloomsburg Towers
|
Mid Rise | Jan-06 | Bloomsburg, PA | 1981 | 75 | 1 | 4,128 | 351 | 1 | 4,479 | 4,480 | (2,761 | ) | 1,719 | 1,553 | |||||||||||||||||||||||||||||||||||
|
Bolton North
|
High Rise | Jan-06 | Baltimore, MD | 1977 | 209 | 1,450 | 6,569 | 649 | 1,429 | 7,239 | 8,668 | (2,347 | ) | 6,321 | 2,438 | |||||||||||||||||||||||||||||||||||
|
Burchwood
|
Garden | Oct-07 | Berea, KY | 1999 | 24 | 253 | 1,173 | 551 | 253 | 1,724 | 1,977 | (958 | ) | 1,019 | 981 | |||||||||||||||||||||||||||||||||||
|
Butternut Creek
|
Mid Rise | Jan-06 | Charlotte, MI | 1980 | 100 | 505 | 3,617 | 3,957 | 505 | 7,574 | 8,079 | (2,239 | ) | 5,840 | — | |||||||||||||||||||||||||||||||||||
|
Cache Creek Apartment Homes
|
Mid Rise | Jun-04 | Clearlake, CA | 1986 | 80 | 1,545 | 9,405 | 494 | 1,545 | 9,899 | 11,444 | (2,866 | ) | 8,578 | 2,302 | |||||||||||||||||||||||||||||||||||
|
California Square I
|
High Rise | Jan-06 | Louisville, KY | 1982 | 101 | 154 | 5,704 | 523 | 154 | 6,227 | 6,381 | (3,600 | ) | 2,781 | 3,499 | |||||||||||||||||||||||||||||||||||
|
Campbell Heights
|
High Rise | Oct-02 | Washington, D.C. | 1978 | 171 | 750 | 6,719 | 859 | 750 | 7,578 | 8,328 | (3,062 | ) | 5,266 | 15,449 | |||||||||||||||||||||||||||||||||||
|
Canterbury Towers
|
High Rise | Jan-06 | Worcester, MA | 1976 | 156 | 567 | 4,557 | 936 | 567 | 5,493 | 6,060 | (3,681 | ) | 2,379 | 3,966 | |||||||||||||||||||||||||||||||||||
|
Carriage House
|
Mid Rise | Dec-06 | Petersburg, VA | 1885 | 118 | 847 | 2,886 | 3,356 | 716 | 6,373 | 7,089 | (1,407 | ) | 5,682 | 2,273 | |||||||||||||||||||||||||||||||||||
|
Casa de Las Hermanitas
|
Garden | Mar-02 | Los Angeles, CA | 1982 | 88 | 1,775 | 4,606 | 4,222 | 1,879 | 8,724 | 10,603 | (1,118 | ) | 9,485 | 5,081 | |||||||||||||||||||||||||||||||||||
|
Castlewood
|
Garden | Mar-02 | Davenport, IA | 1980 | 96 | 585 | 2,351 | 1,443 | 585 | 3,794 | 4,379 | (1,497 | ) | 2,882 | 3,503 | |||||||||||||||||||||||||||||||||||
|
Cherry Ridge Terrace
|
Garden | Mar-02 | Northern Cambria, PA | 1983 | 62 | 372 | 1,490 | 906 | 372 | 2,396 | 2,768 | (852 | ) | 1,916 | 795 | |||||||||||||||||||||||||||||||||||
|
City Line
|
Garden | Mar-02 | Newport News, VA | 1976 | 200 | 500 | 2,014 | 7,172 | 500 | 9,186 | 9,686 | (2,046 | ) | 7,640 | 4,863 | |||||||||||||||||||||||||||||||||||
|
Clisby Towers
|
Mid Rise | Jan-06 | Macon, GA | 1980 | 52 | 524 | 1,970 | 228 | 524 | 2,198 | 2,722 | (1,677 | ) | 1,045 | 939 | |||||||||||||||||||||||||||||||||||
|
Club, The
|
Garden | Jan-06 | Lexington, NC | 1972 | 87 | 498 | 2,128 | 662 | 498 | 2,790 | 3,288 | (1,978 | ) | 1,310 | 303 | |||||||||||||||||||||||||||||||||||
|
Coatesville Towers
|
High Rise | Mar-02 | Coatesville, PA | 1979 | 90 | 500 | 2,011 | 693 | 500 | 2,704 | 3,204 | (866 | ) | 2,338 | 2,108 | |||||||||||||||||||||||||||||||||||
|
Cold Spring Homes
|
Garden | Oct-07 | Cold Springs, KY | 2000 | 30 | 187 | 917 | 1,122 | 187 | 2,039 | 2,226 | (1,441 | ) | 785 | 790 | |||||||||||||||||||||||||||||||||||
|
Community Circle II
|
Garden | Jan-06 | Cleveland, OH | 1975 | 129 | 263 | 4,699 | 804 | 263 | 5,503 | 5,766 | (3,265 | ) | 2,501 | 3,275 | |||||||||||||||||||||||||||||||||||
|
Copperwood I Apartments
|
Garden | Apr-06 | The Woodlands, TX | 1980 | 150 | 390 | 8,373 | 4,862 | 363 | 13,262 | 13,625 | (8,167 | ) | 5,458 | 5,590 | |||||||||||||||||||||||||||||||||||
|
Copperwood II Apartments
|
Garden | Oct-05 | The Woodlands, TX | 1981 | 150 | 452 | 5,552 | 3,415 | 459 | 8,960 | 9,419 | (3,134 | ) | 6,285 | 5,773 | |||||||||||||||||||||||||||||||||||
|
Country Club Heights
|
Garden | Mar-04 | Quincy, IL | 1976 | 200 | 676 | 5,715 | 4,841 | 675 | 10,557 | 11,232 | (3,837 | ) | 7,395 | 7,312 | |||||||||||||||||||||||||||||||||||
|
Country Commons
|
Garden | Jan-06 | Bensalem, PA | 1972 | 352 | 1,853 | 17,657 | 2,308 | 1,853 | 19,965 | 21,818 | (10,649 | ) | 11,169 | 4,715 | |||||||||||||||||||||||||||||||||||
|
Courtyard
|
Mid Rise | Jan-06 | Cincinnati, OH | 1980 | 137 | 1,362 | 4,876 | 448 | 1,362 | 5,324 | 6,686 | (3,126 | ) | 3,560 | 3,830 | |||||||||||||||||||||||||||||||||||
|
Crevenna Oaks
|
Town Home | Jan-06 | Burke, VA | 1979 | 50 | 355 | 4,849 | 219 | 355 | 5,068 | 5,423 | (945 | ) | 4,478 | 3,312 | |||||||||||||||||||||||||||||||||||
|
Crockett Manor
|
Garden | Mar-04 | Trenton, TN | 1982 | 38 | 42 | 1,395 | 38 | 42 | 1,433 | 1,475 | (37 | ) | 1,438 | 978 | |||||||||||||||||||||||||||||||||||
|
Cumberland Court
|
Garden | Jan-06 | Harrisburg, PA | 1975 | 108 | 379 | 4,040 | 682 | 379 | 4,722 | 5,101 | (3,282 | ) | 1,819 | 1,314 | |||||||||||||||||||||||||||||||||||
|
Daugette Tower
|
High Rise | Mar-02 | Gadsden, AL | 1979 | 100 | 540 | 2,178 | 1,744 | 540 | 3,922 | 4,462 | (1,324 | ) | 3,138 | 117 | |||||||||||||||||||||||||||||||||||
|
Delhaven Manor
|
Mid Rise | Mar-02 | Jackson, MS | 1983 | 104 | 575 | 2,304 | 1,986 | 575 | 4,290 | 4,865 | (1,621 | ) | 3,244 | 3,758 | |||||||||||||||||||||||||||||||||||
|
Denny Place
|
Garden | Mar-02 | North Hollywood, CA | 1984 | 17 | 394 | 1,579 | 139 | 394 | 1,718 | 2,112 | (479 | ) | 1,633 | 1,121 | |||||||||||||||||||||||||||||||||||
|
Douglas Landing
|
Garden | Oct-07 | Austin, TX | 1999 | 96 | 11 | 4,989 | 22 | 11 | 5,011 | 5,022 | — | 5,022 | 4,000 | ||||||||||||||||||||||||||||||||||||
F-58
Table of Contents
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(2)
|
||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
(3)
|
December 31, 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
Cost
|
Total
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
(1)
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Capitalized
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Accumulated
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Cost
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Property
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Date
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Buildings and
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Subsequent to
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Buildings and
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(5)
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Depreciation
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Net of
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Property Name
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Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Elmwood
|
Garden | Jan-06 | Athens, AL | 1981 | 80 | 346 | 2,643 | 346 | 346 | 2,989 | 3,335 | (1,673 | ) | 1,662 | 1,869 | |||||||||||||||||||||||||||||||||||
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Fairburn And Gordon II
|
Garden | Jan-06 | Atlanta, GA | 1969 | 58 | 439 | 1,647 | 231 | 439 | 1,878 | 2,317 | (1,469 | ) | 848 | 98 | |||||||||||||||||||||||||||||||||||
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Fairwood
|
Garden | Jan-06 | Carmichael, CA | 1979 | 86 | 176 | 5,264 | 379 | 176 | 5,643 | 5,819 | (3,523 | ) | 2,296 | 2,475 | |||||||||||||||||||||||||||||||||||
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Fountain Place
|
Mid Rise | Jan-06 | Connersville, IN | 1980 | 102 | 440 | 2,091 | 2,883 | 447 | 4,967 | 5,414 | (511 | ) | 4,903 | 1,155 | |||||||||||||||||||||||||||||||||||
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Fox Run
|
Garden | Mar-02 | Orange, TX | 1983 | 70 | 420 | 1,992 | 1,026 | 420 | 3,018 | 3,438 | (928 | ) | 2,510 | 2,563 | |||||||||||||||||||||||||||||||||||
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Foxfire
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Garden | Jan-06 | Jackson, MI | 1975 | 160 | 856 | 6,853 | 1,423 | 856 | 8,276 | 9,132 | (5,247 | ) | 3,885 | 1,803 | |||||||||||||||||||||||||||||||||||
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Franklin Square School Apts
|
Mid Rise | Jan-06 | Baltimore, MD | 1888 | 65 | 566 | 3,581 | 216 | 566 | 3,797 | 4,363 | (2,153 | ) | 2,210 | 2,099 | |||||||||||||||||||||||||||||||||||
|
Friendset Apartments
|
High Rise | Jan-06 | Brooklyn, NY | 1979 | 259 | 550 | 16,825 | 1,737 | 550 | 18,562 | 19,112 | (10,414 | ) | 8,698 | 14,404 | |||||||||||||||||||||||||||||||||||
|
Frio
|
Garden | Jan-06 | Pearsall, TX | 1980 | 63 | 327 | 2,207 | 407 | 327 | 2,614 | 2,941 | (1,728 | ) | 1,213 | 1,109 | |||||||||||||||||||||||||||||||||||
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Gates Manor
|
Garden | Mar-04 | Clinton, TN | 1981 | 80 | 266 | 2,225 | 881 | 264 | 3,108 | 3,372 | (1,195 | ) | 2,177 | 2,411 | |||||||||||||||||||||||||||||||||||
|
Gateway Village
|
Garden | Mar-04 | Hillsborough, NC | 1980 | 64 | 433 | 1,666 | 580 | 515 | 2,164 | 2,679 | (746 | ) | 1,933 | 2,360 | |||||||||||||||||||||||||||||||||||
|
Glens, The
|
Garden | Jan-06 | Rock Hill, SC | 1982 | 88 | 839 | 4,135 | 1,140 | 839 | 5,275 | 6,114 | (3,627 | ) | 2,487 | 3,757 | |||||||||||||||||||||||||||||||||||
|
Greenbriar
|
Garden | Jan-06 | Indianapolis, IN | 1980 | 121 | 812 | 3,272 | 346 | 812 | 3,618 | 4,430 | (2,491 | ) | 1,939 | 1,098 | |||||||||||||||||||||||||||||||||||
|
Hamlin Estates
|
Garden | Mar-02 | North Hollywood, CA | 1983 | 30 | 1,010 | 1,691 | 241 | 1,010 | 1,932 | 2,942 | (678 | ) | 2,264 | 1,515 | |||||||||||||||||||||||||||||||||||
|
Hanover Square
|
High Rise | Jan-06 | Baltimore, MD | 1980 | 199 | 1,656 | 9,575 | 425 | 1,656 | 10,000 | 11,656 | (6,267 | ) | 5,389 | 5,495 | |||||||||||||||||||||||||||||||||||
|
Harris Park Apartments
|
Garden | Dec-97 | Rochester, NY | 1968 | 114 | 475 | 2,786 | 1,101 | 475 | 3,887 | 4,362 | (1,824 | ) | 2,538 | 200 | |||||||||||||||||||||||||||||||||||
|
Hatillo Housing
|
Mid Rise | Jan-06 | Hatillo, PR | 1982 | 64 | 202 | 2,875 | 204 | 202 | 3,079 | 3,281 | (1,820 | ) | 1,461 | 1,370 | |||||||||||||||||||||||||||||||||||
|
Hemet Estates
|
Garden | Mar-02 | Hemet, CA | 1983 | 80 | 700 | 2,802 | 2,995 | 420 | 6,077 | 6,497 | (1,138 | ) | 5,359 | 4,316 | |||||||||||||||||||||||||||||||||||
|
Henna Townhomes
|
Garden | Oct-07 | Round Rock, TX | 1999 | 160 | 1,047 | 12,893 | 84 | 1,047 | 12,977 | 14,024 | (2,641 | ) | 11,383 | 6,172 | |||||||||||||||||||||||||||||||||||
|
Heritage House
|
Mid Rise | Jan-06 | Lewisburg, PA | 1982 | 80 | 178 | 3,251 | 131 | 178 | 3,382 | 3,560 | (2,034 | ) | 1,526 | 2,106 | |||||||||||||||||||||||||||||||||||
|
Hillside Village
|
Town Home | Jan-06 | Catawissa, PA | 1981 | 50 | 31 | 2,643 | 186 | 31 | 2,829 | 2,860 | (1,795 | ) | 1,065 | 1,089 | |||||||||||||||||||||||||||||||||||
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Hilltop
|
Garden | Jan-06 | Duquesne, PA | 1975 | 152 | 1,271 | 6,194 | 722 | 1,271 | 6,916 | 8,187 | (5,198 | ) | 2,989 | 2,110 | |||||||||||||||||||||||||||||||||||
|
Hopkins Village
|
Mid Rise | Sep-03 | Baltimore, MD | 1979 | 165 | 438 | 5,973 | 3,680 | 452 | 9,639 | 10,091 | (1,192 | ) | 8,899 | 9,100 | |||||||||||||||||||||||||||||||||||
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Hudson Gardens
|
Garden | Mar-02 | Pasadena, CA | 1983 | 41 | 914 | 1,548 | 335 | 914 | 1,883 | 2,797 | (644 | ) | 2,153 | 539 | |||||||||||||||||||||||||||||||||||
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Hudson Terrace
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Garden | Jan-06 | Hudson, NY | 1973 | 168 | 647 | 5,025 | 584 | 647 | 5,609 | 6,256 | (3,813 | ) | 2,443 | 1,044 | |||||||||||||||||||||||||||||||||||
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Indio Gardens
|
Mid Rise | Oct-06 | Indio, CA | 1980 | 151 | 775 | 8,759 | 4,155 | 775 | 12,914 | 13,689 | (1,213 | ) | 12,476 | 4,173 | |||||||||||||||||||||||||||||||||||
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Ingram Square
|
Garden | Jan-06 | San Antonio, TX | 1980 | 120 | 630 | 3,137 | 5,716 | 630 | 8,853 | 9,483 | (1,338 | ) | 8,145 | 3,825 | |||||||||||||||||||||||||||||||||||
|
Jenny Lind Hall
|
High Rise | Mar-04 | Springfield, MO | 1977 | 78 | 142 | 3,684 | 260 | 142 | 3,944 | 4,086 | (358 | ) | 3,728 | 942 | |||||||||||||||||||||||||||||||||||
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JFK Towers
|
Mid Rise | Jan-06 | Durham, NC | 1983 | 177 | 750 | 7,970 | 773 | 750 | 8,743 | 9,493 | (4,678 | ) | 4,815 | 5,796 | |||||||||||||||||||||||||||||||||||
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Kephart Plaza
|
High Rise | Jan-06 | Lock Haven, PA | 1978 | 101 | 609 | 3,796 | 462 | 609 | 4,258 | 4,867 | (2,987 | ) | 1,880 | 1,488 | |||||||||||||||||||||||||||||||||||
|
King Bell Apartments
|
Garden | Jan-06 | Milwaukie, OR | 1982 | 62 | 204 | 2,497 | 193 | 204 | 2,690 | 2,894 | (1,451 | ) | 1,443 | 1,631 | |||||||||||||||||||||||||||||||||||
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Kirkwood House
|
High Rise | Sep-04 | Baltimore, MD | 1979 | 261 | 1,281 | 9,358 | 6,398 | 1,275 | 15,762 | 17,037 | (1,929 | ) | 15,108 | 16,000 | |||||||||||||||||||||||||||||||||||
|
Kubasek Trinity Manor (The Hollows)
|
High Rise | Jan-06 | Yonkers, NY | 1981 | 130 | 54 | 8,308 | 1,788 | 54 | 10,096 | 10,150 | (5,033 | ) | 5,117 | 4,749 | |||||||||||||||||||||||||||||||||||
|
La Salle
|
Garden | Oct-00 | San Francisco, CA | 1976 | 145 | 1,841 | 19,568 | 16,650 | 1,866 | 36,193 | 38,059 | (12,408 | ) | 25,651 | 15,992 | |||||||||||||||||||||||||||||||||||
|
La Vista
|
Garden | Jan-06 | Concord, CA | 1981 | 75 | 565 | 4,448 | 4,223 | 581 | 8,655 | 9,236 | (909 | ) | 8,327 | 5,499 | |||||||||||||||||||||||||||||||||||
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Lafayette Square
|
Garden | Jan-06 | Camden, SC | 1978 | 72 | 142 | 1,875 | 79 | 142 | 1,954 | 2,096 | (1,629 | ) | 467 | 270 | |||||||||||||||||||||||||||||||||||
|
Lakeview Arms
|
Mid Rise | Jan-06 | Poughkeepsie, NY | 1981 | 72 | 111 | 3,256 | 288 | 111 | 3,544 | 3,655 | (2,182 | ) | 1,473 | 1,790 | |||||||||||||||||||||||||||||||||||
|
Landau
|
Garden | Oct-05 | Clinton, SC | 1970 | 80 | 1,293 | 1,429 | 246 | 1,293 | 1,675 | 2,968 | (1,675 | ) | 1,293 | 283 | |||||||||||||||||||||||||||||||||||
|
Laurelwood
|
Garden | Jan-06 | Morristown, TN | 1981 | 65 | 75 | 1,870 | 179 | 75 | 2,049 | 2,124 | (1,275 | ) | 849 | 1,320 | |||||||||||||||||||||||||||||||||||
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Lock Haven Gardens
|
Garden | Jan-06 | Lock Haven, PA | 1979 | 150 | 1,163 | 6,045 | 606 | 1,163 | 6,651 | 7,814 | (4,643 | ) | 3,171 | 2,860 | |||||||||||||||||||||||||||||||||||
|
Locust House
|
High Rise | Mar-02 | Westminster, MD | 1979 | 99 | 650 | 2,604 | 786 | 650 | 3,390 | 4,040 | (1,123 | ) | 2,917 | 2,264 | |||||||||||||||||||||||||||||||||||
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Lodge Run
|
Mid Rise | Jan-06 | Portage, PA | 1983 | 31 | 274 | 1,211 | 377 | 274 | 1,588 | 1,862 | (1,259 | ) | 603 | 363 | |||||||||||||||||||||||||||||||||||
|
Long Meadow
|
Garden | Jan-06 | Cheraw, SC | 1973 | 56 | 158 | 1,342 | 174 | 158 | 1,516 | 1,674 | (1,168 | ) | 506 | 198 | |||||||||||||||||||||||||||||||||||
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Loring Towers
|
High Rise | Oct-02 | Minneapolis, MN | 1975 | 230 | 1,297 | 7,445 | 7,587 | 886 | 15,443 | 16,329 | (4,248 | ) | 12,081 | 7,387 | |||||||||||||||||||||||||||||||||||
|
Loring Towers Apartments
|
High Rise | Sep-03 | Salem, MA | 1973 | 250 | 129 | 14,050 | 6,414 | 140 | 20,453 | 20,593 | (3,664 | ) | 16,929 | 16,177 | |||||||||||||||||||||||||||||||||||
|
Lynnhaven
|
Garden | Mar-04 | Durham, NC | 1980 | 75 | 539 | 2,159 | 793 | 563 | 2,928 | 3,491 | (652 | ) | 2,839 | 2,787 | |||||||||||||||||||||||||||||||||||
|
Michigan Beach
|
Garden | Oct-07 | Chicago, IL | 1958 | 239 | 2,225 | 10,797 | 757 | 2,225 | 11,554 | 13,779 | (3,296 | ) | 10,483 | 5,510 | |||||||||||||||||||||||||||||||||||
|
Mill Pond
|
Mid Rise | Jan-06 | Taunton, MA | 1982 | 49 | 80 | 2,704 | 311 | 80 | 3,015 | 3,095 | (1,655 | ) | 1,440 | 1,301 | |||||||||||||||||||||||||||||||||||
|
Miramar Housing
|
High Rise | Jan-06 | Ponce, PR | 1983 | 96 | 367 | 5,085 | 194 | 367 | 5,279 | 5,646 | (2,946 | ) | 2,700 | 2,869 | |||||||||||||||||||||||||||||||||||
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Montblanc Gardens
|
Town Home | Dec-03 | Yauco, PR | 1982 | 128 | 391 | 3,859 | 959 | 391 | 4,818 | 5,209 | (2,469 | ) | 2,740 | 3,282 | |||||||||||||||||||||||||||||||||||
F-59
Table of Contents
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(2)
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| Initial Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
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(3)
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December 31, 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||
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Cost
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Total
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(1)
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Capitalized
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Accumulated
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Cost
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Property
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Date
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Year
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Number
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Buildings and
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Subsequent to
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Buildings and
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(5)
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Depreciation
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Net of
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Property Name
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Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
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Morrisania II
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High Rise | Jan-06 | Bronx, NY | 1979 | 203 | 659 | 15,783 | 1,710 | 659 | 17,493 | 18,152 | (10,840 | ) | 7,312 | 8,144 | |||||||||||||||||||||||||||||||||||
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Moss Gardens
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Mid Rise | Jan-06 | Lafayette, LA | 1980 | 114 | 524 | 3,818 | 257 | 524 | 4,075 | 4,599 | (3,058 | ) | 1,541 | 1,991 | |||||||||||||||||||||||||||||||||||
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New Baltimore
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Mid Rise | Mar-02 | New Baltimore, MI | 1980 | 101 | 888 | 2,360 | 5,154 | 896 | 7,506 | 8,402 | (1,459 | ) | 6,943 | 2,213 | |||||||||||||||||||||||||||||||||||
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New Vistas I
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Garden | Jan-06 | Chicago, IL | 1925 | 148 | 1,448 | 6,121 | 380 | 1,448 | 6,501 | 7,949 | (5,577 | ) | 2,372 | 1,386 | |||||||||||||||||||||||||||||||||||
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Newberry Park
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Garden | Dec-97 | Chicago, IL | 1985 | 82 | 1,380 | 7,632 | 459 | 1,380 | 8,091 | 9,471 | (2,739 | ) | 6,732 | 7,399 | |||||||||||||||||||||||||||||||||||
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Northlake Village
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Garden | Oct-00 | Lima, OH | 1971 | 150 | 487 | 1,317 | 1,791 | 487 | 3,108 | 3,595 | (1,736 | ) | 1,859 | 608 | |||||||||||||||||||||||||||||||||||
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Northpoint
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Garden | Jan-00 | Chicago, IL | 1921 | 304 | 2,280 | 14,334 | 16,403 | 2,510 | 30,507 | 33,017 | (14,624 | ) | 18,393 | 19,556 | |||||||||||||||||||||||||||||||||||
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Northwinds, The
|
Garden | Mar-02 | Wytheville, VA | 1978 | 144 | 500 | 2,012 | 525 | 500 | 2,537 | 3,037 | (1,339 | ) | 1,698 | 1,599 | |||||||||||||||||||||||||||||||||||
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Oakbrook
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Garden | Jan-08 | Topeka, KS | 1979 | 170 | 240 | 6,200 | 7 | 240 | 6,207 | 6,447 | (2,773 | ) | 3,674 | 2,770 | |||||||||||||||||||||||||||||||||||
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Oakwood Manor
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Garden | Mar-04 | Milan, TN | 1984 | 34 | 95 | 498 | 27 | 95 | 525 | 620 | (96 | ) | 524 | 433 | |||||||||||||||||||||||||||||||||||
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O’Neil
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High Rise | Jan-06 | Troy, NY | 1978 | 115 | 88 | 4,067 | 791 | 88 | 4,858 | 4,946 | (3,278 | ) | 1,668 | 1,353 | |||||||||||||||||||||||||||||||||||
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Orange Village
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Garden | Jan-06 | Hermitage, PA | 1979 | 81 | 79 | 3,406 | 436 | 79 | 3,842 | 3,921 | (2,361 | ) | 1,560 | 1,833 | |||||||||||||||||||||||||||||||||||
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Overbrook Park
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Garden | Jan-06 | Chillicothe, OH | 1981 | 50 | 136 | 2,282 | 198 | 136 | 2,480 | 2,616 | (1,377 | ) | 1,239 | 1,447 | |||||||||||||||||||||||||||||||||||
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Oxford House
|
Mid Rise | Mar-02 | Deactur, IL | 1979 | 156 | 993 | 4,164 | 451 | 993 | 4,615 | 5,608 | (1,932 | ) | 3,676 | 2,910 | |||||||||||||||||||||||||||||||||||
|
Oxford Terrace IV
|
Town Home | Oct-07 | Indianapolis, IN | 1994 | 48 | 247 | 1,410 | 607 | 247 | 2,017 | 2,264 | (1,057 | ) | 1,207 | 1,261 | |||||||||||||||||||||||||||||||||||
|
Palm Springs Senior
|
Garden | Mar-02 | Palm Springs, CA | 1981 | 116 | — | 8,745 | 3,657 | — | 12,402 | 12,402 | (1,782 | ) | 10,620 | 6,902 | |||||||||||||||||||||||||||||||||||
|
Panorama Park
|
Garden | Mar-02 | Bakersfield, CA | 1982 | 66 | 621 | 5,520 | 893 | 619 | 6,415 | 7,034 | (1,254 | ) | 5,780 | 2,331 | |||||||||||||||||||||||||||||||||||
|
Parc Chateau I
|
Garden | Jan-06 | Lithonia, GA | 1973 | 86 | 592 | 1,442 | 324 | 592 | 1,766 | 2,358 | (1,744 | ) | 614 | 434 | |||||||||||||||||||||||||||||||||||
|
Parc Chateau II
|
Garden | Jan-06 | Lithonia, GA | 1974 | 88 | 596 | 2,965 | 284 | 596 | 3,249 | 3,845 | (2,522 | ) | 1,323 | 437 | |||||||||||||||||||||||||||||||||||
|
Park — Joplin Apartments
|
Garden | Oct-07 | Joplin, MO | 1974 | 192 | 996 | 8,847 | 2 | 996 | 8,849 | 9,845 | (2,816 | ) | 7,029 | 3,395 | |||||||||||||||||||||||||||||||||||
|
Park Place
|
Mid Rise | Jun-05 | St Louis, MO | 1977 | 242 | 742 | 6,327 | 9,758 | 705 | 16,122 | 16,827 | (8,022 | ) | 8,805 | 9,572 | |||||||||||||||||||||||||||||||||||
|
Park Vista
|
Garden | Oct-05 | Anaheim, CA | 1958 | 392 | 6,155 | 25,929 | 4,463 | 6,155 | 30,392 | 36,547 | (6,356 | ) | 30,191 | 37,757 | |||||||||||||||||||||||||||||||||||
|
Parkview
|
Garden | Mar-02 | Sacramento, CA | 1980 | 97 | 1,041 | 2,880 | 7,019 | 1,145 | 9,795 | 10,940 | (1,456 | ) | 9,484 | 6,198 | |||||||||||||||||||||||||||||||||||
|
Parkways, The
|
Garden | Jun-04 | Chicago, IL | 1925 | 446 | 3,684 | 23,257 | 17,401 | 3,427 | 40,915 | 44,342 | (12,211 | ) | 32,131 | 21,927 | |||||||||||||||||||||||||||||||||||
|
Patman Switch
|
Garden | Jan-06 | Hughes Springs, TX | 1978 | 82 | 727 | 1,382 | 604 | 727 | 1,986 | 2,713 | (1,532 | ) | 1,181 | 1,229 | |||||||||||||||||||||||||||||||||||
|
Pavilion
|
High Rise | Mar-04 | Philadelphia, PA | 1976 | 296 | — | 15,416 | 1,265 | — | 16,681 | 16,681 | (4,111 | ) | 12,570 | 9,230 | |||||||||||||||||||||||||||||||||||
|
Peachwood Place
|
Garden | Oct-07 | Waycross, GA | 1999 | 72 | 163 | 2,254 | — | 163 | 2,254 | 2,417 | (1,317 | ) | 1,100 | 737 | |||||||||||||||||||||||||||||||||||
|
Pinebluff Village
|
Mid Rise | Jan-06 | Salisbury, MD | 1980 | 151 | 1,112 | 7,177 | 685 | 1,112 | 7,862 | 8,974 | (5,627 | ) | 3,347 | 2,050 | |||||||||||||||||||||||||||||||||||
|
Pinewood Place
|
Garden | Mar-02 | Toledo, OH | 1979 | 99 | 420 | 1,698 | 1,234 | 420 | 2,932 | 3,352 | (1,229 | ) | 2,123 | 2,001 | |||||||||||||||||||||||||||||||||||
|
Pleasant Hills
|
Garden | Apr-05 | Austin, TX | 1982 | 100 | 1,188 | 2,631 | 3,502 | 1,229 | 6,092 | 7,321 | (1,810 | ) | 5,511 | 3,206 | |||||||||||||||||||||||||||||||||||
|
Plummer Village
|
Mid Rise | Mar-02 | North Hills, CA | 1983 | 75 | 624 | 2,647 | 1,613 | 667 | 4,217 | 4,884 | (1,670 | ) | 3,214 | 2,598 | |||||||||||||||||||||||||||||||||||
|
Portner Place
|
Town Home | Jan-06 | Washington, DC | 1980 | 48 | 697 | 3,753 | 92 | 697 | 3,845 | 4,542 | (287 | ) | 4,255 | 6,428 | |||||||||||||||||||||||||||||||||||
|
Post Street Apartments
|
High Rise | Jan-06 | Yonkers, NY | 1930 | 56 | 148 | 3,315 | 415 | 148 | 3,730 | 3,878 | (2,297 | ) | 1,581 | 1,599 | |||||||||||||||||||||||||||||||||||
|
Pride Gardens
|
Garden | Dec-97 | Flora, MS | 1975 | 76 | 102 | 1,071 | 1,628 | 102 | 2,699 | 2,801 | (1,454 | ) | 1,347 | 1,079 | |||||||||||||||||||||||||||||||||||
|
Rancho California
|
Garden | Jan-06 | Temecula, CA | 1984 | 55 | 488 | 5,462 | 256 | 488 | 5,718 | 6,206 | (2,797 | ) | 3,409 | 4,536 | |||||||||||||||||||||||||||||||||||
|
Ridgewood (La Loma)
|
Garden | Mar-02 | Sacramento, CA | 1980 | 75 | 684 | 227 | 7,367 | 718 | 7,560 | 8,278 | (910 | ) | 7,368 | 4,650 | |||||||||||||||||||||||||||||||||||
|
Ridgewood Towers
|
High Rise | Mar-02 | East Moline, IL | 1977 | 140 | 698 | 2,803 | 755 | 698 | 3,558 | 4,256 | (1,296 | ) | 2,960 | 1,552 | |||||||||||||||||||||||||||||||||||
|
River Village
|
High Rise | Jan-06 | Flint, MI | 1980 | 340 | 1,756 | 13,877 | 1,484 | 1,756 | 15,361 | 17,117 | (10,068 | ) | 7,049 | 7,370 | |||||||||||||||||||||||||||||||||||
|
River’s Edge
|
Town Home | Jan-06 | Greenville, MI | 1983 | 49 | 311 | 2,097 | 283 | 311 | 2,380 | 2,691 | (1,643 | ) | 1,048 | 664 | |||||||||||||||||||||||||||||||||||
|
Riverwoods
|
High Rise | Jan-06 | Kankakee, IL | 1983 | 125 | 590 | 4,932 | 3,454 | 598 | 8,378 | 8,976 | (1,234 | ) | 7,742 | 5,077 | |||||||||||||||||||||||||||||||||||
|
Rosedale Court Apartments
|
Garden | Mar-04 | Dawson Springs, KY | 1981 | 40 | 194 | 1,177 | 180 | 194 | 1,357 | 1,551 | (548 | ) | 1,003 | 876 | |||||||||||||||||||||||||||||||||||
|
Round Barn
|
Garden | Mar-02 | Champaign, IL | 1979 | 156 | 947 | 5,134 | 5,729 | 934 | 10,876 | 11,810 | (2,312 | ) | 9,498 | 5,220 | |||||||||||||||||||||||||||||||||||
|
Rutherford Park
|
Town Home | Jan-06 | Hummelstown, PA | 1981 | 85 | 376 | 4,814 | 312 | 376 | 5,126 | 5,502 | (3,005 | ) | 2,497 | 2,841 | |||||||||||||||||||||||||||||||||||
|
San Jose Apartments
|
Garden | Sep-05 | San Antonio, TX | 1970 | 220 | 404 | 5,770 | 11,373 | 234 | 17,313 | 17,547 | (3,275 | ) | 14,272 | 5,271 | |||||||||||||||||||||||||||||||||||
|
San Juan Del Centro
|
Mid Rise | Sep-05 | Boulder, CO | 1971 | 150 | 243 | 7,110 | 12,551 | 438 | 19,466 | 19,904 | (3,729 | ) | 16,175 | 11,652 | |||||||||||||||||||||||||||||||||||
|
Sandy Hill Terrace
|
High Rise | Mar-02 | Norristown, PA | 1980 | 174 | 1,650 | 6,599 | 2,783 | 1,650 | 9,382 | 11,032 | (3,011 | ) | 8,021 | 3,598 | |||||||||||||||||||||||||||||||||||
|
Sandy Springs
|
Garden | Mar-05 | Macon, GA | 1979 | 74 | 366 | 1,522 | 1,403 | 366 | 2,925 | 3,291 | (1,703 | ) | 1,588 | 1,915 | |||||||||||||||||||||||||||||||||||
|
School Street
|
Mid Rise | Jan-06 | Taunton, MA | 1920 | 75 | 219 | 4,335 | 645 | 219 | 4,980 | 5,199 | (2,742 | ) | 2,457 | 2,625 | |||||||||||||||||||||||||||||||||||
|
Sherman Hills
|
High Rise | Jan-06 | Wilkes-Barre, PA | 1976 | 344 | 2,039 | 15,549 | 1,334 | 2,039 | 16,883 | 18,922 | (13,422 | ) | 5,500 | 3,028 | |||||||||||||||||||||||||||||||||||
F-60
Table of Contents
|
(2)
|
||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
(3)
|
December 31, 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
Cost
|
Total
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
(1)
|
Capitalized
|
Accumulated
|
Cost
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Property
|
Date
|
Year
|
Number
|
Buildings and
|
Subsequent to
|
Buildings and
|
(5)
|
Depreciation
|
Net of
|
|||||||||||||||||||||||||||||||||||||||||
|
Property Name
|
Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Shoreview
|
Garden | Oct-99 | San Francisco, CA | 1976 | 156 | 1,498 | 19,071 | 18,283 | 1,476 | 37,376 | 38,852 | (13,248 | ) | 25,604 | 17,278 | |||||||||||||||||||||||||||||||||||
|
South Bay Villa
|
Garden | Mar-02 | Los Angeles, CA | 1981 | 80 | 663 | 2,770 | 4,354 | 1,352 | 6,435 | 7,787 | (3,290 | ) | 4,497 | 3,063 | |||||||||||||||||||||||||||||||||||
|
Spring Manor
|
Mid Rise | Jan-06 | Holidaysburg, PA | 1983 | 51 | 608 | 2,083 | 425 | 608 | 2,508 | 3,116 | (2,168 | ) | 948 | 631 | |||||||||||||||||||||||||||||||||||
|
Springfield Villas
|
Garden | Oct-07 | Lockhart, TX | 1999 | 32 | — | 1,153 | 9 | — | 1,162 | 1,162 | — | 1,162 | 855 | ||||||||||||||||||||||||||||||||||||
|
St. George Villas
|
Garden | Jan-06 | St. George, SC | 1984 | 40 | 86 | 1,025 | 95 | 86 | 1,120 | 1,206 | (787 | ) | 419 | 503 | |||||||||||||||||||||||||||||||||||
|
Sterling Village
|
Town Home | Mar-02 | San Bernadino, CA | 1983 | 80 | 549 | 3,459 | 2,722 | 188 | 6,542 | 6,730 | (1,470 | ) | 5,260 | 4,497 | |||||||||||||||||||||||||||||||||||
|
Stonegate Apts
|
Mid Rise | Jul-09 | Indianapolis, IN | 1920 | 52 | 255 | 3,610 | 6 | 255 | 3,616 | 3,871 | (733 | ) | 3,138 | 1,918 | |||||||||||||||||||||||||||||||||||
|
Stonegate Village
|
Garden | Oct-00 | New Castle, IN | 1970 | 122 | 313 | 1,895 | 1,342 | 308 | 3,242 | 3,550 | (1,344 | ) | 2,206 | 284 | |||||||||||||||||||||||||||||||||||
|
Sumler Terrace
|
Garden | Jan-06 | Norfolk, VA | 1976 | 126 | 215 | 4,400 | 503 | 215 | 4,903 | 5,118 | (3,643 | ) | 1,475 | 1,303 | |||||||||||||||||||||||||||||||||||
|
Summit Oaks
|
Town Home | Jan-06 | Burke, VA | 1980 | 50 | 382 | 4,930 | 288 | 382 | 5,218 | 5,600 | (1,103 | ) | 4,497 | 3,303 | |||||||||||||||||||||||||||||||||||
|
Suntree
|
Garden | Jan-06 | St. Johns, MI | 1980 | 121 | 403 | 6,488 | 658 | 403 | 7,146 | 7,549 | (4,472 | ) | 3,077 | 966 | |||||||||||||||||||||||||||||||||||
|
Tabor Towers
|
Mid Rise | Jan-06 | Lewisburg, WV | 1979 | 84 | 163 | 3,360 | 236 | 163 | 3,596 | 3,759 | (2,136 | ) | 1,623 | 1,934 | |||||||||||||||||||||||||||||||||||
|
Tamarac Apartments I
|
Garden | Nov-04 | Woodlands, TX | 1980 | 144 | 140 | 2,775 | 3,613 | 363 | 6,165 | 6,528 | (2,071 | ) | 4,457 | 4,188 | |||||||||||||||||||||||||||||||||||
|
Tamarac Apartments II
|
Garden | Nov-04 | Woodlands, TX | 1980 | 156 | 142 | 3,195 | 4,048 | 266 | 7,119 | 7,385 | (2,349 | ) | 5,036 | 4,537 | |||||||||||||||||||||||||||||||||||
|
Terraces
|
Mid Rise | Jan-06 | Kettering, OH | 1979 | 102 | 1,561 | 2,815 | 634 | 1,561 | 3,449 | 5,010 | (2,493 | ) | 2,517 | 2,483 | |||||||||||||||||||||||||||||||||||
|
Terry Manor
|
Mid Rise | Oct-05 | Los Angeles, CA | 1977 | 170 | 1,775 | 5,848 | 6,648 | 1,997 | 12,274 | 14,271 | (4,379 | ) | 9,892 | 6,961 | |||||||||||||||||||||||||||||||||||
|
Tompkins Terrace
|
Garden | Oct-02 | Beacon, NY | 1974 | 193 | 872 | 6,827 | 12,128 | 872 | 18,955 | 19,827 | (3,124 | ) | 16,703 | 8,536 | |||||||||||||||||||||||||||||||||||
|
Trestletree Village
|
Garden | Mar-02 | Atlanta, GA | 1981 | 188 | 1,150 | 4,655 | 1,500 | 1,150 | 6,155 | 7,305 | (2,119 | ) | 5,186 | 2,856 | |||||||||||||||||||||||||||||||||||
|
University Square
|
High Rise | Mar-05 | Philadelphia, PA | 1978 | 442 | 702 | 12,201 | 12,209 | 702 | 24,410 | 25,112 | (8,361 | ) | 16,751 | 13,634 | |||||||||||||||||||||||||||||||||||
|
Van Nuys Apartments
|
High Rise | Mar-02 | Los Angeles, CA | 1981 | 299 | 4,253 | 21,226 | 19,594 | 4,219 | 40,854 | 45,073 | (5,581 | ) | 39,492 | 20,870 | |||||||||||||||||||||||||||||||||||
|
Victory Square
|
Garden | Mar-02 | Canton, OH | 1975 | 81 | 215 | 889 | 550 | 215 | 1,439 | 1,654 | (633 | ) | 1,021 | 850 | |||||||||||||||||||||||||||||||||||
|
Village Oaks
|
Mid Rise | Jan-06 | Catonsville, MD | 1980 | 181 | 2,127 | 5,188 | 1,775 | 2,127 | 6,963 | 9,090 | (4,748 | ) | 4,342 | 4,479 | |||||||||||||||||||||||||||||||||||
|
Village of Kaufman
|
Garden | Mar-05 | Kaufman, TX | 1981 | 68 | 370 | 1,606 | 628 | 370 | 2,234 | 2,604 | (747 | ) | 1,857 | 1,851 | |||||||||||||||||||||||||||||||||||
|
Vintage Crossing
|
Town Home | Mar-04 | Cuthbert, GA | 1982 | 50 | 188 | 1,058 | 553 | 188 | 1,611 | 1,799 | (917 | ) | 882 | 1,639 | |||||||||||||||||||||||||||||||||||
|
Vista Park Chino
|
Garden | Mar-02 | Chino, CA | 1983 | 40 | 380 | 1,521 | 388 | 380 | 1,909 | 2,289 | (693 | ) | 1,596 | 1,446 | |||||||||||||||||||||||||||||||||||
|
Vistula Heritage Village
|
Garden | Oct-08 | Toledo, OH | 1930 | 250 | 1,312 | 20,635 | — | 1,312 | 20,635 | 21,947 | (8,119 | ) | 13,828 | 12,716 | |||||||||||||||||||||||||||||||||||
|
Wah Luck House
|
High Rise | Jan-06 | Washington, DC | 1982 | 153 | — | 8,690 | 476 | — | 9,166 | 9,166 | (2,407 | ) | 6,759 | 9,147 | |||||||||||||||||||||||||||||||||||
|
Walnut Hills
|
High Rise | Jan-06 | Cincinnati, OH | 1983 | 198 | 888 | 5,608 | 5,114 | 826 | 10,784 | 11,610 | (1,788 | ) | 9,822 | 5,645 | |||||||||||||||||||||||||||||||||||
|
Wasco Arms
|
Garden | Mar-02 | Wasco, CA | 1982 | 78 | 625 | 2,519 | 1,025 | 625 | 3,544 | 4,169 | (1,368 | ) | 2,801 | 3,109 | |||||||||||||||||||||||||||||||||||
|
Washington Square West
|
Mid Rise | Sep-04 | Philadelphia, PA | 1982 | 132 | 555 | 11,169 | 5,854 | 582 | 16,996 | 17,578 | (7,665 | ) | 9,913 | 3,888 | |||||||||||||||||||||||||||||||||||
|
Westwood Terrace
|
Mid Rise | Mar-02 | Moline, IL | 1976 | 97 | 720 | 3,242 | 586 | 720 | 3,828 | 4,548 | (1,237 | ) | 3,311 | 1,652 | |||||||||||||||||||||||||||||||||||
|
White Cliff
|
Garden | Mar-02 | Lincoln Heights, OH | 1977 | 72 | 215 | 938 | 419 | 215 | 1,357 | 1,572 | (567 | ) | 1,005 | 1,003 | |||||||||||||||||||||||||||||||||||
|
Whitefield Place
|
Garden | Apr-05 | San Antonio, TX | 1980 | 80 | 223 | 3,151 | 2,550 | 219 | 5,705 | 5,924 | (2,054 | ) | 3,870 | 2,260 | |||||||||||||||||||||||||||||||||||
|
Wickford
|
Garden | Mar-04 | Henderson, NC | 1983 | 44 | 247 | 946 | 123 | 247 | 1,069 | 1,316 | (436 | ) | 880 | 1,423 | |||||||||||||||||||||||||||||||||||
|
Wilderness Trail
|
High Rise | Mar-02 | Pineville, KY | 1983 | 124 | 1,010 | 4,048 | 674 | 1,010 | 4,722 | 5,732 | (1,223 | ) | 4,509 | 4,478 | |||||||||||||||||||||||||||||||||||
|
Wilkes Towers
|
High Rise | Mar-02 | North Wilkesboro, NC | 1981 | 72 | 410 | 1,680 | 494 | 410 | 2,174 | 2,584 | (723 | ) | 1,861 | 1,875 | |||||||||||||||||||||||||||||||||||
|
Willow Wood
|
Garden | Mar-02 | North Hollywood, CA | 1984 | 19 | 1,051 | 840 | 193 | 1,051 | 1,033 | 2,084 | (308 | ) | 1,776 | 1,068 | |||||||||||||||||||||||||||||||||||
|
Winnsboro Arms
|
Garden | Jan-06 | Winnsboro, SC | 1978 | 60 | 272 | 1,697 | 253 | 272 | 1,950 | 2,222 | (1,508 | ) | 714 | 182 | |||||||||||||||||||||||||||||||||||
|
Winter Gardens
|
High Rise | Mar-04 | St Louis, MO | 1920 | 112 | 300 | 3,072 | 4,448 | 300 | 7,520 | 7,820 | (1,334 | ) | 6,486 | 3,796 | |||||||||||||||||||||||||||||||||||
|
Woodcrest
|
Garden | Dec-97 | Odessa, TX | 1972 | 80 | 41 | 229 | 674 | 41 | 903 | 944 | (708 | ) | 236 | 443 | |||||||||||||||||||||||||||||||||||
|
Woodland
|
Garden | Jan-06 | Spartanburg, SC | 1972 | 100 | 182 | 663 | 1,379 | 182 | 2,042 | 2,224 | (491 | ) | 1,733 | — | |||||||||||||||||||||||||||||||||||
|
Woodland Hills
|
Garden | Oct-05 | Jackson, MI | 1980 | 125 | 541 | 3,875 | 4,266 | 321 | 8,361 | 8,682 | (2,727 | ) | 5,955 | 3,644 | |||||||||||||||||||||||||||||||||||
|
Total Affordable Properties:
|
22,476 | 127,444 | 949,906 | 453,506 | 126,642 | 1,404,214 | 1,530,856 | (534,697 | ) | 996,159 | 755,205 | |||||||||||||||||||||||||||||||||||||||
|
Other(4)
|
— | 74 | 2,470 | 2,465 | 2,107 | 2,902 | 5,009 | (2,490 | ) | 2,519 | — | |||||||||||||||||||||||||||||||||||||||
F-61
Table of Contents
|
(2)
|
||||||||||||||||||||||||||||||||||||||||||||||||||
| Initial Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
(3)
|
December 31, 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
Cost
|
Total
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
(1)
|
Capitalized
|
Accumulated
|
Cost
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Property
|
Date
|
Year
|
Number
|
Buildings and
|
Subsequent to
|
Buildings and
|
(5)
|
Depreciation
|
Net of
|
|||||||||||||||||||||||||||||||||||||||||
|
Property Name
|
Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Total Continuing Operations
|
94,357 | 2,125,927 | 4,884,110 | 2,653,370 | 2,183,927 | 7,479,480 | 9,663,407 | (2,701,046 | ) | 6,962,361 | 5,547,253 | |||||||||||||||||||||||||||||||||||||||
|
Discontinued Operations:
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
Conventional Properties:
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
Fairway
|
Garden | Jan-00 | Plano, TX | 1978 | 256 | 2,961 | 5,137 | 5,788 | 2,961 | 10,925 | 13,886 | (5,794 | ) | 8,092 | 8,885 | |||||||||||||||||||||||||||||||||||
|
Sienna Bay
|
Garden | Apr-00 | St. Petersburg, FL | 1984 | 276 | 1,737 | 9,778 | 10,702 | 1,737 | 20,480 | 22,217 | (10,277 | ) | 11,940 | 10,630 | |||||||||||||||||||||||||||||||||||
|
Solana Vista
|
Garden | Dec-97 | Bradenton, FL | 1984 | 200 | 1,276 | 7,170 | 6,872 | 1,276 | 14,042 | 15,318 | (5,449 | ) | 9,869 | 7,865 | |||||||||||||||||||||||||||||||||||
|
Stoney Brook
|
Garden | Nov-96 | Houston, TX | 1972 | 113 | 275 | 1,865 | 1,931 | 275 | 3,796 | 4,071 | (1,215 | ) | 2,856 | 1,797 | |||||||||||||||||||||||||||||||||||
|
Total Conventional Properties:
|
845 | 6,249 | 23,950 | 25,293 | 6,249 | 49,243 | 55,492 | (22,735 | ) | 32,757 | 29,177 | |||||||||||||||||||||||||||||||||||||||
|
Other(4)
|
— | — | — | 79 | 1 | 78 | 79 | (63 | ) | 16 | — | |||||||||||||||||||||||||||||||||||||||
|
Total Discontinued Operations
|
845 | 6,249 | 23,950 | 25,372 | 6,250 | 49,321 | 55,571 | (22,798 | ) | 32,773 | 29,177 | |||||||||||||||||||||||||||||||||||||||
|
Total Continuing and Discontinued Operations
|
95,202 | 2,132,176 | 4,908,060 | 2,678,742 | 2,190,177 | 7,528,801 | 9,718,978 | (2,723,844 | ) | 6,995,134 | 5,576,430 | |||||||||||||||||||||||||||||||||||||||
| (1) | Date we acquired the property or first consolidated the partnership which owns the property. | |
| (2) | Initial cost includes the tendering costs to acquire the noncontrolling interest share of our consolidated real estate partnerships. | |
| (3) | Costs capitalized subsequent to consolidation includes costs capitalized since acquisition or first consolidation of the partnership/property. | |
| (4) | Other includes land parcels, commercial properties and other related costs. | |
| (5) | The aggregate cost of land and depreciable property for federal income tax purposes was approximately $8.0 billion at December 31, 2009. |
F-62
Table of Contents
APARTMENT
INVESTMENT AND MANAGEMENT COMPANY
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION
For the Years Ended December 31, 2009, 2008 and 2007
(In Thousands)
For the Years Ended December 31, 2009, 2008 and 2007
(In Thousands)
| 2009 | 2008 | 2007 | ||||||||||
|
Real Estate
|
||||||||||||
|
Balance at beginning of year
|
$ | 11,000,496 | $ | 12,420,200 | $ | 12,011,693 | ||||||
|
Additions during the year:
|
||||||||||||
|
Newly consolidated assets and acquisition of limited partnership
interests(1)
|
19,683 | 31,447 | 31,572 | |||||||||
|
Acquisitions
|
— | 107,445 | 233,059 | |||||||||
|
Capital expenditures
|
275,444 | 665,233 | 689,719 | |||||||||
|
Deductions during the year:
|
||||||||||||
|
Casualty and other write-offs(2)
|
(43,134 | ) | (130,595 | ) | (24,594 | ) | ||||||
|
Sales
|
(1,533,511 | ) | (2,093,234 | ) | (521,249 | ) | ||||||
|
Balance at end of year
|
$ | 9,718,978 | $ | 11,000,496 | $ | 12,420,200 | ||||||
|
Accumulated Depreciation
|
||||||||||||
|
Balance at beginning of year
|
$ | 2,815,497 | $ | 3,047,716 | $ | 2,901,414 | ||||||
|
Additions during the year:
|
||||||||||||
|
Depreciation
|
478,550 | 497,395 | 477,725 | |||||||||
|
Newly consolidated assets and acquisition of limited partnership
interests(1)
|
(2,763 | ) | (22,256 | ) | (128,272 | ) | ||||||
|
Deductions during the year:
|
||||||||||||
|
Casualty and other write-offs
|
(5,200 | ) | (1,838 | ) | (5,280 | ) | ||||||
|
Sales
|
(562,240 | ) | (705,520 | ) | (197,871 | ) | ||||||
|
Balance at end of year
|
$ | 2,723,844 | $ | 2,815,497 | $ | 3,047,716 | ||||||
| (1) | Includes the effect of newly consolidated assets, acquisition of limited partnership interests and related activity. | |
| (2) | Casualty and other write-offs in 2008 include impairments totaling $91.1 million related to our Lincoln Place and Pacific Bay Vistas properties. |
F-63
TABLE OF CONTENTS
Part IItem 1. BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission Of Matters To A Vote Of Security HoldersPart IIItem 5. Market For The Registrant S Common Equity, Related Stockholder Matters and Issuer Purchases Of Equity SecuritiesItem 6. Selected Financial DataItem 7. Management S Discussion and Analysis Of Financial Condition and Results Of OperationsItem 7A. Quantitative and Qualitative Disclosures About Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresItem 9B. Other InformationPart IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accountant Fees and ServicesPart IVItem 15. Exhibits and Financial Statement SchedulesNote 1 OrganizationNote 2 Basis Of Presentation and Summary Of Significant Accounting PoliciesNote 3 Real Estate and Partnership Acquisitions and Other Significant TransactionsNote 4 Investments in Unconsolidated Real Estate PartnershipsNote 5 Notes ReceivableNote 6 Property Tax-exempt Bond Financings, Property Loans Payable and Other BorrowingsNote 7 Term Loans and Credit FacilityNote 8 Commitments and ContingenciesNote 9 Income TaxesNote 10 Transactions Involving Noncontrolling Interests in Aimco Operating PartnershipNote 11 Aimco EquityNote 12 Share-based Compensation and Employee Benefit PlansNote 13 Discontinued Operations and Assets Held For SaleNote 14 Earnings Per ShareNote 15 Unaudited Summarized Consolidated Quarterly InformationNote 16 Transactions with AffiliatesNote 17 Business Segments