APARTMENT INVESTMENT & MANAGEMENT CO
10-Qs and 10-Ks
PROXIES
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, 2010 | ||
|
or
|
||
|
o
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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 | Name of Each Exchange on Which Registered | |
|
Class A Common Stock
|
New York Stock Exchange | |
|
Class T Cumulative Preferred Stock
|
New York Stock Exchange | |
|
Class U Cumulative Preferred Stock
|
New York Stock Exchange | |
|
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
þ
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 | Smaller reporting company o |
(Do not check if a smaller reporting company)
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
$2.2 billion as of June 30, 2010. As of
February 22, 2011, there were 118,131,892 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, 2011, 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, 2010
For the Fiscal Year Ended December 31, 2010
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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 our
ability to maintain current or meet projected occupancy, rental
rates and property operating results and the effect of
acquisitions and redevelopments. 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, including the pace of job growth and
the level of unemployment; 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.
PART I
| 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. Our principal financial objective is to provide
predictable and attractive returns to our stockholders. Our
business plan to achieve this objective is described in the
Business Overview section.
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, 2010, 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
partnership units, high performance partnership units and
partnership preferred units, which we refer to as common
OP Units, High Performance Units and preferred
OP Units, respectively. At December 31, 2010,
117,642,872 shares of our Common Stock were outstanding and
the Aimco Operating Partnership had 8,470,013 common partnership
units and equivalents outstanding for a combined total of
126,112,885 shares of Common Stock, common partnership
units and equivalents outstanding.
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, 2010, our portfolio of owned
and/or
managed properties consists of 768 properties with 122,694
apartment units.
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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.
Business
Overview
Our principal financial objective is to provide predictable and
attractive returns to our stockholders. Our business plan to
achieve this objective is to:
| • | own and operate a broadly diversified portfolio of primarily class “B/B+” assets with properties concentrated in the 20 largest markets in the United States (as measured by total apartment value, which is the estimated total market value of apartment properties in a particular market); | |
| • | improve our portfolio by selling assets with lower projected returns and reinvesting those proceeds through the purchase of new assets or additional investment in existing assets in our portfolio, including increased ownership or redevelopment; and | |
| • | provide financial leverage primarily by the use of non-recourse, long-dated, fixed-rate property debt and perpetual preferred equity. |
Our business is organized around two core activities: Property
Operations and Portfolio Management. We continue to simplify our
business, including de-emphasizing transactional based activity
fees and a corresponding reduction in personnel involved in
those activities. Our core activities, along with our financial
strategy, are described in more detail below.
Property
Operations
Our owned real estate portfolio is comprised of two business
components: conventional and affordable property operations,
which also comprise our reportable segments. Our conventional
property operations consist of market-rate apartments with rents
paid by the resident and included 219 properties with
68,972 units as of December 31, 2010. Our affordable
property operations consist of apartments with rents that are
generally paid, in whole or part, by a government agency and
consisted of 228 properties with 26,540 units as of
December 31, 2010. 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. Our conventional and affordable properties
generated 87% and 13%, respectively, of our proportionate
property net operating income (as defined in
Item 7) during the year ended December 31, 2010.
For the three months ended December 31, 2010, our
conventional portfolio monthly rents averaged $1,052 and
provided 62% operating margins. These average rents increased
about 1% from average rents of $1,042 for the three months ended
December 31, 2009.
Our property operations currently are organized into five
geographic areas. 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
capital spending, 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:
upgrading systems; standardizing business processes, 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. |
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| • | 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. | |
| • | 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 and net operating income by optimizing the balance between rental and occupancy rates, as well as taking into consideration the cost of preparing an apartment unit for a new tenant. We are also focused on careful measurements 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, as well as the automation of certain aspects of on-site operations, to enable our on-site employees to focus more of their time on customer service. We have standardized policies for new and renewal pricing with timely data and analyses by floor-plan, thereby enabling us to respond quickly to changing supply and demand for our product and maximize rental revenue. | |
| • | Controlling Expenses. Cost controls are accomplished by local focus at the area level; taking advantage of economies of scale at the corporate level; and through electronic procurement. | |
| • | 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 2010, for properties included in continuing operations, we invested $74.7 million, or $848 per owned apartment unit, in Capital Replacements, which represent the share of additions that are deemed to replace the consumed portion of acquired capital assets. Additionally, for properties included in continuing operations, we invested $45.4 million, or $515 per owned apartment unit, in 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. |
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.
Our geographic allocation strategy focuses on the 20 largest
markets in the United States (as measured by total apartment
value) to reduce volatility in and our dependence on particular
areas of the country. We believe these 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
expect that increased geographic focus will also add to our
investment knowledge and increase operating efficiencies based
on local economies of scale.
Our portfolio strategy also focuses on asset type and quality.
Our target allocation of capital to conventional and affordable
properties is 90% and 10%, respectively, of our Net Asset Value,
which is the estimated fair value of our assets, net of
liabilities and preferred equity. For conventional assets, we
focus on the ownership of primarily
B/B+
assets.
We measure conventional property asset quality based on average
rents compared to local market
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average rents as reported by a third-party provider of
commercial real estate performance and analysis, with A-quality
assets earning rents greater than 125% of local market average,
B-quality assets earning rents 90% to 125% of local market
average and C-quality assets earning rents less than 90% of
local market average.
Portfolio management involves strategic portfolio and capital
allocation decisions such as transactions to buy or sell
properties, or modify our ownership interest in properties,
including the use of partnerships and joint ventures, or to
increase our investment in existing properties through
redevelopment. We generally seek to sell assets with lower
projected returns, which are often in markets less desirable
than our target markets, and reinvest those proceeds through the
purchase of new assets or additional investment in existing
assets in our portfolio. The purpose of these transactions is to
adjust our investments to reflect decisions regarding target
allocations to geographic markets and between conventional and
affordable properties.
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. We believe redevelopment also provides superior
risk adjusted returns with lower volatility compared to
ground-up
development. Redevelopment work may also include 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 2010, we increased our allocation of capital to our
target markets by disposing of 24 conventional properties
located primarily outside of our target markets or in less
desirable locations within our target markets and by investing
$26.4 million in redevelopment of conventional properties
included in continuing operations. As of December 31, 2010,
our conventional portfolio included 219 properties with
68,972 units in 38 markets. As of December 31, 2010,
conventional properties comprised 88% of our Net Asset Value and
conventional properties in our target markets comprised 88% of
the Net Asset Value 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; Chicago, Illinois; Boston, Massachusetts;
and Philadelphia, Pennsylvania.
During 2010, we invested $3.1 million in redevelopment of
affordable properties included in continuing operations, funded
primarily by proceeds from the sale of tax credits to
institutional partners. As with conventional properties, we also
seek to dispose of affordable properties that are inconsistent
with our long-term investment and operating strategies. During
2010, we sold 27 properties from our affordable portfolio. As of
December 31, 2010, our affordable portfolio included 228
properties with 26,540 units and our affordable properties
comprised 12% of our Net Asset Value.
Financial
Strategy
Our leverage strategy seeks to balance increasing financial
returns with the risks inherent with leverage. At
December 31, 2010, approximately 86% of our leverage
consisted of property-level, non-recourse, long-dated,
fixed-rate, amortizing debt and 13% consisted of perpetual
preferred equity, a combination which helps to limit our
refunding and
re-pricing
risk. At December 31, 2010, we had no outstanding corporate
level debt. Our leverage strategy limits refunding risk on our
property-level debt. At December 31, 2010, the weighted
average maturity of our property-level debt was 7.8 years,
with 2% of our debt maturing in 2011, less than 9% maturing in
2012, and on average approximately 7% maturing in each of 2013,
2014 and 2015. Long duration, fixed-rate liabilities provide a
hedge against increases in interest rates and inflation.
Approximately 91% of our property-level debt is fixed-rate. Of
the $104.9 million of property debt maturing during 2011,
we completed the refinance of $79.4 million in February
2011, and we are focusing on refinancing our property debt
maturing during 2012 through 2015 to extend maturities and lock
in current low interest rates.
During 2010, we repaid the remaining $90.0 million on our
term loan. We also expanded our credit facility from
$180.0 million to $300.0 million, providing additional
liquidity for short-term or unexpected cash
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requirements. As of December 31, 2010, we had the capacity
to borrow $260.3 million pursuant to our credit facility
(after giving effect to $39.7 million outstanding for
undrawn letters of credit). The revolving credit facility
matures May 1, 2013, and may be extended for an additional
year, subject to certain conditions.
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 an
oversupply of single family homes and condominiums and a
reduction of households, both of which affect the pricing and
occupancy of our rental apartments.
We also compete with other real estate investors, including
other apartment REITs, pension and investment funds,
partnerships and investment companies in acquiring,
redeveloping, managing, obtaining financing for and disposing of
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; finance or refinance
properties in our portfolio and the cost of such financing; and
dispose of properties we no longer desire to retain in our
portfolio and the timing and price for which we dispose of such
properties.
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 management 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 that cannot
be offered directly by a REIT. We also use TRS entities to hold
investments in certain properties.
The recently enacted Tax Relief, Unemployment Insurance
Reauthorization and Job Creation Act of 2010 extends the 2001
and 2003 tax rates for taxpayers that are taxable as
individuals, trusts and estates through 2012, including the
maximum 35% tax rate on ordinary income and the maximum 15% tax
rate for long-term capital gains and qualified dividend income.
Dividends paid by REITs will generally not constitute qualified
dividend income eligible for the 15% tax rate for stockholders
that are taxable as individuals, trusts and estates and will
generally be taxable at the higher ordinary income tax rates.
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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.
Dodd-Frank
Wall Street Reform and Consumer Protection Act
In July 2010, the Dodd-Frank Wall Street Reform and Consumer
Protection Act, or the Act, was signed into federal law. The
provisions of the Act include new regulations for
over-the-counter
derivatives and substantially increased regulation and risk of
liability for credit rating agencies, all of which could
increase our cost of capital. The Act also includes provisions
concerning corporate governance and executive compensation
which, among other things, require additional executive
compensation disclosures and enhanced independence requirements
for board compensation committees and related advisors, as well
as provide explicit authority for the Securities and Exchange
Commission to adopt proxy access, all of which could result in
additional expenses in order to maintain compliance. The Act is
wide-ranging, and the provisions are broad with significant
discretion given to the many and varied agencies tasked with
adopting and implementing the Act. The majority of the
provisions of the Act do not go into effect immediately and may
be adopted and implemented over many months or years. As such,
we cannot predict the full impact of the Act on our financial
condition or results of operations.
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 potentially hazardous materials
present on a property. These materials may include lead-based
paint, asbestos, polychlorinated biphenyls, and petroleum-based
fuels, among other miscellaneous materials. Such laws often
impose liability without regard to whether the owner or operator
knew of, or was responsible for, the release or presence of such
materials. 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 and litigation management procedures to manage our
exposure.
Employees
At December 31, 2010, we had approximately
3,100 employees, of which approximately 2,400 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,
2010, unions represented 103 of our employees. We have never
experienced a work stoppage and believe we maintain satisfactory
relations with our employees.
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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 2010, our chief executive officer submitted
his annual corporate governance listing standards certification
to the New York Stock Exchange, which certification was
unqualified.
| 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, 2010,
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.
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, 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. In recent years, 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.
During 2008, the Federal Housing Finance Agency, or FHFA, placed
Freddie Mac and Fannie Mae into, and they currently remain
under, conservatorship. In February 2011, the Obama
Administration presented Congress with a set of proposals
regarding the Federal government’s future role in the
housing finance market, each of which included the winding down
of Freddie Mac and Fannie Mae. Freddie Mac’s and Fannie
Mae’s future relationship with the Federal government and
their future role in the financial markets is uncertain. Any
significant reduction in Freddie Mac’s or Fannie Mae’s
level of involvement in the secondary credit markets may
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 or the cost of
financing when it matures in May 2014 (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.
8
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Increases
in interest rates would increase our interest expense and reduce
our profitability.
As of December 31, 2010, on a consolidated basis, we had
approximately $470.3 million of variable-rate indebtedness
outstanding and $57.0 million of variable rate preferred
stock outstanding. Of the total debt subject to variable
interest rates, floating rate tax-exempt bond financing was
approximately $374.4 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 75% of the
30-day
LIBOR
rate. If this historical relationship continues, we estimate
that an increase in
30-day
LIBOR
of 100 basis points (75 basis points for tax-exempt
interest rates) with constant credit risk spreads would result
in net income and net income attributable to Aimco common
stockholders being reduced (or the amounts of net loss and net
loss attributable to Aimco common stockholders being increased)
by $3.9 million on an annual basis.
At December 31, 2010, we had approximately
$450.4 million in cash and cash equivalents, restricted
cash and notes receivable, a portion of which bear interest at
variable rates indexed to LIBOR-based rates, and which may
mitigate the effect of an increase in variable rates on our
variable-rate indebtedness and preferred stock discussed above.
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 which we can only do upon renewal of existing leases or at the inception of new leases; | |
| • | competition from other apartment communities and other housing options; | |
| • | 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; | |
| • | 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.
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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. REIT tax rules also restrict our ability
to sell properties. 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. Recent 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 the Aimco Operating Partnership and our other
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; | |
| • | 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 |
10
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| • | 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 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 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 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 property net
operating 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
11
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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.
Additionally, the government may cease to operate government
housing programs which would result in a loss of
benefits.
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 one or more of the following: 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 limit our
choice of residents to those with incomes at or below certain
levels. Failure to comply with these requirements may result in
financial penalties or loss of benefits. We are usually required
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.
Additionally, there is no guarantee that the government will
continue to operate these programs. Any cessation of these
government housing programs may result in our loss of the
benefits we receive under these programs, including rental
subsidies. During 2010, 2009 and 2008, for continuing
operations, our rental revenues include $131.4 million,
$126.9 million and $119.5 million, respectively, of
subsidies from government agencies. Of the 2010 subsidy amounts,
approximately 10.7% related to properties subject to housing
assistance contracts that expire in 2011, which we anticipate
renewing, and the remainder related to properties subject to
housing assistance contracts that expire after 2011 and have a
weighted average term of 10.8 years. Any loss of these
benefits may adversely affect our liquidity and results of
operations.
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. The Fair Housing Amendments Act of 1988, or
FHAA, requires apartment properties first occupied after
March 13, 1991, to comply with design and construction
requirements for disabled access. For those projects receiving
Federal funds, the Rehabilitation Act of 1973 also has
requirements regarding disabled access. 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, the FHAA and the Rehabilitation Act of 1973
in connection with the ongoing operation or redevelopment of our
properties.
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Table of Contents
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 potentially hazardous materials
present on a property, including lead-based paint, asbestos,
polychlorinated biphenyls, petroleum-based fuels, and other
miscellaneous materials. Such laws often impose liability
without regard to whether the owner or operator knew of, or was
responsible for, the release or presence of such materials. The
presence of, or the failure to manage or remedy properly, these
materials 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 improper management of
these materials 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 these materials through a
licensed disposal or treatment facility. Anyone who arranges for
the disposal or treatment of these materials 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 responsible 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.
Although we are proactively engaged in managing moisture
intrusion and preventing the presence of mold at our properties,
it is not unusual for mold to be present at some units within
the portfolio. 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 manage mold exposure at 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. We have only limited insurance coverage for
property damage claims arising from the presence of mold and for
personal injury claims related to mold exposure. 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 distribution 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.
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 do 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.
13
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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.
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% (or up to 9.8%
upon a waiver from our Board of Directors) 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 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, 2010, 422,157,736 shares were classified
as Common Stock, of which 117,642,872 were outstanding, and
88,429,764 shares were classified as preferred stock,
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of which 24,900,114 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 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.
15
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| Item 2. | Properties |
Our portfolio includes garden style, mid-rise and high-rise
properties located in 43 states, the District of Columbia
and Puerto Rico. Our geographic allocation strategy focuses on
the 20 largest markets in the United States, which are grouped
according to the five geographic areas into which our property
operations team is organized. The following table sets forth
information on all of our properties as of December 31,
2010:
|
Number of
|
Number
|
Average
|
||||||||||
| Properties | of Units | Ownership | ||||||||||
|
Conventional:
|
||||||||||||
|
Chicago
|
15 | 4,633 | 94 | % | ||||||||
|
Houston
|
7 | 2,835 | 82 | % | ||||||||
|
Dallas — Fort Worth
|
2 | 569 | 100 | % | ||||||||
|
Central
|
24 | 8,037 | 90 | % | ||||||||
|
Manhattan
|
22 | 957 | 100 | % | ||||||||
|
New York City
|
22 | 957 | 100 | % | ||||||||
|
Washington — Northern Virginia — Maryland
|
17 | 8,015 | 88 | % | ||||||||
|
Boston
|
11 | 4,129 | 100 | % | ||||||||
|
Philadelphia
|
7 | 3,888 | 91 | % | ||||||||
|
Suburban New York — New Jersey
|
4 | 1,162 | 81 | % | ||||||||
|
Northeast
|
39 | 17,194 | 91 | % | ||||||||
|
Miami
|
5 | 2,471 | 95 | % | ||||||||
|
Palm Beach — Fort Lauderdale
|
4 | 1,265 | 93 | % | ||||||||
|
Orlando
|
9 | 2,836 | 92 | % | ||||||||
|
Tampa
|
6 | 1,755 | 92 | % | ||||||||
|
Jacksonville
|
4 | 1,643 | 85 | % | ||||||||
|
Atlanta
|
5 | 1,295 | 80 | % | ||||||||
|
South
|
33 | 11,265 | 91 | % | ||||||||
|
Los Angeles
|
14 | 4,645 | 86 | % | ||||||||
|
Orange County
|
4 | 1,213 | 94 | % | ||||||||
|
San Diego
|
6 | 2,143 | 97 | % | ||||||||
|
East Bay
|
2 | 413 | 85 | % | ||||||||
|
San Jose
|
1 | 224 | 100 | % | ||||||||
|
San Francisco
|
6 | 1,083 | 100 | % | ||||||||
|
Seattle
|
3 | 413 | 75 | % | ||||||||
|
Denver
|
9 | 2,553 | 78 | % | ||||||||
|
Phoenix
|
17 | 4,420 | 89 | % | ||||||||
|
West
|
62 | 17,107 | 88 | % | ||||||||
|
Total target markets
|
180 | 54,560 | 90 | % | ||||||||
|
Opportunistic and other markets
|
39 | 14,412 | 93 | % | ||||||||
|
Total conventional owned and managed
|
219 | 68,972 | 91 | % | ||||||||
|
Affordable owned and managed
|
228 | 26,540 | ||||||||||
|
Property management
|
20 | 2,373 | ||||||||||
|
Asset management
|
301 | 24,809 | ||||||||||
|
Total
|
768 | 122,694 | ||||||||||
16
Table of Contents
At December 31, 2010, we owned an equity interest in and
consolidated 399 properties containing 89,875 apartment units,
which we refer to as “consolidated properties.” These
consolidated properties contain, on average, 225 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, dog
parks and open spaces. Many of the apartment units offer
features such as vaulted ceilings, fireplaces, washer and dryer
connections, 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, 2010, we held an equity interest in and did
not consolidate 48 properties containing 5,637 apartment units,
which we refer to as “unconsolidated properties.” In
addition, we provided property management services for 20
properties containing 2,373 apartment units, and asset
management services for 301 properties containing 24,809
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, 2010, our consolidated
properties were encumbered by aggregate property debt totaling
$5,457.8 million having an aggregate weighted average
interest rate of 5.52%. Such property debt was collateralized by
388 properties with a combined net book value of
$6,443.9 million. Included in the 388 properties, we had a
total of 16 property loans on 13 properties, with an aggregate
principal balance outstanding of $294.8 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. | (Removed and Reserved) |
17
Table of Contents
PART II
| 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) | |||||||||
|
2010
|
||||||||||||
|
December 31, 2010
|
$ | 26.24 | $ | 21.22 | $ | 0.10 | ||||||
|
September 30, 2010
|
22.82 | 18.12 | 0.10 | |||||||||
|
June 30, 2010
|
24.21 | 18.14 | 0.10 | |||||||||
|
March 31, 2010
|
19.17 | 15.01 | 0.00 | |||||||||
|
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 | |||||||||
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. In February 2011, our Board of Directors
declared a cash dividend of $0.12 per share on our Class A
Common Stock for the quarter ended December 31, 2010. Our
Board of Directors anticipates similar per share quarterly
dividends for the remainder of 2011. However, 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 22, 2011, the closing price of our Common Stock
was $24.24 per share, as reported on the NYSE, and there were
118,131,892 shares of Common Stock outstanding, held by
2,943 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, 2010, we did not issue any shares of
Common Stock in exchange for common OP Units or 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, 2010. As of December 31, 2010, we were
authorized to repurchase approximately 19.3 million 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.
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
18
Table of Contents
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 MSCI US REIT Index and the
Standard & Poor’s 500 Total Return Index (the
“S&P 500”). 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, 2005,
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 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | ||||||||||||||||||
|
Aimco
|
100.00 | 155.12 | 107.06 | 57.60 | 82.27 | 135.43 | ||||||||||||||||||
|
MSCI US REIT
|
100.00 | 135.92 | 113.06 | 70.13 | 90.20 | 115.89 | ||||||||||||||||||
|
S&P 500
|
100.00 | 115.79 | 122.16 | 76.96 | 97.33 | 111.99 | ||||||||||||||||||
Source: (other than with respect to S&P 500) SNL
Financial LC, Charlottesville, VA
©
2011
The Performance Graph will not be deemed to be incorporated by
reference into any filing by Aimco under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as
amended, except to the extent that Aimco 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, | ||||||||||||||||||||
| 2010 | 2009(1) | 2008(1) | 2007(1) | 2006(1) | ||||||||||||||||
| (Dollar amounts in thousands, except per share data) | ||||||||||||||||||||
|
OPERATING DATA:
|
||||||||||||||||||||
|
Total revenues
|
$ | 1,144,934 | $ | 1,131,103 | $ | 1,178,878 | $ | 1,111,656 | $ | 1,024,592 | ||||||||||
|
Total operating expenses(2)
|
(1,014,425 | ) | (1,035,408 | ) | (1,136,563 | ) | (940,067 | ) | (862,141 | ) | ||||||||||
|
Operating income(2)
|
130,509 | 95,695 | 42,315 | 171,589 | 162,451 | |||||||||||||||
|
Loss from continuing operations(2)
|
(165,889 | ) | (201,641 | ) | (117,926 | ) | (47,203 | ) | (42,999 | ) | ||||||||||
|
Income from discontinued operations, net(3)
|
76,265 | 156,841 | 744,928 | 172,709 | 330,021 | |||||||||||||||
|
Net (loss) income
|
(89,624 | ) | (44,800 | ) | 627,002 | 125,506 | 287,022 | |||||||||||||
|
Net loss (income) attributable to noncontrolling interests
|
17,896 | (19,474 | ) | (214,995 | ) | (95,595 | ) | (110,234 | ) | |||||||||||
|
Net income attributable to preferred stockholders
|
(53,590 | ) | (50,566 | ) | (53,708 | ) | (66,016 | ) | (81,132 | ) | ||||||||||
|
Net (loss) income attributable to Aimco common stockholders
|
(125,318 | ) | (114,840 | ) | 351,314 | (40,586 | ) | 93,710 | ||||||||||||
|
Earnings (loss) per common share — basic and diluted:
|
||||||||||||||||||||
|
Loss from continuing operations attributable to Aimco common
stockholders
|
$ | (1.48 | ) | $ | (1.78 | ) | $ | (2.09 | ) | $ | (1.38 | ) | $ | (1.46 | ) | |||||
|
Net (loss) income attributable to Aimco common stockholders
|
$ | (1.08 | ) | $ | (1.00 | ) | $ | 3.96 | $ | (0.43 | ) | $ | 0.98 | |||||||
|
BALANCE SHEET INFORMATION:
|
||||||||||||||||||||
|
Real estate, net of accumulated depreciation
|
$ | 6,533,253 | $ | 6,711,327 | $ | 6,870,540 | $ | 6,638,655 | $ | 6,171,605 | ||||||||||
|
Total assets
|
7,378,566 | 7,906,468 | 9,441,870 | 10,617,681 | 10,292,587 | |||||||||||||||
|
Total indebtedness
|
5,504,801 | 5,479,476 | 5,853,544 | 5,464,521 | 4,784,107 | |||||||||||||||
|
Total equity
|
1,306,772 | 1,534,703 | 1,646,749 | 2,048,546 | 2,650,182 | |||||||||||||||
|
OTHER INFORMATION:
|
||||||||||||||||||||
|
Dividends declared per common share(4)
|
$ | 0.30 | $ | 0.40 | $ | 7.48 | $ | 4.31 | $ | 2.40 | ||||||||||
|
Total consolidated properties (end of period)
|
399 | 426 | 514 | 657 | 703 | |||||||||||||||
|
Total consolidated apartment units (end of period)
|
89,875 | 95,202 | 117,719 | 153,758 | 162,432 | |||||||||||||||
|
Total unconsolidated properties (end of period)
|
48 | 77 | 85 | 94 | 102 | |||||||||||||||
|
Total unconsolidated apartment units (end of period)
|
5,637 | 8,478 | 9,613 | 10,878 | 11,791 | |||||||||||||||
| (1) | Certain reclassifications have been made to conform to the current financial statement presentation, including retroactive adjustments to reflect additional properties sold during 2010 as discontinued operations (see Note 13 to the consolidated financial statements in Item 8). | |
| (2) | 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. | |
| (3) | Income from discontinued operations for the years ended December 31, 2010, 2009, 2008, 2007 and 2006 includes $94.9 million, $221.8 million, $800.3 million, $116.1 million and $336.2 million in gains on disposition of real estate, respectively. Income from discontinued operations for 2010, 2009 and 2008 is discussed further in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7. | |
| (4) | As further discussed in Note 11 to the consolidated financial statements in Item 8, dividends declared per common share during the years ended December 31, 2008 and 2007, included $5.08 and $1.91, respectively, of per share dividends that were paid through the issuance of shares of Aimco Class A Common Stock. |
20
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. Our principal financial objective is
to provide predictable and attractive returns to our
stockholders. Our business plan to achieve this objective is to:
| • | own and operate a broadly diversified portfolio of primarily class “B/B+” assets with properties concentrated in the 20 largest markets in the United States (as measured by total apartment value, which is the estimated total market value of apartment properties in a particular market); | |
| • | improve our portfolio by selling assets with lower projected returns and reinvesting those proceeds through the purchase of new assets or additional investment in existing assets in our portfolio, including increased ownership or redevelopment; and | |
| • | provide financial leverage primarily by the use of non-recourse, long-dated, fixed-rate property debt and perpetual preferred equity. |
Our owned real estate portfolio includes 219 conventional
properties with 68,972 units and 228 affordable properties
with 26,540 units. Our conventional and affordable
properties comprise 88% and 12%, respectively, of our total
property Net Asset Value. For the three months ended
December 31, 2010, our conventional portfolio monthly rents
averaged $1,052 and provided 62% operating margins. These
average rents increased from $1,042 for the three months ended
December 31, 2009. Notwithstanding the economic challenges
of the last several years, our diversified portfolio of
conventional and affordable properties generated improved
property operating results from 2007 to 2010. From 2007 to 2010,
the net operating income of our same store properties and total
real estate operations increased by 1.2% and 5.8%, respectively.
We continue to work toward simplifying our business, including
de-emphasizing transaction-based activity fees and, as a result,
reducing the cost of personnel involved in those activities.
Revenues from transactional activities decreased from
$68.2 million during 2008 to $7.9 million during 2010,
and during 2010 transactional activities generated approximately
3.0% of our Pro forma Funds From Operations (defined below).
Additionally, we have reduced our offsite costs by
$16.8 million. Our 2010, 2009 and 2008 results are
discussed in the Results of Operations section below.
We upgrade the quality of our portfolio through the sale of
assets with lower projected returns, which are often in markets
less desirable than our target markets, and reinvest these
proceeds through the purchase of new assets or additional
investment in existing assets in our portfolio, through
increased ownership or redevelopment. We prefer the
redevelopment of select properties in our existing portfolio to
ground-up
development, as we believe it provides superior risk adjusted
returns with lower volatility.
Our leverage strategy focuses on increasing financial returns
while minimizing risk. At December 31, 2010, approximately
86% of our leverage consisted of property-level, non-recourse,
long-dated, fixed-rate, amortizing debt and 13% consisted of
perpetual preferred equity, a combination which helps to limit
our refunding and re-pricing risk. At December 31, 2010, we
had no outstanding corporate level debt. Our leverage strategy
limits refunding risk on our property-level debt. At
December 31, 2010, the weighted average maturity of our
property-level debt was 7.8 years, with 2% of our debt
maturing in 2011, less than 9% maturing in 2012, and on average
approximately 7% maturing in each of 2013, 2014 and 2015. Long
duration, fixed-rate liabilities provide a hedge against
increases in interest rates and inflation. Approximately 91% of
our property-level debt is fixed-rate. Of the
$104.9 million of property debt maturing during 2011, we
completed the refinance of $79.4 million in February 2011,
and we are focusing on refinancing our property debt maturing
during 2012 through 2015 to extend maturities and lock in
current low interest rates.
21
Table of Contents
During 2010, we repaid the remaining $90.0 million on our
term loan. We also expanded our credit facility from
$180.0 million to $300.0 million, providing additional
liquidity for short-term or unexpected cash requirements. As of
December 31, 2010, we had the capacity to borrow
$260.3 million pursuant to our credit facility (after
giving effect to $39.7 million outstanding for undrawn
letters of credit). The revolving credit facility matures
May 1, 2013, and may be extended for an additional year,
subject to certain conditions.
The key financial indicators that we use in managing our
business and in evaluating our financial condition and operating
performance are: Net Asset Value; Pro forma Funds From
Operations, which is Funds From Operations excluding operating
real estate impairment losses and preferred equity redemption
related amounts; Adjusted Funds From Operations, which is Pro
forma Funds From Operations less spending for Capital
Replacements; property net operating income, which is rental and
other property revenues less direct property operating expenses,
including real estate taxes; proportionate property net
operating income, which reflects our share of property net
operating income of our consolidated and unconsolidated
properties; same store property operating results; Free Cash
Flow, which is net operating income less spending for Capital
Replacements; Free Cash Flow internal rate of return; financial
coverage ratios; and leverage as shown on our balance sheet.
Funds From Operations is defined and further described in the
section captioned “Funds From Operations.” 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.
Highlights of our results of operations for the year ended
December 31, 2010, are summarized below:
| • | Average daily occupancy for our Conventional Same Store properties increased 200 basis points, from 94.1% in 2009 to 96.1% in 2010. | |
| • | Conventional Same Store revenues and expenses for 2010, decreased by 0.2% and 1.0%, respectively, as compared to 2009, resulting in a 0.2% increase in net operating income. | |
| • | Total Same Store revenues and expenses for 2010 increased by 0.2% and decreased by 0.8%, respectively, as compared to 2009, resulting in a 0.8% increase in net operating income. | |
| • | Net operating income for our real estate portfolio (continuing operations) increased 2.3% for the year ended December 31, 2010 as compared to 2009. | |
| • | Property sales declined in 2010 as compared to 2009, as property sales completed through July 2010 allowed us to fully repay the remainder of our term debt. |
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
2010
compared to 2009
We reported net loss attributable to Aimco of $71.7 million
and net loss attributable to Aimco common stockholders of
$125.3 million for the year ended December 31, 2010,
compared to 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,
increases of $7.4 million and $10.5 million,
respectively. These increases in net loss 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 a decrease in gains on dispositions of real estate due to fewer property sales in 2010 as compared to 2009; and |
22
Table of Contents
| • | a decrease in asset management and tax credit revenues, primarily due to decreased amortization of deferred tax credit income and a de-emphasis on transaction-based fees. |
The effects of these items on our operating results were
partially offset by:
| • | an increase in net operating income of our properties included in continuing operations, reflecting improved operations; | |
| • | a decrease in provisions for losses on notes receivable, primarily due to the impairment during 2009 of our interest in Casden Properties; and | |
| • | a decrease in earnings allocated to noncontrolling interests in consolidated real estate partnerships, primarily due to their share of the decrease in gains on disposition of consolidated real estate properties as discussed above. |
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 in net income
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 a decrease in gains on dispositions of real estate due to fewer property sales in 2009 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; | |
| • | 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 general and administrative expenses, primarily related to reductions in personnel and related expenses from our organizational restructuring activities during 2008 and 2009; | |
| • | impairment losses on real estate development assets in 2008, for which no similar impairments were recognized in 2009; and | |
| • | 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. |
The following paragraphs discuss these and other items affecting
the results of our operations in more detail.
Real
Estate Operations
Our real estate portfolio is comprised of two business
components: conventional real estate operations and affordable
real estate operations, which also represent our two reportable
segments. Our conventional real estate portfolio consists of
market-rate apartments with rents paid by the resident and
includes 219 properties with 68,972 units. Our affordable
real estate portfolio consists of 228 properties with
26,540 units, with rents that are generally paid, in whole
or part, by a government agency. Our conventional and affordable
properties contributed 87% and 13%, respectively, of
proportionate property net operating income amounts during the
year ended December 31, 2010.
In accordance with accounting principles generally accepted in
the United States of America, or GAAP, we consolidate certain
properties in which we hold an insignificant economic interest
and in some cases we do not consolidate other properties in
which we have a significant economic interest. Due to the
diversity of our economic ownership interests in our properties,
our chief operating decision maker emphasizes proportionate
property net
23
Table of Contents
operating income as a key measurement of segment profit or loss.
Accordingly, the results of operations of our conventional and
affordable segments discussed below are presented on a
proportionate basis.
We do not include property management revenues and expenses or
casualty related amounts in our assessment of segment
performance. Accordingly, these items are not allocated to our
segment results discussed below. The effects of these items on
our real estate operations results are discussed below on a
consolidated basis, that is, before adjustments for
noncontrolling interests or our interest in unconsolidated real
estate partnerships.
The tables and discussions below reflect the proportionate
results of our conventional and affordable segments and the
consolidated results related to our real estate operations not
allocated to segments for the years ended December 31,
2010, 2009 and 2008 (in thousands). The tables and discussions
below exclude the results of operations for properties included
in discontinued operations as of December 31, 2010. Refer
to Note 17 in the consolidated financial statements in
Item 8 for further discussion regarding our reporting
segments, including a reconciliation of these proportionate
amounts to consolidated rental and other property revenues and
property operating expenses.
Conventional
Real Estate Operations
Our conventional segment consists of conventional properties we
classify as same store, redevelopment and other conventional
properties. Same store properties are properties we manage and
that have reached and maintained a stabilized level of occupancy
during the current and prior year comparable period.
Redevelopment properties are those in which a substantial number
of available units have been vacated for major renovations or
have not been stabilized in occupancy for at least one year as
of the earliest period presented, or for which other significant
non-unit
renovations are underway or have been complete for less than one
year. Other conventional properties may include conventional
properties that have significant rent control restrictions,
acquisition properties, university housing properties and
properties that are not multifamily, such as commercial
properties or fitness centers. Our definitions of same store and
redevelopment properties may result in these populations
differing for the purpose of comparing 2010 to 2009 results and
2009 to 2008 results.
| Year Ended December 31, | ||||||||||||||||
| 2010 | 2009 | $ Change | % Change | |||||||||||||
|
Rental and other property revenues:
|
||||||||||||||||
|
Conventional same store
|
$ | 641,282 | $ | 642,784 | $ | (1,502 | ) | (0.2 | )% | |||||||
|
Conventional redevelopment
|
113,273 | 107,461 | 5,812 | 5.4 | % | |||||||||||
|
Other Conventional
|
71,414 | 70,065 | 1,349 | 1.9 | % | |||||||||||
|
Total
|
825,969 | 820,310 | 5,659 | 0.7 | % | |||||||||||
|
Property operating expenses:
|
||||||||||||||||
|
Conventional same store
|
247,658 | 250,062 | (2,404 | ) | (1.0 | )% | ||||||||||
|
Conventional redevelopment
|
40,915 | 42,206 | (1,291 | ) | (3.1 | )% | ||||||||||
|
Other Conventional
|
34,689 | 33,990 | 699 | 2.1 | % | |||||||||||
|
Total
|
323,262 | 326,258 | (2,996 | ) | (0.9 | )% | ||||||||||
|
Property net operating income:
|
||||||||||||||||
|
Conventional same store
|
393,624 | 392,722 | 902 | 0.2 | % | |||||||||||
|
Conventional redevelopment
|
72,358 | 65,255 | 7,103 | 10.9 | % | |||||||||||
|
Other Conventional
|
36,725 | 36,075 | 650 | 1.8 | % | |||||||||||
|
Total
|
$ | 502,707 | $ | 494,052 | $ | 8,655 | 1.8 | % | ||||||||
For the year ended December 31, 2010, as compared to 2009,
our conventional segment’s proportionate property net
operating income increased $8.7 million, or 1.8%.
24
Table of Contents
Conventional same store net operating income increased by
$0.9 million. This increase was attributable to a
$2.4 million decrease in expense primarily due to a
reduction during 2010 of previously estimated real estate tax
obligations resulting from successful appeals settled during the
period, and decreases in marketing expenses and unit turn costs,
partially offset by increases in contract services, insurance
and administrative costs. This decrease in expense was partially
offset by a $1.5 million decrease in revenue, primarily due
to lower average rent (approximately $34 per unit). The decrease
in average rent was partially offset by a 200 basis point
increase in average physical occupancy and higher utility
reimbursement and miscellaneous income. Rental rates on new
leases transacted during the year ended December 31, 2010,
were 2.3% lower than expiring lease rates and renewal rates were
1.5% higher than expiring lease rates.
The net operating income of our conventional redevelopment
properties increased by $7.1 million, primarily due to a
$5.8 million increase in revenue resulting from higher
average physical occupancy and an increase in utility
reimbursement and miscellaneous income, and a $1.3 million
reduction in expense primarily related to marketing expenses,
partially offset by higher insurance.
Our other conventional net operating income increased by
$0.7 million, primarily due to increases in both revenue
and expense of approximately 2.0%.
| Year Ended December 31, | ||||||||||||||||
| 2009 | 2008 | $ Change | % Change | |||||||||||||
|
Rental and other property revenues:
|
||||||||||||||||
|
Conventional same store
|
$ | 585,501 | $ | 600,907 | $ | (15,406 | ) | (2.6 | )% | |||||||
|
Conventional redevelopment
|
165,480 | 153,983 | 11,497 | 7.5 | % | |||||||||||
|
Other Conventional
|
69,329 | 68,126 | 1,203 | 1.8 | % | |||||||||||
|
Total
|
820,310 | 823,016 | (2,706 | ) | (0.3 | )% | ||||||||||
|
Property operating expenses:
|
||||||||||||||||
|
Conventional same store
|
226,572 | 225,694 | 878 | 0.4 | % | |||||||||||
|
Conventional redevelopment
|
65,996 | 65,111 | 885 | 1.4 | % | |||||||||||
|
Other Conventional
|
33,690 | 31,527 | 2,163 | 6.9 | % | |||||||||||
|
Total
|
326,258 | 322,332 | 3,926 | 1.2 | % | |||||||||||
|
Property net operating income:
|
||||||||||||||||
|
Conventional same store
|
358,929 | 375,213 | (16,284 | ) | (4.3 | )% | ||||||||||
|
Conventional redevelopment
|
99,484 | 88,872 | 10,612 | 11.9 | % | |||||||||||
|
Other Conventional
|
35,639 | 36,599 | (960 | ) | (2.6 | )% | ||||||||||
|
Total
|
$ | 494,052 | $ | 500,684 | $ | (6,632 | ) | (1.3 | )% | |||||||
For the year ended December 31, 2009, as compared to 2008,
our conventional segment’s proportionate property net
operating income decreased $6.6 million, or 1.3%.
Our conventional same store net operating income decreased
$16.3 million, or 4.3%. This decrease was primarily
attributable to a $15.4 million decrease in revenue,
primarily due to a 2.5% decline in rental rates and a
90 basis point decrease in occupancy, partially offset by
an increase in utility reimbursements and miscellaneous income.
The decrease was also attributable to a $0.9 million
increase in expense, primarily due to higher insurance and
personnel costs, partially offset by lower administrative costs.
Conventional redevelopment net operating income increased by
$10.6 million, primarily due to an $11.5 million
increase in revenue. Revenue increased due to more units in
service at these properties during 2009 and an increase in
utility reimbursements and miscellaneous income. This increase
in revenue was partially offset by a $0.9 million increase
in expense, primarily related to higher real estate taxes,
partially offset by lower administrative costs.
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Our other conventional net operating income decreased by
$0.9 million, primarily due to a 6.9% increase in expenses
partially offset by a 1.8% increase in revenues.
Affordable
Real Estate Operations
Our affordable segment consists of properties we classify as
same store or other (primarily redevelopment properties). Our
criteria for classifying affordable properties as same store or
redevelopment are consistent with those for our conventional
properties described above. Our definitions of same store and
redevelopment properties may result in these populations
differing for the purpose of comparing 2010 to 2009 results and
2009 to 2008 results.
| Year Ended December 31, | ||||||||||||||||
| 2010 | 2009 | $ Change | % Change | |||||||||||||
|
Rental and other property revenues:
|
||||||||||||||||
|
Affordable same store
|
$ | 116,852 | $ | 113,853 | $ | 2,999 | 2.6 | % | ||||||||
|
Other Affordable
|
13,710 | 12,695 | 1,015 | 8.0 | % | |||||||||||
|
Total
|
130,562 | 126,548 | 4,014 | 3.2 | % | |||||||||||
|
Property operating expenses:
|
||||||||||||||||
|
Affordable same store
|
53,121 | 53,057 | 64 | 0.1 | % | |||||||||||
|
Other Affordable
|
5,519 | 5,998 | (479 | ) | (8.0 | )% | ||||||||||
|
Total
|
58,640 | 59,055 | (415 | ) | (0.7 | )% | ||||||||||
|
Property net operating income:
|
||||||||||||||||
|
Affordable same store
|
63,731 | 60,796 | 2,935 | 4.8 | % | |||||||||||
|
Other Affordable
|
8,191 | 6,697 | 1,494 | 22.3 | % | |||||||||||
|
Total
|
$ | 71,922 | $ | 67,493 | $ | 4,429 | 6.6 | % | ||||||||
The proportionate property net operating income of our
affordable segment increased $4.4 million, or 6.6%, during
the year ended December 31, 2010, as compared to 2009.
Affordable same store net operating income increased by
$2.9 million, primarily due to a $3.0 million increase
in revenue due to higher average rent ($7 per unit) and higher
average physical occupancy (18 basis points). The net
operating income of our other affordable properties increased by
$1.5 million, primarily due to an increase in revenue
driven by higher average rent ($23 per unit) and higher average
occupancy.
| Year Ended December 31, | ||||||||||||||||
| 2009 | 2008 | $ Change | % Change | |||||||||||||
|
Rental and other property revenues:
|
||||||||||||||||
|
Affordable same store
|
$ | 113,853 | $ | 109,483 | $ | 4,370 | 4.0 | % | ||||||||
|
Other Affordable
|
12,695 | 12,209 | 486 | 4.0 | % | |||||||||||
|
Total
|
126,548 | 121,692 | 4,856 | 4.0 | % | |||||||||||
|
Property operating expenses:
|
||||||||||||||||
|
Affordable same store
|
53,057 | 52,975 | 82 | 0.2 | % | |||||||||||
|
Other Affordable
|
5,998 | 6,048 | (50 | ) | (0.8 | )% | ||||||||||
|
Total
|
59,055 | 59,023 | 32 | 0.1 | % | |||||||||||
|
Property net operating income:
|
||||||||||||||||
|
Affordable same store
|
60,796 | 56,508 | 4,288 | 7.6 | % | |||||||||||
|
Other Affordable
|
6,697 | 6,161 | 536 | 8.7 | % | |||||||||||
|
Total
|
$ | 67,493 | $ | 62,669 | $ | 4,824 | 7.7 | % | ||||||||
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Table of Contents
Our affordable segment proportionate property net operating
income increased $4.8 million, or 7.7%, during the year
ended December 31, 2009, as compared to 2008. Affordable
same store net operating income increased $4.3 million,
primarily due to increased revenue. Affordable same store
revenue increased by $4.4 million, primarily due to higher
average rent ($29 per unit), partially offset by lower average
physical occupancy (56 basis points). The net operating
income of our other affordable properties increased by
$0.5 million, primarily due to an increase in revenues due
to higher average rent ($43 per unit), partially offset by lower
average occupancy. The increase in revenues was partially offset
by an increase in expenses.
Non-Segment
Real Estate Operations
Real estate operations net operating income amounts not
attributed to our conventional or affordable segments include
property management revenues and expenses and casualty losses,
reported in consolidated amounts, which we do not allocate to
our conventional or affordable segments for purposes of
evaluating segment performance (see Note 17 to the
consolidated financial statements in Item 8).
For the year ended December 31, 2010, as compared to 2009,
property management revenues decreased by $2.2 million,
from $5.1 million to $2.9 million, primarily due to
the elimination of revenues related to properties consolidated
during 2010 in connection with our adoption of revised
accounting guidance regarding consolidation of variable interest
entities (see Note 2 to our consolidated financial
statements in Item 8). For the year ended December 31,
2010, as compared to 2009, expenses not allocated to our
conventional or affordable segments, including property
management expenses and casualty losses, decreased by
$3.2 million. Property management expenses decreased by
$3.0 million, from $51.2 million to
$48.2 million, primarily due to reductions in personnel and
related costs attributed to our restructuring activities and
casualty losses decreased by $0.2 million, from
$9.8 million to $9.6 million.
For the year ended December 31, 2009, as compared to 2008,
property management revenues decreased by $1.3 million,
from $6.4 million to $5.1 million, primarily due to a
decrease in the number of managed properties due to asset sales.
For the year ended December 31, 2009, as compared to 2008,
expenses not allocated to our conventional or affordable
segments decreased by $16.5 million. Property management
expenses decreased by $16.6 million, from
$67.8 million to $51.2 million, primarily due to
reductions in personnel and related costs attributed to our
restructuring activities, and casualty losses increased by
$0.1 million.
Asset
Management and Tax Credit Revenues
We perform activities and services for consolidated and
unconsolidated real estate partnerships, including portfolio
strategy, capital allocation, joint ventures, tax credit
syndication, acquisitions, dispositions and other transaction
activities. These activities are conducted in part by our
taxable subsidiaries, and the related net operating income may
be subject to income taxes.
For the year ended December 31, 2010, compared to the year
ended December 31, 2009, asset management and tax credit
revenues decreased $14.3 million. This decrease is
attributable to an $8.7 million decrease in income related
to our affordable housing tax credit syndication business.
Approximately $3.8 million of this decrease is due to the
delivery of historic credits during 2009 for which no comparable
credits were delivered during 2010, and the remainder of the
decrease is primarily due to a reduction in amortization of
deferred tax credit income. Asset management and tax credit
revenues also decreased due to a $2.0 million decrease in
current asset management fees due to the elimination of fees on
newly consolidated properties, for which the benefit of these
fees is now included in noncontrolling interests in consolidated
real estate partnerships, a $1.9 million decrease in
disposition and other fees we earn in connection with
transactional activities, and a $1.7 million decrease in
promote income, which is income earned in connection with the
disposition of properties owned by our consolidated joint
ventures.
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, asset management and tax credit
revenues decreased $49.0 million. This decrease is
primarily attributable to a $42.8 million decrease in
promote income due to fewer sales of joint venture assets in
2009, a $7.6 million decrease in other general partner
transactional fees, and a $2.2 million decrease in asset
management fees, partially offset by a $3.6 million
increase in revenues related to our affordable housing tax
credit syndication business, including syndication fees and
other revenue earned in connection with these arrangements.
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Table of Contents
Investment
Management Expenses
Investment management expenses consist primarily of the costs of
personnel that perform asset management and tax credit
activities. For the year ended December 31, 2010, compared
to the year ended December 31, 2009, investment management
expenses decreased $1.3 million. This decrease is primarily
due to a $4.3 million reduction in personnel and related
costs from our organizational restructurings, partially offset
by a $3.0 million net increase in expenses, primarily
related to our write off of previously deferred costs related to
tax credit projects we recently abandoned.
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, investment management expenses
decreased $9.0 million, primarily due to reductions in
personnel and related costs from our organizational
restructurings (see Note 4 to the consolidated financial
statements in Item 8) and a reduction in transaction
costs, which in 2008 include the retrospective application of
SFAS 141(R).
Depreciation
and Amortization
For the year ended December 31, 2010, compared to the year
ended December 31, 2009, depreciation and amortization
decreased $1.6 million, or 0.4%. This decrease was
primarily due to depreciation adjustments recognized in 2009 to
reduce the carrying amount of certain properties. This decrease
was partially offset by an increase in depreciation primarily
related to properties we consolidated during 2010 based on our
adoption of revised accounting guidance regarding consolidation
of variable interest entities (see Note 2 to our
consolidated financial statements in Item 8) and
completed redevelopments and other capital projects recently
placed in service.
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, depreciation and amortization
increased $51.2 million, or 13.6%. This increase primarily
consists of depreciation related to properties acquired during
the latter part of 2008, completed redevelopments and other
capital projects placed in service in the latter part of 2009.
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.
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 operations
for the year ended December 31, 2008 included in
Item 8. We recognized no similar impairments on real estate
development assets during the years ended December 31, 2010
or 2009.
General
and Administrative Expenses
For the year ended December 31, 2010, compared to the year
ended December 31, 2009, general and administrative
expenses decreased $3.3 million, or 5.8%. This decrease is
primarily attributable to net reductions in personnel and
related expenses, partially offset by an increase in information
technology outsourcing costs.
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, general and administrative
expenses decreased $23.7 million, or 29.5%. 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.
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Table of Contents
As a result of our restructuring activities, our general and
administrative expense as a percentage of total revenues has
decreased from 6.8% in 2008, to 5.0% in 2009 and 4.7% in 2010.
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, 2010, compared to the year
ended December 31, 2009, other expenses, net decreased by
$5.0 million. During 2009, we settled certain litigation
matters resulting in a net expense in our operations, and in
2010 we settled certain litigation matters that resulted in a
net gain in our operations. The effect of the expense in 2009
and gain in 2010 resulted in a $14.8 million decrease in
other expenses, net from 2009 to 2010. This decrease was
partially offset by an increase in the cost of our insurance
(net of a reduction in the number of properties insured from
2009 to 2010).
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, other expenses, net decreased by
$6.8 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 $4.8 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. For the year ended December 31,
2010, we recognized no similar restructuring costs.
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 may occur infrequently and thus accretion
income may vary from period to period.
For the year ended December 31, 2010, compared to the year
ended December 31, 2009, interest income increased
$2.0 million, or 22.4%. Interest income increased during
2010 primarily due to an increase of accretion income related to
a change in timing and amount of collection for certain of our
discounted notes, including several notes that were repaid in
advance of their maturity dates.
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, interest income decreased
$10.5 million, or 53.5%. Interest income decreased by
$8.7 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 accretion income related to other
notes during the year ended December 31, 2008, resulting
from a change in the timing and amount of collection.
Provision
for Losses on Notes Receivable
During the years ended December 31, 2010, 2009 and 2008, we
recognized net provisions for losses on notes receivable of
$0.9 million, $21.5 million and $17.6 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 further discussed in Note 5 to the consolidated
financial statements in Item 8, we have an investment in
Casden Properties LLC, an entity organized to acquire,
re-entitle and develop land parcels in Southern California.
29
Table of Contents
Based upon the profit allocation agreement, we account for this
investment as a note receivable. 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 $0.9 million, $0.8 million and
$1.3 million during the years ended December 31, 2010,
2009 and 2008, respectively.
Interest
Expense
For the year ended December 31, 2010, compared to the year
ended December 31, 2009, interest expense, which includes
the amortization of deferred financing costs, increased by less
than $0.1 million. Property related interest expense
increased by $7.6 million, due to a $3.3 million
increase related to properties newly consolidated in 2010 (see
Note 2 to our consolidated financial statements in
Item 8 for further discussion of our adoption of ASU
2009-17)
and
an increase related to properties refinanced with higher average
outstanding balances, partially offset by lower average rates.
The increase in property related interest expense was
substantially offset by a $7.6 million decrease in
corporate interest expense, primarily due to a decrease in the
average outstanding balance on our term loan, which we repaid
during July 2010.
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, interest expense increased
$1.1 million, or 0.3%. Property related interest expense
increased by $20.5 million, primarily due to a
$14.2 million decrease in capitalized interest due to a
reduction in redevelopment during 2009, and an increase of
$5.1 million related to properties refinanced with higher
average rates, partially offset by lower average outstanding
balances during 2009. The increase in property related interest
expense was offset by a $19.4 million decrease in corporate
interest expense, primarily due to lower average outstanding
balances and lower average rates during 2009.
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 may include impairment losses, gains or
losses on the disposition of real estate assets or depreciation
expense which generally exceeds the net operating income
recognized by such unconsolidated partnerships.
For the year ended December 31, 2010, compared to the year
ended December 31, 2009, equity in losses of unconsolidated
real estate partnerships increased $11.7 million. During
the three months ended December 31, 2010, certain of our
consolidated investment partnerships, including those we
consolidated in 2010 in connection with our adoption of ASU
2009-17,
reduced by $9.8 million their investment balances related
to unconsolidated low income housing tax credit partnerships
based on a reduction in the remaining tax credits to be
delivered. This increase in equity in losses was in addition to
an increase in equity in losses from real estate operations due
to an increase in the number of unconsolidated partnerships,
resulting from our consolidation during 2010 of additional
investment partnerships that hold investments in unconsolidated
real estate partnerships. These losses had an insignificant
effect on net loss attributable to Aimco during 2010 as
substantially all of the results of these consolidated
investment partnerships are attributed to the noncontrolling
interests in these entities.
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, equity in losses of unconsolidated
real estate partnerships increased $6.7 million. The
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.
30
Table of Contents
Gain
on Dispositions of Unconsolidated Real Estate and
Other
Gain on dispositions of unconsolidated real estate and other
includes gains on disposition of interests in unconsolidated
real estate partnerships, gains on dispositions of land and
other non-depreciable assets and certain 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, 2010, compared to the year
ended December 31, 2009, gain on dispositions of
unconsolidated real estate and other decreased
$10.9 million. This decrease is primarily attributable to
$8.6 million of additional proceeds received in 2009
related to our disposition during 2008 of an interest in an
unconsolidated real estate partnership and a $4.0 million
gain from the disposition of our interest in a group purchasing
organization during 2009.
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
$75.8 million. This decrease is primarily attributable to a
net 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
several unconsolidated real estate partnerships.
Income
Tax Benefit
Certain of our operations or a portion thereof, including
property management, asset management and risk management 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 that cannot
be offered directly by a 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
operations.
For the year ended December 31, 2010, compared to the year
ended December 31, 2009, income tax benefit increased by
$0.9 million, from $17.5 million to
$18.4 million. This increase in income tax benefit was
primarily due to increased losses of our TRS entities, and was
substantially offset by the $8.1 million tax benefit we
recognized in 2009 related to the impairment of our investment
in Casden Properties, LLC, for which no similar benefit was
recognized in 2010.
For the year ended December 31, 2009, compared to the year
ended December 31, 2008, income tax benefit decreased by
$39.1 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. The decrease in tax
benefit from 2008 to 2009 related to these impairment losses was
in addition to a decrease in tax benefit primarily due to larger
losses by our TRS entities during 2008 as compared to 2009,
including restructuring costs incurred in 2008 and a reduction
in personnel and other costs in 2009 as a result of the
organizational restructurings.
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
31
Table of Contents
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, 2010 and 2009, income from
discontinued operations totaled $76.3 million and
$156.8 million, respectively. The $80.5 million
decrease in income from discontinued operations was principally
due to a $129.9 million decrease in gain on dispositions of
real estate, net of income taxes, primarily attributable to
fewer properties sold in 2010 as compared to 2009, partially
offset by a $21.0 million decrease in operating loss
(inclusive of a $41.9 million decrease in real estate
impairment losses) and a $34.9 million decrease in interest
expense.
For the years ended December 31, 2009 and 2008, income from
discontinued operations totaled $156.8 million and
$744.9 million, respectively. The $588.1 million
decrease in income from discontinued operations was principally
due to a $541.1 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
$112.8 million decrease in operating income (inclusive of a
$27.1 million increase in real estate impairment losses),
partially offset by a $59.8 million decrease in interest
expense and a $44.9 million increase in income tax benefit
for 2009.
During the year ended December 31, 2010, we sold 51
consolidated properties for gross proceeds of
$401.4 million and net proceeds of $118.4 million,
resulting in a net gain on sale of approximately
$86.1 million (which is net of $8.8 million of related
income taxes). 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
$757.1 million (which is net of $43.1 million of
related income taxes).
For the years ended December 31, 2010, 2009 and 2008,
income from discontinued operations includes the operating
results of the properties sold during the year ended
December 31, 2010.
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, as well as the
noncontrolling partners’ share of property management fees,
interest on notes and other amounts 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, 2010, we allocated net
losses of $13.3 million to noncontrolling interests in
consolidated real estate partnerships as compared to net income
of $22.5 million allocated to these noncontrolling
interests during the year ended December 31, 2009, a
variance of $35.8 million. This change was substantially
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attributed to a decrease in the noncontrolling interest
partners’ share of income from discontinued operations,
which decreased primarily due to a reduction in gains on the
dispositions of real estate from 2009 to 2010.
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 interest partners’ 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.
Noncontrolling
Interests in Aimco Operating Partnership
Noncontrolling interests in Aimco Operating Partnership consist
of common partnership units and preferred OP Units held by
limited partners in the Aimco Operating Partnership other than
Aimco. We allocate the Aimco Operating Partnership’s income
or loss to the holders of common partnership units based on the
weighted average number of common partnership units (including
those held by Aimco) 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, 2010, compared to the year
ended December 31, 2009, the effect on our earnings of
income or loss attributable to noncontrolling interests in the
Aimco Operating Partnership changed by $1.5 million. This
change is primarily attributable to the $1.8 million excess
of the carrying amount over the consideration paid in our
repurchase of certain preferred OP Units during 2010, which
is reflected as a reduction of income allocated to preferred
noncontrolling interests in the Aimco Operating Partnership.
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 by $62.3 million. This
change is attributable to a decrease of $50.8 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 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.
Critical
Accounting Policies and Estimates
We prepare our consolidated financial statements in accordance
with 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
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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; | |
| • | 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 of our long-lived assets, including real estate and
investments in unconsolidated real estate partnerships. During
2011, we expect to market for sale certain real estate
properties that are inconsistent with our long-term investment
strategy. For any properties that are sold or meet the criteria
to be classified as held for sale during 2011, the reduction in
the estimated holding period for these assets may result in
additional impairment losses.
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, 2010 and 2009, we recorded impairment losses
of $0.4 million and $2.3 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. During the years
ended December 31, 2010, 2009 and 2008, we recognized
impairment losses of $12.7 million, $54.5 million and
$27.4 million, respectively, for properties included in
discontinued operations, primarily due to reductions in the
estimated holding periods for assets sold during these periods.
Notes
Receivable and Interest Income Recognition
Notes receivable from unconsolidated real estate partnerships
and from non-affiliates represent our two portfolio segments, as
defined in FASB Accounting Standards Update
2010-20,
Disclosures about the Credit Quality of Financing Receivables
and the Allowance for Credit Losses
, that we use to evaluate
for potential loan loss. 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. These loans are typically due on
demand, have no stated maturity date and may not require current
payments of principal or interest. Notes receivable from
non-affiliates have stated maturity dates and may require
current payments of principal and interest. Repayment of these
notes is subject to a number of variables, including the
performance and value of the underlying real estate properties
and the claims of unaffiliated mortgage lenders, which are
generally senior to our claims. Our notes receivable consist of
two classes: 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
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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.
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 update our cash flow projections of the borrowers annually,
and more frequently for certain loans depending on facts and
circumstances. 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. Factors
that affect this assessment include the fair value of the
partnership’s real estate, pending transactions to
refinance the partnership’s senior obligations or sell the
partnership’s real estate, and market conditions (current
and forecasted) related to a particular asset. 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, 2010, 2009 and 2008 we
recorded net provisions for losses on notes receivable of
$0.9 million, $21.5 million and $17.6 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
($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, 2010, 2009 and 2008, for
continuing and discontinued operations, we capitalized
$11.6 million, $9.8 million and $25.7 million of
interest costs, respectively, and $25.3 million,
$40.0 million and $78.1 million of site payroll and
indirect costs, respectively. The reductions from 2008 to 2010
are primarily due to a reduced level of redevelopment activities.
Funds
From Operations
Funds From Operations, or 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
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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 (loss) 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 Pro forma FFO and which is FFO attributable
to Aimco common stockholders (diluted), excluding operating real
estate impairments and preferred equity redemption related
amounts (adjusted for noncontrolling interests). Both operating
real estate impairment losses and preferred equity redemption
related amounts are items that periodically affect our operating
results. We exclude operating real estate impairment losses, net
of related income tax benefits and noncontrolling interests,
from our calculation of Pro forma 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 equity
redemption related amounts (gains or losses) from our
calculation of Pro forma FFO because such amounts are not
representative of our operating results. Similar to FFO, we
believe Pro forma 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 alternate measure of FFO similar to our Pro forma FFO
measure and there can be no assurance our basis for calculating
Pro forma FFO is comparable to those of other REITs that do
provide such a measure.
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For the years ended December 31, 2010, 2009 and 2008, our
FFO and Pro forma FFO are calculated as follows (in thousands):
| 2010 | 2009 | 2008 | ||||||||||
|
Net (loss) income attributable to Aimco common
stockholders(1)
|
$ | (125,318 | ) | $ | (114,840 | ) | $ | 351,314 | ||||
|
Adjustments:
|
||||||||||||
|
Depreciation and amortization
|
426,060 | 427,666 | 376,473 | |||||||||
|
Depreciation and amortization related to non-real estate assets
|
(14,552 | ) | (16,563 | ) | (17,267 | ) | ||||||
|
Depreciation of rental property related to noncontrolling
partners and unconsolidated entities(2)
|
(46,318 | ) | (38,219 | ) | (25,616 | ) | ||||||
|
Loss (gain) on dispositions of unconsolidated real estate and
other, net of noncontrolling partners’ interests(2)
|
623 | (12,845 | ) | (97,993 | ) | |||||||
|
Income tax expense (benefit) arising from disposition of
unconsolidated real estate and other
|
8 | 1,582 | (433 | ) | ||||||||
|
Deficit distributions to noncontrolling partners(3)
|
— | — | 38,124 | |||||||||
|
Discontinued operations:
|
||||||||||||
|
Gain on dispositions of real estate, net of noncontrolling
partners’ interest(2)
|
(74,169 | ) | (166,146 | ) | (618,108 | ) | ||||||
|
Depreciation of rental property, net of noncontrolling
partners’ interest(2)
|
7,973 | 59,845 | 121,208 | |||||||||
|
Deficit distributions to noncontrolling partners, net(3)
|
— | — | (30,798 | ) | ||||||||
|
Income tax expense arising from disposals
|
8,819 | 5,788 | 43,146 | |||||||||
|
Noncontrolling interests in Aimco Operating Partnership’s
share of above adjustments(4)
|
(21,521 | ) | (19,509 | ) | 21,667 | |||||||
|
Preferred stock dividends
|
52,079 | 52,215 | 55,190 | |||||||||
|
Preferred stock redemption related amounts
|
1,511 | (1,649 | ) | (1,482 | ) | |||||||
|
Amounts allocable to participating securities(5)
|
— | — | 6,985 | |||||||||
|
FFO
|
$ | 215,195 | $ | 177,325 | $ | 222,410 | ||||||
|
Preferred stock dividends
|
(52,079 | ) | (52,215 | ) | (55,190 | ) | ||||||
|
Preferred stock redemption related amounts
|
(1,511 | ) | 1,649 | 1,482 | ||||||||
|
Amounts allocable to participating securities(5)
|
(655 | ) | (773 | ) | (6,985 | ) | ||||||
|
Dividends/distributions on dilutive preferred securities
|
— | — | 4,292 | |||||||||
|
FFO attributable to Aimco common stockholders —
diluted
|
$ | 160,950 | $ | 125,986 | $ | 166,009 | ||||||
|
Operating real estate impairment losses, net of noncontrolling
partners’ interest and related income tax benefit(6)
|
17,325 | 59,250 | 26,905 | |||||||||
|
Preferred equity redemption related amounts(7)
|
(254 | ) | (1,649 | ) | (1,482 | ) | ||||||
|
Noncontrolling interests in Aimco Operating Partnership’s
share of above adjustments
|
(1,191 | ) | (4,304 | ) | (2,474 | ) | ||||||
|
Amounts allocable to participating securities(5)
|
(82 | ) | (448 | ) | — | |||||||
|
Pro forma FFO attributable to Aimco common
stockholders — diluted
|
$ | 176,748 | $ | 178,835 | $ | 188,958 | ||||||
|
FFO and Pro forma FFO attributable to Aimco common
stockholders — diluted(8)
|
||||||||||||
|
Weighted average common shares
outstanding — diluted (earnings per share)
|
116,369 | 114,301 | 88,690 | |||||||||
|
Dilutive common share equivalents
|
324 | 1,262 | 1,137 | |||||||||
|
Dilutive preferred securities
|
— | — | 1,490 | |||||||||
|
Total
|
116,693 | 115,563 | 91,317 | |||||||||
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. | |
| (3) | Prior to our adoption of the provisions of SFAS 160, which are codified in FASB ASC Topic 810 (see Note 2 to the consolidated financial statements in Item 8), we recognized deficit distributions to noncontrolling partners as charges in our statement of operations 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 |
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| 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 statement of operations. | ||
| (4) | During the years ended December 31, 2010, 2009 and 2008, the Aimco Operating Partnership had 6,037,616, 6,534,140 and 7,191,199 common OP Units outstanding and 2,340,029, 2,344,719 and 2,367,629 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 amounts in FFO. As a result, FFO for the years ended December 31, 2010, 2009 and 2008 includes redemption discounts, net of issuance costs, of $0.3 million, $1.6 million and $1.5 million, respectively, which we exclude from our calculation of Pro forma FFO. | |
| (8) | Represents the denominator for earnings per common share — diluted, calculated in accordance with GAAP, plus common share equivalents and preferred securities that are dilutive for FFO and Pro forma 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, proceeds from refinancings of existing property loans,
borrowings under new property loans and borrowings under our
revolving credit facility.
Our principal uses for liquidity include normal operating
activities, payments of principal and interest on outstanding
property debt, capital expenditures, dividends paid to
stockholders and distributions paid to noncontrolling interest
partners 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 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 availability of credit and its related effect on the overall
economy may affect our liquidity and future financing
activities, both through changes in interest rates and access to
financing. Currently, interest rates are low compared to
historical levels, many lenders have reentered the market, and
the CMBS market is showing signs of recovery. However, any
adverse changes in the lending environment could negatively
affect our liquidity. We believe we mitigate this exposure
through our continued focus on reducing our short and
intermediate term maturity risk, by refinancing such loans with
long-dated, fixed-rate property loans. If property financing
options become unavailable for our debt needs, we may consider
alternative sources of liquidity, such as reductions in certain
capital spending or proceeds from asset dispositions.
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 and preferred stock. At December 31, 2010, we
estimate that a 1.0% increase in
30-day
LIBOR
with constant credit risk spreads would reduce our net income
(or increase our net loss) attributable to Aimco common
stockholders by approximately $3.9 million on an annual
basis. The effect of an increase in
30-day
LIBOR
may be mitigated by the effect of our variable rate assets.
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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 debt to variable-rates. The
cost of financing through these arrangements is generally lower
than the fixed rate on the debt. As of December 31, 2010,
we had total rate of return swap positions with two financial
institutions with notional amounts totaling $277.3 million.
Swaps with notional amounts of $248.1 million and
$29.2 million had maturity dates in May 2012 and October
2012, respectively. During the year ended December 31,
2010, we received net cash receipts of $20.9 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.
During 2010, we refinanced certain of the underlying borrowings
subject to total rate of return swaps with long-dated,
fixed-rate property debt, and we expect to do the same with
certain of the underlying borrowings in 2011. The average
effective interest rate associated with our borrowings subject
to the total rate of return swaps was 1.6% at December 31,
2010. To the extent we are successful in refinancing additional
of the borrowings subject to the total rate of return swaps
during 2011, we anticipate the interest cost associated with
these borrowings will increase, which would negatively affect
our liquidity.
We periodically evaluate counterparty credit risk associated
with these arrangements. 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 liquidity.
However, at the current time, we have concluded we do not have
material exposure.
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 us. At
December 31, 2010, 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.
See
Derivative Financial Instruments
in Note 2 to
the consolidated financial statements in Item 8 for
additional information regarding these arrangements, including
the current swap maturity dates and disclosures regarding fair
value measurements.
As of December 31, 2010, we had the capacity to borrow
$260.3 million pursuant to our $300.0 million
revolving credit facility (after giving effect to
$39.7 million outstanding for undrawn letters of credit).
At December 31, 2010, we had $111.3 million in cash
and cash equivalents, an increase of $30.1 million from
December 31, 2009. At December 31, 2010, we had
$201.4 million of restricted cash, a decrease of
$17.3 million from December 31, 2009. Restricted cash
primarily consists 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 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, 2010, our net cash provided
by operating activities of $257.5 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 increased
$23.7 million compared with the year ended
December 31, 2009, primarily due to decreases in interest
paid and other working capital expenditures, including payments
related to our restructuring accruals, in 2010 as compared to
2009, partially offset by a decrease in property net operating
income, primarily due to property sales during 2009 and 2010.
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Investing
Activities
For the year ended December 31, 2010, our net cash provided
by investing activities of $86.4 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, 2010, we sold 51
consolidated properties. These properties were sold for an
aggregate sales price of $402.5 million, generating
proceeds totaling $387.9 million after the payment of
transaction costs and debt prepayment penalties. The
$387.9 million is inclusive of debt assumed by buyers. Net
cash proceeds from property sales were used primarily to repay
or pay down property debt and for other corporate purposes.
Capital expenditures totaled $178.9 million during the year
ended December 31, 2010, and consisted primarily of Capital
Improvements and Capital Replacements, and to a lesser extent
included spending for redevelopment projects and casualties. In
2011, we expect to increase our redevelopment spending on
conventional properties from approximately $30.0 million in
2010 to approximately $50.0 million to $75.0 million.
We generally fund capital additions with cash provided by
operating activities, working capital and property sales.
Financing
Activities
For the year ended December 31, 2010, net cash used in
financing activities of $313.8 million was primarily
attributed to debt principal payments, dividends paid to common
and preferred stockholders, distributions to noncontrolling
interests and our redemption and repurchase of preferred stock.
Proceeds from property loans and our issuance of preferred stock
partially offset the cash outflows.
Property
Debt
At December 31, 2010 and 2009, we had $5.5 billion and
$5.6 billion, respectively, in consolidated property debt
outstanding, which included $240.0 million at
December 31, 2009, of property debt classified within
liabilities related to assets held for sale. During the year
ended December 31, 2010, we refinanced or closed property
loans on 23 properties generating $449.4 million of
proceeds from borrowings with a weighted average interest rate
of 5.42%. Our share of the net proceeds after repayment of
existing debt, payment of transaction costs and distributions to
limited partners, was $138.9 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.
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. During 2010, we amended the
Credit Agreement to, among other things, increase the revolving
commitments from $180.0 million to $300.0 million,
extend the maturity from May 2012 to May 2014 (both inclusive of
a one year extension option) and reduce the LIBOR floor on the
facility’s base interest rate from 2.00% to 1.50%. During
2010, we also repaid in full the remaining $90.0 million
term loan that was outstanding as of December 31, 2009.
As of December 31, 2010, the Credit Agreement consisted of
$300.0 million of revolving loan commitments. 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 1.50% 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, 2013, and may be extended for an
additional year, subject to certain conditions, including
payment of a 35.0 basis point fee on the total revolving
commitments.
At December 31, 2010, we had no outstanding borrowings
under the revolving credit facility. The amount available under
the revolving credit facility at December 31, 2010, was
$260.3 million (after giving effect to $39.7 million
outstanding for undrawn letters of credit issued under the
revolving credit facility). The proceeds of revolving loans are
generally used to fund working capital and for other corporate
purposes.
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Our Credit Agreement requires us to satisfy covenant ratios of
earnings before interest, taxes and depreciation and
amortization to debt service and earnings to fixed charges of
1.40:1 and 1.20:1, respectively. For the twelve months ended
December 31, 2010, as calculated based on the provisions in
our Credit Agreement, we had a ratio of earnings before
interest, taxes and depreciation and amortization to debt
service of 1.57:1 and a ratio of earnings to fixed charges of
1.33:1. We expect to remain in compliance with these covenants
during 2011. In the first quarter of 2012, the covenant ratios
of earnings before interest, taxes and depreciation and
amortization to debt service and earnings to fixed charges
required by our Credit Agreement will increase to 1.50:1 and
1.30:1, respectively.
Equity
Transactions
During the year ended December 31, 2010, we paid cash
dividends or distributions totaling $53.4 million,
$46.7 million and $10.1 million to preferred
stockholders, common stockholders and noncontrolling interests
in the Aimco Operating Partnership, respectively.
During the year ended December 31, 2010, we sold
4,000,000 shares of our 7.75% Class U Cumulative
Preferred Stock for net proceeds of $96.1 million (after
deducting underwriting discounts and commissions and transaction
expenses of $3.3 million), and we sold 600,000 shares
of our Common Stock pursuant to an
At-The-Market,
or ATM, offering program we initiated during 2010, generating
$14.4 million of net proceeds. Aimco used the proceeds from
the Common Stock issuance primarily to fund the acquisition of
noncontrolling limited partnership interests for certain
consolidated real estate partnerships.
During the year ended December 31, 2010, we repurchased
20 shares, or $10.0 million in liquidation preference,
of CRA Preferred Stock for $7.0 million, and primarily
using the proceeds from our issuance of preferred stock
discussed above, we redeemed the 4,040,000 outstanding shares of
our 9.375% Class G Cumulative Preferred Stock for
$101.0 million plus accrued and unpaid dividends of
$2.2 million.
Pursuant to the ATM offering program discussed above, we may
issue up to 6.4 million additional shares of our Common
Stock. Additionally, 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.
During the year ended December 31, 2010, we paid cash
distributions of $44.5 million to noncontrolling interests
in consolidated real estate partnerships, primarily related to
property sales during 2010 and late 2009.
During the year ended December 31, 2010, we acquired the
remaining noncontrolling limited partnership interests in two
consolidated partnerships, in which our affiliates serve as
general partner, for total consideration of $19.9 million.
This consideration consisted of $12.5 million in cash,
$6.9 million in common OP Units and $0.5 million
of other consideration.
Contractual
Obligations
This table summarizes information contained elsewhere in this
Annual Report regarding payments due under contractual
obligations and commitments as of December 31, 2010
(amounts in thousands):
|
Less than
|
More than
|
|||||||||||||||||||
| Total | One Year | 1-3 Years | 3-5 Years | 5 Years | ||||||||||||||||
|
Long-term debt(1)
|
$ | 5,504,801 | $ | 288,990 | $ | 986,396 | $ | 941,339 | $ | 3,288,076 | ||||||||||
|
Interest related to long-term debt(2)
|
2,223,580 | 308,220 | 550,958 | 447,195 | 917,207 | |||||||||||||||
|
Leases for space(3)
|
14,400 | 6,334 | 5,780 | 1,436 | 850 | |||||||||||||||
|
Other obligations(4)
|
3,750 | 3,750 | — | — | — | |||||||||||||||
|
Total
|
$ | 7,746,531 | $ | 607,294 | $ | 1,543,134 | $ | 1,389,970 | $ | 4,206,133 | ||||||||||
| (1) | Includes scheduled principal amortization and maturity payments related to our long-term debt. | |
| (2) | Includes interest related to both fixed rate and variable rate debt. Interest related to variable rate debt is estimated based on the rate effective at December 31, 2010. Refer to Note 6 in the consolidated financial statements in Item 8 for a description of average interest rates associated with our debt. |
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| (3) | Inclusive of leased space that has been abandoned as part of our organizational restructuring in 2008. | |
| (4) | Represents a commitment to fund $3.8 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, 2010, we had $679.5 million (liquidation
value) of perpetual preferred stock outstanding with annual
dividend yields ranging from 1.5% (variable) to 8.0%, and
$82.6 million (liquidation value) of redeemable preferred
units of the Aimco Operating Partnership outstanding with annual
distribution yields ranging from 1.8% to 8.8%, or equal to the
dividends paid on Common Stock based on the conversion terms. As
further discussed in Note 11 to the consolidated financial
statements in Item 8, we have a potential obligation to
repurchase $20.0 million in liquidation preference our
Series A Community Reinvestment Act Preferred Stock over
the next two years for $14.0 million.
As discussed in Note 5 to the consolidated financial
statements in Item 8, we have notes receivable
collateralized by second mortgages 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 of approximately
$30.6 million and the assumption of approximately
$118.6 million in property debt. The obligor’s right
to exercise the put is dependent upon the achievement of
specified operating performance thresholds.
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, redevelopment projects, Capital Improvements and
Capital Replacements 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 or accounts 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.
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Table of Contents
As of December 31, 2010, on a consolidated basis, we had
approximately $470.3 million of variable-rate indebtedness
outstanding and $57.0 million of variable rate preferred
stock outstanding. Of the total debt subject to variable
interest rates, floating rate tax-exempt bond financing was
approximately $374.4 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 75% of the
30-day
LIBOR
rate. If this historical relationship continues, we estimate
that an increase in
30-day
LIBOR
of 100 basis points (75 basis points for tax-exempt
interest rates) with constant credit risk spreads would result
in net income and net income attributable to Aimco common
stockholders being reduced (or the amounts of net loss and net
loss attributable to Aimco common stockholders being increased)
by $3.9 million on an annual basis.
At December 31, 2010, we had approximately
$450.4 million in cash and cash equivalents, restricted
cash and notes receivable, a portion of which bear interest at
variable rates indexed to LIBOR-based rates, and which may
mitigate the effect of an increase in variable rates on our
variable-rate indebtedness and preferred stock discussed above.
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 $5.6 billion and
$5.7 billion at December 31, 2010 and 2009,
respectively. The combined carrying value of our consolidated
debt (including amounts reported in liabilities related to
assets held for sale) was approximately $5.5 billion and
$5.7 billion at December 31, 2010 and 2009,
respectively. See Note 6 and Note 7 to 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 $5.6 billion
to $5.3 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 $5.6 billion to $6.0 billion.
| 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.
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Table of Contents
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.
Management assessed the effectiveness of our internal control
over financial reporting as of December 31, 2010. 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, 2010, 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 2010 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, 2010, 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, 2010, 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, 2010 and 2009, and the related consolidated
statements of operations, equity, and cash flows for each of the
three years in the period ended December 31, 2010, and our
report dated February 24, 2011 expressed an unqualified
opinion thereon.
/s/
Ernst &
Young LLP
Denver, Colorado
February 24, 2011
45
Table of Contents
| Item 9B. | Other Information |
None.
PART III
| 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 2011 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 2010,”
“Outstanding Equity Awards at Fiscal Year End 2010,”
“Option Exercises and Stock Vested in 2010,”
“Potential Payments Upon Termination or Change in
Control” and “Corporate Governance Matters —
Director Compensation” in the proxy statement for our 2011
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 2011 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 2011 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 2011 annual meeting of stockholders
and is incorporated herein by reference.
46
Table of Contents
PART IV
| 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 Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2010, 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 2, 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 | Third Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 2, 2010 (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated September 3, 2010, is incorporated herein by this reference) | ||
| 10 | .5 | 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 | .6 | 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 | .7 | 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 | .8 | 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 | .9 | 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 | .10 | 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 | .11 | 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 | .12 | 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 | .13 | 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 | .14 | Ninth Amendment to Amended and Restated Senior Secured Credit Agreement, dated as of May 14, 2010, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., and AIMCO/Bethesda Holdings, Inc., as the borrowers, the guarantors and the pledgors named therein and the lenders party thereto (exhibit 10.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010, is incorporated herein by this reference) | ||
| 10 | .15 | Tenth Amendment to Senior Secured Credit Agreement, dated as of September 29, 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, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, and the lenders party thereto (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated September 29, 2010, is incorporated herein by this reference) | ||
| 10 | .16 | 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 | .17 | 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) | ||
48
Table of Contents
| Exhibit No. | Description | |||
| 10 | .18 | 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 | .19 | 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 | .20 | 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) * | ||
| 10 | .21 | 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 | .22 | 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 | .23 | 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 | .24 | 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 | .25 | 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 | ||
| 101 | .INS | XBRL Instance Document | ||
| 101 | .SCH | XBRL Taxonomy Extension Schema Document | ||
| 101 | .CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||
| 101 | .LAB | XBRL Taxonomy Extension Labels Linkbase Document | ||
| 101 | .PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ||
| 101 | .DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||
| (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 24, 2011
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 24, 2011 | ||||
|
/s/
Ernest
M. Freedman
|
Executive Vice President and
Chief Financial Officer (principal financial officer) |
February 24, 2011 | ||||
|
/s/
Paul
Beldin
|
Senior Vice President and
Chief Accounting Officer (principal accounting officer) |
February 24, 2011 | ||||
|
/s/
James
N. Bailey
|
Director | February 24, 2011 | ||||
|
/s/
Richard
S. Ellwood
|
Director | February 24, 2011 | ||||
|
/s/
Thomas
L. Keltner
|
Director | February 24, 2011 | ||||
|
/s/
J.
Landis Martin
|
Director | February 24, 2011 | ||||
|
/s/
Robert
A. Miller
|
Director | February 24, 2011 | ||||
|
/s/
Kathleen
M. Nelson
|
Director | February 24, 2011 | ||||
|
/s/
Michael
A. Stein
|
Director | February 24, 2011 | ||||
50
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, 2010 and 2009, and
the related consolidated statements of operations, equity and
cash flows for each of the three years in the period ended
December 31, 2010. 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, 2010 and
2009, and the consolidated results of its operations and its
cash flows for each of the three years in the period ended
December 31, 2010, 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.
As discussed in Note 2 to the consolidated financial
statements, during 2010 the Company adopted the provisions of
Financial Accounting Standards Board, or FASB, Accounting
Standards Update
2009-17,
Improvements to Financial Reporting by Enterprises Involved
with Variable Interest Entities,
and during 2009 adopted
FASB Statement of Financial Accounting Standards No. 160,
Noncontrolling Interests in Consolidated Financial
Statements — an amendment of ARB No. 51
(codified in FASB Accounting Standards Codification Topic
810).
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, 2010, 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 24, 2011 expressed an
unqualified opinion thereon.
/s/
ERNST &
YOUNG LLP
Denver, Colorado
February 24, 2011
F-2
Table of Contents
APARTMENT
INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED BALANCE SHEETS
As of December 31, 2010 and 2009
(In thousands, except share data)
CONSOLIDATED BALANCE SHEETS
As of December 31, 2010 and 2009
(In thousands, except share data)
| 2010 | 2009 | |||||||
|
ASSETS
|
||||||||
|
Real estate:
|
||||||||
|
Buildings and improvements
|
$ | 7,328,734 | $ | 7,130,309 | ||||
|
Land
|
2,139,431 | 2,121,044 | ||||||
|
Total real estate
|
9,468,165 | 9,251,353 | ||||||
|
Less accumulated depreciation
|
(2,934,912 | ) | (2,540,026 | ) | ||||
|
Net real estate ($867,053 and $850,398 related to VIEs)
|
6,533,253 | 6,711,327 | ||||||
|
Cash and cash equivalents ($34,808 and $23,366 related to VIEs)
|
111,325 | 81,260 | ||||||
|
Restricted cash ($55,186 and $56,179 related to VIEs)
|
201,406 | 218,660 | ||||||
|
Accounts receivable, net ($13,582 and $20,766 related to VIEs)
|
49,855 | 59,822 | ||||||
|
Accounts receivable from affiliates, net
|
8,392 | 23,744 | ||||||
|
Deferred financing costs, net
|
48,032 | 50,282 | ||||||
|
Notes receivable from unconsolidated real estate partnerships,
net
|
10,896 | 14,295 | ||||||
|
Notes receivable from non-affiliates, net
|
126,726 | 125,269 | ||||||
|
Investment in unconsolidated real estate partnerships ($54,374
and $99,460 related to VIEs)
|
59,282 | 105,324 | ||||||
|
Other assets
|
170,663 | 185,890 | ||||||
|
Deferred income tax assets, net
|
58,736 | 42,015 | ||||||
|
Assets held for sale
|
— | 288,580 | ||||||
|
Total assets
|
$ | 7,378,566 | $ | 7,906,468 | ||||
| LIABILITIES AND EQUITY | ||||||||
|
Non-recourse property tax-exempt bond financing ($212,245 and
$211,691 related to VIEs)
|
$ | 514,506 | $ | 574,926 | ||||
|
Non-recourse property loans payable ($442,055 and $385,453
related to VIEs)
|
4,943,277 | 4,761,493 | ||||||
|
Term loan
|
— | 90,000 | ||||||
|
Other borrowings ($15,486 and $15,665 related to VIEs)
|
47,018 | 53,057 | ||||||
|
Total indebtedness
|
5,504,801 | 5,479,476 | ||||||
|
Accounts payable
|
27,322 | 29,819 | ||||||
|
Accrued liabilities and other ($79,170 and $62,503 related to
VIEs)
|
250,106 | 286,328 | ||||||
|
Deferred income
|
150,815 | 178,878 | ||||||
|
Security deposits
|
35,322 | 34,052 | ||||||
|
Liabilities related to assets held for sale
|
— | 246,556 | ||||||
|
Total liabilities
|
5,968,366 | 6,255,109 | ||||||
|
Preferred noncontrolling interests in Aimco Operating Partnership
|
83,428 | 86,656 | ||||||
|
Preferred stock subject to repurchase agreement (Note 11)
|
20,000 | 30,000 | ||||||
|
Commitments and contingencies (Note 8)
|
— | — | ||||||
|
Equity:
|
||||||||
|
Perpetual Preferred Stock (Note 11)
|
657,601 | 660,500 | ||||||
|
Class A Common Stock, $0.01 par value, 422,157,736 and
426,157,736 shares authorized, 117,642,872 and
116,479,791 shares issued and outstanding, at
December 31, 2010 and 2009, respectively
|
1,176 | 1,165 | ||||||
|
Additional paid-in capital
|
3,070,882 | 3,072,665 | ||||||
|
Accumulated other comprehensive loss
|
(2,076 | ) | (1,138 | ) | ||||
|
Notes due on common stock purchases
|
(586 | ) | (1,392 | ) | ||||
|
Distributions in excess of earnings
|
(2,680,955 | ) | (2,492,082 | ) | ||||
|
Total Aimco equity
|
1,046,042 | 1,239,718 | ||||||
|
Noncontrolling interests in consolidated real estate partnerships
|
291,458 | 316,177 | ||||||
|
Common noncontrolling interests in Aimco Operating Partnership
|
(30,728 | ) | (21,192 | ) | ||||
|
Total equity
|
1,306,772 | 1,534,703 | ||||||
|
Total liabilities and equity
|
$ | 7,378,566 | $ | 7,906,468 | ||||
See notes to consolidated financial statements.
F-3
Table of Contents
APARTMENT
INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2010, 2009 and 2008
(In thousands, except per share data)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2010, 2009 and 2008
(In thousands, except per share data)
| 2010 | 2009 | 2008 | ||||||||||
|
REVENUES:
|
||||||||||||
|
Rental and other property revenues
|
$ | 1,109,381 | $ | 1,081,250 | $ | 1,080,048 | ||||||
|
Asset management and tax credit revenues
|
35,553 | 49,853 | 98,830 | |||||||||
|
Total revenues
|
1,144,934 | 1,131,103 | 1,178,878 | |||||||||
|
OPERATING EXPENSES:
|
||||||||||||
|
Property operating expenses
|
510,179 | 506,803 | 519,241 | |||||||||
|
Investment management expenses
|
14,487 | 15,779 | 24,784 | |||||||||
|
Depreciation and amortization
|
426,060 | 427,666 | 376,473 | |||||||||
|
Provision for operating real estate impairment losses
|
352 | 2,329 | — | |||||||||
|
Provision for impairment losses on real estate development assets
|
— | — | 91,138 | |||||||||
|
General and administrative expenses
|
53,365 | 56,640 | 80,376 | |||||||||
|
Other expenses, net
|
9,982 | 14,950 | 21,749 | |||||||||
|
Restructuring costs
|
— | 11,241 | 22,802 | |||||||||
|
Total operating expenses
|
1,014,425 | 1,035,408 | 1,136,563 | |||||||||
|
Operating income
|
130,509 | 95,695 | 42,315 | |||||||||
|
Interest income
|
11,131 | 9,091 | 19,543 | |||||||||
|
Provision for losses on notes receivable, net
|
(949 | ) | (21,549 | ) | (17,577 | ) | ||||||
|
Interest expense
|
(312,576 | ) | (312,534 | ) | (311,448 | ) | ||||||
|
Equity in losses of unconsolidated real estate partnerships
|
(23,112 | ) | (11,401 | ) | (4,736 | ) | ||||||
|
Gain on dispositions of unconsolidated real estate and other, net
|
10,675 | 21,570 | 97,403 | |||||||||
|
Loss before income taxes and discontinued operations
|
(184,322 | ) | (219,128 | ) | (174,500 | ) | ||||||
|
Income tax benefit
|
18,433 | 17,487 | 56,574 | |||||||||
|
Loss from continuing operations
|
(165,889 | ) | (201,641 | ) | (117,926 | ) | ||||||
|
Income from discontinued operations, net
|
76,265 | 156,841 | 744,928 | |||||||||
|
Net (loss) income
|
(89,624 | ) | (44,800 | ) | 627,002 | |||||||
|
Noncontrolling interests:
|
||||||||||||
|
Net loss (income) attributable to noncontrolling interests in
consolidated real estate partnerships
|
13,301 | (22,541 | ) | (155,727 | ) | |||||||
|
Net income attributable to preferred noncontrolling interests in
Aimco Operating Partnership
|
(4,964 | ) | (6,288 | ) | (7,646 | ) | ||||||
|
Net loss (income) attributable to common noncontrolling
interests in Aimco Operating Partnership
|
9,559 | 9,355 | (51,622 | ) | ||||||||
|
Total noncontrolling interests
|
17,896 | (19,474 | ) | (214,995 | ) | |||||||
|
Net (loss) income attributable to Aimco
|
(71,728 | ) | (64,274 | ) | 412,007 | |||||||
|
Net income attributable to Aimco preferred stockholders
|
(53,590 | ) | (50,566 | ) | (53,708 | ) | ||||||
|
Net income attributable to participating securities
|
— | — | (6,985 | ) | ||||||||
|
Net (loss) income attributable to Aimco common stockholders
|
$ | (125,318 | ) | $ | (114,840 | ) | $ | 351,314 | ||||
|
Earnings (loss) per common share — basic and diluted:
|
||||||||||||
|
Loss from continuing operations attributable to Aimco common
stockholders
|
$ | (1.48 | ) | $ | (1.78 | ) | $ | (2.09 | ) | |||
|
Income from discontinued operations attributable to Aimco common
stockholders
|
0.40 | 0.78 | 6.05 | |||||||||
|
Net (loss) income attributable to Aimco common stockholders
|
$ | (1.08 | ) | $ | (1.00 | ) | $ | 3.96 | ||||
|
Weighted average common shares outstanding — basic and
diluted
|
116,369 | 114,301 | 88,690 | |||||||||
|
Dividends declared per common share
|
$ | 0.30 | $ | 0.40 | $ | 7.48 | ||||||
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, 2010, 2009 and 2008
(In thousands)
For the Years Ended December 31, 2010, 2009 and 2008
(In thousands)
|
Accumulated
|
Notes Due on
|
|||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock |
Additional
|
Other
|
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, 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 Dividends
|
— | — | 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 loss
|
— | — | — | — | — | (1,565 | ) | — | — | (1,565 | ) | 190 | (1,375 | ) | ||||||||||||||||||||||||||||||
|
Net income
|
— | — | — | — | — | — | — | 412,007 | 412,007 | 207,349 | 619,356 | |||||||||||||||||||||||||||||||||
|
Distributions to noncontrolling interests
|
— | — | — | — | — | — | — | — | — | (318,014 | ) | (318,014 | ) | |||||||||||||||||||||||||||||||
|
Common Stock dividends
|
— | — | — | — | — | — | — | (674,185 | ) | (674,185 | ) | — | (674,185 | ) | ||||||||||||||||||||||||||||||
|
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 | |||||||||||||||||||||||||||||||||
|
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 | |||||||||||||||||||||||||||||||||
|
Common Stock issued pursuant to Special Dividends
|
— | — | 15,548 | 156 | 148,590 | — | — | — | 148,746 | — | 148,746 | |||||||||||||||||||||||||||||||||
|
Expense for dividends on forfeited shares and other
|
— | — | — | — | 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 loss
|
— | — | — | — | — | 1,111 | — | — | 1,111 | 297 | 1,408 | |||||||||||||||||||||||||||||||||
|
Net loss
|
— | — | — | — | — | — | — | (64,274 | ) | (64,274 | ) | 13,186 | (51,088 | ) | ||||||||||||||||||||||||||||||
|
Distributions to noncontrolling interests
|
— | — | — | — | — | — | — | — | — | (94,552 | ) | (94,552 | ) | |||||||||||||||||||||||||||||||
|
Common Stock dividends
|
— | — | — | — | — | — | — | (46,202 | ) | (46,202 | ) | — | (46,202 | ) | ||||||||||||||||||||||||||||||
|
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 | ||||||||||||||||||||||||||||||
|
Issuance of Preferred Stock
|
4,000 | 98,101 | — | — | (3,346 | ) | — | — | — | 94,755 | — | 94,755 | ||||||||||||||||||||||||||||||||
|
Repurchase of Preferred Stock
|
(4,040 | ) | (101,000 | ) | — | — | 4,511 | — | — | (1,511 | ) | (98,000 | ) | — | (98,000 | ) | ||||||||||||||||||||||||||||
|
Issuance of Common Stock
|
— | — | 600 | 6 | 14,040 | — | — | — | 14,046 | — | 14,046 | |||||||||||||||||||||||||||||||||
|
Aimco Operating Partnership units issued in exchange for
noncontrolling interests in consolidated real estate partnerships
|
— | — | — | — | — | — | — | — | — | 6,854 | 6,854 | |||||||||||||||||||||||||||||||||
|
Redemption of Aimco Operating Partnership units
|
— | — | — | — | — | — | — | — | — | (3,571 | ) | (3,571 | ) | |||||||||||||||||||||||||||||||
|
Repayment of notes receivable from officers
|
— | — | — | — | 4 | — | 573 | — | 577 | — | 577 | |||||||||||||||||||||||||||||||||
|
Officer and employee stock awards and purchases, net
|
— | — | 555 | 5 | 1,920 | — | 251 | — | 2,176 | — | 2,176 | |||||||||||||||||||||||||||||||||
|
Amortization of stock option and restricted stock compensation
cost
|
— | — | — | — | 8,182 | — | — | — | 8,182 | — | 8,182 | |||||||||||||||||||||||||||||||||
|
Contributions from noncontrolling interests
|
— | — | — | — | — | — | — | — | — | 7,422 | 7,422 | |||||||||||||||||||||||||||||||||
|
Adjustment to noncontrolling interests from consolidation of
entities
|
— | — | — | — | — | — | — | — | — | 6,324 | 6,324 | |||||||||||||||||||||||||||||||||
|
Adjustment to noncontrolling interests related to revision of
investment balances (Note 2)
|
— | — | — | — | — | — | — | — | — | (38,718 | ) | (38,718 | ) | |||||||||||||||||||||||||||||||
|
Effect of changes in ownership for consolidated entities
(Note 3)
|
— | — | — | — | (27,391 | ) | — | — | — | (27,391 | ) | 5,533 | (21,858 | ) | ||||||||||||||||||||||||||||||
|
Cumulative effect of a change in accounting principle
(Note 2)
|
— | — | — | — | — | — | — | (27,724 | ) | (27,724 | ) | 50,879 | 23,155 | |||||||||||||||||||||||||||||||
|
Change in accumulated other comprehensive loss
|
— | — | — | — | — | (938 | ) | — | — | (938 | ) | (167 | ) | (1,105 | ) | |||||||||||||||||||||||||||||
|
Other, net
|
— | — | 8 | — | 297 | — | (18 | ) | (751 | ) | (472 | ) | 1,876 | 1,404 | ||||||||||||||||||||||||||||||
|
Net loss
|
— | — | — | — | — | — | — | (71,728 | ) | (71,728 | ) | (22,860 | ) | (94,588 | ) | |||||||||||||||||||||||||||||
|
Distributions to noncontrolling interests
|
— | — | — | — | — | — | — | — | — | (47,827 | ) | (47,827 | ) | |||||||||||||||||||||||||||||||
|
Common Stock dividends
|
— | — | — | — | — | — | — | (35,080 | ) | (35,080 | ) | — | (35,080 | ) | ||||||||||||||||||||||||||||||
|
Preferred Stock dividends
|
— | — | — | — | — | — | — | (52,079 | ) | (52,079 | ) | — | (52,079 | ) | ||||||||||||||||||||||||||||||
|
Balances at December 31, 2010
|
24,900 | $ | 657,601 | 117,643 | $ | 1,176 | $ | 3,070,882 | $ | (2,076 | ) | $ | (586 | ) | $ | (2,680,955 | ) | $ | 1,046,042 | $ | 260,730 | $ | 1,306,772 | |||||||||||||||||||||
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, 2010, 2009 and 2008
(In thousands)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2010, 2009 and 2008
(In thousands)
| 2010 | 2009 | 2008 | ||||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
|
Net (loss) income
|
$ | (89,624 | ) | $ | (44,800 | ) | $ | 627,002 | ||||
|
Adjustments to reconcile net (loss) income to net cash provided
by operating activities:
|
||||||||||||
|
Depreciation and amortization
|
426,060 | 427,666 | 376,473 | |||||||||
|
Provision for impairment losses on real estate development assets
|
— | — | 91,138 | |||||||||
|
Provision for operating real estate impairment losses
|
352 | 2,329 | — | |||||||||
|
Equity in losses of unconsolidated real estate partnerships
|
23,112 | 11,401 | 4,736 | |||||||||
|
Gain on dispositions of unconsolidated real estate and other
|
(10,675 | ) | (21,570 | ) | (97,403 | ) | ||||||
|
Income tax benefit
|
(18,433 | ) | (17,487 | ) | (56,574 | ) | ||||||
|
Stock-based compensation expense
|
7,331 | 6,666 | 13,833 | |||||||||
|
Amortization of deferred loan costs and other
|
9,742 | 10,399 | 9,432 | |||||||||
|
Distributions of earnings from unconsolidated entities
|
1,231 | 4,893 | 14,619 | |||||||||
|
Discontinued operations:
|
||||||||||||
|
Depreciation and amortization
|
10,773 | 67,902 | 139,075 | |||||||||
|
Gain on disposition of real estate
|
(94,901 | ) | (221,770 | ) | (800,270 | ) | ||||||
|
Other adjustments to income from discontinued operations
|
20,210 | 52,531 | 70,585 | |||||||||
|
Changes in operating assets and operating liabilities:
|
||||||||||||
|
Accounts receivable
|
25,561 | 27,067 | 4,848 | |||||||||
|
Other assets
|
16,567 | 18,954 | 75,211 | |||||||||
|
Accounts payable, accrued liabilities and other
|
(69,806 | ) | (90,369 | ) | (32,337 | ) | ||||||
|
Total adjustments
|
347,124 | 278,612 | (186,634 | ) | ||||||||
|
Net cash provided by operating activities
|
257,500 | 233,812 | 440,368 | |||||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
|
Purchases of real estate
|
— | — | (112,655 | ) | ||||||||
|
Capital expenditures
|
(178,929 | ) | (300,344 | ) | (665,233 | ) | ||||||
|
Proceeds from dispositions of real estate
|
218,571 | 875,931 | 2,060,344 | |||||||||
|
Proceeds from sale of interests and distributions from real
estate partnerships
|
19,707 | 25,067 | 94,277 | |||||||||
|
Purchases of partnership interests and other assets
|
(9,399 | ) | (6,842 | ) | (28,121 | ) | ||||||
|
Originations of notes receivable
|
(1,190 | ) | (5,778 | ) | (6,911 | ) | ||||||
|
Proceeds from repayment of notes receivable
|
5,699 | 5,264 | 8,929 | |||||||||
|
Net increase in cash from consolidation and deconsolidation of
entities
|
13,128 | 98 | 241 | |||||||||
|
Other investing activities
|
18,788 | 36,858 | (6,002 | ) | ||||||||
|
Net cash provided by investing activities
|
86,375 | 630,254 | 1,344,869 | |||||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
|
Proceeds from property loans
|
449,384 | 772,443 | 949,549 | |||||||||
|
Principal repayments on property loans
|
(426,662 | ) | (1,076,318 | ) | (1,291,543 | ) | ||||||
|
Proceeds from tax-exempt bond financing
|
— | 15,727 | 50,100 | |||||||||
|
Principal repayments on tax-exempt bond financing
|
(66,466 | ) | (157,862 | ) | (217,361 | ) | ||||||
|
Payments on term loans
|
(90,000 | ) | (310,000 | ) | (75,000 | ) | ||||||
|
(Payments on) proceeds from other borrowings
|
(13,469 | ) | (40,085 | ) | 21,367 | |||||||
|
Proceeds from issuance of preferred stock
|
96,110 | — | — | |||||||||
|
Proceeds from issuance of Common Stock
|
14,350 | — | — | |||||||||
|
Repurchases and redemptions of preferred stock
|
(108,000 | ) | (4,200 | ) | (24,840 | ) | ||||||
|
Repurchases of Class A Common Stock
|
— | — | (502,296 | ) | ||||||||
|
Proceeds from Class A Common Stock option exercises
|
1,806 | — | 481 | |||||||||
|
Payment of Class A Common Stock dividends
|
(46,729 | ) | (95,335 | ) | (212,286 | ) | ||||||
|
Payment of preferred stock dividends
|
(53,435 | ) | (52,215 | ) | (55,215 | ) | ||||||
|
Payment of distributions to noncontrolling interests
|
(54,557 | ) | (120,361 | ) | (330,582 | ) | ||||||
|
Other financing activities
|
(16,142 | ) | (14,276 | ) | (8,396 | ) | ||||||
|
Net cash used in financing activities
|
(313,810 | ) | (1,082,482 | ) | (1,696,022 | ) | ||||||
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
30,065 | (218,416 | ) | 89,215 | ||||||||
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
81,260 | 299,676 | 210,461 | |||||||||
|
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$ | 111,325 | $ | 81,260 | $ | 299,676 | ||||||
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, 2010, 2009 and 2008
(In thousands)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2010, 2009 and 2008
(In thousands)
| 2010 | 2009 | 2008 | ||||||||||
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||||||
|
Interest paid
|
$ | 311,432 | $ | 348,341 | $ | 434,645 | ||||||
|
Cash paid for income taxes
|
1,899 | 4,560 | 13,780 | |||||||||
|
Non-cash transactions associated with the disposition of real
estate:
|
||||||||||||
|
Secured debt assumed in connection with the disposition of real
estate
|
157,629 | 314,265 | 157,394 | |||||||||
|
Issuance of notes receivable in connection with the disposition
of real estate
|
4,544 | 3,605 | 10,372 | |||||||||
|
Non-cash transactions associated with consolidation and
deconsolidation of real estate partnerships:
|
||||||||||||
|
Real estate, net
|
80,629 | 6,058 | 25,830 | |||||||||
|
Investments in and notes receivable primarily from affiliated
entities
|
41,903 | 4,326 | 4,497 | |||||||||
|
Restricted cash and other assets
|
3,290 | (1,682 | ) | 5,483 | ||||||||
|
Non-recourse debt
|
61,211 | 2,031 | 22,036 | |||||||||
|
Noncontrolling interests in consolidated real estate partnerships
|
57,099 | 2,225 | 11,896 | |||||||||
|
Accounts payable, accrued and other liabilities
|
20,640 | 4,544 | 2,124 | |||||||||
|
Other non-cash transactions:
|
||||||||||||
|
Redemption of common OP Units for Class A Common Stock
|
— | 7,085 | 4,182 | |||||||||
|
Cancellation of notes receivable from officers for Class A
Common Stock purchases
|
(251 | ) | (1,452 | ) | (385 | ) | ||||||
|
Common Stock issued pursuant to special dividends (Note 11)
|
— | (148,746 | ) | (487,477 | ) | |||||||
|
Issuance of common OP Units for acquisition of noncontrolling
interests in consolidated real estate partnerships (Note 3)
|
6,854 | — | — | |||||||||
See notes to consolidated financial statements.
F-7
Table of Contents
APARTMENT
INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010
NOTE 1 —
Organization
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. Our principal financial objective is to provide
predictable and attractive returns to our stockholders. Our
business plan to achieve this objective is to:
| • | own and operate a broadly diversified portfolio of primarily class “B/B+” assets with properties concentrated in the 20 largest markets in the United States (as measured by total apartment value, which is the estimated total market value of apartment properties in a particular market); | |
| • | improve our portfolio by selling assets with lower projected returns and reinvesting those proceeds through the purchase of new assets or additional investment in existing assets in our portfolio, including increased ownership or redevelopment; and | |
| • | provide financial leverage primarily by the use of non-recourse, long-dated, fixed-rate property debt and perpetual preferred equity. |
As of December 31, 2010, we:
| • | owned an equity interest in 219 conventional real estate properties with 68,972 units; | |
| • | owned an equity interest in 228 affordable real estate properties with 26,540 units; and | |
| • | provided services for or managed 27,182 units in 321 properties, primarily pursuant to long-term asset management agreements. In certain cases, we may indirectly own generally less than one percent of the operations of such properties through a syndication or other fund. |
Of these properties, we consolidated 217 conventional properties
with 67,668 units and 182 affordable properties with
22,207 units. These conventional and affordable properties
generated 87% and 13%, respectively, of our proportionate
property net operating income (as defined in
Note 17) during the year ended December 31, 2010.
Any reference to the number of properties or units is unaudited.
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, 2010, 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
partnership units, high performance partnership units and
partnership preferred units, which we refer to as common
OP Units, High Performance Units and preferred
OP Units, respectively. At December 31, 2010,
117,642,872 shares of our Common Stock were outstanding and
the Aimco Operating Partnership had 8,470,013 common partnership
units and equivalents outstanding for a combined total of
126,112,885 shares of Common Stock, common partnership
units and equivalents outstanding.
Except as the context otherwise requires, “we,”
“our,” “us” and the “Company”
refer to Aimco, the Aimco Operating Partnership and their
consolidated entities, collectively.
NOTE 2 —
Basis of Presentation and Summary of Significant Accounting
Policies
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.
Effective January 1, 2010, we adopted the provisions of
FASB Accounting Standards Update
2009-17,
Improvements to Financial Reporting by Enterprises Involved
with Variable Interest Entities,
or ASU
2009-17,
on
a prospective basis. ASU
2009-17,
which modified the guidance in FASB ASC Topic 810, introduced 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 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.
In determining whether we are the primary beneficiary of a VIE,
we consider qualitative and quantitative factors, including, but
not limited to: which activities most significantly impact the
VIEs economic performance and which party controls such
activities; the amount and characteristics of our investment;
the obligation or likelihood for us or other investors to
provide financial support; and the similarity with and
significance to 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 a result of our adoption of ASU
2009-17,
we
concluded we are the primary beneficiary of, and therefore
consolidated, 49 previously unconsolidated partnerships. Those
partnerships own, or control other entities that own, 31
apartment properties. Our direct and indirect interests in the
profits and losses of those partnerships range from less than 1%
to 35%, and average approximately 7%. We applied the
practicability exception for initial measurement of consolidated
VIEs to partnerships that own 13 properties and accordingly
recognized the consolidated assets, liabilities and
noncontrolling interests at fair value effective January 1,
2010 (refer to the Fair Value Measurements section for further
information regarding certain of the fair value amounts
recognized upon consolidation). We deconsolidated partnerships
that own ten apartment properties in which we hold an average
interest of approximately 55%. The initial consolidation and
deconsolidation of these partnerships resulted
F-9
Table of Contents
in increases (decreases), net of intercompany eliminations, in
amounts included in our consolidated balance sheet as of
January 1, 2010, as follows (in thousands):
| Consolidation | Deconsolidation | |||||||
|
Real estate, net
|
$ | 143,986 | $ | (86,151 | ) | |||
|
Cash and cash equivalents and restricted cash
|
25,056 | (7,425 | ) | |||||
|
Accounts and notes receivable
|
(12,249 | ) | 6,002 | |||||
|
Investment in unconsolidated real estate partnerships
|
31,579 | 11,302 | ||||||
|
Other assets
|
3,870 | (1,084 | ) | |||||
|
Total assets
|
$ | 192,242 | $ | (77,356 | ) | |||
|
Total indebtedness
|
$ | 129,164 | $ | (56,938 | ) | |||
|
Accrued and other liabilities
|
34,426 | (14,921 | ) | |||||
|
Total liabilities
|
163,590 | (71,859 | ) | |||||
|
Cumulative effect of a change in accounting principle:
|
||||||||
|
Noncontrolling interests
|
59,380 | (8,501 | ) | |||||
|
Aimco
|
(30,728 | ) | 3,004 | |||||
|
Total equity
|
28,652 | (5,497 | ) | |||||
|
Total liabilities and equity
|
$ | 192,242 | $ | (77,356 | ) | |||
In periods prior to 2009, when consolidated real estate
partnerships made cash distributions to partners in excess of
the carrying amount of the noncontrolling interest, we generally
recorded a charge to earnings equal to the amount of such excess
distribution, even though there was no economic effect or cost.
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. Consolidation of a partnership does not
ordinarily result in a change to the net amount of partnership
income or loss that is recognized using the equity method.
However, prior to 2009, when a partnership had a deficit in
equity, accounting principles generally accepted in the United
States of America, or GAAP, may have required the controlling
partner that consolidates the partnership to recognize any
losses that would otherwise be allocated to noncontrolling
partners, in addition to the controlling partner’s share of
losses. Certain of the partnerships that we consolidated in
accordance with ASU
2009-17
had
deficits in equity that resulted from losses or deficit
distributions during prior periods when we accounted for our
investment using the equity method. We would have been required
to recognize the noncontrolling partners’ share of those
losses had we consolidated those partnerships in those periods
prior to 2009. In accordance with our prospective transition
method for the adoption of ASU
2009-17
related to our consolidation of previously unconsolidated
partnerships, we recorded a $30.7 million charge to our
equity, the majority of which was attributed to the cumulative
amount of additional losses that we would have recognized had we
applied ASU
2009-17
in
periods prior to 2009. Substantially all of those losses were
attributable to real estate depreciation expense.
F-10
Table of Contents
Our consolidated statements of operations for the year ended
December 31, 2010, include the following amounts for the
entities and related real estate properties consolidated as of
January 1, 2010, in accordance with ASU
2009-17
(in
thousands):
| 2010 | ||||
|
Rental and other property revenues
|
$ | 32,216 | ||
|
Property operating expenses
|
(19,192 | ) | ||
|
Depreciation and amortization
|
(10,624 | ) | ||
|
Other expenses
|
(2,038 | ) | ||
|
Operating income
|
362 | |||
|
Interest income
|
33 | |||
|
Interest expense
|
(8,370 | ) | ||
|
Equity in losses of unconsolidated real estate partnerships
|
(17,895 | ) | ||
|
Gain on disposition of unconsolidated real estate and other
|
7,360 | |||
|
Net loss
|
(18,510 | ) | ||
|
Net loss attributable to noncontrolling interests in
consolidated real estate partnerships
|
19,328 | |||
|
Net income attributable to noncontrolling interests in the Aimco
Operating Partnership
|
(57 | ) | ||
|
Net income attributable to Aimco
|
$ | 761 | ||
Our equity in the results of operations of the partnerships and
related properties we deconsolidated in connection with our
adoption of ASU
2009-17
is
included in equity in earnings or losses of unconsolidated real
estate partnerships in our consolidated statements of operations
for the year ended December 31, 2010. The amounts related
to these entities are not significant.
As of December 31, 2010, we were the primary beneficiary
of, and therefore consolidated, approximately 137 VIEs, which
owned 96 apartment properties with 14,054 units. Real
estate with a carrying value of $867.1 million
collateralized $654.3 million of debt of those VIEs. Any
significant amounts of assets and liabilities related to our
consolidated VIEs are identified parenthetically on our
accompanying condensed consolidated balance sheets. The
creditors of the consolidated VIEs do not have recourse to our
general credit.
As of December 31, 2010, we also held variable interests in
276 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 329
apartment properties with 20,570 units. We are involved
with those VIEs as an equity holder, lender, management agent,
or through other contractual relationships. The majority of our
investments in unconsolidated VIEs, or approximately
$48.9 million at December 31, 2010, are held through
consolidated investment partnerships that are VIEs and in which
we generally hold a 1% or less general partner or equivalent
interest. Accordingly, substantially all of the investment
balances related to these unconsolidated VIEs are attributed to
the noncontrolling interests in the consolidated investment
partnerships that hold the investments in these unconsolidated
VIEs. Our maximum risk of loss related to our investment in
these VIEs is generally limited to our equity interest in the
consolidated investment partnerships, which is insignificant.
The remainder of our investment in unconsolidated VIEs, or
approximately $5.5 million at December 31, 2010, is
held through consolidated investment partnerships that are VIEs
and in which we hold substantially all of the economic
interests. Our maximum risk of loss related to our investment in
these VIEs is limited to our $5.5 million recorded
investment in such entities.
In addition to our investments in unconsolidated VIEs discussed
above, at December 31, 2010, we had in aggregate
$101.7 million of receivables from unconsolidated VIEs and
we had a contractual obligation to advance funds to certain
unconsolidated VIEs totaling $3.8 million. Our maximum risk
of loss associated with our lending and management activities
related to these unconsolidated VIEs is limited to these
amounts. We may be subject to additional losses to the extent of
any receivables relating to future provision of services to
these entities or financial support that we voluntarily provide.
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Acquisition
of Real Estate Assets and Related Depreciation and
Amortization
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 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
SFAS 141(R)’s revised definition of a business.
Accordingly, in connection with our 2009 adoption of
SFAS 141(R), we retroactively adjusted our results of
operations for the year ended December 31, 2008, to expense
$3.5 million of transaction costs incurred prior to
December 31, 2008. This retroactive adjustment is reflected
in investment management expenses in our accompanying
consolidated statements of operations and reduced basic and
diluted earnings per share amounts by $0.04 for the year ended
December 31, 2008.
Effective January 1, 2009, we recognize at fair value the
acquisition of properties or interests in partnerships that own
properties if the transaction results in consolidation and we
expense as incurred most related transaction costs. 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, 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, 2010 and 2009, deferred income in our
consolidated balance sheets includes below-market lease amounts
totaling $27.9 million and $31.8 million,
respectively, which are net of accumulated amortization of
$24.9 million and $21.0 million, respectively. During
the years ended December 31, 2010, 2009 and 2008, we
included amortization of below-market leases of
$3.9 million, $4.4 million and $4.4 million,
respectively, in rental and other property revenues in our
consolidated statements of operations. At December 31,
2010, our below-market
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leases had a weighted average amortization period of
7.0 years and estimated aggregate amortization for each of
the five succeeding years as follows (in millions):
| 2011 | 2012 | 2013 | 2014 | 2015 | ||||||||||||||||
|
Estimated amortization
|
$ | 3.6 | $ | 3.2 | $ | 2.8 | $ | 2.5 | $ | 2.3 | ||||||||||
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, 2010, 2009 and 2008, for
continuing and discontinued operations, we capitalized
$11.6 million, $9.8 million and $25.7 million of
interest costs, respectively, and $25.3 million,
$40.0 million and $78.1 million of site payroll and
indirect costs, respectively.
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
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.
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, 2010 and 2009, we
recorded real estate impairment
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losses of $0.4 million and $2.3 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 $0.2 million, $18.3 million and
$10.7 million, and resulted in decreases in basic and
diluted earnings per share of less than $0.01, $0.16 and $0.12,
for the years ended December 31, 2010, 2009 and 2008,
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 $2.1 million and $1.4 million as of
December 31, 2010 and 2009, 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 $1.0 million and
$0.3 million as of December 31, 2010 and 2009,
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
$1.5 million and $1.9 million as of December 31,
2010 and 2009, 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.
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.
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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
and from non-affiliates represent our two portfolio segments, as
defined in FASB Accounting Standards Update
2010-20,
Disclosures about the Credit Quality of Financing Receivables
and the Allowance for Credit Losses
, that we use to evaluate
for potential loan loss. 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. These loans are typically due on
demand, have no stated maturity date and may not require current
payments of principal or interest. Notes receivable from
non-affiliates have stated maturity dates and may require
current payments of principal and interest. Repayment of these
notes is subject to a number of variables, including the
performance and value of the underlying real estate properties
and the claims of unaffiliated mortgage lenders, which are
generally senior to our claims. Our notes receivable consist of
two classes: 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 update our cash flow projections of the borrowers annually,
and more frequently for certain loans depending on facts and
circumstances. 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. Factors
that affect this assessment include the fair value of the
partnership’s real estate, pending transactions to
refinance the partnership’s senior obligations or sell the
partnership’s real estate, and market conditions (current
and forecasted) related to a particular asset. 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 our notes receivable.
Investments
in Unconsolidated Real Estate Partnerships
We own general and limited partner interests in partnerships
that either directly, or through interests in other real estate
partnerships, 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, inclusive
of our share of impairments and property disposition gains
recognized by and related to such entities. 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
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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. See Note 4 for
further discussion of Investments in Unconsolidated Real Estate
Partnerships.
Intangible
Assets
At December 31, 2010 and 2009, other assets included
goodwill associated with our reportable segments of
$67.1 million and $71.8 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 2010, 2009 or 2008.
During the years ended December 31, 2010 and 2009, we
allocated $4.7 million and $10.1 million,
respectively, of goodwill related to our reportable segments
(conventional and affordable real estate operations) 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,
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 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, 2010, 2009 and 2008, we capitalized software
development costs totaling $8.7 million, $5.6 million
and $20.9 million, respectively. At December 31, 2010
and 2009, other assets included $28.1 million and
$29.7 million of net capitalized software, respectively.
During the years ended December 31, 2010, 2009 and 2008, we
recognized amortization of capitalized software of
$10.2 million, $11.5 million and $10.0 million,
respectively, which is included in depreciation and amortization
in our consolidated statements of operations.
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. There were no similar write-offs during the
years ended December 31, 2010 or 2009.
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 statements of
operations, of the amounts of consolidated net income (loss) and
other comprehensive income (loss) 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.
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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.
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
operations for the year ended December 31, 2008, 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
exceeds 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 operations 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 legal obligation and financial capacity to
contribute additional capital to the partnership. For the year
ended December 31, 2008, we recorded charges for
partnership losses resulting from depreciation of approximately
$9.0 million 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 $291.5 million at
December 31, 2010. 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, 2010. 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.
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. The effect on our equity of our
purchase of additional interests in consolidated real estate
partnerships during the year ended December 31, 2010 is
shown in the consolidated statement of equity and further
discussed in Note 3. Our purchase of additional interests
in consolidated real estate partnerships had no significant
effect on our equity during the years ended December 31,
2009 and 2008. 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
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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.
Noncontrolling
Interests in Aimco Operating Partnership
Noncontrolling interests in Aimco Operating Partnership consist
of common OP Units, High Performance Units and preferred
OP Units held by limited partners in the Aimco Operating
Partnership other than Aimco. 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 partnership units (including those held
by us) and High Performance Units outstanding during the period.
During 2010, 2009 and 2008, the holders of common OP Units
and equivalents had a weighted average ownership interest in the
Aimco Operating Partnership of was approximately 7%, 7% and 10%,
respectively. Holders of the preferred OP Units participate
in the Aimco Operating Partnership’s income or loss only to
the extent of their preferred distributions. See Note 10
for further information regarding noncontrolling interests in
the Aimco Operating Partnership.
Revenue
Recognition
Our properties have operating leases with apartment residents
with terms averaging 12 months. 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, 2010, 2009 and 2008, for both continuing and
discontinued operations, total advertising expense was
$14.2 million, $21.7 million and $31.8 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. 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 for the partnerships in exchange for fees over the
expected
F-18
Table of Contents
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 year ended December 31, 2010, we recognized a
net $1.0 million reduction of syndication fees due to our
determination that certain syndication fees receivable were
uncollectible. We recognized no syndication fee income during
the year ended December 31, 2009. During the year ended
December 31, 2008, we recognized syndication fee income of
$3.4 million. During the years ended December 31,
2010, 2009 and 2008 we recognized revenue associated with the
delivery of tax benefits of $28.9 million,
$36.6 million and $29.4 million, respectively. At
December 31, 2010 and 2009, $114.7 million and
$148.1 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 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. The interest rate caps are not
material to our financial position or results of operations.
As of December 31, 2010 and 2009, we had interest rate
swaps with aggregate notional amounts of $52.3 million, and
recorded fair values of $2.7 million and $1.6 million,
respectively, reflected in accrued liabilities and other in our
consolidated balance sheets. At December 31, 2010, these
interest rate swaps had a weighted average term of
10.1 years. We have designated these interest rate swaps as
cash flow hedges and
F-19
Table of Contents
recognize any changes in their fair value as an adjustment of
accumulated other comprehensive income (loss) within equity to
the extent of their effectiveness. Changes in the fair value of
these instruments and the related amounts of such changes that
were reflected as an adjustment of accumulated other
comprehensive loss within equity and as an adjustment of
earnings (ineffectiveness) are discussed in the foregoing Fair
Value Measurements section.
If the forward rates at December 31, 2010 remain constant,
we estimate that during the next twelve months, we would
reclassify into earnings approximately $1.6 million of the
unrealized losses in accumulated other comprehensive loss. If
market interest rates increase above the 3.43% weighted average
fixed rate under these interest rate swaps we will benefit from
net cash payments due to us from our counterparty to the
interest rate swaps.
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 $276.9 million
and $352.7 million at December 31, 2010 and 2009,
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 the carrying amount of property loans
payable by $4.8 million and $5.2 million for the years
ended December 31, 2010 and 2009, respectively, and reduced
the carrying amount of property loans payable by
$20.1 million for the year ended December 31, 2008,
with offsetting adjustments to the swap values in accrued
liabilities, resulting in no net effect on net income. Refer to
the foregoing Fair Value Measurements section for further
discussion of fair value measurements related to these
arrangements. During 2010, 2009 and 2008, we determined these
hedges were fully effective and accordingly we made no
adjustments to interest expense for ineffectiveness.
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Table of Contents
At December 31, 2010, the weighted average fixed receive
rate under the total return swaps was 6.8% and the weighted
average variable pay rate was 1.6%, based on the applicable
SIFMA and
30-day
LIBOR
rates effective as of that date. Further information related to
our total return swaps as of December 31, 2010 is as
follows (dollars in millions):
|
Weighted Average Swap
|
||||||||||||||||||||
|
Weighted
|
Year of
|
Variable Pay Rate at
|
||||||||||||||||||
|
Debt
|
Year of Debt
|
Average Debt
|
Swap Notional
|
Swap
|
December 31,
|
|||||||||||||||
| Principal | Maturity | Interest Rate | Amount | Maturity | 2010 | |||||||||||||||
| $ | 29.2 | 2012 | 7.5 | % | $ | 29.2 | 2012 | 1.6 | % | |||||||||||
| 24.0 | 2015 | 6.9 | % | 24.0 | 2012 | 1.1 | % | |||||||||||||
| 93.0 | 2031 | 7.4 | % | 93.0 | 2012 | 1.1 | % | |||||||||||||
| 106.1 | 2036 | 6.2 | % | 106.5 | 2012 | 2.2 | % | |||||||||||||
| 12.1 | 2038 | 5.5 | % | 12.1 | 2012 | 1.0 | % | |||||||||||||
| 12.5 | 2048 | 6.5 | % | 12.5 | 2012 | 1.0 | % | |||||||||||||
| $ | 276.9 | $ | 277.3 | |||||||||||||||||
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.
Real
Estate
From time to time, we may be required to recognize an impairment
loss to the extent the carrying amount of a property exceeds the
estimated fair value, for properties classified as held for use,
or the estimated fair value, less estimated selling costs, for
properties classified as held for sale. Additionally, we are
generally required to initially measure real estate recognized
in connection with our consolidation of real estate partnerships
at fair value.
F-21
Table of Contents
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 recognized interest rate swaps at their estimated fair value.
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.
Non-recourse
Property Debt
We recognize changes in the fair value of the non-recourse
property debt subject to total rate of return swaps discussed
above, which we have designated as fair value hedges.
Additionally, we are generally required
F-22
Table of Contents
to initially measure non-recourse property debt recognized in
connection with our consolidation of real estate partnerships at
fair value.
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, 2010, 2009
and 2008 (and the changes in fair value between such dates) for
significant items measured in our consolidated balance sheets at
fair value on a recurring basis (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
|
Subject to Total
|
|||||||||||||||
|
Rate
|
Total Rate of
|
Rate of Return
|
||||||||||||||
| Swaps | Return Swaps | Swaps | Total | |||||||||||||
|
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 | ) | |||||
|
Unrealized gains (losses) included in earnings(1)(2)
|
(45 | ) | 4,765 | (4,765 | ) | (45 | ) | |||||||||
|
Realized gains (losses) included in earnings
|
— | — | — | — | ||||||||||||
|
Unrealized gains (losses) included in equity
|
(1,105 | ) | — | — | (1,105 | ) | ||||||||||
|
Fair value at December 31, 2010
|
$ | (2,746 | ) | $ | (19,542 | ) | $ | 19,542 | $ | (2,746 | ) | |||||
| (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 consolidated statements of operations. |
The table below presents information regarding significant
amounts measured at fair value in our consolidated financial
statements on a nonrecurring basis during the years ended
December 31, 2010 and 2009, all of which were based, in
part, on significant unobservable inputs classified within
Level 3 of the valuation hierarchy (in thousands):
| 2010 | 2009 | |||||||||||||||
|
Fair Value
|
Fair Value
|
|||||||||||||||
| Measurement | Gain (loss) | Measurement | Gain (loss) | |||||||||||||
|
Real estate (impairment losses)(1)
|
$ | 62,111 | $ | (12,043 | ) | $ | 425,345 | $ | (48,542 | ) | ||||||
|
Real estate (newly consolidated)(2)
|
117,083 | 1,104 | 10,798 | — | ||||||||||||
|
Property debt (newly consolidated)(2)
|
83,890 | — | 2,031 | — | ||||||||||||
|
Investment in Casden Properties LLC (Note 5)
|
— | — | 10,000 | (20,740 | ) | |||||||||||
F-23
Table of Contents
| (1) | During the year ended December 31, 2010 and 2009, we reduced the aggregate carrying amounts of $74.2 million and $473.9 million, respectively, for real estate assets classified as held for sale to their estimated fair value, less estimated costs to sell. These impairment losses recognized generally resulted from a reduction in the estimated holding period for these assets. In periods prior to their classification as held for sale, we evaluated the recoverability of their carrying amounts based on an analysis of the undiscounted cash flows over the then anticipated holding period. | |
| (2) | In connection with our adoption of ASU 2009-17 (see preceding discussion of Variable Interest Entities) and reconsideration events during the year ended December 31, 2010, we consolidated 17 partnerships at fair value. With the exception of such partnerships’ investments in real estate properties and related non-recourse property debt obligations, we determined the carrying amounts of the related assets and liabilities approximated their fair values. The difference between our recorded investments in such partnerships and the fair value of the assets and liabilities recognized in consolidation, resulted in an adjustment of consolidated equity (allocated between Aimco and noncontrolling interests) for those partnerships consolidated in connection with our adoption of ASU 2009-17. For the partnerships we consolidated at fair value due to reconsideration events during the year ended December 31, 2010, the difference between our recorded investments in such partnerships and the fair value of the assets, liabilities and noncontrolling interests recognized upon consolidation resulted in our recognition of a gain, which is included in gain on disposition of unconsolidated real estate and other in our consolidated statement of operations for the year ended December 31, 2010. We recognized no similar gain as a result of our consolidation of partnerships during the year ended December 31, 2009. |
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,
2010, due to their relatively short-term nature and high
probability of realization. We estimate fair value for our notes
receivable and debt instruments as discussed in the preceding
Fair Value Measurements section The estimated aggregate
fair value of our notes receivable was approximately
$126.0 million and $126.1 million at December 31,
2010 and 2009, respectively, as compared to carrying amounts of
$137.6 million and $139.6 million, 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 $5.6 billion and
$5.7 billion at December 31, 2010 and 2009,
respectively, as compared to the carrying amounts of
$5.5 billion and $5.7 billion, 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.
F-24
Table of Contents
Certain of our operations or a portion thereof, including
property management, asset management and risk management, 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 and investment partners that cannot be offered
directly by a 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 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. The matter is
currently pending administratively before IRS Appeals and the
IRS has made no determination. 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. Approximately
$89.3 million of our notes receivable, or 1.2% of the
carrying amount of our total assets, at December 31, 2010,
are collateralized by 84 buildings with 1,596 residential units
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 diversification
of the properties that serve as the primary source of repayment
of the notes.
At December 31, 2010, we had total rate of return swap
positions with two financial institutions totaling
$277.3 million. 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.
Comprehensive
Income or Loss
As discussed in the Derivative Financial Instruments section, we
recognize changes in the fair value of our cash flow hedges as
changes in accumulated other comprehensive loss within equity.
For the years ended December 31, 2010 and 2009, before the
effects of noncontrolling interests, our consolidated
comprehensive loss totaled $90.7 million and
$43.4 million, respectively, and for the year ended
December 31, 2008, our consolidated comprehensive income
totaled $624.9 million.
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).
F-25
Table of Contents
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.
Reclassifications
and Adjustments
Certain items included in the 2009 and 2008 financial statements
have been reclassified to conform to the current presentation,
including adjustments for discontinued operations.
During the three months ended March 31, 2010, we reduced
the investment and noncontrolling interest balances for certain
of our consolidated partnerships by $38.7 million related
to excess amounts allocated to the investments upon our
consolidation of such partnerships.
| NOTE 3 — | Real Estate and Partnership Acquisitions and Other Significant Transactions |
Real
Estate Acquisitions
During the years ended December 31, 2010 and 2009, we did
not acquire any significant 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.
Acquisitions
of Noncontrolling Partnership Interests
During the year ended December 31, 2010, we acquired the
remaining noncontrolling limited partnership interests in two
consolidated partnerships, in which our affiliates serve as
general partner, for total consideration of $19.9 million.
This consideration consisted of $12.5 million in cash,
$6.9 million in common OP Units and $0.5 million
of other consideration. We also acquired for $1.8 million
additional noncontrolling interests in a consolidated
partnership for $1.2 million in cash and other
consideration. We recognized the $27.4 million excess of
the consideration paid over the carrying amount of the
noncontrolling interests acquired as an adjustment of additional
paid-in capital within Aimco equity. During the years ended
December 31, 2009 and 2008, we did not acquire any
significant noncontrolling limited partnership interests.
Disposition
of Unconsolidated Real Estate and Other
During the year ended December 31, 2010, we recognized
$10.7 million in net gains on disposition of unconsolidated
real estate and other. These gains were primarily related to
sales of investments held by partnerships we consolidated in
accordance with our adoption of ASU
2009-17
(see
Note 2) and in which we generally hold a nominal
general partner interest. Accordingly, these gains were
primarily attributed to the noncontrolling interests in these
partnerships.
During the year ended December 31, 2009, we recognized
$21.6 million in net 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 below),
$5.5 million from our disposition of interests in
unconsolidated real estate partnerships and $3.5 million of
net gains related to various other transactions.
During the year ended December 31, 2008, we recognized
$97.4 million in net 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.
F-26
Table of Contents
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 unconsolidated real estate and other in our
consolidated statement of operations for the year ended
December 31, 2009. This gain was partially offset by a
$1.0 million provision for income tax. We also had a note
receivable from another principal in the group purchasing
organization, which was 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 operations for the year
ended December 31, 2009. During the year ended
December 31, 2010, we received payment of the remaining
outstanding $1.6 million balance on the note.
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.
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, 2010 and 2009, the remaining accruals
associated with these restructuring activities were
$4.7 million and $6.9 million, respectively, for
estimated unrecoverable lease obligations, which will be paid
over the remaining terms of the affected leases, and at
December 31, 2009, we had $4.7 million accrued for
severance and personnel related costs, which were paid during
the first quarter of 2010.
| NOTE 4 — | Investments in Unconsolidated Real Estate Partnerships |
We owned general and limited partner interests in unconsolidated
real estate partnerships owning approximately 173, 77 and 85
properties at December 31, 2010, 2009 and 2008,
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%.
F-27
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, 2010, 2009 and
2008 (in thousands):
| 2010 | 2009 | 2008 | ||||||||||
|
Real estate, net of accumulated depreciation
|
$ | 624,913 | $ | 95,226 | $ | 122,788 | ||||||
|
Total assets
|
676,373 | 122,543 | 155,444 | |||||||||
|
Secured and other notes payable
|
494,967 | 101,678 | 122,859 | |||||||||
|
Total liabilities
|
726,480 | 145,637 | 175,681 | |||||||||
|
Partners’ deficit
|
(50,107 | ) | (23,094 | ) | (20,237 | ) | ||||||
|
Rental and other property revenues
|
145,598 | 55,366 | 69,392 | |||||||||
|
Property operating expenses
|
(93,521 | ) | (34,497 | ) | (42,863 | ) | ||||||
|
Depreciation expense
|
(36,650 | ) | (10,302 | ) | (12,640 | ) | ||||||
|
Interest expense
|
(40,433 | ) | (11,103 | ) | (17,182 | ) | ||||||
|
(Impairment losses)/Gain on sale, net
|
(29,316 | ) | 8,482 | 5,391 | ||||||||
|
Net income (loss)
|
(58,274 | ) | 6,622 | 1,398 | ||||||||
The increase in the number of partnerships we account for using
the equity method and the related selected combined financial
information for such partnerships is primarily attributed to our
adoption of ASU
2009-17
(see
Note 2), pursuant to which we consolidated 18 investment
partnerships that hold investments in other unconsolidated real
estate partnerships. Prior to our consolidation of these
investment partnerships, we had no recognized basis in the
investment partnerships’ investments in the unconsolidated
real estate partnerships and accounted for our indirect
interests in these partnerships using the cost method. We
generally hold a nominal general partnership interest in these
investment partnerships and substantially all of the assets and
liabilities of these investment partnerships are attributed to
the noncontrolling interests in such entities.
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 and our
consolidation of investment partnerships and their investments
in unconsolidated real estate partnerships at fair values that
may exceed the historical carrying amount of the unconsolidated
partnerships’ net assets, our aggregate investment in
unconsolidated partnerships at December 31, 2010 and 2009
of $59.3 million and $105.3 million, respectively,
exceeds our share of the underlying historical partners’
deficit of the partnerships by approximately $63.0 million
and $109.5 million, respectively.
| NOTE 5 — | Notes Receivable |
The following table summarizes our notes receivable at
December 31, 2010 and 2009 (in thousands):
| 2010 | 2009 | |||||||||||||||||||||||
|
Unconsolidated
|
Unconsolidated
|
|||||||||||||||||||||||
|
Real Estate
|
Non-
|
Real Estate
|
Non-
|
|||||||||||||||||||||
| Partnerships | Affiliates | Total | Partnerships | Affiliates | Total | |||||||||||||||||||
|
Par value notes
|
$ | 10,821 | $ | 17,899 | $ | 28,720 | $ | 11,353 | $ | 20,862 | $ | 32,215 | ||||||||||||
|
Discounted notes
|
980 | 145,888 | 146,868 | 5,095 | 141,468 | 146,563 | ||||||||||||||||||
|
Allowance for loan losses
|
(905 | ) | (37,061 | ) | (37,966 | ) | (2,153 | ) | (37,061 | ) | (39,214 | ) | ||||||||||||
|
Total notes receivable
|
$ | 10,896 | $ | 126,726 | $ | 137,622 | $ | 14,295 | $ | 125,269 | $ | 139,564 | ||||||||||||
|
Face value of discounted notes
|
$ | 31,755 | $ | 158,621 | $ | 190,376 | $ | 37,709 | $ | 155,848 | $ | 193,557 | ||||||||||||
Included in notes receivable from unconsolidated real estate
partnerships at December 31, 2010 and 2009, are
$2.3 million and $2.4 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 an annual interest rate of 12.0%.
Included in the notes receivable from non-affiliates at
December 31, 2010 and 2009, are $103.9 million and
$102.2 million, respectively, in notes that were secured by
interests in real estate or interests in real estate
F-28
Table of Contents
partnerships. We earn interest on these secured notes receivable
at various annual interest rates ranging between 3.5% and 12.0%
and averaging 4.1%.
Notes receivable from non-affiliates at December 31, 2010
and 2009, include notes receivable totaling $89.3 million
and $87.4 million, respectively, from certain 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
$3.8 million had not been funded as of December 31,
2010. 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 84
buildings containing 1,596 residential units and 43 commercial
spaces in West Harlem, 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 operations,
totaled $0.9 million in 2010, $0.9 million in 2009 and
$0.7 million in 2008. 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 from a non-affiliate and through
2008 were amortizing the discounted value of the investment to
the $50.0 million previously estimated to be collectible,
through the initial dissolution date of the entity. As a result
of a declines in land values in Southern California, we
determined our recorded investment amount was not fully
recoverable, and accordingly recognized impairment losses of
$20.7 million ($12.4 million net of tax) during the
three months ended December 31, 2009 and $16.3 million
($10.0 million net of tax) during the three months ended
December 31, 2008.
The activity in the allowance for loan losses related to our
notes receivable from unconsolidated real estate partnerships
and non-affiliates, in total for both par value notes and
discounted notes, for the years ended December 31, 2010 and
2009, is as follows (in thousands):
|
Unconsolidated
|
||||||||
|
Real Estate
|
Non-
|
|||||||
| Partnerships | Affiliates | |||||||
|
Balance at December 31, 2008
|
$ | (4,863 | ) | $ | (17,743 | ) | ||
|
Provisions for losses on notes receivable
|
(2,231 | ) | — | |||||
|
Recoveries of losses on notes receivable
|
— | 1,422 | ||||||
|
Provisions for impairment loss on investment in Casden
Properties LLC
|
— | (20,740 | ) | |||||
|
Write offs charged against allowance
|
4,367 | — | ||||||
|
Net reductions due to consolidation of real estate partnerships
and property dispositions
|
574 | — | ||||||
|
Balance at December 31, 2009
|
$ | (2,153 | ) | $ | (37,061 | ) | ||
|
Provisions for losses on notes receivable
|
(304 | ) | (220 | ) | ||||
|
Recoveries of losses on notes receivable
|
116 | — | ||||||
|
Write offs charged against allowance
|
639 | 220 | ||||||
|
Net reductions due to consolidation of real estate partnerships
and property dispositions
|
797 | — | ||||||
|
Balance at December 31, 2010
|
$ | (905 | ) | $ | (37,061 | ) | ||
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Table of Contents
In addition to the provisions shown above, during the year ended
December 31, 2010, we wrote off $0.5 million of
receivables that were not reserved through the allowance.
Additional information regarding our par value notes and
discounted notes impaired during the years ended
December 31, 2010 and 2009 is presented in the table below
(in thousands):
| 2010 | 2009 | |||||||
|
Par value notes:
|
||||||||
|
Allowance for losses recognized
|
$ | (796 | ) | $ | (1,158 | ) | ||
|
Carrying amounts of loans prior to impairments
|
1,115 | 3,819 | ||||||
|
Average recorded investment in impaired loans
|
1,255 | 7,589 | ||||||
|
Interest income recognized related to impaired loans
|
75 | 84 | ||||||
|
Discounted notes:
|
||||||||
|
Allowance for losses recognized
|
$ | (110 | ) | $ | (996 | ) | ||
|
Carrying amounts of loans prior to impairments
|
110 | 1,580 | ||||||
|
Average recorded investment in impaired loans
|
538 | 3,503 | ||||||
|
Interest income recognized related to impaired loans
|
— | — | ||||||
The remaining $27.0 million of our par value notes
receivable at December 31, 2010, is estimated to be
collectible and, therefore, interest income on these par value
notes is recognized as earned. Of our total par value notes
outstanding at December 31, 2010, notes with balances of
$17.5 million have stated maturity dates and the remainder
have no stated maturity date and are governed by the terms of
the partnership agreements pursuant to which the loans were
extended. At December 31, 2010, none of the par value notes
with stated maturity dates were past due. The information in the
table above regarding our discounted notes excludes the
impairment related to our investment in Casden Properties LLC.
No interest income has been recognized on our investment in
Casden Properties LLC following the initial impairment
recognized during 2008.
In addition to the interest income recognized on impaired loans
shown above, we recognized interest income, including accretion,
of $7.7 million, $5.8 million and $9.2 million
for the years ended December 31, 2010, 2009 and 2008,
respectively, related to our remaining notes receivable.
| NOTE 6 — | Non-Recourse Property Tax-Exempt Bond Financings, Non-Recourse Property Loans Payable and Other Borrowings |
We finance our properties primarily using long-dated, fixed-rate
debt that is collateralized by the underlying real estate
properties and is non-recourse to us. The following table
summarizes our property tax-exempt bond financings related to
properties classified as held for use at December 31, 2010
and 2009 (in thousands):
|
Weighted Average
|
||||||||||||
| Interest Rate | Principal Outstanding | |||||||||||
| 2010 | 2010 | 2009 | ||||||||||
|
Fixed rate property tax-exempt bonds payable
|
5.72 | % | $ | 140,111 | $ | 140,995 | ||||||
|
Variable rate property tax-exempt bonds payable
|
1.29 | % | 374,395 | 433,931 | ||||||||
|
Total
|
$ | 514,506 | $ | 574,926 | ||||||||
Fixed rate property tax-exempt bonds payable mature at various
dates through January 2050. Variable rate property tax-exempt
bonds payable mature at various dates through July 2033.
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,
2010, 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, 2010, our property tax-exempt bond
financings related to properties classified as held for use were
secured by 38 properties with a combined net book value of
$722.0 million. At December 31, 2010, property
tax-exempt bonds payable with a weighted average fixed rate of
6.7% have been converted to a weighted average variable rate of
1.6% using total rate of return swaps that
F-30
Table of Contents
mature during 2012. These property tax-exempt bonds payable are
presented above as variable rate debt at their carrying amounts,
or fair value, of $229.1 million. See Note 2 for
further discussion of our total rate of return swap arrangements.
The following table summarizes our property loans payable
related to properties classified as held for use at
December 31, 2010 and 2009 (in thousands):
|
Weighted Average
|
||||||||||||
| Interest Rate | Principal Outstanding | |||||||||||
| 2010 | 2010 | 2009 | ||||||||||
|
Fixed rate property notes payable
|
5.90 | % | $ | 4,855,871 | $ | 4,672,254 | ||||||
|
Variable rate property notes payable
|
2.86 | % | 73,852 | 75,685 | ||||||||
|
Secured notes credit facility
|
1.04 | % | 13,554 | 13,554 | ||||||||
|
Total
|
$ | 4,943,277 | $ | 4,761,493 | ||||||||
Fixed rate property notes payable mature at various dates
through December 2049. 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, 2010, our property notes payable related to
properties classified as held for use were secured by 350
properties with a combined net book value of
$5,721.9 million. In connection with our 2010 adoption of
ASU
2009-17(see
Note 2), we consolidated and deconsolidated various
partnerships, which resulted in a net increase in property loans
payable of approximately $61.2 million as compared to 2009.
The remainder of the increase in property loans payable during
the year is primarily due to refinancing activities. At
December 31, 2010, property loans payable with a weighted
average fixed rate of 7.5% have been converted to a weighted
average variable rate of 1.6% using total rate of return swaps
that mature during 2012, which is the same year the notes
payable mature. These property loans payable are presented above
as variable rate debt at their carrying amounts, or fair value,
of $28.7 million. See Note 2 for further discussion of
our total rate of return swap arrangements.
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. During 2010, the credit facility
was modified to reduce allowed borrowings to the then
outstanding borrowings and to remove the option for new loans
under the facility. During 2010, we also exercised an option to
extend the maturity date to October 2011 for a nominal fee. At
December 31, 2010, outstanding borrowings of
$13.6 million related to properties classified as held for
use are included in 2012 maturities below based on a remaining
one-year extension option for nominal cost.
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, 2010, we were in
compliance with all financial covenants pertaining to our
consolidated debt instruments.
Other borrowings totaled $47.0 million and
$53.1 million at December 31, 2010 and 2009,
respectively. We classify within other borrowings notes payable
that do not have a collateral interest in real estate properties
but for which real estate serves as the primary source of
repayment. These borrowings are generally non-recourse to us. At
December 31, 2010, other borrowings includes
$38.5 million in fixed rate obligations with interest rates
ranging from 4.5% 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 2011 to 2014,
although certain amounts are due upon occurrence of specified
events, such as property sales.
F-31
Table of Contents
As of December 31, 2010, 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 | ||||||||||
|
2011
|
$ | 100,162 | $ | 188,828 | $ | 288,990 | ||||||
|
2012
|
101,864 | 454,229 | 556,093 | |||||||||
|
2013
|
100,995 | 329,308 | 430,303 | |||||||||
|
2014
|
87,292 | 375,505 | 462,797 | |||||||||
|
2015
|
83,893 | 394,649 | 478,542 | |||||||||
|
Thereafter
|
3,288,076 | |||||||||||
| $ | 5,504,801 | |||||||||||
Amortization for 2011, 2012 and 2013 in the table above includes
$6.5 million, $5.9 million and $9.6 million,
respectively, and maturities for 2011, 2012 and thereafter
includes $13.3 million, $11.1 million and
$0.6 million, respectively, related to other borrowings at
December 31, 2010.
| NOTE 7 — | Credit Agreement and Term Loan |
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, 2010, the Credit Agreement consisted of
$300.0 million of revolving loan commitments (an increase
of $120.0 million from the revolving commitments at
December 31, 2009). As of December 31, 2009, the
Credit Agreement consisted of aggregate commitments of
$270.0 million, consisting of the $90.0 million
outstanding balance on our term loan and $180.0 million of
revolving commitments. During 2010, we repaid in full the
remaining balance on the term loan.
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 1.50% 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, 2013, and may be
extended for an additional year, subject to certain conditions,
including payment of a 35.0 basis point fee on the total
revolving commitments. As of December 31, 2010, we had the
capacity to borrow $260.3 million pursuant to our credit
facility (after giving effect to $39.7 million outstanding
for undrawn letters of credit).
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, 2010.
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.
F-32
Table of Contents
| NOTE 8 — | Commitments and Contingencies |
Commitments
We did not have any significant commitments related to our
redevelopment activities at December 31, 2010. 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 $3.8 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 of approximately
$30.6 million and the assumption of approximately
$118.6 million in property debt. The ability to exercise
the put 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 $20.0 million in liquidation preference of our
Series A Community Reinvestment Act Preferred Stock for
$14.0 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.
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 potentially hazardous materials
present on a property, including lead-based paint, asbestos,
polychlorinated biphenyls, petroleum-based fuels, and other
miscellaneous materials. Such laws often impose liability
without regard to whether the owner or operator knew of, or was
responsible for, the release or presence of such materials. The
presence of, or the failure to manage or remedy properly, these
materials 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 improper management of
these materials on a property could result in claims by private
plaintiffs for personal injury,
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Table of Contents
disease, disability or other infirmities. Various laws also
impose liability for the cost of removal, remediation or
disposal of these materials through a licensed disposal or
treatment facility. Anyone who arranges for the disposal or
treatment of these materials 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
responsible 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 certain potentially hazardous materials may be
conditional asset retirement obligations, as defined in GAAP.
Except in limited circumstances where the asset retirement
activities are expected to be performed in connection with a
planned construction project or 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, 2010, are immaterial to our consolidated
financial condition, results of operations and cash flows.
Operating
Leases
We are obligated under non-cancelable operating leases for
office space and equipment. In addition, we sublease certain of
our office space to tenants under non-cancelable subleases.
Approximate minimum annual rentals under operating leases and
approximate minimum payments to be received under annual
subleases are as follows (in thousands):
|
Operating Lease
|
Sublease
|
|||||||
| Obligations | Receivables | |||||||
|
2011
|
$ | 6,334 | $ | 785 | ||||
|
2012
|
4,399 | 658 | ||||||
|
2013
|
1,381 | 205 | ||||||
|
2014
|
925 | — | ||||||
|
2015
|
511 | — | ||||||
|
Thereafter
|
850 | — | ||||||
|
Total
|
$ | 14,400 | $ | 1,648 | ||||
Substantially all of the office space subject to the operating
leases described above is for the use of our corporate offices
and area operations. Rent expense recognized totaled
$6.6 million, $7.7 million and $10.2 million for
the years ended December 31, 2010, 2009 and 2008,
respectively. Sublease receipts that offset rent expense totaled
approximately $1.6 million, $0.7 million and
$0.7 million for the years ended December 31, 2010,
2009 and 2008, 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, 2010, approximately $4.7 million related
to the above operating lease obligations was included in accrued
liabilities related to these estimates.
Additionally, during January 2011, we provided notice of our
intent to terminate one of the leases included in the table
above effective March 31, 2012, and we paid the required
lease termination payment of approximately $1.3 million.
Obligations shown in the table above reflect our revised
obligations following the lease buyout.
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Table of Contents
| NOTE 9 — | Income Taxes |
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):
| 2010 | 2009 | |||||||
|
Deferred tax liabilities:
|
||||||||
|
Partnership differences
|
$ | 26,033 | $ | 32,565 | ||||
|
Depreciation
|
1,212 | 2,474 | ||||||
|
Deferred revenue
|
11,975 | 14,862 | ||||||
|
Total deferred tax liabilities
|
$ | 39,220 | $ | 49,901 | ||||
|
Deferred tax assets:
|
||||||||
|
Net operating, capital and other loss carryforwards
|
$ | 41,511 | $ | 37,164 | ||||
|
Provision for impairments on real estate assets
|
33,321 | 33,321 | ||||||
|
Receivables
|
8,752 | 3,094 | ||||||
|
Accrued liabilities
|
6,648 | 9,272 | ||||||
|
Accrued interest expense
|
2,220 | — | ||||||
|
Intangibles — management contracts
|
1,273 | 1,911 | ||||||
|
Tax credit carryforwards
|
7,181 | 6,949 | ||||||
|
Equity compensation
|
900 | 1,463 | ||||||
|
Other
|
159 | 929 | ||||||
|
Total deferred tax assets
|
101,965 | 94,103 | ||||||
|
Valuation allowance
|
(4,009 | ) | (2,187 | ) | ||||
|
Net deferred income tax assets
|
$ | 58,736 | $ | 42,015 | ||||
At December 31, 2010, we increased the valuation allowance
for our deferred tax assets by $1.8 million for certain
state net operating losses as well as certain low income housing
credits 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 (in thousands):
| 2010 | 2009 | 2008 | ||||||||||
|
Balance at January 1
|
$ | 3,079 | $ | 3,080 | $ | 2,965 | ||||||
|
Additions based on tax positions related to prior years
|
992 | — | 115 | |||||||||
|
Reductions based on tax positions related to prior years
|
— | (1 | ) | — | ||||||||
|
Balance at December 31
|
$ | 4,071 | $ | 3,079 | $ | 3,080 | ||||||
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,
2007, and subsequent years and certain of our State income tax
returns for the year ended December 31, 2005, and
subsequent years are currently subject to examination by the
Internal Revenue Service or other tax authorities. Approximately
$3.3 million of the unrecognized tax benefit, if
recognized, would affect the effective tax rate. 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
operations.
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In accordance with the accounting requirements for stock-based
compensation, we may recognize tax benefits in connection with
the exercise of stock options by employees of our taxable
subsidiaries and the vesting of restricted stock awards. During
the years ended December 31, 2010 and 2009, we had no
excess tax benefits from employee stock option exercises and
vested restricted stock awards.
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 operations for the years
ended December 31, 2010, 2009 and 2008 (in thousands):
| 2010 | 2009 | 2008 | ||||||||||
|
Current:
|
||||||||||||
|
Federal
|
$ | — | $ | (1,910 | ) | $ | 8,678 | |||||
|
State
|
1,395 | 3,992 | 2,415 | |||||||||
|
Total current
|
1,395 | 2,082 | 11,093 | |||||||||
|
Deferred:
|
||||||||||||
|
Federal
|
(10,912 | ) | (17,320 | ) | (22,115 | ) | ||||||
|
State
|
(1,380 | ) | (3,988 | ) | (2,386 | ) | ||||||
|
Total deferred
|
(12,292 | ) | (21,308 | ) | (24,501 | ) | ||||||
|
Total benefit
|
$ | (10,897 | ) | $ | (19,226 | ) | $ | (13,408 | ) | |||
|
Classification:
|
||||||||||||
|
Continuing operations
|
$ | (18,433 | ) | $ | (17,487 | ) | $ | (56,574 | ) | |||
|
Discontinued operations
|
$ | 7,536 | $ | (1,739 | ) | $ | 43,166 | |||||
Consolidated losses subject to tax, consisting of pretax income
or loss of our taxable REIT subsidiaries and gains or losses on
certain property sales that are subject to income tax under
section 1374 of the Internal Revenue Code, for the years
ended December 31, 2010, 2009 and 2008 totaled
$50.3 million, $40.6 million and $81.8 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):
| 2010 | 2009 | 2008 | ||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||
|
Tax at U.S. statutory rates on consolidated loss subject to tax
|
$ | (17,622 | ) | 35.0 | % | $ | (14,221 | ) | 35.0 | % | $ | (28,632 | ) | 35.0 | % | |||||||||
|
State income tax, net of Federal tax benefit
|
14 | — | (2,183 | ) | 5.4 | % | 29 | — | ||||||||||||||||
|
Effect of permanent differences
|
(673 | ) | 1.3 | % | 127 | (0.3 | )% | 215 | (0.3 | )% | ||||||||||||||
|
Tax effect of intercompany transfers of assets between the REIT
and taxable REIT subsidiaries(1)
|
5,694 | (11.3 | )% | (4,759 | ) | 11.7 | % | 15,059 | (18.4 | )% | ||||||||||||||
|
Write-off of excess tax basis
|
(132 | ) | 0.3 | % | (377 | ) | 0.9 | % | (79 | ) | 0.1 | % | ||||||||||||
|
Increase in valuation allowance
|
1,822 | (3.6 | )% | 2,187 | (5.4 | )% | — | — | ||||||||||||||||
| $ | (10,897 | ) | 21.7 | % | $ | (19,226 | ) | 47.3 | % | $ | (13,408 | ) | 16.4 | % | ||||||||||
| (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. |
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Income taxes paid totaled approximately $1.9 million,
$4.6 million and $13.8 million in the years ended
December 31, 2010, 2009 and 2008, respectively.
At December 31, 2010, we had net operating loss
carryforwards, or NOLs, of approximately $73.7 million for
income tax purposes that expire in years 2027 to 2030. 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
$9.8 million of NOLs during the year ended
December 31, 2010, 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,
2010, interest carryovers of approximately $23.7 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
$9.2 million. Additionally, our low-income housing and
rehabilitation tax credit carryforwards as of December 31,
2010, were approximately $7.7 million for income tax
purposes that expire in years 2012 to 2029. The net deferred tax
asset related to these credits is approximately
$6.0 million.
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, 2010, 2009 and 2008, dividends per share
held for the entire year were estimated to be taxable as follows:
| 2010(1) | 2009(1)(2) | 2008(1)(3) | ||||||||||||||||||||||
| Amount | Percentage | Amount | Percentage | Amount | Percentage | |||||||||||||||||||
|
Ordinary income
|
$ | 0.04 | 13 | % | $ | — | — | $ | — | — | ||||||||||||||
|
Capital gains
|
0.06 | 20 | % | 0.10 | 26 | % | 4.77 | 64 | % | |||||||||||||||
|
Qualified dividends
|
— | — | 0.06 | 14 | % | 0.03 | — | |||||||||||||||||
|
Unrecaptured Section 1250 gain
|
0.20 | 67 | % | 0.24 | 60 | % | 2.68 | 36 | % | |||||||||||||||
| $ | 0.30 | 100 | % | $ | 0.40 | 100 | % | $ | 7.48 | 100 | % | |||||||||||||
| (1) | We designated the per share amounts above as capital gain dividends in accordance with the requirements under the Code. Additionally, we designated as capital gain dividends a like portion of preferred dividends. | |
| (2) | 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 stockholders in 2009. | |
| (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 stockholders in 2008. |
| NOTE 10 — | Transactions Involving Noncontrolling Interests in Aimco Operating Partnership |
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 Aimco 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 Aimco and
holders of High Performance Units received the distributions
entirely in cash.
F-37
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. Preferred OP Units
entitle the holders thereof to a preference with respect to
distributions or upon liquidation. Depending on the terms of
each class, these preferred OP Units are convertible into
common OP Units or redeemable for cash, or at the Aimco
Operating Partnership’s option, Common Stock, and are paid
distributions varying from 1.8% to 8.8% per annum per unit, or
equal to the dividends paid on Common Stock based on the
conversion terms. As of December 31, 2010 and 2009, a total
of 3.1 million preferred OP Units were outstanding
with redemption values of $82.6 million and $85.7 million,
respectively. At December 31, 2010 and 2009, these
preferred OP Units were redeemable into approximately
3.2 million and 5.2 million shares of Common Stock,
respectively, or cash at the Aimco Operating Partnership’s
option, and were included in temporary equity in our
consolidated balance sheets.
The following table presents a reconciliation of preferred
noncontrolling interests in the Aimco Operating Partnership for
the years ending December 31, 2010, 2009 and 2008 (in
thousands):
| 2010 | 2009 | 2008 | ||||||||||
|
Balance at January 1
|
$ | 86,656 | $ | 88,148 | $ | 89,716 | ||||||
|
Net income attributable to preferred noncontrolling interests in
the Aimco Operating Partnership
|
4,964 | 6,288 | 7,646 | |||||||||
|
Distributions attributable to preferred noncontrolling interests
in the Aimco Operating Partnership
|
(6,730 | ) | (6,806 | ) | (7,486 | ) | ||||||
|
Purchases and redemptions of preferred OP Units
|
(1,462 | ) | (1,725 | ) | (976 | ) | ||||||
|
Other
|
— | 751 | (752 | ) | ||||||||
|
Balance at December 31
|
$ | 83,428 | $ | 86,656 | $ | 88,148 | ||||||
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 OP Units.
During the year ended December 31, 2010, we purchased
approximately 68,700 preferred OP Units from the holder in
exchange for cash and other consideration, and during the years
ended December 31, 2010 and 2009, approximately 14,800 and
68,200 preferred OP Units, respectively, were tendered for
redemption in exchange for
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Table of Contents
cash. During the years ended December 31, 2010 and 2009, 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
The holders of the common OP Units receive distributions,
prorated from the date of issuance, in an amount equivalent to
the dividends paid to holders of Common Stock, and may redeem
such units for cash or, at the Aimco Operating
Partnership’s option, Common Stock.
During the year ended December 31, 2010, we acquired the
noncontrolling limited partnership interests in certain of our
consolidated real estate partnerships in exchange for cash and
the Aimco Operating Partnership’s issuance of approximately
276,000 common OP Units. We completed no similar
acquisitions of noncontrolling interests during 2009 or 2008.
During the years ended December 31, 2010 and 2009,
approximately 168,300 and 64,000 common OP Units,
respectively, were redeemed in exchange for cash, and
approximately 519,000 common OP Units were redeemed in
exchange for shares of Common Stock in 2009. No common
OP Units were redeemed in exchange for shares of Common
Stock in 2010.
High
Performance Units
At December 31, 2010 and 2009, the Aimco Operating
Partnership had outstanding 2,339,950 and 2,344,719,
respectively, of high performance partnership units, or HPUs.
The holders of HPUs are generally restricted from transferring
these units except upon a change of control in the Aimco
Operating Partnership. The holders of HPUs 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.
| NOTE 11 — | Aimco Equity |
Preferred
Stock
At December 31, 2010 and 2009, we had the following classes
of perpetual preferred stock outstanding (dollars in thousands):
|
Annual Dividend
|
Balance
|
|||||||||||||||||||
|
Redemption
|
Rate Per Share
|
December 31, | ||||||||||||||||||
| Date(1) | (paid quarterly) | 2010 | 2009 | |||||||||||||||||
|
Class G Cumulative Preferred Stock, $0.01 par value,
4,050,000 shares authorized, zero and 4,050,000 shares
issued and outstanding, respectively(2)
|
07/15/2008 | 9.375 | % | $ | — | $ | 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,
12,000,000 and 8,000,000 shares authorized, 12,000,000 and
8,000,000 shares issued and outstanding, respectively
|
03/24/2009 | 7.750 | % | 298,101 | 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, 114
and 134 shares issued and outstanding, respectively(3)
|
06/30/2011 | (3 | ) | 57,000 | 67,000 | |||||||||||||||
|
Total
|
677,601 | 690,500 | ||||||||||||||||||
|
Less preferred stock subject to repurchase agreement(4)
|
(20,000 | ) | (30,000 | ) | ||||||||||||||||
|
Preferred stock per consolidated balance sheets
|
$ | 657,601 | $ | 660,500 | ||||||||||||||||
| (1) | All classes of preferred stock are redeemable at our option on and after the dates specified. | |
| (2) | Outstanding shares at December 31, 2009, included 10,000 shares held by a consolidated subsidiary that were eliminated in consolidation. |
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Table of Contents
| (3) | 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 Series A Community Reinvestment Act Perpetual Preferred Stock, or CRA Preferred Stock) plus 1.25%, calculated as of the beginning of each quarterly dividend period. The rate at December 31, 2010 and 2009 was 1.54%. 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 May 2010 and June 2009, we repurchased 20 shares and 12 shares, or $10.0 million and $6.0 million in liquidation preference, respectively, of CRA Preferred Stock for $7.0 million and $4.2 million, respectively. The holder of the CRA Preferred Stock may require us to repurchase an additional 40 shares, or $20.0 million in liquidation preference, of CRA Preferred Stock over the next two years, for $14.0 million. If required, these additional repurchases will be for up to $10.0 million in liquidation preference in May 2011 and 2012. Based on the holder’s ability to require us to repurchase shares of CRA Preferred Stock pursuant to this agreement, $20.0 million and $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 sheets at December 31, 2010 and 2009, respectively. |
On September 7, 2010, we issued 4,000,000 shares of
our 7.75% Class U Cumulative Preferred Stock, par value
$0.01 per share, or the Class U Preferred Stock, in an
underwritten public offering for a price per share of $24.09
(reflecting a price to the public of $24.86 per share, less an
underwriting discount and commissions of $0.77 per share). The
offering generated net proceeds of $96.1 million (after
deducting underwriting discounts and commissions and transaction
expenses). We recorded issuance costs of $3.3 million,
consisting primarily of underwriting commissions, as an
adjustment of additional paid-in capital within Aimco equity in
our condensed consolidated balance sheet.
On October 7, 2010, using the net proceeds from the
issuance of Class U Preferred Stock supplemented by
corporate funds, we redeemed all of the 4,050,000 outstanding
shares of our 9.375% Class G Cumulative Preferred Stock,
inclusive of 10,000 shares held by a consolidated
subsidiary that are eliminated in consolidation. This redemption
was for cash at a price equal to $25.00 per share, or
$101.3 million in aggregate ($101.0 million net of
eliminations), plus accumulated and unpaid dividends of
$2.2 million. In connection with the redemption, we
reflected $4.3 million of issuance costs previously
recorded as a reduction of additional paid-in capital as an
increase in net income attributable to preferred stockholders
for purposes of calculating earnings per share for the year
ended December 31, 2010.
In connection with our May 2010 and June 2009 CRA Preferred
Stock repurchase discussed above, we reflected the
$3.0 million and $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 years ended December 31,
2010 and 2009, respectively.
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 repurchase 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 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
F-40
Table of Contents
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, 2010, 2009 and
2008 are as follows (in thousands, except per share data):
| 2010 | 2009 | 2008 | ||||||||||||||||||||||
|
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 | ||||||||||||||||||
|
Class G
|
$ | 2.30 | $ | 9,334 | $ | 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 | 17,438 | (2) | 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
|
8,169.00 | (3) | 971 | 10,841.00 | (4) | 1,531 | 24,381.00 | (5) | 4,531 | |||||||||||||||
|
Total
|
$ | 53,435 | $ | 52,215 | $ | 55,215 | ||||||||||||||||||
| (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 paid includes $1.3 million related to the two months prior purchase of the 4,000,000 shares sold in September 2010, which amount was prepaid by the purchaser in connection with the sale. | |
| (3) | Amount per share is based on 114 shares outstanding for the entire period. We repurchased 20 shares in May 2010 and the holders of these shares received $1,980 per share in dividends through the date of repurchase. | |
| (4) | Amount per share is based on 134 shares outstanding for the entire period. We repurchased 12 shares in June 2009 and the holders of these shares received $6,509 per share in dividends through the date of repurchase. | |
| (5) | Amount per share is based on 146 shares outstanding for the entire period. We repurchased 54 shares in September 2008 and the holders of these shares received $17,980 per share in dividends through the date of repurchase. |
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.
F-41
Table of Contents
|
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 | ||||||||||||
During the year ended December 31, 2010, we sold
600,000 shares of our Common Stock pursuant to an
At-The-Market,
or ATM, offering program we initiated during 2010, generating
$14.4 million of net proceeds.
During 2008 and prior years, from time to time, we issued 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. 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 2010 and 2009 on all notes
from officers were $0.6 million and $0.8 million,
respectively. In 2010 and 2009, we reacquired approximately
9,000 and 94,000 shares of Common Stock from officers in
exchange for the cancellation of related notes totaling
$0.3 million and $1.5 million, respectively.
As further discussed in Note 12, during 2010, 2009 and
2008, we issued shares of restricted Common Stock to certain
officers, employees and independent directors.
Registration
Statements
Pursuant to the ATM offering program discussed above, we may
issue up to 6.4 million additional shares of our Common
Stock. Additionally, 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.
| NOTE 12 — | Share-Based Compensation and Employee Benefit Plans |
Stock
Award and Incentive Plan
We have a stock award and incentive plan to attract and retain
officers, key employees and independent directors. Our 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 our
F-42
Table of Contents
plan. Pursuant to the anti-dilution provisions of our plan, the
number of shares reserved for issuance has been adjusted to
reflect the special dividends discussed in Note 11. At
December 31, 2010 there were approximately 1.3 million
shares available to be granted under our plan. Our 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 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. The expected term of the options was based on
historical option exercises and post-vesting terminations.
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 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, 2010, 2009 and 2008 were as follows:
| 2010 | 2009 | 2008 | ||||||||||
|
Weighted average grant-date fair value
|
$ | 9.27 | $ | 2.47 | $ | 4.34 | ||||||
|
Assumptions:
|
||||||||||||
|
Risk-free interest rate
|
3.14 | % | 2.26 | % | 3.12 | % | ||||||
|
Expected dividend yield
|
2.90 | % | 8.00 | % | 6.02 | % | ||||||
|
Expected volatility
|
52.16 | % | 45.64 | % | 24.02 | % | ||||||
|
Weighted average expected life of options
|
7.8 years | 6.9 years | 6.5 years | |||||||||
The following table summarizes activity for our outstanding
stock options for the years ended December 31, 2010, 2009
and 2008 (numbers of options in thousands):
| 2010 | 2009(1) | 2008(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
|
8,873 | $ | 28.22 | 10,344 | $ | 31.01 | 8,555 | $ | 39.57 | |||||||||||||||
|
Granted
|
3 | 21.67 | 965 | 8.92 | 980 | 39.77 | ||||||||||||||||||
|
Exercised
|
(202 | ) | 8.92 | — | — | (14 | ) | 37.45 | ||||||||||||||||
|
Forfeited
|
(1,514 | ) | 28.73 | (2,436 | ) | 32.03 | (1,423 | ) | 38.75 | |||||||||||||||
|
Adjustment to outstanding options pursuant to special dividends
|
— | n/a | — | n/a | 2,246 | n/a | ||||||||||||||||||
|
Outstanding at end of year
|
7,160 | $ | 28.65 | 8,873 | $ | 28.22 | 10,344 | $ | 31.01 | |||||||||||||||
|
Exercisable at end of year
|
5,869 | $ | 30.18 | 6,840 | $ | 29.65 | 7,221 | $ | 29.51 | |||||||||||||||
| (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 |
F-43
Table of Contents
| 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, 2010, had an aggregate intrinsic value of
$12.8 million and a weighted average remaining contractual
term of 3.8 years. Options exercisable at December 31,
2010, had an aggregate intrinsic value of $2.4 million and
a weighted average remaining contractual term of 3.1 years.
The intrinsic value of stock options exercised during the years
ended December 31, 2010 and 2008, was $2.9 million and
less than $0.1 million, respectively. We may realize tax
benefits in connection with the exercise of options by employees
of our taxable subsidiaries. During the year ended
December 31, 2010, we did not recognize any significant tax
benefits related to options exercised during the year, and
during the year ended December 31, 2009, as no stock
options were exercised we realized no related tax benefits.
The following table summarizes activity for restricted stock
awards for the years ended December 31, 2010, 2009 and 2008
(numbers of shares in thousands):
| 2010 | 2009 | 2008 | ||||||||||||||||||||||
|
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
|
458 | $ | 26.73 | 893 | $ | 40.33 | 960 | $ | 46.08 | |||||||||||||||
|
Granted
|
381 | 16.72 | 378 | 8.92 | 248 | 39.85 | ||||||||||||||||||
|
Vested
|
(261 | ) | 27.56 | (418 | ) | 32.83 | (377 | ) | 43.45 | |||||||||||||||
|
Forfeited
|
(34 | ) | 26.11 | (533 | ) | 27.66 | (128 | ) | 46.85 | |||||||||||||||
|
Issued pursuant to special dividends(1)
|
— | — | 138 | 9.58 | 190 | 22.51 | ||||||||||||||||||
|
Unvested at end of year
|
544 | $ | 19.36 | 458 | $ | 26.73 | 893 | $ | 40.33 | |||||||||||||||
| (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, 2010, 2009 and 2008 was
$4.4 million, $3.1 million and $16.5 million,
respectively.
Total compensation cost recognized for restricted stock and
stock option awards was $8.1 million, $8.0 million and
$17.6 million for the years ended December 31, 2010,
2009 and 2008, respectively. Of these amounts,
$0.8 million, $1.3 million and $3.8 million,
respectively, were capitalized. At December 31, 2010, total
unvested compensation cost not yet recognized was
$7.8 million. We expect to recognize this compensation over
a weighted average period of approximately 1.7 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
2010, 2009 and 2008, 5,662, 20,076 and 8,926 shares were
purchased under this plan at an average price of $20.92, $8.82
and $23.86, respectively. No compensation cost is recognized in
connection with this plan. Shares of Common Stock purchased
under the employee stock purchase plan are treated as issued and
outstanding on the date of purchase and dividends paid on such
shares are recognized as a reduction of equity when such
dividends are declared.
F-44
Table of Contents
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 year ended December 31, 2008, 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 less than $0.1 million in 2010,
$0.6 million in 2009 and $5.2 million in 2008.
| NOTE 13 — | Discontinued Operations and Assets Held for Sale |
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 operations under the heading
“income from discontinued operations, net.” This
treatment resulted in the retrospective adjustment of the 2009
and 2008 statements of operations and the 2009 balance
sheet.
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, 2010, we had
no properties classified as held for sale and at
December 31, 2009, after adjustments to classify as held
for sale properties that were sold during 2010, we had 51
properties with an aggregate of 8,189 units classified as
held for sale. Amounts classified as held for sale in the
accompanying consolidated balance sheets as of December 31,
2009 are as follows (in thousands):
|
December 31,
|
||||
| 2009 | ||||
|
Real estate, net
|
$ | 283,806 | ||
|
Other assets
|
4,774 | |||
|
Assets held for sale
|
$ | 288,580 | ||
|
Property debt
|
$ | 240,011 | ||
|
Other liabilities
|
6,545 | |||
|
Liabilities related to assets held for sale
|
$ | 246,556 | ||
During the years ended December 31, 2010, 2009 and 2008, we
sold 51, 89 and 151 consolidated properties with an aggregate
8,189, 22,503 and 37,202 units, respectively. For the years
ended December 31, 2010, 2009 and 2008, 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, 2010.
F-45
Table of Contents
The following is a summary of the components of income from
discontinued operations for the years ended December 31,
2010, 2009 and 2008 (in thousands):
| 2010 | 2009 | 2008 | ||||||||||
|
Rental and other property revenues
|
$ | 42,394 | $ | 217,472 | $ | 527,524 | ||||||
|
Property operating and other expenses
|
(22,988 | ) | (120,109 | ) | (273,298 | ) | ||||||
|
Depreciation and amortization
|
(10,773 | ) | (67,902 | ) | (139,075 | ) | ||||||
|
Provision for operating real estate impairment losses
|
(12,674 | ) | (54,530 | ) | (27,420 | ) | ||||||
|
Operating (loss) income
|
(4,041 | ) | (25,069 | ) | 87,731 | |||||||
|
Interest income
|
271 | 362 | 2,118 | |||||||||
|
Interest expense
|
(7,330 | ) | (42,220 | ) | (102,026 | ) | ||||||
|
Gain on extinguishment of debt
|
— | 259 | — | |||||||||
|
Loss before gain on dispositions of real estate and income taxes
|
(11,100 | ) | (66,668 | ) | (12,177 | ) | ||||||
|
Gain on dispositions of real estate
|
94,901 | 221,770 | 800,270 | |||||||||
|
Income tax (expense) benefit
|
(7,536 | ) | 1,739 | (43,165 | ) | |||||||
|
Income from discontinued operations, net
|
$ | 76,265 | $ | 156,841 | $ | 744,928 | ||||||
|
Income from discontinued operation attributable to:
|
||||||||||||
|
Noncontrolling interests in consolidated real estate partnerships
|
$ | (25,843 | ) | $ | (61,650 | ) | $ | (150,366 | ) | |||
|
Noncontrolling interests in Aimco Operating Partnership
|
(3,518 | ) | (6,882 | ) | (57,672 | ) | ||||||
|
Total noncontrolling interests
|
(29,361 | ) | (68,532 | ) | (208,038 | ) | ||||||
|
Aimco
|
$ | 46,904 | $ | 88,309 | $ | 536,890 | ||||||
Gain on dispositions of real estate is reported net of
incremental direct costs incurred in connection with the
transactions, including any prepayment penalties incurred upon
repayment of property loans collateralized by the properties
being sold. Such prepayment penalties totaled $4.5 million,
$29.0 million and $64.9 million for the years ended
December 31, 2010, 2009 and 2008, 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 years ended December 31, 2010 and 2009, we allocated
$4.7 million and $10.1 million, respectively, of
goodwill related to our real estate segment to the carrying
amounts of the properties sold or classified as held for sale
during the applicable periods. Of these amounts,
$4.1 million and $8.7 million, respectively, were
reflected as a reduction of gain on dispositions of real estate
and $0.6 million and $1.4 million, respectively, were
reflected as an adjustment of impairment losses.
F-46
Table of Contents
| NOTE 14 — | Earnings per Share |
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, 2010, 2009 and 2008 (in thousands,
except per share data):
| 2010 | 2009 | 2008 | ||||||||||
|
Numerator:
|
||||||||||||
|
Loss from continuing operations
|
$ | (165,889 | ) | $ | (201,641 | ) | $ | (117,926 | ) | |||
|
Loss (income) from continuing operations attributable to
noncontrolling interests
|
47,257 | 49,058 | (6,957 | ) | ||||||||
|
Income attributable to preferred stockholders
|
(53,590 | ) | (50,566 | ) | (53,708 | ) | ||||||
|
Income attributable to participating securities
|
— | — | (6,985 | ) | ||||||||
|
Loss from continuing operations attributable to Aimco common
stockholders
|
$ | (172,222 | ) | $ | (203,149 | ) | $ | (185,576 | ) | |||
|
Income from discontinued operations
|
$ | 76,265 | $ | 156,841 | $ | 744,928 | ||||||
|
Income from discontinued operations attributable to
noncontrolling interests
|
(29,361 | ) | (68,532 | ) | (208,038 | ) | ||||||
|
Income from discontinued operations attributable to Aimco common
stockholders
|
$ | 46,904 | $ | 88,309 | $ | 536,890 | ||||||
|
Net (loss) income
|
$ | (89,624 | ) | $ | (44,800 | ) | $ | 627,002 | ||||
|
Net loss (income) attributable to noncontrolling interests
|
17,896 | (19,474 | ) | (214,995 | ) | |||||||
|
Income attributable to preferred stockholders
|
(53,590 | ) | (50,566 | ) | (53,708 | ) | ||||||
|
Income attributable to participating securities
|
— | — | (6,985 | ) | ||||||||
|
Net (loss) income attributable to Aimco common stockholders
|
$ | (125,318 | ) | $ | (114,840 | ) | $ | 351,314 | ||||
|
Denominator:
|
||||||||||||
|
Denominator for basic earnings per share — weighted
average number of shares of Common Stock outstanding
|
116,369 | 114,301 | 88,690 | |||||||||
|
Effect of dilutive securities:
|
||||||||||||
|
Dilutive potential common shares
|
— | — | — | |||||||||
|
Denominator for diluted earnings per share
|
116,369 | 114,301 | 88,690 | |||||||||
|
Earnings (loss) per common share
—
basic and
diluted:
|
||||||||||||
|
Loss from continuing operations attributable to Aimco common
stockholders
|
$ | (1.48 | ) | $ | (1.78 | ) | $ | (2.09 | ) | |||
|
Income from discontinued operations attributable to Aimco common
stockholders
|
0.40 | 0.78 | 6.05 | |||||||||
|
Net (loss) income attributable to Aimco common stockholders
|
$ | (1.08 | ) | $ | (1.00 | ) | $ | 3.96 | ||||
As of December 31, 2010, 2009 and 2008, the common share
equivalents that could potentially dilute basic earnings per
share in future periods totaled 7.2 million,
8.9 million and 9.2 million, respectively. These
securities, representing stock options, have been excluded from
the earnings per share computations for the years ended
December 31, 2010, 2009 and 2008, 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
0.6 million, 0.5 million and 1.0 million at
December 31, 2010, 2009 and 2008, 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
F-47
Table of Contents
distributed and undistributed earnings. During the years ended
December 31, 2010 and 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 2010 and 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.
| NOTE 15 — | Unaudited Summarized Consolidated Quarterly Information |
Summarized unaudited consolidated quarterly information for 2010
and 2009 is provided below (in thousands, except per share
amounts).
| Quarter(1) | ||||||||||||||||
| 2010 | First | Second | Third | Fourth | ||||||||||||
|
Total revenues
|
$ | 279,872 | $ | 285,161 | $ | 286,433 | $ | 293,468 | ||||||||
|
Total operating expenses
|
(255,739 | ) | (249,690 | ) | (249,464 | ) | (259,532 | ) | ||||||||
|
Operating income
|
24,133 | 35,471 | 36,969 | 33,936 | ||||||||||||
|
Loss from continuing operations
|
(36,844 | ) | (39,123 | ) | (47,976 | ) | (41,946 | ) | ||||||||
|
Income from discontinued operations, net
|
20,084 | 28,953 | 19,494 | 7,734 | ||||||||||||
|
Net loss
|
(16,760 | ) | (10,170 | ) | (28,482 | ) | (34,212 | ) | ||||||||
|
Loss attributable to Aimco common stockholders
|
(40,440 | ) | (17,995 | ) | (28,500 | ) | (38,427 | ) | ||||||||
|
Loss per common share — basic and diluted:
|
||||||||||||||||
|
Loss from continuing operations attributable to Aimco common
stockholders
|
$ | (0.43 | ) | $ | (0.33 | ) | $ | (0.36 | ) | $ | (0.36 | ) | ||||
|
Net loss attributable to Aimco common stockholders
|
$ | (0.35 | ) | $ | (0.15 | ) | $ | (0.25 | ) | $ | (0.33 | ) | ||||
|
Weighted average common shares outstanding — basic and
diluted
|
116,035 | 116,323 | 116,434 | 116,683 | ||||||||||||
| Quarter(1) | ||||||||||||||||
| 2009 | First | Second | Third | Fourth | ||||||||||||
|
Total revenues
|
$ | 281,173 | $ | 282,974 | $ | 280,210 | $ | 286,746 | ||||||||
|
Total operating expenses
|
(253,240 | ) | (254,471 | ) | (262,992 | ) | (264,705 | ) | ||||||||
|
Operating income
|
27,933 | 28,503 | 17,218 | 22,041 | ||||||||||||
|
Loss from continuing operations
|
(35,287 | ) | (47,419 | ) | (55,460 | ) | (63,475 | ) | ||||||||
|
Income from discontinued operations, net
|
2,716 | 39,791 | 45,904 | 68,430 | ||||||||||||
|
Net (loss) income
|
(32,571 | ) | (7,628 | ) | (9,556 | ) | 4,955 | |||||||||
|
Loss attributable to Aimco common stockholders
|
(37,698 | ) | (29,923 | ) | (40,490 | ) | (6,729 | ) | ||||||||
|
Loss per common share — basic and diluted:
|
||||||||||||||||
|
Loss from continuing operations attributable to Aimco common
stockholders
|
$ | (0.33 | ) | $ | (0.41 | ) | $ | (0.47 | ) | $ | (0.57 | ) | ||||
|
Net loss attributable to Aimco common stockholders
|
$ | (0.34 | ) | $ | (0.26 | ) | $ | (0.34 | ) | $ | (0.06 | ) | ||||
|
Weighted average common shares outstanding — basic and
diluted
|
110,262 | 115,510 | 115,563 | 115,871 | ||||||||||||
| (1) | Certain reclassifications have been made to 2010 and 2009 quarterly amounts to conform to the full year 2010 presentation, primarily related to treatment of discontinued operations. |
F-48
Table of Contents
| NOTE 16 — | Transactions with Affiliates |
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, 2010, 2009 and 2008 totaled
$10.6 million, $18.5 million and $72.5 million,
respectively. The total accounts receivable due from affiliates
was $8.4 million, net of allowance for doubtful accounts of
$1.5 million, at December 31, 2010, and
$23.7 million, net of allowance for doubtful accounts of
$1.9 million, at December 31, 2009.
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, 2010, 2009 and 2008, we did not recognize a
significant amount of interest income on par value notes from
unconsolidated real estate partnerships. Accretion income
recognized on discounted notes from affiliated real estate
partnerships totaled $0.8 million, $0.1 million and
$1.4 million for the years ended December 31, 2010,
2009 and 2008, respectively. See Note 5 for additional
information on notes receivable from unconsolidated real estate
partnerships.
| NOTE 17 — | Business Segments |
We have two reportable segments: conventional real estate
operations and affordable real estate operations. Our
conventional real estate operations consist of market-rate
apartments with rents paid by the resident and included 219
properties with 68,972 units as of December 31, 2010.
Our affordable real estate operations consisted of 228
properties with 26,540 units as of December 31, 2010,
with rents that are generally paid, in whole or part, by a
government agency.
Our chief operating decision maker uses various generally
accepted industry financial measures to assess the performance
and financial condition of the business, including: Net Asset
Value, which is the estimated fair value of our assets, net of
liabilities and preferred equity; Pro forma Funds From
Operations, which is Funds From Operations excluding operating
real estate impairment losses and preferred equity redemption
related amounts; Adjusted Funds From Operations, which is Pro
forma Funds From Operations less spending for Capital
Replacements; property net operating income, which is rental and
other property revenues less direct property operating expenses,
including real estate taxes; proportionate property net
operating income, which reflects our share of property net
operating income of our consolidated and unconsolidated
properties; same store property operating results; Free Cash
Flow, which is net operating income less spending for Capital
Replacements; Free Cash Flow internal rate of return; financial
coverage ratios; and leverage as shown on our balance sheet. Our
chief operating decision maker emphasizes proportionate property
net operating income as a key measurement of segment profit or
loss.
During the three months ended December 31, 2010, we revised
certain of the reports our chief operating decision maker uses
to assess the performance of our business to include additional
information about proportionate operating results of our
segments. Based on the change in our measure of segment
performance, we have recast the presentation of our segment
results for the years ended December 31, 2009 and 2008, to
be consistent with the current presentation.
F-49
Table of Contents
The following tables present the revenues, expenses, net
operating income (loss) and income (loss) from continuing
operations of our conventional and affordable real estate
operations segments on a proportionate basis for the years ended
December 31, 2010, 2009 and 2008 (in thousands):
|
Corporate and
|
||||||||||||||||||||
|
Conventional
|
Affordable
|
Proportionate
|
Amounts Not
|
|||||||||||||||||
|
Real Estate
|
Real Estate
|
Adjustments
|
Allocated to
|
|||||||||||||||||
| Operations | Operations | (1) | Segments | Consolidated | ||||||||||||||||
|
Year Ended December 31, 2010:
|
||||||||||||||||||||
|
Rental and other property revenues(2)
|
$ | 825,969 | $ | 130,562 | $ | 149,991 | $ | 2,859 | $ | 1,109,381 | ||||||||||
|
Asset management and tax credit revenues
|
— | — | — | 35,553 | 35,553 | |||||||||||||||
|
Total revenues
|
825,969 | 130,562 | 149,991 | 38,412 | 1,144,934 | |||||||||||||||
|
Property operating expenses(2)
|
323,262 | 58,640 | 70,397 | 57,880 | 510,179 | |||||||||||||||
|
Asset management and tax credit expenses
|
— | — | — | 14,487 | 14,487 | |||||||||||||||
|
Depreciation and amortization(2)
|
— | — | — | 426,060 | 426,060 | |||||||||||||||
|
Provision for operating real estate impairment losses(2)
|
— | — | — | 352 | 352 | |||||||||||||||
|
General and administrative expenses
|
— | — | — | 53,365 | 53,365 | |||||||||||||||
|
Other expenses, net
|
— | — | — | 9,982 | 9,982 | |||||||||||||||
|
Total operating expenses
|
323,262 | 58,640 | 70,397 | 562,126 | 1,014,425 | |||||||||||||||
|
Net operating income (loss)
|
502,707 | 71,922 | 79,594 | (523,714 | ) | 130,509 | ||||||||||||||
|
Other items included in continuing operations
|
— | — | — | (296,398 | ) | (296,398 | ) | |||||||||||||
|
Income (loss) from continuing operations
|
$ | 502,707 | $ | 71,922 | $ | 79,594 | $ | (820,112 | ) | $ | (165,889 | ) | ||||||||
F-50
Table of Contents
|
Corporate and
|
||||||||||||||||||||
|
Conventional
|
Affordable
|
Proportionate
|
Amounts Not
|
|||||||||||||||||
|
Real Estate
|
Real Estate
|
Adjustments
|
Allocated to
|
|||||||||||||||||
| Operations | Operations | (1) | Segments | Consolidated | ||||||||||||||||
|
Year Ended December 31, 2009:
|
||||||||||||||||||||
|
Rental and other property revenues(2)
|
$ | 820,310 | $ | 126,548 | $ | 129,310 | $ | 5,082 | $ | 1,081,250 | ||||||||||
|
Asset management and tax credit revenues
|
— | — | — | 49,853 | 49,853 | |||||||||||||||
|
Total revenues
|
820,310 | 126,548 | 129,310 | 54,935 | 1,131,103 | |||||||||||||||
|
Property operating expenses(2)
|
326,258 | 59,055 | 60,439 | 61,051 | 506,803 | |||||||||||||||
|
Asset management and tax credit expenses
|
— | — | — | 15,779 | 15,779 | |||||||||||||||
|
Depreciation and amortization(2)
|
— | — | — | 427,666 | 427,666 | |||||||||||||||
|
Provision for operating real estate impairment losses(2)
|
— | — | — | 2,329 | 2,329 | |||||||||||||||
|
General and administrative expenses
|
— | — | — | 56,640 | 56,640 | |||||||||||||||
|
Other expenses, net
|
— | — | — | 14,950 | 14,950 | |||||||||||||||
|
Restructuring costs
|
— | — | — | 11,241 | 11,241 | |||||||||||||||
|
Total operating expenses
|
326,258 | 59,055 | 60,439 | 589,656 | 1,035,408 | |||||||||||||||
|
Net operating income (loss)
|
494,052 | 67,493 | 68,871 | (534,721 | ) | 95,695 | ||||||||||||||
|
Other items included in continuing operations
|
— | — | — | (297,336 | ) | (297,336 | ) | |||||||||||||
|
Income (loss) from continuing operations
|
$ | 494,052 | $ | 67,493 | $ | 68,871 | $ | (832,057 | ) | $ | (201,641 | ) | ||||||||
|
Year Ended December 31, 2008:
|
||||||||||||||||||||
|
Rental and other property revenues(2)
|
$ | 823,016 | $ | 121,692 | $ | 128,995 | $ | 6,345 | $ | 1,080,048 | ||||||||||
|
Asset management and tax credit revenues
|
— | — | — | 98,830 | 98,830 | |||||||||||||||
|
Total revenues
|
823,016 | 121,692 | 128,995 | 105,175 | 1,178,878 | |||||||||||||||
|
Property operating expenses(2)
|
322,332 | 59,023 | 60,299 | 77,587 | 519,241 | |||||||||||||||
|
Asset management and tax credit expenses
|
— | — | — | 24,784 | 24,784 | |||||||||||||||
|
Depreciation and amortization(2)
|
— | — | — | 376,473 | 376,473 | |||||||||||||||
|
Provision for impairment losses on real estate development assets
|
— | — | — | 91,138 | 91,138 | |||||||||||||||
|
General and administrative expenses
|
— | — | — | 80,376 | 80,376 | |||||||||||||||
|
Other expenses, net
|
— | — | — | 21,749 | 21,749 | |||||||||||||||
|
Restructuring costs
|
— | — | — | 22,802 | 22,802 | |||||||||||||||
|
Total operating expenses
|
322,332 | 59,023 | 60,299 | 694,909 | 1,136,563 | |||||||||||||||
|
Net operating income (loss)
|
500,684 | 62,669 | 68,696 | (589,734 | ) | 42,315 | ||||||||||||||
|
Other items included in continuing operations
|
— | — | — | (160,241 | ) | (160,241 | ) | |||||||||||||
|
Income (loss) from continuing operations
|
$ | 500,684 | $ | 62,669 | $ | 68,696 | $ | (749,975 | ) | $ | (117,926 | ) | ||||||||
| (1) | Represents adjustments for the noncontrolling interests in consolidated real estate partnerships’ share of the results of our consolidated properties, which are excluded from our measurement of segment performance but included in the related consolidated amounts, and our share of the results of operations of our unconsolidated real estate partnerships, which are included in our measurement of segment performance but excluded from the related consolidated amounts. | |
| (2) | Our chief operating decision maker assesses the performance of our conventional and affordable real estate operations using, among other measures, proportionate property net operating income, which excludes depreciation and amortization, provision for operating real estate impairment losses, property management revenues (which are included in rental and other property revenues) and property management expenses and casualty gains and losses (which are included in property operating expenses). Accordingly, we do not allocate these amounts to our segments. |
F-51
Table of Contents
During the years ended December 31, 2010, 2009 and 2008,
for continuing operations, our rental revenues include
$131.4 million, $126.9 million and
$119.5 million, respectively, of subsidies from government
agencies, which exceeded 10% of the combined revenues of our
conventional and affordable segments for each of the years
presented.
The assets of our reportable segments on a proportionate basis,
together with the proportionate adjustments to reconcile these
amounts to the consolidated assets of our segments, and the
consolidated assets not allocated to our segments are as follows
(in thousands):
| 2010 | 2009 | |||||||
|
Conventional
|
$ | 5,492,437 | $ | 5,647,192 | ||||
|
Affordable
|
886,874 | 966,703 | ||||||
|
Proportionate adjustments(1)
|
555,079 | 463,767 | ||||||
|
Corporate and other assets
|
444,176 | 828,806 | ||||||
|
Total consolidated assets
|
$ | 7,378,566 | $ | 7,906,468 | ||||
| (1) | Proportionate adjustments for the noncontrolling interests in consolidated real estate partnerships’ share of the assets of our consolidated properties, which are excluded from our measurement of segment financial condition, and our share of the assets of our unconsolidated real estate partnerships, which are included in our measure of segment financial condition. |
For the years ended December 31, 2010, 2009 and 2008,
capital additions related to our conventional segment totaled
$140.1 million, $208.0 million and
$516.6 million, respectively, and capital additions related
to our affordable segment totaled $35.2 million,
$67.4 million and $148.6 million, respectively.
F-52
Table of Contents
APARTMENT
INVESTMENT AND MANAGEMENT COMPANY
SCHEDULE III: REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2010
(In Thousands Except Unit Data)
SCHEDULE III: REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2010
(In Thousands Except Unit Data)
|
(3)
|
December 31, 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
(2)
|
Cost
|
Total
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(1)
|
Initial Cost |
Capitalized
|
Accumulated
|
Cost
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Property
|
Date
|
Year
|
Number
|
Buildings and
|
Subsequent to
|
Buildings and
|
(4)
|
Depreciation
|
Net of
|
|||||||||||||||||||||||||||||||||||||||||
| Property Name | Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Conventional Properties:
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
100 Forest Place
|
High Rise | Dec-97 | Oak Park, IL | 1987 | 234 | $ | 2,664 | $ | 18,815 | $ | 5,790 | $ | 2,664 | $ | 24,605 | $ | 27,269 | $ | (9,484 | ) | $ | 17,785 | $ | 27,347 | ||||||||||||||||||||||||||
|
1582 First Avenue
|
High Rise | Mar-05 | New York, NY | 1900 | 17 | 4,250 | 752 | 256 | 4,281 | 977 | 5,258 | (308 | ) | 4,950 | 2,639 | |||||||||||||||||||||||||||||||||||
|
173 E. 90th Street
|
High Rise | May-04 | New York, NY | 1910 | 72 | 11,773 | 4,535 | 2,369 | 12,067 | 6,610 | 18,677 | (1,598 | ) | 17,079 | 8,481 | |||||||||||||||||||||||||||||||||||
|
182-188
Columbus Avenue
|
Mid Rise | Feb-07 | New York, NY | 1910 | 32 | 17,187 | 3,300 | 4,066 | 19,123 | 5,430 | 24,553 | (1,266 | ) | 23,287 | 13,471 | |||||||||||||||||||||||||||||||||||
|
204-206 West
133rd Street
|
Mid Rise | Jun-07 | New York, NY | 1910 | 44 | 3,291 | 1,450 | 2,023 | 4,352 | 2,412 | 6,764 | (441 | ) | 6,323 | 3,132 | |||||||||||||||||||||||||||||||||||
|
2232-2240
Seventh Avenue
|
Mid Rise | Jun-07 | New York, NY | 1910 | 24 | 2,863 | 3,785 | 1,530 | 3,366 | 4,812 | 8,178 | (743 | ) | 7,435 | 2,973 | |||||||||||||||||||||||||||||||||||
|
2247-2253
Seventh Avenue
|
Mid Rise | Jun-07 | New York, NY | 1910 | 35 | 6,787 | 3,335 | 1,775 | 7,356 | 4,541 | 11,897 | (848 | ) | 11,049 | 5,483 | |||||||||||||||||||||||||||||||||||
|
2252-2258
Seventh Avenue
|
Mid Rise | Jun-07 | New York, NY | 1910 | 35 | 3,623 | 4,504 | 1,914 | 4,318 | 5,723 | 10,041 | (1,027 | ) | 9,014 | 5,125 | |||||||||||||||||||||||||||||||||||
|
2300-2310
Seventh Avenue
|
Mid Rise | Jun-07 | New York, NY | 1910 | 63 | 8,623 | 6,964 | 5,618 | 10,417 | 10,788 | 21,205 | (2,073 | ) | 19,132 | 9,896 | |||||||||||||||||||||||||||||||||||
|
236 — 238 East 88th Street
|
High Rise | Jan-04 | New York, NY | 1900 | 43 | 8,751 | 2,914 | 1,353 | 8,820 | 4,198 | 13,018 | (1,360 | ) | 11,658 | 6,736 | |||||||||||||||||||||||||||||||||||
|
237-239
Ninth Avenue
|
High Rise | Mar-05 | New York, NY | 1900 | 36 | 8,430 | 1,866 | 775 | 8,494 | 2,577 | 11,071 | (775 | ) | 10,296 | 5,165 | |||||||||||||||||||||||||||||||||||
|
240 West 73rd Street, LLC
|
High Rise | Sep-04 | New York, NY | 1900 | 200 | 68,006 | 12,140 | 4,131 | 68,109 | 16,168 | 84,277 | (3,626 | ) | 80,651 | 29,668 | |||||||||||||||||||||||||||||||||||
|
2484 Seventh Avenue
|
Mid Rise | Jun-07 | New York, NY | 1921 | 23 | 2,384 | 1,726 | 497 | 2,601 | 2,006 | 4,607 | (340 | ) | 4,267 | 2,472 | |||||||||||||||||||||||||||||||||||
|
2900 on First Apartments
|
Mid Rise | Oct-08 | Seattle, WA | 1989 | 135 | 19,015 | 17,518 | 613 | 19,071 | 18,075 | 37,146 | (1,546 | ) | 35,600 | 20,400 | |||||||||||||||||||||||||||||||||||
|
306 East 89th Street
|
High Rise | Jul-04 | New York, NY | 1930 | 20 | 2,659 | 1,006 | 168 | 2,681 | 1,152 | 3,833 | (405 | ) | 3,428 | 1,885 | |||||||||||||||||||||||||||||||||||
|
311 & 313 East 73rd Street
|
Mid Rise | Mar-03 | New York, NY | 1904 | 34 | 5,635 | 1,609 | 552 | 5,678 | 2,118 | 7,796 | (1,088 | ) | 6,708 | 2,703 | |||||||||||||||||||||||||||||||||||
|
322-324
East
61st Street
|
High Rise | Mar-05 | New York, NY | 1900 | 40 | 6,319 | 2,224 | 729 | 6,372 | 2,900 | 9,272 | (881 | ) | 8,391 | 3,627 | |||||||||||||||||||||||||||||||||||
|
3400 Avenue of the Arts
|
Mid Rise | Mar-02 | Costa Mesa, CA | 1987 | 770 | 55,223 | 65,506 | 73,569 | 57,240 | 137,058 | 194,298 | (43,291 | ) | 151,007 | 118,280 | |||||||||||||||||||||||||||||||||||
|
452 East 78th Street
|
High Rise | Jan-04 | New York, NY | 1900 | 12 | 1,966 | 608 | 285 | 1,982 | 877 | 2,859 | (289 | ) | 2,570 | 1,567 | |||||||||||||||||||||||||||||||||||
|
464-466
Amsterdam &
200-210 W. 83rd
Street
|
Mid Rise | Feb-07 | New York, NY | 1910 | 72 | 23,677 | 7,101 | 4,367 | 25,552 | 9,593 | 35,145 | (1,755 | ) | 33,390 | 19,679 | |||||||||||||||||||||||||||||||||||
|
510 East 88th Street
|
High Rise | Jan-04 | New York, NY | 1900 | 20 | 3,137 | 1,002 | 287 | 3,163 | 1,263 | 4,426 | (359 | ) | 4,067 | 2,579 | |||||||||||||||||||||||||||||||||||
|
514-516
East
88th Street
|
High Rise | Mar-05 | New York, NY | 1900 | 36 | 6,230 | 2,168 | 569 | 6,282 | 2,685 | 8,967 | (765 | ) | 8,202 | 4,553 | |||||||||||||||||||||||||||||||||||
|
656 St. Nicholas Avenue
|
Mid Rise | Jun-07 | New York, NY | 1920 | 31 | 2,731 | 1,636 | 2,823 | 3,576 | 3,614 | 7,190 | (739 | ) | 6,451 | 2,375 | |||||||||||||||||||||||||||||||||||
|
707 Leahy
|
Garden | Apr-07 | Redwood City, CA | 1973 | 111 | 15,352 | 7,909 | 4,407 | 15,444 | 12,224 | 27,668 | (2,269 | ) | 25,399 | 14,983 | |||||||||||||||||||||||||||||||||||
|
759 St. Nicholas Avenue
|
Mid Rise | Oct-07 | New York, NY | 1920 | 9 | 682 | 535 | 683 | 1,013 | 887 | 1,900 | (138 | ) | 1,762 | 545 | |||||||||||||||||||||||||||||||||||
|
865 Bellevue
|
Garden | Jul-00 | Nashville, TN | 1972 | 326 | 3,558 | 12,037 | 27,236 | 3,558 | 39,273 | 42,831 | (15,414 | ) | 27,417 | 18,951 | |||||||||||||||||||||||||||||||||||
|
Arbors, The
|
Garden | Oct-97 | Tempe, AZ | 1967 | 200 | 1,092 | 6,208 | 3,378 | 1,092 | 9,586 | 10,678 | (4,505 | ) | 6,173 | 6,655 | |||||||||||||||||||||||||||||||||||
|
Arbours Of Hermitage, The
|
Garden | Jul-00 | Hermitage, TN | 1972 | 350 | 3,217 | 12,023 | 7,326 | 3,217 | 19,349 | 22,566 | (8,540 | ) | 14,026 | 10,059 | |||||||||||||||||||||||||||||||||||
|
Auburn Glen
|
Garden | Dec-06 | Jacksonville, FL | 1974 | 251 | 7,483 | 8,191 | 3,441 | 7,670 | 11,445 | 19,115 | (2,767 | ) | 16,348 | 9,765 | |||||||||||||||||||||||||||||||||||
|
BaLaye
|
Garden | Apr-06 | Tampa, FL | 2002 | 324 | 10,329 | 28,800 | 1,261 | 10,608 | 29,782 | 40,390 | (5,202 | ) | 35,188 | 22,658 | |||||||||||||||||||||||||||||||||||
|
Bank Lofts
|
High Rise | Apr-01 | Denver, CO | 1920 | 117 | 3,525 | 9,045 | 1,786 | 3,525 | 10,831 | 14,356 | (5,080 | ) | 9,276 | 7,138 | |||||||||||||||||||||||||||||||||||
|
Bay Parc Plaza
|
High Rise | Sep-04 | Miami, FL | 2000 | 471 | 22,680 | 41,847 | 4,346 | 22,680 | 46,193 | 68,873 | (8,063 | ) | 60,810 | 45,835 | |||||||||||||||||||||||||||||||||||
|
Bay Ridge at Nashua
|
Garden | Jan-03 | Nashua, NH | 1984 | 412 | 3,352 | 40,713 | 7,031 | 3,262 | 47,834 | 51,096 | (12,617 | ) | 38,479 | 40,337 | |||||||||||||||||||||||||||||||||||
|
Bayberry Hill Estates
|
Garden | Aug-02 | Framingham, MA | 1971 | 424 | 18,915 | 35,945 | 11,382 | 18,916 | 47,326 | 66,242 | (16,011 | ) | 50,231 | 34,820 | |||||||||||||||||||||||||||||||||||
|
Boston Lofts
|
High Rise | Apr-01 | Denver, CO | 1890 | 158 | 3,447 | 20,589 | 3,304 | 3,447 | 23,893 | 27,340 | (10,686 | ) | 16,654 | 14,582 | |||||||||||||||||||||||||||||||||||
|
Boulder Creek
|
Garden | Jul-94 | Boulder, CO | 1973 | 221 | 755 | 7,730 | 17,237 | 755 | 24,967 | 25,722 | (12,807 | ) | 12,915 | 11,311 | |||||||||||||||||||||||||||||||||||
|
Brandywine
|
Garden | Jul-94 | St. Petersburg, FL | 1972 | 477 | 1,437 | 12,725 | 9,193 | 1,437 | 21,918 | 23,355 | (14,848 | ) | 8,507 | 20,838 | |||||||||||||||||||||||||||||||||||
|
Breakers, The
|
Garden | Oct-98 | Daytona Beach, FL | 1985 | 208 | 1,008 | 5,507 | 3,349 | 1,008 | 8,856 | 9,864 | (4,261 | ) | 5,603 | 6,207 | |||||||||||||||||||||||||||||||||||
|
Broadcast Center
|
Garden | Mar-02 | Los Angeles, CA | 1990 | 279 | 27,603 | 41,244 | 29,464 | 29,407 | 68,904 | 98,311 | (20,934 | ) | 77,377 | 55,875 | |||||||||||||||||||||||||||||||||||
|
Buena Vista
|
Mid Rise | Jan-06 | Pasadena, CA | 1973 | 92 | 9,693 | 6,818 | 1,178 | 9,693 | 7,996 | 17,689 | (1,207 | ) | 16,482 | 10,476 | |||||||||||||||||||||||||||||||||||
|
Burke Shire Commons
|
Garden | Mar-01 | Burke, VA | 1986 | 360 | 4,867 | 23,617 | 4,216 | 4,867 | 27,833 | 32,700 | (11,376 | ) | 21,324 | 31,607 | |||||||||||||||||||||||||||||||||||
|
Calhoun Beach Club
|
High Rise | Dec-98 | Minneapolis, MN | 1928 | 332 | 11,708 | 73,334 | 47,028 | 11,708 | 120,362 | 132,070 | (45,129 | ) | 86,941 | 48,548 | |||||||||||||||||||||||||||||||||||
|
Canterbury Green
|
Garden | Dec-99 | Fort Wayne, IN | 1970 | 1,988 | 13,659 | 73,115 | 27,161 | 13,659 | 100,276 | 113,935 | (50,369 | ) | 63,566 | 52,666 | |||||||||||||||||||||||||||||||||||
|
Canyon Terrace
|
Garden | Mar-02 | Saugus, CA | 1984 | 130 | 7,300 | 6,602 | 6,192 | 7,508 | 12,586 | 20,094 | (4,449 | ) | 15,645 | 10,598 | |||||||||||||||||||||||||||||||||||
F-53
Table of Contents
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(3)
|
December 31, 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||
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(2)
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Cost
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Total
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||||||||||||||||||||||||||||||||||||||||||||||||
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(1)
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Initial Cost |
Capitalized
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Accumulated
|
Cost
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||||||||||||||||||||||||||||||||||||||||||||||
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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
|
(4)
|
Depreciation
|
Net of
|
|||||||||||||||||||||||||||||||||||||||||
| Property Name | Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Casa del Mar at Baymeadows
|
Garden | Oct-06 | Jacksonville, FL | 1984 | 144 | 4,902 | 10,562 | 1,570 | 5,039 | 11,995 | 17,034 | (2,302 | ) | 14,732 | 9,294 | |||||||||||||||||||||||||||||||||||
|
Cedar Rim
|
Garden | Apr-00 | Newcastle, WA | 1980 | 104 | 761 | 5,218 | 17,275 | 761 | 22,493 | 23,254 | (12,073 | ) | 11,181 | 7,772 | |||||||||||||||||||||||||||||||||||
|
Center Square
|
High Rise | Oct-99 | Doylestown, PA | 1975 | 350 | 582 | 4,190 | 3,648 | 582 | 7,838 | 8,420 | (3,479 | ) | 4,941 | 14,644 | |||||||||||||||||||||||||||||||||||
|
Charleston Landing
|
Garden | Sep-00 | Brandon, FL | 1985 | 300 | 7,488 | 8,656 | 7,971 | 7,488 | 16,627 | 24,115 | (7,051 | ) | 17,064 | 13,057 | |||||||||||||||||||||||||||||||||||
|
Chesapeake Landing I
|
Garden | Sep-00 | Aurora, IL | 1986 | 416 | 15,800 | 16,875 | 5,621 | 15,800 | 22,496 | 38,296 | (8,693 | ) | 29,603 | 24,331 | |||||||||||||||||||||||||||||||||||
|
Chesapeake Landing II
|
Garden | Mar-01 | Aurora, IL | 1987 | 184 | 1,969 | 7,980 | 3,745 | 1,969 | 11,725 | 13,694 | (5,276 | ) | 8,418 | 10,099 | |||||||||||||||||||||||||||||||||||
|
Chestnut Hall
|
High Rise | Oct-06 | Philadelphia, PA | 1923 | 315 | 12,047 | 14,299 | 5,256 | 12,338 | 19,264 | 31,602 | (5,490 | ) | 26,112 | 18,356 | |||||||||||||||||||||||||||||||||||
|
Chestnut Hill
|
Garden | Apr-00 | Philadelphia, PA | 1963 | 821 | 6,463 | 49,315 | 49,521 | 6,463 | 98,836 | 105,299 | (43,941 | ) | 61,358 | 58,962 | |||||||||||||||||||||||||||||||||||
|
Chimneys of Cradle Rock
|
Garden | Jun-04 | Columbia, MD | 1979 | 198 | 2,234 | 8,107 | 911 | 2,040 | 9,212 | 11,252 | (2,702 | ) | 8,550 | 16,494 | |||||||||||||||||||||||||||||||||||
|
Colonnade Gardens
|
Garden | Oct-97 | Phoenix, AZ | 1973 | 196 | 766 | 4,346 | 3,011 | 766 | 7,357 | 8,123 | (4,004 | ) | 4,119 | 1,464 | |||||||||||||||||||||||||||||||||||
|
Colony at Kenilworth
|
Garden | Oct-99 | Towson, MD | 1966 | 383 | 2,403 | 18,798 | 14,392 | 2,403 | 33,190 | 35,593 | (16,540 | ) | 19,053 | 24,128 | |||||||||||||||||||||||||||||||||||
|
Columbus Avenue
|
Mid Rise | Sep-03 | New York, NY | 1880 | 59 | 35,472 | 9,450 | 3,763 | 35,527 | 13,158 | 48,685 | (5,818 | ) | 42,867 | 25,324 | |||||||||||||||||||||||||||||||||||
|
Country Lakes I
|
Garden | Apr-01 | Naperville, IL | 1982 | 240 | 8,512 | 10,832 | 3,422 | 8,512 | 14,254 | 22,766 | (5,882 | ) | 16,884 | 14,367 | |||||||||||||||||||||||||||||||||||
|
Country Lakes II
|
Garden | May-97 | Naperville, IL | 1986 | 400 | 5,165 | 29,430 | 6,072 | 5,165 | 35,502 | 40,667 | (15,568 | ) | 25,099 | 24,539 | |||||||||||||||||||||||||||||||||||
|
Creekside
|
Garden | Jan-00 | Denver, CO | 1974 | 328 | 2,953 | 12,697 | 5,668 | 3,189 | 18,129 | 21,318 | (8,709 | ) | 12,609 | 14,157 | |||||||||||||||||||||||||||||||||||
|
Creekside
|
Garden | Mar-02 | Simi Valley, CA | 1985 | 397 | 24,595 | 18,818 | 7,149 | 25,245 | 25,317 | 50,562 | (9,342 | ) | 41,220 | 40,670 | |||||||||||||||||||||||||||||||||||
|
Crescent at West Hollywood, The
|
Mid Rise | Mar-02 | West Hollywood, CA | 1985 | 130 | 15,382 | 10,215 | 15,245 | 15,765 | 25,077 | 40,842 | (11,723 | ) | 29,119 | 24,195 | |||||||||||||||||||||||||||||||||||
|
Douglaston Villas and Townhomes
|
Garden | Aug-99 | Altamonte Springs, FL | 1979 | 234 | 1,666 | 9,353 | 7,941 | 1,666 | 17,294 | 18,960 | (7,378 | ) | 11,582 | 10,384 | |||||||||||||||||||||||||||||||||||
|
Elm Creek
|
Mid Rise | Dec-97 | Elmhurst, IL | 1987 | 372 | 5,534 | 30,830 | 17,543 | 5,635 | 48,272 | 53,907 | (21,197 | ) | 32,710 | 34,695 | |||||||||||||||||||||||||||||||||||
|
Evanston Place
|
High Rise | Dec-97 | Evanston, IL | 1990 | 189 | 3,232 | 25,546 | 4,453 | 3,232 | 29,999 | 33,231 | (11,529 | ) | 21,702 | 21,417 | |||||||||||||||||||||||||||||||||||
|
Farmingdale
|
Mid Rise | Oct-00 | Darien, IL | 1975 | 240 | 11,763 | 15,174 | 9,317 | 11,763 | 24,491 | 36,254 | (11,145 | ) | 25,109 | 17,349 | |||||||||||||||||||||||||||||||||||
|
Ferntree
|
Garden | Mar-01 | Phoenix, AZ | 1968 | 219 | 2,078 | 13,752 | 3,462 | 2,079 | 17,213 | 19,292 | (7,186 | ) | 12,106 | 6,977 | |||||||||||||||||||||||||||||||||||
|
Fisherman’s Village
|
Garden | Jan-06 | Indianapolis, IN | 1982 | 328 | 2,156 | 9,936 | 3,023 | 2,156 | 12,959 | 15,115 | (7,618 | ) | 7,497 | 6,350 | |||||||||||||||||||||||||||||||||||
|
Fishermans Wharf
|
Garden | Nov-96 | Clute, TX | 1981 | 360 | 1,257 | 7,584 | 5,757 | 1,257 | 13,341 | 14,598 | (6,252 | ) | 8,346 | 6,852 | |||||||||||||||||||||||||||||||||||
|
Flamingo Towers
|
High Rise | Sep-97 | Miami Beach, FL | 1960 | 1,127 | 32,191 | 38,399 | 220,608 | 32,239 | 258,959 | 291,198 | (105,723 | ) | 185,475 | 117,541 | |||||||||||||||||||||||||||||||||||
|
Forestlake Apartments
|
Garden | Mar-07 | Daytona Beach, FL | 1982 | 120 | 3,691 | 4,320 | 610 | 3,860 | 4,761 | 8,621 | (838 | ) | 7,783 | 4,658 | |||||||||||||||||||||||||||||||||||
|
Four Quarters Habitat
|
Garden | Jan-06 | Miami, FL | 1976 | 336 | 2,383 | 17,199 | 16,848 | 2,379 | 34,051 | 36,430 | (13,301 | ) | 23,129 | 10,974 | |||||||||||||||||||||||||||||||||||
|
Foxchase
|
Garden | Dec-97 | Alexandria, VA | 1940 | 2,113 | 15,419 | 96,062 | 34,962 | 15,496 | 130,947 | 146,443 | (61,112 | ) | 85,331 | 218,590 | |||||||||||||||||||||||||||||||||||
|
Georgetown
|
Garden | Aug-02 | Framingham, MA | 1964 | 207 | 12,351 | 13,168 | 2,216 | 12,351 | 15,384 | 27,735 | (5,123 | ) | 22,612 | 12,070 | |||||||||||||||||||||||||||||||||||
|
Glen at Forestlake, The
|
Garden | Mar-07 | Daytona Beach, FL | 1982 | 26 | 897 | 862 | 209 | 933 | 1,035 | 1,968 | (174 | ) | 1,794 | 1,022 | |||||||||||||||||||||||||||||||||||
|
Granada
|
Mid Rise | Aug-02 | Framingham, MA | 1958 | 72 | 4,577 | 4,058 | 881 | 4,577 | 4,939 | 9,516 | (2,292 | ) | 7,224 | 4,040 | |||||||||||||||||||||||||||||||||||
|
Grand Pointe
|
Garden | Dec-99 | Columbia, MD | 1972 | 325 | 2,715 | 16,771 | 5,613 | 2,715 | 22,384 | 25,099 | (9,121 | ) | 15,978 | 16,690 | |||||||||||||||||||||||||||||||||||
|
Greens
|
Garden | Jul-94 | Chandler, AZ | 2000 | 324 | 2,303 | 713 | 27,389 | 2,303 | 28,102 | 30,405 | (14,494 | ) | 15,911 | 12,087 | |||||||||||||||||||||||||||||||||||
|
Greenspoint at Paradise Valley
|
Garden | Jan-00 | Phoenix, AZ | 1985 | 336 | 3,042 | 13,223 | 12,552 | 3,042 | 25,775 | 28,817 | (13,733 | ) | 15,084 | 15,884 | |||||||||||||||||||||||||||||||||||
|
Hampden Heights
|
Garden | Jan-00 | Denver, CO | 1973 | 376 | 3,224 | 12,905 | 6,885 | 3,453 | 19,561 | 23,014 | (9,518 | ) | 13,496 | 13,639 | |||||||||||||||||||||||||||||||||||
|
Harbour, The
|
Garden | Mar-01 | Melbourne, FL | 1987 | 162 | 4,108 | 3,563 | 6,360 | 4,108 | 9,923 | 14,031 | (3,661 | ) | 10,370 | — | |||||||||||||||||||||||||||||||||||
|
Heritage Park at Alta Loma
|
Garden | Jan-01 | Alta Loma, CA | 1986 | 232 | 1,200 | 6,428 | 3,621 | 1,200 | 10,049 | 11,249 | (4,108 | ) | 7,141 | 7,264 | |||||||||||||||||||||||||||||||||||
|
Heritage Park Escondido
|
Garden | Oct-00 | Escondido, CA | 1986 | 196 | 1,055 | 7,565 | 1,454 | 1,055 | 9,019 | 10,074 | (4,474 | ) | 5,600 | 7,299 | |||||||||||||||||||||||||||||||||||
|
Heritage Park Livermore
|
Garden | Oct-00 | Livermore, CA | 1988 | 167 | 1,039 | 9,170 | 1,434 | 1,039 | 10,604 | 11,643 | (5,029 | ) | 6,614 | 7,532 | |||||||||||||||||||||||||||||||||||
|
Heritage Park Montclair
|
Garden | Mar-01 | Montclair, CA | 1985 | 144 | 690 | 4,149 | 1,279 | 690 | 5,428 | 6,118 | (2,149 | ) | 3,969 | 4,620 | |||||||||||||||||||||||||||||||||||
|
Heritage Village Anaheim
|
Garden | Oct-00 | Anaheim, CA | 1986 | 196 | 1,832 | 8,541 | 1,821 | 1,832 | 10,362 | 12,194 | (5,210 | ) | 6,984 | 8,858 | |||||||||||||||||||||||||||||||||||
|
Hidden Cove
|
Garden | Jul-98 | Escondido, CA | 1983 | 334 | 3,043 | 17,615 | 7,524 | 3,043 | 25,139 | 28,182 | (11,328 | ) | 16,854 | 30,561 | |||||||||||||||||||||||||||||||||||
|
Hidden Cove II
|
Garden | Jul-07 | Escondido, CA | 1986 | 117 | 12,730 | 6,530 | 5,614 | 12,849 | 12,025 | 24,874 | (2,919 | ) | 21,955 | 11,420 | |||||||||||||||||||||||||||||||||||
|
Hidden Harbour
|
Garden | Oct-02 | Melbourne, FL | 1985 | 216 | 1,444 | 7,590 | 5,500 | 1,444 | 13,090 | 14,534 | (4,211 | ) | 10,323 | — | |||||||||||||||||||||||||||||||||||
|
Highcrest Townhomes
|
Town Home | Jan-03 | Woodridge, IL | 1968 | 176 | 3,045 | 13,452 | 1,727 | 3,045 | 15,179 | 18,224 | (6,713 | ) | 11,511 | 10,724 | |||||||||||||||||||||||||||||||||||
|
Hillcreste
|
Garden | Mar-02 | Century City, CA | 1989 | 315 | 33,755 | 47,216 | 26,126 | 35,862 | 71,235 | 107,097 | (25,749 | ) | 81,348 | 56,594 | |||||||||||||||||||||||||||||||||||
|
Hillmeade
|
Garden | Nov-94 | Nashville, TN | 1986 | 288 | 2,872 | 16,069 | 14,093 | 2,872 | 30,162 | 33,034 | (18,098 | ) | 14,936 | 18,076 | |||||||||||||||||||||||||||||||||||
|
Horizons West Apartments
|
Mid Rise | Dec-06 | Pacifica, CA | 1970 | 78 | 8,763 | 6,376 | 1,634 | 8,887 | 7,886 | 16,773 | (1,548 | ) | 15,225 | 5,250 | |||||||||||||||||||||||||||||||||||
|
Hunt Club
|
Garden | Mar-01 | Austin, TX | 1987 | 384 | 10,342 | 11,920 | 8,707 | 10,342 | 20,627 | 30,969 | (11,288 | ) | 19,681 | 17,143 | |||||||||||||||||||||||||||||||||||
|
Hunt Club
|
Garden | Sep-00 | Gaithersburg, MD | 1986 | 336 | 17,859 | 13,149 | 4,272 | 17,859 | 17,421 | 35,280 | (7,126 | ) | 28,154 | 31,787 | |||||||||||||||||||||||||||||||||||
|
Hunter’s Chase
|
Garden | Jan-01 | Midlothian, VA | 1985 | 320 | 7,935 | 7,915 | 3,534 | 7,935 | 11,449 | 19,384 | (4,080 | ) | 15,304 | 16,169 | |||||||||||||||||||||||||||||||||||
F-54
Table of Contents
|
(3)
|
December 31, 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
(2)
|
Cost
|
Total
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(1)
|
Initial Cost |
Capitalized
|
Accumulated
|
Cost
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Property
|
Date
|
Year
|
Number
|
Buildings and
|
Subsequent to
|
Buildings and
|
(4)
|
Depreciation
|
Net of
|
|||||||||||||||||||||||||||||||||||||||||
| Property Name | Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Hunter’s Crossing
|
Garden | Apr-01 | Leesburg, VA | 1967 | 164 | 2,244 | 7,763 | 4,360 | 2,244 | 12,123 | 14,367 | (7,363 | ) | 7,004 | 6,845 | |||||||||||||||||||||||||||||||||||
|
Hunters Glen IV
|
Garden | Oct-99 | Plainsboro, NJ | 1976 | 264 | 2,709 | 14,420 | 5,028 | 2,709 | 19,448 | 22,157 | (10,380 | ) | 11,777 | 19,864 | |||||||||||||||||||||||||||||||||||
|
Hunters Glen V
|
Garden | Oct-99 | Plainsboro, NJ | 1976 | 304 | 3,283 | 17,337 | 5,410 | 3,283 | 22,747 | 26,030 | (12,046 | ) | 13,984 | 23,864 | |||||||||||||||||||||||||||||||||||
|
Hunters Glen VI
|
Garden | Oct-99 | Plainsboro, NJ | 1976 | 328 | 2,787 | 15,501 | 6,279 | 2,787 | 21,780 | 24,567 | (12,372 | ) | 12,195 | 24,838 | |||||||||||||||||||||||||||||||||||
|
Hyde Park Tower
|
High Rise | Oct-04 | Chicago, IL | 1990 | 155 | 4,683 | 14,928 | 2,901 | 4,731 | 17,781 | 22,512 | (3,462 | ) | 19,050 | 13,842 | |||||||||||||||||||||||||||||||||||
|
Independence Green
|
Garden | Jan-06 | Farmington Hills, MI | 1960 | 981 | 10,293 | 24,586 | 21,221 | 10,156 | 45,944 | 56,100 | (15,476 | ) | 40,624 | 27,372 | |||||||||||||||||||||||||||||||||||
|
Indian Oaks
|
Garden | Mar-02 | Simi Valley, CA | 1986 | 254 | 23,927 | 15,801 | 4,086 | 24,523 | 19,291 | 43,814 | (6,778 | ) | 37,036 | 32,716 | |||||||||||||||||||||||||||||||||||
|
Island Club
|
Garden | Oct-00 | Daytona Beach, FL | 1986 | 204 | 6,086 | 8,571 | 2,330 | 6,087 | 10,900 | 16,987 | (4,927 | ) | 12,060 | 8,440 | |||||||||||||||||||||||||||||||||||
|
Island Club
|
Garden | Oct-00 | Oceanside, CA | 1986 | 592 | 18,027 | 28,654 | 12,050 | 18,027 | 40,704 | 58,731 | (18,241 | ) | 40,490 | 64,102 | |||||||||||||||||||||||||||||||||||
|
Key Towers
|
High Rise | Apr-01 | Alexandria, VA | 1964 | 140 | 1,526 | 7,050 | 5,031 | 1,526 | 12,081 | 13,607 | (5,674 | ) | 7,933 | 10,736 | |||||||||||||||||||||||||||||||||||
|
Lakeside
|
Garden | Oct-99 | Lisle, IL | 1972 | 568 | 5,840 | 27,937 | 28,990 | 5,840 | 56,927 | 62,767 | (26,920 | ) | 35,847 | 29,050 | |||||||||||||||||||||||||||||||||||
|
Lakeside at Vinings Mountain
|
Garden | Jan-00 | Atlanta, GA | 1983 | 220 | 2,109 | 11,863 | 15,288 | 2,109 | 27,151 | 29,260 | (13,281 | ) | 15,979 | 9,297 | |||||||||||||||||||||||||||||||||||
|
Lakeside Place
|
Garden | Oct-99 | Houston, TX | 1976 | 734 | 6,160 | 34,151 | 15,829 | 6,160 | 49,980 | 56,140 | (21,691 | ) | 34,449 | 26,670 | |||||||||||||||||||||||||||||||||||
|
Lamplighter Park
|
Garden | Apr-00 | Bellevue, WA | 1967 | 174 | 2,225 | 9,272 | 4,513 | 2,225 | 13,785 | 16,010 | (7,046 | ) | 8,964 | 10,444 | |||||||||||||||||||||||||||||||||||
|
Latrobe
|
High Rise | Jan-03 | Washington, DC | 1980 | 175 | 3,459 | 9,103 | 15,756 | 3,459 | 24,859 | 28,318 | (12,479 | ) | 15,839 | 21,960 | |||||||||||||||||||||||||||||||||||
|
Lazy Hollow
|
Garden | Apr-05 | Columbia, MD | 1979 | 178 | 2,424 | 12,181 | 1,075 | 2,424 | 13,256 | 15,680 | (5,985 | ) | 9,695 | 13,896 | |||||||||||||||||||||||||||||||||||
|
Lewis Park
|
Garden | Jan-06 | Carbondale, IL | 1972 | 269 | 1,407 | 12,193 | 3,403 | 1,404 | 15,599 | 17,003 | (9,351 | ) | 7,652 | 3,739 | |||||||||||||||||||||||||||||||||||
|
Lincoln Place Garden
|
Garden | Oct-04 | Venice, CA | 1951 | 696 | 43,979 | 10,439 | 99,532 | 42,894 | 111,056 | 153,950 | (1,943 | ) | 152,007 | 63,000 | |||||||||||||||||||||||||||||||||||
|
Lodge at Chattahoochee, The
|
Garden | Oct-99 | Sandy Springs, GA | 1970 | 312 | 2,320 | 16,370 | 22,232 | 2,320 | 38,602 | 40,922 | (18,613 | ) | 22,309 | 10,974 | |||||||||||||||||||||||||||||||||||
|
Los Arboles
|
Garden | Sep-97 | Chandler, AZ | 1986 | 232 | 1,662 | 9,504 | 3,522 | 1,662 | 13,026 | 14,688 | (6,226 | ) | 8,462 | 7,996 | |||||||||||||||||||||||||||||||||||
|
Malibu Canyon
|
Garden | Mar-02 | Calabasas, CA | 1986 | 698 | 66,257 | 53,438 | 35,821 | 69,834 | 85,682 | 155,516 | (35,048 | ) | 120,468 | 96,233 | |||||||||||||||||||||||||||||||||||
|
Maple Bay
|
Garden | Dec-99 | Virginia Beach, VA | 1971 | 414 | 2,598 | 16,141 | 30,168 | 2,598 | 46,309 | 48,907 | (20,430 | ) | 28,477 | 32,994 | |||||||||||||||||||||||||||||||||||
|
Mariners Cove
|
Garden | Mar-02 | San Diego, CA | 1984 | 500 | — | 66,861 | 7,555 | — | 74,416 | 74,416 | (21,635 | ) | 52,781 | 4,915 | |||||||||||||||||||||||||||||||||||
|
Meadow Creek
|
Garden | Jul-94 | Boulder, CO | 1968 | 332 | 1,435 | 24,532 | 6,526 | 1,435 | 31,058 | 32,493 | (14,418 | ) | 18,075 | 23,746 | |||||||||||||||||||||||||||||||||||
|
Merrill House
|
High Rise | Jan-00 | Falls Church, VA | 1964 | 159 | 1,836 | 10,831 | 6,423 | 1,836 | 17,254 | 19,090 | (5,336 | ) | 13,754 | 15,600 | |||||||||||||||||||||||||||||||||||
|
Mesa Royale
|
Garden | Jul-94 | Mesa, AZ | 1985 | 153 | 832 | 4,569 | 9,675 | 832 | 14,244 | 15,076 | (6,590 | ) | 8,486 | 5,093 | |||||||||||||||||||||||||||||||||||
|
Monterey Grove
|
Garden | Jun-08 | San Jose, CA | 1999 | 224 | 34,175 | 21,939 | 2,424 | 34,325 | 24,213 | 58,538 | (2,999 | ) | 55,539 | 34,826 | |||||||||||||||||||||||||||||||||||
|
Oak Park Village
|
Garden | Oct-00 | Lansing, MI | 1973 | 618 | 10,048 | 16,771 | 8,035 | 10,048 | 24,806 | 34,854 | (14,010 | ) | 20,844 | 23,487 | |||||||||||||||||||||||||||||||||||
|
Ocean Oaks
|
Garden | May-98 | Port Orange, FL | 1987 | 296 | 2,132 | 12,855 | 3,424 | 2,132 | 16,279 | 18,411 | (7,139 | ) | 11,272 | 10,295 | |||||||||||||||||||||||||||||||||||
|
One Lytle Place
|
High Rise | Jan-00 | Cincinnati, OH | 1980 | 231 | 2,662 | 21,800 | 12,916 | 2,662 | 34,716 | 37,378 | (14,193 | ) | 23,185 | 15,450 | |||||||||||||||||||||||||||||||||||
|
Pacific Bay Vistas
|
Garden | Mar-01 | San Bruno, CA | 1987 | 308 | 3,703 | 62,460 | 25,945 | 22,994 | 69,114 | 92,108 | (55,442 | ) | 36,666 | — | |||||||||||||||||||||||||||||||||||
|
Pacifica Park
|
Garden | Jul-06 | Pacifica, CA | 1977 | 104 | 12,770 | 6,579 | 3,234 | 12,970 | 9,613 | 22,583 | (2,801 | ) | 19,782 | 11,049 | |||||||||||||||||||||||||||||||||||
|
Palazzo at Park La Brea, The
|
Mid Rise | Feb-04 | Los Angeles, CA | 2002 | 521 | 47,822 | 125,464 | 11,001 | 48,362 | 135,925 | 184,287 | (35,703 | ) | 148,584 | 123,809 | |||||||||||||||||||||||||||||||||||
|
Palazzo East at Park La Brea, The
|
Mid Rise | Mar-05 | Los Angeles, CA | 2005 | 611 | 61,004 | 136,503 | 22,826 | 72,578 | 147,755 | 220,333 | (33,073 | ) | 187,260 | 150,000 | |||||||||||||||||||||||||||||||||||
|
Paradise Palms
|
Garden | Jul-94 | Phoenix, AZ | 1985 | 130 | 647 | 3,515 | 7,074 | 647 | 10,589 | 11,236 | (6,439 | ) | 4,797 | 6,315 | |||||||||||||||||||||||||||||||||||
|
Park Towne Place
|
High Rise | Apr-00 | Philadelphia, PA | 1959 | 959 | 10,451 | 47,301 | 55,507 | 10,451 | 102,808 | 113,259 | (29,724 | ) | 83,535 | 85,165 | |||||||||||||||||||||||||||||||||||
|
Parktown Townhouses
|
Garden | Oct-99 | Deer Park, TX | 1968 | 309 | 2,570 | 12,052 | 10,497 | 2,570 | 22,549 | 25,119 | (8,886 | ) | 16,233 | 10,554 | |||||||||||||||||||||||||||||||||||
|
Parkway
|
Garden | Mar-00 | Willamsburg, VA | 1971 | 148 | 386 | 2,834 | 3,326 | 386 | 6,160 | 6,546 | (3,583 | ) | 2,963 | 9,128 | |||||||||||||||||||||||||||||||||||
|
Pathfinder Village
|
Garden | Jan-06 | Fremont, CA | 1973 | 246 | 19,595 | 14,838 | 8,400 | 19,595 | 23,238 | 42,833 | (4,555 | ) | 38,278 | 19,121 | |||||||||||||||||||||||||||||||||||
|
Peachtree Park
|
Garden | Jan-96 | Atlanta, GA | 1969 | 303 | 4,683 | 11,713 | 11,744 | 4,683 | 23,457 | 28,140 | (10,572 | ) | 17,568 | 9,231 | |||||||||||||||||||||||||||||||||||
|
Peak at Vinings Mountain, The
|
Garden | Jan-00 | Atlanta, GA | 1980 | 280 | 2,651 | 13,660 | 17,806 | 2,651 | 31,466 | 34,117 | (15,234 | ) | 18,883 | 10,002 | |||||||||||||||||||||||||||||||||||
|
Peakview Place
|
Garden | Jan-00 | Englewood, CO | 1975 | 296 | 3,440 | 18,734 | 4,695 | 3,440 | 23,429 | 26,869 | (16,129 | ) | 10,740 | 12,567 | |||||||||||||||||||||||||||||||||||
|
Peppertree
|
Garden | Mar-02 | Cypress, CA | 1971 | 136 | 7,835 | 5,224 | 2,868 | 8,030 | 7,897 | 15,927 | (3,151 | ) | 12,776 | 15,617 | |||||||||||||||||||||||||||||||||||
|
Pine Lake Terrace
|
Garden | Mar-02 | Garden Grove, CA | 1971 | 111 | 3,975 | 6,035 | 2,209 | 4,125 | 8,094 | 12,219 | (2,929 | ) | 9,290 | 11,898 | |||||||||||||||||||||||||||||||||||
|
Pine Shadows
|
Garden | May-98 | Tempe, AZ | 1983 | 272 | 2,095 | 11,899 | 3,888 | 2,095 | 15,787 | 17,882 | (8,163 | ) | 9,719 | 7,500 | |||||||||||||||||||||||||||||||||||
|
Pines, The
|
Garden | Oct-98 | Palm Bay, FL | 1984 | 216 | 603 | 3,318 | 2,830 | 603 | 6,148 | 6,751 | (2,701 | ) | 4,050 | 1,896 | |||||||||||||||||||||||||||||||||||
|
Plantation Gardens
|
Garden | Oct-99 | Plantation, FL | 1971 | 372 | 3,773 | 19,443 | 9,324 | 3,773 | 28,767 | 32,540 | (12,033 | ) | 20,507 | 23,798 | |||||||||||||||||||||||||||||||||||
|
Post Ridge
|
Garden | Jul-00 | Nashville, TN | 1972 | 150 | 1,883 | 6,712 | 4,321 | 1,883 | 11,033 | 12,916 | (5,084 | ) | 7,832 | 5,961 | |||||||||||||||||||||||||||||||||||
|
Ramblewood
|
Garden | Dec-99 | Wyoming, MI | 1973 | 1,704 | 8,607 | 61,082 | 3,863 | 8,661 | 64,891 | 73,552 | (15,065 | ) | 58,487 | 34,388 | |||||||||||||||||||||||||||||||||||
|
Ravensworth Towers
|
High Rise | Jun-04 | Annandale, VA | 1974 | 219 | 3,455 | 17,157 | 3,018 | 3,455 | 20,175 | 23,630 | (10,249 | ) | 13,381 | 20,172 | |||||||||||||||||||||||||||||||||||
|
Reflections
|
Garden | Oct-02 | Casselberry, FL | 1984 | 336 | 3,906 | 10,491 | 4,538 | 3,906 | 15,029 | 18,935 | (5,493 | ) | 13,442 | 10,700 | |||||||||||||||||||||||||||||||||||
F-55
Table of Contents
|
(3)
|
December 31, 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
(2)
|
Cost
|
Total
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(1)
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Initial Cost |
Capitalized
|
Accumulated
|
Cost
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Property
|
Date
|
Year
|
Number
|
Buildings and
|
Subsequent to
|
Buildings and
|
(4)
|
Depreciation
|
Net of
|
|||||||||||||||||||||||||||||||||||||||||
| Property Name | Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Reflections
|
Garden | Sep-00 | Virginia Beach, VA | 1987 | 480 | 15,988 | 13,684 | 5,591 | 15,988 | 19,275 | 35,263 | (8,531 | ) | 26,732 | 39,832 | |||||||||||||||||||||||||||||||||||
|
Reflections
|
Garden | Oct-00 | West Palm Beach, FL | 1986 | 300 | 5,504 | 9,984 | 4,677 | 5,504 | 14,661 | 20,165 | (5,777 | ) | 14,388 | 9,101 | |||||||||||||||||||||||||||||||||||
|
Regency Oaks
|
Garden | Oct-99 | Fern Park, FL | 1961 | 343 | 1,832 | 9,905 | 10,415 | 1,832 | 20,320 | 22,152 | (11,054 | ) | 11,098 | 10,978 | |||||||||||||||||||||||||||||||||||
|
Remington at Ponte Vedra Lakes
|
Garden | Dec-06 | Ponte Vedra Beach, FL | 1986 | 344 | 18,576 | 18,650 | 2,468 | 18,795 | 20,899 | 39,694 | (4,581 | ) | 35,113 | 24,345 | |||||||||||||||||||||||||||||||||||
|
River Club
|
Garden | Apr-05 | Edgewater, NJ | 1998 | 266 | 30,578 | 30,638 | 2,155 | 30,579 | 32,792 | 63,371 | (7,544 | ) | 55,827 | 37,920 | |||||||||||||||||||||||||||||||||||
|
River Reach
|
Garden | Sep-00 | Naples, FL | 1986 | 556 | 17,728 | 18,337 | 7,378 | 17,728 | 25,715 | 43,443 | (11,353 | ) | 32,090 | 23,354 | |||||||||||||||||||||||||||||||||||
|
Riverbend Village
|
Garden | Jul-01 | Arlington, TX | 1983 | 201 | 893 | 4,128 | 5,054 | 893 | 9,182 | 10,075 | (4,704 | ) | 5,371 | — | |||||||||||||||||||||||||||||||||||
|
Riverloft
|
High Rise | Oct-99 | Philadelphia, PA | 1910 | 184 | 2,120 | 11,287 | 31,208 | 2,120 | 42,495 | 44,615 | (16,738 | ) | 27,877 | 18,881 | |||||||||||||||||||||||||||||||||||
|
Riverside
|
High Rise | Apr-00 | Alexandria, VA | 1973 | 1,222 | 10,433 | 65,474 | 80,363 | 10,409 | 145,861 | 156,270 | (72,434 | ) | 83,836 | 105,508 | |||||||||||||||||||||||||||||||||||
|
Rosewood
|
Garden | Mar-02 | Camarillo, CA | 1976 | 152 | 12,128 | 8,060 | 2,532 | 12,430 | 10,290 | 22,720 | (3,749 | ) | 18,971 | 17,900 | |||||||||||||||||||||||||||||||||||
|
Royal Crest Estates
|
Garden | Aug-02 | Fall River, MA | 1974 | 216 | 5,832 | 12,044 | 2,082 | 5,832 | 14,126 | 19,958 | (6,329 | ) | 13,629 | 11,686 | |||||||||||||||||||||||||||||||||||
|
Royal Crest Estates
|
Garden | Aug-02 | Marlborough, MA | 1970 | 473 | 25,178 | 28,786 | 4,117 | 25,178 | 32,903 | 58,081 | (15,197 | ) | 42,884 | 34,969 | |||||||||||||||||||||||||||||||||||
|
Royal Crest Estates
|
Garden | Aug-02 | Nashua, NH | 1970 | 902 | 68,231 | 45,562 | 11,730 | 68,231 | 57,292 | 125,523 | (28,323 | ) | 97,200 | 48,117 | |||||||||||||||||||||||||||||||||||
|
Royal Crest Estates
|
Garden | Aug-02 | North Andover, MA | 1970 | 588 | 51,292 | 36,808 | 10,653 | 51,292 | 47,461 | 98,753 | (21,029 | ) | 77,724 | 59,507 | |||||||||||||||||||||||||||||||||||
|
Royal Crest Estates
|
Garden | Aug-02 | Warwick, RI | 1972 | 492 | 22,433 | 24,095 | 5,605 | 22,433 | 29,700 | 52,133 | (13,883 | ) | 38,250 | 37,433 | |||||||||||||||||||||||||||||||||||
|
Runaway Bay
|
Garden | Oct-00 | Lantana, FL | 1987 | 404 | 5,934 | 16,052 | 8,111 | 5,934 | 24,163 | 30,097 | (9,195 | ) | 20,902 | 21,521 | |||||||||||||||||||||||||||||||||||
|
Runaway Bay
|
Garden | Jul-02 | Pinellas Park, FL | 1986 | 192 | 1,884 | 7,045 | 3,843 | 1,884 | 10,888 | 12,772 | (2,988 | ) | 9,784 | 8,848 | |||||||||||||||||||||||||||||||||||
|
Savannah Trace
|
Garden | Mar-01 | Shaumburg, IL | 1986 | 368 | 13,960 | 20,731 | 4,369 | 13,960 | 25,100 | 39,060 | (9,545 | ) | 29,515 | 22,015 | |||||||||||||||||||||||||||||||||||
|
Scotchollow
|
Garden | Jan-06 | San Mateo, CA | 1971 | 418 | 49,474 | 17,756 | 8,864 | 49,474 | 26,620 | 76,094 | (5,014 | ) | 71,080 | 48,982 | |||||||||||||||||||||||||||||||||||
|
Scottsdale Gateway I
|
Garden | Oct-97 | Tempe, AZ | 1965 | 124 | 591 | 3,359 | 8,042 | 591 | 11,401 | 11,992 | (5,172 | ) | 6,820 | 5,800 | |||||||||||||||||||||||||||||||||||
|
Scottsdale Gateway II
|
Garden | Oct-97 | Tempe, AZ | 1972 | 487 | 2,458 | 13,927 | 23,595 | 2,458 | 37,522 | 39,980 | (18,369 | ) | 21,611 | 16,699 | |||||||||||||||||||||||||||||||||||
|
Shadow Creek
|
Garden | May-98 | Mesa, AZ | 1984 | 266 | 2,016 | 11,886 | 4,017 | 2,016 | 15,903 | 17,919 | (8,416 | ) | 9,503 | — | |||||||||||||||||||||||||||||||||||
|
Shenandoah Crossing
|
Garden | Sep-00 | Fairfax, VA | 1984 | 640 | 18,492 | 57,197 | 8,058 | 18,492 | 65,255 | 83,747 | (30,696 | ) | 53,051 | 68,604 | |||||||||||||||||||||||||||||||||||
|
Signal Pointe
|
Garden | Oct-99 | Winter Park, FL | 1969 | 368 | 2,382 | 11,359 | 22,094 | 2,382 | 33,453 | 35,835 | (13,652 | ) | 22,183 | 18,596 | |||||||||||||||||||||||||||||||||||
|
Signature Point
|
Garden | Nov-96 | League City, TX | 1994 | 304 | 2,810 | 17,579 | 2,983 | 2,810 | 20,562 | 23,372 | (7,452 | ) | 15,920 | 10,269 | |||||||||||||||||||||||||||||||||||
|
Springwoods at Lake Ridge
|
Garden | Jul-02 | Woodbridge, VA | 1984 | 180 | 5,587 | 7,284 | 1,450 | 5,587 | 8,734 | 14,321 | (2,349 | ) | 11,972 | 14,250 | |||||||||||||||||||||||||||||||||||
|
Spyglass at Cedar Cove
|
Garden | Sep-00 | Lexington Park, MD | 1985 | 152 | 3,241 | 5,094 | 2,735 | 3,241 | 7,829 | 11,070 | (3,595 | ) | 7,475 | 10,300 | |||||||||||||||||||||||||||||||||||
|
Stafford
|
High Rise | Oct-02 | Baltimore, MD | 1889 | 96 | 706 | 4,032 | 3,454 | 562 | 7,630 | 8,192 | (4,261 | ) | 3,931 | 4,255 | |||||||||||||||||||||||||||||||||||
|
Steeplechase
|
Garden | Sep-00 | Largo, MD | 1986 | 240 | 3,675 | 16,111 | 3,755 | 3,675 | 19,866 | 23,541 | (8,054 | ) | 15,487 | 23,326 | |||||||||||||||||||||||||||||||||||
|
Steeplechase
|
Garden | Jul-02 | Plano, TX | 1985 | 368 | 7,056 | 10,510 | 7,183 | 7,056 | 17,693 | 24,749 | (6,390 | ) | 18,359 | 16,575 | |||||||||||||||||||||||||||||||||||
|
Sterling Apartment Homes, The
|
Garden | Oct-99 | Philadelphia, PA | 1961 | 537 | 8,871 | 55,364 | 21,600 | 8,871 | 76,964 | 85,835 | (34,388 | ) | 51,447 | 76,778 | |||||||||||||||||||||||||||||||||||
|
Stone Creek Club
|
Garden | Sep-00 | Germantown, MD | 1984 | 240 | 13,593 | 9,347 | 3,381 | 13,593 | 12,728 | 26,321 | (7,386 | ) | 18,935 | 24,611 | |||||||||||||||||||||||||||||||||||
|
Sun Lake
|
Garden | May-98 | Lake Mary, FL | 1986 | 600 | 4,551 | 25,543 | 32,151 | 4,551 | 57,694 | 62,245 | (24,911 | ) | 37,334 | 35,128 | |||||||||||||||||||||||||||||||||||
|
Sun River Village
|
Garden | Oct-99 | Tempe, AZ | 1981 | 334 | 2,367 | 13,303 | 4,157 | 2,367 | 17,460 | 19,827 | (9,273 | ) | 10,554 | 10,467 | |||||||||||||||||||||||||||||||||||
|
Tamarac Village
|
Garden | Apr-00 | Denver, CO | 1979 | 564 | 3,928 | 23,491 | 8,715 | 4,223 | 31,911 | 36,134 | (17,565 | ) | 18,569 | 18,212 | |||||||||||||||||||||||||||||||||||
|
Tamarind Bay
|
Garden | Jan-00 | St. Petersburg, FL | 1980 | 200 | 1,091 | 6,310 | 5,193 | 1,091 | 11,503 | 12,594 | (6,110 | ) | 6,484 | 6,838 | |||||||||||||||||||||||||||||||||||
|
Tatum Gardens
|
Garden | May-98 | Phoenix, AZ | 1985 | 128 | 1,323 | 7,155 | 2,035 | 1,323 | 9,190 | 10,513 | (5,152 | ) | 5,361 | 7,334 | |||||||||||||||||||||||||||||||||||
|
Bluffs at Pacifica, The
|
Garden | Oct-06 | Pacifica, CA | 1963 | 64 | 7,975 | 4,131 | 10,549 | 8,108 | 14,547 | 22,655 | (2,601 | ) | 20,054 | 6,323 | |||||||||||||||||||||||||||||||||||
|
Timbertree
|
Garden | Oct-97 | Phoenix, AZ | 1979 | 387 | 2,292 | 13,000 | 6,728 | 2,292 | 19,728 | 22,020 | (10,752 | ) | 11,268 | 4,062 | |||||||||||||||||||||||||||||||||||
|
Towers Of Westchester Park, The
|
High Rise | Jan-06 | College Park, MD | 1972 | 303 | 15,198 | 22,029 | 4,763 | 15,198 | 26,792 | 41,990 | (5,219 | ) | 36,771 | 27,272 | |||||||||||||||||||||||||||||||||||
|
Township At Highlands
|
Town Home | Nov-96 | Centennial, CO | 1985 | 161 | 1,615 | 9,773 | 6,227 | 1,536 | 16,079 | 17,615 | (7,771 | ) | 9,844 | 16,365 | |||||||||||||||||||||||||||||||||||
|
Twin Lake Towers
|
High Rise | Oct-99 | Westmont, IL | 1969 | 399 | 3,268 | 18,763 | 23,912 | 3,268 | 42,675 | 45,943 | (19,292 | ) | 26,651 | 26,759 | |||||||||||||||||||||||||||||||||||
|
Twin Lakes
|
Garden | Apr-00 | Palm Harbor, FL | 1986 | 262 | 2,062 | 12,850 | 4,809 | 2,062 | 17,659 | 19,721 | (8,622 | ) | 11,099 | 10,471 | |||||||||||||||||||||||||||||||||||
|
Vantage Pointe
|
Mid Rise | Aug-02 | Swampscott, MA | 1987 | 96 | 4,749 | 10,089 | 1,432 | 4,749 | 11,521 | 16,270 | (3,847 | ) | 12,423 | 6,978 | |||||||||||||||||||||||||||||||||||
|
Verandahs at Hunt Club
|
Garden | Jul-02 | Apopka, FL | 1985 | 210 | 2,271 | 7,724 | 3,346 | 2,271 | 11,070 | 13,341 | (3,268 | ) | 10,073 | 10,891 | |||||||||||||||||||||||||||||||||||
|
Views at Vinings Mountain, The
|
Garden | Jan-06 | Atlanta, GA | 1983 | 180 | 610 | 5,026 | 12,158 | 610 | 17,184 | 17,794 | (9,692 | ) | 8,102 | 13,577 | |||||||||||||||||||||||||||||||||||
|
Villa Del Sol
|
Garden | Mar-02 | Norwalk, CA | 1972 | 120 | 7,294 | 4,861 | 2,666 | 7,476 | 7,345 | 14,821 | (3,122 | ) | 11,699 | 13,386 | |||||||||||||||||||||||||||||||||||
|
Village Crossing
|
Garden | May-98 | West Palm Beach, FL | 1985 | 189 | 1,618 | 8,188 | 3,040 | 1,618 | 11,228 | 12,846 | (5,947 | ) | 6,899 | 7,000 | |||||||||||||||||||||||||||||||||||
|
Village in the Woods
|
Garden | Jan-00 | Cypress, TX | 1983 | 530 | 3,457 | 15,787 | 10,605 | 3,457 | 26,392 | 29,849 | (14,251 | ) | 15,598 | 19,250 | |||||||||||||||||||||||||||||||||||
|
Village of Pennbrook
|
Garden | Oct-98 | Levittown, PA | 1969 | 722 | 10,229 | 38,222 | 14,189 | 10,229 | 52,411 | 62,640 | (24,526 | ) | 38,114 | 47,804 | |||||||||||||||||||||||||||||||||||
|
Villages of Baymeadows
|
Garden | Oct-99 | Jacksonville, FL | 1972 | 904 | 4,859 | 33,957 | 55,352 | 4,859 | 89,309 | 94,168 | (47,875 | ) | 46,293 | 37,113 | |||||||||||||||||||||||||||||||||||
F-56
Table of Contents
|
(3)
|
December 31, 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
(2)
|
Cost
|
Total
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(1)
|
Initial Cost |
Capitalized
|
Accumulated
|
Cost
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Property
|
Date
|
Year
|
Number
|
Buildings and
|
Subsequent to
|
Buildings and
|
(4)
|
Depreciation
|
Net of
|
|||||||||||||||||||||||||||||||||||||||||
| Property Name | Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Villas at Park La Brea, The
|
Garden | Mar-02 | Los Angeles, CA | 2002 | 250 | 8,621 | 48,871 | 3,886 | 8,630 | 52,748 | 61,378 | (14,930 | ) | 46,448 | 28,949 | |||||||||||||||||||||||||||||||||||
|
Vista Del Lagos
|
Garden | Dec-97 | Chandler, AZ | 1986 | 200 | 804 | 4,952 | 3,646 | 804 | 8,598 | 9,402 | (3,740 | ) | 5,662 | 11,618 | |||||||||||||||||||||||||||||||||||
|
Waterford Village
|
Garden | Aug-02 | Bridgewater, MA | 1971 | 588 | 28,585 | 28,102 | 5,896 | 29,110 | 33,473 | 62,583 | (17,747 | ) | 44,836 | 40,130 | |||||||||||||||||||||||||||||||||||
|
Waterways Village
|
Garden | Jun-97 | Aventura, FL | 1994 | 180 | 4,504 | 11,064 | 4,062 | 4,504 | 15,126 | 19,630 | (7,089 | ) | 12,541 | 6,443 | |||||||||||||||||||||||||||||||||||
|
Waverly Apartments
|
Garden | Aug-08 | Brighton, MA | 1970 | 103 | 7,696 | 11,347 | 1,275 | 7,920 | 12,398 | 20,318 | (1,302 | ) | 19,016 | 12,000 | |||||||||||||||||||||||||||||||||||
|
West Winds
|
Garden | Oct-02 | Orlando, FL | 1985 | 272 | 2,324 | 11,481 | 3,319 | 2,324 | 14,800 | 17,124 | (5,545 | ) | 11,579 | 12,570 | |||||||||||||||||||||||||||||||||||
|
Westway Village
|
Garden | May-98 | Houston, TX | 1977 | 326 | 2,921 | 11,384 | 3,503 | 2,921 | 14,887 | 17,808 | (7,395 | ) | 10,413 | 7,677 | |||||||||||||||||||||||||||||||||||
|
Wexford Village
|
Garden | Aug-02 | Worcester, MA | 1974 | 264 | 6,339 | 17,939 | 2,203 | 6,339 | 20,142 | 26,481 | (8,167 | ) | 18,314 | 13,269 | |||||||||||||||||||||||||||||||||||
|
Willow Bend
|
Garden | May-98 | Rolling Meadows, IL | 1969 | 328 | 2,717 | 15,437 | 26,536 | 2,717 | 41,973 | 44,690 | (18,148 | ) | 26,542 | 19,595 | |||||||||||||||||||||||||||||||||||
|
Willow Park on Lake Adelaide
|
Garden | Oct-99 | Altamonte Springs, FL | 1972 | 185 | 1,225 | 7,357 | 3,519 | 1,224 | 10,877 | 12,101 | (6,063 | ) | 6,038 | 6,716 | |||||||||||||||||||||||||||||||||||
|
Windrift
|
Garden | Mar-01 | Oceanside, CA | 1987 | 404 | 24,960 | 17,590 | 19,325 | 24,960 | 36,915 | 61,875 | (18,841 | ) | 43,034 | 44,601 | |||||||||||||||||||||||||||||||||||
|
Windrift
|
Garden | Oct-00 | Orlando, FL | 1987 | 288 | 3,696 | 10,029 | 5,834 | 3,696 | 15,863 | 19,559 | (6,451 | ) | 13,108 | 16,841 | |||||||||||||||||||||||||||||||||||
|
Windsor Crossing
|
Garden | Mar-00 | Newport News, VA | 1978 | 156 | 307 | 2,110 | 2,528 | 131 | 4,814 | 4,945 | (2,358 | ) | 2,587 | 1,885 | |||||||||||||||||||||||||||||||||||
|
Windsor Park
|
Garden | Mar-01 | Woodbridge, VA | 1987 | 220 | 4,279 | 15,970 | 2,329 | 4,279 | 18,299 | 22,578 | (7,179 | ) | 15,399 | 19,325 | |||||||||||||||||||||||||||||||||||
|
Woodcreek
|
Garden | Oct-02 | Mesa, AZ | 1985 | 432 | 2,426 | 15,886 | 4,767 | 2,426 | 20,653 | 23,079 | (11,433 | ) | 11,646 | 19,165 | |||||||||||||||||||||||||||||||||||
|
Woods of Burnsville
|
Garden | Nov-04 | Burnsville, MN | 1984 | 400 | 3,954 | 18,125 | 2,890 | 3,954 | 21,015 | 24,969 | (8,248 | ) | 16,721 | 16,580 | |||||||||||||||||||||||||||||||||||
|
Woods of Inverness
|
Garden | Oct-99 | Houston, TX | 1983 | 272 | 2,146 | 10,978 | 4,115 | 2,146 | 15,093 | 17,239 | (7,424 | ) | 9,815 | 5,878 | |||||||||||||||||||||||||||||||||||
|
Woods Of Williamsburg
|
Garden | Jan-06 | Williamsburg, VA | 1976 | 125 | 798 | 3,657 | 1,102 | 798 | 4,759 | 5,557 | (3,546 | ) | 2,011 | 1,090 | |||||||||||||||||||||||||||||||||||
|
Yacht Club at Brickell
|
High Rise | Dec-03 | Miami, FL | 1998 | 357 | 31,363 | 32,214 | 5,418 | 31,363 | 37,632 | 68,995 | (7,188 | ) | 61,807 | 37,289 | |||||||||||||||||||||||||||||||||||
|
Yorktown Apartments
|
High Rise | Dec-99 | Lombard, IL | 1971 | 364 | 2,971 | 18,163 | 17,222 | 3,055 | 35,301 | 38,356 | (13,149 | ) | 25,207 | 25,469 | |||||||||||||||||||||||||||||||||||
|
Total Conventional Properties
|
67,668 | 1,946,419 | 3,767,197 | 2,245,548 | 2,002,838 | 5,956,326 | 7,959,164 | (2,388,645 | ) | 5,570,519 | 4,695,494 | |||||||||||||||||||||||||||||||||||||||
|
Affordable Properties:
|
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|
All Hallows
|
Garden | Jan-06 | San Francisco, CA | 1976 | 157 | 1,348 | 29,770 | 20,594 | 1,338 | 50,374 | 51,712 | (18,274 | ) | 33,438 | 21,207 | |||||||||||||||||||||||||||||||||||
|
Alliance Towers
|
High Rise | Mar-02 | Alliance, OH | 1979 | 101 | 530 | 1,934 | 773 | 530 | 2,707 | 3,237 | (838 | ) | 2,399 | 2,219 | |||||||||||||||||||||||||||||||||||
|
Antioch Towers
|
High Rise | Jan-10 | Cleveland, OH | 1976 | 171 | 720 | 8,802 | 88 | 720 | 8,890 | 9,610 | (2,359 | ) | 7,251 | 5,717 | |||||||||||||||||||||||||||||||||||
|
Anton Square
|
Garden | Jan-10 | Whistler, AL | 1984 | 48 | 152 | 1,846 | 53 | 152 | 1,899 | 2,051 | (393 | ) | 1,658 | 1,499 | |||||||||||||||||||||||||||||||||||
|
Arvada House
|
High Rise | Nov-04 | Arvada, CO | 1977 | 88 | 641 | 3,314 | 1,800 | 405 | 5,350 | 5,755 | (1,520 | ) | 4,235 | 4,118 | |||||||||||||||||||||||||||||||||||
|
Bayview
|
Garden | Jun-05 | San Francisco, CA | 1976 | 146 | 1,023 | 15,265 | 16,581 | 582 | 32,287 | 32,869 | (12,021 | ) | 20,848 | 10,934 | |||||||||||||||||||||||||||||||||||
|
Beacon Hill
|
High Rise | Mar-02 | Hillsdale, MI | 1980 | 198 | 1,380 | 7,044 | 6,650 | 1,093 | 13,981 | 15,074 | (4,080 | ) | 10,994 | 4,338 | |||||||||||||||||||||||||||||||||||
|
Bedford House
|
Mid Rise | Mar-02 | Falmouth, KY | 1979 | 48 | 230 | 919 | 335 | 230 | 1,254 | 1,484 | (494 | ) | 990 | 1,079 | |||||||||||||||||||||||||||||||||||
|
Benjamin Banneker Plaza
|
Mid Rise | Jan-06 | Chester, PA | 1976 | 70 | 79 | 3,862 | 810 | 79 | 4,672 | 4,751 | (3,118 | ) | 1,633 | 1,497 | |||||||||||||||||||||||||||||||||||
|
Berger Apartments
|
Mid Rise | Mar-02 | New Haven, CT | 1981 | 144 | 1,152 | 4,657 | 2,609 | 1,152 | 7,266 | 8,418 | (2,332 | ) | 6,086 | 595 | |||||||||||||||||||||||||||||||||||
|
Biltmore Towers
|
High Rise | Mar-02 | Dayton, OH | 1980 | 230 | 1,813 | 6,411 | 13,229 | 1,813 | 19,640 | 21,453 | (10,325 | ) | 11,128 | 10,591 | |||||||||||||||||||||||||||||||||||
|
Birchwood
|
Garden | Jan-10 | Dallas, TX | 1963 | 276 | 975 | 5,525 | — | 975 | 5,525 | 6,500 | (380 | ) | 6,120 | 4,240 | |||||||||||||||||||||||||||||||||||
|
Blakewood
|
Garden | Oct-05 | Statesboro, GA | 1973 | 42 | 316 | 882 | 402 | 316 | 1,284 | 1,600 | (1,167 | ) | 433 | 676 | |||||||||||||||||||||||||||||||||||
|
Bolton North
|
High Rise | Jan-06 | Baltimore, MD | 1977 | 209 | 1,450 | 6,569 | 806 | 1,429 | 7,396 | 8,825 | (2,579 | ) | 6,246 | 2,223 | |||||||||||||||||||||||||||||||||||
|
Bridge Street
|
Garden | Jan-10 | East Stroudsburg, PA | 1999 | 52 | 398 | 2,255 | 47 | 398 | 2,302 | 2,700 | (169 | ) | 2,531 | 2,016 | |||||||||||||||||||||||||||||||||||
|
Brittany Apartments
|
Garden | Jan-10 | Raytown, MO | 1971 | 144 | 465 | 2,635 | — | 465 | 2,635 | 3,100 | (194 | ) | 2,906 | 2,138 | |||||||||||||||||||||||||||||||||||
|
Burchwood
|
Garden | Oct-07 | Berea, KY | 1999 | 24 | 147 | 247 | 494 | 147 | 741 | 888 | (274 | ) | 614 | 949 | |||||||||||||||||||||||||||||||||||
|
Butternut Creek
|
Mid Rise | Jan-06 | Charlotte, MI | 1980 | 100 | 505 | 3,617 | 3,785 | 505 | 7,402 | 7,907 | (3,124 | ) | 4,783 | — | |||||||||||||||||||||||||||||||||||
|
California Square I
|
High Rise | Jan-06 | Louisville, KY | 1982 | 101 | 154 | 5,704 | 560 | 154 | 6,264 | 6,418 | (3,813 | ) | 2,605 | 3,465 | |||||||||||||||||||||||||||||||||||
|
Calvert City
|
Garden | Jan-10 | Calvert City, KY | 1980 | 60 | 128 | 694 | 11 | 128 | 705 | 833 | (663 | ) | 170 | 711 | |||||||||||||||||||||||||||||||||||
|
Canterbury Towers
|
High Rise | Jan-06 | Worcester, MA | 1976 | 156 | 567 | 4,557 | 1,012 | 567 | 5,569 | 6,136 | (3,984 | ) | 2,152 | 3,005 | |||||||||||||||||||||||||||||||||||
|
Canyon Shadows
|
Garden | Jan-10 | Riverside, CA | 1971 | 120 | 488 | 2,763 | — | 488 | 2,763 | 3,251 | (205 | ) | 3,046 | 2,547 | |||||||||||||||||||||||||||||||||||
|
Carriage House
|
Mid Rise | Dec-06 | Petersburg, VA | 1885 | 118 | 847 | 2,886 | 3,454 | 716 | 6,471 | 7,187 | (1,951 | ) | 5,236 | 2,041 | |||||||||||||||||||||||||||||||||||
|
Castlewood
|
Garden | Mar-02 | Davenport, IA | 1980 | 96 | 585 | 2,351 | 1,544 | 585 | 3,895 | 4,480 | (1,753 | ) | 2,727 | 3,486 | |||||||||||||||||||||||||||||||||||
|
City Line
|
Garden | Mar-02 | Newport News, VA | 1976 | 200 | 500 | 2,014 | 7,329 | 500 | 9,343 | 9,843 | (1,598 | ) | 8,245 | 4,786 | |||||||||||||||||||||||||||||||||||
|
Clisby Towers
|
Mid Rise | Jan-06 | Macon, GA | 1980 | 52 | 524 | 1,970 | 272 | 524 | 2,242 | 2,766 | (1,736 | ) | 1,030 | 881 | |||||||||||||||||||||||||||||||||||
|
Club, The
|
Garden | Jan-06 | Lexington, NC | 1972 | 87 | 498 | 2,128 | 688 | 498 | 2,816 | 3,314 | (2,142 | ) | 1,172 | 235 | |||||||||||||||||||||||||||||||||||
|
Cold Spring Homes
|
Garden | Oct-07 | Cold Springs, KY | 2000 | 30 | 118 | (433 | ) | 1,129 | 118 | 696 | 814 | (383 | ) | 431 | 719 | ||||||||||||||||||||||||||||||||||
F-57
Table of Contents
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(3)
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December 31, 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||
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(2)
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Cost
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Total
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(1)
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Initial Cost |
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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(4)
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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 | ||||||||||||||||||||||||||||||||||||
|
Community Circle II
|
Garden | Jan-06 | Cleveland, OH | 1975 | 129 | 263 | 4,699 | 962 | 263 | 5,661 | 5,924 | (3,517 | ) | 2,407 | 3,275 | |||||||||||||||||||||||||||||||||||
|
Copperwood I Apartments
|
Garden | Apr-06 | The Woodlands, TX | 1980 | 150 | 390 | 8,373 | 4,879 | 363 | 13,279 | 13,642 | (9,980 | ) | 3,662 | 5,529 | |||||||||||||||||||||||||||||||||||
|
Copperwood II Apartments
|
Garden | Oct-05 | The Woodlands, TX | 1981 | 150 | 452 | 5,552 | 3,442 | 459 | 8,987 | 9,446 | (3,917 | ) | 5,529 | 5,704 | |||||||||||||||||||||||||||||||||||
|
Country Club Heights
|
Garden | Mar-04 | Quincy, IL | 1976 | 200 | 676 | 5,715 | 4,872 | 675 | 10,588 | 11,263 | (4,294 | ) | 6,969 | 7,027 | |||||||||||||||||||||||||||||||||||
|
Country Commons
|
Garden | Jan-06 | Bensalem, PA | 1972 | 352 | 1,853 | 17,657 | 4,493 | 1,853 | 22,150 | 24,003 | (11,635 | ) | 12,368 | 12,633 | |||||||||||||||||||||||||||||||||||
|
Courtyard
|
Mid Rise | Jan-06 | Cincinnati, OH | 1980 | 137 | 1,362 | 4,876 | 548 | 1,362 | 5,424 | 6,786 | (3,324 | ) | 3,462 | 3,787 | |||||||||||||||||||||||||||||||||||
|
Courtyards at Kirnwood
|
Garden | Jan-10 | DeSoto, TX | 1997 | 198 | 861 | 4,881 | — | 861 | 4,881 | 5,742 | (516 | ) | 5,226 | 4,397 | |||||||||||||||||||||||||||||||||||
|
Courtyards of Arlington
|
Garden | Jan-10 | Arlington, TX | 1996 | 140 | 758 | 4,293 | — | 758 | 4,293 | 5,051 | (286 | ) | 4,765 | 2,943 | |||||||||||||||||||||||||||||||||||
|
Crevenna Oaks
|
Town Home | Jan-06 | Burke, VA | 1979 | 50 | 355 | 4,849 | 247 | 355 | 5,096 | 5,451 | (1,436 | ) | 4,015 | 3,197 | |||||||||||||||||||||||||||||||||||
|
Crockett Manor
|
Garden | Mar-04 | Trenton, TN | 1982 | 38 | 42 | 1,395 | 73 | 130 | 1,380 | 1,510 | (115 | ) | 1,395 | 978 | |||||||||||||||||||||||||||||||||||
|
Cumberland Court
|
Garden | Jan-06 | Harrisburg, PA | 1975 | 108 | 379 | 4,040 | 863 | 379 | 4,903 | 5,282 | (3,490 | ) | 1,792 | 1,228 | |||||||||||||||||||||||||||||||||||
|
Darby Townhouses
|
Town Home | Jan-10 | Sharon Hill, PA | 1970 | 172 | 1,298 | 11,115 | 218 | 1,298 | 11,333 | 12,631 | (4,241 | ) | 8,390 | 5,504 | |||||||||||||||||||||||||||||||||||
|
Daugette Tower
|
High Rise | Mar-02 | Gadsden, AL | 1979 | 100 | 540 | 2,178 | 1,841 | 540 | 4,019 | 4,559 | (1,462 | ) | 3,097 | — | |||||||||||||||||||||||||||||||||||
|
Day Meadows
|
Garden | Jan-10 | Mountain Home, ID | 1978 | 44 | 270 | 1,530 | 11 | 270 | 1,541 | 1,811 | (81 | ) | 1,730 | 956 | |||||||||||||||||||||||||||||||||||
|
Delhaven Manor
|
Mid Rise | Mar-02 | Jackson, MS | 1983 | 104 | 575 | 2,304 | 2,046 | 575 | 4,350 | 4,925 | (1,923 | ) | 3,002 | 3,625 | |||||||||||||||||||||||||||||||||||
|
Denny Place
|
Garden | Mar-02 | North Hollywood, CA | 1984 | 17 | 394 | 1,579 | 146 | 394 | 1,725 | 2,119 | (542 | ) | 1,577 | 1,111 | |||||||||||||||||||||||||||||||||||
|
Douglas Landing
|
Garden | Oct-07 | Austin, TX | 1999 | 96 | 750 | 4,250 | 95 | 750 | 4,345 | 5,095 | (502 | ) | 4,593 | 3,902 | |||||||||||||||||||||||||||||||||||
|
Elmwood
|
Garden | Jan-06 | Athens, AL | 1981 | 80 | 346 | 2,643 | 426 | 346 | 3,069 | 3,415 | (1,793 | ) | 1,622 | 1,860 | |||||||||||||||||||||||||||||||||||
|
Fairburn and Gordon I
|
Garden | Jan-10 | Atlanta, GA | 1969 | 102 | 143 | 1,941 | 292 | 143 | 2,233 | 2,376 | (1,509 | ) | 867 | — | |||||||||||||||||||||||||||||||||||
|
Fairburn and Gordon II
|
Garden | Jan-06 | Atlanta, GA | 1969 | 58 | 439 | 1,360 | 484 | 439 | 1,844 | 2,283 | (1,568 | ) | 715 | — | |||||||||||||||||||||||||||||||||||
|
Fairwood
|
Garden | Jan-06 | Carmichael, CA | 1979 | 86 | 176 | 5,264 | 460 | 176 | 5,724 | 5,900 | (3,729 | ) | 2,171 | 2,364 | |||||||||||||||||||||||||||||||||||
|
Fountain Place
|
Mid Rise | Jan-06 | Connersville, IN | 1980 | 102 | 440 | 2,091 | 2,914 | 378 | 5,067 | 5,445 | (751 | ) | 4,694 | 1,121 | |||||||||||||||||||||||||||||||||||
|
Fox Run
|
Garden | Mar-02 | Orange, TX | 1983 | 70 | 420 | 1,992 | 1,050 | 420 | 3,042 | 3,462 | (1,166 | ) | 2,296 | 2,549 | |||||||||||||||||||||||||||||||||||
|
Foxfire
|
Garden | Jan-06 | Jackson, MI | 1975 | 160 | 856 | 6,853 | 2,505 | 856 | 9,358 | 10,214 | (5,660 | ) | 4,554 | 1,611 | |||||||||||||||||||||||||||||||||||
|
Franklin Square School Apts
|
Mid Rise | Jan-06 | Baltimore, MD | 1888 | 65 | 566 | 3,581 | 259 | 566 | 3,840 | 4,406 | (2,271 | ) | 2,135 | 3,898 | |||||||||||||||||||||||||||||||||||
|
Friendset Apartments
|
High Rise | Jan-06 | Brooklyn, NY | 1979 | 259 | 550 | 16,825 | 1,873 | 550 | 18,698 | 19,248 | (11,001 | ) | 8,247 | 14,095 | |||||||||||||||||||||||||||||||||||
|
Frio
|
Garden | Jan-06 | Pearsall, TX | 1980 | 63 | 327 | 2,207 | 419 | 327 | 2,626 | 2,953 | (1,855 | ) | 1,098 | 1,109 | |||||||||||||||||||||||||||||||||||
|
Gates Manor
|
Garden | Mar-04 | Clinton, TN | 1981 | 80 | 266 | 2,225 | 927 | 264 | 3,154 | 3,418 | (1,355 | ) | 2,063 | 2,381 | |||||||||||||||||||||||||||||||||||
|
Georgetown Woods
|
Garden | Jan-10 | Indianapolis, IN | 1993 | 90 | 375 | 2,125 | — | 375 | 2,125 | 2,500 | (175 | ) | 2,325 | 2,118 | |||||||||||||||||||||||||||||||||||
|
Glens, The
|
Garden | Jan-06 | Rock Hill, SC | 1982 | 88 | 839 | 4,135 | 1,187 | 839 | 5,322 | 6,161 | (3,939 | ) | 2,222 | 3,723 | |||||||||||||||||||||||||||||||||||
|
Gotham Apts
|
Garden | Jan-10 | Kansas City, MO | 1930 | 105 | 471 | 5,419 | 79 | 471 | 5,498 | 5,969 | (3,334 | ) | 2,635 | 3,408 | |||||||||||||||||||||||||||||||||||
|
Greenbriar
|
Garden | Jan-06 | Indianapolis, IN | 1980 | 121 | 812 | 3,272 | 396 | 812 | 3,668 | 4,480 | (2,583 | ) | 1,897 | 3,266 | |||||||||||||||||||||||||||||||||||
|
Hamlin Estates
|
Garden | Mar-02 | North Hollywood, CA | 1983 | 30 | 1,010 | 1,691 | 262 | 1,010 | 1,953 | 2,963 | (754 | ) | 2,209 | 1,349 | |||||||||||||||||||||||||||||||||||
|
Hanover Square
|
High Rise | Jan-06 | Baltimore, MD | 1980 | 199 | 1,656 | 9,575 | 510 | 1,656 | 10,085 | 11,741 | (6,567 | ) | 5,174 | 10,500 | |||||||||||||||||||||||||||||||||||
|
Harris Park Apartments
|
Garden | Dec-97 | Rochester, NY | 1968 | 114 | 475 | 2,786 | 1,321 | 475 | 4,107 | 4,582 | (1,959 | ) | 2,623 | 42 | |||||||||||||||||||||||||||||||||||
|
Hatillo Housing
|
Mid Rise | Jan-06 | Hatillo, PR | 1982 | 64 | 202 | 2,875 | 515 | 202 | 3,390 | 3,592 | (1,939 | ) | 1,653 | 1,358 | |||||||||||||||||||||||||||||||||||
|
Henna Townhomes
|
Garden | Oct-07 | Round Rock, TX | 1999 | 160 | 1,716 | 9,197 | 270 | 1,736 | 9,447 | 11,183 | (1,132 | ) | 10,051 | 5,874 | |||||||||||||||||||||||||||||||||||
|
Hopkins Village
|
Mid Rise | Sep-03 | Baltimore, MD | 1979 | 165 | 438 | 5,973 | 3,593 | 549 | 9,455 | 10,004 | (1,808 | ) | 8,196 | 9,100 | |||||||||||||||||||||||||||||||||||
|
Hudson Gardens
|
Garden | Mar-02 | Pasadena, CA | 1983 | 41 | 914 | 1,548 | 607 | 914 | 2,155 | 3,069 | (732 | ) | 2,337 | 408 | |||||||||||||||||||||||||||||||||||
|
Ingram Square
|
Garden | Jan-06 | San Antonio, TX | 1980 | 120 | 630 | 3,137 | 5,863 | 630 | 9,000 | 9,630 | (2,228 | ) | 7,402 | 3,825 | |||||||||||||||||||||||||||||||||||
|
James Court
|
Garden | Jan-10 | Meridian, ID | 1978 | 50 | 345 | 1,955 | 9 | 345 | 1,964 | 2,309 | (101 | ) | 2,208 | 1,925 | |||||||||||||||||||||||||||||||||||
|
JFK Towers
|
Mid Rise | Jan-06 | Durham, NC | 1983 | 177 | 750 | 7,970 | 872 | 750 | 8,842 | 9,592 | (5,001 | ) | 4,591 | 5,736 | |||||||||||||||||||||||||||||||||||
|
Kephart Plaza
|
High Rise | Jan-06 | Lock Haven, PA | 1978 | 101 | 609 | 3,796 | 569 | 609 | 4,365 | 4,974 | (3,131 | ) | 1,843 | 1,650 | |||||||||||||||||||||||||||||||||||
|
King Bell Apartments
|
Garden | Jan-06 | Milwaukie, OR | 1982 | 62 | 204 | 2,497 | 205 | 204 | 2,702 | 2,906 | (1,535 | ) | 1,371 | 1,599 | |||||||||||||||||||||||||||||||||||
|
Kirkwood House
|
High Rise | Sep-04 | Baltimore, MD | 1979 | 261 | 1,281 | 9,358 | 8,143 | 1,338 | 17,444 | 18,782 | (3,162 | ) | 15,620 | 16,000 | |||||||||||||||||||||||||||||||||||
|
Kubasek Trinity Manor
|
High Rise | Jan-06 | Yonkers, NY | 1981 | 130 | 54 | 8,308 | 1,864 | 54 | 10,172 | 10,226 | (5,341 | ) | 4,885 | 4,671 | |||||||||||||||||||||||||||||||||||
|
La Salle
|
Garden | Oct-00 | San Francisco, CA | 1976 | 145 | 1,841 | 19,568 | 17,382 | 1,866 | 36,925 | 38,791 | (15,711 | ) | 23,080 | 16,093 | |||||||||||||||||||||||||||||||||||
|
La Vista
|
Garden | Jan-06 | Concord, CA | 1981 | 75 | 565 | 4,448 | 4,230 | 581 | 8,662 | 9,243 | (1,438 | ) | 7,805 | 5,418 | |||||||||||||||||||||||||||||||||||
|
Lafayette Square
|
Garden | Jan-06 | Camden, SC | 1978 | 72 | 142 | 1,875 | 98 | 142 | 1,973 | 2,115 | (1,664 | ) | 451 | 236 | |||||||||||||||||||||||||||||||||||
|
Lake Avenue Commons
|
Garden | Jan-10 | Cleveland, OH | 1982 | 79 | 488 | 2,763 | — | 488 | 2,763 | 3,251 | (158 | ) | 3,093 | 3,070 | |||||||||||||||||||||||||||||||||||
|
Landau
|
Garden | Oct-05 | Clinton, SC | 1970 | 80 | 1,293 | 1,429 | 320 | 1,293 | 1,749 | 3,042 | (1,770 | ) | 1,272 | 228 | |||||||||||||||||||||||||||||||||||
F-58
Table of Contents
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(3)
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December 31, 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||
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(2)
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Cost
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Total
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(1)
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Initial Cost |
Capitalized
|
Accumulated
|
Cost
|
||||||||||||||||||||||||||||||||||||||||||||||
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Property
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Date
|
Year
|
Number
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Buildings and
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Subsequent to
|
Buildings and
|
(4)
|
Depreciation
|
Net of
|
|||||||||||||||||||||||||||||||||||||||||
| Property Name | Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Laurelwood
|
Garden | Jan-06 | Morristown, TN | 1981 | 65 | 75 | 1,870 | 224 | 75 | 2,094 | 2,169 | (1,350 | ) | 819 | 1,320 | |||||||||||||||||||||||||||||||||||
|
Lock Haven Gardens
|
Garden | Jan-06 | Lock Haven, PA | 1979 | 150 | 1,163 | 6,045 | 666 | 1,163 | 6,711 | 7,874 | (4,894 | ) | 2,980 | 2,359 | |||||||||||||||||||||||||||||||||||
|
Locust House
|
High Rise | Mar-02 | Westminster, MD | 1979 | 99 | 650 | 2,604 | 851 | 650 | 3,455 | 4,105 | (1,228 | ) | 2,877 | 2,084 | |||||||||||||||||||||||||||||||||||
|
Long Meadow
|
Garden | Jan-06 | Cheraw, SC | 1973 | 56 | 158 | 1,342 | 214 | 158 | 1,556 | 1,714 | (1,232 | ) | 482 | 165 | |||||||||||||||||||||||||||||||||||
|
Loring Towers
|
High Rise | Oct-02 | Minneapolis, MN | 1975 | 230 | 1,297 | 7,445 | 7,643 | 886 | 15,499 | 16,385 | (4,787 | ) | 11,598 | 10,501 | |||||||||||||||||||||||||||||||||||
|
Loring Towers Apartments
|
High Rise | Sep-03 | Salem, MA | 1973 | 250 | 129 | 14,050 | 6,599 | 187 | 20,591 | 20,778 | (4,763 | ) | 16,015 | 15,786 | |||||||||||||||||||||||||||||||||||
|
Madisonville
|
Garden | Jan-10 | Madisonville, KY | 1981 | 60 | 73 | 367 | 86 | 73 | 453 | 526 | (498 | ) | 28 | 589 | |||||||||||||||||||||||||||||||||||
|
Maunakea Tower
|
High Rise | Jan-10 | Honolulu, HI | 1976 | 380 | 7,995 | 45,305 | 3,702 | 7,995 | 49,007 | 57,002 | (2,074 | ) | 54,928 | 34,957 | |||||||||||||||||||||||||||||||||||
|
Michigan Beach
|
Garden | Oct-07 | Chicago, IL | 1958 | 239 | 2,225 | 10,797 | 978 | 2,225 | 11,775 | 14,000 | (4,011 | ) | 9,989 | 5,576 | |||||||||||||||||||||||||||||||||||
|
Mill Pond
|
Mid Rise | Jan-06 | Taunton, MA | 1982 | 49 | 80 | 2,704 | 319 | 80 | 3,023 | 3,103 | (1,768 | ) | 1,335 | 983 | |||||||||||||||||||||||||||||||||||
|
Mill Run
|
Garden | Jan-10 | Mobile, AL | 1983 | 50 | 293 | 2,569 | 42 | 293 | 2,611 | 2,904 | (818 | ) | 2,086 | 1,466 | |||||||||||||||||||||||||||||||||||
|
Miramar Housing
|
High Rise | Jan-06 | Ponce, PR | 1983 | 96 | 367 | 5,085 | 425 | 367 | 5,510 | 5,877 | (3,099 | ) | 2,778 | 2,769 | |||||||||||||||||||||||||||||||||||
|
Montblanc Gardens
|
Town Home | Dec-03 | Yauco, PR | 1982 | 128 | 391 | 3,859 | 1,010 | 391 | 4,869 | 5,260 | (2,645 | ) | 2,615 | 3,252 | |||||||||||||||||||||||||||||||||||
|
Monticello Manor
|
Garden | Jan-10 | San Antonio, TX | 1998 | 154 | 647 | 3,665 | — | 647 | 3,665 | 4,312 | (250 | ) | 4,062 | 3,935 | |||||||||||||||||||||||||||||||||||
|
Moss Gardens
|
Mid Rise | Jan-06 | Lafayette, LA | 1980 | 114 | 524 | 3,818 | 824 | 524 | 4,642 | 5,166 | (3,174 | ) | 1,992 | 1,946 | |||||||||||||||||||||||||||||||||||
|
New Baltimore
|
Mid Rise | Mar-02 | New Baltimore, MI | 1980 | 101 | 888 | 2,360 | 5,157 | 896 | 7,509 | 8,405 | (1,905 | ) | 6,500 | 2,179 | |||||||||||||||||||||||||||||||||||
|
Newberry Park
|
Garden | Dec-97 | Chicago, IL | 1995 | 84 | 1,380 | 7,632 | 486 | 1,380 | 8,118 | 9,498 | (2,972 | ) | 6,526 | 7,299 | |||||||||||||||||||||||||||||||||||
|
Nintey Five Vine Street
|
Garden | Jan-10 | Hartford, CT | 1800 | 31 | 188 | 1,062 | 626 | 188 | 1,688 | 1,876 | (104 | ) | 1,772 | 1,055 | |||||||||||||||||||||||||||||||||||
|
Northlake Village
|
Garden | Oct-00 | Lima, OH | 1971 | 150 | 487 | 1,317 | 1,886 | 487 | 3,203 | 3,690 | (1,987 | ) | 1,703 | — | |||||||||||||||||||||||||||||||||||
|
Northpoint
|
Garden | Jan-00 | Chicago, IL | 1921 | 305 | 2,280 | 14,334 | 16,706 | 2,510 | 30,810 | 33,320 | (16,997 | ) | 16,323 | 19,101 | |||||||||||||||||||||||||||||||||||
|
Northwinds, The
|
Garden | Mar-02 | Wytheville, VA | 1978 | 144 | 500 | 2,012 | 575 | 500 | 2,587 | 3,087 | (1,466 | ) | 1,621 | 1,466 | |||||||||||||||||||||||||||||||||||
|
Oakbrook
|
Garden | Jan-08 | Topeka, KS | 1979 | 170 | 550 | 2,915 | 885 | 550 | 3,800 | 4,350 | (773 | ) | 3,577 | 2,636 | |||||||||||||||||||||||||||||||||||
|
Oakwood Manor
|
Garden | Mar-04 | Milan, TN | 1984 | 34 | 95 | 498 | 18 | 103 | 508 | 611 | (140 | ) | 471 | 316 | |||||||||||||||||||||||||||||||||||
|
O’Neil
|
High Rise | Jan-06 | Troy, NY | 1978 | 115 | 88 | 4,067 | 864 | 88 | 4,931 | 5,019 | (3,452 | ) | 1,567 | 2,595 | |||||||||||||||||||||||||||||||||||
|
Oswego Village
|
Garden | Jan-10 | Columbia, PA | 1979 | 68 | 392 | 2,221 | — | 392 | 2,221 | 2,613 | (140 | ) | 2,473 | 1,395 | |||||||||||||||||||||||||||||||||||
|
Overbrook Park
|
Garden | Jan-06 | Chillicothe, OH | 1981 | 50 | 136 | 2,282 | 311 | 136 | 2,593 | 2,729 | (1,458 | ) | 1,271 | 1,432 | |||||||||||||||||||||||||||||||||||
|
Oxford House
|
Mid Rise | Mar-02 | Deactur, IL | 1979 | 156 | 993 | 4,164 | 928 | 993 | 5,092 | 6,085 | (2,109 | ) | 3,976 | 2,627 | |||||||||||||||||||||||||||||||||||
|
Panorama Park
|
Garden | Mar-02 | Bakersfield, CA | 1982 | 66 | 621 | 5,520 | 884 | 619 | 6,406 | 7,025 | (1,687 | ) | 5,338 | 2,255 | |||||||||||||||||||||||||||||||||||
|
Parc Chateau I
|
Garden | Jan-06 | Lithonia, GA | 1973 | 86 | 592 | 1,442 | 521 | 592 | 1,963 | 2,555 | (1,861 | ) | 694 | 359 | |||||||||||||||||||||||||||||||||||
|
Parc Chateau II
|
Garden | Jan-06 | Lithonia, GA | 1974 | 88 | 596 | 2,965 | 497 | 596 | 3,462 | 4,058 | (2,626 | ) | 1,432 | 361 | |||||||||||||||||||||||||||||||||||
|
Park — Joplin Apartments
|
Garden | Oct-07 | Joplin, MO | 1974 | 192 | 1,154 | 5,539 | 402 | 1,154 | 5,941 | 7,095 | (924 | ) | 6,171 | 3,165 | |||||||||||||||||||||||||||||||||||
|
Park Place
|
Mid Rise | Jun-05 | St Louis, MO | 1977 | 242 | 742 | 6,327 | 9,798 | 705 | 16,162 | 16,867 | (10,003 | ) | 6,864 | 9,423 | |||||||||||||||||||||||||||||||||||
|
Park Vista
|
Garden | Oct-05 | Anaheim, CA | 1958 | 392 | 6,155 | 25,929 | 4,822 | 6,155 | 30,751 | 36,906 | (7,763 | ) | 29,143 | 37,656 | |||||||||||||||||||||||||||||||||||
|
Parkways, The
|
Garden | Jun-04 | Chicago, IL | 1925 | 446 | 3,684 | 23,257 | 18,115 | 3,427 | 41,629 | 45,056 | (14,959 | ) | 30,097 | 21,209 | |||||||||||||||||||||||||||||||||||
|
Patman Switch
|
Garden | Jan-06 | Hughes Springs, TX | 1978 | 82 | 727 | 1,382 | 616 | 727 | 1,998 | 2,725 | (1,589 | ) | 1,136 | 1,229 | |||||||||||||||||||||||||||||||||||
|
Pavilion
|
High Rise | Mar-04 | Philadelphia, PA | 1976 | 296 | — | 15,416 | 1,471 | — | 16,887 | 16,887 | (4,984 | ) | 11,903 | 8,680 | |||||||||||||||||||||||||||||||||||
|
Peachwood Place
|
Garden | Oct-07 | Waycross, GA | 1999 | 72 | 390 | 748 | 82 | 390 | 830 | 1,220 | (159 | ) | 1,061 | 737 | |||||||||||||||||||||||||||||||||||
|
Pinebluff Village
|
Mid Rise | Jan-06 | Salisbury, MD | 1980 | 151 | 1,112 | 7,177 | 758 | 1,112 | 7,935 | 9,047 | (5,801 | ) | 3,246 | 1,893 | |||||||||||||||||||||||||||||||||||
|
Pinewood Place
|
Garden | Mar-02 | Toledo, OH | 1979 | 99 | 420 | 1,698 | 1,276 | 420 | 2,974 | 3,394 | (1,408 | ) | 1,986 | 1,992 | |||||||||||||||||||||||||||||||||||
|
Pleasant Hills
|
Garden | Apr-05 | Austin, TX | 1982 | 100 | 1,188 | 2,631 | 3,529 | 1,229 | 6,119 | 7,348 | (2,237 | ) | 5,111 | 3,171 | |||||||||||||||||||||||||||||||||||
|
Plummer Village
|
Mid Rise | Mar-02 | North Hills, CA | 1983 | 75 | 624 | 2,647 | 1,637 | 667 | 4,241 | 4,908 | (1,968 | ) | 2,940 | 2,560 | |||||||||||||||||||||||||||||||||||
|
Portner Place
|
Town Home | Jan-06 | Washington, DC | 1980 | 48 | 697 | 3,753 | 142 | 697 | 3,895 | 4,592 | (431 | ) | 4,161 | 6,348 | |||||||||||||||||||||||||||||||||||
|
Post Street Apartments
|
High Rise | Jan-06 | Yonkers, NY | 1930 | 56 | 148 | 3,315 | 461 | 148 | 3,776 | 3,924 | (2,407 | ) | 1,517 | 1,518 | |||||||||||||||||||||||||||||||||||
|
Pride Gardens
|
Garden | Dec-97 | Flora, MS | 1975 | 76 | 102 | 1,071 | 1,753 | 102 | 2,824 | 2,926 | (1,586 | ) | 1,340 | 1,062 | |||||||||||||||||||||||||||||||||||
|
Rancho California
|
Garden | Jan-06 | Temecula, CA | 1984 | 55 | 488 | 5,462 | 307 | 488 | 5,769 | 6,257 | (3,035 | ) | 3,222 | 4,480 | |||||||||||||||||||||||||||||||||||
|
Ridgewood Towers
|
High Rise | Mar-02 | East Moline, IL | 1977 | 140 | 698 | 2,803 | 818 | 698 | 3,621 | 4,319 | (1,418 | ) | 2,901 | 1,418 | |||||||||||||||||||||||||||||||||||
|
River Village
|
High Rise | Jan-06 | Flint, MI | 1980 | 340 | 1,756 | 13,877 | 3,599 | 1,756 | 17,476 | 19,232 | (11,075 | ) | 8,157 | 6,929 | |||||||||||||||||||||||||||||||||||
|
River’s Edge
|
Town Home | Jan-06 | Greenville, MI | 1983 | 49 | 311 | 2,097 | 391 | 311 | 2,488 | 2,799 | (1,731 | ) | 1,068 | 521 | |||||||||||||||||||||||||||||||||||
|
Riverwoods
|
High Rise | Jan-06 | Kankakee, IL | 1983 | 125 | 590 | 4,932 | 3,475 | 598 | 8,399 | 8,997 | (1,678 | ) | 7,319 | 4,702 | |||||||||||||||||||||||||||||||||||
|
Rosedale Court Apartments
|
Garden | Mar-04 | Dawson Springs, KY | 1981 | 40 | 194 | 1,177 | 222 | 194 | 1,399 | 1,593 | (612 | ) | 981 | 858 | |||||||||||||||||||||||||||||||||||
|
Round Barn
|
Garden | Mar-02 | Champaign, IL | 1979 | 156 | 947 | 5,134 | 5,764 | 810 | 11,035 | 11,845 | (2,565 | ) | 9,280 | 5,078 | |||||||||||||||||||||||||||||||||||
F-59
Table of Contents
|
(3)
|
December 31, 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
(2)
|
Cost
|
Total
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(1)
|
Initial Cost |
Capitalized
|
Accumulated
|
Cost
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Property
|
Date
|
Year
|
Number
|
Buildings and
|
Subsequent to
|
Buildings and
|
(4)
|
Depreciation
|
Net of
|
|||||||||||||||||||||||||||||||||||||||||
| Property Name | Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
San Jose Apartments
|
Garden | Sep-05 | San Antonio, TX | 1970 | 220 | 404 | 5,770 | 11,459 | 234 | 17,399 | 17,633 | (4,471 | ) | 13,162 | 5,069 | |||||||||||||||||||||||||||||||||||
|
San Juan Del Centro
|
Mid Rise | Sep-05 | Boulder, CO | 1971 | 150 | 243 | 7,110 | 12,574 | 438 | 19,489 | 19,927 | (5,060 | ) | 14,867 | 11,259 | |||||||||||||||||||||||||||||||||||
|
Sandy Hill Terrace
|
High Rise | Mar-02 | Norristown, PA | 1980 | 175 | 1,650 | 6,599 | 2,874 | 1,650 | 9,473 | 11,123 | (3,341 | ) | 7,782 | 3,351 | |||||||||||||||||||||||||||||||||||
|
Sandy Springs
|
Garden | Mar-05 | Macon, GA | 1979 | 74 | 366 | 1,522 | 1,451 | 366 | 2,973 | 3,339 | (1,876 | ) | 1,463 | 1,894 | |||||||||||||||||||||||||||||||||||
|
Santa Maria
|
Garden | Jan-10 | San German, PR | 1983 | 86 | 368 | 2,087 | — | 368 | 2,087 | 2,455 | (390 | ) | 2,065 | 2,343 | |||||||||||||||||||||||||||||||||||
|
School Street
|
Mid Rise | Jan-06 | Taunton, MA | 1920 | 75 | 219 | 4,335 | 670 | 219 | 5,005 | 5,224 | (2,890 | ) | 2,334 | 2,116 | |||||||||||||||||||||||||||||||||||
|
Sherman Hills
|
High Rise | Jan-06 | Wilkes-Barre, PA | 1976 | 344 | 2,039 | 15,549 | 1,560 | 2,037 | 17,111 | 19,148 | (13,907 | ) | 5,241 | 2,686 | |||||||||||||||||||||||||||||||||||
|
Shoreview
|
Garden | Oct-99 | San Francisco, CA | 1976 | 156 | 1,498 | 19,071 | 18,772 | 1,476 | 37,865 | 39,341 | (16,745 | ) | 22,596 | 17,391 | |||||||||||||||||||||||||||||||||||
|
South Bay Villa
|
Garden | Mar-02 | Los Angeles, CA | 1981 | 80 | 663 | 2,770 | 4,383 | 1,352 | 6,464 | 7,816 | (4,055 | ) | 3,761 | 3,018 | |||||||||||||||||||||||||||||||||||
|
Springfield Villas
|
Garden | Oct-07 | Lockhart, TX | 1999 | 32 | — | 1,153 | 86 | — | 1,239 | 1,239 | (44 | ) | 1,195 | 828 | |||||||||||||||||||||||||||||||||||
|
St. George Villas
|
Garden | Jan-06 | St. George, SC | 1984 | 40 | 86 | 1,025 | 147 | 86 | 1,172 | 1,258 | (822 | ) | 436 | 483 | |||||||||||||||||||||||||||||||||||
|
Stonegate Apts
|
Mid Rise | Jul-09 | Indianapolis, IN | 1920 | 52 | 255 | 3,610 | 353 | 255 | 3,963 | 4,218 | (920 | ) | 3,298 | 1,931 | |||||||||||||||||||||||||||||||||||
|
Sumler Terrace
|
Garden | Jan-06 | Norfolk, VA | 1976 | 126 | 215 | 4,400 | 671 | 215 | 5,071 | 5,286 | (3,836 | ) | 1,450 | 1,191 | |||||||||||||||||||||||||||||||||||
|
Summit Oaks
|
Town Home | Jan-06 | Burke, VA | 1980 | 50 | 382 | 4,930 | 311 | 382 | 5,241 | 5,623 | (1,513 | ) | 4,110 | 3,189 | |||||||||||||||||||||||||||||||||||
|
Suntree
|
Garden | Jan-06 | St. Johns, MI | 1980 | 121 | 403 | 6,488 | 2,012 | 403 | 8,500 | 8,903 | (4,744 | ) | 4,159 | 530 | |||||||||||||||||||||||||||||||||||
|
Tabor Towers
|
Mid Rise | Jan-06 | Lewisburg, WV | 1979 | 84 | 163 | 3,360 | 384 | 163 | 3,744 | 3,907 | (2,263 | ) | 1,644 | 1,906 | |||||||||||||||||||||||||||||||||||
|
Tamarac Apartments I
|
Garden | Nov-04 | Woodlands, TX | 1980 | 144 | 140 | 2,775 | 3,650 | 363 | 6,202 | 6,565 | (2,451 | ) | 4,114 | 4,117 | |||||||||||||||||||||||||||||||||||
|
Tamarac Apartments II
|
Garden | Nov-04 | Woodlands, TX | 1980 | 156 | 142 | 3,195 | 4,064 | 266 | 7,135 | 7,401 | (2,786 | ) | 4,615 | 4,460 | |||||||||||||||||||||||||||||||||||
|
Terraces
|
Mid Rise | Jan-06 | Kettering, OH | 1979 | 102 | 1,561 | 2,815 | 1,126 | 1,561 | 3,941 | 5,502 | (2,652 | ) | 2,850 | 2,472 | |||||||||||||||||||||||||||||||||||
|
Terry Manor
|
Mid Rise | Oct-05 | Los Angeles, CA | 1977 | 170 | 1,775 | 5,848 | 6,674 | 1,997 | 12,300 | 14,297 | (5,810 | ) | 8,487 | 6,859 | |||||||||||||||||||||||||||||||||||
|
Tompkins Terrace
|
Garden | Oct-02 | Beacon, NY | 1974 | 193 | 872 | 6,827 | 13,333 | 872 | 20,160 | 21,032 | (4,632 | ) | 16,400 | 8,211 | |||||||||||||||||||||||||||||||||||
|
Trestletree Village
|
Garden | Mar-02 | Atlanta, GA | 1981 | 188 | 1,150 | 4,655 | 1,838 | 1,150 | 6,493 | 7,643 | (2,355 | ) | 5,288 | 2,793 | |||||||||||||||||||||||||||||||||||
|
Underwood Elderly
|
High Rise | Jan-10 | Hartford, CT | 1982 | 136 | 2,274 | 7,238 | 580 | 2,274 | 7,818 | 10,092 | (3,380 | ) | 6,712 | 6,203 | |||||||||||||||||||||||||||||||||||
|
Underwood Family
|
Town Home | Jan-10 | Hartford, CT | 1982 | 25 | 830 | 1,505 | 44 | 830 | 1,549 | 2,379 | (729 | ) | 1,650 | 1,582 | |||||||||||||||||||||||||||||||||||
|
University Square
|
High Rise | Mar-05 | Philadelphia, PA | 1978 | 442 | 702 | 12,201 | 12,809 | 702 | 25,010 | 25,712 | (9,800 | ) | 15,912 | 18,405 | |||||||||||||||||||||||||||||||||||
|
Van Nuys Apartments
|
High Rise | Mar-02 | Los Angeles, CA | 1981 | 299 | 4,253 | 21,226 | 20,286 | 3,575 | 42,190 | 45,765 | (7,748 | ) | 38,017 | 22,224 | |||||||||||||||||||||||||||||||||||
|
Verdes Del Oriente
|
Garden | Jan-10 | San Pedro, CA | 1976 | 113 | 1,100 | 7,044 | 105 | 1,100 | 7,149 | 8,249 | (2,841 | ) | 5,408 | 5,471 | |||||||||||||||||||||||||||||||||||
|
Vicente Geigel Polanco
|
Garden | Jan-10 | Isabela, PR | 1983 | 80 | 361 | 2,044 | — | 361 | 2,044 | 2,405 | (203 | ) | 2,202 | 2,277 | |||||||||||||||||||||||||||||||||||
|
Victory Square
|
Garden | Mar-02 | Canton, OH | 1975 | 81 | 215 | 889 | 719 | 215 | 1,608 | 1,823 | (728 | ) | 1,095 | 833 | |||||||||||||||||||||||||||||||||||
|
Villa de Guadalupe
|
Garden | Jan-10 | San Jose, CA | 1982 | 101 | 1,770 | 8,456 | 31 | 1,770 | 8,487 | 10,257 | (3,517 | ) | 6,740 | 6,980 | |||||||||||||||||||||||||||||||||||
|
Village Oaks
|
Mid Rise | Jan-06 | Catonsville, MD | 1980 | 181 | 2,127 | 5,188 | 1,895 | 2,127 | 7,083 | 9,210 | (4,997 | ) | 4,213 | 4,252 | |||||||||||||||||||||||||||||||||||
|
Village of Kaufman
|
Garden | Mar-05 | Kaufman, TX | 1981 | 68 | 370 | 1,606 | 689 | 370 | 2,295 | 2,665 | (846 | ) | 1,819 | 1,843 | |||||||||||||||||||||||||||||||||||
|
Villas of Mount Dora
|
Garden | Jan-10 | Mt. Dora, FL | 1979 | 70 | 323 | 1,828 | — | 323 | 1,828 | 2,151 | (156 | ) | 1,995 | 1,704 | |||||||||||||||||||||||||||||||||||
|
Vintage Crossing
|
Town Home | Mar-04 | Cuthbert, GA | 1985 | 50 | 188 | 1,058 | 571 | 188 | 1,629 | 1,817 | (1,051 | ) | 766 | 1,614 | |||||||||||||||||||||||||||||||||||
|
Vista Park Chino
|
Garden | Mar-02 | Chino, CA | 1983 | 40 | 380 | 1,521 | 440 | 380 | 1,961 | 2,341 | (776 | ) | 1,565 | 3,120 | |||||||||||||||||||||||||||||||||||
|
Wah Luck House
|
High Rise | Jan-06 | Washington, DC | 1982 | 153 | — | 8,690 | 553 | — | 9,243 | 9,243 | (2,723 | ) | 6,520 | 8,613 | |||||||||||||||||||||||||||||||||||
|
Walnut Hills
|
High Rise | Jan-06 | Cincinnati, OH | 1983 | 198 | 888 | 5,608 | 5,176 | 826 | 10,846 | 11,672 | (2,599 | ) | 9,073 | 5,600 | |||||||||||||||||||||||||||||||||||
|
Wasco Arms
|
Garden | Mar-02 | Wasco, CA | 1982 | 78 | 625 | 2,519 | 1,050 | 625 | 3,569 | 4,194 | (1,564 | ) | 2,630 | 3,103 | |||||||||||||||||||||||||||||||||||
|
Washington Square West
|
Mid Rise | Sep-04 | Philadelphia, PA | 1982 | 132 | 555 | 11,169 | 6,078 | 582 | 17,220 | 17,802 | (9,279 | ) | 8,523 | 3,824 | |||||||||||||||||||||||||||||||||||
|
Westwood Terrace
|
Mid Rise | Mar-02 | Moline, IL | 1976 | 97 | 720 | 3,242 | 664 | 720 | 3,906 | 4,626 | (1,356 | ) | 3,270 | 1,488 | |||||||||||||||||||||||||||||||||||
|
White Cliff
|
Garden | Mar-02 | Lincoln Heights, OH | 1977 | 72 | 215 | 938 | 446 | 215 | 1,384 | 1,599 | (639 | ) | 960 | 996 | |||||||||||||||||||||||||||||||||||
|
Whitefield Place
|
Garden | Apr-05 | San Antonio, TX | 1980 | 80 | 223 | 3,151 | 2,570 | 219 | 5,725 | 5,944 | (2,387 | ) | 3,557 | 2,226 | |||||||||||||||||||||||||||||||||||
|
Wickford
|
Garden | Mar-04 | Henderson, NC | 1983 | 44 | 247 | 946 | 198 | 247 | 1,144 | 1,391 | (493 | ) | 898 | 1,441 | |||||||||||||||||||||||||||||||||||
|
Wilderness Trail
|
High Rise | Mar-02 | Pineville, KY | 1983 | 124 | 1,010 | 4,048 | 739 | 1,010 | 4,787 | 5,797 | (1,391 | ) | 4,406 | 4,379 | |||||||||||||||||||||||||||||||||||
|
Wilkes Towers
|
High Rise | Mar-02 | North Wilkesboro, NC | 1981 | 72 | 410 | 1,680 | 514 | 410 | 2,194 | 2,604 | (845 | ) | 1,759 | 1,870 | |||||||||||||||||||||||||||||||||||
|
Willow Wood
|
Garden | Mar-02 | North Hollywood, CA | 1984 | 19 | 1,051 | 840 | 208 | 1,051 | 1,048 | 2,099 | (350 | ) | 1,749 | 1,057 | |||||||||||||||||||||||||||||||||||
|
Winnsboro Arms
|
Garden | Jan-06 | Winnsboro, SC | 1978 | 60 | 272 | 1,697 | 298 | 272 | 1,995 | 2,267 | (1,572 | ) | 695 | 112 | |||||||||||||||||||||||||||||||||||
|
Winter Gardens
|
High Rise | Mar-04 | St Louis, MO | 1920 | 112 | 300 | 3,072 | 4,489 | 300 | 7,561 | 7,861 | (1,531 | ) | 6,330 | 3,732 | |||||||||||||||||||||||||||||||||||
|
Woodcrest
|
Garden | Dec-97 | Odessa, TX | 1972 | 80 | 41 | 229 | 718 | 41 | 947 | 988 | (788 | ) | 200 | 430 | |||||||||||||||||||||||||||||||||||
|
Woodland
|
Garden | Jan-06 | Spartanburg, SC | 1972 | 100 | 182 | 663 | 1,438 | 182 | 2,101 | 2,283 | (590 | ) | 1,693 | — | |||||||||||||||||||||||||||||||||||
|
Woodland Hills
|
Garden | Oct-05 | Jackson, MI | 1980 | 125 | 541 | 3,875 | 4,275 | 321 | 8,370 | 8,691 | (3,584 | ) | 5,107 | 3,589 | |||||||||||||||||||||||||||||||||||
F-60
Table of Contents
|
(3)
|
December 31, 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||
|
(2)
|
Cost
|
Total
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(1)
|
Initial Cost |
Capitalized
|
Accumulated
|
Cost
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Property
|
Date
|
Year
|
Number
|
Buildings and
|
Subsequent to
|
Buildings and
|
(4)
|
Depreciation
|
Net of
|
|||||||||||||||||||||||||||||||||||||||||
| Property Name | Type | Consolidated | Location | Built | of Units | Land | Improvements | Consolidation | Land | Improvements | Total | (AD) | AD | Encumbrances | ||||||||||||||||||||||||||||||||||||
|
Woodlands
|
Garden | Jan-10 | Whistler, AL | 1983 | 50 | 213 | 2,277 | 29 | 213 | 2,306 | 2,519 | (765 | ) | 1,754 | 1,538 | |||||||||||||||||||||||||||||||||||
|
Total Affordable Properties
|
22,207 | 135,550 | 927,186 | 439,064 | 134,530 | 1,367,270 | 1,501,800 | (543,342 | ) | 958,458 | 762,289 | |||||||||||||||||||||||||||||||||||||||
|
Other(5)
|
— | 1,038 | 2,470 | 3,693 | 2,063 | 5,138 | 7,201 | (2,925 | ) | 4,276 | — | |||||||||||||||||||||||||||||||||||||||
|
Total
|
89,875 | $ | 2,083,007 | $ | 4,696,853 | $ | 2,688,305 | $ | 2,139,431 | $ | 7,328,734 | $ | 9,468,165 | $ | (2,934,912 | ) | $ | 6,533,253 | $ | 5,457,783 | ||||||||||||||||||||||||||||||
| (1) | Date we acquired the property or first consolidated the partnership which owns the property. | |
| (2) | For 2008 and prior periods, costs to acquire the noncontrolling interest’s share of our consolidated real estate partnerships were capitalized as part of the initial cost. | |
| (3) | Costs capitalized subsequent to consolidation includes costs capitalized since acquisition or first consolidation of the partnership/property. | |
| (4) | The aggregate cost of land and depreciable property for federal income tax purposes was approximately $3.8 billion at December 31, 2010. | |
| (5) | Other includes land parcels, commercial properties and other related costs. We exclude such properties from our residential unit counts. |
F-61
Table of Contents
APARTMENT
INVESTMENT AND MANAGEMENT COMPANY
SCHEDULE III: REAL ESTATE AND ACCUMULATED DEPRECIATION
For the Years Ended December 31, 2010, 2009 and 2008
(In Thousands)
SCHEDULE III: REAL ESTATE AND ACCUMULATED DEPRECIATION
For the Years Ended December 31, 2010, 2009 and 2008
(In Thousands)
| 2010 | 2009 | 2008 | ||||||||||
|
Real Estate
|
||||||||||||
|
Balance at beginning of year
|
$ | 9,718,978 | $ | 11,000,496 | $ | 12,420,200 | ||||||
|
Additions during the year:
|
||||||||||||
|
Newly consolidated assets and acquisition of limited partnership
interests(1)
|
69,410 | 19,683 | 31,447 | |||||||||
|
Acquisitions
|
— | — | 107,445 | |||||||||
|
Capital additions
|
175,329 | 275,444 | 665,233 | |||||||||
|
Deductions during the year:
|
||||||||||||
|
Casualty and other write-offs(2)
|
(15,865 | ) | (43,134 | ) | (130,595 | ) | ||||||
|
Sales
|
(479,687 | ) | (1,533,511 | ) | (2,093,234 | ) | ||||||
|
Balance at end of year
|
$ | 9,468,165 | $ | 9,718,978 | $ | 11,000,496 | ||||||
|
Accumulated Depreciation
|
||||||||||||
|
Balance at beginning of year
|
$ | 2,723,844 | $ | 2,815,497 | $ | 3,047,716 | ||||||
|
Additions during the year:
|
||||||||||||
|
Depreciation
|
422,099 | 478,550 | 497,395 | |||||||||
|
Newly consolidated assets and acquisition of limited partnership
interests(1)
|
(12,348 | ) | (2,763 | ) | (22,256 | ) | ||||||
|
Deductions during the year:
|
||||||||||||
|
Casualty and other write-offs
|
(4,831 | ) | (5,200 | ) | (1,838 | ) | ||||||
|
Sales
|
(193,852 | ) | (562,240 | ) | (705,520 | ) | ||||||
|
Balance at end of year
|
$ | 2,934,912 | $ | 2,723,844 | $ | 2,815,497 | ||||||
| (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-62
Table of Contents
| ITEM 15. | Exhibits |
INDEX TO
EXHIBITS (1)(2)
|
Exhibit
|
||||
| No. | Description | |||
| 3 | .1 | Charter (Exhibit 3.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2010, 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 2, 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 | Third Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 2, 2010 (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated September 3, 2010, is incorporated herein by this reference) | ||
| 10 | .5 | 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 | .6 | 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 | .7 | 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 | .8 | 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) | ||
| 10 | .9 | 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 | .10 | 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) | ||
Table of Contents
|
Exhibit
|
||||
| No. | Description | |||
| 10 | .11 | 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 | .12 | 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 | .13 | 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 | .14 | Ninth Amendment to Amended and Restated Senior Secured Credit Agreement, dated as of May 14, 2010, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., and AIMCO/Bethesda Holdings, Inc., as the borrowers, the guarantors and the pledgors named therein and the lenders party thereto (exhibit 10.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010, is incorporated herein by this reference) | ||
| 10 | .15 | Tenth Amendment to Senior Secured Credit Agreement, dated as of September 29, 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, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, and the lenders party thereto (Exhibit 10.1 to Aimco’s Current Report on Form 8-K, dated September 29, 2010, is incorporated herein by this reference) | ||
| 10 | .16 | 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 | .17 | 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 | .18 | 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 | .19 | 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 | .20 | 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) * | ||
| 10 | .21 | 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 | .22 | 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 | .23 | 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 | .24 | 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) * | ||
Table of Contents
|
Exhibit
|
||||
| No. | Description | |||
| 10 | .25 | 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 | ||
| 101 | .INS | XBRL Instance Document | ||
| 101 | .SCH | XBRL Taxonomy Extension Schema Document | ||
| 101 | .CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||
| 101 | .LAB | XBRL Taxonomy Extension Labels Linkbase Document | ||
| 101 | .PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ||
| 101 | .DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||
| (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 |
TABLE OF CONTENTS
Part IprintItem 1. BusinessprintItem 1A. Risk FactorsprintItem 1B. Unresolved Staff CommentsprintItem 2. PropertiesprintItem 3. Legal ProceedingsprintItem 4. (removed and Reserved)printPart IIprintItem 5. Market For The Registrant S Common Equity, Related Stockholder Matters and Issuer Purchases Of Equity SecuritiesprintItem 6. Selected Financial DataprintItem 7. Management S Discussion and Analysis Of Financial Condition and Results Of OperationsprintItem 7A. Quantitative and Qualitative Disclosures About Market RiskprintItem 8. Financial Statements and Supplementary DataprintItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureprintItem 9A. Controls and ProceduresprintItem 9B. Other InformationprintPart IIIprintItem 10. Directors, Executive Officers and Corporate GovernanceprintItem 11. Executive CompensationprintItem 12. Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder MattersprintItem 13. Certain Relationships and Related Transactions, and Director IndependenceprintItem 14. Principal Accountant Fees and ServicesprintPart IVprintItem 15. Exhibits and Financial Statement SchedulesprintNote 1 OrganizationprintNote 2 Basis Of Presentation and Summary Of Significant Accounting PoliciesprintNote 3 Real Estate and Partnership Acquisitions and Other Significant TransactionsprintNote 4 Investments in Unconsolidated Real Estate PartnershipsprintNote 5 Notes ReceivableprintNote 6 Non-recourse Property Tax-exempt Bond Financings, Non-recourse Property Loans Payable and Other BorrowingsprintNote 7 Credit Agreement and Term LoanprintNote 8 Commitments and ContingenciesprintNote 9 Income TaxesprintNote 10 Transactions Involving Noncontrolling Interests in Aimco Operating PartnershipprintNote 11 Aimco EquityprintNote 12 Share-based Compensation and Employee Benefit PlansprintNote 13 Discontinued Operations and Assets Held For SaleprintNote 14 Earnings Per ShareprintNote 15 Unaudited Summarized Consolidated Quarterly InformationprintNote 16 Transactions with AffiliatesprintNote 17 Business SegmentsprintItem 15. Exhibitsprint