| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, | |||||
Apartment Investment and Management Company: | |||||
| Large accelerated filer | x | Accelerated filer | o | ||
| Non-accelerated filer | o | Smaller reporting company | o | ||
| Emerging growth company | o | ||||
AIMCO Properties, L.P.: | |||||
| Large accelerated filer | o | Accelerated filer | x | ||
| Non-accelerated filer | o | (Do not check if a smaller reporting company) | Smaller reporting company | o | |
| Emerging growth company | o | ||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | |||||
Apartment Investment and Management Company: o | AIMCO Properties, L.P.: o | ||||
| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | ||
Apartment Investment and Management Company: Yes o No x | AIMCO Properties, L.P.: Yes o No x | |
| The aggregate market value of the voting and non-voting common stock of Apartment Investment and Management Company held by non-affiliates of Apartment Investment and Management Company was approximately | ||
| As of February | ||
| _______________________________________________________ |
| Documents Incorporated by Reference |
| Portions of Apartment Investment and Management Company’s definitive proxy statement to be issued in conjunction with Apartment Investment and Management Company’s annual meeting of stockholders to be held April |
EXPLANATORY NOTE
This filing combines the Annual Reports on Form 10-K for the fiscal year ended December 31, 2015,2018, of Apartment Investment and Management Company, or Aimco, and AIMCO Properties, L.P., or the Aimco Operating Partnership. Where it is important to distinguish between the two entities, we refer to them specifically. Otherwise, references to “we,” “us” or “our” mean collectively Aimco, the Aimco Operating Partnership and their consolidated entities.
Aimco, a Maryland corporation, is a self-administered and self-managed real estate investment trust, or REIT. Aimco, through wholly-owned subsidiaries, is the general and special limited partner of and, as of December 31, 2015,2018, owned a 95.2%94.3% ownership interest in the common partnership units of, the Aimco Operating Partnership. The remaining 4.8%5.7% interest is owned by limited partners. As the sole general partner of the Aimco Operating Partnership, Aimco has exclusive control of the Aimco Operating Partnership’s day-to-day management.
The Aimco Operating Partnership holds all of Aimco’s assets and manages the daily operations of Aimco’s business. Pursuant to the Aimco Operating Partnership agreement, Aimco is required to contribute to the Aimco Operating Partnership any assets, which it may acquire including all proceeds from the offerings of its securities. In exchange for the contribution of these assets, Aimco receives additional interests in the Aimco Operating Partnership with similar terms (e.g., if Aimco contributes proceeds of a stock offering, Aimco receives partnership units with terms substantially similar to the stock issued by Aimco).
We believe combining the periodic reports of Aimco and the Aimco Operating Partnership into this single report provides the following benefits:
We present our business as a whole, in the same manner our management views and operates the business;
We eliminate duplicative disclosure and provide a more streamlined and readable presentation sincebecause a substantial portion of the disclosures apply to both Aimco and the Aimco Operating Partnership; and
We save time and cost through the preparation of a single combined report rather than two separate reports.
We operate Aimco and the Aimco Operating Partnership as one enterprise, the management of Aimco directs the management and operations of the Aimco Operating Partnership, and the members of the Board of Directors of Aimco are identical to those of the Aimco Operating Partnership.Partnership’s general partner.
We believe it is important to understand the few differences between Aimco and the Aimco Operating Partnership in the context of how Aimco and the Aimco Operating Partnership operate as a consolidated company. Aimco has no assets or liabilities other than its investment in the Aimco Operating Partnership. Also, Aimco is a corporation that issues publicly traded equity from time to time, whereas the Aimco Operating Partnership is a partnership that has no publicly traded equity. Except for the net proceeds from stock offerings by Aimco, which are contributed to the Aimco Operating Partnership in exchange for additional limited partnership interests (of a similar type and in an amount equal to the shares of stock sold in the offering), the Aimco Operating Partnership generates all remaining capital required by its business. These sources include the Aimco Operating Partnership’s working capital, net cash provided by operating activities, borrowings under its revolving credit facility, the issuance of debt and equity securities, including additional partnership units, and proceeds received from the sale of apartment communities.
Equity, partners’ capital and noncontrolling interests are the main areas of difference between the consolidated financial statements of Aimco and those of the Aimco Operating Partnership. Interests in the Aimco Operating Partnership held by entities other than Aimco, which we refer to as OP Units, are classified within partners’ capital in the Aimco Operating Partnership’s financial statements and as noncontrolling interests in Aimco’s financial statements.
To help investors understand the differences between Aimco and the Aimco Operating Partnership, this report provides separate consolidated financial statements for Aimco and the Aimco Operating Partnership; a single set of consolidated notes to such financial statements that includes separate discussions of each entity's stockholders'entity’s stockholders’ equity or partners'partners’ capital, as applicable; and a combined Management’s Discussion and Analysis of Financial Condition and Results of Operations section that includes discrete information related to each entity.
This report also includes separate Part II, Item 9A. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for Aimco and the Aimco Operating Partnership in order to establish that the requisite certifications have been made and that Aimco and the Aimco Operating Partnership are both compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 18 U.S.C. §1350.
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
AIMCO PROPERTIES, L.P.
TABLE OF CONTENTS
ANNUAL REPORT ON FORM 10-K
For the Fiscal Year Ended December 31, 20152018
| Item | Page | Page | ||
| 1. | ||||
| 1A. | ||||
| 1B. | ||||
| 2. | ||||
| 3. | ||||
| 4. | ||||
| 5. | ||||
| 6. | ||||
| 7. | ||||
| 7A. | ||||
| 8. | ||||
| 9. | ||||
| 9A. | ||||
| 9B. | ||||
| 10. | ||||
| 11. | ||||
| 12. | ||||
| 13. | ||||
| 14. | ||||
| 15. | ||||
| 16. | ||||
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 Federalfederal securities laws, including, without limitation, statements regarding: our ability to maintain current or meet projected occupancy;occupancy, rental ratesrate and property operating results; the effect of acquisitions, dispositions, developmentsredevelopments and redevelopments;developments; our ability to meet budgeted costs and timelines, and achieve budgeted rental rates related to our developmentredevelopment and redevelopmentdevelopment investments; expectations regarding sales of our apartment communities and the use of proceeds thereof; and our ability to comply with debt covenants, including financial coverage ratios.
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: real
Real estate and operating 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 amount, location and quality of competitive new housing supply; financingthe timing of acquisitions, dispositions, redevelopments and developments; and changes in operating costs, including energy costs;
Financing risks, including the availability and cost of capital markets financing andmarkets’ financing; the risk that our cash flows from operations may be insufficient to meet required payments of principal and interest; and the risk that our earnings may not be sufficient to maintain compliance with debt covenants;
Insurance risks, including the cost of insurance, natural disasters and severe weather such as hurricanes; and
Legal and regulatory risks, including costs associated with prosecuting or defending claims and any adverse outcomes; the terms of governmental regulations that affect us and interpretations of those regulations; the competitive environment in which we operate; the timing of acquisitions, dispositions, redevelopments and developments; 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 apartment communities presently 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” described in Item 1A of this Annual Report and the other documents we file from time to time with the Securities and Exchange Commission.
As used herein and except as the context otherwise requires, “we,” “our” and “us” refer to Apartment Investment and Management Company (which we refer to as Aimco), AIMCO Properties, L.P. (which we refer to as the Aimco Operating Partnership) and their consolidated entities, collectively.
Certain financial and operating measures found herein and used by management are not defined under accounting principles generally accepted in the United States, or GAAP. These measures are defined and reconciled to the most comparable GAAP measures under the Non-GAAP Measures heading and include: Funds From Operations, Pro forma Funds From Operations, Adjusted Funds From Operations, Free Cash Flow, Net Asset Value, Economic Income, and the measures used to compute our leverage ratios.
PART I
Item 1. Business
The Company
Apartment Investment and Management Company, or Aimco, is a Maryland corporation incorporated on January 10, 1994. Aimco is a self-administered and self-managed real estate investment trust, or REIT. AIMCO Properties, L.P., or the Aimco Operating Partnership, is a Delaware limited partnership formed on May 16, 1994, to conduct our business, which isREIT, focused on the ownership, management, redevelopment and limited development of quality apartment communities located in some of the largest coastal and job growth markets ofin the United States.
Aimco, through its wholly-owned subsidiaries, AIMCO-GP, Inc. and AIMCO-LP Trust, owns a majority of the ownership interests in AIMCO Properties, L.P., or the Aimco Operating Partnership.Partnership, a Delaware limited partnership formed on May 16, 1994. Aimco conducts all of its business and owns all of its 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, HPUs and preferred OP Units, respectively. We also refer to HPUs as common partnership unit equivalents. At December 31, 2015, after eliminations for units held by consolidated entities, the Aimco Operating Partnership had 164,179,533 common partnership units and equivalents outstanding. At December 31, 2015, Aimco owned 156,326,416 of the common partnership units (95.2% of the outstanding common partnership units and equivalents of the Aimco Operating Partnership) and Aimco had outstanding an equal number of shares of its Class A Common Stock, which we refer to as Common Stock.
Business Overview
Our business activities are defined by a commitment to our core values of integrity, respect, collaboration, performance and a focus on our customers. These values and our corporate mission, “to consistently provide quality apartment homes in a respectful environment delivered by a team of people who care,” shape our culture. In all of our interactions with residents, team members, business partners, lenders, and equity holders, we aim to be the best owner and operator of apartment communities and an outstanding corporate citizen.
Our principal financial objective is to provide predictable and attractive returns to our equity holders, as measured by growth inholders. We measure our long- term total return using Economic Income, defined as Net Asset Value, or NAV, growth plus dividends. NAV is used by many investors because the value of company assets can be readily estimated, even for non-earning assets such as land or properties under development. NAV has the advantage of incorporating the investment decisions of thousands of real estate investors, enhancing comparability among companies that have differences in their accounting, and avoiding disparity that can result from application of GAAP to investment properties and various ownership structures. Some investors focus on multiples of Adjusted Funds From Operations, (each defined underor AFFO, and Funds From Operations, FFO. Our disclosure of AFFO, a measure of current return, complements our focus on Economic Income. We also use Pro forma Funds From Operations, or Pro forma FFO, as a secondary measure of operational performance. Over the Non-GAAP Performance and Liquidity Measures heading in Item 7)past five years, we have generated Economic Income at a compounded annual return of 11.5%. Our business plan to achieve this principal financial objective is to:
operate our portfolio of desirable apartment homes with valued amenities, with a high level of focus on customer selection and customer satisfaction and in an efficient manner that realizes the benefits of our corporate systemsproduces predictable and local management expertise;growing Free Cash Flow;
improve our geographically diversified portfolio of apartment communities, which average “B/B+” in quality (defined under the Portfolio Management heading below)is diversified both by geography and price point by selling lower rated apartment communities with lower projected Free Cash Flow internal rates of return and investing the proceeds from such sales through property upgrades,capital enhancements, redevelopment, limited development, and acquisitionacquisitions with greater land value, higher expected rent growth, and projected Free Cash Flow internal rates of higher-quality apartment communities;return in excess of those expected from the communities sold;
Our long-standing business is organized around our strategicfive areas of strategic focus: excellence in property operations; adding value through redevelopment and limited development; upgrading our portfolio through disciplinedoperational excellence; redevelopment; portfolio management; maintaining a safe and liquid balance sheet; and fostering a performanceteam and culture. Our strategic areas of strategic focus are described in more detail below. Recent accomplishments in the execution of such strategies are discussed in the Executive Overview in Item 7.
We own and operate a diversified portfolio of conventionalmarket rate apartment communities. We also operate acommunities, diversified by both geography and price point, which we refer to as our Real Estate portfolio. At December 31, 2018, our Real Estate portfolio included 134 apartment communities with 36,549 apartment homes in which we held an average ownership of approximately 99%. This portfolio was divided about two thirds by value to our “Same Store” portfolio of affordable apartment communities, which consists of apartments with rents that are generally paid, in whole or part, by a government agency. As the tax credit delivery or compliance periods for our affordable apartment communities expire, between 2016 and 2023, we expect to sell thesestabilized apartment communities and reinvest the proceeds in our conventional portfolio. Our conventionalabout one third by value to “Other Real Estate,” which includes recently acquired communities and affordable portfolios comprise our reportable segments.communities under redevelopment or development whose long-term financial contribution is not yet stabilized.
We seek to improve our property operations by: employing service-oriented, well-trained employees; upgrading systems;team members; taking advantage of advances in technology; centralizing operational tasks where efficient to do so; standardizing business processes, operational measurements, and internal reporting; and enhancing financial controls over field operations. We focus on the following areas:
Customer Satisfaction. Our operating culture is focused on our residents and we regularly monitor and evaluate our performance through a customer satisfaction tracking system. Our goal is to provide our residentsproviding them with a high level of service in a clean, safe, and attractive communities.respectful living environment. We regularly monitor and evaluate our performance by providing customers with numerous opportunities to grade our work. In 2018, we received 78,000 customer grades averaging 4.25 on a five-point scale. We use this customer feedback as a daily management tool. We also publish on-line these customer evaluations as important and credible information for prospective customers. We have automated certain aspects of our on-site operations to enable our current and future residents to interact with us using methods that are efficient and effective for them, such as making on-line requests for service work taking self-guided apartment community tours and executing leases and lease renewals on-line. In addition, we emphasize the quality of our on-site employeesteam members through recruiting, training and retention programs, which, we believewith continuous and real-time customer feedback, contributes to improved customer serviceservice. We believe that greater customer satisfaction leads to higher resident retention and increased occupancy rates, which in turn leads to increased occupancy ratesrevenue and enhanced operational performance.reduced costs.
Resident Selection and Retention. In our apartment communities, we believe that one’s neighbors are a meaningful part of the value provided,customer experience, together with the location of the community and the physical quality of the apartment homes. Part of our property operations strategy is to focus on attracting and retaining stable, credit-worthy residents who are also good neighbors. We have structured goalsexplicit criteria for resident selection, which we apply to new and coaching for allrenewal leases, including creditworthiness and behavior in accordance with our community standards and our written “Good Neighbor Commitment.” Our focus on resident selection and retention led to 54% of our sales personnel, a tracking system for inquiries and a standardized renewal communication program. Weexpiring leases being renewed in 2018, the highest result we have standardized residential financial stability requirements and have policies and monitoring practices to maintain our resident quality.yet achieved.
Revenue Management and Ancillary Services. For our conventional apartment communities, weWe have a centralized revenue management system that leverages people, processes and technology to work in partnership with our area operationallocal property management teams to develop rental rate pricing. We seek to increase revenue,Free Cash Flow, which we define as net operating income and free cash flowless Capital Replacements, by optimizing the balance between rental and occupancy rates, as well as taking into consideration the cost ofcosts such as preparing an apartment home for a new resident. We are also focused on careful measurements of on-site operations, as we believe that timely and accurate collection of apartment community performance and resident profile data will enableallows us to maximize revenueFree Cash Flow through better property management and leasing decisions. We seek to maximize rental revenue withprofit by performing timely data and analysis of new and renewal pricing for each apartment home, thereby enabling us to respondadjust rents quickly in response to changes in supply and demand.demand and minimize vacancy time. We also generate incremental revenue by providing or facilitating the provision of services to our residents, including, at certain apartment communities, telecommunications services, appliance rental, carport, premier parking garageoptions, package lockers and storage space rental.
Controlling Expenses. Cost controls are accomplished by localInnovation is the foundation of our cost control efforts. Innovative activities we have undertaken include: moving administrative tasks to our shared service center, which reduces costs and allows site teams to focus at the area level;on sales and service; taking advantage of economies of scale at the corporate level; andlevel, through electronic procurement. Referprocurement which reduces complexity and increases purchasing volume discounts; focusing on life cycle costs by investing in more durable, longer-lived materials, which reduce turn times and costs; and leveraging technology to enhance the Resultscustomer experience through such items as website design and package lockers, which meet today’s customer preference for self-service. These and other innovations contributed to a growth rate in controllable operating expense, which we define as property expenses less taxes, insurance and utility expenses, compounding for the past decade at an annual rate of Operations discussion within Item 7 for further information regarding our cost controls.0.1%.
Redevelopment
Our second line of business is the redevelopment and Developmentlimited development of apartment communities. Through these activities, we expect to create value by repositioning communities within our portfolio. Over the past five years, we have spent approximately $1.0 billion on redevelopment and development, resulting in estimated value creation of approximately $400.0 million. We measure the rate and quality of financial returns by NAV creation, an important component of Economic Income, our primary measure of
long-term financial performance. We invest in the redevelopment of certain apartment communities in superior locations, when we believe the investment will yieldto earn risk-adjusted returns in excess of those expected from the apartment communities sold in paired trades or in excess of the cost of equity issued to fund the equity component of the redevelopments. redevelopment or development.
We have historically undertakenundertake a range of redevelopment projects: fromredevelopments, including those in which buildings or exteriors are renovated without the need to vacate apartment homes; to those in which significant renovation of apartment homes may be accomplished upon lease expiration;expiration and toturnover; and those in which an entire building or community is wholly vacated. We primarilyoften execute our redevelopment projects using a phased approach, wherein which we renovate portions of an apartment community in stages, which allows additional flexibility in project costs and the ability to tailor our product offerings to customer response and rent achievement.stages. Redevelopment and development work may include seeking entitlements from local governments, which for redevelopments, enhance the value of our existing portfolio by increasing density, that is, the right to add apartment homes to a site.
We have a specialized Redevelopment and Construction Services team which oversees these projects and uses third party contractors with expertise in the local markets.
Portfolio Management
Our portfolio strategy seeks predictable rent growth from a portfolio of apartment communities is diversified across “A,” “B”“B,” and “C+” quality conventional apartment communities,price points, averaging “B/B+” in quality and is also diversified amongacross several of the largest coastal and job growth markets in the United States,
As part of which are tied to local market rent averages, the metrics used to classify apartment community quality as well as the timing for which local markets rents are calculated may vary from company to company. Accordingly, our rating system for measuring apartment community quality is neither broadly nor consistently used in the multifamily real estate industry.
Balance Sheet and Liquidity
Our leverage strategy seeks to increasemagnify financial returns while using leverage with appropriate caution. We limit risk through balance sheet structure, employing low leverage, primarily non-recourse and long-dated property debt; build financial flexibility by maintaining ample unused and available credit as well as holding properties with substantial value unencumbered by property debt; and use partners’ capital when it enhances financial returns or reduces investment risk.
Our leverage includes our share of long-term, non-recourse, property debt encumbering apartment communities, outstanding borrowings under our revolving credit facility, and outstanding preferred equity.
We target thea ratio of Proportionate Debt plusand Preferred Equity to Adjusted EBITDA to be below 7.0x and we target thea ratio of Adjusted EBITDA Coverage ofto Adjusted Interest Expense and Preferred Dividends to be greater than 2.5x. We also focus on theOur ratios as of Debt to Adjusted EBITDA and Adjusted EBITDA Coverage of Interest.
Our liquidity consists of property-level, non-recourse, long-dated debt,cash balances and 6% atavailable capacity on our revolving line of credit. As of December 31, 2015, consists2018, we had cash and restricted cash of perpetual preferred equity, a combination which reduces$72.6 million and had capacity to borrow $632.5 million under our refunding and re-pricing risk. The majority of our property-level debt is fixed-rate, which provides a hedge against increases in interest rates, capitalization rates and inflation. Although our primary sources of leverage are property-level, non-recourse, long-dated, fixed-rate, amortizing debt and perpetual preferred equity, we also have a revolving credit arrangement whichfacility.
We manage our financial flexibility by maintaining an investment grade rating and holding apartment communities that are unencumbered by property debt. As of December 31, 2018, we useheld unencumbered apartment communities with an estimated fair market value of approximately $2.7 billion, up 50% from December 31, 2017.
Please refer to the Executive Overview and Liquidity and Capital Resources headings under Item 7 for working capitaladditional information regarding our balance sheet and other short-term purposes.liquidity.
Team and Culture
Our team and culture is the keyare keys to our success. Our emphasisintentional focus on a collaborative respectful, and performance-orientedproductive culture based on respect for others and personal responsibility is what enablesreinforced by a preference for promotion from within. We focus on succession planning and talent development to produce a strong, stable team that is the continuing transformationenduring foundation of the Aimco business.our success. In 2015, Aimco was2018, we were recognized
by the Denver Post as a Top Work Place for the thirdsixth consecutive year.year, an accomplishment shared with only seven other companies in Colorado.
Competition
In attracting and retaining residents to occupy our apartment communities we compete with numerous other housing alternatives.providers. Our apartment communities 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 apartment communities are located. Principal factors of competition include rent or price charged, attractiveness of the location and apartment community, and the quality and breadth of services. The number of competitive apartment communities relative to demand in a particular area has a material effect on our ability to lease apartment homes at our communities and on the rents we charge. In certain markets, there exists an oversupply of newly-constructed apartment homes, single-family homes, and condominiums relative to consumer demand, which affectaffects 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 communities. This competition affects our ability to acquire apartment communities we want to add to our portfolio and the price that we pay in such acquisitions; our ability to finance or refinance communities in our portfolio and the cost of such financing; and our ability to dispose of communities we no longer desire to retain in our portfolio and the timing and price for whichavailable to us when we seek to dispose of such communities.
Taxation
Aimco
Aimco has 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 intends to continue to operate in such a manner. Aimco’s current and continuing qualification as a REIT depends on its ability to meet theThe Code imposes various requirements imposed by the Code, which relaterelated to organizational structure, distribution levels, diversity of stock ownership, and certain restrictions with regard to owned assets and categories of income.income that must be met in order to continue to qualify as a REIT. If Aimco continues to qualify for taxation as a REIT, Aimco will generally not be subject to United States Federalfederal corporate income tax on its 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.
Certain of Aimco’s 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 subsidiary C-corporation that has not elected REIT status and, as such, is subject to United States Federalfederal 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 apartment communities.
The Aimco Operating Partnership
The Aimco Operating Partnership is treated as a “pass-through” entity for United States Federalfederal income tax purposes and is not subject to United States Federalfederal income taxation. Each of its partners,Partners in the Aimco Operating Partnership, however, isare subject to tax on his or hertheir allocable share of partnership tax items, including partnership income, gains, losses, deductions and credits, or Partnership Tax Items, for each taxable year during which he or she is a partner, regardless of whether he or she receivesthe partners receive any actual distributions of cash or other property from the Aimco Operating Partnership during the taxable year. Generally, the characterization of any particular partnership tax item is determined by us,the Aimco Operating Partnership, rather than at the partner level, and the amount of a partner’s allocable share of such item is governed by the terms of the Aimco Operating Partnership’s Partnership Agreement. AIMCO-GP, Inc., the general partner, is our “tax matters partner” for United States Federal income tax purposes. The tax matters partner is authorized, but not required, to take certain actions on behalf of the Aimco Operating Partnership with respect to tax matters. The Aimco Operating Partnership is subject to tax in certain states.
Regulation
General
Apartment communities 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 apartment communities 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, existing rent control laws, as well as future enactment of rent control or rent stabilization laws, such as legislation that has been considered in New York and certain cities in California, or other laws regulating multifamily housing, may reduce rental revenue or increase operating costs in particular markets.
Environmental
Various Federal,federal, state and local laws subject apartment community owners or operators to liability for management, and the costs of removal or remediation, of certain potentially hazardous materials that may be present at an apartment community. These materials may include lead-based paint, asbestos, polychlorinated biphenyls and petroleum-based fuels. Such laws often impose liability without regard to fault or 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 apartment communities, we could potentially be liable for environmental liabilities or costs associated with our current apartment communities, communities we acquire or manage in
the future, or communities we previously owned or operated in the past. These and other risks related to environmental matters are described in more detail in Item 1A, “Risk1A. 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 apartment communities 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, 2015,2018, we had 1,591 employees,approximately 1,050 team members, of which 1,108whom about 700 were at the apartment community level performing various on-site functions or at our shared service center performing tasks that have been centralized there, with the balance managing corporate and area operations,functions, including investment and debt transactions, legal, financial reporting,finance and accounting, information systems, human resources and other support functions. As of December 31, 2015,2018, unions represented 89approximately 50 of our employees.team members. We have never experienced a work stoppage and believe we maintain satisfactory relations with our employees.team members.
Available Information
Our combined Annual Report on Form 10-K, our combined Quarterly Reports on Form 10-Q, Current Reports on Form 8-K filed by Aimco or the Aimco Operating Partnership 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 Aimco’s website at www.aimco.com. The information contained on Aimco’s website is not incorporated into this Annual Report. Aimco’s Common Stock is listed on the New York Stock Exchange under the symbol “AIV.” In 2015,2018, Aimco’s 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.
Redevelopment, development and construction risks could affect our profitability.
We are currently redeveloping and we intend to continue to redevelop, certain of our apartment communities. Additionally, we are developing a 12-story apartment building in Boston, Massachusetts. During 2016,2019, we expect to invest approximately $180invest $225 million to $220$275 million in conventional redevelopmentredevelopment and development activities. Redevelopment and development activities are subject to numerous risks, including the following risks:following:
we may be unable to obtain, or experience delays in obtaining, necessary zoning, occupancy or other required governmental or third partythird-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 uplease-up of an apartment community on schedule, resulting in increased construction and financing costs and a decrease in expected rental revenues;
occupancy rates and rents at an apartment community 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, which may cause us to delay or abandon an opportunity;
we may abandon opportunities that we have already begun to explore, or stop projects we have already commenced, 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 costs already incurred in exploring those opportunities;
we may incur liabilities to third parties during the redevelopment or development process;
unexpected events or circumstances may arise during the redevelopment or development process that affect the timing of completion and the cost and profitability of the project;redevelopment or development; and
loss of a key member of a projectredevelopment or development team could adversely affect our ability to deliver projectsredevelopments and developments on time and within our budget.
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 or distributions.
Our ability to fund necessary capital expenditures on our apartment communities 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 apartment communities, we may not be able to preserve the competitiveness of our communities, which could adversely affect ourtheir net operating income and long termlong-term value.
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 communities 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.
Competition could limit our ability to lease apartment homes or increase or maintain rents.
Because real estate investments are relatively illiquid, we may not be able to sell apartment communities when appropriate.
If we are not successful in our acquisition of apartment communities, our results of operations could be adversely affected.
The selective acquisition of apartment communities is a component of our strategy. However, we may not be able to complete transactions successfully in the future. Although we seek to acquire apartment communities when such acquisitions increase our Free Cash Flow internal rate of returns and are accretive to Net Asset Value, such transactions may fail to perform in accordance with our expectations. In particular, following acquisition, the value and operational performance of an apartment community may be diminished if obsolescence or neighborhood changes occur before we are able to redevelop or sell the community. This could have an adverse effect on our financial condition or results of operations.
Our existing and future debt financing could render us unable to operate, result in foreclosure of our apartment communities, 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 our non-recourse debt, our
lenders could foreclose on the apartment communities and other collateral securing such debt, which would result in the loss to us of income and asset value to us.value. As of December 31, 2015,2018, the majority of our apartment communities 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 communities or pay distributions required to be paid in order to maintain Aimco’s 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. During periods of economic uncertainty the United States credit markets may experience significant liquidity disruptions, which may cause the spreads on debt financings to widen considerably and make obtaining financing, both non-recourse property debt and corporate borrowings such as those under our Credit Agreement,revolving credit agreement, more difficult. Additionally,In particular, apartment borrowers have benefited from the historic willingness of Federal National Mortgage Association, or Fannie Mae, and the Federal Home Loan Mortgage Corporation, or Freddie Mac, to make substantial amounts of loans secured by multi-family properties, even in times of economic distress. These two lenders are federally chartered and Federal National Mortgage Association, or Fannie Mae, have historically provided significant capital atsubject to federal regulation, which is subject to change, making uncertain their prospects and ability to provide liquidity in a relatively low cost to finance multifamily properties. Freddie Mac and Fannie Mae are under conservatorship by the Housing Finance Agency, and their future role in the housing finance market is uncertain. If there is any significant reduction in Freddie Mac’s or Fannie Mae’s level of involvement in the secondary credit markets, it may adversely affect the pricing at which we may obtain non-recourse property debt financing.downturn.
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 apartment communities securing such debt and loss of income and asset value, eachboth of which would adversely affect our liquidity.
Increases in interest rates would increase our interest expense and reduce our profitability.
As of December 31, 2015, on a consolidated basis,2018, we had approximately $111.9$420.5 million of variable-rate indebtedness outstanding. We estimate that an increase in 30-day LIBOR of 100 basis points with constant credit risk spreads would result inreduce our net income and the amount of net income attributable to our common security holders (including Aimco common stockholders and the Aimco Operating Partnership’s common unitholders) being reduced (or the amounts of net loss and net loss attributable to our common equity holders being increased) by approximately $0.9$4.2 million on an annual basis.
At December 31, 2015,2018, we had approximately $137.7$72.6 million in cash and cash equivalents and restricted cash, a portion of which bear interest at variable rates indexed to LIBOR-based rates, and which may partially mitigate the effect of an increase in variable rates on our variable-rate indebtedness discussed above.
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 Agreementrevolving credit agreement provides, among other things, that we may not make distributions to our investors during any four consecutive fiscal quarters in an aggregate amount that does not exceed the greater ofthan 95% of our Funds From Operations for such period, subject to certain non-cash adjustments, or such amount as may be necessary to maintain Aimco’s REIT status. Our outstanding classes of preferred stock or preferred units prohibit the payment of dividends on our Common Stock or common partnership units if we fail to pay the dividends to which the holders of the preferred stock or preferred units are entitled.
All of Aimco’s apartment communities are owned, and all of Aimco’s operations are conducted, by the Aimco Operating Partnership. Further, many of the Aimco Operating Partnership’s apartment communities are owned by other subsidiaries.subsidiaries of the Aimco Operating Partnership. As a result, Aimco depends on distributions and other payments from the Aimco Operating Partnership, and the Aimco Operating Partnership depends on distributions and payments from its subsidiaries in order to satisfy our collective financial obligations and make payments to our investors. The ability of the Aimco Operating Partnership and its 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 the Aimco Operating Partnership and its 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.
Potential liability or other expenditures associated with potential environmental contamination may be costly.
Various Federal,federal, state and local laws subject apartment community owners or operators to liability for management, and the costs of removal or remediation, of certain potentially hazardous materials that may be present in the land or buildings of an apartment community. Potentially hazardous materials may include polychlorinated biphenyls, petroleum-based fuels, lead-based paint or asbestos.asbestos, among other materials. Such laws often impose liability without regard to fault or whether the owner or operator
knew of, or was responsible for, the presence of such materials. The presence of, or the failure to manage or remediate properly, these materials may adversely affect occupancy at such apartment communities as well as the ability to sell or finance such apartment communities. In addition, governmental agencies may bring claims for costs associated with investigation and remediation actions, damages to natural resources and for potential fines or penalties in connection with such damage or with respect to the improper management of hazardous materials. Moreover, private plaintiffs may potentially make claims for investigation and remediation costs they incur or personal injury, disease, disability or other infirmities related to the alleged presence of hazardous materials at an apartment community. In addition to potential environmental liabilities or costs associated with our current apartment communities, we may also be responsible for such liabilities or costs associated with communities we acquire or manage in the future, or apartment communities we no longer own or operate.
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 Federalfederal requirements related to access and use by disabled persons. The Fair Housing Amendments Act of 1988, or FHAA, requires apartment communities first occupied after March 13, 1991, to comply with design and construction requirements for disabled access. For those projectsapartment communities receiving Federalfederal funds, the Rehabilitation Act of 1973 also has requirements regarding disabled access. These and other Federal,federal, state and local laws may require structural modifications to our apartment communities or changes in policy/practice, or affect renovations of the communities. 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 apartment communities 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 apartment communities.
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 apartment communities, it is not unusual for periodic moisture intrusion issues to cause mold in isolated locations within an apartment community. We have implemented policies, procedures 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 apartment communities 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.
Although we are insured for certain risks, 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 apartment communities’ 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 apartment community and the amount of any related insurance proceeds. In many instances, the actual cost to repair or replace the apartment community may exceed its net book value and any insurance proceeds. We recognize the uninsured portion of losses as 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 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 such as earthquakes and severe weather such as hurricanes may result in significant damage to our apartment communities. 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 adverse 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.
Aimco may fail to qualify as a REIT.
If Aimco fails to qualify as a REIT, Aimco will not be allowed a deduction for dividends paid to its stockholders in computing its taxable income, and will be subject to United States Federalfederal income tax at regular corporate rates, including any applicable AMT.rates. This would substantially reduce our funds available for distribution to our investors. Unless entitled to relief under certain provisions of the Code, Aimco also would be disqualified from taxation as a REIT for the four taxable years following the year during which it ceased to qualify as a REIT. In addition, Aimco’s failure to qualify as a REIT would place us in default under our Credit Agreement.revolving credit agreement.
We believe that Aimco operates, and has since its taxable year ended December 31, 1994, operated, in a manner that enables it to meet the requirements for qualification as a REIT for United States Federalfederal income tax purposes. Aimco’s continued qualification as a REIT will depend on its satisfaction of certain asset, income, investment, organizational, distribution, stockholder ownership and other requirements on a continuing basis. Aimco’s 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. Aimco’s compliance with the REIT annual 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 United States Federalfederal 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 Aimco to fail to qualify as a REIT, or Aimco’s Board of Directors may determine to revoke its REIT status.
REIT distribution requirements limit our available cash.
As a REIT, Aimco is subject to annual distribution requirements. As Aimco’s operating partnership, theThe Aimco Operating Partnership pays distributions intended to enable Aimco to satisfy Aimco’sits distribution requirements. This limits the amount of cash available for other business purposes, including amounts to fund our growth. Aimco generally must distribute annually at least 90% of its REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain, in order for its distributed earnings not to be subject to United States Federalfederal corporate income tax. We intend to make distributions to Aimco’s 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 apartment communities or borrow funds on a short-term or long-term basis to meet the 90% distribution requirement of the Code.
Aimco may be subject to federal and state income taxes, in certain circumstances.
Even if Aimco qualifies as a REIT, Aimco may be subject to United States Federalfederal income and excise taxes in various situations, such as on its undistributed income. Aimco could also be required to pay a 100% tax on any net income on non-arm'snon-arm’s length transactions between Aimco and a taxable REIT subsidiary and on any net income from sales of apartment communities that were held for sale to customersprimarily in the ordinary course. In addition, Aimco could be subject to alternative minimum tax, or AMT, on items of tax preference. State and local tax laws may not conform to the United States Federalfederal income tax treatment, and Aimco may be subject to state or local taxation in various state or local jurisdictions including those in which Aimco transacts business. Any taxes imposed on Aimco would reduce our operating cash flow and net income and could negatively impact our ability to pay dividends and distributions.
REITs are entitled to a United States federal tax deduction for dividends paid to their stockholders. As compared to other taxable corporations, this ability to reduce or eliminate the REIT’s taxable income by paying dividends to stockholders is a principal benefit of maintaining REIT status, generally resulting in a lower combined tax liability of the REIT and its stockholders as
compared to that of the combined tax liability of other taxable corporations and their stockholders. Notwithstanding this combined benefit, dividends payable by REITs may result in marginally higher taxes to the stockholder.
C-corporations are generally required to pay United States federal income tax on earnings. After tax earnings are then available for stockholder dividends. The maximum U.S. Federal Income Tax Rules Applicablefederal tax rate applicable to income from “qualified dividends” payable to United States stockholders that are individuals, trusts and estates is currently 20%, plus the 3.8% investment tax surcharge. While dividends payable by REITs are generally not eligible for the qualified dividend reduced rates, stockholders that are individuals, trusts or estates may deduct 20% of the aggregate amount of ordinary dividends from REITs. This deduction is available for taxable years beginning after December 31, 2017, and before January 1, 2026, and will generally cause the maximum tax rate for ordinary dividends from REITs to be 29.6%, plus the 3.8% investment tax surcharge. The more favorable tax rates applicable to regular corporate qualified dividends could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive than investments in the shares of non-REIT corporates that pay dividends, which could adversely affect the value of the shares of REITs, including Aimco Common Stock.
Changes to United States federal income tax laws could materially and adversely affect Aimco and Aimco’s stockholders.
The recently enacted Protecting Americans from Tax Hikes Actpresent United States federal income tax treatment of 2015,REITs may be modified, possibly with retroactive effect, by legislative, judicial or PATH Act, contains changes to certain aspectsadministrative action at any time, which could affect the United States federal income tax treatment of the U.S.an investment in Aimco Common Stock. The United States federal income tax rules applicabledealing with REITs constantly are under review by persons involved in the legislative process, the IRS and the United States Treasury Department, which results in statutory changes as well as frequent revisions to REITs. The PATH Act modifiesregulations and interpretations. We cannot predict how changes in the tax laws might affect Aimco or Aimco’s stockholders. Revisions in federal tax laws and interpretations thereof could significantly and negatively affect Aimco’s ability to qualify as a REIT and the tax considerations relevant to an investment in Aimco Common Stock, or could cause Aimco to change its investments and commitments.
Government housing regulations may limit the opportunities at some of our apartment communities 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 or reduce funding for government housing programs which would result in a loss of benefits from those programs.
We own equity interests in entities that own certain apartment communities that benefit from governmental programs intended to provide housing to people with low or moderate incomes. These programs, which are usually administered by the United States 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-exempt interest; historic or low-income housing tax credits; or rental assistance payments to the apartment community owners. As a condition of the receipt of assistance under these programs, the apartment communities must comply with various rules that applyrequirements, which typically limit rents to a REIT’s ownershippre-approved amounts and limit our choice of and business relationshipresidents to those with its TRS entities and reduces (beginningincomes at or below certain levels. Failure to comply with these requirements may result in 2018)financial penalties or loss of benefits. We are usually required to obtain the valueapproval of HUD in order to acquire or dispose of a REIT’s assets thatsignificant interest in or manage a HUD-assisted apartment community. We may be in TRS entities from 25% to 20%. The PATH Act makes permanent the reduction of the period (from ten years to five years) during which a REIT is subject to corporate-level tax on the recognition of built-in gains in assets of an acquired corporation. The PATH Act also makes multiple changes related to the Foreign Investment in Real Property Tax Act, expands prohibited transaction safe harbors and qualifying hedges, and repeals the preferential dividend rule for publicly-offered REITs. Lastly, the PATH Act adjusts the way a REIT calculates earnings and profits in certain circumstances to avoid double taxation at the shareholder level, and expands the types of assets and income treated as qualifying for purposes of the REIT requirements. Investors are urged to consult their tax advisors with respect to these changes and the potential impact on their investment in our common stock and debt securities.not always receive such approval.
Limits on ownership of shares specified in Aimco’s charter may result in the loss of economic and voting rights by purchasers that violate those limits.
Aimco’s charter limits ownership of Common Stock by any single stockholder (applying certain “beneficial ownership” rules under the Federalfederal securities laws) to 8.7% (or up to 12.0% upon a waiver from Aimco’s Board of Directors) of outstanding shares of Common Stock, or 15% in the case of certain pension trusts, registered investment companies and Mr. Considine (or up to 18.0% for such pension trusts or registered investment companies upon a waiver from Aimco’s Board of Directors). Aimco’s charter also limits ownership of Aimco’s 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 Aimco’s capital stock if the purchase would result in Aimco losing its REIT status. This could happen if a transaction results in fewer than 100 persons owning all of Aimco’s 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 Aimco’s 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 Aimco’s 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 Aimco.
Aimco 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 distributionsdividends received from us as a result of his or her ownership of the shares.
Aimco’s charter may limit the ability of a third partythird-party to acquire control of Aimco.
The 8.7% and other ownership limitlimits discussed above may have the effect of delaying or precluding acquisition by a third-party of control of Aimco by a third party without the consent of Aimco’s Board of Directors. Aimco’s charter authorizes its Board of Directors to issue up to 510,587,500 shares of capital stock. As of December 31, 2015,2018, 500,787,260 shares were classified as Common Stock, of which 156,326,416149,133,826 were outstanding, and 9,800,240 shares were classified as preferred stock, of which 6,391,6435,000,000 were outstanding. Under Aimco’s charter, its Board of Directors has the authority to classify and reclassify any of Aimco’s unissued shares of capital stock into shares of capital stock with such preferences, conversion or other rights, voting power restrictions, limitations as to dividends, qualifications or terms or conditions of redemptions as the 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 Aimco, even ifwhere there is a change in control weredifference of opinion between the Aimco Board of Directors and others as to what is in Aimco’s stockholders’ best interests.
The Maryland General Corporation Law may limit the ability of a third partythird-party to acquire control of Aimco.
As a Maryland corporation, Aimco is subject to various Maryland laws that may have the effect of discouraging offers to acquire Aimco and increasing the difficulty of consummating any such offers, even if an acquisition would bewhere there is a difference of opinion between the Aimco Board of Directors and others as to what is in Aimco’s stockholders’ best interests. The Maryland General Corporation Law, specifically the Maryland Business Combination Act, restricts mergers and other business combination transactions between Aimco and any person who acquires, directly or indirectly, beneficial ownership of shares of Aimco’s stock representing 10% or more of the voting power without Aimco’s 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 Aimco’s 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, Aimco has not adopted a stockholders’ rights plan. In addition, the Maryland General Corporation Law provides that a corporation that:
has 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 its 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, Aimco has not made any of the elections described above.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Additional information about our consolidated apartment communities is contained in “Schedule III - Real Estate and Accumulated Depreciation” in this Annual Report on Form 10-K. Refer to Note 4 to the consolidated financial statements in Item 8 for additional information regarding property debt.
Our Real Estate portfolio is diversified by both price point and geography and consists of market rate apartment communities in which we own a substantial interest. Our Real Estate portfolio includes garden style, mid-rise and high-rise apartment communities located in 2217 states and the District of Columbia. Our geographic allocationportfolio strategy focuses onseeks predictable rent growth from a portfolio of apartment communities diversified among some of the largest coastal and job growth markets in the United States.States, and that is diversified across “A,” “B” and “C+” price points, averaging “B/B+” in quality. As of December 31, 2018, our Real Estate portfolio consisted of roughly one-half “A” quality communities and one-half “B” and “C+” quality communities (as measured by gross asset value). Please refer to the Executive Overview heading under Item 7 for a description of our portfolio quality ratings. The following table sets forth information on all ofthe apartment communities in our apartment communitiesReal Estate portfolio as of December 31, 2015:2018:
| Number of Apartment Communities | Number of Apartment Homes | Average Ownership | Number of Apartment Communities | Number of Apartment Homes | Average Economic Ownership | |||||||||||
| Conventional: | ||||||||||||||||
| Atlanta | 8 | 1,497 | 99 | % | 5 | 817 | 100 | % | ||||||||
| Bay Area | 11 | 2,169 | 100 | % | 12 | 2,632 | 100 | % | ||||||||
| Boston | 15 | 4,689 | 100 | % | 15 | 4,689 | 100 | % | ||||||||
| Chicago | 10 | 3,246 | 100 | % | 10 | 3,246 | 100 | % | ||||||||
| Denver | 8 | 2,065 | 98 | % | 8 | 2,151 | 98 | % | ||||||||
| Greater DC | 14 | 6,547 | 100 | % | ||||||||||||
| Greater LA | 15 | 5,313 | 88 | % | ||||||||||||
| Greater New York | 18 | 1,040 | 100 | % | ||||||||||||
| Greater Washington, DC | 14 | 5,900 | 100 | % | ||||||||||||
| Los Angeles | 13 | 4,347 | 100 | % | ||||||||||||
| Miami | 5 | 2,571 | 100 | % | 5 | 2,671 | 100 | % | ||||||||
| New York | 18 | 1,040 | 100 | % | ||||||||||||
| Philadelphia | 6 | 3,525 | 98 | % | 8 | 2,638 | 97 | % | ||||||||
| San Diego | 12 | 2,423 | 97 | % | 12 | 2,423 | 97 | % | ||||||||
| Seattle | 2 | 239 | 100 | % | 2 | 239 | 100 | % | ||||||||
| Total target markets | 124 | 35,324 | 97 | % | ||||||||||||
| Other markets | 16 | 5,140 | 98 | % | 12 | 3,756 | 99 | % | ||||||||
| Total conventional owned and managed | 140 | 40,464 | 98 | % | ||||||||||||
| Affordable | 56 | 8,685 | 95 | % | ||||||||||||
| Total | 196 | 49,149 | 97 | % | ||||||||||||
| Total Real Estate portfolio | 134 | 36,549 | 99 | % | ||||||||||||
At December 31, 2015,2018, we owned an equity interest in and consolidated within our financial statements 185134 apartment communities containing 48,320with 36,549 apartment homes in our Real Estate portfolio. We consolidated 130 of these apartment communities with 36,407 apartment homes.
These consolidated apartment communities contain,contained, on average, 261280 apartment homes, with the largest community containing 2,113 apartment homes. These apartment communities offer residents a range of amenities, including resort pools with cabanas, grills, and other amenities, clubhouses, spas, fitness centers, package lockers, dog parks and large open spaces. Many of the apartment homes offer features such as granite countertops, wood flooring, and cabinets, stainless steel appliances, fireplaces, spacious closets, washer and dryer connections, and balconies and patios. Some of our premier apartment communities also offer premium features including designer kitchens and bathroom finishes. Additional information on our consolidated apartment communities is contained in “Schedule III - Real Estate and Accumulated Depreciation” in this Annual Report on Form 10-K. At December 31, 2015, we held an equity interest in and did not consolidate within our financial statements 11 apartment communities containing 829 apartment homes.
The majority of our consolidated apartment communities are encumbered by property debt. At December 31, 2015, 157 of2018, apartment communities in our consolidated apartment communitiesReal Estate portfolio were encumbered by, in aggregate, $3.8$3.9 billion of property debt with a weighted average interest rate of 5.01%4.18% and a weighted average maturity of 8.1 years, respectively. Each of the8.0 years. The apartment communities collateralizing this non-recourse property debt instruments comprising this total are collateralized by onehave an estimated aggregate fair value of our$10.2 billion. At December 31, 2018, we held unencumbered apartment communities without cross-collateralization, with an aggregate gross book value of $6.9 billion. Refer to Note 5 to the consolidated financial statements in Item 8 for additional information regarding our property debt. As of December 31, 2015, we had an unencumbered pool that included 25 consolidated apartment communities and had an estimated fair value of $1.8 billion. At December 31, 2015, we also had two recently acquired consolidated apartment communities which we anticipate encumbering but for which financing was not yet in place.approximately $2.7 billion.
Item 3. Legal Proceedings
As further discussed in Note 75 to the consolidated financial statements in Item 8, we are engaged in discussions with regulatory agencies regarding environmental matters at apartment communities we, or predecessor entities, previously owned. Although the outcome of the process we are undergoing for these environmental matters is uncertain, we do not expect the resolution to have a material adverse effect on our consolidated financial condition, results of operations or cash flows.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Aimco
Aimco’s 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:
| Quarter Ended | High | Low | Dividends Declared (per share) | ||||||||
| December 31, 2015 | $ | 40.83 | $ | 35.88 | $ | 0.30 | |||||
| September 30, 2015 | 40.43 | 34.71 | 0.30 | ||||||||
| June 30, 2015 | 39.66 | 36.52 | 0.30 | ||||||||
| March 31, 2015 | 41.55 | 36.59 | 0.28 | ||||||||
| December 31, 2014 | $ | 38.53 | $ | 31.62 | $ | 0.26 | |||||
| September 30, 2014 | 34.87 | 31.51 | 0.26 | ||||||||
| June 30, 2014 | 32.76 | 28.95 | 0.26 | ||||||||
| March 31, 2014 | 31.28 | 25.52 | 0.26 | ||||||||
On February 25, 2016, the closing price of the Common Stock was $36.62 per share, as reported on the NYSE, and15, 2019, there were 156,599,775148,766,616 shares of Common Stock outstanding, held by 1,9581,673 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.record holder.
From time to time, Aimco may issue shares of Common Stock in exchange for common and preferred OP Units, tendered to thedefined under The Aimco Operating Partnership heading below. Please refer to Note 7 to the consolidated financial statements in Item 8 for redemption in accordance with the terms and provisionsfurther discussion 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. Additionally, from time to time,such exchanges. Aimco may also issue shares of Common Stock in exchange for limited partnership units in consolidated real estate partnerships that are tendered to the Aimco Operating Partnership for redemption in accordance with the terms and provisions of the related limited partnership agreement. The shares are generally issued in exchange for OP Units or limited partnership units in private transactions exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof. During the year ended December 31, 2015, we did not issue any shares of Common Stock in exchange for common OP Units or preferred OP Units. During the year ended December 31, 2015, we did not issue any shares of Common Stock in exchange for limited partnership interests in consolidated real estate partnerships.
The following table summarizes Aimco’s share repurchases (in thousands, except for per share data) for the three months ended December 31, 2015, Aimco was 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.2018:
| Fiscal period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under Plans or Programs (1) | ||||||||
| October 1 - October 31, 2018 | 1,708 | $ | 43.91 | 1,708 | 17,616 | |||||||
| November 1 - November 30, 2018 | 1,828 | 45.50 | 1,828 | 15,788 | ||||||||
| December 1 - December 31, 2018 | 4,683 | 46.00 | 4,683 | 11,105 | ||||||||
| Total | 8,219 | $ | 45.43 | 8,219 | ||||||||
| (1) | Aimco’s Board of Directors has, from time to time, authorized Aimco to repurchase shares of its outstanding capital stock. This authorization has no expiration date. These repurchases may be made from time to time in the open market or in privately negotiated transactions. |
Performance Graph
The following graph compares cumulative total returns for Aimco’s Common Stock, the MSCI US REIT Index, the NAREIT Apartment Index, and the Standard & Poor’s 500 Total Return Index (the “S&P 500”), and the NAREIT Apartment Index.. The MSCI US REIT Index is published by Morgan Stanley Capital International Inc., a provider of equity indices. The NAREIT Apartment Index is published by The National Association of Real Estate Investment Trusts, or NAREIT, a representative of real estate investment trusts and publicly traded real estate companies with interests in United States real estate and capital markets. The MSCI REIT Index reflects total shareholder return for a broad range of REITs and the NAREIT Apartment Index provides a more direct multifamily peer comparison of total shareholder return. 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 to add themcompanies to the index calculation as they become publicly traded companies. All companies ofthat fit the definitional criteria in existenceand existed at the point in time presented are included in the index calculations. The graph assumes the investment of $100 in Aimco’s Common Stock and in each index on December 31, 2010,2013, and that all dividends paid have been reinvested. The historical information set forth below is not necessarily indicative of future performance.
| For the fiscal years ended December 31, | For the fiscal years ended December 31, | |||||||||||||||||||||||
| Index | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||
| Aimco (1) | $ | 100.00 | $ | 90.39 | $ | 109.99 | $ | 108.83 | $ | 161.12 | $ | 179.08 | 100.00 | 148.04 | 164.54 | 192.98 | 191.69 | 199.60 | ||||||
| MSCI US REIT (1) | 100.00 | 108.69 | 128.00 | 131.17 | 171.01 | 175.32 | 100.00 | 130.38 | 133.67 | 145.16 | 152.52 | 145.55 | ||||||||||||
| NAREIT Apartment Index (2) | 100.00 | 139.62 | 162.60 | 167.24 | 173.46 | 179.88 | ||||||||||||||||||
| S&P 500 (1) | 100.00 | 102.11 | 118.45 | 156.82 | 178.28 | 180.75 | 100.00 | 113.69 | 115.26 | 129.05 | 157.22 | 150.33 | ||||||||||||
| NAREIT Apartment Index (2) | 100.00 | 115.10 | 123.08 | 115.45 | 161.20 | 187.72 | ||||||||||||||||||
(1) Source: SNL Financial LC, Charlottesville, VAS&P Global Market Intelligence © 20162019
(2) Source: National Association of Real Estate Investment Trusts
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 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, which we refer to as common OP Units, as well as partnership preferred units, or preferred OP Units. There is no public market for the Aimco Operating Partnership’s common partnership units, including OP Units, and we have no intention of listing the common partnership units on any securities exchange. In addition, the Aimco Operating Partnership’s Partnership Agreement restricts the transferability of common partnership units, including OP Units. The following table sets forth the distributions declared per common partnership unit in each quarterly period during the two years ended December 31, 2015 and 2014:
| Quarter Ended | 2015 | 2014 | ||||||
| December 31 | $ | 0.30 | $ | 0.26 | ||||
| September 30 | 0.30 | 0.26 | ||||||
| June 30 | 0.30 | 0.26 | ||||||
| March 31 | 0.28 | 0.26 | ||||||
At February 25, 2016,15, 2019, there were 164,453,698158,495,487 common partnership units and equivalents outstanding (156,599,775(148,766,616 of which were held by Aimco) that were held by 2,8062,515 unitholders of record.
The Aimco Operating Partnership’s Partnership Agreement generally provides that after holding common OP Units for one year, limited partners other than Aimco have the right to redeem their common OP Units for cash subject toor, at our prior right to cause Aimco to acquire some or all of the common OP Units tendered for redemption in exchange for shares of Aimco Common Stock. Common OP Units redeemed forelection, shares of Aimco Common Stock are exchanged on a one-for-one basis (subject to customary antidilution adjustments).
No common OP Units or preferred OP Units held by Limited Partners were redeemed in exchange for shares of Aimco Common Stock during the year ended December 31, 2015.2018.
The following table summarizes the Aimco Operating Partnership’s repurchases of common OP Units for the three months ended December 31, 2015:2018:
| Fiscal period | Total Number of Units Purchased | Average Price Paid per Unit | Total Number of Units Purchased as Part of Publicly Announced Plans or Programs (1) | Maximum Number of Units that May Yet Be Purchased Under Plans or Programs (1) | |||||||
| October 1 - October 31, 2015 | 34,064 | $ | 35.98 | N/A | N/A | ||||||
| November 1 - November 30, 2015 | 5,436 | 39.69 | N/A | N/A | |||||||
| December 1 - December 31, 2015 | 3,920 | 37.39 | N/A | N/A | |||||||
| Total | 43,420 | $ | 36.57 | ||||||||
| Fiscal period | Total Number of Units Purchased | Average Price Paid per Unit | Total Number of Units Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Units that May Yet Be Purchased Under Plans or Programs | ||||||
| October 1 - October 31, 2018 | 11,150 | $ | 43.96 | N/A | N/A | |||||
| November 1 - November 30, 2018 | 3,765 | 43.47 | N/A | N/A | ||||||
| December 1 - December 31, 2018 | 11,360 | 46.45 | N/A | N/A | ||||||
| Total | 26,275 | $ | 44.97 | |||||||
Dividend and Distribution Payments
As a REIT, Aimco is required to distribute annually to holders of its Common Stock at least 90% of its “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. Aimco’s Board of Directors determines and declares its dividends. In making a dividend determination, Aimco’s 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. Aimco’s Board of Directors targets a dividend payout ratio between 65% and 70% of Adjusted Funds From Operations.
In February 2019, the Aimco’s Board of Directors declared a special dividend on the common stock that consists of $67.1 million in cash and 4.5 million shares of Class A Common Stock. The special dividend will be payable on March 22, 2019, to stockholders of record as of February 22, 2019. The special dividend amount includes the regular quarterly cash dividend, which for 2019 is expected to be $0.39 per share, which represents an increase of 3% compared to cash dividends paid during 2018. Stockholders will have the opportunity to elect to receive the special dividend in the form of all cash or all stock, subject to proration if either option is oversubscribed.
Stockholders receiving such dividend and any future dividend payable in cash and shares of Aimco Common Sock will be required to include the full amount of such dividends as ordinary income to the extent of Aimco’s current and accumulated earnings and profits, as determined for United States federal income tax purposes for the year of such dividends, and may be required to pay income taxes with respect to such dividends in excess of the cash dividends received. With respect to certain non-United States stockholders, Aimco may be required to withhold United States tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in Common Stock.
The Board of Directors of the Aimco Operating Partnership’s general partner determines and declares distributions on OP Units. Aimco, through wholly-owned subsidiaries, is the general and special limited partner of and, as of December 31, 2018, owned a 94.3% ownership interest in the common partnership units of the Aimco Operating Partnership. The Aimco Operating Partnership holds all of Aimco’s assets and manages the daily operations of Aimco’s business. The distributions paid by the Aimco Operating Partnership to Aimco are used by Aimco to fund the dividends paid to its stockholders. Accordingly, the per share dividends Aimco pays to its stockholders generally equal the per unit distributions paid by the Aimco Operating Partnership to holders of its common partnership units.
In February 2019, the Board of Directors of the Aimco Operating Partnership’s general partner declared a special distribution on the common partnership units that consists of $71.5 million in cash and 4.8 million common partnership units. The special distribution will be payable on March 22, 2019, to unitholders of record as of February 22, 2019.
In order to neutralize the dilutive impact of the stock issued in the special dividend, Aimco’s Board of Directors also authorized a reverse stock split in which every 1.03119 share of Class A Common Stock will be combined into one share of Class A Common Stock, effective at the close of business on February 20, 2019. The Board of Directors of the Aimco Operating Partnership’s general partner authorized a corresponding reverse unit split to be effective concurrent with the Aimco reverse stock split. As a result, total shares and total units outstanding following completion of the transactions are expected to be unchanged from the total shares and units outstanding immediately prior to the transactions. Some stockholders may have more Aimco shares and some may have fewer based on their individual elections.
Our Credit Agreementrevolving credit agreement includes customary covenants, including a restriction on dividends and other restricted payments, but permits dividends and distributions during any four consecutive fiscal quarters in an aggregate amount of up to 95% of Aimco’s Funds From Operations for such period, subject to certain non-cash adjustments, or such amount as may be necessary to maintain Aimco’s REIT status.
Item 6. Selected Financial Data
The following selected financial data is based on audited historical financial statements of Aimco and the Aimco Operating Partnership. 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, | Years Ended December 31, | |||||||||||||||||||||||||||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||
| (dollar amounts in thousands, except per share data) | (dollar amounts in thousands, except per share data) | |||||||||||||||||||||||||||||||||||||
| OPERATING DATA: | ||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | 981,310 | $ | 984,363 | $ | 974,053 | $ | 958,511 | $ | 914,355 | $ | 972,410 | $ | 1,005,437 | $ | 995,854 | $ | 981,310 | $ | 984,363 | ||||||||||||||||||
| Income (loss) from continuing operations (1) | 91,390 | 67,475 | 34,596 | (18,756 | ) | (136,237 | ) | |||||||||||||||||||||||||||||||
| Earnings (loss) per common share - basic and diluted: | ||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations attributable to Aimco common stockholders | $ | 1.52 | $ | 2.06 | $ | 0.29 | $ | (0.60 | ) | $ | (1.22 | ) | ||||||||||||||||||||||||||
| Net income | 716,603 | 347,079 | 483,273 | 271,983 | 356,111 | |||||||||||||||||||||||||||||||||
| Net income attributable to Aimco/the Aimco Operating Partnership per common share/unit – diluted | $ | 4.21 | $ | 1.96 | $ | 2.67 | $ | 1.52 | $ | 2.06 | ||||||||||||||||||||||||||||
| BALANCE SHEET INFORMATION: | ||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 6,144,194 | $ | 6,097,028 | $ | 6,079,413 | $ | 6,401,380 | $ | 6,871,862 | $ | 6,190,004 | $ | 6,079,040 | $ | 6,232,818 | $ | 6,118,681 | $ | 6,068,631 | ||||||||||||||||||
| Total indebtedness | 3,873,160 | 4,135,139 | 4,388,185 | 4,413,083 | 4,488,822 | 4,075,665 | 3,861,770 | 3,648,206 | 3,599,648 | 3,852,885 | ||||||||||||||||||||||||||||
| Non-recourse property debt of partnerships served by Asset Management business | — | 227,141 | 236,426 | 249,493 | 255,140 | |||||||||||||||||||||||||||||||||
| OTHER INFORMATION: | ||||||||||||||||||||||||||||||||||||||
| Dividends declared per common share (2) | $ | 1.18 | $ | 1.04 | $ | 0.96 | $ | 0.76 | $ | 0.48 | ||||||||||||||||||||||||||||
| Dividends/distributions declared per common share/unit | $ | 1.52 | $ | 1.44 | $ | 1.32 | $ | 1.18 | $ | 1.04 | ||||||||||||||||||||||||||||