Apartment Investment and Management Company (NYSE: AIV) Announces Second Quarter 2009 Results

DENVER, July 31 /PRNewswire-FirstCall/ --

Second Quarter 2009 Highlights

  • Funds From Operations (FFO, as defined below) - FFO, before operating real estate impairments and preferred stock redemption related gains, of $0.45 per share was $0.02 above the high end of the $0.37 to $0.43 per share guidance range primarily due to favorable non-Same Store operating results and lower general and administrative expenses.
  • Property Operations - During the second quarter, Aimco's share of total conventional and affordable property net operating income was $157.8 million. Total conventional and affordable property net operating income, adjusted for property acquisitions and dispositions, was 1.5% higher than the second quarter 2008.
    • Same Store Results (as defined below) - When comparing second quarter 2009 to second quarter 2008, Same Store property net operating income declined 3.5%, below the guidance range of negative 2.0% to negative 3.0%. Same Store revenue declined 2.3% and expenses declined 0.4%. Average daily occupancy declined 2.1% from 94.9% for the second quarter 2008 to 92.8% for the second quarter 2009. Since April, average daily occupancy has increased each month.
    • Non-Same Store Results - Second quarter 2009 conventional redevelopment net operating income increased 10.4% compared to the second quarter 2008 and affordable property operations, including affordable redevelopment operations, generated net operating income growth of 19.3% during the same period.
  • Capital Markets Activity

Due to turmoil in capital markets, Aimco has focused on reducing refunding risk by accelerating refinancing of property loans maturing prior to 2012. At the beginning of the second quarter 2009, Aimco's share of property debt maturing during 2009 through 2011 was $536.3 million. During the second quarter, through refinancing, repayment and property sales, Aimco reduced these maturities by $315.0 million. As of June 30, 2009, the balance of property debt maturing through 2011 totaled $221.3 million and was related to 20 loans. Of these loans, refunding risk is expected to be eliminated by the end of the third quarter 2009 with respect to all but five loans. The five remaining property loans total $164.0 million and are expected to be refinanced at maturity in 2011.

                                                           AIMCO SHARE
                                                     PROPERTY LOANS MATURING
                                                          2009 - 2011

                                                   Balance at       Number of
                                                    Maturity          Loans
                                                    ----------      ---------
    Property loans outstanding March 31, 2009 ($mm)   $536.3            30
    -----------------------------------------------   ------            --
      Loans refinanced                                (286.7)           (6)
      ----------------                                ------            --
      Loans paid down                                   (7.5)
      ---------------                                   ----
      Loans on properties sold during
       the second quarter 2009                         (20.8)           (4)
      -------------------------------                  -----            --
    Property loans outstanding June 30, 2009*         $221.3            20
    -----------------------------------------         ------            --
      Loans to be refinanced during
       the third quarter 2009                           (7.9)           (2)
      -----------------------------                     ----            --
      Loans to be paid off during the
       third quarter 2009                              (26.1)           (1)
      -------------------------------                  -----            --
      Loans on properties under
       contract for sale during the
       third quarter 2009                              (18.5)           (4)
      -----------------------------                    -----            --
      Committed financing                               (4.8)           (2)
      -------------------                               ----            --
      Fully amortizing loans                               -            (6)
      ----------------------                              --            --
    Property loans to be refinanced
     at maturity in 2011                              $164.0             5
    -------------------------------                   ------            --

    * Includes one loan for $2.3 million related to a property classified as
    held for sale at the end of the quarter.  Aimco's share of 2009 to 2011
    property debt maturities shown on Supplemental Schedule 5, Selected Debt
    Structure and Maturity Data, does not include this loan.

  • Property Sales and Asset Allocation - During the second quarter 2009, Aimco sold 20 properties for $291.3 million, generating $104.9 million in net proceeds to Aimco, after distributions to limited partners, repayment of existing property debt and transaction costs. Year-to-date through June 30, 2009, Aimco has sold 30 properties generating net proceeds to Aimco of $119.2 million. Aimco continues to market properties located in its non-target markets and lower rated locations within its target markets.
  • Dividend - Aimco's Board of Directors declared a cash dividend of $0.10 per share on its Class A Common Stock for the quarter ended June 30, 2009. The dividend is payable August 31, 2009, to stockholders of record on August 21, 2009.

2009 Outlook

  • Property Operations - Aimco remains focused on retaining its existing residents and maintaining expense control. For the third quarter 2009, Same Store net operating income is expected to decline 5.0% to 6.0% when compared to third quarter 2008. For the full year 2009, Same Store net operating income is expected to decline 3.0% to 5.0% compared to full year 2008, which is within the guidance range provided at the beginning of 2009. Improved results in the redevelopment and affordable property portfolios are expected to largely offset the declines in the Same Store results.
  • Balance Sheet and Liquidity - Aimco continues to focus on maintaining a sound balance sheet with balanced sources and uses of cash, ample liquidity and coverage ratios adequate to satisfy bank debt covenants. Aimco leverage is 82% long-term, non-recourse property debt with a weighted average maturity of 8.9 years, and 12% of Aimco leverage is perpetual preferred equity. On average, approximately 5%, or $300 million, of Aimco's share of leverage is subject to refunding in any one year. Aimco's $350 million term debt matures in first quarter 2011 and is expected to be repaid prior to maturity with proceeds from property sales.
  • Property Sales and Asset Allocation - In order to improve liquidity and increase its allocation of capital to well located properties within its target markets, Aimco continues to market more than $2 billion of non-target conventional and affordable assets, with approximately $615 million currently under contract and an additional $565 million in negotiations.
  • FFO Outlook - Aimco's previously provided guidance for full year 2009 FFO, before operating real estate impairments and preferred stock redemption related gains, was a range of $1.65 to $1.95 per share, and specifically excluded the impact of FFO dilution from 2009 property sales. Based on year-to-date financial results and our projections for the remainder of the year, we are narrowing our full year 2009 FFO guidance, excluding the impact of dilution from 2009 property sales, to $1.70 to $1.90 per share. Additionally, based on sales completed through July 2009, and sales expected to be completed during the balance of the year, we now estimate that dilution from 2009 property sales will total approximately $0.15 per share for the full year 2009. As a result, we are further adjusting our full year 2009 guidance to a range of $1.55 to $1.75 per share. For the third quarter 2009, FFO is expected to range from $0.36 to $0.42 per share, inclusive of dilution from 2009 asset sales.

Management Comments

Chairman and Chief Executive Officer Terry Considine comments: "During the second quarter 2009, Aimco continued to execute its plans to focus on operations, reduce off-site costs including G&A, lower refinancing risk, and upgrade its investment portfolio. Since April, operating results in the Same Store portfolio have trended up. Taken together, operating results in the Same Store, redevelopment and affordable property portfolios are up year-over-year. Year to date, 60% of property debt maturities during 2009 to 2011 have been refinanced at a weighted average term of ten years and a weighted average interest rate of 5.93%, and another 7% of maturities have been settled either through the sale of the related assets or loan paydowns. We continue to execute our plan to improve the quality of our portfolio by selling our lower rated assets, which has contributed to a 43% increase in average rents over the past five years, up from $726 in second quarter 2004 to $1,035 today."

President, Chief Investment Officer and Chief Financial Officer David Robertson adds: "We made significant progress in reducing our refunding risk during the quarter. Property debt maturing prior to 2012 essentially has been reduced to $164 million, comprised primarily of two loans that we plan to refinance at maturity in 2011. We extended the maturity of our revolving line of credit to 2012, and currently have a zero balance excluding letters of credit. We sold $291 million of assets during the quarter and have $1.2 billion more under contract or in negotiations, the proceeds of which we plan to use to repay our $350 million of term debt prior to its maturity in the first quarter of 2011. Taken together, these actions greatly strengthen Aimco's balance sheet."

Second Quarter 2009 Financial Results

In accordance with Generally Accepted Accounting Principles (GAAP), all previously reported share and per share data have been adjusted to take into account the special dividends paid on August 29, 2008, December 1, 2008, and January 29, 2009, which resulted in the issuance of approximately 5.7 million, 12.6 million and 15.6 million additional shares of Aimco's Class A Common Stock, respectively.

  • Net loss attributable to common stockholders for the quarter was $29.9 million, compared to net income of $239.1 million for the second quarter 2008. Lower gains on dispositions of consolidated and unconsolidated real estate of $313.5 million, lower asset management and tax credit revenues of $25.6 million, and higher depreciation and amortization expense of $16.6 million were partially offset by a decrease in income attributable to noncontrolling interests of $76.2 million, lower general and administrative expenses of $9.2 million, a decrease in other expenses of $6.5 million, and an increase in property operating income from continuing operations of $2.2 million. Earnings per share (EPS) attributable to common stockholders were a loss of $0.26 on a diluted basis, compared with earnings of $1.94 per share in the second quarter 2008.
  • Funds from operations (diluted) (FFO) is a non-GAAP financial measure defined in the glossary in the Supplemental Information (the Glossary). FFO calculated in accordance with the definition prescribed by the National Association of Real Estate Investment Trusts (NAREIT) was $38.7 million, or $0.34 per share, compared with $74.6 million, or $0.59 per share, in the second quarter 2008. FFO, before operating real estate impairments and preferred stock redemption related gains, was $52.3 million, or $0.45 per share, down from $0.63 per share in the second quarter 2008.
  • Adjusted funds from operations (diluted) (AFFO; a non-GAAP financial measure defined in the Glossary) was $35.6 million, or $0.31 per share, compared with $57.4 million, or $0.46 per share, in the second quarter 2008. AFFO includes deductions of $0.15 and $0.17 per share for capital replacement expenditures in the second quarter 2009 and the second quarter 2008, respectively.
    Adjusted Diluted Per Share Results*

                                           SECOND QUARTER     YEAR-TO-DATE
                                           2009     2008     2009       2008
                                           ----     ----     ----       ----
     Earnings (loss)  EPS                ($0.26)   $1.94   ($0.59)     $1.60
     --------------------                ------    -----   ------      -----
     Funds from operations  FFO           $0.34    $0.59    $0.78      $1.09
     --------------------------           -----    -----    -----      -----
     FFO before operating real estate
      impairments and
      preferred stock redemption
      related gains                       $0.45    $0.63    $0.88      $1.14
      --------------------------          -----    -----    -----      -----
     Adjusted funds from operations
       AFFO                               $0.31    $0.46    $0.61      $0.82
     ------------------------------       -----    -----    -----      -----

    * These per share results reflect the cumulative effect of the shares
    issued as part of Aimco's special dividends paid in 2008 and on January
    29, 2009.  To estimate the approximate per share results before the
    effect of Aimco's special dividends, multiply the reported per share
    results by a factor of 1.48.

Property Operations

Property operating results discussed below represent Aimco's share of reported amounts.

Conventional Real Estate Operations

Conventional real estate operations relate to Aimco's diversified portfolio of market rate apartment communities. At the end of the second quarter 2009, this portfolio included 287 properties with 88,170 units in which Aimco had a weighted average ownership of 90%. Average rents for the conventional real estate portfolio increased 7.9% from $959 per unit during the second quarter 2008 to $1,035 per unit during the second quarter 2009. During the second quarter 2009, conventional real estate operations generated net operating income of $137.0 million. Aimco's Same Store portfolio net operating income was $111.5 million for the second quarter 2009, down 3.5% from the second quarter 2008, while conventional redevelopment property operations generated net operating income of $25.2 million during the quarter, an increase of 10.4% compared to the second quarter 2008.

"Same Store" Results

In the second quarter 2009, the Same Store portfolio included 206 communities with 60,306 Effective Units (see the Glossary) based on Aimco's weighted average ownership of 91%.

Comparing Same Store results in the second quarter 2009 with the second quarter 2008, total revenue decreased $4.3 million, or 2.3%. The decrease in revenue was primarily the result of lower average daily occupancy, which was down 2.1% from 94.9% to 92.8%, and lower average rent, down $13 per unit or 1.3%, from $1,008 per unit to $995 per unit. Same Store expenses decreased $0.3 million or 0.4%, due to decreases in utilities, marketing, repairs and maintenance, real estate taxes and contract services, partially offset by increased insurance expense.

    Same Store Operating Results

                                SECOND QUARTER            SECOND QUARTER
                                Year-over-year               Sequential
                                --------------            -----------------
                             2009    2008  Variance     1st Qtr    Variance
                             ----    ----  --------     -------    --------
    Same Store Operating
     Measures
    --------------------
        Average Physical
         Occupancy           92.8%   94.9% -2.1%          93.5%      -0.7%
        ----------------     ----    ----  ----           ----        ----
        Average Rent Per
         Unit                $995  $1,008  -1.3%        $1,004       -0.9%
        ----------------     ----  ------  ----         ------        ----
    Total Same Store ($mm)
    ----------------------
        Revenue            $182.6  $186.9  -2.3%        $185.1       -1.3%
        -------            ------  ------  ----         ------       ----
        Expenses            (71.1)  (71.4) -0.4%         (73.1)      -2.7%
        --------            -----  ------  ----          -----       ----
        NOI                $111.5  $115.5  -3.5%        $112.0       -0.5%
        ---                ------  ------  ----         ------       ----

                                         YEAR-TO-DATE
                                         Year-over-year
                                         --------------
                                       2009    2008   Variance
                                       ----    ----  ---------
     Same Store Operating
      Measures
     --------------------
         Average Physical
          Occupancy                   93.2%     94.8%   -1.6%
         ----------------            ------   ------    ----
         Average Rent Per Unit      $1,000    $1,006    -0.6%
         ---------------------       ------   ------    ----
     Total Same Store ($mm)
    ----------------------          -------   -------   ----
         Revenue                    $365.6    $371.3    -1.5%
         -------                    ------    ------    ----
         Expenses                   (143.2)   (144.5)   -1.0%
         --------                  -------   -------    ----
         NOI                        $222.4    $226.8    -1.9%
         ---                        ------    ------    ----



See Supplemental Schedules 6a through 6c for additional information on Same Store operating results.

Affordable Real Estate Operations

At the end of the second quarter 2009, Aimco's affordable real estate portfolio included 280 properties with 31,799 units in which Aimco had an average ownership of 54%. During the second quarter 2009, affordable property operations generated net operating income of $20.8 million. Total affordable property net operating income, adjusted for property sales, was 19.3% higher than the second quarter 2008. Average month-end occupancy for the affordable portfolio decreased 90 basis points from 97.8% for the second quarter 2008 to 96.9% for the second quarter 2009, while average rent per unit increased 3.2% from $729 to $752 per unit.

Investment Management

Investment management includes activities related to our owned portfolio of properties as well as services provided to affiliated partnerships. Investment management includes portfolio strategy, capital allocation, joint ventures, tax credit syndication, acquisitions, dispositions and other transaction activities. Within our owned portfolio, we refer to these activities as Portfolio Management, and their benefit is seen in property operating results and in investment gains. For affiliated partnerships, we refer to these activities as Asset Management for which we are separately compensated through fees paid by third party investors.

Investment management income includes the fees earned for providing asset management services to third party investors, syndication fees and deferred income related to tax credit activities, and portfolio management income earned through investment gains on our owned assets. Aimco's share of investment management income, net of tax, was $10.1 million in the second quarter 2009 compared to $29.1 million in the second quarter 2008. Recurring asset management activities and deferred tax credit income comprised 57% of total investment management revenue during the second quarter 2009. See Supplemental Schedule 11 for additional information on investment management income.

Portfolio Management

Portfolio management includes the ongoing allocation of investment capital to meet our geographic and product type goals. Our geographic allocation strategy focuses on the 20 largest U.S. markets as measured by total market capitalization. We believe these markets to be deep, relatively liquid and possessing desirable long-term growth characteristics. These target markets are primarily coastal markets, and also include a number of Sun Belt cities and Chicago, Illinois. As we execute this strategy, we expect to reduce our investment in markets outside the 20 largest markets and to increase our investment in the 20 largest markets both by making acquisitions and through redevelopment spending.

In the second quarter 2009, Aimco sold 17 conventional properties and three affordable properties with 4,593 and 492 units, respectively, for $291.3 million in gross proceeds (Aimco share $242.7 million). Aimco's share of net proceeds after distributions to limited partners, repayment of existing property debt and transaction costs was $104.9 million.

See Supplemental Schedules 6 and 7 for additional details regarding Aimco's portfolio allocation and Supplemental Schedule 8 for additional information on disposition activity.

Redevelopment

During the second quarter 2009, Aimco invested $19.2 million in conventional redevelopment projects and completed nine of the 30 projects that were active at the end of the first quarter. Additionally, Aimco elected to reduce the scope of certain projects, resulting in an $18.8 million reduction in their estimated cost of completion. Aimco also invested $13.7 million in seven tax credit redevelopment projects during the second quarter 2009.

Balance Sheet and Liquidity

At the end of the second quarter 2009, Aimco leverage was provided 82% by long-term non-recourse property debt of $6.0 billion ($5.4 billion Aimco share) at a weighted average interest rate of 5.5% and weighted average maturity of 8.9 years. Aimco's preferred securities represented approximately 12% of Aimco's leverage at the end of the quarter at which time Aimco had $776.9 million in perpetual preferred stock and preferred partnership units at a weighted average rate of 7.6%.

Aimco's recourse debt is limited to its revolving credit facility and corporate term debt, which represented approximately 5% of Aimco's leverage at the end of second quarter 2009. At that time, the balance on Aimco's revolving credit facility was zero and available capacity was $135.3 million, net of $44.7 million of letters of credit drawn against the facility. Aimco's revolving credit facility is used for working capital purposes and to secure letters of credit used in the Aimco business. The balance on Aimco's corporate term debt of $350 million matures in first quarter 2011. In connection with these recourse obligations, Aimco is subject to debt service and fixed charge coverage covenants of 1.50:1 and 1.30:1, respectively, as defined in the credit facility. For second quarter 2009, Aimco's debt service and fixed charge coverage ratios were 1.64:1 and 1.42:1, respectively. Aimco expects to remain in compliance with these covenants.

At June 30, 2009, Aimco had outstanding $6.5 billion of consolidated debt, which consisted of $5.4 billion of fixed rate property debt and $1.1 billion of floating rate property and corporate debt. In addition, Aimco had outstanding $67.0 million of floating rate preferred stock. Aimco's FFO exposure to changes in floating interest rates is mitigated by $501.2 million of tax-exempt bonds with rates tied to the Securities Industry and Financial Markets Association Municipal Swap Index (SIFMA), which over the last twenty years has moved at approximately 0.72% for a 1.00% change in LIBOR. Aimco's FFO exposure is further offset by floating rate assets, such as cash and notes receivable, and interest capitalized on redevelopment properties. Based on Aimco's proportionate share of quarter-end balances, Aimco estimates its sensitivity to a 100 basis point change in LIBOR to be approximately $0.01 per share per quarter.

See Supplemental Schedule 5 for more detail on debt characteristics and activity.

Dividends on Common Stock

On July 28, 2009, the Aimco Board of Directors declared a quarterly cash dividend of $0.10 per share of Class A Common Stock for the quarter ended June 30, 2009, payable on August 31, 2009, to stockholders of record on August 21, 2009. At the end of the second quarter 2009, there were approximately 115.5 million shares of Class A Common Stock outstanding. See Supplemental Schedule 4 for additional detail on Aimco's securities.

Earnings Conference Call

Please join Aimco management for the Second Quarter 2009 earnings conference call to be held Friday, July 31, 2009, at 1:00 p.m. Eastern time.

    Live Conference Call
    Domestic Dial-In Number:  1-866-843-0890
    International Dial-In Number:  1-412-317-9250
    Passcode:  0487767
    Webcast:  http://www.aimco.com/CorporateInformation/Overview.aspx

    Conference Call Replay
    Domestic Dial-In Number: 1-877-344-7529
    International Dial-In Number: 1-412-317-0088
    Passcode:  431855

    The conference call replay will be available until 9:00 a.m. Eastern
    time on August 8, 2009.

    Webcast Replay:  http://www.aimco.com/CorporateInformation/About/Financial/news.aspx

Supplemental Information

The full text of this release and the Supplemental Information referenced in this release is available on Aimco's Website at the link http://www.aimco.com/CorporateInformation/About/Financial/QEarnRelease.aspx.

Forward-looking Statements

This earnings release and Supplemental Information contain forward-looking statements, including statements regarding projected results and specifically forecasts of third quarter and full year 2009 results. These forward-looking statements are based on management's judgment as of this date and include certain risks and uncertainties. Risks and uncertainties include, but are not limited to, Aimco's ability to maintain current or meet projected occupancy, rent levels and Same Store results and Aimco's ability to close transactions necessary to generate sales proceeds for debt repayment and other purposes and to generate fee income as anticipated. Actual results may differ materially from those described in these forward-looking statements and, in addition, will be affected by a variety of risks and factors, some of which are beyond the control of Aimco, including, without limitation: financing risks, including the availability and cost of capital markets financing and the risk that our cash flows from operations may be insufficient to meet required payments of principal and interest; earnings may not be sufficient to maintain compliance with debt covenants; national and local economic conditions; energy costs; the terms of governmental regulations that affect Aimco and interpretations of those regulations; the competitive environment in which Aimco operates; real estate risks, including fluctuations in real estate values and the general economic climate in the markets in which Aimco operates and competition for tenants in such markets; insurance risk; acquisition and development risks, including failure of such acquisitions to perform in accordance with projections; the timing of acquisitions and dispositions; natural disasters and severe weather such as hurricanes; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by Aimco. In addition, our current and continuing qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code and depends on our ability to meet the various requirements imposed by the Internal Revenue Code, through actual operating results, distribution levels and diversity of stock ownership. Readers should carefully review Aimco's financial statements and notes thereto, as well as the risk factors described in Aimco's Annual Report on Form 10-K for the year ended December 31, 2008, and the other documents Aimco files from time to time with the Securities and Exchange Commission. These forward-looking statements reflect management's judgment as of this date, and Aimco assumes no obligation to revise or update them to reflect future events or circumstances. This press release does not constitute an offer of securities for sale.

About Aimco

Aimco is a real estate investment trust headquartered in Denver, Colorado that owns and operates a geographically diversified portfolio of apartment communities. Aimco, through its subsidiaries and affiliates, is one of the largest owners and operators of apartment communities in the United States with 950 properties, including 154,511 apartment units, and serves approximately 500,000 residents each year. Aimco's properties are located in 44 states, the District of Columbia and Puerto Rico. Aimco common shares are traded on the New York Stock Exchange under the ticker symbol AIV and are included in the S&P 500. For more information about Aimco, please visit our website at www.aimco.com.

    GAAP Income Statements
    ----------------------------

    Consolidated Statements of Income
    (in thousands, except per
     share data) (unaudited)
                                     Three Months Ended   Six Months Ended
                                           June 30,            June 30,
                                           --------            --------
                                       2009      2008      2009      2008
                                       ----      ----      ----      ----
    REVENUES:
      Rental and other property
       revenues                     $320,852  $316,970  $643,010  $633,727
      Property management revenues,
       primarily from affiliates       1,340     1,415     2,983     3,519
      Asset management and tax
       credit revenues                12,606    38,175    22,144    51,027
                                      ------    ------    ------    ------
            Total revenues           334,798   356,560   668,137   688,273
                                     -------   -------   -------   -------

    OPERATING EXPENSES:
      Property operating expenses    142,914   141,213   292,108   294,945
      Property management expenses       472     1,254     1,905     2,589
      Investment management
       expenses                        4,716     5,807     8,506    10,194
      Depreciation and amortization  122,198   105,642   240,914   204,659
      Provision for operating real
       estate impairment losses        4,988         -     5,498         -
      General and administrative
       expenses                       17,849    27,004    37,922    48,370
      Other expenses, net              4,398    10,933     6,463    18,117
                                       -----    ------     -----    ------
          Total operating expenses   297,535   291,853   593,316   578,874
                                     -------   -------   -------   -------

    Operating income                  37,263    64,707    74,821   109,399

    Interest income                    2,264     1,748     5,655    11,312
    Provision for losses on notes
     receivable                       (1,534)      (42)   (1,685)     (265)
    Interest expense                 (90,896)  (89,790) (179,888) (178,391)
    Equity losses of
     unconsolidated real estate
     partnerships                     (1,696)     (843)   (3,736)   (1,872)
    Gain on dispositions of
     unconsolidated real estate
     and other                         3,750       255    14,611       166
                                       -----     -----    ------     -----

    Loss before income taxes and
     discontinued operations         (50,849)  (23,965)  (90,222)  (59,651)

    Income tax benefit                 3,080     3,281     5,285     4,977
                                       -----     -----     -----     -----

    Loss from continuing operations  (47,769)  (20,684)  (84,937)  (54,674)

    Income from discontinued
     operations, net (1)              40,143   363,639    44,737   373,968
                                      ------   -------    ------   -------

    Net (loss) income                 (7,626)  342,955   (40,200)  319,294
    Noncontrolling interests (2):
      Net income attributable to
       noncontrolling interests in
       consolidated real estate
       partnerships                  (11,695)  (58,648)   (5,422)  (61,963)
      Net income attributable to
       preferred noncontrolling
       interests in Aimco
       Operating Partnership (3)      (1,746)   (1,925)   (2,815)   (3,707)
      Net loss (income)
       attributable to common
       noncontrolling interests
       in Aimco Operating
       Partnership (3)                 2,623   (26,427)    5,458   (22,319)
                                       -----   -------     -----   -------
          Total noncontrolling
           interests                 (10,818)  (87,000)   (2,779)  (87,989)
                                     -------   -------    ------   -------
    Net (loss) income
     attributable to Aimco           (18,444)  255,955   (42,979)  231,305
    Net income attributable to Aimco
     preferred stockholders          (11,477)  (13,670)  (24,643)  (27,878)
    Net income attributable to
     participating securities (4)          -    (3,145)        -    (2,497)
                                      ------    ------    ------    ------
    Net (loss) income
     attributable to Aimco
     common stockholders            $(29,921) $239,140  $(67,622) $200,930
                                    ========  ========  ========  ========

    Weighted average common shares
     outstanding -basic and
     diluted (5)                     115,510   123,484   115,304   125,723
                                     =======   =======   =======   =======

    Earnings (loss) per common
     share -basic and diluted (5):
      Loss from continuing
       operations attributable
       to Aimco (net of income
       attributable to
       preferred stockholders
       and participating
       securities)                    $(0.41)   $(0.36)   $(0.74)   $(0.70)
      Income from
       discontinued
       operations
       attributable to
       Aimco                            0.15      2.30      0.15      2.30
                                        ----      ----      ----      ----
      Net (loss) income
       attributable to Aimco
       common stockholders            $(0.26)    $1.94    $(0.59)    $1.60
                                      ======     =====    ======     =====



    GAAP Income Statements (continued)
    ----------------------------------

    Notes to Consolidated Statements of Income

    (1) Income from discontinued
     operations consists of the
     following (in thousands):
                                      Three Months Ended   Six Months Ended
                                           June 30,            June 30,
                                           --------            --------
                                        2009      2008      2009      2008
                                        ----      ----      ----      ----
    Rental and other property
     revenues (6)                     $13,721  $103,429   $31,496  $211,288
    Property operating expenses (6)    (8,020)  (52,543)  (19,314) (105,803)
    Depreciation and amortization      (3,776)  (20,853)   (8,654)  (50,266)
    Real estate impairment losses     (14,760)   (6,536)  (11,396)   (6,536)
    Other expenses, net                (2,533)   (2,009)   (3,945)   (2,742)
                                       ------    ------    ------    ------
        Operating (loss) income       (15,368)   21,488   (11,813)   45,941
    Interest income                         7       185        66       782
    Interest expense                   (1,773)  (17,765)   (5,524)  (37,558)
                                       ------   -------    ------   -------
        (Loss) income before gain on
         dispositions of real estate
         and income taxes             (17,134)    3,908   (17,271)    9,165
    Gain on dispositions of real
     estate                            58,615   375,623    63,165   380,387
    Income tax expense                 (1,338)  (15,892)   (1,157)  (15,584)
                                       ------   -------    ------   -------
        Income from discontinued
         operations, net              $40,143  $363,639   $44,737  $373,968
                                      =======  ========   =======  ========
    Income from discontinued
     operations attributable to:
        Noncontrolling interests in
         consolidated real estate
         partnerships (6)            $(21,007) $(53,802) $(25,121) $(58,173)
        Noncontrolling interests in
         Aimco Operating
         Partnership (3)               (1,476)  (25,840)   (1,512)  (26,337)
                                       ------   -------    ------   -------
        Total noncontrolling
         interests                    (22,483)  (79,642)  (26,633)  (84,510)
                                      -------   -------   -------   -------
          Aimco                       $17,660  $283,997   $18,104  $289,458
                                      =======  ========   =======  ========

    (2) Noncontrolling interests refers to interests in consolidated
    partnerships held by parties other than Aimco.
    (3) The Aimco Operating Partnership is AIMCO Properties, L.P., the
    operating partnership in Aimco's UPREIT structure.
    (4) Income attributable to participating securities represents dividends
    declared and any amounts of undistributed earnings allocable to
    participating securities. Participating securities consist of unvested
    restricted stock and shares purchased pursuant to officer loans, both of
    which are entitled to dividends similar to common stock.
    (5) Weighted average share and earnings per share amounts for the periods
    presented above have been retroactively adjusted for the effect of shares
    of common stock issued pursuant to the special dividends paid in 2008 and
    January 2009.
    (6) Income from discontinued operations for the three months ended June
    30, 2009, attributable to properties classified as held for sale at June
    30, 2009, includes $5.6 million of rental and other property revenues and
    $2.8 million of property operating expenses. Noncontrolling interests in
    consolidated real estate partnerships' share of these amounts totaled $0.6
    million.
    GAAP Balance Sheets
    -------------------

    Consolidated Balance Sheets
    (in thousands)
    (unaudited)

                                        June 30, 2009  December 31, 2008
                                        -------------  -----------------
     ASSETS
     Buildings and improvements            $8,231,111         $8,145,589
     Land                                   2,273,852          2,264,335
     Accumulated depreciation              (2,812,016)        (2,627,373)
                                           ----------         ----------
         Total real estate                  7,692,947          7,782,551
     Cash and cash equivalents                112,114            299,676
     Restricted cash                          257,432            256,817
     Accounts receivable                       67,729             92,923
     Accounts receivable from
      affiliates                               27,644             36,372
     Deferred financing costs                  59,038             56,052
     Notes receivable from
      unconsolidated real estate
      partnerships                             14,818             22,567
     Notes receivable from non-
      affiliates                              141,125            139,897
     Investment in unconsolidated real
      estate partnerships                     117,432            119,036
     Other assets                             222,081            188,765
     Deferred income tax asset, net            28,332             28,326
     Assets held for sale                     100,729            391,884
                                              -------            -------
         Total assets                      $8,841,421         $9,414,866
                                           ==========         ==========
     LIABILITIES AND EQUITY
     Property tax-exempt bond
      financing                              $624,975           $669,339
     Property loans payable                 5,423,593          5,425,908
     Term loans                               350,000            400,000
     Other borrowings                          88,237             95,981
                                               ------             ------
         Total indebtedness                 6,486,805          6,591,228
     Accounts payable                          33,335             64,241
     Accrued liabilities and other            292,110            411,093
     Deferred income                          183,594            194,867
     Security deposits                         41,427             41,308
     Liabilities related to assets held
      for sale                                 72,570            245,332
                                               ------            -------
         Total liabilities                  7,109,841          7,548,069
                                            ---------          ---------
     Preferred noncontrolling interests
      in Aimco Operating Partnership           87,286             88,148
     Preferred stock subject to
      repurchase agreement                     30,000                  -
     Equity:
       Perpetual preferred stock              660,500            696,500
       Class A Common Stock                     1,164              1,162
       Additional paid-in capital           3,065,080          3,058,799
       Accumulated other comprehensive
        loss                                     (473)            (2,249)
       Notes due on common stock
        purchases                              (1,403)            (3,607)
       Distributions in excess of
        earnings                           (2,413,472)        (2,335,628)
                                           ----------         ----------
         Total Aimco equity                 1,311,396          1,414,977
                                            ---------          ---------
        Noncontrolling interests in
         consolidated real estate
         partnerships                         311,384            363,672
        Common noncontrolling interests in
         Aimco Operating Partnership           (8,486)                 -
                                               ------            -------
         Total equity                       1,614,294          1,778,649
                                            ---------          ---------
         Total liabilities and equity      $8,841,421         $9,414,866
                                           ==========         ==========

Outlook and Forward Looking Statement

Third Quarter and Full Year 2009

(unaudited)

This earnings release and Supplemental Information contain forward-looking statements, including statements regarding projected results and specifically forecasts of third quarter and full year 2009 results. These forward-looking statements are based on management's judgment as of this date and include certain risks and uncertainties. Risks and uncertainties include, but are not limited to, Aimco's ability to maintain current or meet projected occupancy, rent levels and Same Store results and Aimco's ability to close transactions necessary to generate sales proceeds for debt repayment and other purposes and to generate fee income as anticipated.

Actual results may differ materially from those described in these forward-looking statements and, in addition, will be affected by a variety of risks and factors, some of which are beyond the control of Aimco, including, without limitation: financing risks, including the availability and cost of capital markets financing and the risk that our cash flows from operations may be insufficient to meet required payments of principal and interest; earnings may not be sufficient to maintain compliance with debt covenants; national and local economic conditions; energy costs; the terms of governmental regulations that affect Aimco and interpretations of those regulations; the competitive environment in which Aimco operates; real estate risks, including fluctuations in real estate values and the general economic climate in the markets in which Aimco operates and competition for tenants in such markets; insurance risk; acquisition and development risks, including failure of such acquisitions to perform in accordance with projections; the timing of acquisitions and dispositions; natural disasters and severe weather such as hurricanes; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by Aimco. In addition, our current and continuing qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code and depends on our ability to meet the various requirements imposed by the Internal Revenue Code, through actual operating results, distribution levels and diversity of stock ownership.

Readers should carefully review Aimco's financial statements and notes thereto, as well as the risk factors described in Aimco's Annual Report on Form 10-K for the year ended December 31, 2008, and the other documents Aimco files from time to time with the Securities and Exchange Commission. These forward-looking statements reflect management's judgment as of this date, and Aimco assumes no obligation to revise or update them to reflect future events or circumstances. This press release does not constitute an offer of securities for sale.

                                      Third Quarter 2009   Full Year 2009
                                      ------------------   --------------
    GAAP earnings per share (1)(3)    -$0.50  to -$0.44  -$1.63  to -$1.43
    FFO per share (2)(3)               $0.36  to  $0.42   $1.55  to  $1.75
    2009 Same Store operating
     assumptions:
      Weighted average daily
       occupancy                       93.5%  to  94.5%   93.0%  to  94.0%
      NOI change - sequential         -3.25%  to -2.25%
      NOI change - 2009 vs. 2008       -6.0%  to  -5.0%   -5.0%  to  -3.0%


    (1) Aimco's earnings per share guidance does not include estimates for (i)
    gains on dispositions or impairment losses due to the unpredictable timing
    of transactions, (ii) gains or losses on early repayment of debt, (iii)
    preferred stock redemption related costs or gains or (iv) potential future
    share repurchases or special dividends.
    (2) FFO per share represents FFO before operating real estate impairment
    losses and preferred redemption related costs or gains.
    (3) The GAAP earnings per share and FFO per share amounts are calculated
    based on 115.5 million weighted average common shares (diluted) for third
    quarter 2009 and 115.4 million weighted average common shares (diluted)
    for full year 2009.

SOURCE Aimco



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