UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
Commission File Number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of |
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(I.R.S. Employer |
incorporation or organization) |
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Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
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(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
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Trading Symbol(s) |
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Name of Each Exchange on Which Registered |
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Securities registered pursuant to Section 12(g) of the Act:
None (Apartment Investment and Management Company)
Partnership Common Units (Aimco OP L.P.)
(title of each class)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Apartment Investment and Management Company: |
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Aimco OP L.P.: |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Apartment Investment and Management Company: |
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Aimco OP L.P.: |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Apartment Investment and Management Company:
☒ |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
Aimco OP L.P.:
Large accelerated filer |
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Non-accelerated filer |
☐ |
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Smaller reporting company |
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Emerging growth company |
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: |
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Aimco OP L.P.: |
☒ |
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 |
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Aimco OP L.P.: Yes |
The number of shares of Apartment Investment and Management Company Class A Common Stock outstanding as of May 5, 2022:
EXPLANATORY NOTE
Apartment Investment and Management Company (“Aimco” or “the Company”), a Maryland corporation, is a self-administered and self-managed real estate investment trust, or REIT. On December 15, 2020, Aimco completed the separation of its business into two, separate and distinct, publicly traded companies, Aimco and Apartment Income REIT Corp. (“AIR”). The separation was effected by way of a pro rata distribution, in which stockholders of Aimco received one share of Class A common stock of AIR for every one share of Class A common stock of Aimco held as of the close of business on December 5, 2020. Apartment Income REIT, L.P. (“AIR Operating Partnership”), formerly known as “Aimco Properties, L.P.” until July 7, 2021, also completed a pro rata distribution of all of the outstanding common limited partnership units of Aimco OP L.P. (“Aimco Operating Partnership” and such units, “OP Units”) to holders of AIR Operating Partnership common limited partnership units and AIR Operating Partnership Class I High Performance partnership units as of the close of business on December 5, 2020. The transactions described in this paragraph are collectively referred to as the “Separation” and are governed by the terms of the Separation and Distribution Agreement (the “Separation Agreement”).
Aimco, through a wholly owned subsidiary, is the general partner and directly is the special limited partner of Aimco Operating Partnership. As of March 31, 2022, Aimco owned 92.6% of the legal interest in the common partnership units of Aimco Operating Partnership and 95.0% of the economic interest in Aimco Operating Partnership. The remaining 7.4% legal interest is owned by limited partners. As the sole general partner of Aimco Operating Partnership, Aimco has exclusive control of Aimco Operating Partnership’s day-to-day management.
Aimco Operating Partnership holds all of Aimco’s assets and manages the daily operations of Aimco’s business. Pursuant to Aimco Operating Partnership agreement, Aimco is required to contribute to Aimco Operating Partnership all proceeds from the offerings of its securities. In exchange for the contribution of such proceeds, Aimco receives additional interests in 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).
This filing combines the quarterly reports on Form 10-Q for the quarterly period ended March 31, 2022, of Aimco and 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, Aimco Operating Partnership, and their consolidated entities.
We believe combining the periodic reports of Aimco and Aimco Operating Partnership into this single report provides the following benefits:
We operate Aimco and Aimco Operating Partnership as one enterprise; the management of Aimco directs the management and operations of Aimco Operating Partnership; and Aimco OP GP, LLC, Aimco Operating Partnership’s general partner, is managed by Aimco.
We believe it is important to understand the few differences between Aimco and Aimco Operating Partnership in the context of how Aimco and Aimco Operating Partnership operate as a consolidated company. Aimco has no assets or liabilities other than its investment in Aimco Operating Partnership. Also, Aimco is a corporation that issues publicly traded equity from time to time, whereas 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 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), Aimco Operating Partnership generates all remaining capital required by its business. These sources include 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 real estate.
Equity, partners’ capital, and noncontrolling interests are the main areas of difference between the condensed consolidated financial statements of Aimco and those of Aimco Operating Partnership. Interests in Aimco Operating Partnership held by entities other than Aimco, which we refer to as OP Units, are classified within partners’ capital in Aimco Operating Partnership’s
1
condensed consolidated financial statements and as noncontrolling interests in Aimco’s condensed consolidated financial statements.
To help investors understand the differences between Aimco and Aimco Operating Partnership, this report provides: separate condensed consolidated financial statements for Aimco and Aimco Operating Partnership; a single set of condensed consolidated notes to such financial statements that includes separate discussions of each entity’s stockholders’ equity or partners’ capital, and earnings per share or earnings per unit, 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, where appropriate.
This report also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for Aimco and Aimco Operating Partnership in order to establish that the requisite certifications have been made and that Aimco and 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.
2
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
AIMCO OP L.P.
TABLE OF CONTENTS
FORM 10-Q
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Page |
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ITEM 1. |
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4 |
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5 |
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6 |
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7 |
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8 |
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9 |
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Condensed Consolidated Statements of Partners’ Capital (Unaudited) |
10 |
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11 |
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12 |
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ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
25 |
ITEM 3. |
36 |
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ITEM 4. |
36 |
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ITEM 1A. |
38 |
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ITEM 2. |
38 |
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ITEM 6. |
39 |
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40 |
3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
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March 31, 2022 |
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December 31, 2021 |
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ASSETS |
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Buildings and improvements |
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$ |
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$ |
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Land |
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Total real estate |
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Accumulated depreciation |
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Net real estate |
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Cash and cash equivalents |
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Restricted cash |
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Mezzanine investment |
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Interest rate options |
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Right-of-use lease assets |
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Other assets, net |
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Total assets |
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$ |
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$ |
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LIABILITIES AND EQUITY |
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Non-recourse property debt, net |
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$ |
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$ |
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Construction loans, net |
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Notes payable to AIR |
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Total indebtedness |
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Deferred tax liabilities |
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Lease liabilities |
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Accrued liabilities and other |
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Total liabilities |
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Redeemable noncontrolling interests in consolidated real estate partnerships |
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Equity: |
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Common Stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total Aimco equity |
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Noncontrolling interests in consolidated real estate partnerships |
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Common noncontrolling interests in Aimco Operating Partnership |
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Total equity |
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Total liabilities and equity |
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$ |
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$ |
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See notes to condensed consolidated financial statements.
4
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
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Three Months Ended March 31, |
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2022 |
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2021 |
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REVENUES |
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Rental and other property revenues |
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$ |
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$ |
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OPERATING EXPENSES |
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Property operating expenses |
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Depreciation and amortization |
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General and administrative expenses |
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Total operating expenses |
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Interest expense |
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Mezzanine investment income, net |
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Unrealized gains on interest rate options |
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Other (expense) income, net |
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Income before income tax benefit |
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Income tax benefit |
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Net income |
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Net (income) loss attributable to redeemable noncontrolling |
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Net loss (income) attributable to noncontrolling interests |
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Net income attributable to common noncontrolling |
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Net income attributable to Aimco |
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$ |
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$ |
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Net income attributable to Aimco per common share – basic (Note 6) |
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$ |
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$ |
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Net income attributable to Aimco per common share – diluted (Note 6) |
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$ |
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$ |
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Weighted average common shares outstanding – basic |
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Weighted average common shares outstanding – diluted |
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See notes to condensed consolidated financial statements.
5
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
For the Three Months Ended March 31, 2022 and 2021
(In thousands)
(Unaudited)
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Common Stock |
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Noncontrolling |
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Common |
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Shares |
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Amount |
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Additional |
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Accumulated Deficit |
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Total Aimco |
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Consolidated |
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Aimco |
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Total |
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Balances at December 31, 2020 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Net income attributable to Aimco |
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— |
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— |
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— |
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— |
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— |
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Net income attributable to noncontrolling interests in consolidated real estate partnerships |
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— |
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— |
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— |
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— |
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— |
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— |
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Net income attributable to common noncontrolling interests in Aimco Operating Partnership |
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— |
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— |
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— |
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— |
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— |
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— |
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Redemption of OP Units |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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Share-based compensation expense |
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— |
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— |
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— |
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— |
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Distribution to noncontrolling interests in consolidated real estate partnerships |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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Other Common Stock issuances |
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— |
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— |
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— |
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Other, net |
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( |
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( |
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( |
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— |
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( |
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Balances at March 31, 2021 |
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Balances at December 31, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
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$ |
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Net income attributable to Aimco |
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— |
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— |
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— |
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— |
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— |
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Net loss attributable to noncontrolling interests in consolidated real estate partnerships |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Net income attributable to common noncontrolling interests in Aimco Operating Partnership |
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— |
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— |
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— |
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— |
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— |
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— |
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Redemption of OP Units |
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— |
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— |
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— |
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( |
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( |
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Share-based compensation expense |
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— |
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— |
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— |
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— |
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Distribution to noncontrolling interests in consolidated real estate partnerships |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Contributions from noncontrolling interests in consolidated real estate partnerships |
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— |
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— |
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— |
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— |
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— |
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— |
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Common stock repurchased |
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( |
) |
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( |
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( |
) |
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— |
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( |
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— |
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— |
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( |
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Other Common Stock issuances |
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— |
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— |
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— |
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Redemption of redeemable noncontrolling interests in consolidated real estate partnerships |
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— |
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— |
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( |
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— |
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( |
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— |
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— |
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( |
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Other, net |
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( |
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— |
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( |
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( |
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( |
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( |
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Balances at March 31, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
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$ |
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See notes to condensed consolidated financial statements.
6
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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Three Months Ended March 31, |
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2022 |
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2021 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income |
$ |
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$ |
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Adjustments to reconcile net income to net cash provided by |
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Depreciation and amortization |
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Income from unconsolidated real estate partnerships |
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( |
) |
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( |
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Unrealized gains on interest rate options |
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( |
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( |
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Income tax benefit |
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( |
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( |
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Amortization of debt issuance costs and other |
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Mezzanine investment, net |
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( |
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( |
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Share based compensation |
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Changes in operating assets and operating liabilities: |
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Other assets |
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( |
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Accrued liabilities and other |
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Total adjustments |
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( |
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( |
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Net cash provided by operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchases of real estate |
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( |
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( |
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Capital expenditures (1) |
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( |
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( |
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Investment in IQHQ |
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( |
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— |
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Other investing activities |
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( |
) |
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( |
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Net cash used in investing activities |
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( |
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( |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds from non-recourse property debt |
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— |
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|
Proceeds from construction loans |
|
|
|
|
— |
|
|
Principal repayments on non-recourse property debt |
|
( |
) |
|
|
( |
) |
Purchase of interest rate options |
|
— |
|
|
|
( |
) |
Payments on financing leases |
|
( |
) |
|
|
( |
) |
Common stock repurchased |
|
( |
) |
|
|
— |
|
Contributions from noncontrolling interests in consolidated |
|
|
|
|
— |
|
|
Contributions from redeemable noncontrolling interests in consolidated |
|
|
|
|
— |
|
|
Redemption of redeemable noncontrolling interests in consolidated |
|
( |
) |
|
|
— |
|
Other financing activities |
|
( |
) |
|
|
( |
) |
Net cash provided by (used in) financing activities |
|
|
|
|
( |
) |
|
NET DECREASE IN CASH, CASH EQUIVALENTS, |
|
( |
) |
|
|
( |