SECURITIES AND EXCHANGE COMMISSION
Form 10-Q
| (Mark One) | ||
| [X] |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
| FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002 | ||
| 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 1-13232
Apartment Investment and Management Company
| Maryland | 84-1259577 | |
| (State or other jurisdiction of Incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
| 2000 South Colorado Boulevard, Tower 2, Suite 2-1000 |
||
| Denver, Colorado | 80222-7900 | |
| (Address of principal executive offices) | (Zip Code) |
(303) 757-8101
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares of Class A Common Stock outstanding as of October 31, 2002: 93,649,333
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
FORM 10-Q
INDEX
| Page | ||||||||
PART I. FINANCIAL INFORMATION |
||||||||
| ITEM 1. | Financial Statements |
|||||||
Consolidated Balance Sheets as of September 30, 2002 (unaudited) and December 31, 2001 |
2 | |||||||
Consolidated Statements of Income for the Three and Nine Months Ended September 30,
2002 and 2001 (unaudited) |
3 | |||||||
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2002
and 2001 (unaudited) |
4 | |||||||
Notes to Consolidated Financial Statements (unaudited) |
5 | |||||||
| ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
24 | ||||||
| ITEM 3. | Quantitative and Qualitative Disclosures about Market Risk |
44 | ||||||
| ITEM 4. | Controls and Procedures |
44 | ||||||
PART II. OTHER INFORMATION |
||||||||
| ITEM 1. | Legal Proceedings |
45 | ||||||
| ITEM 2. | Changes in Securities and Use of Proceeds |
46 | ||||||
| ITEM 6. | Exhibits and Reports on Form 8-K |
47 | ||||||
Signatures |
48 | |||||||
| Certifications | 49 | |||||||
1
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
| September 30, 2002 | December 31, 2001 | |||||||||||
| (Unaudited) | ||||||||||||
ASSETS |
||||||||||||
Real estate: |
||||||||||||
Land |
$ | 1,817,603 | $ | 1,227,340 | ||||||||
Buildings and improvements |
8,552,258 | 6,993,677 | ||||||||||
Total real estate |
10,369,861 | 8,221,017 | ||||||||||
Less accumulated depreciation |
(1,822,034 | ) | (1,593,686 | ) | ||||||||
Net real estate |
8,547,827 | 6,627,331 | ||||||||||
Assets held for sale |
18,980 | 168,524 | ||||||||||
Cash and cash equivalents |
87,475 | 80,000 | ||||||||||
Restricted cash |
201,342 | 138,223 | ||||||||||
Accounts receivable |
110,304 | 100,339 | ||||||||||
Deferred financing costs |
67,548 | 82,693 | ||||||||||
Notes receivable from unconsolidated real estate partnerships |
247,506 | 243,511 | ||||||||||
Investments in unconsolidated real estate partnerships |
598,944 | 601,935 | ||||||||||
Other assets |
231,624 | 258,116 | ||||||||||
Total assets |
$ | 10,111,550 | $ | 8,300,672 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||
Secured notes payable |
$ | 4,248,178 | $ | 3,419,923 | ||||||||
Secured tax-exempt bond financing |
1,241,323 | 991,127 | ||||||||||
Credit facility |
275,000 | 213,500 | ||||||||||
Term loan |
144,992 | — | ||||||||||
Total indebtedness |
5,909,493 | 4,624,550 | ||||||||||
Liabilities related to assets held for sale |
8,825 | 136,292 | ||||||||||
Accounts payable |
14,204 | 10,597 | ||||||||||
Accrued liabilities and other |
354,140 | 240,478 | ||||||||||
Deferred income |
19,988 | 9,075 | ||||||||||
Security deposits |
40,929 | 31,174 | ||||||||||
Deferred income taxes payable |
36,239 | 36,348 | ||||||||||
Total liabilities |
6,383,818 | 5,088,514 | ||||||||||
Mandatorily redeemable convertible preferred securities |
15,169 | 20,637 | ||||||||||
Minority interest in consolidated real estate partnerships |
85,179 | 113,782 | ||||||||||
Minority interest in AIMCO Operating Partnership |
396,928 | 367,124 | ||||||||||
Stockholders’ equity: |
||||||||||||
Preferred Stock, perpetual |
552,520 | 502,520 | ||||||||||
Preferred Stock, convertible |
392,500 | 621,947 | ||||||||||
Class A Common Stock, $.01 par value, 454,962,738 shares and 456,962,738
shares authorized, 93,195,129 and 74,498,582 shares issued and
outstanding,
at September 30, 2002 and December 31, 2001, respectively |
932 | 745 | ||||||||||
Additional paid-in capital |
3,026,554 | 2,209,803 | ||||||||||
Unvested restricted stock |
(7,432 | ) | (5,775 | ) | ||||||||
Notes
due from officers on common stock purchases |
(49,685 | ) | (46,460 | ) | ||||||||
Distributions in excess of earnings |
(684,933 | ) | (572,165 | ) | ||||||||
Total stockholders’ equity |
3,230,456 | 2,710,615 | ||||||||||
Total liabilities and stockholders’ equity |
$ | 10,111,550 | $ | 8,300,672 | ||||||||
See notes to consolidated financial statements.
2
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
(Unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2002 | 2001 | 2002 | 2001 | ||||||||||||||
RENTAL PROPERTY OPERATIONS: |
|||||||||||||||||
Rental and other property revenues |
$ | 367,049 | $ | 314,950 | $ | 1,052,905 | $ | 943,511 | |||||||||
Property operating expense |
(153,095 | ) | (119,143 | ) | (424,871 | ) | (360,789 | ) | |||||||||
Income from property operations |
213,954 | 195,807 | 628,034 | 582,722 | |||||||||||||
INVESTMENT MANAGEMENT BUSINESS: |
|||||||||||||||||
Management fees and other income primarily from affiliates |
25,463 | 46,728 | 78,650 | 118,669 | |||||||||||||
Management and other expenses |
(22,131 | ) | (31,458 | ) | (57,519 | ) | (80,102 | ) | |||||||||
Amortization of intangibles |
(1,154 | ) | (4,230 | ) | (3,194 | ) | (13,463 | ) | |||||||||
Income from investment management business |
2,178 | 11,040 | 17,937 | 25,104 | |||||||||||||
General and administrative expenses |
(4,360 | ) | (4,319 | ) | (12,377 | ) | (12,868 | ) | |||||||||
Other expenses |
— | — | (5,000 | ) | — | ||||||||||||
Provision for losses on notes receivable |
(1,682 | ) | — | (4,838 | ) | — | |||||||||||
Depreciation of rental property |
(73,418 | ) | (78,605 | ) | (212,932 | ) | (263,263 | ) | |||||||||
Interest expense |
(81,065 | ) | (78,787 | ) | (249,069 | ) | (241,172 | ) | |||||||||
Interest and other income |
12,260 | 14,989 | 53,640 | 46,998 | |||||||||||||
Equity in earnings (losses) of unconsolidated real estate
partnerships |
(254 | ) | (4,861 | ) | 2,357 | (14,068 | ) | ||||||||||
Minority interest in consolidated real estate partnerships |
(1,893 | ) | (8,238 | ) | (6,136 | ) | (19,025 | ) | |||||||||
Operating earnings |
65,720 | 47,026 | 211,616 | 104,428 | |||||||||||||
Distributions to minority partners in excess of income |
(4,302 | ) | (19,220 | ) | (15,274 | ) | (30,034 | ) | |||||||||
Discontinued operations: |
|||||||||||||||||
Income (loss) from operations |
(177 | ) | (292 | ) | 326 | 751 | |||||||||||
Gain (loss) on disposals |
(8,044 | ) | 2,847 | (10,035 | ) | 4,403 | |||||||||||
Income
tax (expense) benefit arising from disposals |
127 | (1,207 | ) | (552 | ) | (1,207 | ) | ||||||||||
Total discontinued operations |
(8,094 | ) | 1,348 | (10,261 | ) | 3,947 | |||||||||||
Income before minority interest in AIMCO Operating
Partnership |
53,324 | 29,154 | 186,081 | 78,341 | |||||||||||||
Minority interest in AIMCO Operating Partnership, preferred |
(2,713 | ) | (2,758 | ) | (8,141 | ) | (7,049 | ) | |||||||||
Minority interest in AIMCO Operating Partnership, common |
(4,266 | ) | (285 | ) | (15,503 | ) | (728 | ) | |||||||||
Net income |
46,345 | 26,111 | 162,437 | 70,564 | |||||||||||||
Net income attributable to preferred stockholders |
22,092 | 24,341 | 71,466 | 65,444 | |||||||||||||
Net income attributable to common stockholders |
$ | 24,253 | $ | 1,770 | $ | 90,971 | $ | 5,120 | |||||||||
Basic earnings per common share |
$ | 0.26 | $ | 0.02 | $ | 1.09 | $ | 0.07 | |||||||||
Diluted earnings per common share |
$ | 0.26 | $ | 0.02 | $ | 1.07 | $ | 0.07 | |||||||||
Dividends declared per common share |
$ | 0.82 | $ | 0.78 | $ | 2.46 | $ | 2.34 | |||||||||
See notes to consolidated financial statements.
3
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
| Nine Months Ended | |||||||||||
| September 30, | |||||||||||
| 2002 | 2001 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||||||||
Net income |
$ | 162,437 | $ | 70,564 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||
Depreciation and amortization of intangibles |
216,126 | 276,726 | |||||||||
Distributions to minority partners in excess of income |
15,274 | 30,034 | |||||||||
Loss (gain) on disposals from discontinued operations |
10,035 | (4,403 | ) | ||||||||
Minority interest in AIMCO Operating Partnership |
23,644 | 7,777 | |||||||||
Minority interest in consolidated real estate partnerships |
6,136 | 19,025 | |||||||||
Equity in (earnings) losses of unconsolidated real estate partnerships |
(2,357 | ) | 14,068 | ||||||||
Changes
in operating assets and operating liabilities, net |
(27,052 | ) | (28,852 | ) | |||||||
Total adjustments |
241,806 | 314,375 | |||||||||
Net cash provided by operating activities |
404,243 | 384,939 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||||||||||
Purchase of and additions to real estate |
(709,898 | ) | (24,343 | ) | |||||||
Initial capital expenditures |
(23,165 | ) | (34,721 | ) | |||||||
Capital enhancements |
(5,632 | ) | (25,558 | ) | |||||||
Capital replacements |
(60,726 | ) | (82,958 | ) | |||||||
Redevelopment additions to real estate |
(118,505 | ) | (100,721 | ) | |||||||
Proceeds from sales of property |
203,237 | 151,858 | |||||||||
Proceeds from sales of investments |
22,747 | 237,824 | |||||||||
Cash from newly consolidated properties |
7,509 | 22,505 | |||||||||
Purchase of notes receivable, general and limited partnership interests and other assets |
(69,464 | ) | (73,744 | ) | |||||||
Purchase/originations of notes receivable |
(74,547 | ) | (82,971 | ) | |||||||
Proceeds from repayment of notes receivable |
53,017 | 38,561 | |||||||||
Cash paid in connection with merger/acquisition related costs |
(41,348 | ) | (45,930 | ) | |||||||
Distributions received from investments in unconsolidated real estate partnerships |
6,866 | 33,408 | |||||||||
Net cash (used in) provided by investing activities |
(809,909 | ) | 13,210 | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||||||||
Proceeds from secured notes payable borrowings |
651,824 | 448,836 | |||||||||
Principal
repayments on secured notes payable borrowings |
(412,196 | ) | (420,151 | ) | |||||||
Proceeds from secured tax-exempt bond financing |
287,551 | 112,676 | |||||||||
Principal repayments on secured tax-exempt bond financing |
(395,271 | ) | (145,759 | ) | |||||||
Principal repayments on secured short-term financing |
— | (25,105 | ) | ||||||||
Net borrowings (pay downs) on term loan and revolving credit facilities |
|||||||||||