<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 21, 1999
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
-------------------------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 1-13232 84-1259577
- ------------------------------- ------------- -----------------
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
1873 SOUTH BELLAIRE STREET, SUITE 1700, DENVER, CO 80222-4348
- -------------------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 757-8101
NOT APPLICABLE
-------------------------------------------------------------
(Former name or Former Address, if Changed Since Last Report)
<PAGE> 2
ITEM 5. OTHER EVENTS.
The press release of Apartment Investment and Management Company attached
hereto as Exhibit 99.1 is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
The following exhibit is filed with this report:
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
99.1 Press Release of Apartment Investment and Management
Company dated January 21, 1999.
</TABLE>
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
Date: February 10, 1999 By: /s/ Troy D. Butts
--------------------------
Troy D. Butts
Senior Vice President and
Chief Financial Officer
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
99.1 Press Release of Apartment Investment and Management Company
dated January 21, 1999.
</TABLE>
<PAGE> 1
EXHIBIT 99.1
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
REPORTS 26% INCREASE IN PER SHARE OPERATING RESULTS AND
REPORTS 11% DIVIDEND INCREASE
DENVER, COLORADO, January 21, 1999 (NYSE:AIV)
Apartment Investment and Management Company ("AIMCO") announced that
its Adjusted Funds From Operations ("AFFO"), AIMCO's measure of economic
profitability, equaled $177,715,000 or $3.12 per common share for the year ended
December 31, 1998, compared to $72,043,000 or $2.47 per common share for the
year ended December 31, 1997, an increase of 26% on a per share basis.
AIMCO announced that its Funds From Operations ("FFO") equaled
$194,746,000 or $3.42 per common share for the year ended December 31, 1998,
compared to $81,155,000 or $2.78 per common share for the year ended December
31, 1997, an increase of 23% on a per share basis.
AIMCO announced that AFFO for the fourth quarter of 1998 equaled
$55,760,000 or $0.82 per common share, compared to $28,733,000 or $0.67 per
common share for the quarter ended December 31, 1997, a 22% increase on a per
share basis.
AIMCO announced that FFO for the fourth quarter of 1998 equaled
$61,865,000 or $0.91 per common share compared to $31,463,000 or $0.74 per
common share for the quarter ended December 31, 1997, a 23% increase on a per
share basis.
Fourth quarter 1998 "same store" sales for the 308 apartment
communities containing 83,968 units owned during both 1998 and 1997, applying
AIMCO's ownership interest in these "same store" apartment communities, showed a
5.2% increase in revenues, a 1.8% increase in operating expenses and a 7.6%
increase in Net Operating Income from the fourth quarter of 1997. Annual
improvements in "same store" sales showed a 4.2% increase in revenue, a 1.4%
decrease in operating expenses and an 8.0% increase in Net Operating Income from
the year ended December 31, 1997.
Weighted average physical occupancy for the 308 apartment communities
was 95.3% as of December 31, 1998 compared to 92.1% at December 31, 1997, an
increase of 3.5%. Average monthly rent per occupied unit increased from $620 at
December 31, 1997 to $637 at December 31, 1998, a 2.7% increase.
On January 20, 1999, the Board of Directors increased the quarterly
cash dividend to $0.625 per common share for the quarter ended December 31,
1998, payable on February 12, 1999, to shareholders of record on February 5,
1999. The increased dividend is equivalent to an annualized dividend rate of
$2.50 per common share, an 11% increase from the previous annual dividend rate
of $2.25. The increased dividend represents a distribution of 68.7% of FFO for
the quarter and a 6.8% yield based on the closing price of AIMCO's Class A
Common Stock of $36.50 as of January 20, 1999.
The Board of Governors of the National Association of Real Estate
Investment Trusts ("NAREIT") defines FFO as net income (loss), computed in
accordance with generally accepted accounting principles, excluding gains and
losses from debt restructuring and sales of property, plus real estate related
depreciation and amortization (excluding amortization of financing costs), and
after adjustments for unconsolidated partnerships and joint ventures. AIMCO
calculates FFO in a manner consistent with the NAREIT definition, which includes
adjustments for minority interest in AIMCO's
<PAGE> 2
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Earnings Release - January 21, 1999
Page Two
Operating Partnership, amortization of goodwill, the non-cash deferred portion
of the income tax provision for unconsolidated subsidiaries and the payment of
dividends on perpetual preferred stock. AFFO, which is AIMCO's measure of
economic profitability, is defined as FFO less an estimated reserve for capital
replacements of $300 per apartment unit.
The fourth quarter 1998 earnings conference call will be conducted on
Monday, January 25, 1999 at 3:00 p.m. Eastern time. You may participate in the
conference call by dialing 1-800-374-0616 approximately five minutes before the
conference call is scheduled to begin and indicating that you wish to join the
Apartment Investment and Management Company fourth quarter 1998 results
conference call.
AIMCO is a real estate investment trust with headquarters in Denver,
Colorado and 37 regional operating centers, which holds a geographically
diversified portfolio of apartment communities. AIMCO, through its subsidiaries,
operates approximately 2,150 properties, including approximately 380,000
apartment units, and serves approximately one million residents. AIMCO's
properties are located in 49 states, the District of Columbia and Puerto Rico.
Summary (dollars in thousands, except per share data):
<TABLE>
<CAPTION>
Quarter Quarter
Ended Ended Year Ended Year Ended
12/31/98 12/31/97 12/31/98 12/31/97
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Funds From Operations $ 61,865 $ 31,463 $ 194,746 $ 81,155
Adjusted Funds From Operations 55,760 28,733 177,715 72,043
Net Income 12,630 11,818 64,474 28,633
Net Income Allocable to Common 2,550 10,338 37,941 26,318
Shareholders
Per Common Share
Funds From Operations $ 0.91 $ 0.74 $ 3.42 $ 2.78
Adjusted Funds From Operations 0.82 0.67 3.12 2.47
Basic Earnings Per Share 0.05 0.30 0.84 1.09
Diluted Earnings Per Share 0.05 0.29 0.80 1.08
Dividends Declared 0.625 0.5625 2.3125 1.95
Payout Ratios
Funds From Operations 68.7% 76.0% 67.6% 70.1%
Adjusted Funds From Operations 76.2% 84.0% 74.1% 78.9%
</TABLE>
Summary financial statements and fact sheet follow.
Contact: Peter Kompaniez, President (714) 593-1723
Leeann Morein, Senior Vice President - Investor
Services (303) 757-8101
E-Mail: [email protected]
Web Site: http://www.aimco.com
<PAGE> 3
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Earnings Release - January 21, 1999
Page Three
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED DECEMBER 31, FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------- -------------------------------
1998 1997 1998 1997
--------- -------- --------- ---------
<S> <C> <C> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property revenues $ 111,439 $ 65,923 $ 377,139 $ 193,006
Property operating expenses (45,941) (25,431) (147,541) (76,168)
Owned property management expense (3,267) (2,276) (11,013) (6,620)
Depreciation (24,843) (13,893) (84,635) (37,741)
--------- -------- --------- ---------
Income from property operations 37,388 24,323 133,950 72,477
--------- -------- --------- ---------
SERVICE COMPANY BUSINESS
Management fees and other income 10,135 4,764 24,103 13,937
Management and other expenses (8,660) (4,881) (16,761) (9,910)
Corporate overhead allocation -- (147) (196) (588)
Other assets depreciation and amortization -- (217) (3) (453)
--------- -------- --------- ---------
Income from service company business 1,475 (481) 7,143 2,986
Minority interests in service company business -- (58) -- (10)
--------- -------- --------- ---------
Company's share of income from service company business 1,475 (539) 7,143 2,976
--------- -------- --------- ---------
GENERAL AND ADMINISTRATIVE EXPENSES (7,206) (3,988) (14,650) (5,396)
INTEREST EXPENSE (32,668) (18,026) (89,424) (51,385)
INTEREST INCOME 12,206 4,218 30,450 8,676
MINORITY INTEREST IN OTHER PARTNERSHIPS 584 1,785 (468) 1,008
EQUITY IN EARNINGS OF OTHER PARTNERSHIPS (a) 224 (1,335) (4,854) (1,798)
EQUITY IN EARNINGS OF UNCONSOLIDATED SUBSIDIARIES 3,157 4,180 11,570 4,636
AMORTIZATION OF GOODWILL (3,664) (237) (8,735) (948)
--------- -------- --------- ---------
INCOME BEFORE EXTRAORDINARY ITEM AND MINORITY INTEREST 11,496 10,381 64,982 30,246
Extraordinary item - early extinguishment of debt -- -- -- (269)
Gain on disposition of properties 1,891 2,889 4,674 2,720
--------- -------- --------- ---------
INCOME BEFORE MINORITY INTEREST IN OPERATING
PARTNERSHIP 13,387 13,270 69,656 32,697
Minority interest in Operating Partnership (757) (1,452) (5,182) (4,064)
--------- -------- --------- ---------
NET INCOME $ 12,630 $ 11,818 $ 64,474 $ 28,633
========= ======== ========= =========
Net income allocable to preferred shareholders $ 10,080 $ 1,480 $ 26,533 $ 2,315
========= ======== ========= =========
Net income allocable to common shareholders $ 2,550 $ 10,338 $ 37,941 $ 26,318
========= ======== ========= =========
Weighted average number of common shares outstanding 47,261 34,771 45,187 24,055
========= ======== ========= =========
Weighted average number of common shares and common share
equivalents outstanding 56,244 35,190 47,624 24,436
========= ======== ========= =========
Basic earnings per share $ 0.05 $ 0.30 $ 0.84 $ 1.09
========= ======== ========= =========
Diluted earnings per share $ 0.05 $ 0.29 $ 0.80 $ 1.08
========= ======== ========= =========
</TABLE>
(a) Represents AIMCO's share of earnings from 170,061 units in which AIMCO holds
an equity interest.
<PAGE> 4
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Earnings Release - January 21, 1999
Page Four
FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED DECEMBER 31, FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------- -------------------------------
1998 1997 1998 1997
-------- -------- --------- --------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Income before minority interest in Operating Partnership $ 13,387 $ 13,270 $ 69,656 $ 32,697
Extraordinary item - early extinguishment of debt -- -- -- 269
Gain on disposition of properties (1,891) (2,889) (4,674) (2,720)
Real estate depreciation, net of minority interests in
other partnerships 23,469 12,699 80,369 33,751
Amortization of goodwill 4,324 237 11,401 948
Amortization of recoverable amount of management
contracts 10,575 1,157 14,776 1,587
Equity in earnings of other partnerships:
Real estate depreciation 17,461 3,499 34,840 6,280
Equity in earnings of unconsolidated subsidiaries:
Real estate depreciation -- 895 -- 3,584
Deferred taxes 3,081 2,730 9,215 4,894
Class C Preferred Stock Dividend (1,350) (135) (5,393) (135)
Class D Preferred Stock Dividend (2,297) -- (7,952) --
Class G Preferred Stock Dividend (2,373) -- (4,351) --
Class H Preferred Stock Dividend (1,188) -- (1,808) --
Class J Preferred Stock Dividend (1,197) -- (1,197) --
Preferred OP Unit Distribution (136) -- (136) --
-------- -------- --------- --------
Funds From Operations 61,865 31,463 194,746 81,155
Capital Replacements (6,105) (2,730) (17,031) (9,112)
-------- -------- --------- --------
Adjusted Funds From Operations $ 55,760 $ 28,733 $ 177,715 $ 72,043
======== ======== ========= ========
Weighted average common shares, convertible
preferred stock and Operating Partnership units
outstanding:
Common share and common share equivalents 56,244 35,190 47,624 24,436
Preferred stock convertible into common shares 2,463 2,463 2,463 1,006
Operating Partnership units 9,573 5,081 6,732 3,677
-------- -------- --------- --------
68,280 42,734 56,819 29,119
======== ======== ========= ========
Per Common Share:
Funds From Operations $ 0.91 $ 0.74 $ 3.42 $ 2.78
Adjusted Funds From Operations $ 0.82 $ 0.67 $ 3.12 $ 2.47
Dividends Declared $ 0.625 $ 0.5625 $ 2.3125 $ 1.95
Payout Ratios:
Funds From Operations 68.7% 76.0% 67.6% 70.1%
Adjusted Funds From Operations 76.2% 84.0% 74.1% 78.9%
</TABLE>
<PAGE> 5
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Earnings Release - January 21, 1999
Page Five
OTHER HIGHLIGHTS
(in thousands, except unit data)
(unaudited)
<TABLE>
<CAPTION>
PERCENTAGE
DECEMBER 31, 1998 DECEMBER 31, 1997 INCREASE
----------------- ----------------- --------
<S> <C> <C> <C>
OTHER DATA:
- -----------
Same store:
Weighted average physical occupancy (a) 95.3% 92.1% 3.5%
Average monthly rent per occupied unit (a) $ 637 $ 620 2.7%
Total portfolio:
Weighted average physical occupancy (a) 95.0% 91.9% 3.4%
Average monthly rent per occupied unit (a) $ 628 $ 605 3.8%
Apartment units managed:
Owned or controlled (243 properties at December 31, 1998) 63,268 40,039 58.0%
Equity interest (901 properties at December 31, 1998) 170,061 83,431 103.8%
Managed for third parties & affiliates (1,003 properties at
December 31, 1998) 146,034 69,587 109.9%
--------- --------- ---
Total 379,363 193,057 96.5%
--------- --------- ---
</TABLE>
(a) Excludes properties undergoing renovation and properties acquired mid-month
in December 1998.
<TABLE>
<CAPTION>
PERCENTAGE
DECEMBER 31, 1998 DECEMBER 31, 1997 INCREASE
----------------- ----------------- --------
<S> <C> <C> <C>
SELECTED BALANCE SHEET DATA
- ---------------------------
Real estate, net $ 2,564,357 $ 1,503,922 70.5%
Investments in and notes receivable from unconsolidated
real estate partnerships 881,246 212,150 315.4%
Total assets 4,259,249 2,100,510 102.8%
Total indebtedness 1,660,715 808,530 105.4%
Total liabilities 1,872,634 906,913 106.5%
Minority interest in Operating Partnership 148,847 111,962 32.9%
Stockholders' equity 1,902,564 1,045,300 82.0%
Total liabilities and stockholders' equity 4,259,249 2,100,510 102.8%
MARKET CAPITALIZATION
Period end price per share $ 37.1875 $ 36.75 1.2%
Common shares outstanding (b) 56,875 40,439 40.6%
Operating Partnership units outstanding 9,763 5,363 82.0%
----------- ----------- -----
Total common shares and Operating Partnership units 66,638 45,802 45.5%
----------- ----------- -----
Common stock $ 2,478,100 $ 1,683,224 47.2%
Convertible preferred stock 175,000 75,000 133.3%
Perpetual preferred stock 316,250 60,000 427.1%
Convertible Preferred OP Units 39,850 -- 100.0%
----------- ----------- -----
Total Equity 3,009,200 1,818,224 65.5%
Debt 2,510,260 882,296 184.5%
----------- ----------- -----
Total Market Capitalization $ 5,519,460 $ 2,700,520 104.4%
----------- ----------- -----
Debt (including perpetual preferred) to Market Capitalization 51.2% 34.9% 46.7%
</TABLE>
(b) Includes 8,424 shares of Class E Preferred Stock that was converted to
Class A Common Stock on January 15, 1999.
