Apartment Investment and Management Company (AIV), or Aimco as the real estate investment trust (REIT) is popularly known, reported fiscal 2010 third quarter funds from operations (FFO) of $48.9 million or 42 cents per share compared to $22.3 million or 19 cents in the year-ago period. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Excluding the non-recurring one-time items, FFO during the quarter was $46.7 million or 40 cents per share compared to $47.4 million or 41 cents in the year-earlier quarter. The recurring FFO for fiscal 2010 third quarter was well ahead of the Zacks Consensus Estimate of 35 cents. During the quarter, total revenues stood at $292.3 million, compared to $281.4 million in the year-ago period. Total revenues for the reported quarter surpassed the Zacks Consensus Estimate of $270 million.
In the conventional real estate portfolio, Aimco had a weighted average ownership of 92%. Average rents in the conventional real estate portfolio decreased 2.5% during the quarter to $1,024 per unit from $1,050 during third quarter 2009. Rental rates on new leases in the conventional real estate portfolio were 1.4% lower than expiring lease rates. Third quarter renewal rates were 1.5% higher than expiring lease rates. Same-store revenues in the conventional portfolio decreased $0.2 million or 0.1% primarily due to lower average rent, partially offset by higher average daily occupancy of 96.0% for third quarter 2010 compared to 94.8% for third quarter 2009.
In the affordable real estate portfolio, Aimco had a weighted average ownership of 63% during the quarter. Average occupancy was 97.4% at quarter-end,an increase of 0.6% from third quarter 2009, while average rent per unit increased 2.7% from $773 to $794.
During the quarter, Aimco sold 5 conventional properties (1,069 units) and 3 affordable properties (432 units) for $98.7 million of total gross proceeds, bulk of which was used to repay debt. At quarter-end, Aimco had a total debt of $4.9 billion with debt service and fixed charge coverage ratios of 1.58x and 1.34x respectively. At quarter-end, Aimco had cash and cash equivalents of $145.1 million.
Aimco had no outstanding property debt maturing in the remainder of 2010, while its recourse debt at September 30, 2010, was limited to its revolving credit facility. On September 29, 2010, the company amended its revolving credit facility to increase the borrowing capacity from $180 million to $300 million and extend the debt maturity from May 2012 to May 2014. At quarter-end, Aimco had no outstanding debt under its revolving credit facility and had available borrowing capacity of $258.7 million, net of $41.3 million of letters of credit backed by the facility.
With strong third quarter results, Aimco increased its recurring FFO guidance for full year 2010 from the range of $1.37 to $1.45 per share to $1.47 to $1.51, while recurring FFO for fourth quarter 2010 is expected in the range of 34 cents to 38 cents per share. Same-store conventional net operating income during fiscal 2010 is expected to decline 0.5% to 1% compared to the previous year. We maintain our long-term Neutral recommendation on the stock, which presently has a Zacks #2 Rank translating into a short-term “Buy” rating.
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