Earnings (Loss) per Share/Unit

Aimco

The following table illustrates Aimco’s calculation of basic and diluted earnings (loss) per share for the years ended December 31, 2014, 2013 and 2012 (in thousands, except per share data):



	2014			2013			2012
Numerator:
Income (loss) from continuing operations	$	67,475		$	34,596		$	(18,756	)
Gain on dispositions of real estate, net of tax	288,636			—			—
(Income) loss from continuing operations and gain on dispositions attributable to noncontrolling interests	(46,862		)	10,555			(11,034		)
Income attributable to preferred stockholders	(7,947		)	(2,804		)	(49,888		)
Income attributable to participating securities	(1,082		)	(813		)	(422		)
Income (loss) from continuing operations attributable to Aimco common stockholders	$	300,220		$	41,534		$	(80,100	)

Income from discontinued operations, net of tax	$	—		$	203,229		$	214,117
Income from discontinued operations attributable to noncontrolling interests	—			(41,090		)	(51,871		)
Income from discontinued operations attributable to Aimco common stockholders	$	—		$	162,139		$	162,246

Net income	$	356,111		$	237,825		$	195,361
Net income attributable to noncontrolling interests	(46,862		)	(30,535		)	(62,905		)
Net income attributable to preferred stockholders	(7,947		)	(2,804		)	(49,888		)
Net income attributable to participating securities	(1,082		)	(813		)	(422		)
Net income attributable to Aimco common stockholders	$	300,220		$	203,673		$	82,146

Denominator:
Weighted average common shares outstanding – basic	145,639			145,291			134,479
Dilutive potential common shares	363			241			—
Weighted average common shares outstanding – diluted	146,002			145,532			134,479

Earnings (loss) per common share – basic and diluted:
Income (loss) from continuing operations attributable to Aimco common stockholders	$	2.06		$	0.29		$	(0.60	)
Income from discontinued operations attributable to Aimco common stockholders	—			1.11			1.21
Net income attributable to Aimco common stockholders	$	2.06		$	1.40		$	0.61
Dividends declared per common share	$	1.04		$	0.96		$	0.76

The Aimco Operating Partnership

The following table illustrates the Aimco Operating Partnership’s calculation of basic and diluted earnings (loss) per unit for the years ended December 31, 2014, 2013 and 2012 (in thousands, except per unit data):



	2014			2013			2012
Numerator:
Income (loss) from continuing operations	$	67,475		$	34,596		$	(18,756	)
Gain on dispositions of real estate, net of tax	288,636			—			—
(Income) loss from continuing operations and gain on dispositions attributable to noncontrolling interests	(24,595		)	19,369			(9,585		)
Income attributable to the Aimco Operating Partnership’s preferred unitholders	(14,444		)	(9,227		)	(56,384		)
Income attributable to participating securities	(1,082		)	(813		)	(422		)
Income (loss) from continuing operations attributable to the Aimco Operating Partnership’s common unitholders	$	315,990		$	43,925		$	(85,147	)

Income from discontinued operations, net of tax	$	—		$	203,229		$	214,117
Income from discontinued operations attributable to noncontrolling interests	—			(31,842		)	(41,633		)
Income from discontinued operations attributable to the Aimco Operating Partnership’s common unitholders	$	—		$	171,387		$	172,484

Net income	$	356,111		$	237,825		$	195,361
Net income attributable to noncontrolling interests	(24,595		)	(12,473		)	(51,218		)
Net income attributable to the Aimco Operating Partnership’s preferred unitholders	(14,444		)	(9,227		)	(56,384		)
Net income attributable to participating securities	(1,082		)	(813		)	(422		)
Net income attributable to the Aimco Operating Partnership’s common unitholders	$	315,990		$	215,312		$	87,337

Denominator:
Weighted average common units outstanding – basic	153,363			153,256			142,614
Dilutive potential common units	363			241			—
Weighted average common units outstanding – diluted	153,726			153,497			142,614

Earnings (loss) per common unit – basic and diluted:
Income (loss) from continuing operations attributable to the Partnership’s common unitholders	$	2.06		$	0.29		$	(0.60	)
Income from discontinued operations attributable to the Partnership’s common unitholders	—			1.11			1.21
Net income attributable to the Partnership’s common unitholders	$	2.06		$	1.40		$	0.61
Distributions declared per unit	$	1.04		$	0.96		$	0.76

Aimco and the Aimco Operating Partnership

As of December 31, 2014, the common share or unit equivalents that could potentially dilute basic earnings per share or unit in future periods totaled 1.6 million. These securities represent options to purchase shares of Common Stock, which, if exercised, would result in Aimco’s issuance of additional shares and the Aimco Operating Partnership’s issuance to Aimco of additional common partnership units equal to the number of shares purchased under the options. The effect of these securities was dilutive for the years ended December 31, 2014 and 2013, and accordingly has been included in the denominator for calculating diluted earnings per share and unit during these periods. These securities have been excluded from the earnings (loss) per share or unit computations for the year ended December 31, 2012, because their effect would have been anti-dilutive. Participating securities, consisting primarily of unvested restricted shares of Common Stock, receive dividends similar to shares of Common Stock and common partnership units and totaled 0.5 million, 0.6 million and 0.5 million at December 31, 2014, 2013 and 2012, respectively. The effect of participating securities is included in basic and diluted earnings (loss) per share and unit computations for the periods presented above using the two-class method of allocating distributed and undistributed earnings.

As discussed in Note 10, the Aimco Operating Partnership has various classes of preferred OP Units, which may be redeemed at the holders’ option. The Aimco Operating Partnership may redeem these units for cash or at its option, shares of Common Stock. As of December 31, 2014, these preferred OP Units were potentially redeemable for approximately 2.4 million shares of Common Stock (based on the period end market price), or cash. The Aimco Operating Partnership has a redemption policy that requires cash settlement of redemption requests for the preferred OP Units, subject to limited exceptions. Accordingly, we have excluded these securities from earnings per share and unit computations for the periods presented above, and we expect to exclude them in future periods.