Apartment Investment and Management Co. or Aimco (AIV) issued an update on its 2012 financial and dividend forecast, based on its recently announced public offering of 11.0 million shares. Aimco plans to use the offering's net proceeds and available cash to redeem all of its outstanding shares of Class T Cumulative Preferred Stock, Class V Cumulative Preferred Stock and Class Y Cumulative Preferred Stock.
Through this series of transactions, Aimco expects to increase annual cash flow by about $16 million, also anticipating that the dilutive impact to Net Asset Value of some $0.40 per share would be recovered within 5 years.
While the company projects modest dilution to Funds From Operations or FFO and Adjusted FFO or AFFO until the preferred stocks are redeemed later this quarter, Aimco sees FFO to increase by $0.01 per share during the second half of this year from its original guidance. On an annualized basis, the company estimates Pro forma FFO to improve by $0.02 and AFFO to increase by $0.07 from these transactions.
Chairman and Chief Executive noted, "Based on the expected increase in AFFO, the Aimco Board also intends to increase the company's quarterly dividend 11%, from $0.18 to $0.20 per share, at its next meeting in July."
For 2012, the company raised its AFFO outlook to $1.24 - $1.34 from its earlier view of $1.21 - $1.31, while backing its full-year Pro forma FFO forecast of $1.76 to $1.84.
Pursuant to the redemption of the preferred securities, Aimco expects to recognize preferred stock redemption charges of some $10.5 million, or $0.08 per share, that are excluded from the above estimates for Pro forma FFO and AFFO, but reflected in the above estimate of net loss per share.
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