APARTMENT INVESTMENT & MANAGEMENT CO 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of financial condition and results of operations for the year ended December 31, 2025, compared to 2024, should be read in conjunction with the accompanying consolidated financial statements in Part II, Item 8. For discussion of the year ended December 31, 2024, compared to 2023, please refer to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 on our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 24, 2025. Executive Overview Subsequent to December 31, 2025, on February 6, 2026, Common Stockholders adopted the Plan of Sale and Liquidation. Prior to the adoption of the Plan of Sale and Liquidation, our mission was to make real estate investments, primarily focused on the multifamily sector within targeted U.S. markets, where outcomes were enhanced through our human capital and substantial value was created for investors, teammates, and the communities in which we operated. Subsequent to the Plan of Sale and Liquidation, we plan to sell our assets in an orderly fashion and return net proceeds from asset sales and cash on hand to our stockholders, subject to payment of our liabilities and obligations. Please refer to “Item 1. Business” for additional discussion of our business organization and strategy and “Item 2. Properties” and “Schedule III – Real Estate and Accumulated Depreciation” for details regarding the size, location, and key characteristics of our various properties. Results for the Twelve Months Ended December 31, 2025 The results from the execution of our business plan during the twelve months ended December 31, 2025, are described below. Financial Results and Highlights • For the year ended December 31, 2025, net income attributable to common stockholders per share, on a fully dilutive basis, was net income per share of $3.87. • For the year ended December 31, 2025, property net operating income from our Operating segment was $47.6 million, down 2.0% year-over-year. • In the fourth quarter of 2025, we sold our final suburban Boston property for $250 million and our Brickell Assemblage which included The Yacht Club Apartments and the adjacent 1001 Brickell Bay Drive office building located in Miami, Florida for $520 million. In total, we sold $1.26 billion of real estate assets in 2025. • We distributed $2.23 per share to stockholders by way of a special cash dividend paid on October 15, 2025, bringing total 2025 dividends to $2.83 per share. • In December, we agreed to sell our portfolio of seven apartment communities in the Chicago area for $455 million with the full $20 million deposit becoming non-refundable in January 2026. Additionally, subsequent to year end, in the first quarter 2026, we received non-refundable deposits and agreed to sell two properties in New York City and one property in Atlanta, Georgia for a combined $56.5 million. • Subsequent to year end, in February 2026, we sold three properties, Hillmeade in Nashville, Tennessee, Plantation Gardens in Plantation, Florida, and the Benson Hotel and Faculty Club in Aurora, Colorado for a combined $177.5 million. • Our high-rise development project, 34th Street, located in Miami, Florida remains on schedule and on budget. Transactions On February 6, 2026, Aimco stockholders adopted the Plan of Sale and Liquidation proposed by Aimco's Board of Directors. Pursuant to this plan, Aimco expects to continue to monetize its assets and return proceeds to stockholders through liquidating distributions. Additional information regarding the Plan of Sale and Liquidation is available in the Company’s filings with the U.S. Securities and Exchange Commission. • In October, we completed the monetization of its suburban Boston portfolio with the sale of an apartment property located in Nashua, New Hampshire for $250 million. In connection with the sale, $173.4 million of non-recourse property debt was assumed by the buyer. 37 • In October, we completed a transfer of ownership interests with our joint venture partner at the development land sites along Broward Avenue in Fort Lauderdale, Florida. We exchanged our joint venture ownership in the non-performing seller financing note secured by 200 Broward Avenue along with $7.5 million of cash, for full ownership of 300 Broward Avenue. • In December, we sold the Brickell Assemblage which included The Yacht Club Apartments and the adjacent 1001 Brickell Bay Drive office building located in Miami, Florida for $520 million. o The sale included $85 million of transferable and cross-collateralized seller financing notes we provided to the buyer at closing. Each note has a two-year term and two one-year extension options with an average interest rate over the full duration of 18%. As previously announced, we plan to monetize the seller financing notes. o Initial net proceeds, after taking into account the associated property-level debt, the tax liability, transaction costs, and excluding the seller financing notes, were more than $220 million. • Subsequent to year end, in January 2026 we monetized the subordinated seller financing note associated with property in La Jolla, California for $18.5 million. The note had approximately seven years of term remaining at an average interest rate of approximately 5.5%. • Subsequent to year end, in February 2026 we sold three properties, Hillmeade in Nashville, Tennessee, Plantation Gardens in Plantation, Florida, and The Benson Hotel and Faculty Club in Aurora, Colorado, for a combined $177.5 million. • In December 2025, we agreed to sell our portfolio of seven apartment communities in the Chicago area for $455 million with a $20 million deposit becoming non-refundable in January 2026. Closing is scheduled for the first quarter 2026. • In the first quarter 2026, we agreed to sell two properties in New York City and one in Atlanta, Georgia for a combined $56.5 million with non-refundable deposits of $5.1 million. Closings are scheduled for the second quarter 2026. Operating Property Results As of the year ended December 31, 2025, we own a diversified portfolio of 15 stabilized apartment communities, including two held for sale, located in U.S. markets with average rents in line with local market averages (generally defined as B class). Highlights for the year ended December 31, 2025 include: • Revenue for our Operating segment was $72.5 million, up 1.2% year over year, resulting from a $56 increase in average monthly revenue per apartment home to $2,495 offset by a decrease in Average Daily Occupancy of 100-basis points to 96.0%. • Expenses for our Operating segment were $24.9 million, up 7.9% year over year, due primarily to a multi-year property assessment at our Chicago properties, which assessments are being appealed. • Net operating income for our Operating segment was $47.6 million, down 2.0% year over year. Active Construction and Lease-up Assets We plan to fulfill our contractual obligations and maximize value at our one multifamily development project under construction in Miami, Florida and complete the lease-up of our two recently completed Washington, D.C. Metro Area multifamily communities. We have ceased planning and predevelopment efforts for future projects. During the year ended December 31, 2025, we invested $93.6 million in development activities compared to $126.1 million in the year ended December 31, 2024. Updates on our one active development project and two lease-ups include: • In Miami, construction remains on schedule and on budget at 34th Street, an ultra-luxury waterfront residential tower. Initial occupancy is scheduled for 3Q 2027 with stabilized occupancy in 4Q 2028. 38 • In Upper Northwest Washington, D.C., we expect to complete the lease up of 689 apartment homes at Upton Place during the second quarter 2026. As of December 31, 2025, 527 (76%) were units were leased or pre-leased. Additionally, as of December 31, 2025, 97% of the project's 105,000 square feet of retail space has been leased. • In Bethesda, Maryland, we expect to complete the lease up of 220 of the highly tailored apartment homes at the first phase of Strathmore Square in the second quarter 2026. As of December 31, 2025, 178 (81%) units had been leased or pre-leased. Balance Sheet and Financing Activities We are highly focused on maintaining a strong balance sheet, prudent simplification, and appropriate liquidity while promptly returning capital to stockholders. As of December 31, 2025, we had $394.9 million of cash on hand and $11.7 million of restricted cash. Refer to the Liquidity and Capital Resources section for additional information regarding our leverage. Subsequent to year end, we announced the following sources and uses of cash: • Approximately $80 million of net proceeds from assets monetized or sold in 2026 as of filing. • The pay down, in full, of the preferred equity borrowings collateralized by certain stabilized properties and the remaining preferred equity borrowings that funded the development of Upton Place, totaling approximately $135 million. • The initial liquidating distribution of $1.45 per share to be paid on March 13, 2026, to stockholders of record on February 27, 2026, totaling approximately $220 million. • The payment of approximately $52 million of income taxes related to 2025 dispositions, which is presented within Accrued liabilities and other in our Consolidated Balance Sheets in Item 8 of this report . As of December 31, 2025, 100% of our debt was either fixed rate or hedged with interest rate cap protection. Considering investments under contract to sell and including contractual extensions, we have no debt maturing prior to June 2027. • In the third quarter, we used proceeds from the sale of four suburban Boston properties to pay down in full the borrowings on our revolving credit facility. Certain of the properties sold served as collateral for the credit facility, which was retired upon completion of the sales. Financial Results of Operations The following discussion and analysis of the results of our operations and financial condition should be read in conjunction with the accompanying consolidated financial statements in Item 8. Results of Operations for the Year Ended December 31, 2025, Compared to the same period in 2024 Net income attributable to Aimco common stockholders changed by $656.5 million for the year ended December 31, 2025 compared to the same period in 2024, as described more fully below. Property Results We have three segments: (i) Development; (ii) Operating; and (iii) Other. Our Development segment includes properties that are under construction or have not achieved stabilization, as well as land held for development. As of December 31, 2025, our Development and segment consists of 9 properties, including one under construction, two completed and in lease-up, one that has completed lease-up and is stabilizing operations, and five undeveloped land parcels. Our Operating segment includes 15 residential apartment communities that have achieved stabilized levels of operations as of January 1, 2024, and maintained it throughout the current year and comparable period. Two of the communities, Hillmeade and Plantation Gardens, meet the held for sale criteria in accordance with GAAP as described in Note 2 to the consolidated financial statements in Item 8. We aggregate all our apartment communities that have reached stabilization into our Operating segment. Our Other segment consists of properties that are not included in our Development or Operating segments. Other segment includes The Benson Hotel, our only hotel. 39 Prior period segment information has been recast based upon our current segment population, and is consistent with how our President and Chief Executive Officer, the chief operating decision maker (“CODM”) evaluates the business. During the year ended December 31, 2025, we reclassified as discontinued operations the five properties within our Boston portfolio, which was previously reported within the Operating segment. We use property net operating income (“PNOI”) to assess the operating performance of our segments. PNOI is defined as rental and other property revenues, excluding utility reimbursements, less direct property operating expenses, net of utility reimbursements, for the consolidated communities; but excluding • the results of four apartment communities with an aggregate 142 apartment homes that we neither manage nor consolidate, our investment in IQHQ, the Mezzanine Investment, and investments in real estate technology funds; and • property management costs and casualty gains or losses, reported in consolidated amounts, in our assessment of segment performance. Please refer to Note 15 to the consolidated financial statements in Item 8 for further discussion regarding our segments, including a reconciliation of these amounts to consolidated rental and other property revenues and property operating expenses. Property Net Operating Income The results of our segments for the years ended December 31, 2025 and 2024, as presented below, are based on segment classifications as of December 31, 2025. Year Ended December 31, (in thousands) 2025 2024 $ Change % Change Rental and other property revenues, before utility reimbursements: Development $ 27,518 $ 9,852 $ 17,666 nm Operating 72,519 71,689 830 1.2 % Other 7,553 6,690 863 12.9 % Total 107,590 88,231 19,359 21.9 % Property operating expenses, net of utility reimbursements: Development 13,276 9,468 3,808 40.2 % Operating 24,870 23,048 1,822 7.9 % Other 8,586 7,712 874 11.3 % Total 46,732 40,228 6,504 16.2 % Property net operating income: Development 14,242 384 13,858 nm Operating 47,649 48,641 (992 ) (2.0 %) Other (1,033 ) (1,022 ) (11 ) 1.1 % Total $ 60,858 $ 48,003 $ 12,855 26.8 % For the year ended December 31, 2025, compared to the same period in 2024: • Development property net operating income increased by $13.9 million due primarily to the lease up of apartment homes at Upton Place, Strathmore Square, and Oak Shore. • Operating property net operating income decreased by $1.0 million, or 2.0%. The decrease was attributable to a $1.8 million, or 7.9% increase in property operating expenses due primarily to higher real estate taxes, offset partially by a $0.8 million, or 1.2% increase in rental and other property revenues. • Other property net operating income slightly decreased by 1.1%, due primarily to an increase in food and beverage operating expenses, offset partially by an increase in food and beverage sales. 40 The results of our segments for the years ended December 31, 2024 and 2023, as presented below, are based on segment classifications as of December 31, 2025. Year Ended December 31, (in thousands) 2024 2023 $ Change % Change Rental and other property revenues, before utility reimbursements: Development $ 9,852 $ 109 $ 9,743 nm Operating 71,689 69,267 2,422 3.5 % Other 6,690 2,691 3,999 nm Total 88,231 72,067 16,164 22.4 % Property operating expenses, net of utility reimbursements: Development 9,468 927 8,541 nm Operating 23,048 21,590 1,458 6.8 % Other 7,712 4,710 3,002 63.7 % Total 40,228 27,227 13,001 47.8 % Property net operating income: Development 384 (818 ) 1,202 nm Operating 48,641 47,677 964 2.0 % Other (1,022 ) (2,019 ) 997 49.4 % Total $ 48,003 $ 44,840 $ 3,163 7.1 % For the year ended December 31, 2024, compared to the same period in 2023: • Development property net operating income increased by $1.2 million due primarily to the lease-up of Upton Place, Strathmore Square, and Oak Shore. • Operating property net operating income increased by $1.0 million, or 2.0% for the year ended December 31, 2024, compared to 2023. The increase was attributable to a $2.4 million, or 3.5% increase in rental and other property revenues, offset partially by a $1.5 million, or 6.8% increase in property operating expenses due primarily to higher real estate taxes. • Other property net operating income increased by $1.0 million for the year ended December 31, 2024, compared to 2023, due primarily to a full year of The Benson Hotel operations in 2024 whereas operations commenced in the second quarter of 2023. Non-Segment Real Estate Operations Operating income amounts not attributed to our segments include property management costs, casualty losses, and, if applicable, the results of apartment communities sold and reported in consolidated amounts, which we do not allocate to our segments for purposes of evaluating segment performance. For the year ended December 31, 2025 and 2024, other property operating expenses not allocated to segments were $4.1 million and $5.4 million, respectively. For the year ended December 31, 2025 and 2024, properties that were sold generated property net operating income of $13.3 million and $27.0 million, respectively. Please refer to Note 14 to the consolidated financial statements in Item 8 for our Boston portfolio performance, which includes five apartment communities classified as discontinued operations. Depreciation and Amortization For the year ended December 31, 2025, compared to the same period in 2024, Depreciation and amortization expense decreased by $18.9 million, or 24.4% due primarily to the classification of the Brickell Assemblage as held for sale the disposition of The Hamilton in December 2024, partially offset by the substantial completion of Upton Place, Strathmore Square, and Oak Shore in 2024. General and Administrative Expenses For the year ended December 31, 2025, compared to the same period in 2024, General and administrative expenses increased by $1.2 million due primarily to increased short term incentive compensation expense and reduced capitalization payroll costs as development projects were advanced and substantially completed in 2024. 41 Impairment of Real Estate Based on periodic tests of recoverability of long-lived assets, during the year ended December 31, 2025, we recognized impairment losses totaling $147.5 million. No impairment losses were recognized in 2024. The impairment losses were recognized primarily due to the reductions in the estimated period over which we expect to hold the properties, and, for certain development pipeline properties, the decision not to pursue development given the Plan of Sale and Liquidation. Approximately $87.3 million of the non-cash impairment charge relates to the write-off of planning costs and amounts capitalized for GAAP, such as team time and interest expense for development pipeline assets for which development will not be pursued by us given our Plan of Sale and Liquidation. Interest Income For the year ended December 31, 2025, compared to the same period in 2024, Interest income decreased by $1.0 million, or 10.3%. The decrease is due primarily to ceasing recognition of interest income in the second quarter of 2025 on the seller financing provided in connection with the sale of 200 Broward Avenue in 2023, as well as a decrease in amounts earned on invested cash. Interest Expense For the year ended December 31, 2025, compared to the same period in 2024, Interest expense increased by $0.1 million, or 0.1% due primarily to increased non-recourse construction loan draws and reduced capitalization due to the substantial completion of Upton Place, Strathmore Square, and Oak Shore in 2024, partially offset by the repayment and refinancing of certain non-recourse construction loans in December 2024 and use of the revolving credit facility for a portion of the year before its retirement to pay off a higher interest rate non-recourse construction loan in May 2025. In September 2025, we used proceeds from the sale of four Boston properties to paydown in full the borrowings and retire the revolving credit facility. Mezzanine Investment Income (Loss), Net For the years ended December 31, 2025, compared to the same period in 2024, Mezzanine Investment Income (Loss), Net changed by $3.3 million due primarily to incremental income earned in 2025 and the cessation of amortization costs associated with the partial sale of the Mezzanine investment in 2024. Realized and Unrealized Gains (Losses) on Interest Rate Contracts We are required to adjust our interest rate contracts to fair value on a quarterly basis. As a result of the mark-to-market adjustments, we recorded unrealized losses of $1.3 million and $4.2 million during the years ended December 31, 2025, and 2024, respectively. In addition, we realized gains of $0.8 million and $6.0 million during the years ended December 31, 2025, and 2024, respectively. Realized and Unrealized Gains (Losses) on Equity Investments We measure our investments in property technology funds at NAV as a practical expedient. Prior to the sale of our investment in stock during the year ended December 31, 2025, we measured our investments in stock based on its market price at period end. In addition, we measure our investment in IQHQ at cost, less impairment if any needed, with subsequent adjustments for observable price changes of identical or similar investments of the same issuer since it does not have a readily determinable fair value. As a result of changes in the values of these investments, we recorded net losses of $5.8 million and $49.5 million, respectively, for the years ended December 31, 2025 and 2024. During the year ended December 31, 2025 we recorded a $6.6 million non-cash impairment recognized on our investment in IQHQ compared to $48.6 million during the year ended December 31, 2024. During the years ended December 31, 2025 and 2024, we recognized net losses on our investment in stock of $0.3 million and $1.3 million, respectively. During the years ended December 31, 2025 and 2024, we recognized unrealized gains on our investments in property technology funds of $1.1 million and $0.4 million, respectively Gain on Dispositions of Real Estate During the year ended December 31, 2025, we recognized gains on the disposition of real estate of $237.1 million due primarily to the sale of the Brickell Assemblage in December 2025, compared to gains of $10.6 million recognized for the same period in 2024 that resulted primarily from the sale of The Hamilton in December 2024. 42 Credit Loss Expense During the year ended December 31, 2025, we recognized $22.9 million of credit loss expense to reduce the amortized cost basis of one of our seller financing notes receivable from $41.4 million to $18.5 million. An agreement to monetize the seller financing notes receivable for $18.5 million was finalized subsequent to year end and structured as a modification and repayment of the note, in January 2026. Other Income (Expense), Net Other income (expense), net , includes costs associated with our risk management activities, fee income, certain non-recurring items, and activity related to our unconsolidated real estate partnerships. For the year ended December 31, 2025, compared to the same period in 2024, Other income (expense), net changed by $1.4 million primarily due to a non-cash other than temporary impairment recognized on our investment in unconsolidated investment in the third quarter of 2024, partially offset by incremental expenses incurred in 2025 associated with the exploration of the Plan of Sale and Liquidation. Income Tax Benefit (Expense) Taxable income from activities performed through our TRS entities is subject to federal, state and local income taxes. Consolidated GAAP income or loss subject to tax consists of pretax income or loss of our taxable entities and income and gains retained by the REIT. For the years ended December 31, 2025, and 2024, we had consolidated net losses subject to tax of $33.1 million and $28.2 million, respectively. For the year ended December 31, 2025, we recognized income tax benefit of $57.6 million, compared to income tax benefit of $11.1 million for the same period in 2024. The year-to-year change is due primarily to the removal of the deferred tax liability that arose in the original acquisition of 1001 Brickell offset by the income taxes associated with the gain on sale, both triggered by the sale of the Brickell Assemblage. Income (loss) from Discontinued Operations, Net The results of operations for consolidated properties that met the criteria required to be recognized within discontinued operations, whether sold during the period or designated as held for sale at the end of the period, are required to be classified as discontinued operations for all periods presented. The components of net earnings that are classified as discontinued operations include all property-related revenues and operating expenses, depreciation expense recognized prior to the classification as held for sale, and property-specific interest expense. In addition, the net gain or loss on the eventual disposal of properties are reported in discontinued operations, along with any related tax effects or allocation of income to noncontrolling interests in the results of the discontinued operations. For the years ended December 31, 2025 and 2024, we recognized income from discontinued operations, net, of $551.2 million and $28.2 million, respectively. The change in income from discontinued operations, net, is due primarily to the recognition of a gain on disposal of $545.9 million related to the sale of five properties in our suburban Boston portfolio. Please refer to Note 14 to the consolidated financial statements in Item 8 for our Boston portfolio performance, which includes five apartment communities classified as discontinued operations. Liquidity and Capital Resources Liquidity Liquidity is the ability to meet present and future financial obligations either through operating cash flows, sales of properties, and/or the issuance of debt. Our primary source of liquidity is current cash on hand and future sales of properties. As of December 31, 2025, our available liquidity was $406.6 million, which consisted of: • $394.9 million in cash and cash equivalents; and • $11.7 million of restricted cash, including amounts related to tenant security deposits and escrows held by lenders for capital additions, property taxes, and insurance; 43 Our principal uses for liquidity include operating activities, payments of principal and interest on outstanding debt, ground lease payments, and capital expenditures. As of December 31, 2025, we had sufficient capacity on our construction loans and preferred equity to cover our remaining commitments on our development project of approximately $87.5 million. Additionally, our third-party property managers may enter into commitments on our behalf to purchase goods and services in connection with the operation of our apartment communities and our office building. Those commitments generally have terms of one year or less and reflect expenditure levels comparable to historical levels. Subsequent to year end, in February 2026, stockholders adopted the Plan of Sale and Liquidation. We believe, based on the information available at this time, cash and cash equivalents, cash generated from operations, and proceeds from planned dispositions are sufficient sources of liquidity to meet our operational needs for the next twelve months and debt maturities and remaining commitments on development projects through the liquidation of the company's assets pursuant to the Plan of Sale and Liquidation. In the event that these sources of liquidity are not sufficient to cover our liquidity needs, we have the means to generate additional liquidity, such as from additional property financing activity. Leverage and Capital Resources The availability and cost of credit and its related effect on the overall economy may affect our liquidity and future financing activities, both through changes in interest rates and access to financing. Any adverse changes in the lending environment, declines in our share price, and the effects of the adopted Plan of Sale and Liquidation could negatively affect our liquidity. As of December 31, 2025, all of our outstanding non-recourse property debt had a fixed interest rate. In addition, the weighted-average contractual rate on our non-recourse debt was 4.4%, and the average remaining term to maturity was 4.7 years. Our use of interest rate caps may vary from quarter to quarter depending on lender requirements, recycling of interest rate caps between projects, and our view on forecasted interest rates. Our primary sources of leverage are non-recourse property-level debt and non-recourse construction loans. In the third quarter, we used proceeds from the sale of four suburban Boston properties to paydown in full $43.8 million of borrowings on our revolving credit facility. Certain properties sold served as collateral for the credit facility, which was retired upon completion of the sales. Subsequent to year end, we used proceeds from our property sales to redeem, at our sole discretion, preferred equity interests for aggregate cash redemption prices of $137.6 million. Changes in Cash, Cash Equivalents, and Restricted Cash The following discussion relates to changes in consolidated cash, cash equivalents, and restricted cash due to operating, investing, and financing activities, which are presented in our Consolidated Statements of Cash Flows in Item 8 of this report. Operating Activities For the year ended December 31, 2025, net cash provided by operating activities was $8.1 million. Our operating cash flow is primarily affected by rental rates, occupancy levels, operating expenses related to our portfolio of apartment communities and general and administrative costs. Cash provided by operating activities for the year ended December 31, 2025, decreased by $38.9 million compared to the same period in 2024, due primarily to the timing of changes in operating assets and operating liabilities, decreased cash flows provided by operating activities from discontinued operations, and increased interest expense. Investing Activities For the year ended December 31, 2025, net cash provided by investing activities of $875.0 million consisted primarily of $973.5 million of proceeds from dispositions of real estate, offset by capital expenditures of $99.6 million. Net cash provided by investing activities for the year ended December 31, 2025, increased by $844.4 million compared to the same period in 2024, due primarily to greater proceeds from dispositions of real estate and decreased capital expenditures. 44 Financing Activities For the year ended December 31, 2025, net cash used in financing activities was $648.8 million. Net cash used in financing activities for the year ended December 31, 2025, increased by $604.9 million compared to the same period in 2024, due primarily to the payment of dividends and distributions, increased principal repayments on non-recourse property debt associated with properties sold during the current year, decreased proceeds of non-recourse construction loans and bridge financing, partially offset by increased contributions from noncontrolling interests and decreased repayments of non-recourse construction loans and bridge financing. Non-GAAP Measures We use EBITDAre and Adjusted EBITDAre in managing our business and in evaluating our financial condition and operating performance. These key financial indicators are non-GAAP measures and are defined and described below. We provide reconciliations of the non-GAAP financial measures to the most comparable financial measure computed in accordance with GAAP. Earnings Before Interest Expense, Income Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) EBITDAre and Adjusted EBITDAre are non-GAAP measures, which we believe are useful to investors, creditors, and rating agencies as a supplemental measure of our ability to incur and service debt because they are recognized measures of performance by the real estate industry and allow for comparison of our credit strength to different companies. EBITDAre and Adjusted EBITDAre should not be considered alternatives to net income (loss) as determined in accordance with GAAP as indicators of liquidity. There can be no assurance that our method of calculating EBITDAre and Adjusted EBITDAre is comparable with that of other real estate investment trusts. Nareit defines EBITDAre as net income computed in accordance with GAAP, before interest expense, income taxes, depreciation, and amortization expense, further adjusted for: • gains and losses on the dispositions of depreciated property; • impairment write-downs of depreciated property; • impairment write-downs of investments in unconsolidated partnerships caused by a decrease in the value of the depreciated property in such partnerships; and • adjustments to reflect our share of EBITDAre of investments in unconsolidated entities. EBITDAre is defined by Nareit and provides for an additional performance measure independent of capital structure for greater comparability between real estate investment trusts. We define Adjusted EBITDAre as EBITDAre adjusted to exclude the effect of the following items: • net (income) loss attributable to noncontrolling interests in consolidated real estate partnerships and EBITDAre adjustments attributable to noncontrolling interests; • realized and unrealized (gains) losses on interest rate contracts, which we believe allow investors to compare a measure of our earnings before the effects of our capital structure and indebtedness with that of other companies in the real estate industry; • the (income) loss recognized on our Mezzanine Investment; • the non-cash (income) loss recognized on passive equity investments; • credit losses on our notes receivable; and • other non-cash (income) loss. 45 The reconciliation of net income (loss) to EBITDAre and Adjusted EBITDAre for the years ended December 31, 2025 and 2024 is as follows ( in thousands ): Year Ended December 31, 2025 2024 Net income (loss) $ 592,968 $ (96,000 ) Adjustments: Interest expense 59,429 59,364 Income tax (benefit) expense (57,595 ) (11,071 ) Depreciation and amortization 58,278 77,133 Impairment on real estate 147,456 — Interest expense, depreciation, amortization, and income taxes related to discontinued operations 28,406 19,919 Gains on dispositions of real estate, including discontinued operations (782,974 ) (10,600 ) Unrealized (gains) losses from investments in unconsolidated partnerships — 2,597 Adjustment related to EBITDAre of unconsolidated partnerships 1,004 872 EBITDAre $ 46,972 $ 42,214 Net (income) loss attributable to redeemable noncontrolling interests in consolidated real estate partnerships (13,237 ) (13,958 ) Net (income) loss attributable to noncontrolling interests in consolidated real estate partnerships (781 ) 1,849 EBITDAre adjustments attributable to noncontrolling interests (530 ) (4,254 ) Mezzanine investment (income) loss, net (856 ) 2,432 Realized and unrealized (gains) losses on interest rate contracts 471 (1,752 ) Realized and unrealized (gains) losses on passive equity investments 5,790 48,615 Credit loss expense 22,899 — Other non-cash (income) loss (1,252 ) — Adjusted EBITDAre $ 59,476 $ 75,146 Critical Accounting Estimates We prepare our consolidated financial statements in accordance with GAAP, which requires us to make estimates and assumptions. We believe that the following critical accounting policies involve our more significant judgments and estimates used in the preparation of our consolidated financial statements for the year ended December 31, 2025. Refer to Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations , of Aimco's and Aimco Operating Partnership's combined Annual Report on Form 10-K for the years ended December 31, 2024 and 2023 for significant judgments and estimates related to comparative reporting period. Impairment of investment in IQHQ On a periodic basis, we perform a qualitative impairment assessment on our investment in IQHQ in accordance with GAAP. We determined during the year ended December 31, 2025 that our investment in IQHQ was impaired after consideration of factors, such as continued adverse capital market conditions, IQHQ's financial condition, and capital raising activities that further diluted our investment. As a result, we recognized a $6.6 million non-cash impairment to reduce the carrying value of the investment in IQHQ to $4.5 million as of December 31, 2025. The measurement of the impairment loss is based on the fair value of our investment in IQHQ. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors. Estimating the fair value of our investment in IQHQ incorporates various estimates, assumptions, and market data, the most significant being projected operational cash flow, capitalization rates, and discount rates. We determine capitalization rates and discount rates using third-party market research analytics. Property operational cash flows are based on historical, current and expected future operating results and take into consideration stated operational strategies. These projections are adjusted to reflect current economic conditions and require considerable management judgment. Impairment of Real Estate and Other Long-Lived Assets Real estate and other long-lived assets to be held and used are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of an asset may not be recoverable, we assess its recoverability by comparing the carrying amount to our estimate of the undiscounted future cash flows, excluding interest charges, of the asset. If the carrying amount exceeds the aggregate undiscounted future cash flows, we recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the asset. The future cash 46 flows utilized in the evaluation of recoverability and the measurement of fair value are highly subjective and are based on assumptions, such as anticipated hold periods, future occupancy, future rental or room rates, discount rates, capitalization rates, and recent sales data for comparable properties. In the year ended December 31, 2025, we assessed our properties for impairment as a result of a change in estimated hold period, and, for certain development pipeline properties, the decision not to pursue development given the Plan of Sale and Liquidation. Our assessment resulted in $147.5 million of impairment recognized on certain properties located within Colorado's Front Range and Southeast Florida for the year ended December 31, 2025. The properties are presented within the Development and Other segments within Note 15 . There were no such impairments for the years ended December 31, 2024 and 2023.