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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 8-K/A
AMENDMENT NO. 2
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) JUNE 3, 1997
----------------------
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)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
Acquisition of NHP Real Estate Companies
On June 3, 1997, Apartment Investment and Management Company, a
Maryland corporation ("AIMCO" and, together with its subsidiaries and other
controlled entities, the "Company"), acquired all of the issued and outstanding
capital stock of NHP Partners, Inc., a Delaware corporation ("NHP Partners,
Inc."), and the Company acquired all of the outstanding partnership interests in
NHP Partners Two Limited Partnership, a Delaware limited partnership ("NHP
Partners Two LP" and, together with NHP Partners, Inc. and their subsidiaries,
the "NHP Real Estate Companies").
The Company acquired the NHP Partners, Inc. capital stock from NHP
Partners Limited Partnership, a Delaware limited partnership which is owned
by Demeter Holdings Corporation, a Massachusetts corporation ("Demeter"),
Capricorn Investors, L.P., a Delaware limited partnership ("Capricorn"), and
J. Roderick Heller, III. The Company acquired the interests in NHP Partners
Two LP from Phemus Corporation, a Massachusetts corporation ("Phemus"),
Capricorn, Mr. Heller and NHP Partners Two LLC, a Delaware limited liability
company ("NHP Partners Two LLC") which is owned by Phemus, Capricorn and Mr.
Heller. As consideration, the Company paid $54.8 million in cash and issued
warrants to purchase 399,999 shares of AIMCO's Class A Common Stock, par
value $.01 per share, at an exercise price of $36 per share. The Company
financed the cash consideration with borrowings under its revolving credit
facility (the "Credit Facility") with Bank of America National Trust and Savings
Association.
The acquisition of the NHP Real Estate Companies was made pursuant
to a Real Estate Acquisition Agreement, dated as of May 22, 1997 (the "Real
Estate Agreement"), by and among AIMCO, AIMCO Properties, L.P., a Delaware
limited partnership (the "Operating Partnership"), Demeter, Phemus,
Capricorn, Mr. Heller and NHP Partners Two LLC. The purchase price and other
terms of the Real Estate Agreement were determined based on negotiations
among AIMCO, Demeter, Phemus, Capricorn and Mr. Heller. A copy of the Real
Estate Agreement is filed herewith as Exhibit 2.1 and incorporated herein by
this reference.
NHP Partners, Inc. owns the National Corporation for Housing
Partnerships, a District of Columbia corporation ("NCHP"), and NHP Partners,
Inc. and NHP Partners Two LP own The National Housing Partnership, a District
of Columbia limited partnership (the "NHP Partnership"). NCHP and the NHP
Partnership were organized by Congress in 1970 as private, for-profit
entities pursuant to Title IX of the Housing and Urban Development Act of
1968, to promote private investment in the production of low and moderate
income (affordable) housing. NCHP acts as the general partner of the NHP
Partnership. Through NCHP, the NHP Partnership and other subsidiar-
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ies, the NHP Real Estate Companies hold interests in partnerships that own
approximately 534 conventional and affordable multifamily apartment
properties, which contain approximately 87,659 apartment units, as well as a
captive insurance subsidiary and other related assets.
A majority of the properties in which the NHP Real Estate Companies
own interests (the "NHP Properties") are managed by NHP Incorporated, a
Delaware corporation ("NHP"). On May 5, 1997, AIMCO/NHP Holdings, Inc., a
Delaware corporation and a subsidiary of AIMCO, acquired approximately 51% of
the outstanding common stock of NHP from Demeter, Capricorn and certain
Capricorn partners. AIMCO and NHP have previously announced an agreement
pursuant to which a wholly owned subsidiary of AIMCO would be merged with and
into NHP. The merger is subject to the approval of shareholders of NHP and
AIMCO, as well as certain other conditions. Mr. Heller is the Chairman of
the Board, President and Chief Executive Officer of NHP, and three executive
officers of AIMCO currently serve as directors of NHP. The Company's
acquisition of the NHP Real Estate Companies was approved by a committee of
independent directors of NHP.
On June 6, 1997, AIMCO issued a press release describing the terms
of the acquisition of the NHP Real Estate Companies. The press release is
filed herewith as Exhibit 99.1 and incorporated herein by this reference.
Acquisition of Apartment Properties
On June 6, 1997, the Company acquired The Vinings at the Waterways, a
180-unit apartment community located in Aventura, Florida, for $16.4 million
(including $0.4 million for closing costs and initial capital expenditures at
the property). The Company financed a portion of the purchase price with a
short term loan of $8 million from Amresco, Inc., and the remainder with
additional borrowings under the Credit Facility.
On June 12, 1997, the Company acquired two apartment communities
located in Tustin, California for $9.3 million in cash (including $1.9
million for closing costs and initial capital expenditures at the property)
and 315,419 units ("OP Units") of limited partnership interest in the
Operating Partnership. The Californian Apartments contains 92 apartment
units and Tustin East Village contains 200 apartment units. The two
apartment communities are operated as one complex, together with the
Brookside Apartments which the Company acquired in April 1996. The Company
financed the cash portion of the purchase price with borrowings under its
Credit Facility. On the same date, the Company also acquired from the same
sellers a 45,000 sq. ft. retail shopping center, which is adjacent to the two
acquired apartment communities, for 182,375 OP Units.
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Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired
1. Combined Balance Sheets of NHP Real Estate Companies, as of
December 31, 1996 and 1995, and March 31, 1997 (unaudited), and the related
combined statements of operations, changes in shareholders' equity (deficit) and
partners' capital (deficit), net and cash flows for each of the three years in
the period ended December 31, 1996, and for the three months ended March 31,
1997 (unaudited) and 1996 (unaudited), together with the Report of Independent
Public Accountants (included as Exhibit 99.5 to this Report and incorporated
herein by this reference).
2. Balance Sheets of NHP Southwest Partners, L.P. (a Delaware
Limited Partnership), as of December 31, 1996 and 1995, and the related
statements of operations, changes in partners' capital and cash flows for the
year ended December 31, 1996 and for the period from January 20, 1995 (date of
inception) through December 31, 1995, together with the Report of Independent
Public Accountants (included as Exhibit 99.6 to this Report and incorporated
herein by this reference).
3. Combined Balance Sheets of NHP New LP Entities as of December 31,
1996 and 1995, and the related combined statements of operations, changes in
partners' capital, and cash flows for the year ended December 31, 1996 and for
the period from January 20, 1995 (date of inception) through December 31, 1995,
together with the Report of Independent Public Accountants (included as Exhibit
99.7 to this Report and incorporated herein by this reference).
4. Combined Balance Sheets of NHP Borrower Entities as of December
31, 1996 and 1995, and the related combined statements of operations, changes in
partners' capital, and cash flows for the year ended December 31, 1996 and for
the period from January 20, 1995 (date of inception) through December 31, 1995,
together with the Report of Independent Public Accountants (included as Exhibit
99.8 to this Report and incorporated herein by this reference).
5. Historical Summary of Gross Income and Certain Expenses (Summary)
of The Bay Club at Aventura for the year ended December 31, 1996 and the three
months ended March 31, 1997 (unaudited), together with the Report of Independent
Auditors (included as Exhibit 99.9 to this Report and incorporated herein by
this reference).
(b) Pro Forma Financial Information
The required pro forma financial information is included as Exhibit
99.10 to this Report and incorporated herein by this reference.
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(c) Exhibits
The following exhibits are filed with this report:
Exhibit
Number Description
- ------- -----------
2.1 Real Estate Acquisition Agreement, dated as of May 22, 1997, by and
among Apartment Investment and Management Company, AIMCO Properties,
L.P., Demeter Holdings Corporation, Phemus Corporation, Capricorn
Investors, L.P., J. Roderick Heller, III, and NHP Partners Two LLC*
23.1 Consent of Arthur Andersen LLP dated June 23, 1997*
23.2 Consents of Deloitte & Touche LLP dated June 23, 1997*
23.3 Consent of Anders, Minkler & Diehl LLP dated June 23, 1997*
23.4 Consent of Dauby O'Connor & Zaleski, LLC dated June 23, 1997*
23.5 Consent of Edwards Leap & Sauer dated June 23, 1997*
23.6 Consent of Fishbein & Company, P.C. dated June 23, 1997*
23.7 Consents of Freeman and Vessillo dated June 23, 1997*
23.8 Consents of Friduss, Lukee, Schiff & Co., PC dated June 23, 1997*
23.9 Consent of George A. Hieronymous & Company, LLC dated June 23, 1997*
23.10 Consent of Goldenberg Rosenthal Friedlander, LLP dated June 23, 1997*
23.11 Consent of Hansen, Hunter & Kibbee, P.C. dated June 23, 1997*
23.12 Consent of J.H. Cohn LLP dated June 23, 1997*
23.13 Consent of J.A. Plumer & Co., P.A. dated June 23, 1997*
23.14 Consent of Marks Shron & Company, LLP dated June 23, 1997*
23.15 Consent of Prague & Company, P.C. dated June 23, 1997*
23.16 Consent of Reznick Fedder & Silverman dated June 23, 1997*
23.17 Consents of Robert Ercolini & Company dated June 23, 1997*
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23.18 Consent of Russell Thompson Butler & Houston dated June 23, 1997*
23.19 Consent of Sciarabba Walker & Co., LLP dated June 23, 1997*
23.20 Consent of Wallace Sanders & Company dated June 23, 1997*
23.21 Consent of Warady and Davis dated June 23, 1997*
23.22 Consent of Ziner and Company, PC dated June 23, 1997*
23.23 Consent of Zinner & Co. dated June 23, 1997*
23.24 Consent of Ernst & Young LLP dated June 23, 1997*
99.1 Press Release of Apartment Investment and Management Company, dated
June 6, 1997*
99.2 1994 Reports of Independent Auditors*
99.3 1995 Reports of Independent Auditors*
99.4 1996 Reports of Independent Auditors*
99.5 Financial Statements of NHP Real Estate Companies and Report of
Independent Accountants*
99.6 Financial Statements of NHP Southwest Partners, L.P. (a Delaware
Limited Partnership) and Report of Independent Accounts*
99.7 Financial Statements of NHP New LP Entities and Report of Independent
Accountants*
99.8 Financial Statements of NHP Borrower Entities and Report of
Independent Accountants*
99.9 Financial Statements of The Bay Club at Aventura and Report of
Independent Auditors*
99.10 Pro Forma Financial Information of Apartment Investment and Management
Company
__________________
* Previously filed
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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: August 13, 1997 By: /s/ Leeann Morein
---------------------------------
Leeann Morein
Senior Vice President, Chief
Financial Officer and Secretary
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EXHIBIT INDEX TO CURRENT REPORT ON FORM 8-K
Exhibit
Number Description
- ------- -----------
2.1 Real Estate Acquisition Agreement, dated as of May 22, 1997,
by and among Apartment Investment and Management Company,
AIMCO Properties, L.P., Demeter Holdings Corporation, Phemus
Corporation, Capricorn Investors, L.P., J. Roderick Heller,
III, and NHP Partners Two LLC*
23.1 Consent of Arthur Andersen LLP dated June 23, 1997*
23.2 Consents of Deloitte & Touche LLP dated June 23, 1997*
23.3 Consent of Anders, Minkler & Diehl LLP dated June 23, 1997*
23.4 Consent of Dauby O'Connor & Zaleski, LLC dated June 23, 1997*
23.5 Consent of Edwards Leap & Sauer dated June 23, 1997*
23.6 Consent of Fishbein & Company, P.C. dated June 23, 1997*
23.7 Consents of Freeman and Vessillo dated June 23, 1997*
23.8 Consents of Friduss, Lukee, Schiff & Co., PC dated June 23,
1997*
23.9 Consent of George A. Hieronymous & Company, LLC dated June
23, 1997*
23.10 Consent of Goldenberg Rosenthal Friedlander, LLP dated June 23,
1997*
23.11 Consent of Hansen, Hunter & Kibbee, P.C. dated June 23, 1997*
23.12 Consent of J.H. Cohn LLP dated June 23, 1997*
23.13 Consent of J.A. Plumer & Co., P.A. dated June 23, 1997*
<PAGE>
23.14 Consent of Marks Shron & Company, LLP dated June 23, 1997*
23.15 Consent of Prague & Company, P.C. dated June 23, 1997*
23.16 Consent of Reznick Fedder & Silverman dated June 23, 1997*
23.17 Consents of Robert Ercolini & Company dated June 23, 1997*
23.18 Consent of Russell Thompson Butler & Houston dated June 23, 1997*
23.19 Consent of Sciarabba Walker & Co., LLP dated June 23, 1997*
23.20 Consent of Wallace Sanders & Company dated June 23, 1997*
23.21 Consent of Warady and Davis dated June 23, 1997*
23.22 Consent of Ziner and Company, PC dated June 23, 1997*
23.23 Consent of Zinner & Co. dated June 23, 1997*
23.24 Consent of Ernst & Young LLP dated June 23, 1997*
99.1 Press Release of Apartment Investment and Management Company,
dated June 6, 1997*
99.2 1994 Reports of Independent Auditors*
99.3 1995 Reports of Independent Auditors*
99.4 1996 Reports of Independent Auditors*
99.5 Financial Statements of NHP Real Estate Companies and Report
of Independent Accountants*
99.6 Financial Statements of NHP Southwest Partners, L.P. (a
Delaware Limited Partnership) and Report of Independent
Accounts*
99.7 Financial Statements of NHP New LP Entities and Report of
Independent Accountants*
99.8 Financial Statements of NHP Borrower Entities and Report of
Independent Accountants*
99.9 Financial Statements of The Bay Club at Aventura and Report
of Independent Auditors*
99.10 Pro Forma Financial Information of Apartment Investment and Management
Company
__________________
* Previously filed
<PAGE>
EXHIBIT 99.10
PRO FORMA FINANCIAL INFORMATION
Introduction
In May 1997, an unconsolidated subsidiary of Apartment Investment
and Management Company, a Maryland corporation ("AIMCO"), AIMCO/NHP Holdings,
Inc., a Delaware corporation ("ANHI"), acquired 6,496,073 shares of Common
Stock, par value $.01 per share ("NHP Common Stock"), of NHP Incorporated, a
Delaware corporation ("NHP"), representing 51.3% of the shares issued and
outstanding as of May 31, 1997 (the "NHP Stock Purchase"). The consideration
for the NHP Stock Purchase was $72.6 million in cash, 2,142,857 shares of
AIMCO's Class A Common Stock, par value $.01 per share ("AIMCO Common
Stock"), and the shares of common stock of NHP's wholly owned subsidiary, The
WMF Group, Ltd., a Delaware corporation ("WMF"), that will be received upon
the spin-off of WMF. Pursuant to rights distributed to NHP stockholders in
May 1997 (the "Rights Distribution"), subject to certain conditions, on the
earlier of the effective time of the proposed merger (the "Merger") of an
AIMCO subsidiary with and into NHP, or December 1, 1997, all of the
outstanding shares of WMF common stock will be distributed to NHP
stockholders (the "WMF Spin-Off"). Shares of WMF common stock received by
AIMCO or ANHI in the WMF Spin-Off will be transferred to the sellers under
the agreement relating to the NHP Stock Purchase. ANHI financed the cash
portion of the purchase price with a short-term loan of $72.6 million (the
"ANHI Credit Facility").
In June 1997, AIMCO acquired NHP Partners, Inc., a Delaware
corporation ("NHP Partners, Inc."), and NHP Partners Two Limited Partnership,
a Delaware limited partnership ("NHP Partners Two L.P." and, together with
NHP Partners, Inc. and their subsidiaries, the "NHP Real Estate Companies"),
which hold interests in partnerships that own conventional and affordable
multifamily apartment properties (the "NHP Properties"), a captive insurance
subsidiary and certain related assets (the "NHP Real Estate Acquisition"). A
substantial majority of the NHP Properties are currently managed by NHP
pursuant to a long-term agreement (the "Master Property Management
Agreement"). AIMCO is currently engaged in a reorganization (the "NHP Real
Estate Reorganization") of its interests in the NHP Real Estate Companies,
which will result in the vast majority of the assets of the NHP Real Estate
Companies being owned by a limited partnership (the "Unconsolidated
Partnership") in which AIMCO Properties, L.P., a Delaware limited partnership
through which AIMCO conducts substantially all of its operations (the
"Operating Partnership"), will hold a 99% limited partner interest and
certain directors and officers of AIMCO will, directly or indirectly, hold a
1% general partner interest.
The Operating Partnership holds a 95% economic interest in ANHI
through ownership of shares of non-voting preferred stock, and certain
directors and officers of AIMCO hold a 5% economic interest in ANHI through
ownership of all of the outstanding shares of common stock. As a result of
the controlling ownership interest in ANHI held by such directors and
officers, AIMCO accounts for its interest in ANHI and other similarly held
subsidiaries (collectively, the "Unconsolidated Subsidiaries") on the equity
method.
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Pro Forma Financial Information
The following Pro Forma Consolidated Balance Sheet of AIMCO as of March
31, 1997 has been prepared as if each of the following transactions had
occurred as of March 31, 1997: (i) the NHP Stock Purchase; (ii) the NHP Real
Estate Acquisition; (iii) the NHP Real Estate Reorganization; (iv) the
acquisition of four multifamily apartment properties and related incurrence
of debt and issuance of 497,794 units ("OP Units") of limited partnership
interest in the Operating Partnership (the "Recent Property Acquisitions");
and (v) the sale of an aggregate of 2,300,000 shares of AIMCO Common Stock in
May 1997, and the application of net proceeds thereof to repay indebtedness
(the "May 1997 Stock Offering").
The following Pro Forma Consolidated Statement of Operations of AIMCO for
the year ended December 31, 1996 has been prepared as if each of the
following transactions had occurred as of January 1, 1996: (i) the NHP Stock
Purchase; (ii) the NHP Real Estate Acquisition; (iii) the NHP Real Estate
Reorganization; (iv) the Recent Property Acquisitions; (v) the sale of
1,265,000 shares of AIMCO Common Stock in November 1996, and the application
of net proceeds thereof to repay indebtedness (the "November 1996 Stock
Offering"); (vi) the sale of 2,015,000 shares of AIMCO Common Stock in
February 1997, and the application of net proceeds thereof to repay
indebtedness (the "February 1997 Stock Offering"); (vii) the May 1997 Stock
Offering; (viii) the acquisition during 1996 of (a) seven multifamily
properties, (b) general and limited partnership interests in limited
partnerships owning 22 multifamily apartment properties and (c) general
partnership interests in and loans to limited partnerships owning 12
multifamily apartment properties, and the related issuance of AIMCO Common
Stock and OP Units and the incurrence of indebtedness to finance such
acquisitions, and the refinancing of such indebtedness (the "1996
Acquisitions"); (ix) the disposition of four multifamily apartment properties
(the "Sold Properties"); and (x) the purchase of a management company in the
third quarter of 1996 (the "Management Company Acquisition").
The following Pro Forma Consolidated Statement of Operations of AIMCO for
the three months ended March 31, 1997 has been prepared as if each of the
following transactions had occurred as of January 1, 1996: (i) the NHP Stock
Purchase; (ii) the NHP Real Estate Acquisition; (iii) the NHP Real Estate
Reorganization; (iv) the Recent Property Acquisitions; (v) the February 1997
Stock Offering; and (vi) the May 1997 Stock Offering.
The following Pro Forma Financial Information is based, in part, on the
following historical financial statements: (i) the Consolidated Financial
Statements of AIMCO for the year ended December 31, 1996 and for the three
months ended March 31, 1997; (ii) the restated Consolidated Financial
Statements of NHP for the year ended December 31, 1996 (which have been
restated to reflect WMF as a discontinued operation as a result of the Rights
Distribution) and for the three months ended March 31, 1997; (iii) the
Combined Financial Statements of the NHP Real Estate Companies for the year
ended December 31, 1996 and the three months ended March 31, 1997; (iv) the
Financial Statements of NHP Southwest Partners, L.P. for the year ended
December 31, 1996 and the three months ended March 31, 1997; (v) the Combined
Financial Statements of the NHP New LP Entities for the year ended December
31, 1996 and the three months ended March 31, 1997; (vi) the Combined
Financial Statements of the NHP Borrower Entities for the year ended December
31, 1996 and the three months ended March 31, 1997; and (v) the Historical
Summaries of Gross Income and Certain Expenses of The Bay Club at Aventura
for the year ended December 31, 1996 and the three months ended March 31,
1997.
The Pro Forma Financial Information has been prepared using the purchase
method of accounting whereby the assets and liabilities of NHP and the NHP
Real Estate Companies are adjusted to estimated fair market value, based upon
preliminary estimates, which are subject to change as
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additional information is obtained. The allocations of purchase costs are
subject to final determination based upon estimates and other evaluations of
fair market value. Therefore, the allocations reflected in the following
unaudited Pro Forma Financial Information may differ from the amounts
ultimately determined. The Pro Forma Financial Information has also been
prepared with certain assumptions concerning the real estate assets to be
contributed to the Unconsolidated Partnership in connection with the NHP Real
Estate Reorganization. AIMCO is currently evaluating the real estate assets
to be contributed to the Unconsolidated Partnership. Therefore, the assets
contributed to the Unconsolidated Partnership reflected in the following
unaudited Pro Forma Financial Information may differ from those ultimately
contributed.
Pursuant to the requirements of the Securities Exchange Act of 1934,
AIMCO has filed with the Securities and Exchange Commission (the "SEC"), on a
confidential basis, a preliminary proxy statement relating to the proposed
Merger, which includes the Pro Forma Financial Information set forth below.
The SEC is currently reviewing the preliminary proxy statement and, as a
result of that review, may request that changes be made to the Pro Forma
Financial Information. In such event, AIMCO expects that it would amend the
Pro Forma Financial Information included herein by making the corresponding
changes.
The Pro Forma Financial Information is presented for informational
purposes only and is not necessarily indicative of the financial position or
results of operations of AIMCO that would have occurred if such transactions
had been completed on the dates indicated, nor does it purport to be
indicative of future financial positions or results of operations. In the
opinion of AIMCO's management, all material adjustments necessary to reflect
the effects of these transactions have been made. The Pro Forma Condensed
Consolidated Statement of Operations for the three months ended March 31,
1997 is not necessarily indicative of the results of operations to be
expected for the year ending December 31, 1997.
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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1997
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
NHP
NHP NHP REAL REAL ESTATE
AIMCO STOCK ESTATE COMPANIES PRO FORMA
HISTORICAL ADJUSTMENTS (A) PURCHASE (B) COMPANIES (C) ADJUSTMENTS (D) TOTAL
----------- --------------- ------------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Real estate...................... $ 742,399 $ 120,597 (E) $ -- $ 94,923 $ (4,498)(J) $ 953,421
Investments in real estate
partnerships................... -- -- -- 24,420 25,163 (K) 49,583
Investment in Unconsolidated
Sub............................ 57,321(S) -- -- 57,321
Cash and cash equivalents........ 11,531 -- -- 11,882 (1,600)(L) 21,813
Restricted cash.................. 10,423 -- -- 2,855 (1,497)(L) 11,781
Investments in securities........ -- -- -- 4,962 -- 4,962
Investment in Management
Contracts...................... 10,480 -- -- -- -- 10,480
Accounts receivable.............. 5,313 -- -- 16,031 -- 21,344
Deferred financing costs......... 10,576 450 (F) -- 1,594 (1,594)(M) 11,026
Other assets..................... 25,507 -- -- 12,222 (10,779)(N) 26,950
----------- --------------- ------------- ------------- --------------- -----------
$ 816,229 $ 121,047 $ 57,321 $ 168,889 $ 5,195 $1,168,681
----------- --------------- ------------- ------------- --------------- -----------
----------- --------------- ------------- ------------- --------------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Secured long-term notes
payable........................ $ 240,935 $ 55,446 (E) $ -- $ 101,386 $ (29,089)(L) $ 368,678
Secured long-term tax-exempt bond
financing...................... 75,151 -- -- -- -- 75,151
Secured short-term financing..... 140,487 (36,136)(G) -- -- 55,807 (O) 160,158
Unsecured short-term financing... -- 25,000 (E) -- -- -- 25,000
Accounts payable, accrued and
other liabilities.............. 14,248 -- -- 44,828 817 (P) 59,893
Resident security deposits and
prepaid rents.................. 4,623 -- -- 699 (364)(L) 4,958
Losses in excess of investment in
real estate partnerships....... -- -- -- 30,850 (30,850)(Q) --
----------- --------------- ------------- ------------- --------------- -----------
475,444 44,310 -- 177,763 (3,679) 693,838
Minority interest in other
partnerships and
corporations................... 9,893 -- -- 968 (968)(L) 9,893
Minority interest in Operating
Partnership.................... 50,045 13,876 (E) -- -- -- 63,921
Unrealized Gain on Investments... -- -- -- 303 (303)(R) --
Class A Common Stock ($.01 par
value)......................... 176 23 (H) 21(I) -- -- 220
Class B Common Stock ($.01 par
value)......................... 3 -- -- -- -- 3
Additional paid-in capital....... 297,322 62,838 (H) 57,300(I) -- -- 417,460
Accumulated deficit.............. (16,654) -- -- (10,145) 10,145 (R) (16,654)
----------- --------------- ------------- ------------- --------------- -----------
280,847 62,861 57,321 (9,842) 9,842 401,029
----------- --------------- ------------- ------------- --------------- -----------
$ 816,229 $ 121,047 $ 57,321 $ 168,889 $ 5,195 $1,168,681
----------- --------------- ------------- ------------- --------------- -----------
----------- --------------- ------------- ------------- --------------- -----------
</TABLE>
- ------------------------------
(A) Represents adjustments to reflect the Recent Property Acquisitions and the
May 1997 Stock Offering.
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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1997
(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
(B) Represents adjustments to reflect AIMCO's investment in ANHI, one of the
Unconsolidated Subsidiaries.
(C) Represents the unaudited combined historical financial position of the NHP
Real Estate Companies at March 31, 1997.
(D) Represents adjustments to record the assets and liabilities of the NHP Real
Estate Companies at their fair values and borrowings of $55,807 under
AIMCO's Credit Facility to finance a portion of the purchase price for the
NHP Real Estate Acquisition (including acquisition-related costs). In
addition, the financial statements of the NHP Real Estate Companies
consolidate certain real estate partnerships that will be presented on the
equity method, as a result of the NHP Real Estate Reorganization. Therefore,
adjustments have been made to present certain real estate partnerships on
the equity method.
(E) Represents an aggregate purchase price of approximately $120,597 for the
Recent Property Acquisitions. To finance the Recent Property Acquisitions,
the Company assumed existing indebtedness totaling approximately $55,446,
borrowed approximately $26,275 under AIMCO's Credit Facility (a portion of
which was repaid with proceeds from the May 1997 Stock Offering) and other
bridge financing, borrowed approximately $25,000 on an unsecured line of
credit and issued 497,794 OP Units valued at $13,876 to finance the
acquisitions.
(F) Represents deferred loan costs incurred in connection with the modification
of AIMCO's Credit Facility to, among other items, increase the maximum
amount available to $100 million.
(G) Represents (i) borrowings of $26,275 to finance a portion of the purchase
price for the Recent Property Acquisitions; and (ii) borrowings of $450 to
finance the deferred loan costs incurred to modify the AIMCO Credit
Facility; offset by (iii) repayment of $62,861 from the proceeds of the
May 1997 Stock Offering.
(H) Represents the issuance of AIMCO Common Stock and additional paid-in capital
resulting from the May 1997 Stock Offering.
(I) Represents the issuance of 2,142,857 shares of AIMCO Common Stock, with a
value of approximately $57,321, to the sellers in connection with the NHP
Stock Purchase.
(J) Represents (i) adjustments of $25,005 to reflect the allocation of a portion
of the purchase price to real estate; offset by (ii) adjustments of $29,503
to present certain real estate partnerships on the equity method, as a
result of the NHP Real Estate Reorganization.
(K) Represents (i) adjustments of $1,534 to present certain real estate
partnerships on the equity method, as a result of the NHP Real Estate
Reorganization; and (ii) adjustment of $23,629 to record the investments in
real estate partnerships at their fair values.
(L) Represents adjustments to present certain real estate partnerships on the
equity method, as a result of the NHP Real Estate Reorganization.
(M) Represents (i) adjustments of $424 to present certain real estate
partnerships on the equity method, as a result of the NHP Real Estate
Reorganization; and (ii) adjustments of $1,170 to eliminate the remaining
deferred financing costs.
5
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1997
(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
(N) Represents (i) adjustment of $200 to present certain real estate
partnerships on the equity method, as a result of the NHP Real Estate
Reorganization; and (ii) adjustments of $10,579 to reduce the other assets
to their fair values.
(O) Represents borrowings on AIMCO's Credit Facility to finance the NHP Real
Estate Acquisition (including acquisition-related costs).
(P) Represents (i) adjustments of $1,647 to present certain real estate
partnerships on the equity method, as a result of the NHP Real Estate
Reorganization; offset by (ii) adjustments of $2,464 to accrue liabilities
related to the NHP Real Estate Acquisition, primarily severance costs.
(Q) Represents (i) adjustments of $1,386 to present certain real estate
partnerships on the equity method, as a result of the NHP Real Estate
Reorganization; offset by (ii) adjustments of $32,236 to remove losses in
excess of investment in real estate partnerships since all of the underlying
debt is non-recourse and the partnership agreements do not contain a deficit
capital restoration requirement.
(R) Represents adjustments to eliminate the accumulated deficit of the NHP Real
Estate Companies.
(S) Represents a contribution to ANHI of 2,866,073 shares of NHP Common Stock in
exchange for 95,000 shares of non-voting preferred stock of ANHI. The NHP
Common Stock was acquired through the issuance of 2,142,857 shares of AIMCO
Common Stock valued at $57,321. The following table (which is based on the
historical financial statements of NHP incorporated herein) presents a
condensed pro forma consolidated balance sheet of ANHI assuming that the NHP
Stock Purchase had occurred as of March 31, 1997:
6
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1997
(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
NHP STOCK
PURCHASE ADJUSTMENTS
(i) NHP (ii) (iii) PRO FORMA
----------- ---------- --------------- -----------
<S> <C> <C> <C> <C>
ASSETS
Real estate............................................. $ -- $ -- $ 88,789 (iv) $ 88,789
Real estate held for sale............................... -- 13,727 (13,727)(iv) --
Investment in NHP Common Stock.......................... 129,921 -- (129,921)(v) --
Cash and cash equivalents............................... -- 6,698 1,136 (iv) 7,834
Investment in management contracts...................... -- 49,360 2,523 (vi) 51,883
Preferential interest in real estate partnerships....... -- -- 54,122 (vii) 54,122
Goodwill................................................ -- 5,733 80,973 (viii) 86,706
Net deferred tax asset.................................. -- 12,565 (12,565)(ix) --
Net assets of WMF....................................... -- 22,596 -- 22,596
Other assets............................................ 165 48,843 613 (x) 49,621
----------- ---------- --------------- -----------
$ 130,086 $ 159,522 $ 71,943 $ 361,551
----------- ---------- --------------- -----------
----------- ---------- --------------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable........................................... $ 72,765 $ 69,188 $ 71,557 (iv) $ 213,510
Accounts payable and other liabilities.................. -- 31,282 10,371 (xi) 41,653
Net deferred tax liability.............................. -- -- 8,532 (xii) 8,532
----------- ---------- --------------- -----------
72,765 100,470 90,460 263,695
Minority interest....................................... -- -- 40,535 (xiii) 40,535
Common stock............................................ -- -- -- --
Preferred stock......................................... 57,321 -- -- 57,321
NHP Common Stock........................................ -- 127 (127)(xiv) --
Additional paid-in capital.............................. -- 132,341 (132,341)(xiv) --
Retained earnings....................................... -- (73,416) 73,416 (xiv) --
----------- ---------- --------------- -----------
57,321 59,052 (59,052) 57,321
----------- ---------- --------------- -----------
$ 130,086 $ 159,522 $ 71,943 $ 361,551
----------- ---------- --------------- -----------
----------- ---------- --------------- -----------
</TABLE>
- ------------------------
(i) Represents the issuance of 95,000 shares of non-voting ANHI
Preferred Stock, representing 95% of the economic ownership, in
exchange for 2,866,073 shares of NHP Common Stock, valued at $57,321,
and the purchase of an additional 3,630,000 shares of NHP Common Stock,
financed with $72,765 borrowed under the ANHI Credit Facility
(including $165 of deferred financing costs). Certain executive
officers of AIMCO own all the outstanding shares of voting common stock
of ANHI, which represents 5% of the economic ownership. The common
stock was recorded net of notes receivable from these executive
officers to purchase the stock.
(ii) Represents the historical financial position of NHP as of March
31, 1997.
7
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1997
(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
(iii) Represents adjustments to record the assets and liabilities of
NHP at their fair values using the purchase method of accounting. The
allocation of the purchase price is based upon preliminary estimates of
the fair market value of such assets and liabilities, which are subject
to change as additional information is obtained. Therefore, the
allocations may differ from the amounts ultimately determined.
(iv) Represents the reclassification of real estate held for sale,
which was reflected net of related indebtedness by NHP, to real estate
held for investment, adjusted to reflect the fair market value of the
real estate and to separately present the related debt assumed and
working capital balances.
(v) Represents the elimination of the investment in NHP Common Stock
upon consolidation.
(vi) Represents adjustment to record the fair value of investment in
management contracts based on current market terms.
(vii) Represents management's estimate of the fair value of investment
in the management contracts above current market terms. The terms of
the management contracts between NHP and the NHP Real Estate Companies
include longer lives and higher management fees than those which
management believes would be present in a current contract negotiated
with an unaffiliated third party. Management views this as preferred
interest in the real estate partnerships.
(viii) Represents the purchase consideration in excess of ANHI's share
of the fair value of the net assets of NHP.
(ix) Represents reclassification of the net deferred tax asset to
offset the deferred tax liability.
(x) Represents (a) adjustments of $3,950 to record certain working
capital balances relating to the real estate held for investment;
offset by (b) adjustments of $3,337 to the historical values of certain
assets of NHP to present their respective fair values.
(xi) Represents (a) adjustments of $2,013 to record certain working
capital balances relating to the real estate held for investment; and
(b) the net accrual of $8,358 to accrue liabilities related to the NHP
Stock Purchase, primarily severance costs.
(xii) Represents the estimated net deferred Federal and state tax
liabilities at a combined rate of 40% for the estimated difference
between the book and tax basis of the net assets of ANHI.
(xiii) Represents (a) minority interest of $40,350 for the 48.7% of the NHP
Common Stock that is not owned by ANHI, including 100% of the net
assets of WMF; and (b) adjustments of $185 to record the minority
interest related to the real estate.
(xiv) Represents adjustments to eliminate the shareholders' equity of NHP.
8
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
NHP REAL NHP REAL ESTATE
AIMCO NHP STOCK ESTATE COMPANIES PRO FORMA
HISTORICAL ADJUSTMENTS(A) PURCHASE(B) COMPANIES(C) ADJUSTMENTS(D) TOTAL
---------- -------------- ------------ ------------- ------------------ ------------
<S> <C> <C> <C> <C> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property
revenues.................... $ 100,516 $ 63,592 (E) $-- $ 29,243 $(15,371)(J) $177,980
Property operating expenses... (38,400) (34,372)(E) -- (18,125) 10,409 (J) (80,488)
Owned property management
expense..................... (2,746) (2,653)(E) -- (1,293) 768 (J) (5,924)
---------- -------------- ----- ------------- -------- ------------
Income from property
operations before
depreciation................ 59,370 26,567 -- 9,825 (4,194) 91,568
Depreciation.................. (19,556) (12,037)(E) -- (3,904) 740 (J) (34,757)
---------- -------------- ----- ------------- -------- ------------
Income from property
operations.................. 39,814 14,530 -- 5,921 (3,454) 56,811
---------- -------------- ----- ------------- -------- ------------
SERVICE COMPANY BUSINESS
Management fees and other
income...................... 8,367 1,962 (F) -- 7,173 (I) -- 17,502
Management and other
expenses.................... (5,352) (1,254)(F) -- (8,210)(I) 1,254 (K) (13,562)
Corporate overhead
allocation.................. (590) -- -- -- -- (590)
Amortization of management
contracts and depreciation
and amortization of other
assets...................... (718) (508)(G) -- -- -- (1,226)
---------- -------------- ----- ------------- -------- ------------
Income from service company
business.................... 1,707 200 -- (1,037) 1,254 2,124
Minority interest in service
company business............ 10 -- -- -- -- 10
---------- -------------- ----- ------------- -------- ------------
Company's share of income from
service company busines..... 1,717 200 -- (1,037) 1,254 2,134
---------- -------------- ----- ------------- -------- ------------
General and administrative
expenses.................... (1,512) -- -- -- -- (1,512)
Interest expense.............. (24,802) (14,937)(H) -- (10,400) (1,208)(L) (51,347)(P)
Interest income............... 523 -- -- 2,000 -- 2,523
---------- -------------- ----- ------------- -------- ------------
Income (loss) before equity in
earnings of unconsolidated
subsidiaries, gain on
disposition of property,and
minority interests.......... 15,740 (207) -- (3,516) (3,408) 8,609
Equity in earnings of
unconsolidated
corporations................ -- -- 653(R) -- -- 653
Equity in losses of
partnerships................ -- -- -- (5,726) (2,572)(M) (8,298)
Gain on disposition of
property.................... 44 (44)(E) -- -- -- --
---------- -------------- ----- ------------- -------- ------------
Income (loss) before minority
interests................... 15,784 (251) 653 (9,242) (5,980) 964
Minority interest in other
partnerships................ (111) 2,778 (N) -- -- 255 (N) 2,922
---------- -------------- ----- ------------- -------- ------------
Income (loss) before minority
interests in Operating
Partnership................. 15,673 2,527 653 (9,242) (5,725) 3,886
Minority interest in Operating
Partnership................. (2,689) (571)(O) -- -- 2,625 (O) (635)
---------- -------------- ----- ------------- -------- ------------
Net income (loss) allocable to
common stockholders......... $ 12,984 $ 1,956 $ 653 $ (9,242) $ (3,100) $ 3,251
---------- -------------- ----- ------------- -------- ------------
---------- -------------- ----- ------------- -------- ------------
Net income per common share
(Q)......................... $ 1.04 $ 0.16
---------- ------------
---------- ------------
Weighted average number of
common shares and common
share equivalents
outstanding................. 12,427 20,378
---------- ------------
---------- ------------
</TABLE>
- ------------------------
(A) Represents adjustments to reflect the Recent Property Acquisitions, the
November 1996 Stock Offering, the February 1997 Stock Offering, the May 1997
Stock Offering, the 1996 Acquisitions, the disposition of the Sold
Properties, and the Management Company Acquisition.
(B) Represents AIMCO's equity in losses of ANHI. As a result of the NHP Stock
Purchase, ANHI, one of the Unconsolidated Subsidiaries, acquired 6,496,073
shares of NHP Common Stock (representing 51.3% of the shares outstanding as
of May 31, 1997).
9
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
(C) Represents the audited historical combined results of operations of the NHP
Real Estate Companies for the year ended December 31, 1996, excluding gain
on disposition of real estate investments.
(D) Represents adjustments to record additional depreciation and amortization
related to recording the assets of the NHP Real Estate Companies at their
fair values and additional interest expense incurred in connection with
borrowings to consummate the NHP Real Estate Acquisition. In addition, the
financial statements of the NHP Real Estate Companies currently consolidate
certain real estate partnerships that, as a result of the NHP Real Estate
Reorganization, will be presented on the equity method by AIMCO. Therefore,
adjustments have been made to present certain real estate partnerships on
the equity method.
(E) Represents the pro forma operating results of the 1996 Acquisitions and the
Recent Property Acquisitions, less the operating results of the Sold
Properties. These pro forma operating results are based on historical
results of the properties, except for depreciation, which is based on
AIMCO's investment in the properties.
(F) Represents the pro forma operating results of the management companies
acquired by AIMCO since January 1, 1996. These pro forma operating results
are based on historical results of the management companies; however, they
have been adjusted for the elimination upon consolidation of management fee
income earned by the respective management companies from the properties in
which AIMCO has a controlling ownership interest.
(G) Represents amortization of the intangible assets related to the purchase of
management contracts. Management contracts are amortized using the
straight-line method over the terms of the related management contracts.
(H) Represents (i) interest of $16,887 resulting from borrowings on AIMCO's
Credit Facility and other loans and mortgages assumed in connection with the
1996 Acquisitions; and (ii) interest of $8,192 resulting from borrowings on
AIMCO's Credit Facility and other loans and mortgages assumed in connection
with the Recent Property Acquisitions; offset by (iii) a decrease in
interest of $10,142 resulting from the repayment of borrowings on AIMCO's
Credit Facility with proceeds from the Sold Properties and the November 1996
Stock Offering, the February 1997 Stock Offering and the May 1997 Stock
Offering.
(I) Represents revenues and expenses from ancillary businesses purchased from
the NHP Real Estate Companies.
(J) Represents adjustments to present the net operations of certain real estate
partnerships on the equity method, as a result of the NHP Real Estate
Reorganization.
(K) Represents a reduction in personnel costs due to the restructuring plan that
has been put in place by AIMCO which includes reductions of personnel to
operate the combined companies.
(L) Represents (i) interest of $4,016 related to borrowings on AIMCO's Credit
Facility of $55,807 to finance the NHP Real Estate Acquisition; and (ii) a
decrease in interest of $2,808 related to the presentation of certain real
estate partnerships on the equity method, as a result of the NHP Real Estate
Reorganization.
(M) Represents (i) adjustments of $1,234 related to the presentation of certain
real estate partnerships on the equity method, as a result of the NHP Real
Estate Reorganization; and (ii) adjustments of $1,338 representing
amortization of the increase in investments in real estate partnerships,
based on an estimated average life of 17.5 years.
10
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
(N) Represents the minority interest in consolidated real estate partnerships in
which AIMCO has a controlling ownership interest.
(O) Represents adjustments to minority interest in the Operating Partnership
assuming the Recent Property Acquisitions, the November 1996 Stock Offering,
the February 1997 Stock Offering, the May 1997 Stock Offering, the 1996
Acquisitions, the disposition of the Sold Properties, the Management Company
Acquisition, the NHP Stock Purchase and the NHP Real Estate Acquisition had
occurred as of January 1, 1996. On a pro forma basis, without giving effect
to the NHP Stock Purchase and the NHP Real Estate Acquisition, as of
December 31, 1996, the minority interest percentage is approximately 17.91%.
On a pro forma basis, giving effect to the NHP Stock Purchase and the NHP
Real Estate Acquisition, as of December 31, 1996, the minority interest
percentage is approximately 16.34%.
(P) The pro forma amounts presented assume an average interest rate of 8.16% per
annum (on floating-rate debt, representing LIBOR plus 1.45% on AIMCO's
Credit Facility) on outstanding debt obligations with a weighted average
term of 6.7 years. An increase of 0.25% in the interest rate would increase
pro forma interest expense to $51,651, decrease net income applicable to
common shareholders to $2,997 and decrease net income per common share to
$0.15.
(Q) In February 1997, the Financial Accounting Standards Board issued Statement
128 which specifies the computation, presentation and disclosure
requirements for basic earnings per share and diluted earnings per share.
AIMCO's management believes that adoption of Statement 128 will not have a
material effect on the earnings per share of AIMCO.
11
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
(R) Represents AIMCO's equity in earnings of ANHI. The following table (which is
based in part on the historical financial statements of NHP incorporated by
reference herein) presents a condensed pro forma statement of operations of
ANHI assuming the NHP Stock Purchase had occurred as of January 1, 1996:
<TABLE>
<CAPTION>
NHP STOCK
PURCHASE(i) NHP(ii) ADJUSTMENTS PRO FORMA
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Rental property operations.................................. $ -- $ -- $ 4,212 (iii) $ 4,212
Depreciation................................................ -- -- (3,108)(iii) (3,108)
----------- ----------- ----------- -----------
Income from property operations............................. -- -- 1,104 1,104
----------- ----------- ----------- -----------
Management fees and other income............................ -- 194,979 (127,266)(iv) 67,713
Management and other expenses............................... -- (153,907) 136,920 (v) (16,987)
Amortization of management contracts and goodwill and
depreciation and amortization of other assets............. -- (6,321) (3,660)(vi) (9,981)
----------- ----------- ----------- -----------
34,751 5,994 40,745
----------- ----------- ----------- -----------
General and administrative.................................. -- (14,074) -- (14,074)
Interest expense............................................ (5,932) (3,982) (4,082)(iii) (13,996)
Interest income............................................. -- 747 -- 747
----------- ----------- ----------- -----------
Income (loss) before income taxes and minority interest..... (5,932) 17,442 3,016 14,526
Income tax provision........................................ -- (6,977) (135)(vii) (7,112)
Equity in losses of partnerships............................ -- -- (3,075)(viii) (3,075)
Minority interest in NHP.................................... -- -- (3,652)(ix) (3,652)
----------- ----------- ----------- -----------
Net income (loss)........................................... $ (5,932) $ 10,465 $ (3,846) $ 687
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Income attributable to preferred stockholder................ $ 653
-----------
-----------
Income attributable to common stockholder................... $ 34
-----------
-----------
</TABLE>
- ------------------------
(i) Represents interest related to indebtedness incurred of $72,765
(including deferred financing costs) on the ANHI Credit Facility to
finance the cash portion of the NHP Stock Purchase.
(ii) Represents the historical operating results of NHP for the year ended
December 31, 1996, which have been restated to reflect WMF as a
discontinued operation as a result of the Rights Distribution.
(iii) Represents the operating results of the real estate, which was held for
sale by NHP.
(iv) Represents the offsetting of certain property management costs and
related reimbursements.
(v) Represents (a) adjustment of $127,266, which represents the offsetting of
certain property management costs and related reimbursements; and (b) a
reduction in personnel costs of $9,654 due to the restructuring plan that
has been put in place by AIMCO which includes reductions of personnel to
operate the combined companies.
12
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(CONTINUED)
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
(vi) Represents depreciation and amortization of the tangible and intangible
assets related to the property management and other businesses
operated by ANHI, including amortization of management contracts of
$1,899, depreciation of furniture, fixtures and equipment of $669 and
amortization of goodwill of $4,335, less ANHI's 51.3% share of NHP's
historical depreciation and amortization of $3,243. Management
contracts are amortized using the straight-line method over the
weighted average life of 14.7 years. Furniture, fixtures and equipment
are depreciated using the straight-line method over the estimated life
of 5 years. Goodwill is amortized using the straight-line method over
20 years.
(vii) Represents adjustment to the estimated Federal and state tax provisions
calculated on the operating results of ANHI, excluding amortization of
goodwill which is not deductible for tax purposes.
(viii) Represents amortization of the preferential interest in real estate
partnerships. The preferential interest in real estate partnerships
(on properties in which AIMCO (through its subsidiaries) is the
general partner and property manager) is amortized using the
straight-line method over an estimated average life of 17.5 years.
(ix) Represents the share of NHP net income attributable to the 48.7% of the
NHP Common Stock owned by other stockholders.
13
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
NHP REAL NHP REAL ESTATE
AIMCO NHP STOCK ESTATE COMPANIES
HISTORICAL ADJUSTMENTS(A) PURCHASE(B) COMPANIES(C) ADJUSTMENTS(D)
----------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property revenues........ $ 38,040 $ 4,321 (E) $ -- $ 6,950 $ (3,406)(H)
Property operating expenses............... (14,456) (1,517)(E) -- (3,953) 2,397 (H)
Owned property management expense......... (1,321) (154)(E) -- (330) 195 (H)
----------- ------- --- ------- -------
Income from property operations before
depreciation............................ 22,263 2,650 -- 2,667 (814)
Depreciation.............................. (7,455) (1,055)(E) -- (810) 19 (H)
----------- ------- --- ------- -------
Income from property operations........... 14,808 1,595 -- 1,857 (795)
----------- ------- --- ------- -------
SERVICE COMPANY BUSINESS
Management fees and other income.......... 2,444 -- -- 908 (G) --
Management and other expenses............. (1,420) -- -- (1,572)(G) 789 (I)
Corporate overhead allocation............. (147) -- -- -- --
Amortization of management contracts and
depreciation and amortization of other
assets.................................. (325) -- -- -- --
----------- ------- --- ------- -------
Income from service company business...... 552 -- -- (664) 789
Minority interest in service company
business................................ (1) -- -- -- --
----------- ------- --- ------- -------
Company's share of income from service
company busines......................... 551 -- -- (664) 789
----------- ------- --- ------- -------
General and administrative expenses....... (351) -- -- -- --
Interest expense.......................... (9,452) (516)(F) -- (2,124) (691)(J)
Interest income........................... 507 -- -- 117 --
----------- ------- --- ------- -------
Income (losses) before equity in earnings
of unconsolidated subsidiaries, gain on
disposition of property, and minority
interests............................... 6,063 1,079 -- (814) (697)
Equity in losses of corporations.......... -- -- 20(P) -- --
Equity in losses of partnerships.......... -- -- -- (1,209) (331)(K)
----------- ------- --- ------- -------
Income (loss) before minority interests... 6,063 1,079 20 (2,023) (1,028)
Minority interest in other partnerships... (369) -- -- -- 21(L)
----------- ------- --- ------- -------
Income (loss) before minority interests in
Operating Partnership................... 5,694 1,079 20 (2,023) (1,007)
Minority interest in Operating
Partnership............................. (841) (185)(M) -- -- 504 (M)
----------- ------- --- ------- -------
Net income (loss) allocable to common
stockholders............................ $ 4,853 $ 894 $ 20 $ (2,023) $ (503)
----------- ------- --- ------- -------
----------- ------- --- ------- -------
Net income per common share (O)........... $ 0.29
-----------
-----------
Weighted average number of common shares
and common share equivalents
outstanding............................. 16,586
-----------
-----------
<CAPTION>
PRO FORMA
TOTAL
-----------
<S> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property revenues........ $ 45,905
Property operating expenses............... (17,529)
Owned property management expense......... (1,610)
-----------
Income from property operations before
depreciation............................ 26,766
Depreciation.............................. (9,301)
-----------
Income from property operations........... 17,465
-----------
SERVICE COMPANY BUSINESS
Management fees and other income.......... 3,352
Management and other expenses............. (2,203)
Corporate overhead allocation............. (147)
Amortization of management contracts and
depreciation and amortization of other
assets.................................. (325)
-----------
Income from service company business...... 677
Minority interest in service company
business................................ (1)
-----------
Company's share of income from service
company busines......................... 676
-----------
General and administrative expenses....... (351)
Interest expense.......................... (12,783)(N)
Interest income........................... 624
-----------
Income (losses) before equity in earnings
of unconsolidated subsidiaries, gain on
disposition of property, and minority
interests............................... 5,631
Equity in losses of corporations.......... 20
Equity in losses of partnerships.......... (1,540)
-----------
Income (loss) before minority interests... 4,111
Minority interest in other partnerships... (348)
-----------
Income (loss) before minority interests in
Operating Partnership................... 3,763
Minority interest in Operating
Partnership............................. (522)
-----------
Net income (loss) allocable to common
stockholders............................ $ 3,241
-----------
-----------
Net income per common share (O)........... $ 0.15
-----------
-----------
Weighted average number of common shares
and common share equivalents
outstanding............................. 21,951
-----------
-----------
</TABLE>
- ------------------------
(A) Represents adjustments to reflect the Recent Property Acquisitions, the
February 1997 Stock Offering and the May 1997 Stock Offering.
(B) Represents AIMCO's equity in losses of ANHI. As a result of the NHP Stock
Purchase, ANHI acquired 6,496,073 shares of NHP Common Stock, representing
51.3% of the shares outstanding as of May 31, 1997.
14
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
(C) Represents the unaudited historical combined results of operations of the
NHP Real Estate Companies for the three months ended March 31, 1997,
excluding gain on disposition of real estate investments.
(D) Represents adjustments to record additional depreciation and amortization
related to recording the assets of the NHP Real Estate Companies at their
fair values and additional interest expense incurred in connection with
borrowings to consummate the NHP Real Estate Acquisition. In addition, the
financial statements of the NHP Real Estate Companies currently consolidate
certain real estate partnerships that, as a result of the NHP Real Estate
Reorganization, will be presented on the equity method by AIMCO. Therefore,
adjustments have been made to present certain real estate partnerships on
the equity method.
(E) Represents the pro forma operating results of the Recent Property
Acquisitions. These pro forma operating results are based on historical
results of the properties, except for depreciation, which is based on
AIMCO's investment in the properties.
(F) Represents (i) interest of $2,018 resulting from borrowings on AIMCO's
Credit Facility and other loans and mortgages assumed in connection with the
Recent Property Acquisitions; offset by (iii) a decrease in interest of
$1,502 resulting from the repayment of borrowings on AIMCO's Credit Facility
with proceeds from the February 1997 Stock Offering and the May 1997 Stock
Offering.
(G) Represents revenues and expenses from ancillary businesses purchased from
the NHP Real Estate Companies.
(H) Represents adjustments to present the net operations of certain real estate
partnerships on the equity method, as a result of the NHP Real Estate
Reorganization.
(I) Represents a reduction in personnel costs due to the restructuring plan that
has been put in place by AIMCO which includes reductions of personnel to
operate the combined companies.
(J) Represents (i) interest of $964 related to borrowings on AIMCO's Credit
Facility of $55,807 to finance the NHP Real Estate Acquisition; and (iii) a
decrease in interest of $273 related to the presentation of certain real
estate partnerships on the equity method, as a result of the NHP Real Estate
Reorganization.
(K) Represents (i) adjustments of $3 related to the presentation of certain real
estate partnerships on the equity method, as a result of the NHP Real Estate
Reorganization; offset by (ii) adjustments of $334 representing amortization
of the increase in investments in real estate partnerships, based on an
estimated average life of 17.5 years.
(L) Represents the minority interest in consolidated real estate partnerships in
which AIMCO has a controlling ownership interest.
(M) Represents adjustments to minority interest in the Operating Partnership
assuming the Recent Property Acquisitions, the February 1997 Stock Offering,
the May 1997 Stock Offering, the NHP Stock Purchase and the NHP Real Estate
Acquisition had occurred as of January 1, 1996. On a pro forma basis,
without giving effect to the NHP Stock Purchase and the NHP Real Estate
Acquisition, as of March 31, 1997, the minority interest percentage is
approximately 15.15%. On a pro forma basis, giving effect to the NHP Stock
Purchase and the NHP Real Estate Acquisition, as of March 31, 1997, the
minority interest percentage is approximately 13.87%.
15
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
(N) The pro forma amounts presented assume an average interest rate of 8.13% per
annum (on floating-rate debt, representing LIBOR plus 1.45% on AIMCO's
Credit Facility) on outstanding debt obligations with a weighted average
term of 6.7 years. An increase of 0.25% in the interest rate would increase
pro forma interest expense to $12,860, decrease net income applicable to
common shareholders to $3,175 and decrease net loss per common share to
$0.14.
(O) In February 1997, the Financial Accounting Standards Board issued Statement
128 which specifies the computation, presentation and disclosure
requirements for basic earnings per share and diluted earnings per share.
AIMCO's management believes that adoption of Statement 128 will not have a
material effect on the earnings per share of AIMCO.
(P) Represents AIMCO's equity in earnings of ANHI. The following table (which is
based in part on the historical financial statements of NHP incorporated by
reference herein) presents a condensed pro forma statement of operations of
ANHI assuming the NHP Stock Purchase had occurred as of January 1, 1996:
<TABLE>
<CAPTION>
NHP STOCK
PURCHASE (i) NHP (ii) ADJUSTMENTS PRO FORMA
------------- ----------- ------------- -----------
(RESTATED)
<S> <C> <C> <C> <C>
Rental property operations.............................. $ -- $ -- $ 1,345 (iii) $ 1,345
Depreciation............................................ -- -- (777)(iii) (777)
------------- ----------- ------------- -----------
Income from property operations......................... -- -- 568 568
------------- ----------- ------------- -----------
Management fees and other income........................ -- 51,117 (32,755)(iv) 18,362
Management and other expenses........................... -- (39,973) 35,312 (v) (4,661)
Amortization of management contracts and goodwill and
depreciation and amortization of other assets......... -- (2,354) (518)(vi) (2,872)
------------- ----------- ------------- -----------
8,790 2,039 10,829
------------- ----------- ------------- -----------
General and administrative.............................. -- (4,494) -- (4,494)
Interest expense........................................ (1,475) (1,265) (1,720)(iii) (4,460)
Interest income......................................... -- 487 -- 487
------------- ----------- ------------- -----------
Income (loss) before income taxes and minority
interest.............................................. (1,475) 3,518 887 2,930
Income tax provision.................................... -- (1,407) (265)(vii) (1,672)
Equity in losses of partnerships........................ -- -- (767)(viii) (767)
Minority interest in NHP................................ -- -- (470)(ix) (470)
------------- ----------- ------------- -----------
Net income (loss)....................................... $ (1,475) $ 2,111 $ (615) $ 21
------------- ----------- ------------- -----------
------------- ----------- ------------- -----------
Income attributable to preferred stockholder............ $ 20
-----------
-----------
Income attributable to common stockholder............... $ 1
-----------
-----------
</TABLE>
- ------------------------
(i) Represents interest related to indebtedness incurred of $72,765 (including
deferred financing costs) on the ANHI Credit Facility to finance the cash
portion of the NHP Stock Purchase.
(ii) Represents the historical operating results of NHP for the three months
ended March 31, 1997.
16
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
(iii) Represents the operating results of the real estate, which was held for
sale by NHP.
(iv) Represents the offsetting of certain property management costs and
related reimbursements.
(v) Represents (a) adjustment of $32,755, which represents the offsetting of
certain property management costs and related reimbursements; and (b) a
reduction in personnel costs of $2,557 due to the restructuring plan that
has been put in place by AIMCO which includes planned reductions of
personnel to operate the combined companies.
(vi) Represents depreciation and amortization of the tangible and intangible
assets related to the property management and other businesses
operated by ANHI, including amortization of management contracts of
$475, depreciation of furniture, fixtures and equipment of $167 and
amortization of goodwill of $1,083, less ANHI's 51.3% share of NHP's
historical depreciation and amortization of $1,207. Management
contracts are amortized using the straight-line method over the
weighted average life of 14.7 years. Furniture, fixtures and equipment
are depreciated using the straight-line method over the estimated life
of 5 years. Goodwill is amortized using the straight-line method over
20 years.
(vii) Represents adjustment to the estimated Federal and state tax provisions
calculated on the operating results of the Unconsolidated Subsidiaries,
excluding amortization of goodwill which is not deductible for tax
purposes.
(viii) Represents amortization of the preferential interest in real estate
partnerships. The preferential interest in real estate partnerships
(on properties in which AIMCO (through its subsidiaries) is the
general partner and property manager) is amortized using the
straight-line method over an estimated average life of 17.5 years.
(ix) Represents the share of NHP net income attributable to the 48.7% of the
NHP Common Stock owned by other stockholders.
17
