<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 15, 1999
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
---------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
MARYLAND 1-13232 84-1259577
- --------------------------- ------------ -------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or File Number) Identification No.)
organization)
</TABLE>
COLORADO CENTER, TOWER TWO, 2000 SOUTH COLORADO BOULEVARD,
SUITE 2-1000, 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)
<PAGE> 2
ITEM 5. OTHER EVENTS.
In December 1999 and January 2000, Apartment Investment and Management
Company ("AIMCO"), through AIMCO Properties, L.P., the operating partnership for
Apartment Investment and Management Company, acquired from Dreyfuss Brothers,
Inc. ("Dreyfuss"), four separate residential communities. AIMCO has agreements
to acquire an additional five communities from Dreyfuss, which are expected to
be acquired by June 30, 2000. The communities are located in Maryland and
Virginia. The purchase price for the nine residential communities is estimated
at $100,500,000, and is to be payable in cash, the assumption of indebtedness,
and the issuance by AIMCO Properties, L.P. of its Class Four Partnership
Preferred Units.
In December, 1999 and January 2000, AIMCO acquired from the Regency
Windsor Companies fourteen separate residential communities located in Indiana,
Michigan and North Carolina for $301,400,000. As consideration, AIMCO paid cash,
assumed indebtedness, and issued Partnership Common Units and Class Three
Partnership Preferred Units of AIMCO Properties, L.P.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
Combined Historical Summary of Gross Income and Direct Operating
Expenses of Dreyfuss Apartment Communities for the year ended December
31, 1998 and the nine months ended September 30, 1999 (unaudited),
together with the Report of Independent Auditors (is included as
Exhibit 99.1 to this Report and is incorporated herein by reference).
Combined Historical Summary of Gross Income and Direct Operating
Expenses of Regency Windsor Apartment Communities for the year ended
December 31, 1998 and the nine months ended September 30, 1999
(unaudited), together with the Report of Independent Auditors (is
included as Exhibit 99.2 to this Report and is incorporated herein by
reference).
(b) Pro Forma Financial Information.
Pro Forma Financial Information of Apartment Investment and Management
Company (is included as Exhibit 99.3 to this Report and is
incorporated herein by reference.)
(c) Exhibits
The following exhibits are filed with this report:
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
23.1 Consent of Independent Auditor-Ernst & Young LLP.
99.1 Combined Historical Summary of Gross Income and Direct Operating
Expenses of Dreyfuss Apartment Communities for the year ended December
31, 1998 and the nine months ended September 30, 1999 (unaudited),
together with the Report of Independent Auditors.
</TABLE>
Page 2 of 5
<PAGE> 3
<TABLE>
<S> <C>
99.2 Combined Historical Summary of Gross Income and Direct Operating
Expenses of Regency Windsor Apartment Communities for the year ended
December 31, 1998 and the nine months ended September 30, 1999
(unaudited), together with the Report of Independent Auditors.
99.3 Pro Forma Financial Information of Apartment Investment and Management
Company.
</TABLE>
Page 3 of 5
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: March 13, 2000
APARTMENT INVESTMENT
AND MANAGEMENT COMPANY
By: /s/Paul J. McAuliffe
-----------------------------
Paul J. McAuliffe
Executive Vice President--
Capital Markets and Chief
Financial Officer
Page 4 of 5
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
23.1 Consent of Independent Auditor - Ernst & Young LLP.
99.1 Combined Historical Summary of Gross Income and Direct Operating
Expenses of Dreyfuss Apartment Communities for the year ended December
31, 1998 and the nine months ended September 30, 1999 (unaudited),
together with the Report of Independent Auditors.
99.2 Combined Historical Summary of Gross Income and Direct Operating
Expenses of Regency Windsor Apartment Communities for the year ended
December 31, 1998 and the nine months ended September 30, 1999
(unaudited), together with the Report of Independent Auditors.
99.23 Pro Forma Financial Information of Apartment Investment and Management
Company.
</TABLE>
Page 5 of 5
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
listed below of Apartment Investment and Management Company of (i) our report
dated October 8, 1999, with respect to the Combined Historical Summary of Gross
Income and Direct Operating Expenses of the Dreyfuss Apartment Communities; and
(ii) our report dated November 19, 1999, with respect to the Combined Historical
Summary of Gross Income and Direct Operating Expenses of the Regency Windsor
Apartment Communities; both included in the Current Report (Form 8-K) of
Apartment Investment and Management Company dated December 15, 1999.
Form S-3 (No. 333-828)
Form S-3 (No. 333-8997)
Form S-3 (No. 333-17431)
Form S-3 (No. 333-20755)
Form S-3 (No. 333-4546)
Form S-3 (No. 333-36531)
Form S-3 (No. 333-36537)
Form S-3 (No. 333-4542)
Form S-8 (No. 333-4550)
Form S-8 (No. 333-4548)
Form S-8 (No. 333-14481)
Form S-8 (No. 333-36803)
Form S-8 (No. 333-41719)
Form S-4 (No. 333-49075)
Form S-3 (No. 333-47201)
Form S-8 (No. 333-57617)
Form S-4 (No. 333-60663)
Form S-8 (No. 333-70409)
Form S-3 (No. 333-61409)
Form S-3 (No. 333-69121)
Form S-3 (No. 333-75109)
Form S-4 (No. 333-60355)
Form S-8 (No. 333-75349)
Form S-3 (No. 333-77257)
Form S-3 (No. 333-77067)
Form S-3 (No. 333-81689)
Form S-3 (No. 333-92743)
Form S-3 (No. 333-31718)
/s/ ERNST & YOUNG LLP
Denver, Colorado
March 9, 2000
<PAGE> 1
EXHIBIT 99.1
Report of Independent Auditors
Board of Directors and Stockholders
Apartment Investment and Management Company
We have audited the accompanying Combined Historical Summary of Gross Income and
Direct Operating Expenses of the Dreyfuss Apartment Communities (the
"Communities") as described in Note 1 for the year ended December 31, 1998. This
Combined Historical Summary is the responsibility of the Communities'
management. Our responsibility is to express an opinion on this Combined
Historical Summary based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the Combined Historical Summary is
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the Combined Historical
Summary. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the Combined Historical Summary. We believe that our audit
provides a reasonable basis for our opinion.
The Combined Historical Summary has been prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission for
inclusion in the Current Report on Form 8-K of Apartment Investment and
Management Company, as described in Note 1, and is not intended to be a complete
presentation of the income and expenses of the Communities.
In our opinion, the Combined Historical Summary referred to above presents
fairly, in all material respects, the gross income and direct operating expenses
of the Dreyfuss Apartment Communities, as described in Note 1, for the year
ended December 31, 1998, in conformity with accounting principles generally
accepted in the United States.
/s/ ERNST & YOUNG LLP
Denver, Colorado
October 8, 1999
1
<PAGE> 2
Dreyfuss Apartment Communities
Combined Historical Summary of
Gross Income and Direct Operating Expenses
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1998 1999
--------------- ---------------
(unaudited)
<S> <C> <C>
GROSS INCOME
Rental income $ 17,157,910 $ 13,458,968
Other income 456,564 336,807
--------------- ---------------
Total gross income 17,614,474 13,795,775
DIRECT OPERATING EXPENSES
Repairs and maintenance 1,458,278 1,055,680
Utilities and other property operating 1,583,070 1,244,916
General and administrative 2,720,227 1,989,925
Real estate taxes 1,151,069 960,736
Management fees 724,115 576,577
--------------- ---------------
Total direct operating expenses 7,636,759 5,827,834
--------------- ---------------
Excess of gross income over direct operating expenses $ 9,977,715 $ 7,967,941
=============== ===============
</TABLE>
See accompanying notes.
2
<PAGE> 3
Dreyfuss Apartment Communities
Notes to Combined Historical Summary of Gross Income
and Direct Operating Expenses
Year Ended December 31, 1998 and
Nine Months Ended September 30, 1999 (unaudited)
1. ORGANIZATION AND BASIS OF PRESENTATION
The Dreyfuss Apartment Communities (the "Communities") include nine separate
residential apartment communities located in Virginia and Maryland. The
Communities, which are under common management and control, are as follows:
<TABLE>
<CAPTION>
NUMBER OF
COMMUNITY LOCATION UNITS
--------- -------- ---------
<S> <C> <C>
Bradford Place Suitland, MD 214
Burgundy Park Forestville, MD 108
Hunters Crossing Leesburg, VA 164
Key Towers Alexandria, VA 142
Maple Bay Virginia Beach, VA 414
Merrill House Falls Church, VA 160
Parker House Hyattsville, MD 296
Rosecroft Mews Ft. Washington, MD 303
Tor Columbia, MD 324
-----
Total 2,125
=====
</TABLE>
In August 1999, Apartment Investment Management Company, a publicly traded
real estate investment trust, entered into an agreement to acquire the Dreyfuss
Apartment Communities.
The accompanying Combined Historical Summary has been prepared for the purpose
of complying with the rules and regulations of the Securities and Exchange
Commission for inclusion in the Current Report on Form 8-K of Apartment
Investment and Management Company. The Combined Historical Summary is not
intended to be a complete presentation of income and expenses of the Communities
for the year ended December 31, 1998 and the nine months ended September 30,
1999, as certain costs such as depreciation, amortization, interest, and other
debt service costs have been excluded. These costs are not considered to be
direct operating expenses.
3
<PAGE> 4
Dreyfuss Apartment Communities
Notes to Combined Historical Summary of Gross Income
and Direct Operating Expenses (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of the Combined Historical Summary in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts included in the
Combined Historical Summary and accompanying notes thereto. Actual results could
differ from those estimates.
REVENUE RECOGNITION
Rental income attributable to residential leases is recorded when due from
residents. Leases are for periods of up to one year, with rental payments due
monthly.
INTERIM UNAUDITED FINANCIAL INFORMATION
The accompanying interim unaudited Combined Historical Summary has been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission
and was prepared on the same basis as the Combined Historical Summary for the
year ended December 31, 1998. In the opinion of management of the Communities,
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of the information for this interim period have been made.
The excess of combined gross income over direct operating expenses for such
interim period is not necessarily indicative of the excess of gross income over
direct operating expenses for the full year.
3. TRANSACTIONS WITH AFFILIATES
Dreyfuss Brothers Inc. and Dreyfuss Management Services, Inc., affiliates,
receive management fees relating to the Communities. The management fee ranges
from 3.5% to 5.0% of gross annual cash receipts.
4
<PAGE> 1
EXHIBIT 99.2
1
Report of Independent Auditors
Board of Directors and Stockholders
Apartment Investment and Management Company
We have audited the accompanying Combined Historical Summary of Gross Income and
Direct Operating Expenses of the Regency Windsor Apartment Communities (the
"Communities"), as described in Note 1 for the year ended December 31, 1998.
This Combined Historical Summary is the responsibility of the Communities'
management. Our responsibility is to express an opinion on this Combined
Historical Summary based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the Combined Historical Summary is
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the Combined Historical
Summary. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the Combined Historical Summary. We believe that our audit
provides a reasonable basis for our opinion.
The Combined Historical Summary has been prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission for
inclusion in the Current Report on Form 8-K of Apartment Investment and
Management Company, as described in Note 1, and is not intended to be a complete
presentation of the income and expenses of the Communities.
In our opinion, the Combined Historical Summary referred to above presents
fairly, in all material respects, the gross income and direct operating expenses
of the Regency Windsor Apartment Communities, as described in Note 1, for the
year ended December 31, 1998, in conformity with accounting principles generally
accepted in the United States.
/s/ ERNST & YOUNG LLP
Denver, Colorado
November 19, 1999
1
<PAGE> 2
Regency Windsor Apartment Communities
Combined Historical Summary of
Gross Income and Direct Operating Expenses
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
(unaudited)
<S> <C> <C>
GROSS INCOME
Rental income $49,085,105 $37,419,229
Other income 2,931,990 2,343,803
----------- -----------
Total gross income 52,017,095 39,763,032
DIRECT OPERATING EXPENSES
Repairs and maintenance 5,862,791 5,921,816
Utilities and other property operating 3,044,678 2,457,676
General and administrative 9,736,047 6,548,021
Real estate taxes 4,895,284 3,632,386
Management fees 2,098,485 1,592,300
----------- -----------
Total direct operating expenses 25,637,285 20,152,199
----------- -----------
Excess of gross income over direct operating expenses $26,379,810 $19,610,833
=========== ===========
</TABLE>
2
See accompanying notes.
<PAGE> 3
Regency Windsor Apartment Communities
Notes to Combined Historical Summary of Gross Income
and Direct Operating Expenses
Year Ended December 31, 1998 and
Nine Months Ended September 30, 1999 (unaudited)
1. ORGANIZATION AND BASIS OF PRESENTATION
The Regency Windsor Apartment Communities (the "Communities") include fourteen
separate residential apartment communities located in Indiana, Michigan and
North Carolina. The Communities, which are under common management and control,
have been summarized as follows:
<TABLE>
<CAPTION>
NUMBER OF
COMMUNITY LOCATION UNITS
--------- -------- ---------
<S> <C> <C>
Brookwood Apts Indianapolis, IN 500
Canterbury Green Apts Fort Wayne, IN 2,009
Colonial Crest Bloomington, IN 208
Glen Hollow Charlotte, NC 336
Lafayette/Beau Jardin West Lafayette, IN 252
Mayfair Village West Lafayette, IN 72
Michgan Meadows Indianapolis, IN 253
Northview Harbor Grand Rapids, MI 360
Oakbrook Battle Creek, MI 586
Old Orchard Grand Rapids, MI 664
Ramblewood Apts Grand Rapids, MI 1,792
Stone Point Village Fort Wayne, IN 296
Williamsburg on the Wabash West Lafayette, IN 473
Woodlands Battle Creek, MI 76
--------
Total 7,877
========
</TABLE>
In September 1999, Apartment Investment Management Company, a publicly traded
real estate investment trust, entered into an agreement to acquire the
Communities.
The accompanying Combined Historical Summary has been prepared for the purpose
of complying with the rules and regulations of the Securities and Exchange
Commission for inclusion in the Current Report on Form 8-K of Apartment
Investment and Management Company. The Combined Historical Summary is not
intended to be a complete presentation of income and expenses of the Communities
for the year ended December 31, 1998, and the nine months ended September 30,
1999, as certain costs such as depreciation, amortization, interest,
professional fees, and other debt service costs have been excluded. These costs
are not considered to be direct operating expenses.
3
<PAGE> 4
Regency Windsor Apartment Communities
Notes to Combined Historical Summary of Gross Income
and Direct Operating Expenses
Year Ended December 31, 1998 and
Nine Months Ended September 30, 1999 (unaudited)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of the Combined Historical Summary in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts included in the
Combined Historical Summary and accompanying notes thereto. Actual results could
differ from those estimates.
REVENUE RECOGNITION
Rental income attributable to residential leases is recorded when due from
residents. Leases are for periods of up to one year, with rental payments due
monthly.
4
<PAGE> 5
INTERIM UNAUDITED FINANCIAL INFORMATION
The accompanying interim unaudited Combined Historical Summary has been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission
and was prepared on the same basis as the Combined Historical Summary for the
year ended December 31, 1998. In the opinion of management of the Communities,
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of the information for this interim period have been made.
The excess of combined gross income over direct operating expenses for such
interim period is not necessarily indicative of the excess of gross income over
direct operating expenses for the full year.
3. TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES
Regency Windsor Management, Inc., an affiliate, receives management fees
relating to the Communities. The management fee ranges from 1.0% to 6.0% of
gross annual cash receipts.
OTHER
The Communities reimburse Regency Windsor Management, Inc. for commercial
insurance premiums paid on their behalf. The Communities also provide certain
employee benefits through benefit plans administered by Regency Windsor
Management, Inc.
5
<PAGE> 1
EXHIBIT 99.3
PRO FORMA FINANCIAL INFORMATION OF APARTMENT INVESTMENT AND MANAGEMENT COMPANY
AS OF SEPTEMBER 30, 1999 AND FOR THE YEAR
ENDED DECEMBER 31, 1998 AND THE
NINE MONTHS ENDED SEPTEMBER 30, 1999
INTRODUCTION
In January 2000, Apartment Investment and Management Company ("AIMCO"), through
AIMCO Properties, L.P. (the "Operating Partnership"), completed its acquisition
of the Regency Windsor Apartment Communities ("Regency"), which include fourteen
separate residential apartment communities located in Indiana, Michigan and
North Carolina. Additionally, in early 2000, AIMCO is expected to complete its
acquisition of the Dreyfuss Apartment Communities ("Dreyfuss"), which include
nine separate residential apartment communities located in Virginia and
Maryland. Total consideration for the above acquisitions, which included a
combination of cash, assumption of debt, preferred operating partnership units,
and common operating partnership units, will be approximately $401.9 million. As
of December 31, 1999, eleven of the Regency properties and three of the Dreyfuss
properties had been acquired while in January 2000, closing procedures for an
additional three Regency properties and one Dreyfuss property were completed.
The remaining five Dreyfuss property closings are expected to be completed by
the second quarter of 2000.
On October 1, 1998, AIMCO completed its merger with Insignia Financial Group
("IFG") ("the IFG Merger"). In the IFG Merger, IFG's common stock was converted
into 8,423,751 shares of Class E Cumulative Convertible Preferred Stock of AIMCO
("Class E Preferred Stock") whose issue date market value approximately equaled
$292 million. In addition to receiving the same dividends as holders of AIMCO
Common Stock, holders of Class E Preferred Stock were entitled to a special
dividend of approximately $50 million in the aggregate. When that special
dividend was paid in January, 1999, the Class E Preferred Stock automatically
converted into AIMCO Common Stock on a one-for-one basis, subject to
antidilution adjustments, if any. In addition, AIMCO assumed approximately $411
million in indebtedness and other liabilities of IFG and its subsidiaries and
subsidiaries of AIMCO, assumed approximately $149.5 million of convertible
securities and purchased approximately $5 million of IFG stock prior to the
Merger. On February 26, 1999, AIMCO completed its merger with Insignia
Properties Trust ("IPT")(the "IPT Merger"). In the IPT Merger, IPT's common
stock was converted into 4,826,745 shares of AIMCO Class A Common Stock whose
market value approximately equaled $152 million. AIMCO assumed approximately $68
million in indebtedness. In connection with the IFG Merger and the IPT Merger,
AIMCO incurred approximately $55 million in transaction costs for a combined
transactional value of approximately $1,183 million. In connection with the IFG
Merger, AIMCO assumed property management of approximately 192,000 multifamily
units which consist of general and limited partnership investments in 115,000
units and third party management of 77,000 units. Insignia Properties Trust
("IPT"), which prior to the IFG Merger was a subsidiary of IFG, owns a 32%
weighted average general and limited partnership interest in approximately
51,000 units.
Immediately following the IFG Merger, in order to satisfy certain requirements
of the Internal Revenue Code of 1986 (the "Code") applicable to AIMCO's status
as a REIT, AIMCO engaged in a reorganization (the "IFG Reorganization") of the
assets and operations of IFG whereby IFG's operations are being conducted
through corporations (the "Unconsolidated Subsidiaries") in which the Operating
Partnership holds non-voting preferred stock that represents a 99% economic
interest, and certain officers and/or directors of AIMCO hold, directly or
indirectly, all of the voting common stock, representing a 1% economic interest.
As a result of the controlling ownership interest in the Unconsolidated
Subsidiaries held by others, the Operating Partnership accounts for its interest
in the Unconsolidated Subsidiaries on the equity method.
On May 8, 1998, AIMCO completed a merger with Ambassador Apartments, Inc.
("Ambassador"), pursuant to which Ambassador was merged into AIMCO (the
"Ambassador Merger"). Each outstanding share of stock ("Ambassador Common
<PAGE> 2
Stock") of Ambassador, other than those shares held by AIMCO or Ambassador, were
converted into 0.553 (the "Conversion Ratio") shares of AIMCO Common Stock. Any
outstanding options to purchase Ambassador Common Stock were converted, at the
election of the option holder, into cash or options to purchase AIMCO Common
Stock at such options' then current exercise price divided by the Conversion
Ratio. In accordance with the Agreement and Plan of Merger, dated December 23,
1997 and supplemented by letter dated as of March 11, 1998 (the "Ambassador
Merger Agreement"), the outstanding shares of Class A Senior Cumulative
Convertible Preferred Stock of Ambassador, (the "Ambassador Preferred Stock")
were redeemed and converted into Ambassador Common Stock prior to the Ambassador
Merger. Following the consummation of the Ambassador Merger, a subsidiary of the
Operating Partnership was merged with and into the Ambassador Operating
Partnership (the "Ambassador OP Merger"). Each outstanding unit of limited
partnership interest in the Ambassador Operating Partnership was converted into
the right to receive 0.553 OP Units, and as a result, the Ambassador Operating
Partnership became a 99.9% owned subsidiary partnership of the Operating
Partnership.
Also during 1998, AIMCO (i) (a) sold 4,200,000 shares of its Class D Cumulative
Preferred Stock for net proceeds of $101.5 million (the "Class D Preferred Stock
Offering"); (b) sold 4,050,000 shares of its Class G Cumulative Preferred Stock
for net proceeds of $98.0 million (the "Class G Preferred Stock Offering"); (c)
sold 2,000,000 shares of its Class H Cumulative Preferred Stock for net proceeds
of $48.1 million (the "Class H Preferred Stock Offering"); and (d) sold
1,000,000 shares of its Class J Cumulative Convertible Preferred Stock in a
private placement for $100.0 million (the "Class J Preferred Stock Offering")
(collectively, the "1998 Stock Offerings"); (ii) purchased 31 properties for
aggregate purchase consideration of $374.8 million, of which $78.6 million was
paid in the form of OP Units (the "1998 Acquisitions"); (iii) sold two real
estate properties (the "1998 Dispositions"); (iv) sold 1,400,000 Class B
Preferred Partnership Units of a subsidiary and warrants to purchase 875,000
shares of AIMCO Class A Common Stock for $35.0 million (the "Preferred
Partnership Unit Offering").
PRO FORMA FINANCIAL INFORMATION OF AIMCO
The following Pro Forma Consolidated Balance Sheet of AIMCO as of September 30,
1999 has been prepared as if each of the following transactions had occurred
as of September 30, 1999: (i) the purchase of the Regency properties; and (ii)
the purchase of the Dreyfuss properties.
The following Pro Forma Consolidated Statement of Operations of AIMCO for the
year ended December 31, 1998 has been prepared as if each of the following
transactions had occurred as of January 1, 1998: (i) the purchase of the Regency
properties (ii) the purchase of the Dreyfuss properties (iii) the 1998 Stock
Offerings; (iv) the 1998 Acquisitions; (v) the 1998 Dispositions; (vi) the
Ambassador Merger; (vii) the IFG Merger; (viii) the AMIT Merger; (ix) the IPT
Merger; (x) the IFG Reorganization; and (xi) the Preferred Partnership Unit
Offering.
The following Pro Forma Consolidated Statement of Operations of AIMCO for the
nine months ended September 30, 1999 has been prepared as if each of the
following transactions had occurred as of January 1, 1998: (i) the purchase of
the Regency properties; and (ii) the purchase of the Dreyfuss properties.
The following Pro Forma Financial Information is based, in part, on the
following historical financial statements, which have been previously filed by
AIMCO (i) the audited Consolidated Financial Statements of AIMCO for the year
ended December 31, 1998; (ii) the unaudited Consolidated Financial Statements of
AIMCO for the nine months ended September 30, 1999; (iii) the audited Combined
Historical Summaries of Gross Income and Direct Operating Expenses of the
Regency Windsor Apartment Communities for year ended December 31, 1998; (iv) the
audited Combined Historical Summaries of Gross Income and Direct Operating
Expenses of the Dreyfuss Apartment Communities for the year ended December 31,
1998; (v) the unaudited Consolidated Financial Statements of Ambassador for the
<PAGE> 3
four months ended April 30, 1998; (vi) the unaudited Consolidated Financial
Statements of IFG for the nine months ended September 30, 1998; (vii) the
unaudited Combined Historical Summaries of Gross Income and Direct Operating
Expenses of the Regency Windsor Apartment Communities for nine months ended
September 30, 1999; (viii) the unaudited Combined Historical Summaries of Gross
Income and Direct Operating Expenses of the Dreyfuss Apartment Communities for
the nine months ended September 30, 1999; (ix) the unaudited Consolidated
Financial Statements of AMIT for the eight months ended August 31, 1998; (x) the
unaudited Combined Historical Summary of Gross Income and Direct Operating
Expenses of the Realty Investment Apartment Communities I for the nine months
ended September 30, 1998; (xi) the unaudited Combined Historical Summary of
Gross Income and Direct Operating Expenses of the Cirque Apartment Communities
for the three months ended March 31, 1998; (xii) the unaudited Combined
Historical Summary of Gross Income and Direct Operating Expenses of the Realty
Investment Apartment Communities II for the nine months ended September 30,
1998; and (xiii) the unaudited Historical Summary of Gross Income and Direct
Operating Expenses of Calhoun Beach Club Apartments for the nine months ended
September 30, 1998. The following Pro Forma Financial Information should be read
in conjunction with such financial statements and the notes thereto incorporated
by reference herein.
The unaudited Pro Forma Financial Information has been prepared using the
purchase method of accounting whereby the assets and liabilities of the Regency
properties, the Dreyfuss properties, Ambassador, IFG, IPT, and the 1998
Acquisitions are adjusted to estimated fair market value, based upon preliminary
estimates, which are subject to change as 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 following unaudited 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.
<PAGE> 4
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONSOLIDATED BALANCE SHEET
As of September 30, 1999
In thousands, except share data
<TABLE>
<CAPTION>
1999 Completed & Probable
Historical (A) Transactions (B) Pro-forma
-------------- -------------------------- ------------
<S> <C> <C> <C>
Real estate $ 2,757,218 $ 393,678 $ 3,150,896
Property held for sale 4,146 -- 4,146
Investments in unconsolidated real estate partnerships 1,065,922 -- 1,065,922
Investments in unconsolidated subsidiaries 46,781 -- 46,781
Notes receivable from unconsolidated real estate partnerships 105,925 -- 105,925
Notes receivable from and advances to unconsolidated subsidiaries 140,588 -- 140,588
Cash and cash equivalents 56,203 (27,605) 28,598
Restricted cash 54,098 2,705 56,803
Accounts receivable 19,429 399 19,828
Other assets 256,858 5,079 261,937
----------- ----------- -----------
TOTAL ASSETS $ 4,507,168 $ 374,256 $ 4,881,424
=========== =========== ===========
Secured notes payable $ 1,189,187 $ 232,797 $ 1,421,984
Secured tax-exempt bond financing 392,001 -- 392,001
Unsecured short-term financing 111,700 -- 111,700
----------- ----------- -----------
Total indebtedness 1,692,888 232,797 1,925,685
Accounts payable, accrued and other liabilities 142,532 18,482 161,014
Security deposits and prepaid rents 13,461 684 14,145
----------- ----------- -----------
Total liabilities 1,848,881 251,963 2,100,844
Company-obligated mandatory redeemable
convertible preferred securities of a
subsidiary trust 149,500 -- 149,500
Minority interest in other entities 78,750 2,276 81,026
Minority interest in operating partnership 132,688 120,017 252,705
Stockholders' equity
Preferred stock 641,250 -- 641,250
Class A common stock 667 -- 667
Additional paid in capital 1,888,613 -- 1,888,613
Notes receivable on common stock purchases (50,967) -- (50,967)
Distributions in excess of earnings (182,214) -- (182,214)
----------- ----------- -----------
Total stockholders' equity 2,297,349 -- 2,297,349
----------- ----------- -----------
TOTAL LIABILITIES AND EQUITY $ 4,507,168 $ 374,256 4,881,424
=========== =========== ===========
</TABLE>
<PAGE> 5
(A) Represents the unaudited historical consolidated financial position of
AIMCO as of September 30, 1999, as reported in AIMCO's Quarterly Report on
Form 10-Q.
(B) Represent adjustments to reflect the Dreyfuss and Regency acquisitions as
if they had occurred on September 30, 1999.
<PAGE> 6
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1998
(In thousands, except per share data)
<TABLE>
<CAPTION>
1998 Completed
Historical(A) Transactions(B) Ambassador (C)
---------- --------------- --------------
<S> <C> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property revenues $ 377,139 $ 28,001 (F) $ 35,480
Property operating expenses (147,541) (12,754)(F) (14,912)
Owned property management expense (11,013) (1,187)(F) --
Depreciation (84,635) (6,511)(F) (8,690)
--------- --------- ---------
Income from property operations 133,950 7,549 11,878
--------- --------- ---------
SERVICE COMPANY BUSINESS
Management fees and other income 24,103 -- --
Management and other expenses (16,764) -- --
Corporate overhead allocation (196) -- --
--------- --------- ---------
Income from service company business 7,143 -- --
General and administrative expenses (14,650) -- --
Interest expense (89,424) (494)(G) (9,934)
Interest income 30,450 (1)
Equity in losses of unconsolidated real estate partnerships (4,854) -- (71)
Equity in earnings of unconsolidated subsidiaries 11,570 -- --
Minority interest in other entities (468) 160 (H) --
Amortization (8,735) -- --
--------- --------- ---------
Income from operations 64,982 7,214 1,873
Gain on disposition of properties 4,674 (4,674) --
--------- --------- ---------
Income before minority interest in operating partnership 69,656 2,540 1,873
Minority interest in operating partnership (5,182) 569 (I) 211 (I)
--------- --------- ---------
Net Income 64,474 3,109 2,084
Income attributable to preferred stockholders 26,533 16,094 --
--------- --------- ---------
Income attributable to common stockholders $ 37,941 $ (12,985) $ 2,084
========= ========= =========
Basic earnings per common share $ 0.84
=========
Diluted earnings per common share $ 0.80
=========
Weighted average common shares outstanding 45,187
=========
Weighted average common shares and common share equivalents outstanding 47,624
=========
<CAPTION>
1999 Completed & Probable
IFG (D) Transactions (E)
--------- -------------------------
<S> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property revenues $ 8,126 $ 69,631 (J)
Property operating expenses (2,585) (30,452)(J)
Owned property management expense -- (2,822)(J)
Depreciation (2,487) (11,165)(J)
--------- ---------
Income from property operations 3,054 25,192
--------- ---------
SERVICE COMPANY BUSINESS
Management fees and other income 14,944 --
Management and other expenses (16,630) --
Corporate overhead allocation -- --
--------- ---------
Income from service company business (1,686) --
General and administrative expenses (1,188) --
Interest expense (17,826) (18,477)(K)
Interest income 22,644 (1,518)(L)
Equity in losses of unconsolidated real estate partnerships (9,980) --
Equity in earnings of unconsolidated subsidiaries (7,562) --
Minority interest in other entities (7,537) --
Amortization -- --
--------- ---------
Income from operations (20,081) 5,197
Gain on disposition of properties -- --
--------- ---------
Income before minority interest in operating partnership (20,081) 5,197
Minority interest in operating partnership 2,914 (9,004)(I)
--------- ---------
Net Income (17,167) (3,807)
Income attributable to preferred stockholders -- --
--------- ---------
Income attributable to common stockholders $ (17,167) $ (3,807)
========= =========
Basic earnings per common share
Diluted earnings per common share
Weighted average common shares outstanding
Weighted average common shares and common share equivalents outstanding
<CAPTION>
Pro
Forma
---------
<S> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property revenues $ 518,377
Property operating expenses (208,244)
Owned property management expense (15,022)
Depreciation (113,488)
---------
Income from property operations 181,623
---------
SERVICE COMPANY BUSINESS
Management fees and other income 39,047
Management and other expenses (33,394)
Corporate overhead allocation (196)
---------
Income from service company business 5,457
General and administrative expenses (15,838)
Interest expense (136,155)
Interest income 51,575
Equity in losses of unconsolidated real estate partnerships (14,905)
Equity in earnings of unconsolidated subsidiaries 4,008
Minority interest in other entities (7,845)
Amortization (8,735)
---------
Income from operations 59,185
Gain on disposition of properties --
---------
Income before minority interest in operating partnership 59,185
Minority interest in operating partnership (10,492)
---------
Net Income 48,693
Income attributable to preferred stockholders 42,627
---------
Income attributable to common stockholders $ 6,066
=========
Basic earnings per common share $ 0.13
=========
Diluted earnings per common share $ 0.13
=========
Weighted average common shares outstanding 45,187
=========
Weighted average common shares and common share equivalents outstanding 47,624
=========
</TABLE>
<PAGE> 7
(A) Represents AIMCO's audited historical consolidated results of operations
for the year ended December 31, 1998, as reported in AIMCO's Annual
Report on Form 10-K.
(B) Represents adjustments to reflect the following as if they had occurred
on January 1, 1998: (i) the 1998 Stock Offerings; (ii) The 1998
Acquisitions; (iii) the 1998 Dispositions; and (iv) the Preferred
Partnership Unit Offering.
(C) Represents adjustments to reflect the Ambassador Merger as if the
transaction had taken place on January 1, 1998. These adjustments are
detailed, as follows:
<PAGE> 8
<TABLE>
<CAPTION>
Ambassador
Ambassador Purchase Price
Historical(i) Adjustments(ii) Total
---------- --------------- ----------
<S> <C> <C> <C>
Rental and other property revenues $ 35,480 $ -- $ 35,480
Property operating expenses (14,912) -- (14,912)
Owned property management expense -- -- --
Depreciation (7,270) (1,420) (iii) (8,690)
-------- -------- --------
Income from property operations 13,298 (1,420) 11,878
-------- -------- --------
Management fees and other income -- -- --
Management and other expenses -- -- --
Corporate overhead allocation -- -- --
-------- -------- --------
Income from service company business -- -- --
General and administrative expenses (5,278) 5,278 (iv) --
Interest expense (10,079) 145 (v) (9,934)
Interest income -- -- --
Equity in losses of unconsolidated real estate partnerships (71) -- (71)
Equity in earnings of unconsolidated subsidiaries -- -- --
Minority interest in other partnerships (252) 252 (vi) --
Amortization -- -- --
-------- -------- --------
Income before minority interest in AIMCO OP (2,382) 4,255 1,873
Minority interest in AIMCO Operating Partnership -- 243 (I) 243
-------- -------- --------
Net Income $ (2,382) $ 4,498 $ 2,116
======== ======== ========
</TABLE>
<PAGE> 9
(i) Represents the unaudited historical statement of operations of
Ambassador for the four months ended April 30, 1998. Certain
reclassifications have been made to Ambassador's historical Statement of
Operations to conform to AIMCO's Statement of Operations presentation.
(ii) Represents the following adjustments occurring as a result of the
Ambassador Merger: (i) the incremental depreciation of the purchase price
adjustment related to real estate; (ii) the reduction in personnel costs,
primarily severance costs, pursuant to a restructuring plan; (iii) the
reduction of interest expense resulting from the net reduction of debt;
and (iv) the elimination of the minority interest associated with
Jupiter-I, L.P.
(iii) Represents incremental depreciation related to the real estate assets
purchased in connection with the Ambassador Merger. Buildings and
improvements are depreciated on the straight-line method over a period of
30 years, and furniture and fixtures are depreciated on the straight-line
method over a period of 5 years.
(iv) Decrease results from identified historical costs of certain items which
will be eliminated or reduced as a result of the Ambassador Merger, as
follows:
<TABLE>
<S> <C>
Duplication of public company expenses...................... $ 355
Reduction in salaries and benefits.......................... 2,482
Merger related costs........................................ 1,212
Other....................................................... 1,229
------
$5,278
======
</TABLE>
The reduction in salaries and benefits is pursuant to a restructuring
plan, approved by AIMCO senior management, assuming that the Ambassador
Merger had occurred on January 1, 1998 and that the restructuring plan
was completed on January 1, 1998. The restructuring plan specifically
identifies all significant actions to be taken to complete the
restructuring plan, including the reduction of personnel, job functions,
location and date of completion.
(v) Represents the decrease in interest expense of $1,480 related to the
repayment of the Ambassador revolving lines of credit upon consummation
of the Ambassador Merger, offset by an increase in interest expense of
$1,335 related to borrowings under the AIMCO line of credit.
(vi) Represents elimination of minority interest in Jupiter-I, L.P. resulting
from the redemption of limited partnership interests not owned by
Ambassador in connection with the Ambassador Merger.
<PAGE> 10
(D) Represents adjustments to reflect the IFG Merger as if the
transaction had taken place on January 1, 1998. These adjustments are
detailed, as follows:
<PAGE> 11
<TABLE>
<CAPTION>
IFG IFG
IFG As Merger Reorganization
Adjusted (i) Adjustments (ii) Adjustments (iii) Total
------------ ---------------- ------------------ ----------
<S> <C> <C> <C> <C>
Rental and other property revenues $ 8,126 $ -- $ -- $ 8,126
Property operating expenses (2,585) -- -- (2,585)
Depreciation (904) (1,583) (iv) -- (2,487)
---------- ---------- ---------- ----------
Income from property operations 4,637 (1,583) -- 3,054
Management fees and other income 71,155 -- (56,211)(x) 14,944
Management and other expenses (55,463) (19,000) (v) 57,833 (xi) (16,630)
Corporate overhead allocation -- -- -- --
---------- ---------- ---------- ----------
Income from service company business 15,692 (19,000) 1,622 (1,686)
General and administrative expenses (61,386) 45,823 (vi) 14,375 (x) (1,188)
Interest expense (24,871) 7,045 -- (17,826)
Interest income 22,501 -- 143 (xii) 22,644
Equity in losses of unconsolidated subsidiaries -- -- (7,562)(xiii) (7,562)
Equity in earnings of unconsolidated real estate partnerships 13,492 (23,472)(viii) -- (9,980)
Minority interest (14,159) 6,622 (vii) -- (7,537)
---------- ---------- ---------- ----------
Income from operations (44,094) 15,435 8,578 (20,081)
Income tax provision 1,180 (1,180)(ix) -- --
Gain on disposition of property 6,576 (6,576) -- --
---------- ---------- ---------- ----------
Net Income $ (36,338) $ 7,679 $ 8,578 $ (20,081)
========== ========== ========== ==========
</TABLE>
<PAGE> 12
(i) Represents adjustments to reflect the IFG Merger, the AMIT Merger, the
IPT Merger and the spin-off of the common stock of Holdings as if these
transactions had occurred on January 1, 1998. These adjustments are
detailed, as follows:
<TABLE>
<CAPTION>
IFG AMIT HOLDINGS IFG
HISTORICAL(a) MERGER(b) SPIN-OFF(c) AS ADJUSTED
------------- ---------- ------------- -----------
<S> <C> <C> <C> <C>
Rental and other property
revenues....................... $ 7,566 $ 560 $ -- $ 8,126
Property operating expenses...... (2,585) -- -- (2,585)
Depreciation..................... (904) -- -- (904)
--------- ------ --------- --------
Income from property
operations..................... 4,077 560 -- 4,637
--------- ------ --------- --------
Management fees and other
income......................... 311,475 -- (240,320) 71,155
Management and other expenses.... (279,076) (48) 223,661 (55,463)
--------- ------ --------- --------
Income from service company
business....................... 32,399 (48) (16,659) 15,692
--------- ------ --------- --------
General and administrative
expenses....................... (66,272) (675) 5,561 (61,386)
Interest expense................. (24,164) -- (707) (24,871)
Interest income.................. 18,817 4,193 (509) 22,501
Equity in losses of
unconsolidated partnerships.... 12,169 -- 1,323 13,492
Minority interest in other
partnerships................... (14,159) -- -- (14,159)
--------- ------ --------- --------
Income (loss) from operations.... (37,133) 4,030 (10,991) (44,094)
Income tax provision............. (4,772) -- 5,952 1,180
Gain on disposition of property.. 5,888 688 -- 6,576
--------- ------ --------- --------
Item income (loss)............... $ (36,017) $4,718 $ (5,039) $(36,338)
========= ====== ========= ========
</TABLE>
- ---------------
(a) Represents the unaudited consolidated results of operations of IFG
for the nine months ended September 30, 1998. Certain
reclassifications have been made to IFG's historical statement of
operations to conform to AIMCO's statement of operations
presentation.
(b) Represents the historical statement of operations of AMIT, as well
as pro forma adjustments related to the AMIT Merger. The AMIT Merger
closed prior to the IFG Merger.
(c) Represents the distribution of two shares of Holdings common stock
for each three shares of IFG common stock to holders of IFG common
stock.
(ii) Represents the following adjustments occurring as a result of the IFG
Merger: (a) the incremental depreciation of the purchase price adjustment
<PAGE> 13
related to consolidated real estate and investments in real estate
partnerships; (b) the amortization of property management contracts
resulting from the IFG Merger; (c) the increase in interest expense
resulting from the net increase in debt; and (d) the elimination of the
income tax provision.
(iii) Represents adjustments related to the IFG Reorganization, whereby,
following the IFG Merger, AIMCO contributed or sold to the combined
Unconsolidated Subsidiaries certain assets and liabilities of IFG,
primarily management contracts and related working capital assets and
liabilities related to IFG's third party management operations. The
adjustments reflect the related revenues and expenses primarily related
to the management operations owned by IFG, with additional amortization
recorded related to AIMCO's new basis resulting from the allocation of
the purchase price of IFG.
(iv) Represents incremental depreciation related to the consolidated real
estate assets purchased in connection with the IFG Merger and IPT Merger,
based on AIMCO's new basis resulting from the allocation of the purchase
price of IFG and IPT. Buildings and improvements are depreciated on the
straight-line method over a period of 20 years, and furniture and
fixtures are depreciated on the straight-line method over a period of 5
years.
(v) Represents incremental depreciation and amortization of the tangible and
intangible assets related to the property management business of IFG,
based on AIMCO's new basis resulting from the allocation of the purchase
price of IFG, including amortization of property management contracts of
$30,096, and depreciation of furniture, fixtures, and equipment of
$2,842, less IFG's historical depreciation and amortization of $13,938.
Property management contracts are amortized using the straight-line
method over a period of three years. Furniture, fixtures, and equipment
are depreciated using the straight-line method over a period of three
years.
(vi) Represents the elimination of merger related expenses recorded by IFG
during the nine months ended September 30, 1998. In connection with the
IFG Merger, certain IFG executives will receive one-time lump-sum
payments in connection with the termination of their employment and
option agreements. The total of these lump sum payments is estimated to
be approximately $50,000.
(vii) Represents elimination of minority interest in IPT resulting from the IPT
merger.
(viii) Represents amortization related to the increased basis in investment in
real estate partnerships, as a result of the allocation of the purchase
price of IFG and IPT, based on an estimated average life of 20 years, and
based on AIMCO's new basis resulting from the allocation of the purchase
price of IFG and IPT.
(ix) Represents the reversal of IFG's income tax provision.
(x) Represents the historical income and expenses associated with certain
assets and liabilities of IFG that were contributed or sold to the
Unconsolidated Subsidiaries, primarily related to the management
operations of IFG.
(xi) Represents (a) the historical expenses of $35,192 associated with certain
assets and liabilities of IFG that were contributed or sold to the
Unconsolidated Subsidiaries, primarily related to the management
operations of IFG; and (b) the depreciation and amortization of $22,641
of certain management contracts and furniture, fixtures, and equipment
that were contributed or sold to the Unconsolidated Subsidiaries,
primarily related to the
<PAGE> 14
management operations of IFG, based on AIMCO's new basis resulting from
the allocation of the purchase price of IFG.
(xii) Represents interest income of $2,861 earned on notes payable of $45,000
to AIMCO issued as consideration for certain assets and liabilities sold
to the Unconsolidated Subsidiaries of AIMCO, net of the elimination of
AIMCO's share of the related interest expense of $2,718 reflected in the
equity in earnings of the Unconsolidated Subsidiaries.
(xiii) Represents AIMCO's equity in earnings of the Unconsolidated Subsidiaries.
<PAGE> 15
(E) Represent adjustments to reflect the Dreyfuss and Regency acquisitions as
if they had occurred on January 1, 1998.
(F) Represents adjustments to reflect the 1998 acquisitions, less the 1998
dispositions as if they had occurred on January 1, 1998. 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.
These adjustments are as follows:
<TABLE>
<CAPTION>
1998 1998
ACQUISITIONS DISPOSITIONS TOTAL
------------ ------------ -----------
<S> <C> <C> <C>
Rental and other property revenues $ 28,952 $ (951) $ 28,001
Property operating expense (13,130) 376 (12,754)
Owned property management expense (1,224) 37 (1,187)
Depreciation (6,604) 93 (6,511)
</TABLE>
(G) Represents adjustments to interest expense for the following:
<TABLE>
<CAPTION>
<S> <C>
Borrowings on AIMCO's credit facilities and other loans and
mortgages assumed in connection with the 1998
acquisitions .................................................. $ (11,167)
Repayments on AIMCO's credit facilities and other
indebtedness with proceeds from the 1998 dispositions and
the 1998 stock offerings ...................................... 10,326
Repayments on AIMCO's credit facilities and other
indebtedness with proceeds from the preferred
partnership unit offering ..................................... 347
----------
$ (494)
==========
</TABLE>
(H) Represents (i) loss of $537 related to limited partners in consolidated
partnerships acquired in connection with the 1998 Acquisitions and (ii)
income of $377 allocable to the Partnership Preferred Units.
(I) Represents adjustments to Minority Interest in the AIMCO Operating
Partnership assuming the Completed Transactions, the Ambassador Merger,
the IFG Merger, the IPT Merger and the 1999 Completed and Probable
Transactions had occurred as of January 1, 1998. On a pro forma basis,
without giving effect to the Ambassador Merger, the IFG Merger, the IPT
Merger, and the 1999 Completed and Probable Transactions, as of December
31, 1998, the minority interest percentage is approximately 15.6%. On a
pro forma basis, without giving effect to the IFG Merger, the IPT Merger,
and the 1999 Completed and Probable Transactions, as of December 31, 1998,
the minority interest percentage is approximately 14.0%. On a pro forma
basis, without giving effect to 1999 Completed and Probable Transactions,
as of December 31, 1998, the minority interest percentage is approximately
13.1%. On a pro forma basis, giving effect to the Completed Transactions,
the Ambassador Merger, the IFG Merger, the IPT Merger and the 1999
Completed and Probable Transactions, as of December 31, 1998, the minority
interest percentage is approximately 14.0%.
<PAGE> 16
(J) Represents adjustments to reflect the Regency acquisitions and the
Dreyfuss acquisitions as if they had occurred on January 1, 1998. 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.
(K) Represents adjustments to interest expense related to the assumption of
mortgage debt in connection with the Regency acquisitions and Dreyfuss
acquisitions.
(L) Represents adjustments to interest income related to the forfeiture of
cash in connection with the Regency acquisitions and Dreyfuss
acquisitions.
<PAGE> 17
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1999
(In thousands, except per share data)
<TABLE>
<CAPTION>
1999 Completed & Probable Pro
Historical (A) Transactions Forma
-------------- ------------------------- ----------
<S> <C> <C> <C>
RENTAL PROPERTY OPERATIONS:
Rental and other property revenues $ 349,221 $ 53,559 (B) 402,780
Property operating expenses (136,631) (23,811)(B) (160,442)
Owned property management expense (10,439) (2,169)(B) (12,608)
Depreciation (83,078) (8,374)(B) (91,452)
---------- --------------- ----------
Income from property operations 119,073 19,205 138,278
---------- --------------- ----------
SERVICE COMPANY BUSINESS:
Management fees and other income 26,372 -- 26,372
Management and other expenses (25,883) -- (25,883)
---------- --------------- ----------
Income (loss) from service company business 489 -- 489
General and administrative expenses (10,322) -- (10,322)
Interest expense (92,386) (13,858)(C) (106,244)
Interest income 40,387 (1,139)(D) 39,248
Equity in earnings (losses) of unconsolidated real estate partnerships 5,385 -- 5,385
Equity in earnings of unconsolidated subsidiaries 1,829 -- 1,829
Minority interest in other entities 98 -- 98
Amortization (5,826) -- (5,826)
---------- --------------- ----------
Income from operations 58,727 4,208 62,935
Gain on disposition of properties 330 -- 330
---------- --------------- ----------
Income before minority interest in operating partnership 59,057 4,208 63,265
Minority interest in operating partnership (2,497) (4,314)(E) (6,811)
---------- --------------- ----------
Net Income 56,560 (106) 56,454
Income attributable to preferred stockholders 42,249 -- 42,249
---------- --------------- ----------
Income attributable to common stockholders $ 14,311 $ (106) $ 14,205
========== =============== ==========
Basic earnings per common share $ 0.23 $ 0.23
========== ==========
Diluted earnings per common share $ 0.23 $ 0.23
========== ==========
Weighted average common shares outstanding 61,054 61,054
========== ==========
Weighted average common shares and common share equivalents outstanding 62,472 62,472
========== ==========
</TABLE>
<PAGE> 18
(A) Represents AIMCO's unaudited consolidated results of operations for the
nine months ended September 30, 1999, as reported in AIMCO's quarterly
report on form 10-Q.
(B) Represent adjustments to reflect the Dreyfuss and Regency acquisitions as
if they had occurred on January 1, 1998. 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.
(C) Represents interest expense adjustment related to the assumption of
mortgage debt in connection with the Regency acquisitions and Dreyfuss
acquisitions.
(D) Represents interest income adjustment related to the forfeiture of cash in
connection with the Regency acquisitions and Dreyfuss acquisitions.
(E) Represents minority interest adjustment based on the preferred and common
operating partnership units that were issued in connection with the
Dreyfuss and Regency acquisitions being outstanding for the entire period
presented. On a pro forma basis, the minority interest percentage is
approximately 10.8% for the nine months ended September 30, 1999.
