<PAGE> 1
Exhibit 99.7
INDEX TO PRO FORMA FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Pro Forma Financial Information of AIMCO (Pre-Merger)....... 99.7-2
AIMCO Pro Forma Condensed Consolidated Statement of
Operations (Pre-Merger) for the Year Ended
December 31, 1999..................................... 99.7-3
AIMCO Pro Forma Condensed Consolidated Statement of
Operations (Pre-Merger) for the Nine Months Ended
September 30, 2000.................................... 99.7-8
Pro Forma Financial Information of AIMCO (Merger)........... 99.7-13
AIMCO Pro Forma Condensed Consolidated Balance Sheet
(Merger) as of September 30, 2000..................... 99.7-14
AIMCO Pro Forma Condensed Consolidated Statement of
Operations (Merger) for the Year Ended December 31,
1999.................................................. 99.7-17
AIMCO Pro Forma Condensed Consolidated Statement of
Operations (Merger) for the Nine Months Ended
September 30, 2000.................................... 99.7-19
</TABLE>
99.7-1
<PAGE> 2
PRO FORMA FINANCIAL INFORMATION OF AIMCO (PRE-MERGER)
The following Pro Forma Consolidated Statement of Operations (Pre-Merger)
of AIMCO for the year ended December 31, 1999 has been prepared as if each of
the following transactions had occurred as of January 1, 1999: (i) the Oxford
Acquisition; (ii) the acquisition of the Regency Windsor Apartment Communities
(the "Regency Acquisition"), which includes fourteen separate residential
apartment communities located in Indiana, Michigan and North Carolina; (iii) the
acquisition of four Dreyfuss Apartment Communities located in Virginia and
Maryland ( the "1999 Dreyfuss Acquisition"); and (iv) the acquisition in 2000 of
five Dreyfuss Apartment Communities located in Virginia and Maryland (the "2000
Dreyfuss Acquisition," and combined with the 1999 Dreyfuss Acquisition, the
"Dreyfuss Acquisitions").
The following Pro Forma Consolidated Statement of Operations (Pre-Merger)
of AIMCO for the nine months ended September 30, 2000 has been prepared as if
each of the following transactions had occurred as of January 1, 1999: (i) the
Oxford Acquisition; and (ii) the 2000 Dreyfuss Acquisition.
No Pro Forma Consolidated Balance Sheet (Pre-Merger) of AIMCO as of
September 30, 2000 has been presented as the Oxford Acquisition, which occurred
on September 20, 2000, and the 2000 Dreyfuss Acquisition, which occurred on
September 22, 2000, are already reflected in the historical balance sheet of
AIMCO at September 30, 2000.
The total purchase price for the Oxford acquisition was $1,183,137, as
follows (in thousands):
<TABLE>
<S> <C>
Cash paid to sellers $ 279,000
OP Units issued to sellers 62,177
Transaction costs 18,441
Accrued liabilities resulting from acquisition, including pre- 33,650
acquisition contingencies
Accrued liability for restructuring plan related to restructuring 2,133
of Oxford
Assumed liabilities of the Oxford entities 720,929
Deferred tax liability resulting from the acquisition 30,000
Minority interest assumed of consolidated real estate partnerships 36,807
----------
Total $1,183,137
==========
</TABLE>
The purchase price was allocated to the various assets acquired in the
Oxford acquisition, as follows (in thousands):
<TABLE>
<S> <C>
Real estate $ 702,107
Investments in unconsolidated real estate partnerships 172,617
Notes receivable from unconsolidated real estate partnerships 91,094
Notes receivable from and advances to unconsolidated subsidiaries 92,248
Cash and cash equivalents 32,512
Investment in asset management contracts 7,487
Investment in participation management contracts 52,026
Other assets 33,046
----------
$1,183,137
==========
</TABLE>
The following Pro Forma Financial Information (Pre-Merger) is based, in
part, on the following historical financial statements, which have been
previously filed by AIMCO with the Securities and Exchange Commission: (i) the
Consolidated Financial Statements of AIMCO for the year ended December 31, 1999
and the nine months ended September 30, 2000; (ii) the combined historical
summary of gross income and direct operating expenses of Regency Windsor
Apartment Communities for the year ended December 31, 1998; (iii) the combined
historical summary of gross income and direct operating expenses of Dreyfuss
Apartment Communities for the year ended December 31, 1998; (iv) the combined
financial statements of Oxford Realty Financial Group, Inc. and Subsidiaries,
Zimco and Oxford Equities Corporation III (the "Oxford Entities"); (v) the
consolidated financial statements of ORFG Operations L.L.C. and Subsidiary
("ORFG Operations"); and (vi) the combined financial statements of Oxparc
L.L.C.s (the "Oxparc Entities"). The Pro Forma Financial Information
(Pre-Merger) should be read in conjunction with such financial statements and
the notes thereto. In the opinion of AIMCO's management, all material
adjustments necessary to reflect the effects of these transactions have been
made.
The unaudited Pro Forma Financial Information (Pre-Merger) has been
prepared using the purchase method of accounting whereby the assets and
liabilities of the entities acquired in the Oxford Acquisition 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 value. Therefore, the allocations reflected in the following
unaudited Pro Forma Financial Information (Pre-Merger) may differ from the
amounts ultimately determined.
The unaudited Pro Forma Financial Information (Pre-Merger) 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 unaudited Pro Forma
Consolidated Statement of Operations (Pre-Merger) for the nine months ended
September 30, 2000 is not necessarily indicative of the results of operations to
be expected for the year ending December 31, 2000.
99.7-2
<PAGE> 3
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS (PRE-MERGER)
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
-----------------------------------------------------------------------
AIMCO BEFORE
AIMCO OXFORD OXFORD OXFORD PRO FORMA
HISTORICAL(A) ADJUSTMENTS(B) ACQUISITION(C) REORGANIZATION(D) REORGANIZATION(E) TOTAL
------------- -------------- -------------- ----------------- ----------------- ---------
<S> <C> <C> <C> <C> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property
revenues.................. $ 533,917 $ 71,412(F) $119,272 $ 724,601 $(80,823)(J) $ 643,778
Property operating
expenses.................. (214,693) (31,748)(F) (67,290) (313,731) 50,342(J) (263,389)
Owned property management
expense................... (15,429) (2,892)(F) (4,569) (22,890) 3,191(J) (19,699)
Depreciation................ (131,753) (11,165)(F) (30,213) (173,131) 15,435(J) (157,696)
--------- -------- -------- --------- -------- ---------
Income from property
operations................ 172,042 25,607 17,200 214,849 (11,855) 202,994
--------- -------- -------- --------- -------- ---------
SERVICE COMPANY BUSINESS
Management fees and other
income.................... 43,455 -- 15,541 58,996 (14,206)(K) 44,790
Management and other
expenses.................. (25,470) -- (3,735) (29,205) 2,086(K) (27,119)
--------- -------- -------- --------- -------- ---------
Income from service company
business.................. 17,985 -- 11,806 29,791 (12,120) 17,671
--------- -------- -------- --------- -------- ---------
General and administrative
expense................... (13,112) -- (1,152) (14,264) 1,152(K) (13,112)
Interest expense............ (140,094) (18,477)(G) (84,695) (243,266) 43,267(L) (199,999)
Interest income............. 62,721 (1,519)(H) 12,595 73,797 (997)(K)
2,465(M) 75,265
Equity in earnings (losses)
of unconsolidated real
estate partnerships....... (4,467) -- (8,827) (13,294) 1,299(K) (11,995)
Equity in earnings (losses)
of unconsolidated
subsidiaries.............. (2,818) -- -- (2,818) (24,456)(N) (27,274)(P)
Minority interest in other
entities.................. (900) -- 4,782 3,882 (3,278)(J) 604
Amortization of
intangibles............... (5,860) -- (14,134) (19,994) 14,134(K) (5,860)
--------- -------- -------- --------- -------- ---------
Income from operations...... 85,497 5,611 (62,425) 28,683 9,611 38,294
Gain (loss) on disposition
of properties............. (1,785) -- (600) (2,385) 600 (1,785)
Gain (loss) on
extinguishment of Debt.... -- -- 1,378 1,378 (1,378) --
--------- -------- -------- --------- -------- ---------
Income (loss) before
extraordinary item and
minority interest in
operating partnership..... 83,712 5,611 (61,647) 27,676 8,833 36,509
Extraordinary item.......... -- -- (7,883) (7,883) 7,883 --
--------- -------- -------- --------- -------- ---------
Income (loss) before
minority interest in
operating partnership..... 83,712 5,611 (69,530) 19,793 16,716 36,509
Minority interest in
operating partnership..... (2,753) (8,812)(I) 8,001 (3,564) (2,054)(I) (5,618)
--------- -------- -------- --------- -------- ---------
Net income (loss)........... $ 80,959 $ (3,201) $(61,529) $ 16,229 $ 14,662 $ 30,891
========= ======== ======== ========= ======== =========
Net income allocable to
preferred stockholders.... $ 56,885 $ 56,885
========= =========
Net income (loss) allocable
to common stockholders.... $ 24,074 $ (25,994)
========= =========
Basis earnings (loss) per
common share.............. $ 0.39 $ (0.42)
========= =========
Diluted earnings (loss) per
common share.............. $ 0.38 $ (0.42)
========= =========
Weighted average common
shares outstanding........ 62,242 62,242
========= =========
Weighted average common
shares and common share
equivalents outstanding... 63,446 62,242(O)
========= =========
</TABLE>
99.7-3
<PAGE> 4
---------------
(A) Represents AIMCO's audited historical consolidated results of operations
for the year ended December 31, 1999.
(B) Represents adjustments to reflect (i) the Regency Acquisition; and (ii) the
Dreyfuss Acquisitions as if they had occurred on January 1, 1999. 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 the adjustment to reflect the Oxford Acquisition as if it had
occurred on January 1, 1999. These adjustments are detailed, as follows:
<TABLE>
<CAPTION>
COMBINED COMBINED
OXFORD ORFG OXPARC OXFORD PRO FORMA OXFORD
ENTITIES(i) OPERATIONS(ii) ENTITIES(iii) OTHER(iv) HISTORICAL ADJUSTMENTS(v) ACQUISITION
----------- -------------- ------------- --------- ---------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property
revenues................... $ 76,087 $ -- $ -- $ -- $ 76,087 $ 43,185(vi) $119,272
Property operating expenses.. (39,932) -- -- -- (39,932) (27,358)(vi) (67,290)
Owned property management
expense.................... (3,537) -- -- -- (3,537) (1,032)(vi) (4,569)
Depreciation................. (7,223) -- -- -- (7,223) (22,990)(vi) (30,213)
-------- -------- ------- ------- -------- --------- --------
Income from property
operations................. 25,395 -- -- -- 25,395 (8,195) 17,200
-------- -------- ------- ------- -------- --------- --------
SERVICE COMPANY BUSINESS
Management fees and other
income..................... 9,500 12,109 4,707 -- 26,316 (10,775)(vii) 15,541
Management and other
expenses................... (13,107) (11,533) (1,236) -- (25,876) 10,775(vii)
11,366(viii) (3,735)
-------- -------- ------- ------- -------- --------- --------
Income from service company
business................... (3,607) 576 3,471 -- 440 11,366 11,806
-------- -------- ------- ------- -------- --------- --------
General and administrative
expense.................... (1,415) -- -- -- (1,415) 263(ix) (1,152)
Interest expense............. (40,501) (124) -- -- (40,625) (11,501)(vi) (84,695)
(30,380)(x)
(2,189)(xi)
Interest income.............. 913 12 -- 2,824 3,749 8,846(xii) 12,595
Equity in losses of
unconsolidated real
estate partnerships........ (295) 768 -- (2,160) (1,687) (7,140)(xiii) (8,827)
Equity in earnings (losses)
of unconsolidated
subsidiaries............... -- -- --
Minority interest............ -- (6) -- -- (6) 4,788(vi)
4,782
Amortization................. -- -- -- -- -- (14,134)(xiv) (14,134)
-------- -------- ------- ------- -------- --------- --------
Income from operations....... (19,510) 1,226 3,471 664 (14,149) (48,276) (62,425)
Gain (loss) on disposition
of properties.............. (600) -- -- -- (600) -- (600)
Gain (loss) on
extinguishment of debt..... 1,378 -- -- -- 1,378 -- 1,378
-------- -------- ------- ------- -------- --------- --------
Income (loss) before
extraordinary item and
tax provision.............. (18,732) 1,226 3,471 664 (13,371) (48,276) (61,647)
Extraordinary item........... (7,883) -- -- -- (7,883) -- (7,883)
-------- -------- ------- ------- -------- --------- --------
Income (loss) before tax
provision.................. (26,615) 1,226 3,471 664 (21,254) (48,276) (69,530)
Income tax provision......... 120 -- -- -- 120 (120)(xv) --
-------- -------- ------- ------- -------- --------- --------
Net income (loss)............ $(26,495) $ 1,226 $ 3,471 $ 664 $(21,134) $ (48,396) $(69,530)
======== ======== ======= ======= ======== ========= ========
</TABLE>
--------------------
(i) Represents the combined historical operating results of the Oxford
Entities for the year ended December 31, 1999.
(ii) Represents the historical operating results of ORFG Operations for
the year ended December 31, 1999.
(iii) Represents the historical operating results of the Oxparc Entities for
the year ended December 31, 1999.
(iv) Represents the historical operating results of other assets acquired in
the Oxford Acquisition, primarily related to partnership interests in
the real estate partnerships and notes receivable.
99.7-4
<PAGE> 5
(v) Represents adjustments related to the Oxford Acquisition as follows:
(a) reversal of results of operations for Oxford entities consolidated
in the Combined Oxford financial statements; (b) results of operations
for Oxford entities consolidated in the financial statements of AIMCO;
(c) interest income on additional borrowings for the Oxford
Acquisition; (d) elimination of intercompany costs recorded in the
Combined Oxford financial statements; (e) interest income and expense
on notes receivable and payable adjusted to AIMCO's basis; (f) equity
in earnings of unconsolidated real estate partnerships adjusted to
AIMCO's basis; and (g) amortization of intangible assets acquired by
AIMCO in the Oxford Acquisition.
(vi) Represents adjustments to consolidate additional partnerships in
AIMCO's consolidated financial statements. Certain of the former Oxford
entities' financial statements may not be combined or consolidated on a
historical basis under generally accepted accounting principles. As a
result of AIMCO's acquisition of ownership interests in real estate
partnerships from several different Oxford entities, AIMCO owns a
controlling interest in partnerships that were previously accounted for
on the equity method by the Oxford entities. Therefore, additional
partnerships are consolidated by AIMCO.
(vii) Represents adjustment to eliminate the intercompany servicing fee in
the Combined Oxford financial statements.
(viii) Represents adjustment for a reduction in personnel costs of Oxford
pursuant to a restructuring plan, approved by AIMCO senior management,
assuming that the Oxford Acquisition had occurred on January 1, 1999,
and the restructuring plan was completed on January 1, 1999. 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. As a result
of such restructuring plan, the personnel costs of the Oxford entities
will not be incurred by AIMCO.
(ix) Represents the elimination of general and administrative costs related
to assets not purchased from the Oxford entities ($85) and adjustment
to depreciation expense for furniture and equipment on a fair value
basis ($178).
(x) Represents interest expense related to the $279 million borrowed by
AIMCO to complete the Oxford Acquisition, at 10.5%, plus amortization
of the related deferred financing cost.
(xi) Represents adjustment to historical interest expense, based on the fair
value of the notes payable recorded by AIMCO. The adjustment represents
the difference between the fair market interest rate and the
contractual interest rate.
(xii) Represents adjustment to interest income on loans receivable from
affiliates based on the fair value recorded by AIMCO, net of interest
income on the historical basis recorded in the Combined Oxford
financial statements. The adjustment represents the difference between
the fair market interest rate and the contractual interest rate.
(xiii) Represents adjustment to equity in earnings of unconsolidated real
estate partnerships related primarily to the increased depreciation as
a result of the allocation of the purchase price of the Oxford
Acquisition. The increase in depreciation is due to the fair value of
the partnership interest being greater than the historical value of the
partnership interest. This difference is primarily driven by the fair
value of the underlying real estate properties owned by the
partnerships being higher than the historical cost basis that is being
depreciated by the partnership. The increased depreciation expense for
AIMCO's ownership percentage on a fair value basis is included as a
reduction of equity in earnings of unconsolidated real estate
partnerships.
(xiv) Represents incremental amortization of intangible assets, based on
AIMCO's new basis as adjusted by the allocation of the purchase price
of the Oxford Acquisition. The intangible assets are comprised of
asset management and participation management contracts. The asset
management contracts are amortized using the straight-line method over
the estimated life of one year, as the contracts have a one-year term.
The participation management contracts are amortized using the
straight-line method over the estimated life of ten years. The
participation contracts have no termination date and provide for
AIMCO to participate in cash flows from operations and cash flows upon
liquidation of the partnership. A ten year amortization period was used
as the useful life as ten years is the average expected hold period for
the properties.
(xv) Represents reversal of income tax provision recorded in the Combined
Oxford financial statements.
(D) Represents the effects of AIMCO's acquisition of Oxford immediately after
the Oxford Acquisition. These amounts do not give effect to the Oxford
Reorganization, which includes the transfers of certain assets and
liabilities of Oxford to the combined Unconsolidated Subsidiaries. The
Oxford Reorganization must occur immediately after the Oxford Acquisition
in order for AIMCO to maintain
99.7-5
<PAGE> 6
its qualification as a REIT. This column is included as an intermediate
step to assist the reader in understanding the entire nature of the Oxford
Acquisition and related transactions.
(E) Represents adjustments related to the Oxford Reorganization, whereby,
following the Oxford Acquisition, AIMCO contributed or sold to the combined
Unconsolidated Subsidiaries certain assets and liabilities of Oxford,
primarily asset management and cash flow participation contracts and
related working capital assets and liabilities related to Oxford's asset
management operations. The adjustments reflect the transfer of assets
valued at AIMCO's new basis resulting from the allocation of the purchase
price of Oxford. AIMCO received non-voting preferred stock and a $29
million note payable as consideration in exchange for the net assets
contributed or sold.
(F) Represents adjustment to reflect (i) the Regency Acquisition and (ii) the
Dreyfuss Acquisitions as if they had occurred on January 1, 1999. 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.
(G) Represents interest expense adjustment related to the assumption of
mortgage debt in connection with the Regency Acquisition and the Dreyfuss
Acquisitions.
(H) Represents adjustments to interest income related to the forfeiture of cash
in connection with the Regency Acquisition and the Dreyfuss Acquisitions.
(I) Represents adjustments to Minority Interest in Operating Partnership
assuming the Regency Acquisition, the Dreyfuss Acquisitions, and the Oxford
Acquisition had occurred as of January 1, 1999. On a pro forma basis, as of
December 31, 1999, the minority interest percentage is approximately 12.3%.
(J) Represents results of operations from certain consolidated Oxford entities
that were contributed to the Unconsolidated Subsidiaries.
(K) Represents management income and expense associated with certain assets and
liabilities contributed to the Unconsolidated Subsidiaries, primarily
related to the asset management operations, cashflow participations, notes
receivable, and equity in earnings of unconsolidated partnerships of
Oxford.
(L) Represents the following: (i) interest expense from certain consolidated
Oxford entities that were contributed to the Unconsolidated Subsidiaries of
$23,784; (ii) interest expense of $5,227 on $48,000 of third party
financing contributed by AIMCO to the Unconsolidated Subsidiaries in
connection with the Oxford Reorganization; and (iii) interest expense on
certain liabilities that were contributed to the Unconsolidated
Subsidiaries of $14,256.
(M) Represents interest income earned at 8.5% on notes payable of $29 million
to AIMCO issued as consideration for certain assets sold by AIMCO to the
Unconsolidated Subsidiaries.
(N) Represents adjustment to AIMCO's equity in income (loss) of the
Unconsolidated Subsidiaries as a result of the Oxford Acquisition and the
contribution and sale of certain assets and liabilities to the
Unconsolidated Subsidiaries.
(O) On a pro forma basis, there is a net loss allocable to common stockholders.
As a result, there are no common stock equivalents included for the
computation of diluted earnings (loss) per common share as they would be
antidilutive.
99.7-6
<PAGE> 7
(P) The combined Pro Forma Statement of Operations (Pre-Merger) of the
Unconsolidated Subsidiaries for the year ended December 31, 1999 is
presented below, which reflects the effects of the Oxford Acquisition and
the Oxford Reorganization as if these transactions had occurred as of
January 1, 1999.
COMBINED UNCONSOLIDATED SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS (PRE-MERGER)
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED
UNCONSOLIDATED
SUBSIDIARIES OXFORD
HISTORICAL(i) REORGANIZATION(ii) PRO-FORMA
-------------- ------------------ ---------
<S> <C> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property revenues................... $ 4,064 $ 80,823 $ 84,887
Property operating expenses.......................... (1,524) (50,342) (51,866)
Owned property management expense.................... -- (3,191) (3,191)
Depreciation......................................... (1,161) (15,435) (16,596)
-------- -------- --------
Income from property operations...................... 1,379 11,855 13,234
-------- -------- --------
SERVICE COMPANY BUSINESS
Management fees and other income..................... 140,666 14,206 154,872
Management and other expenses........................ (77,753) (2,086) (79,839)
-------- -------- --------
Income from service company business................. 62,913 12,120 75,033
-------- -------- --------
General and administrative expense................... (24,162) (1,152) (25,314)
Interest expense..................................... (8,123) (43,267)
(2,465)(iii) (53,855)
Interest income...................................... 2,776 997 3,773
Equity in losses of unconsolidated real estate
partnerships....................................... (1,665) (1,299) (2,964)
Minority interest.................................... -- 3,278 3,278
Depreciation and Amortization........................ (31,915) (14,134) (46,049)
-------- -------- --------
Income from operations............................... 1,203 (34,067) (32,864)
Gain (loss) on disposition of properties............. 1,051 (600) 451
Gain (loss) on extinguishment of debt................ -- 1,378 1,378
-------- -------- --------
Income (loss) before extraordinary item and
tax provision...................................... 2,254 (33,289) (31,035)
Extraordinary item................................... -- (7,883) (7,883)
-------- -------- --------
Income (loss) before tax provision................... 2,254 (41,172) (38,918)
Income tax provision................................. (927) 16,469(iv) 15,542
-------- -------- --------
Net income (loss).................................... $ 1,327 $(24,703) $(23,376)
======== ======== ========
Income (loss) allocable to preferred stock........... $ 1,314 $(24,456) $(23,142)
======== ======== ========
Income (loss) allocable to common stock.............. $ 13 $ (247) $ (234)
======== ======== ========
</TABLE>
---------------
(i) Represents the combined historical operating results of the Unconsolidated
Subsidiaries for the year ended December 31, 1999.
(ii) Represents adjustments related to the Oxford Reorganization, whereby,
following the Oxford Acquisition, AIMCO contributed or sold to the combined
Unconsolidated Subsidiaries certain assets and liabilities of Oxford,
primarily asset management and cash flow participation contracts and
related working capital assets and liabilities related to Oxford's asset
management operations. The adjustments reflect the transfer of assets
valued at AIMCO's new basis resulting from the allocation of the purchase
price of Oxford. AIMCO received non-voting preferred stock and a $29
million note payable as consideration in exchange for the net assets
contributed or sold.
(iii)Represents interest expense at 8.5% on notes payable of $29 million to
AIMCO issued as consideration for certain assets sold by AIMCO to the
Unconsolidated Subsidiaries.
(iv) Represents the estimated Federal and state tax provisions, which are
calculated on the operating results of the Unconsolidated Subsidiaries.
99.7-7
<PAGE> 8
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS (PRE-MERGER)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
-----------------------------------------------------------------------
AIMCO BEFORE
AIMCO OXFORD OXFORD OXFORD PRO FORMA
HISTORICAL(A) ADJUSTMENTS(B) ACQUISITION(C) REORGANIZATION(D) REORGANIZATION(E) TOTAL
------------- -------------- -------------- ----------------- ----------------- ---------
<S> <C> <C> <C> <C> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property
revenues................. $ 753,463 $ 6,903(F) $ 92,935 $ 853,301 $(61,163)(I) $ 792,138
Property operating
expenses................. (302,435) (2,634)(F) (49,528) (354,597) 35,887(I) (318,710)
Owned property management
expense.................. (9,713) (287)(F) (3,651) (13,651) 2,479(I) (11,172)
Depreciation............... (223,128) (1,121)(F) (20,964) (245,213) 11,164(I) (234,049)
--------- -------- -------- --------- -------- ---------
Income from property
operations............... 218,187 2,861 18,792 239,840 (11,633) 228,207
--------- -------- -------- --------- -------- ---------
SERVICE COMPANY BUSINESS
Management fees and other
income................... 36,865 -- 9,629 46,494 (9,432)(J) 37,062
Management and other
expenses................. (23,603) -- (2,762) (26,365) 1,169(J) (25,196)
--------- -------- -------- --------- -------- ---------
Income from service company
business................. 13,262 -- 6,867 20,129 (8,263) 11,866
--------- -------- -------- --------- -------- ---------
General and administrative
expense.................. (9,609) -- (1,101) (10,710) 1,121(J) (9,589)
Interest expense........... (190,459) (2,055)(G) (62,545) (255,059) 32,378(K) (222,681)
Interest income............ 47,352 -- 16,426 63,778 (7,984)(J)
1,849(L) 57,643
Equity in earnings (losses)
of unconsolidated real
estate partnerships...... (4,489) -- (3,222) (7,711) 625(J) (7,086)
Equity in earnings (losses)
of unconsolidated
subsidiaries............. 2,538 -- -- 2,538 (7,015)(M) (4,477)(N)
Minority interest in other
entities................. (10,977) -- 2,635 (8,342) (1,801)(I) (10,143)
Amortization of
intangibles.............. (4,968) -- (4,580) (9,548) 4,985(J) (4,563)
--------- -------- -------- --------- -------- ---------
Income from operations..... 60,837 806 (26,728) 34,915 4,262 39,177
Gain (loss) on disposition
of properties............ 14,234 35 14,269 (35) 14,234
Gain (loss) on
extinguishment of debt... -- -- (568) (568) 568 --
--------- -------- -------- --------- -------- ---------
Income (loss) before
minority interest in
operating partnership.... 75,071 806 (27,261) 48,616 4,795 53,411
Minority interest in
operating partnership.... (7,131) (781)(H) 2,388 (5,524) (502)(H) (6,026)
--------- -------- -------- --------- -------- ---------
Net income (loss).......... $ 67,940 $ 25 $(24,873) $ 43,092 $ 4,293 $ 47,385
========= ======== ======== ========= ======== =========
Net income allocable to
preferred stockholders... $ 44,843 $ 44,843
========= =========
Net income (loss) allocable
to common stockholders... $ 23,097 2,542
========= =========
Basis earnings (loss) per
common share............. $ 0.35 0.04
========= =========
Diluted earnings (loss) per
common share............. $ 0.34 $ 0.04
========= =========
Weighted average common
shares outstanding....... 66,641 66,641
========= =========
Weighted average common
shares and common share
equivalents
outstanding.............. 68,478 68,478
========= =========
</TABLE>
---------------
(A) Represents AIMCO's unaudited historical condensed consolidated results of
operations for the nine months ended September 30, 2000.
99.7-8
<PAGE> 9
(B) Represents adjustment to reflect the 2000 Dreyfuss Acquisition as if it had
occurred on January 1, 1999. 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 the adjustment to reflect the Oxford Acquisition as if it had
occurred on January 1, 1999. These adjustments are detailed as follows:
<TABLE>
<CAPTION>
COMBINED
OXFORD ORFG OXPARC OXFORD PRO FORMA
ENTITIES(i) OPERATIONS(ii) ENTITIES(iii) OTHER(iv) HISTORICAL ADJUSTMENTS(v)
----------- -------------- ------------- --------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property
revenues..................... $ 52,667 $ -- $ -- $ -- $ 52,667 $ 40,268(vi)
Property operating expenses.... (25,777) -- -- -- (25,777) (23,751)(vi)
Owned property management
expense...................... (2,423) -- -- -- (2,423) (1,228)(vi)
Depreciation................... (4,901) -- -- -- (4,901) (16,063)(vi)
-------- ------- ------ ------- -------- --------
Income from property
operations................... 19,566 -- -- -- 19,566 (774)
-------- ------- ------ ------- -------- --------
SERVICE COMPANY BUSINESS
Management fees and other
income....................... 5,900 9,044 2,484 -- 17,428 1,747(vii)
(9,546)(viii)
Management and other
expenses..................... (9,581) (7,324) (684) -- (17,589) 5,281(ix)
9,546(viii)
-------- ------- ------ ------- -------- --------
Income from service company
business..................... (3,681) 1,720 1,800 -- (161) 7,028
-------- ------- ------ ------- -------- --------
General and administrative
expense...................... (1,136) -- -- -- (1,136) 35(x)
Interest expense............... (25,905) (75) -- -- (25,980) (13,774)(vi)
(21,890)(xi)
(901)(xii)
Interest income................ 603 13 -- 2,316 2,932 13,494(xiii)
Equity in losses of
unconsolidated real estate
partnerships................. 181 647 -- (1,699) (871) (2,351)(xiv)
Equity in earnings (losses) of
unconsolidated
subsidiaries................. -- --
Minority interest.............. -- (6) -- -- (6) 2,641(vi)
Amortization................... -- -- -- -- -- (4,580)(xv)
-------- ------- ------ ------- -------- --------
Income from operations......... (10,372) 2,299 1,800 617 (5,656) (21,072)
Gain (loss) on disposition of
properties................... 35 -- -- -- 35 --
Gain (loss) on extinguishment
of debt...................... (568) -- -- -- (568) --
-------- ------- ------ ------- -------- --------
Income (loss) before tax
provision.................... (10,905) 2,299 1,800 617 (6,189) (21,072)
Income tax provision........... (1,576) -- -- -- (1,576) 1,576(xvi)
-------- ------- ------ ------- -------- --------
Net income (loss).............. $(12,481) $ 2,299 $1,800 $ 617 $ (7,765) $(19,496)
======== ======= ====== ======= ======== ========
<CAPTION>
OXFORD
ACQUISITION
-----------
<S> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property
revenues.....................
$ 92,935
Property operating expenses....
(49,528)
Owned property management
expense......................
(3,651)
Depreciation...................
(20,964)
--------
Income from property
operations................... 18,792
--------
SERVICE COMPANY BUSINESS
Management fees and other
income.......................
9,629
Management and other
expenses.....................
(2,762)
--------
Income from service company
business..................... 6,867
--------
General and administrative
expense...................... (1,101)
Interest expense...............
(62,545)
Interest income................ 16,426
Equity in losses of
unconsolidated real estate
partnerships................. (3,222)
Equity in earnings (losses) of
unconsolidated
subsidiaries................. --
Minority interest..............
2,635
Amortization................... (4,580)
--------
Income from operations......... (26,728)
Gain (loss) on disposition of
properties................... 35
Gain (loss) on extinguishment
of debt...................... (568)
--------
Income (loss) before tax
provision.................... (27,261)
Income tax provision........... --
--------
Net income (loss).............. $(27,261)
========
</TABLE>
---------------
(i) Represents the unaudited combined historical operating results of the
Oxford Entities for the eight months ended August 31, 2000.
(ii) Represents the unaudited historical operating results of ORFG
Operations for the eight months ended August 31, 2000.
99.7-9
<PAGE> 10
(iii) Represents the unaudited historical operating results of the Oxparc
Entities for the eight months ended August 31, 2000.
(iv) Represents the unaudited historical operating results for the eight
months ended August 31, 2000 of other assets acquired in the Oxford
Acquisition, primarily related to partnership interests in the real
estate partnerships and notes receivable.
(v) Represents adjustments related to the Oxford Acquisition as follows:
(a) reversal of results of operations for Oxford entities consolidated
in the Combined Oxford financial statements; (b) results of operations
for Oxford entities consolidated in the financial statements of AIMCO;
(c) interest income on additional borrowings for the Oxford
Acquisition; (d) elimination of intercompany costs recorded in the
Combined Oxford financial statements; (e) interest income and expense
on notes receivable and payable adjusted to AIMCO's basis; (f) equity
in earnings of unconsolidated real estate partnerships adjusted to
AIMCO's basis; and (g) amortization of intangible assets acquired by
AIMCO in the Oxford Acquisition.
(vi) Represents adjustments to consolidate additional partnerships in
AIMCO's consolidated financial statements. Certain of the former Oxford
entities' financial statements may not be combined or consolidated on a
historical basis under generally accepted accounting principles. As a
result of AIMCO's acquisition of ownership interests in real estate
partnerships from several different Oxford entities, AIMCO owns a
controlling interest in partnerships that were previously accounted for
on the equity method by the Oxford entities. Therefore, additional
partnerships are consolidated by AIMCO.
(vii) Represents adjustment from eight months of management fees and other
income recorded in the Combined Oxford financial statements to nine
months recorded in the pro forma financial statements of AIMCO, net of
amount recorded by AIMCO subsequent to the Oxford Acquisition.
(viii) Represents adjustment to eliminate the intercompany servicing fee in
the Combined Oxford financial statements.
(ix) Represents adjustment for a reduction in personnel costs of Oxford
pursuant to a restructuring plan, approved by AIMCO senior management,
assuming that the Oxford Acquisition had occurred on January 1, 1999,
and the restructuring plan was completed on January 1, 1999. 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. As a result
of such restructuring plan, the personnel costs of the Oxford entities
will not be incurred by AIMCO.
(x) Represents (i) $122 for adjustment from eight months of expense to nine
months, net of the amount recorded by AIMCO subsequent to the Oxford
Acquisition; net of (ii) the elimination of general and administrative
expenses related to assets not purchased from the Oxford entities ($64)
and adjustment to depreciation expense for furniture and equipment on a
fair value basis ($93).
(xi) Represents interest expense related to the $279 million borrowed by
AIMCO to complete the Oxford Acquisition, at 10.5%, plus amortization
of the related deferred financing cost.
(xii) Represents adjustment to historical interest expense, based on the fair
value of the notes payable recorded by AIMCO. The adjustment represents
the difference between the fair market interest rate and the
contractual interest rate.
(xiii) Represents adjustment to interest income on loans receivable from
affiliates based on the fair value recorded by AIMCO, net of interest
income on the historical basis recorded in the Combined Oxford
financial statements. The adjustment represents the difference between
the fair market interest rate and the contractual interest rate.
(xiv) Represents adjustment to equity in earnings of unconsolidated real
estate partnerships related primarily to the increased depreciation as
a result of the allocation of the purchase price of the Oxford
Acquisition. The increase in depreciation is due to the fair value of
the partnership interest being greater than the historical value of
the partnership interest. This difference is primarily driven by the
fair value of the underlying real estate properties owned by the
partnerships being higher than the historical cost basis that is being
depreciated by the partnership. The increased depreciation expense for
AIMCO's ownership percentage on a fair value basis is included as a
reduction of equity in earnings of unconsolidated real estate
partnerships.
(xv) Represents incremental amortization of intangible assets, based on
AIMCO's new basis as adjusted by the allocation of the purchase price
of the Oxford Acquisition. The intangible assets are comprised of asset
management and participation management contracts. The asset
management contracts are amortized using the straight-line method over
the estimated life of one year, as the contracts have a one-year term.
The participation management contracts are amortized using the
straight-line method over the estimated life of ten years. The
participation contracts have no termination date and provide for AIMCO
to participate in cash flows from operations and cash flows upon
liquidation of the partnership. A ten year amortization period was
used as the useful life as ten years is the average expected hold
period for the properties.
99.7-10
<PAGE> 11
(xvi) Represents reversal of income tax provision recorded in the Combined
Oxford financial statements.
(D) Represents the effects of AIMCO's acquisition of Oxford immediately after
the Oxford Acquisition. These amounts do not give effect to the Oxford
Reorganization, which includes the transfers of certain assets and
liabilities of Oxford to the combined Unconsolidated Subsidiaries. The
Oxford Reorganization must occur immediately after the Oxford Acquisition
in order for AIMCO to maintain its qualification as a REIT. This column is
included as an intermediate step to assist the reader in understanding the
entire nature of the Oxford Acquisition and related transactions.
(E) Represents adjustments related to the Oxford Reorganization, whereby,
following the Oxford Acquisition, AIMCO contributed or sold to the combined
Unconsolidated Subsidiaries certain assets and liabilities of Oxford,
primarily asset management and cash flow participation contracts and
related working capital assets and liabilities related to Oxford's asset
management operations. The adjustments reflect the transfer of assets
valued at AIMCO's new basis resulting from the allocation of the purchase
price of Oxford. AIMCO received non-voting preferred stock and a $29
million note payable as consideration in exchange for the net assets
contributed or sold.
(F) Represent adjustments to reflect the 2000 Dreyfuss Acquisition as if it had
occurred on January 1, 1999. 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.
(G) Represents interest expense adjustment related to the assumption of
mortgage debt in connection with the 2000 Dreyfuss Acquisition.
(H) Represents adjustments to Minority Interest in Operating Partnership
assuming the Oxford Acquisition and the 2000 Dreyfuss Acquisition had
occurred as of January 1, 1999. On a pro forma basis, as of September 30,
2000, the minority interest percentage is approximately 10.5%.
(I) Represents results of operations from certain consolidated Oxford entities
that were contributed to the Unconsolidated Subsidiaries.
(J) Represents management income and expense associated with certain assets and
liabilities contributed to the Unconsolidated Subsidiaries, primarily
related to the asset management operations, cash flow participations, notes
receivable, and equity in earnings of unconsolidated partnerships of
Oxford.
(K) Represents the following: (i) interest expense from certain consolidated
Oxford entities that were contributed to the Unconsolidated Subsidiaries of
$17,837; (ii) interest expense of $3,920 on $48,000 of third party
financing contributed by AIMCO to the Unconsolidated Subsidiaries in
connection with the Oxford Reorganization; and (iii) interest expense on
certain liabilities that were contributed to the Unconsolidated
Subsidiaries of $10,621.
(L) Represents interest income earned at 8.5% on notes payable of $29 million
to AIMCO issued as consideration for certain assets sold by AIMCO to the
Unconsolidated Subsidiaries.
(M) Represents adjustment to AIMCO's equity in income (loss) of the
Unconsolidated Subsidiaries as a result of the Oxford Acquisition and the
contribution and sale of certain assets and liabilities to the
Unconsolidated Subsidiaries.
99.7-11
<PAGE> 12
(N) The combined Pro Forma Statement of Operations (Pre-Merger) of the
Unconsolidated Subsidiaries for the nine months ended September 30, 2000 is
presented below, which reflects the effects of the Oxford Acquisition and
the Oxford Reorganization as if these transactions had occurred as of
January 1, 1999.
COMBINED UNCONSOLIDATED SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(PRE-MERGER)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED
UNCONSOLIDATED
SUBSIDIARIES OXFORD
HISTORICAL(i) REORGANIZATION(ii) PRO-FORMA
-------------- ------------------ ---------
<S> <C> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property revenues................... $ -- $ 61,163 $ 61,163
Property operating expenses.......................... -- (35,887) (35,887)
Owned property management expense.................... -- (2,479) (2,479)
Depreciation......................................... -- (11,164) (11,164)
-------- -------- --------
Income from property operations...................... -- 11,633 11,633
-------- -------- --------
SERVICE COMPANY BUSINESS
Management fees and other income..................... 102,392 9,432 111,824
Management and other expenses........................ (46,198) (1,169) (47,367)
-------- -------- --------
Income from service company business................. 56,194 8,263 64,457
-------- -------- --------
General and administrative expense................... (15,057) (1,121) (16,178)
Interest expense..................................... (7,311) (32,378)
(1,849)(iii) (41,538)
Interest income...................................... 4,529 7,984 12,513
Equity in losses of unconsolidated real estate
partnerships....................................... (13,654) (625) (14,279)
Minority interest.................................... -- 1,801 1,801
Depreciation and Amortization........................ (18,967) (4,985) (23,952)
-------- -------- --------
Income from operations............................... 5,734 (11,277) (5,543)
Gain (loss) on disposition of properties............. 5,760 35 5,795
Gain (loss) on extinguishment of debt................ -- (568) (568)
-------- -------- --------
Income (loss) before tax provision................... 11,494 (11,810) (316)
Income tax provision................................. (2,562) 4,724(iv) 2,162
-------- -------- --------
Net income (loss).................................... $ 8,932 $ (7,086) $ 1,846
======== ======== ========
Income (loss) allocable to preferred stock........... $ 8,843 $ (7,015) $ 1,828
======== ======== ========
Income (loss) allocable to common stock.............. $ 89 $ (71) $ 18
======== ======== ========
</TABLE>
---------------
(i) Represents the unaudited combined historical operating results of the
Unconsolidated Subsidiaries for the nine months ended September 30,
2000.
(ii) Represents adjustments related to the Oxford Reorganization, whereby,
following the Oxford Acquisition, AIMCO contributed or sold to the
combined Unconsolidated Subsidiaries certain assets and liabilities of
Oxford, primarily asset management and cash flow participation
contracts and related working capital assets and liabilities related to
Oxford's asset management operations. The adjustments reflect the
transfer of assets valued at AIMCO's new basis resulting from the
allocation of the purchase price of Oxford. AIMCO received non-voting
preferred stock and a $29 million note payable as consideration in
exchange for the net assets contributed or sold.
(iii) Represents interest expense at 8.5% on notes payable of $29 million to
AIMCO issued as consideration for certain assets sold by AIMCO to the
Unconsolidated Subsidiaries.
(iv) Represents the estimated Federal and state tax provisions, which are
calculated on the operating results of the Unconsolidated Subsidiaries.
99.7-12
<PAGE> 13
PRO FORMA FINANCIAL INFORMATION OF AIMCO (MERGER)
The following Pro Forma Condensed Consolidated Balance Sheet (Merger) of
AIMCO as of September 30, 2000 has been prepared as if the OTEF Merger had
occurred as of September 30, 2000. The following Pro Forma Condensed
Consolidated Statements of Operations (Merger) of AIMCO for the year ended
December 31, 1999 and the nine months ended September 30, 2000 have been
prepared as if each of the following transactions had occurred as of January 1,
1999: (i) OTEF's redemption of the status quo BACs and payment of the special
distribution; (ii) the exercise by AIMCO of 652,125 options to acquire BACs;
(iii) the OTEF Merger; and (iv) each of the transactions reflected in the Pro
Forma Consolidated Statements of Operations (Pre-Merger) of AIMCO for the year
ended December 31, 1999 and the nine months ended September 30, 2000.
The following Pro Forma Financial Information (Merger) is based, in part,
on the Pro Forma Financial Information (Pre-Merger) included elsewhere in this
Current Report on Form 8-K/A. The Pro Forma Financial Information (Pre-Merger)
gives effect to all material transactions of AIMCO prior to the OTEF Merger and
as of the date of this Current Report on Form 8-K/A, including the Oxford
Acquisition, the Regency Acquisition, and the Dreyfuss Acquisitions. See "Pro
Forma Financial Information (Pre-Merger)." The Pro Forma Financial Information
(Merger) is also based, in part, on the following historical financial
statements, which are incorporated by reference in this Current Report on Form
8-K/A: (i) the Consolidated Financial Statements of AIMCO for the year ended
December 31, 1999 and the nine months ended September 30, 2000; and (ii) the
Consolidated Financial Statements of OTEF for the year ended December 31, 1999
and the nine months ended September 30, 2000. The Pro Forma Financial
Information (Merger) should be read in conjunction with such financial
statements and the notes thereto.
The unaudited Pro Forma Financial Information (Merger) has been prepared
using the purchase method of accounting whereby the assets and liabilities of
OTEF 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 (Merger)
may differ from the amounts ultimately determined.
The unaudited Pro Forma Financial Information (Merger) 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 unaudited Pro Forma
Consolidated Statement of Operations (Merger) for the nine months ended
September 30, 2000 is not necessarily indicative of the results of operations to
be expected for the year ending December 31, 2000.
99.7-13
<PAGE> 14
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (MERGER)
AS OF SEPTEMBER 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
----------------------------------------------------
OPTION EXERCISE, OTEF MERGER
AIMCO OTEF REDEMPTION MERGER PRO FORMA
HISTORICAL(A) HISTORICAL(B) AND DISTRIBUTION(C) ADJUSTMENTS(D) TOTAL
------------- ------------- ------------------- -------------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Real estate, net of accumulated
depreciation.............................. $5,471,364 $ -- $ -- $ -- $5,471,364
Investments in unconsolidated real estate
partnerships.............................. 798,158 -- -- -- 798,158
Investments in unconsolidated
subsidiaries.............................. 91,358 -- -- -- 91,358
Notes receivable from unconsolidated real
estate partnerships....................... 145,587 -- -- -- 145,587
Notes receivable from and advances to
unconsolidated subsidiaries............... 213,991 -- -- -- 213,991
Investments in bonds and notes
receivable.............................. -- 288,362 -- (5,084) --
(190,362)(G) 92,916
Cash and cash equivalents................. 106,544 41,358 (40,082)(C) --
15,573(E)
(15,573)(F) 107,820
Restricted cash........................... 113,545 -- -- -- 113,545
Other assets.............................. 216,237 4,452 15,573(F) (1,427)
(4,800)
(2,172)
(15,573) 212,290
---------- -------- -------- --------- ----------
$7,156,784 $334,172 $(24,509) $(219,418) $7,247,029
========== ======== ======== ========= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY/PARTNERS' CAPITAL
Liabilities:
Secured notes payable..................... $2,836,097 $ -- $ -- $ -- $2,836,097
Secured tax-exempt bond financing......... 583,106 -- -- (190,362)(G) 392,744
Unsecured short-term financing............ 406,000 52,229 10,000(C) 2,585 470,814
---------- -------- -------- --------- ----------
Total indebtedness.................. 3,825,203 52,229 10,000 (187,777) 3,699,655
Accounts payable, accrued and other
liabilities............................... 243,286 4,488 -- 5,000 252,774
Resident security deposits and prepaid
rents..................................... 32,899 -- -- -- 32,899
---------- -------- -------- --------- ----------
Total liabilities................... 4,101,388 56,717 10,000 (182,777) 3,985,328
---------- -------- -------- --------- ----------
Commitments and contingencies............... -- -- -- -- --
Mandatorily redeemable convertible preferred
securities................................ 35,330 -- -- -- 35,330
Minority interest in other entities......... 194,006 -- -- -- 194,006
Minority interest in Operating
Partnership............................... 297,631 -- -- -- 297,631
Stockholders' equity/Partners' capital:
Preferred Stock........................... 837,717 -- -- 100,000 937,717
Class A Common Stock ($.01 par value)..... 712 -- -- 22 734
General Partners' interests............... -- (1,670) -- 1,670 --
Limited Partners' interests............... -- 194,002 (50,082)(C) (159,493)
15,573(E) --
Additional paid-in capital................ 2,065,618 -- -- 106,283 2,171,901
Notes receivable on common stock
purchases................................. (44,795) -- -- -- (44,795)
Distributions in excess of earnings......... (330,823) -- -- -- (330,823)
Accumulated other comprehensive income...... -- 85,411 -- (85,411) --
Treasury shares............................. -- (288) -- 288 --
---------- -------- -------- --------- ----------
Total stockholders' equity/partners'
capital........................... 2,528,429 277,455 (34,509) (36,641) 2,734,734
---------- -------- -------- --------- ----------
Total liabilities and stockholders'
equity/ partners' capital......... $7,156,784 $334,172 $(24,509) $(219,418) $7,247,029
========== ======== ======== ========= ==========
</TABLE>
99.7-14
<PAGE> 15
---------------
(A) Represents the unaudited historical consolidated financial position of
AIMCO as of September 30, 2000.
(B) Represents the unaudited historical consolidated financial position of OTEF
as of September 30, 2000.
(C) Represents the following transactions of OTEF immediately prior to the OTEF
Merger: (i) the exercise by AIMCO of 652,125 options to acquire BACs; (ii)
the redemption at $860.25 of each outstanding status quo BAC, for a total
of $82; and (iii) the payment of the special distribution of $50,000.
(D) Represents the following adjustments occurring as a result of the OTEF
Merger: (i) the issuance of $100,000 of Class P Preferred Stock, with a
dividend rate of 9%, as merger consideration to holders of OTEF BAC
interests outstanding as of September 30, 2000 and to the OTEF associate
general partner; (ii) the issuance of 2,405 shares of AIMCO Class A Common
Stock, valued at approximately $106,305 (based on $48.509 per share, which
is the average of the high and low reported sales prices of AIMCO Class A
common stock for the 20 trading-day period beginning on December 4, 2000,
the third full trading day following the first public announcement of the
OTEF Merger) as merger consideration to holders of OTEF BAC interests
outstanding as of September 30, 2000 and to the OTEF associate general
partner; (iii) the payment of $2,585 to the Oxford principals and the OTEF
non-employee directors as additional consideration for the options to
acquire BACs; (iv) the reclassification of the OTEF options acquired by
AIMCO in the Oxford Acquisition for $4,800, which is considered additional
consideration in connection with the OTEF Merger; (v) the reclassification
of the fair value assigned to the OTEF general partner interest acquired by
AIMCO in the Oxford Acquisition of $2,172; (vi) the elimination of AIMCO's
investment in OTEF of $15,573, resulting from AIMCO's exercise of options
to acquire BACs; and (vii) the allocation of the purchase price of OTEF
based on the preliminary estimates of relative fair value of the asset and
liabilities of OTEF.
The total purchase price of OTEF is $287,579, as follows:
<TABLE>
<S> <C>
Issuance of Class P Preferred Stock......................... $ 100,000
Issuance of 2,405 shares of AIMCO Class A Common Stock...... 106,305
Reclassification of OTEF options purchased in the Oxford
Acquisition............................................... 4,800
Reclassification of OTEF general partner interest acquired
by AIMCO in the Oxford Acquisition........................ 2,172
Additional consideration paid to the Oxford principals and
the OTEF non-employee directors for the options to acquire
BACs...................................................... 2,585
Assumption of OTEF liabilities, including additional
borrowings by OTEF to pay a portion of the special
distribution.............................................. 66,717
Transaction costs........................................... 5,000
---------
Total............................................. $ 287,579
=========
The purchase price was allocated to the various assets of OTEF to be
acquired in the OTEF Merger, as follows:
Purchase Price.............................................. $ 287,579
Historical basis of OTEF assets, net of payment of cash by
OTEF for the redemption of the status quo BACs and payment
of the special distribution............................... (294,090)
---------
Reduction to record OTEF's assets at AIMCO's costs as a
result of the OTEF Merger................................. $ (6,511)
=========
The reduction was applied to OTEF's assets based on their relative fair
values, as follows:
Reduction in investments in bonds and notes receivable...... $ (5,084)
Reduction in other assets................................... (1,427)
---------
Reduction to record OTEF's assets at AIMCO's costs as a
result of the OTEF Merger................................. $ (6,511)
=========
</TABLE>
99.7-15
<PAGE> 16
<TABLE>
<S> <C>
The reduction in the assets of OTEF results from the excess of the
historical net assets acquired over the consideration given in the OTEF
Merger. The write-down required by purchase accounting in the pro forma
balance sheet has been applied to all non-current assets of OTEF.
As of September 30, 2000, OTEF's partners' capital (after the redemption of
the status quo BACs, AIMCO's exercise of options to acquire BACs and the
payment of the special distribution) was $242,946, which is detailed as
follows:
General Partners' capital................................... $ (1,670)
Limited Partners' capital (after the redemption of the
status quo BACs and the payment of the special
distribution)............................................. 159,493
Accumulated other comprehensive income...................... 85,411
Treasury shares............................................. (288)
---------
Total partners' capital..................................... $ 242,946
=========
Upon completion of the OTEF Merger, the entire amount of OTEF partners'
capital is eliminated.
</TABLE>
(E) Represents the receipt of cash by OTEF from the exercise of 652,125 BACs by
AIMCO at an exercise price of $23.88 per BAC.
(F) Represents the exercise of 652,125 BACs by AIMCO at an exercise price of
$23.88 per BAC. AIMCO's investment in OTEF is recorded in Other assets.
(G) Represents the elimination of the investment in bonds with the secured
tax-exempt bond financing on OTEF properties that are consolidated by
AIMCO.
99.7-16
<PAGE> 17
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (MERGER)
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
----------------------------------------------------
PRE-MERGER OTEF OTEF MERGER
PRO FORMA OTEF REDEMPTION MERGER PRO FORMA
TOTAL(A) HISTORICAL(B) AND DISTRIBUTION(C) ADJUSTMENTS(D) TOTAL
---------- ------------- ------------------- -------------- ---------
<S> <C> <C> <C> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property
revenues......................... $ 643,778 $ -- $ -- $ -- $ 643,778
Property operating expenses........ (263,389) -- -- -- (263,389)
Owned property management
expense.......................... (19,699) -- -- -- (19,699)
Depreciation....................... (157,696) -- -- -- (157,696)
--------- ------- ----- -------- ---------
Income from property operations.... 202,994 -- -- -- 202,994
--------- ------- ----- -------- ---------
SERVICE COMPANY BUSINESS
Management fees and other income... 44,790 -- -- -- 44,790
Management and other expenses...... (27,119) -- -- -- (27,119)
--------- ------- ----- -------- ---------
Income from service company
business......................... 17,671 -- -- -- 17,671
--------- ------- ----- -------- ---------
General and administrative
expense.......................... (13,112) (2,512) (15,624)
Interest expense................... (199,999) (2,121) (783) 13,200(E)
(202)(F) (189,905)
Interest income.................... 75,265 24,607 -- 508(G)
-- (13,200)(E) 87,180
Equity in losses of
unconsolidated real estate
partnerships................... (11,995) -- -- -- (11,995)
Equity in losses of unconsolidated
subsidiaries..................... (27,274) -- -- -- (27,274)
Minority interest in other
entities......................... 604 -- -- -- 604
Amortization of intangibles........ (5,860) -- -- -- (5,860)
--------- ------- ----- -------- ---------
Income from operations............. 38,294 19,974 (783) 306 57,791
Gain (loss) on the disposition
of properties.................... (1,785) -- -- -- (1,785)
--------- ------- ----- -------- ---------
Income before minority interest in
operating partnership............ 36,509 19,974 (783) 306 56,006
Minority interest in operating
partnership...................... (5,618) -- -- (2,433)(H) (8,051)
--------- ------- ----- -------- ---------
Net income......................... $ 30,891 $19,974 $(783) $ (2,127) $ 47,955
========= ======= ===== ======== =========
Net income allocable to preferred
stockholders..................... $ 56,885 $ 9,000(I) $ 65,885
========= ======== =========
Net income (loss) allocable to
common stockholders.............. $ (25,994) $ (17,930)
========= =========
Basis earnings (loss) per common
share............................ $ (0.42) $ (0.28)
========= =========
Diluted earnings (loss) per common
share............................ $ (0.42) $ (0.28)
========= =========
Weighted average common shares
outstanding...................... 62,242 2,191(J) 64,433
========= ======== =========
Weighted average common shares and
common share equivalents
outstanding...................... 62,242 2,191(J) 64,433(K)
========= ======== =========
</TABLE>
99.7-17
<PAGE> 18
---------------
(A) Represents AIMCO's pro forma consolidated results of operations for the
year ended December 31, 1999, which gives effect to (i) the Regency
Acquisition; (ii) the Dreyfuss Acquisitions; and (iii) the Oxford
Acquisition. See "Pro Forma Financial Information (Pre-Merger)."
(B) Represents the audited historical consolidated results of operations of
OTEF for the year ended December 31, 1999.
(C) Represents additional interest expense due to the additional borrowings by
OTEF of $10,000 to pay a portion of the special distribution.
(D) Represents the following adjustments occurring as a result of the OTEF
Merger: (i) the amortization of the discount on the bonds and notes
receivable; (ii) the allocation of income to the Class P Preferred Stock
issued in connection with the OTEF Merger, at a dividend rate of 9%; and
(iii) the issuance of AIMCO Class A Common Stock in connection with the
OTEF Merger.
(E) Represents the elimination of the interest income on the investment in
bonds with the interest expense on the secured tax-exempt bond financing on
OTEF properties that are consolidated by AIMCO.
(F) Represents adjustment for interest expense on additional borrowings for the
additional consideration to the Oxford principals and the OTEF non-employee
directors.
(G) Represents adjustment to amortize the discount on the bonds and notes
receivable purchased from OTEF, using the effective interest method over
the estimated lives of the bonds and notes receivable. The discount on the
bonds is the result of AIMCO purchasing the bonds and notes receivable at a
discount of $5,084. The discount is amortized to interest income based upon
estimated future cash flows and the estimated timing of their receipt.
(H) Represents adjustment to minority interest in the Operating Partnership
assuming the OTEF Merger had occurred as of January 1, 1999. On a pro forma
basis, as of December 31, 1999, the minority interest percentage is 11.9%.
(I) Represents the allocation of income to the Class P Preferred Stock issued
in connection with the OTEF Merger, at a dividend rate of 9%.
(J) Represents the number of shares of AIMCO Class A Common Stock to be issued
in connection with the OTEF Merger.
(K) On pro forma basis, there is a net loss allocable to common stockholders.
As a result, there are no common stock equivalents included for the
computation of diluted earnings (loss) per common share as they would be
antidilutive.
99.7-18
<PAGE> 19
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (MERGER)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
PRE-MERGER ----------------------------------- OTEF MERGER
PRO FORMA OTEF OTEF REDEMPTION MERGER PRO FORMA
TOTAL(A) HISTORICAL(B) AND DISTRIBUTION(C) ADJUSTMENTS(D) TOTAL
---------- ------------- ------------------- -------------- ---------
<S> <C> <C> <C> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property
revenues....................... $ 792,138 $ -- $ -- $ -- $ 792,138
Property operating expenses...... (318,710) -- -- -- (318,710)
Owned property management
expense........................ (11,172) -- -- -- (11,172)
Depreciation..................... (234,049) -- -- -- (234,049)
--------- ------- ----- --------- ---------
Income from property
operations..................... 228,207 -- -- -- 228,207
--------- ------- ----- --------- ---------
SERVICE COMPANY BUSINESS
Management fees and other
income......................... 37,062 -- -- -- 37,062
Management and other expenses.... (25,196) -- -- -- (25,196)
--------- ------- ----- --------- ---------
Income from service company
business....................... 11,866 -- -- -- 11,866
--------- ------- ----- --------- ---------
General and administrative
expense........................ (9,589) (1,939) -- -- (11,528)
Interest expense................. (222,681) (1,943) (688) 9,900(E)
(178)(F) (215,590)
Interest income.................. 57,643 18,539 -- 381(G)
-- (9,900)(E) 66,663
Equity in losses of
unconsolidated real estate
partnerships................... (7,086) -- -- -- (7,086)
Equity in losses of
unconsolidated subsidiaries.... (4,477) -- -- -- (4,477)
Minority interest in other
entities....................... (10,143) -- -- -- (10,143)
Amortization of intangibles...... (4,563) -- -- -- (4,563)
--------- ------- ----- --------- ---------
Income from operations........... 39,177 14,657 (688) 203 53,349
Gain on disposition of
securities..................... -- 23,499 -- -- 23,499
Gain (loss) on disposition
of properties.................. 14,234 -- -- -- 14,234
--------- ------- ----- --------- ---------
Income (loss) before minority
interest in operating
partnership.................... 53,411 38,156 (688) 203 91,082
Minority interest in operating
partnership.................... (6,026) -- -- (3,818)(H) (9,844)
--------- ------- ----- --------- ---------
Net income (loss)................ $ 47,385 $38,156 $(688) $ (3,615) $ 81,238
========= ======= ===== ========= =========
Net income allocable to preferred
stockholders................... $ 44,843 $ 6,750(I) $ 51,593
========= ========= =========
Net income (loss) allocable to
common stockholders............ $ 2,542 $ 29,645
========= =========
Basis earnings (loss) per common
share.......................... $ 0.04 $ 0.43
========= =========
Diluted earnings (loss) per
common share................... $ 0.04 $ 0.42
========= =========
Weighted average common shares
outstanding.................... 66,641 2,191(J) 68,832
========= ========= =========
Weighted average common shares
and common share equivalents
outstanding.................... 68,478 2,191(J) 70,669
========= ========= =========
</TABLE>
99.7-19
<PAGE> 20
---------------
(A) Represents AIMCO's pro forma consolidated results of operations for the
nine months ended September 30, 2000, which gives effect to (i) the 2000
Dreyfuss Acquisition; and (ii) the Oxford Acquisition. See "Pro Forma
Financial Information (Pre-Merger)."
(B) Represents the unaudited historical consolidated results of operations of
OTEF for the nine months ended September 30, 2000.
(C) Represents additional interest expense due to the additional borrowings by
OTEF of $10,000 to pay a portion of the special distribution.
(D) Represents the following adjustments occurring as a result of the OTEF
Merger: (i) the amortization of the discount on the bonds and notes
receivable; (ii) the elimination of OTEF's historical gain on disposition
of securities; (iii) the allocation of income to the Class P Preferred
Stock issued in connection with the OTEF Merger, at a dividend rate of 9%;
and (iv) the issuance of AIMCO Class A Common Stock in connection with the
OTEF Merger.
(E) Represents the elimination of the interest income on the investment in
bonds with the interest expense on the secured tax-exempt bond financing on
OTEF properties that are consolidated by AIMCO.
(F) Represents adjustment for interest expense on additional borrowings for the
additional consideration to the Oxford principals and the OTEF non-employee
directors.
(G) Represents adjustment to amortize the discount on the bonds and notes
receivable purchased from OTEF, using the effective interest method over
the estimated lives of the bonds and notes receivable. The discount on the
bonds is the result of AIMCO purchasing the bonds and notes receivable at
a discount of $5,084 to OTEF's carrying value. The discount is amortized to
interest income based upon estimated future cash flows and the estimated
timing of their receipt.
(H) Represents adjustment to minority interest in the Operating Partnership
assuming the OTEF Merger had occurred as of January 1, 1999. On a pro forma
basis, as of September 30, 2000, the minority interest percentage is 10.2%.
(I) Represents the allocation of income to the Class P Preferred Stock issued
in connection with the OTEF Merger, at a dividend rate of 9%.
(J) Represents the number of shares of AIMCO Class A Common Stock to be issued
in connection with the OTEF Merger.
99.7-20
