<PAGE> 1
Exhibit 99.7
INDEX TO PRO FORMA FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Pro Forma Financial Information of AIMCO Properties
(Pre-Merger)........................................... 99.7-2
AIMCO Pro Forma Condensed Consolidated Properties
Statement of Operations (Pre-Merger) for the
Year Ended December 31, 1999.......................... 99.7-3
AIMCO Pro Forma Condensed Consolidated Properties
Statement of Operations (Pre-Merger) for the
Nine Months Ended September 30, 2000.................. 99.7-8
Pro Forma Financial Information of AIMCO Properties
(Merger).............................................. 99.7-13
AIMCO Pro Forma Condensed Consolidated Properties
Balance Sheet (Merger) as of September 30, 2000....... 99.7-14
AIMCO Pro Forma Condensed Consolidated Properties
Statement of Operations (Merger) for the Year
Ended December 31, 1999............................... 99.7-17
AIMCO Pro Forma Condensed Consolidated Properties
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 PROPERTIES (PRE-MERGER)
The following Pro Forma Consolidated Statement of Operations (Pre-Merger)
of AIMCO Properties 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 Properties 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 Properties 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 Properties 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-acquisition contingencies............................. 33,650
Accrued liability for restructuring plan related to
restructuring of Oxford................................... 2,133
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 Properties with the Securities and Exchange
Commission: (i) the Consolidated Financial Statements of AIMCO Properties 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 Properties'
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 Properties 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 Properties' 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
AIMCO PROPERTIES, L.P.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS (PRE-MERGER)
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER UNIT DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
-----------------------------------------------------------------------
AIMCO PROPERTIES
AIMCO PROPERTIES OXFORD BEFORE 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.................. $ 531,883 $ 71,412(F) $119,272 $ 722,567 $(80,823)(I) $ 641,744
Property operating
expenses.................. (213,959) (31,748)(F) (67,290) (312,997) 50,342(I) (262,655)
Owned property management
expense................... (15,322) (2,892)(F) (4,569) (22,783) 3,191(I) (19,592)
Depreciation................ (131,257) (11,165)(F) (30,213) (172,635) 15,435(I) (157,200)
--------- -------- -------- --------- -------- ---------
Income from property
operations................ 171,345 25,607 17,200 214,152 (11,855) 202,297
--------- -------- -------- --------- -------- ---------
SERVICE COMPANY BUSINESS
Management fees and other
income.................... 42,877 -- 15,541 58,418 (14,206)(J) 44,212
Management and other
expenses.................. (25,470) -- (3,735) (29,205) 2,086(J) (27,119)
--------- -------- -------- --------- -------- ---------
Income from service company
business.................. 17,407 -- 11,806 29,213 (12,120) 17,093
--------- -------- -------- --------- -------- ---------
General and administrative
expense................... (12,016) -- (1,152) (13,168) 1,152(J) (12,016)
Interest expense............ (139,124) (18,477)(G) (84,695) (242,296) 43,267(K) (199,029)
Interest income............. 62,183 (1,519)(H) 12,595 73,259 (997)(J)
2,465(L) 74,727
Equity in earnings (losses)
of unconsolidated real
estate partnerships....... (2,588) -- (8,827) (11,415) 1,299(J) (10,116)
Equity in earnings (losses)
of unconsolidated
subsidiaries.............. (2,400) -- -- (2,400) (24,456)(M) (26,856)(O)
Loss from IPLP exchange and
assumption............... (684) -- -- (684) -- (684)
Minority interest in other
entities.................. (5,788) -- 4,782 (1,006) (3,278)(I) (4,284)
Amortization of
intangibles............... (5,860) -- (14,134) (19,994) 14,134(J) (5,860)
--------- -------- -------- --------- -------- ---------
Income from operations...... 82,475 5,611 (62,425) 25,661 9,611 35,272
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........ 80,690 5,611 (61,647) 24,654 8,833 33,487
Extraordinary item.......... -- -- (7,883) (7,883) 7,883 --
--------- -------- -------- --------- -------- ---------
Net income (loss)........... $ 80,690 $ 5,611 $(69,530) $ 16,771 $ 16,716 $ 33,487
========= ======== ======== ========= ======== =========
Net income allocable to
preferred unitholders..... $ 54,173 $ 9,261 $ -- $ 63,434 $ -- $ 63,434
========= ======== ======== ========= ======== =========
Net income (loss) allocable
to common unitholders..... $ 26,517 $ (3,650) $(69,530) $ (46,663) $ 16,716 $ (29,947)
========= ======== ======== ========= ======== =========
Basis earnings (loss) per
common unit............... $ 0.39 $ (0.43)
========= =========
Diluted earnings (loss) per
common unit............... $ 0.38 $ (0.43)
========= =========
Weighted average common
units outstanding......... 68,541 1,360 69,901 69,901
========= ======= ======== =========
Weighted average common
units and common unit
equivalents outstanding... 69,511 1,360 70,871 69,901(N)
========= ======= ======== =========
</TABLE>
99.7-3
<PAGE> 4
---------------
(A) Represents AIMCO Properties' 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 Properties' 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.......................... $ 76,087 $ -- $ -- $ -- $ 76,087 $ 43,185 (vi)
Property operating expenses......... (39,932) -- -- -- (39,932) (27,358)(vi)
Owned property management expense... (3,537) -- -- -- (3,537) (1,032)(vi)
Depreciation........................ (7,223) -- -- -- (7,223) (22,990)(vi)
-------- -------- ------- ------- -------- ---------
Income from property operations..... 25,395 -- -- -- 25,395 (8,195)
-------- -------- ------- ------- -------- ---------
SERVICE COMPANY BUSINESS
Management fees and other income.... 9,500 12,109 4,707 -- 26,316 (10,775)(vii)
Management and other expenses....... (13,107) (11,533) (1,236) -- (25,876) 10,775 (vii)
11,366 (viii)
-------- -------- ------- ------- -------- ---------
Income from service company
business.......................... (3,607) 576 3,471 -- 440 11,366
-------- -------- ------- ------- -------- ---------
General and administrative
expense........................... (1,415) -- -- -- (1,415) 263 (ix)
Interest expense.................... (40,501) (124) -- -- (40,625) (11,501)(vi)
(30,380)(x)
(2,189)(xi)
Interest income..................... 913 12 -- 2,824 3,749 8,846 (xii)
Equity in losses of unconsolidated
real estate partnerships.......... (295) 768 -- (2,160) (1,687) (7,140)(xiii)
Equity in earnings (losses) of
unconsolidated subsidiaries....... -- -- -- -- -- --
Minority interest................... -- (6) -- -- (6) 4,788 (vi)
Amortization........................ -- -- -- -- -- (14,134)(xiv)
-------- -------- ------- ------- -------- ---------
Income from operations.............. (19,510) 1,226 3,471 664 (14,149) (48,276)
Gain (loss) on disposition of
properties........................ (600) -- -- -- (600) --
Gain (loss) on extinguishment of
debt.............................. 1,378 -- -- -- 1,378 --
-------- -------- ------- ------- -------- ---------
Income (loss) before extraordinary
item and tax provision............ (18,732) 1,226 3,471 664 (13,371) (48,276)
Extraordinary item.................. (7,883) -- -- -- (7,883)
-------- -------- ------- ------- -------- ---------
Income (loss) before tax
provision......................... (26,615) 1,226 3,471 664 (21,254) (48,276)
Income tax provision................ 120 -- -- -- 120 (120)(xv)
-------- -------- ------- ------- -------- ---------
Net income (loss)................... $(26,495) $ 1,226 $ 3,471 $ 664 $(21,134) $ (48,396)
======== ======== ======= ======= ======== =========
<CAPTION>
OXFORD
ACQUISITION
-----------
<S> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property
revenues..........................
$119,272
Property operating expenses.........
(67,290)
Owned property management expense...
(4,569)
Depreciation........................
(30,213)
--------
Income from property operations..... 17,200
--------
SERVICE COMPANY BUSINESS
Management fees and other income.... 15,541
Management and other expenses.......
(3,735)
--------
Income from service company
business.......................... 11,806
--------
General and administrative
expense........................... (1,152)
Interest expense....................
(84,695)
Interest income..................... 12,595
Equity in losses of unconsolidated
real estate partnerships.......... (8,827)
Equity in earnings (losses) of
unconsolidated subsidiaries....... --
Minority interest...................
4,782
Amortization........................ (14,134)
--------
Income from operations.............. (62,425)
Gain (loss) on disposition of
properties........................ (600)
Gain (loss) on extinguishment of
debt.............................. 1,378
--------
Income (loss) before extraordinary
item and tax provision............ (61,647)
Extraordinary item.................. (7,883)
--------
Income (loss) before tax
provision......................... (69,530)
Income tax provision................ --
--------
Net income (loss)................... $(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
Properties; (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 Properties' basis;
(f) equity in earnings of unconsolidated real estate partnerships
adjusted to AIMCO Properties' basis; and (g) amortization of intangible
assets acquired by AIMCO Properties in the Oxford Acquisition.
(vi) Represents adjustments to consolidate additional partnerships in AIMCO
Properties' 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 Properties' acquisition of ownership
interests in real estate partnerships from several different Oxford
entities, AIMCO Properties 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
Properties.
(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 Properties 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 Properties.
(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 Properties 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 Properties. 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 Properties, 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 Properties' 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 Properties' 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 Properties 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 Properties' 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 Properties 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 Properties' new basis resulting from the allocation of the
purchase price of Oxford. AIMCO Properties 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 Properties' 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 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, cashflow 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
$23,784; (ii) interest expense of $5,227 on $48,000 of third party
financing contributed by AIMCO Properties 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.
(L) Represents interest income earned at 8.5% on notes payable of $29 million
to AIMCO Properties issued as consideration for certain assets sold by
AIMCO Properties to the Unconsolidated Subsidiaries.
(M) Represents adjustment to AIMCO Properties' 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.
(N) On a pro forma basis, there is a net loss allocable to common unitholders.
As a result, there are no common unit equivalents included for the
computation of diluted earnings (loss) per common unit as they would be
antidilutive.
99.7-6
<PAGE> 7
(O) 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 Properties 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 Properties' new basis resulting from the allocation
of the purchase price of Oxford. AIMCO Properties 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 Properties issued as consideration for certain assets sold by AIMCO
Properties 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
AIMCO PROPERTIES, L.P.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS (PRE-MERGER)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN THOUSANDS, EXCEPT PER UNIT DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
-----------------------------------------------------------------------
AIMCO PROPERTIES
AIMCO PROPERTIES OXFORD BEFORE 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)(H) $ 792,138
Property operating
expenses................... (302,435) (2,634)(F) (49,528) (354,597) 35,887 (H) (318,710)
Owned property management
expense.................... (9,713) (287)(F) (3,651) (13,651) 2,479 (H) (11,172)
Depreciation................. (223,128) (1,121)(F) (20,964) (245,213) 11,164 (H) (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)(I) 37,062
Management and other
expenses................... (23,603) -- (2,762) (26,365) 1,169 (I) (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 (I) (9,589)
Interest expense............. (190,459) (2,055)(G) (62,545) (255,059) 32,378 (J) (222,681)
Interest income.............. 47,352 -- 16,426 63,778 (7,984)(I)
1,849 (K) 57,643
Equity in earnings (losses)
of unconsolidated real
estate partnership......... (4,489) -- (3,222) (7,711) 625 (I) (7,086)
Equity in earnings (losses)
of unconsolidated
subsidiaries............... 2,538 -- -- 2,538 (7,015)(L) (4,477)(M)
Minority interest in other
entities................... (10,977) -- 2,635 (8,342) (1,801)(H) (10,143)
Amortization of
intangibles................ (4,968) -- (4,580) (9,548) 4,985 (I) (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 --
--------- -------- -------- --------- -------- ---------
Net income (loss)............ $ 75,071 $ 806 $(27,261) $ 48,616 $ 4,795 $ 53,411
========= ======== ======== ========= ======== =========
Net income allocable to
preferred unitholders...... $ 49,698 $ 778 $ -- $ 50,476 $ -- $ 50,476
========= ======== ======== ========= ======== =========
Net income (loss) allocable
to common unitholders...... $ 25,373 $ 28 $(27,261) $ (1,860) $ 4,795 $ 2,935
========= ======== ======== ========= ======== =========
Basis earnings (loss) per
common unit................ $ 0.35 0.04
========= =========
Diluted earnings (loss) per
common unit................ $ 0.34 $ 0.04
========= =========
Weighted average common
units outstanding.......... 72,494 1,360 73,854 73,854
========= ======== ========= =========
Weighted average common
units and common unit
equivalents outstanding.... 74,626 1,360 75,986 75,986
========= ======== ========= =========
</TABLE>
---------------
(A) Represents AIMCO Properties' 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 Properties' 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
Properties; (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 Properties' basis;
(f) equity in earnings of unconsolidated real estate partnerships
adjusted to AIMCO Properties' basis; and (g) amortization of intangible
assets acquired by AIMCO Properties in the Oxford Acquisition.
(vi) Represents adjustments to consolidate additional partnerships in AIMCO
Properties' 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 Properties' acquisition of ownership
interests in real estate partnerships from several different Oxford
entities, AIMCO Properties 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
Properties.
(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
Properties, net of amount recorded by AIMCO Properties 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 Properties
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 Properties.
(x) Represents (i) $122 for adjustment from eight months of expense to nine
months, net of the amount recorded by AIMCO Properties 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 Properties 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 Properties. 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 Properties, 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 Properties' 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 Properties' 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 Properties 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 Properties' 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 Properties 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 Properties' new basis resulting from the allocation
of the purchase price of Oxford. AIMCO Properties 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 Properties' 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 results of operations from certain consolidated Oxford entities
that were contributed to the Unconsolidated Subsidiaries.
(I) 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.
(J) 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 Properties 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.
(K) Represents interest income earned at 8.5% on notes payable of $29 million
to AIMCO Properties issued as consideration for certain assets sold by
AIMCO Properties to the Unconsolidated Subsidiaries.
(L) Represents adjustment to AIMCO Properties' 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
(M) 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 Properties 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 Properties'
new basis resulting from the allocation of the purchase price of
Oxford. AIMCO Properties 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 Properties issued as consideration for certain assets sold by
AIMCO Properties 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 PROPERTIES (MERGER)
The following Pro Forma Condensed Consolidated Balance Sheet (Merger) of
AIMCO Properties 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 Properties 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 Properties 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
Properties 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 Properties 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 have either been previously filed by AIMCO
Properties with the Securities and Exchange Commission or are incorporated by
reference in this Current Report on Form 8-K/A: (i) the Consolidated Financial
Statements of AIMCO Properties 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 Properties 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 Properties' 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
AIMCO PROPERTIES, L.P.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (MERGER)
AS OF SEPTEMBER 30, 2000
(IN THOUSANDS, EXCEPT PER UNIT DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
----------------------------------------------------
AIMCO OPTION EXERCISE, OTEF MERGER
PROPERTIES 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.............................. $5,471,869 $ -- $ -- $ -- $5,471,869
Investments in unconsolidated real estate
partnerships.............................. 798,502 -- -- -- 798,502
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.............................. 214,688 4,452 15,573(F) (1,427)
(4,800)
(2,172)
(15,573) 210,741
---------- -------- -------- --------- ----------
$7,156,084 $334,172 $(24,509) $(219,418) $7,246,329
========== ======== ======== ========= ==========
LIABILITIES AND 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............................... 242,957 4,488 -- 5,000 252,445
Resident security deposits and prepaid
rents..................................... 32,899 -- -- -- 32,899
---------- -------- -------- --------- ----------
Total liabilities................... 4,101,059 56,717 10,000 (182,777) 3,984,999
---------- -------- -------- --------- ----------
Commitments and contingencies............... -- -- -- -- --
Mandatorily redeemable convertible preferred
securities................................ 35,330 -- -- -- 35,330
Minority interest in other entities......... 194,955 -- -- -- 194,955
Partners' capital:
Preferred Units........................... 934,474 -- -- 100,000 1,034,474
General partner and special limited
partner.................................. 1,560,826 -- -- 106,305 1,667,131
General Partners' interests............... -- (1,670) -- 1,670 --
Limited Partners' interests............... 350,429 194,002 (50,082)(C) (159,493)
15,573(E) 350,429
Accumulated other comprehensive income...... -- 85,411 -- (85,411) --
Investment in AIMCO common stock............ (20,989) -- -- -- (20,989)
Treasury shares............................. -- (288) -- 288 --
---------- -------- -------- --------- ----------
Total partners' capital............. 2,824,740 277,455 (34,509) (36,641) 3,031,045
---------- -------- -------- --------- ----------
Total liabilities and partners'
capital........................... $7,156,084 $334,172 $(24,509) $(219,418) $7,246,329
========== ======== ======== ========= ==========
</TABLE>
99.7-14
<PAGE> 15
---------------
(A) Represents the unaudited historical consolidated financial position of
AIMCO Properties 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 Properties 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
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 Properties 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 Properties in the Oxford Acquisition of $2,172;
(vi) the elimination of AIMCO Properties' investment in OTEF of $15,573,
resulting from AIMCO Properties' 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.
AIMCO will contribute substantially all the assets and liabilities of OTEF
acquired in the OTEF Merger to AIMCO Properties in exchange for Class P
Preferred Units and limited partnership units in AIMCO Properties ("OP
Units"). The Class P Preferred Units have terms substantially the same as
the Class P Preferred Stock and the OP Units have terms substantially the
same as AIMCO Class A Common Stock.
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 the 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 Properties' 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 Properties' 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 Properties' 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 Properties at an exercise price of $23.88 per BAC.
(F) Represents the exercise of 652,125 BACs by AIMCO Properties at an exercise
price of $23.88 per BAC. AIMCO Properties' 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 Properties.
99.7-16
<PAGE> 17
AIMCO PROPERTIES, L.P.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (MERGER)
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER UNIT 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......................... $ 641,744 $ -- $ -- $ -- $ 641,744
Property operating expenses........ (262,655) -- -- -- (262,655)
Owned property management
expense.......................... (19,592) -- -- -- (19,592)
Depreciation....................... (157,200) -- -- -- (157,200)
--------- ------- ----- -------- ---------
Income from property operations.... 202,297 -- -- -- 202,297
--------- ------- ----- -------- ---------
SERVICE COMPANY BUSINESS
Management fees and other income... 44,212 -- -- -- 44,212
Management and other expenses...... (27,119) -- -- -- (27,119)
--------- ------- ----- -------- ---------
Income from service company
business......................... 17,093 -- -- -- 17,093
--------- ------- ----- -------- ---------
General and administrative
expense.......................... (12,016) (2,512) (14,528)
Interest expense................... (199,029) (2,121) (783) 13,200 (E)
(202)(F) (188,935)
Interest income.................... 74,727 24,607 -- 508 (G)
-- (13,200)(E) 86,642
Equity in losses of
unconsolidated real estate
partnerships................... (10,116) -- -- -- (10,116)
Equity in losses of unconsolidated
subsidiaries..................... (26,856) -- -- -- (26,856)
Loss from IPLP exchange and
assumption....................... (684) -- -- -- (684)
Minority interest in other
entities......................... (4,284) -- -- -- (4,284)
Amortization of intangibles........ (5,860) -- -- -- (5,860)
--------- ------- ----- -------- ---------
Income from operations............. 35,272 19,974 (783) 306 54,769
Gain (loss) on disposition
of properties.................... (1,785) -- -- -- (1,785)
--------- ------- ----- -------- ---------
Net income ........................ $ 33,487 $19,974 $(783) $ 306 $ 52,984
========= ======= ===== ======== =========
Net income allocable to preferred
unitholders...................... $ 63,434 $ 9,000(H) $ 72,434
========= ======== =========
Net income (loss) allocable to
common unitholders............... $ (29,947) $ (19,450)
========= =========
Basis earnings (loss) per common
unit............................. $ (0.43) $ (0.27)
========= =========
Diluted earnings (loss) per common
unit............................. $ (0.43) $ (0.27)
========= =========
Weighted average common units
outstanding...................... 69,901 2,191(I) 72,092
========= ======== =========
Weighted average common units and
common unit equivalents
outstanding...................... 69,901 2,191(I) 72,092(J)
========= ======== =========
</TABLE>
97.7-17
<PAGE> 18
---------------
(A) Represents AIMCO Properties' 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 Units
issued in connection with the OTEF Merger, at a dividend rate of 9%; and
(iii) the issuance of OP Units 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 Properties.
(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 Properties 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 the allocation of income to the Class P Preferred Units issued
in connection with the OTEF Merger, at a dividend rate of 9%.
(I) Represents the number of OP Units to be issued in connection with the
OTEF Merger.
(J) On pro forma basis, there is a net loss allocable to common unitholders.
As a result, there are no common unit equivalents included for the
computation of diluted earnings (loss) per common unit as they would be
antidilutive.
99.7-18
<PAGE> 19
AIMCO PROPERTIES, L.P.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (MERGER)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN THOUSANDS, EXCEPT PER UNIT 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
--------- ------- ----- --------- ---------
Net income (loss)................ $ 53,411 $38,156 $(688) $ 203 $ 91,082
========= ======= ===== ========= =========
Net income allocable to preferred
unitholders.................... $ 50,476 $ 6,750(H) $ 57,226
========= ========= =========
Net income (loss) allocable to
common unitholders............. $ 2,935 $ 33,856
========= =========
Basis earnings (loss) per common
unit........................... $ 0.04 $ 0.45
========= =========
Diluted earnings (loss) per
common unit.................... $ 0.04 $ 0.43
========= =========
Weighted average common units
outstanding.................... 73,854 2,191(I) 76,045
========= ========= =========
Weighted average common units
and common unit equivalents
outstanding.................... 75,986 2,191(I) 78,177
========= ========= =========
</TABLE>
99.7-19
<PAGE> 20
---------------
(A) Represents AIMCO Properties' 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
Units issued in connection with the OTEF Merger, at a dividend rate of 9%;
and (iv) the issuance of OP Units 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 Properties.
(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 the allocation of income to the Class P Preferred Units issued
in connection with the OTEF Merger, at a dividend rate of 9%.
(I) Represents the number of OP Units to be issued in connection with the OTEF
Merger.
99.7-20
