-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AHhzB3VHAHuRL3o5q6BpvXaBdTulYmkQsRZ5QTyRILFK1rFdTG96lqbZbxiw1lAF EhneX69OfACf2jFMX6Ax7A== 0000950134-00-001874.txt : 20000314 0000950134-00-001874.hdr.sgml : 20000314 ACCESSION NUMBER: 0000950134-00-001874 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19991215 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000313 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIMCO PROPERTIES LP CENTRAL INDEX KEY: 0000926660 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF APARTMENT BUILDINGS [6513] IRS NUMBER: 841275621 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-24497 FILM NUMBER: 568094 BUSINESS ADDRESS: STREET 1: 2000 SOUTH COLORADO BLVD. STREET 2: SUITE 2-1000 CITY: DENVER STATE: CO ZIP: 80222-8101 BUSINESS PHONE: 3037578101 8-K 1 FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) December 15, 1999 AIMCO PROPERTIES, L.P. ------------------------------------------------------ (Exact name of registrant as specified in its charter) MARYLAND 0-24497 84-1275621 - ---------------------------- ------------ ------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation or File Number) Identification No.) organization) COLORADO CENTER, TOWER TWO, 2000 SOUTH COLORADO BOULEVARD, SUITE 2-1000, DENVER, CO 80222-4348 ----------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (303) 757-8101 NOT APPLICABLE ------------------------------------------------------------- (Former name or Former Address, if Changed Since Last Report) 2 ITEM 5. OTHER EVENTS. In December 1999 and January 2000, AIMCO Properties, L.P., the operating partnership for Apartment Investment and Management Company, acquired from Dreyfuss Brothers, Inc. ("Dreyfuss"), four separate residential communities. AIMCO Properties, L.P. has agreements to acquire an additional five communities from Dreyfuss, which are expected to be acquired by June 30, 2000. The communities are located in Maryland and Virginia. The total value for the nine residential communities is estimated at $100,500,000, and is to be payable in cash, the assumption of indebtedness, and the issuance by AIMCO Properties, L.P. of its Class Four Partnership Preferred Units. In December, 1999 and January 2000, AIMCO Properties, Inc., acquired from Regency Windsor Companies ("Regency") fourteen separate residential communities located in Indiana, Michigan and North Carolina for $301,400,000. As consideration, AIMCO Properties, L.P. paid cash, assumed indebtedness, and issued its Partnership Common Units and Class Three Partnership Preferred Units. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements of Businesses Acquired. Combined Historical Summary of Gross Income and Direct Operating Expenses of Dreyfuss Apartment Communities for the year ended December 31, 1998 and the nine months ended September 30, 1999 (unaudited), together with the Report of Independent Auditors (is included as Exhibit 99.1 to this Report and is incorporated herein by reference). Combined Historical Summary of Gross Income and Direct Operating Expenses of Regency Windsor Apartment Communities for the year ended December 31, 1998 and the nine months ended September 30, 1999 (unaudited), together with the Report of Independent Auditors (is included as Exhibit 99.2 to this Report and is incorporated here by reference). (b) Pro Forma Financial Information. Pro Forma Financial Information of AIMCO Properties, L.P. (is included as Exhibit 99.3 to this Report and is incorporated herein by reference). (c) Exhibits The following exhibits are filed with this report: Number Description ------ ----------- 23.1 Consent of Independent Auditor - Ernst & Young LLP. 99.1 Combined Historical Summary of Gross Income and Direct Operating Expenses of Dreyfuss Apartment Communities for the year ended December 31, 1998 and the nine months ended September 30, 1999 (unaudited), together with the Report of Independent Auditor. Page 2 of 5 3 99.2 Combined Historical Summary of Gross Income and Direct Operating Expenses of Regency Windsor Apartment Communities for the year ended December 31, 1998 and the nine months ended September 30, 1999 (unaudited), together with the Report of Independent Auditors. 99.3 Pro Forma Financial Information of AIMCO Properties, L.P. Page 3 of 5 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: March 13, 2000 AIMCO PROPERTIES, L.P. By: AIMCO-GP, Inc. (Its General Partner) By: /s/ Paul J. McAuliffe --------------------- Paul J. McAuliffe Executive Vice President--Capital Markets and Chief Financial Officer Page 4 of 5 5 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION ----------- ----------- 23.1 Consent of Independent Auditor - Ernst & Young LLP. 99.1 Combined Historical Summary of Gross Income and Direct Operating Expenses of Dreyfuss Apartment Communities for the year ended December 31, 1998 and the nine months ended September 30, 1999 (unaudited), together with the Report of Independent Auditors. 99.2 Combined Historical Summary of Gross Income and Direct Operating Expenses of Regency Windsor Apartment Communities for the year ended December 31, 1998 and the nine months ended September 30, 1999 (unaudited), together with the Report of Independent Auditors. 99.3 Pro Forma Financial Information of AIMCO Properties, L.P.
Page 5 of 5 EX-23.1 2 CONSENT OF ERNST & YOUNG LLP 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statements (Form S-3 No. 333-61409) and the Registration Statement (Form S-4 No. 333-60355) of AIMCO Properties, LP of (i) our report dated October 8, 1999, with respect to the Combined Historical Summary of Gross Income and Direct Operating Expenses of the Dreyfuss Apartment Communities; and (ii) our report dated November 19, 1999, with respect to the Combined Historical Summary of Gross Income and Direct Operating Expenses of the Regency Windsor Apartment Communities; both included in the Current Report (Form 8-K) of AIMCO Properties, LP dated December 15, 1999. /s/ ERNST & YOUNG LLP Denver, Colorado March 9, 2000 EX-99.1 3 SUMMARY OF GROSS INCOME/DIRECT OPERATING EXPENSES 1 EXHIBIT 99.1 Report of Independent Auditors Partners AIMCO Properties, L.P. We have audited the accompanying Combined Historical Summary of Gross Income and Direct Operating Expenses of the Dreyfuss Apartment Communities (the "Communities") as described in Note 1 for the year ended December 31, 1998. This Combined Historical Summary is the responsibility of the Communities' management. Our responsibility is to express an opinion on this Combined Historical Summary based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Combined Historical Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Combined Historical Summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Combined Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The Combined Historical Summary has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K of AIMCO Properties, L.P., as described in Note 1, and is not intended to be a complete presentation of the income and expenses of the Communities. In our opinion, the Combined Historical Summary referred to above presents fairly, in all material respects, the gross income and direct operating expenses of the Dreyfuss Apartment Communities, as described in Note 1, for the year ended December 31, 1998, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG LLP Denver, Colorado October 8, 1999 1 2 Dreyfuss Apartment Communities Combined Historical Summary of Gross Income and Direct Operating Expenses
NINE MONTHS YEAR ENDED ENDED DECEMBER 31, SEPTEMBER 30, 1998 1999 ------------- ------------- (unaudited) GROSS INCOME Rental income $ 17,157,910 $ 13,458,968 Other income 456,564 336,807 ------------- ------------- Total gross income 17,614,474 13,795,775 DIRECT OPERATING EXPENSES Repairs and maintenance 1,458,278 1,055,680 Utilities and other property operating 1,583,070 1,244,916 General and administrative 2,720,227 1,989,925 Real estate taxes 1,151,069 960,736 Management fees 724,115 576,577 ------------- ------------- Total direct operating expenses 7,636,759 5,827,834 ------------- ------------- Excess of gross income over direct operating expenses $ 9,977,715 $ 7,967,941 ============= =============
See accompanying notes. 2 3 Dreyfuss Apartment Communities Notes to Combined Historical Summary of Gross Income and Direct Operating Expenses Year Ended December 31, 1998 and Nine Months Ended September 30, 1999 (unaudited) 1. ORGANIZATION AND BASIS OF PRESENTATION The Dreyfuss Apartment Communities (the "Communities") include nine separate residential apartment communities located in Virginia and Maryland. The Communities, which are under common management and control, are as follows:
COMMUNITY LOCATION NUMBER OF --------- -------- UNITS ----- Bradford Place Suitland, MD 214 Burgundy Park Forestville, MD 108 Hunters Crossing Leesburg, VA 164 Key Towers Alexandria, VA 142 Maple Bay Virginia Beach, VA 414 Merrill House Falls Church, VA 160 Parker House Hyattsville, MD 296 Rosecroft Mews Ft. Washington, MD 303 Tor Columbia, MD 324 ------ Total 2,125 ======
In August 1999, AIMCO Properties, L.P., entered into an agreement to acquire the Dreyfuss Apartment Communities. The accompanying Combined Historical Summary has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K of AIMCO Properties, L.P. The Combined Historical Summary is not intended to be a complete presentation of income and expenses of the Communities for the year ended December 31, 1998 and the nine months ended September 30, 1999, as certain costs such as depreciation, amortization, interest, and other debt service costs have been excluded. These costs are not considered to be direct operating expenses. 3 4 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES The preparation of the Combined Historical Summary in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts included in the Combined Historical Summary and accompanying notes thereto. Actual results could differ from those estimates. REVENUE RECOGNITION Rental income attributable to residential leases is recorded when due from residents. Leases are for periods of up to one year, with rental payments due monthly. INTERIM UNAUDITED FINANCIAL INFORMATION The accompanying interim unaudited Combined Historical Summary has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and was prepared on the same basis as the Combined Historical Summary for the year ended December 31, 1998. In the opinion of management of the Communities, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the information for this interim period have been made. The excess of combined gross income over direct operating expenses for such interim period is not necessarily indicative of the excess of gross income over direct operating expenses for the full year. 3. TRANSACTIONS WITH AFFILIATES Dreyfuss Brothers Inc. and Dreyfuss Management Services, Inc., affiliates, receive management fees relating to the Communities. The management fee ranges from 3.5% to 5.0% of gross annual cash receipts. 4 EX-99.2 4 SUMMARY OF GROSS INCOME/DIRECT OPERATING EXPENSES 1 EXHIBIT 99.2 Report of Independent Auditors Partners AIMCO Properties, L.P. We have audited the accompanying Combined Historical Summary of Gross Income and Direct Operating Expenses of the Regency Windsor Apartment Communities (the "Communities"), as described in Note 1 for the year ended December 31, 1998. This Combined Historical Summary is the responsibility of the Communities' management. Our responsibility is to express an opinion on this Combined Historical Summary based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Combined Historical Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Combined Historical Summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Combined Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The Combined Historical Summary has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K of AIMCO Properties, L.P., as described in Note 1, and is not intended to be a complete presentation of the income and expenses of the Communities. In our opinion, the Combined Historical Summary referred to above presents fairly, in all material respects, the gross income and direct operating expenses of the Regency Windsor Apartment Communities, as described in Note 1, for the year ended December 31, 1998, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG LLP Denver, Colorado November 19, 1999 1 2 Regency Windsor Apartment Communities Combined Historical Summary of Gross Income and Direct Operating Expenses
NINE MONTHS YEAR ENDED ENDED DECEMBER 31, SEPTEMBER 30, 1998 1999 ------------ ------------- (unaudited) GROSS INCOME Rental income $ 49,085,105 $ 37,419,229 Other income 2,931,990 2,343,803 ------------ ------------ Total gross income 52,017,095 39,763,032 DIRECT OPERATING EXPENSES Repairs and maintenance 5,862,791 5,921,816 Utilities and other property operating 3,044,678 2,457,676 General and administrative 9,736,047 6,548,021 Real estate taxes 4,895,284 3,632,386 Management fees 2,098,485 1,592,300 ------------ ------------ Total direct operating expenses 25,637,285 20,152,199 ------------ ------------ Excess of gross income over direct operating expenses $ 26,379,810 $ 19,610,833 ============ ============
See accompanying notes. 2 3 Regency Windsor Apartment Communities Notes to Combined Historical Summary of Gross Income and Direct Operating Expenses Year Ended December 31, 1998 and Nine Months Ended September 30, 1999 (unaudited) 1. ORGANIZATION AND BASIS OF PRESENTATION The Regency Windsor Apartment Communities (the "Communities") include fourteen separate residential apartment communities located in Indiana, Michigan and North Carolina. The Communities, which are under common management and control, have been summarized as follows:
NUMBER OF COMMUNITY LOCATION UNITS --------- -------- ----- Brookwood Apts Indianapolis, IN 500 Canterbury Green Apts Fort Wayne, IN 2,009 Colonial Crest Bloomington, IN 208 Glen Hollow Charlotte, NC 336 Lafayette/Beau Jardin West Lafayette, IN 252 Mayfair Village West Lafayette, IN 72 Michgan Meadows Indianapolis, IN 253 Northview Harbor Grand Rapids, MI 360 Oakbrook Battle Creek, MI 586 Old Orchard Grand Rapids, MI 664 Ramblewood Apts Grand Rapids, MI 1,792 Stone Point Village Fort Wayne, IN 296 Williamsburg on the Wabash West Lafayette, IN 473 Woodlands Battle Creek, MI 76 -------------- Total 7,877 ==============
In September 1999, AIMCO Properties, L.P. entered into an agreement to acquire the Communities. The accompanying Combined Historical Summary has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K of AIMCO Properties, L.P. The Combined Historical Summary is not intended to be a complete presentation of income and expenses of the Communities for the year ended December 31, 1998, and the nine months ended September 30, 1999, as certain costs such as depreciation, amortization, interest, professional fees, and other debt service costs have been excluded. These costs are not considered to be direct operating expenses. 3 4 Regency Windsor Apartment Communities Notes to Combined Historical Summary of Gross Income and Direct Operating Expenses Year Ended December 31, 1998 and Nine Months Ended September 30, 1999 (unaudited) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES The preparation of the Combined Historical Summary in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts included in the Combined Historical Summary and accompanying notes thereto. Actual results could differ from those estimates. REVENUE RECOGNITION Rental income attributable to residential leases is recorded when due from residents. Leases are for periods of up to one year, with rental payments due monthly. 4 5 INTERIM UNAUDITED FINANCIAL INFORMATION The accompanying interim unaudited Combined Historical Summary has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and was prepared on the same basis as the Combined Historical Summary for the year ended December 31, 1998. In the opinion of management of the Communities, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the information for this interim period have been made. The excess of combined gross income over direct operating expenses for such interim period is not necessarily indicative of the excess of gross income over direct operating expenses for the full year. 3. TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES Regency Windsor Management, Inc., an affiliate, receives management fees relating to the Communities. The management fee ranges from 1.0% to 6.0% of gross annual cash receipts. OTHER The Communities reimburse Regency Windsor Management, Inc. for commercial insurance premiums paid on their behalf. The Communities also provide certain employee benefits through benefit plans administered by Regency Windsor Management, Inc. 5 EX-99.3 5 PRO FORMA FINANCIAL INFORMATION 1 EXHIBIT 99.3 PRO FORMA FINANCIAL INFORMATION OF AIMCO PROPERTIES, L.P. AS OF SEPTEMBER 30, 1999 AND FOR THE YEAR ENDED DECEMBER 31, 1998 AND THE NINE MONTHS ENDED SEPTEMBER 30, 1999 INTRODUCTION In January 2000, AIMCO Properties, L.P. (the "Partnership") completed its acquisition of the Regency Windsor Apartment Communities ("Regency"), which include fourteen separate residential apartment communities located in Indiana, Michigan and North Carolina. Additionally, in early 2000, the Partnership is expected to complete its acquisition of the Dreyfuss Apartment Communities ("Dreyfuss"), which include nine separate residential apartment communities located in Virginia and Maryland. Total consideration for the above acquisitions, which included a combination of cash, assumption of debt, preferred operating partnership units, and common operating partnership units, will be approximately $401.9 million. As of December 31, 1999, eleven of the Regency properties and three of the Dreyfuss properties had been acquired while in January 2000, closing procedures for an additional three Regency properties and one Dreyfuss property were completed. The remaining five Dreyfuss property closings are expected to be completed by the second quarter of 2000. On October 1, 1998, Apartment Investment and Management Company ("AIMCO") completed its merger with Insignia Financial Group ("IFG") ("the IFG Merger"). In the IFG Merger, IFG's common stock was converted into 8,423,751 shares of Class E Cumulative Convertible Preferred Stock of AIMCO ("Class E Preferred Stock") whose issue date market value approximately equaled $292 million. In addition to receiving the same dividends as holders of AIMCO Common Stock, holders of Class E Preferred Stock were entitled to a special dividend of approximately $50 million in the aggregate. When that special dividend was paid in January, 1999, the Class E Preferred Stock automatically converted into AIMCO Common Stock on a one-for-one basis, subject to antidilution adjustments, if any. In addition, AIMCO assumed approximately $411 million in indebtedness and other liabilities of IFG and its subsidiaries and subsidiaries of AIMCO, assumed approximately $149.5 million of convertible securities and purchased approximately $5 million of IFG stock prior to the Merger. On February 26, 1999, AIMCO completed its merger with Insignia Properties Trust ("IPT")(the "IPT Merger"). In the IPT Merger, IPT's common stock was converted into 4,826,745 shares of AIMCO Class A Common Stock whose market value approximately equaled $152 million. AIMCO assumed approximately $68 million in indebtedness. In connection with the IFG Merger and the IPT Merger, AIMCO incurred approximately $55 million in transaction costs for a combined transactional value of approximately $1,183 million. AIMCO contributed substantially all the assets and liabilities of Insignia acquired in the Insignia Merger to the Partnership in exchange for 8,423,751 Class E Preferred Units. The Class E Preferred Units have terms substantially the same as the Class E Preferred Stock. In addition, AIMCO contributed substantially all the assets and liabilities of IPT acquired in the IPT Merger to the Partnership in exchange for 4,826,745 limited partnership units in the Partnership ("OP Units"). In connection with the IFG Merger, AIMCO assumed property management of approximately 192,000 multifamily units which consist of general and limited partnership investments in 115,000 units and third party management of 77,000 units. Insignia Properties Trust ("IPT"), which prior to the IFG Merger was a subsidiary of IFG, owns a 32% weighted average general and limited partnership interest in approximately 51,000 units. Immediately following the IFG Merger, in order to satisfy certain requirements of the Internal Revenue Code of 1986 (the "Code") applicable to AIMCO's status as a REIT, AIMCO engaged in a reorganization (the "IFG Reorganization") of the assets and operations of IFG whereby IFG's operations are being conducted through corporations (the "Unconsolidated Subsidiaries") in which the Partnership holds non-voting preferred stock that represents a 99% economic interest, and certain officers and/or directors of AIMCO hold, directly or indirectly, all of the voting common stock, representing a 1% economic 2 interest. As a result of the controlling ownership interest in the Unconsolidated Subsidiaries held by others, the Partnership accounts for its interest in the Unconsolidated Subsidiaries on the equity method. On May 8, 1998, AIMCO completed a merger with Ambassador Apartments, Inc. ("Ambassador"), pursuant to which Ambassador was merged into AIMCO (the "Ambassador Merger"). Each outstanding share of stock ("Ambassador Common Stock") of Ambassador, other than those shares held by AIMCO or Ambassador, were converted into 0.553 (the "Conversion Ratio") shares of AIMCO Common Stock. Any outstanding options to purchase Ambassador Common Stock were converted, at the election of the option holder, into cash or options to purchase AIMCO Common Stock at such options' then current exercise price divided by the Conversion Ratio. In accordance with the Agreement and Plan of Merger, dated December 23, 1997 and supplemented by letter dated as of March 11, 1998 (the "Ambassador Merger Agreement"), the outstanding shares of Class A Senior Cumulative Convertible Preferred Stock of Ambassador, (the "Ambassador Preferred Stock") were redeemed and converted into Ambassador Common Stock prior to the Ambassador Merger. Following the consummation of the Ambassador Merger, a subsidiary of the Partnership was merged with and into the Ambassador Operating Partnership (the "Ambassador OP Merger"). Each outstanding unit of limited partnership interest in the Ambassador Operating Partnership was converted into the right to receive 0.553 OP Units, and as a result, the Ambassador Operating Partnership became a 99.9% owned subsidiary partnership of the Partnership. Also during 1998, AIMCO (i) (a) sold 4,200,000 shares of its Class D Cumulative Preferred Stock for net proceeds of $101.5 million (the "Class D Preferred Stock Offering"); (b) sold 4,050,000 shares of its Class G Cumulative Preferred Stock for net proceeds of $98.0 million (the "Class G Preferred Stock Offering"); (c) sold 2,000,000 shares of its Class H Cumulative Preferred Stock for net proceeds of $48.1 million (the "Class H Preferred Stock Offering"); and (d) sold 1,000,000 shares of its Class J Cumulative Convertible Preferred Stock in a private placement for $100.0 million (the "Class J Preferred Stock Offering"); of which all proceeds were contributed by AIMCO to the Partnership in exchange for 4,200,000 Class D Preferred Units, 4,050,000 Class G Preferred Units, 2,000,000 Class H Preferred Units and 1,000,000 Class J Preferred Units (collectively, the "1998 Stock Offerings"); (ii) purchased 31 properties for aggregate purchase consideration of $374.8 million, of which $78.6 million was paid in the form of OP Units (the "1998 Acquisitions"); (iii) sold two real estate properties (the "1998 Dispositions"); (iv) sold 1,400,000 Class B Preferred Partnership Units of a subsidiary and warrants to purchase 875,000 shares of AIMCO Class A Common Stock for $35.0 million (the "Preferred Partnership Unit Offering"). PRO FORMA FINANCIAL INFORMATION OF AIMCO PROPERTIES The following Pro Forma Consolidated Balance Sheet of the Partnership as of September 30, 1999 has been prepared as if each of the following transactions had occurred as of September 30, 1999: (i) the purchase of the Regency properties; and (ii) the purchase of the Dreyfuss properties. The following Pro Forma Consolidated Statement of Operations of the Partnership for the year ended December 31, 1998 has been prepared as if each of the following transactions had occurred as of January 1, 1998: (i) the purchase of the Regency properties (ii) the purchase of the Dreyfuss properties (iii) the 1998 Stock Offerings; (iv) the 1998 Acquisitions; (v) the 1998 Dispositions; (vi) the Ambassador Merger; (vii) the IFG Merger; (viii) the AMIT Merger; (ix) the IPT Merger; (x) the IFG Reorganization; and (xi) the Preferred Partnership Unit Offering. The following Pro Forma Consolidated Statement of Operations of the Partnership for the nine months ended September 30, 1999 has been prepared as if each of the following transactions had occurred as of January 1, 1998: (i) the purchase of the Regency properties; and (ii) the purchase of the Dreyfuss properties. The following Pro Forma Financial Information is based, in part, on the following historical financial statements, which have been previously filed by 3 AIMCO or the Partnership: (i) the audited Consolidated Financial Statements of the Partnership for the year ended December 31, 1998; (ii) the unaudited Consolidated Financial Statements of the Partnership for the nine months ended September 30, 1999; (iii) the audited Combined Historical Summaries of Gross Income and Direct Operating Expenses of the Regency Windsor Apartment Communities for year ended December 31, 1998; (iv) the audited Combined Historical Summaries of Gross Income and Direct Operating Expenses of the Dreyfuss Apartment Communities for the year ended December 31, 1998; (v) the unaudited Consolidated Financial Statements of Ambassador for the four months ended April 30, 1998; (vi) the unaudited Consolidated Financial Statements of IFG for the nine months ended September 30, 1998; (vii) the unaudited Combined Historical Summaries of Gross Income and Direct Operating Expenses of the Regency Windsor Apartment Communities for nine months ended September 30, 1999; (viii) the unaudited Combined Historical Summaries of Gross Income and Direct Operating Expenses of the Dreyfuss Apartment Communities for the nine months ended September 30, 1999; (ix) the unaudited Consolidated Financial Statements of AMIT for the eight months ended August 31, 1998; (x) the unaudited Combined Historical Summary of Gross Income and Direct Operating Expenses of the Realty Investment Apartment Communities I for the nine months ended September 30, 1998; (xi) the unaudited Combined Historical Summary of Gross Income and Direct Operating Expenses of the Cirque Apartment Communities for the three months ended March 31, 1998; (xii) the unaudited Combined Historical Summary of Gross Income and Direct Operating Expenses of the Realty Investment Apartment Communities II for the nine months ended September 30, 1998; and (xiii) the unaudited Historical Summary of Gross Income and Direct Operating Expenses of Calhoun Beach Club Apartments for the nine months ended September 30, 1998. The following Pro Forma Financial Information should be read in conjunction with such financial statements and the notes thereto incorporated by reference herein. The unaudited Pro Forma Financial Information has been prepared using the purchase method of accounting whereby the assets and liabilities of the Regency properties, the Dreyfuss properties, Ambassador, IFG, IPT, and the 1998 Acquisitions are adjusted to estimated fair market value, based upon preliminary estimates, which are subject to change as additional information is obtained. The allocations of purchase costs are subject to final determination based upon estimates and other evaluations of fair market value. Therefore, the allocations reflected in the following unaudited Pro Forma Financial Information may differ from the amounts ultimately determined. The following unaudited Pro Forma Financial Information is presented for informational purposes only and is not necessarily indicative of the financial position or results of operations of the Partnership 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 the Partnership's management, all material adjustments necessary to reflect the effects of these transactions have been made. 4 AIMCO PROPERTIES, LP PRO FORMA CONSOLIDATED BALANCE SHEET As of September 30, 1999 In thousands, except share data
1999 Completed & Probable Historical (A) Transactions (B) Pro-forma -------------- ------------------------- ------------ Real estate $ 2,757,723 $ 393,678 $ 3,151,401 Property held for sale 4,146 -- 4,146 Investments in unconsolidated real estate partnerships 1,066,266 -- 1,066,266 Investments in unconsolidated subsidiaries 46,781 -- 46,781 Notes receivable from unconsolidated real estate partnerships 105,925 -- 105,925 Notes receivable from and advances to unconsolidated subsidiaries 140,588 -- 140,588 Cash and cash equivalents 56,203 (27,605) 28,598 Restricted cash 54,098 2,705 56,803 Notes Receivable 19,429 399 19,828 Other assets 255,309 5,079 260,388 ------------ ------------ ------------ TOTAL ASSETS $ 4,506,468 $ 374,256 $ 4,880,724 ============ ============ ============ Secured notes payable $ 1,189,187 $ 232,797 $ 1,421,984 Secured tax-exempt bond financing 392,001 -- 392,001 Unsecured short-term financing 111,700 -- 111,700 ------------ ------------ ------------ Total indebtedness 1,692,888 232,797 1,925,685 Accounts payable, accrued and other liabilities 142,207 18,482 160,689 Resident security deposits and prepaid rents 13,461 684 14,145 ------------ ------------ ------------ Total Liabilities 1,848,556 251,963 2,100,519 Committments and contingencies -- -- Partnership-obligated mandatory redeemable -- convertible preferred securities of a subsidiary trust 149,500 -- 149,500 Minority interest 79,699 2,276 81,975 Partners' capital Preferred Units 642,436 76,162 718,598 General Partner and Special Limited Partner 1,598,659 -- 1,598,659 Limited Partners 211,118 43,855 254,973 ------------ ------------ ------------ 2,452,213 120,017 2,572,230 Less: Investment in AIMCO preferred stock 23,500 -- 23,500 ------------ ------------ ------------ Total partners' capital 2,428,713 120,017 2,548,730 ------------ ------------ ------------ TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 4,506,468 $ 374,256 $ 4,880,724 ============ ============ ============
5 (A) Represents the unaudited historical consolidated financial position of AIMCO Properties, L.P. as of September 30, 1999, as reported in AIMCO Properties, L.P. Quarterly Report on Form 10-Q. (B) Represent adjustments to reflect the Dreyfuss and Regency acquisitions as if they had occurred on September 30, 1999. 6 AIMCO PROPERTIES, LP PRO FORMA CONSOLIDATED INCOME STATEMENT For the Year Ended December 31, 1998 In thousands, except share data
Completed Historical(A) Transactions(B) Ambassador(C) IFG(D) ------------- --------------- ------------- ---------- RENTAL PROPERTY OPERATIONS Rental and other property revenues $ 373,963 $ 28,001 (F) $ 35,480 $ 8,126 Property operating expenses (145,966) (12,754)(F) (14,912) (2,585) Owned property management expense (10,882) (1,187)(F) -- -- Depreciation (83,908) (6,511)(F) (8,690) (2,487) ---------- ---------- ---------- ---------- Income from property operations 133,207 7,549 11,878 3,054 ---------- ---------- ---------- ---------- SERVICE COMPANY BUSINESS Management fees and other income 22,675 -- -- 14,944 Management and other expenses (16,764) -- -- (16,630) Partnership overhead allocation (196) -- -- -- ---------- ---------- ---------- ---------- Income from service company business 5,715 -- -- (1,686) General and administrative expenses (11,418) -- -- (1,188) Interest expense (88,208) (494)(G) (9,934) (17,826) Interest income 29,252 (1) -- 22,644 Equity in earnings of unconsolidated subsidiaries 12,009 -- -- (7,562) Equity in losses of unconsolidated real estate partnerships (2,665) -- (71) (9,980) Loss from IPLP exchange and assumptions (2,648) -- -- -- Minority interest (1,868) 160(H) -- (7,537) Amortization (8,735) -- -- -- ---------- ---------- ---------- ---------- Income from operations 64,641 7,214 1,873 (20,081) Gain on disposition of properties 4,287 (4,287) -- -- ---------- ---------- ---------- ---------- Net Income 68,928 2,927 1,873 (20,081) Income attributable to preferred unit holders 26,533 16,094 -- -- ---------- ---------- ---------- ---------- Income attributable to common unit holders $ 42,395 $ (13,167) $ 1,873 $ (20,081) ========== ========== ========== ========== Basic earnings per common unit $ 0.80 ========== Diluted earnings per common unit $ 0.78 ========== Weighted average units outstanding 52,798 ========== Weighted average units and equiv. OS 54,104 ========== 1999 Completed & Probable Transactions(E) Pro-forma ------------------------- ---------- RENTAL PROPERTY OPERATIONS Rental and other property revenues $ 69,631 (I) $ 515,201 Property operating expenses (30,452)(I) (206,669) Owned property management expense (2,822)(I) (14,891) Depreciation (11,165)(I) (112,761) ---------------- ---------- Income from property operations 25,192 180,880 ---------------- ---------- SERVICE COMPANY BUSINESS Management fees and other income -- 37,619 Management and other expenses -- (33,394) Partnership overhead allocation -- (196) ---------------- ---------- Income from service company business -- 4,029 General and administrative expenses -- (12,606) Interest expense (18,477)(J) (134,939) Interest income (1,518)(K) 50,377 Equity in earnings of unconsolidated subsidiaries -- 4,447 Equity in losses of unconsolidated real estate partnerships -- (12,716) Loss from IPLP exchange and assumptions -- (2,648) Minority interest -- (9,245) Amortization -- (8,735) ---------------- ---------- Income from operations 5,197 58,844 Gain on disposition of properties -- -- ---------------- ---------- Net Income 5,197 58,844 Income attributable to preferred unit holders 6,793 49,420 ---------------- ---------- Income attributable to common unit holders $ (1,596) $ 9,424 ================ ========== Basic earnings per common unit $ 0.18 ========== Diluted earnings per common unit $ 0.17 ========== Weighted average units outstanding 53,846 ========== Weighted average units and equiv. OS 55,152 ==========
7 (A) Represents the Partnership's audited historical consolidated results of operations for the year ended December 31, 1998, as reported in the Partnership's Annual Report on Form 10-K. (B) Represents adjustments to reflect the following as if they had occurred on January 1, 1998: (i) the 1998 Stock Offerings; (ii) the 1998 Acquisitions; (iii) the 1998 Dispositions; and (iv) the Preferred Partnership Unit Offering. (C) Represents adjustments to reflect the Ambassador Merger as if the transaction had taken place on January 1, 1998. These adjustments are detailed, as follows: 8
Ambassador Ambassador Purchase Price Historical(i) Adjustments(ii) Total ------------- --------------- ---------- Rental and other property revenues $ 35,480 $ -- $ 35,480 Property operating expenses (14,912) -- (14,912) Depreciation (7,270) (1,420)(iii) (8,690) ---------- ---------- ---------- Income from property operations 13,298 (1,420) 11,878 Management fees and other income -- -- -- Management and other expenses -- -- -- Partnership overhead allocation -- -- -- ---------- ---------- ---------- Income from service company business -- -- -- General and administrative expenses (5,278) 5,278(iv) -- Interest expense (10,079) 145(v) (9,934) Interest income -- -- -- Equity in earnings of unconsolidated subsidiaries -- -- -- Equity in losses of unconsolidated real estate partnerships (71) -- (71) Loss from IPLP exchange and assumptions -- -- -- Minority interest (252) 252(vi) -- Amortization -- -- ---------- ---------- ---------- Net income $ (2,382) $ 4,255 $ 1,873 ========== ========== ==========
9 (i) Represents the unaudited historical statement of operations of Ambassador for the four months ended April 30, 1998. Certain reclassifications have been made to Ambassador's historical Statement of Operations to conform to the Partnership's Statement of Operations presentation. (ii) Represents the following adjustments occurring as a result of the Ambassador Merger: (i) the incremental depreciation of the purchase price adjustment related to real estate; (ii) the reduction in personnel costs, primarily severance costs, pursuant to a restructuring plan; (iii) the reduction of interest expense resulting from the net reduction of debt; and (iv) the elimination of the minority interest associated with Jupiter-I, L.P. (iii) Represents incremental depreciation related to the real estate assets purchased in connection with the Ambassador Merger. Buildings and improvements are depreciated on the straight-line method over a period of 30 years, and furniture and fixtures are depreciated on the straight-line method over a period of 5 years. (iv) Decrease results from identified historical costs of certain items which will be eliminated or reduced as a result of the Ambassador Merger, as follows: Duplication of public company expenses...................... $ 355 Reduction in salaries and benefits.......................... 2,482 Merger related costs........................................ 1,212 Other....................................................... 1,229 ------ $5,278 ======
The reduction in salaries and benefits is pursuant to a restructuring plan, approved by the Partnership's senior management, assuming that the Ambassador Merger had occurred on January 1, 1998 and that the restructuring plan was completed on January 1, 1998. The restructuring plan specifically identifies all significant actions to be taken to complete the restructuring plan, including the reduction of personnel, job functions, location and date of completion. (v) Represents the decrease in interest expense of $1,480 related to the repayment of the Ambassador revolving lines of credit upon consummation of the Ambassador Merger, offset by an increase in interest expense of $1,335 related to borrowings under the Partnership's line of credit. (vi) Represents elimination of minority interest in Jupiter-I, L.P. resulting from the redemption of limited partnership interests not owned by Ambassador in connection with the Ambassador Merger. (D) Represents adjustments to reflect the IFG Merger as if the transaction had taken place on January 1, 1998. These adjustments are detailed, as follows: 10
IFG IFG IFG As Merger Reorganization Adjusted(i) Adjustments(ii) Adjustments(iii) Total ----------- --------------- ---------------- ---------- Rental and other property revenues $ 8,126 $ -- $ -- $ 8,126 Property operating expenses (2,585) -- -- (2,585) Depreciation (904) (1,583)(iv) -- (2,487) ---------- ------------ ------------ ---------- Income from property operations 4,637 (1,583) -- 3,054 Management fees and other income 71,155 -- (56,211)(x) 14,944 Management and other expenses (55,463) (19,000)(v) 57,833(xi) (16,630) Corporate overhead allocation -- -- -- -- ---------- ------------ ------------ ---------- Income from service company business 15,692 (19,000) 1,622 (1,686) General and administrative expenses (61,386) 45,823(vi) 14,375(x) (1,188) Interest expense (24,871) 7,045 -- (17,826) Interest income 22,501 -- 143(xii) 22,644 Equity in losses of unconsolidated subsidiaries -- -- (7,562)(Xiii) (7,562) Equity in earnings of unconsolidated real estate partnerships 13,492 (23,472)(viii) -- (9,980) Minority interest (14,159) 6,622(vii) -- (7,537) ---------- ------------ ------------ ---------- Income from operations (44,094) 15,435 8,578 (20,081) Income tax provision 1,180 (1,180)(ix) -- -- Gain on disposition of property 6,576 (6,576) -- -- ---------- ------------ ------------ ---------- Net Income $ (36,338) $ 7,679 $ 8,578 $ (20,081) ========== ============ ============ ==========
11 (i) Represents adjustments to reflect the IFG Merger, the AMIT Merger, the IPT Merger and the spin-off of the common stock of Holdings as if these transactions had occurred on January 1, 1998. These adjustments are detailed, as follows:
IFG AMIT HOLDINGS IFG HISTORICAL(a) MERGER(b) SPIN-OFF(c) AS ADJUSTED ------------- ---------- ------------- ----------- Rental and other property revenues....................... $ 7,566 $ 560 $ -- $ 8,126 Property operating expenses...... (2,585) -- -- (2,585) Depreciation..................... (904) -- -- (904) --------- ------ --------- -------- Income from property operations..................... 4,077 560 -- 4,637 --------- ------ --------- -------- Management fees and other income......................... 311,475 -- (240,320) 71,155 Management and other expenses.... (279,076) (48) 223,661 (55,463) --------- ------ --------- -------- Income from service company business....................... 32,399 (48) (16,659) 15,692 --------- ------ --------- -------- General and administrative expenses....................... (66,272) (675) 5,561 (61,386) Interest expense................. (24,164) -- (707) (24,871) Interest income.................. 18,817 4,193 (509) 22,501 Equity in losses of unconsolidated partnerships.... 12,169 -- 1,323 13,492 Minority interest in other partnerships................... (14,159) -- -- (14,159) --------- ------ --------- -------- Income (loss) from operations.... (37,133) 4,030 (10,991) (44,094) Income tax provision............. (4,772) -- 5,952 1,180 Gain on disposition of property.. 5,888 688 -- 6,576 --------- ------ --------- -------- Item income (loss)............... $ (36,017) $4,718 $ (5,039) $(36,338) ========= ====== ========= ========
- --------------- (a) Represents the unaudited consolidated results of operations of IFG for the nine months ended September 30, 1998. Certain reclassifications have been made to IFG's historical statement of operations to conform to the Partnership's statement of operations presentation. (b) Represents the historical statement of operations of AMIT, as well as pro forma adjustments related to the AMIT Merger. The AMIT Merger closed prior to the IFG Merger. (c) Represents the distribution of two shares of Holdings common stock for each three shares of IFG common stock to holders of IFG common stock. (ii) Represents the following adjustments occurring as a result of the IFG Merger: (a) the incremental depreciation of the purchase price adjustment 12 related to consolidated real estate and investments in real estate partnerships; (b) the amortization of property management contracts resulting from the IFG Merger; (c) the increase in interest expense resulting from the net increase in debt; and (d) the elimination of the income tax provision. (iii) Represents adjustments related to the IFG Reorganization, whereby, following the IFG Merger, the Partnership contributed or sold to the combined Unconsolidated Subsidiaries certain assets and liabilities of IFG, primarily management contracts and related working capital assets and liabilities related to IFG's third party management operations. The adjustments reflect the related revenues and expenses primarily related to the management operations owned by IFG, with additional amortization recorded related to the Partnership's new basis resulting from the allocation of the purchase price of IFG. (iv) Represents incremental depreciation related to the consolidated real estate assets purchased in connection with the IFG Merger and IPT Merger, based on the Partnership's new basis resulting from the allocation of the purchase price of IFG and IPT. Buildings and improvements are depreciated on the straight-line method over a period of 20 years, and furniture and fixtures are depreciated on the straight-line method over a period of 5 years. (v) Represents incremental depreciation and amortization of the tangible and intangible assets related to the property management business of IFG, based on the Partnership's new basis resulting from the allocation of the purchase price of IFG, including amortization of property management contracts of $30,096 and depreciation of furniture, fixtures, and equipment of $2,842, less IFG's historical depreciation and amortization of $13,938. Property management contracts are amortized using the straight-line method over a period of three years. Furniture, fixtures, and equipment are depreciated using the straight-line method over a period of three years. (vi) Represents the elimination of merger related expenses recorded by IFG during the nine months ended September 30, 1998. In connection with the IFG Merger, certain IFG executives will receive one-time lump-sum payments in connection with the termination of their employment and option agreements. The total of these lump sum payments is estimated to be approximately $50,000. (vii) Represents elimination of minority interest in IPT resulting from the IPT merger. (viii) Represents amortization related to the increased basis in investment in real estate partnerships, as a result of the allocation of the purchase price of IFG and IPT, based on an estimated average life of 20 years, and based on the Partnership's new basis resulting from the allocation of the purchase price of IFG and IPT. (ix) Represents the reversal of IFG's income tax provision. (x) Represents the historical income and expenses associated with certain assets and liabilities of IFG that were contributed or sold to the Unconsolidated Subsidiaries, primarily related to the management operations of IFG. (xi) Represents (a) the historical expenses of $35,192 associated with certain assets and liabilities of IFG that were contributed or sold to the unconsolidated subsidiaries, primarily related to the management operations of IFG; and (b) the depreciation and amortization of $22,641 of certain management contracts and furniture, fixtures, and equipment that were contributed or sold to the Unconsolidated Subsidiaries, primarily related to the 13 management operations of IFG, based on the Partnership's new basis resulting from the allocation of the purchase price of IFG. (xii) Represents interest income of $2,861 earned on notes payable of $45,000 to the Partnership issued as consideration for certain assets and liabilities sold to the Unconsolidated Subsidiaries of the Partnership, net of the elimination of the Partnership's share of the related interest expense of $2,718 reflected in the equity in earnings of the Unconsolidated Subsidiaries. (xiii) Represents Partnership's equity in earnings of the Unconsolidated Subsidiaries. 14 (E) Represent adjustments to reflect the Dreyfuss and Regency acquisitions as if they had occurred on January 1, 1998. (F) Represents adjustments to reflect the 1998 Acquisitions, less the 1998 Dispositions as if they had occurred on January 1, 1998. These pro forma operating results are based on historical results of the properties, except for depreciation, which is based on the Partnership's investment in the properties. These adjustments are as follows:
1998 1998 ACQUISITIONS DISPOSITIONS TOTAL ------------ ------------ ------- Rental and other property revenues...... $28,952 $(951) $28,001 Property operating expense.............. (13,130) 376 (12,754) Owned property management expense....... (1,224) 37 (1,187) Depreciation............................ (6,604) 93 (6,511)
(G) Represents adjustments to interest expense for the following: Borrowings on the Partnership's credit facilities and other loans and mortgages assumed in connection with the 1998 Acquisitions.............................................. $(11,167) Repayments on the Partnership's credit facilities and other indebtedness with proceeds from the 1998 Dispositions and the 1998 Stock Offerings.................................. 10,326 Repayments on the Partnership's credit facilities and other indebtedness with proceeds from the Preferred Partnership Unit Offering................................. 347 ------- $ (494) =======
(H) Represents (i) loss of $537 related to limited partners in consolidated partnerships acquired in connection with the 1998 Acquisitions and (ii) income of $377 allocable to the Partnership Preferred Units. (I) Represents adjustments to reflect the Regency acquisitions and the Dreyfuss 15 acquisitions as if they had occurred on January 1, 1998. These pro forma operating results are based on historical results of the properties, except for depreciation, which is based on the Partnership's investment in the properties. (J) Represents adjustments to interest expense related to the assumption of mortgage debt in connection with the Regency acquisitions and Dreyfuss acquisitions. (K) Represents adjustments to interest income related to the forfeiture of cash in connection with the Regency acquisitions and Dreyfuss acquisitions. 16 AIMCO PROPERTIES, LP PRO FORMA CONSOLIDATED INCOME STATEMENT For the Nine Months Ended September 30, 1999 In thousands, except share data
1999 Completed & Probable Historical(A) Transactions Pro-forma ------------- ------------------------- ---------- RENTAL PROPERTY OPERATIONS Rental and other property revenues $ 347,187 $ 53,559 (B) $ 400,746 Property operating expenses (135,897) (23,811)(B) (159,708) Owned property management expense (10,332) (2,169)(B) (12,501) Depreciation (82,582) (8,374)(B) (90,956) ---------- ------------ ---------- Income from property operations 118,376 19,205 137,581 ---------- ------------ ---------- SERVICE COMPANY BUSINESS Management fees and other income 25,794 -- 25,794 Management and other expenses (25,883) -- (25,883) ---------- ------------ ---------- Income (loss) from service company business (89) -- (89) General and administrative expenses (9,226) -- (9,226) Interest expense (91,416) (13,858)(C) (105,274) Interest income 39,848 (1,139)(D) 38,709 Equity in earnings (losses) of unconsolidated real estate partnerships 7,264 -- 7,264 Equity in earnings of unconsolidated subsidiaries 2,247 -- 2,247 Loss from IPLP exchange and assumption (684) -- (684) Minority interest (2,078) -- (2,078) Amortization (5,826) -- (5,826) ---------- ------------ ---------- Income from operations 58,416 4,208 62,624 Gain on disposition of properties 330 -- 330 ---------- ------------ ---------- Net Income 58,746 4,208 62,954 Income attributable to preferred unit holders 41,571 5,096 46,667 ---------- ------------ ---------- Income attributable to common unit holders $ 17,175 (888) 16,287 ========== ============ ========== Basic earnings per unit $ 0.25 0.24 ========== ========== Diluted earnings per unit $ 0.25 0.23 ========== ========== Weighted average units outstanding 67,597 68,645 ========== ========== Weighted average units and equiv. OS 68,776 69,824 ========== ==========
17 (A) Represents the Partnership's unaudited consolidated results of operations for the nine months ended September 30, 1999, as reported in the Partnership's Quarterly Report on Form 10-Q. (B) Represent adjustments to reflect the Dreyfuss and Regency acquisitions as if they had occurred on January 1, 1998. These pro-forma operating results are based on historical results of the properties, except for depreciation, which is based on the Partnership's investment in the properties. (C) Represents interest expense adjustment related to the assumption of mortgage debt in connection with the Regency acquisitions and the Dreyfuss acquisitions. (D) Represents interest income adjustment related to the forfeiture of cash in connection with the Regency acquisitions and the Dreyfuss acquisitions. -----END PRIVACY-ENHANCED MESSAGE-----