-----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, KLm7On8DHB+ZNyy/VI6tveilU12woZcwUixXpvNazp22toub5haqY7w1XXLU2FFJ ZGUBaHPfEiJE6MdjYMojkw== 0000950134-00-002770.txt : 20000331 0000950134-00-002770.hdr.sgml : 20000331 ACCESSION NUMBER: 0000950134-00-002770 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000330 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: 10-K SEC ACT: SEC FILE NUMBER: 000-24497 FILM NUMBER: 586094 BUSINESS ADDRESS: STREET 1: 2000 SOUTH COLORADO BLVD. STREET 2: SUITE 2-1000 CITY: DENVER STATE: CO ZIP: 80222-8101 BUSINESS PHONE: 3037578101 10-K 1 FORM 10-K FOR FISCAL YEAR END DECEMBER 31, 1999 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------- FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 0-24497 AIMCO PROPERTIES, L.P. (Exact name of registrant as specified in its charter) DELAWARE 84-1275621 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2000 SOUTH COLORADO BOULEVARD, TOWER TWO, SUITE 2-1000, DENVER, CO 80222-7900 (Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (303) 757-8101 Securities Registered Pursuant to Section 12(b) of the Act:
NOT APPLICABLE NOT APPLICABLE -------------- -------------- (Title of each class (Name of each exchange on which to be so registered) each class to be registered)
Securities Registered Pursuant to Section 12(g) of the Act: PARTNERSHIP COMMON UNITS Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] As of March 8, 2000, there were 73,424,988 Partnership Common Units outstanding. DOCUMENTS INCORPORATED BY REFERENCE NONE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 AIMCO PROPERTIES, L.P. TABLE OF CONTENTS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
ITEM PAGE - ---- ---- PART I 1. Business.................................................... 1 1999 Developments........................................... 1 Financial Information About Industry Segments............... 4 Operating and Financial Strategies.......................... 4 Growth Strategies........................................... 5 Property Management Strategies.............................. 6 Taxation of the Partnership................................. 6 Taxation of AIMCO........................................... 7 Competition................................................. 7 Regulation.................................................. 7 Insurance................................................... 8 Employees................................................... 9 2. Properties.................................................. 9 3. Legal Proceedings........................................... 10 4. Submission of Matters to a Vote of Security Holders......... 11 PART II 5. Market Price of and Distributions on the Registrant's Common 11 Units and Related Unitholder Matters...................... 6. Selected Financial Data..................................... 12 7. Management's Discussion and Analysis of Financial Condition 13 and Results of Operations................................. 7a. Quantitative and Qualitative Disclosures About Market 21 Risk...................................................... 8. Financial Statements and Supplementary Data................. 21 9. Changes in and Disagreements with Accountants on Accounting 21 and Financial Disclosure.................................. PART III 10. Directors and Executive Officers of the Registrant.......... 22 11. Executive Compensation...................................... 24 12. Security Ownership of Certain Beneficial Owners and 26 Management................................................ 13. Certain Relationships and Related Transactions.............. 27 PART IV 14. Exhibits, Financial Statement Schedule and Reports on Form 28 8-K.......................................................
i 3 PART I ITEM 1. BUSINESS. AIMCO Properties, L.P. (together with its subsidiaries and other controlled entities, the "Partnership" (and together with entities in which the Partnership has a controlling financial interest, the "Company")), is a Delaware limited partnership organized pursuant to the provisions of the Delaware Revised Uniform Limited Partnership Act (as amended from time to time, or any successor to such statute, the "Act"), and is engaged in the ownership, acquisition, development, expansion, and management of multi-family apartment properties. The term of the Partnership commenced on May 16, 1994, and will continue until December 31, 2093, unless the Partnership is dissolved sooner pursuant to the provisions of the Third Amended and Restated Agreement of limited partnership, dated as of July 29, 1994 (the "Partnership Agreement"), or as otherwise provided by the Act. AIMCO-GP, Inc., a Delaware corporation (the "General Partner"), and a wholly owned subsidiary of Apartment Investment and Management Company, a Maryland corporation, which controls the Partnership ("AIMCO") is the sole general partner of the Partnership, and another wholly owned subsidiary of AIMCO, AIMCO-LP, Inc., a Delaware corporation (the "Special Limited Partner"), is a limited partner in the Partnership. As of December 31, 1999, AIMCO held an approximate 91% interest in the Partnership. AIMCO, which was formed on January 10, 1994, is a self-administered and self-managed REIT that does not have any material assets or operations other than its interest in the Partnership. On July 24, 1994, AIMCO completed its initial public offering and engaged in a business combination and consummated a series of related transactions which enabled it to continue and expand the property management and related businesses of Property Asset Management, L.L.C. and its affiliated companies, and PDI Realty Enterprises, Inc. Based on apartment unit data compiled by the National Multi Housing Council, we believe that, as of December 31, 1999, the Company was the largest owner and manager of multifamily apartment properties in the United States. As of December 31, 1999, the Company owned or managed 363,462 apartment units in 1,942 properties located in 48 states, the District of Columbia and Puerto Rico, as follows: - owned or controlled 106,148 units in 373 apartment properties; - held an equity interest in 133,113 units in 751 apartment properties; and - managed 124,201 units in 818 apartment properties for third party owners and affiliates. By virtue of its aggregate 91% interest in the Partnership and its control of the General Partner, AIMCO has the ability to control all of the day-to-day operations of the Partnership. Moreover, by virtue of its ownership interest in the Partnership and the General Partner, AIMCO is able to approve amendments to the Partnership Agreement, without the approval of any other limited partners of the Partnership, except for certain amendments that require the approval of all of the limited partners. AIMCO conducts substantially all of its operations through the Partnership. From time to time the Company has formed corporations (the "Management Companies") in which the Partnership holds non-voting preferred stock and 100% of the voting stock is owned by certain of the Company's executive officers (or entities controlled by them), including Messrs. Considine and Kompaniez. The Management Companies were formed to engage in businesses generally not permitted under the REIT provisions of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"). The Partnership's principal executive offices are located at 2000 South Colorado Boulevard, Tower Two, Suite 2-1000, Denver, Colorado 80222-7900 and its telephone number is (303) 757-8101. 1999 DEVELOPMENTS Individual Property Acquisitions The Company directly acquired 28 apartment communities in unrelated transactions during 1999 (not including those acquired in connection with the merger with Insignia Properties Trust, "IPT"). The aggregate consideration paid by the Company of $495.0 million consisted of $91.5 million in cash, 2.4 million Partnership Preferred Units ("Preferred Units"), 1.4 million Partnership Common Units ("OP Units") with 1 4 a total recorded value of $116.8 million, assumption of $110.1 million of secured long-term indebtedness, the assumption of $15.2 million of other liabilities, and new financing of $161.4 million of secured long-term indebtedness. The Company has budgeted an additional $23.9 million for initial capital enhancements related to these properties. Tender Offers During 1999, the Company made separate offers to the limited partners of approximately 600 partnerships to acquire their limited partnership interests. The Company paid approximately $258 million in cash and OP Units to acquire limited partnership interests pursuant to the offers. Property Dispositions In 1999, the Company sold 63 properties for an aggregate sales price of approximately $426.0 million. Net cash proceeds to the Company from the sales of $135.8 million were used to repay a portion of the Company's outstanding short-term indebtedness. The results of operations of 55 of these properties were accounted for by the Company under the equity method. Debt Assumptions and Financings In August 1999, AIMCO and the Partnership closed a $300 million revolving credit facility arranged by Bank of America, N.A. BankBoston, N.A. and First Union National Bank and comprised of a total of nine lender participants. The obligations under the new credit facility are secured by certain non-real estate assets of the Company. The existing lines of credit were terminated. The credit facility is used for general corporate purposes and has a two-year term with two one-year extensions. The annual interest rate under the new credit facility is based on either LIBOR or a base rate which is the higher of Bank of America's reference rate or 0.5% over the federal funds rate, plus, in either case, an applicable margin. The margin ranges between 2.05% and 2.55%, in the case of LIBOR-based loans, and between 0.55% and 1.05%, in the case of base rate loans, based upon a fixed charge coverage ratio. The weighted average interest rate at December 31, 1999 was 8.84%. The amount available under the credit facility at December 31, 1999 was $90.8 million. In March 2000, the Partnership executed an Amended and Restated Credit Agreement which increases its existing credit facility to $345 million, with an additional potential increase up to $400 million. During the year ended December 31, 1999, the Company issued $410.3 million of long-term fixed rate, fully amortizing non-recourse mortgage notes payable with a weighted average interest rate of 7.3%. Each of the notes is individually secured by one of forty properties with no cross-collateralization. The Company used the net proceeds after transaction costs of $373.6 million to repay existing debt. During the year ended December 31, 1999, the Company has also assumed $110.1 million of long-term fixed rate, fully amortizing notes payables with a weighted average interest rate of 7.9% in connection with the acquisition of properties. Each of the notes is individually secured by one of thirteen properties with no cross-collateralization. 2 5 Equity Offerings The Partnership Agreement requires that, whenever AIMCO issues shares of its Class A Common Stock or its preferred stock, the proceeds from such issuances are contributed to the Partnership in exchange for an equal number of OP Units or Preferred Units, respectively. In 1999, AIMCO raised proceeds of $304.6 million in one public offering and two direct placements of equity securities. The total proceeds were contributed by AIMCO to the Partnership in exchange for similar classes of preferred units that have the same respective terms as the preferred stock detailed below. These transactions are summarized below:
NUMBER TOTAL PROCEEDS DIVIDEND OR OF IN DISTRIBUTION TRANSACTION TYPE DATE SHARES MILLIONS RATE - ----------- ------ ---------- ------ -------------- ------------ Class K Convertible Cumulative Preferred Stock of AIMCO....... Public Feb. 1999 5,000,000 $125.0 (1) Class L Convertible Cumulative Preferred Stock of AIMCO....... Direct May 1999 5,000,000 125.0 (2) Class A Common Stock of AIMCO.... Direct Sept. 1999 1,382,580 54.6 ------ Total Proceeds 1999....... $304.6 ======
- --------------- (1) For three years from the date of original issuance, the Class K Preferred Stock dividend will be in an amount per share equal to the greater of (i) $2.00 per year (equivalent to 8% of the liquidation preference), or (ii) the cash dividends payable on the number of shares of AIMCO Class A Common Stock (or portion thereof) into which a share of Class K Preferred Stock is convertible. Beginning with the third anniversary of the date of original issuance, the Class K Preferred Stock dividend per share will be increased to the greater of (i) $2.50 per year (equivalent to 10% of the liquidation preference), or (ii) the cash dividends payable on the number of shares of AIMCO Class A Common Stock (or portion thereof) into which a share of Class K Preferred Stock is convertible. The Class K Preferred Units held by AIMCO have the same terms as the Class K Preferred Stock. (2) For three years from the date of original issuance, the Class L Preferred Stock dividend will be in an amount per share equal to the greater of (i) $2.025 per year (equivalent to 8.1% of the liquidation preference), or (ii) the cash dividends payable on the number of shares of AIMCO Class A Common Stock into which a share of Class L Preferred Stock is convertible. Beginning with the third anniversary of the date of original issuance, the holder of Class L Preferred Stock will be entitled to receive an amount per share equal to the greater of (i) $2.50 per year (equivalent to 10% of the liquidation preference), or (ii) the cash dividends payable on the number of shares of Class A Common Stock into which a share of Class L Preferred Stock is convertible. The Class L Preferred Units held by AIMCO have the same terms as the Class L Preferred Stock. Insignia Properties Trust Merger As a result of the Insignia merger on October 1, 1998, AIMCO acquired approximately 51% of the outstanding shares of beneficial interest of IPT. On February 26, 1999, IPT was merged into AIMCO. Pursuant to the merger, each of the outstanding shares of IPT that were not held by AIMCO were converted into the right to receive 0.3601 shares of AIMCO Class A Common Stock, resulting in the issuance of approximately 4.3 million shares of AIMCO Class A Common Stock (valued at approximately $158.8 million). Concurrently with the IPT merger, all the assets and liabilities of IPT were contributed by AIMCO to the Partnership in exchange for approximately 8.9 million OP Units (valued at approximately $318.2 million). Also in connection with the IPT merger, the IPLP Exchange and Assumption (under which the Partnership purchased from IPLP, a subsidiary of IPT, the economic interests underlying substantially all the assets of IPLP in exchange for assumption of all of IPLP's obligations and approximately 10.2 million OP Units) was unwound. The approximately 10.2 million OP Units issued in connection with the IPLP Exchange and Assumption were also canceled at that time. 3 6 Pending Acquisitions In the ordinary course of business, the Company engages in discussions and negotiations regarding the acquisition of apartment properties (including interests in entities that own apartment properties). The Company frequently enters into contracts and non-binding letters of intent with respect to the purchase of properties. These contracts are typically subject to certain conditions and permit the Company to terminate the contract in its sole and absolute discretion if it is not satisfied with the results of its due diligence investigation of the properties. The Company believes that such contracts essentially result in the creation of an option on the subject properties and give the Company greater flexibility in seeking to acquire properties. As of February 29, 2000, the Company had under contract or letter of intent an aggregate of 10 multi-family apartment properties with a maximum aggregate purchase price of $107.6 million, including estimated capital improvements, which, in some cases, may be paid in the form of assumption of existing debt. All such contracts are subject to termination by the Company as described above. No assurance can be given that any of these possible acquisitions will be completed or, if completed, that they will be accretive on a per share basis. Contribution and Management Agreement In order to maintain AIMCO's qualification as a REIT under the Code, AIMCO has acquired, and may in the future acquire, an interest in entities in which the Partnership does not own any interest (the "QRSs"). AIMCO and the Partnership have entered into a Contribution and Management Agreement (the "Management Agreement"), pursuant to which the Partnership has acquired from AIMCO, in exchange for interests in the Partnership, the economic benefits of the assets owned by the QRSs, and AIMCO has granted the Partnership certain rights with respect to the assets owned by the QRSs. Under the Management Agreement, the Partnership has a right of first refusal to acquire the assets owned by the QRSs for no additional consideration. Under the Management Agreement, AIMCO is obligated to contribute to the Partnership all dividends, distributions, and other proceeds received from the QRSs (excluding distributions received in respect of any interest in the Partnership). Properties owned by the QRSs and properties in which the QRSs have ownership interests are included in the consolidated financial statements of the Partnership pursuant to the Management Agreement. FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS The Company operates in one industry segment, the ownership and management of real estate properties. See the consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K for financial information relating to the Company. OPERATING AND FINANCIAL STRATEGIES The Company strives to meet its objective of providing long-term, predictable funds from operations ("FFO") per OP Unit, less an allowance for Capital Replacements of $300 per apartment unit, by implementing its operating and financing strategies which include the following: - Acquisition of Properties at Less Than Replacement Cost. The Company attempts to acquire properties at a significant discount to their replacement cost. - Geographic Diversification. The Company operates in 48 states, the District of Columbia and Puerto Rico. This geographic diversification insulates the Company, to some degree, from inevitable downturns in any one market. The Company's net income before depreciation and interest expense is earned in more than 175 local markets. In 1999, the largest single market contributed 7% to net income before depreciation and interest expense, and the five largest markets contributed 32%. - Market Growth. The Company seeks to operate in markets where population and employment growth are expected to exceed the national average and where it believes it can become a regionally significant owner or manager of properties. For the period from 1997 through 2000, annual population and 4 7 employment growth rates in the Company's five largest regional markets are forecasted to be 2.2% and 3.6%, respectively. - Product Diversification. The Company's portfolio of apartment properties spans a wide range of apartment community types, both within and among markets, including garden and high-rise apartments, as well as corporate and student housing. - Capital Replacement. The Company believes that the physical condition and amenities of its apartment communities are important factors in its ability to maintain and increase rental rates. The Company allocates approximately $300 annually per owned apartment unit for capital replacements, and reserves unexpended amounts for future capital replacements. - Debt Financing. The Company's strategy is generally to incur debt to increase its return on equity while maintaining acceptable interest coverage ratios. The Company seeks to maintain a ratio of free cash flow to combined interest expense and preferred stock dividends of between 2:1 and 3:1, and a ratio of earnings before interest, income taxes, depreciation and amortization (with certain adjustments and after a provision of approximately $300 per owned apartment unit) to debt service of at least 2:1, and to match debt maturities to the character of the assets financed. For the year ended December 31, 1999, the Company was within these targets. The Company uses predominantly long-term, fixed-rate and self-amortizing non-recourse debt in order to avoid the refunding or repricing risks of short-term borrowings. The Company uses short-term debt financing to fund acquisitions and generally expects to refinance such borrowings with proceeds from equity offerings or long-term debt financings. As of December 31, 1999, approximately 9% of the Company's outstanding debt was short-term debt and 91% was long-term debt. - Dispositions. The Company regularly sells properties that do not meet its return on investment criteria or that are located in areas where the Company does not believe that the long-term neighborhood values justify the continued investment in the properties. - Dividend Policy. The Partnership pays distributions on its OP Units to share its profitability with its OP Unitholders. The Partnership distributed 61.3%, 65.7% and 66.5% of FFO to holders of OP Units for the years ended December 31, 1999, 1998 and 1997, respectively. It is the present policy of the Board of Directors of AIMCO, as General Partner, to increase the distribution annually in an amount equal to one-half of the projected increase in FFO, adjusted for Capital Replacements, subject to minimum distribution requirements applicable to REITs. GROWTH STRATEGIES The Company seeks growth through two primary sources -- internal expansion and acquisitions. Internal Growth Strategies. The Company pursues internal growth primarily through the following strategies: - Revenue Increases. The Company increases rents where feasible and seeks to improve occupancy rates. - Controlling Expenses. Cost reductions are accomplished by local focus on the regional operating center level and by exploiting economies of scale. As a result of the size of its portfolio and its creation of regional concentrations of properties, the Company has the ability to leverage fixed costs for general and administrative expenditures and certain operating functions, such as insurance, information technology and training, over a large property base. - Redevelopment of Properties. The Company believes redevelopment of selected properties in superior locations provides advantages over development of new properties. The Company believes that redevelopment generally allows the Company to maintain rents comparable to new properties and, compared to development of new properties, can be accomplished with relatively lower financial risk, in less time and with reduced delays due to governmental regulation. 5 8 - Expansion of Properties. The Company believes that expansion within or adjacent to properties already owned or managed by the Company also provides growth opportunities at lower risk than new development. Such expansion can offer cost advantages to the extent common area amenities and on-site management personnel can service the property expansions. The Company's current policy is to limit redevelopments and expansions to 10% of total equity market capitalization. - Ancillary Services. The Company believes that its ownership and management of properties provides it with unique access to a customer base that allows us to provide additional services and thereby increase occupancy, increase rents and generate incremental revenue. The Company currently provides cable television, telephone services, appliance rental, and carport, garage and storage space rental at certain properties. Acquisition Strategies. The Company believes its acquisition strategies will increase profitability and predictability of earnings by increasing its geographic diversification, economies of scale and opportunities to provide ancillary services to tenants at its properties. Since AIMCO's initial public offering in July 1994, the Company has completed numerous acquisitions, expanding its portfolio of owned or managed properties from 132 apartment properties with 29,343 units to 1,942 apartment properties with 363,462 units as of December 31, 1999. The Company acquires additional properties primarily in three ways: - Direct Acquisitions. The Company may directly, including through mergers and other business combinations, acquire individual properties or portfolios of properties and controlling interests in entities that own or control such properties or portfolios. To date, a significant portion of the Company's growth has resulted from the acquisition of other companies that owned or controlled properties. - Acquisition of Managed Properties. The Company believes that its property management operations support its acquisition activities. Since AIMCO's initial public offering, the Company has acquired from its managed portfolio 16 properties comprising 5,697 units for total consideration of $189.9 million. - Increasing its Interest in Partnerships. For properties where the Company owns a general partnership interest in the property-owning partnership, the Company may seek to acquire, subject to its fiduciary duties, the interests in the partnership held by third parties for cash or, in some cases, in exchange for OP Units. The Company has completed tender offers with respect to approximately 1,000 partnerships and has purchased additional interests in such partnerships for cash and for OP Units. PROPERTY MANAGEMENT STRATEGIES The Company seeks to improve the operating results from its property management business by, among other methods, combining centralized financial control and uniform operating procedures with localized property management decision-making and market knowledge. The Company's management operations are organized into 31 regional operating centers. Each of the regional operating centers is supervised by a Regional Vice-President. TAXATION OF THE PARTNERSHIP The Partnership is treated as a "pass-through" entity for Federal income tax purposes and is not itself subject to Federal income taxation. Each partner of the partnership, however, is subject to tax on his allocable share of partnership tax items, including partnership income, gains, losses, deductions and credits ("Partnership Tax Items") for each taxable year, regardless of whether the Partnership makes any actual distributions of cash or other property during the taxable year. Generally, the characterization of any particular Partnership Tax Item is determined by the Partnership, rather than at the partner level, and the amount of a partner's allocable share of such item is governed by the terms of the partnership agreement. AIMCO, the General Partner, is the "tax matters partner" of the Partnership for Federal income tax purposes. The tax matters 6 9 partner is authorized, but not required, to take certain actions on behalf of the Partnership with respect to tax matters. TAXATION OF AIMCO AIMCO has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, commencing with its taxable year ended December 31, 1994, and the Company intends to continue to operate in such a manner. AIMCO's current and continuing qualification as a REIT depends on its ability to meet the various requirements imposed by the Internal Revenue Code, through actual operating results, distribution levels and diversity of stock ownership. If AIMCO qualifies for taxation as a REIT, it will generally not be subject to U.S. federal corporate income tax on its net income that is currently distributed to stockholders. This treatment substantially eliminates the "double taxation" (at the corporate and stockholder levels) that generally results from investment in a corporation. If AIMCO fails to qualify as a REIT in any taxable year, its taxable income will be subject to U.S. federal income tax at regular corporate rates (including any applicable alternative minimum tax). Even if AIMCO qualifies as a REIT, it may be subject to certain state and local income taxes and to U.S. federal income and excise taxes on its undistributed income. If in any taxable year AIMCO fails to qualify as a REIT and incurs additional tax liability, AIMCO may need to borrow funds or liquidate certain investments in order to pay the applicable tax and AIMCO would not be compelled to make distributions under the Code. Unless entitled to relief under certain statutory provisions, AIMCO would also be disqualified from treatment as a REIT for the four taxable years following the year during which qualification is lost. Although AIMCO currently intends to operate in a manner designed to qualify as a REIT, it is possible that future economic, market, legal, tax or other considerations may cause AIMCO to fail to qualify as a REIT or may cause the Board of Directors to revoke AIMCO's REIT election. AIMCO and its stockholders may be subject to state or local taxation in various state or local jurisdictions, including those in which it or they transact business or reside. The state and local tax treatment of AIMCO and its stockholders may not conform to the U.S. federal income tax treatment. COMPETITION There are numerous housing alternatives that compete with the Company's properties in attracting residents. The Company's properties compete directly with other multi-family rental apartments and single family homes that are available for rent or purchase in the markets in which the Company's properties are located. The Company's properties also compete for residents with new and existing and condominiums. The number of competitive properties in a particular area could have a material effect on the Company's ability to lease apartment units at its properties and on the rents charged. The Company competes with numerous real estate companies in acquiring, developing and managing multi-family apartment properties and seeking tenants to occupy its properties. In addition, the Company competes with numerous property management companies in the markets where the properties managed by the Company are located. REGULATION General Multifamily apartment properties are subject to various laws, ordinances and regulations, including regulations relating to recreational facilities such as swimming pools, activity centers and other common areas. Changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions, as well as changes in laws affecting development, construction and safety requirements, may result in significant unanticipated expenditures, which would adversely affect the Company's cash flows from operating activities. In addition, future enactment of rent control or rent stabilization laws or other laws regulating multi-family housing may reduce rental revenue or increase operating costs in particular markets. 7 10 Laws Benefiting Disabled Persons Under the Americans with Disabilities Act of 1990, all places of public accommodation are required to meet certain Federal requirements related to access and use by disabled persons. These requirements became effective in 1992. A number of additional Federal, state and local laws may also require modifications to the Company's properties, or restrict certain further renovations of the properties, with respect to access thereto by disabled persons. For example, the Fair Housing Amendments Act of 1988 requires apartment properties first occupied after March 13, 1990 to be accessible to the handicapped. Noncompliance with these laws could result in the imposition of fines or an award of damages to private litigants and also could result in an order to correct any non-complying feature, which could result in substantial capital expenditures. Although the Company believes that its properties are substantially in compliance with present requirements, it may incur unanticipated expenses to comply with these laws. Regulation of Affordable Housing As of December 31, 1999, the Company owned or controlled 27 properties and held an equity interest in 434 properties with a combined weighted average ownership percentage of 24%. AIMCO also managed for third parties and affiliates 477 properties that benefit from governmental programs intended to provide housing to people with low or moderate incomes. These programs, which are usually administered by the United States Department of Housing and Urban Development ("HUD") or state housing finance agencies, typically provide mortgage insurance, favorable financing terms or rental assistance payments to the property owners. As a condition to the receipt of assistance under these programs, the properties must comply with various requirements, which typically limit rents to pre-approved amounts. If permitted rents on a property are insufficient to cover costs, a sale of the property may become necessary, which could result in a loss of management fee revenue. The Company must obtain the approval of HUD in order to manage, or acquire a significant interest in, a HUD-assisted or HUD-insured property. This approval process is commonly referred to as "2530 Clearance." The Company had three unresolved flags in the 2530 system as of December 31, 1999, which the Company believes will not have a material effect on its ability to receive 2530 approval. The Company can make no assurance, however, that it will always receive such approval. Environmental The Company is subject to various Federal, state and local laws that impose liability on property owners or operators for the costs of removal or remediation of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of the hazardous substances. The presence of, or the failure to properly remediate, hazardous substances may adversely affect occupancy at contaminated apartment communities and our ability to sell or borrow against contaminated properties. In addition to the costs associated with investigation and remediation actions brought by governmental agencies, the presence of hazardous wastes on a property could result in personal injury or similar claims by private plaintiffs. The Company also is subject to various laws that impose liability for the cost of removal or remediation of hazardous substances at a disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous or toxic substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of our properties, we could potentially be liable for environmental liabilities or costs associated with our properties or properties we may acquire or manage in the future. INSURANCE Management believes that the Company's properties are covered by adequate fire, flood and property insurance provided by reputable companies and with commercially reasonable deductibles and limits. 8 11 EMPLOYEES The Company has a staff of employees performing various acquisition, redevelopment and management functions. The Company, through the Partnership and the Management Companies, has approximately 12,500 employees, most of whom are employed at the property level. None of the employees are represented by a union, and the Company has never experienced a work stoppage. The Company believes it maintains satisfactory relations with its employees. ITEM 2. PROPERTIES. The Company's properties are located in 48 states, Puerto Rico and the District of Columbia. The properties are managed by four Division Vice-Presidents controlling 31 regional operating centers. The following table sets forth information for the regional operating centers as of December 31, 1999:
NUMBER OF NUMBER OF REGIONAL OPERATING CENTER DIVISION PROPERTIES UNITS ------------------------- --------- ---------- --------- Chicago, IL.......................................... Far West 57 10,761 Denver, CO........................................... Far West 84 14,279 Kansas City, MO...................................... Far West 72 11,094 Los Angeles, CA...................................... Far West 53 9,505 Oakland, CA.......................................... Far West 69 8,013 Phoenix, AZ.......................................... Far West 52 13,008 ----- ------- 387 66,660 ----- ------- Allentown, PA........................................ East 116 9,693 Columbia, SC......................................... East 73 13,767 Greenville, SC....................................... East 86 12,016 Philadelphia, PA..................................... East 62 19,512 Rockville, MD........................................ East 62 16,881 Tarrytown, NY........................................ East 67 9,413 ----- ------- 466 81,282 ----- ------- Atlanta, GA.......................................... Southeast 56 11,066 Boca Raton, FL....................................... Southeast 25 6,083 Miami, FL............................................ Southeast 32 7,400 Mobile, AL........................................... Southeast 60 9,893 Nashville, TN........................................ Southeast 58 10,720 Orlando, FL.......................................... Southeast 48 10,444 Tampa, FL............................................ Southeast 56 12,921 ----- ------- 335 68,527 ----- ------- Austin, TX........................................... West 54 10,202 Columbus, OH......................................... West 62 12,426 Dallas I, TX......................................... West 58 10,989 Dallas II, TX........................................ West 68 13,281 Houston I, TX........................................ West 47 10,290 Houston II, TX....................................... West 48 12,062 Indianapolis, IN..................................... West 51 13,741 ----- ------- 388 82,991 ----- -------
9 12
NUMBER OF NUMBER OF REGIONAL OPERATING CENTER DIVISION PROPERTIES UNITS ------------------------- --------- ---------- --------- Portfolio: Senior Living Sub ROC 1.............................. Oxford 8 1,637 Affordable Midwest................................... Oxford 42 5,409 Conventional Mideast................................. Oxford 32 8,289 Conventional Midwest................................. Oxford 45 10,725 Conventional South................................... Oxford 38 10,337 ----- ------- 165 36,397 ----- ------- Other................................................ 201 27,605 ----- ------- 1,942 363,462 ===== =======
At December 31, 1999, the Company owned or controlled 373 properties containing 106,148 units. These owned or controlled properties contain, on average, 285 apartment units, with the largest property containing 2,113 apartment units. These properties offer residents a range of amenities, including swimming pools, clubhouses, spas, fitness centers, tennis courts and saunas. Many of the apartment units offer design and appliance features such as vaulted ceilings, fireplaces, washer and dryer hook-ups, cable television, balconies and patios. In addition, at December 31, 1999, the Company held an equity interest in 751 properties containing 133,113 units, and managed 818 other properties containing 124,201 units. The Company's total portfolio of 1,942 properties contain, on average, 187 apartment units, with the largest property containing 2,907 apartment units. Substantially all of the properties owned or controlled by the Company are encumbered by mortgage indebtedness or serve as collateral for the Company's indebtedness. At December 31, 1999, the Company had aggregate mortgage indebtedness totaling $2,375.1 million, which was secured by 361 properties with a combined net book value of $4,028.8 million, having an aggregate weighted average interest rate of 6.66%. As of December 31, 1999, approximately 9% of the Company's outstanding debt was short-term debt and 91% was long-term debt. See the financial statements included elsewhere in this Annual Report on Form 10-K for additional information about the Company's indebtedness. ITEM 3. LEGAL PROCEEDINGS. General The Company is a party to various legal actions resulting from its operating activities. These actions are routine litigation and administrative proceedings arising in the ordinary course of business, some of which are covered by liability issuance, and none of which are expected to have a material adverse effect on the consolidated financial condition or results of operations of the Company. Limited Partnerships In connection with the Company's offers to purchase interests in limited partnerships that own properties, the Company and its affiliates are sometimes subject to legal actions, including allegations that such activities may involve breaches of fiduciary duties to the limited partners of such partnerships or violations of the relevant partnership agreements. The Company believes it complies with its fiduciary obligations and relevant partnership agreements, and does not expect such legal actions to have a material adverse effect on the consolidated financial condition or results of operations of the Company and its subsidiaries taken as a whole. The Company may incur costs in connection with the defense or settlement of such litigation, which could adversely affect the Company's desire or ability to complete certain transactions and thereby have a material adverse effect on the Company and its subsidiaries. 10 13 Pending Investigations of HUD Management Arrangements In 1997, NHP received subpoenas from the HUD Inspector General ("IG") requesting documents relating to arrangements whereby NHP or any of its affiliates provides compensation to owners of HUD-assisted or HUD-insured multi-family projects in exchange for or in connection with property management of a HUD project. In July 1999, NHP received a grand jury subpoena requesting documents relating to the same subject matter as the HUD IG subpoenas and NHP's operation of a group purchasing program created by NHP, known as Buyers Access. To date, neither the HUD IG nor the grand jury has initiated any action against NHP or the Company or, to NHP's or the Company's knowledge, any owner of a HUD property managed by NHP. The Company believes that NHP's operations and programs are in compliance, in all material respects, with all laws, rules and regulations relating to HUD-assisted or HUD-insured properties. The Company is cooperating with the investigations and does not believe that the investigations will result in a material adverse impact on its operations. However, as with any similar investigation, there can be no assurance that these will not result in material fines, penalties or other costs. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. PART II ITEM 5. MARKET PRICE OF AND DISTRIBUTIONS ON THE REGISTRANT'S COMMON UNITS AND RELATED UNITHOLDER MATTERS. There is no public market for the OP Units, and the Partnership does not intend to list the OP Units on any securities exchange. In addition, the Partnership Agreement restricts the transferability of OP Units. The following table sets forth the cash distributions per OP Unit during the years ended December 31, 1999 and 1998.
YEAR ENDED DECEMBER 31, ---------------- 1999 1998 ------ ------- 1st Quarter................................................. $0.625 $0.5625 2nd Quarter................................................. 0.625 0.5625 3rd Quarter................................................. 0.625 0.5625 4th Quarter................................................. 0.625 0.5625
On March 8, 2000, there were 73,424,988 OP Units outstanding, held by 2,627 Unitholders of record. For the year ended December 31, 1999, the Partnership issued 1.0 million OP Units and 2.3 million Preferred Units in transactions to acquire real estate property or interests in real estate property. Each of these transactions was exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(2) thereof or Regulation D thereunder. During the year ended December 31, 1999, the Partnership issued to AIMCO, in exchange for cash, 5,000,000 Class K Preferred Units, and 5,000,000 Class L Preferred Units. All the proceeds were used to repay indebtedness or for general corporate purposes. Each of these transactions was also exempt from registration under the Securities Act, pursuant to Section 4(2) thereof or Regulation D thereunder. 11 14 ITEM 6. SELECTED FINANCIAL DATA The following historical selected financial data for the Company is based on audited financial statements. This information should be read in conjunction with such financial statements, including the notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included herein.
FOR THE YEAR ENDED DECEMBER 31, ---------------------------------------------------------- 1999 1998 1997 1996 1995 ---------- ---------- ---------- -------- -------- OPERATING DATA: RENTAL PROPERTY OPERATIONS: Rental and other income................................... $ 531,883 $ 373,963 $ 193,006 $100,516 $ 74,947 Property operating expenses............................... (213,959) (145,966) (76,168) (38,400) (30,150) Owned property management expenses........................ (15,322) (10,882) (6,620) (2,746) (2,276) Depreciation.............................................. (131,257) (83,908) (37,741) (19,556) (15,038) ---------- ---------- ---------- -------- -------- Income from property operations........................... 171,345 133,207 72,477 39,814 27,483 ---------- ---------- ---------- -------- -------- SERVICE COMPANY BUSINESS: Management fees and other income.......................... 42,877 22,675 13,937 8,367 8,132 Management and other expenses............................. (25,470) (16,960) (10,961) (6,150) (5,731) ---------- ---------- ---------- -------- -------- Income from service company business...................... 17,407 5,715 2,976 2,217 2,401 ---------- ---------- ---------- -------- -------- General and administrative expenses....................... (12,016) (10,336) (5,396) (1,512) (1,804) Interest expense.......................................... (139,124) (88,208) (51,385) (24,802) (13,322) Interest income........................................... 62,183 28,170 8,676 523 658 Equity in losses of unconsolidated real estate partnerships............................................ (2,588) (2,665) (1,798) -- -- Equity in earnings (losses) of unconsolidated subsidiaries............................................ (2,400) 12,009 4,636 -- -- Loss from IPLP Exchange and Assumption.................... (684) (2,648) -- -- -- Minority interest......................................... (5,788) (1,868) 1,008 (111) -- Amortization.............................................. (5,860) (8,735) (948) (500) (428) ---------- ---------- ---------- -------- -------- Income from operations.................................... 82,475 64,641 30,246 15,629 14,988 Gain (loss) on disposition of properties.................. (1,785) 4,287 2,720 44 -- ---------- ---------- ---------- -------- -------- Income before extraordinary item.......................... 80,690 68,928 32,966 15,673 14,988 Extraordinary item -- early extinguishment of debt........ -- -- (269) -- -- ---------- ---------- ---------- -------- -------- Net income................................................ $ 80,690 $ 68,928 $ 32,697 $ 15,673 $ 14,988 ========== ========== ========== ======== ======== OTHER INFORMATION: Total owned or controlled properties (end of period)...... 373 234 147 94 56 Total owned or controlled apartment units (end of period)................................................. 106,148 61,672 40,039 23,764 14,453 Total equity apartment units (end of period).............. 133,113 171,657 83,431 3,611 6,349 Units under management (end of period).................... 124,201 146,034 69,587 15,439 13,245 Basic earnings per OP Unit................................ $ 0.39 $ 0.80 $ 1.09 $ 1.05 $ 0.86 Diluted earnings per OP Unit.............................. $ 0.38 $ 0.78 $ 1.08 $ 1.04 $ 0.86 Distributions paid per OP Unit............................ $ 2.50 $ 2.25 $ 1.85 $ 1.70 $ 1.66 BALANCE SHEET INFORMATION: Real estate, before accumulated depreciation.............. $4,508,535 $2,743,865 $1,657,207 $865,222 $477,162 Real estate, net of accumulated depreciation.............. 4,092,543 2,515,710 1,503,922 745,145 448,425 Total assets.............................................. 5,684,251 4,186,764 2,100,510 827,673 480,361 Total indebtedness........................................ 2,584,289 1,601,730 808,530 522,146 268,692 Redeemable partnership units.............................. -- -- 197,086 96,064 38,463 Partnership-obligated mandatorily redeemable convertible preferred securities of a subsidiary trust.............. 149,500 149,500 -- -- -- Partners' capital......................................... 2,486,889 2,153,335 960,176 178,462 160,947
12 15 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. OVERVIEW The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements in certain circumstances. Certain information included in this report and other filings (collectively "SEC Filings") under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (as well as information communicated orally or in writing between the dates of such SEC Filings) contains or may contain information that is forward looking, including, without limitation, statements regarding the effect of acquisitions, the Company's future financial performance and the effect of government regulations. Actual results may differ materially from those described in the forward looking statements and will be affected by a variety of risks and factors including, without limitation, national and local economic conditions, the general level of interest rates, terms of governmental regulations that affect the Company and interpretations of those regulations, the competitive environment in which the Company operates, financing risks, including the risk that the Company's cash flows from operations may be insufficient to meet required payments of principal and interest, real estate risks, including variations of real estate values and the general economic climate in local markets and competition for tenants in such markets, acquisition and development risks, including failure of such acquisitions to perform in accordance with projections, and possible environmental liabilities, including costs which may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by the Company. In addition, AIMCO's continued qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code. Readers should carefully review the Company's financial statements and the notes thereto, as well as the risk factors described in the SEC Filings. The following discussion and analysis of the results of operations and financial condition of the Company should be read in conjunction with the financial statements incorporated by reference in Item 8 of this Annual Report on Form 10-K. The following discussion of results of operations is based on net income calculated under accounting principles generally accepted in the United States. The Company, however, considers funds from operations, less a reserve for capital replacements, to be a more meaningful measure of economic performance. RESULTS OF OPERATIONS Comparison of the Year Ended December 31, 1999 to the Year Ended December 31, 1998 NET INCOME The Company recognized net income of $80.7 million, and net income attributable to holders of OP Units of $26.5 million, for the year ended December 31, 1999, compared to net income and net income attributable to holders of OP Units of $68.9 million and $42.4 million, respectively, for the year ended December 31, 1998. Net income attributable to holders of OP Units represents net income less distributions on Preferred Units. The increase in net income of $11.8 million, or 17.1%, was primarily the result of the following: - the increase in net "same store" property results; - the acquisition of 22,459 units in 82 apartment communities during 1998; - the acquisition of 12,721 units in 28 apartment communities during 1999; - the acquisition of Ambassador Apartments, Inc. in May 1998 which impacted the second half of 1998; - the acquisition of the Insignia Multi-family Business in October 1998 which primarily impacted 1999; - the completion of the Insignia Properties Trust Merger in February 1999; - the purchase of $258 million in limited partnership interests from unaffiliated third parties; and - an increase in interest income on notes receivable from unconsolidated real estate partnerships. 13 16 The effect of the above on net income was partially offset by the sale of eight properties in 1999 and four properties in 1998. These factors are discussed in more detail in the following paragraphs. Rental Property Operations The increases in rental property operations resulted primarily from improved same store sales results, acquisitions of properties in 1998 and 1999, and through the purchase of limited partnership interests from unaffiliated third parties which gave the Company a controlling interest in partnerships owning 125 properties in 1999. Rental and other property revenues from the Company's owned and controlled properties totaled $531.9 million for the year ended December 31, 1999, compared to $374.0 million for the year ended December 31, 1998, an increase of $157.9 million, or 42.2%. Property operating expenses totaled $214.0 million for the year ended December 31, 1999, compared to $146.0 million for the year ended December 31, 1998, an increase of $68.0 million, or 46.6%. Property operating expenses consist of on-site payroll costs, utilities (net of reimbursements received from tenants), contract services, turnover costs, repairs and maintenance, advertising and marketing, property taxes and insurance. Owned property management expenses, representing the costs of managing the Company's owned or controlled properties, totaled $15.3 million for the year ended December 31, 1999, compared to $10.9 million for the year ended December 31, 1998, an increase of $4.4 million, or 40.4%. Service Company Business Income from the service company business was $17.4 million for the year ended December 31, 1999, compared to $5.7 million for the year ended December 31, 1998, an increase of $11.7 million or 205.3%. The increase was primarily due to management contracts acquired in the Insignia and IPT mergers that are held by the Company, as well as the transfer of majority-owned management contracts from the unconsolidated management companies to the Company. When the Company owns at least a 40% interest in a real estate partnership, the management contract with that real estate partnership is assigned to the Company increasing the amount of revenues recognized by the consolidated service company operations. General and Administrative Expenses General and administrative expenses totaled $12.0 million for the year ended December 31, 1999, compared to $10.3 million for the year ended December 31, 1998, an increase of $1.7 million, or 16.5%. The increase in general and administrative expenses is primarily due to efforts to align expenses with the revenues they help generate. The results of these efforts increased the amount of expenses allocated to both consolidated and unconsolidated service company management expenses. Interest Expense Interest expense, which includes the amortization of deferred finance costs, totaled $139.1 million for the year ended December 31, 1999, compared to $88.2 million for the year ended December 31, 1998, an increase of $50.9 million or 57.7%. The increase was primarily due to interest expense incurred in connection with 1999 and 1998 acquisitions, as well as the consolidation of an additional 125 properties when control was obtained. Interest Income Interest income totaled $62.2 million for the year ended December 31, 1999, compared to $28.2 million for the year ended December 31, 1998, an increase of $34.0 million or 120.6%. The Company holds investments in notes receivable which were either extended by the Company and are carried at the face amount plus accrued interest ("par value notes") or were made by predecessors whose positions have been acquired by the Company at a discount and are carried at the acquisition amount using the cost recovery method ("discounted notes"). $32.5 million of the increase in interest income is due to the recognition of 14 17 interest income that had previously been deferred and portions of the related discounts for certain discounted notes. Based upon closed or pending transactions, market conditions, and improved operations of the obligor, the collectibility of such notes is now believed to be probable and the amounts and timing of collections are estimable. The remaining increase is primarily related to other recurring interest earned on both the par value and discounted notes made by the Company to the partnerships in which the Company acts as the general partner and interest earned on notes receivable acquired in the mergers with Insignia and IPT. Comparison of the Year Ended December 31, 1998 to the Year Ended December 31, 1997 NET INCOME The Company recognized net income of $68.9 million, and net income attributable to holders of OP Units of $42.4 million, for the year ended December 31, 1998, compared to net income and net income attributable to holders of OP Units of $32.7 million and $30.4 million, respectively, for the year ended December 31, 1997. Net income attributable to holders of OP Units represents net income less distributions on Preferred Units. The increase in net income of $36.2 million, or 110.7%, was primarily the result of the following: - the increase in net "same store" property results; - the acquisition of 11,706 units in 44 apartment communities during 1997; - the acquisition of 22,459 units in 82 apartment communities during 1998; - the acquisition of NHP Incorporated ("NHP") in December 1997 which impacted operations in 1998; - the acquisition of Ambassador Apartments, Inc. in May 1998 which impacted the second half of 1998; - the acquisition of the Insignia Multi-family Business in October 1998 which impacted the last quarter of 1998; and - an increase in interest income on notes receivable from unconsolidated real estate partnerships. The effect of the above on net income was partially offset by the sale of four properties in 1998 and five properties in 1997. These factors are discussed in more detail in the following paragraphs. Rental Property Operations The increases in rental property operations resulted primarily from improved same store sale results, acquisitions of properties in 1997 and 1998, and acquisitions of controlling interests in properties through the NHP, Ambassador and Insignia mergers. Rental and other property revenues from the Company's owned and controlled properties totaled $374.0 million for the year ended December 31, 1998, compared to $193.0 million for the year ended December 31, 1997, an increase of $181.0 million, or 93.8%. Property operating expenses totaled $146.0 million for the year ended December 31, 1998, compared to $76.2 million for the year ended December 31, 1997, an increase of $69.8 million, or 91.6%. Property operating expenses consist of on-site payroll costs, utilities (net of reimbursements received from tenants), contract services, turnover costs, repairs and maintenance, advertising and marketing, property taxes and insurance. Owned property management expenses, representing the costs of managing the Company's owned or controlled properties, totaled $10.9 million for the year ended December 31, 1998, compared to $6.6 million for the year ended December 31, 1997, an increase of $4.3 million, or 65.2%. Service Company Business Income from the service company business was $5.7 million for the year ended December 31, 1998, compared to $3.0 million for the year ended December 31, 1997, an increase of $2.7 million or 90.0%. The 15 18 increase was primarily due to management contracts acquired in the Insignia merger that are held by the Company, as well as the transfer of majority-owned management contracts from the management companies to the Company. When the Company owns at least a 40% interest in a real estate partnership, the management contract with that real estate partnership is assigned to the Company increasing the amount of revenues recognized by the consolidated service company operations. General and Administrative Expenses General and administrative expenses totaled $10.3 million for the year ended December 31, 1998, compared to $5.4 million for the year ended December 31, 1997, an increase of $4.9 million, or 90.7%. The increase in general and administrative expenses is primarily due to additional corporate costs and additional employee salaries associated with the purchase of NHP Real Estate Companies in June 1997 and the mergers with NHP Incorporated in December 1997, Ambassador Apartments, Inc. in May 1998 and Insignia Financial Group, Inc. in October 1998. In addition, due to the growth of the Company, several new departments have been added including legal, tax and Limited Partnership administration, as well as increased levels of personnel in the accounting and finance departments. Interest Expense Interest expense, which includes the amortization of deferred finance costs, totaled $88.2 million for the year ended December 31, 1998, compared to $51.4 million for the year ended December 31, 1997, an increase of $36.8 million or 71.6%. The increase was primarily due to interest expense incurred in connection with the acquisition of interests in Ambassador Apartments, Inc. and Insignia Financial Group, Inc. and interest expense incurred in connection with 1998 and 1997 acquisitions. Interest Income Interest income totaled $28.2 million for the year ended December 31, 1998, compared to $8.7 million for the year ended December 31, 1997. The increase is primarily due to interest earned on the increased average outstanding balances of notes receivable from unconsolidated real estate partnerships and subsidiaries. LIQUIDITY AND CAPITAL RESOURCES At December 31, 1999, the Company had $101.6 million in cash and cash equivalents and $84.6 million of restricted cash, primarily consisting of reserves and impounds held by lenders for capital expenditures, property taxes and insurance. In addition, cash, cash equivalents and restricted cash are held by partnerships and subsidiaries which are not presented on a consolidated basis. The Company's principal demands for liquidity include normal operating activities, payments of principal and interest on outstanding debt, capital improvements, acquisitions of and investments in properties, distributions paid to its unitholders and distributions paid to limited partners. The Company considers its cash provided by operating activities to be adequate to meet short-term liquidity demands. In August 1999, AIMCO and the Partnership closed a $300 million revolving credit facility arranged by Bank of America, N.A. BankBoston, N.A. and First Union National Bank and comprised of a total of nine lender participants. The obligations under the credit facility are secured by certain non-real estate assets of the Company. The existing lines of credit were terminated. The credit facility is used for general corporate purposes and has a two-year term with two one-year extensions. The annual interest rate under the credit facility is based on either LIBOR or a base rate which is the higher of Bank of America's reference rate or 0.5% over the federal funds rate, plus, in either case, an applicable margin. The margin ranges between 2.05% and 2.55%, in the case of LIBOR-based loans, and between 0.55% and 1.05%, in the case of base rate loans, based upon a fixed charge coverage ratio. The weighted average interest rate at December 31, 1999 was 8.84%. The amount available under the credit facility at December 31, 1999 was $90.8 million. In March 2000, the Partnership executed an Amended and Restated Credit Agreement which increases its existing credit facility to $345 million, with an additional potential increase up to $400 million. 16 19 As of December 31, 1999, 96.8% of the Company's owned or controlled properties and 45.4% of its total assets were encumbered by debt. The Company had total outstanding indebtedness of $2,584.3 million, of which $2,375.1 million was secured by properties. The Company's indebtedness is comprised of $1,954.3 million of secured long-term financing, $420.8 million of secured tax-exempt bond financing and $209.2 in unsecured short-term financing. As of December 31, 1999, approximately 9% of the Company's indebtedness bears interest at variable rates. General Motors Acceptance Corporation has made 113 loans (the "GMAC Loans") to property owning partnerships of the Company, each of which is secured by the property owned by such partnership. The 113 GMAC Loans had an aggregate outstanding principal balance of $570.1 million as of December 31, 1999. Certain GMAC Loans are cross-collateralized with certain other GMAC Loans. Other than certain GMAC Loans, none of the Company's debt is subject to cross-collateralization provisions. The weighted average interest rate on the Company's secured, long-term notes payable was 6.66% with a weighted average maturity of 12.8 years as of December 31, 1999. At December 31, 1999, the weighted average interest rate on the Company's unsecured short-term financing was 8.84%. During the year ended December 31, 1999, the Company issued $410.3 million of long-term fixed rate, fully amortizing notes payable with a weighted average interest rate of 7.3%. Each of the notes is individually secured by one of forty properties with no cross-collateralization. The Company used the net proceeds after transaction costs of $373.6 million to repay existing debt. During the year ended December 31, 1999, the Company has also assumed $110.1 million of long-term fixed rate, fully amortizing notes payable with a weighted average interest rate of 7.9% in connection with the acquisition of properties. Each of the notes is individually secured by one of thirteen properties with no cross-collateralization. The Company expects to meet its long-term liquidity requirements, such as refinancing debt and property acquisitions, through long-term borrowings, both secured and unsecured, the issuance of debt or equity securities (including OP Units) and cash generated from operations. In August 1998, AIMCO and the Partnership filed a shelf registration statement with the Securities and Exchange Commission ("SEC") with respect to an aggregate of $1,268 million of debt and equity securities of AIMCO (of which $268 million was carried forward from AIMCO's 1997 shelf registration statement) and $500 million of debt securities of the Partnership. The registration statement was declared effective by the SEC on December 10, 1998. As of December 31, 1999, AIMCO had $1,088 million available and the Partnership had $500 million available from this registration statement. The Company expects to finance acquisition of real estate interests with cash from operations or the issuance of equity securities and debt. CAPITAL EXPENDITURES For the year ended December 31, 1999, the Company spent a total of $291.7 million for capital expenditures on its portfolio of assets. The Company's share of those expenditures for its conventional assets are as follows: $38.4 million for capital replacements (expenditures for routine maintenance of a property); $54.8 million for Initial Capital Expenditures ("ICE", expenditures at a property that have been identified, at the time the property is acquired, as expenditures to be incurred within one year of the acquisition); and $43.3 million for construction and capital enhancements (amenities that add a material new feature or revenue source at a property). The expenditures for capital replacements in 1999 exceeded the provision of $300 per apartment provided for by the Company by $9.7 million which represents unspent capital replacements and ICE from prior years. These expenditures were funded by net cash provided by operating activities, working capital reserves, and borrowings under the Company's credit facility. ICE and capital enhancements will primarily be funded by cash from operating activities and borrowings under the Company's credit facility. 17 20 The Company's accounting treatment of various capital and maintenance costs is detailed in the following table:
DEPRECIABLE LIFE EXPENDITURE ACCOUNTING TREATMENT IN YEARS - ----------- -------------------- ---------------- Initial capital expenditures........................ capitalize 5 to 15 Capital enhancements................................ capitalize 5 to 30 Capital replacements: Carpet/vinyl replacement............................ capitalize 5 Carpet cleaning..................................... expense N/A Major appliance replacement (refrigerators, stoves, Dishwashers, washers/dryers)...................... capitalize 5 Cabinet replacement................................. capitalize 5 Major new landscaping............................... capitalize 5 Seasonal plantings and landscape replacements....... expense N/A Roof replacements................................... capitalize 15 Roof repairs........................................ expense N/A Model furniture..................................... capitalize 5 Office equipment.................................... capitalize 5 Exterior painting, significant...................... capitalize 5 Interior painting................................... expense N/A Parking lot repairs................................. expense N/A Parking lot repaving................................ capitalize 15 Equipment repairs................................... expense N/A General policy for capitalization................... capitalize amounts Various in excess of $250
FUNDS FROM OPERATIONS The Company measures its economic profitability based on funds from operations ("FFO"), less a reserve for capital replacements of $300 per apartment unit. The Company's management believes that FFO, less such a reserve, provides investors with an understanding of the Company's ability to incur and service debt and make capital expenditures. The Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss), computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains and losses from debt restructuring and sales of property, plus real estate related depreciation and amortization (excluding amortization of financing costs), and after adjustments for unconsolidated partnerships and joint ventures. The Company calculates FFO based on the NAREIT definition, as adjusted for amortization, the non-cash deferred portion of the income tax provision for unconsolidated subsidiaries and less the payment of distributions on Preferred Units. FFO should not be considered an alternative to net income or net cash flows from operating activities, as calculated in accordance with GAAP, as an indication of the Company's performance or as a measure of liquidity. FFO is not necessarily indicative of cash available to fund future cash needs. In addition, there can be no assurance that the Company's basis for computing FFO is comparable with that of other real estate investment trusts. 18 21 For the years ended December 31, 1999, 1998 and 1997, the Company's FFO is calculated as follows (amounts in thousands):
1999 1998 1997 -------- -------- --------- Net income.......................................... $ 80,690 $ 68,928 $ 32,697 Extraordinary item.................................. -- -- 269 (Gain) loss on disposition of properties............ 1,785 (4,287) (2,720) Real estate depreciation, net of minority Interests......................................... 121,084 79,869 33,751 Real estate depreciation related to Unconsolidated entities.......................................... 104,754 34,765 9,864 Amortization........................................ 36,731 26,177 2,535 Deferred taxes...................................... 1,763 9,215 4,894 Expenses associated with convertible preferred securities........................................ 6,892 -- -- Preferred unit distributions........................ (33,265) (20,837) (135) -------- -------- --------- Funds From Operations (FFO)......................... $320,434 $193,830 $ 81,155 ======== ======== ========= Weighted average number of OP Units and OP Unit equivalents: OP Units.......................................... 68,828 52,798 27,732 OP Unit equivalents............................... 1,101 1,306 381 Preferred units convertible into OP Units......... 8,602 2,463 1,006 -------- -------- --------- 78,531 56,567 29,119 ======== ======== ========= CASH FLOW INFORMATION: Cash flow provided by operating activities.......... $254,380 $144,152 $ 73,032 Cash flow used in investing activities.............. (243,078) (342,541) (717,663) Cash flow provided by financing activities.......... 37,470 214,133 668,549
CONTRIBUTION TO FREE CASH FLOW The Company seeks to improve funds from operations, less a reserve for capital replacements, on a per share basis. In this regard, in addition to the year-to-year comparative discussion, the Company has provided disclosure (see Footnote 22 in the accompanying Notes to Consolidated Financial Statements) on the contribution (separated between consolidated and unconsolidated activity) to the Company's free cash flow from several components of the Company and a reconciliation of free cash flow to FFO, less a reserve for capital replacements, and to net income for the year ended December 31, 1999. The Company defines free cash flow as FFO, less a reserve for capital replacements, plus interest expense and preferred stock dividends. The contributors to the Company's free cash flow of $526 million were real estate -- $419 million (79%), service businesses -- $51 million (10%), recurring interest income -- $31 million (6%) and transactions (fees and recovery of loan discounts) -- $37 million (7%), less general and administrative expenses -- $12 million (2%). Expenses to arrive at FFO, less a reserve for capital replacements, were interest expense -- $201 million, and Preferred Unit distributions -- $33 million. This results in FFO, less a reserve for capital replacements, of $292 million of which $178 million (61%) is from consolidated activities and $114 million (39%) is from unconsolidated activities. The real estate free cash flow contribution of $444 million before a $24 million minority interest deduction is concentrated in conventional apartment properties, which comprise $389 million or 88% of the real estate free cash flow contribution. Conventional apartments with rents of $500 per month or higher comprise $333 million or 86% of the real estate free cash flow contribution from conventional units. Conventional apartments with rents of $600 per month or higher comprise $222 million or 57% of the real estate free cash flow contribution from conventional units. Overall, the Company has balanced contributions to conventional real estate free cash flow from monthly rents of less than $500 per unit to monthly rents greater than $800 per unit. 19 22 Contributions to conventional real estate free cash flow for 1999 were as follows:
TOTAL CONTR. % -------- -------- Average monthly rent greater than $800 per unit............. $ 78,305 20% Average monthly rent $700 to $800 per unit.................. 56,939 15% Average monthly rent $600 to $700 per unit.................. 86,400 22% Average monthly rent $500 to $600 per unit.................. 110,921 29% Average monthly rent $500 per unit.......................... 56,553 14% -------- --- $389,118 100% ======== ===
The service businesses contributed $51 million (10%) to free cash flow. The service businesses provide management services to properties and partnerships and includes Buyers Access, the nation's largest group purchasing organization serving the apartment industry. Management contracts contribute $47 million (92%) to the service businesses contribution. $36 million (75%) of the management contract contribution is derived from properties the Company controls through economic ownership or its general partner position. $10 million (22%) of the management contract contribution is from long-term management contracts. Less than $1 million is contributed from short-term third party management contracts (30 day cancelable). Buyer's Access contributed $3 million or 6% to the service businesses contribution. The Company received recurring interest income from par value notes and other receivables and interest bearing accounts of $31 million (50% of total interest income in 1999). In addition, the Company has realized interest income from recoveries of notes receivable that were acquired at a discount to actual face value. As the Company improved property operations, some of these notes have become collectible. In 1999, the Company recognized $32 million (50% of total interest income) in recoveries from notes purchased at a discount. Fees contributed $5 million (1%) to free cash flow contribution. Fees are earned in partnership sales and financing transactions. The Company considers fees and interest income from notes purchased at a discount as transactional. Together, the transactional contribution was $37 million (7%) of free cash flows contribution. Footnote 22 in the accompanying Notes to Consolidated Financial Statements provides additional detail on each component of free cash flow. We believe this disclosure is complementary to the previous year-to-year results of operations comparisons. CONTINGENCIES Pending Investigations of HUD Management Arrangements In 1997, NHP received subpoenas from the HUD Inspector General ("IG") requesting documents relating to arrangements whereby NHP or any of its affiliates provides compensation to owners of HUD-assisted or HUD-insured multi-family projects in exchange for or in connection with property management of a HUD project. In July 1999, NHP received a grand jury subpoena requesting documents relating to the same subject matter as the HUD IG subpoenas and NHP's operation of a group purchasing program created by NHP, known as Buyers Access. To date, neither the HUD IG nor the grand jury has initiated any action against NHP or the Company or, to NHP's or the Company's knowledge, any owner of a HUD property managed by NHP. The Company believes that NHP's operations and programs are in compliance, in all material respects, with all laws, rules and regulations relating to HUD-assisted or HUD-insured properties. The Company is cooperating with the investigations and does not believe that the investigations will result in a material adverse impact on its operations. However, as with any similar investigation, there can be no assurance that these will not result in material fines, penalties or other costs. INFLATION Substantially all of the leases at the Company's apartment properties are for a period of twelve months or less, allowing, at the time of renewal, for adjustments in the rental rate and the opportunity to re-lease the 20 23 apartment unit at the prevailing market rate. The short term nature of these leases generally serves to minimize the risk to the Company of the adverse effect of inflation and the Company does not believe that inflation has had a material adverse impact on its revenues. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company's primary market risk exposure relates to changes in interest rates. The Company is not subject to any foreign currency exchange rate risk or commodity price risk, or any other material market rate or price risks. The Company uses predominantly long-term, fixed-rate and self-amortizing non-recourse mortgage debt in order to avoid the refunding or repricing risks of short-term borrowings. The Company uses short-term debt financing and working capital primarily to fund acquisitions and generally expects to refinance such borrowings with proceeds from operating activities, equity offerings or long-term debt financings. The Company had $240.9 million of variable rate debt outstanding at December 31, 1999, which represents 9% of the Company's total outstanding debt. Based on this level of debt, an increase in interest rates of 1% would result in the Company's income and cash flows being reduced by $2.4 million on an annual basis. At December 31, 1999, the Company had $2,343.4 million of fixed rate debt outstanding. The partnership debt secured by individual properties in an aggregate amount of $51.8 million, $92.7 million, $66.9 million, $139.7 million and $205.7 million will mature in the years 2000, 2001, 2002, 2003 and 2004, respectively. The estimated aggregate fair value of the Company's cash and cash equivalents, receivables, payables and short-term unsecured debt as of December 31, 1999 is assumed to approximate their carrying value due to their relatively short terms. Management further believes that the fair market value of the Company's secured tax-exempt bond debt and secured long-term debt approximates their carrying value, based on market comparisons to similar types of debt instruments having similar maturities. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The independent auditor's reports, consolidated financial statements and schedules listed in the accompanying index are filed as part of this report and incorporated herein by this reference. See "Index to Financial Statements" on page F-1. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 21 24 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT All of the executive officers of the General Partner of the Partnership also serve as executive officers of AIMCO. Accordingly, the information below reflects the directors of the General Partner and the executive officers of both the General Partner of the Partnership and AIMCO. The officers of AIMCO and the General Partner of the Partnership are elected annually by their respective Boards of Directors.
NAME AGE FIRST ELECTED POSITION - ---- --- ------------- -------- Terry Considine................ 52 July 1994 Chairman of the Board of Directors and Chief Executive Officer Peter K. Kompaniez............. 55 July 1994 Vice Chairman of the Board of Directors and President Thomas W. Toomey............... 39 January 1996 Chief Operating Officer Harry G. Alcock................ 36 July 1996 Executive Vice President and Chief Investment Officer Joel F. Bonder................. 51 December 1997 Executive Vice President, General Counsel and Secretary Patrick J. Foye................ 43 May 1998 Executive Vice President Lance J. Graber................ 38 October 1999 Executive Vice President -- Acquisitions Steven D. Ira.................. 49 July 1994 Co-Founder and Executive Vice President -- Property Operations Paul J. McAuliffe.............. 43 February 1999 Executive Vice President and Chief Financial Officer
The following is a biographical summary of the experience of the current directors of the General Partner and executive officers of the General Partner and AIMCO as of February 29, 2000. Terry Considine. Mr. Considine has been Chairman of the Board of Directors and Chief Executive Officer of the General Partner and AIMCO since July 1994. Mr. Considine serves as Chairman and director of Asset Investors Corporation ("Asset Investors") and Commercial Assets, Inc. ("Commercial Assets"), two other public real estate investment trusts. Mr. Considine has been and remains involved as a principal in a variety of other business activities. Peter K. Kompaniez. Mr. Kompaniez has been Vice Chairman of the Board of Directors of the General Partner and AIMCO since July 1994 and was appointed President of AIMCO in July 1997. Mr. Kompaniez has also served as Chief Operating Officer of NHP Incorporated ("NHP"), which was acquired by the Company in December 1997. From 1986 to 1993, he served as President and Chief Executive Officer of Heron Financial Corporation ("HFC"), a United States holding company for Heron International, N.V.'s real estate and related assets. While at HFC, Mr. Kompaniez administered the acquisition, development and disposition of approximately 8,150 apartment units (including 6,217 units that have been acquired by the Company) and 3.1 million square feet of commercial real estate. Thomas W. Toomey. Mr. Toomey served as Senior Vice President-Finance and Administration of the General Partner and AIMCO since January 1996 to March 1997, when he was promoted to Executive Vice President-Finance and Administration. Mr. Toomey served as Executive Vice President -- Finance and Administration until December 1999, when he was appointed Chief Operating Officer. From 1990 until 1995, Mr. Toomey served in a similar capacity with Lincoln Property Company ("LPC") as Vice President/Senior Controller and Director of Administrative Services of Lincoln Property Services where he was responsible for LPC's computer systems, accounting, tax, treasury services and benefits administration. From 1984 to 1990, he was an audit manager with Arthur Andersen & Co. where he served real estate and banking clients. Mr. Toomey received a B.S. in Business Administration/Finance from Oregon State University. 22 25 Harry G. Alcock. Mr. Alcock served as a Vice President of the General Partner and AIMCO since July 1996 to October 1997, when he was promoted to Senior Vice President-Acquisitions. Mr. Alcock served as Senior Vice President-Acquisitions until October 1999, when he was promoted to Executive Vice President and Chief Investment Officer. Mr. Alcock has had responsibility for acquisition and financing activities of the Company since July 1994. From June 1992 until July 1994, Mr. Alcock served as Senior Financial Analyst for PDI and HFC. From 1988 to 1992, Mr. Alcock worked for Larwin Development Corp., a Los Angeles-based real estate developer, with responsibility for raising debt and joint venture equity to fund land acquisitions and development. From 1987 to 1988, Mr. Alcock worked for Ford Aerospace Corp. He received his B.S. from San Jose State University. Joel F. Bonder. Mr. Bonder was appointed Executive Vice President, General Counsel and Secretary of the General Partner and AIMCO in December 1997. Prior to joining the Company, Mr. Bonder served as Senior Vice President and General Counsel of NHP from April 1994 until December 1997. Mr. Bonder served as Vice President and Deputy General Counsel of NHP from June 1991 to March 1994 and as Associate General Counsel of NHP Incorporated from 1986 to 1991. From 1983 to 1985, Mr. Bonder practiced with the Washington, D.C. law firm of Lane & Edson, P.C. and from 1979 to 1983 practiced with the Chicago law firm of Ross and Hardies. Mr. Bonder received a B.A. from the University of Rochester and a J.D. from Washington University School of Law. Patrick J. Foye. Mr. Foye was appointed Executive Vice President of the General Partner and AIMCO in May 1998. He is responsible for acquisitions of partnership securities, consolidation of minority interests, and corporate and other acquisitions. Prior to joining the Company, Mr. Foye was a Merger and Acquisitions Partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to 1998 and was Managing Partner of the firm's Brussels, Budapest and Moscow offices from 1992 through 1994. Mr. Foye is also Deputy Chairman of the Long Island Power Authority and serves as a member of the New York State Privatization Council. He received a B.A. from Fordham College and a J.D. from Fordham Law School and was Associate Editor of the Fordham Law Review. Lance J. Graber. Mr. Graber was appointed Executive Vice President-Acquisitions of the General Partner and AIMCO in October 1999. His principal business function is acquisitions. Prior to joining the Company, Mr. Graber was an Associate from 1991 through 1992 and then a Vice President from 1992 through 1994 at Credit Suisse First Boston engaged in real estate financial advisory services and principal investing. He was a Director there from 1994 to May 1999, during which time he supervised a staff of seven in the making of principal investments in hotel, multi-family and assisted living properties. Mr. Graber received a B.S. and an M.B.A. from the Wharton School of the University of Pennsylvania. Steven D. Ira. Mr. Ira is a Co-Founder of AIMCO and has served as Executive Vice President -- Property Operations of the General Partner and AIMCO since July 1994. Mr. Ira has been Executive Vice President of the General Partner since July 1998. From 1987 until July 1994, he served as President of Property Asset Management ("PAM"). Prior to merging his firm with PAM in 1987, Mr. Ira acquired extensive experience in property management. Between 1977 and 1981 he supervised the property management of over 3,000 apartment and mobile home units in Colorado, Michigan, Pennsylvania and Florida, and in 1981 he joined with others to form the property management firm of McDermott, Stein and Ira. Mr. Ira served for several years on the National Apartment Manager Accreditation Board and is a former president of both the National Apartment Association and the Colorado Apartment Association. Mr. Ira is the sixth individual elected to the Hall of Fame of the National Apartment Association in its 54-year history. He holds a Certified Apartment Property Supervisor (CAPS) and a Certified Apartment Manager designation from the National Apartment Association, a Certified Property Manager (CPM) designation from the National Institute of Real Estate Management (IREM) and he is a member of the Boards of Directors of the National Multi-Housing Council, the National Apartment Association and the Apartment Association of Greater Orlando. Mr. Ira received a B.S. from Metropolitan State College in 1975. Paul J. McAuliffe. Mr. McAuliffe has been Executive Vice President of the General Partner and AIMCO since February 1999 and was appointed Chief Financial Officer in October 1999. Prior to joining the Company, Mr. McAuliffe was Senior Managing Director of Secured Capital Corp and prior to that time had 23 26 been a Managing Director of Smith Barney, Inc. from 1993 to 1996, where he was senior member of the underwriting team that lead AIMCO's initial public offering in 1994. Mr. McAuliffe was also a Managing Director and head of the real estate group at CS First Boston from 1990 to 1993 and he was a Principal in the real estate group at Morgan Stanley & Co., Inc. where he worked from 1983 to 1990. Mr. McAuliffe received a B.A. from Columbia College and an M.B.A. from University of Virginia, Darden School. Section 16(a) Compliance. Section 16(a) of the Securities Exchange Act requires the General Partner's executive officers and directors, and persons who own more than ten percent of a registered class of the Partnership's OP Units, to file reports (Forms 3, 4 and 5) of unit ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and beneficial owners of more than ten percent of the Partnership's OP Units are required by Securities Exchange Commission regulations to furnish the Partnership with copies of all such forms that they file. Based solely on the Partnership's review of the copies of Forms 3, 4 and 5 and the amendments thereto received by it for the year ended December 31, 1999, or written representations from certain reporting persons that no Forms 5 were required to be filed by those persons, the Partnership believes that during the period ended December 31, 1999, all filing requirements were complied with by its executive officers, directors and beneficial owners of more than ten percent of the Partnership's OP Units. ITEM 11. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The following table sets forth the compensation paid for each of the three fiscal years ended December 31, 1999, 1998 and 1997 to the directors of the General Partner and the Chief Executive Officer and each of the four other most highly compensated executive officers of the General Partner and AIMCO (the "Named Executive Officers"). Information regarding stock options and other stock based compensation payable by AIMCO has been included for informational purposes since the Partnership will issue to AIMCO additional OP Units upon the exercise of such stock options and the contribution to the Partnership of the net proceeds therefrom.
LONG TERM COMPENSATION(1) ---------------------------- SECURITIES UNDERLYING STOCK ANNUAL COMPENSATION OPTIONS/ NAME AND PRINCIPAL ----------------------- OTHER ANNUAL RESTRICTED SARS(#) ALL OTHER POSITION YEAR SALARY($) BONUS($)(2) COMPENSATION($) STOCK AWARDS($) AWARDS COMPENSATION($) ------------------ ---- --------- ----------- --------------- --------------- ---------- --------------- Terry Considine............ 1999 $275,000 $1,275,000 $ -- 385,294 Chairman of the Board of 1998 275,000 1,025,000 -- -- 150,000 -- Directors and Chief 1997 275,000 2,060,000 -- -- 2,740,000 -- Executive Officer Peter K. Kompaniez......... 1999 $235,000 $ 985,000 $ -- 75,000 President and Vice 1998 235,000 735,000 -- -- 75,000 -- Chairman 1997 235,000 800,000 -- -- 815,000 -- Thomas W. Toomey........... 1999 $200,000 $ 500,000 $ -- 29,412 Chief Operating Officer 1998 200,000 300,000 -- -- 100,000 -- 1997 180,000 555,000 -- -- 220,000 -- Patrick J. Foye(3)......... 1999 $225,000 $ 400,000 $995,313 29,412 Executive Vice President 1998 135,600 400,000 -- -- 375,000 -- 1997 -- -- -- -- -- -- Paul J. McAuliffe(4)....... 1999 $166,667 $ 300,000 $995,313 223,529 Executive Vice President 1998 -- -- -- -- -- -- and Chief Financial 1997 -- -- -- -- -- -- Officer
- --------------- (1) Excludes 1,227,078, 376,526, 165,632, 78,948 and 64,865 shares of AIMCO Class A Common Stock underlying options granted to Messrs. Considine, Kompaniez, Toomey, Foye and McAuliffe, respectively, 24 27 from 1996 to 1999, which were immediately exercised to purchase shares pursuant to the Company's leveraged stock purchase program. See "Certain Relationships and Transactions -- Stock Purchase Loans." Options earned in respect of 1998 and 1999 fiscal years were awarded in January 1999 and 2000, respectively. (2) Includes all Discretionary and Incentive cash compensation earned by the Named Executive Officers. (3) Mr. Foye was not an employee of the Company prior to May 1998. (4) Mr. McAuliffe was not an employee of the Company prior to February 1999. OPTION/SAR GRANTS IN LAST FISCAL YEAR Information on options granted in 1999 to the Named Executive Officers is set forth in the following table.
INDIVIDUAL GRANTS(1) ------------------------------------------------------- % OF TOTAL POTENTIAL REALIZABLE VALUE OPTIONS/SARS AT ASSUMED ANNUAL RATES NUMBER OF GRANTED OF STOCK PRICE SECURITIES TO APPRECIATION FOR OPTION UNDERLYING EMPLOYEES EXERCISE TERM(3) OPTIONS/SARS IN FISCAL OR BASE EXPIRATION -------------------------- NAME GRANTED(#)(2) YEAR(2) PRICE($/SH) DATE 5%($) 10%($) - ---- ------------- ------------ ----------- ---------- ------------ ----------- Terry Considine................... 385,294 38.5% $38.50 1/20/2009 $9,328,909 $23,641,287 Peter K. Kompaniez................ 75,000 7.5% 38.50 1/20/2009 1,815,933 4,601,931 Thomas W. Toomey.................. 29,412 2.9% 38.50 1/20/2009 712,136 1,804,693 Patrick J. Foye................... 29,412 2.9% 38.50 1/20/2009 712,136 1,804,693 Paul J. McAuliffe................. 223,529 22.4% 37.16 2/01/2009 5,223,515 13,237,412
- --------------- (1) Unless otherwise specified, options vest over five years, with vesting as to 60% of the underlying shares after three years and an additional 20% vesting each of the next two years. Under the terms of the Apartment Investment and Management Company 1997 Stock Award and Incentive Plan (the "1997 Stock Plan"), the plan administrator retains discretion, subject to certain restrictions, to modify the terms of outstanding options. The exercise price of incentive and non-qualified options granted under the 1997 Stock Plan will generally equal the fair market value of a share of AIMCO Class A Common Stock on the date of grant. (2) Excludes 64,865 shares of AIMCO Class A Common Stock underlying options granted to Mr. McAuliffe which were immediately exercised to purchase shares pursuant to the Company's leveraged stock purchase program. See "Certain Relationships and Transactions -- Stock Purchase Loans." (3) Assumed annual rates of stock price appreciation are set forth for illustrative purposes only. The amounts shown are for the assumed rates of appreciation only, do not constitute projections of future stock price performance, and may not be realized. 25 28 AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES Information on option exercises during 1999 by the Named Executive Officers, and the value of unexercised options held by Named Executive Officers at December 31, 1999 is set forth in the following table.
NUMBER OF SECURITIES VALUE OF UNEXERCISED UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS AT FY- OPTIONS/SARS AT FY- SHARES END(#) END($)(2) ACQUIRED ON VALUE --------------------------- --------------------------- NAME EXERCISE(#)(1) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - ---- -------------- ----------- ----------- ------------- ----------- ------------- Terry Considine............... 2,400 $43,050 -- 2,894,800 -- $7,267,725 Peter K. Kompaniez............ 1,600 28,600 -- 891,600 -- 2,265,700 Thomas W. Toomey.............. -- -- -- 320,000 -- 867,500 Patrick J. Foye............... -- -- -- 375,000 -- 829,688 Paul J. McAuliffe............. -- -- -- 200,000 -- 562,500
- --------------- (1) Excludes 64,865 shares of AIMCO Class A Common Stock underlying options granted to Mr. McAuliffe which were immediately exercised to purchase shares pursuant to the Company's leveraged stock purchase program. See "Certain Relationships and Transactions -- Stock Purchase Loans." (2) Market value of underlying securities at fiscal year-end, less the exercise price. Market value is determined based on the closing price of the AIMCO Class A Common Stock on the New York Stock Exchange on December 31, 1999 of $39.8125 per share. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information available to the Company, as of January 31, 2000, with respect to OP Units of the Company held by (i) each director of the General Partner and the five most highly compensated executive officers of the General Partner who were serving as of December 31, 1999; (ii) all directors and executive officers of the General Partner and AIMCO as a group; and (iii) those persons known to the Company to be the beneficial owners (as determined under the rules of the Securities Exchange Commission) of more than 5% of such OP Units. This table does not reflect options that are not exercisable within 60 days, or the beneficial ownership of High Performance Units by executive officers and directors of the General Partner. The business address of each of the following directors and executive officers of the General Partner is 2000 South Colorado Boulevard, Tower 2, Suite 2-1000, Denver, Colorado 80222-7900, unless otherwise specified.
PERCENTAGE OF NUMBER OF OP OWNERSHIP OF THE NAME AND ADDRESS OF BENEFICIAL OWNER UNITS PARTNERSHIP - ------------------------------------ ------------ ---------------- Directors & Executive Officers of the General Partner: Terry Considine........................................ 816,661(1) 1.1% Peter K. Kompaniez..................................... 30,5000 * Thomas W. Toomey....................................... -- * Patrick J Foye......................................... -- * Paul J. McAuliffe...................................... -- * All directors and executive officers as a group (13 persons)............................................ 943,801 1.3% 5% or Greater Holders AIMCO-LP, Inc. ........................................ 66,932,716 91.4%
- --------------- * Less than 1.0% (1) Includes 192,374 OP Units held by entities in which Mr. Considine has sole voting and investment power, 2,300 OP Units held by the Considine Partnership, for 99% of which Mr. Considine disclaims beneficial ownership, and 157,698 OP Units held by Mr. Considine's spouse, Elizabeth Considine, for which Mr. Considine disclaims beneficial ownership. 26 29 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS From time to time, the Company has entered into various transactions with certain of its executive officers and directors. The Company attempts to price such transactions based on fair market value, and believes that the transactions are on terms that are as favorable to the Company as could be achieved with unrelated third parties. TRANSACTIONS WITH MANAGEMENT COMPANIES From time to time the Company has formed "Management Companies" in which the Partnership holds non-voting preferred stock and 100% of the voting stock is owned by certain of the Company's executive officers of the General Partner and AIMCO (or entities controlled by them), including Messrs. Considine and Kompaniez. The Management Companies were formed to engage in businesses generally not permitted under the REIT provisions of the Internal Revenue Code. Although transactions between the Company and the Management Companies are not at arm's length, the Company believes that such transactions are at fair market value. Prior to December 29, 1999, Messrs. Considine and Kompaniez, collectively, owned 5% of the outstanding stock (100% of the voting stock) of the following Management Companies: AIMCO/NHP Holdings, Inc. ("ANHI"), NHP Management Company ("NHPMC"), AIMCO/NHP Properties, Inc. ("ANPI") and NHP A&R Services, Inc. ("NHPAR"). All of Mr. Considine's ownership interests in these Management Companies are held through Tebet, L.L.C., a Colorado limited liability company of which he is the managing member ("Tebet"). On December 29, 1999, Tebet and Mr. Kompaniez each transferred to the Partnership 80% of their common stock holdings in each of ANHI, NHPMC, ANPI and NHPAR. The Partnership then exchanged such common stock for additional shares of non-voting preferred stock of ANHI, NHPMC, ANPI and NHPAR. As a result, the Partnership increased its ownership interest in each of ANHI, NHPMC, ANPI and NHPAR from 95% to 99%, and Tebet and Mr. Kompaniez decreased their ownership interest in each of ANHI, NHPMC, ANPI and NHPAR from 5% to 1%. The Partnership paid $3,996,000 and $996,000 for these interests in the Management Companies acquired from Tebet and Mr. Kompaniez, respectively. These purchase prices were determined by AIMCO's independent directors, based on a valuation done by Arthur Andersen LLP. In consideration for the transfers, the Partnership assumed $2,730,000 and $721,000 of promissory notes that Tebet and Mr. Kompaniez, respectively, had issued to purchase their interests in these Management Companies, and the Partnership issued to Tebet and Mr. Kompaniez 31,650 and 6,875 OP units, respectively. For the year ended December 31, 1999, Tebet and Mr. Kompaniez have received dividends of approximately $725,000 and $181,000, respectively, on their shares of common stock of the Management Companies, and the Company has received dividends of $5,227,000 on its shares of preferred stock of the Management Companies. All of the amounts paid as dividends to Tebet and Mr. Kompaniez were used to pay interest and/or principal due under promissory notes issued to the Company and the Management Companies. When the Company owns a significant interest in a real estate partnership, the management contract for the property owned by that real estate partnership may be assigned by the Management Companies to the Partnership. During 1999, Management Companies assigned their rights under a total of 82 management contracts to the Partnership in exchange for the Partnership assuming all obligations under such contracts. STOCK PURCHASE LOANS From time to time, AIMCO makes loans to its executive officers to finance their purchase of shares of AIMCO Class A Common Stock from AIMCO. All loans made prior to 1999 bear interest between 7.00% to 7.25% per annum. During 1999, AIMCO sold 130,893 shares of AIMCO Class A Common Stock to Messrs. Alcock, Bonder, Graber and McAuliffe for an aggregate purchase price of $4,910,027. In each case, the purchase price was equal to the closing price of AIMCO Class A Common Stock on the New York Stock Exchange on the date of sale. In payment for such shares, Messrs. Alcock, Bonder, Graber and McAuliffe executed notes payable to AIMCO bearing interest at 7.25%, 7.0%, 6.25% and 7.00%, respectively, per annum, 27 30 payable quarterly, and due in 2009. The interest rate on the loans is based upon the Company's cost of borrowing under its line of credit. The following table sets forth certain information with respect to these loans to executive officers.
HIGHEST AMOUNT AMOUNT REPAID OWED DURING SINCE INCEPTION 1/31/00 NAME INTEREST RATE 1999 (THRU 1/31/00) BALANCE - ---- ------------- -------------- --------------- ----------- Terry Considine......................... 7.25% $16,550,175 $19,620,213 $16,215,777 Peter K. Kompaniez...................... 7.25% 4,124,478 8,174,873 3,761,392 Steven D. Ira........................... 7.25% 2,982,022 207,090 2,886,620 Thomas W. Toomey........................ 7.25% 1,294,446 4,562,588 1,205,082 Harry G. Alcock......................... 7.25% 748,416 152,177 1,141,829 Troy D. Butts(1)........................ 7.25% 1,037,652 1,050,008 -- Joel F. Bonder.......................... 7.00% 1,360,016 30,285 1,329,731 Robert Ty Howard(2)..................... 7.00% 1,432,428 22,215 1,425,285 Patrick J. Foye......................... 6.25% 3,000,024 140,342 2,859,682 Paul J. McAuliffe....................... 7.00% 2,400,005 236,106 2,163,899 Lance Graber............................ 6.25% 1,925,000 -- 1,925,000 ----------- ----------- ----------- $36,854,662 $34,195,897 $34,914,297 =========== =========== ===========
- --------------- (1) Mr. Butts resigned his position with the Company in October 1999. (2) Mr. Howard resigned his position with the Company in August 1999. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K (a)(1) The financial statements listed in the Index to Financial Statements on Page F-1 of this report are filed as part of this report and incorporated herein by reference. (a)(2) The financial statement schedule listed in the Index to Financial Statements on Page F-1 of this report is filed as part of this report and incorporated herein by reference. (a)(3) The following exhibits are incorporated herein by reference.
EXHIBIT NO. DESCRIPTION ------- ----------- 2.1 -- Second Amended and Restated Agreement and Plan of Merger, dated as of January 22, 1999, by and between Apartment Investment and Management Company and Insignia Properties Trust (Exhibit 2.2 to the Current Report on Form 8-K of Insignia Properties Trust, dated February 11, 1999, is incorporated herein by this reference) 2.2 -- Amended and Restated Agreement and Plan of Merger, dated as of May 26, 1998, by and among Apartment Investment Management Company, AIMCO Properties, L.P., Insignia Financial Group, Inc., and Insignia/ESG Holdings, Inc. (Exhibit 2.1 to AIMCO's Registration Statement on Form S-4, filed August 5, 1998, is incorporated herein by this reference) 10.1 -- Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 29, 1994 as amended and restated as of October 1, 1998 (Exhibit 10.8 to AIMCO's Quarterly Report on Form 10-Q for the quarterly period ending September 30, 1998, is incorporated herein by this reference)
28 31
EXHIBIT NO. DESCRIPTION ------- ----------- 10.2 -- First Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of November 6, 1998 (Exhibit 10.9 to AIMCO's Quarterly Report on Form 10-Q for the quarterly period ending September 30, 1998, is incorporated herein by this reference) 10.3 -- Second Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of December 30, 1998 (Exhibit 10.1 to Amendment No. 1 to AIMCO's Current Report on Form 8-K/A, filed February 11, 1999, is incorporated herein by this reference) 10.4 -- Third Amendment to Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of February 18, 1999 (Exhibit 10.12 to AIMCO's Annual Report on Form 10-K for the fiscal year 1998, is incorporated herein by this reference) 10.5 -- Fourth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 25, 1999 (Exhibit 10.2 to AIMCO's Quarterly Report on Form 10-Q for the quarterly period ending March 31, 1999, is incorporated herein by this reference) 10.6 -- Fifth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 26, 1999 (Exhibit 10.3 to AIMCO's Quarterly Report on Form 10-Q for the quarterly period ending March 31, 1999, is incorporated herein by this reference) 10.7 -- Sixth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 26, 1999 (Exhibit 10.1 to AIMCO's Quarterly Report on Form 10-Q for the quarterly period ending June 30, 1999, is incorporated herein by this reference) 10.8 -- Seventh Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 27, 1999 (Exhibit 10.1 to AIMCO's Quarterly Report on Form 10-Q for the quarterly period ending September 30, 1999, is incorporated herein by this reference) 10.9 -- Eighth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of December 14, 1999 (Exhibit 10.9 to AIMCO's Annual Report on Form 10-K for the fiscal year 1999, is incorporated herein by this reference) 10.10 -- Ninth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of December 21, 1999 (Exhibit 10.10 to AIMCO's Annual Report on Form 10-K for the fiscal year 1999, is incorporated herein by this reference) 10.11 -- Tenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of December 21, 1999 (Exhibit 10.11 to AIMCO's Annual Report on Form 10-K for the fiscal year 1999, is incorporated herein by this reference) 10.12 -- Eleventh Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of January 13, 2000 (Exhibit 10.12 to Aimco's Annual Report on Form 10-K for the fiscal year 1999, is incorporated herein by this reference)
29 32
EXHIBIT NO. DESCRIPTION ------- ----------- 10.13 -- Amended and Restated Assignment and Assumption Agreement, dated as of December 7, 1998, by and among Insignia Properties, L.P. and AIMCO Properties, L.P. (Exhibit 10.1 to the Current Report on Form 8-K of Insignia Properties Trust, dated February 11, 1999, is incorporated herein by this reference) 10.14 -- Amended and Restated Indemnification Agreement, dated as of May 26, 1998, by and between Apartment Investment and Management Company and Insignia/ ESG Holdings, Inc. (Exhibit 2.2 to AIMCO's Registration Statement on Form S-4, filed August 5, 1998, is incorporated herein by this reference) 10.15 -- Credit Agreement (Secured Revolving Credit Facility), dated as of August 16, 1999, among AIMCO Properties, L.P., Bank of America, BankBoston, N.A., and First Union National Bank (Exhibit 10.1 to the Current Report on Form 8-K of Apartment Investment and Management Company, dated as of August 16, 1 999, is incorporated herein by this reference) 10.16 -- Borrower Pledge Agreement, dated August 16, 1999 between AIMCO Properties, L.P. and Bank of America (Exhibit 10.2 to the Current Report on Form 8-K of Apartment Investment and Management Company, dated August 16, 1999 is incorporated herein by this reference) 10.17 -- Form of Committed Loan Note, issued by AIMCO Properties, L.P. to Bank of America, BankBoston, N.A., and First Union National Bank (Exhibit 10.3 to the Current Report on Form 8-K of Apartment Investment and Management Company, dated August 16, 1999, is incorporated herein by this reference) 10.18 -- Form of Swing Line Note, issued by AIMCO Properties, L.P. to Bank of America, BankBoston, N.A., and First Union National Bank (Exhibit 10.4 to the Current Report on Form 8-K of Apartment Investment and Management Company, dated August 16, 1999, is incorporated herein by this reference) 10.19 -- Form of Payment Guaranty, by Apartment Investment and Management Company, AIMCO/NHP Holdings, Inc., NHP A&R Services, Inc., and NHP Management Company (Exhibit 10.5 to the Current Report on Form 8-K of Apartment Investment and Management Company, dated August 16, 1999, is incorporated herein by this reference) 10.20 -- Amended and Restated Credit Agreement, dated as of March 15, 2000, among AIMCO Properties, L.P., the lenders listed therein, Bank of America, N.A., Fleet National Bank (as successor in interest to BankBoston, N.A.), and First Union National Bank 10.21 -- Employment Contract, executed on July 29, 1994, by and between AIMCO Properties, L.P., and Peter Kompaniez (Exhibit 10.44A to AIMCO's Annual Report on Form 10-K for the fiscal year 1994, is incorporated herein by this reference)* 10.22 -- Employment Contract executed on July 29, 1994 by and between AIMCO Properties, L.P. and Terry Considine (Exhibit 10.44C to AIMCO's Annual Report on Form 10-K for the fiscal year 1994, is incorporated herein by this reference)* 10.23 -- Employment Contract executed on July 29, 1994 by and between AIMCO Properties, L.P. and Steven D. Ira (Exhibit 10.44D to AIMCO's Annual Report on Form 10-K for fiscal year 1994, is incorporated herein by this reference)
30 33
EXHIBIT NO. DESCRIPTION ------- ----------- 10.24 -- The 1994 Stock Incentive Plan for Officers, Directors and Key Employees of Ambassador Apartments, Inc., Ambassador Apartments, L.P., and Subsidiaries (Exhibit 10.40 to Ambassador Apartments, Inc. Annual Report on Form 10-K for the fiscal year 1997, is incorporated herein by this reference)* 10.25 -- Amendment to the 1994 Stock Incentive Plan for Officers, Directors and Key Employees of Ambassador Apartments, Inc., Ambassador Apartments, L.P. and Subsidiaries (Exhibit 10.41 to Ambassador Apartments, Inc. Annual Report on Form 10-K for the fiscal year 1997, is incorporated herein by this reference)* 10.26 -- The 1996 Stock Incentive Plan for Officers, Directors and Key Employees of Ambassador Apartments, Inc., Ambassador Apartments, L.P., and Subsidiaries, as amended March 20, 1997 (Exhibit 10.42 to Ambassador Apartments, Inc. Annual Report on Form 10-K for the fiscal year 1997, is incorporated herein by this reference)* 21.1 -- List of Subsidiaries (Exhibit 21.1 to AIMCO's Annual Report on Form 10-K for the fiscal year 1999, is incorporated herein by this reference) 23.1 -- Consent of Ernst & Young LLP 27.1 -- Financial Data Schedule 99.1 -- Agreement re: disclosure of long-term debt instruments
- --------------- (1) Schedule and supplemental materials to the exhibits have been omitted but will be provided to the Securities and Exchange Commission upon request. * Management contract (b) Reports on Form 8-K for the quarter ended December 31, 1999: None. 31 34 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 30th day of March, 2000. AIMCO PROPERTIES, L.P. By: AIMCO-GP, Inc., its General Partner /s/ TERRY CONSIDINE ------------------------------------ Terry Considine Chairman of the Board And Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ TERRY CONSIDINE Chairman of the Board and March 30, 2000 - ----------------------------------------------------- Chief Executive Officer Terry Considine /s/ PETER K. KOMPANIEZ Vice Chairman, President and March 30, 2000 - ----------------------------------------------------- Director Peter K. Kompaniez /s/ THOMAS W. TOOMEY Chief Operating Officer March 30, 2000 - ----------------------------------------------------- Thomas W. Toomey /s/ PATRICK FOYE Executive Vice President March 30, 2000 - ----------------------------------------------------- Patrick Foye /s/ PAUL MCAULIFFE Executive Vice President and March 30, 2000 - ----------------------------------------------------- Chief Financial Officer Paul McAuliffe
32 35 AIMCO PROPERTIES, L.P.
PAGE ----- FINANCIAL STATEMENTS: Report of Independent Auditors............................ F-2 Consolidated Balance Sheets as of December 31, 1999 and 1998................................................... F-3 Consolidated Statements of Income for the Years Ended December 31, 1999, 1998 and 1997....................... F-4 Consolidated Statements of Partners' Capital for the Years Ended December 31, 1999, 1998 and 1997................. F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 1999, 1998 and 1997....................... F-6 Notes to Consolidated Financial Statements................ F-8 FINANCIAL STATEMENT SCHEDULE: Schedule III -- Real Estate and Accumulated Depreciation........................................... F-32 All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
F-1 36 REPORT OF INDEPENDENT AUDITORS The Partners AIMCO Properties, L.P. We have audited the accompanying consolidated balance sheets of AIMCO Properties, L.P. as of December 31, 1999 and 1998, and the related consolidated statements of income, partners' capital and cash flows for each of the three years in the period ended December 31, 1999. Our audits also included the financial statement schedule listed in the Index at Item 14(a)(2). These financial statements and schedule are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits. We conducted our audits 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of AIMCO Properties, L.P. at December 31, 1999 and 1998, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 1999 in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects the information set forth therein. /s/ ERNST & YOUNG LLP Denver, Colorado January 20, 2000 F-2 37 AIMCO PROPERTIES, L.P. CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1999 AND 1998 (IN THOUSANDS)
1999 1998 ---------- ---------- ASSETS Real estate, net of accumulated depreciation of $415,992 and $228,155.................................................. $4,092,543 $2,515,710 Property held for sale...................................... 4,162 27,304 Investments in unconsolidated real estate partnerships...... 890,318 615,206 Investments in unconsolidated subsidiaries.................. 44,921 62,244 IPLP exchange and assumption receivable..................... -- 346,352 Notes receivable from unconsolidated real estate partnerships.............................................. 142,828 103,979 Notes receivable from unconsolidated subsidiaries........... 88,754 136,173 Cash and cash equivalents................................... 101,604 52,832 Restricted cash............................................. 84,595 53,703 Other assets................................................ 234,526 273,261 ---------- ---------- $5,684,251 $4,186,764 ========== ========== LIABILITIES AND PARTNERS' CAPITAL Secured notes payable....................................... $1,954,259 $ 819,331 Secured tax-exempt bond financing........................... 420,830 394,077 Unsecured short-term financing.............................. 209,200 280,300 Secured short-term financing................................ -- 108,022 ---------- ---------- Total indebtedness................................ 2,584,289 1,601,730 Accounts payable, accrued and other liabilities............. 271,298 195,296 Resident security deposits and prepaid rents................ 22,793 12,654 ---------- ---------- Total liabilities................................. 2,878,380 1,809,680 ---------- ---------- Commitments and contingencies............................... -- -- Partnership-obligated mandatorily redeemable convertible preferred securities of a subsidiary trust................ 149,500 149,500 Minority interest........................................... 169,482 74,249 Partners' capital Preferred Units........................................... 707,745 647,330 General Partner and Special Limited Partner............... 1,545,715 1,030,792 Limited Partners.......................................... 256,429 500,213 ---------- ---------- 2,509,889 2,178,335 Less: Investment in AIMCO Preferred Stock................. 23,000 25,000 ---------- ---------- Total partners' capital........................... 2,486,889 2,153,335 ---------- ---------- $5,684,251 $4,186,764 ========== ==========
See accompanying notes to consolidated financial statements. F-3 38 AIMCO PROPERTIES, L.P. CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (IN THOUSANDS, EXCEPT PER UNIT DATA)
1999 1998 1997 --------- --------- -------- RENTAL PROPERTY OPERATIONS Rental and other property revenues......................... $ 531,883 $ 373,963 $193,006 Property operating expenses................................ (213,959) (145,966) (76,168) Owned property management expense.......................... (15,322) (10,882) (6,620) Depreciation............................................... (131,257) (83,908) (37,741) --------- --------- -------- Income from property operations............................ 171,345 133,207 72,477 --------- --------- -------- SERVICE COMPANY BUSINESS Management fees and other income........................... 42,877 22,675 13,937 Management and other expenses.............................. (25,470) (16,960) (10,961) --------- --------- -------- Income from service company business....................... 17,407 5,715 2,976 --------- --------- -------- General and administrative expenses........................ (12,016) (10,336) (5,396) Interest expense........................................... (139,124) (88,208) (51,385) Interest income............................................ 62,183 28,170 8,676 Equity in losses of unconsolidated real estate partnerships............................................. (2,588) (2,665) (1,798) Equity in earnings (losses) of unconsolidated subsidiaries............................................. (2,400) 12,009 4,636 Loss from IPLP exchange and assumption..................... (684) (2,648) -- Minority interest.......................................... (5,788) (1,868) 1,008 Amortization............................................... (5,860) (8,735) (948) --------- --------- -------- Income from operations..................................... 82,475 64,641 30,246 Gain (loss) on disposition of properties................... (1,785) 4,287 2,720 --------- --------- -------- Income before extraordinary item........................... 80,690 68,928 32,966 Extraordinary item -- early extinguishment of debt......... -- -- (269) --------- --------- -------- Net income................................................. 80,690 68,928 32,697 Net income attributable to preferred unitholders........... 54,173 26,533 2,315 --------- --------- -------- Net income attributable to common unitholders.............. $ 26,517 $ 42,395 $ 30,382 ========= ========= ======== Comprehensive Income Net income................................................. $ 80,690 $ 68,928 $ 32,697 Other comprehensive income: Net unrealized gains on investment in securities......... -- -- (1,683) --------- --------- -------- Comprehensive income....................................... $ 80,690 $ 68,928 $ 31,014 ========= ========= ======== Basic earnings per common unit............................. $ 0.39 $ 0.80 $ 1.09 ========= ========= ======== Diluted earnings per common unit........................... $ 0.38 $ 0.78 $ 1.08 ========= ========= ======== Weighted average common units outstanding.................. 68,541 52,798 27,732 ========= ========= ======== Weighted average common units and common units equivalents outstanding.............................................. 69,511 54,104 28,113 ========= ========= ======== Distributions paid per common unit......................... $ 2.50 $ 2.25 $ 1.85 ========= ========= ========
See accompanying notes to consolidated financial statements. F-4 39 AIMCO PROPERTIES, L.P. CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (IN THOUSANDS)
INVESTMENT GENERAL PARTNER IN AIMCO AND SPECIAL PREFERRED LIMITED PREFERRED LIMITED PARTNER UNITS PARTNERS STOCK TOTAL --------------- --------- --------- ---------- ---------- PARTNERS' CAPITAL AT DECEMBER 31, 1996...................... $ 178,462 $ -- $ -- $ -- $ 178,462 Contributions from AIMCO related to Class A common offering.................................................. 510,114 -- -- -- 510,114 Contributions from AIMCO related to preferred offerings..... -- 133,110 -- -- 133,110 Contribution from AIMCO related to stock purchased by officers, net of notes receivable of $33,517.............. 1,198 -- -- -- 1,198 Contributions from AIMCO related to options and warrants exercised, net of notes receivable of $9,045.............. (327) -- -- -- (327) Issuance of common units in connection with NHP merger...... 180,851 -- -- -- 180,851 Common units redeemed by Limited Partners to Special Limited Partner........................................... 8,621 -- -- -- 8,621 Repayment of notes receivable from officers of AIMCO........ 14,540 -- -- -- 14,540 Net Income.................................................. 26,318 2,315 -- -- 28,633 Distributions paid to common unitholders.................... (44,660) -- -- -- (44,660) Distributions paid to Class B preferred unitholders......... -- (846) -- -- (846) Unrealized loss on investments.............................. (1,683) -- -- -- (1,683) Adjustment to reflect Limited Partners' capital at redemption value.......................................... (47,837) -- -- -- (47,837) ---------- --------- --------- -------- ---------- PARTNERS' CAPITAL AT DECEMBER 31, 1997...................... 825,597 134,579 -- -- 960,176 Reclassification of Limited Partners' redeemable units as of October 1, 1998........................................... -- -- 232,405 -- 232,405 Contributions from AIMCO related to preferred offerings..... -- 340,897 -- -- 340,897 Exchange of Class J Preferred Units for Class J Preferred Stock of AIMCO............................................ -- 25,000 -- (25,000) -- Contribution from AIMCO related to warrant to purchase AIMCO Class A Common Stock...................................... 4,150 -- -- -- 4,150 Contribution from AIMCO related to stock purchased by officers, net of notes receivable of $23,471.............. 155 -- -- -- 155 Contributions from AIMCO related to options and warrants exercised................................................. 11,015 -- -- -- 11,015 Repurchase of common units.................................. (11,067) -- -- -- (11,067) Issuance of common units in connection with the Ambassador merger.................................................... 251,275 -- -- -- 251,275 Issuance of common units for IPLP exchange and assumption... -- -- 271,638 -- 271,638 Issuance of Class E Preferred Units in connection with Insignia merger........................................... -- 132,515 -- -- 132,515 Common units redeemed by Limited Partners to Special Limited Partner................................................... 5,795 -- (281) -- 5,514 Repayment of notes receivable from officers of AIMCO........ 8,908 -- -- -- 8,908 Acquisition of real estate or interests in real estate partnerships through issuance of common units............. -- 9,000 5,417 -- 14,417 Net Income.................................................. 37,213 26,533 757 -- 64,503 Distributions paid to common unitholders.................... (100,045) -- (3,949) -- (103,994) Distributions paid to preferred unitholders................. -- (21,194) -- -- (21,194) Change in unrealized loss on investments.................... 1,683 -- -- -- 1,683 Adjustment to reflect Limited Partners' capital at redemption value.......................................... (3,887) -- (5,774) -- (9,661) ---------- --------- --------- -------- ---------- PARTNERS' CAPITAL AT DECEMBER 31, 1998...................... 1,030,792 647,330 500,213 (25,000) 2,153,335 Contributions from AIMCO related to preferred offerings..... -- 233,101 -- -- 233,101 Contribution from AIMCO related to stock purchased by officers, net of notes receivable of $8,202............... 624 -- -- -- 624 Contribution from AIMCO related to options and warrants exercised................................................. 5,227 -- -- -- 5,227 Termination of IPLP exchange and assumption through cancellation of common units.............................. -- -- (267,146) -- (267,146) Issuance of common units in connection with IPT merger...... 327,499 -- -- -- 327,499 Common units redeemed by Limited Partners to Special Limited Partner................................................... 13,766 -- (13,766) -- -- Contributions from AIMCO related to First Union acquisition............................................... 21,140 -- -- -- 21,140 Contributions from AIMCO related to issuance of common stock..................................................... 54,612 -- -- -- 54,612 Repurchase of common units.................................. (8,038) -- -- -- (8,038) Acquisitions of real estate or interests in real estate through issuance of common units.......................... -- -- 44,951 -- 44,951 Acquisitions of real estate or interests in real estate through issuance of preferred units....................... -- 59,883 -- -- 59,883 Conversion of preferred units to common units............... 232,515 (232,515) -- -- -- Repayment of notes receivable from officers of AIMCO........ 6,241 -- -- -- 6,241 Net Income.................................................. 24,292 54,173 2,225 -- 80,690 Distributions paid to common unitholders.................... (154,654) -- (18,349) -- (173,003) Distributions paid to preferred unitholders................. -- (54,227) -- 2,000 (52,227) Adjustment to reflect Limited Partners' capital at redemption value.......................................... (8,301) -- 8,301 -- -- ---------- --------- --------- -------- ---------- PARTNERS' CAPITAL AT DECEMBER 31, 1999...................... $1,545,715 $ 707,745 $ 256,429 $(23,000) $2,486,889 ========== ========= ========= ======== ==========
See accompanying notes to consolidated financial statements. F-5 40 AIMCO PROPERTIES, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (IN THOUSANDS)
1999 1998 1997 --------- --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net income................................................ $ 80,690 $ 68,928 $ 32,697 --------- --------- --------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization........................... 150,670 100,884 43,520 (Gain) loss on disposition of properties................ 1,785 (4,287) (2,720) Minority interest....................................... 5,788 1,868 (1,008) Equity in losses of unconsolidated real estate partnerships........................................... 2,588 2,665 1,798 Equity in (earnings) losses of unconsolidated subsidiaries........................................... 2,400 (12,009) (4,636) Loss from IPLP exchange and assumption.................. 684 2,648 -- Extraordinary loss on early extinguishment of debt...... -- -- 269 Changes in operating assets and operating liabilities... 9,775 (16,545) 3,112 --------- --------- --------- Total adjustments................................... 173,690 75,224 40,335 --------- --------- --------- Net cash provided by operating activities........... 254,380 144,152 73,032 --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of real estate.................................. (103,354) (137,052) (376,315) Additions to real estate.................................. (113,929) (79,584) (26,966) Proceeds from sale of property held for sale.............. 46,143 36,468 22,095 Purchase of common stock, notes receivable, general and limited partnership interests and other assets.......... (220,160) (32,576) (199,146) Purchase of/additions to notes receivable................. (97,593) (81,587) (60,575) Advances to unconsolidated real estate partnerships....... -- -- (42,879) Cash received from sale of notes receivable............... -- 11,000 -- Proceeds from repayment of notes receivable............... 61,407 29,290 -- Cash from newly consolidated properties................... 68,127 -- -- Cash received in connection with acquisitions............. 22,677 4,693 -- Cash paid for merger related costs........................ (19,347) (76,286) -- Distributions received from investments in real estate partnerships............................................ 87,284 1,576 -- Distributions from (contributions to) unconsolidated subsidiaries............................................ 25,667 (13,032) (13,996) Purchase of investments held for sale..................... -- (4,935) (19,881) Redemption of common units................................ -- (516) -- --------- --------- --------- Net cash used in investing activities............... (243,078) (342,541) (717,663) --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from secured notes payable borrowings............ 297,536 102,115 225,436 Principal repayments on secured notes payable............. (53,572) (93,469) (12,512) Proceeds from secured tax-exempt bond financing........... 20,731 210,720 -- Principal repayments on secured tax-exempt bond financing............................................... (41,894) (224,395) (1,487) Payoff of unsecured short-term financing.................. -- -- (12,579) Proceeds from secured short-term financing................ -- 57,140 19,050 Repayments on secured short-term financing................ (4,522) (34,333) -- Net paydowns on the revolving credit facilities........... (166,100) (46,262) (162,008) Payment of loan costs, including proceeds and costs from interest rate hedges.................................... (16,070) (7,398) (6,387) Proceeds from issuance of common and preferred units, exercise of options/warrants............................ 293,225 351,912 644,095 Proceeds from partnership preferred units in a subsidiary and warrants to purchase AIMCO Class A Common Stock..... -- 35,000 -- Principal repayments received on notes due from officers on common unit purchases................................ 6,241 8,951 25,957 Repurchase of common units................................ (8,038) (11,066) -- Payment of distributions to General Partner and Special Limited Partner......................................... (154,654) (100,045) (44,660) Payment of distributions to Limited Partners.............. (18,349) (12,651) (5,510) Payment of preferred unit distributions................... (101,746) (21,194) (846) Payment of distributions to minority interest............. (15,318) (2,880) -- Proceeds from issuance of High Performance Units.......... -- 1,988 -- --------- --------- --------- Net cash provided by financing activities........... 37,470 214,133 668,549 --------- --------- --------- Net increase in cash and cash equivalents................... 48,772 15,744 23,918 Cash and cash equivalents at beginning of year.............. 52,832 37,088 13,170 --------- --------- --------- Cash and cash equivalents at end of year.................... $ 101,604 $ 52,832 $ 37,088 ========= ========= =========
See accompanying notes to consolidated financial statements. F-6 41 AIMCO PROPERTIES, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (IN THOUSANDS)
1999 1998 1997 ---------- ------- ------- SUPPLEMENTAL CASH INFORMATION: Interest paid............................................. $ 140,410 $90,580 $51,076 Non Cash Transactions Associated with the Acquisition of Properties: Secured debt assumed in connection with purchase of real estate................................................. 110,101 115,151 150,051 Real estate, assets acquired............................ 230,194 43,756 55,906 Assumption of operating liabilities..................... 15,233 857 -- Accrual of contingent consideration..................... (4,500) 4,500 -- OP Units issued......................................... 104,950 -- -- Non Cash Transactions Associated with Acquisition of Limited Partnership Interests and Interests in the Unconsolidated Subsidiaries: Issuance of OP Units for interests in unconsolidated real estate partnerships............................... 15,085 4,045 7,469 Issuance of OP Units and assumption of liabilities for interests in unconsolidated subsidiaries.......................................... 4,762 -- -- Non Cash Transactions Associated with Mergers: Real estate............................................. 65,605 713,596 638,944 Investments in and notes receivable from unconsolidated real estate partnerships............................... 447,128 488,537 -- Investments in and notes receivable from unconsolidated subsidiaries........................................... (13,137) 68,168 -- IPLP exchange and assumption............................ (386,161) 386,161 -- Restricted cash......................................... 1,339 36,871 -- Other assets............................................ 33,493 77,116 -- Secured debt............................................ 59,002 705,541 71,055 Unsecured debt.......................................... -- 2,513 -- Accounts payable, accrued and other liabilities......... 38,941 172,400 239,699 Mandatorily redeemable convertible preferred securities of a subsidiary trust.................................. -- 149,500 -- Minority interest in other entities..................... 13,817 5,752 -- OP Units issued......................................... 56,101 655,574 185,061 Non Cash Transactions Associated with Consolidation of Assets: Real estate............................................. 1,016,343 22,089 Investments in and notes receivable from unconsolidated real estate partnerships............................... (380,359) (16,683) -- Restricted cash......................................... 43,605 -- -- Secured debt............................................ 561,129 4,679 -- Accounts payable, accrued and other liabilities......... 44,361 727 -- Minority interest in other entities..................... 77,774 -- -- Non Cash Transfer of Assets to an Unconsolidated Subsidiary: Real estate............................................. (32,091) -- -- Notes receivable........................................ 6,245 -- -- Secured debt............................................ (25,620) -- -- Other: Receipt of notes payable from officers.................. 8,202 23,471 42,562 Conversion of Preferred Stock into Class A Common Stock.................................................. 401,218 -- -- Tenders payable for purchase of limited partner interest............................................... 77,380 -- --
See accompanying notes to consolidated financial statements. F-7 42 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1999, 1998, AND 1997 NOTE 1 -- ORGANIZATION AIMCO Properties, L.P. (together with its subsidiaries and other controlled entities, the "Partnership" (and together with entities in which the Partnership has a controlling financial interest, the "Company")), a Delaware limited partnership, was formed on May 16, 1994 to engage in the ownership, acquisition, development, expansion and management of multi-family apartment properties. The Partnership's securities include Partnership Common Units ("OP Units"), Partnership Preferred Units ("Preferred Units"), and High Performance Units (see Note 19). Apartment and Investment Management Company ("AIMCO") is the owner of the General Partner and Special Limited Partner, as defined in the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P. (the "Partnership Agreement"), of the Partnership. The General Partner and Special Limited Partner hold OP Units of the Partnership. In addition, AIMCO is the primary holder of all Preferred Units outstanding in the Partnership. The Limited Partners of the Partnership are individuals or entities that own OP Units other than AIMCO. After holding the OP Units for one year, the Limited Partners have the right to redeem their OP Units for cash, subject to the prior right of the Partnership to elect to acquire some or all of the OP Units tendered for redemption for cash or in exchange for shares of AIMCO Class A Common Stock, on a one-for-one ratio. The Partnership, through its operating divisions and subsidiaries, was formed to hold and conduct substantially all of AIMCO's operations and manages the daily operations of AIMCO's business and assets. All employees of the Company are employees of the Partnership; AIMCO has no employees. According to the terms of the Partnership Agreement, the capital structure of the Partnership, in terms of the OP Units owned by the General Partner, the Special Limited Partner and the Preferred Units outstanding, is required to mirror the capital structure of AIMCO, with the only difference being that the Partnership has additional OP Units and Preferred Units outstanding which are owned by the Limited Partners. Therefore, AIMCO is required to contribute to the Partnership all proceeds from offerings of the AIMCO Class A Common Stock, preferred stock, or any other equity offerings. In addition, substantially all of AIMCO's assets must be owned through the Partnership; therefore, AIMCO is generally required to contribute to the Partnership all assets acquired. In exchange for the contribution of offering proceeds or assets, AIMCO receives additional interests in the Partnership with similar terms (i.e., if AIMCO contributes proceeds of a preferred stock offering, AIMCO receives Preferred Units). AIMCO frequently consummates transactions for the benefit of the Partnership. For legal, tax or other business reasons, AIMCO may hold title or ownership of certain assets until they can be transferred to the Partnership. However, the Partnership has a controlling financial interest in all of AIMCO's assets in the process of transfer to the Partnership. Based on apartment unit data compiled by the National Multi Housing Council, we believe that, as of December 31, 1999, the Company was the largest owner and manager of multifamily apartment properties in the United States. As of December 31, 1999, the Company owned or managed 363,462 apartment units in 1,942 properties located in 48 states, the District of Columbia and Puerto Rico, as follows: - owned or controlled 106,148 units in 373 apartment properties; - held an equity interest in 133,113 units in 751 apartment properties; and - managed 124,201 units in 818 apartment properties for third party owners and affiliates. The Company manages apartment properties for third parties and affiliates through unconsolidated subsidiaries referred to as the "management companies." At December 31, 1999 and 1998, the Partnership had 73,243,819 and 64,946,583 OP Units outstanding, respectively, and 26,013,450 and 18,563,422 Preferred Units outstanding, respectively. F-8 43 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NOTE 2 -- BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Partnership, its majority owned subsidiaries and controlled real estate partnerships. Pursuant to a Management and Contribution Agreement between the Partnership and AIMCO, the Partnership has acquired, in exchange for interests in the Partnership, the economic benefits of subsidiaries of AIMCO in which the Partnership does not have an interest, and AIMCO has granted the Partnership a right of first refusal to acquire such subsidiaries' assets for no additional consideration. Pursuant to the agreement, AIMCO has also granted the Partnership certain rights with respect to assets of such subsidiaries. Interests held by limited partners in real estate partnerships controlled by the Company are reflected as Minority Interest. Significant intercompany balances and transactions have been eliminated in consolidation. The assets of property-owning limited partnerships and limited liability companies owned or controlled by the Company are generally not available to pay creditors or secure the obligations of the Company. Real Estate and Depreciation Real estate is recorded at cost, less accumulated depreciation, unless considered impaired. If events or circumstances indicate that the carrying amount of a property may be impaired, the Company will make an assessment of its recoverability by estimating the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the aggregate future cash flows, the Company would recognize an impairment loss to the extent the carrying amount exceeds the fair value of the property. As of December 31, 1999, management believes that no impairments exist based on periodic reviews. No impairment losses were recognized for the years ended December 31, 1999, 1998 and 1997. Direct costs associated with the acquisition of ownership or control of properties are capitalized as a cost of the assets acquired, and are depreciated over the estimated useful lives of the related assets. Expenditures for ordinary repairs, maintenance and apartment turnover costs are expensed as incurred. Initial Capital Expenditures ("ICE") are those costs considered necessary by the Company in its investment decision to correct deferred maintenance or improve a property. Capital enhancements are costs incurred that add a material new feature or increase the revenue potential of a property. ICE and capital enhancement costs are capitalized and depreciated over the estimated useful lives of the related assets. Expenditures in excess of $250 that maintain an existing asset which has a useful life of more than one year are capitalized as capital replacement expenditures and depreciated over the estimated useful life of the asset. Depreciation is calculated on the straight-line method based on a fifteen to thirty year life for buildings and improvements and five years for furniture, fixtures and equipment. Property Held For Sale Property held for sale is recorded at the lower of carrying amount or fair value less costs to sell. Redevelopment The Company capitalizes direct and indirect costs (including interest, taxes and other costs) in connection with the redevelopment of its owned or controlled properties and land under development. Interest of $6.6 million, $2.8 million and $1.3 million was capitalized for the years ended December 31, 1999, 1998 and 1997, respectively. F-9 44 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Investments in Unconsolidated Real Estate Partnerships The Company owns general and limited partnership interests in numerous partnerships that own multi-family apartment properties. Investments in real estate partnerships in which the Company has significant influence but does not have control are accounted for under the equity method. Under the equity method, the Company's pro-rata share of the earnings or losses of the entity for the periods being presented is included in earnings (losses) from unconsolidated real estate partnerships (see Note 5). Investments in Unconsolidated Subsidiaries The Company has investments in numerous subsidiaries. Investments in entities in which the Company has significant influence but does not have control are accounted for under the equity method. Under the equity method, the Company's pro-rata share of the earnings or losses of the entity for the periods being presented is included in earnings (losses) from unconsolidated subsidiaries (see Note 6). Notes Receivable from Unconsolidated Real Estate Partnerships and Subsidiaries The Company has investments in numerous notes receivable, which were either extended by the Company or were made by predecessors whose positions have been acquired by the Company. Interest income is recognized on these investments based upon whether the collectibility of such amounts is both probable and estimable (see Note 7). Cash Equivalents The Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted Cash Restricted cash includes capital replacement reserves, completion repair reserves, bond sinking fund amounts and tax and insurance impound accounts held by lenders. Other Assets Fees and costs incurred in obtaining financing are capitalized and are included in other assets. Such costs are amortized over the terms of the related loan agreements and are charged to interest expense. Certain intangible assets are included in other assets and consist of costs associated with the purchase of property management businesses, including property management contracts, legal and other acquisition costs. These costs are amortized on a straight-line basis over terms ranging from five to twenty years. Redeemable Partnership Common Units The Partnership accounts for the outstanding OP Units not held by AIMCO as redeemable partnership common units. Prior to October 1, 1998, these OP Units were classified outside of permanent partners' capital in the accompanying financial statements because, in connection with a Limited Partner's right to redeem OP Units for cash, AIMCO had the right to elect to acquire some or all of the OP Units tendered for redemption for cash or in exchange for shares of AIMCO Class A Common Stock, on a one-for-one ratio. Effective October 1, 1998, pursuant to the Partnership Agreement, the right of AIMCO to elect to acquire redeemed OP Units for cash or AIMCO Class A Common Stock became the sole right of the Partnership. As a result, subsequent to September 30, 1998, these OP Units held by Limited Partners were classified as permanent partners' capital. The OP Units held by Limited Partners are initially recorded at their fair value and F-10 45 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) subsequently adjusted based on the fair value at the balance sheet date as measured by the closing price of AIMCO Class A Common Stock on that date (see Note 15). Revenue Recognition The Company's properties have operating leases with apartment residents with terms generally of six months or less. Rental revenues and property management and asset management fees are recognized when earned. Income Taxes Income or losses of the Partnership are allocated to the partners of the Partnership for inclusion in their respective income tax returns. Accordingly, no provision or benefit for income taxes has been made in the accompanying financial statements. AIMCO has elected to be taxed as a real estate investment trust ("REIT"), as defined under the Internal Revenue Code of 1986, as amended. In order for AIMCO to qualify as a REIT, at least 95% of AIMCO's gross income in any year must be derived from qualifying sources. The activities of unconsolidated subsidiaries engaged in the service company business are not qualifying sources. As a REIT, AIMCO generally will not be subject to U.S. Federal income taxes at the corporate level if it distributes at least 95% of its REIT taxable income to its stockholders. REITs are also subject to a number of other organizational and operational requirements. If AIMCO fails to qualify as a REIT in any taxable year, its taxable income will be subject to U.S. Federal income tax at regular corporate rates (including any applicable alternative minimum tax). Even if AIMCO qualifies as a REIT, it may be subject to certain state and local income taxes and to U.S. Federal income and excise taxes on its undistributed income. Earnings Per OP Unit Earnings per OP Unit is calculated based on the weighted average number of OP Units, OP Unit equivalents and dilutive convertible securities outstanding during the period. Diluted earnings per OP Unit also includes the effect of potential issuances of additional OP Units if stock options and warrants were exercised or converted into AIMCO Class A Common Stock (see Note 17). Fair Value of Financial Instruments The estimated aggregate fair value of the Company's cash and cash equivalents, receivables, payables and short-term unsecured debt as of December 31, 1999 is assumed to approximate their carrying value due to their relatively short terms. Management further believes that the fair market value of the Company's secured tax-exempt bond debt and secured long-term debt approximate their carrying value, based on market comparisons to similar types of debt instruments having similar maturities. Reclassifications Certain items included in the 1998 and 1997 consolidated financial statements have been reclassified to conform with the 1999 presentation. Use of Estimates The preparation of the Company's consolidated financial statements 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 financial statements and accompanying notes thereto. Actual results could differ from those estimates. F-11 46 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NOTE 3 -- REAL ESTATE Real estate at December 31, 1999 and 1998, is as follows (in thousands):
1999 1998 ---------- ---------- Land........................................................ $ 661,502 $ 404,868 Buildings and improvements.................................. 3,847,033 2,338,997 ---------- ---------- 4,508,535 2,743,865 Accumulated depreciation.................................... (415,992) (228,155) ---------- ---------- $4,092,543 $2,515,710 ========== ==========
During the years ended December 31, 1999 and 1998, the Company purchased 28 properties (12,721 units) and 82 properties (22,459 units), respectively, and disposed of eight properties (2,309 units) and four properties (1,468 units), respectively, as described below. The Company directly acquired 28 apartment communities in unrelated transactions during 1999 (not including those acquired in connection with the merger with Insignia Properties Trust (see Note 4)). The aggregate consideration paid by the Company of $495.0 million consisted of $91.5 million in cash, 2.4 million Preferred Units, 1.4 million OP Units with a total recorded value of $116.8 million, the assumption of $110.1 million of secured long-term indebtedness, the assumption of $15.2 million of other liabilities, and new financing of $161.4 million of secured long-term indebtedness. Four of these assets were then contributed to an unconsolidated subsidiary. The Company directly acquired 30 apartment communities in unrelated transactions during 1998 (not including those acquired in connection with the mergers with Ambassador Apartments, Inc. and Insignia Financial Group, Inc. (see Note 4)). The aggregate consideration paid by the Company of $316.5 million consisted of $96.0 million in cash, 1.2 million OP Units with a total recorded value of $48.2 million, and the assumption of $172.3 million of secured long-term indebtedness. In addition to the acquisitions described above, in 1999 the Company acquired controlling interests in partnerships owning 125 properties (34,228 units) and began consolidating these entities. Control was obtained through the purchase of limited partnership interests from unaffiliated third parties or other increases in the Company's equity investment in the partnerships. During 1999, the Company sold eight properties containing 2,309 units to unaffiliated third parties. Cash proceeds from the sales of approximately $49.0 million were used to repay a portion of the Company's outstanding indebtedness. The Company recognized a loss of approximately $1.8 million on the disposition of these properties, of which 96% of the loss related to one property. During 1998, the Company sold four apartment properties containing 1,468 units to unaffiliated third parties. Cash proceeds from the sales of approximately $37.5 million were used to repay a portion of the Company's outstanding indebtedness. The Company recognized a gain of approximately $4.3 million on the disposition of these four properties. NOTE 4 -- MERGERS NHP Merger In May and September 1997, the Company acquired an aggregate of approximately 6.9 million shares of common stock ("NHP Common Stock") of NHP. On December 8, 1997, the Company acquired the remaining shares of NHP Common Stock in a merger transaction accounted for as a purchase (the "NHP Merger"). Pursuant to the NHP Merger, each outstanding share of NHP Common Stock was converted into either (i) 0.74766 shares of AIMCO Class A Common Stock or (ii) at the stockholder's option, F-12 47 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 0.37383 shares of AIMCO Class A Common Stock and $10.00 in cash. As a result of the NHP Merger, AIMCO issued approximately 6.8 million shares of AIMCO Class A Common Stock, valued at $180.8 million, and paid $86.5 million in cash. The total cost of the purchase was $349.5 million. Subsequent to the NHP merger, AIMCO contributed substantially all the assets and liabilities of NHP to the Partnership in exchange for OP Units. Ambassador Merger On May 8, 1998, Ambassador Apartments, Inc. ("Ambassador"), was merged with and into AIMCO, with AIMCO being the surviving corporation. The merger was accounted for as a purchase. The purchase price of $713.6 million was comprised of $90.3 million in cash, $372.0 million of assumed debt and approximately 6.6 million shares of AIMCO Class A Common Stock valued at $251.3 million. Pursuant to the Ambassador merger agreement, each outstanding share of Ambassador common stock not owned by AIMCO was converted into the right to receive 0.553 shares of AIMCO Class A Common Stock. Concurrently, all outstanding options to purchase Ambassador common stock were converted into cash or options to purchase AIMCO Class A Common Stock, at the same conversion ratio. Contemporaneously with the consummation of the Ambassador merger, a subsidiary of the AIMCO operating partnership merged with Ambassador's operating partnership and each outstanding unit of limited partnership interest in the Ambassador operating partnership was converted into the right to receive 0.553 OP Units. Prior to its acquisition by AIMCO, Ambassador was a self-administered and self-managed real estate investment trust engaged in the ownership and management of garden-style apartment properties leased primarily to middle income tenants. Ambassador owned 52 apartment communities with a total of 15,728 units located in Arizona, Colorado, Florida, Georgia, Illinois, Tennessee and Texas, and managed one property containing 252 units for an unrelated third party. Insignia Merger On October 1, 1998, Insignia Financial Group, Inc., a Delaware Corporation, ("Insignia") was merged with and into AIMCO, with AIMCO being the surviving corporation. The merger was accounted for as a purchase. The purchase price of $1,125.7 million was comprised of the issuance of up to approximately 8.9 million shares of AIMCO Class E Cumulative Convertible Preferred Stock (the "AIMCO Class E Preferred Stock") valued at $301.2 million, $670.1 million in assumed debt and liabilities (including a $50 million special dividend, assumed liabilities of Insignia Properties Trust and transaction costs), $149.5 million in assumed mandatory redeemable convertible preferred securities, and $4.9 million in cash. The AIMCO Class E Preferred Stock entitled the holders thereof to receive the same cash dividends per share as holders of AIMCO Class A Common Stock. On January 15, 1999, holders of AIMCO Class E Preferred Stock received a special dividend in an aggregate amount of approximately $50 million, and all outstanding shares of AIMCO Class E Preferred Stock automatically converted into an equal number of shares of AIMCO Class A Common Stock. As a result of the Insignia merger, AIMCO acquired: (i) Insignia's interests in Insignia Properties Trust, ("IPT"), a Maryland REIT, which was a majority owned subsidiary of Insignia; (ii) Insignia's interest in Insignia Properties, L.P., ("IPLP") IPT's operating partnership; (iii) 100% of the ownership of the Insignia entities that provide multifamily property management and partnership administrative services; (iv) Insignia's interest in multi-family co-investments; (v) Insignia's ownership of subsidiaries that control multi-family properties not included in IPT; (vi) Insignia's limited partner interests in public and private syndicated real estate limited partnerships; and (vii) assets incidental to the foregoing businesses. Concurrently with the Insignia merger, AIMCO contributed to the Partnership all the assets and liabilities acquired, except Insignia's interests in IPT, in exchange for approximately 3.8 million OP Units valued at approximately $132.5 million and $4.9 million in cash. The assets and liabilities contributed to the F-13 48 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Partnership consisted of assets valued at $775.7 million, assumed debt and liabilities of $488.8 million (including the $50 million special dividend and transaction costs) and $149.5 million in assumed mandatory redeemable convertible preferred securities. Also on October 1, 1998, in connection with and following the Insignia merger, the Partnership purchased from IPLP the economic interests underlying substantially all the assets of IPLP, excluding certain enumerated assets such as cash (the "IPLP Exchange and Assumption"). In exchange for the economic interests underlying the assets, the Partnership agreed to assume all the obligations of IPLP with respect to such assets and issued to IPLP approximately 10.2 million OP Units (which were assigned a value of approximately $386.2 million). The Company records income or loss from the assets and liabilities subject to the IPLP Exchange and Assumption. Effective February 26, 1999, upon completion of the merger with IPT (described below), IPLP and the Partnership unwound the IPLP Exchange and Assumption. Insignia Properties Trust Merger As a result of the Insignia merger, AIMCO acquired approximately 51% of the outstanding shares of beneficial interest of IPT. On February 26, 1999, IPT was merged into AIMCO. Pursuant to the merger, each of the outstanding shares of IPT that were not held by AIMCO was converted into the right to receive 0.3601 shares of AIMCO Class A Common Stock, resulting in the issuance of approximately 4.3 million shares of AIMCO Class A Common Stock (with a recorded value of approximately $158.8 million). Concurrently with the IPT merger, all the assets and liabilities of IPT were contributed by AIMCO to the Partnership in exchange for approximately 8.9 million OP Units (valued at approximately $318.2 million). Also in connection with the IPT Merger, the IPLP Exchange and Assumption was unwound and the approximately 10.2 million OP Units issued in connection with the IPLP Exchange and Assumption were canceled. NOTE 5 -- INVESTMENTS IN UNCONSOLIDATED REAL ESTATE PARTNERSHIPS The Company owns general and limited partner interests in approximately 900 partnerships which it acquired through acquisitions, direct purchases and separate offers to other limited partners. The Company's total ownership interests in these unconsolidated real estate partnerships range from 1% to 99%. However, based on the provisions of the related partnership agreements, which grant varying degrees of control, the Company does not possess control of these partnerships. During 1999 and 1998, the Company made separate offers to the limited partners of approximately 600 and 280 partnerships, respectively, to acquire their limited partnership interests. The Company paid approximately $258 million and $41 million during 1999 and 1998, respectively, in connection with such tender offers. F-14 49 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The following table provides selected combined financial information for the Company's unconsolidated real estate partnerships as of and for the years ended December 31, 1999 and 1998 (in thousands):
1999 1998 ---------- ---------- Real estate, net of accumulated depreciation................ $2,930,748 $3,744,132 Total assets................................................ 3,501,195 4,907,242 Secured notes payable....................................... 2,940,819 3,293,295 Total liabilities........................................... 3,536,646 4,001,926 Partners' capital (deficit)................................. (35,451) 905,316 Rental and other property revenues.......................... 1,120,888 879,154 Property operating expenses................................. (582,523) (526,980) Depreciation expense........................................ (237,066) (151,972) Interest expense............................................ (269,163) (221,380) Net income (loss)........................................... 42,106 (10,696)
NOTE 6 -- INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES In order to satisfy certain requirements of the Internal Revenue Code applicable to AIMCO's status as a REIT, certain assets of the Company are held through corporations in which the Company holds non-voting preferred stock and certain officers and/or directors of AIMCO hold, directly or indirectly, all of the voting common stock. Effective January 1, 1999, a portion of the voting common stock was purchased by the Company and was exchanged for non-voting preferred stock, bringing the total voting common stock interests to represent a 1% economic interest and the non-voting preferred stock to represent a 99% economic interest. As a result of the controlling ownership interest in the unconsolidated subsidiaries being held by others, the Company accounts for its interest in the unconsolidated subsidiaries using the equity method. As of December 31, 1999, the unconsolidated subsidiaries included AIMCO/NHP Holdings, Inc., AIMCO/NHP Properties, Inc., NHP Management Company, and NHP A&R Services, Inc. The following table provides selected combined financial information for the Company's unconsolidated subsidiaries as of and for the years ended December 31, 1999 and 1998 (in thousands):
1999 1998 --------- -------- Management contracts........................................ $ 25,181 $122,291 Total assets................................................ 166,019 236,976 Total liabilities........................................... 128,423 169,560 Stockholders' equity........................................ 37,596 67,416 Service company revenues.................................... 139,667 100,308 Service company expenses.................................... (133,231) (70,771) Interest expense............................................ (7,832) (7,699) Net income (loss)........................................... (2,848) 12,641
NOTE 7 -- INTEREST INCOME RECOGNITION The Company recognizes interest income earned from its investments in notes receivable based upon whether the collectibility of such amounts is both probable and estimable. The notes receivable were either extended by the Company and are carried at the face amount plus accrued interest ("par value notes") or were made by predecessors whose positions have been acquired by the Company at a discount and are carried at the acquisition amount using the cost recovery method ("discounted notes"). As of December 31, 1999 and 1998, the Company held $157.3 million and $212.3 million, respectively, of par value notes, including accrued interest, for which management believes the collectibility of such amounts F-15 50 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) is both probable and estimable. As such, interest income from the par value notes is generally recognized as it is earned. Interest income from such notes for the year ended December 31, 1999, 1998 and 1997, totaled $12.8 million, $15.3 million, and $0.4 million, respectively. The decrease in the Company's investment in par value notes from December 31, 1998 to December 31, 1999 is primarily due to a reduction in certain notes receivable from the unconsolidated subsidiaries during 1999. As of December 31, 1999 and 1998, the Company held discounted notes, including accrued interest, with a carrying value of $92.5 million and $52.0 million, respectively. The total face value plus accrued interest of these notes was $173.1 million at December 31, 1999. In general, interest income from the discounted notes is not recognized as it is earned because the timing and amounts of cash flows are not probable and estimable. The increase in the Company's investment in discounted notes from December 31, 1998 to December 31, 1999 is primarily due to a purchase of a portfolio of discounted notes for approximately $26.1 million. Under the cost recovery method, the discounted notes are carried at the acquisition amount, less subsequent cash collections, until such time as collectibility is probable and the timing and amounts are estimable. Based upon closed or pending transactions (including sales activity), market conditions, and improved operations of the obligor, among other things, certain notes and the related discounts have been determined to be collectible. Accordingly, interest income that had previously been deferred and portions of the related discounts were recognized as interest income during the period. For the years ended December 31, 1999 and 1998, the Company recognized deferred interest income and discounts of approximately $32.5 million ($0.47 per basic and diluted OP Unit), and $1.4 million ($0.03 per basic and diluted OP Unit), respectively. There was no recognition of deferred interest income and discounts for the year ended December 31, 1997. NOTE 8 -- SECURED NOTES PAYABLE During 1999, the Company issued $392.5 million of long-term fixed rate, fully amortizing non-recourse notes payable with a weighted average interest rate of 7.3%. Each of the notes is individually secured by one of thirty-eight properties with no cross-collateralization. The Company used the net proceeds after transaction costs of $356.3 million to repay existing debt. The following table summarizes the Company's secured notes payable at December 31, 1999 and 1998, all of which are non-recourse to the Company (in thousands):
1999 1998 ---------- -------- Fixed rate, ranging from 5.99% to 10.13%, fully-amortizing notes maturing at various dates through 2034.............. $1,597,772 $659,953 Fixed rate, ranging from 5.00% to 10.63%, non-amortizing notes maturing at various dates through 2029.............. 356,487 153,798 Floating rate, ranging from 5.0% to 7.1%, non-amortizing notes..................................................... -- 5,580 ---------- -------- Total............................................. $1,954,259 $819,331 ========== ========
F-16 51 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) As of December 31, 1999, the scheduled principal amortization and balloon payments for the Company's secured notes payable are as follows (in thousands): 2000.................................................... $ 30,074 2001.................................................... 78,739 2002.................................................... 57,144 2003.................................................... 129,448 2004.................................................... 178,886 Thereafter.............................................. 1,479,968 ---------- $1,954,259 ==========
NOTE 9 -- SECURED TAX-EXEMPT BOND FINANCING During 1999, the Company issued $17.8 million of long-term fixed rate, fully amortizing non-recourse tax-exempt bonds with a weighted average interest rate of 7.1%. Each of the bonds is individually secured by one of two properties with no cross-collateralization. The Company used the net proceeds after transaction costs of $17.3 million to repay existing debt. In December 1998, the Company completed the refinancing of $222 million in variable rate tax-exempt debt assumed in conjunction with the May 1998 merger with Ambassador Apartments, Inc. The debt was secured by 27 properties located in Texas, Arizona, Tennessee and Illinois. Through the refinancing, the Company converted the previous tax-exempt debt to $204 million in fixed rate, fully amortizing tax-exempt debt secured by 26 properties. The new debt has a weighted average interest rate of 5.8% and matures in 22 years. The Company also incurred $7.1 million of taxable debt secured by three of the properties, repaid $11.4 million of the previous tax-exempt debt, released $21.5 million in cash reserves and impound accounts held by the prior mortgagors, and released two properties that served as additional collateral for the previous debt. The following table summarizes the Company's secured tax-exempt bond financing at December 31, 1999 and 1998, all of which is non-recourse to the Company (in thousands):
1999 1998 -------- -------- 7.0% fully-amortizing bonds, due July 2016.................. $ 43,889 $ 45,237 6.9% fully-amortizing bonds, due July 2016.................. 8,987 9,267 Fixed rate fully-amortizing bonds, ranging from 5.1% to 5.8%, due 2021............................................ 157,578 159,555 Fixed rate fully-amortizing bonds, ranging from 6.5% to 7.3%, due at various dates through 2028................... 79,866 78,926 Fixed rate non-amortizing bonds, ranging from 5.0% to 8.19%, due at various dates through 2017......................... 50,158 55,747 4.0% interest-only bonds, due December 2020................. 4,453 -- Floating rate non-amortizing bonds, due 2001 and 2008....... 31,689 -- Variable rate bonds, ranging from 4.9% to 5.3%, due 2021.... 44,210 45,345 -------- -------- Total............................................. $420,830 $394,077 ======== ========
F-17 52 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) As of December 31, 1999, the scheduled principal amortization and balloon payments for the Company's secured tax-exempt bonds are as follows (in thousands): 2000..................................................... $ 21,761 2001..................................................... 13,978 2002..................................................... 9,752 2003..................................................... 10,239 2004..................................................... 26,842 Thereafter............................................... 338,258 -------- $420,830 ========
NOTE 10 -- UNSECURED SHORT-TERM FINANCING In August 1999, AIMCO and the Partnership closed a $300 million revolving credit facility arranged by Bank of America, N.A., BankBoston, N.A. and First Union National Bank and comprised of a total of nine lender participants. The obligations under the credit facility are secured by certain non-real estate assets of the Company. The existing lines of credit were terminated. The credit facility is used for general corporate purposes and has a two-year term with two one-year extensions. The annual interest rate under the credit facility is based on either LIBOR or a base rate which is the higher of Bank of America's reference rate or 0.5% over the federal funds rate, plus, in either case, an applicable margin. The margin ranges between 2.05% and 2.55%, in the case of LIBOR-based loans, and between 0.55% and 1.05%, in the case of base rate loans, based upon a fixed charge coverage ratio. At December 31, 1999, the weighted average interest rate was 8.84%, the balance was $209.2 million, and the remaining available credit was $90.8 million. NOTE 11 -- SECURED SHORT-TERM FINANCING In February 1999, the Partnership terminated its $50 million secured credit facility with Washington Mortgage Financial Group, Ltd. and repaid all outstanding borrowings with proceeds from new long-term, fully amortizing notes payable totaling $58.2 million secured by certain properties that previously secured the credit facility. NOTE 12 -- COMMITMENTS AND CONTINGENCIES Legal The Company is a party to various legal actions resulting from its operating activities. These actions are routine litigation and administrative proceedings arising in the ordinary course of business, some of which are covered by liability insurance, and none of which are expected to have a material adverse effect on the consolidated financial condition or results of operations of the Company and its subsidiaries taken as a whole. Limited Partnerships In connection with the Company's offers to purchase interests in limited partnerships that own properties, the Company and its affiliates are sometimes subject to legal actions, including allegations that such activities may involve breaches of fiduciary duties to the limited partners of such partnerships or violations of the relevant partnership agreements. The Company believes it complies with its fiduciary obligations and relevant partnership agreements, and does not expect such legal actions to have a material adverse effect on the consolidated financial condition or results of operations of the Company and its subsidiaries taken as a whole. F-18 53 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Pending Investigations of HUD Management Arrangements In 1997, NHP received subpoenas from the HUD Inspector General ("IG") requesting documents relating to arrangements whereby NHP or any of its affiliates provides compensation to owners of HUD-assisted or HUD-insured multi-family projects in exchange for or in connection with property management of a HUD project. In July 1999, NHP received a grand jury subpoena requesting documents relating to the same subject matter as the HUD IG subpoenas and NHP's operation of a group purchasing program created by NHP, known as Buyers Access. To date, neither the HUD IG nor the grand jury has initiated any action against NHP or the Company or, to NHP's or the Company's knowledge, any owner of a HUD property managed by NHP. The Company believes that NHP's operations and programs are in compliance, in all material respects, with all laws, rules and regulations relating to HUD-assisted or HUD-insured properties. The Company is cooperating with the investigations and does not believe that the investigations will result in a material adverse impact on its operations. However, as with any similar investigation, there can be no assurance that these will not result in material fines, penalties or other costs. Environmental The Company is subject to various Federal, state and local laws that impose liability on property owners or operators for the costs of removal or remediation of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of the hazardous substances. The presence of, or the failure to properly remediate, hazardous substances may adversely affect occupancy at contaminated apartment communities and our ability to sell or borrow against contaminated properties. In addition to the costs associated with investigation and remediation actions brought by governmental agencies, the presence of hazardous wastes on a property could result in personal injury or similar claims by private plaintiffs. The Company is also subject to various laws that impose liability for the cost of removal or remediation of hazardous substances at a disposal or treatment facility. Anyone who arranges for a disposal or treatment of hazardous or toxic substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of our properties, we could potentially be liable for environmental liabilities or costs associated with our properties or properties we may acquire or manage in the future. Operating Leases The Company is obligated under office space and equipment non-cancelable operating leases. In addition, the Company subleases certain of its office space to tenants under non-cancelable subleases. Approximate minimum annual rentals under operating leases and approximate minimum payments to be received under annual subleases for the five years ending after December 31, 1999 are as follows (in thousands):
OPERATING LEASE SUBLEASE PAYMENTS PAYMENTS --------------- -------- 2000........................................................ $11,792 $3,037 2001........................................................ 10,429 2,250 2002........................................................ 5,295 81 2003........................................................ 3,602 -- 2004........................................................ 2,936 -- ------- ------ Total............................................. $34,054 $5,368 ======= ======
Under the Company's current operating structure, substantially all of the office space and equipment subject to the operating leases described above are for the use of its regional operating centers, which are operated by certain of the Company's unconsolidated subsidiaries (see Note 6). Rent expense recognized by F-19 54 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) the unconsolidated subsidiaries totaled $5.8 and $6.2 million in 1999 and 1998, respectively. Rent expense recognized by the Company totaled $0.7 million in 1997. Sublease payments for 1999, 1998 and 1997 were not material. NOTE 13 -- TRUST BASED CONVERTIBLE PREFERRED SECURITIES In connection with the Insignia merger, the Company assumed the obligations under the Trust Based Convertible Preferred Securities (the "Securities") with an aggregate liquidation amount of $149.5 million. The Securities will mature on September 30, 2016 and require distributions at the rate of 6.5% per annum, with quarterly distributions payable in arrears. The Securities are convertible by the holders at any time through September 30, 2016 and may be redeemed by the Company on or after November 1, 1999. Each $50 of liquidation value of the Securities can be converted into AIMCO Class A Common Stock at a conversion price of $49.61, which equates to 1.007 shares of AIMCO Class A Common Stock. Upon conversion of the Securities into AIMCO Class A Common Stock, the Partnership will issue OP Units to AIMCO on a one-for-one ratio. NOTE 14 -- REGISTRATION STATEMENTS In August 1998, AIMCO and the Partnership filed a shelf registration statement with the Securities and Exchange Commission with respect to an aggregate of $1,268 million of debt and equity securities of AIMCO (of which $268 million was carried forward from AIMCO 1997 shelf registration statement) and $500 million of debt securities of the Partnership. The registration statement was declared effective by the SEC on December 10, 1998. As of December 31, 1999, AIMCO had $1,088 million available and the Partnership had $500 million available from this registration statement. The Company expects to finance pending acquisitions of real estate interests with the issuance of equity and debt securities under the shelf registration statement. NOTE 15 -- PARTNERS' CAPITAL Preferred Units All classes of Preferred Units are on equal parity and are senior to the OP Units, except the Class E Preferred Units, which were junior to all other classes of Preferred Units and senior to the OP Units. None of the classes of Preferred Units have any voting rights, except the right to approve certain changes to the Partnership Agreement that would adversely affect holders of such class of units. Holders of the Class B Cumulative Convertible Preferred Units (the "Class B Preferred Units") are entitled to receive, when, as and if declared by the General Partner, quarterly cash distributions per share equal to the greater of $1.78125 or the cash distributions declared on the number of OP Units into which one Class B Preferred Unit is convertible. Each share of Class B Preferred Unit is convertible at the option of the holder, beginning August 1998, into 3.28407 OP Units, subject to certain anti-dilution adjustments. Holders of the Class C, D, G and H Preferred Units are entitled to receive, when, as and if declared by the General Partner, distributions at the following rates per annum: Class C Cumulative Preferred Units.......................... 9.000% Class D Cumulative Preferred Units.......................... 8.750% Class G Cumulative Preferred Units.......................... 9.375% Class H Cumulative Preferred Units.......................... 9.500%
Holders of the Class J Cumulative Convertible Preferred Units (the "Class J Preferred Units") were entitled to receive cash distributions at the rate of 7% per annum of the $100 liquidation preference (equivalent to $7 per annum per unit) for the period beginning November 6, 1998 and lasting until November 15, 1998, and 8% per annum of the liquidation preference (equivalent to $8 per annum per unit) F-20 55 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) for the period beginning November 15, 1998 and lasting until November 15, 1999. On May 14, 1999, the Company notified the holders of the Class J Preferred Units that the defined internal rate of return threshold had been met, and the Company exercised its right to convert all of the Class J Preferred Units into 2.5 million OP Units. Holders of Class K Convertible Cumulative Preferred Units (the "Class K Preferred Units"), which were issued on February 18, 1999, are entitled to receive cash distributions in an amount per share equal to the greater of (i) $2.00 per year (equivalent to 8% of the liquidation preference), or (ii) the cash distributions payable on the number of shares of OP Units into which a Class K Preferred Unit is convertible. Beginning with the third anniversary of the date of original issuance, holders of Class K Preferred Units will be entitled to receive an amount per share equal to the greater of (i) $2.50 per year (equivalent to 10% of the liquidation preference), or (ii) the cash distributions payable on the number of OP Units into which a Class K Preferred Unit is convertible. Holders of Class L Convertible Cumulative Preferred Units (the "Class L Preferred Units"), which were issued on May 28, 1999, are entitled to receive cash distributions in an amount per share equal to the greater of (i) $2.025 per year (equivalent to 8.1% of the liquidation preference), or (ii) the cash distributions payable on the number of OP Units into which a Class L Preferred Unit is convertible. Beginning with the third anniversary of the date of original issuance, the holders of Class L Preferred Units will be entitled to receive an amount per share equal to the greater of (i) $2.50 per year (equivalent to 10% of the liquidation preference), or (ii) the cash distributions payable on the number of OP Units into which a Class L Preferred Unit is convertible. The Class E Preferred Units were issued in connection with the Insignia merger. Holders of Class E Preferred Units were entitled to receive the same cash distributions per share as holders of OP Units. In addition, on January 15, 1999, holders of Class E Preferred Units received a special distribution in an aggregate amount of approximately $50 million and all outstanding Class E Preferred Units automatically converted into an equal number of OP Units. In addition to the Preferred Units described above, the Partnership has issued Preferred Units to third parties as follows. In 1999, the Company completed tender offers for limited partnership interests resulting in the issuance of 11,000 Class Two Preferred OP Units, 1,682,000 Class Three Preferred OP Units, and 580,000 Class Four Preferred OP Units. In 1998, the Company acquired Calhoun Beach Club Apartments, a 351 unit, high-rise apartment community and 83,300 square feet of commercial space for approximately $77.1 million, including the issuance of 90,000 Class One Preferred OP Units valued at $9.0 million. As of December 31, 1999 and 1998, the following amounts of Preferred Units owned by third parties are outstanding (in thousands):
1999 1998 ----- ---- Class One Partnership Preferred Units, redeemable to Class A Common Stock in one year, holder to receive dividends at 8% ($8.00 per annum per unit)............................. 90 90 Class Two Partnership Preferred Units, redeemable to Class A Common Stock in one year, holders to receive dividends at 8% ($2.00 per annum per unit)............................. 11 -- Class Three Partnership Preferred Units, redeemable to Class A Common Stock in one year, holders to receive dividends at 9.5% ($2.375 per annum per unit)....................... 1,682 -- Class Four Partnership Preferred Units, redeemable to Class A Common Stock in two years, holders to receive dividends at 8% ($2.00 per annum per unit).......................... 580 -- ----- -- 2,363 90 ===== ==
F-21 56 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The distributions paid on each class of Preferred Units for the years ended December 31, 1999, 1998, and 1997 are as follows (in thousands, except per OP Unit data):
1999 1998 1997 ------------------ ------------------ ----------------- AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL CLASS OF PER AMOUNT PER AMOUNT PER AMOUNT PREFERRED UNITS UNIT(1) PAID UNIT(1) PAID UNIT(1) PAID --------------- ------- ------- ------- ------- ------- ------ Class B................. $ 8.21 $ 6,158 $ 7.39 $ 5,542 $ 1.13(2) $846 Class C................. 2.25 5,400 1.89(3) 4,538 -- -- Class D................. 2.19 9,188 1.40(3) 5,869 -- -- Class E................. -- -- 0.22(4) 1,892 -- -- Class G................. 2.34 9,492 0.59(3) 2,373 -- -- Class H................. 2.38 4,750 0.40(3) 805 -- -- Class J................. 3.16(5) 5,956 0.14(3) 175 -- -- Class K................. 1.50(6) 7,500 -- -- -- -- Class L................. 1.01(6) 5,063 -- -- -- -- Class One............... 8.00(6) 720 -- -- -- -- Class Two............... --(7) -- -- -- -- -- Class Three............. --(7) -- -- -- -- -- Class Four.............. --(7) -- -- -- -- -- ------- ------- ---- $54,227 $21,194 $846 ======= ======= ====
- --------------- (1) Amounts per unit are calculated based on number of preferred units outstanding at the end of each year. (2) For the period from the date of issuance to December 31, 1997. (3) For the period from the date of issuance to December 31, 1998. (4) For the period from the date of issuance to December 31, 1998. The Class E Preferred Units was converted to AIMCO Class A Common Stock on January 15, 1999. (5) For the period from January 1, 1999 to the date of conversion to AIMCO Class A Common Stock. (6) For the period from the date of issuance to December 31, 1999. (7) No distributions for these Preferred Units were required during 1999 based on the date of issuance. OP Units OP Units are redeemable by OP Unitholders (other than the General Partner and Special Limited Partner) at their option, subject to certain restrictions, on the basis of one OP Unit for either one share of AIMCO Class A Common Stock or cash equal to the fair value of a share of AIMCO Class A Common Stock at the time of redemption. The Company has the option to deliver shares of AIMCO Class A Common Stock in exchange for all or any portion of the cash requested. When a Limited Partner redeems an OP Unit for AIMCO Class A Common Stock, Limited Partner's capital is reduced and the Special Limited Partners' capital is increased. OP Units held by AIMCO are not redeemable. In 1999, the Company completed tender offers for limited partnership interests resulting in the issuance of 1,084,000 OP Units. In 1998, in connection with the acquisition of Calhoun Beach Club Apartments, described above, the Partnership also issued approximately 100,300 OP Units valued at $4.1 million. The Company also withheld, as contingent consideration, approximately 109,800 OP Units valued at approximately $4.5 million. In September 1999, the contingent consideration was met and the 109,800 OP Units were issued. F-22 57 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) During 1999 and 1998, the Company issued approximately 215,000 and 600,000 shares, respectively, of AIMCO Class A Common Stock to certain of AIMCO's executive officers (or entities controlled by them) at market prices. In exchange for the shares purchased, the executive officers (or entities controlled by them) executed notes payable to AIMCO totaling $8.2 million and $23.5 million, respectively. The notes were contributed by AIMCO to the Partnership in exchange for approximately 215,000 and 600,000 OP Units, respectively. Total payments on such notes from officers in 1999 and 1998 were $6.2 million and $8.9 million, respectively. In addition, in 1999 and 1998, the Partnership issued approximately 37,000 and 40,000 OP Units to AIMCO and AIMCO issued approximately 37,000 and 40,000 shares of AIMCO Class A Common Stock, respectively, to certain of AIMCO's executive officers. On September 15, 1999, AIMCO completed a direct placement of 1,382,580 shares of AIMCO Class A Common Stock at a net price of $39.50 per share to five institutional investors. The net proceeds of approximately $54.6 million were contributed by AIMCO to the Partnership in exchange for 1,382,580 OP Units and were used to repay outstanding indebtedness under the new credit facility. During 1999, the Company repurchased 205,300 shares of AIMCO Class A Common Stock (and the Partnership repurchased 205,300 OP Units from AIMCO) at an average price of $38.82 per share/unit. The following table sets forth the changes in redeemable OP Units held by Limited Partners through September 30, 1998, after which date they were classified as permanent partners' capital:
LIMITED PARTNERS -------- Redeemable OP Units at December 31, 1997.................... $197,086 OP Units redeemed by Limited Partners to Special Limited Partner................................................ (5,514) Acquisition of real estate or interests in real estate partnerships through issuance of OP Units.............. 33,384 Issuance of High Performance Units........................ 2,070 OP Units redeemed by Limited Partners for cash............ (516) Issuance of OP Units in connection with Ambassador merger................................................. 146 Net income................................................ 4,425 Distributions paid to OP Unitholders...................... (8,702) Other..................................................... 365 Adjustment to reflect Limited Partners' capital at redemption value....................................... 9,661 -------- Redeemable OP Units at September 30, 1998................... $232,405 ========
Investment in AIMCO Preferred Stock In November 1998, AIMCO issued 1 million shares of Class J Preferred Stock for proceeds of $100.0 million. The proceeds were contributed by AIMCO to the Partnership in exchange for 1 million Class J Preferred Units. Concurrently, the Partnership issued 250,000 Class J Preferred Units valued at $25.0 million to AIMCO, in exchange for 250,000 shares of Class J Preferred Stock. The investment in AIMCO's preferred stock is presented in the accompanying financial statements as a reduction to partners' capital. Other Convertible Securities On December 14, 1998, the Company sold, in a private placement, 1.4 million Class B partnership preferred units (the "Class B Partnership Units") of a subsidiary of the Partnership for $30.85 million. The partnership preferred units may be redeemed at the option of the holders at any time, and at the option of the Company under certain circumstances. Any redemption of the units may be satisfied by delivery of cash, AIMCO Class A Common Stock or OP Units. F-23 58 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NOTE 16 -- STOCK OPTION PLANS AND STOCK WARRANTS AIMCO, from time to time, will issue stock options and stock warrants. Upon exercise of the stock options or stock warrants, AIMCO must contribute the proceeds received to the Partnership in exchange for OP Units in the same number as shares of AIMCO Class A Common Stock issued in connection with the exercised stock options or stock warrants. Therefore, the following disclosures are made pertaining to AIMCO's stock options and stock warrants AIMCO Board of Directors has adopted the 1994 Stock Option Plan of Apartment Investment and Management Company (the "1994 Plan"), the Apartment Investment and Management Company 1996 Stock Award and Incentive Plan (the "1996 Plan"), the Apartment Investment and Management Company 1997 Stock Award and Incentive Plan (the "1997 Plan") and the Apartment Investment and Management Company Non-Qualified Employee Stock Option Plan (the "Non-Qualified Plan") to attract and retain officers, key employees and independent directors. The 1994 Plan provides for the granting of a maximum of 150,000 options to purchase common shares. The 1996 Plan provides for the granting of a maximum of 500,000 options to purchase common shares. The 1997 Plan provides for the granting of a maximum of 20,000,000 options to purchase common shares. The Non-Qualified Plan provides for the granting of a maximum of 500,000 options to purchase common shares. The 1994 Plan, the 1996 Plan, the 1997 Plan and the Non-Qualified Plan allow for the grant of incentive and non-qualified stock options, and are administered by the Compensation Committee of the Board of Directors of AIMCO. The 1994 Plan also provides for a formula grant of the non-qualified stock options to the independent directors to be administered by the Board of Directors of AIMCO to the extent necessary. The exercise price of the options granted may not be less than the fair market value of the common stock at the date of grant. The term of the incentive and non-qualified options is ten years from the date of grant. The options vest over a one to five-year period from the date of grant. Terms may be modified at the discretion of the Compensation Committee of the Board of Directors of AIMCO. AIMCO has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25") and related interpretations in accounting for its employee stock options because, as discussed below, the alternative fair value accounting provided for under Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), requires the use of option valuation models that were not developed for use in valuing employee stock options and warrants. Under APB 25, because the exercise price of AIMCO's employee stock options and warrants equals the market price of the underlying stock on the date of grant, no compensation expense is recognized. Pro forma information regarding net income and earnings per share is required by SFAS 123, which also requires that the information be determined as if AIMCO had accounted for its employee stock options and warrants granted subsequent to December 31, 1994 under the fair value method. The fair value for these options and warrants were estimated at the date of grant using a Black-Scholes valuation model with the following assumptions:
1999 1998 1997 ------------- ------------ ------------- Range of risk free interest rates........... 4.5% to 6.5% 4.4% to 5.6% 5.8% to 6.6% Expected dividend yield..................... 6.6% 6.0% 6.0% Volatility factor of the expected market price of the Company's common stock....... 0.183 0.183 0.175 Weighted average expected life of options... 4.5 years 4.5 years 4.5 years
The Black-Scholes valuation model was developed for use in estimating the fair value of traded options and for warrants which have no vesting restrictions and are fully transferable. In addition, the valuation model requires the input of highly subjective assumptions including the expected stock price volatility. Because F-24 59 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) AIMCO stock options and warrants have characteristics significantly different from those of traded options and warrants, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing model does not necessarily provide a reliable single measure of the fair value of its employee stock options and warrants. For purposes of pro forma disclosures, the estimated fair values of the options are amortized over the options' vesting period. AIMCO's pro forma information for the years ended December 31, 1999, 1998 and 1997 is as follows (in thousands, except per share data):
1999 1998 1997 ------- ------- ------- Pro forma net income attributable to common Stockholders.......................................... $17,606 $34,396 $26,096 Pro forma basic earnings per common share............... $ 0.28 $ 0.76 $ 1.00 Pro forma diluted earnings per common share............. $ 0.28 $ 0.75 $ 1.00
The effects of applying SFAS 123 in calculating pro forma income attributable to common stockholders and pro forma basic earnings per share may not necessarily be indicative of the effects of applying SFAS 123 to future years' earnings. The following table summarizes the option and warrants activity for the years ended December 31, 1999, 1998 and 1997:
1999 1998 1997 -------------------- -------------------- -------------------- WEIGHTED WEIGHTED WEIGHTED OPTIONS AVERAGE OPTIONS AVERAGE OPTIONS AVERAGE AND EXERCISE AND EXERCISE AND EXERCISE WARRANTS PRICE WARRANTS PRICE WARRANTS PRICE --------- -------- --------- -------- --------- -------- Outstanding at beginning of year.... 7,450,000 $36.21 1,684,000 $30.53 505,000 $20.74 Granted................ 1,000,000 37.14 5,811,000 37.78 627,000 38.77 Assumed in connection with acquisitions.... -- -- 671,000 25.99 995,000 24.77 Exercised.............. (490,000) 13.78 (661,000) 25.19 (437,000) 18.11 Forfeited.............. (175,000) 34.68 (55,000) 35.71 (6,000) 18.50 --------- ------ --------- ------ --------- ------ Outstanding at end of year................. 7,785,000 $37.78 7,450,000 $36.21 1,684,000 $30.53 Exercisable at end of year................. 1,643,000 $37.55 1,793,000 $31.69 690,000 $19.95 Weighted-average fair value of options and warrants granted during the year...... $ 3.41 $ 3.70 $ 3.24
At December 31, 1999, exercise prices for outstanding and exercisable options range from $15.21 to $43.85 and warrants range from $36.00 to $51.67, and the remaining weighted-average contractual life of the options and warrants is 9.06 years. On June 3, 1997, AIMCO issued warrants (the "NHP Warrants") exercisable to purchase an aggregate of 399,999 shares of AIMCO Class A Common Stock at $36 per share at any time prior to June 3, 2002. The NHP Warrants were issued as part of the consideration for the NHP Real Estate Companies. On December 2, 1997, AIMCO issued warrants (the "Oxford Warrants") exercisable to purchase up to an aggregate of 500,000 shares of AIMCO Class A Common Stock at $41 per share. The Oxford Warrants F-25 60 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) were issued to affiliates of Oxford Realty Financial Group, Inc., a Maryland corporation ("Oxford"), in connection with the amendment of certain agreements pursuant to which the Company manages properties controlled by Oxford or its affiliates. The actual number of shares of AIMCO Class A Common Stock for which the Oxford Warrants will be exercisable is based on certain performance criteria with respect to the Company's management arrangements with Oxford for each of the five years ending December 31, 2001. The Oxford Warrants are exercisable for six years after the determination of such criteria for each of the five years. In connection with the Insignia merger, AIMCO assumed warrants that allowed the holders to purchase shares of AIMCO Class A Common Stock at prices ranging from approximately $4 to $52 per share. As of December 31, 1999, approximately 15,000 of the Insignia warrants were still outstanding. On December 14, 1998, AIMCO sold, in a private placement, a warrant to purchase 875,000 shares of AIMCO Class A Common Stock for $4.15 million. The warrant has an exercise price of $40 per share. The warrant may be exercised at any time, and expires upon a redemption of the Class B Partnership Units (see Note 15). NOTE 17 -- EARNINGS PER OP UNIT The following table illustrates the calculation of basic and diluted earnings per share for the years ended December 31, 1999, 1998 and 1997 (in thousands, except per common unit data):
1999 1998 1997 ------- ------- ------- Numerator: Net income.............................................. $80,690 $68,928 $32,697 Preferred Unit distributions............................ (54,173) (26,533) (2,315) ------- ------- ------- Numerator for basic and diluted earnings per common unit -- income attributable to common unitholders..... $26,517 $42,395 $30,382 ======= ======= ======= Denominator: Denominator for basic earnings per common unit -- weighted average number of common units outstanding........................................... 68,541 52,798 27,732 Effect of dilutive securities: Dilutive potential common units......................... 970 1,306 381 ------- ------- ------- Denominator for diluted earnings per unit............... 69,511 54,104 28,113 ======= ======= ======= Basic earnings per common unit: Operations............................................ $ 0.42 $ 0.72 $ 0.99 Gain (loss) on disposition of properties.............. (0.03) 0.08 0.11 Extraordinary item.................................... -- -- (0.01) ------- ------- ------- Total......................................... $ 0.39 $ 0.80 $ 1.09 ======= ======= ======= Diluted earnings per common unit: Operations............................................ $ 0.41 $ 0.70 $ 0.98 Gain (loss) on disposition of properties.............. (0.03) 0.08 0.11 Extraordinary item.................................... -- -- (0.01) ------- ------- ------- Total......................................... $ 0.38 $ 0.78 $ 1.08 ======= ======= =======
The Class B Preferred Units, the Class J Preferred Units, the Class K Preferred Units, the Class L Preferred Units, and High Performance Units are convertible (see Notes 15 and 19). The Class C Preferred Units, the Class D Preferred Units, the Class G Preferred Units, and the Class H Preferred Units are not convertible. F-26 61 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NOTE 18 -- RECENT ACCOUNTING DEVELOPMENTS In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities ("Statement 133"). Statement 133 requires recording all derivative instruments as assets or liabilities, measured at fair value. Statement 133 is effective beginning after 2000. The Company has elected not to early adopt the provisions of Statement 133 as of December 31, 1999 and when Statement 133 is adopted, the Company does not expect the Statement to have a significant impact on its financial position or results of operations. NOTE 19 -- TRANSACTIONS WITH AFFILIATES In January 1998, the Partnership sold an aggregate of 15,000 High Performance Partnership Units (the "High Performance Units") to a joint venture of twelve members of AIMCO's senior management and three of AIMCO's independent directors for $2.1 million in cash. The High Performance Units have nominal value unless AIMCO's total return, defined as dividend income plus share price appreciation, over the three year period ending December 31, 2000, is at least 30% and exceeds the industry average, as determined by a peer group index, by at least 15% (the "Total Return"). At the conclusion of the three year period, if AIMCO's Total Return satisfies these criteria, the holders of the High Performance Units will receive distributions and allocations of income and loss from the Partnership in the same amounts and at the same times as would holders of a number of OP Units equal to the quotient obtained by dividing the product of (i)(a) 15% of the amount by which AIMCO's cumulative Total Return over the three year period exceeds the greater of 115% of a peer group index or 30% (such excess being the "Excess Return"), multiplied by (b) the weighted average market value of the outstanding AIMCO Class A Common Stock and OP Units, by (ii) the market value of one share of AIMCO Class A Common Stock at the end of the three year period. The three year measurement period will be shortened in the event of a change of control of AIMCO. Unlike OP Units, the High Performance Units are not redeemable or convertible into AIMCO Class A Common Stock unless a change of control of AIMCO occurs. Because there is substantial uncertainty that the High Performance Units will have more than nominal value due to the required Total Return over the three year term, the Company has not recorded any value to the High Performance Units in excess of the cash received upon their issuance (recorded as Limited partners' capital). If the measurement period had ended December 31, 1999, the Excess Return would have been $83.8 million and the value of the High Performance Units would have been $12.6 million. Fees earned based on services provided by the Company, as general partner, to real estate partnerships for customary services including refinancing, construction supervisory and disposition fees for the years ended December 31, 1999 and 1998 were $14.2 million and $6.4 million, respectively. Fees earned by the Company for the year ended December 31, 1997 were not significant. NOTE 20 -- EMPLOYEE BENEFIT PLANS The Company offers medical, dental, life and short-term and long-term disability benefits to employees of the Company through insurance coverage of Company-sponsored plans. The medical and dental plans are self-funded and are administered by independent third parties. In addition, the Company also participates in a 401(k) defined-contribution employee savings plan. Employees who have completed six months of service are eligible to participate. The Company matches 50%-100% of the participant's contributions to the plan up to a maximum of 6% of the participant's prior year compensation. The Company match percentage is based on employee tenure. F-27 62 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NOTE 21 -- UNAUDITED SUMMARIZED CONSOLIDATED QUARTERLY INFORMATION Summarized unaudited consolidated quarterly information for 1999 and 1998 is provided below (amounts in thousands, except per unit amounts).
QUARTER ----------------------------------------- YEAR ENDED DECEMBER 31, 1999 FIRST SECOND THIRD FOURTH - ---------------------------- -------- -------- -------- -------- Revenue from property operations........... $110,552 $116,237 $120,398 $184,696 Income from property operations............ 38,105 39,815 40,456 52,969 Revenue from service company business...... 7,978 7,536 10,280 17,083 Company's share of income from service company business......................... (924) 5,150 (4,315) 17,496 Net income before extraordinary item....... 14,864 23,993 19,889 21,944 Net income................................. 14,864 23,993 19,889 21,944 Basic earnings per common unit............. $ 0.03 $ 0.15 $ 0.08 $ 0.13 Diluted earnings per common unit........... $ 0.03 $ 0.14 $ 0.07 $ 0.13 Weighted average common units outstanding.............................. 64,923 67,943 69,925 71,372 Weighted average common units and common unit equivalents outstanding............. 66,149 69,172 71,006 71,715
QUARTER --------------------------------------- YEAR ENDED DECEMBER 31, 1998 FIRST SECOND THIRD FOURTH - ---------------------------- ------- ------- -------- -------- Revenue from property operations............. $71,336 $89,928 $104,436 $108,263 Income from property operations.............. 28,918 33,701 33,943 36,645 Revenue from service company business........ 4,821 4,741 4,406 8,707 Company's share of income from service company business........................... 2,710 1,183 1,775 47 Net income before extraordinary item......... 23,930 14,594 17,745 12,659 Net income................................... 23,930 14,594 17,745 12,659 Basic earnings per common unit............... $ 0.44 $ 0.19 $ 0.19 $ 0.04 Diluted earnings per common unit............. $ 0.43 $ 0.19 $ 0.19 $ 0.04 Weighted average common units outstanding.... 46,424 51,159 52,896 60,523 Weighted average common units and common unit equivalents outstanding.................... 46,606 51,400 53,523 64,890
NOTE 22 -- INDUSTRY SEGMENTS The Company owns and operates multi-family apartment communities throughout the United States and Puerto Rico which generate rental and other property related income through the leasing of apartment units to a diverse base of tenants. The Company separately evaluates the performance of each of its apartment communities. However, because each of the apartment communities has similar economic characteristics, facilities, services and tenants, the apartment communities have been aggregated into a single apartment communities segment. All segment disclosures are included in or can be derived from the Company's consolidated financial statements. All revenues are from external customers and no revenues are generated from transactions with other segments. There are no tenants which contributed 10% or more of the Company's total revenues during 1999, 1998 or 1997. Although the Company operates in only one segment, there are different components of the multi-family business for which management considers disclosure to be useful. The following table presents the contribution (separated between consolidated and unconsolidated activity) to the Company's free cash flow for the F-28 63 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) year ended December 31, 1999, from the components of the Company and a reconciliation of free cash flow to funds from operations, less a reserve for capital replacements, and net income (in thousands, except equivalent units and monthly rents):
CONSOLIDATED UNCONSOLIDATED TOTAL CONTR. % ------------ -------------- --------- -------- REAL ESTATE: Conventional: Average monthly rent greater than $800 per unit (9,008 equivalent units).............. $ 62,428 $ 15,877 $ 78,305 15% Average monthly rent $700 to $800 per unit (9,310 equivalent units)................... 35,328 21,611 56,939 11% Average monthly rent $600 to $700 per unit (16,494 equivalent units).................. 58,425 27,975 86,400 16% Average monthly rent $500 to $600 per unit (29,492 equivalent units).................. 78,163 32,758 110,921 21% Average monthly rent less than $500 per unit (29,387 equivalent units).................. 36,254 20,299 56,553 11% --------- --------- --------- --- Subtotal conventional real estate contribution to free cash flow(1)....... 270,598 118,520 389,118 74% Affordable (9,809 equivalent units)............. 5,131 32,382 37,513 7% College housing (average rent of $663 per month) (2,214 equivalent units)..................... 3,633 4,612 8,245 2% Other real estate............................... 1,892 5,021 6,913 1% Resident services............................... 1,914 442 2,356 -- Minority interest............................... (25,080) -- (25,080) (5)% --------- --------- --------- --- Total real estate contribution to free cash flow(1).......................... 258,088 160,977 419,065 79% --------- --------- --------- --- SERVICE BUSINESSES: Management contracts (property and asset management): Controlled properties........................ 18,999 16,396 35,395 7% Third party with terms in excess of one year....................................... -- 10,281 10,281 2% Third party cancelable in 30 days............ -- 908 908 -- --------- --------- --------- --- Subtotal management contracts contribution to free cash flow(1).................... 18,999 27,585 46,584 9% Buyers Access................................... -- 3,314 3,314 1% Other service businesses........................ 3,490 (2,703) 787 -- --------- --------- --------- --- Total service businesses contribution to free cash flow(1)..................... 22,489 28,196 50,685 10% --------- --------- --------- --- INTEREST INCOME: General partner loan interest................... 11,774 -- 11,774 2% Notes receivable from officers.................. 869 -- 869 -- Other notes receivable.......................... 8,863 -- 8,863 2% Money market and interest bearing accounts...... 8,217 1,568 9,785 2% --------- --------- --------- --- Subtotal interest income................... 29,723 1,568 31,291 6% Accretion of loan discount(2)................... 32,460 -- 32,460 6% --------- --------- --------- --- Total interest income contribution to free cash flow(1)..................... 62,183 1,568 63,751 12% --------- --------- --------- ---
F-29 64 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONSOLIDATED UNCONSOLIDATED TOTAL CONTR. % ------------ -------------- --------- -------- FEES: Disposition fees................................ 3,070 1,219 4,289 1% Refinancing fees................................ 283 331 614 -- --------- --------- --------- --- Total fees contribution to free cash flow(1)............................... 3,353 1,550 4,903 1% --------- --------- --------- --- GENERAL AND ADMINISTRATIVE EXPENSES............... (12,016) -- (12,016) (2)% --------- --------- --------- --- Total contribution to free cash flow from business components(1)........... 334,097 192,291 526,388 100% --------- --------- --------- --- OTHER EXPENSES: Interest expense: Secured debt Long-term, fixed rate...................... (107,100) (63,939) (171,039) Long-term, variable rate................... (1,314) (2,034) (3,348) Short-term................................. (14,828) (2,883) (17,711) General partner loans and deferred acquisition notes.......................... -- (1,744) (1,744) Lines of credit and other unsecured debt..... (12,754) (384) (13,138) Interest on notes payable to the OP.......... -- (7,401) (7,401) Convertible preferred securities............. (4,858) -- (4,858) Interest capitalized......................... 6,588 93 6,681 --------- --------- --------- Total interest expense before minority interest.............................. (134,266) (78,292) (212,558) Minority interest share of interest expense.................................... 11,154 -- 11,154 --------- --------- --------- Total interest expense after minority interest.............................. (123,112) (78,292) (201,404) --------- --------- --------- Funds from operations, less a reserve for capital replacements, before preferred dividends(1)............................... 210,985 113,999 324,984 Preferred Unit distributions.................... (33,265) -- (33,265) --------- --------- --------- Funds from operations, less a reserve for capital replacements(1).................... 177,720 113,999 291,719 Capital replacement reserve..................... 19,434 9,281 28,715 Preferred Unit distributions.................... 33,265 -- 33,265 Equity in losses of unconsolidated real estate partnerships................................. (3,272) 3,272 -- Equity in losses of unconsolidated subsidiaries................................. (2,400) 2,400 -- Expenses associated with convertible preferred securities................................... (6,892) -- (6,892) Loss on disposition of properties............... (1,785) -- (1,785) Depreciation.................................... (131,257) (104,755) (236,012) Minority interest in depreciation............... 10,174 -- 10,174 Amortization.................................... (14,297) (22,434) (36,731) Deferred tax provision.......................... -- (1,763) (1,763) --------- --------- --------- Net income.............................. $ 80,690 $ -- $ 80,690 ========= ========= =========
- --------------- (1) "Funds from operations" and "free cash flow" are measurement standards used by the Company's management, as follows: - The Company measures its economic profitability based on funds from operations ("FFO"), less a reserve for capital replacements of $300 per apartment unit. The Company's management believes that FFO, less such a reserve (or adjusted funds from operations, "AFFO") provides investors with an understanding of the Company's ability to incur and service debt and make capital expenditures. The F-30 65 AIMCO PROPERTIES, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss), computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains and losses from debt restructuring and sales of property, plus real estate related depreciation and amortization (excluding amortization of financing costs), and after adjustments for unconsolidated partnerships and joint ventures. The Company calculates FFO based on the NAREIT definition, as adjusted for amortization, the non-cash deferred portion of the income tax provision for unconsolidated subsidiaries and less the payment of distributions on Preferred Units. FFO should not be considered an alternative to net income or net cash flows from operating activities, as calculated in accordance with GAAP, as an indication of the Company's performance or as a measure of liquidity. FFO is not necessarily indicative of cash available to fund future cash needs. In addition, there can be no assurance that the Company's basis for computing FFO is comparable with that of other real estate investment trusts. - Free cash flow is defined by the Company as AFFO plus interest expense and Preferred Unit distributions. It measures profitability prior to the cost of capital. Free cash flow should not be considered an alternative to net income or net cash flows from operating activities, as calculated in accordance. (2) See Note 7. NOTE 23 -- SUBSEQUENT EVENTS Distribution Declared On January 19, 2000, the General Partner declared a quarterly cash distribution of $0.70 per OP Unit for the quarter ended December 31, 1999, paid on February 11, 2000, to OP Unitholders of record on February 4, 2000. The increased distribution is equivalent to an annualized distribution rate of $2.80 per OP Unit, a 12% increase from the previous annual distribution rate of $2.50. Class M Preferred Stock On January 13, 2000, AIMCO issued 1,200,000 shares of newly created Class M Convertible Cumulative Preferred Stock, par value $.01 per share ("Class M Preferred Stock") in a direct placement. The net proceeds of $30.0 million were contributed by AIMCO to the Partnership in exchange for 1,200,000 Class M Preferred Units and were used to repay certain indebtedness and for working capital. For three years, holders of the Class M Preferred Stock (which mirror those of the Class M Preferred Units) are entitled to receive, when, as and if declared by the Board of Directors and AIMCO, as General Partner, annual cash distributions in an amount per OP Unit equal to the greater of (i) $2.125 per year (equivalent to 8.5% of the liquidation preference), or (ii) the cash distributions (payable quarterly) payable on the number of shares of OP Units into which a Class M Preferred Unit is convertible. Beginning with the third anniversary of the date of original issuance, holders of Class M Preferred Units will be entitled to receive an amount per Class M Preferred Unit equal to the greater of (i) $2.3125 per year (equivalent to 9.25% of the liquidation preference), or (ii) the cash distributions payable on the number of OP Units into which a Class M Preferred Unit is convertible. The Class M Preferred Units are senior to the OP Units as to distributions and liquidation. Upon any liquidation, dissolution or winding up of AIMCO, before payment or dividends by AIMCO shall be made to any holders of AIMCO Class A Common Stock, the holders of the Class M Preferred Stock and the Class M Preferred Units shall be entitled to receive a liquidation preference of $25 per share/unit, plus accumulated, accrued and unpaid distributions. F-31 66 AIMCO PROPERTIES, L.P. REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999 (IN THOUSANDS, EXCEPT UNIT DATA) SCHEDULE III
INITIAL COST COST ----------------------- CAPITALIZED BUILDINGS SUBSEQUENT DATE YEAR NUMBER AND TO PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION - ------------- -------- --------------------- --------- -------- -------- ------------ ----------- 100 Forest Place..... Oct-97 OakPark, IL 1986 234 $ 2,498 $ 14,154 $ 3,591 40th North........... Jul-94 Phoenix, AZ 1970 556 2,546 14,437 2,156 Alpine Village....... Oct-98 Birmingham, AL 1972 160 751 3,034 83 Anchorage............ Nov-96 League City, TX 1985 264 523 9,097 1,994 Arbor Crossing....... May-97 Lithonia, GA 1988 240 1,879 10,647 1,517 Arbor Station........ Apr-98 Montgomery, AL 1987 264 1,627 9,218 702 Arbor Station II..... Apr-99 Montgomery, AL 1988 288 198 1,133 -- Arbors............... Oct-97 Tempe, AZ 1971 200 1,092 6,189 509 Arbors............... May-98 Deland, FL 1983 224 1,507 8,537 936 Ashford Plantation... Dec-95 Atlanta, GA 1975 211 2,770 9,956 1,604 Aspen Hills.......... May-98 Austin, TX 1986 344 2,645 14,989 518 Aspen Point.......... Jul-99 Arvada, CO 1974 120 288 5,935 135 Atriums of Plantation......... Aug-98 Plantation, FL 1980 210 1,807 9,756 799 Baldwin Oaks......... May-97 Parsippany, NJ 1980 251 689 7,226 201 Barcelona............ Oct-98 Houston, TX 1963 126 852 4,184 275 Bay Club............. Apr-97 Aventura, FL 1990 702 10,530 60,830 2,523 Baymeadows........... Oct-98 Jacksonville, FL 1972 904 5,308 20,953 163 Beacon Hill.......... Oct-97 Chamblee, GA 1978 120 928 5,261 406 Beech Lake........... May-99 Durham, NC 1986 345 2,284 13,011 -- Bella Vista.......... Jul-99 Miami, FL 1986 352 2,560 14,660 -- Bent Oaks............ May-98 Austin, TX 1979 146 1,117 6,328 227 Blossomtree.......... Oct-97 Scottsdale, AZ 1970 125 535 3,029 381 Boardwalk............ Dec-95 Tamarac, FL 1986 291 3,350 8,196 1,283 Boulder Creek (Bluffs)........... Sep-83 Boulder, CO 1971 232 696 7,779 5,657 Bradford Place....... Dec-99 Suitland, MD 1968 214 1,176 6,666 -- Braesview............ May-98 San Antonio, TX 1982 396 3,135 17,764 392 Brandywine........... Apr-83 St. Petersburg, FL 1971 477 1,423 11,336 2,269 Brant Rock........... Oct-97 Houston, TX 1984 84 337 1,908 330 Brentwood............ Nov-96 Lake Jackson, TX 1980 104 200 3,092 479 Briarwest............ Oct-98 Houston, TX 1970 380 2,671 15,362 258 Briarwood............ Oct-98 Cedar Rapids, IA 1975 73 453 1,831 55 Briarwood............ Oct-98 Houston, TX 1970 351 2,138 10,159 99 Bridgewater.......... Nov-96 Tomball, TX 1978 206 333 4,033 2,894 Brittany Point....... Oct-98 Huntsville, AL 1978 431 1,627 9,220 207 Broadmoor Apartments......... May-98 Austin, TX 1985 200 1,370 7,765 1,035 Brookdale Lakes...... May-98 Naperville, IL 1990 200 2,709 15,350 269 Brookside Village.... Apr-96 Tustin, CA 1970 628 2,498 14,180 21,605 Burke Shire Commons............ May-97 Burke, VA 1986 360 2,785 23,320 145 Calhoun Beach........ Dec-98 Minneapolis, MN 1928/1998 351 11,567 65,546 4,177 Cambridge Heights.... May-97 Natchez, MS 1979 94 249 1,413 825 Canterbury Green..... Dec-99 Fort Wayne, IN 1979 2,007 13,929 73,975 -- Cape Cod............. May-98 San Antonio, TX 1985 244 1,582 8,946 234 DECEMBER 31, 1999 --------------------------------------------------------------------------------- TOTAL COST BUILDINGS NET OF AND ACCUMULATED ACCUMULATED PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES - ------------- -------- ------------ ---------- ------------ ------------ ------------ 100 Forest Place..... $ 759 $ 19,484 $ 20,243 $ 5,165 $ 15,078 $ 15,080 40th North........... 2,546 16,592 19,139 3,783 15,356 10,202 Alpine Village....... 751 3,117 3,868 410 3,459 2,100 Anchorage............ 615 10,999 11,614 3,660 7,954 4,708 Arbor Crossing....... 740 13,303 14,043 2,168 11,875 4,956 Arbor Station........ 1,627 9,920 11,547 653 10,894 7,385 Arbor Station II..... 198 1,133 1,331 54 1,277 776 Arbors............... 1,092 6,698 7,790 647 7,143 3,715 Arbors............... 1,507 9,474 10,980 700 10,280 7,605 Ashford Plantation... 2,770 11,560 14,330 1,994 12,335 7,100 Aspen Hills.......... 2,645 15,507 18,152 1,102 17,050 9,570 Aspen Point.......... 288 6,070 6,358 1,647 4,711 -- Atriums of Plantation......... 1,807 10,555 12,362 617 11,745 7,629 Baldwin Oaks......... 689 7,427 8,116 718 7,399 7,384 Barcelona............ 852 4,459 5,312 171 5,141 2,371 Bay Club............. 10,533 63,350 73,883 6,330 67,552 49,000 Baymeadows........... 5,308 21,115 26,423 2,256 24,167 13,657 Beacon Hill.......... 929 5,666 6,595 534 6,060 3,496 Beech Lake........... 2,284 13,011 15,294 543 14,751 11,783 Bella Vista.......... 2,560 14,660 17,220 365 16,856 12,765 Bent Oaks............ 1,117 6,555 7,672 458 7,214 4,300 Blossomtree.......... 535 3,411 3,945 322 3,623 2,037 Boardwalk............ 3,350 9,479 12,829 1,702 11,128 8,987 Boulder Creek (Bluffs)........... 755 13,378 14,132 5,059 9,074 -- Bradford Place....... 1,176 6,666 7,842 -- 7,842 5,218 Braesview............ 3,135 18,155 21,290 1,284 20,006 13,690 Brandywine........... 1,437 13,591 15,028 6,089 8,939 6,216 Brant Rock........... 337 2,238 2,575 208 2,367 1,178 Brentwood............ -- 3,771 3,771 409 3,362 1,725 Briarwest............ 2,671 15,619 18,290 596 17,694 6,992 Briarwood............ 453 1,886 2,339 184 2,156 1,562 Briarwood............ 2,138 10,258 12,397 454 11,943 4,949 Bridgewater.......... 398 6,863 7,260 1,389 5,871 4,055 Brittany Point....... 1,658 9,396 11,054 (87) 11,141 9,159 Broadmoor Apartments......... 1,370 8,800 10,170 637 9,533 6,000 Brookdale Lakes...... 2,709 15,619 18,328 1,089 17,239 13,280 Brookside Village.... 7,263 31,021 38,283 4,286 33,998 26,492 Burke Shire Commons............ 2,785 23,465 26,250 906 25,344 22,055 Calhoun Beach........ 11,821 69,469 81,290 3,378 77,912 52,763 Cambridge Heights.... 90 2,397 2,487 1,018 1,469 1,520 Canterbury Green..... 13,929 73,975 87,904 87,904 52,804 Cape Cod............. 1,582 9,180 10,762 625 10,137 6,640
F-32 67
INITIAL COST COST ----------------------- CAPITALIZED BUILDINGS SUBSEQUENT DATE YEAR NUMBER AND TO PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION - ------------- -------- --------------------- --------- -------- -------- ------------ ----------- Captiva Club......... Dec-96 Tampa, FL 1975 357 1,500 7,085 9,147 Carlin Manor......... Oct-98 Columbus, OH 1966 278 1,353 3,883 114 Carriage House....... Oct-98 Gastonia, NC 1970 102 486 2,059 99 Casa Anita........... Mar-98 Phoenix, AZ 1986 224 1,125 6,404 386 Cedar Creek.......... May-98 San Antonio, TX 1979 392 1,788 10,131 1,753 Center Square........ May-97 Doylestown, PA 1975 352 372 5,347 14 Chambers Ridge....... Oct-98 Harrisburg, PA 1973 324 1,469 6,135 1,690 Chapel NDP........... May-97 Baltimore, MD 1974 175 131 3,354 113 Chatham Harbor....... Oct-99 Altamonte Springs, FL 1985 324 2,288 12,999 -- Chesapeake........... Dec-96 Houston, TX 1983 320 775 7,317 778 Chestnut Hill Village............ May-97 Middletown, CT 1985 314 6,300 15,328 35 Citrus Grove......... Jun-98 Redlands, CA 1985 198 1,118 6,333 235 Citrus Sunset........ Mar-98 Vista, CA 1985 96 663 3,758 208 Cobble Creek......... Mar-98 Tucson, AZ 1980 301 1,299 7,395 575 Colonade Gardens (Ferntree)......... Oct-97 Phoenix, AZ 1973 196 765 4,337 411 Colonial Crest....... Dec-99 Bloomington, IN 1965 208 938 4,488 -- Colony............... Sep-98 Bradenton, FL 1986 166 1,121 6,350 316 Colony At Kenilworth......... Oct-98 Towson, MD 1966 383 2,600 11,255 437 Colony House......... Oct-98 Murfreesboro, TN 1973 194 898 3,336 208 Copper Chase......... Dec-96 Katy, TX 1982 316 1,354 7,672 1,348 Copperfield.......... Nov-96 Houston, TX 1983 196 702 7,003 1,158 Coral Cove........... May-98 Tampa, FL 1985 200 727 4,119 3,431 Coral Gardens........ Apr-93 Las Vegas, NV 1983 670 3,190 12,745 2,530 Country Club Villas.. Jul-94 Amarillo, TX 1984 282 1,049 5,951 993 Country Club West.... May-98 Greeley, CO 1986 288 2,848 16,138 614 Country Wood......... Oct-98 Raleigh, NC 1972 384 2,652 8,816 130 Courtney Park........ May-98 Fort Collins, CO 1986 248 2,726 15,450 400 Coventry Square...... Nov-96 Houston, TX 1983 270 975 6,355 1,722 Crossbridge.......... Oct-98 Dallas, TX 1980 160 490 3,994 19 Crossings at Belle... Jan-98 Amarillo, TX 1976 160 483 2,737 1,256 Crossings of Bellevue........... May-98 Nashville, TN 1985 300 2,588 14,667 680 Crossroads........... May-98 Phoenix, AZ 1982 316 2,180 12,353 410 Crows Nest........... Nov-96 League City, TX 1984 176 795 5,400 1,090 Cypress Landing...... Dec-96 Savannah, GA 1984 200 915 5,188 603 Cypress Ridge........ May-98 Houston, TX 1979 268 870 4,931 1,204 Debaliviere I........ May-97 St. Louis, MO 1979 146 188 2,795 80 Dolphins Landing..... Dec-96 Corpus Christi, TX 1980 218 1,740 5,589 806 Douglaston Villas and Townhomes (Cameron Villas)............ Aug-99 Altamonte Springs, FL 1979 234 1,721 9,835 242 Dunwoody Park........ Jul-94 Dunwoody, GA 1980 318 1,838 10,538 1,484 Eagle's Nest......... May-98 San Antonio, TX 1973 226 1,053 5,966 294 Eaglewood(s)......... Jun-98 Memphis, TN 1983 584 750 16,544 4,285 Easton Village....... Nov-96 Houston, TX 1983 146 440 6,584 1,957 Eden Crossing........ Nov-94 Pensacola, FL 1985 200 1,111 6,332 895 Elm Creek............ May-97 Elmhurst, IL 1986 372 5,339 30,253 6,958 Emerald Ridge........ Feb-98 Tyler, TX 1984 484 1,469 8,324 926 Essex Park........... Oct-98 Columbia, SC 1971 323 1,570 5,554 141 Evanston Place....... May-97 Evanston, IL 1988 190 1,503 19,960 6,858 Fairway View I....... Oct-98 Baton Rouge, LA 1972 242 1,456 5,992 126 Fairway View II...... Oct-98 Baton Rouge, LA 1981 204 1,428 5,899 94 Fairways............. Jul-94 Chandler, AZ 1986 352 1,830 10,403 15,999 Ferntree Apartments.. Oct-98 Phoenix, AZ 1970 219 1,243 12,818 404 DECEMBER 31, 1999 --------------------------------------------------------------------------------- TOTAL COST BUILDINGS NET OF AND ACCUMULATED ACCUMULATED PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES - ------------- -------- ------------ ---------- ------------ ------------ ------------ Captiva Club......... 1,752 15,980 17,732 816 16,916 8,950 Carlin Manor......... 1,353 3,997 5,350 520 4,830 2,500 Carriage House....... 486 2,158 2,643 229 2,414 1,892 Casa Anita........... 1,125 6,790 7,915 491 7,424 4,050 Cedar Creek.......... 1,788 11,884 13,671 768 12,903 4,609 Center Square........ 372 5,360 5,733 316 5,416 5,619 Chambers Ridge....... 1,469 7,825 9,294 901 8,393 5,396 Chapel NDP........... 131 3,467 3,598 142 3,456 3,269 Chatham Harbor....... 2,288 12,999 15,287 68 15,219 -- Chesapeake........... 775 8,095 8,870 1,015 7,854 7,199 Chestnut Hill Village............ 6,300 15,363 21,663 1,324 20,340 16,070 Citrus Grove......... 1,118 6,569 7,686 435 7,251 5,056 Citrus Sunset........ 663 3,966 4,629 256 4,373 3,561 Cobble Creek......... 1,299 7,970 9,269 669 8,600 6,924 Colonade Gardens (Ferntree)......... 766 4,747 5,513 452 5,061 2,752 Colonial Crest....... 938 4,488 5,426 -- 5,426 1,789 Colony............... 1,121 6,666 7,787 392 7,395 3,277 Colony At Kenilworth......... 2,600 11,692 14,292 1,474 12,818 7,985 Colony House......... 898 3,544 4,442 381 4,061 2,249 Copper Chase......... 1,354 9,020 10,374 750 9,624 5,289 Copperfield.......... 646 8,217 8,863 1,589 7,274 3,367 Coral Cove........... 1,381 6,896 8,277 882 7,395 3,928 Coral Gardens........ 3,190 15,275 18,465 4,627 13,838 10,661 Country Club Villas.. 1,049 6,944 7,993 1,489 6,504 3,837 Country Club West.... 2,848 16,752 19,600 1,228 18,372 11,158 Country Wood......... 2,652 8,946 11,598 1,004 10,593 4,267 Courtney Park........ 2,726 15,850 18,577 1,117 17,460 9,895 Coventry Square...... 1,054 7,997 9,052 2,982 6,070 2,928 Crossbridge.......... 490 4,013 4,504 420 4,083 1,700 Crossings at Belle... 483 3,993 4,476 306 4,171 2,388 Crossings of Bellevue........... 2,588 15,348 17,936 1,109 16,826 8,325 Crossroads........... 2,180 12,763 14,943 912 14,031 6,853 Crows Nest........... 856 6,429 7,285 1,923 5,362 2,784 Cypress Landing...... 915 5,791 6,706 750 5,957 4,165 Cypress Ridge........ 870 6,135 7,005 461 6,545 4,250 Debaliviere I........ 188 2,874 3,062 233 2,830 2,534 Dolphins Landing..... 1,740 6,395 8,135 887 7,248 4,431 Douglaston Villas and Townhomes (Cameron Villas)............ 1,721 10,077 11,798 245 11,554 -- Dunwoody Park........ 1,838 12,022 13,860 2,681 11,179 7,114 Eagle's Nest......... 1,053 6,260 7,313 461 6,851 4,685 Eaglewood(s)......... 945 20,634 21,579 8,101 13,478 -- Easton Village....... 565 8,416 8,981 1,890 7,091 2,789 Eden Crossing........ 1,111 7,227 8,338 1,547 6,791 5,603 Elm Creek............ 5,421 37,130 42,550 10,348 32,202 23,508 Emerald Ridge........ 1,469 9,249 10,719 755 9,964 6,089 Essex Park........... 1,570 5,694 7,264 638 6,626 3,017 Evanston Place....... 2,101 26,220 28,321 5,697 22,624 18,425 Fairway View I....... 1,456 6,118 7,574 516 7,058 4,000 Fairway View II...... 1,428 5,993 7,421 669 6,753 4,200 Fairways............. 4,133 24,099 28,232 2,822 25,410 6,040 Ferntree Apartments.. 1,242 13,223 14,465 478 13,987 5,191
F-33 68
INITIAL COST COST ----------------------- CAPITALIZED BUILDINGS SUBSEQUENT DATE YEAR NUMBER AND TO PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION - ------------- -------- --------------------- --------- -------- -------- ------------ ----------- Fieldcrest........... Oct-98 Jacksonville, FL 1982 240 1,331 7,544 315 Fishermans Landing... Sep-98 Temple Terrace, FL 1986 256 1,643 9,311 603 Fishermans Landing... Dec-97 Bradenton, FL 1984 200 1,275 7,225 767 Fishermans Wharf..... Nov-96 Clute, TX 1981 360 830 9,969 1,478 Foothills............ Oct-97 Tucson, AZ 1982 270 1,203 6,817 351 Forest River......... Oct-98 Gadsden, AL 1979 248 795 3,499 204 Foxchase............. May-97 Alexandria, VA 1947 2,113 39,390 93,181 7,949 Foxfire.............. Oct-98 Doraville, GA 1971 266 1,691 8,568 264 Foxfire-Barcelona/ Durham............. Oct-98 Durham, NC 1972 354 2,357 7,898 134 Foxtree.............. Oct-97 Tempe, AZ 1976 487 2,505 14,194 1,191 Frankford Place...... Jul-94 Carrollton, TX 1982 274 1,125 6,382 844 Franklin Oaks........ May-98 Franklin, TN 1987 468 4,031 22,842 1,087 Freedom Place Club... Oct-97 Jacksonville, FL 1988 352 2,289 12,970 867 Gateway Gardens...... Oct-98 Cedar Rapids, IA 1969 328 1,857 7,522 178 Georgetown........... Oct-98 Columbus, OH 1962 150 1,004 3,827 175 Glen Hollow.......... Dec-99 Charlotte, NC 1972 336 2,133 10,174 -- Grand Flamingo (Morton Towers).... Sep-97 Miami Beach, FL 1960 1,277 8,736 49,774 51,840 Greens of Naperville......... May-97 Naperville, IL 1986 400 3,756 21,284 624 Greentree............ Dec-96 Carrollton, TX 1983 365 1,955 11,098 761 Hampton Hill......... Nov-96 Houston, TX 1984 332 1,574 8,408 4,824 Harbor Cove.......... May-98 San Antonio, TX 1980 256 1,446 8,193 353 Hastings Place....... Nov-96 Houston, TX 1984 176 734 3,382 1,830 Haverhill Commons.... May-98 W. Palm Beach, FL 1986 222 1,656 9,386 1,149 Hazeltree............ Oct-97 Phoenix, AZ 1970 310 997 5,650 1,118 Heather Ridge........ Dec-96 Arlington, TX 1983 180 614 3,478 272 Heather Ridge........ May-98 Phoenix, AZ 1983 252 1,609 9,119 244 Heritage Pointe...... Oct-98 Rome, GA 1976 149 510 1,985 71 Heritage Village..... Dec-97 Temple Terrace, FL 1967 252 713 10,678 2,441 Hidden Lake.......... May-98 Tampa, FL 1983 267 1,361 7,715 287 Hiddentree........... Oct-97 East Lansing, MI 1966 261 1,470 8,330 1,134 Highland Park........ Dec-96 Fort Worth, TX 1985 500 1,823 10,330 5,193 Hillmeade............ Nov-94 Nashville, TN 1985 288 2,872 16,066 2,999 Hunt Club............ Oct-98 Indianapolis, IN 1972 200 689 4,045 -- Hunters Creek........ May-99 Cincinnati, OH 1981 146 661 3,832 -- Hunters Glen......... Apr-98 Austell, GA 1983 72 301 1,704 112 Hunters Glen IV...... Oct-98 Plainsboro, NJ 1976 264 2,488 9,738 149 Hunters Glen V....... Oct-98 Plainsboro, NJ 1977 304 2,997 10,912 279 Hunters Glen VI...... Oct-98 Plainsboro, NJ 1977 328 3,120 11,376 300 Huntington Athletic Club............... Oct-98 Morrisville, NC 1986 212 1,830 8,535 52 Indian Creek Village............ Oct-98 Overland Park, KS 1972 273 1,959 3,033 159 Islandtree........... Oct-97 Savannah, GA 1985 216 1,267 7,181 645 Jefferson Place...... Nov-94 Baton Rouge, LA 1985 234 2,696 15,115 1,493 La Colina............ Oct-98 Denton, TX 1984 264 1,599 5,034 130 La Jolla de San Antonio............ May-98 San Antonio, TX 1975 300 2,071 11,733 378 La Jolla de Tucson... May-98 Tucson, AZ 1978 223 1,342 7,603 441 Lake Castleton Arms.. Oct-98 Indianapolis, IN 1997 1,265 5,188 33,504 147 Lake Crossing........ May-97 Austell, GA 1988 300 1,683 9,538 1,756 Lake Johnson Mews.... Oct-98 Raleigh, NC 1972 201 1,683 5,803 181 Lakehaven I.......... May-97 Carol Stream, IL 1984 144 701 3,974 (796) Lakehaven II......... May-97 Carol Stream, IL 1985 348 1,673 9,482 (119) DECEMBER 31, 1999 --------------------------------------------------------------------------------- TOTAL COST BUILDINGS NET OF AND ACCUMULATED ACCUMULATED PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES - ------------- -------- ------------ ---------- ------------ ------------ ------------ Fieldcrest........... 1,331 7,859 9,190 411 8,779 5,705 Fishermans Landing... 1,643 9,915 11,557 573 10,984 5,554 Fishermans Landing... 1,276 7,990 9,267 691 8,575 4,687 Fishermans Wharf..... 933 11,344 12,277 4,640 7,637 3,407 Foothills............ 1,203 7,168 8,371 668 7,703 3,734 Forest River......... 795 3,702 4,498 405 4,093 3,266 Foxchase............. 16,028 124,492 140,520 8,527 131,993 63,015 Foxfire.............. 1,691 8,832 10,522 776 9,746 7,187 Foxfire-Barcelona/ Durham............. 2,357 8,032 10,389 896 9,493 5,355 Foxtree.............. 2,505 15,385 17,890 1,542 16,348 8,613 Frankford Place...... 1,125 7,226 8,351 1,778 6,573 3,779 Franklin Oaks........ 4,031 23,929 27,960 1,719 26,241 17,255 Freedom Place Club... 2,289 13,838 16,126 1,271 14,856 6,753 Gateway Gardens...... 1,857 7,700 9,557 847 8,709 6,295 Georgetown........... 1,004 4,002 5,006 183 4,823 3,646 Glen Hollow.......... 2,133 10,174 12,307 -- 12,307 7,690 Grand Flamingo (Morton Towers).... 13,182 97,168 110,350 4,936 105,414 26,299 Greens of Naperville......... 1,995 23,669 25,664 6,138 19,526 12,181 Greentree............ 1,955 11,859 13,814 1,199 12,615 7,169 Hampton Hill......... 2,227 12,580 14,806 4,569 10,238 3,991 Harbor Cove.......... 1,446 8,545 9,991 605 9,386 5,755 Hastings Place....... 799 5,147 5,946 1,333 4,613 2,558 Haverhill Commons.... 1,656 10,534 12,191 771 11,420 9,045 Hazeltree............ 997 6,768 7,765 618 7,147 3,928 Heather Ridge........ 614 3,751 4,364 436 3,929 2,573 Heather Ridge........ 1,609 9,362 10,972 662 10,310 5,850 Heritage Pointe...... 510 2,056 2,566 251 2,315 1,400 Heritage Village..... 1,022 12,810 13,832 4,008 9,824 5,180 Hidden Lake.......... 1,361 8,002 9,363 583 8,780 5,347 Hiddentree........... 1,470 9,464 10,934 939 9,995 4,227 Highland Park........ 2,098 15,249 17,347 1,459 15,888 9,030 Hillmeade............ 2,872 19,065 21,937 3,903 18,034 10,458 Hunt Club............ 689 4,045 4,734 502 4,232 3,637 Hunters Creek........ 661 3,832 4,493 160 4,333 2,684 Hunters Glen......... 301 1,816 2,117 126 1,991 1,063 Hunters Glen IV...... 2,488 9,887 12,375 1,038 11,337 8,181 Hunters Glen V....... 2,997 11,191 14,188 1,189 12,999 8,813 Hunters Glen VI...... 3,120 11,676 14,796 1,268 13,527 9,173 Huntington Athletic Club............... 1,830 8,587 10,418 745 9,673 3,386 Indian Creek Village............ 1,959 3,192 5,152 782 4,369 4,485 Islandtree........... 1,267 7,825 9,093 731 8,362 4,080 Jefferson Place...... 2,697 16,607 19,304 3,545 15,759 8,998 La Colina............ 1,599 5,165 6,763 121 6,643 5,064 La Jolla de San Antonio............ 2,071 12,111 14,182 841 13,341 8,645 La Jolla de Tucson... 1,342 8,044 9,386 575 8,811 5,880 Lake Castleton Arms.. 5,188 33,650 38,838 260 38,578 28,748 Lake Crossing........ 1,123 11,854 12,977 2,977 10,000 9,541 Lake Johnson Mews.... 1,683 5,983 7,666 735 6,931 4,350 Lakehaven I.......... 510 3,369 3,879 220 3,659 5,387 Lakehaven II......... 1,219 9,818 11,036 467 10,569 13,714
F-34 69
INITIAL COST COST ----------------------- CAPITALIZED BUILDINGS SUBSEQUENT DATE YEAR NUMBER AND TO PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION - ------------- -------- --------------------- --------- -------- -------- ------------ ----------- Lakeland East........ May-97 Jackson, MS 1984 144 426 3,435 12 Lakeside............. Oct-98 Lisle, IL 1972 568 4,866 20,380 137 Lakeside Place....... Oct-98 Houston, TX 1976 734 6,186 22,681 112 Landmark............. May-98 Albuquerque, NM 1965 101 780 4,455 326 Las Brisas........... Jul-94 Casa Grande, AZ 1985 132 573 3,260 305 Las Brisas........... Dec-95 San Antonio, TX 1983 176 1,100 5,454 501 Lebanon Station...... Oct-98 Columbus, OH 1974 387 1,790 8,671 71 Legend Oaks (The Woodlands)......... May-98 Tampa, FL 1983 416 2,304 13,058 507 Lexington............ Jul-94 San Antonio, TX 1981 72 311 1,764 161 Lexington Green...... Oct-98 Sarasota, FL 1974 267 1,726 6,204 376 Los Arboles.......... Sep-97 Chandler, AZ 1985 232 1,662 9,418 746 Madera Point......... May-98 Phoenix, AZ 1986 256 2,103 11,916 986 Magnolia Trace....... Oct-98 Baton Rouge, LA 1973 246 1,205 37 200 Maple Bay............ Dec-99 Virginia Beach, VA 1971 414 2,598 14,719 1,223 Marbella Club........ Jul-99 Miami, FL 1988 504 2,815 16,193 -- Meadow Creek......... Apr-85 Boulder, CO 1972 332 1,387 10,027 1,517 Meadows.............. Dec-96 Austin, TX 1983 100 579 3,283 280 Mesa Ridge........... May-98 San Antonio, TX 1986 200 1,209 6,852 222 Michigan Meadows..... Dec-99 Indianapolis, IN 1965 253 582 3,539 -- Millhopper Village... Oct-98 Gainesville, FL 1969 136 988 3,497 50 Mills................ May-98 Houston, TX 1979 708 3,936 22,306 1,309 Montecito............ Jul-94 Austin, TX 1985 268 1,268 7,194 1,933 Mountain Run......... Jul-99 Lakewood, CO 1970 96 240 7,391 135 Mountain View........ May-98 Colorado Springs, CO 1985 252 2,536 14,371 480 Newberry Park........ May-97 Chicago, IL 1985 84 181 1,027 1,989 Newport.............. Jul-94 Avondale, AZ 1986 204 800 4,554 713 North River Village.. Oct-98 Atlanta, GA 1970 133 931 3,488 21 Northview Harbor..... Dec-99 Grand Rapids, MI 1982 360 2,016 10,696 -- Northwoods Apartments......... Oct-98 Pensacola, FL 1979 320 1,784 6,615 166 Nottingham Square.... Oct-98 Urbandale, IA 1974 442 1,772 8,010 48 Oak Falls............ Nov-96 Spring, TX 1983 144 514 3,585 1,937 Oakbrook............. Dec-99 Battle Creek, MI 1981 586 3,512 16,501 -- Oakwood Village on Lake Nan........... Oct-98 Winter Park, FL 1973 278 1,475 5,746 145 Ocean Oaks........... May-98 Port Orange, FL 1988 296 2,132 12,083 1,150 Old Farm............. Dec-98 Lexington, KY 1985 330 1,893 10,725 430 Old Orchard.......... Dec-99 Grand Rapids, MI 1974 664 3,217 14,077 -- Old Salem............ Oct-98 Charlottesville, VA 1967 364 2,809 12,713 871 Olmos Club........... Oct-97 San Antonio, TX 1983 134 322 1,825 186 Olympiad............. Nov-94 Montgomery, AL 1986 176 1,046 5,958 736 Orchidtree........... Oct-97 Scottsdale, AZ 1971 278 2,314 13,112 617 Palencia............. May-98 Tampa, FL 1985 420 2,804 15,887 2,269 Palm Lake (Village Square)............ Oct-98 Tampa, FL 1972 150 832 1,143 190 Panorama Terrace..... Oct-98 Birmingham, AL 1975 227 1,401 4,672 115 Paradise Palms....... Jul-94 Phoenix, AZ 1970 130 647 3,684 540 Park at Cedar Lawn... Nov-96 Galveston, TX 1985 192 769 5,073 2,659 Park at Deerbrook.... Oct-98 Humble, TX 1984 100 563 2,720 42 Park Colony.......... May-98 Norcross, GA 1984 352 3,257 18,454 409 Parktown Townhouses.. Oct-98 Deer Park, TX 1968 309 2,031 6,674 93 Parliament Bend...... Jul-94 San Antonio, TX 1980 232 765 4,342 769 Patchen Place........ Oct-98 Lexington, KY 1974 202 883 3,794 136 DECEMBER 31, 1999 --------------------------------------------------------------------------------- TOTAL COST BUILDINGS NET OF AND ACCUMULATED ACCUMULATED PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES - ------------- -------- ------------ ---------- ------------ ------------ ------------ Lakeland East........ 426 3,447 3,873 227 3,646 3,450 Lakeside............. 4,866 20,517 25,384 1,272 24,111 17,200 Lakeside Place....... 6,186 22,793 28,979 2,289 26,690 14,261 Landmark............. 780 4,781 5,561 340 5,221 2,400 Las Brisas........... 573 3,565 4,138 796 3,342 -- Las Brisas........... 1,100 5,955 7,055 1,069 5,986 3,217 Lebanon Station...... 1,790 8,741 10,531 374 10,157 6,927 Legend Oaks (The Woodlands)......... 2,304 13,565 15,869 996 14,873 7,779 Lexington............ 312 1,924 2,236 433 1,803 1,007 Lexington Green...... 1,726 6,580 8,306 769 7,536 3,392 Los Arboles.......... 1,662 10,164 11,826 944 10,882 7,149 Madera Point......... 2,103 12,903 15,006 921 14,084 8,067 Magnolia Trace....... 1,205 237 1,442 541 901 -- Maple Bay............ 2,781 15,758 18,539 -- 18,539 10,176 Marbella Club........ 2,815 16,193 19,009 402 18,606 13,896 Meadow Creek......... 1,435 11,495 12,931 4,581 8,350 7,485 Meadows.............. 579 3,563 4,143 347 3,796 2,008 Mesa Ridge........... 1,209 7,075 8,284 498 7,786 4,980 Michigan Meadows..... 582 3,539 4,121 -- 4,121 1,726 Millhopper Village... 988 3,547 4,534 477 4,058 2,700 Mills................ 3,936 23,615 27,551 1,739 25,812 14,230 Montecito............ 1,268 9,127 10,395 2,066 8,329 4,749 Mountain Run......... 240 7,526 7,766 1,977 5,789 -- Mountain View........ 2,536 14,851 17,387 1,044 16,343 9,093 Newberry Park........ 431 2,767 3,197 980 2,217 8,455 Newport.............. 800 5,267 6,067 1,250 4,817 2,456 North River Village.. 931 3,509 4,440 399 4,041 1,657 Northview Harbor..... 2,016 10,696 12,712 -- 12,712 8,019 Northwoods Apartments......... 1,784 6,781 8,565 730 7,835 5,000 Nottingham Square.... 1,772 8,058 9,830 982 8,848 7,412 Oak Falls............ 574 5,462 6,036 1,369 4,667 2,632 Oakbrook............. 3,512 16,501 20,013 -- 20,013 8,727 Oakwood Village on Lake Nan........... 1,475 5,891 7,365 774 6,591 3,884 Ocean Oaks........... 2,132 13,234 15,366 957 14,410 10,251 Old Farm............. 1,893 11,156 13,048 451 12,597 9,824 Old Orchard.......... 3,217 14,077 17,293 -- 17,293 10,723 Old Salem............ 2,809 13,584 16,394 1,296 15,098 10,187 Olmos Club........... 322 2,011 2,333 196 2,137 1,209 Olympiad............. 1,046 6,694 7,740 1,438 6,301 4,993 Orchidtree........... 2,314 13,729 16,043 1,283 14,760 7,037 Palencia............. 2,804 18,156 20,959 1,290 19,670 13,172 Palm Lake (Village Square)............ 832 1,333 2,165 406 1,759 1,670 Panorama Terrace..... 1,401 4,787 6,188 694 5,494 3,731 Paradise Palms....... 647 4,224 4,871 961 3,910 2,205 Park at Cedar Lawn... 843 7,658 8,501 1,650 6,851 5,150 Park at Deerbrook.... 563 2,762 3,326 90 3,236 1,510 Park Colony.......... 3,257 18,864 22,120 1,352 20,769 11,072 Parktown Townhouses.. 2,031 6,767 8,798 722 8,076 3,017 Parliament Bend...... 765 5,111 5,876 1,191 4,686 -- Patchen Place........ 883 3,930 4,813 620 4,192 3,000
F-35 70
INITIAL COST COST ----------------------- CAPITALIZED BUILDINGS SUBSEQUENT DATE YEAR NUMBER AND TO PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION - ------------- -------- --------------------- --------- -------- -------- ------------ ----------- Peachtree Park....... Jan-96 Atlanta, GA 1962/1995 295 4,681 12,957 2,359 Penn Square.......... Dec-94 Albuquerque, NM 1982 210 1,128 6,478 657 Peppermill Place..... Nov-96 Houston, TX 1983 224 406 3,957 2,269 Pickwick Place....... Oct-98 Indianapolis, IN 1973 336 963 7,607 63 Pine Creek........... Oct-97 Clio, MI 1978 233 852 4,830 510 Pine Shadows......... May-98 Phoenix, AZ 1983 272 2,093 11,858 333 Pinebrook............ Oct-98 Jacksonville, FL 1974 208 856 4,854 340 Pines of Northwest Crossing........... Oct-98 Houston, TX 1973 412 1,566 5,974 233 Pines of Roanoke..... Oct-98 Roanoke, VA 1978 216 1,169 5,108 189 Pinetree............. Oct-98 Charlotte, NC 1972 220 1,350 6,787 242 Place du Plantier.... Oct-98 Baton Rouge, LA 1972 268 1,702 6,252 127 Plantation Gardens... Oct-98 Plantation, FL 1971 372 2,163 5,048 119 Pleasant Ridge....... Nov-94 Little Rock, AR 1982 200 1,660 9,464 972 Pleasant Valley Pointe............. Nov-94 Little Rock, AR 1985 112 907 5,069 910 Point West........... May-97 Lenexa, KS 1985 172 979 5,548 1,049 Pointe James......... Oct-98 Charleston, SC 1977 128 886 926 111 Polo Park............ Oct-97 Midland, TX 1983 184 800 4,532 587 Prairie Hills........ Jul-94 Albuquerque, NM 1985 360 1,680 9,633 1,214 Preston Creek........ Oct-98 Dallas, TX 1979 228 1,625 6,650 83 Pride Gardens........ May-97 Flora, MS 1975 76 265 1,502 2,223 Prime Crest.......... May-98 Austin, TX 1973 148 724 4,104 486 Privado Park......... May-98 Phoenix, AZ 1984 352 2,636 14,937 382 Quail Hollow......... Oct-98 West Columbia, SC 1973 215 1,271 4,396 95 Quail Ridge.......... May-98 Tucson, AZ 1974 253 1,613 9,143 513 Quail Run............ Oct-98 Zionsville, IN 1972 166 1,293 4,568 112 Quail Run............ Oct-98 Columbia, SC 1970 332 1,885 8,270 75 Quail Woods.......... Oct-98 Gastonia, NC 1974 188 1,079 1,789 127 Quailtree............ Oct-97 Phoenix, AZ 1978 184 659 3,735 412 Raintree............. Oct-98 Pensacola, FL 1971 168 192 1,091 1,162 Raintree............. Oct-98 Anderson, SC 1972 176 706 2,385 114 Ramblewood........... Dec-99 Grand Rapids, MI 1973 1,710 9,742 59,378 -- Rancho Sunset........ Mar-98 Escondido, CA 1985 344 3,103 16,755 1,436 Randol Crossing...... Dec-96 Fort Worth, TX 1984 160 728 4,125 286 Regency Oaks......... Oct-98 Fern Park, FL 1965 343 1,666 (48) 50 Ridgecrest........... Dec-96 Denton, TX 1983 152 393 2,228 403 Rio Cancion.......... Oct-98 Tucson, AZ 1983 379 2,832 16,090 521 River Loft Apartments......... May-97 Philadelphia, PA 1910 197 1,103 12,223 79 River Reach.......... Oct-98 Jacksonville, FL 1972 298 2,271 8,575 78 Rivercrest........... Oct-97 Tucson, AZ 1984 310 751 4,253 280 Rivercrest........... Oct-98 Atlanta, GA 1970 312 2,929 5,416 31 Riverside............ Jul-94 Littleton, CO 1987 248 1,553 8,828 1,447 Riverwalk............ Dec-95 Little Rock, AR 1988 262 1,075 9,295 634 Rocky Creek.......... Oct-98 Augusta, GA 1979 120 620 2,555 32 Rocky Ridge.......... Oct-98 Birmingham, AL 1973 116 566 2,197 69 Rosemont Crossing (The Greens)....... Oct-98 San Antonio, TX 1974 217 668 3,094 607 Royal Crest.......... May-98 Austin, TX 1973 204 1,220 5,912 1,402 Royal Gardens........ Oct-98 Hemet, CA 1987 137 521 2,817 458 Royal Palms.......... Jul-94 Mesa, AZ 1985 152 832 4,730 345 Ryan's Pointe........ Oct-98 Houston, TX 1983 280 1,551 8,313 146 Salem Arms........... Oct-98 Augusta, GA 1971 136 598 1,421 64 DECEMBER 31, 1999 --------------------------------------------------------------------------------- TOTAL COST BUILDINGS NET OF AND ACCUMULATED ACCUMULATED PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES - ------------- -------- ------------ ---------- ------------ ------------ ------------ Peachtree Park....... 4,683 15,314 19,997 2,557 17,440 9,111 Penn Square.......... 1,128 7,135 8,263 1,529 6,734 4,147 Peppermill Place..... 474 6,157 6,632 1,365 5,266 4,793 Pickwick Place....... 963 7,670 8,633 841 7,792 6,308 Pine Creek........... 852 5,339 6,192 406 5,786 2,292 Pine Shadows......... 2,093 12,191 14,283 866 13,418 7,500 Pinebrook............ 857 5,193 6,050 256 5,793 3,594 Pines of Northwest Crossing........... 1,566 6,207 7,773 845 6,929 4,828 Pines of Roanoke..... 1,169 5,297 6,466 571 5,895 4,225 Pinetree............. 1,350 7,029 8,379 524 7,855 4,996 Place du Plantier.... 1,702 6,379 8,081 849 7,232 3,800 Plantation Gardens... 2,163 5,167 7,330 1,194 6,136 6,776 Pleasant Ridge....... 1,661 10,435 12,096 2,292 9,803 6,700 Pleasant Valley Pointe............. 907 5,979 6,886 1,327 5,559 3,267 Point West........... 1,044 6,532 7,576 1,973 5,603 5,505 Pointe James......... 886 1,038 1,923 215 1,708 1,270 Polo Park............ 800 5,119 5,919 475 5,444 2,209 Prairie Hills........ 2,011 10,516 12,527 2,326 10,201 6,916 Preston Creek........ 1,625 6,733 8,358 588 7,770 4,500 Pride Gardens........ 35 3,955 3,990 1,411 2,578 866 Prime Crest.......... 724 4,591 5,315 340 4,975 2,340 Privado Park......... 2,636 15,319 17,955 1,075 16,880 8,980 Quail Hollow......... 1,271 4,491 5,762 437 5,324 2,850 Quail Ridge.......... 1,613 9,657 11,270 703 10,567 6,245 Quail Run............ 1,293 4,680 5,972 464 5,508 4,427 Quail Run............ 1,885 8,345 10,230 903 9,327 5,508 Quail Woods.......... 1,079 1,917 2,996 244 2,752 2,447 Quailtree............ 659 4,147 4,806 388 4,418 2,141 Raintree............. 356 2,090 2,445 (19) 2,464 2,610 Raintree............. 706 2,499 3,204 316 2,888 1,339 Ramblewood........... 9,742 59,378 69,120 -- 69,120 37,854 Rancho Sunset........ 3,103 18,191 21,294 1,137 20,157 13,661 Randol Crossing...... 728 4,411 5,140 469 4,671 2,365 Regency Oaks......... 1,666 2 1,668 983 685 -- Ridgecrest........... 393 2,631 3,024 376 2,648 2,390 Rio Cancion.......... 2,832 16,611 19,443 1,294 18,149 12,851 River Loft Apartments......... 1,103 12,302 13,405 749 12,656 6,499 River Reach.......... 2,271 8,653 10,924 1,017 9,907 6,962 Rivercrest........... 751 4,533 5,284 418 4,866 2,727 Rivercrest........... 2,929 5,447 8,376 (4,818) 13,194 6,659 Riverside............ 1,956 9,872 11,828 2,278 9,551 5,708 Riverwalk............ 1,075 9,929 11,004 1,704 9,300 5,411 Rocky Creek.......... 620 2,586 3,206 277 2,930 2,053 Rocky Ridge.......... 566 2,266 2,832 326 2,506 1,450 Rosemont Crossing (The Greens)....... 668 3,701 4,369 404 3,965 2,840 Royal Crest.......... 1,220 7,314 8,534 529 8,005 3,320 Royal Gardens........ 521 3,275 3,796 118 3,678 2,396 Royal Palms.......... 832 5,076 5,907 1,135 4,773 3,358 Ryan's Pointe........ 1,551 8,459 10,010 315 9,695 4,317 Salem Arms........... 598 1,485 2,084 139 1,945 1,193
F-36 71
INITIAL COST COST ----------------------- CAPITALIZED BUILDINGS SUBSEQUENT DATE YEAR NUMBER AND TO PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION - ------------- -------- --------------------- --------- -------- -------- ------------ ----------- San Marina........... Mar-98 Phoenix, AZ 1986 399 1,926 10,954 765 Sand Castles......... Oct-97 League City, TX 1987 136 978 5,541 408 Sand Pebble.......... Oct-97 El Paso, TX 1983 208 861 4,879 436 Sandalwood........... May-98 Houston, TX 1979 352 1,462 8,287 408 Sandpiper Cove....... May-97 Boynton Beach, FL 1987 416 11,447 29,088 (53) Sawgrass............. Jul-97 Orlando, FL 1986 208 1,443 8,157 621 Seaside Point........ Nov-96 Galveston, TX 1985 102 295 2,994 2,851 Seasons.............. Oct-95 San Antonio, TX 1976 280 974 5,749 1,010 Shadetree............ Oct-97 Tempe, AZ 1965 123 591 3,349 638 Shadow Brook......... Oct-98 Salt Lake, UT 1984 300 911 5,164 3,392 Shadow Creek......... May-98 Phoenix, AZ 1984 266 2,087 11,824 483 Shadow Lake.......... Oct-97 Greensboro, NC 1988 136 1,054 5,972 585 Shadowood............ May-97 Chapel Hill, NC 1987 336 1,268 14,574 30 Shaker Square........ Oct-98 Whitehall, OH 1968 194 1,078 4,195 55 Shallow Creek........ May-98 San Antonio, TX 1982 208 1,234 6,995 263 Shirewood Townhomes.......... Oct-98 Shreveport, LA 1948 228 697 246 196 Shoreview............ May-97 San Francisco, CA 1976 156 106 4,063 78 Signal Pointe (Squire One)............... Oct-98 Winter Park, FL 1971 368 1,973 6,768 179 Signature Point...... Nov-96 League City, TX 1994 304 2,160 13,627 3,344 Silktree............. Oct-97 Phoenix, AZ 1979 86 421 2,383 222 Silver Ridge......... Oct-98 Maplewood, MN 1986 186 650 3,677 489 Silverado............ Oct-98 El Paso, TX 1973 248 799 22 89 Ski Lodge............ Oct-98 Montgomery, AL 1978 522 2,428 9,436 88 Snowden Village I.... Oct-98 Fredericksburg, VA 1970 132 905 2,337 478 Snowden Village II... Oct-98 Fredericksburg, VA 1980 122 804 2,484 353 Snug Harbor.......... Dec-95 Las Vegas, NV 1990 64 750 2,966 392 Society Park......... Oct-98 Tampa, FL 1968 324 1,154 308 170 Society Park East.... Oct-98 Indian Harbor, FL 1963 200 899 1,256 291 Somerset Lakes....... May-99 Indianapolis, IN 1974 360 3,533 20,285 -- Somerset Village..... May-96 West Valley City, UT 1985 486 4,375 17,600 1,419 South Point.......... Oct-98 Durham, NC 1980 180 2,113 (520) 78 South Willow......... Jul-94 West Jordan, UT 1987 440 2,218 12,612 1,366 Southridge........... Dec-96 Greenville, TX 1984 160 643 3,645 421 Spectrum Pointe...... Jul-94 Marietta, GA 1984 196 1,029 5,903 728 St. Charleston Village............ Oct-98 Las Vegas, NV 1980 312 1,909 7,697 93 Steeplechase......... May-99 Loveland, OH 1988 272 1,669 9,539 -- Stirling Court....... Nov-96 Houston, TX 1984 228 946 5,958 1,664 Stone Mountain West.. Oct-98 Stone Mountain, GA 1971 142 1,143 4,019 28 Stone Pointe Village............ Dec-99 Fort Wayne, IN 1980 296 1,809 8,591 -- Stonebrook........... Jun-97 Sanford, FL 1991 244 1,583 9,046 1,279 Stoney Brook......... Nov-96 Houston, TX 1972 113 579 3,871 2,402 Stonybrook........... May-98 Tucson, AZ 1983 411 2,187 12,278 1,090 Strawbridge Square... May-97 Alexandria, VA 1979 128 86 4,743 36 Summerchase.......... May-97 Van Buren, AR 1974 72 170 962 1,399 Summerwalk........... Oct-98 Winter Park, FL 1974 306 353 2,000 6,355 Summit Creek......... May-98 Austin, TX 1985 164 611 3,464 3,068 Sun Grove............ Jul-94 Peoria, AZ 1986 86 659 3,749 230 Sun Katcher (Teal Pointe)............ Dec-95 Jacksonville, FL 1972 360 578 3,440 6,191 Sun Lake............. May-98 Lake Mary, FL 1986 600 4,556 25,819 980 Sun River Village.... Oct-98 Tempe, AZ 1981 334 2,518 9,063 189 Sunbury Downs........ Nov-96 Houston, TX 1982 240 565 4,380 2,521 DECEMBER 31, 1999 --------------------------------------------------------------------------------- TOTAL COST BUILDINGS NET OF AND ACCUMULATED ACCUMULATED PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES - ------------- -------- ------------ ---------- ------------ ------------ ------------ San Marina........... 1,926 11,719 13,645 924 12,721 7,828 Sand Castles......... 978 5,949 6,927 566 6,361 3,000 Sand Pebble.......... 861 5,315 6,176 519 5,657 2,620 Sandalwood........... 1,462 8,695 10,158 622 9,536 4,619 Sandpiper Cove....... 7,459 33,023 40,482 6,233 34,249 12,814 Sawgrass............. 1,443 8,778 10,221 905 9,315 4,564 Seaside Point........ 334 5,807 6,140 1,029 5,112 2,027 Seasons.............. 982 6,751 7,733 1,200 6,534 4,405 Shadetree............ 591 3,987 4,578 392 4,186 1,994 Shadow Brook......... 2,153 7,314 9,467 801 8,666 6,000 Shadow Creek......... 2,087 12,306 14,393 867 13,526 6,815 Shadow Lake.......... 1,054 6,557 7,611 599 7,012 3,132 Shadowood............ 1,268 14,605 15,872 1,575 14,297 9,834 Shaker Square........ 1,078 4,250 5,328 (547) 5,874 3,320 Shallow Creek........ 1,234 7,257 8,492 514 7,978 4,500 Shirewood Townhomes.......... 697 442 1,139 501 637 -- Shoreview............ 106 4,141 4,248 405 3,843 4,283 Signal Pointe (Squire One)............... 1,973 6,946 8,920 803 8,117 3,998 Signature Point...... 2,161 16,970 19,131 2,690 16,441 7,121 Silktree............. 421 2,606 3,026 249 2,777 1,506 Silver Ridge......... 722 4,095 4,816 (38) 4,854 4,453 Silverado............ 799 111 910 412 497 -- Ski Lodge............ 2,428 9,524 11,952 1,287 10,665 6,800 Snowden Village I.... 905 2,816 3,720 225 3,496 2,472 Snowden Village II... 804 2,836 3,640 171 3,469 2,616 Snug Harbor.......... 751 3,357 4,108 629 3,479 1,976 Society Park......... 1,154 478 1,633 728 905 -- Society Park East.... 899 1,547 2,447 512 1,935 1,966 Somerset Lakes....... 3,533 20,285 23,819 844 22,975 14,182 Somerset Village..... 4,375 19,019 23,394 2,843 20,551 8,061 South Point.......... 2,113 (443) 1,670 (5,997) 7,668 4,600 South Willow......... 2,218 13,979 16,196 3,185 13,012 7,842 Southridge........... 643 4,066 4,709 498 4,211 2,029 Spectrum Pointe...... 1,029 6,631 7,660 1,486 6,175 4,108 St. Charleston Village............ 1,909 7,790 9,699 723 8,977 6,060 Steeplechase......... 1,669 9,539 11,208 396 10,812 8,442 Stirling Court....... 1,010 7,558 8,568 3,227 5,341 3,455 Stone Mountain West.. 1,143 4,047 5,191 375 4,816 3,000 Stone Pointe Village............ 1,809 8,591 10,400 -- 10,400 6,414 Stonebrook........... 2,070 9,838 11,908 1,055 10,853 7,695 Stoney Brook......... 704 6,148 6,852 992 5,860 705 Stonybrook........... 2,167 13,388 15,554 994 14,561 4,028 Strawbridge Square... 86 4,779 4,865 246 4,618 3,267 Summerchase.......... 59 2,472 2,531 1,482 1,049 643 Summerwalk........... 1,895 6,812 8,707 605 8,102 4,902 Summit Creek......... 1,153 5,990 7,143 787 6,356 3,491 Sun Grove............ 659 3,978 4,638 912 3,725 -- Sun Katcher (Teal Pointe)............ 785 9,424 10,209 1,005 9,204 8,675 Sun Lake............. 4,556 26,799 31,355 1,935 29,420 14,889 Sun River Village.... 2,518 9,252 11,771 870 10,900 6,126 Sunbury Downs........ 633 6,834 7,466 1,348 6,118 2,370
F-37 72
INITIAL COST COST ----------------------- CAPITALIZED BUILDINGS SUBSEQUENT DATE YEAR NUMBER AND TO PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION - ------------- -------- --------------------- --------- -------- -------- ------------ ----------- Sunchase of Clearwater......... Nov-94 Clearwater, FL 1985 461 2,177 19,641 1,821 Sunchase of Orlando East............... Nov-94 Orlando, FL 1985 296 927 8,361 970 Sunchase of Orlando North.............. Nov-94 Orlando, FL 1985 324 1,013 9,142 1,175 Sunchase Tampa....... Nov-94 Tampa, FL 1985 216 757 6,831 897 Sundown Village...... Mar-98 Tucson, AZ 1984/1994 330 2,214 12,582 349 Sunlake.............. Sep-98 Brandon, FL 1986 88 189 1,086 3,777 Sunset Village....... Mar-98 Oceanside, CA 1987 114 1,128 6,392 262 Surrey Oaks.......... Oct-97 Bedford, TX 1983 152 628 3,560 377 Swiss Village........ Nov-96 Houston, TX 1972 360 1,011 11,310 391 Tall Timbers......... Oct-97 Houston, TX 1982 256 1,238 7,016 493 Tar River Estates.... Oct-98 Greenville, NC 1969 402 521 2,953 3,243 Tara Bridge.......... May-97 Jonesboro, GA 1988 220 1,253 7,100 1,213 Tates Creek Village.. Oct-98 Lexington, KY 1970 204 1,145 1,788 126 Tatum Gardens Apartments......... May-98 Phoenix, AZ 1985 128 653 3,699 3,009 The Bluffs........... Dec-98 Lafayette, IN 1982 181 979 5,549 527 The Bradford......... Oct-97 Midland, TX 1982 264 705 3,996 (519) The Breakers......... Oct-98 Daytona Beach, FL 1985 258 1,008 5,710 397 The Falls of Bells Ferry.............. May-98 Marietta, GA 1987 720 6,568 37,218 701 The Hills............ Oct-97 Austin, TX 1983 329 1,367 7,747 531 The Knolls........... Oct-98 Colorado Springs, CO 1972 262 2,406 3,210 100 The Landings......... Oct-98 Tampa, FL 1978 200 800 3,508 116 The Loft............. Oct-98 Raleigh, NC 1974 184 1,575 14,576 86 The Palisaides....... Oct-98 Montgomery, AL 1968 432 1,214 5,714 76 The Park............. Oct-98 Melbourne, FL 1983 120 719 4,072 193 The Pines............ Oct-98 Palm Bay, FL 1984 216 601 3,406 354 The Sterling......... Oct-98 Philadelphia, PA 1962 536 6,427 85,108 98 The Stratford........ May-98 San Antonio, TX 1979 269 1,920 10,879 398 Thurber Manor........ Oct-98 Columbus, OH 1965 115 810 2,281 237 Timber Ridge......... Oct-98 Sharonville, OH 1972 248 1,427 5,315 120 Timberlake........... May-97 Arlington, TX 1971 224 753 6,327 50 Timbermill........... Oct-95 San Antonio, TX 1982 296 778 4,674 784 Timbertree........... Oct-97 Phoenix, AZ 1980 387 2,334 13,229 875 Tor.................. Dec-99 Columbia, MD 1974 324 2,715 15,382 1,223 Torrey Pines Village............ Oct-98 Las Vegas, NV 1980 204 1,230 4,743 99 Township at Highlands.......... Nov-96 Littleton, CO 1986 119 1,058 11,166 10,853 Trails of Ashford.... May-98 Houston, TX 1979 514 2,650 15,018 497 Twin Lake Towers..... Oct-98 Westmont, IL 1969 399 3,233 11,262 2,551 Victoria Station..... Jun-98 Victoria, TX 1997 224 425 3,946 2,848 Villa La Paz......... Jun-98 Sun City, CA 1990 96 573 3,096 260 Villa Ladera......... Jan-96 Albuquerque, NM 1985 280 1,765 10,013 1,667 Village Creek at Brookhill.......... Jul-94 Westminster, CO 1987 324 2,446 13,901 1,162 Village Crossing..... May-98 W. Palm Beach, FL 1986 289 1,618 9,167 1,130 Village Gardens...... Oct-98 Fort Collins, CO 1973 141 1,080 3,549 39 Village Green........ Oct-98 Montgomery, AL 1972 337 1,681 5,659 79 Village of Pennbrook.......... Oct-98 Levitown, PA 1970 722 5,533 31,345 4,031 Vista Ventana........ May-98 Phoenix, AZ 1982 275 1,908 10,810 440 Walnut Springs....... Dec-96 San Antonio, TX 1983 224 998 5,657 347 DECEMBER 31, 1999 --------------------------------------------------------------------------------- TOTAL COST BUILDINGS NET OF AND ACCUMULATED ACCUMULATED PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES - ------------- -------- ------------ ---------- ------------ ------------ ------------ Sunchase of Clearwater......... 2,177 21,462 23,639 4,625 19,014 16,566 Sunchase of Orlando East............... 927 9,331 10,258 1,994 8,264 8,694 Sunchase of Orlando North.............. 1,013 10,317 11,330 2,189 9,141 11,660 Sunchase Tampa....... 757 7,727 8,485 1,728 6,757 6,969 Sundown Village...... 2,214 12,931 15,145 970 14,175 8,373 Sunlake.............. 632 4,419 5,052 776 4,276 2,766 Sunset Village....... 1,128 6,654 7,782 412 7,370 5,498 Surrey Oaks.......... 628 3,937 4,565 314 4,251 2,230 Swiss Village........ 1,129 11,583 12,712 4,692 8,019 4,373 Tall Timbers......... 1,238 7,509 8,747 722 8,025 3,973 Tar River Estates.... 2,203 4,513 6,716 (1,085) 7,801 4,686 Tara Bridge.......... 1,009 8,557 9,566 2,104 7,462 6,642 Tates Creek Village.. 1,145 1,914 3,058 696 2,362 2,481 Tatum Gardens Apartments......... 1,117 6,244 7,360 795 6,565 3,394 The Bluffs........... 979 6,076 7,055 255 6,800 3,848 The Bradford......... 519 3,663 4,182 333 3,850 1,588 The Breakers......... 1,008 6,107 7,115 318 6,797 3,747 The Falls of Bells Ferry.............. 6,568 37,919 44,487 2,635 41,852 26,980 The Hills............ 1,367 8,278 9,645 787 8,858 8,029 The Knolls........... 2,406 3,309 5,716 766 4,950 5,177 The Landings......... 800 3,624 4,424 362 4,062 2,213 The Loft............. 1,575 14,662 16,237 497 15,741 4,338 The Palisaides....... 1,214 5,790 7,004 854 6,149 4,547 The Park............. 720 4,264 4,984 222 4,761 2,518 The Pines............ 603 3,758 4,361 168 4,192 2,209 The Sterling......... 6,427 85,207 91,633 5,071 86,562 22,736 The Stratford........ 1,920 11,278 13,198 835 12,362 5,805 Thurber Manor........ 810 2,518 3,328 158 3,170 2,303 Timber Ridge......... 1,427 5,435 6,862 337 6,525 5,206 Timberlake........... 753 6,377 7,130 160 6,970 2,042 Timbermill........... 778 5,457 6,236 1,027 5,209 3,456 Timbertree........... 2,334 14,104 16,438 1,314 15,124 7,637 Tor.................. 2,898 16,422 19,320 -- 19,320 11,615 Torrey Pines Village............ 1,230 4,842 6,072 406 5,666 3,607 Township at Highlands.......... 1,064 22,014 23,077 2,857 20,220 9,279 Trails of Ashford.... 2,650 15,514 18,165 1,089 17,076 8,840 Twin Lake Towers..... 3,233 13,813 17,046 1,411 15,635 10,886 Victoria Station..... 682 6,537 7,219 2,016 5,203 3,199 Villa La Paz......... 573 3,355 3,929 223 3,705 2,362 Villa Ladera......... 2,235 11,210 13,445 1,882 11,563 5,345 Village Creek at Brookhill.......... 2,446 15,063 17,509 3,341 14,168 -- Village Crossing..... 1,618 10,296 11,914 748 11,166 6,955 Village Gardens...... 1,080 3,588 4,668 379 4,289 2,410 Village Green........ 1,681 5,739 7,419 705 6,715 4,744 Village of Pennbrook.......... 6,401 34,508 40,909 (324) 41,233 19,300 Vista Ventana........ 1,908 11,251 13,158 783 12,375 6,245 Walnut Springs....... 998 6,004 7,002 536 6,466 4,170
F-38 73
INITIAL COST COST ----------------------- CAPITALIZED BUILDINGS SUBSEQUENT DATE YEAR NUMBER AND TO PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION - ------------- -------- --------------------- --------- -------- -------- ------------ ----------- Waterford............ Nov-96 Houston, TX 1984 312 533 5,692 768 Waterways Village.... Jun-97 Aventura, FL 1991 180 4,504 11,702 458 Weatherly............ Oct-98 Stone Mountain, GA 1984 274 1,275 6,887 541 West 135th Street.... Aug-98 New York, NY 1979 242 1,195 14,969 1,374 West Lake Arms Apartments......... May-97 Indianapolis, IN 1977 1,381 2,816 24,661 27 Westway Village...... May-98 Houston, TX 1979 276 980 5,554 4,768 Westgate............. Oct-98 Houston, TX 1971 313 1,985 9,158 124 Whispering Pines..... Oct-98 Madison, WI 1986 186 719 4,046 (191) Wickertree........... Oct-97 Phoenix, AZ 1983 226 1,225 6,944 335 Wildflower........... Oct-97 Midland, TX 1982 264 705 3,996 1,003 Williams Cove........ Jul-94 Irving, TX 1984 260 1,227 6,972 631 Williamsburg......... May-98 Rolling Meadows, IL 1985 379 2,717 15,398 685 Williamsburg Apartments......... Oct-98 Indianapolis, IN 1974 460 2,333 9,803 129 Williamsburg on the Wabash............. Dec-99 West Lafayette, IN 1967 473 3,225 17,569 -- Willow Park on Lake Adelaide........... Oct-98 Altamonte Springs, FL 1972 185 1,045 5,404 178 Willowick............ Oct-98 Greenville, SC 1974 180 734 2,529 226 Windridge............ May-98 San Antonio, TX 1983 286 1,480 8,386 306 Windsor at South Square............. Oct-98 Durham, NC 1972 230 1,415 4,852 103 Windsor Hills........ Oct-98 Blacksburg, VA 1970 300 1,859 6,857 137 Windsor Landing...... Oct-97 Morrow, GA 1991 200 1,641 9,298 330 Windward at the Villages........... Oct-97 W. Palm Beach, FL 1988 196 1,595 9,037 683 Woodhill............. Dec-96 Denton, TX 1985 352 1,554 8,805 983 Woodhollow........... Oct-97 Austin, TX 1974 108 658 3,728 299 Woodland Ridge....... Dec-96 Irving, TX 1984 130 595 3,373 267 Woodland Village I... Oct-98 Columbia, SC 1970 308 768 4,351 3,491 Woodlands............ Dec-99 Battle Creek, MI 1987 76 496 3,513 -- Woodlands/Odessa..... Jul-94 Odessa, TX 1982 240 676 3,835 888 Woodlands/Tyler...... Jul-94 Tyler, TX 1984 256 1,029 5,845 733 Woods of Inverness... Oct-98 Houston, TX 1983 272 1,774 6,802 121 Wyntre Brook Apartments......... May-97 West Chester, PA 1976 212 536 8,182 46 Yorktown Apartments.. Oct-98 Lombard, IL 1973 368 3,712 10,447 657 Yorktree............. Oct-97 Carolstream, IL 1972 293 1,968 11,151 911 -------- ---------- -------- $667,279 $3,432,295 $408,961 ======== ========== ======== DECEMBER 31, 1999 --------------------------------------------------------------------------------- TOTAL COST BUILDINGS NET OF AND ACCUMULATED ACCUMULATED PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES - ------------- -------- ------------ ---------- ------------ ------------ ------------ Waterford............ 533 6,460 6,993 2,106 4,887 3,870 Waterways Village.... 4,504 12,160 16,664 1,372 15,292 7,575 Weatherly............ 1,275 7,427 8,703 386 8,316 4,607 West 135th Street.... 1,196 16,342 17,538 5,416 12,122 328 West Lake Arms Apartments......... 2,816 24,689 27,505 1,040 26,465 16,446 Westway Village...... 2,457 8,844 11,301 1,124 10,178 4,798 Westgate............. 1,985 9,283 11,268 426 10,842 5,987 Whispering Pines..... 693 3,881 4,574 (36) 4,610 4,251 Wickertree........... 1,225 7,279 8,504 718 7,786 4,014 Wildflower........... 705 4,999 5,704 458 5,246 2,011 Williams Cove........ 1,227 7,603 8,830 1,774 7,056 3,708 Williamsburg......... 2,717 16,083 18,800 1,154 17,646 12,240 Williamsburg Apartments......... 2,333 9,932 12,265 1,394 10,871 7,400 Williamsburg on the Wabash............. 3,225 17,569 20,794 -- 20,794 12,554 Willow Park on Lake Adelaide........... 1,045 5,582 6,627 553 6,073 4,000 Willowick............ 734 2,755 3,489 320 3,169 1,178 Windridge............ 1,480 8,692 10,172 614 9,557 6,115 Windsor at South Square............. 1,415 4,956 6,370 547 5,824 2,146 Windsor Hills........ 1,859 6,995 8,854 554 8,300 4,123 Windsor Landing...... 1,642 9,627 11,269 901 10,367 5,278 Windward at the Villages........... 1,595 9,721 11,315 887 10,429 4,408 Woodhill............. 1,554 9,789 11,343 819 10,524 5,627 Woodhollow........... 658 4,027 4,685 380 4,305 2,027 Woodland Ridge....... 595 3,639 4,234 402 3,832 2,006 Woodland Village I... 1,913 6,697 8,610 709 7,901 4,950 Woodlands............ 496 3,513 4,009 -- 4,009 2,154 Woodlands/Odessa..... 676 4,724 5,399 1,127 4,272 -- Woodlands/Tyler...... 1,029 6,578 7,607 1,510 6,097 4,049 Woods of Inverness... 1,774 6,923 8,697 629 8,068 5,052 Wyntre Brook Apartments......... 536 8,228 8,764 406 8,358 6,651 Yorktown Apartments.. 3,712 11,105 14,817 900 13,917 12,187 Yorktree............. 1,968 12,062 14,030 1,131 12,899 6,431 -------- ---------- ---------- -------- ---------- ---------- $661,502 $3,847,033 $4,508,535 $415,992 $4,092,543 $2,375,089 ======== ========== ========== ======== ========== ==========
F-39 74 AIMCO PROPERTIES, L.P. REAL ESTATE AND ACCUMULATED DEPRECIATION FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (IN THOUSANDS)
1999 1998 1997 ---------- ---------- ---------- REAL ESTATE Balance at beginning of year........................... $2,743,865 $1,657,207 $ 865,222 Additions during the year: Newly consolidated assets........................... 1,101,134 -- -- Acquisitions........................................ 521,624 1,058,428 786,571 Additions........................................... 177,245 78,270 26,808 Sales/transfers to held for sale.................... (35,333) (50,040) (21,394) ---------- ---------- ---------- Balance at end of year................................. $4,508,535 $2,743,865 $1,657,207 ========== ========== ========== ACCUMULATED DEPRECIATION Balance at beginning of year........................... $ 228,155 $ 153,285 $ 120,077 Additions during the year: Depreciation........................................ 131,257 83,908 37,741 Newly consolidated assets........................... 60,345 -- -- Sales/transfers to held for sale.................... (3,765) (9,038) (4,533) ---------- ---------- ---------- Balance at end of year................................. $ 415,992 $ 228,155 $ 153,285 ========== ========== ==========
F-40 75 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION ------- ----------- 2.1 -- Second Amended and Restated Agreement and Plan of Merger, dated as of January 22, 1999, by and between Apartment Investment and Management Company and Insignia Properties Trust (Exhibit 2.2 to the Current Report on Form 8-K of Insignia Properties Trust, dated February 11, 1999, is incorporated herein by this reference) 2.2 -- Amended and Restated Agreement and Plan of Merger, dated as of May 26, 1998, by and among Apartment Investment Management Company, AIMCO Properties, L.P., Insignia Financial Group, Inc., and Insignia/ESG Holdings, Inc. (Exhibit 2.1 to AIMCO's Registration Statement on Form S-4, filed August 5, 1998, is incorporated herein by this reference) 10.1 -- Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 29, 1994 as amended and restated as of October 1, 1998 (Exhibit 10.8 to AIMCO's Quarterly Report on Form 10-Q for the quarterly period ending September 30, 1998, is incorporated herein by this reference) 10.2 -- First Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of November 6, 1998 (Exhibit 10.9 to AIMCO's Quarterly Report on Form 10-Q for the quarterly period ending September 30, 1998, is incorporated herein by this reference) 10.3 -- Second Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of December 30, 1998 (Exhibit 10.1 to Amendment No. 1 to AIMCO's Current Report on Form 8-K/A, filed February 11, 1999, is incorporated herein by this reference) 10.4 -- Third Amendment to Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of February 18, 1999 (Exhibit 10.12 to AIMCO's Annual Report on Form 10-K for the fiscal year 1998, is incorporated herein by this reference) 10.5 -- Fourth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 25, 1999 (Exhibit 10.2 to AIMCO's Quarterly Report on Form 10-Q for the quarterly period ending March 31, 1999, is incorporated herein by this reference) 10.6 -- Fifth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 26, 1999 (Exhibit 10.3 to AIMCO's Quarterly Report on Form 10-Q for the quarterly period ending March 31, 1999, is incorporated herein by this reference) 10.7 -- Sixth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 26, 1999 (Exhibit 10.1 to AIMCO's Quarterly Report on Form 10-Q for the quarterly period ending June 30, 1999, is incorporated herein by this reference) 10.8 -- Seventh Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 27, 1999 (Exhibit 10.1 to AIMCO's Quarterly Report on Form 10-Q for the quarterly period ending September 30, 1999, is incorporated herein by this reference) 10.9 -- Eighth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of December 14, 1999 (Exhibit 10.9 to AIMCO's Annual Report on Form 10-K for the fiscal year 1999, is incorporated herein by this reference)
76
EXHIBIT NO. DESCRIPTION ------- ----------- 10.10 -- Ninth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of December 21, 1999 (Exhibit 10.10 to AIMCO's Annual Report on Form 10-K for the fiscal year 1999, is incorporated herein by this reference) 10.11 -- Tenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of December 21, 1999 (Exhibit 10.11 to AIMCO's Annual Report on Form 10-K for the fiscal year 1999, is incorporated herein by this reference) 10.12 -- Eleventh Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of January 13, 2000 (Exhibit 10.12 to Aimco's Annual Report on Form 10-K for the fiscal year 1999, is incorporated herein by this reference) 10.13 -- Amended and Restated Assignment and Assumption Agreement, dated as of December 7, 1998, by and among Insignia Properties, L.P. and AIMCO Properties, L.P. (Exhibit 10.1 to the Current Report on Form 8-K of Insignia Properties Trust, dated February 11, 1999, is incorporated herein by this reference) 10.14 -- Amended and Restated Indemnification Agreement, dated as of May 26, 1998, by and between Apartment Investment and Management Company and Insignia/ ESG Holdings, Inc. (Exhibit 2.2 to AIMCO's Registration Statement on Form S-4, filed August 5, 1998, is incorporated herein by this reference) 10.15 -- Credit Agreement (Secured Revolving Credit Facility), dated as of August 16, 1999, among AIMCO Properties, L.P., Bank of America, BankBoston, N.A., and First Union National Bank (Exhibit 10.1 to the Current Report on Form 8-K of Apartment Investment and Management Company, dated as of August 16, 1 999, is incorporated herein by this reference) 10.16 -- Borrower Pledge Agreement, dated August 16, 1999 between AIMCO Properties, L.P. and Bank of America (Exhibit 10.2 to the Current Report on Form 8-K of Apartment Investment and Management Company, dated August 16, 1999 is incorporated herein by this reference) 10.17 -- Form of Committed Loan Note, issued by AIMCO Properties, L.P. to Bank of America, BankBoston, N.A., and First Union National Bank (Exhibit 10.3 to the Current Report on Form 8-K of Apartment Investment and Management Company, dated August 16, 1999, is incorporated herein by this reference) 10.18 -- Form of Swing Line Note, issued by AIMCO Properties, L.P. to Bank of America, BankBoston, N.A., and First Union National Bank (Exhibit 10.4 to the Current Report on Form 8-K of Apartment Investment and Management Company, dated August 16, 1999, is incorporated herein by this reference) 10.19 -- Form of Payment Guaranty, by Apartment Investment and Management Company, AIMCO/NHP Holdings, Inc., NHP A&R Services, Inc., and NHP Management Company (Exhibit 10.5 to the Current Report on Form 8-K of Apartment Investment and Management Company, dated August 16, 1999, is incorporated herein by this reference) 10.20 -- Amended and Restated Credit Agreement, dated as of March 15, 2000, among AIMCO Properties, L.P., the lenders listed therein, Bank of America, N.A., Fleet National Bank (as successor in interest to BankBoston, N.A.), and First Union National Bank
77
EXHIBIT NO. DESCRIPTION ------- ----------- 10.21 -- Employment Contract, executed on July 29, 1994, by and between AIMCO Properties, L.P., and Peter Kompaniez (Exhibit 10.44A to AIMCO's Annual Report on Form 10-K for the fiscal year 1994, is incorporated herein by this reference)* 10.22 -- Employment Contract executed on July 29, 1994 by and between AIMCO Properties, L.P. and Terry Considine (Exhibit 10.44C to AIMCO's Annual Report on Form 10-K for the fiscal year 1994, is incorporated herein by this reference)* 10.23 -- Employment Contract executed on July 29, 1994 by and between AIMCO Properties, L.P. and Steven D. Ira (Exhibit 10.44D to AIMCO's Annual Report on Form 10-K for fiscal year 1994, is incorporated herein by this reference) 10.24 -- The 1994 Stock Incentive Plan for Officers, Directors and Key Employees of Ambassador Apartments, Inc., Ambassador Apartments, L.P., and Subsidiaries (Exhibit 10.40 to Ambassador Apartments, Inc. Annual Report on Form 10-K for the fiscal year 1997, is incorporated herein by this reference)* 10.25 -- Amendment to the 1994 Stock Incentive Plan for Officers, Directors and Key Employees of Ambassador Apartments, Inc., Ambassador Apartments, L.P. and Subsidiaries (Exhibit 10.41 to Ambassador Apartments, Inc. Annual Report on Form 10-K for the fiscal year 1997, is incorporated herein by this reference)* 10.26 -- The 1996 Stock Incentive Plan for Officers, Directors and Key Employees of Ambassador Apartments, Inc., Ambassador Apartments, L.P., and Subsidiaries, as amended March 20, 1997 (Exhibit 10.42 to Ambassador Apartments, Inc. Annual Report on Form 10-K for the fiscal year 1997, is incorporated herein by this reference)* 21.1 -- List of Subsidiaries (Exhibit 21.1 to AIMCO's Annual Report on Form 10-K for the fiscal year 1999, is incorporated herein by this reference) 23.1 -- Consent of Ernst & Young LLP 27.1 -- Financial Data Schedule 99.1 -- Agreement re: disclosure of long-term debt instruments
- --------------- (1) Schedule and supplemental materials to the exhibits have been omitted but will be provided to the Securities and Exchange Commission upon request. * Management contract EX-10.20 2 AMENDED AND RESTATED CREDIT AGREEMENT 3/15/2000 1 EXHIBIT 10.20 $345,000,000 AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF MARCH 15, 2000 BY AND AMONG AIMCO PROPERTIES, L.P. AS BORROWER, THE LENDERS LISTED THEREIN, AS LENDERS, BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT, FLEET NATIONAL BANK (AS SUCCESSOR IN INTEREST TO BANKBOSTON N.A.), AS CO-LEAD AGENT AND SYNDICATION AGENT, AND FIRST UNION NATIONAL BANK, AS DOCUMENTATION AGENT. 1 2 AIMCO PROPERTIES, L.P. AMENDED AND RESTATED CREDIT AGREEMENT This AMENDED AND RESTATED CREDIT AGREEMENT (this "AMENDMENT") is dated as of March 15, 2000 (the "AMENDMENT EFFECTIVE DATE") and entered into by and among AIMCO PROPERTIES, L.P., a Delaware limited partnership ("BORROWER"), the financial institutions listed on the signature pages hereof (collectively, "LENDERS" and individually a "LENDER") and BANK OF AMERICA, N.A. ("BANK OF AMERICA"), as Administrative Agent (in such capacity, "ADMINISTRATIVE AGENT"), Issuing Lender and a Co-Lead Agent, FLEET NATIONAL BANK (as successor in interest to BankBoston, N.A.) ("FLEET"), as a Lender, a Co-Lead Agent, and Syndication Agent, and FIRST UNION NATIONAL BANK ("First Union"), as a Lender and Documentation Agent, and is made with reference to that certain Credit Agreement dated as of August 16, 1999 (as amended by this Amendment, the "CREDIT AGREEMENT"), by and among Borrower, Lenders and Administrative Agent. Capitalized terms used in this Amendment shall have the meanings set forth in the Credit Agreement unless otherwise defined. The Guarantor Subsidiaries set forth on pages S-11 through S-19 are only parties to this Amendment for the purposes of Section 4 and are not a party to the Credit Agreement. RECITAL WHEREAS, Borrower and Lenders desire to amend and restate the Credit Agreement to, among other things, increase the Combined Commitments by $45,000,000 as of the date hereof, and to provide for the further increase of the Combined Commitments up to an additional $55,000,000 as provided in Section 1.2 hereof, all as more particularly set forth below; NOW, THEREFORE, in consideration of the agreements, provisions and covenants herein contained, the parties hereto agree as follows: SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT 1.1 AMENDMENT TO SUBSECTION 1.01: DEFINED TERMS. A. Subsection 1.01 of the Credit Agreement is hereby further amended by deleting, in their entirety, the definitions of the terms listed below and inserting the following in lieu thereof: "COMBINED COMMITMENTS" has the meaning assigned to such term in the definition of "Commitment". The Combined Commitments are $345,000,000, and are subject to increase in accordance with Section 2.14 below. "PRO RATA SHARE" means, with respect to each Lender, the percentage of the Combined Commitments set forth opposite the name of that Lender on Schedule 2.01, as may be amended from time to time. 2 3 1.2 AMENDMENT TO SUBSECTION 2.14: THE COMMITMENTS AND EXTENSIONS OF CREDIT; INCREASE IN COMMITMENTS. A. Subsection 2.14 of the Credit Agreement shall be deleted in its entirety and replaced with the following: 2.14 INCREASE IN COMBINED COMMITMENTS. As of the Amendment Effective Date, the Combined Commitments will be $345,000,000; provided, however, that from and after the Amendment Effective Date, with the consent of Administrative Agent and Borrower only, new Lenders may be added to this Agreement and/or existing Lenders may choose to increase their individual Commitment, such that the Combined Commitments may be increased up to a maximum of $400,000,000. (a) Each of the Lenders acknowledges and agrees that, notwithstanding anything to the contrary in Section 10.01, their consent to any such increase in the Combined Commitments shall not be required and additional Lenders may be added to this Agreement, and any existing Lender under this Agreement may increase its Commitment without the consent or agreement of the other Lenders (provided, however, that no Lender's individual Commitment may be increased without such Lender's consent); so long as Administrative Agent and Borrower have consented in writing to such new Lenders or the increase in the Commitment of any of the existing Lenders, as applicable. (b) Administrative Agent shall not unreasonably withhold its consent to Borrower's request for an increase in the Combined Commitments under this Subsection, provided that each of the following must be satisfied: (i) any proposed new Lender must be acceptable to Administrative Agent in its sole discretion; (ii) Borrower shall pay a fee for such increase which must be acceptable to Administrative Agent in its sole discretion; and (iii) all requirements of this Section 2.14 must be satisfied. (c) The addition of any new Lender to this Agreement, or the increase in the Commitment of any existing Lender, shall be effective upon the satisfaction of the following: (i) Administrative Agent shall have sent written notice of such new Lender or increase in the Commitment of any existing Lender to the other Lenders hereunder, together with notice of such new Lender's Commitment or such existing Lender's increase in its Commitment; 3 4 (ii) Administrative Agent and Borrower shall determine the effective date of such increase (the "INCREASE EFFECTIVE DATE"), and Administrative Agent shall promptly notify Lenders thereof. On or prior to the Increase Effective Date: (1) Borrower shall have executed and delivered to Administrative Agent a new Committed Loan Note with respect to any new or existing Lender in the amount of such Lender's Commitment; (2) Borrower shall have delivered a certificate signed by a Responsible Officer stating that (i) the representations and warranties contained in Section 5 are true and correct on and as of the date of such certificate, and (ii) no Default or Event of Default exists; (3) Borrower shall deliver to Administrative Agent, in form and substance satisfactory to Administrative Agent, corporate resolutions and incumbency certificates of Borrower and any Guarantor dated as of the Increase Effective Date approving such increase and in sufficient copies for each Lender; (4) Administrative Agent shall distribute an amended Schedule 2.01 (which shall thereafter be incorporated into this Agreement) to reflect any changes in Lenders, the Combined Commitments, the Commitments and each Lender's Pro Rata Share thereof; (5) with respect to (a) new Lenders under this Agreement, each new Lender shall acknowledge in writing (in a form satisfactory to Administrative Agent) that it is assuming the rights and obligations of a "Lender" under this Agreement; and (b) existing Lenders that increase their Commitment, each such existing Lender shall acknowledge in writing (in a form satisfactory to Administrative Agent) the increased amount of such existing Lender's increased Commitment; and (6) Borrower, and each new Lender and each existing Lender increasing its Commitment, shall execute and deliver to Administrative Agent such additional documents as Administrative Agent and its legal counsel shall reasonably require to carry out the intent of this Section 2.14. 1.3 AMENDMENT TO SECTION 7.14: NEGATIVE COVENANTS; FINANCIAL COVENANTS. A. Subsection 7.14(a) shall be deleted in its entirety and replaced with the following: (a) Permit the Fixed Charge Coverage Ratio as of the end of any fiscal quarter ending during any period set forth below to be less than the following ratios during the applicable periods: 4 5
------------------------------------------------------------------------------------------------------------- APPLICABLE PERIOD RATIO ------------------------------------------------------------------------------------------------------------- Closing Date to and including September 30, 1999 1.70:1.00 ------------------------------------------------------------------------------------------------------------- October 1, 1999 to and including December 31, 1999 1.75:1.00 ------------------------------------------------------------------------------------------------------------- January 1, 2000 to and including December 31, 2000 1.70:1.00 ------------------------------------------------------------------------------------------------------------- January 1, 2001 and thereafter 1.75:1.00 -------------------------------------------------------------------------------------------------------------
1.4 AMENDMENT TO SECTION 10.12: MISCELLANEOUS; SURVIVAL OF REPRESENTATIONS AND WARRANTIES. A. Subsection 10.12 shall be deleted in its entirety and replaced with the following: 10.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties made hereunder and in any Loan Document, certificate or statement delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery thereof but shall terminate on the later of (a) when the Commitments are terminated and (b) when no Obligations remain outstanding under any Loan Document. Provided, however, notwithstanding anything in this Agreement or implied by law to the contrary, the agreements of Borrower set forth in Section 3 and Subsections 10.03, 10.05, 10.13, and 10.14 and the agreements of Lenders set forth in Subsections 9.03, 9.07 and 10.06 shall survive the payment of the other Obligations and the termination of this Agreement. 1.5 AMENDMENT TO SCHEDULES. A. Schedule 2.01 shall be deleted in its entirety and replaced with that attached hereto. SECTION 2. CONDITIONS TO EFFECTIVENESS This Amendment shall become effective on the Amendment Effective Date, if each of the following conditions are satisfied: A. Borrower has delivered to Lenders (or to Administrative Agent for Lenders with sufficient originally executed copies, where appropriate, for each Lender and its counsel) executed copies of this Amendment dated as of the Amendment Effective Date; B. Guarantor Subsidiaries have executed this Amendment with respect to Section 4; C. Borrower shall have executed new Committed Loan Notes for any Lender whose Commitment increases pursuant to this Amendment dated as of the Amendment Effective Date and in an amount equal to such Lender's Commitment; 5 6 D. On or before the Amendment Effective Date, Borrower has paid to Administrative Agent an amendment fee in the amount of $300,000 and a commitment fee calculated as provided below. The amendment fee will be distributed among all Lenders who are party to the Credit Agreement on the Amendment Effective Date based upon the Pro Rata Shares in existence immediately before the Amendment Effective Date. The commitment fee will be an aggregate amount equal to $168,750, and will be distributed among each Lender party to the Credit Agreement immediately before the Amendment Effective Date which increases its Commitment pursuant to this Amendment, in an amount equal to 37.5 basis points times the amount of such increase; E. Borrower shall have delivered a certificate, satisfactory to Agent, signed by a Responsible Officer stating that (i) the representations and warranties contained in Section 5 are true and correct on and as of the Amendment Effective Date, and (ii) no Default or Event of Default then exists, and no Default or Event of Default will result from the consummation of the transactions contemplated by this Amendment; F. If required by Administrative Agent, Lenders and their respective counsel shall have received originally executed copies of one or more favorable written opinions of counsel for Borrower and the Guarantor Subsidiaries in form and substance reasonably satisfactory to Administrative Agent and its counsel, dated as of the Amendment Effective Date, with respect to the validity, binding effect and enforceability of this Amendment, and due authorization, execution and delivery thereof, and as to such other matters as Administrative Agent acting on behalf of Lenders may reasonably request; and G. Borrower shall have paid the reasonable fees, costs and expenses of Administrative Agent's counsel in connection with this Amendment. SECTION 3. BORROWER'S REPRESENTATIONS AND WARRANTIES In order to induce Lenders to enter into this Amendment and to amend the Credit Agreement in the manner provided herein, Borrower represents and warrants to each Lender that the following statements are true, correct and complete: A. CORPORATE POWER AND AUTHORITY. Borrower has all requisite corporate power and authority to enter into this Amendment and any other agreements, guaranties or other operative documents to be delivered pursuant to this Amendment, to carry out the transactions contemplated by, and perform its obligations under, the Credit Agreement. Each of the Borrower, the REIT and the Guarantor Subsidiaries are in good standing in the respective states of their organization on the Amendment Effective Date. B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this Amendment and the performance of the Credit Agreement have been duly authorized by all necessary corporate action on the part of Borrower and the other parties delivering any of such documents, as the case may be. The organizational documents of the Borrower, the REIT and the Guarantor Subsidiaries have not been modified in any material respect since August 16, 1999. 6 7 C. NO CONFLICT. The execution and delivery by Borrower and the Guarantor Subsidiaries of this Amendment and the performance by Borrower of the Credit Agreement by Borrower do not and will not (i) violate any provision of any law or any governmental rule or regulation applicable to Borrower or any of its Subsidiaries, their respective Organization Documents or any order, judgment or decree of any court or other agency of government binding on Borrower, the REIT or any of their Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of Borrower, the REIT or any of their Subsidiaries, (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of Borrower, the REIT or any of their Subsidiaries, or (iv) require any approval of stockholders or any approval or consent of any Person under any Contractual Obligation of Borrower, the REIT or any of their Subsidiaries. D. GOVERNMENTAL CONSENTS. The execution and delivery by Borrower and the Guarantor Subsidiaries of this Amendment and the performance by Borrower and the Guarantor Subsidiaries under the Credit Agreement do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any federal, state or other governmental authority or regulatory body. E. BINDING OBLIGATION. The Credit Agreement, as amended by this Amendment, has been duly executed and delivered by Borrower and the Guarantor Subsidiaries, as applicable, and is enforceable against Borrower and/or the Guarantor Subsidiaries, as applicable, in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally or by equitable principles relating to enforceability. F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT AGREEMENT. The representations and warranties contained in Section 5 of the Credit Agreement are and will be true, correct and complete in all material respects on and as of the Amendment Effective Date to the same extent as though made on and as of such date, except representations and warranties solely to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date. SECTION 4. ACKNOWLEDGEMENT AND CONSENT Guarantor Subsidiaries are party to that certain Payment Guaranty of REIT and of Preferred Stock Subsidiaries dated August 16, 1999 and that certain Payment Guaranty of Non-Preferred Stock Subsidiaries dated August 16, 1999, in each case as amended at even date herewith, pursuant to which Guarantor Subsidiaries have guarantied the Obligations. Nothing in this Section 4 shall be construed to make the Guarantor Subsidiaries a party to the Credit Agreement or to create any obligation in respect thereof except pursuant to each Guaranty. Each Guarantor Subsidiary hereby acknowledges that it has reviewed the terms and provisions of the Credit Agreement and this Amendment and consents to the amendment of 7 8 the Credit Agreement effected pursuant to this Amendment. Each Guarantor Subsidiary hereby confirms that each Guaranty to which it is a party or otherwise bound will continue to guaranty or secure, as the case may be, to the fullest extent possible the payment and performance of all of the "Indebtedness" (as defined in the applicable Guaranty), including without limitation the payment and performance of all such "Indebtedness," as the case may be, with respect to the Obligations of Borrower now or hereafter existing under or in respect of the Credit Agreement (as amended hereby) and the Notes defined therein. Each Guarantor Subsidiary acknowledges and agrees that any Guaranty to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment. Each Guarantor Subsidiary represents and warrants that all representations and warranties contained in the Credit Agreement and the Guaranty to which it is a party or otherwise bound are true, correct and complete in all material respects on and as of the Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date. Each Guarantor Subsidiary acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Guarantor Subsidiary is not required by the terms of the Credit Agreement or any other Loan Document to consent to the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other Loan Document shall be deemed to require the consent of such Guarantor Subsidiary to any future amendments to the Credit Agreement. SECTION 5. MISCELLANEOUS A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS. (i) On and after the Amendment Effective Date, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the "Credit Agreement", "thereunder", "thereof" or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement, as amended by this Amendment. (ii) Except as specifically amended by this Amendment, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed. (iii) The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of Administrative Agent or any Lender under, the Credit 8 9 Agreement or any of the other Loan Documents. B. FEES AND EXPENSES. Borrower acknowledges that all reasonable costs, fees and expenses incurred by Administrative Agent and its counsel with respect to this Amendment and the documents and transactions contemplated hereby shall be for the account of Borrower. C. HEADINGS. Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect. D. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. This Amendment shall become effective upon the execution of a counterpart hereof by Borrower and the Requisite Lenders, and receipt by Borrower and Administrative Agent of written, facsimile or telephonic notification of such execution and authorization of delivery thereof. [Signatures on Attached Pages S-1 through S-10] 9 10 SCHEDULE 2.01 COMMITMENTS AND PRO RATA SHARES (AS OF THE AMENDMENT EFFECTIVE DATE)
===================================================================================================================== LENDER COMMITMENT PRO RATA SHARE - --------------------------------------------------------------------------------------------------------------------- Bank of America, N.A. $ 55,000,000 15.942028986% - --------------------------------------------------------------------------------------------------------------------- Fleet National Bank $ 50,000,000 14.492753623% - --------------------------------------------------------------------------------------------------------------------- First Union National Bank $ 45,000,000 13.043478261% - --------------------------------------------------------------------------------------------------------------------- U.S. Bank $ 40,000,000 11.594202899% - --------------------------------------------------------------------------------------------------------------------- The Bank of Nova Scotia $ 40,000,000 11.594202899% - --------------------------------------------------------------------------------------------------------------------- Chase Manhattan $ 35,000,000 10.144927536% - --------------------------------------------------------------------------------------------------------------------- KeyBank $ 30,000,000 8.695652174% - --------------------------------------------------------------------------------------------------------------------- SouthTrust Bank $ 25,000,000 7.246376812% - --------------------------------------------------------------------------------------------------------------------- California Bank & Trust $ 25,000,000 7.246376812% - --------------------------------------------------------------------------------------------------------------------- TOTALS $345,000,000 100.000000000% =====================================================================================================================
10 11 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first written above. BORROWER AIMCO PROPERTIES, L.P., a Delaware limited partnership By: AIMCO - GP, INC., a Delaware corporation, its general partner By: /s/ PETER K. KOMPANIEZ Peter K. Kompaniez President Notices to be sent to: 2000 South Colorado Boulevard Tower 2, Suite 2-1000 Denver, Colorado 80222 Attention: Paul McAuliffe Executive Vice President & Chief Financial Officer Facsimile: (303) 691-4317 S-11 12 BANK OF AMERICA BANK OF AMERICA, N.A., as a Lender and as the Issuing Lender By: /s/ MARK GREGOR-PEARSE Name: Mark Gregor-Pearse Title: Principal BANK OF AMERICA, N.A., as Administrative Agent By: /s/ MARK GREGOR-PEARSE Name: Mark Gregor-Pearse Title: Principal S-12 13 FLEET NATIONAL BANK, as Lender, Co-Lead Agent and Syndication Agent By: /s/ KATHLEEN M. AHERN Name: Kathleen M. Ahern Title: Vice President S-13 14 FIRST UNION NATIONAL BANK, as a Lender and Documentation Agent By: /s/ REX RUDY Name: Rex Rudy Title: Vice President S-14 15 CALIFORNIA BANK & TRUST, a California banking corporation, as a Lender By: /s/ EILEEN E. PORTER -------------------------------- Name: Eileen E. Porter Title: Vice President S-15 16 THE CHASE MANHATTAN BANK, a New York banking corporation, as a Lender By: /s/ ALAN C. BREINDEL -------------------------------- Name: Alan C. Breindel Title: Managing Director S-16 17 KEYBANK NATIONAL ASSOCIATION, as a Lender By: /s/ DAN HERBLE -------------------------------- Name: Daniel R. Herble Title: Vice President S-17 18 THE BANK OF NOVA SCOTIA, acting through its San Francisco Agency, as a Lender By: /s/ ABID GILANI -------------------------------- Name: Abid Gilani Title: Director S-18 19 SOUTHTRUST BANK, N.A., as a Lender By: /s/ SAMUEL L. BOROUGHS -------------------------------- Name: Samuel L. Boroughs Title: Assistant Vice President S-19 20 U.S. BANK NATIONAL ASSOCIATION, as a Lender By: /s/ D. PETRE -------------------------------- Name: D. Petre Title: Vice President S-20 21 The undersigned Guarantor Subsidiaries hereby execute this Amendment solely for the purposes of acknowledging the same and consenting thereto in accordance with Section 4 thereof. REIT AND PREFERRED STOCK SUBSIDIARIES: APARTMENT INVESTMENT AND MANAGEMENT COMPANY By: /s/ PETER K. KOMPANIEZ ------------------------------------- Peter K. Kompaniez President AIMCO/NHP HOLDINGS, INC. By: /s/ PETER K. KOMPANIEZ ------------------------------------- Peter K. Kompaniez President NHP A&R SERVICES, INC. By: /s/ PETER K. KOMPANIEZ ------------------------------------- Peter K. Kompaniez President NHP MANAGEMENT COMPANY By: /s/ THOMAS TOOMEY ------------------------------------- Thomas Toomey President S-21 22 NON-PREFERRED STOCK SUBSIDIARIES - -------------------------------- AIMCO Anchorage, L.P. AIMCO Bay Club, L.P. AIMCO Bridgewater, L.P. AIMCO Copperfield, L.P. AIMCO Crows Nest, L.P. AIMCO Group, L.P. AIMCO Hampton Hill, L.P. AIMCO Hastings Place, L.P. AIMCO LT, L.P. AIMCO Oak Falls, L.P. AIMCO Park at Cedar Lawn, L.P. AIMCO Peppermill Place, L.P. AIMCO Recovery Fund, L.P. AIMCO Seaside Point, L.P. AIMCO Signature Point, L.P. AIMCO Stirling Court, L.P. AIMCO Sunbury, L.P. AIMCO Township at Highlands, L.P. AIMCO UT, L.P. AIMCO West Trails, L.P. By: AIMCO Holdings, L.P., as their general partner By: AIMCO Holdings QRS, Inc., its general partner By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President S-22 23 AIMCO Bay Club II, L.P. By: AIMCO Bay Club, L.P., its general partner By: AIMCO Holdings, L.P., as their general partner By: AIMCO Holdings QRS, Inc., its general partner By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President AIMCO Holdings, L.P. By: AIMCO Holdings QRS, Inc., its general partner By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President Ambassador CRM Florida Partners, L.P. By: Ambassador Florida Partners Limited Partnership, as its general partner By: Ambassador Florida Partners, Inc., as its general partner By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President S-23 24 Ambassador I, L.P. By: Ambassador I, Inc., its general partner By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President Ambassador II, L.P. By: Ambassador II, Inc., its general partner By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President Ambassador VIII, L.P. By: Ambassador VIII, Inc., its general partner By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President Ambassador IX, L.P. By: Ambassador IX, Inc., its general partner By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President S-24 25 Ambassador Apartments, L.P. Property Asset Management Services, L.P. By: AIMCO Properties, L.P., as their general partner By: AIMCO-GP, Inc., its general partner By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President Ambassador X, L.P. By: Ambassador X, Inc., its general partner By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President Williamsburg L.P. By: Ambassador IX, L.P.., its general partner By: Ambassador IX, Inc., its general partner By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President S-25 26 Property Asset Management Services-California, LLC By: Property Asset Management Services, L.P., its managing general partner By: AIMCO Properties, L.P., its general partner By: AIMCO-GP, Inc., its general partner By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President NHP Congress Management L.P. By: NHP-HG Six, Inc., its general partner By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President NPI-AP Management, L.P. By: NPI Property Management Corporation, its general partner By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President S-26 27 AIMCO Residential Group, L.P. By: AG Management, L.L.C., its general partner By: NHP Management Company, its managing member By: /s/ THOMAS TOOMEY ------------------------------ Thomas Toomey President Insignia Properties, L.P. By: AIMCO/IPT, Inc., its general partner By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President AIMCO Calhoun, Inc. AIMCO Holdings QRS, Inc. AIMCO LJ Tucson, Inc. AIMCO Properties Finance Corp. AIMCO Somerset, Inc. AIMCO/Brant Rock, Inc. AIMCO/Beacon Hill, Inc. AIMCO/Blossomtree, Inc. AIMCO/Colonnade, Inc. AIMCO/Foothills, Inc. AIMCO/Foxbay, Inc. AIMCO/Foxtree, Inc. AIMCO/Freedom Place, Inc. AIMCO/Grovetree, Inc. AIMCO/Hazeltree, Inc. AIMCO/Hiddentree, Inc. AIMCO/IPT, Inc. AIMCO/Islandtree, Inc. AIMCO/Olmos, Inc. AIMCO/Orchidtree, Inc. AIMCO/OTC QRS, Inc. AIMCO/Pine Creek, Inc. AIMCO/Polo Park, Inc. S-27 28 AIMCO/Quailtree, Inc. AIMCO/Rivercrest, Inc. AIMCO/Sand Castles, Inc. AIMCO/Sand Pebble, Inc. AIMCO/Shadetree, Inc. AIMCO/Shadow Lake, Inc. AIMCO/Silktree, Inc. AIMCO/Surrey Oaks, Inc. AIMCO/Tall Timbers, Inc. AIMCO/The Hills, Inc. AIMCO/Timbertree, Inc. AIMCO/Twinbridge, Inc. AIMCO/Wickertree, Inc. AIMCO/Wildflower, Inc. AIMCO/Windsor Landing, Inc. AIMCO/Woodhollow, Inc. AIMCO/Wydewood, Inc. AIMCO/Yorktree, Inc. AIMCO-LP, Inc. AIMCO-GP, Inc. Ambassador I, Inc. Ambassador II, Inc. Ambassador IV, Inc. Ambassador V, Inc. Ambassador VIII, Inc. Ambassador Texas, Inc. Ambassador X, Inc. Ambassador XI, Inc. Ambassador Florida Partners Inc. Angeles Realty Corporation II NHP Multi-Family Capital Corporation NHP Real Estate Corporation A.J. Two, Inc. AIMCO Equity Services, Inc. NHP Texas Management Company NHP Puerto Rico Management Company NHP Florida Management Company NHP Maintenance Services Company NHP-HDV Ten, Inc. NHP-HDV Fourteen, Inc. NHP-HDV Sixteen, Inc. NHP-HDV 20, Inc. NHP-HS Two, Inc. S-28 29 Broadstreet Management, Inc. Rescorp Realty, Inc. Preferred Home Health, Inc. Security Management, Inc. Insignia Residential Group of Alabama, Inc. Insignia Residential Group of California, Inc. Insignia Residential Group of Texas, Inc. DBL Properties Corporation Colony of Springdale Properties, Inc. SF General, Inc. CPF XIV/St. Charleston, Inc. CPF XIV/Torrey Pines, Inc. CPF XIV/Sun River, Inc. CPF XIV/Lakeside Place, Inc. ConCap CCP/IV Stratford Place Properties, Inc. ConCap CCP/IV River's Edge Properties, Inc. ConCap Equities, Inc. ConCap Holdings, Inc. PRA, Inc. National Property Investors, Inc. By: /s/ PETER K. KOMPANIEZ ------------------------------ Peter K. Kompaniez President S-29 30 Address Where Notices are to be Sent: To Guarantor: 2000 South Colorado Boulevard Tower 2, Suite 2-1000 Denver, Colorado 80222 To Administrative Agent: BANK OF AMERICA, N.A. CA9-706-06-02 555 South Flower Street, 6th Floor Los Angeles, California 90071 Attention: Manager - Unit #1313 To Lenders: Per the Credit Agreement S-30 EX-23.1 3 CONSENT OF ERNST & YOUNG LLP 1 Exhibit 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-3 No. 333-61409) and Registration Statement (Form S-4 No. 333-60355) of AIMCO Properties, L.P. and in the related Prospectuses of our report dated January 20, 2000, with respect to the consolidated financial statements and schedule of AIMCO Properties, L.P. included in this Annual Report (Form 10-K) for the year ended December 31, 1999. /s/ ERNST & YOUNG LLP Denver, Colorado March 29, 2000 EX-27.1 4 FINANCIAL DATA SCHEDULE
5 1,000 YEAR DEC-31-1999 JAN-01-1999 DEC-31-1999 186,199 0 0 0 0 0 4,508,535 415,992 5,684,251 0 2,584,289 149,500 707,745 0 1,802,144 5,684,251 574,760 636,943 386,008 403,884 0 0 139,124 80,690 0 80,690 0 0 0 80,690 .40 .40
EX-99.1 5 AGREEMENT RE: DISCLOSURE OF LONG-TERM DEBT 1 EXHIBIT 99.1 Agreement Regarding Disclosure of Long-Term Debt Instruments In reliance upon Item 601(b)(4)(111)(A), of Regulation S-K, AIMCO Properties, L.P., a Delaware limited partnership (the "Partnership") has not filed as an exhibit to its Annual Report on Form 10-K for the fiscal year ended December 31, 1999, any instrument with respect to long-term debt not being registered where the total amount of securities authorized thereunder does not exceed 10 percent of the total assets of the Partnership and its subsidiaries on a consolidated basis. Pursuant to Item 601(b)(4)(111)(A), of Regulation S-K, the Partnership hereby agrees to furnish a copy of any such agreements to the Securities Exchange Commission upon request. AIMCO PROPERTIES, L.P. By: AIMCO-GP, Inc. its General Partner By: /s/ PETER KOMPANIEZ ---------------------------- Peter Kompaniez President -----END PRIVACY-ENHANCED MESSAGE-----