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Apartment Investment and Management Company — Maryland AIMCO Properties, L.P. — Delaware | Apartment Investment and Management Company — 6798 AIMCO Properties, L.P. — 6513 | Apartment Investment and Management Company — 84-1259577 AIMCO Properties, L.P. — 84-1275621 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) |
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The information in this proxy statement-prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. |
AIMCO PROPERTIES, L.P.
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ALABAMA | NEW YORK | |
ALASKA | OREGON | |
MARYLAND | TENNESSEE | |
NEW HAMPSHIRE | TEXAS | |
NEW JERSEY | WASHINGTON |
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VMS NATIONAL RESIDENTIAL PORTFOLIO II
(participants in VMS National Properties Joint Venture)
, 2007
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Amendment No. 1 to Contribution Agreement | ||||||||
Consent of Ernst & Young LLP, Greenville, South Carolina | ||||||||
Consent of Ernst & Young LLP, Denver, Colorado | ||||||||
Consent of KTR Valuation and Consulting Services, LLC | ||||||||
Consent of CB Richard Ellis | ||||||||
Form of Consideration Election Form |
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• | The Transactions. On August 21, 2006, VMS and Aimco Properties, LLC entered into an agreement (the “Contribution Agreement”) pursuant to which VMS agreed to the Affiliated Contribution. The Properties to be contributed in the Affiliated Contribution are Casa de Monterey, Buena Vista Apartments, Crosswood Park Apartments, Mountain View Apartments, Pathfinder Village Apartments, Scotchollow Apartments, and The Towers of Westchester Park. The value of the consideration to be received by VMS for each of the Affiliated Contribution Properties is $230,078,260, which is equal to the greater of the appraised market value of the fee simple interest in such Properties and internal valuations prepared annually by Aimco. Separately, and as a condition to the Affiliated Contribution, VMS intends to complete the Unaffiliated Sales. On November 22, 2006, VMS entered into an agreement to sell Watergate Apartments to an unaffiliated third party for a total purchase price of $7,710,000. On November 28, 2006, VMS entered into an agreement to sell Shadowood Apartments to an unaffiliated third party for a total purchase price of $5,300,000. On December 4, 2006, VMS entered into agreements to sell Terrace Gardens and The Bluffs to unaffiliated third parties for total purchase prices of $7,200,000 and $9,650,000, respectively. On December 11, 2006, VMS entered into an agreement to sell Vista Village Apartments to an unaffiliated third party for a total purchase price of $7,250,000. On December 12, 2006, VMS entered into an agreement to sell Chappelle Le Grande to an unaffiliated third party for a total purchase price of $5,250,000. The terms of the two remaining Unaffiliated Sales are currently unknown as purchase agreements have not been entered into. However, VMS has received offers at specific offer prices to purchase the two remaining Unaffiliated Sale Properties. VMS will not complete an Unaffiliated Sale if the purchase price for such Unaffiliated Sale Property does not exceed eighty-five percent (85%) of (i) the purchase price of such Property set forth in the applicable agreement described above, or (ii) the highest offer price for a Property for which a contract has not yet been executed, or $59,636,000 in the aggregate. We refer to the Affiliated Contribution and the Unaffiliated Sales collectively as the “Transactions” and individually as a “Transaction” in this proxy statement-prospectus. See “SPECIAL FACTORS — BACKGROUND AND REASONS FOR THE TRANSACTIONS,” “THE TRANSACTIONS,” “VMS AND THE PARTNERSHIPS — Capital Replacement,” and “UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE TRANSACTIONS.” |
• | Limited Partners Right to Object. In accordance with the terms of the VMS joint venture agreement and the partnership agreements of each of the Partnerships, VMS will not complete a Transaction if limited partners owning more than 50% of the aggregate units of the Partnerships give written notice of objection to that Transaction prior to , 2007. For additional information, see “PROCEDURE FOR OBJECTING TO A TRANSACTION.” |
• | Choice of Consideration. The limited partners of the Partnerships are being given a choice as to the consideration they will receive with respect to the Affiliated Contribution. The limited partners may elect to waive the right to receive any portion of the cash distribution with respect to the Affiliated Contribution and receive that portion of the distributable proceeds from the Affiliated Contribution as Common OP Units instead. Those who so elect and those that do not make an election will receive their portion of the distributable proceeds in cash. The choice of consideration with respect to the Affiliated Contribution is more fully described under “THE TRANSACTIONS.” After the first anniversary of becoming a holder of |
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Common OP Units, each holder has the right, subject to the terms and conditions set forth in the Aimco Operating Partnership’s agreement of limited partnership ( the “Aimco Operating Partnership Agreement”), to require the Aimco Operating Partnership to redeem all or a portion of the Common OP Units held by such party in exchange for shares of Class A Common Stock or a cash amount equal to the value of such shares, as the Aimco Operating Partnership may elect. See “DESCRIPTION OF COMMON OP UNITS “for additional information. |
• | Advantages of the Transactions. The Managing General Partner believes that the Transactions have the following principal advantages: |
• | Limited partners that elect to receive Common OP Units as consideration may be entitled to defer a portion of their taxable gain and have the opportunity to participate in the Aimco Operating Partnership’s enterprise. |
• | Limited partners that do not elect to receive Common OP Units will forego the potential deferral of taxable gain that may result from receipt of Common OP Units, but will receive a cash distribution of approximately $28,973 per Portfolio I nondefaulted unit and $28,748 per Portfolio II nondefaulted unit from the Affiliated Contribution. |
• | The Unaffiliated Sales will result in cash distributions to the limited partners of approximately $8,985 per Portfolio I nondefaulted unit and $8,916 per Portfolio II nondefaulted unit, assuming the Minimum Unaffiliated Sale Price for each Unaffiliated Sale Property is achieved. |
• | The Affiliated Contribution provides greater certainty than sales to third parties, due to, among other things, the short feasibility period and abbreviated conditions to closing. Simultaneous approval of the Unaffiliated Sales will permit the Partnerships to avoid the costs and delay of subsequent notifications to the partners. | |
• | There are various costs associated with being a public reporting company, including costs associated with preparing, auditing and filing periodic reports with the SEC, which would be eliminated if VMS were to terminate its registration and therefore its obligation to file annual, quarterly and other reports with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Managing General Partner estimates these expenses to be approximately $87,000 per year. This represents approximately 13% of VMS’s general and administrative expenses and 0.20% of its total expenses (based on 2005 expenses of approximately $686,000 and $42,508,000, respectively). In addition, as a result of the Sarbanes-Oxley Act of 2002, the Managing General Partner estimates these costs will increase by approximately 10% beginning in 2007. | |
• | All of the Properties currently require capital expenditures for which existing resources are not adequate. The refinancing of the Properties, while beneficial to the debt structure of the Partnerships and the Transactions, will not generate sufficient cash to fund the required capital expenditures. | |
• | The tax benefits of continued investment in the Properties have been reduced for most limited partners. |
• | Disadvantages of the Transactions. The Managing General Partner believes that the Transactions have the following disadvantages: |
• | The Unaffiliated Sales will result in taxable gain to the limited partners, and distributable proceeds to the limited partners will likely be insufficient to pay the resulting tax liability. | |
• | To the extent that limited partners in the Partnerships receive cash in connection with the Affiliated Contribution, all limited partners in the Partnership, including limited partners receiving Common OP Units and no cash, will recognize taxable gain. | |
• | The Managing General Partner is an affiliate of Aimco Properties, LLC, and the terms of the Affiliated Contribution, including the amount of consideration, were determined without an arms-length negotiation. VMS might obtain greater consideration in a sale to a third party or another transaction that involved independent third-party negotiations. |
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• | In structuring the Affiliated Contribution, no one separately represented the interests of the limited partners. Although the Managing General Partner has a fiduciary duty to the limited partners, it also has responsibilities to its stockholder, which is affiliated with Aimco Properties, LLC, resulting in a conflict of interest. | |
• | For those limited partners that elect to receive solely Common OP Units as consideration, the Affiliated Contribution will not result in any immediate cash distribution. |
• | Conflicts of Interest. Apartment Investment and Management Company (“Aimco”) beneficially owns both the Managing General Partner of the Partnerships and the general partnership interest and approximately ninety percent (90%) of the common partnership units and equivalents of the Aimco Operating Partnership, as of September 30, 2006. The Aimco Operating Partnership is the sole member of Aimco Properties, LLC and is also a limited partner in the Partnerships. The Managing General Partner has fiduciary duties to the limited partners of the Partnerships, on the one hand, and to Aimco, as its sole stockholder, on the other. As a result, in considering the Affiliated Contribution, the Managing General Partner has substantial conflicts of interest. Dissolution of the partnership would result in the loss of management fees to the Managing General Partner and its affiliates. As of September 30, 2006, Aimco or its affiliates also hold the junior mortgage and certain other indebtedness and bankruptcy claims, including a mortgage participation, general partner loans and other accrued fees in an aggregate amount of $90,581,533 that will be repaid as a part of the refinancing preceding the Transactions. See “RISK FACTORS,” “CONFLICTS OF INTEREST” and “VMS AND THE PARTNERSHIPS — Transactions with Affiliates” for additional information. |
• | Fairness of the Transactions. Although the Managing General Partner has interests that may conflict with those of the limited partners of the Partnerships, the Managing General Partner is of the opinion that each Transaction, considered independently, is fair to the limited partners in view of the factors listed below and described in greater detail under “FAIRNESS OF THE TRANSACTIONS.” | |
• | The consideration for the Affiliated Contribution Properties is equal in value to the greater of the appraised market value of the Properties and internal valuations prepared annually by Aimco. |
• | VMS will not complete a Transaction if limited partners owning more than 50% of the aggregate units of the Partnerships give written notice of objection to that Transaction prior to , 2007. |
• | The Managing General Partner arrived at the Minimum Unaffiliated Sale Prices by applying a 15% discount to (i) the purchase price for each Unaffiliated Sale Property contained in the purchase agreement for such Property described elsewhere herein, or (ii) the highest offer price for a Property for which a contract has not yet been executed. |
• | Limited partners that elect to receive Common OP Units as consideration for the Affiliated Contribution may be entitled to defer a portion of their taxable gain and would have the opportunity to participate in the Aimco Operating Partnership’s enterprise. | |
• | The junior mortgage loans encumbering the Properties and certain other indebtedness and bankruptcy claims of VMS are held by Aimco or its affiliates and will be repaid as part of the refinancing to be concluded prior to the closing of either of the Transactions. | |
• | Pursuant to the Contribution Agreement, VMS, the Partnerships and Aimco Properties, LLC have provided each limited partner with contractual dissenters’ appraisal rights with respect to the Affiliated Contribution that are generally based upon the dissenters’ appraisal rights that a limited partner would have were it a shareholder in a corporate merger under the corporation laws of the state of the Partnerships’ organization. |
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• | After the Transactions are Consummated. After completion of the Transactions, any available proceeds will be distributed to the partners in accordance with the joint venture and partnership agreements (including default provisions with respect to limited partners failing to satisfy certain obligations thereunder), and the elections, if any, of the limited partners as to the nature of the consideration desired, and VMS and the Partnerships will be dissolved in accordance with the terms of their respective venture and partnership agreements. Upon dissolution of VMS, the Managing General Partner intends to file a notice with the SEC that will result in a termination of VMS’s obligation to file annual, quarterly and other reports with the SEC pursuant to the Exchange Act. There are various costs associated with being a public reporting company, including costs associated with preparing, auditing and filing periodic reports with the SEC, which would be eliminated if VMS were to terminate its registration under the Exchange Act. For additional information, see “PLANS AFTER THE TRANSACTIONS ARE CONSUMMATED.” | |
• | VMS and the Partnerships. The general partners of VMS are Portfolio I and Portfolio II. VMS is owned 70.69% by Portfolio I and 29.31% by Portfolio II. There are currently 644 units of Portfolio I and 267 units of Portfolio II issued and outstanding, which are held of record by 669 and 257 limited partners, respectively. VMS’s investment portfolio currently consists of the following 15 residential apartment complexes: Buena Vista Apartments, a92-unit complex in Pasadena, California; Casa de Monterey, a144-unit complex in Norwalk, California; Crosswood Park Apartments, a180-unit complex in Citrus Heights, California; Mountain View Apartments, a168-unit complex in San Dimas, California; Pathfinder Village Apartments, a246-unit complex in Fremont, California; Scotchollow Apartments, a418-unit complex in San Mateo, California; The Bluffs, a137-unit complex in Milwaukee, Oregon; Vista Village Apartments, a220-unit complex in El Paso, Texas; Chapelle Le Grande, a105-unit complex in Merrillville, Indiana; Shadowood Apartments, a120-unit complex in Monroe, Louisiana; The Towers of Westchester Park, a303-unit complex in College Park, Maryland; Terrace Gardens, a126-unit complex in Omaha, Nebraska; North Park Apartments, a284-unit complex in Evansville, Indiana; Watergate Apartments, a140-unit complex in Little Rock, Arkansas; and Forest Ridge Apartments, a278-unit complex in Flagstaff, Arizona. An affiliate of the Aimco Operating Partnership currently serves as manager of the Properties. The principal executive offices of the Managing General Partner, the Partnerships and VMS are located at 55 Beattie Place, P.O. Box 1089, Greenville, South Carolina 29602, telephone(864) 239-1000. For additional information about VMS and the Partnerships, see “VMS AND THE PARTNERSHIPS” and “GENERAL INFORMATION.” | |
• | The Aimco Operating Partnership and Aimco. The Aimco Operating Partnership is a Delaware limited partnership that conducts substantially all of the operations of Aimco. As of September 30, 2006, Aimco beneficially owns approximately ninety percent (90%) of the Common OP Units and equivalents of the Aimco Operating Partnership. Aimco is a real estate investment trust (a “REIT”) that owns and manages multifamily apartment properties throughout the United States. The Aimco Operating Partnership, through its operating divisions and subsidiaries, holds substantially all of Aimco’s assets and manages the daily operations of Aimco’s business and assets. As of September 30, 2006, the Aimco Operating Partnership owned or managed a portfolio of 1,290 apartment properties containing 224,837 apartment units located in 47 states, the District of Columbia and Puerto Rico. Based on apartment unit data compiled by the National Multi Housing Council, as of January 1, 2006, Aimco is the largest owner of multifamily apartment properties in the United States. The general partner of the Aimco Operating Partnership is AIMCO-GP, Inc., a Delaware corporation, which is a wholly owned subsidiary of Aimco. The Aimco Operating Partnership is the sole member of Aimco Properties, LLC. The principal executive offices of Aimco, the Aimco Operating Partnership and Aimco Properties, LLC are located at 4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237, and their telephone number is(303) 757-8101. For additional information about Aimco, the Aimco Operating Partnership and Aimco Properties, LLC, see “INFORMATION CONCERNING AIMCO AND THE AIMCO OPERATING PARTNERSHIP.” | |
• | Tax Consequences of the Transactions. The Unaffiliated Sales will be taxable transactions for United States federal income tax purposes and likely for state and local income tax purposes as well. To the extent |
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that limited partners receive cash in connection with the Affiliated Contribution, the Affiliated Contribution will also be in part a taxable transaction for such tax purposes because VMS will receive cash in the Affiliated Contribution. Any taxable income from the Unaffiliated Sales and the Affiliated Contribution will pass through, and be taxable, to the partners. Taxable income from the Affiliated Contribution will pass through, and be taxable, to all limited partners, including those who elect to receive Common OP Units rather than cash in connection with the Affiliated Contribution. Additional gain may be recognized in connection with actual or deemed distributions of cash by VMS and the Partnerships. There are also other tax considerations related to the Affiliated Contribution and to investment in the Aimco Operating Partnership and Aimco that you should consider. See “UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE TRANSACTIONS” for additional information. |
• | Appraisal Rights. Pursuant to the Contribution Agreement, VMS, the Partnerships and Aimco Properties, LLC have provided each limited partner with contractual dissenters’ appraisal rights with respect to the Affiliated Contribution that are generally based upon the dissenters’ appraisal rights that a limited partner would have were it a shareholder in a corporate merger under the corporation laws of the state of the Partnerships’ organization. To exercise this right, you must take the necessary steps provided by the Contribution Agreement. See “APPRAISAL RIGHTS” for additional information. |
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FROM REFINANCING
New mortgage principal | $ | 207,550,000 | ||
Less: Estimated closing costs | (4,571,000 | ) | ||
Less: Pay off of senior mortgages | (95,693,052 | ) | ||
Less: Pay off of junior mortgages | (21,693,158 | ) | ||
Less:Class 3-C Claim under Bankruptcy Plan | (42,000,000 | ) | ||
Less: MF VMS Interest from Partnership Advance Account | (2,883,152 | ) | ||
Less: 50% of residual to MF VMS Interest | (16,030,091 | ) | ||
Less: Pay off of affiliate-loans | (12,649,527 | ) | ||
Less: Estimated non-resident withholding taxes | (809,920 | ) | ||
Distributable to Portfolio I & Portfolio II | $ | 11,220,100 | ||
FROM REFINANCING
PER UNIT OF PORTFOLIO I
Distributable to Portfolio I & Portfolio II | $ | 11,220,100 | ||
Percentage to Portfolio I | 70.69 | % | ||
Distributable to Portfolio I | 7,931,489 | |||
Total number of Portfolio I units | 611.25 | |||
Distributable per Portfolio I unit | $ | 12,976 | ||
FROM REFINANCING
PER UNIT OF PORTFOLIO II
Distributable to Portfolio I & Portfolio II | $ | 11,220,100 | ||
Percentage to Portfolio II | 29.31 | % | ||
Distributable to Portfolio II | 3,288,611 | |||
Total number of Portfolio II units | 255.42 | |||
Distributable per Portfolio II unit | $ | 12,875 | ||
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FROM UNAFFILIATED SALES
Gross purchase price | $ | 59,636,000 | ||
Plus: Cash and cash equivalents | 545,458 | |||
Plus: Other partnership assets | 1,024,361 | |||
Less: Mortgage debt including accrued interest | (39,550,000 | ) | ||
Less: Due to affiliates | (52,734 | ) | ||
Less: 50% of residual proceeds to MF VMS Interest | (8,976,596 | ) | ||
Less: Accounts payable, accrued expenses and other liabilities | (1,998,277 | ) | ||
Less: Reserve for contingencies | (212,748 | ) | ||
Less: Closing costs | (1,192,720 | ) | ||
Less: Estimated non-resident withholding taxes | (1,206,959 | ) | ||
Less: Estimated transfer taxes | (35,397 | ) | ||
Less: Estimated state entity taxes | (210,751 | ) | ||
Distributable to Portfolio I & Portfolio II | $ | 7,769,637 | ||
FROM UNAFFILIATED SALES
PER UNIT OF PORTFOLIO I
Distributable to Portfolio I & Portfolio II | $ | 7,769,637 | ||
Percentage to Portfolio I | 70.69 | % | ||
Distributable to Portfolio I | 5,492,356 | |||
Total number of Portfolio I units | 611.25 | |||
Distributable per Portfolio I unit | $ | 8,985 | ||
FROM UNAFFILIATED SALES
PER UNIT OF PORTFOLIO II
Distributable to Portfolio I & Portfolio II | $ | 7,769,637 | ||
Percentage to Portfolio II | 29.31 | % | ||
Distributable to Portfolio II | 2,277,281 | |||
Total number of Portfolio II units | 255.42 | |||
Distributable per Portfolio II unit | $ | 8,916 | ||
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FROM AFFILIATED CONTRIBUTION
Gross purchase price | $ | 230,078,260 | ||
Plus: Cash and cash equivalents | 1,080,373 | |||
Plus: Other partnership assets | 2,726,585 | |||
Less: Mortgage debt including accrued interest | (168,000,000 | ) | ||
Less: Due to affiliates | (58,008 | ) | ||
Less: 50% of residual proceeds to holder of MF VMS Interest | (30,547,491 | ) | ||
Less: Accounts payable, accrued expenses and other liabilities | (2,342,610 | ) | ||
Less: Reserve for Contingencies | (820,792 | ) | ||
Less: Estimated non-resident withholding taxes | (5,493,368 | ) | ||
Less: Estimated transfer taxes | (1,568,826 | ) | ||
Less: Estimated state entity taxes | (1,600 | ) | ||
Distributable to Portfolio I & Portfolio II | $ | 25,052,523 | ||
FROM AFFILIATED CONTRIBUTION
PER UNIT OF PORTFOLIO I
Distributable to Portfolio I & Portfolio II | $ | 25,052,523 | ||
Percentage to Portfolio I | 70.69 | % | ||
Distributable to Portfolio I | 17,709,629 | |||
Total number of Portfolio I units | 611.25 | |||
Distributable per Portfolio I unit | $ | 28,973 | ||
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FROM AFFILIATED CONTRIBUTION
PER UNIT OF PORTFOLIO II
Distributable to Portfolio I & Portfolio II | $ | 25,052,523 | ||
Percentage to Portfolio II | 29.31 | % | ||
Distributable to Portfolio II | 7,342,894 | |||
Total number of Portfolio II units | 255.42 | |||
Distributable per Portfolio II unit | $ | 28,748 | ||
ISSUED FOR WAIVED CASH AMOUNTS
AT ASSUMED CLASS A COMMON STOCK PRICES
Assumed Class | ||||||||||||||||||||
A Common | ||||||||||||||||||||
Stock Prices | Potential Waived Cash Amounts | |||||||||||||||||||
$ | 13,000 | $ | 16,000 | $ | 19,000 | $ | 22,000 | $ | 25,000 | |||||||||||
$35.00 | 371.4286 | 457.1429 | 542.8571 | 628.5714 | 714.2857 | |||||||||||||||
$40.00 | 325 | 400 | 475 | 550 | 625 | |||||||||||||||
$45.00 | 288.8889 | 355.5556 | 422.2222 | 488.8889 | 555.5556 | |||||||||||||||
$50.00 | 260 | 320 | 380 | 440 | 500 | |||||||||||||||
$55.00 | 236.3636 | 290.9091 | 345.4545 | 400 | 454.5455 | |||||||||||||||
$60.00 | 216.6667 | 266.6667 | 316.6667 | 366.6667 | 416.6667 |
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PER UNIT RECEIVING COMMON OP UNITS
Cash Percentage | Gain per Unit | Portfolio I | Portfolio II | |||||||
25% Cash | Total Gain | $ | 49,111 | $ | 48,720 | |||||
Unrecaptured 1250 Gain | 44,283 | 44,354 | ||||||||
50% Cash | Total Gain | 98,221 | 97,440 | |||||||
Unrecaptured 1250 Gain | 52,863 | 52,883 | ||||||||
75% Cash | Total Gain | 147,332 | 146,161 | |||||||
Unrecaptured 1250 Gain | 64,563 | 64,595 |
PER UNIT RECEIVING CASH
Portfolio I | Portfolio II | |||||||
Total gain per unit receiving cash | $ | 227,563 | $ | 225,359 | ||||
Unrecaptured 1250 gain per unit receiving cash | 118,046 | 117,603 | ||||||
Cash distribution per unit | 50,938 | 50,578 |
PER UNIT RECEIVING COMMON OP UNITS
Cash Percentage | Gain per Unit | Portfolio I | Portfolio II | |||||||
25% Cash | Total Gain | $ | 99,459 | $ | 98,927 | |||||
Unrecaptured 1250 Gain | 86,730 | 86,876 | ||||||||
50% Cash | Total Gain | 148,569 | 147,647 | |||||||
Unrecaptured 1250 Gain | 91,367 | 91,444 | ||||||||
75% Cash | Total Gain | 197,680 | 196,368 | |||||||
Unrecaptured 1250 Gain | 104,186 | 104,263 |
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• | Potential Tax Deferral. Limited partners that elect to receive Common OP Units as consideration may be entitled to defer a portion of their taxable gain. |
• | Realization of Return on Investment. The tax benefits of continued investment in the Properties have been substantially eliminated for most limited partners due principally to declining depreciation deductions from the Properties. The Unaffiliated Sales would allow partners to realize return on their investment through immediate cash distribution to the partners from the sale proceeds. The Affiliated Contribution would give partners the choice to realize return on their investment through immediate cash distribution or to receive Common OP Units as consideration. |
• | Allows VMS to Avoid Risk of Default and Foreclosure. In connection with the VMS plan of reorganization approved in September 1993, the Properties were encumbered with the mortgage indebtedness described elsewhere in this proxy statement-prospectus. Such mortgage indebtedness matures on January 1, 2008 and may not be prepaid prior to January 1, 2007. Even after completion of the refinancing, if a disposition of the Properties is not consummated, there will be an increased risk that VMS will not be able to repay some of its debt or fund necessary deficits, capital expenditures, or other costs, and therefore an increased risk that VMS will default upon its indebtedness in the future, and perhaps lose its Properties in the future through mortgage foreclosure. |
• | No More Tax Allocations Without Distributions. Without the completion of the Transactions and a refinancing of the existing debt on more favorable terms, at existing rent levels at the Properties, the Partnerships may generate taxable income but will probably not distribute sufficient cash to limited partners to pay resulting tax liabilities for the foreseeable future. |
• | Elimination of Management Fees. Affiliates of Aimco are contractually entitled to receive annual compensation for real estate advisory services and asset management services of $300,000, adjusted annually by the consumer price index, reimbursement of expenses not to exceed $100,000 per year and 4% of the gross receipts from all of the Properties as compensation for providing property management fees. Asset management fees of approximately $257,000, $351,000, $323,000 and $325,000 were charged by |
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affiliates of the Managing General Partner for the nine months ended September 30, 2006 and years ended December 31, 2005, 2004 and 2003, respectively. VMS paid, or accrued for payment, property management fees to such affiliates of approximately $1,024,000, $1,278,000, $1,201,000 and $1,253,000 for the nine months ended September 30, 2006 and years ended December 31, 2005, 2004 and 2003. See “VMS AND THE PARTNERSHIPS — VMS — Transactions with Affiliates.” Following the transfer of a Property in a Transaction, VMS, and indirectly, the limited partners, will no longer be required to bear the cost of these fees. |
• | Disposition at Appraised Value. The value of the consideration for each of the Affiliated Contribution Properties is equal to the greater of the appraised market value of the fee simple interest in such Properties based on appraisals dated November and December 2006 and internal valuations prepared annually by Aimco, and last updated February 2006. A sale of the Affiliated Contribution Properties to a third party could result in a lesser purchase priceand/or could impose additional costs that do not exist in the Affiliated Contribution, which could lower the net proceeds to the Partnerships. |
• | Growth Potential. The Aimco Operating Partnership’s assets, organizational structure and access to capital enable it to pursue acquisition and development opportunities that are not available to VMS. Limited partners that elect to receive Common OP Units would have the opportunity to participate in the Aimco Operating Partnership’s enterprise and could benefit from any future increase in the Class A Common Stock price and from any future increase in distributions on the Common OP Units. |
• | Diversification. The Aimco Operating Partnership’s portfolio of apartment properties is substantially larger and more diverse than the portfolio of properties that VMS proposes to contribute in the Affiliated Contribution. This exchange would therefore substantially diversify the portfolio of any limited partner that elected to receive Common OP Units as consideration for the Affiliated Contribution. |
• | Elimination of Costs Associated with SEC Filing Requirements. There are various costs associated with being a public reporting company, including costs associated with preparing, auditing and filing periodic reports with the SEC, which would be eliminated if VMS were to terminate its registration under the Exchange Act. The Managing General Partner estimates these expenses to be approximately $87,000 per year. This represents approximately 13% of VMS’s general and administrative expenses and 0.20% of its total expenses (based on 2005 expenses of approximately $686,000 and $42,508,000, respectively). In addition, as a result of the Sarbanes-Oxley Act of 2002, the Managing General Partner estimates VMS’s costs will increase by approximately 10% beginning in 2007. |
• | Disposition of Unaffiliated Sales Properties Pursuant to Arms-Length Marketing Process. The Unaffiliated Sales Properties were marketed to unaffiliated third parties and the purchase price for the Unaffiliated Sales was attained through arms-length negotiation, at a purchase price in excess of the Minimum Unaffiliated Sales Price. |
• | Allows VMS to Avoid Risk of Default and Foreclosure. In connection with the VMS plan of reorganization approved in September 1993, the Properties were encumbered with the mortgage indebtedness described elsewhere in this proxy statement-prospectus. Such mortgage indebtedness matures on January 1, 2008 and may not be prepaid prior to January 1, 2007. Even after completion of the refinancing, if a disposition of the Properties is not consummated, there will be an increased risk that VMS will not be able to repay some of its debt or fund necessary deficits, capital expenditures, or other costs, and therefore an increased risk that VMS will default upon its indebtedness in the future, and perhaps lose its Properties in the future through mortgage foreclosure. |
• | Elimination of Management Fees. Affiliates of Aimco are contractually entitled to receive annual compensation for real estate advisory services and asset management services of $300,000, adjusted annually by the consumer price index, reimbursement of expenses not to exceed $100,000 per year and 4% of the gross receipts from all of the Properties as compensation for providing property management fees. Asset management fees of approximately $257,000, $351,000, $323,000 and $325,000 were charged by |
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affiliates of the Managing General Partner for the nine months ended September 30, 2006 and years ended December 31, 2005, 2004 and 2003, respectively. VMS paid, or accrued for payment, property management fees to such affiliates of approximately $1,024,000, $1,278,000, $1,201,000 and $1,253,000 for the nine months ended September 30, 2006 and years ended December 31, 2005, 2004 and 2003. See “VMS AND THE PARTNERSHIPS — VMS — Transactions with Affiliates.” Following the transfer of a Property in a Transaction, VMS, and indirectly, the limited partners, will no longer be required to bear the cost of these fees. |
• | Disposition at Appraised Value. The value of the consideration for each of the Affiliated Contribution Properties is equal to the greater of the appraised market value of the fee simple interest in such Properties based on appraisals dated November and December 2006 and internal valuations prepared annually by Aimco, and last updated February 2006. A sale of the Affiliated Contribution Properties to a third party could result in a lesser purchase priceand/or could impose additional costs that do not exist in the Affiliated Contribution, which could lower the net proceeds to the Partnerships. |
• | Disposition of Unaffiliated Sales Properties Pursuant to Arms-Length Marketing Process. The Unaffiliated Sales Properties were marketed to unaffiliated third parties and the purchase price for the Unaffiliated Sales was attained through arms-length negotiation, at a purchase price in excess of the Minimum Unaffiliated Sales Price. |
• | Allows VMS to Avoid Risk of Default and Foreclosure. In connection with the VMS plan of reorganization approved in September 1993, the Properties were encumbered with the mortgage indebtedness described elsewhere in this proxy statement-prospectus. Such mortgage indebtedness matures on January 1, 2008 and may not be prepaid prior to January 1, 2007. Even after completion of the refinancing, if a disposition of the Properties is not consummated, there will be an increased risk that VMS will not be able to repay some of its debt or fund necessary deficits, capital expenditures, or other costs, and therefore an increased risk that VMS will default upon its indebtedness in the future, and perhaps lose its Properties in the future through mortgage foreclosure. |
• | Elimination of Ultimate Liability as General Partner. As the managing general partner of the Partnerships, the Managing General Partner is ultimately responsible for liabilities incurred by the Partnerships, to the extent any such liability is not a non-recourse loan and a claimant may pursue claims and any security pledged as collateral for any such liability. Upon completion of the Transactions, the Partnerships will be dissolved pursuant to their respective partnership agreements and the Managing General Partner’s liability with respect to the Partnerships will cease to exist. |
• | Benefits as an Affiliate of Aimco. As an affiliate of Aimco, the Managing General Partner will receive the indirect benefits of the Transactions that are received by Aimco and its other affiliates. |
• | Disposition at Appraised Value. The value of the consideration for each of the Affiliated Contribution Properties is equal to the greater of the appraised market value of the fee simple interest in such Properties based on appraisals dated November and December 2006 and internal valuations prepared annually by Aimco, and last updated February 2006. A sale of the Affiliated Contribution Properties to a third party could result in a lesser purchase priceand/or could impose additional costs that do not exist in the Affiliated Contribution, which could lower the net proceeds to the Partnerships. |
• | Benefit as an Affiliate of Aimco. As a shareholder of the Managing General Partner and an affiliate of Aimco, AIMCO/IPT will indirectly receive benefits of the Transactions that are received by the Managing General Partner and Aimco. |
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• | Future Appreciation of the Properties. The Aimco Operating Partnership will receive the benefit of any future appreciation of the Affiliated Contribution Properties that will be held by Aimco Properties, LLC, its wholly owned subsidiary, after consummation of the Affiliated Contribution. |
• | Sales Proceeds from Unaffiliated Sales. The Aimco Operating Partnership will receive its proportional share of proceeds from the consummation of the Unaffiliated Sales. |
• | Opportunity to Acquire Assets Without Cash. To the extent that the limited partners elect to receive OP Units rather than cash pursuant to the Affiliated Contribution, the Aimco Operating Partnership will acquire the Affiliated Contribution Properties without the payment of cash as compensation. |
• | Increased Operating Flexibility. Following the completion of the Affiliated Contribution, the Affiliated Contribution Properties will bewholly-owned by the Aimco Operating Partnership, which will permit greater flexibility in operating and financing the Affiliated Contribution Properties than currently is possible under the existing ownership structure. |
• | No Separate Representation of Limited Partners in the Affiliated Contribution. The Managing General Partner is an affiliate of Aimco Properties, LLC. In structuring the Affiliated Contribution and the consideration, no one separately represented the interests of the limited partners and the amount of consideration and the terms of the Affiliated Contribution were determined without an arms-length negotiation. Although the Managing General Partner has a fiduciary duty to the limited partners, it also has responsibilities to its equity holders that could conflict with the interests of the limited partners. The Managing General Partner did not appoint, nor did Aimco Properties, LLC ask it to appoint, a party to represent only the interests of the limited partners. The terms of the Affiliated Contribution, including the value of the consideration, could differ if they were subject to independent negotiations. |
• | Taxable Gain to the Limited Partners. The Unaffiliated Sales will be considered taxable under United States federal tax laws and will result in taxable gain to the limited partners. Also, to the extent that any limited partners receive cash with respect to the Affiliated Contribution, VMS will receive cash from Aimco Properties, LLC, which will result in taxable income to the limited partners, including the limited partners who receive Common OP Units in the Affiliated Contribution. In addition, tax consequences to particular limited partners may vary depending on the effect of: (i) adjustments to the basis of Partnership property with respect to a limited partner that received its interest in the Partnership as a transferee and (ii) the difference between the tax basis of property of the Partnerships or VMS and the fair market value of such property at the time such property was contributed to or revalued by the Partnerships or VMS. Limited partners are urged to consult their tax advisors as to their particular situations and tax consequences. |
• | Uncertain Future Value of Common OP Units and Distributions. In the Affiliated Contribution, limited partners have the option to receive Common OP Units as consideration. Each Common OP Unit is redeemable, at the option of its holder, after a one-year holding period, for one share of Class A Common Stock or cash equal to the market value of one share of Class A Common Stock at the time of redemption, as the Aimco Operating Partnership may elect. For a detailed description of these redemption rights, see “DESCRIPTION OF COMMON OP UNITS — Redemption Rights of Qualifying Partners.” The number of Common OP Units to be issued to those that elected to waive any portion of the cash distribution and receive Common OP Units instead will be equal to (i) the amount of the cash distribution waived by such limited |
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partner divided by (ii) the average daily closing price of a share of Class A Common Stock on the NYSE over the twenty trading-day period ended two days prior to consummation of the Affiliated Contribution. On , 2007, the last reported sale price of Class A Common Stock on the NYSE was $ . During the period , 2007 to , 2007, the high and low sales prices of the Class A Common Stock on the NYSE were $ and $ , respectively. Limited partners are instructed to contact The Altman Group, Inc. with any direct questions or requests for information, including an estimate of Common OP Units issuable with respect to waivers of particular cash amounts, as of the most recent practicable date. Please see the information set forth under “HOW TO OBTAIN ADDITIONAL INFORMATION.” The market price of Class A Common Stock varies from time to time. These variations may be caused by a number of factors, including changes in Aimco’s business, operations or prospects, regulatory considerations and general market and economic considerations. The number of Common OP Units will not be adjusted for any change in the market price of Class A Common Stock. Accordingly, if the market value of Class A Common stock and, correspondingly, Common OP Units declines prior to the time the Affiliated Contribution is consummated, the value of the consideration to be received will decline. In addition, because the date that the Affiliated Contribution is completed will be later than the date prior to which limited partners may object to it, limited partners will not know the exact value of the Common OP Units that will be issued in the Affiliated Contribution at the time they determine what form of consideration to elect. In addition, although the Aimco Operating Partnership makes quarterly distributions on its Common OP Units, there can be no assurance regarding the amounts of available cash that the Aimco Operating Partnership will generate or the portion that its general partner will choose to distribute. The following table presents the distributions declared and made by the Aimco Operating Partnership on its Common OP Units from with respect to the specified periods: |
Quarter Ended | Distributions per Unit | |||
December 31, 2001 | $ | 0.82 | ||
March 31, 2002 | $ | 0.82 | ||
June 30, 2002 | $ | 0.82 | ||
September 30, 2002 | $ | 0.82 | ||
December 31, 2002 | $ | 0.82 | ||
March 31, 2003 | $ | 0.82 | ||
June 30, 2003 | $ | 0.82 | ||
September 30, 2003 | $ | 0.60 | ||
December 31, 2003 | $ | 0.60 | ||
March 31, 2004 | $ | 0.60 | ||
June 30, 2004 | $ | 0.60 | ||
September 30, 2004 | $ | 0.60 | ||
December 31, 2004 | $ | 0.60 | ||
March 31, 2005 | $ | 0.60 | ||
June 30, 2005 | $ | 0.60 | ||
September 30, 2005 | $ | 0.60 | ||
December 31, 2005 | $ | 0.60 | ||
March 31, 2006 | $ | 0.60 | ||
June 30, 2006 | $ | 0.60 | ||
September 30, 2006 | $ | 0.60 |
• | No Participation in Possible Increase in Value of Sold Properties. The Properties may generate increased net income or cash flow or increase in value after their disposition. Because VMS will no longer own the Properties after completion of the Transactions, limited partners will not be able to participate in the net income or cash flow from the Properties or any net proceeds from the future sale of the Properties, although limited partners who elect to receive Common OP Units in lieu of cash will continue to participate indirectly with respect to the Affiliated Contribution Properties. |
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• | No Separate Representation of Limited Partners in the Affiliated Contribution. The Managing General Partner is an affiliate of Aimco Properties, LLC. In structuring the Affiliated Contribution and the consideration, no one separately represented the interests of the limited partners and the amount of consideration and the terms of the Affiliated Contribution were determined without an arms-length negotiation. Although the Managing General Partner has a fiduciary duty to the limited partners, it also has responsibilities to its equity holders that could conflict with the interests of the limited partners. The Managing General Partner did not appoint, nor did Aimco Properties, LLC ask it to appoint, a party to represent only the interests of the limited partners. The terms of the Affiliated Contribution, including the value of the consideration, could differ if they were subject to independent negotiations. |
• | VMS and the Partnerships will be dissolved and will cease to exist. Because the Properties are the sole assets of VMS, and the interests of VMS are the sole assets of the Partnerships, upon completion of the Transactions the Partnerships and VMS will be dissolved in accordance with the terms of their respective partnership agreements. |
• | Loss of Ownership Interest in the Properties. Upon completion of the Transactions, the Managing General Partner will no longer hold an ownership interest in the Properties. |
• | Discontinued Receipt of Management Fees. After consummation of the Transactions, the Managing General Partner will no longer receive asset management fees and potential future fees from VMS. |
• | Loss of Distributions from the Managing General Partner. As a shareholder of the Managing General Partner, AIMCO/IPT received distributions in connection with VMS which will no longer be paid after consummation of the Transactions. Since January 1, 2005, such distributions to AIMCO/IPT totaled $ . |
• | Responsible for All Future Losses. As the sole member of Aimco Properties, LLC, the Aimco Operating Partnership will be responsible for all future losses or decreases in value of the Affiliated Contribution Properties. |
• | Discontinued Receipt of Management Fees. After consummation of the Transactions, the Aimco Operating Partnership will no longer indirectly receive asset management fees and potential future fees from VMS. |
• | Property Management Fees. After consummation of the Transactions, an affiliate of the Aimco Operating Partnership will continue to receive a property management fee, but such fee will be borne completely by the Aimco Operating Partnership and will no longer be shared with the limited partners. |
• | Reimbursement for Services. After consummation of the Transactions, affiliates of the Aimco Operating Partnership will not be reimbursed for services provided on behalf of the Aimco Operating Partnership, including administrative and bookkeeping expenses, as well as construction management expenses. |
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• | Accounting by Aimco and the Aimco Operating Partnership. Effective January 1, 2006, Aimco and the Aimco Operating Partnership account for VMS and the Partnerships as consolidated subsidiaries. Accordingly, the assets, liabilities, revenues and expenses of VMS and the Partnerships are reported in the consolidated financial statements of Aimco and the Aimco Operating Partnership. The carrying amounts of the Properties as reported in such consolidated financial statements differ from the corresponding amounts reported in the combined financial statements of the Partnerships due to certain valuation adjustments that were recorded by the Managing General Partner and the Aimco Operating Partnership in connection with their acquisitions of equity interests in the Partnerships in prior years. Units of the Partnerships held by limited partners other than the Aimco Operating Partnership are reported as minority interest in the consolidated financial statements of Aimco and the Aimco Operating Partnership; however the carrying amount of the minority interest is zero and Aimco does not allocate any losses of VMS and the Partnerships to the minority interest. |
• | Accounting by the Partnerships. For accounting purposes, VMS, the Partnerships and Aimco Properties, LLC are deemed to be entities under common control. Generally accepted accounting principles ordinarily |
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preclude recognition of gains by the transferor entity in a transfer of assets between entities under common control. Accordingly, the Partnerships will not recognize any gain in connection with the transfer of the Affiliated Contribution Properties from VMS to Aimco Properties, LLC. The excess of (i) the aggregate amount of cash and fair value of Common OP Units received by VMS and the limited partners in exchange for the Affiliated Contribution Properties over (ii) the Partnerships’ aggregate carrying amount of the Affiliated Contribution Properties will be treated by the Partnerships as capital contributions from the Aimco Operating Partnership and be credited to partners’ deficit in the Partnerships’ combined financial statements. An offsetting charge to partners’ deficit will be recognized for the fair value of Common OP Units distributed to limited partners. |
• | The fact that limited partners electing to receive Common OP Units may be able to achieve more favorable tax results than would be the case upon receipt of the cash distribution to which such limited partner would otherwise be entitled, as further described in “UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE TRANSACTIONS.” |
• | The fact that limited partners can elect to waive any portion of the cash distribution to be received in connection with the Affiliated Contribution and receive Common OP Units directly from the Aimco Operating Partnership instead, thereby providing limited partners the potential for more favorable tax results arising from the receipt of Common OP Units. |
• | The fact that the Managing General Partner has significant conflicts of interest with respect to the Affiliated Contribution resulting from the fiduciary duties it owes to its sole stockholder, whose affiliate has an interest in obtaining the lowest price possible for the Affiliated Contribution Properties, and the fiduciary duties it owes to the limited partners of the Partnerships, which have an interest in maximizing the consideration to be received for the Affiliated Contribution Properties. |
• | The appraisals provided by KTR, which are described in detail under “DETERMINATION OF CONSIDERATION BASED ON INDEPENDENT APPRAISALS,” the Aimco internal valuations of the Affiliated Contribution Properties, and the consideration to be received by VMS and the limited partners for the Affiliated Contribution in cashand/or Common OP Units equal to approximately $230,078,260, which is equal to the greater of the appraised market value of the fee simple interest in the Affiliated Contribution Properties and the internal valuations prepared by Aimco. The Aimco internal valuation for Casa De Monterey is $17,369,746, whereas the appraised market value is $18,200,000. The Aimco internal valuation for Buena Vista Apartments is $19,028,260, whereas the appraised market value is $17,900,000. The Aimco internal valuation for Mountain View Apartments is $28,482,135, whereas the appraised market value is $30,800,000. The Aimco internal valuation for Pathfinder Village Apartments is $32,036,484, whereas the appraised market value is $34,700,000. The Aimco internal valuation for Scotchollow Apartments is $64,502,581, whereas the appraised market value is $67,800,000. The Aimco internal valuation for Crosswood Park is $14,792,788, whereas the appraised market value is $15,750,000. The Aimco internal |
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valuation for Towers of Westchester Park is $35,557,852, whereas the appraised market value is $43,800,000. After receipt of KTR’s appraisals, the VMS Related parties considered the valuation approaches, methodologies and analyses described by KTR and determined that such valuation approaches, methodologies and analyses were appropriate in fairly valuing real estate assets such as the Affiliated Contribution Properties. Because the consideration for the Affiliated Contribution Properties was based on the greater of the appraised values for each of the Affiliated Contribution Properties and Aimco’s internal valuation for each such property, the VMS Related Parties then adopted the valuations established by the appraisals as the consideration for each Affiliated Contribution Property for which such appraised value exceeded Aimco’s internal valuation for such Property, resulting in a total consideration valued at approximately $230,078,260. The VMS Related Parties believe that the payment of the greater of the value determined by Aimco in connection with its annual financial reporting process and the value determined by an independent appraiser in the business of valuing properties like the Affiliated Contribution Properties increases the likelihood that the consideration is fair. |
• | The fact that KTR has performed work for Aimco and its affiliates in the past and that this pre-existing relationship between KTR and Aimco could negatively impact KTR’s independence. As noted elsewhere in this proxy statement-prospectus, the VMS Related Parties believe that this relationship had no effect on the results of the appraisals. |
• | The absence of an unaffiliated representative to act solely on behalf of the Partnerships or the limited partners in negotiating the terms of the Affiliated Contribution on an independent, arms-length basis, which might have resulted in greater consideration for the Affiliated Contribution Properties. |
• | The lack of a requirement that the Affiliated Contribution be approved by a majority of the limited partners unaffiliated with the Managing General Partner or Aimco, resulting in the direct application of the provisions of the Partnership Agreements which, in light of the limited partnership interests held by Aimco and its affiliates, requires 63.7% of the unaffiliated limited partners to object in order to prevent the Affiliated Contribution from occurring, rather than a simple majority. |
• | An evaluation of the market price of Class A Common Stock, which is traded on the New York Stock Exchange, as compared to the units of the Partnerships, which are not listed on any national securities exchange or quoted on the NASDAQ system, the Electronic Bulletin Board or the “Pink Sheets,” and therefore have no established public trading market for the units. For more information, see “VMS AND THE PARTNERSHIPS — Distributions and Transfers of Units.” |
• | The fact that current quarterly distributions with respect to the Common OP Units are $0.60 per unit, that since 1993 the Partnerships have paid no distributions and that limited partners electing to waive cash and receive Common OP Units instead would be entitled to receive such distributions in the future. |
• | Pursuant to the Contribution Agreement, VMS, the Partnerships and Aimco Properties, LLC have provided each limited partner with contractual dissenters’ appraisal rights with respect to the Affiliated Contribution that are generally based upon the dissenters’ appraisal rights that a limited partner would have were it a shareholder in a corporate merger under the corporation laws of the state of the Partnerships’ organization. |
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• | The fact that repayment of the senior mortgages encumbering the Properties prior to any default on or before the maturity date will result in greater proceeds to the limited partners than would otherwise be the case. |
• | An analysis of the possible alternatives, including continuation without the proposed disposition of Properties, which included an evaluation of the condition and operating performance of the Properties and the need for substantial capital expenditures. Based on estimates made by the Managing General Partner, the Properties require approximately $32.1 million in capital expenditures, an amount significantly in excess of the net proceeds of the refinancing. The VMS Related Parties believe that the completion of the Transactions, in light of the available alternatives, creates more certain value for the limited partners and the potential for more favorable tax treatment than any of the available alternatives. |
• | The fact that favorable loans from third parties or the Managing General Partner are not currently available to finance necessary capital expenditures and may not be available in the future or, when available, may not be on terms and conditions acceptable to the Managing General Partner or favorable to the Partnerships, which could result in increased stress on the operations of VMS as the Properties continue to deteriorate. |
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• | An appraisal of the Affiliated Contribution Properties was obtained from an independent third party appraiser. In each case, the consideration as of the closing date of the Affiliated Contribution for the Affiliated Contribution Properties is at least equal in value to the greater of the appraised value and the Aimco internal valuations. Aimco Properties, LLC has indicated that it would not have paid more for the Affiliated Contribution Properties than the greater of these two amounts, even if an unaffiliated representative had been engaged to represent the interests of the unaffiliated limited partners. |
• | By providing the information required byForm S-4 and Schedules 13E-3 and 14A of the Exchange Act, the Managing General Partner has provided sufficient information to each limited partner to make its own decision with respect to objecting to or electing the form of consideration for the Affiliated Contribution. |
• | The Affiliated Contribution will not be consummated if limited partners holding a majority of the aggregate units of the Partnerships object in writing in the manner described herein. |
• | The limited partners of the Partnerships have been given their choice of the form of consideration to be received with respect to their distributable portion of the Affiliated Contribution proceeds to give them an opportunity to defer certain tax liability as well as participate in the growth of the Aimco Operating Partnership enterprise. |
• | Pursuant to the Contribution Agreement, VMS, the Partnerships and Aimco Properties, LLC have provided each limited partner with contractual dissenters’ appraisal rights with respect to the Affiliated Contribution that are generally based upon the dissenters’ appraisal rights that a limited partner would have were it a shareholder in a corporate merger under the corporation laws of the state of the Partnerships’ organization. To exercise this right, you must take the necessary steps provided by the Contribution Agreement. See “APPRAISAL RIGHTS.” |
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• | Inspected the Properties; | |
• | Interviewed County and City officials regarding taxes, zoning requirements, flood zone information, demographic data, planned construction, recently completed developments, and other economic impacting events; | |
• | Consulted market participants, including real estate brokers and property managers, regarding market parameters and activity; |
• | Consulted with lenders and investor surveys regarding investment parameters; |
• | Interviewed leasing agents for competitive complexes for property specific information; |
• | Analyzed supply and demand factors affecting the local market for each Property; | |
• | Reviewed historical income and expense statements; | |
• | Reviewed the current rent roll; and | |
• | Reviewed other relevant financial and market information. |
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• | monthly economic rent potential of $172,432 and annual gross rent potential of $2,069,184; |
• | a loss to lease expense of 5.0%; |
• | a concession loss of 0.5%; |
• | a combined vacancy and credit loss allowance of 7.0%; |
• | estimated utility income of $475 per unit; |
• | other income of 4.3% of the gross rent potential or $86,400; |
• | total expenses of $919,173; and |
• | capitalization rate of 5.75%. |
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• | monthly economic rent potential of $168,864 and annual gross rent potential of $2,026,368; | |
• | a loss to lease expense of 4.0%; | |
• | a concession loss of 0.5%; | |
• | a combined vacancy and credit loss allowance of 6.5%; | |
• | estimated utility income of $425 per unit; | |
• | other income of 4.3% of the gross rent potential or $86,400; | |
• | total expenses of $918,603; and | |
• | capitalization rate of 5.75%. |
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• | monthly economic rent potential of $143,678 and annual gross rent potential of $1,724,136; |
• | a loss to lease expense of 3.0%; |
• | a concession loss of 1.0%; |
• | a combined vacancy and credit loss allowance of 2.5%; |
• | estimated utility income of $272 per unit; |
• | other income of 3.0% of the gross rent potential or $51,724; |
• | total expenses of $679,351; and |
• | capitalization rate of 5.75%. |
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• | monthly economic rent potential of $141,144 and annual gross rent potential of $1,693,728; | |
• | a loss to lease expense of 3.0%; | |
• | a concession loss of 1.5%; | |
• | a combined vacancy and credit loss allowance of 4.0%; | |
• | estimated utility income of $255 per unit; | |
• | other income of 3.0% of the gross rent potential or $50,600; | |
• | total expenses of $650,492; and | |
• | capitalization rate of 5.75%. |
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• | monthly economic rent potential of $185,325 and annual gross rent potential of $2,223,900; |
• | a loss to lease expense of 3.5%; |
• | a concession loss of 2.0%; |
• | a combined vacancy and credit loss allowance of 7.5%; |
• | estimated utility income of $64,000; |
• | other income of 2.5% of the gross rent potential; |
• | total expenses of $1,099,368; and |
• | capitalization rate of 6.0%; |
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• | monthly economic rent potential of $184,260 and annual gross rent potential of $2,211,120; | |
• | a loss to lease expense of 3.5%; | |
• | a concession loss of 4.0%; | |
• | a combined vacancy and credit loss allowance of 7.5%; | |
• | estimated utility income of $64,000; | |
• | other income of 2.5% of the gross rent potential; | |
• | total expenses of $1,083,549; and | |
• | capitalization rate of 6.0%. |
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• | monthly economic rent potential of $268,424 and annual gross rent potential of $3,168,768; |
• | a loss to lease expense of 5.5%; |
• | a concession loss of 1.0%; |
• | a combined vacancy and credit loss allowance of 7.5%; |
• | estimated utility income of $440 per unit; |
• | other income of 4.5% of the gross rent potential or $142,800; |
• | total expenses of $1,295,541; and |
• | capitalization rate of 5.5%. |
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• | monthly economic rent potential of $264,064 and annual gross rent potential of $3,168,768; | |
• | a loss to lease expense of 6.0%; | |
• | a concession loss of 1.0%; | |
• | a combined vacancy and credit loss allowance of 7.0%; | |
• | estimated utility income of $400 per unit; | |
• | other income of 4.2% of the gross rent potential or $134,400; | |
• | total expenses of $1,263,286; and | |
• | capitalization rate of 5.5%. |
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• | monthly economic rent potential of $356,760 and annual gross rent potential of $4,281,120; |
• | a loss to lease expense of 5.0%; |
• | a concession loss of 5.0%; |
• | a combined vacancy and credit loss allowance of 5.0%; |
• | estimated utility income of $650 per unit; |
• | other income of 5.0% of the gross rent potential or $214,056; |
• | total expenses of $2,105,766; and |
• | capitalization rate of 5.5%. |
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• | monthly economic rent potential of $337,384 and annual gross rent potential of $4,408,608; | |
• | a loss to lease expense of 3.0%; | |
• | a concession loss of 5.0%; | |
• | a combined vacancy and credit loss allowance of 6.0%; | |
• | estimated utility income of $625 per unit; | |
• | other income of 5.0% of the gross rent potential or $202,430; | |
• | total expenses of $2,044,799; and | |
• | capitalization rate of 5.5%. |
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• | monthly economic rent potential of $637,504 and annual gross rent potential of $7,650,048; |
• | a loss to lease expense of 8.0%; |
• | a concession loss of 2.0%; |
• | a combined vacancy and credit loss allowance of 4.0%; |
• | estimated utility income of $375 per unit; |
• | other income of 3.5% of the gross rent potential or $267,752; |
• | total expenses of $3,274,622; and |
• | capitalization rate of 5.75%. |
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• | monthly economic rent potential of $597,042 and annual gross rent potential of $7,164,504; | |
• | a loss to lease expense of 4.0%; | |
• | a concession loss of 4.0%; | |
• | a combined vacancy and credit loss allowance of 6.0%; | |
• | estimated utility income of $335 per unit; | |
• | other income of 5.0% of the gross rent potential or $358,225; | |
• | total expenses of $3,061,039; and | |
• | capitalization rate of 5.75%. |
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• | based on current average contract rents and estimated annual market rent growth due to inflation, KTR estimated potential rental income of $4,920,087 for the upcoming year; |
• | a combined vacancy and credit loss of 5.0%; |
• | a concession loss of 2.0%; |
• | estimated utility reimbursement income of $400 per unit for the upcoming year; |
• | other income of $650 per unit for the upcoming year; |
• | total expenses of $2,483,860 or $8,198 per unit inclusive of reserves; and |
• | capitalization rate of 5.5%. |
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• | based on current average contract rents and estimated annual market rent growth due to inflation, KTR estimated potential rental income of $4,772,977 for the upcoming year; | |
• | a combined vacancy and credit loss of 5.0%; | |
• | a concession loss of 1.0%; | |
• | estimated utility reimbursement income of $475 per unit for the upcoming year; | |
• | other income of $600 per unit for the upcoming year; | |
• | total expenses of $2,284,477 or $7,540 per unit inclusive of reserves; and | |
• | capitalization rate of 5.75%. |
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• | Decisions of the general partner with respect to the amount and timing of cash expenditures, borrowings, issuances of additional interests and reserves in any quarter will affect whether or the extent to which there is available cash to make distributions in a given quarter. | |
• | Under the terms of its agreement of limited partnership, the Aimco Operating Partnership will reimburse its general partner and its general partner’s affiliates for costs incurred in managing and operating the Aimco Operating Partnership, including compensation of officers and employees. | |
• | Whenever possible, the general partner seeks to limit the Aimco Operating Partnership’s liability under contractual arrangements to all or particular assets of the Aimco Operating Partnership, with the other party thereto to have no recourse against the general partner or its assets. | |
• | Any agreements between the Aimco Operating Partnership and its general partner and its general partner’s affiliates will not grant to the Common OP Unitholders, separate and apart from the Aimco Operating Partnership, the right to enforce the obligations of the general partner and such affiliates in favor of the Aimco Operating Partnership. Therefore, the general partner, in its capacity as the general partner of the Aimco Operating Partnership, will be primarily responsible for enforcing such obligations. |
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• | Under the terms of the Aimco Operating Partnership’s agreement of limited partnership, the general partner is not restricted from causing the Aimco Operating Partnership to pay the general partner or its affiliates for any services rendered on terms that are fair and reasonable to the Aimco Operating Partnership or entering into additional contractual arrangements with any of such entities on behalf of the Aimco Operating Partnership. Neither the agreement of limited partnership nor any of the other agreements, contracts and arrangements between the Aimco Operating Partnership, on the one hand, and the general partner and its affiliates, on the other, are or will be the result of arms-length negotiations. |
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• | the general economic climate; | |
• | competition from other apartment communities and other housing options; | |
• | local conditions, such as loss of jobs or an increase in the supply of apartments, that might adversely affect apartment occupancy or rental rates; | |
• | changes in governmental regulations and the related costs of compliance; | |
• | increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents; | |
• | changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multifamily housing; | |
• | changes in interest rates and the availability of financing; and | |
• | the relative illiquidity of real estate investments. |
• | costs may exceed original estimates; | |
• | occupancy and rental rates at the property may be below its projections; | |
• | financing may not be available on favorable terms or at all; | |
• | redevelopment and leasing of the properties may not be completed on schedule; and | |
• | Aimco may experience difficulty or delays in obtaining necessary zoning, land-use, building, occupancy and other governmental permits and authorizations. |
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• | Aimco would be obligated to repurchase certain classes of its preferred stock; and | |
• | Aimco would be in default under its primary credit facilities and certain other loan agreements. |
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• | the transfer will be considered null and void; | |
• | Aimco will not reflect the transaction on its books; | |
• | Aimco may institute legal action to enjoin the transaction; | |
• | Aimco may demand repayment of any dividends received by the affected person on those shares; | |
• | Aimco may redeem the shares; | |
• | the affected person will not have any voting rights for those shares; and | |
• | the shares (and all voting and dividend rights of the shares) will be held in trust for the benefit of one or more charitable organizations designated by Aimco. |
• | may lose control over the power to dispose of such shares; | |
• | may not recognize profit from the sale of such shares if the market price of the shares increases; | |
• | may be required to recognize a loss from the sale of such shares if the market price decreases; and | |
• | may be required to repay to Aimco any distributions received from Aimco as a result of his or her ownership of the shares. |
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• | have at least three directors who are not employees of the entity or related to an acquiring person; and | |
• | are subject to the reporting requirements of the Securities Exchange Act of 1934, may elect in their charter or bylaws or by resolution of the board of directors to be subject to all or part of a special subtitle that provides that: | |
• | the corporation will have a staggered board of directors; | |
• | any director may be removed only for cause and by the vote of two-thirds of the votes entitled to be cast in the election of directors generally, even if a lesser proportion is provided in the charter or bylaws; | |
• | the number of directors may only be set by the board of directors, even if the procedure is contrary to the charter or bylaws; | |
• | vacancies may only be filled by the remaining directors, even if the procedure is contrary to the charter or bylaws; and | |
• | the secretary of the corporation may call a special meeting of stockholders at the request of stockholders only on the written request of the stockholders entitled to cast at least a majority of all the votes entitled to be cast at the meeting, even if the procedure is contrary to the charter or bylaws. |
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Watergate Apartments | $ | 7,216,000 | ||
Shadowood Apartments | $ | 5,043,000 | ||
Terrace Gardens | $ | 7,335,000 | ||
The Bluffs | $ | 8,895,000 | ||
Vista Village Apartments | $ | 6,252,000 | ||
Chapelle Le Grande | $ | 5,089,000 | ||
North Park Apartments | $ | 9,942,000 | ||
Forest Ridge | $ | 16,980,000 |
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Property | Consideration | |||
Casa de Monterey | $ | 18,200,000 | ||
Buena Vista Apartments | $ | 19,028,260 | ||
Crosswood Park Apartments | $ | 15,750,000 | ||
Mountain View Apartments | $ | 30,800,000 | ||
Pathfinder Village Apartments | $ | 34,700,000 | ||
Scotchollow Apartments | $ | 67,800,000 | ||
The Towers of Westchester Park | $ | 43,800,000 |
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• | Casa de Monterey, a144-unit complex in Norwalk, California. Based on the estimates of the Managing General Partner, Casa de Monterey is currently in need of $1,035,240 in capital expenditures to, among other things, repair north wall fence and unit patio fences, add lighting in parking areas, replace natural gas lines, repair a swimming pool deck, repair sidewalks, replace wood walkway columns, replace all catwalks, treat for termites, replace portion of roof, repair roof drains, repair carport footing and replace carport fascia and post, replace hot water boilers, paint the exteriors, replace exterior wooden trim, stripe parking lot, stucco repairs, replace pool furniture, install area drains at mailboxes, replace HVAC units, replace sliding glass doors, and complete refurbishment of unit interiors. Casa de Monterey is encumbered by a senior mortgage |
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loan having an aggregate unpaid balance of approximately $3,656,000 as of September 30, 2006. The principal balance due at maturity for the senior mortgage is approximately $3,479,000. |
• | Buena Vista Apartments, a92-unit complex in Pasadena, California. Based on the estimates of the Managing General Partner, Buena Vista Apartments is currently in need of $402,645 in capital expenditures to, among other things, repair subfloors, replace elevator controllers and code, replace hot water boilers, clear sanitary sewer lines, add lighting in parking areas, replace mailboxes, resurface a swimming pool, repair sidewalks, stripe parking lot, repair gutters and downspouts, replace HVAC and forced air units, upgrade kitchen and bathroom outlets, replace pool furniture, replace sliding glass doors/screens, and complete refurbishment of unit interiors. Buena Vista Apartments is encumbered by a senior mortgage loan having an aggregate unpaid balance of approximately $4,386,000 as of September 30, 2006. The principal balance due at maturity for the senior mortgage is approximately $4,260,000. | |
• | Crosswood Park Apartments, a180-unit complex in Citrus Heights, California. Based on the estimates of the Managing General Partner, Crosswood Park is currently in need of $4,452,299 in capital expenditures to, among other things, replace roof, replace and repair perimeter fencing, replace site lighting, replace landscaping, replace site signage and building numbers, repair water features, repair sidewalks, repair carports, repair wood balconies and stair rails, repair entry landings, replace in-unit laundry room doors, repair/replace wooden siding, replace gutters and downspouts, replace pool furniture, treat for termites, replace fitness equipment, repair parking area paving, stripe parking lot, replace HVAC and forced air units, replace unit hot water heaters, upgrade kitchen and bathroom outlets, replace sliding glass doors/screens, and complete refurbishment of unit interiors. Crosswood Park is encumbered by a senior mortgage loan having an aggregate unpaid balance of approximately $4,930,000 as of September 30, 2006. The principal balance due at maturity for the senior mortgage is approximately $4,788,000. | |
• | Mountain View Apartments, a168-unit complex in San Dimas, California. Based on the estimates of the Managing General Partner, Mountain View Apartments is currently in need of $1,374,679 in capital expenditures to, among other things, replace roofs, replace carport structures, replace hot water boiler, repair south block wall, construct retaining wall, add lighting in parking areas, clear sanitary sewer lines, repair area drains, repair landscape irrigation, resurface and repair a swimming pool and spa, repair sidewalks, replace pool fence, replace playground equipment, replace pool furniture, treat for termites, replace exterior wooden trim, stripe parking lot, replace HVAC and forced air units, upgrade kitchen and bathroom outlets, and complete refurbishment of unit interiors. Mountain View Apartments is encumbered by a senior mortgage loan having an aggregate unpaid balance of approximately $6,338,000 as of September 30, 2006. The principal balance due at maturity for the senior mortgage is approximately $6,154,000. | |
• | Pathfinder Village Apartments, a246-unit complex in Fremont, California. Based on the estimates of the Managing General Partner, Pathfinder Village is currently in need of $4,377,737 in capital expenditures to, among other things, replace roofs, repair roof deck and roof framing, replace and repair perimeter fencing, replace elevators, replace site lighting, paint the exteriors, replace landscaping, replace site signage and building numbers, repair/replace asphalt paving, repair retaining walls, replace water recirculation piping system, clear sanitary sewer lines, repair storm sewer piping, repair swimming pool, replace/repair sidewalks, resurface decking, repair/replace wood balconies and framing, replace fitness equipment, replace balcony railings, replace stair rails, repair stair treads and stringers, conduct full termite remediation, replace gutters and downspouts, repair carports, refurbish and repair laundry rooms, repair utility panel boxes, replace hot water boilers, stripe parking lot, replace AC units, upgrade kitchen and bathroom outlets, and complete refurbishment of unit interiors. Pathfinder Village is encumbered by a senior mortgage loan having an aggregate unpaid balance of approximately $12,030,000 and a junior mortgage loan payable to an affiliate of the Aimco Operating Partnership, having an aggregate unpaid balance of approximately $3,041,000, each as of September 30, 2006. The principal balance due at maturity for the senior mortgage is approximately $11,576,000. | |
• | Scotchollow Apartments, a418-unit complex in San Mateo, California. Based on the estimates of the Managing General Partner, Scotchollow is currently in need of $6,771,062 in capital expenditures to, among other things, replace roofs, repair roof deck and roof framing, repair fencing, replace elevators, replace site |
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lighting, paint the exteriors, replace landscaping and repair landscape irrigation, replace site signage and building numbers, resurface creek and replace pumps, replace asphalt walkways with concrete, repair structural damage to buildings caused by sinkholes, refurbish perimeter carports and convert into garage units, to clear sanitary sewer lines, repair water recirculation piping, resurface and repair swimming pools and spas, repair sidewalks, repair/replace wood balconies, balcony railings, stair rails, stair treads and stringers, treat for termites, replace fitness equipment, replace gutters and downspouts, replace hot water boilers, stripe and power wash parking lot, replace AC units, upgrade kitchen and bathroom outlets, and complete refurbishment of unit interiors. Scotchollow is encumbered by a senior mortgage loan having an aggregate unpaid balance of approximately $26,036,000 and a junior mortgage loan payable to an affiliate of the Aimco Operating Partnership, having an aggregate unpaid balance of approximately $8,961,000, each as of September 30, 2006. The principal balance due at maturity for the senior mortgage is approximately $25,054,000. |
• | The Towers of Westchester Park, a303-unit complex in College Park, Maryland. Based on the estimates of the Managing General Partner, The Towers of Westchester Park is currently in need of $872,328 in capital expenditures to, among other things, clear sanitary sewer lines, repair a swimming pool, repair sidewalks, replace gutters and downspouts, upgrade electrical panels, repair parking area paving, replace windows, repair and replace balconies, resurface decks, and upgrade kitchen and bathroom outlets. The Towers of Westchester Park is encumbered by a senior mortgage loan having an aggregate unpaid balance of approximately $10,730,000 as of September 30, 2006. The principal balance due at maturity for the senior mortgage is approximately $10,420,000. |
• | North Park Apartments, a284-unit complex in Evansville, Indiana. Based on the estimates of the Managing General Partner, North Park Apartments is currently in need of $4,670,980 in capital expenditures to, among other things, repair add lighting in parking areas, clear sanitary sewer lines, repair a swimming pool, replace gutters and downspouts, upgrade electrical panels, repair parking area paving, repair a storm drainage system, resurface tennis courts, trim trees, replace windows, repair and replace balconies, resurface decks, and upgrade kitchen and bathroom outlets. North Park Apartments is encumbered by a senior mortgage loan having an aggregate unpaid balance of approximately $5,587,000 and a junior mortgage loan payable to an affiliate of the Aimco Operating Partnership, having an aggregate unpaid balance of approximately $2,903,000, each as of September 30, 2006. The principal balance due at maturity for the senior mortgage is approximately $5,376,000. | |
• | Chapelle Le Grande, a105-unit complex in Merrillville, Indiana. Based on the estimates of the Managing General Partner, Chapelle Le Grande is currently in need of $487,171 in capital expenditures to, among other things, repair fencing, add lighting in parking areas, clear sanitary sewer lines, repair a swimming pool, repair sidewalks, repair a wood balcony and stair rails, replace gutters and downspouts, repair roofs, upgrade electrical panels, repair parking area paving, resurface tennis courts, trim trees, replace windows, repair and replace balconies, resurface decks, and upgrade kitchen and bathroom outlets. Chapelle Le Grande is encumbered by a senior mortgage loan having an aggregate unpaid balance of approximately $2,867,000 and a junior mortgage loan payable to an affiliate of the Aimco Operating Partnership, having an aggregate unpaid balance of approximately $1,289,000, each as of September 30, 2006. The principal balance due at maturity for the senior mortgage is approximately $2,759,000. | |
• | Terrace Gardens, a126-unit complex in Omaha, Nebraska. Based on the estimates of the Managing General Partner, Terrace Gardens is currently in need of $3,518,890 in capital expenditures to, among other things, repair fencing, clear sanitary sewer lines, repair a swimming pool, repair sidewalks, repair a wood balcony and stair rails, replace gutters and downspouts, repair roofs, upgrade electrical panels, repair parking area paving, repair a storm drainage system, resurface tennis courts, trim trees, replace windows, repair and replace balconies, resurface decks, and upgrade kitchen and bathroom outlets. Terrace Gardens is encumbered by a senior mortgage loan having an aggregate unpaid balance of approximately $3,968,000 and a junior mortgage loan payable to an affiliate of the Aimco Operating Partnership, having an aggregate unpaid |
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balance of approximately $1,469,000, each as of September 30, 2006. The principal balance due at maturity for the senior mortgage is approximately $3,818,000. |
• | Forest Ridge Apartments, a278-unit complex in Flagstaff, Arizona. Based on the estimates of the Managing General Partner, Forest Ridge Apartments is currently in need of $1,175,736 in capital expenditures to, among other things, repair fencing, add lighting in parking areas, clear sanitary sewer lines, repair a swimming pool, repair sidewalks, repair a wood balcony and stair rails, treat for termites, replace gutters and downspouts, repair roofs, upgrade electrical panels, repair parking area paving, repair a storm drainage system, trim trees, replace windows, repair and replace balconies, resurface decks, and upgrade kitchen and bathroom outlets. Forest Ridge Apartments is encumbered by a senior mortgage loan having an aggregate unpaid balance of approximately $5,272,000 and a junior mortgage loan payable to an affiliate of the Aimco Operating Partnership, having an aggregate unpaid balance of approximately $361,000, each as of September 30, 2006. The principal balance due at maturity for the senior mortgage is approximately $5,073,000. | |
• | The Bluffs, a137-unit complex in Milwaukee, Oregon. Based on the estimates of the Managing General Partner, The Bluffs is currently in need of $630,921 in capital expenditures to, among other things, repair fencing, add lighting in parking areas, clear sanitary sewer lines, repair a swimming pool, repair sidewalks, repair a wood balcony and stair rails, replace gutters and downspouts, repair roofs, upgrade electrical panels, repair parking area paving, trim trees, replace windows, repair and replace balconies, resurface decks, and upgrade kitchen and bathroom outlets. The Bluffs is encumbered by a senior mortgage loan having an aggregate unpaid balance of approximately $3,304,000 and a junior mortgage loan payable to an affiliate of the Aimco Operating Partnership, having an aggregate unpaid balance of approximately $1,434,000, each as of September 30, 2006. The principal balance due at maturity for the senior mortgage is approximately $3,202,000. | |
• | Watergate Apartments, a140-unit complex in Little Rock, Arkansas. Based on the estimates of the Managing General Partner, Watergate Apartments is currently in need of $775,600 in capital expenditures to, among other things, add lighting in parking areas, repair a swimming pool, repair sidewalks, replace gutters and downspouts, repair roofs, upgrade electrical panels, replace windows, resurface decks, and upgrade kitchen and bathroom outlets. Watergate Apartments is encumbered by a senior mortgage loan having an aggregate unpaid balance of approximately $2,590,000 and a junior mortgage loan payable to an affiliate of the Aimco Operating Partnership, having an aggregate unpaid balance of approximately $811,000, each as of September 30, 2006. The principal balance due at maturity for the senior mortgage is approximately $2,492,000. | |
• | Shadowood Apartments, a120-unit complex in Monroe, Louisiana. Based on the estimates of the Managing General Partner, Shadowood Apartments is currently in need of $380,745 in capital expenditures to, among other things, add lighting in parking areas, clear sanitary sewer lines, repair a swimming pool, repair roofs, upgrade electrical panels, repair a storm drainage system, replace windows, resurface decks, and upgrade kitchen and bathroom outlets. Shadowood Apartments is encumbered by a senior mortgage loan having an aggregate unpaid balance of approximately $2,012,000 as of September 30, 2006. The principal balance due at maturity for the senior mortgage is approximately $1,936,000. | |
• | Vista Village Apartments, a220-unit complex in El Paso, Texas. Based on the estimates of the Managing General Partner, Vista Village Apartments is currently in need of $1,174,464 in capital expenditures to, among other things, repair chain link fencing, add lighting in parking areas, repair a swimming pool, repair sidewalks, repair wood fences, repair a wood balcony and stair rails, treat for termites, repair roofs, upgrade electrical panels, repair parking area paving, repair a storm drainage system, replace windows, repair and replace balconies, resurface decks, and upgrade kitchen and bathroom outlets. Vista Village Apartments is encumbered by a senior mortgage loan having an aggregate unpaid balance of approximately $2,968,000 and a junior mortgage loan payable to an affiliate of the Aimco Operating Partnership, having an aggregate unpaid balance of approximately $1,423,000, each as of September 30, 2006. The principal balance due at maturity for the senior mortgage is approximately $2,856,000. |
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Number | Percentage of | |||||||||||
of | Outstanding | Number of | ||||||||||
Year | Units | Units | Transactions | |||||||||
2002 | 53.75 | 8.35 | % | 76 | ||||||||
2003 | 3 | .47 | % | 6 | ||||||||
2004 | 2 | .31 | % | 3 | ||||||||
2005 | 4 | .62 | % | 11 | ||||||||
2006 | 2 | .31 | % | 2 |
Number | Percentage of | |||||||||||
of | Outstanding | Number of | ||||||||||
Year | Units | Units | Transactions | |||||||||
2002 | 28.5833 | 10.71 | % | 33 | ||||||||
2003 | 4 | 1.5 | % | 3 | ||||||||
2004 | .5 | .19 | % | 1 | ||||||||
2005 | 1.5 | .56 | % | 2 | ||||||||
2006 | 0 | 0 | 0 |
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Partnership | ||||||||||||
Fees, | Property | |||||||||||
Expense and | Management | |||||||||||
Year | Interest(1) | Fees | Total | |||||||||
2002 | $ | 4,750,000 | $ | 1,289,000 | $ | 6,039,000 | ||||||
2003 | 3,973,000 | 1,253,000 | 5,222,000 | |||||||||
2004 | 3,855,000 | 1,201,000 | 5,056,000 | |||||||||
2005 | 4,507,000 | 1,278,000 | 5,785,000 | |||||||||
2006 (through September 30 unaudited) | 4,224,000 | 1,024,000 | 5,248,000 |
(1) | Excludes amortization of the mortgage participation liability. See “Selected Financial Information of VMS” for more information. |
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For the Nine Months Ended | For the Year Ended | |||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||
Operating Data: | 2006 | 2005 | 2005 | 2004 | 2003 | |||||||||||||||
(In thousands, except per unit data) | ||||||||||||||||||||
Total Revenues | $ | 26,696 | $ | 24,420 | $ | 33,053 | $ | 30,574 | $ | 31,531 | ||||||||||
Loss from Continuing Operations | (15,776 | ) | (7,166 | ) | (9,455 | ) | (9,202 | ) | (7,134 | ) | ||||||||||
Net loss | (15,776 | ) | (7,166 | ) | (9,455 | ) | (9,202 | ) | (7,134 | ) | ||||||||||
Loss from Continuing Operations per NRP I unit | (16,970 | ) | (7,710 | ) | (10,171 | ) | (9,899 | ) | (7,674 | ) | ||||||||||
Loss from Continuing Operations per NRP II unit | (16,970 | ) | (7,708 | ) | (10,172 | ) | (9,898 | ) | (7,674 | ) | ||||||||||
Net loss per NRP I unit | (16,970 | ) | (7,710 | ) | (10,171 | ) | (9,899 | ) | (7,674 | ) | ||||||||||
Net loss per NRP II unit | (16,970 | ) | (7,708 | ) | (10,172 | ) | (9,898 | ) | (7,674 | ) | ||||||||||
Distributions per NRP I unit | — | — | — | — | — | |||||||||||||||
Distributions per NRP II unit | — | — | — | — | — | |||||||||||||||
Deficit of earnings to fixed charges | $ | (15,744 | ) | $ | (7,188 | ) | $ | (9,473 | ) | $ | (9,202 | ) | $ | (7,146 | ) | |||||
Balance Sheet Data: | ||||||||||||||||||||
Cash and Cash Equivalents | $ | 1,864 | $ | 2,136 | $ | 2,419 | $ | 2,064 | $ | 1,761 | ||||||||||
Real Estate, Net of Accumulated Depreciation | 46,250 | 49,525 | 49,024 | 49,354 | 53,059 | |||||||||||||||
Total Assets | 51,975 | 56,119 | 54,823 | 55,279 | 58,010 | |||||||||||||||
Mortgage Notes Payable | 117,704 | (1) | 120,514 | (2) | 120,561 | (3) | 121,992 | (4) | 124,242 | (5) | ||||||||||
Mortgage Participation Liability(6) | 39,742 | 23,864 | 25,505 | 19,265 | 13,732 | |||||||||||||||
Notes Payable(7) | 42,060 | 42,060 | 42,060 | 42,060 | 42,060 | |||||||||||||||
Deferred Gain on Extinguishment of Debt(8) | 42,225 | 42,225 | 42,225 | 42,225 | 42,225 | |||||||||||||||
VMS National Residential Portfolio I: | ||||||||||||||||||||
General Partners’ Deficit | (4,229 | ) | (3,973 | ) | (4,006 | ) | (3,872 | ) | (3,742 | ) | ||||||||||
Limited Partners’ Deficit | (141,667 | ) | (129,153 | ) | (130,738 | ) | (124,188 | ) | (117,813 | ) | ||||||||||
Partners’ Deficit | (145,896 | ) | (133,126 | ) | (134,744 | ) | (128,060 | ) | (121,555 | ) |
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For the Nine Months Ended | For the Year Ended | |||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||
Operating Data: | 2006 | 2005 | 2005 | 2004 | 2003 | |||||||||||||||
(In thousands, except per unit data) | ||||||||||||||||||||
VMS National Residential Portfolio II: | ||||||||||||||||||||
General Partners’ Deficit | (1,768 | ) | (1,662 | ) | (1,675 | ) | (1,620 | ) | (1,566 | ) | ||||||||||
Limited Partners’ Deficit | (59,430 | ) | (54,241 | ) | (54,899 | ) | (52,183 | ) | (49,540 | ) | ||||||||||
Partners’ Deficit | (61,198 | ) | (55,903 | ) | (56,574 | ) | (53,803 | ) | (51,106 | ) | ||||||||||
Total Partners’ Deficit | $ | (207,094 | ) | $ | (189,029 | ) | $ | (191,318 | ) | $ | (181,863 | ) | $ | (172,661 | ) | |||||
Total Distributions | — | — | — | — | — | |||||||||||||||
Book value per NRP I unit | $ | (219,980 | ) | $ | (200,548 | ) | $ | (203,009 | ) | $ | (192,839 | ) | $ | (182,939 | ) | |||||
Book value per NRP II unit | $ | (222,584 | ) | $ | (203,150 | ) | $ | (205,614 | ) | $ | (195,442 | ) | $ | (185,543 | ) | |||||
Cash Flow Data: | ||||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | $ | (555 | ) | $ | 72 | $ | 355 | $ | 303 | $ | (1,048 | ) | ||||||||
Net cash provided by operating activities | 5,254 | 3,442 | 6,257 | 5,003 | 6,387 |
(1) | Includes junior mortgages of $21,498 due to an affiliate | |
(2) | Includes junior mortgages of $22,104 due to an affiliate | |
(3) | Includes junior mortgages of $22,674 due to an affiliate | |
(4) | Includes junior mortgages of $22,123 due to an affiliate | |
(5) | Includes junior mortgages of $22,521 due to an affiliate | |
(6) | Represents 50% of the excess of the estimated fair market value of the Properties after payment of certain claims. See VMS’sForm 10-Q for the period ended September 30, 2006 andForm 10-K for the year ended December 31, 2005 for further information. | |
(7) | Represents amounts due to holders of theClass 3-C Claim under the Bankruptcy Plan. See VMS’sForm 10-Q for the period ended September 30, 2006 andForm 10-K for the year ended December 31, 2005 for further information. | |
(8) | Represents the difference between the face amount ($152,225) and agreed valuation ($110,000) of the senior mortgages encumbering the properties. This amount will become due if the Venture cannot repay the agreed valuation amount upon maturity. See VMS’sForm 10-Q for the period ended September 30, 2006 andForm 10-K for the year ended December 31, 2005 for further information. |
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Total Portfolio | ||||||||
Properties | Units | |||||||
Consolidated properties (of which Aimco manages 166,802 units) | 721 | 167,305 | ||||||
Unconsolidated properties (of which Aimco manages 8,799 units) | 109 | 14,644 | ||||||
Property managed for third parties | 42 | 3,610 | ||||||
Asset managed for third parties | 418 | 39,278 | ||||||
Total | 1,290 | 224,837 | ||||||
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• | the sum of: |
• | the sum of certain items of noncash income. |
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Class | Interests Outstanding | |||
Partnership Common Units | 103,705,873 | |||
Class G Partnership Preferred Units | 4,050,000 | |||
Class T Partnership Preferred Units | 6,000,000 | |||
Class U Partnership Preferred Units | 8,000,000 | |||
Class V Partnership Preferred Units | 3,450,000 | |||
Class W Partnership Preferred Units | 1,904,762 | |||
Class Y Partnership Preferred Units | 3,450,000 | |||
Class One Partnership Preferred Units | 90,000 | |||
Class Two Partnership Preferred Units | 52,718 | |||
Class Three Partnership Preferred Units | 1,464,173 | |||
Class Four Partnership Preferred Units | 755,999 | |||
Class Five Partnership Preferred Units | 68,671 | |||
Class Six Partnership Preferred Units | 802,453 | |||
Class Seven Partnership Preferred Units | 27,960 | |||
Class Eight Partnership Preferred Units | 6,250 | |||
Class I High Performance Partnership Units | 2,379,084 | |||
Class VII High Performance Partnership Units | 4,109 | |||
Class VIII High Performance Partnership Units | 5,000 | |||
Series A Community Reinvestment Act Perpetual Preferred Units | 200 | |||
Class IX High Performance Partnership Units | 5,000 |
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• | one-tenth or more but less than one-third; | |
• | one-third or more but less than a majority; or | |
• | a majority or more of all voting power. |
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Your Partnership | Aimco Operating Partnership | |
Form of Organization and Assets Owned | ||
Your Partnership is a limited partnership organized under Illinois law. VMS is a general partnership organized under Illinois law. | The Aimco Operating Partnership is organized as a Delaware limited partnership. The Aimco Operating Partnership owns interests (either as a Delaware limited partnership directly or through subsidiaries) in numerous multifamily apartment properties. The Aimco Operating Partnership conducts substantially all of the operations of Aimco, a corporation organized under Maryland and as a REIT. | |
Duration of Existence | ||
Your Partnership was presented to limited partners as a finite life investment, with limited partners to receive regular cash distributions out of your partnership’s profits and losses. The termination date of your partnership is December 31, 2030. The termination date of VMS is September 26, 2044. If VMS cannot refinance or repay its indebtedness at or prior to maturity on January 1, 2008, your partnership and VMS will be required to sell the Properties and liquidate under the VMS plan of reorganization. | The term of the Aimco Operating Partnership continues indefinitely, unless the Aimco Operating Partnership is dissolved sooner pursuant to the terms of the Aimco Operating Partnership Agreement or as provided by law. | |
Purpose and Permitted Activities | ||
Your Partnership was formed for the purpose of serving as general partner of VMS. VMS was formed for the purpose of making investments in various types of real properties which offer potential capital appreciation and cash distributions to its limited partners. | The purpose of the Aimco Operating Partnership is to conduct any business that may be lawfully conducted by a limited partnership organized pursuant to the Delaware LP Act, provided that such business is to be conducted in a manner that permits Aimco to be qualified as a REIT, unless Aimco ceases to qualify as a REIT. The Aimco Operating Partnership is authorized to perform any and all acts for the furtherance of the purposes and business of the Aimco Operating Partnership, provided that the Aimco Operating Partnership may not take, or refrain from taking, any action which, in the judgment of its general partner could (i) adversely affect the ability of Aimco to continue to qualify as a REIT, (ii) subject Aimco to certain income and excise taxes, or (iii) violate any law or regulation of any governmental body or agency (unless such action, or inaction, is specifically consented to by Aimco). Subject to the foregoing, the Aimco Operating Partnership may invest in or enter into partnerships, joint ventures, or similar arrangements. The Aimco Operating Partnership currently invests, and intends to continue to invest, in a real estate portfolio primarily consisting of multifamily rental apartment properties. |
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Your Partnership | Aimco Operating Partnership | |
Additional Equity | ||
The Managing General Partner of your Partnership is authorized to issue additional limited partnership interests in your Partnership and may admit additional limited partners up to an aggregate capital contribution of $136,800,000 by all limited partners of the Partnerships. The capital contribution need not be equal for all limited partners. | The general partner is authorized to issue additional partnership interests in the Aimco Operating Partnership for any partnership purpose from time to time to the limited partners and to other persons, and to admit such other persons as additional limited partners, on terms and conditions and for such capital contributions as may be established by the general partner in its sole discretion. The net capital contribution need not be equal for all OP Unitholders. No action or consent by the Common OP Unitholders is required in connection with the admission of any additional OP Unitholder. Subject to Delaware law, any additional partnership interests may be issued in one or more classes, or one or more series of any of such classes, with such designations, preferences and relative, participating, optional or other special rights, powers and duties as shall be determined by the general partner, in its sole and absolute discretion without the approval of any OP Unitholder, and set forth in a written document thereafter attached to and made an exhibit to the Aimco Operating Partnership Agreement. | |
Restrictions Upon Related Party Transactions | ||
Except for loans made by your Managing General Partner or its affiliates to your Partnership, your agreement of limited partnership does not restrict related party transactions. | The Aimco Operating Partnership may lend or contribute funds or other assets to its subsidiaries or other persons in which it has an equity investment, and such persons may borrow funds from the Aimco Operating Partnership, on terms and conditions established in the sole and absolute discretion of the general partner. To the extent consistent with the business purpose of the Aimco Operating Partnership and the permitted activities of the general partner, the Aimco Operating Partnership may transfer assets to joint ventures, limited liability companies, partnerships, corporations, business trusts or other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions consistent with the Aimco Operating Partnership Agreement and applicable law as the general partner, in its sole and absolute discretion, believes to be advisable. Except as expressly permitted by the Aimco Operating Partnership Agreement, neither the general partner nor any of its affiliates may sell, transfer or convey any property to the Aimco Operating Partnership, directly or indirectly, except pursuant to transactions that are determined by the general partner in good faith to be fair and reasonable. | |
Borrowing Policies | ||
The Managing General Partner of your Partnership is authorized to borrow money in the ordinary course of business and as security therefor to mortgage all or any part of the Properties in addition to obtaining | The Aimco Operating Partnership Agreement contains no restrictions on borrowings, and the general partner has full power and authority to borrow money on behalf of the Aimco Operating Partnership. The Aimco Operating Partnership has credit agreements |
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Your Partnership | Aimco Operating Partnership | |
loans specifically provided for in your Partnership’s agreement of limited partnership. | that restrict, among other things, its ability to incur indebtedness. | |
Review of Investor Lists | ||
Your Partnership’s agreement of limited partnership entitles the limited partners to have access to the current list of the names and addresses of all limited partners at all reasonable times at the principal office of your Partnership. | Each Common OP Unitholder has the right, upon written demand with a statement of the purpose of such demand and at such Common OP Unitholder’s own expense, to obtain a current list of the name and last known business, residence or mailing address of the general partner and each other Common OP Unitholder. | |
Management Control | ||
Subject to the limitations set forth under applicable law and the terms of your Partnership’s agreement of limited partnership, the Managing General Partner of your Partnership has the power to do all things set forth in your Partnership’s agreement of limited partnership. The Managing General Partner represents your Partnership in all transactions with third parties. No limited partner has any right or power to take part in any way in the management of your Partnership business except as may be expressly provided in your Partnership’s agreement of limited partnership or by applicable statutes. | All management powers over the business and affairs of the Aimco Operating Partnership are vested in AIMCO-GP, Inc., which is the general partner. No Common OP Unitholder has any right to participate in or exercise control or management power over the business and affairs of the Aimco Operating Partnership. The Common OP Unitholders have the right to vote on certain matters described below. The general partner may not be removed by the OP Unitholders with or without cause. In addition to the powers granted a general partner of a limited partnership under applicable law or that are granted to the general partner under any other provision of the Aimco Operating Partnership Agreement, the general partner, subject to the other provisions of the Aimco Operating Partnership Agreement, has full power and authority to do all things deemed necessary or desirable by it to conduct the business of the Aimco Operating Partnership, to exercise all powers of the Aimco Operating Partnership and to effectuate the purposes of the Aimco Operating Partnership. The Aimco Operating Partnership may incur debt or enter into other similar credit, guarantee, financing or refinancing arrangements for any purpose upon such terms as the general partner determines to be appropriate, and may perform such other acts and duties for and on behalf of the Aimco Operating Partnership as are provided in the Aimco Operating Partnership Agreement. The general partner is authorized to execute, deliver and perform certain agreements and transactions on behalf of the Aimco Operating Partnership without any further act, approval or vote of the OP Unitholders. | |
Management Liability and Indemnification | ||
Under your Partnership’s agreement of limited partnership, the Managing General Partner will not incur any liability to your Partnership or any other partner for any mistakes or errors in judgment or for any act or omission believed by it in good faith to be within the scope of authority conferred upon it by your Partnership’s agreement of limited partnership. In addition, your Partnership will, to the extent permitted by law, indemnify the Managing General Partner against and from any personal loss, liability | Notwithstanding anything to the contrary set forth in the Aimco Operating Partnership Agreement, the general partner is not liable to the Aimco Operating Partnership for losses sustained, liabilities incurred or benefits not derived as a result of errors in judgment or mistakes of fact or law of any act or omission if the general partner acted in good faith. The Aimco Operating Partnership Agreement provides for indemnification of Aimco, or any director or officer of Aimco (in its capacity as the previous general |
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Your Partnership | Aimco Operating Partnership | |
(including attorneys’ fees) or damage incurred by it as the result of any act or omission in its capacity as managing general partner unless such loss, liability or damage results from fraud, malfeasance, bad faith, breach of fiduciary duty, gross negligence or intentional misconduct of the Managing General Partner. | partner of the Aimco Operating Partnership), the general partner, any officer or director of the general partner or the Aimco Operating Partnership and such other persons as the general partner may designate from and against all losses, claims, damages, liabilities, joint or several, expenses (including legal fees), fines, settlements and other amounts incurred in connection with any actions relating to the operations of the Aimco Operating Partnership, as set forth in the Aimco Operating Partnership Agreement. The Delaware LP Act provides that subject to the standards and restrictions, if any, set forth in its partnership agreement, a limited partnership may, and shall have the power to, indemnify and hold harmless any partner or other person from and against any and all claims and demands whatsoever. It is the position of the SEC and certain state securities administrations that indemnification of directors and officers for liabilities arising under the Securities Act of 1933 is against public policy and is unenforceable pursuant to Section 14 of the Securities Act of 1933 and their respective state securities laws. | |
Anti-Takeover Provisions | ||
Under your Partnership’s agreement of limited partnership, the limited partners may remove a general partner for cause following written notice to the general partner and upon a vote of the limited partners owning 50% or more of the outstanding units. A limited partner may not transfer his interests without the written consent of the general partner which may be withheld at the sole discretion of the general partner. | Except in limited circumstances, the general partner has exclusive management power over the business and affairs of the Aimco Operating Partnership. The general partner may not be removed as general partner of the Aimco Operating Partnership by the OP Unitholders with or without cause. Under the Aimco Operating Partnership Agreement, the general partner may, in its sole discretion, prevent a transferee of a Common OP Unit from becoming a substituted limited partner pursuant to the Aimco Operating Partnership Agreement. The general partner may exercise this right of approval to deter, delay or hamper attempts by persons to acquire a controlling interest in the Aimco Operating Partnership. Additionally, the Aimco Operating Partnership Agreement contains restrictions on the ability of Common OP Unitholders to transfer their Common OP Units. | |
Amendment of Your Partnership Agreement | ||
The Managing General Partner may, and, at the request of a limited partner owning at least 10% of the units, shall, submit any proposed amendment to your partnership agreement. The Managing General Partner may include its recommendation as to such proposal. Limited partners owning 51% or more of the units must approve any proposed amendment, except that any amendment that causes a reduction in the limited partners’ rights and interests requires the consent of limited partners owning 100% of the units. | With the exception of certain circumstances set forth in the Aimco Operating Partnership Agreement, whereby the general partner may, without the consent of the Common OP Unitholders, amend the Aimco Operating Partnership Agreement, amendments to the Aimco Operating Partnership Agreement require the consent of the holders of a majority of the outstanding Common OP Units, excluding Aimco and certain other limited exclusions (a “Majority in Interest”). Amendments to the Aimco Operating Partnership Agreement may be proposed by the general partner or by holders of a Majority in Interest. Following such proposal, the general partner will submit any proposed amendment to the OP |
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Your Partnership | Aimco Operating Partnership | |
Unitholders. The general partner will seek the written consent of the OP Unitholders on the proposed amendment or will call a meeting to vote thereon. | ||
Compensation and Fees | ||
In addition to the right to distributions in respect of its partnership interest and reimbursement forout-of-pocket expenses as set forth in your Partnership’s agreement of limited partnership, the Managing General Partner and its affiliates may receive fees for services rendered to your Partnership or VMS. | The general partner does not receive compensation for its services as general partner of the Aimco Operating Partnership. However, the general partner is entitled to payments, allocations and distributions in its capacity as general partner of the Aimco Operating Partnership. In addition, the Aimco Operating Partnership is responsible for all expenses incurred relating to the Aimco Operating Partnership’s ownership of its assets and the operation of the Aimco Operating Partnership and reimburses the general partner for such expenses paid by the general partner. The employees of the Aimco Operating Partnership receive compensation for their services. | |
Liability of Investors | ||
Under your Partnership’s agreement of limited partnership, the liability of each of the limited partners for its share of the losses or debts of your Partnership is limited to the total capital contribution of such limited partner. | Except for fraud, willful misconduct or gross negligence, no OP Unitholder has personal liability for the Aimco Operating Partnership’s debts and obligations, and liability of the OP Unitholders for the Aimco Operating Partnership’s debts and obligations is generally limited to the amount of their investment in the Aimco Operating Partnership. However, the limitations on the liability of limited partners for the obligations of a limited partnership have not been clearly established in some states. If it were determined that the Aimco Operating Partnership had been conducting business in any state without compliance with the applicable limited partnership statute, or that the right or the exercise of the right by the holders of Common OP Units as a group to make certain amendments to the Aimco Operating Partnership Agreement or to take other action pursuant to the Aimco Operating Partnership Agreement constituted participation in the “control” of the Aimco Operating Partnership’s business, then a holder of Common OP Units could be held liable under certain circumstances for the Aimco Operating Partnership’s obligations to the same extent as the general partner. | |
Fiduciary Duties | ||
Under your Partnership’s agreement of limited partnership, the Managing General Partner must act as a fiduciary with respect of the assets and business of the Partnership. The Managing General Partner must use its best efforts to do all things and perform such duties as may be reasonably necessary to the successful operation of your Partnership. The Managing General Partner must devote such of its time to your Partnership business as may be reasonably necessary to carry on and conduct your Partnership’s business. However, except as | Unless otherwise provided for in the relevant partnership agreement, Delaware law generally requires a general partner of a Delaware limited partnership to adhere to fiduciary duty standards under which it owes its limited partners the highest duties of good faith, fairness and loyalty and which generally prohibit such general partner from taking any action or engaging in any transaction as to which it has a conflict of interest. The Aimco Operating Partnership Agreement expressly authorizes the general partner to enter into, on behalf of the Aimco |
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Your Partnership | Aimco Operating Partnership | |
specifically provided in your Partnership’s agreement of limited partnership, the partners may engage in whatever activities they choose, whether the same be competitive with your Partnership or otherwise, including without limitation, the acquisition, ownership, financing, syndication, development, improvement, leasing, operation, management and brokerage of real property. In general, your partnership’s agreement of limited partnership and the Aimco Operating Partnership Agreement have limitations on general partners but such limitations differ and provide more protection for the general partner of the Aimco Operating Partnership. | Operating Partnership, a right of first opportunity arrangement and other conflict avoidance agreements with various affiliates of the Aimco Operating Partnership and the general partner, on such terms as the general partner, in its sole and absolute discretion, believes are advisable. The Aimco Operating Partnership Agreement expressly limits the liability of the general partner by providing that the general partner, and its officers and directors will not be liable or accountable in damages to the Aimco Operating Partnership, the limited partners or assignees for errors in judgment or mistakes of fact or law or of any act or omission if the general partner or such director or officer acted in good faith. | |
United States Federal Income Taxation | ||
In general, there are no material differences between the taxation of your Partnership and the Aimco Operating Partnership. | The Aimco Operating Partnership is not subject to federal income taxes. Instead, each holder of Common OP Units includes in income its allocable share of the Aimco Operating Partnership’s taxable income or loss when it determines its individual Federal income tax liability. Income and loss from the Aimco Operating Partnership may be subject to the passive activity limitations. If an investment in a Common OP Unit is treated as a passive activity, income and loss from the Aimco Operating Partnership generally can be offset against income and loss from other investments that constitute “passive activities” (unless the Aimco Operating Partnership is considered a “publicly traded partnership”, in which case income and loss from the Aimco Operating Partnership can only be offset against other income and loss from the Aimco Operating Partnership). Income of the Aimco Operating Partnership, however, attributable to dividends from the management subsidiaries or interest paid by the management subsidiaries does not qualify as passive activity income and cannot be offset against losses from “passive activities.” Cash distributions by the Aimco Operating Partnership are not taxable to a holder of Common OP Units except to the extent they exceed such Partner’s basis in its interest in the Aimco Operating Partnership (which will include such Common OP Unitholder’s allocable share of the Aimco Operating Partnership’s nonrecourse debt). Each year, OP Unitholders receive aSchedule K-1 tax form containing tax information for inclusion in preparing their federal income tax returns. OP Unitholders are required, in some cases, to file state income tax returnsand/or pay state income taxes in the states in which the Aimco Operating Partnership owns property or transacts business, even if they are not residents of those states. The Aimco Operating Partnership may be required to pay state income taxes in certain states. |
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Your Units | Common OP Units | |
Nature of Investment | ||
The partnership interests in your Partnership constitute equity interests entitling each partner to its pro rata share of distributions to be made to the partners of your Partnership. | The Common OP Units constitute equity interests entitling each Common OP Unitholder to such partner’s pro rata share of cash distributions made from Available Cash (as such term is defined in the Aimco Operating Partnership Agreement) to the partners of the Aimco Operating Partnership. To the extent the Aimco Operating Partnership sells or refinances its assets, the net proceeds therefrom generally will be retained by the Aimco Operating Partnership for working capital and new investments rather than being distributed to the Common OP Unitholders (including Aimco). | |
Voting Rights | ||
Under your Partnership’s agreement of limited partnership, upon the vote of the limited partners owning 51% or more of the outstanding units, the limited partners may approve most amendments of your Partnership’s agreement of limited partnership. A general partner may cause the dissolution of your Partnership by retiring. In such event, the limited partners holding more than 50% of the outstanding units may, within sixty days of such occurrence, vote to continue the business of your Partnership. If no general partner remains in office, all of the limited partners may elect to reform your Partnership and elect a successor general partner whereupon your Partnership will be dissolved and all of the assets and liabilities of your Partnership will be contributed to a new partnership and all parties to your Partnership’s agreement of limited partnership will become parties to such new partnership. In general, you have greater voting rights in your Partnership than you will have as a Common OP Unitholder. OP Unitholders cannot remove the general partner of the Aimco Operating Partnership. | Under the Aimco Operating Partnership Agreement, the Common OP Unitholders have voting rights only with respect to certain limited matters such as certain amendments and termination of the Aimco Operating Partnership Agreement and certain transactions such as the institution of bankruptcy proceedings, an assignment for the benefit of creditors and certain transfers by the general partner of its interest in the Aimco Operating Partnership or the admission of a successor general partner. Under the Aimco Operating Partnership Agreement, the general partner has the power to effect the acquisition, sale, transfer, exchange or other disposition of any assets of the Aimco Operating Partnership (including, but not limited to, the exercise or grant of any conversion, option, privilege or subscription right or any other right available in connection with any assets at any time held by the Aimco Operating Partnership) or the merger, consolidation, reorganization or other combination of the Aimco Operating Partnership with or into another entity, all without the consent of the OP Unitholders. The general partner may cause the dissolution of the Aimco Operating Partnership by an “event of withdrawal,” as defined in the Delaware LP Act (including, without limitation, bankruptcy), unless, within 90 days after the withdrawal, holders of a “majority in interest,” as defined in the Delaware LP Act, agree in writing, in their sole and absolute discretion, to continue the business of the Aimco Operating Partnership and to the appointment of a successor general partner. The general partner may elect to dissolve the Aimco Operating Partnership in its sole and absolute discretion, with or without the consent of the OP Unitholders. OP Unitholders cannot remove the general partner of the Aimco Operating Partnership with or without cause. |
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Your Units | Common OP Units | |
Distributions | ||
Your Partnership’s agreement of limited partnership specifies how the cash available for distribution, whether arising from operations or sales or refinancing, is to be shared among the partners. Distributions will be made at least quarterly. The distributions payable to the partners are not fixed in amount and depend upon the operating results and net sales or refinancing proceeds available from the disposition of your Partnership’s assets. Your Partnership has made no distributions in the past and is not projected to make distributions in 2006. All of the cash flow from your Partnership is currently dedicated to the payment of operating expenses, capital expenditures and debt service. | Subject to the rights of holders of any outstanding Preferred OP Units, the Aimco Operating Partnership Agreement requires the general partner to cause the Aimco Operating Partnership to distribute quarterly all, or such portion as the general partner may in its sole and absolute discretion determine, of Available Cash (as defined in the Aimco Operating Partnership Agreement) generated by the Aimco Operating Partnership during such quarter to the general partner, AIMCO-LP and the holders of Common OP Units on the record date established by the general partner with respect to such quarter, in accordance with their respective interests in the Aimco Operating Partnership on such record date. Holders of any other Preferred OP Units issued in the future may have priority over the general partner, AIMCO-LP and holders of Common OP Units with respect to distributions of Available Cash, distributions upon liquidation or other distributions. The general partner in its sole and absolute discretion may distribute to the OP Unitholders Available Cash on a more frequent basis and provide for an appropriate record date. The Aimco Operating Partnership Agreement requires the general partner to take such reasonable efforts, as determined by it in its sole and absolute discretion and consistent with Aimco’s qualification as a REIT, to cause the Aimco Operating Partnership to distribute sufficient amounts to enable the general partner to transfer funds to Aimco and enable Aimco to pay stockholder dividends that will (i) satisfy the requirements for qualifying as a REIT under the Internal Revenue Code and the Treasury Regulations and (ii) avoid any United States federal income or excise tax liability of Aimco. | |
Liquidity and Transferability/Redemption Rights | ||
A limited partner may transfer his units to any person and such person will become a substitute limited partner if: (1) a written assignment has been duly executed and acknowledged by the assignor and assignee and delivered to the Managing General Partner, (2) the approval of the Managing General Partner, which may be withheld in its sole discretion and which will be withheld if the transfer would result in the termination of your Partnership for tax purposes, (3) the assignee has agreed to be bound by all of the terms of your Partnership’s agreement of limited partnership and absolute discretion of the Managing General Partner has been granted, (4) the assignee represents he is a citizen and resident of the U.S. and that he is not acquiring the interest with a view to resell the interest, and (5) the assignor and assignee have complied with such other conditions as set forth in your Partnership’s agreement of limited partnership. There are no redemption rights associated with your units. | There is no public market for the Common OP Units. The Aimco Operating Partnership Agreement restricts the transferability of the Common OP Units. Until the expiration of one year from the date on which a Common OP Unitholder acquired Common OP Units, subject to certain exceptions, such Common OP Unitholder may not transfer all or any portion of its Common OP Units to any transferee without the consent of the general partner, which consent may be withheld in its sole and absolute discretion. After the expiration of one year, such OP Unitholder has the right to transfer all or any portion of its Common OP Units to any person, subject to the satisfaction of certain conditions specified in the Aimco Operating Partnership Agreement, including the general partner’s right of first refusal. Generally, after a holding period of twelve months, holders of Common OP Units may redeem such units for Class A Common stock or cash, at the option of the Aimco Operating Partnership. |
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Information Agent Fees | $ | 1,000 | ||
Printing Fees | 10,000 | |||
Postage Fees | 5,300 | |||
Tax and Accounting Fees | 400,000 | |||
Legal Fees | 400,000 | |||
Total | $ | 816,300 |
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• | annual report onForm 10-K for the fiscal year ended December 31, 2005, filed on March 31, 2006. | |
• | quarterly report onForm 10-Q for the quarterly period ended March 31, 2006, filed on May 12, 2006. | |
• | quarterly report onForm 10-Q for the quarterly period ended June 30, 2006, filed on August 14, 2006. | |
• | quarterly report onForm 10-Q for the quarterly period ended September 30, 2006, filed on November 14, 2006. |
• | current reports onForm 8-K filed on August 25, 2006, September 27, 2006, November 28, 2006, December 4, 2006, December 8, 2006, December 15, 2006, December 18, 2006, December 20, 2006, January 3, 2007, and January 9, 2007. |
• | annual report onForm 10-K for the fiscal year ended December 31, 2005, filed on March 9, 2006. | |
• | quarterly report onForm 10-Q for the quarterly period ended March 31, 2006, filed on May 5, 2006. |
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• | quarterly report onForm 10-Q for the quarterly period ended June 30, 2006, filed on August 4, 2006. | |
• | quarterly report on Form 10-Q for the quarterly period ended September 30, 2006, filed on November 7, 2006. |
• | current reports onForm 8-K filed on February 17, 2006, March 27, 2006, June 2, 2006, July 5, 2006, August 22, 2006, September 22, 2006, and December 6, 2006. |
• | annual report onForm 10-K for the fiscal year ended December 31, 2005, filed on March 8, 2006. | |
• | quarterly report onForm 10-Q for the quarterly period ended March 31, 2006, filed on May 5, 2006. | |
• | quarterly report onForm 10-Q for the quarterly period ended June 30, 2006, filed on August 4, 2006. | |
• | quarterly report onForm 10-Q for the quarterly period ended September 30, 2006, filed on November 7, 2006. | |
• | proxy statement relating to the annual meeting of stockholders held on May 10, 2006 filed on March 27, 2006. |
• | current reports onForm 8-K filed on February 15, 2006, February 17, 2006, February 21, 2006, March 27, 2006, April 3, 2006, June 2, 2006, June 20, 2006, July 5, 2006, August 22, 2006, September 22, 2006, and December 6, 2006. |
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Pro Forma Adjustments | ||||||||||||||||||||||||
Repay | Pro Forma | |||||||||||||||||||||||
Refinancing | Existing | after | Affiliated | |||||||||||||||||||||
Historical | Proceeds | Indebtedness | Refinancing | Contribution | ||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | Pro Forma | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,864 | $ | 202,961 | (1) | $ | (202,960 | )(1) | $ | 1,865 | $ | — | (1) | $ | 1,865 | |||||||||
Receivables and deposits | 2,479 | (995 | )(2) | 1,484 | (1,011 | )(2) | 473 | |||||||||||||||||
Restricted escrows | 245 | (245 | )(2) | — | — | |||||||||||||||||||
Other assets | 1,137 | 4,589 | (2) | 5,726 | (4,548 | )(3) | 1,178 | |||||||||||||||||
Investment properties | ||||||||||||||||||||||||
Land | 13,404 | 13,404 | (10,315 | )(2) | 3,089 | |||||||||||||||||||
Buildings and related personal property | 165,282 | 165,282 | (105,479 | )(2) | 59,803 | |||||||||||||||||||
178,686 | — | — | 178,686 | (115,794 | ) | 62,892 | ||||||||||||||||||
Less accumulated depreciation | (132,436 | ) | (132,436 | ) | 83,783 | (2) | (48,653 | ) | ||||||||||||||||
46,250 | — | — | 46,250 | (32,011 | ) | 14,239 | ||||||||||||||||||
$ | 51,975 | $ | 207,550 | $ | (204,200 | ) | $ | 55,325 | $ | (37,570 | ) | $ | 17,755 | |||||||||||
Liabilities and Partners’ (Deficit) Capital: | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | 1,371 | $ | 1,371 | $ | (635 | )(2) | $ | 736 | |||||||||||||||
Tenant security deposit liabilities | 1,006 | 1,006 | (743 | )(2) | 263 | |||||||||||||||||||
Accrued property taxes | 1,035 | 1,035 | (291 | )(2) | 744 | |||||||||||||||||||
Other liabilities | 750 | 750 | (425 | )(2) | 325 | |||||||||||||||||||
Accrued interest | 664 | $ | (664 | )(3) | — | — | ||||||||||||||||||
Due to affiliates | 12,512 | (12,401 | )(4) | 111 | (58 | )(2) | 53 | |||||||||||||||||
Mortgage notes payable | 117,704 | $ | 207,550 | (3) | (117,704 | )(3) | 207,550 | (168,000 | )(4) | 39,550 | ||||||||||||||
Mortgage participation liability | 39,742 | (19,362 | )(5) | 20,380 | (20,380 | )(5) | — | |||||||||||||||||
Notes payable | 42,060 | (42,060 | )(4) | — | — | |||||||||||||||||||
Deferred gain on extinguishment of debt | 42,225 | (42,225 | )(6) | — | — | |||||||||||||||||||
Partners’ (Deficit) Capital | (207,094 | ) | — | 30,216 | (7) | (176,878 | ) | 152,962 | (6) | (23,916 | ) | |||||||||||||
$ | 51,975 | $ | 207,550 | $ | (204,200 | ) | $ | 55,325 | $ | (37,570 | ) | $ | 17,755 | |||||||||||
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PRO FORMA COMBINED STATEMENT OF OPERATIONS ASSUMING
THE AFFILIATED CONTRIBUTION (UNAUDITED)
For the Nine Months Ended September 30, 2006
Pro Forma Adjustments | ||||||||||||||||||||||||||||
Repay | Pro Forma | |||||||||||||||||||||||||||
Refinancing | Existing | after | Affiliated | |||||||||||||||||||||||||
Historical | Proceeds | Indebtedness | Refinancing | Contribution | ||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | Pro Forma | |||||||||||||||||||||||
(In thousands, except per limited partnership interest data) | ||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Rental income | $ | 23,948 | $ | 23,948 | $ | (16,634 | )(1) | $ | 7,314 | |||||||||||||||||||
Other income | 2,210 | 2,210 | (1,256 | )(1) | 954 | |||||||||||||||||||||||
Casualty gains | 538 | 538 | (10 | )(1) | 528 | |||||||||||||||||||||||
Total revenues | 26,696 | — | — | 26,696 | (17,900 | ) | 8,796 | |||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||
Operating | 10,067 | 10,067 | (5,952 | )(1) | 4,115 | |||||||||||||||||||||||
Property management fees to an affiliate | 1,024 | 1,024 | (702 | )(1) | 322 | |||||||||||||||||||||||
General and administrative | 468 | 468 | (245 | )(1) | 223 | |||||||||||||||||||||||
Depreciation | 5,889 | 5,889 | (3,747 | )(1) | 2,142 | |||||||||||||||||||||||
Interest | 23,275 | $ | 10,586 | (1) | $ | (12,293 | )(1) | 21,568 | (15,474 | )(1) | 6,094 | |||||||||||||||||
Property taxes | 1,749 | 1,749 | (1,059 | )(1) | 690 | |||||||||||||||||||||||
Total expenses | 42,472 | 10,586 | (12,293 | ) | 40,765 | (27,179 | ) | 13,586 | ||||||||||||||||||||
Net (loss) income | $ | (15,776 | ) | $ | (10,586 | ) | $ | 12,293 | $ | (14,069 | ) | $ | 9,279 | $ | (4,790 | ) | ||||||||||||
Net (loss) income allocated to general partners (2%) | $ | (316 | ) | $ | (212 | ) | $ | 246 | $ | (281 | ) | $ | 186 | $ | (96 | ) | ||||||||||||
Net (loss) income allocated to limited partners (98%) | (15,460 | ) | (10,374 | ) | 12,047 | (13,788 | ) | 9,093 | (4,694 | ) | ||||||||||||||||||
$ | (15,776 | ) | $ | (10,586 | ) | $ | 12,293 | $ | (14,069 | ) | $ | 9,279 | $ | (4,790 | ) | |||||||||||||
Net (loss) income per limited partnership interest: | ||||||||||||||||||||||||||||
Portfolio I (644 interests issued and outstanding) | $ | (16,970 | ) | $ | (11,388 | ) | $ | 13,224 | $ | (15,134 | ) | $ | 9,982 | $ | (5,153 | ) | ||||||||||||
Portfolio II (267 interests issued and outstanding) | $ | (16,970 | ) | $ | (11,388 | ) | $ | 13,225 | $ | (15,135 | ) | $ | 9,982 | $ | (5,153 | ) | ||||||||||||
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PRO FORMA COMBINED STATEMENT OF OPERATIONS ASSUMING
THE AFFILIATED CONTRIBUTION (UNAUDITED)
For the Year Ended December 31, 2005
Pro Forma Adjustments | ||||||||||||||||||||||||||||
Repay | Pro Forma | |||||||||||||||||||||||||||
Refinancing | Existing | after | Affiliated | |||||||||||||||||||||||||
Historical | Proceeds | Indebtedness | Refinancing | Contribution | ||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | Pro Forma | |||||||||||||||||||||||
(In thousands, except per limited partnership interest data) | ||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Rental income | $ | 30,207 | $ | 30,207 | $ | (20,432 | )(1) | $ | 9,775 | |||||||||||||||||||
Other income | 2,282 | 2,282 | (1,414 | )(1) | 868 | |||||||||||||||||||||||
Casualty gains | 564 | 564 | (275 | )(1) | 289 | |||||||||||||||||||||||
Total revenues | 33,053 | — | — | 33,053 | (22,121 | ) | 10,932 | |||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||
Operating | 12,655 | 12,655 | (7,667 | )(1) | 4,989 | |||||||||||||||||||||||
Property management fees to an affiliate | 1,278 | 1,278 | (859 | )(1) | 419 | |||||||||||||||||||||||
General and administrative | 686 | 686 | (359 | )(1) | 327 | |||||||||||||||||||||||
Depreciation | 7,614 | 7,614 | (4,846 | )(1) | 2,768 | |||||||||||||||||||||||
Interest | 18,088 | $ | 14,006 | (1) | $ | (10,560 | )(1) | 21,534 | (15,711 | )(1) | 5,823 | |||||||||||||||||
Property taxes | 2,187 | 2,187 | (1,385 | )(1) | 802 | |||||||||||||||||||||||
Total expenses | 42,508 | 14,006 | (10,560 | ) | 45,954 | (30,826 | ) | 15,128 | ||||||||||||||||||||
Net (loss) income | $ | (9,455 | ) | $ | (14,006 | ) | $ | 10,560 | $ | (12,901 | ) | $ | 8,705 | $ | (4,196 | ) | ||||||||||||
Net (loss) income allocated to general partners (2%) | $ | (189 | ) | $ | (280 | ) | $ | 211 | $ | (258 | ) | $ | 174 | $ | (84 | ) | ||||||||||||
Net (loss) income allocated to limited partners (98%) | (9,266 | ) | (13,726 | ) | 10,349 | (12,643 | ) | 8,531 | (4,112 | ) | ||||||||||||||||||
$ | (9,455 | ) | $ | (14,006 | ) | $ | 10,560 | $ | (12,901 | ) | $ | 8,705 | $ | (4,196 | ) | |||||||||||||
Net (loss) income per limited partnership interest: | ||||||||||||||||||||||||||||
Portfolio I (644 interests issued and outstanding) | $ | (10,171 | ) | $ | (15,066 | ) | $ | 11,360 | $ | (13,878 | ) | $ | 9,364 | $ | (4,514 | ) | ||||||||||||
Portfolio II (267 interests issued and outstanding) | $ | (10,172 | ) | $ | (15,067 | ) | $ | 11,360 | $ | (13,878 | ) | $ | 9,364 | $ | (4,515 | ) | ||||||||||||
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NOTES TO PRO FORMA FINANCIAL STATEMENTS ASSUMING THE AFFILIATED
CONTRIBUTION
(Unaudited)
(in thousands)
(a) | Reflects the historical combined balance sheet of VMS as of September 30, 2006. |
(b) | Reflects the refinancing of the mortgage indebtedness of the Properties on September 30, 2006 based on estimated mortgage terms, which are based on correspondence and discussion with the potential lender. |
(1) | Reflects the estimated net cash proceeds from the new mortgage loans. |
(2) | Reflects the estimated direct costs incurred in connection with the new mortgage loans. |
(3) | Reflects the aggregate mortgage principal balance of the new mortgage indebtedness, consisting of $168,000 for the Affiliated Contribution Properties and $39,550 for the Unaffiliated Sale Properties. |
(c) | Reflects use of refinancing proceeds for the repayment of the existing senior and junior mortgage indebtedness of the Properties on September 30, 2006. |
(1) | Reflects the estimated cash used to pay existing mortgage principal and accrued interest, advances from affiliates, the mortgage participation liability attributable to the refinancing, notes payable, and distribution to the partners. Netted in the amount is cash received from the close-out of existing mortgage escrow accounts (see notes below for further information). |
(2) | Reflects the close-out of existing mortgage escrow accounts in connection with the repayment of existing mortgage indebtedness. |
(3) | Reflects the payoff of existing mortgage indebtedness principal and accrued interest. |
(4) | Reflects the repayment of advances from an affiliate of the Managing General Partner, including accrued interest, and payment of bankruptcy claims to affiliates of the Managing General Partner. |
(5) | Reflects the payment of the mortgage participation liability to the extent required based on the amount available of refinancing proceeds in excess of senior mortgage indebtedness payments. The mortgage participation liability within these pro forma financial statements is referenced as “residual to MF VMS interest” elsewhere in the proxy statement-prospectus, such as in “Special Factors — Estimated Distributions and Tax Consequences”. |
(6) | Reflects the recognition of deferred gain in connection with the payoff of the existing mortgage indebtedness to which the deferred gain relates (see “Special Factors — Background and Reasons for the Transactions”). |
(7) | Reflects the recognition of the $42,225 deferred gain (as discussed in note (c)(6) above) and the recognition of a $61 overaccrual of bankruptcy claims, partially offset by the estimated distribution of remaining refinancing proceeds of $12,070 to the partners. |
(d) | Reflects the pro forma combined balance sheet of VMS as of September 30, 2006, after the refinancing of the indebtedness of the Properties on September 30, 2006. |
(e) | Reflects the Affiliated Contribution on September 30, 2006. |
(1) | The Affiliated Contribution has no net effect on cash balances. To the extent that cash is received in connection with the Affiliated Contribution, it is used to repay the related balance of the mortgage participation liability and to fund partners distributions. |
(2) | Reflects the balances of assets and liabilities transferred to Aimco Properties, LLC in connection with the Affiliated Contribution, net of adjustments related to the refinancing. |
(3) | Reflects the balance of other assets totaling $768 transferred to Aimco Properties, LLC in connection with the Affiliated Contribution and the write-off of $3,780 in estimated direct costs incurred in connection with the refinancing of the Affiliated Contribution Properties. |
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(4) | Reflects the principal amount of refinanced indebtedness related to the Affiliated Contribution Properties that is assumed by Aimco Properties, LLC in connection with the Affiliated Contribution. |
(5) | Reflects adjustments to (i) accrete the mortgage participation liability by an estimated $10,281 to reflect the estimated amount payable based on the fair value of consideration being received for the Affiliated Contribution Properties and (ii) reduce the mortgage participation liability by an estimated $30,661, representing the amount paid to fully satisfy the liability related to the Affiliated Contribution Properties. |
(6) | Reflects the estimated $198,067 deemed capital contribution, representing the amount by which the consideration being received from Aimco Properties, LLC exceeds the carrying amount of net assets being transferred to Aimco Properties, LLC in connection with the Affiliated Contribution (see “Special Factors — Estimated Distributions and Tax Consequences — Accounting Treatment by the Partnerships”). This is partially offset by the estimated $30,661 distribution of net proceeds to the partners and the recognition of expenses totaling an estimated $14,444 consisting primarily of the write-off of refinancing costs (see note (e)(3) above) and the accretion of the mortgage participation liability related to the Affiliated Contribution Properties (see note (e)(5) above). |
(a) | Reflects the historical combined statement of operations of VMS for the nine months ended September 30, 2006. |
(b) | Reflects the refinancing of the mortgage indebtedness related to the Properties on January 1, 2005 based on estimated mortgage terms, which are based on correspondence and discussions with the potential lender. For the Unaffiliated Sale Properties, such terms reflect an initial principal balance of $39,550, a variable interest rate equal to the Fannie Mae Discount Mortgage Backed Security rate plus 105 basis points (assumed to be 6.27%, the applicable rate at September 30, 2006) and monthly principal and interest payments based on a 30-year amortization period. Direct financing costs related to the refinancing are estimated at $809. For the Affiliated Contribution Properties, such terms reflect an initial principal balance of $168,000, a fixed interest rate of 6.16% and monthly interest only payments. Direct financing costs related to the refinancing are estimated at $3,780. |
(1) | Reflects the interest on new mortgage indebtedness related to the Properties, including amortization of related direct financing costs. |
(c) | Reflects the repayment of the senior and junior mortgage indebtedness of the Properties on January 1, 2005. |
(1) | Reflects the reversal of interest expense related to the existing mortgage indebtedness, advances from an affiliate of the Managing General Partner and mortgage participation liability accretion adjustments due to payoff of related balances in connection with the refinancing on January 1, 2005. |
(d) | Reflects the pro forma combined statement of operations of VMS for the nine months ended September 30, 2006, after giving effect to the refinancing of the indebtedness of the Properties on January 1, 2005. The pro forma amounts do not reflect a nonrecurring debt extinguishment of $42,225 that would be recognized upon the payoff of the Properties’ existing indebtedness (see note (c)(6) to the pro forma combined balance sheet as of September 30, 2006). |
(e) | Reflects the Affiliated Contribution on January 1, 2005. A nonrecurring loss of $3,780, representing estimated direct costs incurred in connection with the refinancing, would be recognized upon the Affiliated Contribution. |
(1) | Reflects the reversal of the actual results of operations related to the Affiliated Contribution Properties for the nine months ended September 30, 2006, net of adjustments related to refinancing and mortgage participation liability accretion. |
(a) | Reflects the historical combined statement of operations of VMS for the year ended December 31, 2005. |
(b) | Reflects the refinancing of the mortgage indebtedness related to the Properties on January 1, 2005 based on estimated mortgage terms, which are based on correspondence and discussions with the potential lender. For the Unaffiliated Sale Properties, such terms reflect an initial principal balance of $39,550, a variable interest rate equal to the Fannie Mae Discount Mortgage Backed Security rate plus 105 basis points (assumed to be |
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6.27%, the applicable rate at September 30, 2006) and monthly principal and interest payments based on a 30-year amortization period. Direct financing costs related to the refinancing are estimated at $809. For the Affiliated Contribution Properties, such terms reflect an initial principal balance of $168,000, a fixed interest rate of 6.16% and monthly interest only payments. Direct financing costs related to the refinancing are estimated at $3,780. |
(1) | Reflects the interest on new mortgage indebtedness related to the Properties, including amortization of related direct financing costs. |
(c) | Reflects the repayment of the senior and junior mortgage indebtedness of the Properties on January 1, 2005. |
(1) | Reflects the reversal of interest expense related to the existing mortgage indebtedness, advances from an affiliate of the Managing General Partner and mortgage participation liability accretion adjustments due to payoff of related balances in connection with the refinancing on January 1, 2005. |
(d) | Reflects the pro forma combined statement of operations of VMS for the year ended December 31, 2005, after giving effect to the refinancing of the indebtedness of the Properties on January 1, 2005. The pro forma amounts do not reflect a nonrecurring debt extinguishment of $42,225 that would be recognized upon the payoff of the Properties’ existing indebtedness (see note (c)(6) to the pro forma combined balance sheet as of September 30, 2006). |
(e) | Reflects the Affiliated Contribution on January 1, 2005. A nonrecurring loss of $3,780, representing estimated direct costs incurred in connection with the refinancing, would be recognized upon the Affiliated Contribution. |
(1) | Reflects the reversal of the actual results of operations related to the Affiliated Contribution Properties for the year ended December 31, 2005, net of adjustments related to refinancing and mortgage participation liability accretion. |
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PRO FORMA COMBINED BALANCE SHEET ASSUMING THE UNAFFILIATED SALES
(UNAUDITED)
As of September 30, 2006
Pro Forma Adjustments | ||||||||||||||||||||||||
Repay | Pro Forma | |||||||||||||||||||||||
Refinancing | Existing | after | Unaffiliated | |||||||||||||||||||||
Historical | Proceeds | Indebtedness | Refinancing | Sales | ||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | Pro Forma | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,864 | $ | 202,961 | (1) | $ | (202,960 | )(1) | $ | 1,865 | $ | — | (1) | $ | 1,865 | |||||||||
Receivables and deposits | 2,479 | (995 | )(2) | 1,484 | (473 | )(2) | 1,011 | |||||||||||||||||
Restricted escrows | 245 | (245 | )(2) | — | — | |||||||||||||||||||
Other assets | 1,137 | 4,589 | (2) | 5,726 | (1,178 | )(3) | 4,548 | |||||||||||||||||
Investment properties | — | |||||||||||||||||||||||
Land | 13,404 | 13,404 | (3,089 | )(2) | 10,315 | |||||||||||||||||||
Buildings and related personal property | 165,282 | 165,282 | (59,803 | )(2) | 105,479 | |||||||||||||||||||
178,686 | — | — | 178,686 | (62,892 | ) | 115,794 | ||||||||||||||||||
Less accumulated depreciation | (132,436 | ) | (132,436 | ) | 48,653 | (2) | (83,783 | ) | ||||||||||||||||
46,250 | — | — | 46,250 | (14,239 | ) | 32,011 | ||||||||||||||||||
$ | 51,975 | $ | 207,550 | $ | (204,200 | ) | $ | 55,325 | $ | (15,890 | ) | $ | 39,435 | |||||||||||
Liabilities and Partners’ (Deficit) Capital: | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | 1,371 | $ | 1,371 | $ | (736 | )(2) | $ | 635 | |||||||||||||||
Tenant security deposit liabilities | 1,006 | 1,006 | (263 | )(2) | 743 | |||||||||||||||||||
Accrued property taxes | 1,035 | 1,035 | (744 | )(2) | 291 | |||||||||||||||||||
Other liabilities | 750 | 750 | (325 | )(2) | 425 | |||||||||||||||||||
Accrued interest | 664 | $ | (664 | )(3) | — | — | ||||||||||||||||||
Due to affiliates | 12,512 | (12,401 | )(4) | 111 | (53 | )(2) | 58 | |||||||||||||||||
Mortgage notes payable | 117,704 | $ | 207,550 | (3) | (117,704 | )(3) | 207,550 | (39,550 | )(4) | 168,000 | ||||||||||||||
Mortgage participation liability | 39,742 | (19,362 | )(5) | 20,380 | (13,871 | )(5) | 6,509 | |||||||||||||||||
Notes payable | 42,060 | (42,060 | )(4) | — | — | |||||||||||||||||||
Deferred gain on extinguishment of debt | 42,225 | (42,225 | )(6) | — | — | |||||||||||||||||||
Partners’ (Deficit) Capital | (207,094 | ) | — | 30,216 | (7) | (176,878 | ) | 39,652 | (137,226 | ) | ||||||||||||||
$ | 51,975 | $ | 207,550 | $ | (204,200 | ) | $ | 55,325 | $ | (15,890 | ) | $ | 39,435 | |||||||||||
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Pro Forma Adjustments | ||||||||||||||||||||||||
Repay | Pro Forma | |||||||||||||||||||||||
Refinancing | Existing | After | Unaffiliated | |||||||||||||||||||||
Historical | Proceeds | Indebtedness | Refinancing | Sales | ||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | Pro Forma | |||||||||||||||||||
(In thousands, except per limited partnership interest data) | ||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Rental income | $ | 23,948 | $ | 23,948 | $ | (7,314 | )(1) | $ | 16,634 | |||||||||||||||
Other income | 2,210 | 2,210 | (954 | )(1) | 1,256 | |||||||||||||||||||
Casualty gains | 538 | 538 | (528 | )(1) | 10 | |||||||||||||||||||
Total revenues | 26,696 | — | — | 26,696 | (8,796 | ) | 17,900 | |||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Operating | 10,067 | 10,067 | (4,115 | )(1) | 5,952 | |||||||||||||||||||
Property management fees to an affiliate | 1,024 | 1,024 | (322 | )(1) | 702 | |||||||||||||||||||
General and administrative | 468 | 468 | (223 | )(1) | 245 | |||||||||||||||||||
Depreciation | 5,889 | 5,889 | (2,142 | )(1) | 3,747 | |||||||||||||||||||
Interest | 23,275 | $ | 10,586 | (1) | $ | (12,293 | )(1) | 21,568 | (2,910 | )(1) | 18,658 | |||||||||||||
Property taxes | 1,749 | 1,749 | (690 | )(1) | 1,059 | |||||||||||||||||||
Total expenses | 42,472 | 10,586 | (12,293 | ) | 40,765 | (10,402 | ) | 30,363 | ||||||||||||||||
Net (loss) income | $ | (15,776 | ) | $ | (10,586 | ) | $ | 12,293 | $ | (14,069 | ) | $ | 1,606 | $ | (12,463 | ) | ||||||||
Net (loss) income allocated to general partners (2%) | $ | (316 | ) | $ | (212 | ) | $ | 246 | $ | (281 | ) | $ | 32 | $ | (249 | ) | ||||||||
Net (loss) income allocated to limited partners (98%) | (15,460 | ) | (10,374 | ) | 12,047 | (13,788 | ) | 1,574 | (12,214 | ) | ||||||||||||||
$ | (15,776 | ) | $ | (10,586 | ) | $ | 12,293 | $ | (14,069 | ) | $ | 1,606 | $ | (12,463 | ) | |||||||||
Net (loss) income per limited partnership interest: | ||||||||||||||||||||||||
Portfolio I (644 interests issued and outstanding) | $ | (16,970 | ) | $ | (11,388 | ) | $ | 13,224 | $ | (15,134 | ) | $ | 1,728 | $ | (13,407 | ) | ||||||||
Portfolio II (267 interests issued and outstanding) | $ | (16,970 | ) | $ | (11,388 | ) | $ | 13,225 | $ | (15,135 | ) | $ | 1,728 | $ | (13,408 | ) | ||||||||
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Pro Forma Adjustments | ||||||||||||||||||||||||
Repay | �� | Pro Forma | ||||||||||||||||||||||
Refinancing | Existing | after | Unaffiliated | |||||||||||||||||||||
Historical | Proceeds | Indebtedness | Refinancing | Sales | ||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | Pro Forma | |||||||||||||||||||
(In thousands, except per limited partnership interest data) | ||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Rental income | $ | 30,207 | $ | 30,207 | $ | (9,775 | )(1) | $ | 20,432 | |||||||||||||||
Other income | 2,282 | 2,282 | (868 | )(1) | 1,414 | |||||||||||||||||||
Casualty gains | 564 | 564 | (289 | )(1) | 275 | |||||||||||||||||||
Total revenues | 33,053 | — | — | 33,053 | (10,932 | ) | 22,121 | |||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Operating | 12,655 | 12,655 | (4,989 | )(1) | 7,666 | |||||||||||||||||||
Property management fees to an affiliate | 1,278 | 1,278 | (419 | )(1) | 859 | |||||||||||||||||||
General and administrative | 686 | 686 | (327 | )(1) | 359 | |||||||||||||||||||
Depreciation | 7,614 | 7,614 | (2,768 | )(1) | 4,846 | |||||||||||||||||||
Interest | 18,088 | $ | 14,006 | (1) | $ | (10,560 | )(1) | 21,534 | (7,860 | )(1) | 13,674 | |||||||||||||
Property taxes | 2,187 | 2,187 | (802 | )(1) | 1,385 | |||||||||||||||||||
Total expenses | 42,508 | 14,006 | (10,560 | ) | 45,954 | (17,165 | ) | 28,789 | ||||||||||||||||
Net (loss) income | $ | (9,455 | ) | $ | (14,006 | ) | $ | 10,560 | $ | (12,901 | ) | $ | 6,233 | $ | (6,668 | ) | ||||||||
Net (loss) income allocated to general partners (2%) | $ | (189 | ) | $ | (280 | ) | $ | 211 | $ | (258 | ) | $ | 125 | $ | (133 | ) | ||||||||
Net (loss) income allocated to limited partners (98%) | (9,266 | ) | (13,726 | ) | 10,349 | (12,643 | ) | 6,108 | (6,535 | ) | ||||||||||||||
$ | (9,455 | ) | $ | (14,006 | ) | $ | 10,560 | $ | (12,901 | ) | $ | 6,233 | $ | (6,668 | ) | |||||||||
Net (loss) income per limited partnership interest: | ||||||||||||||||||||||||
Portfolio I (644 interests issued and outstanding) | $ | (10,171 | ) | $ | (15,066 | ) | $ | 11,360 | $ | (13,878 | ) | $ | 6,705 | $ | (7,173 | ) | ||||||||
Portfolio II (267 interests issued and outstanding) | $ | (10,172 | ) | $ | (15,067 | ) | $ | 11,360 | $ | (13,878 | ) | $ | 6,705 | $ | (7,170 | ) | ||||||||
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NOTES TO PRO FORMA FINANCIAL STATEMENTS ASSUMING THE UNAFFILIATED SALES
(Unaudited)
(In thousands)
(a) | Reflects the historical combined balance sheet of VMS as of September 30, 2006. |
(b) | Reflects the refinancing of the mortgage indebtedness of the Properties on September 30, 2006 based on estimated mortgage terms, which are based on correspondence and discussions with the potential lender. |
(1) | Reflects the estimated net cash proceeds from the new mortgage loans. |
(2) | Reflects the estimated direct costs incurred in connection with the new mortgage loans. |
(3) | Reflects the aggregate mortgage principal balance of the new mortgage indebtedness, consisting of $168,000 for the Affiliated Contribution Properties and $39,550 for the Unaffiliated Sale Properties. |
(c) | Reflects use of refinancing proceeds for the repayment of the existing senior and junior mortgage indebtedness of the Properties on September 30, 2006. |
(1) | Reflects the estimated cash used to pay existing mortgage principal and accrued interest, advances from affiliates, the mortgage participation liability attributable to the refinancing, notes payable, and distribution to the partners. Netted in the amount is cash received from the close-out of existing mortgage escrow accounts (see notes below for further information). |
(2) | Reflects the close-out of existing mortgage escrow accounts in connection with the repayment of existing mortgage indebtedness. |
(3) | Reflects the payoff of existing mortgage indebtedness principal and accrued interest. |
(4) | Reflects the repayment of advances from an affiliate of the Managing General Partner, including accrued interest, and payment of bankruptcy claims to affiliates of the Managing General Partner. |
(5) | Reflects the payment of the mortgage participation liability to the extent required based on the amount available of refinancing proceeds in excess of senior mortgage indebtedness payments. The mortgage participation liability within these pro forma financial statements is referenced as “residual to MF VMS interest” elsewhere in the proxy statement-prospectus, such as in “Special Factors — Estimated Distributions and Tax Consequences”. |
(6) | Reflects the recognition of deferred gain in connection with the payoff of the existing mortgage indebtedness to which the deferred gain relates (see “Special Factors — Background and Reasons for the Transactions”). |
(7) | Reflects the recognition of the $42,225 deferred gain (as discussed in note (c)(6) above) and the recognition of a $61 overaccrual of bankruptcy claims, partially offset by the estimated distribution of remaining refinancing proceeds of $12,070 to the partners. |
(d) | Reflects the pro forma combined balance sheet of VMS as of September 30, 2006, after the refinancing of the indebtedness of the Properties on September 30, 2006. |
(e) | Reflects the Unaffiliated Sales on September 30, 2006. |
(1) | The Unaffiliated Sales have no net effect on cash balances. Cash received in connection with the Unaffiliated Sales is used to repay the related balance of the mortgage participation liability and to fund partner distributions. |
(2) | Reflects the balances of assets and liabilities transferred or liquidated in connection with the Unaffiliated Sales Properties, net of adjustments related to the refinancing. |
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(3) | Reflects the balance of other assets totaling $369 transferred or liquidated in connection with the Unaffiliated Sales and the write-off of $809 in estimated direct costs incurred in connection with the refinancing of the Unaffiliated Sale Properties. |
(4) | Reflects the principal amount of refinanced indebtedness related to the Unaffiliated Sale Properties that is repaid in connection with the Unaffiliated Sales. |
(5) | Reflects adjustment to reduce the mortgage participation liability representing the amount paid to fully satisfy the liability related to the Unaffiliated Sales. |
(6) | Reflects the estimated $54,518 non-recurring gain on the Unaffiliated Sales, partially offset by the estimated $13,871 distribution of net proceeds to the partners and the recognition of expenses totaling $995 consisting primarily of an $809 write-off of refinancing costs (see note (e)(3) above). |
(a) | Reflects the historical combined statement of operations of VMS for the nine months ended September 30, 2006. |
(b) | Reflects the refinancing of the mortgage indebtedness related to the Properties on January 1, 2005 based on estimated mortgage terms, which are based on correspondence and discussions with the potential lender. For the Unaffiliated Sale Properties, such terms reflect an initial principal balance of $39,550, a variable interest rate equal to the Fannie Mae Discount Mortgage Backed Security rate plus 105 basis points (assumed to be 6.27%, the applicable rate at September 30, 2006) and monthly principal and interest payments based on a 30-year amortization period. Direct financing costs related to the refinancing are estimated at $809. For the Affiliated Contribution Properties, such terms reflect an initial principal balance of $168,000, a fixed interest rate of 6.16% and monthly interest only payments. Direct financing costs related to the refinancing are estimated at $3,780. |
(1) | Reflects the interest on new mortgage indebtedness related to the Properties, including amortization of related direct financing costs. |
(c) | Reflects the repayment of the senior and junior mortgage indebtedness of the Properties on January 1, 2005. |
(1) | Reflects the reversal of interest expense related to the existing mortgage indebtedness, advances from an affiliate of the Managing General Partner and mortgage participation liability accretion adjustments due to payoff of related balances in connection with the refinancing on January 1, 2005. |
(d) | Reflects the pro forma combined statement of operations of VMS for the nine months ended September 30, 2006, after giving effect to the refinancing of the indebtedness of the Properties on January 1, 2005. The pro forma amounts do not reflect a nonrecurring debt extinguishment of $42,225 that would be recognized upon the payoff of the Properties’ existing indebtedness (see note (c)(6) to the pro forma combined balance sheet as of September 30, 2006). |
(e) | Reflects the Unaffiliated Sales on January 1, 2005. A nonrecurring loss of $809, representing estimated direct costs incurred in connection with the refinancing, would be recognized upon the Unaffiliated Sales. |
(1) | Reflects the reversal of the actual results of operations related to the Unaffiliated Sale Properties for the nine months ended September 30, 2006, net of adjustments related to refinancing and mortgage participation liability accretion. |
(a) | Reflects the historical combined statement of operations of VMS for the year ended December 31, 2005. |
(b) | Reflects the refinancing of the mortgage indebtedness related to the Properties on January 1, 2005 based on estimated mortgage terms, which are based on correspondence and discussions with the potential lender. For the Unaffiliated Sale Properties, such terms reflect an initial principal balance of $39,550, a variable interest rate equal to the Fannie Mae Discount Mortgage Backed Security rate plus 105 basis points (assumed to be |
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6.27%, the applicable rate at September 30, 2006) and monthly principal and interest payments based on a 30-year amortization period. Direct financing costs related to the refinancing are estimated at $809. For the Affiliated Contribution Properties, such terms reflect an initial principal balance of $168,000, a fixed interest rate of 6.16% and monthly interest only payments. Direct financing costs related to the refinancing are estimated at $3,780. |
(1) | Reflects the interest on new mortgage indebtedness related to the Properties, including amortization of related direct financing costs. |
(c) | Reflects the repayment of the senior and junior mortgage indebtedness of the Properties on January 1, 2005. |
(1) | Reflects the reversal of interest expense related to the existing mortgage indebtedness, advances from an affiliate of the Managing General Partner and mortgage participation liability accretion adjustments due to payoff of related balances in connection with the refinancing on January 1, 2005. |
(d) | Reflects the pro forma combined statement of operations of VMS for the year ended December 31, 2005, after giving effect to the refinancing of the indebtedness of the Properties on January 1, 2005. The pro forma amounts do not reflect a nonrecurring debt extinguishment of $42,225 that would be recognized upon the payoff of the Properties’ existing indebtedness (see note (c)(6) to the pro forma combined balance sheet as of September 30, 2006). |
(e) | Reflects the Unaffiliated Sales on January 1, 2005. A nonrecurring loss of $809, representing estimated direct costs incurred in connection with the refinancing, would be recognized upon the Unaffiliated Sales. |
(1) | Reflects the reversal of the actual results of operations related to the Unaffiliated Sale Properties for the year ended December 31, 2005, net of adjustments related to refinancing and mortgage participation liability accretion. |
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Name (age) | Position | |
Terry Considine (59) | Chairman of the Board of Directors, Chief Executive Officer and President of Aimco; Director, Chief Executive Officer and President of AIMCO-GP and AIMCO/IPT | |
Jeffrey Adler (43) | Executive Vice President — Conventional Property Operations of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL | |
Harry G. Alcock (43) | Executive Vice President and Chief Investment Officer of Aimco and AIMCO-GP; Director, Executive Vice President and Chief Investment Officer of AIMCO/IPT and MAERIL | |
Timothy Beaudin (47) | Executive Vice President and Chief Development Officer of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL | |
Miles Cortez (62) | Executive Vice President, General Counsel and Secretary of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL | |
Patti K. Fielding (42) | Executive Vice President — Securities and Debt of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL | |
Scott W. Fordham (38) | Senior Vice President and Chief Accounting Officer of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL. | |
Lance J. Graber (44) | Executive Vice President of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL | |
Thomas M. Herzog (44) | Executive Vice President and Chief Financial Officer of Aimco, AIMCO/IPT and MAERIL; Director, Executive Vice President and Chief Financial Officer of AIMCO-GP; Executive Vice President and Chief Financial Officer of MAERIL | |
Martha L. Long (47) | Senior Vice President of Aimco, AIMCO-GP and AIMCO/IPT; Director and Senior Vice President of MAERIL | |
James G. Purvis (53) | Executive Vice President — Human Resources of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL | |
David Robertson (40) | Executive Vice President of Aimco, AIMCO-GP and AIMCO/IPT; President of the MAERIL | |
Robert Y. Walker, IV (40) | Executive Vice President of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL | |
Stephen B. Waters (44) | Vice President of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL | |
James N. Bailey (59) | Director of Aimco | |
Richard S. Ellwood (74) | Director of Aimco | |
J. Landis Martin (60) | Director of Aimco | |
Thomas L. Rhodes (66) | Director of Aimco | |
Michael A. Stein (56) | Director of Aimco |
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Table of Contents
Name | Principal Occupations for the Last Five Years | |
Terry Considine | Mr. Considine has been Chairman and Chief Executive Officer of Aimco and AIMCO-GP since July 1994 and has been a director, Chief Executive Officer and President of AIMCO/IPT since February 1999. Mr. Considine serves as Chairman of the Board of Directors of American Land Lease, Inc., another public real estate investment trust. Mr. Considine devotes substantially all of his time to his responsibilities at Aimco. | |
Jeffrey Adler | Mr. Adler has been an Executive Vice President of Aimco, AIMCO/IPT and MAERIL since February 2004. Previously he served as Senior Vice President Risk Management of Aimco, AIMCO-GP, AIMCO/APT and MAERIL from January 2002 until November 2002, when he added the responsibility of Senior Vice President, Marketing. From 2000 to 2002, Mr. Adler was Vice President, Property/Casualty for Channelpoint, a software company. | |
Harry G. Alcock | Mr. Alcock was appointed Executive Vice President and Chief Investment Officer of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL in October 1999. Mr. Alcock has been a Director of MAERIL since October 2004. Mr. Alcock has had responsibility for acquisition and financing activities of Aimco since 1994, serving as a Vice President from July 1996 to October 1997 and as a Senior Vice President from October 1997 to October 1999. | |
Timothy Beaudin | Mr. Beaudin was appointed Executive Vice President and Chief Development Officer of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL in October 2005. Prior to this time, beginning in 1995, Mr. Beaudin was with Catellus Development Corporation, a San Francisco, California-based real estate investment trust. During his last five years at Catellus, Mr. Beaudin served as executive vice president, with management responsibility for development, construction and asset management. | |
Miles Cortez | Mr. Cortez was appointed Executive Vice President, General Counsel and Secretary of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL in August 2001. Prior to this time, Mr. Cortez was the senior partner of Cortez Macaulay Bernhardt & Schuetze LLC, a Denver law firm, from December 1997 through September 2001. He served as president of the Colorado Bar Association from 1996 to 1997 and the Denver Bar Association from 1982 to 1983. | |
Patti K. Fielding | Ms. Fielding was appointed Executive Vice President — Securities and Debt of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL in February 2003 and Treasurer in January 2005. From January 2000 to February 2003, Ms. Fielding served as Senior Vice President — Securities and Debt. Ms. Fielding joined Aimco as a Vice President in February 1997. | |
Scott W. Fordham | Mr. Fordham was appointed Senior Vice President and Chief Accounting Officer of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL in January 2007. Prior to joining Aimco, Mr. Fordham served as Vice President and Chief Accounting Officer of Brandywine Realty Trust. Prior to the merger of Prentiss Properties Trust with Brandywine Realty Trust, Mr. Fordham served as Senior Vice President and Chief Accounting Officer of Prentiss Properties Trust and was in charge of the corporate accounting and financial reporting groups. Prior to joining Prentiss Properties Trust in 1992, Mr. Fordham worked in public accounting with PricewaterhouseCoopers LLP. | |
Lance J. Graber | Mr. Graber was appointed Executive Vice President of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL in October 1999. Prior to this time, Mr. Graber was a Director at Credit Suisse First Boston from 1994 to May 1999. |
A-2
Table of Contents
Name | Principal Occupations for the Last Five Years | |
Thomas M. Herzog | Mr. Herzog was appointed Executive Vice President of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL in July 2005 and Chief Financial Officer in November 2005. Mr. Herzog was appointed a Director of AIMCO-GP in July 2005. In January 2004, Mr. Herzog joined Aimco as Senior Vice President and Chief Accounting Officer. Prior to this time, Mr. Herzog was at GE Real Estate, serving as Chief Accounting Officer & Global Controller from April 2002 to January 2004 and as Chief Technical Advisor from March 2000 to April 2002. Prior to joining GE Real Estate, Mr. Herzog was at Deloitte & Touche LLP from 1990 until 2000. | |
Martha L. Long | Ms. Long has been with Aimco since October 1998 and served in various capacities. From 1998 to 2001, she served as Senior Vice President and Controller. During 2002 and 2003, she served as Senior Vice president of Continuous Improvement. Ms. Long has been a Director and Senior Vice President of MAERIL since May 2004. | |
James G. Purvis | Mr. Purvis was appointed Executive Vice President — Human Resources of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL in February 2003. From October 2000 to February 2003, Mr. Purvis served as the Vice President of Human Resources at SomaLogic, Inc. a privately held biotechnology company in Boulder, Colorado. From July 1997 to October 2000, Mr. Purvis was the principal consultant for O(3)C Global Organization Solutions, a global human resources strategy and technology consulting company based in Colorado and London. | |
David Robertson | Mr. Robertson has been Executive Vice President of Aimco, AIMCO-GP and AIMCO/IPT since February 2002, President and Chief Executive Officer of AIMCO Capital since October 2002 and President of MAERIL since May 2004. From 1991 to 1996, Mr. Robertson was a member of the investment-banking group at Smith Barney. Since February 1996, Mr. Robertson has been Chairman of Robeks Corporation, a privately held chain of specialty food stores. | |
Robert Y. Walker, IV | Mr. Walker was appointed Executive Vice President of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL in July 2006. Prior to such appointment, he served as Senior Vice President of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL since August 2005. Mr. Walker served as the Chief Accounting Officer of Aimco, AIMCO-GP, AIMCO/IPT and MAERIL from November 2005 to January 2007. From June 2002 until he joined Aimco, Mr. Walker served as senior vice president and chief financial officer at Miller Global Properties, LLC, a Denver-based private equity, real estate fund manager. From May 1997 to June 2002, Mr. Walker was employed by GE Capital Real Estate, serving as Global Controller from May 2000 to June 2002. | |
Stephen B. Waters | Mr. Waters was appointed Vice President of Aimco, AIMCO-GP, AIMCO-IPT and MAERIL in April 2004. Mr. Waters serves as principal financial officer of MAERIL. Mr. Waters previously served as a Director of Real Estate Accounting since joining Aimco in September 1999. |
A-3
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Name | Principal Occupations for the Last Five Years | |
James N. Bailey | Mr. Bailey was first elected as a Director of Aimco in June 2000 and is currently Chairman of the Nominating and Corporate Governance Committee and a member of the Audit and Compensation and Human Resources Committees. Mr. Bailey co-founded Cambridge Associates, LLC, an investment consulting firm, in 1973 and currently serves as its Senior Managing Director and Treasurer. He is also a director of The Plymouth Rock Company, SRB Corporation, Inc., Direct Response Corporation and Homeowners Direct Company, all four of which are insurance companies. In addition, he is a director of Getty Images, Inc., a publicly held company. He has also been a member of a number of Harvard University alumni affairs committees, including, the Overseers Nominating Committee and The Harvard Endowment Committee. Mr. Bailey is a member of the Massachusetts Bar and the American Bar Associations. | |
Richard S. Ellwood | Mr. Ellwood was first elected as a Director of Aimco in July 1994. Mr. Ellwood is currently a member of the Audit, Compensation and Human Resources, and Nominating and Corporate Governance Committees. Mr. Ellwood was the founder and President of R.S. Ellwood & Co., Incorporated, which he operated as a real estate investment banking firm until December 31, 2004. Prior to forming his firm, Mr. Ellwood had 31 years experience on Wall Street as an investment banker, serving as: Managing Director and senior banker at Merrill Lynch Capital Markets from 1984 to 1987; Managing Director at Warburg Paribas Becker from 1978 to 1984; general partner and then Senior Vice President and a director at White, Weld & Co. from 1968 to 1978; and in various capacities at J.P. Morgan & Co. from 1955 to 1968. Mr. Ellwood currently serves as a director of Felcor Lodging Trust, Incorporated, a publicly held company. He also serves as a trustee of the Diocesan Investment Trust of the Episcopal Diocese of New Jersey and as a member of the diocesan audit committee. | |
J. Landis Martin | Mr. Martin was first elected as a Director of Aimco in July 1994 and is currently Chairman of the Compensation and Human Resources Committee. Mr. Martin is a member of the Audit and Nominating and Corporate Governance Committees. Mr. Martin is also the Lead Independent Director of Aimco’s Board. Mr. Martin is the Founder and Managing Director of Platte River Ventures LLC, a private equity firm. In November 2005, Mr. Martin retired as Chairman and CEO of Titanium Metals Corporation, a publicly held integrated producer of titanium metals, where he served since January 1994. Mr. Martin served as President and CEO of NL Industries, Inc., a publicly held manufacturer of titanium dioxide chemicals, from 1987 to 2003. Mr. Martin is also a director of Halliburton Company, a publicly held provider of products and services to the energy industry and Crown Castle International Corporation, a publicly held wireless communications company. | |
Thomas L. Rhodes | Mr. Rhodes was first elected as a Director of Aimco in July 1994 and is currently a member of the Audit, Compensation and Human Resources, and Nominating and Corporate Governance Committees. Mr. Rhodes is Chairman of National Review magazine where he served as President since November 1992 and as a Director since 1988. From 1976 to 1992, he held various positions at Goldman, Sachs & Co., was elected a General Partner in 1986 and served as a General Partner from 1987 until November 1992. Mr. Rhodes is Chairman of the Board of Directors of The Lynde and Harry Bradley Foundation and Vice Chairman of American Land Lease, Inc., a publicly held real estate investment trust. |
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Table of Contents
Name | Principal Occupations for the Last Five Years | |
Michael A. Stein | Mr. Stein was first elected as a Director of Aimco in October 2004 and is currently the Chairman of the Audit Committee. Mr. Stein is a member of the Compensation and Human Resources and Nominating and Corporate Governance Committees. Mr. Stein is Senior Vice President and Chief Financial Officer of ICOS Corporation, a biotechnology company based in Bothell, Washington. He joined ICOS in January 2001. From October 1998 to September 2000, Mr. Stein was Executive Vice President and Chief Financial Officer of Nordstrom, Inc. From 1989 to September 1998, Mr. Stein served in various capacities with Marriott International, Inc., including Executive Vice President and Chief Financial Officer from 1993 to 1998. Prior to joining Marriott, Mr. Stein spent 18 years at Arthur Andersen LLP, where he was a partner and served as the head of the Commercial Group within the Washington, D.C. office. Mr. Stein serves on the Board of Directors of Getty Images, Inc., a publicly held company, and the Board of Trustees of the Fred Hutchinson Cancer Research Center. |
A-5
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Page | ||||
Audited Combined Financial Statements | ||||
B-1 | ||||
B-2 | ||||
B-3 | ||||
B-4 | ||||
B-5 | ||||
B-6 | ||||
Unaudited Combined Financial Statements | ||||
B-20 | ||||
B-21 | ||||
B-22 | ||||
B-23 | ||||
B-24 |
Table of Contents
B-1
Table of Contents
December 31, | December 31, | |||||||
2005 | 2004 | |||||||
(In thousands) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 2,419 | $ | 2,064 | ||||
Receivables and deposits | 2,343 | 2,009 | ||||||
Restricted escrows | 251 | 1,115 | ||||||
Other assets | 786 | 737 | ||||||
Investment properties (Notes B and H): | ||||||||
Land | 13,404 | 13,404 | ||||||
Buildings and related personal property | 162,434 | 155,459 | ||||||
175,838 | 168,863 | |||||||
Less accumulated depreciation | (126,814 | ) | (119,509 | ) | ||||
49,024 | 49,354 | |||||||
$ | 54,823 | $ | 55,279 | |||||
LIABILITIES AND PARTNERS’ DEFICIT | ||||||||
Liabilities | ||||||||
Accounts payable | $ | 1,665 | $ | 1,328 | ||||
Tenant security deposit liabilities | 893 | 855 | ||||||
Accrued property taxes | 670 | 695 | ||||||
Other liabilities | 800 | 827 | ||||||
Accrued interest | 878 | 560 | ||||||
Due to affiliates (Note F) | 10,884 | 7,335 | ||||||
Mortgage notes payable, including $22,674 due to an affiliate at 2005 and $22,123 at 2004 (Note B) | 120,561 | 121,992 | ||||||
Mortgage participation liability (Note D) | 25,505 | 19,265 | ||||||
Notes payable (Note C) | 42,060 | 42,060 | ||||||
Deferred gain on extinguishment of debt (Note A) | 42,225 | 42,225 | ||||||
Partners’ Deficit | (191,318 | ) | (181,863 | ) | ||||
$ | 54,823 | $ | 55,279 | |||||
B-2
Table of Contents
For the Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
(In thousands, except per limited partnership interest data) | ||||||||||||
Revenues: | ||||||||||||
Rental income | $ | 30,207 | $ | 28,189 | $ | 29,054 | ||||||
Other income | 2,282 | 2,340 | 2,313 | |||||||||
Casualty gains (Note E) | 564 | 45 | 164 | |||||||||
Total revenues | 33,053 | 30,574 | 31,531 | |||||||||
Expenses: | ||||||||||||
Operating | 12,655 | 11,613 | 11,094 | |||||||||
Property management fees to an affiliate | 1,278 | 1,201 | 1,253 | |||||||||
General and administrative | 686 | 541 | 594 | |||||||||
Depreciation | 7,614 | 7,147 | 6,984 | |||||||||
Interest, including approximately $9,552, $8,512 and $7,903 to an affiliate | 18,088 | 17,094 | 16,732 | |||||||||
Property taxes | 2,187 | 2,180 | 2,008 | |||||||||
Total expenses | 42,508 | 39,776 | 38,665 | |||||||||
Net loss (Note I) | $ | (9,455 | ) | $ | (9,202 | ) | $ | (7,134 | ) | |||
Net loss allocated to general partners (2%) | $ | (189 | ) | $ | (184 | ) | $ | (143 | ) | |||
Net loss allocated to limited partners (98%) | (9,266 | ) | (9,018 | ) | (6,991 | ) | ||||||
$ | (9,455 | ) | $ | (9,202 | ) | $ | (7,134 | ) | ||||
Net loss per limited partnership interest: | ||||||||||||
Portfolio I (644 interests issued and outstanding) | $ | (10,171 | ) | $ | (9,899 | ) | $ | (7,674 | ) | |||
Portfolio II (267 interests issued and outstanding) | $ | (10,172 | ) | $ | (9,898 | ) | $ | (7,674 | ) | |||
B-3
Table of Contents
VMS National Residential Portfolio I | ||||||||||||||||||||
Limited Partners | ||||||||||||||||||||
General | Accumulated | Subscription | ||||||||||||||||||
Partner | Deficit | Notes | Sub-Total | Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Partners’ deficit at December 31, 2002 | $ | (3,641 | ) | $ | (112,369 | ) | $ | (502 | ) | $ | (112,871 | ) | $ | (116,512 | ) | |||||
Net loss for the year ended December 31, 2003 | (101 | ) | (4,942 | ) | — | (4,942 | ) | (5,043 | ) | |||||||||||
Partner’s deficit at December 31, 2003 | (3,742 | ) | (117,311 | ) | (502 | ) | (117,813 | ) | (121,555 | ) | ||||||||||
Net loss for the year ended December 31, 2004 | (130 | ) | (6,375 | ) | — | (6,375 | ) | (6,505 | ) | |||||||||||
Partners’ deficit at December 31, 2004 | (3,872 | ) | (123,686 | ) | (502 | ) | (124,188 | ) | (128,060 | ) | ||||||||||
Net loss for the year ended December 31, 2005 | (134 | ) | (6,550 | ) | — | (6,550 | ) | (6,684 | ) | |||||||||||
Partners’ deficit at December 31, 2005 | $ | (4,006 | ) | $ | (130,236 | ) | $ | (502 | ) | $ | (130,738 | ) | $ | (134,744 | ) | |||||
VMS National Residential Portfolio II | ||||||||||||||||||||
Limited Partners | ||||||||||||||||||||
General | Accumulated | Subscription | ||||||||||||||||||
Partner | Deficit | Notes | Sub-Total | Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Partners’ deficit at December 31, 2002 | $ | (1,524 | ) | $ | (47,163 | ) | $ | (328 | ) | $ | (47,491 | ) | $ | (49,015 | ) | |||||
Net loss for the year ended December 31, 2003 | (42 | ) | (2,049 | ) | — | (2,049 | ) | (2,091 | ) | |||||||||||
Partner’s deficit at December 31, 2003 | (1,566 | ) | (49,212 | ) | (328 | ) | (49,540 | ) | (51,106 | ) | ||||||||||
Net loss for the year ended December 31, 2004 | (54 | ) | (2,643 | ) | — | (2,643 | ) | (2,697 | ) | |||||||||||
Partners’ deficit at December 31, 2004 | (1,620 | ) | (51,855 | ) | (328 | ) | (52,183 | ) | (53,803 | ) | ||||||||||
Net loss for the year ended December 31, 2005 | (55 | ) | (2,716 | ) | — | (2,716 | ) | (2,771 | ) | |||||||||||
Partners’ deficit at December 31, 2005 | $ | (1,675 | ) | $ | (54,571 | ) | $ | (328 | ) | $ | (54,899 | ) | $ | (56,574 | ) | |||||
Combined partners’ deficit at December 31, 2005 | $ | (5,681 | ) | $ | (184,807 | ) | $ | (830 | ) | $ | (185,637 | ) | $ | (191,318 | ) | |||||
B-4
Table of Contents
For the Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
(In thousands) | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (9,455 | ) | $ | (9,202 | ) | $ | (7,134 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||
Depreciation | 7,614 | 7,147 | 6,984 | |||||||||
Amortization of mortgage discounts | 6,240 | 5,533 | 5,079 | |||||||||
Casualty gains | (564 | ) | (45 | ) | (164 | ) | ||||||
Change in accounts: | ||||||||||||
Receivables and deposits | (334 | ) | (321 | ) | 45 | |||||||
Other assets | (49 | ) | (152 | ) | (207 | ) | ||||||
Accounts payable | 551 | (353 | ) | 509 | ||||||||
Tenant security deposit liabilities | 38 | 6 | (44 | ) | ||||||||
Due to affiliates | 259 | 403 | 291 | |||||||||
Accrued property taxes | (25 | ) | 95 | (3 | ) | |||||||
Accrued interest | 2,009 | 1,886 | 1,032 | |||||||||
Other liabilities | (27 | ) | 6 | (1 | ) | |||||||
Net cash provided by operating activities | 6,257 | 5,003 | 6,387 | |||||||||
Cash flows from investing activities: | ||||||||||||
Property improvements and replacements | (7,558 | ) | (2,923 | ) | (2,786 | ) | ||||||
Net withdrawals from (deposits to) restricted escrows | 864 | (219 | ) | (47 | ) | |||||||
Insurance proceeds received | 624 | 74 | 196 | |||||||||
Net cash used in investing activities | (6,070 | ) | (3,068 | ) | (2,637 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Payments on mortgage notes payable | (3,122 | ) | (4,374 | ) | (4,795 | ) | ||||||
Payments on advances from an affiliate | (2,841 | ) | — | (3 | ) | |||||||
Advances from an affiliate | 6,131 | 2,742 | — | |||||||||
Net cash provided by (used in) financing activities | 168 | (1,632 | ) | (4,798 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 355 | 303 | (1,048 | ) | ||||||||
Cash and cash equivalents at beginning of year | 2,064 | 1,761 | 2,809 | |||||||||
Cash and cash equivalents at end of year | $ | 2,419 | $ | 2,064 | $ | 1,761 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Cash paid for interest, including approximately $1,537, $465, and $1,600 paid to an affiliate | $ | 9,868 | $ | 9,262 | $ | 10,346 | ||||||
Supplemental disclosure of non-cash information: | ||||||||||||
Accrued interest added to mortgage notes payable | $ | 1,691 | $ | 2,124 | $ | 937 | ||||||
Property improvements and replacements included in accounts payable and other liabilities | $ | 643 | $ | 857 | $ | 330 | ||||||
B-5
Table of Contents
Note A — | Organization and Summary of Significant Accounting Policies |
B-6
Table of Contents
B-7
Table of Contents
B-8
Table of Contents
Principal | Principal | Principal | ||||||||||||||
Balance at | Balance at | Balance | ||||||||||||||
December 31, | December 31, | Period | Due at | |||||||||||||
Property | 2005 | 2004 | Amortized | Maturity | ||||||||||||
(In thousands) | (In thousands) | |||||||||||||||
North Park Apartments | ||||||||||||||||
1st mortgage | $ | 5,642 | $ | 5,750 | 25 yrs | $ | 5,376 | |||||||||
2nd mortgage | 2,718 | 2,446 | (A | ) | (A | ) | ||||||||||
Chapelle Le Grande | ||||||||||||||||
1st mortgage | 2,896 | 2,955 | 25 yrs | 2,759 | ||||||||||||
2nd mortgage | 1,289 | 1,205 | (A | ) | (A | ) | ||||||||||
Terrace Gardens | ||||||||||||||||
1st mortgage | 4,006 | 4,083 | 25 yrs | 3,818 | ||||||||||||
2nd mortgage | 1,498 | 1,421 | (A | ) | (A | ) | ||||||||||
Forest Ridge Apartments | ||||||||||||||||
1st mortgage | 5,324 | 5,434 | 25 yrs | 5,073 | ||||||||||||
2nd mortgage | 490 | 566 | (A | ) | (A | ) | ||||||||||
Scotchollow | ||||||||||||||||
1st mortgage | 26,291 | 26,834 | 25 yrs | 25,054 | ||||||||||||
2nd mortgage | 9,397 | 8,861 | (A | ) | (A | ) | ||||||||||
Pathfinder Village | ||||||||||||||||
1st mortgage | 12,147 | 12,380 | 25 yrs | 11,576 | ||||||||||||
2nd mortgage | 3,037 | 2,816 | (A | ) | (A | ) |
B-9
Table of Contents
Principal | Principal | Principal | ||||||||||||||
Balance at | Balance at | Balance | ||||||||||||||
December 31, | December 31, | Period | Due at | |||||||||||||
Property | 2005 | 2004 | Amortized | Maturity | ||||||||||||
(In thousands) | (In thousands) | |||||||||||||||
Buena Vista Apartments | ||||||||||||||||
1st mortgage | 4,470 | 4,562 | 25 yrs | 4,260 | ||||||||||||
2nd mortgage(B) | — | 62 | (A | ) | (A | ) | ||||||||||
Mountain View Apartments | ||||||||||||||||
1st mortgage | 6,458 | 6,592 | 25 yrs | 6,154 | ||||||||||||
2nd mortgage(C) | — | — | (A | ) | (A | ) | ||||||||||
Crosswood Park | ||||||||||||||||
1st mortgage | 5,024 | 5,120 | 25 yrs | 4,788 | ||||||||||||
2nd mortgage | 232 | 299 | (A | ) | (A | ) | ||||||||||
Casa de Monterey | ||||||||||||||||
1st mortgage | 3,695 | 3,772 | 25 yrs | 3,479 | ||||||||||||
2nd mortgage | 115 | 268 | (A | ) | (A | ) | ||||||||||
The Bluffs | ||||||||||||||||
1st mortgage | 3,360 | 3,429 | 25 yrs | 3,202 | ||||||||||||
2nd mortgage | 1,442 | 1,349 | (A | ) | (A | ) | ||||||||||
Watergate Apartments | ||||||||||||||||
1st mortgage | 2,611 | 2,665 | 25 yrs | 2,492 | ||||||||||||
2nd mortgage | 885 | 840 | (A | ) | (A | ) | ||||||||||
Shadowood Apartments | ||||||||||||||||
1st mortgage | 2,032 | 2,074 | 25 yrs | 1,936 | ||||||||||||
2nd mortgage | 41 | 88 | (A | ) | (A | ) | ||||||||||
Vista Village Apartments | ||||||||||||||||
1st mortgage | 2,997 | 3,059 | 25 yrs | 2,856 | ||||||||||||
2nd mortgage | 1,337 | 1,215 | (A | ) | (A | ) | ||||||||||
Towers of Westchester Park | ||||||||||||||||
1st mortgage | 10,934 | 11,160 | 25 yrs | 10,420 | ||||||||||||
2nd mortgage | 193 | 687 | (A | ) | (A | ) | ||||||||||
Totals | $ | 120,561 | $ | 121,992 | $ | 93,243 | ||||||||||
(A) | Payments are based on excess monthly cash flow with any unpaid balance due at maturity. Excess monthly cash flow is defined as revenue generated from the operation of a property less: (1) operating expenses of the property; (2) the debt service payment for the senior loan; (3) the tax and insurance reserve deposit; and (4) the replacement reserve deposit. | |
(B) | Second mortgage loan was satisfied in 2005. | |
(C) | Second mortgage loan was satisfied in 2004. |
B-10
Table of Contents
2006 | $ | 2,189 | ||
2007 | 2,403 | |||
2008 | 115,969 | |||
$ | 120,561 | |||
B-11
Table of Contents
B-12
Table of Contents
B-13
Table of Contents
B-14
Table of Contents
Portfolio I | Portfolio II | |||||||
Subscription notes receivable | $ | 502 | $ | 328 | ||||
Accrued interest receivable | 63 | 67 | ||||||
Allowance for uncollectible interest receivable | (63 | ) | (67 | ) | ||||
Total subscription notes and accrued interest receivable | $ | 502 | $ | 328 | ||||
(In thousands) | ||||||||||||||||||||
Buildings and | Costs Capitalized | Provision to | ||||||||||||||||||
Related Personal | Subsequent to | Reduce to | ||||||||||||||||||
Description | Encumbrances | Land | Property | Acquisition | Fair Value | |||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||
North Park Apartments | $ | 8,360 | $ | 557 | $ | 8,349 | $ | 3,257 | $ | — | ||||||||||
Chapelle Le Grande | 4,185 | 166 | 3,873 | 1,371 | — | |||||||||||||||
Terrace Garden | 5,504 | 433 | 4,517 | 2,440 | — | |||||||||||||||
Forest Ridge Apartments | 5,814 | 701 | 6,930 | 2,807 | — | |||||||||||||||
Scotchollow | 35,688 | 3,510 | 19,344 | 10,107 | — | |||||||||||||||
Pathfinder Village | 15,184 | 3,040 | 11,698 | 6,695 | (1,250 | ) | ||||||||||||||
Buena Vista Apartments | 4,470 | 893 | 4,538 | 1,332 | — | |||||||||||||||
Mountain View Apartments | 6,458 | 1,289 | 8,490 | 2,746 | — | |||||||||||||||
Crosswood Park | 5,256 | 611 | 8,597 | 4,853 | (2,000 | ) | ||||||||||||||
Casa De Monterey | 3,810 | 869 | 6,136 | 2,685 | — | |||||||||||||||
The Bluffs | 4,802 | 193 | 3,667 | 1,126 | — | |||||||||||||||
Watergate Apartments | 3,496 | 263 | 5,625 | 2,353 | — | |||||||||||||||
Shadowood Apartments | 2,073 | 209 | 3,393 | 1,324 | — | |||||||||||||||
Vista Village Apartments | 4,334 | 568 | 5,209 | 2,232 | — | |||||||||||||||
Towers Of Westchester Park | 11,127 | 529 | 13,491 | 6,072 | — | |||||||||||||||
TOTAL | $ | 120,561 | $ | 13,831 | $ | 113,857 | $ | 51,400 | $ | (3,250 | ) | |||||||||
B-15
Table of Contents
Buildings | ||||||||||||||||||||||||||||
and Related | ||||||||||||||||||||||||||||
Personal | Accumulated | Year of | Date of | Depreciable | ||||||||||||||||||||||||
Description | Land | Property | Total | Depreciation | Construction | Acquisition | Life | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
North Park Apartments | $ | 557 | $ | 11,606 | $ | 12,163 | $ | 9,139 | 1968 | 11/14/84 | 5-30 yrs | |||||||||||||||||
Chapelle Le Grande | 166 | 5,244 | 5,410 | 4,182 | 1972 | 12/05/84 | 5-30 yrs | |||||||||||||||||||||
Terrace Gardens | 433 | 6,957 | 7,390 | 5,339 | 1973 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Forest Ridge Apartments | 701 | 9,737 | 10,438 | 7,917 | 1974 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Scotchollow | 3,510 | 29,451 | 32,961 | 23,388 | 1973 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Pathfinder Village | 2,753 | 17,430 | 20,183 | 13,571 | 1971 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Buena Vista Apartments | 893 | 5,870 | 6,763 | 4,785 | 1972 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Mountain View Apartments | 1,289 | 11,236 | 12,525 | 8,109 | 1978 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Crosswood Park | 471 | 11,590 | 12,061 | 7,817 | 1977 | 12/05/84 | 5-30 yrs | |||||||||||||||||||||
Casa De Monterey | 869 | 8,821 | 9,690 | 6,868 | 1970 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
The Bluffs | 193 | 4,793 | 4,986 | 4,030 | 1968 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Watergate Apartments | 263 | 7,978 | 8,241 | 6,268 | 1972 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Shadowood Apartments | 209 | 4,717 | 4,926 | 3,892 | 1974 | 11/14/84 | 5-30 yrs | |||||||||||||||||||||
Vista Village Apartments | 568 | 7,441 | 8,009 | 6,011 | 1971 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Towers Of Westchester Park | 529 | 19,563 | 20,092 | 15,498 | 1971 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
TOTAL | $ | 13,404 | $ | 162,434 | $ | 175,838 | $ | 126,814 | ||||||||||||||||||||
2005 | 2004 | 2003 | ||||||||||
Investment Properties | ||||||||||||
Balance at beginning of year | $ | 168,863 | $ | 165,448 | $ | 162,478 | ||||||
Property improvements and replacements | 7,344 | 3,450 | 3,091 | |||||||||
Dispositions of property | (369 | ) | (35 | ) | (121 | ) | ||||||
Balance at end of year | $ | 175,838 | $ | 168,863 | $ | 165,448 | ||||||
2005 | 2004 | 2003 | ||||||||||
Accumulated Depreciation | ||||||||||||
Balance at beginning of year | $ | 119,509 | $ | 112,389 | $ | 105,494 | ||||||
Additions charged to expense | 7,614 | 7,147 | 6,984 | |||||||||
Dispositions of property | (309 | ) | (27 | ) | (89 | ) | ||||||
Balance at end of year | $ | 126,814 | $ | 119,509 | $ | 112,389 | ||||||
B-16
Table of Contents
2005 | 2004 | 2003 | ||||||||||
Net loss as reported | $ | (9,455 | ) | $ | (9,202 | ) | $ | (7,134 | ) | |||
Depreciation differences | 3,678 | 4,368 | 4,120 | |||||||||
Unearned income | (39 | ) | (62 | ) | 14 | |||||||
Casualty loss | (564 | ) | (45 | ) | (124 | ) | ||||||
Residual proceeds expense | 6,240 | 5,533 | 5,079 | |||||||||
Other | (114 | ) | 33 | 645 | ||||||||
Federal taxable (loss) income | $ | (254 | ) | $ | 625 | $ | 2,600 | |||||
Portfolio I Allocation | $ | (180 | ) | $ | 441 | $ | 1,836 | |||||
Portfolio II Allocation | (74 | ) | 184 | 764 | ||||||||
Net income per limited partnership interest: | ||||||||||||
Portfolio I Allocation | $ | 5,305 | $ | 2,772 | $ | 4,147 | ||||||
Portfolio II Allocation | 5,352 | 2,797 | 4,183 |
2005 | 2004 | |||||||
Net liabilities as reported | $ | (191,318 | ) | $ | (181,863 | ) | ||
Land and buildings | 16,716 | 16,808 | ||||||
Accumulated depreciation | (31,369 | ) | (34,738 | ) | ||||
Syndication costs | 17,650 | 17,650 | ||||||
Deferred gain | 42,225 | 42,225 | ||||||
Other deferred costs | 9,601 | 9,601 | ||||||
Other | (52,531 | ) | (52,213 | ) | ||||
Notes payable | 4,882 | 4,882 | ||||||
Subscription notes receivable | 1,837 | 1,837 | ||||||
Mortgage payable | (47,727 | ) | (47,727 | ) | ||||
Residual proceeds liability | 25,505 | 19,265 | ||||||
Accrued interest | 9,571 | 9,571 | ||||||
Net liabilities — Federal tax basis | $ | (194,958 | ) | $ | (194,702 | ) | ||
B-17
Table of Contents
B-18
Table of Contents
1st | 2nd | 3rd | 4th | |||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Total | ||||||||||||||||
2005 | ||||||||||||||||||||
Total revenues | $ | 7,822 | $ | 7,977 | $ | 8,621 | $ | 8,633 | $ | 33,053 | ||||||||||
Total expenses | 10,409 | 10,392 | 10,785 | 10,922 | 42,508 | |||||||||||||||
Net loss | $ | (2,587 | ) | $ | (2,415 | ) | $ | (2,164 | ) | $ | (2,289 | ) | $ | (9,455 | ) | |||||
Net loss per limited partnership interest: | ||||||||||||||||||||
Portfolio I (644 interests issued and outstanding) | $ | (2,783 | ) | $ | (2,597 | ) | $ | (2,330 | ) | $ | (2,461 | ) | $ | (10,171 | ) | |||||
Portfolio II (267 interests issued and outstanding) | $ | (2,783 | ) | $ | (2,599 | ) | $ | (2,326 | ) | $ | (2,464 | ) | $ | (10,172 | ) | |||||
1st | 2nd | 3rd | 4th | |||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Total | ||||||||||||||||
2004 | ||||||||||||||||||||
Total revenues | $ | 7,474 | $ | 7,453 | $ | 7,764 | $ | 7,883 | $ | 30,574 | ||||||||||
Total expenses | 9,643 | 9,919 | 9,791 | 10,423 | 39,776 | |||||||||||||||
Net loss | $ | (2,169 | ) | $ | (2,466 | ) | $ | (2,027 | ) | $ | (2,540 | ) | $ | (9,202 | ) | |||||
Net loss per limited partnership interest: | ||||||||||||||||||||
Portfolio I (644 interests issued and outstanding) | $ | (2,334 | ) | $ | (2,652 | ) | $ | (2,181 | ) | $ | (2,732 | ) | $ | (9,899 | ) | |||||
Portfolio II (267 interests issued and outstanding) | $ | (2,333 | ) | $ | (2,652 | ) | $ | (2,182 | ) | $ | (2,731 | ) | $ | (9,898 | ) | |||||
B-19
Table of Contents
September 30, | December 31, | |||||||
2006 | 2005 | |||||||
(Unaudited) | (Note) | |||||||
(In thousands) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 1,864 | $ | 2,419 | ||||
Receivables and deposits | 2,479 | 2,343 | ||||||
Restricted escrows | 245 | 251 | ||||||
Other assets | 1,137 | 786 | ||||||
Investment properties: | ||||||||
Land | 13,404 | 13,404 | ||||||
Buildings and related personal property | 165,282 | 162,434 | ||||||
178,686 | 175,838 | |||||||
Less accumulated depreciation | (132,436 | ) | (126,814 | ) | ||||
46,250 | 49,024 | |||||||
$ | 51,975 | $ | 54,823 | |||||
LIABILITIES AND PARTNERS’ DEFICIT | ||||||||
Liabilities | ||||||||
Accounts payable | $ | 1,371 | $ | 1,665 | ||||
Tenant security deposit liabilities | 1,006 | 893 | ||||||
Accrued property taxes | 1,035 | 670 | ||||||
Other liabilities | 750 | 800 | ||||||
Accrued interest | 664 | 878 | ||||||
Due to affiliates (Note D) | 12,512 | 10,884 | ||||||
Mortgage notes payable, including $21,498 and $22,674 due to an affiliate at September 30, 2006 and December 31, 2005, respectively (Note D) | 117,704 | 120,561 | ||||||
Mortgage participation liability (Note C) | 39,742 | 25,505 | ||||||
Notes payable (Note B) | 42,060 | 42,060 | ||||||
Deferred gain on extinguishment of debt (Note B) | 42,225 | 42,225 | ||||||
Partners’ Deficit | (207,094 | ) | (191,318 | ) | ||||
$ | 51,975 | $ | 54,823 | |||||
Note: | The combined balance sheet at December 31, 2005 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. |
B-20
Table of Contents
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands, except per partnership interest data) | ||||||||||||||||
Revenues: | ||||||||||||||||
Rental income | $ | 8,083 | $ | 7,724 | $ | 23,948 | $ | 22,434 | ||||||||
Other income | 777 | 568 | 2,210 | 1,657 | ||||||||||||
Casualty gains (Note E) | 300 | 329 | 538 | 329 | ||||||||||||
Total revenues | 9,160 | 8,621 | 26,696 | 24,420 | ||||||||||||
Expenses: | ||||||||||||||||
Operating | 3,531 | 3,244 | 10,067 | 9,423 | ||||||||||||
Property management fee to an affiliate | 348 | 322 | 1,024 | 937 | ||||||||||||
General and administrative | 156 | 151 | 468 | 531 | ||||||||||||
Depreciation | 1,954 | 1,956 | 5,889 | 5,650 | ||||||||||||
Interest | 9,951 | 4,565 | 23,275 | 13,408 | ||||||||||||
Property taxes | 599 | 547 | 1,749 | 1,637 | ||||||||||||
Total expenses | 16,539 | 10,785 | 42,472 | 31,586 | ||||||||||||
Net loss | $ | (7,379 | ) | $ | (2,164 | ) | $ | (15,776 | ) | $ | (7,166 | ) | ||||
Net loss allocated to general partners (2%) | $ | (148 | ) | $ | (43 | ) | $ | (316 | ) | $ | (143 | ) | ||||
Net loss allocated to limited partners (98%) | (7,231 | ) | (2,121 | ) | (15,460 | ) | (7,023 | ) | ||||||||
$ | (7,379 | ) | $ | (2,164 | ) | $ | (15,776 | ) | $ | (7,166 | ) | |||||
Net loss per limited partnership interest: | ||||||||||||||||
Portfolio I (644 interests issued and outstanding) | $ | (7,937 | ) | $ | (2,330 | ) | $ | (16,970 | ) | $ | (7,710 | ) | ||||
Portfolio II (267 interests issued and outstanding) | $ | (7,936 | ) | $ | (2,326 | ) | $ | (16,970 | ) | $ | (7,708 | ) | ||||
B-21
Table of Contents
VMS National Residential Portfolio I | ||||||||||||||||||||
Limited Partners | ||||||||||||||||||||
Limited | ||||||||||||||||||||
General | Accumulated | Subscription | Partners’ | |||||||||||||||||
Partners | Deficit | Notes | Total | Total | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Partners’ deficit at December 31, 2005 | $ | (4,006 | ) | $ | (130,236 | ) | $ | (502 | ) | $ | (130,738 | ) | $ | (134,744 | ) | |||||
Net loss for the nine months ended September 30, 2006 | (223 | ) | (10,929 | ) | — | (10,929 | ) | (11,152 | ) | |||||||||||
Partners’ deficit at September 30, 2006 | $ | (4,229 | ) | $ | (141,165 | ) | $ | (502 | ) | $ | (141,667 | ) | $ | (145,896 | ) | |||||
VMS National Residential Portfolio II | ||||||||||||||||||||
Limited Partners | ||||||||||||||||||||
Limited | ||||||||||||||||||||
General | Accumulated | Subscription | Partners’ | |||||||||||||||||
Partners | Deficit | Notes | Total | Total | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Partners’ deficit at December 31, 2005 | $ | (1,675 | ) | $ | (54,571 | ) | $ | (328 | ) | $ | (54,899 | ) | $ | (56,574 | ) | |||||
Net loss for the nine months ended September 30, 2006 | (93 | ) | (4,531 | ) | — | (4,531 | ) | (4,624 | ) | |||||||||||
Partners’ deficit at September 30, 2006 | $ | (1,768 | ) | $ | (59,102 | ) | $ | (328 | ) | $ | (59,430 | ) | $ | (61,198 | ) | |||||
Combined total at September 30, 2006 | $ | (5,997 | ) | $ | (200,267 | ) | $ | (830 | ) | $ | (201,097 | ) | $ | (207,094 | ) | |||||
B-22
Table of Contents
Nine Months Ended | ||||||||
September 30, | ||||||||
2006 | 2005 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (15,776 | ) | $ | (7,166 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation | 5,889 | 5,650 | ||||||
Amortization of mortgage discounts | 14,237 | 4,599 | ||||||
Casualty gains | (538 | ) | (329 | ) | ||||
Change in accounts: | ||||||||
Receivables and deposits | (136 | ) | (1,004 | ) | ||||
Other assets | (351 | ) | (363 | ) | ||||
Accounts payable | (57 | ) | 437 | |||||
Tenant security deposit liabilities | 113 | 24 | ||||||
Accrued property taxes | 365 | 374 | ||||||
Accrued interest | 817 | 1,389 | ||||||
Other liabilities | (50 | ) | (62 | ) | ||||
Due to affiliate | 741 | (107 | ) | |||||
Net cash provided by operating activities | 5,254 | 3,442 | ||||||
Cash flows from investing activities: | ||||||||
Property improvements and replacements | (3,407 | ) | (5,616 | ) | ||||
Net withdrawals from restricted escrows | 6 | 770 | ||||||
Net insurance proceeds | 593 | 363 | ||||||
Net cash used in investing activities | (2,808 | ) | (4,483 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments on mortgage notes payable | (3,888 | ) | (2,585 | ) | ||||
Payments on advances from an affiliate | (856 | ) | (1,794 | ) | ||||
Advances from an affiliate | 1,743 | 5,492 | ||||||
Net cash (used in) provided by financing activities | (3,001 | ) | 1,113 | |||||
Net (decrease) increase in cash and cash equivalents | (555 | ) | 72 | |||||
Cash and cash equivalents at beginning of period | 2,419 | 2,064 | ||||||
Cash and cash equivalents at end of period | $ | 1,864 | $ | 2,136 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest, including approximately $818 and $1,492 paid to an affiliate | $ | 7,271 | $ | 7,721 | ||||
Supplemental disclosure of non-cash activity: | ||||||||
Accrued interest added to mortgage notes payable | $ | 1,031 | $ | 1,107 | ||||
B-23
Table of Contents
B-24
Table of Contents
B-25
Table of Contents
B-26
Table of Contents
B-27
Table of Contents
B-28
Table of Contents
B-29
Table of Contents
C-1
Table of Contents
C-2
Table of Contents
C-3
Table of Contents
UNAFFILIATED SALE PROPERTIES
COMBINED BALANCE SHEET
September 30, | ||||||||
2006 | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
ASSETS: | ||||||||
Cash and cash equivalents | $ | 634 | ||||||
Receivables and deposits | 832 | |||||||
Restricted escrows | 121 | |||||||
Other assets | 369 | |||||||
Investment properties: | ||||||||
Land | 3,089 | |||||||
Buildings and related personal property | 59,803 | |||||||
62,892 | ||||||||
Less accumulated depreciation | (48,653 | ) | ||||||
14,239 | ||||||||
$ | 16,195 | |||||||
LIABILITIES AND PARTNERS’ DEFICIT | ||||||||
Liabilities | ||||||||
Accounts payable | $ | 736 | ||||||
Tenant security deposit liabilities | 263 | |||||||
Accrued property taxes | 744 | |||||||
Other liabilities | 325 | |||||||
Accrued interest | 289 | |||||||
Due to affiliates (Note D) | 3,378 | |||||||
Mortgage notes payable, including $9,604 due to an affiliate at September 30, 2006 (Note D) | 37,994 | |||||||
Mortgage participation liability (Note C) | 9,538 | |||||||
Notes payable (Note B) | 19,423 | |||||||
Deferred gain on extinguishment of debt (Note B) | 22,852 | |||||||
Partners’ Deficit | (79,347 | ) | ||||||
$ | 16,195 | |||||||
D-1
Table of Contents
UNAFFILIATED SALE PROPERTIES
COMBINED STATEMENTS OF OPERATIONS
Nine Months Ended | ||||||||
September 30, | ||||||||
2006 | 2005 | |||||||
(In thousands, except per interest data) (Unaudited) | ||||||||
Revenues: | ||||||||
Rental income | $ | 7,314 | $ | 7,289 | ||||
Other income | 954 | 615 | ||||||
Casualty gains (Note E) | 528 | 53 | ||||||
Total revenues | 8,796 | 7,957 | ||||||
Expenses: | ||||||||
Operating | 4,115 | 3,753 | ||||||
Property management fee to an affiliate | 322 | 308 | ||||||
General and administrative | 223 | 253 | ||||||
Depreciation | 2,142 | 2,054 | ||||||
Interest | 6,343 | 3,924 | ||||||
Property taxes | 690 | 600 | ||||||
Total expenses | 13,835 | 10,892 | ||||||
Net loss | $ | (5,039 | ) | $ | (2,935 | ) | ||
Net loss allocated to general partners (2%) | $ | (101 | ) | $ | (59 | ) | ||
Net loss allocated to limited partners (98%) | (4,938 | ) | (2,876 | ) | ||||
$ | (5,039 | ) | $ | (2,935 | ) | |||
Net loss per limited partnership interest: | ||||||||
Portfolio I (644 interests issued and outstanding) | $ | (5,420 | ) | $ | (3,157 | ) | ||
Portfolio II (267 interests issued and outstanding) | $ | (5,421 | ) | $ | (3,157 | ) | ||
D-2
Table of Contents
UNAFFILIATED SALE PROPERTIES
COMBINED STATEMENTS OF CASH FLOWS
Nine Months Ended | ||||||||
September 30, | ||||||||
2006 | 2005 | |||||||
(In thousands) (Unaudited) | ||||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (5,039 | ) | $ | (2,935 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation | 2,142 | 2,054 | ||||||
Amortization of mortgage discounts | 3,417 | 1,103 | ||||||
Casualty gains | (528 | ) | (53 | ) | ||||
Change in accounts: | ||||||||
Receivables and deposits | 114 | (242 | ) | |||||
Other assets | (110 | ) | (80 | ) | ||||
Accounts payable | 114 | 187 | ||||||
Tenant security deposit liabilities | 23 | 8 | ||||||
Accrued property taxes | 74 | 85 | ||||||
Other liabilities | (57 | ) | (92 | ) | ||||
Accrued interest | 427 | 554 | ||||||
Due to affiliate | 1,244 | 119 | ||||||
Net cash provided by operating activities | 1,821 | 708 | ||||||
Cash flows from investing activities: | ||||||||
Property improvements and replacements | (1,628 | ) | (2,079 | ) | ||||
Net withdrawals from (deposits to) restricted escrows | (2 | ) | 686 | |||||
Net insurance proceeds | 583 | 58 | ||||||
Net cash used in investing activities | (1,047 | ) | (1,335 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments on mortgage notes payable | (994 | ) | (596 | ) | ||||
Payments on advances from an affiliate | (222 | ) | (505 | ) | ||||
Advances from an affiliate | 222 | 1,749 | ||||||
Net cash (used in) provided by financing activities | (994 | ) | 648 | |||||
Net (decrease) increase in cash and cash equivalents | (220 | ) | 21 | |||||
Cash and cash equivalents at beginning of period | 854 | 609 | ||||||
Cash and cash equivalents at end of period | $ | 634 | $ | 630 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest, including approximately $390 and $448 paid to an affiliate | $ | 2,249 | $ | 2,278 | ||||
Supplemental disclosure of non-cash activity: | ||||||||
Accrued interest added to mortgage notes payable | $ | 421 | $ | 488 | ||||
D-3
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Unaudited)
D-4
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-5
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-6
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-7
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-8
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-9
Table of Contents
UNAFFILIATED SALE PROPERTIES
COMBINED BALANCE SHEETS
December 31, | ||||||||
2005 | 2004 | |||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
ASSETS: | ||||||||
Cash and cash equivalents | $ | 853 | $ | 609 | ||||
Receivables and deposits | 946 | 754 | ||||||
Restricted escrows | 119 | 827 | ||||||
Other assets | 260 | 222 | ||||||
Investment properties (Notes B and H): | ||||||||
Land | 3,089 | 3,089 | ||||||
Buildings and related personal property | 58,473 | 56,476 | ||||||
61,562 | 59,565 | |||||||
Less accumulated depreciation | (46,778 | ) | (44,156 | ) | ||||
14,784 | 15,409 | |||||||
$ | 16,962 | $ | 17,821 | |||||
LIABILITIES AND PARTNERS’ DEFICIT | ||||||||
Liabilities | ||||||||
Accounts payable | $ | 597 | $ | 863 | ||||
Tenant security deposit liabilities | 240 | 239 | ||||||
Accrued property taxes | 670 | 695 | ||||||
Other liabilities | 382 | 447 | ||||||
Accrued interest | 283 | 197 | ||||||
Due to affiliates (Note G) | 3,210 | 1, 814 | ||||||
Mortgage notes payable, including $9,700 due to an affiliate at 2005 and $9,130 at 2004 (Note C) | 38,567 | 38,579 | ||||||
Mortgage participation liability (Note E) | 6,121 | 4,624 | ||||||
Notes payable (Note D) | 19,423 | 19,423 | ||||||
Deferred gain on extinguishment of debt (Note B) | 22,852 | 22,852 | ||||||
Partners’ Deficit | (75,383 | ) | (71,912 | ) | ||||
$ | 16,962 | $ | 17,821 | |||||
D-10
Table of Contents
UNAFFILIATED SALE PROPERTIES
COMBINED STATEMENTS OF OPERATIONS
December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
(In thousands, except per limited partnership interest data) | ||||||||||||
(Unaudited) | ||||||||||||
Revenues: | ||||||||||||
Rental income | $ | 9,775 | $ | 9,118 | $ | 9,216 | ||||||
Other income | 868 | 930 | 859 | |||||||||
Casualty gains (Note F) | 289 | 45 | 64 | |||||||||
Total revenues | 10,932 | 10,093 | 10,139 | |||||||||
Expenses: | ||||||||||||
Operating | 4,989 | 4,499 | 4,313 | |||||||||
Property management fees to an affiliate | 419 | 394 | 397 | |||||||||
General and administrative | 327 | 258 | 283 | |||||||||
Depreciation | 2,768 | 2,559 | 2,522 | |||||||||
Interest, including approximately $2,786, $2,421 and $2,241 to an affiliate | 5,282 | 4,989 | 4,847 | |||||||||
Property taxes | 802 | 830 | 720 | |||||||||
Total expenses | 14,587 | 13,529 | 13,082 | |||||||||
Net loss | $ | (3,655 | ) | $ | (3,436 | ) | $ | (2,943 | ) | |||
Net loss allocated to general partners (2%) | $ | (73 | ) | $ | (69 | ) | $ | (59 | ) | |||
Net loss allocated to limited partners (98%) | (3,582 | ) | $ | (3,367 | ) | $ | (2,884 | ) | ||||
$ | (3,655 | ) | $ | (3,436 | ) | $ | (2,943 | ) | ||||
Net loss per limited partnership interest: | ||||||||||||
Portfolio I (644 interests issued and outstanding) | $ | (3,932 | ) | $ | (3,696 | ) | $ | (3,166 | ) | |||
Portfolio II (267 interests issued and outstanding) | $ | (3,931 | ) | $ | (3,696 | ) | $ | (3,166 | ) | |||
D-11
Table of Contents
UNAFFILIATED SALE PROPERTIES
COMBINED STATEMENTS OF CASH FLOWS
December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
(In thousands) | ||||||||||||
(Unaudited) | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (3,655 | ) | $ | (3,436 | ) | $ | (2,943 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||
Depreciation | 2,768 | 2,559 | 2,523 | |||||||||
Amortization of mortgage discounts | 1,497 | 1,328 | 1,219 | |||||||||
Casualty gains | (289 | ) | (45 | ) | (65 | ) | ||||||
Change in accounts: | ||||||||||||
Receivables and deposits | (192 | ) | (327 | ) | (13 | ) | ||||||
Other assets | (37 | ) | (33 | ) | (62 | ) | ||||||
Accounts payable | 167 | 4 | 41 | |||||||||
Tenant security deposit liabilities | 1 | (9 | ) | 28 | ||||||||
Due to affiliates | (145 | ) | 139 | 202 | ||||||||
Accrued property taxes | (25 | ) | 95 | (3 | ) | |||||||
Accrued interest | 1,485 | 748 | 565 | |||||||||
Other liabilities | (65 | ) | 104 | (7 | ) | |||||||
Net cash provided by operating activities | 1,510 | 1,127 | 1,485 | |||||||||
Cash flows from investing activities: | ||||||||||||
Property improvements and replacements | (2,603 | ) | (947 | ) | (811 | ) | ||||||
Net withdrawals from (deposits to) restricted escrows | 708 | (141 | ) | (18 | ) | |||||||
Insurance proceeds received | 316 | 74 | 78 | |||||||||
Net cash used in investing activities | (1,579 | ) | (1,014 | ) | (751 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Payments on mortgage notes payable | (875 | ) | (832 | ) | (872 | ) | ||||||
Payments on advances from an affiliate | (778 | ) | — | — | ||||||||
Advances from an affiliate | 1,966 | 546 | — | |||||||||
Net cash provided by (used in) financing activities | 313 | (286 | ) | (872 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 244 | (173 | ) | (138 | ) | |||||||
Cash and cash equivalents at beginning of year | 609 | 782 | 920 | |||||||||
Cash and cash equivalents at end of year | $ | 853 | $ | 609 | $ | 782 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Cash paid for interest, including approximately $1,537, $465, and $1,600 paid to an affiliate | $ | 2,907 | $ | 2,805 | $ | 2,984 | ||||||
Supplemental disclosure of non-cash information: | ||||||||||||
Accrued interest added to mortgage notes payable | $ | 1,399 | $ | 733 | $ | 525 | ||||||
Property improvements and replacements included in accounts payable and other liabilities | $ | 181 | $ | 614 | $ | 52 | ||||||
D-12
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS
D-13
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-14
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-15
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-16
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
Principal | Principal | Principal | ||||||||||||||
Balance at | Balance at | Balance | ||||||||||||||
December 31, | December 31, | Period | Due at | |||||||||||||
Property | 2005 | 2004 | Amortized | Maturity | ||||||||||||
(In thousands) | (In thousands) | |||||||||||||||
North Park Apartments | ||||||||||||||||
1st mortgage | $ | 5,642 | $ | 5,750 | 25 yrs | $ | 5,376 | |||||||||
2nd mortgage | 2,718 | 2,446 | (A | ) | (A | ) | ||||||||||
Chapelle Le Grande | ||||||||||||||||
1st mortgage | 2,896 | 2,955 | 25 yrs | 2,759 | ||||||||||||
2nd mortgage | 1,289 | 1,205 | (A | ) | (A | ) | ||||||||||
Terrace Gardens | ||||||||||||||||
1st mortgage | 4,006 | 4,083 | 25 yrs | 3,818 | ||||||||||||
2nd mortgage | 1,498 | 1,421 | (A | ) | (A | ) | ||||||||||
Forest Ridge Apartments | ||||||||||||||||
1st mortgage | 5,323 | 5,434 | 25 yrs | 5,073 | ||||||||||||
2nd mortgage | 490 | 566 | (A | ) | (A | ) | ||||||||||
The Bluffs | ||||||||||||||||
1st mortgage | 3,360 | 3,429 | 25 yrs | 3,202 | ||||||||||||
2nd mortgage | 1,442 | 1,349 | (A | ) | (A | ) | ||||||||||
Watergate Apartments | ||||||||||||||||
1st mortgage | 2,611 | 2,665 | 25 yrs | 2,492 | ||||||||||||
2nd mortgage | 885 | 840 | (A | ) | (A | ) | ||||||||||
Shadowood Apartments | ||||||||||||||||
1st mortgage | 2,032 | 2,074 | 25 yrs | 1,936 | ||||||||||||
2nd mortgage | 41 | 88 | (A | ) | (A | ) | ||||||||||
Vista Village Apartments | ||||||||||||||||
1st mortgage | 2,997 | 3,059 | 25 yrs | 2,856 | ||||||||||||
2nd mortgage | 1,337 | 1,215 | (A | ) | (A | ) | ||||||||||
Totals | $ | 38,567 | $ | 38,579 | $ | 27,512 | ||||||||||
(A) | Payments are based on excess monthly cash flow with any unpaid balance due at maturity. Excess monthly cash flow is defined as revenue generated from the operation of a property less: (1) operating expenses of the property; (2) the debt service payment for the senior loan; (3) the tax and insurance reserve deposit; and (4) the replacement reserve deposit. |
D-17
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
2006 | $ | 657 | ||
2007 | 721 | |||
2008 | 37,189 | |||
$ | 38,567 | |||
D-18
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-19
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-20
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-21
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
Initial Cost | ||||||||||||||||||||
Buildings and | Costs Capitalized | Provision to | ||||||||||||||||||
Related Personal | Subsequent to | Reduce to | ||||||||||||||||||
Description | Encumbrances | Land | Property | Acquisition | Fair Value | |||||||||||||||
(In thousands) | ||||||||||||||||||||
North Park Apartments | $ | 8,360 | $ | 557 | $ | 8,349 | $ | 3,257 | $ | — | ||||||||||
Chapelle Le Grande | 4,185 | 166 | 3,873 | 1,371 | — | |||||||||||||||
Terrace Garden | 5,504 | 433 | 4,517 | 2,440 | — | |||||||||||||||
Forest Ridge Apartments | 5,813 | 700 | 6,930 | 2,807 | — | |||||||||||||||
The Bluffs | 4,802 | 193 | 3,667 | 1,126 | — | |||||||||||||||
Watergate Apartments | 3,496 | 263 | 5,625 | 2,353 | — | |||||||||||||||
Shadowood Apartments | 2,073 | 209 | 3,393 | 1,324 | — | |||||||||||||||
Vista Village Apartments | 4,334 | 568 | 5,209 | 2,232 | — | |||||||||||||||
TOTAL | $ | 38,567 | $ | 3,089 | $ | 41,563 | $ | 16,910 | $ | — | ||||||||||
Gross Amount at Which Carried at December 31, 2005 | ||||||||||||||||||||||||||||
Buildings | ||||||||||||||||||||||||||||
and Related | ||||||||||||||||||||||||||||
Personal | Accumulated | Year of | Date of | Depreciable | ||||||||||||||||||||||||
Description | Land | Property | Total | Depreciation | Construction | Acquisition | Life | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
North Park Apartments | $ | 557 | $ | 11,606 | $ | 12,163 | $ | 9,139 | 1968 | 11/14/84 | 5-30 yrs | |||||||||||||||||
Chapelle Le Grande | 166 | 5,244 | 5,410 | 4,182 | 1972 | 12/05/84 | 5-30 yrs | |||||||||||||||||||||
Terrace Gardens | 433 | 6,957 | 7,390 | 5,339 | 1973 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Forest Ridge Apartments | 700 | 9,737 | 10,437 | 7,917 | 1974 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
The Bluffs | 193 | 4,793 | 4,986 | 4,030 | 1968 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Watergate Apartments | 263 | 7,978 | 8,241 | 6,268 | 1972 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Shadowood Apartments | 209 | 4,717 | 4,926 | 3,892 | 1974 | 11/14/84 | 5-30 yrs | |||||||||||||||||||||
Vista Village Apartments | 568 | 7,441 | 8,009 | 6,011 | 1971 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
TOTAL | $ | 3,089 | $ | 58,473 | $ | 61,562 | $ | 46,778 | ||||||||||||||||||||
D-22
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
2005 | 2004 | 2003 | ||||||||||
Investment Properties | ||||||||||||
Balance at beginning of year | $ | 59,565 | $ | 58,091 | $ | 57,303 | ||||||
Property improvements and replacements | 2,171 | 1,508 | 838 | |||||||||
Dispositions of property | (174 | ) | (34 | ) | (50 | ) | ||||||
Balance at end of year | $ | 61,562 | $ | 59,565 | $ | 58,091 | ||||||
Accumulated Depreciation | ||||||||||||
Balance at beginning of year | $ | 44,156 | $ | 41,624 | $ | 39,138 | ||||||
Additions charged to expense | 2,768 | 2,559 | 2,522 | |||||||||
Dispositions of property | (146 | ) | (27 | ) | (36 | ) | ||||||
Balance at end of year | $ | 46,778 | $ | 44,156 | $ | 41,624 | ||||||
Portfolio I | Portfolio II | |||||||
Subscription notes receivable | $ | 502 | $ | 328 | ||||
Accrued interest receivable | 63 | 67 | ||||||
Allowance for uncollectible interest receivable | (63 | ) | (67 | ) | ||||
Total subscription notes and accrued interest receivable | $ | 502 | $ | 328 | ||||
D-23
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
2005 | 2004 | 2003 | ||||||||||
Net loss as reported | $ | (9,455 | ) | $ | (9,202 | ) | $ | (7,134 | ) | |||
Depreciation differences | 3,678 | 4,368 | 4,120 | |||||||||
Unearned income | (39 | ) | (62 | ) | 14 | |||||||
Casualty loss | (564 | ) | (45 | ) | (124 | ) | ||||||
Residual proceeds expense | 6,240 | 5,533 | 5,079 | |||||||||
Other | (114 | ) | 33 | 645 | ||||||||
Federal taxable (loss) income | $ | (254 | ) | $ | 625 | $ | 2,600 | |||||
Portfolio I Allocation | $ | (180 | ) | $ | 441 | $ | 1,836 | |||||
Portfolio II Allocation | (74 | ) | 184 | 764 | ||||||||
Net income per limited partnership interest: | ||||||||||||
Portfolio I Allocation | $ | 5,305 | $ | 2,772 | $ | 4,147 | ||||||
Portfolio II Allocation | 5,352 | 2,797 | 4,183 |
2005 | 2004 | |||||||
Net liabilities as reported | $ | (191,318 | ) | $ | (181,863 | ) | ||
Land and buildings | 16,716 | 16,808 | ||||||
Accumulated depreciation | (31,369 | ) | (34,738 | ) | ||||
Syndication costs | 17,650 | 17,650 | ||||||
Deferred gain | 42,225 | 42,225 | ||||||
Other deferred costs | 9,601 | 9,601 | ||||||
Other | (52,531 | ) | (52,213 | ) | ||||
Notes payable | 4,882 | 4,882 | ||||||
Subscription notes receivable | 1,837 | 1,837 | ||||||
Mortgage payable | (47,727 | ) | (47,727 | ) | ||||
Residual proceeds liability | 25,505 | 19,265 | ||||||
Accrued interest | 9,571 | 9,571 | ||||||
Net liabilities — Federal tax basis | $ | (194,958 | ) | $ | (194, 702 | ) | ||
D-24
Table of Contents
UNAFFILIATED SALE PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-25
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
COMBINED BALANCE SHEET
September 30, | ||||
2006 | ||||
(In thousands) | ||||
(Unaudited) | ||||
ASSETS: | ||||
Cash and cash equivalents | $ | 1,230 | ||
Receivables and deposits | 1,647 | |||
Restricted escrows | 124 | |||
Other assets | 768 | |||
Investment properties: | ||||
Land | 10,315 | |||
Buildings and related personal property | 105,479 | |||
115,794 | ||||
Less accumulated depreciation | (83,783 | ) | ||
32,011 | ||||
$ | 35,780 | |||
LIABILITIES AND PARTNERS’ DEFICIT | ||||
Liabilities | ||||
Accounts payable | $ | 635 | ||
Tenant security deposit liabilities | 743 | |||
Accrued property taxes | 291 | |||
Other liabilities | 425 | |||
Accrued interest | 375 | |||
Due to affiliates (Note D) | 9,134 | |||
Mortgage notes payable, including $11,894 due to an affiliate at September 30, 2006 (Note D) | 79,710 | |||
Mortgage participation liability (Note C) | 30,204 | |||
Notes payable (Note B) | 22,637 | |||
Deferred gain on extinguishment of debt (Note B) | 19,373 | |||
Partners’ Deficit | (127,747 | ) | ||
$ | 35,780 | |||
D-26
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
COMBINED STATEMENTS OF OPERATIONS
Nine Months Ended | ||||||||
September 30, | ||||||||
2006 | 2005 | |||||||
(In thousands, except per interest data) (Unaudited) | ||||||||
Revenues: | ||||||||
Rental income | $ | 16,634 | $ | 15,145 | ||||
Other income | 1,256 | 1,042 | ||||||
Casualty gains (Note E) | 10 | 276 | ||||||
Total revenues | 17,900 | 16,463 | ||||||
Expenses: | ||||||||
Operating | 5,952 | 5,671 | ||||||
Property management fee to an affiliate | 702 | 629 | ||||||
General and administrative | 245 | 278 | ||||||
Depreciation | 3,747 | 3,595 | ||||||
Interest | 16,932 | 9,485 | ||||||
Property taxes | 1,059 | 1,036 | ||||||
Total expenses | 28,637 | 20,694 | ||||||
Net loss | $ | (10,737 | ) | $ | (4,231 | ) | ||
Net loss allocated to general partners (2%) | $ | (215 | ) | $ | (85 | ) | ||
Net loss allocated to limited partners (98%) | (10,522 | ) | (4,146 | ) | ||||
$ | (10,737 | ) | $ | (4,231 | ) | |||
Net loss per limited partnership interest: | ||||||||
Portfolio I (644 interests issued and outstanding) | $ | (11,550 | ) | $ | (4,551 | ) | ||
Portfolio II (267 interests issued and outstanding) | $ | (11,551 | ) | $ | (4,552 | ) | ||
D-27
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
COMBINED STATEMENTS OF CASH FLOWS
Nine Months Ended | ||||||||
September 30, | ||||||||
2006 | 2005 | |||||||
(In thousands) (Unaudited) | ||||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (10,737 | ) | $ | (4,231 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation | 3,747 | 3,596 | ||||||
Amortization of mortgage discounts | 10,820 | 3,496 | ||||||
Casualty gains | (10 | ) | (276 | ) | ||||
Change in accounts: | ||||||||
Receivables and deposits | (250 | ) | (762 | ) | ||||
Other assets | (241 | ) | (283 | ) | ||||
Accounts payable | (171 | ) | 250 | |||||
Tenant security deposit liabilities | 90 | 17 | ||||||
Accrued property taxes | 291 | 289 | ||||||
Other liabilities | 7 | 29 | ||||||
Accrued interest | 390 | 836 | ||||||
Due to affiliate | (503 | ) | (227 | ) | ||||
Net cash provided by operating activities | 3,433 | 2,734 | ||||||
Cash flows from investing activities: | ||||||||
Property improvements and replacements | (1,779 | ) | (3,538 | ) | ||||
Net withdrawals from restricted escrows | 8 | 84 | ||||||
Net insurance proceeds | 10 | 305 | ||||||
Net cash used in investing activities | (1,761 | ) | (3,149 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments on mortgage notes payable | (2,894 | ) | (1,990 | ) | ||||
Payments on advances from an affiliate | (634 | ) | (1,288 | ) | ||||
Advances from an affiliate | 1,521 | 3,743 | ||||||
Net cash (used in) provided by financing activities | (2,007 | ) | 465 | |||||
Net (decrease) increase in cash and cash equivalents | (335 | ) | 50 | |||||
Cash and cash equivalents at beginning of period | 1,565 | 1,455 | ||||||
Cash and cash equivalents at end of period | $ | 1,230 | $ | 1,505 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest, including approximately $428 and $1,046 paid to an affiliate | $ | 5,022 | $ | 5,443 | ||||
Supplemental disclosure of non-cash activity: | ||||||||
Accrued interest added to mortgage notes payable | $ | 610 | $ | 619 | ||||
D-28
Table of Contents
D-29
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-30
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-31
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-32
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-33
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-34
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
COMBINED BALANCE SHEETS
December 31, | ||||||||||||
2005 | 2004 | |||||||||||
(In thousands) | ||||||||||||
(Unaudited) | ||||||||||||
ASSETS: | ||||||||||||
Cash and cash equivalents | $ | 1,566 | $ | 1,455 | ||||||||
Receivables and deposits | 1,397 | 1,255 | ||||||||||
Restricted escrows | 132 | 288 | ||||||||||
Other assets | 526 | 515 | ||||||||||
Investment properties (Notes B and H): | ||||||||||||
Land | 10,315 | 10,315 | ||||||||||
Buildings and related personal property | 103,960 | 98,983 | ||||||||||
114,275 | 109,298 | |||||||||||
Less accumulated depreciation | (80,036 | ) | (75,353 | ) | ||||||||
34,239 | 33,945 | |||||||||||
$ | 37,860 | $ | 37,458 | |||||||||
LIABILITIES AND PARTNERS’ DEFICIT | ||||||||||||
Liabilities | ||||||||||||
Accounts payable | $ | 1,067 | $ | 465 | ||||||||
Tenant security deposit liabilities | 653 | 616 | ||||||||||
Other liabilities | 418 | 381 | ||||||||||
Accrued interest | 595 | 363 | ||||||||||
Due to affiliates (Note G) | 7,674 | 5,521 | ||||||||||
Mortgage notes payable, including $12,974 due to an affiliate at 2005 and $12,993 at 2004 (Note C) | 81,994 | 83,413 | ||||||||||
Mortgage participation liability (Note E) | 19,384 | 14,641 | ||||||||||
Notes payable (Note D) | 22,636 | 22,636 | ||||||||||
Deferred gain on extinguishment of debt (Note B) | 19,373 | 19,373 | ||||||||||
Partners’ Deficit | (115,934 | ) | (109,951 | ) | ||||||||
$ | 37,860 | $ | 37,458 | |||||||||
D-35
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AFFILIATED CONTRIBUTION PROPERTIES
COMBINED STATEMENTS OF OPERATIONS
December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
(In thousands, except per limited partnership interest data) (Unaudited) | ||||||||||||
Revenues: | ||||||||||||
Rental income | $ | 20,432 | $ | 19,071 | $ | 19,838 | ||||||
Other income | 1,414 | 1,410 | 1,454 | |||||||||
Casualty gains (Note F) | 275 | — | 100 | |||||||||
Total revenues | 22,121 | 20,481 | 21,392 | |||||||||
Expenses: | ||||||||||||
Operating | 7,667 | 7,114 | 6,780 | |||||||||
Property management fees to an affiliate | 859 | 807 | 856 | |||||||||
General and administrative | 359 | 284 | 311 | |||||||||
Depreciation | 4,846 | 4,587 | 4,462 | |||||||||
Interest, including approximately $6,766, $5,965 and $5,662 to an affiliate | 12,805 | 12,106 | 11,885 | |||||||||
Property taxes | 1,385 | 1,350 | 1,288 | |||||||||
Total expenses | 27,921 | 26,248 | 25,582 | |||||||||
Net loss | $ | (5,800 | ) | $ | (5,767 | ) | $ | (4,190 | ) | |||
Net loss allocated to general partners (2%) | $ | (116 | ) | $ | (115 | ) | $ | (84 | ) | |||
Net loss allocated to limited partners (98%) | (5,684 | ) | (5,652 | ) | (4,106 | ) | ||||||
$ | (5,800 | ) | $ | (5,767 | ) | $ | (4,190 | ) | ||||
Net loss per limited partnership interest: | ||||||||||||
Portfolio I (644 interests issued and outstanding) | $ | (6,239 | ) | $ | (6,204 | ) | $ | (4,507 | ) | |||
Portfolio II (267 interests issued and outstanding) | $ | (6,240 | ) | $ | (6,204 | ) | $ | (4,508 | ) | |||
D-36
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
COMBINED STATEMENTS OF CASH FLOWS
December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
(In thousands) | ||||||||||||
(Unaudited) | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (5,800 | ) | $ | (5,767 | ) | $ | (4,190 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||
Depreciation | 4,846 | 4,587 | 4,462 | |||||||||
Amortization of mortgage discounts | 4,743 | 4,205 | 3,860 | |||||||||
Casualty gains | (275 | ) | — | (100 | ) | |||||||
Change in accounts: | ||||||||||||
Receivables and deposits | (142 | ) | 6 | 15 | ||||||||
Other assets | (12 | ) | (119 | ) | (145 | ) | ||||||
Accounts payable | 383 | (357 | ) | 468 | ||||||||
Tenant security deposit liabilities | 37 | 15 | (73 | ) | ||||||||
Due to affiliates | 407 | 264 | 90 | |||||||||
Accrued interest | 524 | 1,138 | 466 | |||||||||
Other liabilities | 36 | (97 | ) | 49 | ||||||||
Net cash provided by operating activities | 4,747 | 3,875 | 4,902 | |||||||||
Cash flows from investing activities: | ||||||||||||
Property improvements and replacements | (4,955 | ) | (1,976 | ) | (1,976 | ) | ||||||
Net withdrawals from (deposits to) restricted escrows | 156 | (78 | ) | (28 | ) | |||||||
Insurance proceeds received | 308 | — | 118 | |||||||||
Net cash used in investing activities | (4,491 | ) | (2,054 | ) | $ | (1,886 | ) | |||||
Cash flows from financing activities: | ||||||||||||
Payments on mortgage notes payable | (2,247 | ) | (3,541 | ) | (3,923 | ) | ||||||
Payments on advances from an affiliate | (2,063 | ) | — | (3 | ) | |||||||
Advances from an affiliate | 4,165 | 2,196 | — | |||||||||
Net cash used in financing activities | (145 | ) | (1,345 | ) | (3,926 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 111 | 476 | (910 | ) | ||||||||
Cash and cash equivalents at beginning of year | 1,455 | 979 | 1,889 | |||||||||
Cash and cash equivalents at end of year | $ | 1,566 | $ | 1,455 | $ | 979 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Cash paid for interest, including approximately $809, $188, and $1,203 paid to an affiliate | $ | 6,960 | $ | 6,457 | $ | 7,362 | ||||||
Supplemental disclosure of non-cash information: | ||||||||||||
Accrued interest added to mortgage notes payable | $ | 292 | $ | 1,390 | $ | 412 | ||||||
Property improvements and replacements included in accounts payable and other liabilities | $ | 462 | $ | 243 | $ | 278 | ||||||
D-37
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS
D-38
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-39
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-40
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-41
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
Principal | Principal | Principal | ||||||||||||||
Balance at | Balance at | Balance | ||||||||||||||
December 31, | December 31, | Period | Due at | |||||||||||||
Property | 2005 | 2004 | Amortized | Maturity | ||||||||||||
(In thousands) | (In thousands) | |||||||||||||||
Scotchollow | ||||||||||||||||
1st mortgage | 26,291 | 26,834 | 25 yrs | 25,054 | ||||||||||||
2nd mortgage | 9,397 | 8, 861 | (A | ) | (A | ) | ||||||||||
Pathfinder Village | ||||||||||||||||
1st mortgage | 12,148 | 12,380 | 25 yrs | 11,576 | ||||||||||||
2nd mortgage | 3, 037 | 2,816 | (A | ) | (A | ) | ||||||||||
Buena Vista Apartments | ||||||||||||||||
1st mortgage | 4,470 | 4,562 | 25 yrs | 4,260 | ||||||||||||
2nd mortgage(B) | — | 62 | (A | ) | (A | ) | ||||||||||
Mountain View Apartments | ||||||||||||||||
1st mortgage | 6,458 | 6,592 | 25 yrs | 6,154 | ||||||||||||
Crosswood Park | ||||||||||||||||
1st mortgage | 5, 024 | 5,120 | 25 yrs | 4,788 | ||||||||||||
2nd mortgage | 232 | 299 | (A | ) | (A | ) | ||||||||||
Casa de Monterey | ||||||||||||||||
1st mortgage | 3,695 | 3,772 | 25 yrs | 3,479 | ||||||||||||
2nd mortgage | 115 | 268 | (A | ) | (A | ) | ||||||||||
Towers of Westchester Park | ||||||||||||||||
1st mortgage | 10,934 | 11,160 | 25 yrs | 10,420 | ||||||||||||
2nd mortgage | 193 | 687 | (A | ) | (A | ) | ||||||||||
Totals | $ | 81,994 | $ | 83,413 | $ | 65,731 | ||||||||||
(A) | Payments are based on excess monthly cash flow with any unpaid balance due at maturity. Excess monthly cash flow is defined as revenue generated from the operation of a property less: (1) operating expenses of the property; (2) the debt service payment for the senior loan; (3) the tax and insurance reserve deposit; and (4) the replacement reserve deposit. |
(B) | Second mortgage loan was satisfied in 2005. |
D-42
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
2006 | $ | 1,532 | ||
2007 | 1,682 | |||
2008 | 78,780 | |||
$ | 81,994 | |||
D-43
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-44
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-45
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
Initial Cost | ||||||||||||||||||||
Buildings and | Costs Capitalized | Provision to | ||||||||||||||||||
Related Personal | Subsequent to | Reduce to | ||||||||||||||||||
Description | Encumbrances | Land | Property | Acquisition | Fair Value | |||||||||||||||
(In thousands) | (In thousands) | (In thousands) | ||||||||||||||||||
Scotchollow | $ | 35,688 | $ | 3,510 | $ | 19,344 | $ | 10,107 | — | |||||||||||
Pathfinder Village | 15,185 | 3,040 | 11,698 | 6,695 | (1,250 | ) | ||||||||||||||
Buena Vista Apartments | 4,470 | 893 | 4,538 | 1,332 | — | |||||||||||||||
Mountain View Apartments | 6,458 | 1,289 | 8,490 | 2,746 | — | |||||||||||||||
Crosswood Park | 5,256 | 611 | 8,597 | 4,853 | (2,000 | ) | ||||||||||||||
Casa De Monterey | 3,810 | 869 | 6,136 | 2,685 | — | |||||||||||||||
Towers Of Westchester Park | 11,127 | 529 | 13,491 | 6,072 | — | |||||||||||||||
TOTAL | $ | 81,994 | $ | 10,741 | $ | 72,294 | $ | 34,490 | $ | (3,250 | ) | |||||||||
D-46
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
Gross Amount at Which Carried at December 31, 2005 | ||||||||||||||||||||||||||||
Buildings | ||||||||||||||||||||||||||||
and Related | ||||||||||||||||||||||||||||
Personal | Accumulated | Year of | Date of | Depreciable | ||||||||||||||||||||||||
Description | Land | Property | Total | Depreciation | Construction | Acquisition | Life | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Scotchollow | $ | 3,510 | $ | 29,451 | $ | 32,961 | 23,388 | 1973 | 10/26/84 | 5-30 yrs | ||||||||||||||||||
Pathfinder Village | 2,753 | 17,430 | 20,183 | 13,571 | 1971 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Buena Vista Apartments | 893 | 5,870 | 6,763 | 4,785 | 1972 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Mountain View Apartments | 1,289 | 11,236 | 12,525 | 8,109 | 1978 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Crosswood Park | 472 | 11,589 | 12,061 | 7,817 | 1977 | 12/05/84 | 5-30 yrs | |||||||||||||||||||||
Casa De Monterey | 869 | 8,821 | 9,690 | 6,868 | 1970 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
Towers Of Westchester Park | 529 | 19,563 | 20,092 | 15,498 | 1971 | 10/26/84 | 5-30 yrs | |||||||||||||||||||||
TOTAL | $ | 10,315 | $ | 103,960 | $ | 114,275 | $ | 80,036 | ||||||||||||||||||||
2005 | 2004 | 2003 | ||||||||||
Investment Properties | ||||||||||||
Balance at beginning of year | $ | 109,298 | $ | 107,357 | $ | 105,175 | ||||||
Property improvements and replacements | 5,173 | 1,942 | 2,253 | |||||||||
Dispositions of property | (195 | ) | (1 | ) | (71 | ) | ||||||
Balance at end of year | $ | 114,275 | $ | 109,298 | $ | 107,357 | ||||||
Accumulated Depreciation | ||||||||||||
Balance at beginning of year | $ | 75,353 | $ | 70,766 | $ | 66,357 | ||||||
Additions charged to expense | 4,846 | 4,587 | 4,462 | |||||||||
Dispositions of property | (163 | ) | — | (53 | ) | |||||||
Balance at end of year | $ | 80,036 | $ | 75,353 | $ | 70,766 | ||||||
D-47
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
Portfolio I | Portfolio II | |||||||
Subscription notes receivable | $ | 502 | $ | 328 | ||||
Accrued interest receivable | 63 | 67 | ||||||
Allowance for uncollectible interest receivable | (63 | ) | (67 | ) | ||||
Total subscription notes and accrued interest receivable | $ | 502 | $ | 328 | ||||
2005 | 2004 | 2003 | ||||||||||
Net loss as reported | $ | (9,455 | ) | $ | (9,202 | ) | $ | (7,134 | ) | |||
Depreciation differences | 3,678 | 4,368 | 4,120 | |||||||||
Unearned income | (39 | ) | (62 | ) | 14 | |||||||
Casualty loss | (564 | ) | (45 | ) | (124 | ) | ||||||
Residual proceeds expense | 6,240 | 5,533 | 5,079 | |||||||||
Other | (114 | ) | 33 | 645 | ||||||||
Federal taxable (loss) income | $ | (254 | ) | $ | 625 | $ | 2,600 | |||||
Portfolio I Allocation | $ | (180 | ) | $ | 441 | $ | 1,836 | |||||
Portfolio II Allocation | (74 | ) | 184 | 764 | ||||||||
Net income per limited partnership interest: | ||||||||||||
Portfolio I Allocation | $ | 5,305 | $ | 2,772 | $ | 4,147 | ||||||
Portfolio II Allocation | 5,352 | 2,797 | 4,183 |
D-48
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
2005 | 2004 | |||||||
Net liabilities as reported | $ | (191,318 | ) | $ | (181,863 | ) | ||
Land and buildings | 16,716 | 16,808 | ||||||
Accumulated depreciation | (31,369 | ) | (34,738 | ) | ||||
Syndication costs | 17,650 | 17,650 | ||||||
Deferred gain | 42,225 | 42,225 | ||||||
Other deferred costs | 9,601 | 9,601 | ||||||
Other | (52,531 | ) | (52,213 | ) | ||||
Notes payable | 4,882 | 4,882 | ||||||
Subscription notes receivable | 1,837 | 1,837 | ||||||
Mortgage payable | (47,727 | ) | (47,727 | ) | ||||
Residual proceeds liability | 25,505 | 19,265 | ||||||
Accrued interest | 9,571 | 9,571 | ||||||
Net liabilities — Federal tax basis | $ | (194,958 | ) | $ | (194,702 | ) | ||
D-49
Table of Contents
AFFILIATED CONTRIBUTION PROPERTIES
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)
D-50
Table of Contents
Item 20. | Indemnification of Directors and Officers. |
II-1
Table of Contents
Item 21. | Exhibits and Financial Statement Schedules. |
Item 22. | Undertakings. |
II-2
Table of Contents
II-3
Table of Contents
By: | /s/ Harry G. Alcock |
Title: | Executive Vice President and Chief Investment Officer |
Signature | Title | Date | ||||
* Terry Considine | Chairman of the Board, Chief Executive Officer and President (principal executive officer) | January 16, 2007 | ||||
/s/ Thomas M. Herzog Thomas M. Herzog | Executive Vice President and Chief Financial Officer (principal financial officer) | January 16, 2007 | ||||
/s/ Scott W. Fordham Scott W. Fordham | Senior Vice President and Chief Accounting Officer (principal accounting officer) | January 16, 2007 | ||||
* James N. Bailey | Director | January 16, 2007 | ||||
* Richard S. Ellwood | Director | January 16, 2007 | ||||
* J. Landis Martin | Director | January 16, 2007 | ||||
* Thomas L. Rhodes | Director | January 16, 2007 | ||||
* Michael A. Stein | Director | January 16, 2007 | ||||
By: /s/ Thomas M. Herzog Attorney-in-Fact | January 16, 2007 |
II-4
Table of Contents
By: | /s/ Harry G. Alcock |
Title: | Executive Vice President and Chief Investment Officer |
Signature | Title | Date | ||||
* Terry Considine | Chairman of the Board, Chief Executive Officer and President of the registrant’s general partner | January 16, 2007 | ||||
/s/ Thomas M. Herzog Thomas M. Herzog | Executive Vice President and Chief Financial Officer of the registrant’s general partner | January 16, 2007 | ||||
/s/ Scott W. Fordham Scott W. Fordham | Chief Accounting Officer of the registrant’s general partner | January 16, 2007 | ||||
By: /s/ Thomas M. Herzog Attorney-in-Fact | January 16, 2007 |
II-5
Table of Contents
Exhibit | ||||
No. | Exhibit Description | |||
2 | .1* | Contribution Agreement dated August 21, 2006 | ||
2 | .2 | Amendment No. 1 to Contribution Agreement, dated January 16, 2007 | ||
3 | .1 | Charter (Exhibit 3.1 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended June 30, 2006, is incorporated herein by this reference) | ||
3 | .2 | Bylaws (Exhibit 3.2 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended March 31, 2001, is incorporated herein by this reference) | ||
3 | .3 | 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 onForm 10-Q for the quarterly period ended September 30, 1998, is incorporated herein by this reference) | ||
3 | .4 | 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 onForm 10-Q for the quarterly period ended September 30, 1998, is incorporated herein by this reference) | ||
3 | .5 | 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 onForm 8-K/A, filed February 11, 1999, is incorporated herein by this reference) | ||
3 | .6 | 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 onForm 10-K for the year ended December 31 1998, is incorporated herein by this reference) | ||
3 | .7 | 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 onForm 10-Q for the quarterly period ended March 31, 1999, is incorporated herein by this reference) | ||
3 | .8 | 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 onForm 10-Q for the quarterly period ended March 31, 1999, is incorporated herein by this reference) | ||
3 | .9 | 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 onForm 10-Q for the quarterly period ended June 30, 1999, is incorporated herein by this reference) | ||
3 | .10 | 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 onForm 10-Q for the quarterly period ended September 30, 1999, is incorporated herein by this reference) | ||
3 | .11 | 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 onForm 10-K for the year ended December 31, 1999, is incorporated herein by reference) | ||
3 | .12 | 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 onForm 10-K for the year ended December 31, 1999, is incorporated hereby by reference) | ||
3 | .13 | 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 onForm 10-K for the year ended December 31, 1999, is incorporated herein by reference) | ||
3 | .14 | 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 onForm 10-K for the year ended December 31, 1999, is incorporated herein by reference) | ||
3 | .15 | Twelfth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of April 19, 2000 (Exhibit 10.2 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended March 31, 2000, is incorporated herein by this reference) | ||
3 | .16 | Thirteenth Amendment to the Third and Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of August 7, 2000 (Exhibit 10.1 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2000, is incorporated herein by this reference) |
II-6
Table of Contents
Exhibit | ||||
No. | Exhibit Description | |||
3 | .17 | Fourteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 12, 2000 (Exhibit 10.1 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended September 30, 2000, is incorporated herein by this reference) | ||
3 | .18 | Fifteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 15, 2000 (Exhibit 10.2 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended September 30, 2000, is incorporated herein by this reference) | ||
3 | .19 | Sixteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 15, 2000 (Exhibit 10.3 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended September 30, 2000, is incorporated herein by this reference) | ||
3 | .20 | Seventeenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of November 10, 2000 (Exhibit 10.4 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended September 30, 2000, is incorporated herein by this reference) | ||
3 | .21 | Eighteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of November 16, 2000 (Exhibit 10.19 to Aimco’s Annual Report onForm 10-K/A for the fiscal year 2000, is incorporated herein by this reference) | ||
3 | .22 | Nineteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of February 28, 2001 (Exhibit 10.20 to Aimco’s Annual Report onForm 10-K/A for the fiscal year 2000, is incorporated herein by this reference) | ||
3 | .23 | Twentieth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 19, 2001 (Exhibit 10.21 to Aimco’s Annual Report onForm 10-K/A for the fiscal year 2000, is incorporated herein by this reference) | ||
3 | .24 | Twenty-first Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of May 10, 2001 (Exhibit 10.1 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference) | ||
3 | .25 | Twenty-second Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of June 20, 2001 (Exhibit 10.2 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference) | ||
3 | .26 | Twenty-third Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 20, 2001 (Exhibit 10.3 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference) | ||
3 | .27 | Twenty-fourth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of August 1, 2001 (Exhibit 10.4 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference) | ||
3 | .28 | Twenty-fifth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 2, 2001 (Exhibit 10.5 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference) | ||
3 | .29 | Twenty-sixth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 2, 2001 (Exhibit 10.6 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference) |
II-7
Table of Contents
Exhibit | ||||
No. | Exhibit Description | |||
3 | .30 | Twenty-seventh Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 2, 2001 (Exhibit 10.7 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference) | ||
3 | .31 | Twenty-eighth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 25, 2002 (Exhibit 10.1 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended March 31, 2002, is incorporated herein by this reference) | ||
3 | .32 | Twenty-ninth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 11, 2002 (Exhibit 10.2 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended March 31, 2002, is incorporated herein by this reference) | ||
3 | .33 | Thirtieth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of April 1, 2002 (Exhibit 10.3 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended March 31, 2002, is incorporated herein by this reference) | ||
3 | .34 | Thirty-first Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of April 10, 2002 (Exhibit 10.4 to the Quarterly Report onForm 10-Q of AIMCO Properties, L.P. for the quarterly period ended March 31, 2002, is incorporated herein by this reference) | ||
3 | .35 | Thirty-second Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of May 14, 2002 (Exhibit 10.1 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended June 30, 2002, is incorporated herein by this reference) | ||
3 | .36 | Thirty-third Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of November 27, 2002 (Exhibit 10.34 to Aimco’s Annual Report onForm 10-K for the year ended December 31, 2002, is incorporated herein by this reference) | ||
3 | .37 | Thirty-fourth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of April 29, 2003 (Exhibit 10.1 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended March 31, 2003, is incorporated herein by this reference) | ||
3 | .38 | Thirty-fifth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of April 30, 2003 (Exhibit 10.2 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended March 31, 2003, is incorporated herein by this reference) | ||
3 | .39 | Thirty-sixth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 16, 2003 (Exhibit 10.1 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended June 30, 2003, is incorporated herein by this reference) | ||
3 | .40 | Thirty-seventh Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 24, 2003 (Exhibit 10.2 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended June 30, 2003, is incorporated herein by this reference) | ||
3 | .41 | Thirty-eighth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of January 30, 2004 (Exhibit 10.39 to Aimco’s Annual Report onForm 10-K for the year ended December 31, 2003, is incorporated herein by this reference) | ||
3 | .42 | Thirty-ninth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 17, 2004 (Exhibit 10.1 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended March 31, 2004, is incorporated herein by this reference) | ||
3 | .43 | Fortieth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of June 18, 2004 (Exhibit 10.1 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended June 30, 2004, is incorporated herein by this reference) | ||
3 | .44 | Forty-first Amendment to Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 24, 2004 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report onForm 8-K dated September 24, 2004, is incorporated herein by this reference) |
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Table of Contents
Exhibit | ||||
No. | Exhibit Description | |||
3 | .45 | Forty-second Amendment to Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 30, 2004 (Exhibit 4.2 to AIMCO Properties, L.P.’s Current Report onForm 8-K dated September 24, 2004, is incorporated herein by this reference) | ||
3 | .46 | Forty-third Amendment to Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 30, 2004 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report onForm 8-K dated September 29, 2004, is incorporated herein by this reference) | ||
3 | .47 | Forty-fourth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of December 21, 2004 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report onForm 8-K dated September 29,2004, is incorporated herein by this reference) | ||
3 | .48 | Forty-fifth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of February 18, 2005 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report onForm 8-K dated February 18, 2005, is incorporated herein by this reference) | ||
3 | .49 | Forty-sixth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of February 28, 2005 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report onForm 8-K dated February 28, 2005, is incorporated herein by this reference) | ||
3 | .50 | Forty-seventh Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of May 31, 2005 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report onForm 8-K dated May 31, 2005, is incorporated herein by this reference) | ||
3 | .51 | Forty-eighth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P. dated as of May 31, 2006 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report onForm 8-K dated June 2, 2006 in incorporated herein by this reference) | ||
3 | .52 | Forty-ninth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of June 29, 2006 (Exhibit 10.1 to AIMCO Properties, L.P.’s Current Report onForm 8-K dated June 29, 2006, is incorporated herein by this reference) | ||
4 | .1 | Specimen certificate for Class A Common Stock (incorporated by reference from AIMCO’s Registration Statement onForm 8-A filed on July 19, 1994) | ||
4 | .2 | Specimen certificate for Partnership Common Units of AIMCO Properties, L.P. (Exhibit 4.2 to Aimco Properties, L.P.’sForm S-4 filed on June 17, 2002, as amended, SEC RegistrationNumber 333-90590, is incorporated herein by reference) | ||
5 | .1* | Form of opinion of Alston & Bird LLP as to the legality of the Common OP Units being registered | ||
5 | .2* | Form of Opinion of DLA Piper Rudnick Gray Cary LLP as to the legality of the Class A Common Stock being registered | ||
8 | .1* | Form of opinion of Alston & Bird LLP as to certain tax matters | ||
8 | .2* | Form of opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to certain tax matters | ||
10 | .1 | Amended and Restated Secured Credit Agreement, dated as of November 2, 2004, by and among Aimco, AIMCO Properties, L.P., AIMCO/Bethesda Holdings, Inc., and NHP Management Company as the borrowers and Bank of America, N.A., Keybank National Association, and the Lenders listed therein (Exhibit 4.1 to Aimco’s Quarterly Report onForm 10-Q for the quarterly period ended September 30, 2004, is incorporated herein by this reference) | ||
10 | .2 | First Amendment to Amended and Restated Secured Credit Agreement, dated as of June 16, 2005, by and among Aimco, AIMCO Properties, L.P., AIMCO/Bethesda Holdings, Inc., and NHP Management Company as the borrowers and Bank of America, N.A., Keybank National Association, and the Lenders listed therein (Exhibit 10.1 to Aimco’s Current Report onForm 8-K, dated June 16, 2005, is incorporated herein by this reference) | ||
10 | .3 | Master Indemnification Agreement, dated December 3, 2001, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., XYZ Holdings LLC, and the other parties signatory thereto (Exhibit 2.3 to Aimco’s Current Report onForm 8-K, filed December 6, 2001, is incorporated herein by this reference) |
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Table of Contents
Exhibit | ||||
No. | Exhibit Description | |||
10 | .4 | Tax Indemnification and Contest Agreement, dated December 3, 2001, by and among Apartment Investment and Management Company, National Partnership Investments, Corp., and XYZ Holdings LLC and the other parties signatory thereto (Exhibit 2.4 to Aimco’s Current Report onForm 8-K, filed December 6, 2001, is incorporated herein by this reference) | ||
10 | .5 | Limited Liability Company Agreement of AIMCO JV Portfolio #1, LLC dated as of December 30, 2003 by and among AIMCO BRE I, LLC, AIMCO BRE II, LLC and SRV-AJVP#1, LLC (Exhibit 10.54 to Aimco’s Annual Report onForm 10-K for the year ended December 31, 2003, is incorporated herein by this reference) | ||
10 | .6 | 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 onForm 10-K for the year ended December 31, 1994, is incorporated herein by this reference) | ||
10 | .7 | Apartment Investment and Management Company 1997 Stock Award and Incentive Plan (October 1999) (Exhibit 10.26 to Aimco’s Annual Report onForm 10-K for the year ended December 31, 1999, is incorporated herein by this reference) | ||
10 | .8 | Form of Restricted Stock Agreement (1997 Stock Award and Incentive Plan) (Exhibit 10.11 to Aimco’s Quarterly Report onForm 10- Q for the quarterly period ended September 30, 1997, is incorporated herein by this reference) | ||
10 | .9 | Form of Incentive Stock Option Agreement (1997 Stock Award and Incentive Plan) (Exhibit 10.42 to Aimco’s Annual Report onForm 10- K for the year ended December 31, 1998, is incorporated herein by this reference) | ||
10 | .10 | 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 onForm 10-K for the year ended December 31, 1997, is incorporated herein by this reference) | ||
21 | .1 | Subsidiaries of the registrants (Exhibit 21.1 to Aimco’s Annual Report onForm 10-K for the year ended December 31, 2005 is incorporated herein by reference) | ||
23 | .1 | Consent of Ernst & Young LLP, Greenville, South Carolina | ||
23 | .2 | Consent of Ernst & Young LLP, Denver, Colorado | ||
23 | .3 | Consent of Alston & Bird LLP (included in Exhibit 5.1) | ||
23 | .4 | Consent of DLA Piper Rudnick Gray Cary LLP (included in Exhibit 5.2) | ||
23 | .5 | Consent of Alston & Bird LLP (included in Exhibit 8.1) | ||
23 | .6 | Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 8.2) | ||
23 | .7 | Consent of KTR Valuation and Consulting Services, LLC | ||
23 | .8 | Consent of CB Richard Ellis | ||
24 | .1* | Powers of Attorney | ||
99 | .1* | Form of Limited Partner Notice of Objection | ||
99 | .2 | Form of Consideration Election Form |
* | Previously Filed |
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