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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-13232
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
(Exact name of registrant as specified in its charter)
MARYLAND 84-1259577
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2000 SOUTH COLORADO BOULEVARD,
TOWER TWO, SUITE 2-1000,
DENVER, CO 80222-7900
(Address of principal executive offices) (Zip Code)
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Registrant's Telephone Number, Including Area Code: (303) 757-8101
Securities Registered Pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Class A Common Stock New York Stock Exchange
Class C Cumulative Preferred Stock New York Stock Exchange
Class D Cumulative Preferred Stock New York Stock Exchange
Class G Cumulative Preferred Stock New York Stock Exchange
Class H Cumulative Preferred Stock New York Stock Exchange
Class K Convertible Cumulative Preferred Stock New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of February 29, 2000, there were 67,096,142 shares of Class A Common
Stock outstanding. The aggregate market value of the voting and non-voting
common stock held by non-affiliates of the registrant, was approximately
$2,482.6 million as of February 29, 2000.
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the proxy statement for the registrant's 2000 annual meeting of
stockholders are incorporated by reference into Part III of this Annual Report.
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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
TABLE OF CONTENTS
ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
ITEM PAGE
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PART I
1. Business....................................................
1999 Developments...........................................
Financial Information About Industry Segments...............
Operating and Financial Strategies..........................
Growth Strategies...........................................
Property Management Strategies..............................
Taxation of the Company.....................................
Competition.................................................
Regulation..................................................
Insurance...................................................
Employees...................................................
2. Properties..................................................
3. Legal Proceedings...........................................
4. Submission of Matters to a Vote of Security Holders.........
PART II
5. Market for the Registrant's Common Equity and Related
Stockholder Matters.........................................
6. Selected Financial Data.....................................
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations...................................
7a. Quantitative and Qualitative Disclosures About Market
Risk........................................................
8. Financial Statements and Supplementary Data.................
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure....................................
PART III
10. Directors and Executive Officers of the Registrant..........
11. Executive Compensation......................................
12. Security Ownership of Certain Beneficial Owners and
Management..................................................
13. Certain Relationships and Related Transactions..............
PART IV
14. Exhibits, Financial Statement Schedule and Reports on Form
8-K.........................................................
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PART I
ITEM 1. BUSINESS.
Apartment Investment and Management Company ("AIMCO"), a Maryland
corporation formed on January 10, 1994, is a self-administered and self-managed
REIT engaged in the ownership, acquisition, development, expansion and
management of multi-family apartment properties. As of December 31, 1999, we
owned or managed 363,462 apartment units in 1,942 properties located in 48
states, the District of Columbia and Puerto Rico. Based on apartment unit data
compiled by the National Multi Housing Council, we believe that, as of December
31, 1999, we were the largest owner and manager of multifamily apartment
properties in the United States. As of December 31, 1999, we:
- owned or controlled 106,148 units in 373 apartment properties;
- held an equity interest in 133,113 units in 751 apartment properties; and
- managed 124,201 units in 818 apartment properties for third party owners
and affiliates.
We conduct substantially all of our operations through our operating
partnership, AIMCO Properties, L.P. Through a wholly-owned subsidiary, we act as
the sole general partner of the AIMCO operating partnership. As of December 31,
1999, we owned approximately a 91% interest in the AIMCO operating partnership.
We manage apartment properties for third parties and affiliates through
unconsolidated subsidiaries that we refer to as the "management companies."
Generally, when we refer to "we," "us" or the "Company" in this annual report on
Form 10-K, we are referring to AIMCO, the AIMCO operating partnership, the
management companies and their respective subsidiaries. We refer to interests in
the AIMCO operating partnership that are held by third parties as "OP Units."
The Company's principal executive offices are located at 2000 South
Colorado Blvd., Tower Two, Suite 2-1000, Denver, Colorado 80222-7900 and its
telephone number is (303) 757-8101.
1999 DEVELOPMENTS
Individual Property Acquisitions
The Company directly acquired 28 apartment communities in unrelated
transactions during 1999 (not including those acquired in connection with the
merger with Insignia Properties Trust, "IPT"). The aggregate consideration paid
by the Company of $495.0 million consisted of $91.5 million in cash, 2.4 million
Preferred OP Units, 0.9 million common OP Units and 0.5 million shares of Class
A Common Stock with a total recorded value of $116.8 million, assumption of
$110.1 million of secured long-term indebtedness, the assumption of $15.2
million of other liabilities, and new financing of $161.4 million of secured
long-term indebtedness. The Company has budgeted an additional $23.9 million for
initial capital enhancements related to these properties.
Tender Offers
During 1999, the Company made separate offers to the limited partners of
approximately 600 partnerships to acquire their limited partnership interests.
The Company paid approximately $271 million in cash and OP Units to acquire
limited partnership interests pursuant to the offers.
Property Dispositions
In 1999, the Company sold 63 properties for an aggregate sales price of
approximately $426.0 million. Net cash proceeds to the Company from the sales of
$135.8 million were used to repay a portion of the Company's outstanding
short-term indebtedness. The results of operations of 55 of these properties
were accounted for by the Company under the equity method.
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Debt Assumptions and Financings
In August 1999, the Company closed a $300 million revolving credit facility
arranged by Bank of America, N.A. BankBoston, N.A. and First Union National Bank
and comprised of a total of nine lender participants. The obligations under the
new credit facility are secured by certain non-real estate assets of the
Company. The existing lines of credit were terminated. The credit facility is
used for general corporate purposes and has a two-year term with two one-year
extensions. The annual interest rate under the new credit facility is based on
either LIBOR or a base rate which is the higher of Bank of America's reference
rate or 0.5% over the federal funds rate, plus, in either case, an applicable
margin. The margin ranges between 2.05% and 2.55%, in the case of LIBOR-based
loans, and between 0.55% and 1.05%, in the case of base rate loans, based upon a
fixed charge coverage ratio. The weighted average interest rate at December 31,
1999 was 8.84%. The amount available under the credit facility at December 31,
1999 was $90.8 million.
During the year ended December 31, 1999, the Company issued $410.3 million
of long-term fixed rate, fully amortizing non-recourse mortgage notes payable
with a weighted average interest rate of 7.3%. Each of the notes is individually
secured by one of forty properties with no cross-collateralization. The Company
used the net proceeds after transaction costs of $373.6 million to repay
existing debt. During the year ended December 31, 1999, the Company has also
assumed $110.1 million of long-term fixed rate, fully amortizing notes payables
with a weighted average interest rate of 7.9% in connection with the acquisition
of properties. Each of the notes is individually secured by one of thirteen
properties with no cross-collateralization.
Equity Offerings
In 1999, the Company raised proceeds of $304.6 million in one public
offering and two direct placements of equity securities (excluding equity issued
in connection with the completion of the IPT merger discussed below and in
connection with the purchase of real estate and limited partnership interests).
These transactions are summarized below:
NUMBER TOTAL PROCEEDS DIVIDEND OR
OF IN DISTRIBUTION
TRANSACTION TYPE DATE SHARES MILLIONS RATE
- ----------- ---- ---- --------- -------------- ------------
Class K Convertible Cumulative
Preferred Stock of AIMCO........... Public Feb. 1999 5,000,000 $125.0 (1)
Class L Convertible Cumulative
Preferred Stock of AIMCO........... Direct May 1999 5,000,000 125.0 (2)
Class A Common Stock of AIMCO........ Direct Sept. 1999 1,382,580 54.6
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TOTAL PROCEEDS 1999................................................... $304.6
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(1) For three years from the date of original issuance, the Class K Preferred
Stock dividend will be in an amount per share equal to the greater of (i)
$2.00 per year (equivalent to 8% of the liquidation preference), or (ii) the
cash dividends payable on the number of shares of Class A Common Stock (or
portion thereof) into which a share of Class K Preferred Stock is
convertible. Beginning with the third anniversary of the date of original
issuance, the Class K Preferred Stock dividend per share will be increased
to the greater of (i) $2.50 per year (equivalent to 10% of the liquidation
preference), or (ii) the cash dividends payable on the number of shares of
Class A Common Stock (or portion thereof) into which a share of Class K
Preferred Stock is convertible.
(2) For three years from the date of original issuance, the Class L Preferred
Stock dividend will be in an amount per share equal to the greater of (i)
$2.025 per year (equivalent to 8.1% of the liquidation preference), or (ii)
the cash dividends payable on the number of shares of Class A Common Stock
into which a share of Class L Preferred Stock is convertible. Beginning with
the third anniversary of the date of original issuance, the holder of Class
L Preferred Stock will be entitled to receive an amount per share equal to
the greater of (i) $2.50 per year (equivalent to 10% of the liquidation
preference), or (ii) the cash dividends payable on the number of shares of
Class A Common Stock into which a share of Class L Preferred Stock is
convertible.
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Insignia Properties Trust Merger
As a result of the Insignia merger on October 1, 1998, AIMCO acquired
approximately 51% of the outstanding shares of beneficial interest of IPT. On
February 26, 1999, IPT was merged into AIMCO. Pursuant to the merger, each of
the outstanding shares of IPT that were not held by AIMCO were converted into
the right to receive 0.3601 shares of AIMCO Class A Common Stock, resulting in
the issuance of approximately 4.3 million shares of AIMCO Class A Common Stock
(valued at approximately $158.8 million).
Pending Acquisitions
In the ordinary course of business, the Company engages in discussions and
negotiations regarding the acquisition of apartment properties (including
interests in entities that own apartment properties). The Company frequently
enters into contracts and non-binding letters of intent with respect to the
purchase of properties. These contracts are typically subject to certain
conditions and permit the Company to terminate the contract in its sole and
absolute discretion if it is not satisfied with the results of its due diligence
investigation of the properties. The Company believes that such contracts
essentially result in the creation of an option on the subject properties and
give the Company greater flexibility in seeking to acquire properties. As of
February 29, 2000, the Company had under contract or letter of intent an
aggregate of 10 multi-family apartment properties with a maximum aggregate
purchase price of $107.6 million, including estimated capital improvements,
which, in some cases, may be paid in the form of assumption of existing debt.
All such contracts are subject to termination by the Company as described above.
No assurance can be given that any of these possible acquisitions will be
completed or, if completed, that they will be accretive on a per share basis.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Company operates in one industry segment, the ownership and management
of real estate properties. See the consolidated financial statements and notes
thereto included elsewhere in this Annual Report on Form 10-K for financial
information relating to the Company.
OPERATING AND FINANCIAL STRATEGIES
The Company strives to meet its objective of providing long-term,
predictable funds from operations ("FFO") per share of Class A Common Stock,
less an allowance for Capital Replacements of $300 per apartment unit, by
implementing its operating and financing strategies which include the following:
- Acquisition of Properties at Less Than Replacement Cost. AIMCO attempts
to acquire properties at a significant discount to their replacement
cost.
- Geographic Diversification. AIMCO operates in 48 states, the District of
Columbia and Puerto Rico. This geographic diversification insulates the
Company, to some degree, from inevitable downturns in any one market.
AIMCO's net income before depreciation and interest expense is earned in
more than 175 local markets. In 1999, the largest single market
contributed 7% to net income before depreciation and interest expense,
and the five largest markets contributed 32%.
- Market Growth. The Company seeks to operate in markets where population
and employment growth are expected to exceed the national average and
where it believes it can become a regionally significant owner or manager
of properties. For the period from 1997 through 2000, annual population
and employment growth rates in AIMCO's five largest regional markets are
forecasted to be 2.2% and 3.6%, respectively.
- Product Diversification. The Company's portfolio of apartment properties
spans a wide range of apartment community types, both within and among
markets, including garden and high-rise apartments, as well as corporate
and student housing.
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- Capital Replacement. AIMCO believes that the physical condition and
amenities of its apartment communities are important factors in its
ability to maintain and increase rental rates. The Company allocates
approximately $300 annually per owned apartment unit for capital
replacements, and reserves unexpended amounts for future capital
replacements.
- Debt Financing. AIMCO's strategy is generally to incur debt to increase
its return on equity while maintaining acceptable interest coverage
ratios. AIMCO seeks to maintain a ratio of free cash flow to combined
interest expense and preferred stock dividends of between 2:1 and 3:1,
and a ratio of earnings before interest, income taxes, depreciation and
amortization (with certain adjustments and after a provision of
approximately $300 per owned apartment unit) to debt service of at least
2:1, and to match debt maturities to the character of the assets
financed. For the year ended December 31, 1999, the Company was within
these targets. The Company uses predominantly long-term, fixed-rate and
self-amortizing non-recourse debt in order to avoid the refunding or
repricing risks of short-term borrowings. The Company uses short-term
debt financing to fund acquisitions and generally expects to refinance
such borrowings with proceeds from equity offerings or long-term debt
financings. As of December 31, 1999, approximately 9% of AIMCO's
outstanding debt was short-term debt and 91% was long-term debt.
- Dispositions. The Company regularly sells properties that do not meet its
return on investment criteria or that are located in areas where AIMCO
does not believe that the long-term neighborhood values justify the
continued investment in the properties.
- Dividend Policy. AIMCO pays dividends on its Class A Common Stock to
share its profitability with its stockholders. The Company distributed
61.3%, 65.8% and 66.5% of FFO to holders of Class A Common Stock for the
years ended December 31, 1999, 1998 and 1997, respectively. It is the
present policy of the Board of Directors to increase the dividend
annually in an amount equal to one-half of the projected increase in FFO,
adjusted for capital replacements, subject to minimum distribution
requirements to maintain its REIT status.
GROWTH STRATEGIES
The Company seeks growth through two primary sources -- internal expansion
and acquisitions.
Internal Growth Strategies.
The Company pursues internal growth primarily through the following
strategies:
- Revenue Increases. The Company increases rents where feasible and seeks
to improve occupancy rates.
- Controlling Expenses. Cost reductions are accomplished by local focus on
the regional operating center level and by exploiting economies of scale.
As a result of the size of its portfolio and its creation of regional
concentrations of properties, the Company has the ability to leverage
fixed costs for general and administrative expenditures and certain
operating functions, such as insurance, information technology and
training, over a large property base.
- Redevelopment of Properties. The Company believes redevelopment of
selected properties in superior locations provides advantages over
development of new properties. AIMCO believes that redevelopment
generally allows the Company to maintain rents comparable to new
properties and, compared to development of new properties, can be
accomplished with relatively lower financial risk, in less time and with
reduced delays due to governmental regulation.
- Expansion of Properties. The Company believes that expansion within or
adjacent to properties already owned or managed by the Company also
provides growth opportunities at lower risk than new development. Such
expansion can offer cost advantages to the extent common area amenities
and on-site management personnel can service the property expansions.
AIMCO's current policy is to limit redevelopments and expansions to 10%
of total equity market capitalization.
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- Ancillary Services. The Company believes that its ownership and
management of properties provides it with unique access to a customer
base that allows us to provide additional services and thereby increase
occupancy, increase rents and generate incremental revenue. The Company
currently provides cable television, telephone services, appliance
rental, and carport, garage and storage space rental at certain
properties.
Acquisition Strategies.
The Company believes its acquisition strategies will increase profitability
and predictability of earnings by increasing its geographic diversification,
economies of scale and opportunities to provide ancillary services to tenants at
its properties. Since AIMCO's initial public offering in July 1994, the Company
has completed numerous acquisition and management transactions, expanding its
portfolio of owned or managed properties from 132 apartment properties with
29,343 units to 1,942 apartment properties with 363,462 units as of December 31,
1999. The Company acquires additional properties primarily in three ways:
- Direct Acquisitions. AIMCO may directly, including through mergers and
other business combinations, acquire individual properties or portfolios
of properties and controlling interests in entities that own or control
such properties or portfolios. To date, a significant portion of AIMCO's
growth has resulted from the acquisition of other companies that owned or
controlled properties.
- Acquisition of Managed Properties. AIMCO believes that its property
management operations support its acquisition activities. Since AIMCO's
initial public offering, the Company has acquired from its managed
portfolio 16 properties comprising 5,697 units for total consideration of
$189.9 million.
- Increasing its Interest in Partnerships. For properties where AIMCO owns
a general partnership interest in the property-owning partnership, the
Company may seek to acquire, subject to its fiduciary duties, the
interests in the partnership held by third parties for cash or, in some
cases, in exchange for OP Units. AIMCO has completed tender offers with
respect to approximately 1,000 partnerships and has purchased additional
interests in such partnerships for cash and for OP Units.
PROPERTY MANAGEMENT STRATEGIES
AIMCO seeks to improve the operating results from its property management
business by, among other methods, combining centralized financial control and
uniform operating procedures with localized property management decision-making
and market knowledge. AIMCO's management operations are organized into 31
regional operating centers. Each of the regional operating centers is supervised
by a Regional Vice-President.
TAXATION OF THE COMPANY
The Company has elected to be taxed as a REIT under the Internal Revenue
Code of 1986, as amended, commencing with its taxable year ended December 31,
1994, and the Company intends to continue to operate in such a manner. The
Company's current and continuing qualification as a REIT depends on its ability
to meet the various requirements imposed by the Internal Revenue Code, through
actual operating results, distribution levels and diversity of stock ownership.
If the Company qualifies for taxation as a REIT, it will generally not be
subject to U.S. federal corporate income tax on its net income that is currently
distributed to stockholders. This treatment substantially eliminates the "double
taxation" (at the corporate and stockholder levels) that generally results from
investment in a corporation. If the Company fails to qualify as a REIT in any
taxable year, its taxable income will be subject to U.S. federal income tax at
regular corporate rates (including any applicable alternative minimum tax). Even
if the Company qualifies as a REIT, it may be subject to certain state and local
income taxes and to U.S. federal income and excise taxes on its undistributed
income.
If in any taxable year the Company fails to qualify as a REIT and incurs
additional tax liability, the Company may need to borrow funds or liquidate
certain investments in order to pay the applicable tax and the
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Company would not be compelled to make distributions under the Code. Unless
entitled to relief under certain statutory provisions, the Company would also be
disqualified from treatment as a REIT for the four taxable years following the
year during which qualification is lost. Although the Company currently intends
to operate in a manner designed to qualify as a REIT, it is possible that future
economic, market, legal, tax or other considerations may cause the Company to
fail to qualify as a REIT or may cause the Board of Directors to revoke the REIT
election.
The Company and its stockholders may be subject to state or local taxation
in various state or local jurisdictions, including those in which it or they
transact business or reside. The state and local tax treatment of the Company
and its stockholders may not conform to the U.S. federal income tax treatment.
COMPETITION
There are numerous housing alternatives that compete with the Company's
properties in attracting residents. The Company's properties compete directly
with other multi-family rental apartments and single family homes that are
available for rent or purchase in the markets in which the Company's properties
are located. The Company's properties also compete for residents with new and
existing and condominiums. The number of competitive properties in a particular
area could have a material effect on the Company's ability to lease apartment
units at its properties and on the rents charged. The Company competes with
numerous real estate companies in acquiring, developing and managing
multi-family apartment properties and seeking tenants to occupy its properties.
In addition, the Company competes with numerous property management companies in
the markets where the properties managed by the Company are located.
REGULATION
General
Multifamily apartment properties are subject to various laws, ordinances
and regulations, including regulations relating to recreational facilities such
as swimming pools, activity centers and other common areas. Changes in laws
increasing the potential liability for environmental conditions existing on
properties or increasing the restrictions on discharges or other conditions, as
well as changes in laws affecting development, construction and safety
requirements, may result in significant unanticipated expenditures, which would
adversely affect the Company's cash flows from operating activities. In
addition, future enactment of rent control or rent stabilization laws or other
laws regulating multi-family housing may reduce rental revenue or increase
operating costs in particular markets.
Laws Benefiting Disabled Persons
Under the Americans with Disabilities Act of 1990, all places of public
accommodation are required to meet certain Federal requirements related to
access and use by disabled persons. These requirements became effective in 1992.
A number of additional Federal, state and local laws may also require
modifications to the Company's properties, or restrict certain further
renovations of the properties, with respect to access thereto by disabled
persons. For example, the Fair Housing Amendments Act of 1988 requires apartment
properties first occupied after March 13, 1990 to be accessible to the
handicapped. Noncompliance with these laws could result in the imposition of
fines or an award of damages to private litigants and also could result in an
order to correct any non-complying feature, which could result in substantial
capital expenditures. Although the Company believes that its properties are
substantially in compliance with present requirements, it may incur
unanticipated expenses to comply with these laws.
Regulation of Affordable Housing
As of December 31, 1999, the Company owned or controlled 27 properties and
held an equity interest in 434 properties with a combined weighted average
ownership percentage of 24%. AIMCO also managed for third parties and affiliates
477 properties that benefit from governmental programs intended to provide
housing to people with low or moderate incomes. These programs, which are
usually administered by the United States Department of Housing and Urban
Development ("HUD") or state housing finance agencies, typically
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provide mortgage insurance, favorable financing terms or rental assistance
payments to the property owners. As a condition to the receipt of assistance
under these programs, the properties must comply with various requirements,
which typically limit rents to pre-approved amounts. If permitted rents on a
property are insufficient to cover costs, a sale of the property may become
necessary, which could result in a loss of management fee revenue. The Company
must obtain the approval of HUD in order to manage, or acquire a significant
interest in, a HUD-assisted or HUD-insured property. This approval process is
commonly referred to as "2530 Clearance." The Company had three unresolved flags
in the 2530 system as of December 31, 1999, which the Company believes will not
have a material effect on its ability to receive 2530 approval. The Company can
make no assurance, however, that it will always receive such approval.
Environmental
The Company is subject to various Federal, state and local laws that impose
liability on property owners or operators for the costs of removal or
remediation of certain hazardous substances present on a property. Such laws
often impose liability without regard to whether the owner or operator knew of,
or was responsible for, the release of the hazardous substances. The presence
of, or the failure to properly remediate, hazardous substances may adversely
affect occupancy at contaminated apartment communities and our ability to sell
or borrow against contaminated properties. In addition to the costs associated
with investigation and remediation actions brought by governmental agencies, the
presence of hazardous wastes on a property could result in personal injury or
similar claims by private plaintiffs. The Company also is subject to various
laws that impose liability for the cost of removal or remediation of hazardous
substances at a disposal or treatment facility. Anyone who arranges for the
disposal or treatment of hazardous or toxic substances is potentially liable
under such laws. These laws often impose liability whether or not the person
arranging for the disposal ever owned or operated the disposal facility. In
connection with the ownership, operation and management of our properties, we
could potentially be liable for environmental liabilities or costs associated
with our properties or properties we may acquire or manage in the future.
INSURANCE
Management believes that the Company's properties are covered by adequate
fire, flood and property insurance provided by reputable companies and with
commercially reasonable deductibles and limits.
EMPLOYEES
The Company has a staff of employees performing various acquisition,
redevelopment and management functions. The Company, through the AIMCO operating
partnership and the management companies, has approximately 12,500 employees,
most of whom are employed at the property level. None of the employees are
represented by a union, and the Company has never experienced a work stoppage.
The Company believes it maintains satisfactory relations with its employees.
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ITEM 2. PROPERTIES.
The Company's properties are located in 48 states, Puerto Rico and the
District of Columbia. The properties are managed by four Division
Vice-Presidents controlling 31 regional operating centers. The following table
sets forth information for the regional operating centers as of December 31,
1999:
NUMBER OF NUMBER OF
REGIONAL OPERATING CENTER DIVISION PROPERTIES UNITS
- ------------------------- -------- ---------- ---------
Chicago, IL.......................................... Far West 57 10,761
Denver, CO........................................... Far West 84 14,279
Kansas City, MO...................................... Far West 72 11,094
Los Angeles, CA...................................... Far West 53 9,505
Oakland, CA.......................................... Far West 69 8,013
Phoenix, AZ.......................................... Far West 52 13,008
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387 66,660
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Allentown, PA........................................ East 116 9,693
Columbia, SC......................................... East 73 13,767
Greenville, SC....................................... East 86 12,016
Philadelphia, PA..................................... East 62 19,512
Rockville, MD........................................ East 62 16,881
Tarrytown, NY........................................ East 67 9,413
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466 81,282
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Atlanta, GA.......................................... Southeast 56 11,066
Boca Raton, FL....................................... Southeast 25 6,083
Miami, FL............................................ Southeast 32 7,400
Mobile, AL........................................... Southeast 60 9,893
Nashville, TN........................................ Southeast 58 10,720
Orlando, FL.......................................... Southeast 48 10,444
Tampa, FL............................................ Southeast 56 12,921
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335 68,527
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Austin, TX........................................... West 54 10,202
Columbus, OH......................................... West 62 12,426
Dallas I, TX......................................... West 58 10,989
Dallas II, TX........................................ West 68 13,281
Houston I, TX........................................ West 47 10,290
Houston II, TX....................................... West 48 12,062
Indianapolis, IN..................................... West 51 13,741
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388 82,991
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Portfolio:
Senior Living Sub ROC 1.............................. Oxford 8 1,637
Affordable Midwest................................... Oxford 42 5,409
Conventional Mideast................................. Oxford 32 8,289
Conventional Midwest................................. Oxford 45 10,725
Conventional South................................... Oxford 38 10,337
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165 36,397
----- -------
Other................................................ 201 27,605
----- -------
1,942 363,462
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At December 31, 1999, the Company owned or controlled 373 properties
containing 106,148 units. These owned or controlled properties contain, on
average, 285 apartment units, with the largest property containing 2,113
apartment units. These properties offer residents a range of amenities,
including swimming pools,
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clubhouses, spas, fitness centers, tennis courts and saunas. Many of the
apartment units offer design and appliance features such as vaulted ceilings,
fireplaces, washer and dryer hook-ups, cable television, balconies and patios.
In addition, at December 31, 1999, the Company held an equity interest in 751
properties containing 133,113 units, and managed 818 other properties containing
124,201 units. The Company's total portfolio of 1,942 properties contain, on
average, 187 apartment units, with the largest property containing 2,907
apartment units.
Substantially all of the properties owned or controlled by the Company are
encumbered by mortgage indebtedness or serve as collateral for the Company's
indebtedness. At December 31, 1999, the Company had aggregate mortgage
indebtedness totaling $2,375.1 million, which was secured by 361 properties with
a combined net book value of $4,028.8 million, having an aggregate weighted
average interest rate of 6.66%. As of December 31, 1999, approximately 9% of
AIMCO's outstanding debt was short-term debt and 91% was long-term debt. See the
financial statements included elsewhere in this Annual Report on Form 10-K for
additional information about the Company's indebtedness.
ITEM 3. LEGAL PROCEEDINGS.
General
The Company is a party to various legal actions resulting from its
operating activities. These actions are routine litigation and administrative
proceedings arising in the ordinary course of business, some of which are
covered by liability issuance, and none of which are expected to have a material
adverse effect on the consolidated financial condition or results of operations
of the Company.
Limited Partnerships
In connection with the Company's offers to purchase interests in limited
partnerships that own properties, the Company and its affiliates are sometimes
subject to legal actions, including allegations that such activities may involve
breaches of fiduciary duties to the limited partners of such partnerships or
violations of the relevant partnership agreements. The Company believes it
complies with its fiduciary obligations and relevant partnership agreements, and
does not expect such legal actions to have a material adverse effect on the
consolidated financial condition or results of operations of the Company and its
subsidiaries taken as a whole. The Company may incur costs in connection with
the defense or settlement of such litigation, which could adversely affect the
Company's desire or ability to complete certain transactions and thereby have a
material adverse effect on the Company and its subsidiaries.
Pending Investigations of HUD Management Arrangements
In 1997, NHP received subpoenas from the HUD Inspector General ("IG")
requesting documents relating to arrangements whereby NHP or any of its
affiliates provides compensation to owners of HUD-assisted or HUD-insured
multi-family projects in exchange for or in connection with property management
of a HUD project. In July 1999, NHP received a grand jury subpoena requesting
documents relating to the same subject matter as the HUD IG subpoenas and NHP's
operation of a group purchasing program created by NHP, known as Buyers Access.
To date, neither the HUD IG nor the grand jury has initiated any action against
NHP or AIMCO or, to NHP's or AIMCO's knowledge, any owner of a HUD property
managed by NHP. AIMCO believes that NHP's operations and programs are in
compliance, in all material respects, with all laws, rules and regulations
relating to HUD-assisted or HUD-insured properties. AIMCO is cooperating with
the investigations and does not believe that the investigations will result in a
material adverse impact on its operations. However, as with any similar
investigation, there can be no assurance that these will not result in material
fines, penalties or other costs.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
AIMCO's Class A Common Stock has been listed and traded on the NYSE under
the symbol "AIV" since July 22, 1994. The following table sets forth the
quarterly high and low sales prices of the Class A Common Stock, as reported on
the NYSE, and the dividends paid by the Company for the periods indicated.
DIVIDENDS
PAID
QUARTER ENDED HIGH LOW (PER SHARE)
- ------------- ---- --- -----------
1997
March 31, 1997....................................... 30 1/2 25 1/2 0.4625
June 30, 1997........................................ 29 3/4 26 0.4625
September 30, 1997................................... 36 3/16 28 1/8 0.4625
December 31, 1997.................................... 38 32 0.4625
1998
March 31, 1998....................................... 38 9/16 34 1/4 0.5625
June 30, 1998........................................ 39 7/8 36 1/2 0.5625
September 30, 1998................................... 41 31 0.5625
December 31, 1998.................................... 37 3/8 30 0.5625
1999
March 31, 1999....................................... 41 5/8 35 0.625
June 30, 1999........................................ 44 1/16 35 5/16 0.625
September 30, 1999................................... 42 5/8 37 5/16 0.625
December 31, 1999.................................... 40 3/16 34 1/16 0.625
2000
March 31, 2000 (through March 8, 2000)............... 39 11/16 36 5/8 0.70(1)
- ---------------
(1) On January 19, 2000, the Company's Board of Directors declared a cash
dividend of $0.70 per share of Class A Common Stock, paid on February 11,
2000 to stockholders of record on February 4, 2000.
On March 8, 2000, there were 67,109,473 shares of Class A Common Stock
outstanding, held by 2,627 stockholders of record.
AIMCO, as a REIT, is required to distribute annually to holders of common
stock at least 95% of its "real estate investment trust taxable income," which,
as defined by the Internal Revenue Code and Treasury regulations, is generally
equivalent to net taxable ordinary income. AIMCO measures its economic
profitability and intends to pay regular dividends to its stockholders based on
FFO during the relevant period. However, the future payment of dividends by
AIMCO will be at the discretion of the Board of Directors and will depend on
numerous factors including AIMCO's financial condition, its capital
requirements, the annual distribution requirements under the provisions of the
Internal Revenue Code applicable to REITs and such other factors as the Board of
Directors deems relevant.
From time to time, AIMCO issues shares of Class A Common Stock in exchange
for OP Units tendered to the AIMCO operating partnership for redemption in
accordance with the terms and provisions of the agreement of limited partnership
of the AIMCO operating partnership. Such shares are issued based on an exchange
ratio of one share for each OP Unit. The shares are issued in exchange for OP
Units in private transactions exempt from registration under the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to Section 4(2) thereof.
During 1999, a total of 963,951 shares of Class A Common Stock were issued in
exchange for OP Units.
On September 15, 1999, AIMCO completed a direct placement of 1,382,580
shares of Class A Common Stock at a net price of $39.50 per share to five
institutional investors. The net proceeds of approximately $54.6 million were
used to repay outstanding indebtedness under the Company's credit facility.
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During 1999, the Company repurchased 205,300 shares of Class A Common Stock
at a net price of $8.0 million.
ITEM 6. SELECTED FINANCIAL DATA
The following historical selected financial data for AIMCO is based on
audited financial statements. This information should be read in conjunction
with such financial statements, including the notes thereto, and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included herein.
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- -------- --------
OPERATING DATA:
RENTAL PROPERTY OPERATIONS:
Rental and other income................................... $ 533,917 $ 377,139 $ 193,006 $100,516 $ 74,947
Property operating expenses............................... (214,693) (147,541) (76,168) (38,400) (30,150)
Owned property management expenses........................ (15,429) (11,013) (6,620) (2,746) (2,276)
Depreciation.............................................. (131,753) (84,635) (37,741) (19,556) (15,038)
---------- ---------- ---------- -------- --------
Income from property operations........................... 172,042 133,950 72,477 39,814 27,483
---------- ---------- ---------- -------- --------
SERVICE COMPANY BUSINESS:
Management fees and other income.......................... 43,455 24,103 13,937 8,367 8,132
Management and other expenses............................. (25,470) (16,960) (10,961) (6,150) (5,731)
---------- ---------- ---------- -------- --------
Income from service company business...................... 17,985 7,143 2,976 2,217 2,401
---------- ---------- ---------- -------- --------
General and administrative expenses....................... (13,112) (13,568) (5,396) (1,512) (1,804)
Interest expense.......................................... (140,094) (89,424) (51,385) (24,802) (13,322)
Interest income........................................... 62,721 29,368 8,676 523 658
Equity in losses of unconsolidated real estate
partnerships............................................ (4,467) (4,854) (1,798) -- --
Equity in earnings (losses) of unconsolidated
subsidiaries............................................ (2,818) 11,570 4,636 -- --
Minority interest in other entities....................... (900) (468) 1,008 (111) --
Amortization.............................................. (5,860) (8,735) (948) (500) (428)
---------- ---------- ---------- -------- --------
Income from operations.................................... 85,497 64,982 30,246 15,629 14,988
Gain (loss) on disposition of properties.................. (1,785) 4,674 2,720 44 --
---------- ---------- ---------- -------- --------
Income before extraordinary item and minority interest in
operating partnership................................... 83,712 69,656 32,966 15,673 14,988
Extraordinary item -- early extinguishment of debt........ -- -- (269) -- --
---------- ---------- ---------- -------- --------
Income before minority interest in operating
partnership............................................. 83,712 69,656 32,697 15,673 14,988
Minority interest in operating partnership................ (2,753) (5,182) (4,064) (2,689) (1,613)
---------- ---------- ---------- -------- --------
Net income................................................ $ 80,959 $ 64,474 $ 28,633 $ 12,984 $ 13,375
========== ========== ========== ======== ========
OTHER INFORMATION:
Total owned or controlled properties (end of period)...... 373 242 147 94 56
Total owned or controlled apartment units (end of
period)................................................. 106,148 63,086 40,039 23,764 14,453
Total equity apartment units (end of period).............. 133,113 170,243 83,431 3,611 6,349
Units under management (end of period).................... 124,201 146,034 69,587 15,434 13,245
Basic earnings per common share........................... $ 0.39 $ 0.84 $ 1.09 $ 1.05 $ 0.86
Diluted earnings per common share......................... $ 0.38 $ 0.80 $ 1.08 $ 1.04 $ 0.86
Dividends paid per common share........................... $ 2.50 $ 2.25 $ 1.85 $ 1.70 $ 1.66
BALANCE SHEET INFORMATION:
Real estate, before accumulated depreciation.............. $4,508,535 $2,802,598 $1,657,207 $865,222 $477,162
Real estate, net of accumulated depreciation.............. 4,092,038 2,573,718 1,503,922 745,145 448,425
Total assets...................................... 5,684,951 4,248,800 2,100,510 827,673 480,361
Total indebtedness................................ 2,584,289 1,660,715 808,530 522,146 268,692
Company-obligated mandatory redeemable convertible
preferred securities of a subsidiary trust.............. 149,500 149,500 -- -- --
Stockholders' equity...................................... 2,262,828 1,902,564 1,045,300 215,749 169,032
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
OVERVIEW
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements in certain circumstances. Certain
information included in this Report, the Company's Annual Report to Stockholders
and other filings (collectively "SEC Filings") under the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended (as well as
information communicated orally or in writing between the dates of such SEC
Filings) contains or may contain information that is forward looking, including,
without limitation, statements regarding the effect of acquisitions, the
Company's future financial performance and the effect of government regulations.
Actual results may differ materially from those described in the forward looking
statements and will be affected by a variety of risks and factors including,
without limitation, national and local economic conditions, the general level of
interest rates, terms of governmental regulations that affect the Company and
interpretations of those regulations, the competitive environment in which the
Company operates, financing risks, including the risk that the Company's cash
flows from operations may be insufficient to meet required payments of principal
and interest, real estate risks, including variations of real estate values and
the general economic climate in local markets and competition for tenants in
such markets, acquisition and development risks, including failure of such
acquisitions to perform in accordance with projections, and possible
environmental liabilities, including costs which may be incurred due to
necessary remediation of contamination of properties presently owned or
previously owned by the Company. In addition, the Company's continued
qualification as a real estate investment trust involves the application of
highly technical and complex provisions of the Internal Revenue Code. Readers
should carefully review the Company's financial statements and the notes
thereto, as well as the risk factors described in the SEC Filings.
The following discussion and analysis of the results of operations and
financial condition of the Company should be read in conjunction with the
financial statements incorporated by reference in Item 8 of this Annual Report
on Form 10-K. The following discussion of results of operations is based on net
income calculated under accounting principles generally accepted in the United
States. The Company, however, considers funds from operations, less a reserve
for capital replacements, to be a more meaningful measure of economic
performance.
RESULTS OF OPERATIONS
Comparison of the Year Ended December 31, 1999 to the Year Ended December 31,
1998
NET INCOME
The Company recognized net income of $81.0 million, and net income
attributable to common stockholders of $24.1 million, for the year ended
December 31, 1999, compared to net income and net income attributable to common
stockholders of $64.5 million and $37.9 million, respectively, for the year
ended December 31, 1998. Net income attributable to common stockholders
represents net income less dividends on preferred stock.
The increase in net income of $16.5 million, or 25.6%, was primarily the
result of the following:
- the increase in net "same store" property results;
- the acquisition of 22,459 units in 82 apartment communities during 1998;
- the acquisition of 12,721 units in 28 apartment communities during 1999;
- the acquisition of Ambassador Apartments, Inc. in May 1998 which impacted
the second half of 1998;
- the acquisition of the Insignia Multi-family Business in October 1998
which primarily impacted 1999;
- the completion of the Insignia Properties Trust Merger in February 1999;
- the purchase of $271 million in limited partnership interests from
unaffiliated third parties; and
- an increase in interest income on notes receivable from unconsolidated
real estate partnerships.
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The effect of the above on net income was partially offset by the sale of
eight properties in 1999 and five properties in 1998. These factors are
discussed in more detail in the following paragraphs.
Rental Property Operations
The increases in rental property operations resulted primarily from
improved same store sales results, acquisitions of properties in 1998 and 1999,
and through the purchase of limited partnership interests from unaffiliated
third parties which gave the Company a controlling interest in partnerships
owning 125 properties in 1999.
Rental and other property revenues from the Company's owned and controlled
properties totaled $533.9 million for the year ended December 31, 1999, compared
to $377.1 million for the year ended December 31, 1998, an increase of $156.8
million, or 41.6%.
Property operating expenses totaled $214.7 million for the year ended
December 31, 1999, compared to $147.5 million for the year ended December 31,
1998, an increase of $67.2 million, or 45.6%. Property operating expenses
consist of on-site payroll costs, utilities (net of reimbursements received from
tenants), contract services, turnover costs, repairs and maintenance,
advertising and marketing, property taxes and insurance.
Owned property management expenses, representing the costs of managing the
Company's owned or controlled properties, totaled $15.4 million for the year
ended December 31, 1999, compared to $11.0 million for the year ended December
31, 1998, an increase of $4.4 million, or 40.0%.
Service Company Business
Income from the service company business was $18.0 million for the year
ended December 31, 1999, compared to $7.1 million for the year ended December
31, 1998, an increase of $10.9 million or 153.5%. The increase was primarily due
to management contracts acquired in the Insignia and IPT mergers that are held
by the Company, as well as the transfer of majority-owned management contracts
from the unconsolidated management companies to the AIMCO operating partnership.
When the Company owns at least a 40% interest in a real estate partnership, the
management contract with that real estate partnership is assigned to the AIMCO
operating partnership increasing the amount of revenues recognized by the
consolidated service company operations.
General and Administrative Expenses
General and administrative expenses totaled $13.1 million for the year
ended December 31, 1999, compared to $13.6 million for the year ended December
31, 1998, a decrease of $0.5 million, or 3.7%. The decrease in general and
administrative expenses is primarily due to efforts to align expenses with the
revenues they help generate. The results of these efforts increased the amount
of expenses allocated to both consolidated and unconsolidated service company
management expenses.
Interest Expense
Interest expense, which includes the amortization of deferred finance
costs, totaled $140.1 million for the year ended December 31, 1999, compared to
$89.4 million for the year ended December 31, 1998, an increase of $50.7 million
or 56.7%. The increase was primarily due to interest expense incurred in
connection with 1999 and 1998 acquisitions, as well as the consolidation of an
additional 125 properties when control was obtained.
Interest Income
Interest income totaled $62.7 million for the year ended December 31, 1999,
compared to $29.4 million for the year ended December 31, 1998, an increase of
$33.3 million or 113.3%. The Company holds investments in notes receivable which
were either extended by the Company and are carried at the face amount plus
accrued interest ("par value notes") or were made by predecessors whose
positions have been acquired by the Company at a discount and are carried at the
acquisition amount using the cost recovery
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method ("discounted notes"). $32.5 million of the increase in interest income is
due to the recognition of interest income that had previously been deferred and
portions of the related discounts for certain discounted notes. Based upon
closed or pending transactions, market conditions, and improved operations of
the obligor, the collectibility of such notes is now believed to be probable and
the amounts and timing of collections are estimable. The remaining increase is
primarily related to other recurring interest earned on both the par value and
discounted notes made by the Company to partnerships in which the Company acts
as the general partner and interest earned on notes receivable acquired in the
mergers with Insignia and IPT.
Comparison of the Year Ended December 31, 1998 to the Year Ended December 31,
1997
NET INCOME
The Company recognized net income of $64.5 million, and net income
attributable to common stockholders of $37.9 million, for the year ended
December 31, 1998, compared to net income and net income attributable to common
stockholders of $28.6 million and $26.3 million, respectively, for the year
ended December 31, 1997. Net income attributable to common stockholders
represents net income less dividends on preferred stock.
The increase in net income of $35.9 million, or 125.5%, was primarily the
result of the following:
- the increase in net "same store" property results;
- the acquisition of 11,706 units in 44 apartment communities during 1997;
- the acquisition of 22,459 units in 82 apartment communities during 1998;
- the acquisition of NHP Incorporated ("NHP") in December 1997 which
impacted operations in 1998;
- the acquisition of Ambassador Apartments, Inc. in May 1998 which impacted
the second half of 1998;
- the acquisition of the Insignia Multi-family Business in October 1998
which impacted the last quarter of 1998; and
- an increase in interest income on notes receivable from unconsolidated
real estate partnerships.
The effect of the above on net income was partially offset by the sale of
five properties in 1998 and five properties in 1997. These factors are discussed
in more detail in the following paragraphs.
Rental Property Operations
The increases in rental property operations resulted primarily from
improved same store sale results, acquisitions of properties in 1997 and 1998,
and acquisitions of controlling interests in properties through the NHP,
Ambassador and Insignia mergers.
Rental and other property revenues from the Company's owned and controlled
properties totaled $377.1 million for the year ended December 31, 1998, compared
to $193.0 million for the year ended December 31, 1997, an increase of $184.1
million, or 95.4%.
Property operating expenses totaled $147.5 million for the year ended
December 31, 1998, compared to $76.2 million for the year ended December 31,
1997, an increase of $71.3 million, or 93.6%. Property operating expenses
consist of on-site payroll costs, utilities (net of reimbursements received from
tenants), contract services, turnover costs, repairs and maintenance,
advertising and marketing, property taxes and insurance.
Owned property management expenses, representing the costs of managing the
Company's owned or controlled properties, totaled $11.0 million for the year
ended December 31, 1998, compared to $6.6 million for the year ended December
31, 1997, an increase of $4.4 million, or 66.7%.
Service Company Business
Income from the service company business was $7.1 million for the year
ended December 31, 1998, compared to $3.0 million for the year ended December
31, 1997, an increase of $4.1 million or 136.7%. The increase was primarily due
to management contracts acquired in the Insignia merger that are held by the
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Company, as well as the transfer of majority-owned management contracts from the
management companies to the AIMCO operating partnership. When the Company owns
at least a 40% interest in a real estate partnership, the management contract
with that real estate partnership is assigned to the AIMCO operating partnership
increasing the amount of revenues recognized by the consolidated service company
operations.
General and Administrative Expenses
General and administrative expenses totaled $13.6 million for the year
ended December 31, 1998, compared to $5.4 million for the year ended December
31, 1997, an increase of $8.2 million, or 151.9%. The increase in general and
administrative expenses is primarily due to additional corporate costs and
additional employee salaries associated with the purchase of NHP Real Estate
Companies in June 1997 and the mergers with NHP Incorporated in December 1997,
Ambassador Apartments, Inc. in May 1998 and Insignia Financial Group, Inc. in
October 1998. In addition, due to the growth of the Company, several new
departments have been added including legal, tax and Limited Partnership
administration, as well as increased levels of personnel in the accounting and
finance departments.
Interest Expense
Interest expense, which includes the amortization of deferred finance
costs, totaled $89.4 million for the year ended December 31, 1998, compared to
$51.4 million for the year ended December 31, 1997, an increase of $38.0 million
or 73.9%. The increase was primarily due to interest expense incurred in
connection with the acquisition of interests in Ambassador Apartments, Inc. and
Insignia Financial Group, Inc. and interest expense incurred in connection with
1998 and 1997 acquisitions.
Interest Income
Interest income totaled $29.4 million for the year ended December 31, 1998,
compared to $8.7 million for the year ended December 31, 1997. The increase is
primarily due to interest earned on the increased average outstanding balances
of notes receivable from unconsolidated real estate partnerships and
subsidiaries.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1999, the Company had $101.6 million in cash and cash
equivalents and $84.6 million of restricted cash, primarily consisting of
reserves and impounds held by lenders for capital expenditures, property taxes
and insurance. In addition, cash, cash equivalents and restricted cash are held
by partnerships and subsidiaries which are not presented on a consolidated
basis. The Company's principal demands for liquidity include normal operating
activities, payments of principal and interest on outstanding debt, capital
improvements, acquisitions of and investments in properties, dividends paid to
stockholders and distributions paid to limited partners. The Company considers
its cash provided by operating activities to be adequate to meet short-term
liquidity demands.
In August 1999, the Company closed a $300 million revolving credit facility
arranged by Bank of America, N.A. BankBoston, N.A. and First Union National Bank
and comprised of a total of nine lender participants. The obligations under the
credit facility are secured by certain non-real estate assets of the Company.
The existing lines of credit were terminated. The credit facility is used for
general corporate purposes and has a two-year term with two one-year extensions.
The annual interest rate under the credit facility is based on either LIBOR or a
base rate which is the higher of Bank of America's reference rate or 0.5% over
the federal funds rate, plus, in either case, an applicable margin. The margin
ranges between 2.05% and 2.55%, in the case of LIBOR-based loans, and between
0.55% and 1.05%, in the case of base rate loans, based upon a fixed charge
coverage ratio. The weighted average interest rate at December 31, 1999 was
8.84%. The amount available under the credit facility at December 31, 1999 was
$90.8 million.
As of December 31, 1999, 96.8% of the Company's owned or controlled
properties and 45.4% of its total assets were encumbered by debt. The Company
had total outstanding indebtedness of $2,584.3 million, of which $2,375.1
million was secured by properties. The Company's indebtedness is comprised of
$1,954.3 million of secured long-term financing, $420.8 million of secured
tax-exempt bond financing and $209.2 in
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unsecured short-term financing. As of December 31, 1999, approximately 9% of the
Company's indebtedness bears interest at variable rates. General Motors
Acceptance Corporation has made 113 loans (the "GMAC Loans") to property owning
partnerships of the Company, each of which is secured by the property owned by
such partnership. The 113 GMAC Loans had an aggregate outstanding principal
balance of $570.1 million as of December 31, 1999. Certain GMAC Loans are
cross-collateralized with certain other GMAC Loans. Other than certain GMAC
Loans, none of the Company's debt is subject to cross-collateralization
provisions. The weighted average interest rate on the Company's secured,
long-term notes payable was 6.66% with a weighted average maturity of 12.8 years
as of December 31, 1999. At December 31, 1999, the weighted average interest
rate on the Company's unsecured short-term financing was 8.84%.
During the year ended December 31, 1999, the Company issued $410.3 million
of long-term fixed rate, fully amortizing notes payable with a weighted average
interest rate of 7.3%. Each of the notes is individually secured by one of forty
properties with no cross-collateralization. The Company used the net proceeds
after transaction costs of $373.6 million to repay existing debt. During the
year ended December 31, 1999, the Company has also assumed $110.1 million of
long-term fixed rate, fully amortizing notes payable with a weighted average
interest rate of 7.9% in connection with the acquisition of properties. Each of
the notes is individually secured by one of thirteen properties with no
cross-collateralization.
The Company expects to meet its long-term liquidity requirements, such as
refinancing debt and property acquisitions, through long-term borrowings, both
secured and unsecured, the issuance of debt or equity securities (including OP
Units) and cash generated from operations. In August 1998, AIMCO and the AIMCO
operating partnership filed a shelf registration statement with the Securities
and Exchange Commission ("SEC") with respect to an aggregate of $1,268 million
of debt and equity securities of AIMCO (of which $268 million was carried
forward from AIMCO's 1997 shelf registration statement) and $500 million of debt
securities of the AIMCO operating partnership. The registration statement was
declared effective by the SEC on December 10, 1998. As of December 31, 1999, the
Company had $1,088 million available and the AIMCO operating partnership had
$500 million available from this registration statement. The Company expects to
finance acquisition of real estate interests with cash from operations or the
issuance of equity securities and debt.
CAPITAL EXPENDITURES
For the year ended December 31, 1999, the Company spent a total of $291.7
million for capital expenditures on its portfolio of assets. The Company's share
of those expenditures for its conventional assets are as follows: $38.4 million
for capital replacements (expenditures for routine maintenance of a property);
$54.8 million for Initial Capital Expenditures ("ICE", expenditures at a
property that have been identified, at the time the property is acquired, as
expenditures to be incurred within one year of the acquisition); and $43.3
million for construction and capital enhancements (amenities that add a material
new feature or revenue source at a property). The expenditures for capital
replacements in 1999 exceeded the provision of $300 per apartment provided for
by the Company by $9.7 million which represents unspent capital replacements and
ICE from prior years. These expenditures were funded by net cash provided by
operating activities, working capital reserves, and borrowings under the
Company's credit facility. ICE and capital enhancements will primarily be funded
by cash from operating activities and borrowings under the Company's credit
facility.
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The Company's accounting treatment of various capital and maintenance costs
is detailed in the following table:
DEPRECIABLE LIFE
EXPENDITURE ACCOUNTING TREATMENT IN YEARS
- ----------- -------------------- ----------------
Initial capital expenditures........................ capitalize 5 to 15
Capital enhancements................................ capitalize 5 to 30
Capital replacements:
Carpet/vinyl replacement............................ capitalize 5
Carpet cleaning..................................... expense N/A
Major appliance replacement (refrigerators, stoves,
dishwashers, washers/dryers)...................... capitalize 5
Cabinet replacement................................. capitalize 5
Major new landscaping............................... capitalize 5
Seasonal plantings and landscape replacements....... expense N/A
Roof replacements................................... capitalize 15
Roof repairs........................................ expense N/A
Model furniture..................................... capitalize 5
Office equipment.................................... capitalize 5
Exterior painting, significant...................... capitalize 5
Interior painting................................... expense N/A
Parking lot repairs................................. expense N/A
Parking lot repaving................................ capitalize 15
Equipment repairs................................... expense N/A
General policy for capitalization................... capitalize amounts Various
in excess of $ 250
FUNDS FROM OPERATIONS
The Company measures its economic profitability based on funds from
operations ("FFO"), less a reserve for capital replacements of $300 per
apartment unit. The Company's management believes that FFO, less such a reserve,
provides investors with an understanding of the Company's ability to incur and
service debt and make capital expenditures. The Board of Governors of the
National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as
net income (loss), computed in accordance with generally accepted accounting
principles ("GAAP"), excluding gains and losses from debt restructuring and
sales of property, plus real estate related depreciation and amortization
(excluding amortization of financing costs), and after adjustments for
unconsolidated partnerships and joint ventures. The Company calculates FFO based
on the NAREIT definition, as adjusted for minority interest in the AIMCO
operating partnership, amortization, the non-cash deferred portion of the income
tax provision for unconsolidated subsidiaries and less the payment of dividends
on preferred stock. FFO should not be considered an alternative to net income or
net cash flows from operating activities, as calculated in accordance with GAAP,
as an indication of the Company's performance or as a measure of liquidity. FFO
is not necessarily indicative of cash available to fund future cash needs. In
addition, there can be no assurance that the Company's basis for computing FFO
is comparable with that of other real estate investment trusts.
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For the years ended December 31, 1999, 1998 and 1997, the Company's FFO is
calculated as follows (amounts in thousands):
1999 1998 1997
--------- --------- ---------
Income before minority interest in operating
partnership.................................... $ 83,712 $ 69,656 $ 32,697
Extraordinary item............................... -- -- 269
(Gain) loss on disposition of properties......... 1,785 (4,674) (2,720)
Real estate depreciation, net of minority
interests...................................... 121,689 80,369 33,751
Real estate depreciation related to
unconsolidated entities........................ 104,764 34,840 9,864
Amortization..................................... 36,731 26,177 2,535
Deferred taxes................................... 1,763 9,215 4,894
TOPR's interest expense.......................... 4,858 -- --
Preferred stock dividends........................ (32,905) (20,701) (135)
Preferred OP Unit distributions.................. (1,038) (136) --
--------- --------- ---------
Funds From Operations (FFO)...................... $ 321,359 $ 194,746 $ 81,155
========= ========= =========
Weighted average number of common shares, common
Share equivalents and OP Units outstanding:
Common stock................................... 63,644 45,187 24,055
Common stock equivalents....................... 91 2,437 381
Preferred stock, OP Units, and other securities
convertible into common stock............... 8,625 2,463 1,006
OP Units....................................... 6,313 6,732 3,677
--------- --------- ---------
78,673 56,819 29,119
========= ========= =========
CASH FLOW INFORMATION:
Cash flow provided by operating activities....... $ 253,257 $ 148,414 $ 73,032
Cash flow used in investing activities........... (281,106) (328,321) (717,663)
Cash flow provided by financing activities....... 58,148 214,124 668,549
CONTRIBUTION TO FREE CASH FLOW
The Company seeks to improve funds from operations, less a reserve for
capital replacements, on a per share basis. In this regard, in addition to the
year-to-year comparative discussion, the Company has provided disclosure (see
Footnote 23 in the accompanying Notes to Consolidated Financial Statements) on
the contribution (separated between consolidated and unconsolidated activity) to
the Company's free cash flow from several components of the Company and a
reconciliation of free cash flow to FFO, less a reserve for capital
replacements, and to net income for the year ended December 31, 1999. The
Company defines free cash flow as FFO, less a reserve for capital replacements,
plus interest expense and preferred stock dividends.
The contributors to the Company's free cash flow of $528 million were real
estate -- $421 million (80%), service businesses -- $51 million (10%), recurring
interest income -- $32 million (6%) and transactions (fees and recovery of loan
discounts) -- $37 million (7%), less general and administrative expenses -- $13
million (3%).
Expenses to arrive at FFO, less a reserve for capital replacements, were
interest expense -- $201 million, and preferred stock and preferred OP unit
dividends -- $34 million. This results in FFO, less a reserve for capital
replacements, of $293 million of which $180 million (62%) is from consolidated
activities and $113 million (38%) is from unconsolidated activities.
The real estate free cash flow contribution of $443 million before a $22
million minority interest deduction is concentrated in conventional apartment
properties, which comprise $389 million or 88% of the real estate free cash flow
contribution. Conventional apartments with rents of $500 per month or higher
comprise $332 million or 85% of the real estate free cash flow contribution from
conventional units. Conventional apartments with rents of $600 per month or
higher comprise $222 million or 57% of the real estate free cash flow
contribution from conventional units. Overall, the Company has balanced
contributions to conventional real estate free cash flow from monthly rents of
less than $500 per unit to monthly rents greater than $800 per unit.
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Contributions to conventional real estate free cash flow for 1999 were as
follows:
TOTAL CONTR. %
-------- --------
Average monthly rent greater than $800 per unit............. $ 78,100 21%
Average monthly rent $700 to $800 per unit.................. 57,627 15%
Average monthly rent $600 to $700 per unit.................. 86,133 22%
Average monthly rent $500 to $600 per unit.................. 110,499 28%
Average monthly rent $500 per unit.......................... 56,385 14%
-------- ---
$388,744 100%
======== ===
The service businesses contributed $51 million (10%) to free cash flow. The
service businesses provide management services to properties and partnerships
and includes Buyers Access, the nation's largest group purchasing organization
serving the apartment industry. Management contracts contribute $47 million
(92%) to the service businesses contribution. $36 million (75%) of the
management contract contribution is derived from properties the Company controls
through economic ownership or its general partner position. $10 million (22%) of
the management contract contribution is from long-term management contracts.
Less than $1 million is contributed from short-term third party management
contracts (30 day cancelable). Buyer's Access contributed $3 million or 6% to
the service businesses contribution.
The Company received recurring interest income from par value notes and
other receivables and interest bearing accounts of $32 million (50% of total
interest income in 1999). In addition, the Company has realized interest income
from recoveries of notes receivable that were acquired at a discount to actual
face value. As the Company improved property operations, some of these notes
have become collectible. In 1999, the Company recognized $32 million (50% of
total interest income) in recoveries from notes purchased at a discount.
Fees contributed $5 million (1%) to free cash flow contribution. Fees are
earned in partnership sales and financing transactions. The Company considers
fees and interest income from notes purchased at a discount as transactional.
Together, the transactional contribution was $37 million (7%) of free cash flows
contribution.
Footnote 23 in the accompanying Notes to Consolidated Financial Statements
provides additional detail on each component of free cash flow. We believe this
disclosure is complementary to the previous year-to-year results of operations
comparisons.
CONTINGENCIES
Pending Investigations of HUD Management Arrangements
In 1997, NHP received subpoenas from the HUD Inspector General ("IG")
requesting documents relating to arrangements whereby NHP or any of its
affiliates provides compensation to owners of HUD-assisted or HUD-insured
multi-family projects in exchange for or in connection with property management
of a HUD project. In July 1999, NHP received a grand jury subpoena requesting
documents relating to the same subject matter as the HUD IG subpoenas and NHP's
operation of a group purchasing program created by NHP, known as Buyers Access.
To date, neither the HUD IG nor the grand jury has initiated any action against
NHP or AIMCO or, to NHP's or AIMCO's knowledge, any owner of a HUD property
managed by NHP. AIMCO believes that NHP's operations and programs are in
compliance, in all material respects, with all laws, rules and regulations
relating to HUD-assisted or HUD-insured properties. AIMCO is cooperating with
the investigations and does not believe that the investigations will result in a
material adverse impact on its operations. However, as with any similar
investigation, there can be no assurance that these will not result in material
fines, penalties or other costs.
INFLATION
Substantially all of the leases at the Company's apartment properties are
for a period of twelve months or less, allowing, at the time of renewal, for
adjustments in the rental rate and the opportunity to re-lease the apartment
unit at the prevailing market rate. The short term nature of these leases
generally serves to
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minimize the risk to the Company of the adverse effect of inflation and the
Company does not believe that inflation has had a material adverse impact on its
revenues.
ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's primary market risk exposure relates to changes in interest
rates. The Company is not subject to any foreign currency exchange rate risk or
commodity price risk, or any other material market rate or price risks. The
Company uses predominantly long-term, fixed-rate and self-amortizing
non-recourse mortgage debt in order to avoid the refunding or repricing risks of
short-term borrowings. The Company uses short-term debt financing and working
capital primarily to fund acquisitions and generally expects to refinance such
borrowings with proceeds from operating activities, equity offerings or
long-term debt financings.
The Company had $240.9 million of variable rate debt outstanding at
December 31, 1999, which represents 9% of the Company's total outstanding debt.
Based on this level of debt, an increase in interest rates of 1% would result in
the Company's income and cash flows being reduced by $2.4 million on an annual
basis. At December 31, 1999, the Company had $2,343.4 million of fixed rate debt
outstanding. The partnership debt secured by individual properties in an
aggregate amount of $51.8 million, $92.7 million, $66.9 million, $139.7 million
and $205.7 million will mature in the years 2000, 2001, 2002, 2003 and 2004,
respectively.
The estimated aggregate fair value of the Company's cash and cash
equivalents, receivables, payables and short-term unsecured debt as of December
31, 1999 is assumed to approximate their carrying value due to their relatively
short terms. Management further believes that the fair market value of the
Company's secured tax-exempt bond debt and secured long-term debt approximates
their carrying value, based on market comparisons to similar types of debt
instruments having similar maturities.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The independent auditor's reports, consolidated financial statements and
schedules listed in the accompanying index are filed as part of this report and
incorporated herein by this reference. See "Index to Financial Statements" on
page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information regarding the Company's Directors required by this item is
presented under the caption "Board of Directors and Officers" in AIMCO's proxy
statement for its 2000 annual meeting of stockholders and is incorporated herein
by reference.
The directors and executive officers of the Company as of February 29, 2000
are:
NAME AGE FIRST ELECTED POSITION
- ---- --- ------------- --------
Terry Considine..... 52 July 1994 Chairman of the Board of Directors and
Chief Executive Officer
Peter K. 55 July 1994 Vice Chairman of the Board of Directors
Kompaniez......... and President
Thomas W. Toomey.... 39 January 1996 Chief Operating Officer
Harry G. Alcock..... 36 July 1996 Executive Vice President and Chief
Investment Officer
Joel F. Bonder...... 51 December 1997 Executive Vice President, General
Counsel and Secretary
Patrick J. Foye..... 43 May 1998 Executive Vice President
Lance J. Graber..... 38 October 1999 Executive Vice President -- Acquisitions
Steven D. Ira....... 49 July 1994 Co-Founder and Executive Vice
President -- Property Operations
Paul J. McAuliffe... 43 February 1999 Executive Vice President and Chief
Financial Officer
Richard S. 68 July 1994 Director, Chairman of the Audit
Ellwood........... Committee
J. Landis Martin.... 54 July 1994 Director, Chairman of the Compensation
Committee
Thomas L. Rhodes.... 60 July 1994 Director
John D. Smith....... 71 November 1994 Director
The following is a biographical summary of the experience of the current
directors and executive officers of the Company for the past five years or more.
Terry Considine. Mr. Considine has been Chairman of the Board of Directors
and Chief Executive Officer of the Company since July 1994. Mr. Considine serves
as Chairman and director of Asset Investors Corporation ("Asset Investors") and
Commercial Assets, Inc. ("Commercial Assets"), two other public real estate
investment trusts. Mr. Considine has been and remains involved as a principal in
a variety of other business activities.
Peter K. Kompaniez. Mr. Kompaniez has been Vice Chairman of the Board of
Directors since July 1994 and was appointed President in July 1997. Mr.
Kompaniez has also served as Chief Operating Officer of NHP Incorporated
("NHP"), which was acquired by the Company in December 1997. From 1986 to 1993,
he served as President and Chief Executive Officer of Heron Financial
Corporation ("HFC"), a United States holding company for Heron International,
N.V.'s real estate and related assets. While at HFC, Mr. Kompaniez administered
the acquisition, development and disposition of approximately 8,150 apartment
units (including 6,217 units that have been acquired by the Company) and 3.1
million square feet of commercial real estate.
Thomas W. Toomey. Mr. Toomey served as Senior Vice President-Finance and
Administration of the Company from January 1996 to March 1997, when he was
promoted to Executive Vice President-Finance and Administration. Mr. Toomey
served as Executive Vice President -- Finance and Administration until December
1999, when he was appointed Chief Operating Officer. From 1990 until 1995, Mr.
Toomey served in a similar capacity with Lincoln Property Company ("LPC") as
Vice President/Senior Controller and
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Director of Administrative Services of Lincoln Property Services where he was
responsible for LPC's computer systems, accounting, tax, treasury services and
benefits administration. From 1984 to 1990, he was an audit manager with Arthur
Andersen & Co. where he served real estate and banking clients. Mr. Toomey
received a B.S. in Business Administration/Finance from Oregon State University.
Harry G. Alcock. Mr. Alcock served as a Vice President of the Company from
July 1996 to October 1997, when he was promoted to Senior Vice
President-Acquisitions. Mr. Alcock served as Senior Vice President-Acquisitions
until October 1999, when he was promoted to Executive Vice President and Chief
Investment Officer. Mr. Alcock has had responsibility for acquisition and
financing activities of the Company since July 1994. From June 1992 until July
1994, Mr. Alcock served as Senior Financial Analyst for PDI and HFC. From 1988
to 1992, Mr. Alcock worked for Larwin Development Corp., a Los Angeles-based
real estate developer, with responsibility for raising debt and joint venture
equity to fund land acquisitions and development. From 1987 to 1988, Mr. Alcock
worked for Ford Aerospace Corp. He received his B.S. from San Jose State
University.
Joel F. Bonder. Mr. Bonder was appointed Executive Vice President, General
Counsel and Secretary of the Company effective December 1997. Prior to joining
the Company, Mr. Bonder served as Senior Vice President and General Counsel of
NHP from April 1994 until December 1997. Mr. Bonder served as Vice President and
Deputy General Counsel of NHP from June 1991 to March 1994 and as Associate
General Counsel of NHP Incorporated from 1986 to 1991. From 1983 to 1985, Mr.
Bonder practiced with the Washington, D.C. law firm of Lane & Edson, P.C. and
from 1979 to 1983 practiced with the Chicago law firm of Ross and Hardies. Mr.
Bonder received a B.A. from the University of Rochester and a J.D. from
Washington University School of Law.
Patrick J. Foye. Mr. Foye was appointed Executive Vice President of the
Company in May 1998. He is responsible for acquisitions of partnership
securities, consolidation of minority interests, and corporate and other
acquisitions. Prior to joining the Company, Mr. Foye was a Merger and
Acquisitions Partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP
from 1989 to 1998 and was Managing Partner of the firm's Brussels, Budapest and
Moscow offices from 1992 through 1994. Mr. Foye is also Deputy Chairman of the
Long Island Power Authority and serves as a member of the New York State
Privatization Council. He received a B.A. from Fordham College and a J.D. from
Fordham Law School and was Associate Editor of the Fordham Law Review.
Lance J. Graber. Mr. Graber was appointed Executive Vice
President-Acquisitions of the Company in October 1999. His principal business
function is acquisitions. Prior to joining the Company, Mr. Graber was an
Associate from 1991 through 1992 and then a Vice President from 1992 through
1994 at Credit Suisse First Boston engaged in real estate financial advisory
services and principal investing. He was a Director there from 1994 to May 1999,
during which time he supervised a staff of seven in the making of principal
investments in hotel, multi-family and assisted living properties. Mr. Graber
received a B.S. and an M.B.A. from the Wharton School of the University of
Pennsylvania.
Steven D. Ira. Mr. Ira is a Co-Founder of the Company and has served as
Executive Vice President -- Property Operations of the Company since July 1994.
From 1987 until July 1994, he served as President of Property Asset Management
("PAM"). Prior to merging his firm with PAM in 1987, Mr. Ira acquired extensive
experience in property management. Between 1977 and 1981 he supervised the
property management of over 3,000 apartment and mobile home units in Colorado,
Michigan, Pennsylvania and Florida, and in 1981 he joined with others to form
the property management firm of McDermott, Stein and Ira. Mr. Ira served for
several years on the National Apartment Manager Accreditation Board and is a
former president of both the National Apartment Association and the Colorado
Apartment Association. Mr. Ira is the sixth individual elected to the Hall of
Fame of the National Apartment Association in its 54-year history. He holds a
Certified Apartment Property Supervisor (CAPS) and a Certified Apartment Manager
designation from the National Apartment Association, a Certified Property
Manager (CPM) designation from the National Institute of Real Estate Management
(IREM) and he is a member of the Boards of Directors of the National
Multi-Housing Council, the National Apartment Association and the Apartment
Association of Greater Orlando. Mr. Ira received a B.S. from Metropolitan State
College in 1975.
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Paul J. McAuliffe. Mr. McAuliffe has been Executive Vice President of the
Company since February 1999 and was appointed Chief Financial Officer in October
1999. Prior to joining the Company, Mr. McAuliffe was Senior Managing Director
of Secured Capital Corp and prior to that time had been a Managing Director of
Smith Barney, Inc. from 1993 to 1996, where he was senior member of the
underwriting team that lead AIMCO's initial public offering in 1994. Mr.
McAuliffe was also a Managing Director and head of the real estate group at CS
First Boston from 1990 to 1993 and he was a Principal in the real estate group
at Morgan Stanley & Co., Inc. where he worked from 1983 to 1990. Mr. McAuliffe
received a B.A. from Columbia College and an M.B.A. from University of Virginia,
Darden School.
Richard S. Ellwood. Mr. Ellwood was appointed a director of the Company in
July 1994. Mr. Ellwood is currently Chairman of the Audit Committee and a member
of the Compensation Committee. Mr. Ellwood is the founder and President of R.S.
Ellwood & Co., Incorporated, a real estate investment banking firm. Prior to
forming R.S. Ellwood & Co., Incorporated in 1987, 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 and Florida
East Coast Industries, Inc.
J. Landis Martin. Mr. Martin was appointed a director of the Company in
July 1994 and became Chairman of the Compensation Committee on March 19, 1998.
Mr. Martin is a member of the Audit Committee. Mr. Martin has served as
President and Chief Executive Officer of NL Industries, Inc., a manufacturer of
titanium dioxide since 1987. Mr. Martin has served as Chairman of Tremont
Corporation ("Tremont"), a holding company operating through its affiliates
Titanium Metals Corporation ("TIMET") and NL Industries, Inc. ("NL"), since 1990
and as Chief Executive Officer and a director of Tremont since 1988. Mr. Martin
has served as Chairman of TIMET, an integrated producer of titanium since 1987
and Chief Executive Officer since January, 1995. From 1990 until its acquisition
by a predecessor of Halliburton Company ("Halliburton") in 1994, Mr. Martin
served as Chairman of the Board and Chief Executive Officer of Baroid
Corporation, an oilfield services company. In addition to Tremont, NL and TIMET,
Mr. Martin is a director of Halliburton, which is engaged in the petroleum
services, hydrocarbon and engineering industries, and Crown Castle International
Corporation, a telecommunications company.
Thomas L. Rhodes. Mr. Rhodes was appointed a Director of the Company in
July 1994 and is currently a member of the Audit and Compensation Committees.
Mr. Rhodes has served as the President and Director of National Review magazine
since November 1992, where he has also served as a Director since 1988. From
1976 to 1992, he held various positions at Goldman, Sachs & Co. and was elected
a General Partner in 1986 and served as a General Partner from 1987 until
November 1992. He is currently Co-Chairman of the Board, Co-Chief Executive
Officer and a Director of Asset Investors and Commercial Assets. He also serves
as a Director of Delphi Financial Group and its subsidiaries, Delphi
International Ltd., Oracle Reinsurance Company and The Lynde and Harry Bradley
Foundation.
John D. Smith. Mr. Smith was appointed a director of the Company in
November 1994. Mr. Smith is a member of the Compensation Committee and the Audit
Committee. Mr. Smith is Principal and President of John D. Smith Developments.
Mr. Smith has been a shopping center developer, owner and consultant for over
8.6 million square feet of shopping center projects including Lenox Square in
Atlanta, Georgia. Mr. Smith is a Trustee and former President of the
International Council of Shopping Centers and was selected to be a member of the
American Society of Real Estate Counselors. Mr. Smith served as a director for
Pan-American Properties, Inc. (National Coal Board of Great Britain) formerly
known as Continental Illinois Properties. He also serves as a director of
American Fidelity Assurance Companies and is retained as an advisor by Shop
System Study Society, Tokyo, Japan.
Additional information required by this item is presented under the caption
"Other Matters -- Section 16(a) Compliance" in the Company's proxy statement for
its 2000 annual meeting of stockholders and is incorporated herein by reference.
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ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is presented under the captions
"Summary Compensation Table," "Option/SAR Grants in Last Fiscal Year" and
"Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-end
Options/SAR Values" in AIMCO's proxy statement for its 2000 annual meeting of
stockholders and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is presented under the caption
"Security Ownership of Certain Beneficial Owners and Management" in AIMCO's
proxy statement for its 2000 annual meeting of stockholders and is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is presented under the caption
"Certain Relationships and Transactions" in AIMCO's proxy statement for its 2000
annual meeting of stockholders and is incorporated herein by reference.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K
(a) (1) The financial statements listed in the Index to Financial
Statements on Page F-1 of this report are filed as part of this report and
incorporated herein by reference.
(a) (2) The financial statement schedule listed in the Index to Financial
Statements on Page F-1 of this report is filed as part of this report and
incorporated herein by reference.
(a) (3) The Exhibit Index is included on page 23 of this report and
incorporated herein by reference.
(b) Reports on Form 8-K for the quarter ended December 31, 1999:
None.
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
2.1 -- Second Amended and Restated Agreement and Plan of Merger,
dated as of January 22, 1999, by and between Apartment
Investment and Management Company and Insignia Properties
Trust (Exhibit 2.2 to the Current Report on Form 8-K of
Insignia Properties Trust, dated February 11, 1999, is
incorporated herein by this reference)
2.2 -- Amended and Restated Agreement and Plan of Merger, dated
as of May 26, 1998, by and among Apartment Investment
Management Company, AIMCO Properties, L.P., Insignia
Financial Group, Inc., and Insignia/ESG Holdings, Inc.
(Exhibit 2.1 to AIMCO's Registration Statement on Form
S-4, filed August 5, 1998, is incorporated herein by this
reference)
3.1 -- Charter
3.2 -- Bylaws
4.1 -- Amended and Restated Declaration of Trust of IFT
Financing I (formerly Insignia Financing I), dated as of
November 1, 1996, among Insignia Financial Group, Inc. as
Sponsor, First Union National Bank of South Carolina as
Property Trustee, First Union Bank of Delaware, as
Delaware Trustee and Andrew I. Farkas, John K. Lines and
Ronald Uretta as Regular Trustees (Exhibit 4.2 to Form
S-3 of Insignia Financial Group, Inc. dated December 10,
1996, is incorporated herein by this reference)
4.2 -- Indenture for the 6.5% Convertible Subordinated
Debentures, dated as of November 1, 1996, between
Insignia Financial Group, Inc., as Issuer and First Union
National Bank of South Carolina, as Trustee (Exhibit 4.2
to Form S-3 of Insignia Financial Group, Inc., dated
December 10, 1996, is incorporated herein by this
reference)
4.3 -- First Supplemental Indenture, dated as of October 1,
1998, by and among Apartment Investment and Management
Company, Insignia Financial Group, Inc., and First Union
National Bank (formerly First Union National Bank of
South Carolina, as Trustee) (Exhibit 4.3 to AIMCO's
Annual Report on Form 10-K for the fiscal year 1998, is
incorporated herein by this reference)
10.1 -- Third Amended and Restated Agreement of Limited
Partnership of AIMCO Properties, L.P., dated as of July
29, 1994 as amended and restated as of October 1, 1998
(Exhibit 10.8 to AIMCO's Quarterly Report on Form 10-Q
for the quarterly period ending September 30, 1998, is
incorporated herein by this reference)
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EXHIBIT NO. DESCRIPTION
----------- -----------
10.2 -- First Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of November 6, 1998 (Exhibit 10.9 to
AIMCO's Quarterly Report on Form 10-Q for the quarterly
period ending September 30, 1998, is incorporated herein
by this reference)
10.3 -- Second Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 30, 1998 (Exhibit 10.1 to
Amendment No. 1 to AIMCO's Current Report on Form 8-K/A,
filed February 11, 1999, is incorporated herein by this
reference)
10.4 -- Third Amendment to Third Amended and Restated Agreement
of Limited Partnership of AIMCO Properties, L.P., dated
as of February 18, 1999 (Exhibit 10.12 to AIMCO's Annual
Report on Form 10-K for the fiscal year 1998, is
incorporated herein by this reference)
10.5 -- Fourth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of March 25, 1999 (Exhibit 10.2 to AIMCO's
Quarterly Report on Form 10-Q for the quarterly period
ending March 31, 1999, is incorporated herein by this
reference)
10.6 -- Fifth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of March 26, 1999 (Exhibit 10.3 to AIMCO's
Quarterly Report on Form 10-Q for the quarterly period
ending March 31, 1999, is incorporated herein by this
reference)
10.7 -- Sixth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of March 26, 1999 (Exhibit 10.1 to AIMCO's
Quarterly Report on Form 10-Q for the quarterly period
ending June 30, 1999, is incorporated herein by this
reference)
10.8 -- Seventh Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of September 27, 1999 (Exhibit 10.1 to
AIMCO's Quarterly Report on Form 10-Q for the quarterly
period ending September 30, 1999, is incorporated herein
by this reference)
10.9 -- Eighth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 14, 1999
10.10 -- Ninth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 21, 1999
10.11 -- Tenth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 21, 1999
10.12 -- Eleventh Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of January 13, 2000
10.13 -- Shareholders Agreement, dated October 1, 1998, by and
among Apartment Investment and Management Company, Andrew
L. Farkas, James A. Aston and Frank M. Garrison (Exhibit
10.4 to AIMCO's Schedule 13D filed on October 15, 1998,
is incorporated herein by this reference)
10.14 -- Common Stock Purchase Agreement made as of August 26,
1997, by and between Apartment Investment and Management
Company and ABKB/LaSalle Securities Limited Partnership
(Exhibit 99.1 to AIMCO's Current Report on Form 8-K,
dated August 26, 1997, is incorporated herein by this
reference)
10.15 -- Amended and Restated Assignment and Assumption Agreement,
dated as of December 7, 1998, by and among Insignia
Properties, L.P. and AIMCO Properties, L.P. (Exhibit 10.1
to the Current Report on Form 8-K of Insignia Properties
Trust, dated February 11, 1999, is incorporated herein by
this reference)
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EXHIBIT NO. DESCRIPTION
----------- -----------
10.16 -- Amended and Restated Indemnification Agreement, dated as
of May 26, 1998, by and between Apartment Investment and
Management Company and Insignia/ESG Holdings, Inc.
(Exhibit 2.2 to AIMCO's Registration Statement on Form
S-4, filed August 5, 1998, is incorporated herein by this
reference)
10.17 -- Credit Agreement (Secured Revolving Credit Facility),
dated as of August 16, 1999, among AIMCO Properties,
L.P., Bank of America, BankBoston, N.A., and First Union
National Bank (Exhibit 10.1 to the Current Report on Form
8-K of Apartment Investment and Management Company, dated
as of August 16, 1999, is incorporated herein by this
reference)
10.18 -- Borrower Pledge Agreement, dated August 16, 1999 between
AIMCO Properties, L.P. and Bank of America (Exhibit 10.2
to the Current Report on Form 8-K of Apartment Investment
and Management Company, dated August 16, 1999 is
incorporated herein by this reference)
10.19 -- Form of Committed Loan Note, issued by AIMCO Properties,
L.P. to Bank of America, BankBoston, N.A., and First
Union National Bank (Exhibit 10.3 to the Current Report
on Form 8-K of Apartment Investment and Management
Company, dated August 16, 1999, is incorporated herein by
this reference)
10.20 -- Form of Swing Line Note, issued by AIMCO Properties, L.P.
to Bank of America, BankBoston, N.A., and First Union
National Bank (Exhibit 10.4 to the Current Report on Form
8-K of Apartment Investment and Management Company, dated
August 16, 1999, is incorporated herein by this
reference)
10.21 -- Form of Payment Guaranty, by Apartment Investment and
Management Company, AIMCO/NHP Holdings, Inc., NHP A&R
Services, Inc., and NHP Management Company (Exhibit 10.5
to the Current Report on Form 8-K of Apartment Investment
and Management Company, dated August 16, 1999, is
incorporated herein by this reference)
10.22 -- Employment Contract, executed on July 29, 1994, by and
between AIMCO Properties, L.P., and Peter Kompaniez
(Exhibit 10.44A to AIMCO's Annual Report on Form 10-K for
the fiscal year 1994, is incorporated herein by this
reference)*
10.23 -- Employment Contract executed on July 29, 1994 by and
between AIMCO Properties, L.P. and Terry Considine
(Exhibit 10.44C to AIMCO's Annual Report on Form 10-K for
the fiscal year 1994, is incorporated herein by this
reference)*
10.24 -- Employment Contract executed on July 29, 1994 by and
between AIMCO Properties, L.P. and Steven D. Ira (Exhibit
10.44D to AIMCO's Annual Report on Form 10-K for fiscal
year 1994, is incorporated herein by this reference)*
10.25 -- Apartment Investment and Management Company 1998
Incentive Compensation Plan (Annex B to AIMCO's Proxy
Statement for Annual Meeting of Stockholders to be held
on May 8, 1998, is incorporated herein by this
reference)*
10.26 -- Apartment Investment and Management Company 1997 Stock
Award and Incentive Plan (October 1999)*
10.27 -- Form of Restricted Stock Agreement (1997 Stock Award and
Incentive Plan) (Exhibit 10.11 to AIMCO's Quarterly
Report on Form 10-Q for the quarterly period ending
September 30, 1997, is incorporated herein by this
reference)*
10.28 -- Form of Incentive Stock Option Agreement (1997 Stock
Award and Incentive Plan) (Exhibit 10.42 to AIMCO's
Annual Report on Form 10-K for the fiscal year 1998, is
incorporated herein by this reference)*
28
30
EXHIBIT NO. DESCRIPTION
----------- -----------
10.29 -- Apartment Investment and Management Company Non-Qualified
Employee Stock Option Plan, adopted August 29, 1996
(Exhibit 10.8 to AIMCO's Quarterly Report on Form 10-Q
for the quarterly period ending September 30, 1996, is
incorporated herein by this reference)*
10.30 -- Amended and Restated Apartment Investment and Management
Company Non-Qualified Employee Stock Option Plan (Annex B
to AIMCO's Proxy Statement for the Annual Meeting of
Stockholders to be held on April 24, 1997, is
incorporated herein by this reference)*
10.31 -- The 1994 Stock Incentive Plan for Officers, Directors and
Key Employees of Ambassador Apartments, Inc., Ambassador
Apartments, L.P., and Subsidiaries (Exhibit 10.40 to
Ambassador Apartments, Inc. Annual Report on Form 10-K
for the fiscal year 1997, is incorporated herein by this
reference)*
10.32 -- Amendment to the 1994 Stock Incentive Plan for Officers,
Directors and Key Employees of Ambassador Apartments,
Inc., Ambassador Apartments, L.P. and Subsidiaries
(Exhibit 10.41 to Ambassador Apartments, Inc. Annual
Report on Form 10-K for the fiscal year 1997, is
incorporated herein by this reference)*
10.33 -- The 1996 Stock Incentive Plan for Officers, Directors and
Key Employees of Ambassador Apartments, Inc., Ambassador
Apartments, L.P., and Subsidiaries, as amended March 20,
1997 (Exhibit 10.42 to Ambassador Apartments, Inc. Annual
Report on Form 10-K for the fiscal year 1997, is
incorporated herein by this reference)*
10.34 -- Insignia 1992 Stock Incentive Plan, as amended through
March 28, 1994 and November 13, 1995 (Exhibit 10.1 to
Insignia Financial Group, Inc. Annual Report on Form 10-K
for the fiscal year 1997, is incorporated herein by this
reference)*
10.35 -- NHP Incorporated 1990 Stock Option Plan (Exhibit 10.9 to
NHP Incorporated Annual Report on Form 10-K for the
fiscal year 1995, is incorporated herein by this
reference)*
10.36 -- NHP Incorporated 1995 Incentive Stock Option Plan
(Exhibit 10.10 to NHP Incorporated Annual Report on Form
10-K for the fiscal year 1995, is incorporated herein by
this reference)*
10.37 -- Summary of Agreement for Sale of Stock to Executive
Officers (Exhibit 10.104 to AIMCO's Annual Report on Form
10-K for the fiscal year 1996, is incorporated herein by
this reference)*
21.1 -- List of Subsidiaries
23.1 -- Consent of Ernst & Young LLP
27.1 -- Financial Data Schedule
99.1 -- Agreement re: disclosure of long-term debt instruments
- ---------------
(1) Schedule and supplemental materials to the exhibits have been omitted but
will be provided to the Securities and Exchange Commission upon request.
* Management contract
29
31
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 13th day of
March, 2000.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
/s/ TERRY CONSIDINE
------------------------------------
Terry Considine
Chairman of the Board
And Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ TERRY CONSIDINE Chairman of the Board and March 13, 2000
- ----------------------------------------------------- Chief Executive Officer
Terry Considine
/s/ PETER K. KOMPANIEZ Vice Chairman, President and March 13, 2000
- ----------------------------------------------------- Director
Peter K. Kompaniez
/s/ THOMAS W. TOOMEY Chief Operating Officer March 13, 2000
- -----------------------------------------------------
Thomas W. Toomey
/s/ PATRICK FOYE Executive Vice President March 13, 2000
- -----------------------------------------------------
Patrick Foye
/s/ PAUL MCAULIFFE Executive Vice President and March 13, 2000
- ----------------------------------------------------- Chief Financial Officer
Paul McAuliffe
/s/ RICHARD S. ELLWOOD Director March 13, 2000
- -----------------------------------------------------
Richard S. Ellwood
/s/ J. LANDIS MARTIN Director March 13, 2000
- -----------------------------------------------------
J. Landis Martin
/s/ THOMAS L. RHODES Director March 13, 2000
- -----------------------------------------------------
Thomas L. Rhodes
/s/ JOHN D. SMITH Director March 13, 2000
- -----------------------------------------------------
John D. Smith
30
32
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
INDEX TO FINANCIAL STATEMENTS
PAGE
----
FINANCIAL STATEMENTS:
Report of Independent Auditors............................ F-2
Consolidated Balance Sheets as of December 31, 1999 and
1998................................................... F-3
Consolidated Statements of Income for the Years Ended
December 31, 1999, 1998 and 1997....................... F-4
Consolidated Statements of Stockholders' Equity for the
Years Ended December 31, 1999, 1998 and 1997........... F-5
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1999, 1998
and 1997............................................... F-6
Notes to Consolidated Financial Statements................ F-8
FINANCIAL STATEMENT SCHEDULE:
Schedule III -- Real Estate and Accumulated
Depreciation........................................... F-32
All other schedules are omitted because they are not
applicable or the required information is shown in the
financial statements or notes thereto
F-1
33
REPORT OF INDEPENDENT AUDITORS
Stockholders and Board of Directors
Apartment Investment and Management Company
We have audited the accompanying consolidated balance sheets of Apartment
Investment and Management Company as of December 31, 1999 and 1998, and the
related consolidated statements of income, stockholders' equity and cash flows
for each of the three years in the period ended December 31, 1999. Our audits
also included the financial statement schedule listed in the Index at Item
14(a)(2). These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Apartment Investment and Management Company at December 31, 1999 and 1998, and
the consolidated results of its operations and its cash flows for each of the
three years in the period ended December 31, 1999 in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the
related financial statement schedule when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all material respects
the information set forth therein.
/s/ ERNST & YOUNG LLP
Denver, Colorado
January 20, 2000
F-2
34
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1999 AND 1998
(IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
1999 1998
---------- ----------
Real estate, net of accumulated depreciation of $416,497 and
$228,880.................................................. $4,092,038 $2,573,718
Property held for sale...................................... 4,162 27,304
Investments in unconsolidated real estate partnerships...... 891,449 945,035
Investments in unconsolidated subsidiaries.................. 44,921 62,244
Notes receivable from unconsolidated real estate
partnerships.............................................. 142,828 103,979
Notes receivable from unconsolidated subsidiaries........... 88,754 116,688
Cash and cash equivalents................................... 101,604 71,305
Restricted cash............................................. 84,595 55,826
Other assets................................................ 234,600 292,701
---------- ----------
$5,684,951 $4,248,800
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Secured notes payable....................................... $1,954,259 $ 843,791
Secured tax-exempt bond financing........................... 420,830 398,602
Unsecured short-term financing.............................. 209,200 310,300
Secured short-term financing................................ -- 108,022
---------- ----------
Total indebtedness................................ 2,584,289 1,660,715
Accounts payable, accrued and other liabilities............. 271,627 188,815
Resident security deposits and prepaid rents................ 22,793 12,654
---------- ----------
Total liabilities................................. 2,878,709 1,862,184
---------- ----------
Commitments and contingencies............................... -- --
Company-obligated mandatorily redeemable convertible
preferred securities of a subsidiary trust................ 149,500 149,500
Minority interest in other entities......................... 168,533 185,705
Minority interest in operating partnership.................. 225,381 148,847
Stockholders' equity
Preferred Stock........................................... 641,250 792,468
Class A Common Stock, $.01 par value, 474,121,284 shares
and 484,027,500 shares authorized, 66,802,886 and
48,451,388 shares issued and outstanding,
respectively........................................... 668 485
Additional paid-in capital................................ 1,885,424 1,246,962
Notes receivable on common stock purchases................ (51,619) (49,658)
Distributions in excess of earnings....................... (212,895) (87,693)
---------- ----------
Total stockholders' equity........................ 2,262,828 1,902,564
---------- ----------
$5,684,951 $4,248,800
========== ==========
See accompanying notes to consolidated financial statements.
F-3
35
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
1999 1998 1997
--------- --------- --------
RENTAL PROPERTY OPERATIONS
Rental and other property revenues......................... $ 533,917 $ 377,139 $193,006
Property operating expenses................................ (214,693) (147,541) (76,168)
Owned property management expense.......................... (15,429) (11,013) (6,620)
Depreciation............................................... (131,753) (84,635) (37,741)
--------- --------- --------
Income from property operations............................ 172,042 133,950 72,477
--------- --------- --------
SERVICE COMPANY BUSINESS
Management fees and other income........................... 43,455 24,103 13,937
Management and other expenses.............................. (25,470) (16,960) (10,961)
--------- --------- --------
Income from service company business....................... 17,985 7,143 2,976
--------- --------- --------
General and administrative expenses........................ (13,112) (13,568) (5,396)
Interest expense........................................... (140,094) (89,424) (51,385)
Interest income............................................ 62,721 29,368 8,676
Equity in losses of unconsolidated real estate
partnerships............................................. (4,467) (4,854) (1,798)
Equity in earnings (losses) of unconsolidated
subsidiaries............................................. (2,818) 11,570 4,636
Minority interest in other entities........................ (900) (468) 1,008
Amortization............................................... (5,860) (8,735) (948)
--------- --------- --------
Income from operations..................................... 85,497 64,982 30,246
Gain (loss) on disposition of properties................... (1,785) 4,674 2,720
--------- --------- --------
Income before extraordinary item and minority interest in
operating partnership.................................... 83,712 69,656 32,966
Extraordinary item -- early extinguishment of debt......... -- -- (269)
--------- --------- --------
Income before minority interest in operating partnership... 83,712 69,656 32,697
Minority interest in operating partnership................. (2,753) (5,182) (4,064)
--------- --------- --------
Net income................................................. 80,959 64,474 28,633
Net income attributable to preferred stockholders.......... 56,885 26,533 2,315
--------- --------- --------
Net income attributable to common stockholders............. $ 24,074 $ 37,941 $ 26,318
========= ========= ========
Comprehensive Income
Net income................................................. $ 80,959 $ 64,474 $ 28,633
Other comprehensive income:
Net unrealized gains on investment in securities......... -- -- (1,683)
--------- --------- --------
Comprehensive income....................................... $ 80,959 $ 64,474 $ 26,950
========= ========= ========
Basic earnings per common share............................ $ 0.39 $ 0.84 $ 1.09
========= ========= ========
Diluted earnings per common share.......................... $ 0.38 $ 0.80 $ 1.08
========= ========= ========
Weighted average common shares outstanding................. 62,242 45,187 24,055
========= ========= ========
Weighted average common shares and common share equivalents
outstanding.............................................. 63,446 47,624 24,436
========= ========= ========
Dividends paid per common share............................ $ 2.50 $ 2.25 $ 1.85
========= ========= ========
See accompanying notes to consolidated financial statements.
F-4
36
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS)
CLASS A CLASS B
PREFERRED STOCK COMMON STOCK COMMON STOCK NOTES
------------------ --------------- --------------- ADDITIONAL RECEIVABLE
SHARES SHARES SHARES PAID-IN FROM
ISSUED AMOUNT ISSUED AMOUNT ISSUED AMOUNT CAPITAL OFFICERS
------ --------- ------ ------ ------ ------ ---------- ----------
BALANCE DECEMBER 31, 1996................. -- $ -- 14,980 $150 325 $ 3 $ 236,791 $ (7,140)
Net proceeds from issuance of Class A
Common Stock............................. -- -- 16,367 164 -- -- 509,950 --
Net proceeds from issuance of Preferred
Stock.................................... 750 75,000 -- -- -- -- -- --
Net proceeds from issuance of Class C
Preferred Stock.......................... 2,400 60,000 -- -- -- -- (1,890) --
Repurchase of Class A Common Stock from
officer.................................. -- -- -- -- -- -- (67) 67
Conversion of Class B Common Stock to
Class A Common Stock..................... -- -- 163 1 (163) (1) -- --
Conversion of operating partnership units
to Class A Common Stock.................. -- -- 562 6 -- -- 8,615 --
Purchase of stock by officers............. -- -- 1,149 11 -- -- 34,704 (33,517)
Repayment of notes receivable from
officers................................. -- -- -- -- -- -- -- 14,540
Stock options and warrants exercised...... -- -- 458 4 -- -- 8,714 (9,045)
Class A Common Stock issued as
consideration for NHP common stock....... -- -- 6,760 67 -- -- 180,784 --
Net income................................ -- -- -- -- -- -- -- --
Dividends paid -- Class A Common Stock.... -- -- -- -- -- -- -- --
Dividends paid -- Preferred Stock......... -- -- -- -- -- -- -- --
Unrealized loss on investments............ -- -- -- -- -- -- -- --
------ --------- ------ ---- ---- --- ---------- --------
BALANCE DECEMBER 31, 1997................. 3,150 135,000 40,439 403 162 2 977,601 (35,095)
Net proceeds from issuances of Preferred
Stock.................................... 11,250 356,250 -- -- -- -- (15,353) --
Repurchase of Class A Common Stock........ -- -- (303) (3) -- -- (11,064) --
Conversion of Class B Common Stock to
Class A Common Stock..................... -- -- 162 2 (162) (2) -- --
Conversion of operating partnership units
to Class A Common Stock.................. -- -- 275 3 -- -- 5,792 --
Purchase of stock by officers and awards
of restricted stock...................... -- -- 640 7 -- -- 23,619 (23,471)
Repayment of notes receivable from
officers................................. -- -- -- -- -- -- -- 8,908
Stock options and warrants exercised...... -- -- 658 7 -- -- 11,008 --
Class A Common Stock issued as
consideration for Ambassador common
stock.................................... -- -- 6,580 66 -- -- 251,209 --
Class E Preferred Stock issued as
consideration for Insignia common
stock.................................... 8,424 301,218 -- -- -- -- -- --
Issuance of warrants to purchase Class A
Common Stock............................. -- -- -- -- -- -- 4,150 --
Net income................................ -- -- -- -- -- -- -- --
Dividends paid -- Class A Common Stock.... -- -- -- -- -- -- -- --
Dividends paid -- Preferred Stock......... -- -- -- -- -- -- -- --
Unrealized gain (loss) on investments..... -- -- -- -- -- -- -- --
------ --------- ------ ---- ---- --- ---------- --------
BALANCE DECEMBER 31, 1998................. 22,824 792,468 48,451 485 -- -- 1,246,962 (49,658)
Net proceeds from issuances of Preferred
Stock.................................... 10,000 250,000 -- -- -- -- (16,899) --
Repurchase of Class A Common Stock........ -- -- (205) (2) -- -- (8,036) --
Conversion of operating partnership units
to Class A Common Stock.................. -- -- 964 10 -- -- 13,756 --
Conversion of Preferred Stock to Class A
Common Stock............................. (9,424) (401,218) 10,924 109 -- -- 401,109 --
Purchase of stock by officers and awards
of restricted stock...................... -- -- 240 2 -- -- 8,824 (8,202)
Repayment of notes receivable from
officers................................. -- -- -- -- -- -- -- 6,241
Stock options and warrants exercised...... -- -- 129 1 -- -- 3,201 --
Class A Common Stock issued as
consideration for Insignia Property Trust
merger................................... -- -- 4,044 40 -- -- 158,753 --
Class A Common Stock issued as
consideration for First Union
Acquisition.............................. -- -- 530 5 -- -- 21,135 --
Class A Common Stock Offering............. -- -- 1,383 14 -- -- 54,598 --
Warrants exercised........................ -- -- 343 4 -- -- 2,021 --
Net income................................ -- -- -- -- -- -- -- --
Dividends paid -- Class A Common Stock.... -- -- -- -- -- -- -- --
Dividends paid -- Preferred Stock......... -- -- -- -- -- -- -- --
------ --------- ------ ---- ---- --- ---------- --------
BALANCE DECEMBER 31, 1999................. 23,400 $ 641,250 66,803 $668 -- $-- $1,885,424 $(51,619)
====== ========= ====== ==== ==== === ========== ========
UNREALIZED
DISTRIBUTIONS GAIN
IN EXCESS (LOSS) ON
OF EARNINGS INVESTMENTS TOTAL
------------- ----------- ----------
BALANCE DECEMBER 31, 1996................. $ (14,055) $ -- $ 215,749
Net proceeds from issuance of Class A
Common Stock............................. -- -- 510,114
Net proceeds from issuance of Preferred
Stock.................................... -- -- 75,000
Net proceeds from issuance of Class C
Preferred Stock.......................... -- -- 58,110
Repurchase of Class A Common Stock from
officer.................................. -- -- --
Conversion of Class B Common Stock to
Class A Common Stock..................... -- -- --
Conversion of operating partnership units
to Class A Common Stock.................. -- -- 8,621
Purchase of stock by officers............. -- -- 1,198
Repayment of notes receivable from
officers................................. -- -- 14,540
Stock options and warrants exercised...... -- -- (327)
Class A Common Stock issued as
consideration for NHP common stock....... -- -- 180,851
Net income................................ 28,633 -- 28,633
Dividends paid -- Class A Common Stock.... (44,660) -- (44,660)
Dividends paid -- Preferred Stock......... (846) -- (846)
Unrealized loss on investments............ -- (1,683) (1,683)
--------- ------- ----------
BALANCE DECEMBER 31, 1997................. (30,928) (1,683) 1,045,300
Net proceeds from issuances of Preferred
Stock.................................... -- -- 340,897
Repurchase of Class A Common Stock........ -- -- (11,067)
Conversion of Class B Common Stock to
Class A Common Stock..................... -- -- --
Conversion of operating partnership units
to Class A Common Stock.................. -- -- 5,795
Purchase of stock by officers and awards
of restricted stock...................... -- -- 155
Repayment of notes receivable from
officers................................. -- -- 8,908
Stock options and warrants exercised...... -- -- 11,015
Class A Common Stock issued as
consideration for Ambassador common
stock.................................... -- -- 251,275
Class E Preferred Stock issued as
consideration for Insignia common
stock.................................... -- -- 301,218
Issuance of warrants to purchase Class A
Common Stock............................. -- -- 4,150
Net income................................ 64,474 -- 64,474
Dividends paid -- Class A Common Stock.... (100,045) -- (100,045)
Dividends paid -- Preferred Stock......... (21,194) -- (21,194)
Unrealized gain (loss) on investments..... -- 1,683 1,683
--------- ------- ----------
BALANCE DECEMBER 31, 1998................. (87,693) -- 1,902,564
Net proceeds from issuances of Preferred
Stock.................................... -- -- 233,101
Repurchase of Class A Common Stock........ -- -- (8,038)
Conversion of operating partnership units
to Class A Common Stock.................. -- -- 13,766
Conversion of Preferred Stock to Class A
Common Stock............................. -- -- --
Purchase of stock by officers and awards
of restricted stock...................... -- -- 624
Repayment of notes receivable from
officers................................. -- -- 6,241
Stock options and warrants exercised...... -- -- 3,202
Class A Common Stock issued as
consideration for Insignia Property Trust
merger................................... -- -- 158,793
Class A Common Stock issued as
consideration for First Union
Acquisition.............................. -- -- 21,140
Class A Common Stock Offering............. -- -- 54,612
Warrants exercised........................ -- -- 2,025
Net income................................ 80,959 -- 80,959
Dividends paid -- Class A Common Stock.... (154,654) -- (154,654)
Dividends paid -- Preferred Stock......... (51,507) -- (51,507)
--------- ------- ----------
BALANCE DECEMBER 31, 1999................. $(212,895) $ -- $2,262,828
========= ======= ==========
See accompanying notes to consolidated financial statements.
F-5
37
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS)
1999 1998 1997
--------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income................................................ $ 80,959 $ 64,474 $ 28,633
--------- --------- ---------
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization........................... 151,166 101,610 43,520
Gain (loss) on disposition of properties................ 1,785 (4,674) (2,720)
Minority interest in operating partnership.............. 2,753 5,182 4,064
Minority interests in other entities.................... 900 468 (1,008)
Equity in losses of unconsolidated real estate
partnerships........................................... 4,467 4,854 1,798
Equity in earnings (losses) of unconsolidated
subsidiaries........................................... 2,818 (11,570) (4,636)
Extraordinary loss on early extinguishment of debt...... -- -- 269
Changes in operating assets and operating liabilities... 8,409 (11,930) 3,112
--------- --------- ---------
Total adjustments................................... 172,298 83,940 44,399
--------- --------- ---------
Net cash provided by operating activities........... 253,257 148,414 73,032
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of real estate................................... (103,354) (155,456) (376,315)
Additions to real estate.................................. (114,026) (79,675) (26,966)
Proceeds from sale of property held for sale.............. 49,023 36,468 22,095
Purchase of common stock, notes receivable, general and
limited partnership interests and other assets.......... (233,640) (56,760) (199,146)
Purchase of/additions to notes receivable................. (103,943) (81,587) (60,575)
Advances to unconsolidated real estate partnerships....... -- -- (42,879)
Proceeds from sale of notes receivable.................... 17,788 -- --
Proceeds from repayment of notes receivable............... 61,407 29,290 --
Cash from newly consolidated properties................... 68,127 -- --
Cash received in connection with acquisitions............. -- 60,777 --
Cash paid for merger related costs........................ (19,347) (78,568) --
Distributions received from investments in real estate
partnerships............................................ 87,284 15,673 --
Distributions received from (contributions to)
unconsolidated subsidiaries............................. 9,575 (13,032) (13,996)
Purchase of investments held for sale..................... -- (4,935) (19,881)
Redemption of OP Units.................................... -- (516) --
--------- --------- ---------
Net cash used in investing activities............... (281,106) (328,321) (717,663)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from secured notes payable borrowings............ 297,536 102,115 225,436
Principal repayments on secured notes payable............. (53,572) (93,469) (12,512)
Proceeds from secured tax-exempt bond financing........... 20,731 210,720 --
Principal repayments on secured tax-exempt bond
financing............................................... (41,894) (224,395) (1,487)
Payoff of unsecured short-term financing.................. -- -- (12,579)
Proceeds from secured short-term financing................ -- 57,140 19,050
Repayments on secured short-term financing................ (4,522) (34,333) --
Net paydowns on the revolving credit facilities........... (151,100) (46,262) (162,008)
Payment of loan costs, including proceeds and costs from
interest rate hedges.................................... (16,070) (7,407) (6,387)
Proceeds from issuance of common and preferred stock,
exercise of options/warrants............................ 293,225 386,912 644,095
Principal repayments received on notes due from officers
on Class A Common Stock purchases....................... 6,241 8,951 25,957
Repurchase of common stock................................ (8,038) (11,066)
Payment of common stock dividends......................... (154,654) (100,045) (44,660)
Payment of distributions to minority interest............. (32,898) (15,531) (5,510)
Payment of preferred stock dividends...................... (96,837) (21,194) (846)
Proceeds from issuance of High Performance Units.......... -- 1,988 --
--------- --------- ---------
Net cash provided by financing activities........... 58,148 214,124 668,549
--------- --------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS................... 30,299 34,217 23,918
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR.............. 71,305 37,088 13,170
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR.................... $ 101,604 $ 71,305 $ 37,088
========= ========= =========
See accompanying notes to consolidated financial statements.
F-6
38
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS)
1999 1998 1997
---------- -------- --------
SUPPLEMENTAL CASH INFORMATION:
Interest paid............................................. $ 140,410 $ 91,795 $ 51,076
Non Cash Transactions Associated with the Acquisition of
Properties:
Secured debt assumed in connection with purchase of real
estate................................................ 110,101 115,151 150,051
Real estate, assets acquired............................ 230,194 43,756 55,906
Assumption of operating liabilities..................... 15,233 857 --
Accrual of contingent consideration..................... (4,500) 4,500 --
OP Units issued......................................... 83,810 -- --
Class A Common Stock issued............................. 21,140 -- --
Non Cash Transactions Associated with Acquisition of
Limited Partnership Interests and Interests in the
Unconsolidated Subsidiaries:
Issuance of OP Units for interests in unconsolidated
real estate partnerships.............................. 15,085 4,045 7,469
Issuance of OP Units and assumption of liabilities for
interests in unconsolidated subsidiaries.............. 4,762 -- --
Non Cash Transactions Associated with Mergers:
Real estate............................................. 6,012 773,189 638,944
Investments in and notes receivable from unconsolidated
real estate partnerships.............................. 97,708 801,467 --
Investments in and notes receivable from unconsolidated
subsidiaries.......................................... (13,137) 68,168 --
Restricted cash......................................... -- 38,210 --
Other assets............................................ -- 110,969 --
Secured debt............................................ -- 764,543 71,055
Unsecured debt.......................................... -- 2,513 --
Accounts payable, accrued and other liabilities......... 30,183 181,158 239,699
Mandatorily redeemable convertible preferred securities
of a subsidiary trust................................. -- 149,500 --
Minority interest in other entities..................... (98,353) 117,922 --
Class A Common Stock issued............................. 158,753 552,492 185,061
Non Cash Transactions Associated with Consolidation of
Assets:
Real estate............................................. 1,016,343 22,089
Investments in and notes receivable from unconsolidated
real estate partnerships.............................. (380,359) (16,683) --
Restricted cash......................................... 43,605 -- --
Secured debt............................................ 561,129 4,679 --
Accounts payable, accrued and other liabilities......... 44,361 727 --
Minority interest in other entities..................... 77,774 -- --
Non Cash Transfer of Assets to an Unconsolidated
Subsidiary:
Real estate............................................. (32,091) -- --
Notes receivable........................................ 6,245 -- --
Secured debt............................................ (25,620) -- --
Other:
Redemption of OP Units.................................. 13,766 5,650 8,621
Receipt of notes payable from officers.................. 8,202 23,471 42,562
Conversion of Preferred Stock into Class A Common
Stock................................................. 401,218 -- --
Tenders payable for purchase of limited partner
interest.............................................. 77,380 -- --
See accompanying notes to consolidated financial statements.
F-7
39
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998, AND 1997
NOTE 1 ORGANIZATION
Apartment Investment and Management Company ("AIMCO" or the "Company"), a
Maryland corporation formed on January 10, 1994, is a self-administered and
self-managed REIT engaged in the ownership, acquisition, development, expansion
and management of multi-family apartment properties. As of December 31, 1999,
the Company owned or managed 363,462 apartment units in 1,942 properties located
in 48 states, the District of Columbia and Puerto Rico. Based on apartment unit
data compiled by the National Multi-Housing Council, we believe that, as of
December 31, 1999, AIMCO was the largest owner and manager of multi-family
apartment properties in the United States. As of December 31, 1999, AIMCO:
- owned or controlled 106,148 units in 373 apartment properties;
- held an equity interest in 133,113 units in 751 apartment properties; and
- managed 124,201 units in 818 apartment properties for third party owners
and affiliates.
AIMCO conducts substantially all of its operations through its operating
partnership, AIMCO Properties, L.P. (the "AIMCO operating partnership"). Through
a wholly owned subsidiary, AIMCO acts as the sole general partner of the AIMCO
operating partnership. As of December 31, 1999, AIMCO owned approximately a 91%
interest in the AIMCO operating partnership. AIMCO manages apartment properties
for third parties and affiliates through unconsolidated subsidiaries referred to
as the "management companies".
At December 31, 1999, AIMCO had 66,802,886 shares of Class A Common Stock
outstanding and the AIMCO operating partnership had 6,440,932 common units
outstanding, for a combined total of 73,243,818 shares and units.
NOTE 2 BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
AIMCO, the AIMCO operating partnership, majority owned subsidiaries and
controlled real estate partnerships. Interests held by limited partners in real
estate partnerships controlled by the Company and interests held by the minority
shareholders of Insignia Properties Trust (through February 26, 1999) are
reflected as Minority Interest in Other Entities. Significant intercompany
balances and transactions have been eliminated in consolidation.
Interests in the AIMCO operating partnership held by limited partners other
than AIMCO are referred to as "OP Units". The AIMCO operating partnership's
income is allocated to holders of OP Units based on the weighted average number
of OP Units outstanding during the period. The AIMCO operating partnership
records the issuance of OP Units and the assets acquired in purchase
transactions based on the market price of the Company's Class A Common Stock at
the date of execution of the purchase contract. The holders of the OP Units
receive distributions, prorated from the date of issuance, in an amount
equivalent to the dividends paid to holders of Class A Common Stock. During
1999, 1998 and 1997, the weighted average ownership interest in the AIMCO
operating partnership held by the OP Unit holders was 9%, 12% and 13%,
respectively.
After holding the OP Units for one year, the limited partners generally
have the right to redeem their OP Units for cash. Notwithstanding that right,
the AIMCO operating partnership may elect to acquire some or all of the OP Units
tendered for redemption in exchange for shares of Class A Common Stock in lieu
of cash.
F-8
40
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Real Estate and Depreciation
Real estate is recorded at cost, less accumulated depreciation, unless
considered impaired. If events or circumstances indicate that the carrying
amount of a property may be impaired, the Company will make an assessment of its
recoverability by estimating the undiscounted future cash flows, excluding
interest charges, of the property. If the carrying amount exceeds the aggregate
future cash flows, the Company would recognize an impairment loss to the extent
the carrying amount exceeds the fair value of the property. As of December 31,
1999, management believes that no impairments exist based on periodic reviews.
No impairment losses were recognized for the years ended December 31, 1999, 1998
and 1997.
Direct costs associated with the acquisition of ownership or control of
properties are capitalized as a cost of the assets acquired, and are depreciated
over the estimated useful lives of the related assets. Expenditures for ordinary
repairs, maintenance and apartment turnover costs are expensed as incurred.
Initial Capital Expenditures ("ICE") are those costs considered necessary
by the Company in its investment decision to correct deferred maintenance or
improve a property. Capital enhancements are costs incurred that add a material
new feature or increase the revenue potential of a property. ICE and capital
enhancement costs are capitalized and depreciated over the estimated useful
lives of the related assets.
Expenditures in excess of $250 that maintain an existing asset which has a
useful life of more than one year are capitalized as capital replacement
expenditures and depreciated over the estimated useful life of the asset.
Depreciation is calculated on the straight-line method based on a fifteen
to thirty year life for buildings and improvements and five years for furniture,
fixtures and equipment.
Property Held For Sale
Property held for sale is recorded at the lower of carrying amount or fair
value less costs to sell.
Redevelopment
The Company capitalizes direct and indirect costs (including interest,
taxes and other costs) in connection with the redevelopment of its owned or
controlled properties and land under development. Interest of $6.6 million, $2.8
million and $1.3 million was capitalized for the years ended December 31, 1999,
1998 and 1997, respectively.
Investments in Unconsolidated Real Estate Partnerships
The Company owns general and limited partnership interests in numerous
partnerships that own multi-family apartment properties. Investments in real
estate partnerships in which the Company has significant influence but does not
have control are accounted for under the equity method. Under the equity method,
the Company's pro-rata share of the earnings or losses of the entity for the
periods being presented is included in earnings (losses) from unconsolidated
partnerships (see Note 5).
Investments in Unconsolidated Subsidiaries
The Company has investments in numerous subsidiaries. Investments in
entities in which the Company has significant influence but does not have
control are accounted for under the equity method. Under the equity method, the
Company's pro-rata share of the earnings or losses of the entity for the periods
being presented is included in earnings (losses) from unconsolidated
subsidiaries (see Note 6).
F-9
41
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Notes Receivable from Unconsolidated Real Estate Partnerships and Subsidiaries
The Company has investments in numerous notes receivable, which were either
extended by the Company or were made by predecessors whose positions have been
acquired by the Company. Interest income is recognized on these investments
based upon whether the collectibility of such amounts is both probable and
estimable (see Note 7).
Cash Equivalents
The Company considers highly liquid investments with an original maturity
of three months or less to be cash equivalents.
Restricted Cash
Restricted cash includes capital replacement reserves, completion repair
reserves, bond sinking fund amounts and tax and insurance impound accounts held
by lenders.
Other Assets
Fees and costs incurred in obtaining financing are capitalized and are
included in other assets. Such costs are amortized over the terms of the related
loan agreements and are charged to interest expense.
Certain intangible assets are included in other assets and consist of costs
associated with the purchase of property management businesses, including
property management contracts, legal and other acquisition costs. These costs
are amortized on a straight-line basis over terms ranging from five to twenty
years.
Revenue Recognition
The Company's properties have operating leases with apartment residents
with terms generally of six months or less. Rental revenues and property
management and asset management fees are recognized when earned.
Income Taxes
AIMCO has elected to be taxed as a real estate investment trust ("REIT"),
as defined under the Internal Revenue Code of 1986, as amended. In order for
AIMCO to qualify as a REIT, at least 95% of AIMCO's gross income in any year
must be derived from qualifying sources. The activities of unconsolidated
subsidiaries engaged in the service company business are not qualifying sources.
As a REIT, AIMCO generally will not be subject to U.S. Federal income taxes
at the corporate level if it distributes at least 95% of its REIT taxable income
to its stockholders. REITs are also subject to a number of other organizational
and operational requirements. If AIMCO fails to qualify as a REIT in any taxable
year, its taxable income will be subject to U.S. Federal income tax at regular
corporate rates (including any applicable alternative minimum tax). Even if
AIMCO qualifies as a REIT, it may be subject to certain state and local income
taxes and to U.S. Federal income and excise taxes on its undistributed income.
Earnings and profits, which determine the taxability of dividends to
stockholders, differ from net income reported for financial reporting purposes
due to differences for U.S. Federal tax purposes in the estimated useful lives
and methods used to compute depreciation and the carrying value (basis) of the
investments in
F-10
42
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
properties, among other things. The following table reconciles the Company's net
income to REIT taxable income for the year ended December 31, 1999:
Net income............................................... $ 80,959
Losses from unconsolidated subsidiaries.................. 2,559
Depreciation and amortization expenses not deductible for
tax.................................................... 70,733
Gain on disposition of properties........................ 17,359
Interest income, not taxable............................. (6,583)
Depreciation timing differences on real estate........... 13,881
Dividends on officer stock, not deductible for tax....... 2,435
Transaction and project costs, deductible for tax........ (7,349)
--------
REIT taxable income...................................... $173,994
========
For income tax purposes, distributions paid to common stockholders consist
of ordinary income, capital gains, return of capital or a combination thereof.
For the years ended December 31, 1999, 1998 and 1997, distributions paid per
share were taxable as follows:
1999 1998 1997
------------------- ------------------- -------------------
AMOUNT PERCENTAGE AMOUNT PERCENTAGE AMOUNT PERCENTAGE
------ ---------- ------ ---------- ------ ----------
Ordinary income..................... $2.04 82% $0.90 40% $1.74 94%
Return of capital................... 0.16 6% 1.33 59% -- --
Capital gains....................... 0.12 5% -- -- 0.04 2%
Unrecaptured SEC.1250 gain.......... 0.18 7% 0.02 1% 0.07 4%
----- --- ----- --- ----- ---
$2.50 100% $2.25 100% $1.85 100%
===== === ===== === ===== ===
Earnings Per Share
Earnings per share is calculated based on the weighted average number of
shares of common stock, common stock equivalents and dilutive convertible
securities outstanding during the period (see Note 18).
Fair Value of Financial Instruments
The estimated aggregate fair value of the Company's cash and cash
equivalents, receivables, payables and short-term unsecured debt as of December
31, 1999 is assumed to approximate their carrying value due to their relatively
short terms. Management further believes that the fair market value of the
Company's secured tax-exempt bond debt and secured long-term debt approximate
their carrying value, based on market comparisons to similar types of debt
instruments having similar maturities.
Reclassifications
Certain items included in the 1998 and 1997 consolidated financial
statements have been reclassified to conform with the 1999 presentation.
Use of Estimates
The preparation of the Company's consolidated financial statements in
conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported
amounts included in the financial statements and accompanying notes thereto.
Actual results could differ from those estimates.
F-11
43
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 3 -- REAL ESTATE
Real estate at December 31, 1999 and 1998, is as follows (in thousands):
1999 1998
---------- ----------
Land........................................................ $ 661,502 $ 413,577
Buildings and improvements.................................. 3,847,033 2,389,021
---------- ----------
4,508,535 2,802,598
Accumulated depreciation.................................... (416,497) (228,880)
---------- ----------
$4,092,038 $2,573,718
========== ==========
During the years ended December 31, 1999 and 1998, the Company purchased 28
properties (12,721 units) and 82 properties (22,459 units), respectively, and
disposed of eight properties (2,309 units) and five properties (1,468 units),
respectively, as described below.
The Company directly acquired 28 apartment communities in unrelated
transactions during 1999 (not including those acquired in connection with the
merger with Insignia Properties Trust (see Note 4)). The aggregate consideration
paid by the Company of $495.0 million consisted of $91.5 million in cash, 2.4
million Preferred OP Units, 0.9 million common OP Units and 0.5 million shares
of Class A Common Stock with a total recorded value of $116.8 million, the
assumption of $110.1 million of secured long-term indebtedness, the assumption
of $15.2 million of other liabilities, and new financing of $161.4 million of
secured long-term indebtedness. Four of these assets were then contributed to an
unconsolidated subsidiary
The Company directly acquired 30 apartment communities in unrelated
transactions during 1998 (not including those acquired in connection with the
mergers with Ambassador Apartments, Inc. and Insignia Financial Group, Inc. (see
Note 4)). The aggregate consideration paid by the Company of $316.5 million
consisted of $96.0 million in cash, 1.2 million OP Units with a total recorded
value of $48.2 million, and the assumption of $172.3 million of secured
long-term indebtedness.
In addition to the acquisitions described above, in 1999 the Company
acquired controlling interests in partnerships owning 125 properties (34,228
units) and began consolidating these entities. Control was obtained through the
purchase of limited partnership interests from unaffiliated third parties or
other increases in the Company's equity investment in the partnerships.
During 1999, the Company sold eight properties containing 2,309 units to
unaffiliated third parties. Cash proceeds from the sales of approximately $49.0
million were used to repay a portion of the Company's outstanding indebtedness.
The Company recognized a loss of approximately $1.8 million on the disposition
of these properties, of which 96% of the loss related to one property.
During 1998, the Company sold five apartment properties containing 1,468
units to unaffiliated third parties. Cash proceeds from the sales of
approximately $40.1 million were used to repay a portion of the Company's
outstanding indebtedness. The Company recognized a gain of approximately $4.7
million on the disposition of these five properties.
NOTE 4 -- MERGERS
NHP Merger
In May and September 1997, the Company acquired an aggregate of
approximately 6.9 million shares of common stock ("NHP Common Stock") of NHP. On
December 8, 1997, the Company acquired the remaining shares of NHP Common Stock
in a merger transaction accounted for as a purchase (the "NHP Merger"). Pursuant
to the NHP Merger, each outstanding share of NHP Common Stock was converted into
either (i) 0.74766 shares of Class A Common Stock or (ii) at the stockholder's
option, 0.37383 shares of
F-12
44
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Class A Common Stock and $10.00 in cash. As a result of the NHP Merger, AIMCO
issued approximately 6.8 million shares of Class A Common Stock, valued at
$180.8 million, and paid $86.5 million in cash. The total cost of the purchase
was $349.5 million.
Ambassador Merger
On May 8, 1998, Ambassador Apartments, Inc. ("Ambassador"), was merged with
and into AIMCO, with AIMCO being the surviving corporation. The merger was
accounted for as a purchase. The purchase price of $713.6 million was comprised
of $90.3 million in cash, $372.0 million of assumed debt and approximately 6.6
million shares of Class A Common Stock valued at $251.3 million. Pursuant to the
Ambassador merger agreement, each outstanding share of Ambassador common stock
not owned by AIMCO was converted into the right to receive 0.553 shares of Class
A Common Stock. Concurrently, all outstanding options to purchase Ambassador
common stock were converted into cash or options to purchase Class A Common
Stock, at the same conversion ratio. Contemporaneously with the consummation of
the Ambassador merger, a subsidiary of the AIMCO operating partnership merged
with Ambassador's operating partnership and each outstanding unit of limited
partnership interest in the Ambassador operating partnership was converted into
the right to receive 0.553 OP Units. Prior to its acquisition by AIMCO,
Ambassador was a self-administered and self-managed real estate investment trust
engaged in the ownership and management of garden-style apartment properties
leased primarily to middle income tenants. Ambassador owned 52 apartment
communities with a total of 15,728 units located in Arizona, Colorado, Florida,
Georgia, Illinois, Tennessee and Texas, and managed one property containing 252
units for an unrelated third party.
Insignia Merger
On October 1, 1998, Insignia Financial Group, Inc., a Delaware Corporation,
("Insignia") was merged with and into AIMCO with AIMCO being the surviving
corporation. The merger was accounted for as a purchase. The purchase price of
$1,125.7 million was comprised of the issuance of up to approximately 8.9
million shares of Class E Cumulative Convertible Preferred Stock (the "Class E
Preferred Stock") valued at $301.2 million, $670.1 million in assumed debt and
liabilities (including a $50 million special dividend, assumed liabilities of
Insignia Properties Trust and transaction costs), $149.5 million in assumed
mandatory redeemable convertible preferred securities, and $4.9 million in cash.
The Class E Preferred Stock entitled the holders thereof to receive the same
cash dividends per share as holders of Class A Common Stock. On January 15,
1999, holders of Class E Preferred Stock received a special dividend in an
aggregate amount of approximately $50 million, and all outstanding shares of
Class E Preferred Stock automatically converted into an equal number of shares
of Class A Common Stock.
As a result of the Insignia merger, AIMCO acquired: (i) Insignia's
interests in Insignia Properties Trust, ("IPT"), a Maryland REIT, which was a
majority owned subsidiary of Insignia; (ii) Insignia's interest in Insignia
Properties, L.P., IPT's operating partnership; (iii) 100% of the ownership of
the Insignia entities that provide multifamily property management and
partnership administrative services; (iv) Insignia's interest in multi-family
co-investments; (v) Insignia's ownership of subsidiaries that control
multi-family properties not included in IPT; (vi) Insignia's limited partner
interests in public and private syndicated real estate limited partnerships; and
(vii) assets incidental to the foregoing businesses. Insignia owned or managed
in excess of 170,000 apartment units.
Insignia Properties Trust Merger
As a result of the Insignia merger, AIMCO acquired approximately 51% of the
outstanding shares of beneficial interest of IPT. On February 26, 1999, IPT was
merged into AIMCO. Pursuant to the merger, each of the outstanding shares of IPT
that were not held by AIMCO was converted into the right to receive
F-13
45
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
0.3601 shares of Class A Common Stock, resulting in the issuance of
approximately 4.3 million shares of Class A Common Stock (with a recorded value
of approximately $158.8 million).
NOTE 5 -- INVESTMENTS IN UNCONSOLIDATED REAL ESTATE PARTNERSHIPS
The Company owns general and limited partner interests in approximately 900
partnerships which it acquired through acquisitions, direct purchases and
separate offers to other limited partners. The Company's total ownership
interests in these unconsolidated real estate partnerships range from 1% to 99%.
However, based on the provisions of the related partnership agreements, which
grant varying degrees of control, the Company does not possess control of these
partnerships.
During 1999 and 1998, the Company made separate offers to the limited
partners of approximately 600 and 300 partnerships, respectively, to acquire
their limited partnership interests. The Company paid approximately $271 million
and $96 million during 1999 and 1998, respectively, in connection with such
tender offers.
The following table provides selected combined financial information for
the Company's unconsolidated real estate partnerships as of and for the years
ended December 31, 1999 and 1998 (in thousands):
1999 1998
---------- ----------
Real estate, net of accumulated depreciation................ $2,930,748 $3,705,342
Total assets................................................ 3,501,195 4,221,817
Secured notes payable....................................... 2,940,819 3,234,310
Total liabilities........................................... 3,536,646 3,547,859
Partners' capital (deficit)................................. (35,451) 673,958
Rental and other property revenues.......................... 1,120,888 873,531
Property operating expenses................................. (582,523) (524,010)
Depreciation expense........................................ (237,066) (151,569)
Interest expense............................................ (269,163) (220,134)
Net income (loss)........................................... 42,106 (12,468)
NOTE 6 -- INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES
In order to satisfy certain requirements of the Internal Revenue Code
applicable to AIMCO's status as a REIT, certain assets of the Company are held
through corporations in which the AIMCO operating partnership holds non-voting
preferred stock and certain officers and/or directors of AIMCO hold, directly or
indirectly, all of the voting common stock. Effective January 1, 1999, a portion
of the voting common stock was purchased by the Company and was exchanged for
non-voting preferred stock, bringing the total voting common stock interests to
represent a 1% economic interest and the non-voting preferred stock to represent
a 99% economic interest.
As a result of the controlling ownership interest in the unconsolidated
subsidiaries being held by others, AIMCO accounts for its interest in the
unconsolidated subsidiaries using the equity method. As of December 31, 1999,
the unconsolidated subsidiaries included AIMCO/NHP Holdings, Inc., AIMCO/NHP
Properties, Inc., NHP Management Company, and NHP A&R Services, Inc.
F-14
46
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table provides selected combined financial information for
the Company's unconsolidated subsidiaries as of and for the years ended December
31, 1999 and 1998 (in thousands):
1999 1998
--------- --------
Management contracts........................................ $ 25,181 $122,291
Total assets................................................ 166,019 236,976
Total liabilities........................................... 128,423 169,560
Stockholders' equity........................................ 37,596 67,416
Service company revenues.................................... 139,667 99,845
Service company expenses.................................... (133,231) (70,771)
Interest expense............................................ (7,832) (7,699)
Net income (loss)........................................... (2,848) 12,177
NOTE 7 -- INTEREST INCOME RECOGNITION
The Company recognizes interest income earned from its investments in notes
receivable based upon whether the collectibility of such amounts is both
probable and estimable. The notes receivable were either extended by the Company
and are carried at the face amount plus accrued interest ("par value notes") or
were made by predecessors whose positions have been acquired by the Company at a
discount and are carried at the acquisition amount using the cost recovery
method ("discounted notes").
As of December 31, 1999 and 1998, the Company held $157.3 million and
$212.3 million, respectively, of par value notes, including accrued interest,
for which management believes the collectibility of such amounts is both
probable and estimable. As such, interest income from the par value notes is
generally recognized as it is earned. Interest income from such notes for the
year ended December 31, 1999, 1998 and 1997, totaled $12.8 million, $15.3
million, and $0.4 million, respectively. The decrease in the Company's
investment in par value notes from December 31, 1998 to December 31, 1999 is
primarily due to a reduction in certain notes receivable from the unconsolidated
subsidiaries during 1999.
As of December 31, 1999 and 1998, the Company held discounted notes,
including accrued interest, with a carrying value of $92.5 million and $52.0
million, respectively. The total face value plus accrued interest of these notes
was $173.1 million at December 31, 1999. In general, interest income from the
discounted notes is not recognized as it is earned because the timing and
amounts of cash flows are not probable and estimable. The increase in the
Company's investment in discounted notes from December 31, 1998 to December 31,
1999 is primarily due to a purchase of a portfolio of discounted notes for
approximately $26.1 million.
Under the cost recovery method, the discounted notes are carried at the
acquisition amount, less subsequent cash collections, until such time as
collectibility is probable and the timing and amounts are estimable. Based upon
closed or pending transactions (including sales activity), market conditions,
and improved operations of the obligor, among other things, certain notes and
the related discounts have been determined to be collectible. Accordingly,
interest income that had previously been deferred and portions of the related
discounts were recognized as interest income during the period. For the years
ended December 31, 1999 and 1998, the Company recognized deferred interest
income and discounts of approximately $32.5 million ($0.52 per basic and $0.51
per diluted share), and $1.4 million ($0.03 per basic and diluted share),
respectively. There was no recognition of deferred interest income and discounts
for the year ended December 31, 1997.
NOTE 8 -- SECURED NOTES PAYABLE
During 1999, the Company issued $392.5 million of long-term fixed rate,
fully amortizing non-recourse notes payable with a weighted average interest
rate of 7.3%. Each of the notes is individually secured by one of
F-15
47
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
thirty-eight properties with no cross-collateralization. The Company used the
net proceeds after transaction costs of $356.3 million to repay existing debt.
The following table summarizes the Company's secured notes payable at
December 31, 1999 and 1998, all of which are non-recourse to the Company (in
thousands):
1999 1998
---------- --------
Fixed rate, ranging from 5.99% to 10.13%, fully-amortizing
notes maturing at various dates through 2034.............. $1,597,772 $659,953
Fixed rate, ranging from 5.00% to 10.63%, non-amortizing
notes maturing at various dates through 2029.............. 356,487 178,258
Floating rate, ranging from 5.0% to 7.1%, non-amortizing
notes..................................................... -- 5,580
---------- --------
Total............................................. $1,954,259 $843,791
========== ========
As of December 31, 1999, the scheduled principal amortization and balloon
payments for the Company's secured notes payable are as follows (in thousands):
2000........................................................ $ 30,074
2001........................................................ 78,739
2002........................................................ 57,144
2003........................................................ 129,448
2004........................................................ 178,886
Thereafter.................................................. 1,479,968
----------
$1,954,259
==========
NOTE 9 -- SECURED TAX-EXEMPT BOND FINANCING
During 1999, the Company issued $17.8 million of long-term fixed rate,
fully amortizing non-recourse tax-exempt bonds with a weighted average interest
rate of 7.1%. Each of the bonds is individually secured by one of two properties
with no cross-collateralization. The Company used the net proceeds after
transaction costs of $17.3 million to repay existing debt.
In December 1998, the Company completed the refinancing of $222 million in
variable rate tax-exempt debt assumed in conjunction with the May 1998 merger
with Ambassador Apartments, Inc. The debt was secured by 27 properties located
in Texas, Arizona, Tennessee and Illinois. Through the refinancing, the Company
converted the previous tax-exempt debt to $204 million in fixed rate, fully
amortizing tax-exempt debt secured by 26 properties. The new debt has a weighted
average interest rate of 5.8% and matures in 22 years. The Company also incurred
$7.1 million of taxable debt secured by three of the properties, repaid $11.4
million of the previous tax-exempt debt, released $21.5 million in cash reserves
and impound accounts held by the prior mortgagors, and released two properties
that served as additional collateral for the previous debt.
F-16
48
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table summarizes the Company's secured tax-exempt bond
financing at December 31, 1999 and 1998, all of which is non-recourse to the
Company (in thousands):
1999 1998
-------- --------
7.0% fully-amortizing bonds, due July 2016.................. $ 43,889 $ 45,237
6.9% fully-amortizing bonds, due July 2016.................. 8,987 9,267
Fixed rate fully-amortizing bonds, ranging from 5.1% to
5.8%, due 2021............................................ 157,578 159,555
Fixed rate fully-amortizing bonds, ranging from 6.5% to
7.3%, due at various dates through 2028................... 79,866 78,926
Fixed rate non-amortizing bonds, ranging from 5.0% to 8.19%,
due at various dates through 2017......................... 50,158 55,747
4.0% interest-only bonds, due December 2020................. 4,453 4,525
Floating rate non-amortizing bonds, due 2001 and 2008....... 31,689 --
Variable rate bonds, ranging from 4.9% to 5.3%, due 2021.... 44,210 45,345
-------- --------
Total............................................. $420,830 $398,602
======== ========
As of December 31, 1999, the scheduled principal amortization and balloon
payments for the Company's secured tax-exempt bonds are as follows (in
thousands):
2000........................................................ $ 21,761
2001........................................................ 13,978
2002........................................................ 9,752
2003........................................................ 10,239
2004........................................................ 26,842
Thereafter.................................................. 338,258
--------
$420,830
========
NOTE 10 -- UNSECURED SHORT-TERM FINANCING
In August 1999, the Company closed a $300 million revolving credit facility
arranged by Bank of America, N.A., BankBoston, N.A. and First Union National
Bank and comprised of a total of nine lender participants. The obligations under
the credit facility are secured by certain non-real estate assets of the
Company. The existing lines of credit were terminated. The credit facility is
used for general corporate purposes and has a two-year term with two one-year
extensions. The annual interest rate under the credit facility is based on
either LIBOR or a base rate which is the higher of Bank of America's reference
rate or 0.5% over the federal funds rate, plus, in either case, an applicable
margin. The margin ranges between 2.05% and 2.55%, in the case of LIBOR-based
loans, and between 0.55% and 1.05%, in the case of base rate loans, based upon a
fixed charge coverage ratio. At December 31, 1999, the weighted average interest
rate was 8.84%, the balance was $209.2 million, and the remaining available
credit was $90.8 million.
NOTE 11 -- SECURED SHORT-TERM FINANCING
In February 1999, the Company terminated its $50 million secured credit
facility with Washington Mortgage Financial Group, Ltd. and repaid all
outstanding borrowings with proceeds from new long-term, fully amortizing notes
payable totaling $58.2 million secured by certain properties that previously
secured the credit facility.
F-17
49
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 12 -- COMMITMENTS AND CONTINGENCIES
Legal
The Company is a party to various legal actions resulting from its
operating activities. These actions are routine litigation and administrative
proceedings arising in the ordinary course of business, some of which are
covered by liability insurance, and none of which are expected to have a
material adverse effect on the consolidated financial condition or results of
operations of the Company and its subsidiaries taken as a whole.
Limited Partnerships
In connection with the Company's offers to purchase interests in limited
partnerships that own properties, the Company and its affiliates are sometimes
subject to legal actions, including allegations that such activities may involve
breaches of fiduciary duties to the limited partners of such partnerships or
violations of the relevant partnership agreements. The Company believes it
complies with its fiduciary obligations and relevant partnership agreements, and
does not expect such legal actions to have a material adverse effect on the
consolidated financial condition or results of operations of the Company and its
subsidiaries taken as a whole.
Pending Investigations of HUD Management Arrangements
In 1997, NHP received subpoenas from the HUD Inspector General ("IG")
requesting documents relating to arrangements whereby NHP or any of its
affiliates provides compensation to owners of HUD-assisted or HUD-insured
multi-family projects in exchange for or in connection with property management
of a HUD project. In July 1999, NHP received a grand jury subpoena requesting
documents relating to the same subject matter as the HUD IG subpoenas and NHP's
operation of a group purchasing program created by NHP, known as Buyers Access.
To date, neither the HUD IG nor the grand jury has initiated any action against
NHP or AIMCO or, to NHP's or AIMCO's knowledge, any owner of a HUD property
managed by NHP. AIMCO believes that NHP's operations and programs are in
compliance, in all material respects, with all laws, rules and regulations
relating to HUD-assisted or HUD-insured properties. AIMCO is cooperating with
the investigations and does not believe that the investigations will result in a
material adverse impact on its operations. However, as with any similar
investigation, there can be no assurance that these will not result in material
fines, penalties or other costs.
Environmental
The Company is subject to various Federal, state and local laws that impose
liability on property owners or operators for the costs of removal or
remediation of certain hazardous substances present on a property. Such laws
often impose liability without regard to whether the owner or operator knew of,
or was responsible for, the release of the hazardous substances. The presence
of, or the failure to properly remediate, hazardous substances may adversely
affect occupancy at contaminated apartment communities and our ability to sell
or borrow against contaminated properties. In addition to the costs associated
with investigation and remediation actions brought by governmental agencies, the
presence of hazardous wastes on a property could result in personal injury or
similar claims by private plaintiffs. The Company is also subject to various
laws that impose liability for the cost of removal or remediation of hazardous
substances at a disposal or treatment facility. Anyone who arranges for a
disposal or treatment of hazardous or toxic substances is potentially liable
under such laws. These laws often impose liability whether or not the person
arranging for the disposal ever owned or operated the disposal facility. In
connection with the ownership, operation and management of our properties, we
could potentially be liable for environmental liabilities or costs associated
with our properties or properties we may acquire or manage in the future.
F-18
50
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Operating Leases
The Company is obligated under office space and equipment non-cancelable
operating leases. In addition, the Company subleases certain of its office space
to tenants under non-cancelable subleases. Approximate minimum annual rentals
under operating leases and approximate minimum payments to be received under
annual subleases for the five years ending after December 31, 1999 are as
follows (in thousands):
OPERATING LEASE SUBLEASE
PAYMENTS PAYMENTS
--------------- --------
2000................................................. $11,792 $3,037
2001................................................. 10,429 2,250
2002................................................. 5,295 81
2003................................................. 3,602 --
2004................................................. 2,936 --
------- ------
Total................................................ $34,054 $5,368
======= ======
Under the Company's current operating structure, substantially all of the
office space and equipment subject to the operating leases described above are
for the use of its regional operating centers, which are operated by certain of
the Company's unconsolidated subsidiaries (see Note 6). Rent expense recognized
by the unconsolidated subsidiaries totaled $5.8 and $6.2 million in 1999 and
1998, respectively. Rent expense recognized by the Company totaled $0.7 million
in 1997. Sublease payments for 1999, 1998 and 1997 were not material.
NOTE 13 -- TRUST BASED CONVERTIBLE PREFERRED SECURITIES
In connection with the Insignia merger, the Company assumed the obligations
under the Trust Based Convertible Preferred Securities (the "Securities") with
an aggregate liquidation amount of $149.5 million. The Securities will mature on
September 30, 2016 and require distributions at the rate of 6.5% per annum, with
quarterly distributions payable in arrears. The Securities are convertible by
the holders at any time through September 30, 2016 and may be redeemed by the
Company on or after November 1, 1999. Each $50 of liquidation value of the
Securities can be converted into Class A Common Stock at a conversion price of
$49.61, which equates to 1.007 shares of Class A Common Stock.
NOTE 14 -- TRANSACTIONS INVOLVING MINORITY INTEREST IN OPERATING PARTNERSHIP
In 1999, the Company completed tender offers for limited partnership
interests resulting in the issuance of 1,084,000 Common OP Units, 11,000 Class
Two Preferred OP Units, 1,682,000 Class Three Preferred OP Units, and 580,000
Class Four Preferred OP Units.
In 1998, the Company acquired Calhoun Beach Club Apartments, a 351 unit,
high-rise apartment community and 83,300 square feet of commercial space for
approximately $77.1 million, including the issuance of 90,000 Class One
Preferred OP Units valued at $9.0 million and approximately 100,300 common OP
units valued at $4.1 million. The Company also withheld, as contingent
consideration, approximately 109,800 common OP units valued at approximately
$4.5 million. In September 1999, the contingent consideration was met and the
109,800 common OP units were issued.
F-19
51
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
As of December 31, 1999 and 1998, the following amounts of preferred OP
Units are outstanding (in thousands):
1999 1998
----- ----
Class One Partnership Preferred Units, redeemable to Class A
Common Stock in one year,
holder to receive dividends at 8% ($2.00 per annum per
unit)..................................................... 90 90
Class Two Partnership Preferred Units, redeemable to Class A
Common Stock in one year,
holders to receive dividends at 8% ($2.00 per annum per
unit)..................................................... 11 --
Class Three Partnership Preferred Units, redeemable to Class
A Common Stock in one
year, holders to receive dividends at 9.5% ($2.375 per
annum per unit)........................................... 1,682 --
Class Four Partnership Preferred Units, redeemable to Class
A Common Stock in two
years, holders to receive dividends at 8% ($2.00 per annum
per unit)................................................. 580 --
--
-----
2,363 90
--
--
=====
On December 14, 1998, the Company sold, in a private placement, 1.4 million
Class B partnership preferred units of a subsidiary of the AIMCO operating
partnership for $30.85 million. The partnership units may be redeemed at the
option of the holders at any time, and at the option of the Company under
certain circumstances. Any redemption of the units may be satisfied by delivery
of cash, Class A Common Stock or OP Units.
NOTE 15 -- REGISTRATION STATEMENTS
In August 1998, AIMCO and the AIMCO operating partnership filed a shelf
registration statement with the Securities and Exchange Commission with respect
to an aggregate of $1,268 million of debt and equity securities of AIMCO (of
which $268 million was carried forward from a 1997 shelf registration statement)
and $500 million of debt securities of the AIMCO operating partnership. The
registration statement was declared effective by the SEC on December 10, 1998.
As of December 31, 1999, the Company had $1,088 million available and the AIMCO
operating partnership had $500 million available from this registration
statement. The Company expects to finance pending acquisitions of real estate
interests with the issuance of equity and debt securities under the shelf
registration statement.
F-20
52
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 16 -- STOCKHOLDERS' EQUITY
Preferred Stock
At December 31, 1999 and 1998, the Company had the following classes of
preferred stock outstanding:
1999 1998
-------- --------
Class B Cumulative Convertible Preferred Stock, $.01 par
value, 750,000 shares authorized, 750,000 and 750,000
shares issued and outstanding............................. $ 75,000 $ 75,000
Class C Cumulative Preferred Stock, $.01 par value,
2,400,000 shares authorized, 2,400,000 and 2,400,000
shares issued and outstanding; dividends payable at 9.0%,
per annum................................................. 60,000 60,000
Class D Cumulative Preferred Stock, $.01 par value,
4,200,000 shares authorized, 4,200,000 and 4,200,000
shares issued and outstanding; dividends payable at 8.75%,
per annum................................................. 105,000 105,000
Class G Cumulative Preferred Stock, $.01 par value,
4,050,000 shares authorized, 4,050,000 and 4,050,000
shares issued and outstanding; dividends payable at
9.375%, per annum......................................... 101,250 101,250
Class H Cumulative Preferred Stock, $.01 par value,
2,000,000 shares authorized, 2,000,000 and 2,000,000
shares issued and outstanding; dividends payable at 9.5%,
per annum................................................. 50,000 50,000
Class J Cumulative Convertible Preferred Stock, $.01 par
value, 1,250,000 shares authorized, 250,000 and 1,250,000
shares issued and outstanding............................. -- 100,000
Class K Convertible Cumulative Preferred Stock, $.01 par
value, 5,000,000 shares authorized, 5,000,000 and no
shares issued and outstanding............................. 125,000 --
Class L Convertible Cumulative Preferred Stock, $.01 par
value, 5,000,000 shares authorized, 5,000,000 and no
shares issued and outstanding............................. 125,000 --
Class E Cumulative Convertible Preferred Stock, $.01 par
value, no shares authorized, no shares and 8,423,658
shares issued and outstanding............................. -- 301,218
-------- --------
$641,250 $792,468
======== ========
All classes of preferred stock are on equal parity and are senior to the
Class A Common Stock, except the Class E Preferred Stock, which was junior to
all other classes of preferred stock and senior to the Class A Common Stock. The
holders of each class of preferred stock are generally not entitled to vote on
matters submitted to stockholders.
Holders of the Class B Cumulative Convertible Preferred Stock (the "Class B
Preferred Stock") are entitled to receive, when, as and if declared by the Board
of Directors, quarterly cash dividends per share equal to the greater of
$1.78125 or the cash dividends declared on the number of shares of Class A
Common Stock into which one share of Class B Preferred Stock is convertible.
Each share of Class B Preferred Stock is convertible at the option of the
holder, beginning August 1998, into 3.28407 shares of Class A Common Stock,
subject to certain anti-dilution adjustments.
Holders of the Class J Cumulative Convertible Preferred Stock (the "Class J
Preferred Stock") were entitled to receive cash dividends at the rate of 7% per
annum of the $100 liquidation preference (equivalent to $7 per annum per share)
for the period beginning November 6, 1998 and lasting until November 15, 1998,
and 8% per annum of the liquidation preference (equivalent to $8 per annum per
share) for the period beginning November 15, 1998 and lasting until November 15,
1999. On May 14, 1999, the Company notified the holders of the Class J Preferred
Stock that the defined internal rate of return threshold had been met, and the
Company exercised its right to convert all of the Class J Preferred Stock into
2.5 million shares of Class A Common Stock.
F-21
53
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Class K Convertible Cumulative Preferred Stock (the "Class K Preferred
Stock"), which was issued on February 18, 1999, are entitled to receive cash
dividends in an amount per share equal to the greater of (i) $2.00 per year
(equivalent to 8% of the liquidation preference), or (ii) the cash dividends
payable on the number of shares of Class A Common Stock into which a share of
Class K Preferred Stock is convertible. Beginning with the third anniversary of
the date of original issuance, holders of Class K Preferred Stock will be
entitled to receive an amount per share equal to the greater of (i) $2.50 per
year (equivalent to 10% of the liquidation preference), or (ii) the cash
dividends payable on the number of Class A Common Stock into which a share of
Class K Preferred is convertible.
Holder of Class L Convertible Cumulative Preferred Stock (the "Class L
Preferred Stock"), which was issued on May 28, 1999, are entitled to receive
cash dividends in an amount per share equal to the greater of (i) $2.025 per
year (equivalent to 8.1% of the liquidation preference), or (ii) the cash
dividends payable on the number of shares of Class A Common Stock into which a
share of Class L Preferred Stock is convertible. Beginning with the third
anniversary of the date of original issuance, the holder of Class L Preferred
Stock will be entitled to receive an amount per share equal to the greater of
(i) $2.50 per year (equivalent to 10% of the liquidation preference), or (ii)
the cash dividends payable on the number of shares of Class A Common Stock into
which a share of Class L Preferred Stock is convertible.
The Class E Preferred Stock was issued in connection with the Insignia
merger. Holders of Class E Preferred Stock were entitled to receive the same
cash dividends per share as holders of Class A Common Stock. In addition, on
January 15, 1999, holders of Class E Preferred Stock received a special dividend
in an aggregate amount of approximately $50 million. Concurrently with the
payment of such special dividend, all outstanding shares of Class E Preferred
Stock automatically converted into an equal number of shares of Class A Common
Stock.
The dividends paid on each class of preferred stock for the years ended
December 31, 1999, 1998, and 1997 are as follows (in thousands, except per share
data):
1999 1998 1997
-------------------- -------------------- -------------------
AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL
CLASS OF PER AMOUNT PER AMOUNT PER AMOUNT
PREFERRED STOCK SHARE(1) PAID SHARE(1) PAID SHARE(1) PAID
- --------------- -------- ------- -------- ------- -------- ------
Class B........................ $8.21 $ 6,158 $7.39 $ 5,542 $1.13(2) $846
Class C........................ 2.25 5,400 1.89(3) 4,538 -- --
Class D........................ 2.19 9,188 1.40(3) 5,869 -- --
Class E........................ -- -- 0.22(4) 1,892 -- --
Class G........................ 2.34 9,492 0.59(3) 2,373 -- --
Class H........................ 2.38 4,750 0.40(3) 805 -- --
Class J........................ 3.16(5) 3,956 0.14(3) 175 -- --
Class K........................ 1.50(6) 7,500 -- -- -- --
Class L........................ 1.01(6) 5,063 -- -- -- --
------- ------- ----
$51,507 $21,194 $846
======= ======= ====
- ---------------
(1) Amounts per share are calculated based on number of preferred shares
outstanding at the end of each year.
(2) For the period from the date of issuance to December 31, 1997.
(3) For the period from the date of issuance to December 31, 1998.
(4) For the period from the date of issuance to December 31, 1998. The Class E
Preferred Stock was converted to Class A Common Stock on January 15, 1999.
(5) For the period from January 1, 1999 to the date of conversion to Class A
Common Stock.
(6) For the period from the date of issuance to December 31, 1999.
F-22
54
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Common Stock
During 1999 and 1998, the Company issued approximately 215,000 and 600,000
shares, respectively, of Class A Common Stock to certain executive officers (or
entities controlled by them) at market prices. In exchange for the shares
purchased, the executive officers (or entities controlled by them) executed
notes payable totaling $8.2 million and $23.5 million, respectively. Total
payments on such notes from officers in 1999 and 1998 were $6.2 million and $8.9
million, respectively. In addition, in 1999 and 1998, the Company issued
approximately 37,000 and 40,000 restricted shares of Class A Common Stock,
respectively, to certain executive officers.
On September 15, 1999, the Company completed a direct placement of
1,382,580 shares of Class A Common Stock at a net price of $39.50 per share to
five institutional investors. The net proceeds of approximately $54.6 million
were used to repay outstanding indebtedness under the new credit facility.
During 1999, the Company repurchased 205,300 shares of Class A Common Stock
at an average price of $38.82 per share.
NOTE 17 -- STOCK OPTION PLANS AND STOCK WARRANTS
The Company has adopted the 1994 Stock Option Plan of Apartment Investment
and Management Company (the "1994 Plan"), the Apartment Investment and
Management Company 1996 Stock Award and Incentive Plan (the "1996 Plan"), the
Apartment Investment and Management Company 1997 Stock Award and Incentive Plan
(the "1997 Plan") and the Apartment Investment and Management Company Non-
Qualified Employee Stock Option Plan (the "Non-Qualified Plan") to attract and
retain officers, key employees and independent directors. The 1994 Plan provides
for the granting of a maximum of 150,000 options to purchase common shares. The
1996 Plan provides for the granting of a maximum of 500,000 options to purchase
common shares. The 1997 Plan provides for the granting of a maximum of
20,000,000 options to purchase common shares. The Non-Qualified Plan provides
for the granting of a maximum of 500,000 options to purchase common shares. The
1994 Plan, the 1996 Plan, the 1997 Plan and the Non-Qualified Plan allow for the
grant of incentive and non-qualified stock options, and are administered by the
Compensation Committee of the Board of Directors. The 1994 Plan also provides
for a formula grant of the non-qualified stock options to the independent
directors to be administered by the Board of Directors to the extent necessary.
The exercise price of the options granted may not be less than the fair market
value of the common stock at the date of grant. The term of the incentive and
non-qualified options is ten years from the date of grant. The options vest over
a one to five-year period from the date of grant. Terms may be modified at the
discretion of the Compensation Committee of the Board of Directors.
The Company has elected to follow Accounting Principles Board Opinion No.
25, Accounting for Stock Issued to Employees ("APB 25") and related
interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under
Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation ("SFAS 123"), requires the use of option valuation models that were
not developed for use in valuing employee stock options and warrants. Under APB
25, because the exercise price of the Company's employee stock options and
warrants equals the market price of the underlying stock on the date of grant,
no compensation expense is recognized.
Pro forma information regarding net income and earnings per share is
required by SFAS 123, which also requires that the information be determined as
if the Company had accounted for its employee stock options and warrants granted
subsequent to December 31, 1994 under the fair value method. The fair value for
these
F-23
55
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
options and warrants were estimated at the date of grant using a Black-Scholes
valuation model with the following assumptions:
1999 1998 1997
---------- ---------- ----------
4.5% to 4.4% to 5.8% to
Range of risk free interest rates........... 6.5% 5.6% 6.6%
Expected dividend yield..................... 6.6% 6.0% 6.0%
Volatility factor of the expected market
price of the Company's common stock....... 0.183 0.183 0.175
Weighted average expected life of options... 4.5 years 4.5 years 4.5 years
The Black-Scholes valuation model was developed for use in estimating the
fair value of traded options and for warrants which have no vesting restrictions
and are fully transferable. In addition, the valuation model requires the input
of highly subjective assumptions including the expected stock price volatility.
Because the Company's stock options and warrants have characteristics
significantly different from those of traded options and warrants, and because
changes in the subjective input assumptions can materially affect the fair value
estimate, in management's opinion, the existing model does not necessarily
provide a reliable single measure of the fair value of its employee stock
options and warrants.
For purposes of pro forma disclosures, the estimated fair values of the
options are amortized over the options' vesting period. The Company's pro forma
information for the years ended December 31, 1999, 1998 and 1997 is as follows
(in thousands, except per share data):
1999 1998 1997
------- ------- -------
Pro forma net income attributable to common
stockholders.......................................... $17,606 $34,396 $26,096
Pro forma basic earnings per common share............... $ 0.28 $ 0.76 $ 1.00
Pro forma diluted earnings per common share............. $ 0.28 $ 0.75 $ 1.00
The effects of applying SFAS 123 in calculating pro forma income
attributable to common stockholders and pro forma basic earnings per share may
not necessarily be indicative of the effects of applying SFAS 123 to future
years' earnings.
F-24
56
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table summarizes the option and warrants activity for the
years ended December 31, 1999, 1998 and 1997:
1999 1998 1997
-------------------- -------------------- --------------------
WEIGHTED WEIGHTED WEIGHTED
OPTIONS AVERAGE OPTIONS AVERAGE OPTIONS AVERAGE
AND EXERCISE AND EXERCISE AND EXERCISE
WARRANTS PRICE WARRANTS PRICE WARRANTS PRICE
--------- -------- --------- -------- --------- --------
Outstanding at
beginning of year.... 7,450,000 $36.21 1,684,000 $30.53 505,000 $20.74
Granted................ 1,000,000 37.14 5,811,000 37.78 627,000 38.77
Assumed in connection
with acquisitions.... -- -- 671,000 25.99 995,000 24.77
Exercised.............. (490,000) 13.78 (661,000) 25.19 (437,000) 18.11
Forfeited.............. (175,000) 34.68 (55,000) 35.71 (6,000) 18.50
--------- ------ --------- ------ --------- ------
Outstanding at end of
year................. 7,785,000 $37.78 7,450,000 $36.21 1,684,000 $30.53
Exercisable at end of
year................. 1,643,000 $37.55 1,793,000 $31.69 690,000 $19.95
Weighted-average fair
value of options and
warrants granted
during the year...... $ 3.41 $ 3.70 $ 3.24
At December 31, 1999, exercise prices for outstanding and exercisable
options range from $15.21 to $43.85 and warrants range from $36.00 to $51.67,
and the remaining weighted-average contractual life of the options and warrants
is 9.06 years.
On June 3, 1997, AIMCO issued warrants (the "NHP Warrants") exercisable to
purchase an aggregate of 399,999 shares of Class A Common Stock at $36 per share
at any time prior to June 3, 2002. The NHP Warrants were issued as part of the
consideration for the NHP Real Estate Companies.
On December 2, 1997, AIMCO issued warrants (the "Oxford Warrants")
exercisable to purchase up to an aggregate of 500,000 shares of Class A Common
Stock at $41 per share. The Oxford Warrants were issued to affiliates of Oxford
Realty Financial Group, Inc., a Maryland corporation ("Oxford"), in connection
with the amendment of certain agreements pursuant to which the Company manages
properties controlled by Oxford or its affiliates. The actual number of shares
of Class A Common Stock for which the Oxford Warrants will be exercisable is
based on certain performance criteria with respect to the Company's management
arrangements with Oxford for each of the five years ending December 31, 2001.
The Oxford Warrants are exercisable for six years after the determination of
such criteria for each of the five years.
In connection with the Insignia merger, the Company assumed warrants that
allowed the holders to purchase shares of Class A Common Stock at prices ranging
from approximately $4 to $52 per share. As of December 31, 1999, approximately
15,000 of the Insignia warrants were still outstanding.
On December 14, 1998, the Company sold, in a private placement, a warrant
to purchase 875,000 shares of Class A Common Stock for $4.15 million. The
warrant has an exercise price of $40 per share. The warrant may be exercised at
any time, and expires upon a redemption of the Class B partnership preferred
units issued by a subsidiary of the AIMCO Operating Partnership (see Note 14).
F-25
57
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 18 EARNINGS PER SHARE
The following table illustrates the calculation of basic and diluted
earnings per share for the years ended December 31, 1999, 1998 and 1997 (in
thousands, except per share data):
1999 1998 1997
-------- -------- -------
Numerator:
Net income............................................ $ 80,959 $ 64,474 $28,633
Preferred stock dividends............................. (56,885) (26,533) (2,315)
-------- -------- -------
Numerator for basic and diluted earnings per
share -- income attributable to common
stockholders........................................ $ 24,074 $ 37,941 $26,318
======== ======== =======
Denominator:
Denominator for basic earnings per share -- weighted
average number of shares of common stock
outstanding......................................... 62,242 45,187 24,055
Effect of dilutive securities:
Dilutive potential common shares...................... 1,204 2,437 381
-------- -------- -------
Denominator for diluted earnings per share............ 63,446 47,624 24,436
======== ======== =======
Basic earnings per common share:
Operations.......................................... $ 0.42 $ 0.74 $ 0.99
Gain on disposition of properties................... (0.03) 0.10 0.11
Extraordinary item.................................. -- -- (0.01)
-------- -------- -------
Total....................................... $ 0.39 $ 0.84 $ 1.09
======== ======== =======
Diluted earnings per common share:
Operations.......................................... $ 0.41 $ 0.70 $ 0.98
Gain on dispositions of properties.................. (0.03) 0.10 0.11
Extraordinary item.................................. -- -- (0.01)
-------- -------- -------
Total....................................... $ 0.38 $ 0.80 $ 1.08
======== ======== =======
The Class B Preferred Stock, the Class J Preferred Stock, the Class K
Preferred Stock, and the Class L Preferred Stock are convertible into Class A
Common Stock (see Note 16). The Class C Preferred Stock, the Class D Preferred
Stock, the Class G Preferred Stock, and the Class H Preferred Stock are not
convertible.
NOTE 19 RECENT ACCOUNTING DEVELOPMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities ("Statement 133"). Statement 133 requires recording all
derivative instruments as assets or liabilities, measured at fair value.
Statement 133 is effective beginning after 2000. The Company has elected not to
early adopt the provisions of Statement 133 as of December 31, 1999 and when
Statement 133 is adopted, the Company does not expect the Statement to have a
significant impact on its financial position and results of operations.
NOTE 20 TRANSACTIONS WITH AFFILIATES
In January 1998, AIMCO's operating partnership sold an aggregate of 15,000
of its Class I High Performance Partnership Units (the "High Performance Units")
to a joint venture of twelve members of AIMCO's senior management and three of
its independent directors for $2.1 million in cash. The High Performance Units
have nominal value unless the Company's total return, defined as dividend income
plus share price appreciation, over the three year period ending December 31,
2000, is at least 30% and exceeds the industry average, as determined by a peer
group index, by at least 15% (the "Total Return"). At the
F-26
58
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
conclusion of the three year period, if the Company's Total Return satisfies
these criteria, the holders of the High Performance Units will receive
distributions and allocations of income and loss from the AIMCO operating
partnership in the same amounts and at the same times as would holders of a
number of OP Units equal to the quotient obtained by dividing the product of
(i)(a) 15% of the amount by which the Company's cumulative Total Return over the
three year period exceeds the greater of 115% of a peer group index or 30% (such
excess being the "Excess Return"), multiplied by (b) the weighted average market
value of the Company's outstanding Class A Common Stock and OP Units, by (ii)
the market value of one share of Class A Common Stock at the end of the three
year period. The three year measurement period will be shortened in the event of
a change of control of the Company. Unlike OP Units, the High Performance Units
are not redeemable or convertible into Class A Common Stock unless a change of
control of the Company occurs. Because there is substantial uncertainty that the
High Performance Units will have more than nominal value due to the required
Total Return over the three year term, the Company has not recorded any value to
the High Performance Units. If the measurement period had ended December 31,
1999, the Excess Return would have been $83.8 million and the value of the High
Performance Units would have been $12.6 million.
Fees earned based on services provided by the Company, as general partner,
to real estate partnerships for customary services including refinancing,
construction supervisory and disposition fees for the years ended December 31,
1999 and 1998 were $14.2 million and $6.4 million, respectively. Fees earned by
the Company for the year ended December 31, 1997 were not significant.
NOTE 21 EMPLOYEE BENEFIT PLANS
The Company offers medical, dental, life and short-term and long-term
disability benefits to employees of the Company through insurance coverage of
Company-sponsored plans. The medical and dental plans are self-funded and are
administered by independent third parties. In addition, the Company also
participates in a 401(k) defined-contribution employee savings plan. Employees
who have completed six months of service are eligible to participate. The
Company matches 50%-100% of the participant's contributions to the plan up to a
maximum of 6% of the participant's prior year compensation. The Company match
percentage is based on employee tenure.
NOTE 22 UNAUDITED SUMMARIZED CONSOLIDATED QUARTERLY INFORMATION
Summarized unaudited consolidated quarterly information for 1999 and 1998
is provided below (amounts in thousands, except per share amounts).
QUARTER
-----------------------------------------
YEAR ENDED DECEMBER 31, 1999 FIRST SECOND THIRD FOURTH
- ---------------------------- -------- -------- -------- --------
Revenue from property operations................... $112,586 $116,237 $120,398 $184,696
Income from property operations.................... 38,802 39,815 40,456 52,969
Revenue from service company business.............. 8,556 7,536 10,280 17,083
Company's share of income from service company
business......................................... (346) 5,150 (4,315) 17,496
Income before minority interest in operating
partnership...................................... 15,175 23,993 19,889 24,655
Net income......................................... 13,956 23,117 19,487 24,399
Basic earnings per common share.................... $ 0.01 $ 0.15 $ 0.08 $ 0.15
Diluted earnings per common share.................. $ 0.01 $ 0.14 $ 0.07 $ 0.15
Weighted average common shares outstanding......... 56,468 62,323 64,370 65,805
Weighted average common shares and common share
equivalents outstanding.......................... 58,412 63,552 65,451 66,368
F-27
59
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
QUARTER
---------------------------------------
YEAR ENDED DECEMBER 31, 1998 FIRST SECOND THIRD FOURTH
- ---------------------------- ------- ------- -------- --------
Revenue from property operations..................... $71,336 $89,928 $104,436 $111,439
Income from property operations...................... 28,918 33,701 33,943 37,388
Revenue from service company business................ 4,821 4,741 4,406 10,135
Company's share of income from service company
Business........................................... 992 1,183 1,775 1,475
Income before minority interest in operating
partnership........................................ 23,930 14,594 17,745 13,387
Net income........................................... 21,642 13,620 16,582 12,630
Basic earnings per common share...................... $ 0.44 $ 0.19 $ 0.19 $ 0.05
Diluted earnings per common share.................... $ 0.43 $ 0.19 $ 0.19 $ 0.05
Weighted average common shares outstanding........... 41,128 45,298 47,062 47,261
Weighted average common shares and common share
equivalents outstanding............................ 41,310 45,539 47,403 56,244
NOTE 23 INDUSTRY SEGMENTS
The Company owns and operates multi-family apartment communities throughout
the United States and Puerto Rico which generate rental and other property
related income through the leasing of apartment units to a diverse base of
tenants. The Company separately evaluates the performance of each of its
apartment communities. However, because each of the apartment communities has
similar economic characteristics, facilities, services and tenants, the
apartment communities have been aggregated into a single apartment communities
segment. All segment disclosures are included in or can be derived from the
Company's consolidated financial statements.
All revenues are from external customers and no revenues are generated from
transactions with other segments. There are no tenants which contributed 10% or
more of the Company's total revenues during 1999, 1998 or 1997.
Although the Company operates in only one segment, there are different
components of the multi-family business for which management considers
disclosure to be useful. The following table presents the contribution
(separated between consolidated and unconsolidated activity) to the Company's
free cash flow for the year ended December 31, 1999, from the components of the
Company and a reconciliation of free cash flow to funds from operations, less a
reserve for capital replacements, and net income (in thousands, except
equivalent units and monthly rents):
CONSOLIDATED UNCONSOLIDATED TOTAL CONTR. %
------------ -------------- --------- --------
REAL ESTATE:
Conventional:
Average monthly rent greater than $800 per
unit (9,008 equivalent units)............ $ 62,428 $ 15,672 $ 78,100 15 %
Average monthly rent $700 to $800 per unit
(9,310 equivalent units)................. 36,295 21,332 57,627 11 %
Average monthly rent $600 to $700 per unit
(16,494 equivalent units)................ 58,518 27,615 86,133 16 %
Average monthly rent $500 to $600 per unit
(29,492 equivalent units)................ 78,163 32,336 110,499 21 %
Average monthly rent less than $500 per
unit (29,387 equivalent units)........... 36,348 20,037 56,385 11 %
--------- --------- --------- ---
Subtotal conventional real estate
contribution to free cash flow(1)..... 271,752 116,992 388,744 74 %
Affordable (9,809 equivalent units)........... 5,131 31,964 37,095 7 %
F-28
60
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONSOLIDATED UNCONSOLIDATED TOTAL CONTR. %
------------ -------------- --------- --------
College housing (average rent of $663 per
month) (2,214 equivalent units)............ 3,633 4,553 8,186 2 %
Other real estate............................. 1,933 4,956 6,889 1 %
Resident services............................. 1,914 436 2,350 --
Minority interest............................. (22,212) -- (22,212) (4)%
--------- --------- --------- ---
Total real estate contribution to free
cash flow(1)........................ 262,151 158,901 421,052 80 %
--------- --------- --------- ---
SERVICE BUSINESSES:
Management contracts (property and asset
management)
Controlled properties...................... 18,999 16,396 35,395 7 %
Third party with terms in excess of one
year..................................... -- 10,281 10,281 2 %
Third party cancelable in 30 days.......... -- 908 908 --
--------- --------- --------- ---
Subtotal management contracts
contribution to free cash flow(1)..... 18,999 27,585 46,584 9 %
Buyers Access................................. -- 3,314 3,314 1 %
Other service businesses...................... 4,068 (2,703) 1,365 --
--------- --------- --------- ---
Total service businesses contribution
to free cash flow(1)................ 23,067 28,196 51,263 10 %
--------- --------- --------- ---
INTEREST INCOME:
General partner loan interest................. 12,243 -- 12,243 2 %
Notes receivable from officers................ 869 -- 869 --
Other notes receivable........................ 8,863 -- 8,863 2 %
Money market and interest bearing accounts.... 8,286 1,568 9,854 2 %
--------- --------- --------- ---
Subtotal interest income................. 30,261 1,568 31,829 6 %
Accretion of loan discount(2)................. 32,460 -- 32,460 6 %
--------- --------- --------- ---
Total interest income contribution to
free cash flow(1)................... 62,721 1,568 64,289 12 %
--------- --------- --------- ---
FEES:
Disposition fees.............................. 3,070 801 3,871 1 %
Refinancing fees.............................. 283 331 614 --
--------- --------- --------- ---
Total fees contribution to free cash
flow(1)............................. 3,353 1,132 4,485 1 %
--------- --------- --------- ---
GENERAL AND ADMINISTRATIVE EXPENSES............. (13,112) -- (13,112) (3)%
--------- --------- --------- ---
Total contribution to free cash flow
from business components(1)......... 338,180 189,797 527,977 100 %
--------- --------- --------- ---
OTHER EXPENSES:
Interest expense:
Secured debt
Long-term, fixed rate...................... (107,368) (63,112) (170,480)
Long-term, variable rate................... (1,314) (2,008) (3,322)
Short-term................................. (14,906) (2,846) (17,752)
General partner loans and deferred acquisition
notes...................................... -- (1,744) (1,744)
Lines of credit and other unsecured debt...... (13,378) (384) (13,762)
Interest on notes payable to AIMCO............ -- (7,401) (7,401)
F-29
61
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONSOLIDATED UNCONSOLIDATED TOTAL CONTR. %
------------ -------------- --------- --------
Convertible preferred securities.............. (4,858) -- (4,858)
Interest capitalized.......................... 6,588 93 6,681
--------- --------- ---------
Total interest expense before minority
interest............................ (135,236) (77,402) (212,638)
Minority interest share of interest expense... 11,248 -- 11,248
--------- --------- ---------
Total interest expense after minority
interest............................ (123,988) (77,402) (201,390)
--------- --------- ---------
Funds from operations, less a reserve for
capital replacements, before preferred
dividends(1)............................... 214,192 112,395 326,587
Preferred Stock and Preferred OP Unit
dividends..................................... (33,943) -- (33,943)
--------- --------- ---------
Funds from operations, less a reserve for
capital replacements(1).................... 180,249 112,395 292,644
Capital replacement reserve..................... 19,434 9,281 28,715
Preferred Stock and Preferred OP Unit
dividends..................................... 33,943 -- 33,943
Equity in losses of unconsolidated real estate
partnerships.................................. (4,467) 4,467 --
Equity in losses of unconsolidated
subsidiaries.................................. (2,818) 2,818 --
Additional interest expense on convertible
preferred securities.......................... (4,858) -- (4,858)
Loss on disposition of properties............... (1,785) -- (1,785)
Depreciation.................................... (131,753) (104,764) (236,517)
Minority interest in depreciation............... 10,064 -- 10,064
Amortization.................................... (14,297) (22,434) (36,731)
Deferred tax provision.......................... -- (1,763) (1,763)
Minority interest in operating partnership...... (2,753) -- (2,753)
--------- --------- ---------
Net income............................ $ 80,959 $ -- $ 80,959
========= ========= =========
- ---------------
(1) "Funds from operations" and "free cash flow" are measurement standards used
by the Company's management, as follows:
- The Company measures its economic profitability based on funds from
operations ("FFO"), less a reserve for capital replacements of $300 per
apartment unit. The Company's management believes that FFO, less such a
reserve (or adjusted funds from operations, "AFFO") provides investors
with an understanding of the Company's ability to incur and service debt
and make capital expenditures. The Board of Governors of the National
Association of Real Estate Investment Trusts ("NAREIT") defines FFO as
net income (loss), computed in accordance with generally accepted
accounting principles ("GAAP"), excluding gains and losses from debt
restructuring and sales of property, plus real estate related
depreciation and amortization (excluding amortization of financing
costs), and after adjustments for unconsolidated partnerships and joint
ventures. The Company calculates FFO based on the NAREIT definition, as
adjusted for minority interest in the AIMCO operating partnership,
amortization, the non-cash deferred portion of the income tax provision
for unconsolidated subsidiaries and less the payment of dividends on
preferred stock. FFO should not be considered an alternative to net
income or net cash flows from operating activities, as calculated in
accordance with GAAP, as an indication of the Company's performance or as
a measure of liquidity. FFO is not necessarily indicative of cash
available to fund future cash needs. In addition, there can be no
assurance that the Company's basis for computing FFO is comparable with
that of other real estate investment trusts.
- Free cash flow is defined by the Company as AFFO plus interest expense
and Preferred Stock dividends. It measures profitability prior to the
cost of capital. Free cash flow should not be considered an alternative
to net income or net cash flows from operating activities, as calculated
in accordance
F-30
62
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
with GAAP, as an indication of the Company's performance or as a measure
of liquidity. Free cash flow is not necessarily indicative of cash
available to fund future cash needs.
(2) See Note 7.
NOTE 24 SUBSEQUENT EVENTS
Dividend Declared
On January 19, 2000, the Board of Directors declared a quarterly cash
dividend of $0.70 per common share for the quarter ended December 31, 1999, paid
on February 11, 2000, to stockholders of record on February 4, 2000. The
increased dividend is equivalent to an annualized dividend rate of $2.80 per
common share, a 12% increase from the previous annual dividend rate of $2.50.
Class M Preferred Stock
On January 13, 2000, AIMCO issued 1,200,000 shares of newly created Class M
Convertible Cumulative Preferred Stock, par value $.01 per share ("Class M
Preferred Stock") in a direct placement. The net proceeds of $30.0 million were
used to repay certain indebtedness and for working capital. For three years,
holders of the Class M Preferred Stock are entitled to receive, when, as and if
declared by the Board of Directors, annual cash dividends in an amount per share
equal to the greater of (i) $2.125 per year (equivalent to 8.5% of the
liquidation preference), or (ii) the cash dividends (payable quarterly) payable
on the number of shares of Class A Common Stock into which a share of Class M
Preferred Stock is convertible. Beginning with the third anniversary of the date
of original issuance, holders of Class M Preferred Stock will be entitled to
receive an amount per share equal to the greater of (i) $2.3125 per year
(equivalent to 9.25% of the liquidation preference), or (ii) the cash dividends
payable on the number of Class A Common Stock into which a share of Class M
Preferred is convertible. The Class M Preferred Stock is senior to the Class A
Common Stock as to dividends and liquidation. Upon any liquidation, dissolution
or winding up of AIMCO, before payment or distributions by AIMCO shall be made
to any holders of Class A Common Stock, the holders of the Class M Preferred
Stock shall be entitled to receive a liquidation preference of $25 per share,
plus accumulated, accrued and unpaid dividends.
F-31
63
SCHEDULE III
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
(IN THOUSANDS EXCEPT UNIT DATA)
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
100 Forest Place............. Oct-97 OakPark, IL 1986 234 $ 2,498 $ 14,154 $ 3,591
40th North................... Jul-94 Phoenix, AZ 1970 556 2,546 14,437 2,156
Alpine Village............... Oct-98 Birmingham, AL 1972 160 751 3,034 83
Anchorage.................... Nov-96 League City, TX 1985 264 523 9,097 1,994
Arbor Crossing............... May-97 Lithonia, GA 1988 240 1,879 10,647 1,517
Arbor Station................ Apr-98 Montgomery, AL 1987 264 1,627 9,218 702
Arbor Station II............. Apr-99 Montgomery, AL 1988 288 198 1,133 --
Arbors....................... Oct-97 Tempe, AZ 1971 200 1,092 6,189 509
Arbors....................... May-98 Deland, FL 1983 224 1,507 8,537 936
Ashford Plantation........... Dec-95 Atlanta, GA 1975 211 2,770 9,956 1,604
Aspen Hills.................. May-98 Austin, TX 1986 344 2,645 14,989 518
Aspen Point.................. Jul-99 Arvada, CO 1974 120 288 5,935 135
Atriums of Plantation........ Aug-98 Plantation, FL 1980 210 1,807 9,756 799
Baldwin Oaks................. May-97 Parsippany, NJ 1980 251 689 7,226 201
Barcelona.................... Oct-98 Houston, TX 1963 126 852 4,184 275
Bay Club..................... Apr-97 Aventura, FL 1990 702 10,530 60,830 2,523
Baymeadows................... Oct-98 Jacksonville, FL 1972 904 5,308 20,953 163
Beacon Hill.................. Oct-97 Chamblee, GA 1978 120 928 5,261 406
Beech Lake................... May-99 Durham, NC 1986 345 2,284 13,011 --
Bella Vista.................. Jul-99 Miami, FL 1986 352 2,560 14,660 --
Bent Oaks.................... May-98 Austin, TX 1979 146 1,117 6,328 227
Blossomtree.................. Oct-97 Scottsdale, AZ 1970 125 535 3,029 381
Boardwalk.................... Dec-95 Tamarac, FL 1986 291 3,350 8,196 1,283
Boulder Creek (Bluffs)....... Sep-83 Boulder, CO 1971 232 696 7,779 5,657
Bradford Place............... Dec-99 Suitland, MD 1968 214 1,176 6,666 --
Braesview.................... May-98 San Antonio, TX 1982 396 3,135 17,764 392
Brandywine................... Apr-83 St. Petersburg, FL 1971 477 1,423 11,336 2,269
Brant Rock................... Oct-97 Houston, TX 1984 84 337 1,908 330
Brentwood.................... Nov-96 Lake Jackson, TX 1980 104 200 3,092 479
Briarwest.................... Oct-98 Houston, TX 1970 380 2,671 15,362 258
Briarwood.................... Oct-98 Cedar Rapids, IA 1975 73 453 1,831 55
Briarwood.................... Oct-98 Houston, TX 1970 351 2,138 10,159 99
Bridgewater.................. Nov-96 Tomball, TX 1978 206 333 4,033 2,894
Brittany Point............... Oct-98 Hunstville, AL 1978 431 1,627 9,220 207
Broadmoor Apartments......... May-98 Austin, TX 1985 200 1,370 7,765 1,035
Brookdale Lakes.............. May-98 Naperville, IL 1990 200 2,709 15,350 269
Brookside Village............ Apr-96 Tustin, CA 1970 628 2,498 14,180 21,605
Burke Shire Commons.......... May-97 Burke, VA 1986 360 2,785 23,320 145
Calhoun Beach................ Dec-98 Minneapolis, MN 1928/1998 351 11,567 65,546 4,177
Cambridge Heights............ May-97 Natchez, MS 1979 94 249 1,413 825
Canterbury Green............. Dec-99 Fort Wayne, IN 1979 2,007 13,929 73,975 --
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
100 Forest Place............. $ 759 $ 19,484 $ 20,243 $ 5,165 $ 15,078 $ 15,080
40th North................... 2,546 16,592 19,139 3,783 15,356 10,202
Alpine Village............... 751 3,117 3,868 410 3,459 2,100
Anchorage.................... 615 10,999 11,614 3,660 7,954 4,708
Arbor Crossing............... 740 13,303 14,043 2,168 11,875 4,956
Arbor Station................ 1,627 9,920 11,547 653 10,894 7,385
Arbor Station II............. 198 1,133 1,331 54 1,277 776
Arbors....................... 1,092 6,698 7,790 647 7,143 3,715
Arbors....................... 1,507 9,474 10,980 700 10,280 7,605
Ashford Plantation........... 2,770 11,560 14,330 1,994 12,335 7,100
Aspen Hills.................. 2,645 15,507 18,152 1,102 17,050 9,570
Aspen Point.................. 288 6,070 6,358 1,647 4,711 --
Atriums of Plantation........ 1,807 10,555 12,362 617 11,745 7,629
Baldwin Oaks................. 689 7,427 8,116 718 7,399 7,384
Barcelona.................... 852 4,459 5,312 171 5,141 2,371
Bay Club..................... 10,533 63,350 73,883 6,330 67,552 49,000
Baymeadows................... 5,308 21,115 26,423 2,256 24,167 13,657
Beacon Hill.................. 929 5,666 6,595 534 6,060 3,496
Beech Lake................... 2,284 13,011 15,294 543 14,751 11,783
Bella Vista.................. 2,560 14,660 17,220 365 16,856 12,765
Bent Oaks.................... 1,117 6,555 7,672 458 7,214 4,300
Blossomtree.................. 535 3,411 3,945 322 3,623 2,037
Boardwalk.................... 3,350 9,479 12,829 1,702 11,128 8,987
Boulder Creek (Bluffs)....... 755 13,378 14,132 5,059 9,074 --
Bradford Place............... 1,176 6,666 7,842 -- 7,842 5,218
Braesview.................... 3,135 18,155 21,290 1,284 20,006 13,690
Brandywine................... 1,437 13,591 15,028 6,089 8,939 6,216
Brant Rock................... 337 2,238 2,575 208 2,367 1,178
Brentwood.................... -- 3,771 3,771 409 3,362 1,725
Briarwest.................... 2,671 15,619 18,290 596 17,694 6,992
Briarwood.................... 453 1,886 2,339 184 2,156 1,562
Briarwood.................... 2,138 10,258 12,397 454 11,943 4,949
Bridgewater.................. 398 6,863 7,260 1,389 5,871 4,055
Brittany Point............... 1,658 9,396 11,054 -- 11,054 9,159
Broadmoor Apartments......... 1,370 8,800 10,170 637 9,533 6,000
Brookdale Lakes.............. 2,709 15,619 18,328 1,089 17,239 13,280
Brookside Village............ 7,263 31,021 38,283 4,286 33,998 26,492
Burke Shire Commons.......... 2,785 23,465 26,250 906 25,344 22,055
Calhoun Beach................ 11,821 69,469 81,290 3,378 77,912 52,763
Cambridge Heights............ 90 2,397 2,487 1,018 1,469 1,520
Canterbury Green............. 13,929 73,975 87,904 87,904 52,804
F-32
64
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
Cape Cod..................... May-98 San Antonio, TX 1985 244 1,582 8,946 234
Captiva Club................. Dec-96 Tampa, FL 1975 357 1,500 7,085 9,147
Carlin Manor................. Oct-98 Columbus, OH 1966 278 1,353 3,883 114
Carriage House............... Oct-98 Gastonia, NC 1970 102 486 2,059 99
Casa Anita................... Mar-98 Phoenix, AZ 1986 224 1,125 6,404 386
Cedar Creek.................. May-98 San Antonio, TX 1979 392 1,788 10,131 1,753
Center Square................ May-97 Doylestown, PA 1975 352 372 5,347 14
Chambers Ridge............... Oct-98 Harrisburg, PA 1973 324 1,469 6,135 1,690
Chapel NDP................... May-97 Baltimore, MD 1974 175 131 3,354 113
Chatham Harbor............... Oct-99 Altamonte Springs, FL 1985 324 2,288 12,999 --
Chesapeake................... Dec-96 Houston, TX 1983 320 775 7,317 778
Chestnut Hill Village........ May-97 Middletown, CT 1985 314 6,300 15,328 35
Citrus Grove................. Jun-98 Redlands, CA 1985 198 1,118 6,333 235
Citrus Sunset................ Mar-98 Vista, CA 1985 96 663 3,758 208
Cobble Creek................. Mar-98 Tucson, AZ 1980 301 1,299 7,395 575
Colonade Gardens
(Ferntree).................. Oct-97 Phoenix, AZ 1973 196 765 4,337 411
Colonial Crest............... Dec-99 Bloomington, IN 1965 208 938 4,488 --
Colony....................... Sep-98 Bradenton, FL 1986 166 1,121 6,350 316
Colony At Kenilworth......... Oct-98 Towson, MD 1966 383 2,600 11,255 437
Colony House................. Oct-98 Murfreesboro, TN 1973 194 898 3,336 208
Copper Chase................. Dec-96 Katy, TX 1982 316 1,354 7,672 1,348
Copperfield.................. Nov-96 Houston, TX 1983 196 702 7,003 1,158
Coral Cove................... May-98 Tampa, FL 1985 200 727 4,119 3,431
Coral Gardens................ Apr-93 Las Vegas, NV 1983 670 3,190 12,745 2,530
Country Club Villas.......... Jul-94 Amarillo, TX 1984 282 1,049 5,951 993
Country Club West............ May-98 Greeley, CO 1986 288 2,848 16,138 614
Country Wood................. Oct-98 Raleigh, NC 1972 384 2,652 8,816 130
Courtney Park................ May-98 Fort Collins, CO 1986 248 2,726 15,450 400
Coventry Square.............. Nov-96 Houston, TX 1983 270 975 6,355 1,722
Crossbridge.................. Oct-98 Dallas, TX 1980 160 490 3,994 19
Crossings at Belle........... Jan-98 Amarillo, TX 1976 160 483 2,737 1,256
Crossings of Bellevue........ May-98 Nashville, TN 1985 300 2,588 14,667 680
Crossroads................... May-98 Phoenix, AZ 1982 316 2,180 12,353 410
Crows Nest................... Nov-96 League City, TX 1984 176 795 5,400 1,090
Cypress Landing.............. Dec-96 Savannah, GA 1984 200 915 5,188 603
Cypress Ridge................ May-98 Houston, TX 1979 268 870 4,931 1,204
Debaliviere I................ May-97 St. Louis, MO 1979 146 188 2,795 80
Dolphins Landing............. Dec-96 Corpus Christi, TX 1980 218 1,740 5,589 806
Douglaston Villas and
Townhomes (Cameron Villas).. Aug-99 Altamonte Springs, FL 1979 234 1,721 9,835 242
Dunwoody Park................ Jul-94 Dunwoody, GA 1980 318 1,838 10,538 1,484
Eagle's Nest................. May-98 San Antonio, TX 1973 226 1,053 5,966 294
Eaglewood(s)................. Jun-98 Memphis, TN 1983 584 750 16,544 4,285
Easton Village............... Nov-96 Houston, TX 1983 146 440 6,584 1,957
Eden Crossing................ Nov-94 Pensacola, FL 1985 200 1,111 6,332 895
Elm Creek.................... May-97 Elmhurst, IL 1986 372 5,339 30,253 6,958
Emerald Ridge................ Feb-98 Tyler, TX 1984 484 1,469 8,324 926
Essex Park................... Oct-98 Columbia, SC 1971 323 1,570 5,554 141
Evanston Place............... May-97 Evanston, IL 1988 190 1,503 19,960 6,858
Fairway View I............... Oct-98 Baton Rouge, LA 1972 242 1,456 5,992 126
Fairway View II.............. Oct-98 Baton Rouge, LA 1981 204 1,428 5,899 94
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
Cape Cod..................... 1,582 9,180 10,762 625 10,137 6,640
Captiva Club................. 1,752 15,980 17,732 816 16,916 8,950
Carlin Manor................. 1,353 3,997 5,350 520 4,830 2,500
Carriage House............... 486 2,158 2,643 229 2,414 1,892
Casa Anita................... 1,125 6,790 7,915 491 7,424 4,050
Cedar Creek.................. 1,788 11,884 13,671 768 12,903 4,609
Center Square................ 372 5,360 5,733 316 5,416 5,619
Chambers Ridge............... 1,469 7,825 9,294 901 8,393 5,396
Chapel NDP................... 131 3,467 3,598 142 3,456 3,269
Chatham Harbor............... 2,288 12,999 15,287 68 15,219 --
Chesapeake................... 775 8,095 8,870 1,015 7,854 7,199
Chestnut Hill Village........ 6,300 15,363 21,663 1,324 20,340 16,070
Citrus Grove................. 1,118 6,569 7,686 435 7,251 5,056
Citrus Sunset................ 663 3,966 4,629 256 4,373 3,561
Cobble Creek................. 1,299 7,970 9,269 669 8,600 6,924
Colonade Gardens
(Ferntree).................. 766 4,747 5,513 452 5,061 2,752
Colonial Crest............... 938 4,488 5,426 -- 5,426 1,789
Colony....................... 1,121 6,666 7,787 392 7,395 3,277
Colony At Kenilworth......... 2,600 11,692 14,292 1,474 12,818 7,985
Colony House................. 898 3,544 4,442 381 4,061 2,249
Copper Chase................. 1,354 9,020 10,374 750 9,624 5,289
Copperfield.................. 646 8,217 8,863 1,589 7,274 3,367
Coral Cove................... 1,381 6,896 8,277 882 7,395 3,928
Coral Gardens................ 3,190 15,275 18,465 4,627 13,838 10,661
Country Club Villas.......... 1,049 6,944 7,993 1,489 6,504 3,837
Country Club West............ 2,848 16,752 19,600 1,228 18,372 11,158
Country Wood................. 2,652 8,946 11,598 1,004 10,593 4,267
Courtney Park................ 2,726 15,850 18,577 1,117 17,460 9,895
Coventry Square.............. 1,054 7,997 9,052 2,982 6,070 2,928
Crossbridge.................. 490 4,013 4,504 420 4,083 1,700
Crossings at Belle........... 483 3,993 4,476 306 4,171 2,388
Crossings of Bellevue........ 2,588 15,348 17,936 1,109 16,826 8,325
Crossroads................... 2,180 12,763 14,943 912 14,031 6,853
Crows Nest................... 856 6,429 7,285 1,923 5,362 2,784
Cypress Landing.............. 915 5,791 6,706 750 5,957 4,165
Cypress Ridge................ 870 6,135 7,005 461 6,545 4,250
Debaliviere I................ 188 2,874 3,062 233 2,830 2,534
Dolphins Landing............. 1,740 6,395 8,135 887 7,248 4,431
Douglaston Villas and
Townhomes (Cameron Villas).. 1,721 10,077 11,798 245 11,554 --
Dunwoody Park................ 1,838 12,022 13,860 2,681 11,179 7,114
Eagle's Nest................. 1,053 6,260 7,313 461 6,851 4,685
Eaglewood(s)................. 945 20,634 21,579 8,101 13,478 --
Easton Village............... 565 8,416 8,981 1,890 7,091 2,789
Eden Crossing................ 1,111 7,227 8,338 1,547 6,791 5,603
Elm Creek.................... 5,421 37,130 42,550 10,348 32,202 23,508
Emerald Ridge................ 1,469 9,249 10,719 755 9,964 6,089
Essex Park................... 1,570 5,694 7,264 638 6,626 3,017
Evanston Place............... 2,101 26,220 28,321 5,697 22,624 18,425
Fairway View I............... 1,456 6,118 7,574 516 7,058 4,000
Fairway View II.............. 1,428 5,993 7,421 669 6,753 4,200
F-33
65
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
Fairways..................... Jul-94 Chandler, AZ 1986 352 1,830 10,403 15,999
Ferntree Apartments.......... Oct-98 Phoenix, AZ 1970 219 1,243 12,818 404
Fieldcrest................... Oct-98 Jacksonville, FL 1982 240 1,331 7,544 315
Fishermans Landing........... Sep-98 Temple Terrace, FL 1986 256 1,643 9,311 603
Fishermans Landing........... Dec-97 Bradenton, FL 1984 200 1,275 7,225 767
Fishermans Wharf............. Nov-96 Clute, TX 1981 360 830 9,969 1,478
Foothills.................... Oct-97 Tucson, AZ 1982 270 1,203 6,817 351
Forest River................. Oct-98 Gadsden, AL 1979 248 795 3,499 204
Foxchase..................... May-97 Alexandria, VA 1947 2,113 39,390 93,181 7,949
Foxfire...................... Oct-98 Doraville, GA 1971 266 1,691 8,568 264
Foxfire-Barcelona/Durham..... Oct-98 Durham, NC 1972 354 2,357 7,898 134
Foxtree...................... Oct-97 Tempe, AZ 1976 487 2,505 14,194 1,191
Frankford Place.............. Jul-94 Carrollton, TX 1982 274 1,125 6,382 844
Franklin Oaks................ May-98 Franklin, TN 1987 468 4,031 22,842 1,087
Freedom Place Club........... Oct-97 Jacksonville, FL 1988 352 2,289 12,970 867
Gateway Gardens.............. Oct-98 Cedar Rapids, IA 1969 328 1,857 7,522 178
Georgetown................... Oct-98 Columbus, OH 1962 150 1,004 3,827 175
Glen Hollow.................. Dec-99 Charlotte, NC 1972 336 2,133 10,174 --
Grand Flamingo (Morton
Towers)..................... Sep-97 Miami Beach, FL 1960 1,277 8,736 49,774 51,840
Greens of Naperville......... May-97 Naperville, IL 1986 400 3,756 21,284 624
Greentree.................... Dec-96 Carrollton, TX 1983 365 1,955 11,098 761
Hampton Hill................. Nov-96 Houston, TX 1984 332 1,574 8,408 4,824
Harbor Cove.................. May-98 San Antonio, TX 1980 256 1,446 8,193 353
Hastings Place............... Nov-96 Houston, TX 1984 176 734 3,382 1,830
Haverhill Commons............ May-98 W. Palm Beach, FL 1986 222 1,656 9,386 1,149
Hazeltree.................... Oct-97 Phoenix, AZ 1970 310 997 5,650 1,118
Heather Ridge................ Dec-96 Arlington, TX 1983 180 614 3,478 272
Heather Ridge................ May-98 Phoenix, AZ 1983 252 1,609 9,119 244
Heritage Pointe.............. Oct-98 Rome, GA 1976 149 510 1,985 71
Heritage Village............. Dec-97 Temple Terrace, FL 1967 252 713 10,678 2,441
Hidden Lake.................. May-98 Tampa, FL 1983 267 1,361 7,715 287
Hiddentree................... Oct-97 East Lansing, MI 1966 261 1,470 8,330 1,134
Highland Park................ Dec-96 Fort Worth, TX 1985 500 1,823 10,330 5,193
Hillmeade.................... Nov-94 Nashville, TN 1985 288 2,872 16,066 2,999
Hunt Club.................... Oct-98 Indianapolis, IN 1972 200 689 4,045 --
Hunters Creek................ May-99 Cincinnati, OH 1981 146 661 3,832 --
Hunters Glen................. Apr-98 Austell, GA 1983 72 301 1,704 112
Hunters Glen IV.............. Oct-98 Plainsboro, NJ 1976 264 2,488 9,738 149
Hunters Glen V............... Oct-98 Plainsboro, NJ 1977 304 2,997 10,912 279
Hunters Glen VI.............. Oct-98 Plainsboro, NJ 1977 328 3,120 11,376 300
Huntington Athletic Club..... Oct-98 Morrisville, NC 1986 212 1,830 8,535 52
Indian Creek Village......... Oct-98 Overland Park, KS 1972 273 1,959 3,033 159
Islandtree................... Oct-97 Savannah, GA 1985 216 1,267 7,181 645
Jefferson Place.............. Nov-94 Baton Rouge, LA 1985 234 2,696 15,115 1,493
La Colina.................... Oct-98 Denton, TX 1984 264 1,599 5,034 130
La Jolla de San Antonio...... May-98 San Antonio, TX 1975 300 2,071 11,733 378
La Jolla de Tucson........... May-98 Tucson, AZ 1978 223 1,342 7,603 441
Lake Castleton Arms.......... Oct-98 Indianapolis, IN 1997 1,265 5,188 33,504 147
Lake Crossing................ May-97 Austell, GA 1988 300 1,683 9,538 1,756
Lake Johnson Mews............ Oct-98 Raleigh, NC 1972 201 1,683 5,803 181
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
Fairways..................... 4,133 24,099 28,232 2,822 25,410 6,040
Ferntree Apartments.......... 1,242 13,223 14,465 478 13,987 5,191
Fieldcrest................... 1,331 7,859 9,190 411 8,779 5,705
Fishermans Landing........... 1,643 9,915 11,557 573 10,984 5,554
Fishermans Landing........... 1,276 7,990 9,267 691 8,575 4,687
Fishermans Wharf............. 933 11,344 12,277 4,640 7,637 3,407
Foothills.................... 1,203 7,168 8,371 668 7,703 3,734
Forest River................. 795 3,702 4,498 405 4,093 3,266
Foxchase..................... 16,028 124,492 140,520 8,527 131,993 63,015
Foxfire...................... 1,691 8,832 10,522 776 9,746 7,187
Foxfire-Barcelona/Durham..... 2,357 8,032 10,389 896 9,493 5,355
Foxtree...................... 2,505 15,385 17,890 1,542 16,348 8,613
Frankford Place.............. 1,125 7,226 8,351 1,778 6,573 3,779
Franklin Oaks................ 4,031 23,929 27,960 1,719 26,241 17,255
Freedom Place Club........... 2,289 13,838 16,126 1,271 14,856 6,753
Gateway Gardens.............. 1,857 7,700 9,557 847 8,709 6,295
Georgetown................... 1,004 4,002 5,006 183 4,823 3,646
Glen Hollow.................. 2,133 10,174 12,307 -- 12,307 7,690
Grand Flamingo (Morton
Towers)..................... 13,182 97,168 110,350 4,936 105,414 26,299
Greens of Naperville......... 1,995 23,669 25,664 6,138 19,526 12,181
Greentree.................... 1,955 11,859 13,814 1,199 12,615 7,169
Hampton Hill................. 2,227 12,580 14,806 4,569 10,238 3,991
Harbor Cove.................. 1,446 8,545 9,991 605 9,386 5,755
Hastings Place............... 799 5,147 5,946 1,333 4,613 2,558
Haverhill Commons............ 1,656 10,534 12,191 771 11,420 9,045
Hazeltree.................... 997 6,768 7,765 618 7,147 3,928
Heather Ridge................ 614 3,751 4,364 436 3,929 2,573
Heather Ridge................ 1,609 9,362 10,972 662 10,310 5,850
Heritage Pointe.............. 510 2,056 2,566 251 2,315 1,400
Heritage Village............. 1,022 12,810 13,832 4,008 9,824 5,180
Hidden Lake.................. 1,361 8,002 9,363 583 8,780 5,347
Hiddentree................... 1,470 9,464 10,934 939 9,995 4,227
Highland Park................ 2,098 15,249 17,347 1,459 15,888 9,030
Hillmeade.................... 2,872 19,065 21,937 3,903 18,034 10,458
Hunt Club.................... 689 4,045 4,734 502 4,232 3,637
Hunters Creek................ 661 3,832 4,493 160 4,333 2,684
Hunters Glen................. 301 1,816 2,117 126 1,991 1,063
Hunters Glen IV.............. 2,488 9,887 12,375 1,038 11,337 8,181
Hunters Glen V............... 2,997 11,191 14,188 1,189 12,999 8,813
Hunters Glen VI.............. 3,120 11,676 14,796 1,268 13,527 9,173
Huntington Athletic Club..... 1,830 8,587 10,418 745 9,673 3,386
Indian Creek Village......... 1,959 3,192 5,152 782 4,369 4,485
Islandtree................... 1,267 7,825 9,093 731 8,362 4,080
Jefferson Place.............. 2,697 16,607 19,304 3,545 15,759 8,998
La Colina.................... 1,599 5,165 6,763 121 6,643 5,064
La Jolla de San Antonio...... 2,071 12,111 14,182 841 13,341 8,645
La Jolla de Tucson........... 1,342 8,044 9,386 575 8,811 5,880
Lake Castleton Arms.......... 5,188 33,650 38,838 260 38,578 28,748
Lake Crossing................ 1,123 11,854 12,977 2,977 10,000 9,541
Lake Johnson Mews............ 1,683 5,983 7,666 735 6,931 4,350
F-34
66
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
Lakehaven I.................. May-97 Carol Stream, IL 1984 144 701 3,974 (796)
Lakehaven II................. May-97 Carol Stream, IL 1985 348 1,673 9,482 (119)
Lakeland East................ May-97 Jackson, MS 1984 144 426 3,435 12
Lakeside..................... Oct-98 Lisle, IL 1972 568 4,866 20,380 137
Lakeside Place............... Oct-98 Houston, TX 1976 734 6,186 22,681 112
Landmark..................... May-98 Albuquerque, NM 1965 101 780 4,455 326
Las Brisas................... Jul-94 Casa Grande, AZ 1985 132 573 3,260 305
Las Brisas................... Dec-95 San Antonio, TX 1983 176 1,100 5,454 501
Lebanon Station.............. Oct-98 Columbus, OH 1974 387 1,790 8,671 71
Legend Oaks (The Woodlands).. May-98 Tampa, FL 1983 416 2,304 13,058 507
Lexington.................... Jul-94 San Antonio, TX 1981 72 311 1,764 161
Lexington Green.............. Oct-98 Sarasota, FL 1974 267 1,726 6,204 376
Los Arboles.................. Sep-97 Chandler, AZ 1985 232 1,662 9,418 746
Madera Point................. May-98 Phoenix, AZ 1986 256 2,103 11,916 986
Magnolia Trace............... Oct-98 Baton Rouge, LA 1973 246 1,205 37 200
Maple Bay.................... Dec-99 Virginia Beach, VA 1971 414 2,598 14,719 1,223
Marbella Club................ Jul-99 Miami, FL 1988 504 2,815 16,193 --
Meadow Creek................. Apr-85 Boulder, CO 1972 332 1,387 10,027 1,517
Meadows...................... Dec-96 Austin, TX 1983 100 579 3,283 280
Mesa Ridge................... May-98 San Antonio, TX 1986 200 1,209 6,852 222
Michigan Meadows............. Dec-99 Indianapolis, IN 1965 253 582 3,539 --
Millhopper Village........... Oct-98 Gainesville, FL 1969 136 988 3,497 50
Mills........................ May-98 Houston, TX 1979 708 3,936 22,306 1,309
Montecito.................... Jul-94 Austin, TX 1985 268 1,268 7,194 1,933
Mountain Run................. Jul-99 Lakewood, CO 1970 96 240 7,391 135
Mountain View................ May-98 Colorado Springs, CO 1985 252 2,536 14,371 480
Newberry Park................ May-97 Chicago, IL 1985 84 181 1,027 1,989
Newport...................... Jul-94 Avondale, AZ 1986 204 800 4,554 713
North River Village.......... Oct-98 Atlanta, GA 1970 133 931 3,488 21
Northview Harbor............. Dec-99 Grand Rapids, MI 1982 360 2,016 10,696 --
Northwoods Apartments........ Oct-98 Pensacola, FL 1979 320 1,784 6,615 166
Nottingham Square............ Oct-98 Urbandale, IA 1974 442 1,772 8,010 48
Oak Falls.................... Nov-96 Spring, TX 1983 144 514 3,585 1,937
Oakbrook..................... Dec-99 Battle Creek, MI 1981 586 3,512 16,501 --
Oakwood Village on Lake
Nan......................... Oct-98 Winter Park, FL 1973 278 1,475 5,746 145
Ocean Oaks................... May-98 Port Orange, FL 1988 296 2,132 12,083 1,150
Old Farm..................... Dec-98 Lexington, KY 1985 330 1,893 10,725 430
Old Orchard.................. Dec-99 Grand Rapids, MI 1974 664 3,217 14,077 --
Old Salem.................... Oct-98 Charlottesville, VA 1967 364 2,809 12,713 871
Olmos Club................... Oct-97 San Antonio, TX 1983 134 322 1,825 186
Olympiad..................... Nov-94 Montgomery, AL 1986 176 1,046 5,958 736
Orchidtree................... Oct-97 Scottsdale, AZ 1971 278 2,314 13,112 617
Palencia..................... May-98 Tampa, FL 1985 420 2,804 15,887 2,269
Palm Lake (Village Square)... Oct-98 Tampa, FL 1972 150 832 1,143 190
Panorama Terrace............. Oct-98 Birmingham, AL 1975 227 1,401 4,672 115
Paradise Palms............... Jul-94 Phoenix, AZ 1970 130 647 3,684 540
Park at Cedar Lawn........... Nov-96 Galveston, TX 1985 192 769 5,073 2,659
Park at Deerbrook............ Oct-98 Humble, TX 1984 100 563 2,720 42
Park Colony.................. May-98 Norcross, GA 1984 352 3,257 18,454 409
Parktown Townhouses.......... Oct-98 Deer Park, TX 1968 309 2,031 6,674 93
Parliament Bend.............. Jul-94 San Antonio, TX 1980 232 765 4,342 769
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
Lakehaven I.................. 510 3,369 3,879 220 3,659 5,387
Lakehaven II................. 1,219 9,818 11,036 467 10,569 13,714
Lakeland East................ 426 3,447 3,873 227 3,646 3,450
Lakeside..................... 4,866 20,517 25,384 1,272 24,111 17,200
Lakeside Place............... 6,186 22,793 28,979 2,289 26,690 14,261
Landmark..................... 780 4,781 5,561 340 5,221 2,400
Las Brisas................... 573 3,565 4,138 796 3,342 --
Las Brisas................... 1,100 5,955 7,055 1,069 5,986 3,217
Lebanon Station.............. 1,790 8,741 10,531 374 10,157 6,927
Legend Oaks (The Woodlands).. 2,304 13,565 15,869 996 14,873 7,779
Lexington.................... 312 1,924 2,236 433 1,803 1,007
Lexington Green.............. 1,726 6,580 8,306 769 7,536 3,392
Los Arboles.................. 1,662 10,164 11,826 944 10,882 7,149
Madera Point................. 2,103 12,903 15,006 921 14,084 8,067
Magnolia Trace............... 1,205 237 1,442 541 901 --
Maple Bay.................... 2,781 15,758 18,539 -- 18,539 10,176
Marbella Club................ 2,815 16,193 19,009 402 18,606 13,896
Meadow Creek................. 1,435 11,495 12,931 4,581 8,350 7,485
Meadows...................... 579 3,563 4,143 347 3,796 2,008
Mesa Ridge................... 1,209 7,075 8,284 498 7,786 4,980
Michigan Meadows............. 582 3,539 4,121 -- 4,121 1,726
Millhopper Village........... 988 3,547 4,534 477 4,058 2,700
Mills........................ 3,936 23,615 27,551 1,739 25,812 14,230
Montecito.................... 1,268 9,127 10,395 2,066 8,329 4,749
Mountain Run................. 240 7,526 7,766 1,977 5,789 --
Mountain View................ 2,536 14,851 17,387 1,044 16,343 9,093
Newberry Park................ 431 2,767 3,197 980 2,217 8,455
Newport...................... 800 5,267 6,067 1,250 4,817 2,456
North River Village.......... 931 3,509 4,440 399 4,041 1,657
Northview Harbor............. 2,016 10,696 12,712 -- 12,712 8,019
Northwoods Apartments........ 1,784 6,781 8,565 730 7,835 5,000
Nottingham Square............ 1,772 8,058 9,830 982 8,848 7,412
Oak Falls.................... 574 5,462 6,036 1,369 4,667 2,632
Oakbrook..................... 3,512 16,501 20,013 -- 20,013 8,727
Oakwood Village on Lake
Nan......................... 1,475 5,891 7,365 774 6,591 3,884
Ocean Oaks................... 2,132 13,234 15,366 957 14,410 10,251
Old Farm..................... 1,893 11,156 13,048 451 12,597 9,824
Old Orchard.................. 3,217 14,077 17,293 -- 17,293 10,723
Old Salem.................... 2,809 13,584 16,394 1,296 15,098 10,187
Olmos Club................... 322 2,011 2,333 196 2,137 1,209
Olympiad..................... 1,046 6,694 7,740 1,438 6,301 4,993
Orchidtree................... 2,314 13,729 16,043 1,283 14,760 7,037
Palencia..................... 2,804 18,156 20,959 1,290 19,670 13,172
Palm Lake (Village Square)... 832 1,333 2,165 406 1,759 1,670
Panorama Terrace............. 1,401 4,787 6,188 694 5,494 3,731
Paradise Palms............... 647 4,224 4,871 961 3,910 2,205
Park at Cedar Lawn........... 843 7,658 8,501 1,650 6,851 5,150
Park at Deerbrook............ 563 2,762 3,326 90 3,236 1,510
Park Colony.................. 3,257 18,864 22,120 1,352 20,769 11,072
Parktown Townhouses.......... 2,031 6,767 8,798 722 8,076 3,017
Parliament Bend.............. 765 5,111 5,876 1,191 4,686 --
F-35
67
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
Patchen Place................ Oct-98 Lexington, KY 1974 202 883 3,794 136
Peachtree Park............... Jan-96 Atlanta, GA 1962/1995 295 4,681 12,957 2,359
Penn Square.................. Dec-94 Albuquerque, NM 1982 210 1,128 6,478 657
Peppermill Place............. Nov-96 Houston, TX 1983 224 406 3,957 2,269
Pickwick Place............... Oct-98 Indianapolis, IN 1973 336 963 7,607 63
Pine Creek................... Oct-97 Clio, MI 1978 233 852 4,830 510
Pine Shadows................. May-98 Phoenix, AZ 1983 272 2,093 11,858 333
Pinebrook.................... Oct-98 Jacksonville, FL 1974 208 856 4,854 340
Pines of Northwest
Crossing.................... Oct-98 Houston, TX 1973 412 1,566 5,974 233
Pines of Roanoke............. Oct-98 Roanoke, VA 1978 216 1,169 5,108 189
Pinetree..................... Oct-98 Charlotte, NC 1972 220 1,350 6,787 242
Place du Plantier............ Oct-98 Baton Rouge, LA 1972 268 1,702 6,252 127
Plantation Gardens........... Oct-98 Plantation, FL 1971 372 2,163 5,048 119
Pleasant Ridge............... Nov-94 Little Rock, AR 1982 200 1,660 9,464 972
Pleasant Valley Pointe....... Nov-94 Little Rock, AR 1985 112 907 5,069 910
Point West................... May-97 Lenexa, KS 1985 172 979 5,548 1,049
Pointe James................. Oct-98 Charleston, SC 1977 128 886 926 111
Polo Park.................... Oct-97 Midland, TX 1983 184 800 4,532 587
Prairie Hills................ Jul-94 Albuquerque, NM 1985 360 1,680 9,633 1,214
Preston Creek................ Oct-98 Dallas, TX 1979 228 1,625 6,650 83
Pride Gardens................ May-97 Flora, MS 1975 76 265 1,502 2,223
Prime Crest.................. May-98 Austin, TX 1973 148 724 4,104 486
Privado Park................. May-98 Phoenix, AZ 1984 352 2,636 14,937 382
Quail Hollow................. Oct-98 West Columbia, SC 1973 215 1,271 4,396 95
Quail Ridge.................. May-98 Tucson, AZ 1974 253 1,613 9,143 513
Quail Run.................... Oct-98 Zionsville, IN 1972 166 1,293 4,568 112
Quail Run.................... Oct-98 Columbia, SC 1970 332 1,885 8,270 75
Quail Woods.................. Oct-98 Gastonia, NC 1974 188 1,079 1,789 127
Quailtree.................... Oct-97 Phoenix, AZ 1978 184 659 3,735 412
Raintree..................... Oct-98 Pensacola, FL 1971 168 192 1,091 1,162
Raintree..................... Oct-98 Anderson, SC 1972 176 706 2,385 114
Ramblewood................... Dec-99 Grand Rapids, MI 1973 1,710 9,742 59,378 --
Rancho Sunset................ Mar-98 Escondido, CA 1985 344 3,103 16,755 1,436
Randol Crossing.............. Dec-96 Fort Worth, TX 1984 160 728 4,125 286
Regency Oaks................. Oct-98 Fern Park, FL 1965 343 1,666 (48) 50
Ridgecrest................... Dec-96 Denton, TX 1983 152 393 2,228 403
Rio Cancion.................. Oct-98 Tucson, AZ 1983 379 2,832 16,090 521
River Loft Apartments........ May-97 Philadelphia, PA 1910 197 1,103 12,223 79
River Reach.................. Oct-98 Jacksonville, FL 1972 298 2,271 8,575 78
Rivercrest................... Oct-97 Tucson, AZ 1984 310 751 4,253 280
Rivercrest................... Oct-98 Atlanta, GA 1970 312 2,929 5,416 31
Riverside.................... Jul-94 Littleton, CO 1987 248 1,553 8,828 1,447
Riverwalk.................... Dec-95 Little Rock, AR 1988 262 1,075 9,295 634
Rocky Creek.................. Oct-98 Augusta, GA 1979 120 620 2,555 32
Rocky Ridge.................. Oct-98 Birmingham, AL 1973 116 566 2,197 69
Rosemont Crossing (The
Greens)..................... Oct-98 San Antonio, TX 1974 217 668 3,094 607
Royal Crest.................. May-98 Austin, TX 1973 204 1,220 5,912 1,402
Royal Gardens................ Oct-98 Hemet, CA 1987 137 521 2,817 458
Royal Palms.................. Jul-94 Mesa, AZ 1985 152 832 4,730 345
Ryan's Pointe................ Oct-98 Houston, TX 1983 280 1,551 8,313 146
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
Patchen Place................ 883 3,930 4,813 620 4,192 3,000
Peachtree Park............... 4,683 15,314 19,997 2,557 17,440 9,111
Penn Square.................. 1,128 7,135 8,263 1,529 6,734 4,147
Peppermill Place............. 474 6,157 6,632 1,365 5,266 4,793
Pickwick Place............... 963 7,670 8,633 841 7,792 6,308
Pine Creek................... 852 5,339 6,192 406 5,786 2,292
Pine Shadows................. 2,093 12,191 14,283 866 13,418 7,500
Pinebrook.................... 857 5,193 6,050 256 5,793 3,594
Pines of Northwest
Crossing.................... 1,566 6,207 7,773 845 6,929 4,828
Pines of Roanoke............. 1,169 5,297 6,466 571 5,895 4,225
Pinetree..................... 1,350 7,029 8,379 524 7,855 4,996
Place du Plantier............ 1,702 6,379 8,081 849 7,232 3,800
Plantation Gardens........... 2,163 5,167 7,330 1,194 6,136 6,776
Pleasant Ridge............... 1,661 10,435 12,096 2,292 9,803 6,700
Pleasant Valley Pointe....... 907 5,979 6,886 1,327 5,559 3,267
Point West................... 1,044 6,532 7,576 1,973 5,603 5,505
Pointe James................. 886 1,038 1,923 215 1,708 1,270
Polo Park.................... 800 5,119 5,919 475 5,444 2,209
Prairie Hills................ 2,011 10,516 12,527 2,326 10,201 6,916
Preston Creek................ 1,625 6,733 8,358 588 7,770 4,500
Pride Gardens................ 35 3,955 3,990 1,411 2,578 866
Prime Crest.................. 724 4,591 5,315 340 4,975 2,340
Privado Park................. 2,636 15,319 17,955 1,075 16,880 8,980
Quail Hollow................. 1,271 4,491 5,762 437 5,324 2,850
Quail Ridge.................. 1,613 9,657 11,270 703 10,567 6,245
Quail Run.................... 1,293 4,680 5,972 464 5,508 4,427
Quail Run.................... 1,885 8,345 10,230 903 9,327 5,508
Quail Woods.................. 1,079 1,917 2,996 244 2,752 2,447
Quailtree.................... 659 4,147 4,806 388 4,418 2,141
Raintree..................... 356 2,090 2,445 -- 2,445 2,610
Raintree..................... 706 2,499 3,204 316 2,888 1,339
Ramblewood................... 9,742 59,378 69,120 -- 69,120 37,854
Rancho Sunset................ 3,103 18,191 21,294 1,137 20,157 13,661
Randol Crossing.............. 728 4,411 5,140 469 4,671 2,365
Regency Oaks................. 1,666 2 1,668 983 685 --
Ridgecrest................... 393 2,631 3,024 376 2,648 2,390
Rio Cancion.................. 2,832 16,611 19,443 1,294 18,149 12,851
River Loft Apartments........ 1,103 12,302 13,405 749 12,656 6,499
River Reach.................. 2,271 8,653 10,924 1,017 9,907 6,962
Rivercrest................... 751 4,533 5,284 418 4,866 2,727
Rivercrest................... 2,929 5,447 8,376 (4,818) 13,194 6,659
Riverside.................... 1,956 9,872 11,828 2,278 9,551 5,708
Riverwalk.................... 1,075 9,929 11,004 1,704 9,300 5,411
Rocky Creek.................. 620 2,586 3,206 277 2,930 2,053
Rocky Ridge.................. 566 2,266 2,832 326 2,506 1,450
Rosemont Crossing (The
Greens)..................... 668 3,701 4,369 404 3,965 2,840
Royal Crest.................. 1,220 7,314 8,534 529 8,005 3,320
Royal Gardens................ 521 3,275 3,796 118 3,678 2,396
Royal Palms.................. 832 5,076 5,907 1,135 4,773 3,358
Ryan's Pointe................ 1,551 8,459 10,010 315 9,695 4,317
F-36
68
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
Salem Arms................... Oct-98 Augusta, GA 1971 136 598 1,421 64
San Marina................... Mar-98 Phoenix, AZ 1986 399 1,926 10,954 765
Sand Castles................. Oct-97 League City, TX 1987 136 978 5,541 408
Sand Pebble.................. Oct-97 El Paso, TX 1983 208 861 4,879 436
Sandalwood................... May-98 Houston, TX 1979 352 1,462 8,287 408
Sandpiper Cove............... May-97 Boynton Beach, FL 1987 416 11,447 29,088 (53)
Sawgrass..................... Jul-97 Orlando, FL 1986 208 1,443 8,157 621
Seaside Point................ Nov-96 Galveston, TX 1985 102 295 2,994 2,851
Seasons...................... Oct-95 San Antonio, TX 1976 280 974 5,749 1,010
Shadetree.................... Oct-97 Tempe, AZ 1965 123 591 3,349 638
Shadow Brook................. Oct-98 Salt Lake, UT 1984 300 911 5,164 3,392
Shadow Creek................. May-98 Phoenix, AZ 1984 266 2,087 11,824 483
Shadow Lake.................. Oct-97 Greensboro, NC 1988 136 1,054 5,972 585
Shadowood.................... May-97 Chapel Hill, NC 1987 336 1,268 14,574 30
Shaker Square................ Oct-98 Whitehall, OH 1968 194 1,078 4,195 55
Shallow Creek................ May-98 San Antonio, TX 1982 208 1,234 6,995 263
Shirewood Townhomes.......... Oct-98 Shreveport, LA 1948 228 697 246 196
Shoreview.................... May-97 San Francisco, CA 1976 156 106 4,063 78
Signal Pointe (Squire One)... Oct-98 Winter Park, FL 1971 368 1,973 6,768 179
Signature Point.............. Nov-96 League City, TX 1994 304 2,160 13,627 3,344
Silktree..................... Oct-97 Phoenix, AZ 1979 86 421 2,383 222
Silver Ridge................. Oct-98 Maplewood, MN 1986 186 650 3,677 489
Silverado.................... Oct-98 El Paso, TX 1973 248 799 22 89
Ski Lodge.................... Oct-98 Montgomery, AL 1978 522 2,428 9,436 88
Snowden Village I............ Oct-98 Fredericksburg, VA 1970 132 905 2,337 478
Snowden Village II........... Oct-98 Fredericksburg, VA 1980 122 804 2,484 353
Snug Harbor.................. Dec-95 Las Vegas, NV 1990 64 750 2,966 392
Society Park................. Oct-98 Tampa, FL 1968 324 1,154 308 170
Society Park East............ Oct-98 Indian Harbor, FL 1963 200 899 1,256 291
Somerset Lakes............... May-99 Indianapolis, IN 1974 360 3,533 20,285 --
Somerset Village............. May-96 West Valley City, UT 1985 486 4,375 17,600 1,419
South Point.................. Oct-98 Durham, NC 1980 180 2,113 (520) 78
South Willow................. Jul-94 West Jordan, UT 1987 440 2,218 12,612 1,366
Southridge................... Dec-96 Greenville, TX 1984 160 643 3,645 421
Spectrum Pointe.............. Jul-94 Marietta, GA 1984 196 1,029 5,903 728
St. Charleston Village....... Oct-98 Las Vegas, NV 1980 312 1,909 7,697 93
Steeplechase................. May-99 Loveland, OH 1988 272 1,669 9,539 --
Stirling Court............... Nov-96 Houston, TX 1984 228 946 5,958 1,664
Stone Mountain West.......... Oct-98 Stone Mountain, GA 1971 142 1,143 4,019 28
Stone Pointe Village......... Dec-99 Fort Wayne, IN 1980 296 1,809 8,591 --
Stonebrook................... Jun-97 Sanford, FL 1991 244 1,583 9,046 1,279
Stoney Brook................. Nov-96 Houston, TX 1972 113 579 3,871 2,402
Stonybrook................... May-98 Tucson, AZ 1983 411 2,187 12,278 1,090
Strawbridge Square........... May-97 Alexandria, VA 1979 128 86 4,743 36
Summerchase.................. May-97 Van Buren, AR 1974 72 170 962 1,399
Summerwalk................... Oct-98 Winter Park, FL 1974 306 353 2,000 6,355
Summit Creek................. May-98 Austin, TX 1985 164 611 3,464 3,068
Sun Grove.................... Jul-94 Peoria, AZ 1986 86 659 3,749 230
Sun Katcher (Teal Pointe).... Dec-95 Jacksonville, FL 1972 360 578 3,440 6,191
Sun Lake..................... May-98 Lake Mary, FL 1986 600 4,556 25,819 980
Sun River Village............ Oct-98 Tempe, AZ 1981 334 2,518 9,063 189
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
Salem Arms................... 598 1,485 2,084 139 1,945 1,193
San Marina................... 1,926 11,719 13,645 924 12,721 7,828
Sand Castles................. 978 5,949 6,927 566 6,361 3,000
Sand Pebble.................. 861 5,315 6,176 519 5,657 2,620
Sandalwood................... 1,462 8,695 10,158 622 9,536 4,619
Sandpiper Cove............... 7,459 33,023 40,482 6,233 34,249 12,814
Sawgrass..................... 1,443 8,778 10,221 905 9,315 4,564
Seaside Point................ 334 5,807 6,140 1,029 5,112 2,027
Seasons...................... 982 6,751 7,733 1,200 6,534 4,405
Shadetree.................... 591 3,987 4,578 392 4,186 1,994
Shadow Brook................. 2,153 7,314 9,467 801 8,666 6,000
Shadow Creek................. 2,087 12,306 14,393 867 13,526 6,815
Shadow Lake.................. 1,054 6,557 7,611 599 7,012 3,132
Shadowood.................... 1,268 14,605 15,872 1,575 14,297 9,834
Shaker Square................ 1,078 4,250 5,328 (547) 5,874 3,320
Shallow Creek................ 1,234 7,257 8,492 514 7,978 4,500
Shirewood Townhomes.......... 697 442 1,139 501 637 --
Shoreview.................... 106 4,141 4,248 405 3,843 4,283
Signal Pointe (Squire One)... 1,973 6,946 8,920 803 8,117 3,998
Signature Point.............. 2,161 16,970 19,131 2,690 16,441 7,121
Silktree..................... 421 2,606 3,026 249 2,777 1,506
Silver Ridge................. 722 4,095 4,816 -- 4,816 4,453
Silverado.................... 799 111 910 412 497 --
Ski Lodge.................... 2,428 9,524 11,952 1,287 10,665 6,800
Snowden Village I............ 905 2,816 3,720 225 3,496 2,472
Snowden Village II........... 804 2,836 3,640 171 3,469 2,616
Snug Harbor.................. 751 3,357 4,108 629 3,479 1,976
Society Park................. 1,154 478 1,633 728 905 --
Society Park East............ 899 1,547 2,447 512 1,935 1,966
Somerset Lakes............... 3,533 20,285 23,819 844 22,975 14,182
Somerset Village............. 4,375 19,019 23,394 2,843 20,551 8,061
South Point.................. 2,113 (443) 1,670 (5,997) 7,668 4,600
South Willow................. 2,218 13,979 16,196 3,185 13,012 7,842
Southridge................... 643 4,066 4,709 498 4,211 2,029
Spectrum Pointe.............. 1,029 6,631 7,660 1,486 6,175 4,108
St. Charleston Village....... 1,909 7,790 9,699 723 8,977 6,060
Steeplechase................. 1,669 9,539 11,208 396 10,812 8,442
Stirling Court............... 1,010 7,558 8,568 3,227 5,341 3,455
Stone Mountain West.......... 1,143 4,047 5,191 375 4,816 3,000
Stone Pointe Village......... 1,809 8,591 10,400 -- 10,400 6,414
Stonebrook................... 2,070 9,838 11,908 1,055 10,853 7,695
Stoney Brook................. 704 6,148 6,852 992 5,860 705
Stonybrook................... 2,167 13,388 15,554 994 14,561 4,028
Strawbridge Square........... 86 4,779 4,865 246 4,618 3,267
Summerchase.................. 59 2,472 2,531 1,482 1,049 643
Summerwalk................... 1,895 6,812 8,707 605 8,102 4,902
Summit Creek................. 1,153 5,990 7,143 787 6,356 3,491
Sun Grove.................... 659 3,978 4,638 912 3,725 --
Sun Katcher (Teal Pointe).... 785 9,424 10,209 1,005 9,204 8,675
Sun Lake..................... 4,556 26,799 31,355 1,935 29,420 14,889
Sun River Village............ 2,518 9,252 11,771 870 10,900 6,126
F-37
69
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
Sunbury Downs................ Nov-96 Houston, TX 1982 240 565 4,380 2,521
Sunchase of Clearwater....... Nov-94 Clearwater, FL 1985 461 2,177 19,641 1,821
Sunchase of Orlando East..... Nov-94 Orlando, FL 1985 296 927 8,361 970
Sunchase of Orlando North.... Nov-94 Orlando, FL 1985 324 1,013 9,142 1,175
Sunchase Tampa............... Nov-94 Tampa, FL 1985 216 757 6,831 897
Sundown Village.............. Mar-98 Tucson, AZ 1984/1994 330 2,214 12,582 349
Sunlake...................... Sep-98 Brandon, FL 1986 88 189 1,086 3,777
Sunset Village............... Mar-98 Oceanside, CA 1987 114 1,128 6,392 262
Surrey Oaks.................. Oct-97 Bedford, TX 1983 152 628 3,560 377
Swiss Village................ Nov-96 Houston, TX 1972 360 1,011 11,310 391
Tall Timbers................. Oct-97 Houston, TX 1982 256 1,238 7,016 493
Tar River Estates............ Oct-98 Greenville, NC 1969 402 521 2,953 3,243
Tara Bridge.................. May-97 Jonesboro, GA 1988 220 1,253 7,100 1,213
Tates Creek Village.......... Oct-98 Lexington, KY 1970 204 1,145 1,788 126
Tatum Gardens Apartments..... May-98 Phoenix, AZ 1985 128 653 3,699 3,009
The Bluffs................... Dec-98 Lafayette, IN 1982 181 979 5,549 527
The Bradford................. Oct-97 Midland, TX 1982 264 705 3,996 (519)
The Breakers................. Oct-98 Daytona Beach, FL 1985 258 1,008 5,710 397
The Falls of Bells Ferry..... May-98 Marietta, GA 1987 720 6,568 37,218 701
The Hills.................... Oct-97 Austin, TX 1983 329 1,367 7,747 531
The Knolls................... Oct-98 Colorado Springs, CO 1972 262 2,406 3,210 100
The Landings................. Oct-98 Tampa, FL 1978 200 800 3,508 116
The Loft..................... Oct-98 Raleigh, NC 1974 184 1,575 14,576 86
The Palisaides............... Oct-98 Montgomery, AL 1968 432 1,214 5,714 76
The Park..................... Oct-98 Melbourne, FL 1983 120 719 4,072 193
The Pines.................... Oct-98 Palm Bay, FL 1984 216 601 3,406 354
The Sterling................. Oct-98 Philadelphia, PA 1962 536 6,427 85,108 98
The Stratford................ May-98 San Antonio, TX 1979 269 1,920 10,879 398
Thurber Manor................ Oct-98 Columbus, OH 1965 115 810 2,281 237
Timber Ridge................. Oct-98 Sharonville, OH 1972 248 1,427 5,315 120
Timberlake................... May-97 Arlington, TX 1971 224 753 6,327 50
Timbermill................... Oct-95 San Antonio, TX 1982 296 778 4,674 784
Timbertree................... Oct-97 Phoenix, AZ 1980 387 2,334 13,229 875
Tor.......................... Dec-99 Columbia, MD 1974 324 2,715 15,382 1,223
Torrey Pines Village......... Oct-98 Las Vegas, NV 1980 204 1,230 4,743 99
Township at Highlands........ Nov-96 Littleton, CO 1986 119 1,058 11,166 10,853
Trails of Ashford............ May-98 Houston, TX 1979 514 2,650 15,018 497
Twin Lake Towers............. Oct-98 Westmont, IL 1969 399 3,233 11,262 2,551
Victoria Station............. Jun-98 Victoria, TX 1997 224 425 3,946 2,848
Villa La Paz................. Jun-98 Sun City, CA 1990 96 573 3,096 260
Villa Ladera................. Jan-96 Albuquerque, NM 1985 280 1,765 10,013 1,667
Village Creek at Brookhill... Jul-94 Westminster, CO 1987 324 2,446 13,901 1,162
Village Crossing............. May-98 W. Palm Beach, FL 1986 289 1,618 9,167 1,130
Village Gardens.............. Oct-98 Fort Collins, CO 1973 141 1,080 3,549 39
Village Green................ Oct-98 Montgomery, AL 1972 337 1,681 5,659 79
Village of Pennbrook......... Oct-98 Levitown, PA 1970 722 5,533 31,345 4,031
Vista Ventana................ May-98 Phoenix, AZ 1982 275 1,908 10,810 440
Walnut Springs............... Dec-96 San Antonio, TX 1983 224 998 5,657 347
Waterford.................... Nov-96 Houston, TX 1984 312 533 5,692 768
Waterways Village............ Jun-97 Aventura, FL 1991 180 4,504 11,702 458
Weatherly.................... Oct-98 Stone Mountain, GA 1984 274 1,275 6,887 541
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
Sunbury Downs................ 633 6,834 7,466 1,348 6,118 2,370
Sunchase of Clearwater....... 2,177 21,462 23,639 4,625 19,014 16,566
Sunchase of Orlando East..... 927 9,331 10,258 1,994 8,264 8,694
Sunchase of Orlando North.... 1,013 10,317 11,330 2,189 9,141 11,660
Sunchase Tampa............... 757 7,727 8,485 1,728 6,757 6,969
Sundown Village.............. 2,214 12,931 15,145 970 14,175 8,373
Sunlake...................... 632 4,419 5,052 776 4,276 2,766
Sunset Village............... 1,128 6,654 7,782 412 7,370 5,498
Surrey Oaks.................. 628 3,937 4,565 314 4,251 2,230
Swiss Village................ 1,129 11,583 12,712 4,692 8,019 4,373
Tall Timbers................. 1,238 7,509 8,747 722 8,025 3,973
Tar River Estates............ 2,203 4,513 6,716 (1,085) 7,801 4,686
Tara Bridge.................. 1,009 8,557 9,566 2,104 7,462 6,642
Tates Creek Village.......... 1,145 1,914 3,058 696 2,362 2,481
Tatum Gardens Apartments..... 1,117 6,244 7,360 795 6,565 3,394
The Bluffs................... 979 6,076 7,055 255 6,800 3,848
The Bradford................. 519 3,663 4,182 333 3,850 1,588
The Breakers................. 1,008 6,107 7,115 318 6,797 3,747
The Falls of Bells Ferry..... 6,568 37,919 44,487 2,635 41,852 26,980
The Hills.................... 1,367 8,278 9,645 787 8,858 8,029
The Knolls................... 2,406 3,309 5,716 766 4,950 5,177
The Landings................. 800 3,624 4,424 362 4,062 2,213
The Loft..................... 1,575 14,662 16,237 497 15,741 4,338
The Palisaides............... 1,214 5,790 7,004 854 6,149 4,547
The Park..................... 720 4,264 4,984 222 4,761 2,518
The Pines.................... 603 3,758 4,361 168 4,192 2,209
The Sterling................. 6,427 85,207 91,633 5,071 86,562 22,736
The Stratford................ 1,920 11,278 13,198 835 12,362 5,805
Thurber Manor................ 810 2,518 3,328 158 3,170 2,303
Timber Ridge................. 1,427 5,435 6,862 337 6,525 5,206
Timberlake................... 753 6,377 7,130 160 6,970 2,042
Timbermill................... 778 5,457 6,236 1,027 5,209 3,456
Timbertree................... 2,334 14,104 16,438 1,314 15,124 7,637
Tor.......................... 2,898 16,422 19,320 -- 19,320 11,615
Torrey Pines Village......... 1,230 4,842 6,072 406 5,666 3,607
Township at Highlands........ 1,064 22,014 23,077 2,857 20,220 9,279
Trails of Ashford............ 2,650 15,514 18,165 1,089 17,076 8,840
Twin Lake Towers............. 3,233 13,813 17,046 1,411 15,635 10,886
Victoria Station............. 682 6,537 7,219 2,016 5,203 3,199
Villa La Paz................. 573 3,355 3,929 223 3,705 2,362
Villa Ladera................. 2,235 11,210 13,445 1,882 11,563 5,345
Village Creek at Brookhill... 2,446 15,063 17,509 3,341 14,168 --
Village Crossing............. 1,618 10,296 11,914 748 11,166 6,955
Village Gardens.............. 1,080 3,588 4,668 379 4,289 2,410
Village Green................ 1,681 5,739 7,419 705 6,715 4,744
Village of Pennbrook......... 6,401 34,508 40,909 -- 40,909 19,300
Vista Ventana................ 1,908 11,251 13,158 783 12,375 6,245
Walnut Springs............... 998 6,004 7,002 536 6,466 4,170
Waterford.................... 533 6,460 6,993 2,106 4,887 3,870
Waterways Village............ 4,504 12,160 16,664 1,372 15,292 7,575
Weatherly.................... 1,275 7,427 8,703 386 8,316 4,607
F-38
70
INITIAL COST COST
----------------------- CAPITALIZED
BUILDINGS SUBSEQUENT
DATE YEAR NUMBER AND TO
PROPERTY NAME ACQUIRED LOCATION BUILT OF UNITS LAND IMPROVEMENTS ACQUISITION
- ------------- -------- ---------------------- --------- -------- -------- ------------ -----------
West 135th Street............ Aug-98 New York, NY 1979 242 1,195 14,969 1,374
West Lake Arms Apartments.... May-97 Indianapolis, IN 1977 1,381 2,816 24,661 27
Westway Village.............. May-98 Houston, TX 1979 276 980 5,554 4,768
Westgate..................... Oct-98 Houston, TX 1971 313 1,985 9,158 124
Whispering Pines............. Oct-98 Madison, WI 1986 186 719 4,046 (191)
Wickertree................... Oct-97 Phoenix, AZ 1983 226 1,225 6,944 335
Wildflower................... Oct-97 Midland, TX 1982 264 705 3,996 1,003
Williams Cove................ Jul-94 Irving, TX 1984 260 1,227 6,972 631
Williamsburg................. May-98 Rolling Meadows, IL 1985 379 2,717 15,398 685
Williamsburg Apartments...... Oct-98 Indianapolis, IN 1974 460 2,333 9,803 129
Williamsburg on the Wabash... Dec-99 West Lafayette, IN 1967 473 3,225 17,569 --
Willow Park on Lake
Adelaide.................... Oct-98 Altamonte Springs, FL 1972 185 1,045 5,404 178
Willowick.................... Oct-98 Greenville, SC 1974 180 734 2,529 226
Windridge.................... May-98 San Antonio, TX 1983 286 1,480 8,386 306
Windsor at South Square...... Oct-98 Durham, NC 1972 230 1,415 4,852 103
Windsor Hills................ Oct-98 Blacksburg, VA 1970 300 1,859 6,857 137
Windsor Landing.............. Oct-97 Morrow, GA 1991 200 1,641 9,298 330
Windward at the Villages..... Oct-97 W. Palm Beach, FL 1988 196 1,595 9,037 683
Woodhill..................... Dec-96 Denton, TX 1985 352 1,554 8,805 983
Woodhollow................... Oct-97 Austin, TX 1974 108 658 3,728 299
Woodland Ridge............... Dec-96 Irving, TX 1984 130 595 3,373 267
Woodland Village I........... Oct-98 Columbia, SC 1970 308 768 4,351 3,491
Woodlands.................... Dec-99 Battle Creek, MI 1987 76 496 3,513 --
Woodlands/Odessa............. Jul-94 Odessa, TX 1982 240 676 3,835 888
Woodlands/Tyler.............. Jul-94 Tyler, TX 1984 256 1,029 5,845 733
Woods of Inverness........... Oct-98 Houston, TX 1983 272 1,774 6,802 121
Wyntre Brook Apartments...... May-97 West Chester, PA 1976 212 536 8,182 46
Yorktown Apartments.......... Oct-98 Lombard, IL 1973 368 3,712 10,447 657
Yorktree..................... Oct-97 Carolstream, IL 1972 293 1,968 11,151 911
-------- ---------- --------
$667,279 $3,432,295 $408,961
======== ========== ========
DECEMBER 31, 1999
---------------------------------------------------------------------------------
TOTAL COST
BUILDINGS NET OF
AND ACCUMULATED ACCUMULATED
PROPERTY NAME LAND IMPROVEMENTS TOTAL DEPRECIATION DEPRECIATION ENCUMBRANCES
- ------------- -------- ------------ ---------- ------------ ------------ ------------
West 135th Street............ 1,196 16,342 17,538 5,416 12,122 328
West Lake Arms Apartments.... 2,816 24,689 27,505 1,040 26,465 16,446
Westway Village.............. 2,457 8,844 11,301 1,124 10,178 4,798
Westgate..................... 1,985 9,283 11,268 426 10,842 5,987
Whispering Pines............. 693 3,881 4,574 -- 4,574 4,251
Wickertree................... 1,225 7,279 8,504 718 7,786 4,014
Wildflower................... 705 4,999 5,704 458 5,246 2,011
Williams Cove................ 1,227 7,603 8,830 1,774 7,056 3,708
Williamsburg................. 2,717 16,083 18,800 1,154 17,646 12,240
Williamsburg Apartments...... 2,333 9,932 12,265 1,394 10,871 7,400
Williamsburg on the Wabash... 3,225 17,569 20,794 -- 20,794 12,554
Willow Park on Lake
Adelaide.................... 1,045 5,582 6,627 553 6,073 4,000
Willowick.................... 734 2,755 3,489 320 3,169 1,178
Windridge.................... 1,480 8,692 10,172 614 9,557 6,115
Windsor at South Square...... 1,415 4,956 6,370 547 5,824 2,146
Windsor Hills................ 1,859 6,995 8,854 554 8,300 4,123
Windsor Landing.............. 1,642 9,627 11,269 901 10,367 5,278
Windward at the Villages..... 1,595 9,721 11,315 887 10,429 4,408
Woodhill..................... 1,554 9,789 11,343 819 10,524 5,627
Woodhollow................... 658 4,027 4,685 380 4,305 2,027
Woodland Ridge............... 595 3,639 4,234 402 3,832 2,006
Woodland Village I........... 1,913 6,697 8,610 709 7,901 4,950
Woodlands.................... 496 3,513 4,009 -- 4,009 2,154
Woodlands/Odessa............. 676 4,724 5,399 1,127 4,272 --
Woodlands/Tyler.............. 1,029 6,578 7,607 1,510 6,097 4,049
Woods of Inverness........... 1,774 6,923 8,697 629 8,068 5,052
Wyntre Brook Apartments...... 536 8,228 8,764 406 8,358 6,651
Yorktown Apartments.......... 3,712 11,105 14,817 900 13,917 12,187
Yorktree..................... 1,968 12,062 14,030 1,131 12,899 6,431
-------- ---------- ---------- -------- ---------- ----------
$661,502 $3,847,033 $4,508,535 $416,497 $4,092,038 $2,375,089
======== ========== ========== ======== ========== ==========
F-39
71
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
REAL ESTATE AND ACCUMULATED DEPRECIATION
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS)
1999 1998 1997
---------- ---------- ----------
REAL ESTATE
Balance at beginning of year........................... $2,802,598 $1,657,207 $ 865,222
Additions during the year:
Newly consolidated assets........................... 1,101,134
Acquisitions........................................ 462,891 1,116,643 786,571
Additions........................................... 177,245 80,368 26,808
Sales/transfers to held for sale.................... (35,333) (51,620) (21,394)
---------- ---------- ----------
Balance at end of year................................. $4,508,535 $2,802,598 $1,657,207
========== ========== ==========
ACCUMULATED DEPRECIATION
Balance at beginning of year........................... $ 228,880 $ 153,285 $ 120,077
Additions during the year:
Depreciation........................................ 131,754 84,635 37,741
Newly consolidated assets........................... 59,627 -- --
Sales/transfers to held for sale.................... (3,765) (9,040) (4,533)
---------- ---------- ----------
Balance at end of year................................. $ 416,497 $ 228,880 $ 153,285
========== ========== ==========
F-40
72
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
2.1 -- Second Amended and Restated Agreement and Plan of Merger,
dated as of January 22, 1999, by and between Apartment
Investment and Management Company and Insignia Properties
Trust (Exhibit 2.2 to the Current Report on Form 8-K of
Insignia Properties Trust, dated February 11, 1999, is
incorporated herein by this reference)
2.2 -- Amended and Restated Agreement and Plan of Merger, dated
as of May 26, 1998, by and among Apartment Investment
Management Company, AIMCO Properties, L.P., Insignia
Financial Group, Inc., and Insignia/ESG Holdings, Inc.
(Exhibit 2.1 to AIMCO's Registration Statement on Form
S-4, filed August 5, 1998, is incorporated herein by this
reference)
3.1 -- Charter
3.2 -- Bylaws
4.1 -- Amended and Restated Declaration of Trust of IFT
Financing I (formerly Insignia Financing I), dated as of
November 1, 1996, among Insignia Financial Group, Inc. as
Sponsor, First Union National Bank of South Carolina as
Property Trustee, First Union Bank of Delaware, as
Delaware Trustee and Andrew I. Farkas, John K. Lines and
Ronald Uretta as Regular Trustees (Exhibit 4.2 to Form
S-3 of Insignia Financial Group, Inc. dated December 10,
1996, is incorporated herein by this reference)
4.2 -- Indenture for the 6.5% Convertible Subordinated
Debentures, dated as of November 1, 1996, between
Insignia Financial Group, Inc., as Issuer and First Union
National Bank of South Carolina, as Trustee (Exhibit 4.2
to Form S-3 of Insignia Financial Group, Inc., dated
December 10, 1996, is incorporated herein by this
reference)
4.3 -- First Supplemental Indenture, dated as of October 1,
1998, by and among Apartment Investment and Management
Company, Insignia Financial Group, Inc., and First Union
National Bank (formerly First Union National Bank of
South Carolina, as Trustee) (Exhibit 4.3 to AIMCO's
Annual Report on Form 10-K for the fiscal year 1998, is
incorporated herein by this reference)
10.1 -- Third Amended and Restated Agreement of Limited
Partnership of AIMCO Properties, L.P., dated as of July
29, 1994 as amended and restated as of October 1, 1998
(Exhibit 10.8 to AIMCO's Quarterly Report on Form 10-Q
for the quarterly period ending September 30, 1998, is
incorporated herein by this reference)
10.2 -- First Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of November 6, 1998 (Exhibit 10.9 to
AIMCO's Quarterly Report on Form 10-Q for the quarterly
period ending September 30, 1998, is incorporated herein
by this reference)
10.3 -- Second Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 30, 1998 (Exhibit 10.1 to
Amendment No. 1 to AIMCO's Current Report on Form 8-K/A,
filed February 11, 1999, is incorporated herein by this
reference)
10.4 -- Third Amendment to Third Amended and Restated Agreement
of Limited Partnership of AIMCO Properties, L.P., dated
as of February 18, 1999 (Exhibit 10.12 to AIMCO's Annual
Report on Form 10-K for the fiscal year 1998, is
incorporated herein by this reference)
73
EXHIBIT NO. DESCRIPTION
----------- -----------
10.5 -- Fourth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of March 25, 1999 (Exhibit 10.2 to AIMCO's
Quarterly Report on Form 10-Q for the quarterly period
ending March 31, 1999, is incorporated herein by this
reference)
10.6 -- Fifth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of March 26, 1999 (Exhibit 10.3 to AIMCO's
Quarterly Report on Form 10-Q for the quarterly period
ending March 31, 1999, is incorporated herein by this
reference)
10.7 -- Sixth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of March 26, 1999 (Exhibit 10.1 to AIMCO's
Quarterly Report on Form 10-Q for the quarterly period
ending June 30, 1999, is incorporated herein by this
reference)
10.8 -- Seventh Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of September 27, 1999 (Exhibit 10.1 to
AIMCO's Quarterly Report on Form 10-Q for the quarterly
period ending September 30, 1999, is incorporated herein
by this reference)
10.9 -- Eighth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 14, 1999
10.10 -- Ninth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 21, 1999
10.11 -- Tenth Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of December 21, 1999
10.12 -- Eleventh Amendment to the Third Amended and Restated
Agreement of Limited Partnership of AIMCO Properties,
L.P., dated as of January 13, 2000
10.13 -- Shareholders Agreement, dated October 1, 1998, by and
among Apartment Investment and Management Company, Andrew
L. Farkas, James A. Aston and Frank M. Garrison (Exhibit
10.4 to AIMCO's Schedule 13D filed on October 15, 1998,
is incorporated herein by this reference)
10.14 -- Common Stock Purchase Agreement made as of August 26,
1997, by and between Apartment Investment and Management
Company and ABKB/LaSalle Securities Limited Partnership
(Exhibit 99.1 to AIMCO's Current Report on Form 8-K,
dated August 26, 1997, is incorporated herein by this
reference)
10.15 -- Amended and Restated Assignment and Assumption Agreement,
dated as of December 7, 1998, by and among Insignia
Properties, L.P. and AIMCO Properties, L.P. (Exhibit 10.1
to the Current Report on Form 8-K of Insignia Properties
Trust, dated February 11, 1999, is incorporated herein by
this reference)
10.16 -- Amended and Restated Indemnification Agreement, dated as
of May 26, 1998, by and between Apartment Investment and
Management Company and Insignia/ESG Holdings, Inc.
(Exhibit 2.2 to AIMCO's Registration Statement on Form
S-4, filed August 5, 1998, is incorporated herein by this
reference)
10.17 -- Credit Agreement (Secured Revolving Credit Facility),
dated as of August 16, 1999, among AIMCO Properties,
L.P., Bank of America, BankBoston, N.A., and First Union
National Bank (Exhibit 10.1 to the Current Report on Form
8-K of Apartment Investment and Management Company, dated
as of August 16, 1999, is incorporated herein by this
reference)
74
EXHIBIT NO. DESCRIPTION
----------- -----------
10.18 -- Borrower Pledge Agreement, dated August 16, 1999 between
AIMCO Properties, L.P. and Bank of America (Exhibit 10.2
to the Current Report on Form 8-K of Apartment Investment
and Management Company, dated August 16, 1999 is
incorporated herein by this reference)
10.19 -- Form of Committed Loan Note, issued by AIMCO Properties,
L.P. to Bank of America, BankBoston, N.A., and First
Union National Bank (Exhibit 10.3 to the Current Report
on Form 8-K of Apartment Investment and Management
Company, dated August 16, 1999, is incorporated herein by
this reference)
10.20 -- Form of Swing Line Note, issued by AIMCO Properties, L.P.
to Bank of America, BankBoston, N.A., and First Union
National Bank (Exhibit 10.4 to the Current Report on Form
8-K of Apartment Investment and Management Company, dated
August 16, 1999, is incorporated herein by this
reference)
10.21 -- Form of Payment Guaranty, by Apartment Investment and
Management Company, AIMCO/NHP Holdings, Inc., NHP A&R
Services, Inc., and NHP Management Company (Exhibit 10.5
to the Current Report on Form 8-K of Apartment Investment
and Management Company, dated August 16, 1999, is
incorporated herein by this reference)
10.22 -- Employment Contract, executed on July 29, 1994, by and
between AIMCO Properties, L.P., and Peter Kompaniez
(Exhibit 10.44A to AIMCO's Annual Report on Form 10-K for
the fiscal year 1994, is incorporated herein by this
reference)*
10.23 -- Employment Contract executed on July 29, 1994 by and
between AIMCO Properties, L.P. and Terry Considine
(Exhibit 10.44C to AIMCO's Annual Report on Form 10-K for
the fiscal year 1994, is incorporated herein by this
reference)*
10.24 -- Employment Contract executed on July 29, 1994 by and
between AIMCO Properties, L.P. and Steven D. Ira (Exhibit
10.44D to AIMCO's Annual Report on Form 10-K for fiscal
year 1994, is incorporated herein by this reference)*
10.25 -- Apartment Investment and Management Company 1998
Incentive Compensation Plan (Annex B to AIMCO's Proxy
Statement for Annual Meeting of Stockholders to be held
on May 8, 1998, is incorporated herein by this
reference)*
10.26 -- Apartment Investment and Management Company 1997 Stock
Award and Incentive Plan (October 1999)*
10.27 -- Form of Restricted Stock Agreement (1997 Stock Award and
Incentive Plan) (Exhibit 10.11 to AIMCO's Quarterly
Report on Form 10-Q for the quarterly period ending
September 30, 1997, is incorporated herein by this
reference)*
10.28 -- Form of Incentive Stock Option Agreement (1997 Stock
Award and Incentive Plan) (Exhibit 10.42 to AIMCO's
Annual Report on Form 10-K for the fiscal year 1998, is
incorporated herein by this reference)*
10.29 -- Apartment Investment and Management Company Non-Qualified
Employee Stock Option Plan, adopted August 29, 1996
(Exhibit 10.8 to AIMCO's Quarterly Report on Form 10-Q
for the quarterly period ending September 30, 1996, is
incorporated herein by this reference)*
10.30 -- Amended and Restated Apartment Investment and Management
Company Non-Qualified Employee Stock Option Plan (Annex B
to AIMCO's Proxy Statement for the Annual Meeting of
Stockholders to be held on April 24, 1997, is
incorporated herein by this reference)*
75
EXHIBIT NO. DESCRIPTION
----------- -----------
10.31 -- The 1994 Stock Incentive Plan for Officers, Directors and
Key Employees of Ambassador Apartments, Inc., Ambassador
Apartments, L.P., and Subsidiaries (Exhibit 10.40 to
Ambassador Apartments, Inc. Annual Report on Form 10-K
for the fiscal year 1997, is incorporated herein by this
reference)*
10.32 -- Amendment to the 1994 Stock Incentive Plan for Officers,
Directors and Key Employees of Ambassador Apartments,
Inc., Ambassador Apartments, L.P. and Subsidiaries
(Exhibit 10.41 to Ambassador Apartments, Inc. Annual
Report on Form 10-K for the fiscal year 1997, is
incorporated herein by this reference)*
10.33 -- The 1996 Stock Incentive Plan for Officers, Directors and
Key Employees of Ambassador Apartments, Inc., Ambassador
Apartments, L.P., and Subsidiaries, as amended March 20,
1997 (Exhibit 10.42 to Ambassador Apartments, Inc. Annual
Report on Form 10-K for the fiscal year 1997, is
incorporated herein by this reference)*
10.34 -- Insignia 1992 Stock Incentive Plan, as amended through
March 28, 1994 and November 13, 1995 (Exhibit 10.1 to
Insignia Financial Group, Inc. Annual Report on Form 10-K
for the fiscal year 1997, is incorporated herein by this
reference)*
10.35 -- NHP Incorporated 1990 Stock Option Plan (Exhibit 10.9 to
NHP Incorporated Annual Report on Form 10-K for the
fiscal year 1995, is incorporated herein by this
reference)*
10.36 -- NHP Incorporated 1995 Incentive Stock Option Plan
(Exhibit 10.10 to NHP Incorporated Annual Report on Form
10-K for the fiscal year 1995, is incorporated herein by
this reference)*
10.37 -- Summary of Agreement for Sale of Stock to Executive
Officers (Exhibit 10.104 to AIMCO's Annual Report on Form
10-K for the fiscal year 1996, is incorporated herein by
this reference)*
21.1 -- List of Subsidiaries
23.1 -- Consent of Ernst & Young LLP
27.1 -- Financial Data Schedule
99.1 -- Agreement re: disclosure of long-term debt instruments
- ---------------
(1) Schedule and supplemental materials to the exhibits have been omitted but
will be provided to the Securities and Exchange Commission upon request.
* Management contract