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EXHIBIT 99.1
Report of Independent Auditors
Board of Directors
Apartment Investment and Management Company
We have audited the accompanying Combined Historical Summary of Gross Income and
Direct Operating Expenses of the Cirque Apartment Communities (the
"Communities"), as described in Note 1 for the year ended December 31, 1997.
This Combined Historical Summary is the responsibility of the Communities'
management. Our responsibility is to express an opinion on this Combined
Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Combined Historical Summary is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the Combined Historical Summary. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the Combined
Historical Summary. We believe that our audit provides a reasonable basis for
our opinion.
The Combined Historical Summary has been prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission for
inclusion in the Current Report on Form 8-K of AIMCO Properties, L.P., as
described in Note 1 and is not intended to be a complete presentation of the
income and expenses of the Communities.
In our opinion, the Combined Historical Summary referred to above presents
fairly, in all material respects, the gross income and direct operating expenses
of the Cirque Apartment Communities, as described in Note 1, for the year ended
December 31, 1997, in conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
June 26, 1998
Denver, Colorado
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Cirque Apartment Communities
Combined Historical Summary of
Gross Income and Direct Operating Expenses
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
1997 1998
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(unaudited)
GROSS INCOME
Rental income $ 8,563,239 $ 2,227,559
Other income 522,630 102,411
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Total gross income 9,085,869 2,329,970
DIRECT OPERATING EXPENSES
Repairs and maintenance 1,755,522 368,838
Utilities and other property operating 733,615 181,238
General and administrative 964,474 265,860
Real estate taxes 667,417 165,321
Management fees 421,697 107,970
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Total direct operating expenses 4,542,725 1,089,227
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Excess of gross income over direct operating expenses $ 4,543,144 $ 1,240,743
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See accompanying notes.
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Cirque Apartment Communities
Notes to Combined Historical Summary of Gross Income
and Direct Operating Expenses
Year Ended December 31, 1997 and
Three Months Ended March 31, 1998 (unaudited)
1. ORGANIZATION AND BASIS OF PRESENTATION
The Cirque Apartment Communities (the "Communities") include five separate
residential apartment communities located in Phoenix and Tucson, Arizona. The
Communities, which are under common management and control, have been summarized
as follows:
COMMUNITY LOCATION NUMBER OF UNITS
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San Marina Phoenix 399
Sundown Tucson 330
Rio Cancion Tucson 379
Casa Anita Phoenix 224
Cobble Creek Tucson 301
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Total 1,633
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On March 31, 1998, the Communities were sold to Apartment Investment Management
Company, a publicly traded real estate investment trust.
The accompanying Combined Historical Summary has been prepared for the purpose
of complying with the rules and regulations of the Securities and Exchange
Commission for inclusion in the Current Report on Form 8-K of AIMCO Properties,
L.P. The Combined Historical Summary is not intended to be a complete
presentation of income and expenses of the Communities for the year ended
December 31, 1997, and the three months ended March 31, 1998, as certain costs
such as depreciation, amortization, interest, and other debt service costs have
been excluded. These costs are not considered to be direct operating expenses.
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CIRQUE APARTMENT COMMUNITIES
Notes to Combined Historical Summary of Gross Income
and Direct Operating Expenses (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of the Combined Historical Summary in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts included in the Combined Historical
Summary and accompanying notes thereto. Actual results could differ from those
estimates.
REVENUE RECOGNITION
Rental income attributable to residential leases is recorded when due from
residents. Leases are for periods of up to one year, with rental payments due
monthly.
INTERIM UNAUDITED FINANCIAL INFORMATION
The accompanying interim unaudited Combined Historical Summary has been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission
and was prepared on the same basis as the Combined Historical Summary for the
year ended December 31, 1997. In the opinion of management of the Communities,
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of the information for this interim period have been made.
The excess of combined gross income over direct operating expenses for such
interim period is not necessarily indicative of the excess of gross income over
direct operating expenses for the full year.
3. TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES
Cirque Property Management ("Cirque"), an affiliate, receives management fees
relating to the Communities. The management fee ranges from 3.5% to 4.0% of
gross annual cash receipts. In addition, Cirque receives an asset management fee
of 1% of gross annual cash receipts.
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