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EXHIBIT 99.2
Independent Auditors' Report
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 Realty Investment Apartment Communities I (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 Realty Investment Apartment Communities I, as described in Note 1, for
the year ended December 31, 1997, in conformity with generally accepted
accounting principles.
/s/ BEERS & CUTLER PLLC
February 11, 1998, except for Note 1, as to
which the date is October 16, 1998
Washington, D.C.
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Realty Investment Apartment Communities I
Combined Historical Summary of
Gross Income and Direct Operating Expenses
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1997 1998
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(unaudited)
GROSS INCOME
Net rental income $ 7,772,039 $ 5,952,494
Service and other income 448,694 352,203
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Total gross income 8,220,733 6,304,697
DIRECT OPERATING EXPENSES
Furnished apartment expense 108,336 98,523
Marketing 182,522 131,151
Management fees 378,372 290,357
Administrative expenses 315,850 235,378
Utilities 563,775 434,210
Maintenance and repairs 1,175,061 735,631
Taxes and insurance 777,725 571,534
Personnel costs 1,236,847 972,249
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Total direct operating expenses 4,738,488 3,469,033
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Excess of gross income over direct operating expenses $ 3,482,245 $ 2,835,664
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See accompanying notes.
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Realty Investment Apartment Communities I
Notes to Combined Historical Summary of Gross Income
and Direct Operating Expenses
Year Ended December 31, 1997 and
Nine Months Ended September 30, 1998 (unaudited)
1. ORGANIZATION AND BASIS OF PRESENTATION
The Realty Investment Apartment Communities I (the "Communities") include seven
separate residential apartment communities located in Florida, California and
Georgia. The Communities, which are under common management and control, have
been summarized as follows:
COMMUNITY LOCATION NUMBER OF UNITS
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The Pines Apartments Palm Bay, FL 216
Pinebrook Apartments Jacksonville, FL 208
Fieldcrest Apartments Jacksonville, FL 240
The Breakers Apartments Daytona Beach, FL 208
Park Apartments Melbourne, FL 120
Royal Gardens Apartments Hemet, CA 137
Weatherly Apartments Stone Mountain, GA 224
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Total 1,353
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On October 16, 1998, the Communities were sold to AIMCO Properties, L.P., a
majority-owned subsidiary of Apartment Investment and 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, 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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Realty Investment Apartment Communities I
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 for occupied units is recorded as earned based on the amount
reflected in the lease.
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 material 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 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
Realty Investment Company, Inc., an affiliate of the Communities, receives
management fees relating to the Communities. The management fee ranges from 4.0%
to 5.0% of gross receipts, as defined in the management agreement.
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