UNITED STATES SECURITIES AND EXCHANGE COMMISSION

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 OF THE

SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

[ ] 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.)

TOWER TWO, SUITE 2-1000,

DENVER, CO 80222-7900

(Address of principal executive offices) (Zip Code)

Registrant's Telephone Number, Including Area Code: (303) 757-8101

Securities Registered Pursuant to Section 12(b) of the Act:

NAME OF EACH EXCHANGE

TITLE OF EACH CLASS ON WHICH REGISTERED

------------------- ---------------------

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.

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.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

TABLE OF CONTENTS

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

ITEM PAGE

---- ----

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.........................................................

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.

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

------

TOTAL PROCEEDS 1999................................................... $304.6

======

(1) For three years from the date of original issuance, the Class K Preferred

Stock dividend will be in an amount per share equal to the greater of (i)

$2.00 per year (equivalent to 8% of the liquidation preference), or (ii) the

cash dividends payable on the number of shares of 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.

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.

- 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.

- 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

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

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.

ITEM 2. PROPERTIES.

The Company's properties are located in 48 states, Puerto Rico and the District of Columbia. The properties are managed by four Division Vice-Presidents controlling 31 regional operating centers. The following table sets forth information for the regional operating centers as of December 31, 1999:

NUMBER OF NUMBER OF

REGIONAL OPERATING CENTER DIVISION PROPERTIES UNITS

------------------------- -------- ---------- ---------

Chicago, IL.......................................... Far West 57 10,761

Denver, CO........................................... Far West 84 14,279

Kansas City, MO...................................... Far West 72 11,094

Los Angeles, CA...................................... Far West 53 9,505

Oakland, CA.......................................... Far West 69 8,013

Phoenix, AZ.......................................... Far West 52 13,008

----- -------

387 66,660

----- -------

Allentown, PA........................................ East 116 9,693

Columbia, SC......................................... East 73 13,767

Greenville, SC....................................... East 86 12,016

Philadelphia, PA..................................... East 62 19,512

Rockville, MD........................................ East 62 16,881

Tarrytown, NY........................................ East 67 9,413

----- -------

466 81,282

----- -------

Atlanta, GA.......................................... Southeast 56 11,066

Boca Raton, FL....................................... Southeast 25 6,083

Miami, FL............................................ Southeast 32 7,400

Mobile, AL........................................... Southeast 60 9,893

Nashville, TN........................................ Southeast 58 10,720

Orlando, FL.......................................... Southeast 48 10,444

Tampa, FL............................................ Southeast 56 12,921

----- -------

335 68,527

----- -------

Austin, TX........................................... West 54 10,202

Columbus, OH......................................... West 62 12,426

Dallas I, TX......................................... West 58 10,989

Dallas II, TX........................................ West 68 13,281

Houston I, TX........................................ West 47 10,290

Houston II, TX....................................... West 48 12,062

Indianapolis, IN..................................... West 51 13,741

----- -------

388 82,991

----- -------

Portfolio:

Senior Living Sub ROC 1.............................. Oxford 8 1,637

Affordable Midwest................................... Oxford 42 5,409

Conventional Mideast................................. Oxford 32 8,289

Conventional Midwest................................. Oxford 45 10,725

Conventional South................................... Oxford 38 10,337

----- -------

165 36,397

----- -------

Other................................................ 201 27,605

----- -------

1,942 363,462

===== =======

At December 31, 1999, the Company owned or controlled 373 properties containing 106,148 units. These owned or controlled properties contain, on average, 285 apartment units, with the largest property containing 2,113 apartment units. These properties offer residents a range of amenities, including swimming pools,

clubhouses, spas, fitness centers, tennis courts and saunas. Many of the apartment units offer design and appliance features such as vaulted ceilings, fireplaces, washer and dryer hook-ups, cable television, balconies and patios. In addition, at December 31, 1999, the Company held an equity interest in 751 properties containing 133,113 units, and managed 818 other properties containing 124,201 units. The Company's total portfolio of 1,942 properties contain, on average, 187 apartment units, with the largest property containing 2,907 apartment units.

Substantially all of the properties owned or controlled by the Company are encumbered by mortgage indebtedness or serve as collateral for the Company's indebtedness. At December 31, 1999, the Company had aggregate mortgage indebtedness totaling $2,375.1 million, which was secured by 361 properties with a combined net book value of $4,028.8 million, having an aggregate weighted average interest rate of 6.66%. As of December 31, 1999, approximately 9% of 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.

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.

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

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.

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

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

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

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.

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.

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.

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

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

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.

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

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.

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.

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.

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)

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)

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)*

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Pending Investigations of HUD Management Arrangements

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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)

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)

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)*

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

EXHIBIT 3.1