Apartment Investment and Management (AIV) 10-Q 2001 Q2 Quarterly report

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark One)
[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001
	OR
[   ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) 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 (State or other jurisdiction of incorporation or organization)	84-1259577 (I.R.S. Employer Identification No.)
2000 South Colorado Boulevard, Tower 2, Suite 2-1000 Denver, Colorado (Address of principal executive offices)	80222 (Zip Code)

(303) 757-8101
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address, and former fiscal year,
if changed since last report)

      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 [ ]

      The number of shares of Class A Common Stock outstanding as of July 31, 2001: 74,115,146

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
	ITEM 1. Financial Statements
		CONSOLIDATED BALANCE SHEETS
		CONSOLIDATED STATEMENTS OF INCOME
		CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
PART II. OTHER INFORMATION
	ITEM 1. Legal Proceedings
	ITEM 2. Changes in Securities and Use of Proceeds
	ITEM 3. Defaults Upon Senior Securities
	ITEM 4. Submission of Matters to a Vote of Security Holders
	ITEM 5. Other Information
	ITEM 6. Exhibits and Reports on Form 8-K
SIGNATURES
EX-3.1 Charter
EX-10.1 21st Amend. to 3rd Amend/Restated Agrmt.
EX-10.2 22nd Amend. to 3rd Amend/Restated Agrmt.
EX-10.3 23rd Amend. to 3rd Amend/Restated Agrmt.
EX-10.4 24th Amend. to 3rd Amend/Restated Agrmt.
EX-10.5 25th Amend. to 3rd Amend/Restated Agrmt.
EX-10.6 26th Amend. to 3rd Amend/Restated Agrmt.
EX-10.7 27th Amend. to 3rd Amend/Restated Agrmt.
Ex-99.1 Agreement Re: Disclosure of Long-Term Debt

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

FORM 10-Q

INDEX

			Page
	PART I. FINANCIAL INFORMATION
ITEM 1.		Financial Statements
		Consolidated Balance Sheets as of June 30, 2001 (unaudited) and December 31, 2000		3
		Consolidated Statements of Income for the Three and Six Months Ended June 30, 2001 and 2000 (unaudited)		4
		Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2001 and 2000 (unaudited)		5
		Notes to Consolidated Financial Statements (unaudited)		6
ITEM 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
ITEM 3.		Quantitative and Qualitative Disclosures about Market Risk		34
	PART II. OTHER INFORMATION
ITEM 1.		Legal Proceedings		35
ITEM 2.		Changes in Securities and Use of Proceeds		35
ITEM 3.		Defaults Upon Senior Securities		35
ITEM 4.		Submission of Matters to a Vote of Security Holders		35
ITEM 5.		Other Information		36
ITEM 6.		Exhibits and Reports on Form 8-K		37
Signatures				38

2

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)

				June 30, 2001			December 31, 2000
				(Unaudited)
			ASSETS
Real estate:
	Improved land			$	1,017,913		$	976,421
	Buildings and improvements				6,780,965			6,036,031
Total real estate					7,798,878			7,012,452
	Less accumulated depreciation				(1,330,210	)		(913,263	)
		Net real estate			6,468,668			6,099,189
Investments in unconsolidated real estate partnerships					646,948			676,188
Investments in unconsolidated subsidiaries					—			107,781
Notes receivable from unconsolidated real estate partnerships					245,908			140,860
Notes receivable from and advances to unconsolidated subsidiaries, net					—			190,453
Cash and cash equivalents					135,393			157,115
Restricted cash					139,917			126,914
Accounts receivable					135,145			2,873
Deferred financing costs, net					78,100			44,403
Goodwill, net					109,313			100,532
Other assets					122,288			53,566
			Total assets	$	8,081,680		$	7,699,874
			LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Secured notes payable				$	3,586,179		$	3,258,342
Secured tax-exempt bond financing					770,258			773,033
Term loan					—			74,040
Credit facility					233,000			254,700
			Total indebtedness		4,589,437			4,360,115
Accounts payable					13,627			88,818
Accrued and other liabilities					256,906			211,324
Deferred rental income					11,901			5,611
Deferred income taxes					33,897			—
Security deposits					32,258			28,332
			Total liabilities		4,938,026			4,694,200
Mandatorily redeemable convertible preferred securities					25,347			32,330
Minority interest in other entities					98,016			139,731
Minority interest in Operating Partnership					340,402			331,956
Stockholders’ equity:
	Preferred Stock, perpetual				379,020			315,770
	Preferred Stock, convertible				621,947			521,947
	Class A Common Stock, $.01 par value, 461,902,738 shares and 468,432,738 shares authorized, 74,017,374 and 71,337,217 shares issued and outstanding, at June 30, 2001 and December 31, 2000, respectively				740			713
	Additional paid-in capital				2,194,833			2,072,208
	Notes receivable on common stock purchases				(44,864	)		(44,302	)
	Distributions in excess of earnings				(471,787	)		(364,679	)
			Total stockholders’ equity		2,679,889			2,501,657
			Total liabilities and stockholders’ equity	$	8,081,680		$	7,699,874

See notes to consolidated financial statements.

3

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
(Unaudited)

		Three Months Ended June 30,						Six Months Ended June 30,
		2001			2000			2001			2000
RENTAL PROPERTY OPERATIONS:
Rental and other property revenues		$	323,770		$	258,064		$	646,004		$	482,384
Property operating expense			(126,209	)		(104,653	)		(251,895	)		(195,404	)
Owned property management expense			(3,008	)		(4,136	)		(6,218	)		(6,241	)
Income from property operations			194,553			149,275			387,891			280,739
SERVICE COMPANY BUSINESS:
Management fees and other income from affiliates			46,978			12,410			97,998			22,435
Management and other expenses			(30,441	)		(5,474	)		(62,490	)		(9,378	)
General and administrative expense allocation			(2,895	)		(2,474	)		(4,176	)		(3,527	)
Amortization of intangibles			(4,332	)		(1,494	)		(9,233	)		(3,069	)
Income from service company business			9,310			2,968			22,099			6,461
General and administrative expenses:
	Before allocation		(4,457	)		(4,414	)		(8,549	)		(8,677	)
	Allocation to consolidated service company business		2,895			2,474			4,176			3,527
General and administrative expenses, net			(1,562	)		(1,940	)		(4,373	)		(5,150	)
Depreciation on rental property			(95,213	)		(85,289	)		(200,604	)		(146,580	)
Interest expense			(82,116	)		(64,397	)		(169,332	)		(122,604	)
Interest and other income			17,375			15,508			32,038			28,511
Equity in earnings (losses) of unconsolidated real estate partnerships			(4,731	)		1,441			(9,207	)		3,886
Equity in earnings of unconsolidated subsidiaries			—			1,700			—			4,472
Minority interest in other entities			(5,256	)		(6,332	)		(10,881	)		(13,452	)
Income before gain on disposition of properties and minority interest in Operating Partnership			32,360			12,934			47,631			36,283
Gain on disposition of properties, net			1,490			226			1,556			5,331
Income before minority interest in Operating Partnership			33,850			13,160			49,187			41,614
Minority interest in AIMCO Operating Partnership, common			(1,225	)		280			(443	)		(709	)
Minority interest in AIMCO Operating Partnership, preferred			(2,190	)		(1,618	)		(4,291	)		(3,201	)
Net income			30,435			11,822			44,453			37,704
Net income attributable to preferred stockholders			22,408			14,600			41,103			29,115
Net income (loss) attributable to common stockholders		$	8,027		$	(2,778	)	$	3,350		$	8,589
Basic earnings (loss) per common share		$	0.11		$	(0.04	)	$	0.05		$	0.13
Diluted earnings (loss) per common share		$	0.11		$	(0.04	)	$	0.05		$	0.13
Dividends declared per common share		$	0.78		$	0.70		$	1.56		$	1.40

See notes to consolidated financial statements.

4

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)

				Six Months Ended June 30,
				2001			2000
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income			$	44,453		$	37,704
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization of intangibles			209,837			149,649
		Gain on disposition of properties			(1,556	)		(5,331	)
		Minority interest in AIMCO Operating Partnership			4,734			3,910
		Minority interest in other entities			10,881			13,452
		Equity in (earnings) losses of unconsolidated real estate partnerships			9,207			(3,886	)
		Equity in earnings of unconsolidated subsidiaries			—			(4,472	)
		Changes in operating assets and operating liabilities			(36,533	)		(40,115	)
			Total adjustments		196,570			113,207
			Net cash provided by operating activities		241,023			150,911
CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchase of and additions to real estate				(160,710	)		(96,559	)
	Proceeds from sales of property				80,775			13,743
	Proceeds from sales of investments				232,537			—
	Cash from newly consolidated properties				22,486			37,691
	Purchase of notes receivable, general and limited partnership interests and other assets				(52,923	)		(146,041	)
	Purchase/originations of notes receivable				(53,281	)		(53,975	)
	Proceeds from repayment of notes receivable				8,517			12,968
	Cash paid in connection with mergers/acquisitions and related costs				(36,783	)		(5,655	)
	Distributions received from investments in unconsolidated real estate partnerships				23,945			40,476
			Net cash provided by (used in) investing activities		64,563			(197,352	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from secured notes payable borrowings				237,063			131,245
	Principal repayments on secured notes payable				(211,453	)		(56,995	)
	Principal repayments on secured tax-exempt bond financing				(6,592	)		(4,325	)
	Principal repayments on secured short-term financing				(25,105	)		—
	Net borrowings (paydowns) on term loan and revolving credit facilities				(158,740	)		84,300
	Payment of loan costs				(10,981	)		(3,603	)
	Proceeds from issuance of common and preferred stock, exercise of options/warrants				84,494			46,661
	Repurchase of Class A Common Stock and Operating Partnership units				(29,898	)		(2,600	)
	Principal repayments received on notes due from officers on Class A Common Stock purchases				5,656			10,026
	Payment of common stock dividends				(111,956	)		(92,352	)
	Payment of distributions to minority interest				(60,191	)		(50,748	)
	Payment of preferred stock dividends				(39,605	)		(26,063	)
			Net cash provided by (used in) financing activities		(327,308	)		35,546
NET DECREASE IN CASH AND CASH EQUIVALENTS					(21,722	)		(10,895	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD					157,115			101,604
CASH AND CASH EQUIVALENTS AT END OF PERIOD				$	135,393		$	90,709

See notes to consolidated financial statements.

5

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001
(Unaudited)

NOTE 1 — Organization

      Apartment Investment and Management Company, a Maryland corporation incorporated on January 10, 1994 (“AIMCO” and, together with its consolidated subsidiaries and other controlled entities, the “Company”), owns a majority of the ownership interests in AIMCO Properties, L.P., (the “AIMCO Operating Partnership”) through its wholly owned subsidiaries, AIMCO-GP, Inc. and AIMCO-LP, Inc. The Company held an approximate 86% interest in the AIMCO Operating Partnership as of June 30, 2001. AIMCO-GP, Inc. is the sole general partner of the AIMCO Operating Partnership.

      As of June 30, 2001, AIMCO:

• owned or controlled (consolidated) and managed 156,572 units in 575 apartment properties;

• held an equity interest in (unconsolidated) and managed 99,594 units in 607 apartment properties; and

• managed 56,243 units in 440 apartment properties for third party owners.

      At June 30, 2001, AIMCO had 74,017,374 shares of Class A Common Stock (the “Common Stock”) outstanding and the AIMCO Operating Partnership had 12,188,550 Partnership Common OP Units (“Common OP Units”) and other units (excluding units held by the Company), for a combined total of 86,205,924 shares of Common Stock, Common OP Units and other units outstanding.

NOTE 2 — Basis of Presentation

      The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2001 are not necessarily indicative of the results that may be expected for the year ending December 31, 2001.

      The balance sheet at December 31, 2000 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

      For further information, refer to the statements and notes thereto included in the AIMCO annual report on Form 10-K for the year ended December 31, 2000. Certain 2000 financial statement amounts have been reclassified to conform to the 2001 presentation.

      The accompanying consolidated financial statements include the accounts of AIMCO, the AIMCO Operating Partnership, majority owned subsidiaries and controlled real estate limited partnerships. Interests held by limited partners in real estate partnerships controlled by the Company are reflected as minority interest in other entities. All significant intercompany balances and transactions have been eliminated in consolidation. Minority interest in limited partnerships represents the non-controlling partners’ share of the underlying net assets of the Company’s controlled limited partnerships. With regard to such partnerships, $10.9 million in losses in excess of the minority partners’ basis for the six months ended June 30, 2001 have been charged to operations. The assets of property owning limited partnerships and limited liability companies owned or controlled by AIMCO or the AIMCO Operating Partnership generally are not available to pay creditors of AIMCO or the AIMCO Operating Partnership.

6

NOTE 3 — Acquisitions

During the six months ended June 30, 2001 the Company purchased:

• for $111 million, limited partnership interests in 187 partnerships (which own 344 properties) where AIMCO serves as general partner;

• interests in five apartment communities with details below:

Date Acquired	Location	Number of Units		Purchase Price	Ownership Interest
March 2001	Naperville, IL		240	$19 million	100.00	%
April 2001	Farmington Hills, MI		981	$23 million	49.99	%
April 2001	Iowa City, Iowa		401	$10 million	100.00	%
June 2001	Venice, California		795	$58 million	42.77	%
June 2001	Jacksonville, Florida		256	$10 million	100.00	%

      On March 26, 2001, the Company completed a merger pursuant to an agreement entered into on November 29, 2000 between AIMCO and Oxford Tax Exempt Fund II Limited Partnership (“OTEF”), for a total purchase price of $270 million, comprised of $100 million in Class P Convertible Cumulative Preferred Stock (the “Class P Preferred Stock”), $106 million in Common Stock issued at $48.46 per share, $17 million in cash, and $47 million in assumed liabilities. OTEF merged with a subsidiary of the AIMCO Operating Partnership. In connection with the Company’s acquisition of interests in properties (the “Oxford properties”) from affiliates of Oxford Realty Financial Group, Inc., on September 20, 2000, the Company had acquired interests in OTEF’s managing general partner and OTEF’s associate general partner. After the merger, the Company’s interests in OTEF include a 1% general partner interest held by OTEF’s managing general partner and a 99% limited partner interest held by the AIMCO Operating Partnership. OTEF was a publicly traded master limited partnership that invested primarily in tax-exempt bonds issued to finance high quality apartment and senior living/health care communities, the majority of which were owned by affiliates of OTEF, including the Oxford properties. In the merger, each BAC was converted into the right to receive 0.299 shares of Common Stock and 0.547 shares of AIMCO’s Class P Preferred Stock. In addition, the BAC holders received a special distribution of $50 million, or $6.21 per BAC.

NOTE 4 — Notes Receivable

      The following table summarizes the Company’s notes receivable from unconsolidated real estate partnerships and subsidiaries at June 30, 2001 and 2000 (in thousands):

	Notes Receivable from				Notes Receivable from
	Unconsolidated Real				Unconsolidated
	Estate Partnerships				Subsidiaries
	2001		2000		2001		2000
Par value notes	$	115,999	$	48,943	$	—	$	91,477
Discounted notes		129,909		91,866		—		—
Total	$	245,908	$	140,809	$	—	$	91,477

      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 June 30, 2001 and June 30, 2000, the Company held $116.0 million and $48.9 million, respectively, of par value notes receivable from unconsolidated real estate partnerships, 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 the par value notes for the three and six months ended June 30, 2001 totaled $8 million and $14 million, respectively, and for the three and six months ended June 30, 2000, totaled $5 million and $9 million, respectively.

7

      As of June 30, 2001 and 2000, the Company held discounted notes, including accrued interest, with a carrying value of $129.9 million and $91.9 million, respectively. The total face value plus accrued interest of these notes were $225 million and $138 million in 2001 and 2000, respectively. Effective January 1, 2001, the Company now consolidates its previously unconsolidated subsidiaries (see Note 10). As a result, the notes receivable from unconsolidated subsidiaries have been eliminated and notes receivable from unconsolidated real estate partnerships have increased, and includes discounted notes which were held at the previously unconsolidated subsidiaries. In general, interest income from the discounted notes is not recognized as it is earned until such time as the timing and amounts of cash flows are probable and estimable.

      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 three and six months ended June 30, 2001, the Company recognized deferred interest income and discounts of approximately $3.6 million ($0.05 per basic and diluted share) and $5.0 million ($0.07 per basic and diluted share), respectively, and in the three and six months ended June 30, 2000, the Company recognized deferred interest income and discounts of approximately $7 million ($0.11 per basic and diluted share) and $13 million ($0.20 per basic and $0.19 per diluted share), respectively. Approximately 90% of the recognized interest income is collected in cash or recapitalized within 12 months from the date that such amounts were determined to be collectible, and the remainder is collected in the following six months.

NOTE 5 — Commitments and Contingencies

Legal

      The Company is a party to various legal actions resulting from its operating activities. These actions are routine litigation and administrative proceedings arising in the ordinary course of business, some of which are covered by liability insurance, and none of which are expected to have a material adverse effect on the consolidated financial condition or results of operations of the Company and its subsidiaries taken as a whole.

Limited Partnerships

      In connection with the Company’s acquisitions of interests in limited partnerships that own properties (including mergers with such limited partnerships) 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 any 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.

Investigations of HUD Management Arrangements

      In July 1999, The National Housing Partnership (“NHP”) received a grand jury subpoena requesting documents relating to NHP’s management of HUD-assisted or HUD-insured multi-family projects and NHP’s operation of a group purchasing program created by NHP, known as Buyers Access. The subpoena related to the same subject matter as subpoenas NHP received in October and December of 1997 from the HUD Inspector General. NHP has been informed that the grand jury investigation has been terminated.

      Separately, AIMCO entered into a draft Settlement Agreement and Release proposal with HUD, which on July 2, 2001 was finalized and resolves, without any finding of wrongdoing, all civil matters that were the subject of a HUD Inspector General investigation. A payment of $4.2 million was made by AIMCO on behalf of NHP in connection with the settlement. This payment had been fully reserved for by the Company and, therefore, had no effect on the financial condition or results of operations of the Company.

8

Environmental

      Various Federal, state and local laws subject property owners or operators to liability 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 claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal or remediation of hazardous substances at the 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, the Company could potentially be liable for environmental liabilities or costs associated with properties or properties it acquires or manages in the future.

9

NOTE 6 — Stockholders’ Equity

					Class A
	Preferred Stock				Common Stock
	Shares				Shares
(In Thousands)	Issued		Amount		Issued			Amount
BALANCE DECEMBER 31, 2000		30,174	$	837,717		71,337		$	713
Net proceeds from issuances of Preferred Stock		2,530		63,250		—			—
Repurchase of Common Stock		—		—		(185	)		(2	)
Conversion of mandatorily redeemable convertible preferred securities to Common Stock		—		—		1			—
Conversion of AIMCO Operating Partnership units to Common Stock		—		—		68			1
Purchase of stock by officers and awards of restricted stock		—		—		52			1
Repayment of notes receivable from officers		—		—		—			—
Class P Preferred Stock issued as consideration for the OTEF merger		4,000		100,000		—			—
Stock options and warrants exercised		—		—		65			—
Common Stock issued as consideration for the OTEF merger		—		—		2,185			22
Net income		—		—		—			—
Dividends paid — Common Stock		—		—		—			—
Dividends paid — Preferred Stock		—		—		—			—
Unrealized gain on investments		—		—		—			—
BALANCE MARCH 31, 2001		36,704	$	1,000,967		73,523		$	735
Net proceeds from issuances of Preferred Stock		—		—		—			—
Repurchase of Common Stock		—		—		(483	)		(5	)
Conversion of mandatorily redeemable convertible preferred securities to Common Stock		—		—		140			1
Conversion of AIMCO Operating Partnership units to Common Stock		—		—		181			2
Purchase of stock by officers and awards of restricted stock		—		—		252			3
Repayment of notes receivable from officers		—		—		—			—
Stock options and warrants exercised		—		—		404			4
Net income		—		—		—			—
Dividends paid — Common Stock		—		—		—			—
Dividends paid — Preferred Stock		—		—		—			—
Unrealized gain on investments		—		—		—			—
BALANCE JUNE 30, 2001		36,704	$	1,000,967		74,017		$	740

[Additional columns below]

[Continued from above table, first column(s) repeated]

				Notes						Accumulated
	Additional			Receivable			Distributions			Other
	Paid-in			From			In Excess			Comprehensive
(In Thousands)	Capital			Officers			Of Earnings			Income			Total
BALANCE DECEMBER 31, 2000	$	2,072,208		$	(44,302	)	$	(364,679	)	$	—		$	2,501,657
Net proceeds from issuances of Preferred Stock		(2,226	)		—			—			—			61,024
Repurchase of Common Stock		(7,650	)		—			—			—			(7,652	)
Conversion of mandatorily redeemable convertible preferred securities to Common Stock		60			—			—			—			60
Conversion of AIMCO Operating Partnership units to Common Stock		3,096			—			—			—			3,097
Purchase of stock by officers and awards of restricted stock		2,077			(2,190	)		—			—			(112	)
Repayment of notes receivable from officers		—			4,521			—			—			4,521
Class P Preferred Stock issued as consideration for the OTEF merger		—			—			—			—			100,000
Stock options and warrants exercised		2,056			—			—			—			2,056
Common Stock issued as consideration for the OTEF merger		106,283			—			—			—			106,305
Net income		—			—			14,018			—			14,018
Dividends paid — Common Stock		—			—			(55,138	)		—			(55,138	)
Dividends paid — Preferred Stock		—			—			(19,129	)		—			(19,129	)
Unrealized gain on investments		—			—			—			3,550			3,550
BALANCE MARCH 31, 2001	$	2,175,904		$	(41,971	)	$	(424,928	)	$	3,550		$	2,714,257
Net proceeds from issuances of Preferred Stock		(775	)		—			—			—			(775	)
Repurchase of Common Stock		(20,971	)		—			—			—			(20,976	)
Conversion of mandatorily redeemable convertible preferred securities to Common Stock		6,922			—			—			—			6,923
Conversion of AIMCO Operating Partnership units to Common Stock		7,434			—			—			—			7,436
Purchase of stock by officers and awards of restricted stock		11,161			(4,028	)		—			—			7,136
Repayment of notes receivable from officers		—			1,135			—			—			1,135
Stock options and warrants exercised		15,158			—			—			—			15,162
Net income		—			—			30,435			—			30,435
Dividends paid — Common Stock		—			—			(56,818	)		—			(56,818	)
Dividends paid — Preferred Stock		—			—			(20,476	)		—			(20,476	)
Unrealized gain on investments		—			—			—			(3,550	)		(3,550	)
BALANCE JUNE 30, 2001	$	2,194,833		$	(44,864	)	$	(471,787	)	$	—		$	2,679,889

Preferred Stock

      On March 26, 2001, AIMCO issued 4,000,000 shares of newly created Class P Preferred Stock, par value $.01 per share, in connection with the OTEF merger. The Class P Preferred Stock is valued at $100 million based on a $25 per share liquidation preference. Holders of Class P Preferred Stock are entitled to receive, when and as declared by the AIMCO board of directors, cash dividends in an amount per share equal to the greater of (i) $2.25 per year (equivalent to 9% of the liquidation preference) or (ii) the cash dividends payable on the number of shares of Common Stock into which a share of Class P Preferred Stock is convertible. Each share of Class P Preferred Stock is convertible at the option of the holder into 0.4464 shares of Common Stock, subject to certain anti-dilutive

10

adjustments. The initial conversion ratio was in excess of the fair market value of the Common Stock on the commitment date. The Class P Preferred Stock is senior to Common Stock as to dividends and liquidation. Upon any liquidation, dissolution or winding up of the Company, before payments or distributions by the Company are made to any holders of Common Stock, the holders of the Class P Preferred Stock are entitled to receive a liquidation preference of $25 per share, plus accumulated, accrued and unpaid dividends.

      On March 19, 2001, AIMCO completed the sale of 2,200,000 shares of its Class Q Cumulative Preferred Stock, $.01 par value per share (the “Class Q Preferred Stock”), in an underwritten public offering. AIMCO also gave the underwriters an option to purchase up to 330,000 additional shares of the Class Q Preferred Stock to cover over-allotments, which was exercised on March 29, 2001. The net proceeds of approximately $61 million were used to repay short-term indebtedness. Holders of Class Q Preferred Stock are entitled to receive, when and as declared by the AIMCO board of directors cash dividends in an amount per share equal to $2.525 per year (equivalent to 10.10% of the liquidation preference). On and after March 19, 2006, the Company may redeem the Class Q Preferred Stock for cash at a price per share equal to the $25 liquidation preference plus accumulated, accrued and unpaid dividends, if any, to the redemption date. The Class Q Preferred Stock is senior to Common Stock as to dividends and liquidation. Upon any liquidation, dissolution or winding up of AIMCO, before payments or distributions by AIMCO are made to any holders of Common Stock, the holders of the Class Q Preferred Stock are entitled to receive a liquidation preference of $25 per share, plus accumulated, accrued and unpaid dividends.

Common Stock

      On March 26, 2001, AIMCO issued approximately 2.2 million shares of Common Stock in connection with the OTEF merger. Pursuant to the agreement of merger, each OTEF BAC was converted into the right to receive 0.299 shares of Common Stock.

      During the three and six months ended June 30, 2001, the Company repurchased and retired approximately 483,000 shares and 668,000 shares, respectively, of Common Stock at average prices of $43.43 per share and $42.86 per share, respectively.

      In April and May 2001, the holders of trust convertible preferred securities (“TOPRS”) converted a total of $6.9 million of TOPRS into 139,563 shares of Common Stock. The convertible preferred securities were assumed by AIMCO in October 1998 in connection with its merger with Insignia Financial Group, Inc. The preferred securities have a conversion price of $49.61 per share which, based on a liquidation amount of $50 per security, results in the issuance of 1.0079 shares of Common Stock for each preferred security converted.

      During the six months ended June 30, 2001, approximately 250,000 shares of Common Stock were issued in exchange for Common OP Units.

11

NOTE 7 — 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. The following tables illustrate the calculation of basic and diluted earnings per share for the three and six months ended June 30, 2001 and 2000 (in thousands, except per share data):

			Three Months Ended
			June 30,
			2001			2000
NUMERATOR:
Net income			$	30,435		$	11,822
Preferred stock dividends				(22,408	)		(14,600	)
Numerator for basic and diluted earnings per share — income (loss) attributable to common stockholders			$	8,027		$	(2,778	)
DENOMINATOR:
Denominator for basic earnings per share — weighted average number of shares of common stock outstanding				72,716			66,261
Effect of dilutive securities:
Dilutive potential common shares, options and warrants				1,638			—
Denominator for dilutive earnings per share				74,354			66,261
Basic earnings (loss) per common share:
	Operations		$	0.09		$	(0.04	)
	Gain on disposition of properties			0.02			—
		Total	$	0.11		$	(0.04	)
Diluted earnings (loss) per common share:
	Operations		$	0.09		$	(0.04	)
	Gain on disposition of properties			0.02			—
		Total	$	0.11		$	(0.04	)

			Six Months Ended
			June 30,
			2001			2000
NUMERATOR:
Net income			$	44,453		$	37,704
Preferred stock dividends				(41,103	)		(29,115	)
Numerator for basic and diluted earnings per share — income attributable to common stockholders			$	3,350		$	8,589
DENOMINATOR:
Denominator for basic earnings per share — weighted average number of shares of common stock outstanding				71,667			66,167
Effect of dilutive securities:
Dilutive potential common shares, options and warrants				1,576			996
Denominator for dilutive earnings per share				73,243			67,163
Basic earnings per common share:
	Operations		$	0.03		$	0.05
	Gain on disposition of properties			0.02			0.08
		Total	$	0.05		$	0.13
Diluted earnings per common share:
	Operations		$	0.03		$	0.05
	Gain on disposition of properties			0.02			0.08
		Total	$	0.05		$	0.13

12

NOTE 8 — Industry Segments

      AIMCO has two reportable segments:   real estate and service business. 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 residents. 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 residents, the apartment communities have been aggregated into a single apartment communities segment, or real estate segment. There are different components of the multi-family business for which management considers disclosure to be useful. All real estate revenues are from external customers and no revenues are generated from transactions with other segments. There were no residents that contributed 10% or more of the Company’s total revenues during the three and six months ended June 30, 2001 and 2000. The Company also manages apartment properties for third parties and affiliates through its service company business segment. As disclosed, a significant portion of the revenues of the service business are from affiliates of the Company.

      The performance measure used by management of the Company for each segment is its contribution to free cash flow (“Free Cash Flow” (“FCF”)). Free Cash Flow is defined by the Company as net operating income minus the capital spending required to maintain the related assets. Free Cash Flow measures profitability prior to the cost of capital. Other performance measures also used by management of the Company include Funds From Operations (“FFO”), Adjusted Funds From Operations (“AFFO”) and Earnings Before Structural Depreciation (“EBSD”).

      The following tables present the contribution (separated between consolidated and unconsolidated activity) to the Company’s Free Cash Flow for the three and six months ended June 30, 2001 and 2000 from these segments, and a reconciliation of Free Cash Flow to Funds From Operations, Adjusted Funds From Operations, and net income (in thousands, except equivalent units (ownership effected and period weighted) and monthly rents):

13

FREE CASH FLOW FROM BUSINESS COMPONENTS
For the Three Months Ended June 30, 2001 and 2000
(in thousands, except share and unit data)

				2001											2000
				Consolidated			Unconsolidated		Total			%			Consolidated			Unconsolidated		Total			%
Real Estate
	Conventional
		Average monthly rent greater than $1,000 per unit (equivalent units of 7,567 and 4,633 for 2001 and 2000)		$	19,030		$	1,996	$	21,026			10.0	%	$	9,316		$	1,102		10,418			6.4	%
		Average monthly rent $900 to $1,000 per unit (equivalent units of 8,772 and 1,592 for 2001 and 2000)			18,682			467		19,149			9.1	%		3,248			283		3,531			2.1	%
		Average monthly rent $800 to $900 per unit (equivalent units of 12,940 and 8,252 for 2001 and 2000)			24,246			1,684		25,930			12.3	%		16,566			773		17,339			10.5	%
		Average monthly rent $700 to $800 per unit (equivalent units of 16,858 and 8,964 for 2001 and 2000)			22,796			2,035		24,831			11.8	%		13,852			1,516		15,368			9.3	%
		Average monthly rent $600 to $700 per unit (equivalent units of 37,174 and 27,991 for 2001 and 2000)			44,494			3,375		47,869			22.7	%		36,594			3,174		39,768			24.2	%
		Average monthly rent $500 to $600 per unit (equivalent units of 38,363 and 39,004 for 2001 and 2000)			32,717			3,076		35,793			17.0	%		37,679			4,903		42,582			25.8	%
		Average monthly rent less than $500 per unit (equivalent units of 16,049 and 21,866 for 2001 and 2000)			9,162			764		9,926			4.7	%		16,077			1,772		17,849			10.8	%
			Subtotal conventional real estate contribution to Free Cash Flow		171,127			13,397		184,524			87.6	%		133,332			13,523		146,855			89.1	%
	Affordable (equivalent units of 14,197 and 13,481 for 2001 and 2000)				3,503			6,146		9,649			4.6	%		3,966			10,578		14,544			8.8	%
	College housing (average rent of $539 and $660 per month for 2001 and 2000) (equivalent units of 3,301 and 2,567 for 2001 and 2000)				2,735			86		2,821			1.3	%		3,109			150		3,259			2.0	%
	Other real estate				4,494			148		4,642			2.2	%		1,320			648		1,968			1.2	%
	Minority interest				(20,140	)		—		(20,140	)		(9.6	)%		(24,319	)		—		(24,319	)		(14.7	)%
		Total real estate contribution to Free Cash Flow			161,719	(1)		19,777		181,496			86.1	%		117,408	(1)		24,899		142,307			86.4	%
Service Business
	Management contracts (property and asset management)
		Controlled properties			5,403			—		5,403			2.6	%		3,207			486		3,693			2.3	%
		Third party with terms in excess of one year			410			—		410			0.2	%		—			2,340		2,340			1.4	%
		Third party cancelable in 30 days			585			—		585			0.3	%		—			1,171		1,171			0.7	%
		Other service income			—			—		—			0.0	%		640			366		1,006			0.6	%
			Service business contribution to Free Cash Flow before fees		6,398			—		6,398			3.1	%		3,847			4,363		8,210			5.0	%
	Activity based fees				7,244			—		7,244			3.4	%		615			65		680			0.4	%
		Total service business contribution to Free Cash Flow			13,642	(2)		—		13,642			6.5	%		4,462	(2)		4,428		8,890			5.4	%
Interest income
	General partner loan interest				7,954			—		7,954			3.8	%		5,125			—		5,125			3.1	%
	Transactional income				6,423			—		6,423			3.0	%		7,206			—		7,206			4.4	%
	Money market and interest bearing accounts				2,998			—		2,998			1.4	%		2,674			—		2,674			1.6	%
	Other notes receivable				—			—		—			0.0	%		503			—		503			0.3	%
		Total interest income contribution to Free Cash Flow			17,375			—		17,375			8.2	%		15,508			—		15,508			9.4	%
General and Administrative Expense					(1,562	)		—		(1,562	)		(0.8	)%		(1,940	)		—		(1,940	)		(1.2	)%
Free Cash Flow (FCF)(4)					191,174			19,777		210,951			100	%		135,438			29,327		164,765			100	%

14

FREE CASH FLOW FROM BUSINESS COMPONENTS
For the Three Months Ended June 30, 2001 and 2000
(in thousands, except share and unit data)

				2001									2000
				Consolidated			Unconsolidated			Total			Consolidated			Unconsolidated			Total
Free Cash Flow (FCF)(4)					191,174			19,777			210,951			135,438			29,327			164,765
Interest expense:
		Secured debt
			Long-term, fixed rate		(74,636	)		(10,329	)		(84,965	)		(46,160	)		(8,863	)		(55,023	)
			Long-term, variable rate		(539	)		(2,447	)		(2,986	)		(285	)		(314	)		(599	)
			Short-term		(3,426	)		(35	)		(3,461	)		(10,633	)		(312	)		(10,945	)
		Lines of credit and other unsecured debt			(5,011	)		(1	)		(5,012	)		(7,334	)		(585	)		(7,919	)
		Interest expense on convertible preferred securities			(489	)		—			(489	)		(2,430	)		—			(2,430	)
		Interest capitalized			1,985			—			1,985			2,445			—			2,445
			Total interest expense before minority interest		(82,116	)		(12,812	)		(94,928	)		(64,397	)		(10,074	)		(74,471	)
		Minority interest share of interest expense			13,296			—			13,296			10,131			—			10,131
			Total interest expense after minority interest		(68,820	)		(12,812	)		(81,632	)		(54,266	)		(10,074	)		(64,340	)
Distributions on preferred OP units					(2,190	)		—			(2,190	)		(1,618	)		—			(1,618	)
Dividends on preferred securities owned by minority interest					(679	)		—			(679	)		(678	)		—			(678	)
Dividends on preferred stock					(22,408	)		—			(22,408	)		(14,600	)		—			(14,600	)
	Total dividends/distributions on preferred securities				(25,277	)		—			(25,277	)		(16,896	)		—			(16,896	)
Non-structural depreciation, net of capital replacements					(1,259	)		(89	)		(1,348	)		(3,912	)		(312	)		(4,224	)
Amortization of intangibles					(4,332	)		—			(4,332	)		(1,494	)		(511	)		(2,005	)
Gain on disposition of properties					1,490			—			1,490			226			—			226
Deferred income tax provision					—			—			—			—			(2,108	)		(2,108	)
		Earnings Before Structural Depreciation (EBSD)(4)			92,976			6,876			99,852			59,096			16,322			75,418
Structural depreciation, net of minority interest in other entities					(78,993	)		(11,607	)		(90,600	)		(65,295	)		(13,181	)		(78,476	)
		Net income (loss) attributable to common OP unitholders and stockholders			13,983			(4,731	)(3)		9,252			(6,199	)		3,141	(3)		(3,058	)
Gain on disposition of properties					(1,490	)		—			(1,490	)		(226	)		—			(226	)
Structural depreciation, net of minority interest in other entities					78,993			11,607			90,600			65,295			13,181			78,476
Non-structural depreciation, net of minority interest in other entities					13,952			2,254			16,206			11,460			2,420			13,880
Amortization of intangibles					4,332			—			4,332			1,494			511			2,005
Deferred income tax provision					—			—			—			—			2,108			2,108
		Funds from Operations (FFO)(4)			109,770			9,130			118,900			71,824			21,361			93,185
Capital replacement reserve					(12,694	)		(2,165	)		(14,859	)		(7,548	)		(2,110	)		(9,658	)
		Adjusted Funds From Operations (AFFO)(4)		$	97,076		$	6,965		$	104,041		$	64,276		$	19,251		$	83,527
										Earnings									Earnings (Loss)
				Earnings			Shares			Per Share			Earnings (Loss)			Shares			Per Share
EBSD
	Basic			$	99,852			84,872					$	75,418			72,580
	Diluted				116,813			103,288						87,536			89,425
Net Income (Loss)
	Basic				9,252			84,872		$	0.11			(3,058	)		72,580		$	(0.04	)
	Diluted				9,252			86,351		$	0.11			(3,058	)		72,580		$	(0.04	)
FFO
	Basic				118,900			84,872						93,185			72,580
	Diluted				135,861			103,288						105,303			89,425
AFFO
	Basic				104,041			84,872						83,527			72,580
	Diluted				121,002			103,288						95,645			89,425

15

FREE CASH FLOW FROM BUSINESS COMPONENTS
For the Six Months Ended June 30, 2001 and 2000
(in thousands, except share and unit data)

				2001											2000
				Consolidated			Unconsolidated		Total			%			Consolidated			Unconsolidated		Total			%
Real Estate
	Conventional
		Average monthly rent greater than $1,000 per unit (equivalent units of 8,086 and 5,025 for 2001 and 2000)		$	39,520		$	4,098	$	43,618			10.4	%	$	19,175		$	2,632	$	21,807			6.8	%
		Average monthly rent $900 to $1,000 per unit (equivalent units of 7,976 and 1,723 for 2001 and 2000)			35,777			863		36,640			8.7	%		6,811			765		7,576			2.4	%
		Average monthly rent $800 to $900 per unit (equivalent units of 12,562 and 7,609 for 2001 and 2000)			47,447			2,945		50,392			12.0	%		29,552			2,621		32,173			10.1	%
		Average monthly rent $700 to $800 per unit (equivalent units of 16,309 and 9,112 for 2001 and 2000)			46,743			4,092		50,835			12.1	%		24,517			4,221		28,738			9.0	%
		Average monthly rent $600 to $700 per unit (equivalent units of 37,765 and 28,149 for 2001 and 2000)			90,527			7,736		98,263			23.5	%		64,622			8,199		72,821			22.9	%
		Average monthly rent $500 to $600 per unit (equivalent units of 37,191 and 39,920 for 2001 and 2000)			65,380			6,859		72,239			17.3	%		73,209			9,885		83,094			26.1	%
		Average monthly rent less than $500 per unit (equivalent units of 16,171 and 22,449 for 2001 and 2000)			19,635			1,137		20,772			5.1	%		30,819			3,771		34,590			10.9	%
			Subtotal conventional real estate contribution to Free Cash Flow		345,029			27,730		372,759			89.1	%		248,705			32,094		280,799			88.2	%
	Affordable (equivalent units of 14,445 and 13,266 for 2001 and 2000)				9,036			12,642		21,678			5.2	%		7,041			19,027		26,068			8.2	%
	College housing (average rent of $538 and $662 per month for 2001 and 2000) (equivalent units of 3,333 and 2,796 for 2001 and 2000)				5,685			259		5,944			1.4	%		6,549			490		7,039			2.2	%
	Other real estate				5,979			242		6,221			1.5	%		3,175			1,472		4,647			1.5	%
	Minority interest				(46,852	)		—		(46,852	)		(11.2	)%		(43,015	)		—		(43,015	)		(13.5	)%
		Total real estate contribution to Free Cash Flow			318,877	(1)		40,873		359,750			86.0	%		222,455	(1)		53,083		275,538			86.6	%
Service Business
	Management contracts (property and asset management) Controlled properties				12,588			—		12,588			3.0	%		6,623			2,349		8,972			2.8	%
		Third party with terms in excess of one year			606			—		606			0.1	%		—			4,525		4,525			1.4	%
		Third party cancelable in 30 days			910			—		910			0.2	%		—			1,428		1,428			0.5	%
		Other service income			2,514			—		2,514			0.6	%		1,173			1,508		2,681			0.8	%
			Service business contribution to Free Cash Flow before fees		16,618			—		16,618			3.9	%		7,796			9,810		17,606			5.5	%
	Activity based fees				14,714			—		14,714			3.5	%		1,734			65		1,799			0.6	%
		Total service business contribution to Free Cash Flow			31,332	(2)		—		31,332			7.4	%		9,530	(2)		9,875		19,405			6.1	%
Interest income
	General partner loan interest				14,288			—		14,288			3.4	%		8,940			—		8,940			2.8	%
	Transactional income				11,158			—		11,158			2.7	%		13,397			—		13,397			4.2	%
	Money market and interest bearing accounts				6,125			—		6,125			1.5	%		5,206			—		5,206			1.6	%
	Other notes receivable				467			—		467			0.1	%		968			—		968			0.3	%
		Total interest income contribution to Free Cash Flow			32,038			—		32,038			7.7	%		28,511			—		28,511			8.9	%
General and Administrative Expense					(4,373	)		—		(4,373	)		(1.1	)%		(5,150	)		—		(5,150	)		(1.6	)%
Free Cash Flow (FCF)(4)					377,874			40,873		418,747			100	%		255,346			62,958		318,304			100	%

16

FREE CASH FLOW FROM BUSINESS COMPONENTS
For the Six Months Ended June 30, 2001 and 2000
(in thousands, except share and unit data)

				2001									2000
				Consolidated			Unconsolidated			Total			Consolidated			Unconsolidated			Total
Free Cash Flow (FCF)(4)					377,874			40,873			418,747			255,346			62,958			318,304
Interest expense:
			Secured debt
			Long-term, fixed rate		(150,311	)		(20,199	)		(170,510	)		(87,128	)		(18,808	)		(105,936	)
			Long-term, variable rate		(1,261	)		(4,971	)		(6,232	)		(461	)		(745	)		(1,206	)
			Short-term		(5,614	)		(141	)		(5,755	)		(21,483	)		(1,123	)		(22,606	)
		Lines of credit and other unsecured debt			(14,749	)		(2	)		(14,751	)		(13,112	)		(833	)		(13,945	)
		Interest expense on convertible preferred securities			(1,014	)		—			(1,014	)		(4,859	)		—			(4,859	)
		Interest capitalized			3,617			—			3,617			4,439			1,165			5,604
			Total interest expense before minority interest		(169,332	)		(25,313	)		(194,645	)		(122,604	)		(20,344	)		(142,948	)
		Minority interest share of interest expense			27,482			—			27,482			18,071			—			18,071
			Total interest expense after minority interest		(141,850	)		(25,313	)		(167,163	)		(104,533	)		(20,344	)		(124,877	)
Distributions on preferred OP units					(4,291	)		—			(4,291	)		(3,201	)		—			(3,201	)
Dividends on preferred securities owned by minority interest					(1,357	)		—			(1,357	)		(1,356	)		—			(1,356	)
Dividends on preferred stock					(41,103	)		—			(41,103	)		(29,115	)		—			(29,115	)
	Total dividends/distributions on preferred securities				(46,751	)		—			(46,751	)		(33,672	)		—			(33,672	)
Non-structural depreciation, net of capital replacements					(5,095	)		(378	)		(5,473	)		(4,764	)		(1,262	)		(6,026	)
Amortization of intangibles					(9,233	)		—			(9,233	)		(3,068	)		(1,019	)		(4,087	)
Gain on disposition of properties					1,556			—			1,556			5,331			—			5,331
Deferred income tax provision					—			—			—			—			(2,960	)		(2,960	)
		Earnings Before Structural Depreciation (EBSD)(4)			176,501			15,182			191,683			114,640			37,373			152,013
Structural depreciation, net of minority interest in other entities					(163,501	)		(24,389	)		(187,890	)		(113,700	)		(29,015	)		(142,715	)
		Net income (loss) attributable to common OP unitholders and stockholders			13,000			(9,207	)(3)		3,793			940			8,358	(3)		9,298
Gain on disposition of properties					(1,556	)		—			(1,556	)		(5,331	)		—			(5,331	)
Structural depreciation, net of minority interest in other entities					163,501			24,389			187,890			113,700			29,015			142,715
Non-structural depreciation, net of minority interest in other entities					27,255			4,478			31,733			20,033			5,548			25,581
Amortization of intangibles					9,233			—			9,233			3,068			1,019			4,087
Deferred income tax provision					—			—			—			—			2,960			2,960
		Funds from Operations (FFO)(4)			211,433			19,660			231,093			132,410			46,900			179,310
Capital replacement reserve					(22,162	)		(4,100	)		(26,262	)		(15,269	)		(4,288	)		(19,557	)
		Adjusted Funds From Operations (AFFO)(4)		$	189,271		$	15,560		$	204,831		$	117,141		$	42,612		$	159,753
										Earnings									Earnings
				Earnings			Shares			Per Share			Earnings			Shares			Per Share
EBSD
	Basic			$	191,683			83,311					$	152,013			72,516
	Diluted				223,229			100,932						176,128			88,287
Net Income
	Basic				3,793			83,311		$	0.05			9,298			72,516		$	0.13
	Diluted				3,793			84,051		$	0.05			9,298			73,392		$	0.13
FFO
	Basic				231,093			83,311						179,310			72,516
	Diluted				262,640			100,932						203,425			88,287
AFFO
	Basic				204,831			83,311						159,753			72,516
	Diluted				236,378			100,932						183,868			88,287

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(1) Reconciliation of total consolidated real estate contribution to Free Cash Flow to consolidated rental and other property revenues:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2001		2000		2001		2000
Consolidated real estate contribution to Free Cash Flow		$	161,719	$	117,408	$	318,877	$	222,455
Plus: minority interest			20,140		24,319		46,852		43,015
Plus: capital replacement reserve			12,694		7,548		22,162		15,269
Plus: property operating expense			126,209		104,653		251,895		195,404
Plus: owned property management expense			3,008		4,136		6,218		6,241
	Rental and other property revenues	$	323,770	$	258,064	$	646,004	$	482,384

(2) Reconciliation of total service business contribution to Free Cash Flow to consolidated management fees and other income from affiliates:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2001		2000		2001		2000
Consolidated service business contribution to Free Cash Flow		$	13,642	$	4,462	$	31,332	$	9,530
Plus: management and other expenses			30,441		5,474		62,490		9,378
Plus: general and administrative expense allocation			2,895		2,474		4,176		3,527
	Management fees and other income from affiliates	$	46,978	$	12,410	$	97,998	$	22,435

(3) Reconciliation of unconsolidated net income attributable to common OP unitholders and stockholders to equity in earnings (losses) of unconsolidated real estate partnerships and equity in earnings of unconsolidated subsidiaries:

		Three Months Ended					Six Months Ended
		June 30,					June 30,
		2001			2000		2001			2000
Equity in earnings of unconsolidated subsidiaries		$	—		$	1,700	$	—		$	4,472
Equity in earnings (losses) of unconsolidated real estate partnerships			(4,731	)		1,441		(9,207	)		3,886
	Unconsolidated net income (loss) attributable to common OP unitholders and stockholders	$	(4,731	)	$	3,141	$	(9,207	)	$	8,358

(4) Free Cash Flow, Earnings Before Structural Depreciation, Funds From Operations, and Adjusted Funds From Operations are measurement standards used by the Company’s management. These should not be considered alternatives to net income or net cash flow from operating activities, as determined in accordance with GAAP, as an indication of the Company’s performance or as a measure of liquidity.

• “Free Cash Flow” is defined by the Company as net operating income minus the capital spending required to maintain the related assets. It measures profitability prior to the cost of capital.

• “Earnings Before Structural Depreciation” is defined by the Company as Net Income, determined in accordance with GAAP, plus “structural depreciation”, i.e., depreciation of buildings and land improvements whose useful lives exceed 20 years.

• “Funds From Operations” is defined by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”) as net income (loss), computed in accordance with generally accepted

18

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 (diluted) based on the NAREIT definition, as further adjusted for minority interest in the AIMCO Operating Partnership, amortization of intangibles for which no economic loss is anticipated or occurring, interest expense on mandatorily convertible preferred securities, the non-cash deferred portion of the income tax provision and less the payment of dividends on perpetual and non-dilutive convertible preferred stock. There can be no assurance that the Company’s basis for computing FFO is comparable with that of other real estate investment trusts.

•

“Adjusted Funds From Operations” (“AFFO”) is defined by the Company as FFO less a charge for capital replacements equal to at least $380 per apartment unit.

Reconciliation of FCF, EBSD, FFO and AFFO to Net Income:

	For the Three Months Ended June 30, 2001												For the Three Months Ended June 30, 2000
	FCF			EBSD			FFO			AFFO			FCF			EBSD			FFO			AFFO
Amount per Free Cash Flow schedule above	$	210,951		$	99,852		$	118,900		$	104,041		$	164,765		$	75,418		$	93,185		$	83,527
Total interest expense after minority interest		(81,632	)		—			—			—			(64,340	)		—			—			—
Dividends on preferred securities owned by minority interest		(680	)		—			—			—			(680	)		—			—			—
Distributions on preferred OP units		—			2,190			2,190			2,190			—			1,618			1,618			1,618
Dividends on preferred stock		—			22,408			22,408			22,408			—			14,600			14,600			14,600
Structural depreciation, net of minority interest		(90,600	)		(90,600	)		(90,600	)		(90,600	)		(78,476	)		(78,476	)		(78,476	)		(78,476	)
Non-structural depreciation, net of minority interest		(16,206	)		—			(16,206	)		(16,206	)		(13,880	)		—			(13,880	)		(13,880	)
Capital replacement reserve		14,859			—			—			14,859			9,658			—			—			9,658
Amortization of intangibles		(4,332	)		—			(4,332	)		(4,332	)		(2,005	)		—			(2,005	)		(2,005	)
Gain on disposition of properties		1,490			—			1,490			1,490			226			—			226			226
Deferred income tax provision		—			—			—			—			(2,108	)		—			(2,108	)		(2,108	)
Minority interest in Operating Partnership		(3,415	)		(3,415	)		(3,415	)		(3,415	)		(1,338	)		(1,338	)		(1,338	)		(1,338	)
Net Income	$	30,435		$	30,435		$	30,435		$	30,435		$	11,822		$	11,822		$	11,822		$	11,822
	For the Six Months Ended June 30, 2001												For the Six Months Ended June 30, 2000
	FCF			EBSD			FFO			AFFO			FCF			EBSD			FFO			AFFO
Amount per Free Cash Flow schedule above	$	418,747		$	191,683		$	231,093		$	204,831		$	318,304		$	152,013		$	179,310		$	159,753
Total interest expense after minority interest		(167,163	)		—			—			—			(124,877	)		—			—			—
Dividends on preferred securities owned by minority interest		(1,359	)		—			—			—			(1,358	)		—			—			—
Distributions on preferred OP units		—			4,291			4,291			4,291			—			3,201			3,201			3,201
Dividends on preferred stock		—			41,103			41,103			41,103			—			29,115			29,115			29,115
Structural depreciation, net of minority interest		(187,890	)		(187,890	)		(187,890	)		(187,890	)		(142,715	)		(142,715	)		(142,715	)		(142,715	)
Non-structural depreciation, net of minority interest		(31,733	)		—			(31,733	)		(31,733	)		(25,581	)		—			(25,581	)		(25,581	)
Capital replacement reserve		26,262			—			—			26,262			19,557			—			—			19,557
Amortization of intangibles		(9,233	)		—			(9,233	)		(9,233	)		(4,087	)		—			(4,087	)		(4,087	)
Gain on disposition of properties		1,556			—			1,556			1,556			5,331			—			5,331			5,331
Deferred income tax provision		—			—			—			—			(2,960	)		—			(2,960	)		(2,960	)
Minority interest in Operating Partnership		(4,734	)		(4,734	)		(4,734	)		(4,734	)		(3,910	)		(3,910	)		(3,910	)		(3,910	)
Net Income	$	44,453		$	44,453		$	44,453		$	44,453		$	37,704		$	37,704		$	37,704		$	37,704

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ASSETS:
		June 30, 2001		December 31, 2000
Total assets for reportable segments(1)		$	7,086,371	$	6,522,114
Corporate and other assets			995,309		1,177,760
	Total consolidated assets	$	8,081,680	$	7,699,874

(1) Assets associated with the service business are immaterial, and therefore included in total assets for reportable segments, and not separately disclosed.

NOTE 9 — Derivative Financial Instruments

      In June 1998, Statement of Financial Accounting Standards No. 133,Accounting for Derivative Instruments and Hedging Activities(“Statement 133”) was issued. In June 2000, Statement of Financial Accounting Standards No. 138,Accounting for Certain Derivative Instruments and Hedging Activities (“Statement 138”),an amendment of Statement 133 was issued. Statements 133 and 138 require that all derivative instruments be recorded on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction.

      The Company predominately uses long-term, fixed-rate and self-amortizing non-recourse debt in order to avoid, among other things, risk related to fluctuating interest rates. Where the Company does use variable-rate debt, occasionally the Company enters into short-term economic hedges, such as interest rate swap agreements and interest rate cap agreements, to reduce its exposure to interest rate fluctuations. The interest rate swap agreements are generally utilized by the Company to modify the Company’s exposure to interest rate risk by converting the variable-rate debt to a fixed rate. The interest rate cap agreements utilized by the Company effectively limit the Company’s exposure to interest rate risk by providing a ceiling on the underlying variable rate debt. Normally, the interest rate caps are embedded within the original debt contract and considered clearly and closely related to the debt contract and, therefore, are not measured as separate derivative instruments. Free standing interest rate exchange agreements were not material and were recorded on the balance sheet at their fair value and in current earnings in each period. The Company adopted Statements 133 and 138 on January 1, 2001. Due to the Company’s limited use of derivative instruments, the adoption of Statements 133 and 138 did not have a material effect on the Company’s financial statements.

NOTE 10 — Consolidation of Subsidiaries

      In prior years, in order to satisfy certain requirements of the Internal Revenue Code applicable to the Company’s status as a REIT, certain assets of the Company were held through unconsolidated subsidiaries in which the AIMCO Operating Partnership held non-voting preferred stock representing a 99% economic interest and certain officers and directors of the Company held all of the voting common stock, representing a 1% economic interest. As a result of the controlling ownership interest in the unconsolidated subsidiaries being held by others, the Company accounted for its interest in the unconsolidated subsidiaries using the equity method.

      The REIT Modernization Act, which became effective January 1, 2001, among other things, permits REITS to own taxable REIT subsidiaries. Therefore, effective January 1, 2001, the Company acquired the 1% controlling ownership interest in the unconsolidated subsidiaries. As a result, the Company now consolidates these subsidiaries.

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      The following table provides selected financial information assuming these subsidiaries were consolidated in the prior year (in thousands):

	Three Months Ended			Six Months Ended
Operating Data:	June 30, 2000			June 30, 2000
Income from property operations	$	149,275		$	280,740
Income from service company business		7,864			16,979
Interest and other income		15,508			29,824
Interest expense		(65,790	)		(125,031	)
Net income		11,822			37,704

Balance Sheet Data:	As of December 31, 2000
Real estate	$	6,370,288
Total assets		8,043,846
Total indebtedness		4,625,314
Total liabilities		5,015,416
Stockholders’ equity		2,501,657

NOTE 11 — Transactional Income

      For the three and six months ended June 30, 2001, the Company’s interest and other income included transactional income (gains on sale of bonds or accretion of discounted notes) of $6.4 and $11.2 million, respectively, net of allocated expenses of $1.2 and $5.0 million, respectively.

      The Company received net proceeds of approximately $232.5 million from the sale of certain of the tax-exempt mortgage bonds. The remaining tax-exempt mortgage bonds of $14.2 million have been classified with other assets and are recorded at their fair value. All gains and losses have been realized and were determined on the specific identification method and are reflected in net income.

NOTE 12 — Dilutive Securities

      In June 2001, AIMCO shareholders approved the sale by AIMCO’s Operating Partnership of an aggregate of 15,000 of its Class II, III, and IV High Performance Partnership Units (the “Class II Units”, “Class III Units” and “Class IV Units,” respectively, and, collectively the “High Performance Units”) to three limited liability companies comprised of a limited number of AIMCO employees for an aggregate offering price of $4.86 million. For further information on this, see Proposal 3 in AIMCO’s proxy statement for its 2001 annual meeting of stockholders.

      There is substantial uncertainty that the High Performance Units will have more than nominal value due to the required total return over the respective measurement periods. The Company has not met the required measurement benchmarks at June 30, 2001, and therefore, the Company has not recorded any value to the High Performance Units in the consolidated financial statements as of June 30, 2001, and such High Performance Units have had no dilutive effect on earnings per share.

21

      AIMCO has additional dilutive securities, which include options, warrants, convertible preferred securities and convertible debt securities. The following table represents the total amount of common shares that would be outstanding if all dilutive securities were converted or exercised (not all of which are included in the fully diluted share count) as of June 30, 2001:

Type of Security		As of June 30, 2001
Common Stock			74,017,374
Common OP Units and other units			12,188,550
Vested options and warrants			2,879,087
Convertible preferred stock			13,320,026
Convertible preferred OP units			3,083,062
Convertible debt securities			510,940
	Total		105,999,039

NOTE 13 — Recent Accounting Developments

      In June 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141,Business Combinations, and No. 142,Goodwill and Other Intangible Assets, effective for fiscal years beginning after December 15, 2001. Under the new rules, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements. Other intangible assets will continue to be amortized over their useful lives.

      The Company will apply the new rules on accounting for goodwill and other intangible assets beginning in the first quarter of 2002. Application of the non-amortization provisions of the Statement is expected to result in an increase in annual net income of $6.7 million ($.09 per share) per year. During 2002, the Company will perform the first of the required impairment tests of goodwill and indefinite lived intangible assets as of January 1, 2002, and believes that there will be no material effect on the earnings and financial position of the Company.

      In July of 2001, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 102, “Selected Loan Loss Allowance Methodology and Documentation Issue” (“SAB 102”). SAB 102 summarizes certain of the SEC’s views on the development, documentation, and application of a systematic methodology as required by Financial Reporting Release No. 28 for determining allowances for loan and lease losses in accordance with generally accepted accounting principles. The Company believes that it is in compliance with the guidelines set forth in SAB 102.

NOTE 14 — Subsequent Event

      On July 20, 2001, AIMCO issued 3,600,000 shares of newly created Class R Cumulative Preferred Stock, par value $0.01 per share (the “Class R Preferred Stock”) in a public offering. On July 26, 2001, the underwriters’ exercised their option to purchase an additional 540,000 shares. On August 1, 2001 an additional 800,000 shares were issued pursuant to an underwriting agreement dated July 27, 2001. The total net proceeds of approximately $119.6 million were used to repay short-term indebtedness. Dividends are cumulative from the date of original issue and are payable quarterly each year, when and as declared, beginning on September 15, 2001. Cumulative dividends on the Class R Preferred Stock will be in an amount per share equal to $2.50 per year, equivalent to 10% of the $25 liquidation preference. The Class R Preferred Stock is senior to the Common Stock as to dividends and liquidation. Upon liquidation, dissolution or winding up of AIMCO, before payment of distributions by AIMCO shall be made to any holders of Common Stock, the holders of the Class R Preferred Stock shall be entitled to receive a liquidation preference of $25 per share, plus accumulated, accrued and unpaid dividends and distributions. Each share of Class R Preferred Stock is redeemable beginning July 20, 2006, at the option of the Company, at a price equal to a liquidation preference of $25 per share, plus all accumulated, accrued, and unpaid dividends, if any, to the date fixed for redemption.

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ITEM 2.   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 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; the 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 residents 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 current and continuing qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code and depends on its ability to meet the various requirements imposed by the Internal Revenue Code, through actual operating results, distributions levels and diversity of stock ownership. Readers should carefully review the Company’s financial statements and the notes thereto, as well as the risk factors described in documents the Company files from time to time with the Securities and Exchange Commission.

      AIMCO is a real estate investment trust with headquarters in Denver, Colorado and 25 regional operating centers, which holds a geographically diversified portfolio of apartment communities. As of June 30, 2001, the Company owned or managed 312,409 apartment units, comprised of 156,572 units in 575 apartment properties owned or controlled by the Company (the “Owned Properties”), 99,594 units in 607 apartment properties in which the Company has an equity interest (the “Equity Properties”) and 56,243 units in 440 apartment properties which the Company manages for third parties (the “Managed Properties” and together with the Owned Properties and the Equity Properties, the “AIMCO Properties”). The apartment communities are located in 46 states, the District of Columbia and Puerto Rico.

      In the three months ended June 30, 2001, the Company completed $526 million in acquisitions, dispositions, and mortgage financing transactions. The Company acquired four property interests for $101 million and purchased $64 million of limited partnership interests. The Company sold 12 apartment communities for a total of $63 million of which the Company’s share was $28 million. Second quarter refinancing activity included the closing of $298 million of new mortgages at a weighted average interest rate of 6.12%.

23

Results of Operations

      Comparison of the Three Months Ended June 30, 2001 to the Three Months Ended June 30, 2000

      In order for a meaningful analysis of the financial statements to be made, the revenues and expenses for the unconsolidated subsidiaries for the three months ended June 30, 2000, have been included as though they had been consolidated in the following analysis. All significant intercompany revenues and expenses have been eliminated.

			Three Months Ended
			June 30,
			2001			2000
RENTAL PROPERTY OPERATIONS:
Rental and other property revenues			$	323,770		$	258,064
Property operating expense				(126,209	)		(104,653	)
Owned property management expense				(3,008	)		(4,136	)
Income from property operations				194,553			149,275
SERVICE COMPANY BUSINESS:
Management fees and other income from affiliates				46,978			47,163
Management and other expenses				(30,441	)		(34,535	)
General and administrative expense allocation				(2,895	)		(2,474	)
Amortization of intangibles				(4,332	)		(2,290	)
Income from service company business				9,310			7,864
General and administrative expenses:
	Before allocation			(4,457	)		(4,414	)
		Allocation to consolidated service company business		2,895			2,474
General and administrative expenses, net				(1,562	)		(1,940	)
Depreciation on rental property				(95,213	)		(84,983	)
Interest expense				(82,116	)		(65,790	)
Interest and other income				17,375			15,508
Equity in earnings (losses) of unconsolidated real estate partnerships				(4,731	)		1,441
Deferred income tax provision				—			(2,109	)
Minority interest in other entities				(5,256	)		(6,332	)
Income before gain on disposition of properties and minority interest in AIMCO Operating Partnership				32,360			12,934
Gain on disposition of properties, net				1,490			226
Income before minority interest in AIMCO Operating Partnership				33,850			13,160
Minority interest in AIMCO Operating Partnership, common				(1,225	)		280
Minority interest in AIMCO Operating Partnership, preferred				(2,190	)		(1,618	)
Net income			$	30,435		$	11,822

Net Income

      The Company recognized net income of $30.4 million for the three months ended June 30, 2001, compared with $11.8 million for the three months ended June 30, 2000. The following paragraphs discuss the results of operations in detail.

24

Consolidated Rental Property Operations

      Consolidated rental and other property revenues from the consolidated Owned Properties totaled $323.8 million for the three months ended June 30, 2001, compared with $258.1 million for the three months ended June 30, 2000, an increase of $65.7 million, or 25.5%. This increase in consolidated rental and other property revenues is a result of the purchase of interests in the Oxford properties, as well as 11 other properties in 2000, and 3 properties in 2001, which contributed 78.3% of the increase; the purchase of controlling interests and the subsequent consolidation of partnerships owning 26 properties in 2000 and 3 properties in 2001, which contributed 17.5% of the increase, and a 4.3% increase in “same store” sales revenues, which contributed 16.9% of the total increase. The effect of the foregoing was offset by the sale of 20 apartment properties in 2000 and 10 apartment properties in 2001.

      Consolidated property operating expenses for the consolidated Owned Properties, consisting of on-site payroll costs, utilities (net of reimbursements received from residents), contract services, turnover costs, repairs and maintenance, advertising and marketing, property taxes and insurance, totaled $126.2 million for the three months ended June 30, 2001, compared with $104.7 million for the three months ended June 30, 2000, an increase of $21.5 million or 20.5%. The increase in property operating expenses was due to the purchase of interests in the Oxford properties, as well as 11 other properties in 2000, and 3 properties in 2001, which contributed 80.4% of the increase; the purchase of controlling interests and the subsequent consolidation of partnerships owning 26 properties in 2000 and 3 properties in 2001, which contributed 16.6% of the increase, and an increase in “same store” expenses of 4.5%, which contributed 21.9% of the total increase, offset by the sale of 20 apartment properties in 2000 and 10 apartment properties in 2001.

      Depreciation expense increased $10.2 million to $95.2 million for the three months ended June 30, 2001, compared to $85.0 million for the three months ended June 30, 2000. This increase is a result of the purchase of interests in the Oxford properties, as well as 11 other properties in 2000, and 3 properties in 2001, which contributed 105.1% of the increase, and the purchase of controlling interests and the subsequent consolidation of partnerships owning 26 properties in 2000 and 3 properties in 2001, which contributed 20.1% of the increase. The effect of the foregoing was offset by the sale of 20 apartment properties in 2000 and 10 apartment properties in 2001.

Consolidated Service Company Business

      The Company’s share of income from the consolidated service company business totaled $9.3 million for the three months ended June 30, 2001, compared with income of $7.9 million for the three months ended June 30, 2000, an increase of $1.4 million or 17.7%. The increase resulted from a reduction in operating expenses of $3.7 million, due to management’s cost containment efforts in the areas of temporary office assistance, recruiting, the use of outside consultants, travel, and compensation. This was partially offset by additional property and asset management contract intangible amortization of $2.1 million as a result of the acquisition of interests in the Oxford properties.

Consolidated General and Administrative Expenses

      Consolidated general and administrative expenses, before allocation to the service company, remained consistent, with $4.5 million for the three months ended June 30, 2001 compared to $4.4 million for the three months ended June 30, 2000.

Consolidated Interest Expense

      Consolidated interest expense, which includes the amortization of deferred financing costs, totaled $82.1 million for the three months ended June 30, 2001, compared with $65.8 million for the three months ended June 30, 2000, an increase of $16.3 million, or 24.8%. The increase was due to the acquisition of interests in the Oxford properties, as well as 11 other properties in 2000, and 3 properties in 2001, which contributed 107.8% of the increase; and the purchase of controlling interests and the subsequent consolidation of partnerships owning 26 properties in 2000 and 3 properties in 2001, which contributed 14.3% of the increase. These increases were offset by the sale of 20 apartment properties in 2000 and 10 apartment properties in 2001, as well as a 14.2% decrease in the interest expense on the Company’s line of credit. The Company had $233 million outstanding on its credit facility as of

25

June 30, 2001, compared with $294 million at June 30, 2000. The cost of such borrowing was at a weighted average interest rate of 6.61% and 9.06% at June 30, 2001 and June 30, 2000, respectively.

Consolidated Interest and Other Income

      Consolidated interest and other income increased $1.9 million or 12.3% from $15.5 million for the three months ended June 30, 2000, to $17.4 million for the three months ended June 30, 2001. While transactional income, which was comprised of gain on sale of bonds or accretion of discounted notes, net of allocated expenses, decreased nearly $1.0 million from $7.2 million for the three months ended June 30, 2000 to $6.4 million for the three months ended June 30, 2001, interest from general partner notes receivable increased $2.9 million, as a result of increased funding of general partner loans.

Equity in Earnings (Losses) of Unconsolidated Real Estate Partnerships

      Equity in earnings (losses) of unconsolidated real estate partnerships totaled $(4.7) million for the three months ended June 30, 2001, compared with $1.4 million for the three months ended June 30, 2000, a decrease of $6.1 million. The acquisition of interests in the Oxford properties in 2000 contributed approximately $0.1 million to the earnings of unconsolidated real estate partnerships. However, this was offset by the purchase of equity interests in better performing apartment properties which resulted in these properties being consolidated and contributing to consolidated rental revenues and expenses (26 properties in 2000 and 3 properties in 2001).

Deferred Income Tax Provision

      In the three months ended June 30, 2001 there was no provision for income taxes, compared to an expense of $2.1 million in the three months ended June 30, 2000. This decrease is a result of a reduction in income from the Company's taxable REIT subsidiaries.

Minority Interest in Other Entities

      Minority interest in other entities totaled $5.3 million for the three months ended June 30, 2001, compared to $6.3 million for the three months ended June 30, 2000, a decrease of $1.0 million. This decrease is a result of the Company’s purchase of additional interests in consolidated properties, thereby reducing the minority interest allocation.

Gain on Disposition of Properties

      Gain on disposition of properties totaled $1.5 million for the three months ended June 30, 2001, compared to $0.2 million for the three months ended June 30, 2000, an increase of $1.3 million. In both periods the properties sold were considered by management to be inconsistent with the Company’s long-term investment strategy.

Minority Interest in AIMCO Operating Partnership

      Minority interest in AIMCO Operating Partnership increased $2.1 million, from $1.3 million for the three months ended June 30, 2000 to $3.4 million for the three months ended June 30, 2001. This increase is due to additional partnership units issued in tender, merger and acquisition related activities, resulting in dilution and an increase to minority interest shareholders. As a result, AIMCO’s interest in the AIMCO Operating Partnership has decreased to 86% as of June 30, 2001 from 92% as of June 30, 2000.

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      Comparison of the Six Months Ended June 30, 2001 to the Six Months Ended June 30, 2000

      In order for a meaningful analysis of the financial statements to be made, the revenues and expenses for the unconsolidated subsidiaries for the six months ended June 30, 2000, have been included as though they had been consolidated in the following analysis. All significant intercompany revenues and expenses have been eliminated.

			Six Months Ended
			June 30,
			2001			2000
RENTAL PROPERTY OPERATIONS:
Rental and other property revenues			$	646,004		$	482,384
Property operating expense				(251,895	)		(195,404	)
Owned property management expense				(6,218	)		(6,240	)
Income from property operations				387,891			280,740
SERVICE COMPANY BUSINESS:
Management fees and other income from affiliates				97,998			85,099
Management and other expenses				(62,490	)		(60,220	)
General and administrative expense allocation				(4,176	)		(3,527	)
Amortization of intangibles				(9,233	)		(4,373	)
Income from service company business				22,099			16,979
General and administrative expenses:
	Before allocation			(8,549	)		(8,678	)
		Allocation to consolidated service company business		4,176			3,527
General and administrative expenses, net				(4,373	)		(5,151	)
Depreciation on rental property				(200,604	)		(146,274	)
Interest expense				(169,332	)		(125,031	)
Interest and other income				32,038			29,824
Equity in earnings (losses) of unconsolidated real estate partnerships				(9,207	)		1,609
Deferred income tax provision				—			(2,961	)
Minority interest in other entities				(10,881	)		(13,452	)
Income before gain on disposition of properties and minority interest in AIMCO Operating Partnership				47,631			36,283
Gain on disposition of properties, net				1,556			5,331
Income before minority interest in AIMCO Operating Partnership				49,187			41,614
Minority interest in AIMCO Operating Partnership, common				(443	)		(709	)
Minority interest in AIMCO Operating Partnership, preferred				(4,291	)		(3,201	)
Net income			$	44,453		$	37,704

Net Income

      The Company recognized net income of $44.5 million for the six months ended June 30, 2001, compared with $37.7 million for the six months ended June 30, 2000. The following paragraphs discuss the results of operations in detail.

Consolidated Rental Property Operations

      Consolidated rental and other property revenues from the consolidated Owned Properties totaled $646.0 million for the six months ended June 30, 2001, compared with $482.4 million for the six months ended June 30, 2000, an

27

increase of $163.6 million, or 33.9%. This increase in consolidated rental and other property revenues is a result of the purchase of interests in the Oxford properties, as well as 12 other properties in 2000, and 3 in 2001, which contributed 60.2% of the increase; the purchase of controlling interests and the subsequent consolidation of partnerships owning 66 properties in 2000 and 3 properties in 2001, which contributed 52.4% of the increase, and a 4.9% increase in “same store” sales revenues, which contributed 14.5% of the total increase. The effect of the foregoing was offset by the sale of 28 apartment properties in 2000 and 10 apartment properties in 2001.

      Consolidated property operating expenses for the consolidated Owned Properties, consisting of on-site payroll costs, utilities (net of reimbursements received from residents), contract services, turnover costs, repairs and maintenance, advertising and marketing, property taxes and insurance, totaled $251.9 million for the six months ended June 30, 2001, compared with $195.4 million for the six months ended June 30, 2000, an increase of $56.5 million or 28.9%. The increase in property operating expenses was due to the purchase of interests in the Oxford properties, as well as 12 other properties in 2000, and 3 in 2001, which contributed 62.3% of the increase; the purchase of controlling interests and the subsequent consolidation of partnerships owning 66 properties in 2000 and 3 properties in 2001, which contributed 49.1% of the increase, and an increase in “same store” expenses of 5.0%, which contributed 17.3% of the total increase, offset by the sale of 28 apartment properties in 2000 and 10 apartment properties in 2001.

      Depreciation expense increased $54.3 million to $200.6 million for the six months ended June 30, 2001, compared to $146.3 million for the six months ended June 30, 2000 as a result of the acquisition of the Oxford properties, as well as 12 other properties in 2000, and 3 in 2001, and the purchase of controlling interests and the subsequent consolidation of partnerships owning 66 properties in 2000 and 3 properties in 2001.

Consolidated Service Company Business

      The Company’s share of income from the consolidated service company business totaled $22.1 million for the six months ended June 30, 2001, compared with income of $17.0 million for the six months ended June 30, 2000, an increase of $5.1 million or 30.0%. The increase resulted from an increase in activity-based fees of $12.9 million, offset by higher compensation and overhead expense of $2.9 million, and $4.9 million in additional property and asset management contract intangible amortization as a result of the acquisition of interests in the Oxford properties.

Consolidated General and Administrative Expenses

      Consolidated general and administrative expenses, before allocation to the service company, remained consistent, with $8.5 million for the six months ended June 30, 2001 compared to $8.7 million for the six months ended June 30, 2000.

Consolidated Interest Expense

      Consolidated interest expense, which includes the amortization of deferred financing costs, totaled $169.3 million for the six months ended June 30, 2001, compared with $125.0 million for the six months ended June 30, 2000, an increase of $44.3 million, or 35.4%. The increase was due to the acquisition of interests in the Oxford properties, as well as 12 other properties in 2000, and 3 in 2001, which contributed 77.5% of the increase; and the purchase of controlling interests and the subsequent consolidation of partnerships owning 66 properties in 2000 and 3 properties in 2001, which contributed 42.6% of the increase. These increases were offset by the sale of 28 apartment properties in 2000 and 10 apartment properties in 2001.

Consolidated Interest and Other Income

      Consolidated interest and other income increased $2.2 million or 7.4% from $29.8 million for the six months ended June 30, 2000, to $32.0 million for the six months ended June 30, 2001. While transactional income, which was comprised of gain on sale of bonds or accretion of discounted notes, net of allocated expenses, and interest on other notes, decreased $3.2 million from $13.4 million for the six months ended June 30, 2000 to $11.1 million for the six months ended June 30, 2001, interest from general partner notes receivable increased $5.4 million, as a result of increased funding of general partner loans.

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Equity in Earnings (Losses) of Unconsolidated Real Estate Partnerships

      Equity in earnings (losses) of unconsolidated real estate partnerships totaled $(9.2) million for the six months ended June 30, 2001, compared with $1.6 million for the six months ended June 30, 2000, a decrease of $10.8 million. The acquisition of interests in the Oxford properties in 2000 contributed approximately $0.8 million to the earnings of unconsolidated real estate partnerships. However, this was offset by the purchase of equity interests in better performing apartment properties which resulted in these properties being consolidated and contributing to consolidated rental revenues and expenses (66 properties in 2000 and 3 properties in 2001).

Deferred Income Tax Provision

      In the six months ended June 30, 2001, there was no provision for income taxes, compared to an expense of $3.0 million in the six months ended June 30, 2000. This decrease is a result of a reduction in income from the Company's taxable REIT subsidiaries.

Minority Interest in Other Entities

      Minority interest in other entities totaled $10.9 million for the six months ended June 30, 2001, compared to $13.5 million for the six months ended June 30, 2000, a decrease of $2.6 million. This decrease is a result of the Company’s purchase of additional interests in consolidated properties, thereby reducing the minority interest allocation.

Gain on Disposition of Properties

      Gain on disposition of properties totaled $1.6 million for the six months ended June 30, 2001, compared to $5.3 million for the six months ended June 30, 2000, a decrease of $3.7 million. In both periods the properties sold were considered by management to be inconsistent with the Company’s long-term investment strategy.

Minority Interest in AIMCO Operating Partnership

      Minority interest in AIMCO Operating Partnership increased $0.8 million, from $3.9 million for the six months ended June 30, 2000 to $4.7 million for the six months ended June 30, 2001. This increase is due to additional partnership units issued in tender, merger and acquisition related activities, resulting in dilution and an increase to minority interest shareholders. As a result, AIMCO’s interest in the AIMCO Operating Partnership has decreased to 86% as of June 30, 2001 from 92% as of June 30, 2000.

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Same Store Property Operating Results

      The Company defines “same store” properties as conventional apartment communities in which AIMCO’s ownership interest exceeded 10% in the comparable periods of 2001 and 2000. Total portfolio includes same store properties plus acquisition and redevelopment properties. The following table summarizes the unaudited conventional rental property operations on a “same store” and a total portfolio basis (dollars in thousands):

	Same Store
	Three Months Ended June 30,						Six Months Ended June 30,
	2001			2000			2001			2000
Properties		655			655			655			655
Apartment units		179,282			179,282			179,282			179,282
Average physical occupancy		93.8	%		94.7	%		93.8	%		94.5	%
Average rent collected/unit/month	$	685		$	657		$	682		$	654
Revenues	$	265,814		$	254,922		$	529,423		$	504,490
Expenses		100,860			96,500			198,067			188,606
Net operating income	$	164,954		$	158,422		$	331,356		$	315,884

	Total Portfolio
	Three Months Ended June 30,						Six Months Ended June 30,
	2001			2000			2001			2000
Properties		687			674			687			674
Apartment units		191,232			186,181			191,232			186,181
Average physical occupancy		93.1	%		92.5	%		92.8	%		92.4	%
Average rent collected/unit/month	$	685		$	658		$	683		$	655
Revenues	$	285,652		$	267,798		$	556,277		$	518,951
Expenses		109,920			103,035			209,151			195,646
Net operating income	$	175,732		$	164,763		$	347,126		$	323,305

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Funds From Operations

      For the three and six months ended June 30, 2001 and 2000, the Company’s Funds From Operations (“FFO”) on a fully diluted basis were as follows (dollars in thousands):

			Three Months Ended						Six Months Ended
			June 30,						June 30,
			2001			2000			2001			2000
Net Income			$	30,435		$	11,822		$	44,453		$	37,704
	Adjustments:
		Real estate depreciation, net of minority interest		92,945			76,756			190,756			133,725
		Real estate depreciation related to unconsolidated entities		13,861			15,601			28,867			34,563
		Amortization of intangibles		4,332			2,004			9,233			4,087
		Gain on disposition of properties		(1,490	)		(226	)		(1,556	)		(5,331	)
	Other items:
		Deferred income tax provision		—			2,109			—			2,961
		Preferred stock dividends and distributions		(8,126	)		(6,530	)		(14,861	)		(13,052	)
		Interest expense on mandatorily redeemable convertible preferred securities		489			2,429			1,014			4,858
		Minority interest in AIMCO Operating Partnership		3,415			1,338			4,734			3,910
Funds From Operations (FFO)			$	135,861		$	105,303		$	262,640		$	203,425
Weighted average number of common shares, common share equivalents, Common OP Units and other units outstanding:
	Common share and common share equivalents			91,132			81,837			89,289			80,679
	Common OP Units and other units			12,156			7,588			11,643			7,608
				103,288			89,425			100,932			88,287

Liquidity and Capital Resources

      For the six months ended June 30, 2001 and 2000, net cash flows were as follows (dollars in thousands):

	2001			2000
Cash flow provided by operating activities	$	241,023		$	150,911
Cash flow provided by (used in) investing activities		64,563			(197,352	)
Cash flow provided by (used in) financing activities		(327,308	)		35,546

      During the six months ended June 30, 2001, the Company issued $536 million of long-term, fixed-rate, fully amortizing notes payable with a weighted average interest rate of 5.76%. Each of the notes is individually secured by one of 51 properties with no cross-collateralization. The Company used the net proceeds totaling $261 million after transaction costs to repay existing debt and for working capital.

      In April 2001, the Company’s revolving credit facility was expanded to a full commitment of $400 million, and the number of lender participants in the facility's syndicate increased from nine to eleven. The obligations under the credit facility are secured by a first priority pledge of certain non-real estate assets of the Company and a second priority pledge of the stock of certain subsidiaries of the Company owned by the AIMCO Operating Partnership, NHP Management Company, AIMCO/Bethesda Holdings, Inc., AIMCO Holdings, L.P., and certain options to purchase BACs in OTEF. Borrowings under the credit facility are available for general corporate purposes. The credit facility matures in July 2002 and can be extended twice at AIMCO’s option, for a term of one year. The annual interest rate under the credit facility is based either on LIBOR or a base rate which is the higher of Bank of America’s reference rate or 0.50% 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 June 30, 2001 was 6.61%. The amount available under

31

the credit facility at June 30, 2001 was $167 million. At July 26, 2001, $139 million was outstanding on the line, providing availability of $261 million.

      On September 20, 2000, AIMCO completed the acquisition of interests in the Oxford properties. In order to pay the cash portion of the purchase price and transactions costs, the Company borrowed $302 million from Bank of America, N.A., Lehman Commercial Paper Inc. and several other lenders, pursuant to a term loan. In March 2001, the Company paid off the remaining balance of the term loan and charged to operations approximately $2.2 million for the complete amortization of deferred financing and loan origination costs principally related to the term loan.

      At June 30, 2001, the Company had $135.4 million in cash and cash equivalents. In addition, the Company had $139.9 million of restricted cash, primarily consisting of reserves and impounds held by lenders for capital replacements, property taxes and insurance. The Company’s principal liquidity requirements include normal operating expenses, payments of principal and interest on outstanding debt, capital improvements, acquisitions of or investments in properties, dividends paid to its stockholders and distributions paid to limited partners. The Company considers its cash provided by operating activities, and funds available under its credit facilities, to be adequate to meet short-term liquidity demands. The Company utilizes its revolving credit facility for general corporate purposes and to fund investments on an interim basis.

      The Company expects to fund its requirements for property acquisitions, tender offers and refinancing of short-term debt with: cash generated from operations; long-term, fixed rate, fully amortizing non-recourse property debt; secured or unsecured short-term debt; and the issuance of debt or equity securities in public offerings or private placements.

      From time to time, the Company has offered to acquire and, in the future, may offer to acquire the interests held by third party investors in certain limited partnerships for which the Company acts as general partner. Any such acquisitions will require funds to pay the cash purchase price for such interests. During the six months ended June 30, 2001, the Company made separate offers to the limited partners of 187 partnerships to acquire their limited partnership interests, and purchased approximately $111 million (including transaction costs) of limited partnership interests.

Return on Assets and Return on Equity

      The Company’s Return On Assets and Return On Equity for the six months ended June 30, 2001 and 2000 are as follows:

		Based on AFFO						Based on FFO
		Six Months Ended						Six Months Ended
		June 30,						June 30,
		2001			2000			2001			2000
Return on Assets(a)			9.8	%		10.3	%		10.2	%		10.8	%
Return on Equity
	Basic(b)		14.3	%		15.0	%		15.5	%		16.4	%
	Diluted(c)		13.1	%		13.5	%		14.1	%		14.5	%

(a)

The Company defines Return on Assets (AFFO) as (i) annualized Free Cash Flow, divided by (ii) Average Assets. Average Assets are computed by averaging the sum of Assets, as defined below, at the beginning and the end of the period. Assets are total assets, plus accumulated depreciation, less accumulated Capital Replacements of $129,868 and $89,796 for the six months ended June 30, 2001 and 2000, respectively, and less all non-indebtedness liabilities. The Company defines Return on Assets (FFO) as (i) annualized Free Cash Flow plus Capital Replacements, divided by (ii) Average Assets plus accumulated Capital Replacements.

(b)

The Company defines Return on Equity-Basic (AFFO) as (i) annualized AFFO-Basic, divided by (ii) Average Equity. Average Equity is computed by averaging the sum of Equity, as defined below, at the beginning and the end of the period. Equity is total stockholders’ equity, plus accumulated depreciation, less accumulated

32

Capital Replacements of $129,868 and $82,796 for the six months ended June 30, 2001 and 2000, respectively, less preferred stock, plus minority interest in the AIMCO Operating Partnership, net of preferred OP unit interests $159,835 and $109,607 for the six months ended June 30, 2001 and 2000, respectively. The Company defines Return on Equity-Basic (FFO) as (i) annualized AFFO-Basic plus Capital Replacements; divided by (ii) Average Equity plus accumulated Capital Replacements.

(c)

The Company defines Return on Equity-Diluted (AFFO) and Return on Equity-Diluted (FFO) assuming conversion of debt and preferred securities whose conversion is dilutive.

33

ITEM 3.   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 believes that an increase in energy costs will not have a material adverse effect on its results of operations. 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 and working capital primarily to fund acquisitions and generally expects to refinance such borrowings with proceeds from equity offerings or long-term debt financings.

      The Company had $388.5 million of variable rate debt outstanding at June 30, 2001, which represented 8.5% 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 $3.9 million on an annual basis.

      The estimated aggregate fair value of the Company’s cash and cash equivalents, receivables, payables and short-term secured and unsecured debt as of June 30, 2001 is assumed to approximate their carrying value due to their relatively short terms. Management further believes that, after consideration of interest rate agreements, 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.

34

PART II. OTHER INFORMATION

ITEM 1.   Legal Proceedings

      None.

ITEM 2.   Changes in Securities and Use of Proceeds

      From time to time during the quarter, AIMCO issued shares of Common Stock in exchange for Common 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 Common OP Unit. The shares are issued in exchange for Common 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 the three months ended June 30, 2001, 181,238 shares of Common Stock were issued in exchange for Common OP Units in these transactions.

      During the three months ended June 30, 2001, the holders of trust convertible preferred securities (“TOPRS”) converted a total of $6.9 million of TOPRS into 139,563 shares of Common Stock. The convertible preferred securities were assumed by AIMCO in October 1998 in connection with its merger with Insignia Financial Group, Inc. The preferred securities have a conversion price of $49.61 per share which, based on a liquidation amount of $50 per security, results in the issuance of 1.0079 shares of Common Stock for each preferred security converted.

      All of the foregoing issuances were made in private placement transactions exempt from registration under the Securities Act pursuant to Section 4(2) thereof.

ITEM 3.   Defaults Upon Senior Securities

      None.

ITEM 4.   Submission of Matters to a Vote of Security Holders

The Company held its annual meeting of stockholders on June 19, 2001. At the meeting, the stockholders approved the proposals set forth below:

1. Proposal to elect six directors, for a term of one year each, until the next annual meeting of stockholders and until their successors are elected and qualify.

Votes Cast For Each Director

	Votes		Votes
	For		Withheld
Terry Considine		53,721,510		4,915,392
Peter K. Kompaniez		53,417,118		5,219,784
James N. Bailey		58,395,367		241,535
Richard S. Ellwood		58,390,627		246,275
J. Landis Martin		58,397,601		239,301
Thomas L. Rhodes		58,385,132		251,770

      There were no abstentions or broker non votes.

35

2. Proposal to ratify the selection of Ernst & Young LLP, to serve as independent auditors for the Company for the fiscal year ending December 31, 2001:

Votes For	Votes Against		Abstentions		Broker Non Votes
58,249,694		41,961		345,247		—

      3.   To approve the sale of an aggregate of 15,000 new High Performance Partnership Units of the AIMCO Operating Partnership:

Votes For	Votes Against		Abstentions		Broker Non Votes
48,421,770		3,386,889		369,653		6,458,590

ITEM 5.   Other Information

      None.

36

ITEM 6.   Exhibits and Reports on Form 8-K

(a) Exhibits. The following exhibits are filed with this report¹:

EXHIBIT NO.
3.1	Charter
10.1	Twenty-first Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of May 10, 2001
10.2	Twenty-second Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of June 20, 2001
10.3	Twenty-third Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 20, 2001
10.4	Twenty-fourth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of August 1, 2001
10.5	Twenty-fifth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 2, 2001
10.6	Twenty-sixth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 2, 2001
10.7	Twenty-seventh Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 2, 2001
99.1	Agreement re: disclosure of long-term debt instruments

(b) Reports on Form 8-K for the quarter ended June 30, 2001:

      During the quarter for which this report is filed, Apartment Investment and Management Company filed its Current Report on Form 8-K, dated April 17, 2001, relating to a change of date of its annual meeting of stockholders; its Current Report on Form 8-K, dated April 26, 2001, relating to an increase in its measure of economic profitability and other financial indicators for the quarter ended March 31, 2001; and its Current Report on Form 8-K, dated June 21, 2001, relating to Regulation FD disclosure of materials to be presented in an address by AIMCO’s Chairman and Chief Executive Officer to a group of investors and analysts.

¹ Schedules and supplemental materials to the exhibits have been omitted but will be provided to the Securities and Exchange Commission upon request.

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APARTMENT INVESTMENT AND MANAGEMENT COMPANY

SIGNATURES

      Pursuant to the requirements 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.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
By:	/s/ PAUL J. McAULIFFE
	Paul J. McAuliffe
	Executive Vice President, Chief Financial Officer (duly authorized officer and principal financial officer)
By:	/s/ THOMAS C. NOVOSEL
	Thomas C. Novosel
	Senior Vice President, Chief Accounting Officer

Date: August 14, 2001

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EXHIBIT INDEX(1)

Exhibit
Number	Description
3.1	Charter
10.1	Twenty-first Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of May 10, 2001
10.2	Twenty-second Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of June 20, 2001
10.3	Twenty-third Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 20, 2001
10.4	Twenty-fourth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of August 1, 2001
10.5	Twenty-fifth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 2, 2001
10.6	Twenty-sixth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 2, 2001
10.7	Twenty-seventh Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 2, 2001]
99.1	Agreement re: disclosure of long-term debt instruments

(1) Schedules and supplemental materials to the exhibits have been omitted but will be provided to the Securities and Exchange Commission upon request.

39