Apartment Investment and Management 8K Other Events | AIV 6 Dec 06

Exhibit 99.1

Item 6.Selected Financial Data

The following selected financial data is based on our audited historical financial statements. This information should be read in conjunction with such financial statements, including the notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included herein or in previous filings with the Securities and Exchange Commission.


	For the Years Ended December 31,

	2005 (1)			2004 (1)			2003 (1)			2002 (1)			2001 (1)

	(dollar amounts in thousands, except per share data)
OPERATING DATA:

Total revenues	$	1,449,478		$	1,314,057		$	1,245,129		$	1,138,433		$	1,055,678
Total operating expenses		(1,162,199	)		(1,025,096	)		(875,492	)		(724,986	)		(710,812	)
Operating income		287,279			288,961			369,637			413,447			344,866
Income (loss) from continuing operations		(25,337	)		54,515			60,015			134,921			82,182
Income from discontinued operations, net		96,319			212,939			98,842			34,125			25,170
Cumulative effect of change in accounting principle		—			(3,957	)		—			—			—
Net income		70,982			263,497			158,857			169,046			107,352
Net income attributable to preferred stockholders		87,948			88,804			93,565			93,558			90,331
Net income (loss) attributable to common stockholders		(16,966	)		174,693			65,292			75,488			17,021

OTHER INFORMATION:
Total consolidated properties (end of period)		619			676			679			728			557
Total consolidated apartment units (end of period)		158,548			169,932			174,172			187,506			157,256
Total unconsolidated properties (end of period)		264			330			441			511			569
Total unconsolidated apartment units (end of period)		35,269			44,728			62,823			73,924			91,512
Units managed for others (end of period) (2)		46,667			49,074			50,565			56,722			31,520
Earnings (loss) per common share — basic:
Income (loss) from continuing operations (net of income attributable to preferred stockholders)	$	(1.21	)	$	(0.37	)	$	(0.36	)	$	0.48		$	(0.11	)
Net income (loss) attributable to common stockholders	$	(0.18	)	$	1.88		$	0.70		$	0.88		$	0.23
Earnings (loss) per common share — diluted:
Income (loss) from continuing operations (net of income attributable to preferred stockholders)	$	(1.21	)	$	(0.37	)	$	(0.36	)	$	0.48		$	(0.11	)
Net income (loss) attributable to common stockholders	$	(0.18	)	$	1.88		$	0.70		$	0.87		$	0.23
Dividends declared per common share	$	3.00		$	2.40		$	2.84		$	3.28		$	3.16

BALANCE SHEET INFORMATION:
Real estate, net of accumulated depreciation	$	8,391,246		$	7,875,045		$	7,280,072		$	7,107,646		$	5,310,756
Total assets		10,019,160			10,074,316			10,087,394			10,309,101			8,300,672
Total indebtedness		6,057,283			5,402,098			5,170,768			5,000,578			3,722,865
Stockholders’ equity		2,716,104			3,008,160			2,860,657			3,163,387			2,710,615


(1)		Certain reclassifications have been made to conform to the September 30, 2006 presentation. These reclassifications primarily represent presentation changes related to discontinued operations resulting from the 2002 adoption of Statement of Financial Accounting Standards No. 144.

(2)		In 2005, 2004, 2003 and 2002, includes approximately 41,421, 41,233, 39,428 and 45,187 units, respectively, for which we provide asset management services only, although in certain cases we may indirectly own generally less than one percent of the operations of such properties through a partnership syndication or other fund.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

We are a self-administered and self-managed real estate investment trust, or REIT, engaged in the ownership, acquisition, management and redevelopment of apartment properties. Our property operations are characterized by diversification of product, location and price point. As of December 31, 2005, we owned or managed 1,370 apartment properties containing 240,484 units located in 47 states, the District of Columbia and Puerto Rico. Our primary sources of income and cash are rents associated with apartment leases.

The key financial indicators that we use in managing our business and in evaluating our financial condition and operating performance are: Funds From Operations, or FFO; FFO less spending for Capital Replacements, or AFFO; same store property operating results; net operating income; net operating income less spending for Capital Replacements, or Free Cash Flow; financial coverage ratios; and leverage as shown on our balance sheet. These terms are defined and described in the sections captioned “Funds From Operations” and “Capital Expenditures” below. The key macro-economic factors and non-financial indicators that affect our financial condition and operating performance are: rates of job growth; single-family and multifamily housing starts; and interest rates.

Because our operating results depend primarily on income from our properties, the supply and demand for apartments influences our operating results. Additionally, the level of expenses required to operate and maintain our properties, the pace and price at which we redevelop, acquire and dispose of our apartment properties, and the volume and timing of fee transactions affect our operating results. Our cost of capital is affected by the conditions in the capital and credit markets and the terms that we negotiate for our equity and debt financings.

Our focus in 2005 has been to increase revenue and implement cost management and productivity initiatives, which includes centralizing purchasing, restructuring business processes, using technology to increase efficiency and implementing structured monthly reporting to identify issues and improve effectiveness of spending. We believe that our efforts are having their intended effect, are resulting in a positive trend in certain operating results and are the foundation for improved long-term operating results. These initiatives and others have also resulted in improved asset quality, and we will continue to seek opportunities to reinvest in our properties through capital expenditures and to manage our portfolio through property sales and acquisitions.

For 2006, our focus will include the following: continue to improve operations so that customer satisfaction and occupancy increase to bring improved profitability; upgrade the quality of our portfolio through portfolio management and redevelopment; increase efficiency through improved business processes and automation; improve balance sheet flexibility; minimize our cost of capital in the face of rising interest rates; and monetize a portion of the value inherent in our properties with increased entitlements.

The following discussion and analysis of the results of our operations and financial condition should be read in conjunction with the financial statements.

Results of Operations

Overview

2005 compared to 2004

We reported net income of $71.0 million and net loss attributable to common stockholders of $17.0 million for the year ended December 31, 2005, compared to net income of $263.5 million and net income attributable to common stockholders of $174.7 million for the year ended December 31, 2004, decreases of $192.5 million and $191.7 million, respectively. These decreases were principally due to the following items, all of which are discussed in further detail within this section:

	•		a decrease in income from discontinued operations, primarily related to lower net gains on dispositions of real estate;

	•		a decrease in net gain on disposition of real estate related to unconsolidated entities and other, primarily related to a 2004 gain on sale of land;

	•		an increase in depreciation and amortization expense;

	•		an increase in interest expense; and

	•		an increase in general and administrative expenses.

These decreases were partially offset by an increase in net operating income associated with property operations, which included increases related to acquisition, newly consolidated and same store properties.

2004 compared to 2003

We reported net income of $263.5 million and net income attributable to common stockholders of $174.7 million for the year ended December 31, 2004, compared to net income of $158.9 million and net income attributable to common stockholders of $65.3 million for the year ended December 31, 2003, increases of $104.6 million and $109.4 million, respectively. These increases were principally due to the following items, all of which are discussed in further detail within this section:

	•		an increase in net gain on disposition of real estate (including the gain recognized in discontinued operations and the gain related to unconsolidated entities and other); and

	•		an increase in activity fees and asset management revenues.

These increases were partially offset by:

	•		an overall decline in net operating income, which included a decline in same store net operating results, partially offset by increases related to acquisition and newly consolidated properties;

	•		an increase in general and administrative expenses;

	•		an increase in interest expense; and

	•		an increase in depreciation and amortization expense.

The following paragraphs discuss these and other items affecting the results of our operations in more detail.

Rental Property Operations

Our operating income is primarily generated from the operations of our consolidated properties. The principal components within our total consolidated property operations are: consolidated same store properties, which consist of all conventional properties that were owned (and not classified as held for sale) and managed by us, stabilized and consolidated for all comparable periods presented; and other consolidated entities, which primarily include acquisition, newly consolidated, affordable and redevelopment properties.

The following table summarizes the overall performance of our consolidated properties for the years ended December 31, 2005, 2004 and 2003 (in thousands):


	Year Ended December 31,
	2005		2004		2003
Rental and other property revenues	$	1,387,601	$	1,246,795	$	1,186,939
Property operating expenses		668,360		599,011		522,611
Net operating income	$	719,241	$	647,784	$	664,328

For the year ended December 31, 2005 compared to the year ended December 31, 2004, net operating income for our consolidated property operations increased by $71.5 million, or 11.0%. This increase was principally due to a $39.3 million increase in consolidated same store net operating income (see further discussion of same store results under the heading “Conventional Same Store Property Operating Results”); a $21.3 million increase related to operations of acquisition properties, which were principally comprised of Palazzo East at Park La Brea and five other properties purchased in 2005 and The Palazzo at Park La Brea and 10 other properties purchased in 2004; an $18.0 million increase related to operations of newly consolidated properties, which are properties that had been previously unconsolidated and accounted for by the equity method (21 properties first consolidated in 2005 and 42 properties first consolidated in 2004, which includes 24 properties that were consolidated due to the adoption of FASB Interpretation No. 46,Consolidation of Variable Interest Entities,or FIN 46); a $3.9 million increase related to operations of our affordable properties; and a $2.7 million increase related to the completion of certain redevelopment properties. These increases were offset by $6.4 million of increased property management expenses and $3.3 million of higher net casualty losses in 2005 as compared to 2004, primarily relating to greater hurricane and tropical storm damage that occurred in 2005.

For the year ended December 31, 2004, compared to the year ended December 31, 2003, net operating income for our consolidated property operations decreased by $16.5 million, or 2.5%. This decrease was principally due to a $40.3 million decrease in consolidated same store net operating income (see further discussion of same store results under the heading “Conventional Same Store Property Operating Results”). Additionally, there was a $6.6 million decrease related to net casualty losses and other costs primarily resulting from hurricanes and tropical storms in the third quarter of 2004, which damaged over 100 of our properties and $4.0 million in higher property management expenses. These decreases were offset by an $18.2 million increase related to operations of newly consolidated properties, which are properties that had been previously unconsolidated and accounted for by the equity method (42 properties first consolidated in 2004 and 12 properties that were first consolidated after the first quarter of 2003) and a $16.0 million increase related to operations of acquisition properties, which were principally comprised of The Palazzo at Park La Brea and 10 other properties purchased in 2004, and three properties purchased in 2003.

Conventional Same Store Property Operating Results

Same store operating results is a key indicator we use to assess the performance of our property operations and to understand the period over period operations of a consistent portfolio of properties. We define “same store” properties as conventional properties (i) that we manage, (ii) in which our ownership interest exceeds 10%, (iii) the operations of which have been stabilized for all periods presented and (iv) that have not been classified as held for sale. To ensure comparability, the information for all periods shown is based on our ownership in the most current period presented in each table. The following tables summarize the conventional rental property operations on a “same store” basis (which is not in accordance with generally accepted accounting principles, or GAAP) and reconcile them to consolidated rental property operations (which is in accordance with GAAP) described in the above comparative discussions (dollars in thousands):


	Year Ended December 31,						Change
	2005			2004
Our share of same store revenues	$	999,383		$	941,731			6.1	%
Less: Our share of same store expenses		443,112			418,221			6.0	%

Our share of same store net operating income		556,271			523,510			6.3	%
Adjustments to reconcile same store net operating income to real estate segment net operating income (1)		162,970			124,274

Real estate segment net operating income	$	719,241		$	647,784			11.0	%


Same store statistics:
Properties		458			458
Apartment units		131,491			131,491
Average physical occupancy		92.2	%		89.3	%		3.2	%
Average rent /unit/month	$	762		$	746			2.1	%


(1)		Includes: (i) minority partners’ share of consolidated, less our share of unconsolidated, property revenues and property operating expenses (at 2005 ownership); (ii) property revenues and property operating expenses related to consolidated properties other than same store properties (e.g., affordable, acquisition and redevelopment properties); and (iii) eliminations and other adjustments and reclassifications made in accordance with GAAP.

For the year ended December 31, 2005, compared to the year ended December 31, 2004, our share of same store net operating income increased $32.8 million, or 6.3%. Revenues increased $57.7 million, or 6.1%, primarily due to higher occupancy (up 2.9%), higher average rent (up $16 per unit) and lower bad debt. Expenses increased by $24.9 million, or 6.0%, primarily due to: an increase of $9.1 million in compensation expense related to increased staffing levels to support our initiatives to improve customer service; a $7.2 million increase in utilities due primarily to higher natural gas rates; a $5.5 million increase in real estate taxes; and $2.4 million of increases primarily related to turnover expenses associated with our efforts to increase occupancy.


	Year Ended December 31,						Change
	2004			2003
Our share of same store revenues	$	1,005,095		$	1,011,323			(0.6)	%
Less: Our share of same store expenses		441,413			417,281			5.8	%

Our share of same store net operating income		563,682			594,042			(5.1)	%
Adjustments to reconcile same store net operating income to real estate segment net operating income (1)		84,102			70,286

Real estate segment net operating income	$	647,784		$	664,328			(2.5)	%


Same store statistics:
Properties		524			524
Apartment units		147,070			147,070
Average physical occupancy		90.3	%		91.9	%		(1.7)	%
Average rent /unit/month	$	721		$	721			—


(1)		Includes: (i) minority partners’ share of consolidated, less our share of unconsolidated, property revenues and property operating expenses (at 2004 ownership); (ii) property revenues and property operating expenses related to consolidated properties other than same store properties (e.g., affordable, acquisition and redevelopment properties); and (iii) eliminations and other adjustments and reclassifications made in accordance with GAAP.

For the year ended December 31, 2004, compared to the year ended December 31, 2003, our share of same store net operating income decreased $30.4 million, or 5.1%. Revenues decreased $6.2 million, or 0.6%, primarily due to lower occupancy (down 1.6%), offset by higher utility reimbursements from residents and lower bad debt expense. Expenses increased by $24.1 million, or 5.8%, primarily due to: an increase of $20.0 million in compensation and benefit expense related to a new employee health plan, merit increases and increased staffing levels; an increase of $4.3 million in utilities due to the increase in the cost of natural gas; and an increase of $3.9 million in marketing and administrative expenses associated with our efforts to increase occupancy. These increases were partially offset by a decrease in property taxes related to successful appeals and changes in estimates related to assessments.

Property Management

We earn income from property management primarily from certain unconsolidated real estate partnerships for which we are the general partner. The income is primarily in the form of fees generated through property management and other associated activities. Reported revenue from property management decreases as we consolidate real estate partnerships because it is eliminated in consolidation. We expect this trend to continue as we increase our ownership in more of these partnerships or otherwise determine that consolidation is required by GAAP. Additionally, our revenue decreases as properties within our unconsolidated real estate partnerships are sold. Offsetting the revenue earned in property management are the direct expenses associated with property management.

The following table summarizes the overall performance of our property management business for the years ended December 31, 2005, 2004 and 2003 (in thousands):


	Year Ended December 31,
	2005		2004		2003
Property management revenues, primarily from affiliates	$	24,528	$	32,461	$	37,992
Property management expenses		7,360		9,789		8,419

Net operating income from property management	$	17,168	$	22,672	$	29,573

For the year ended December 31, 2005, compared to the year ended December 31, 2004, net operating income from property management decreased by $5.5 million, or 24.3%. For the year ended December 31, 2004, compared to the year ended December 31, 2003, net operating income from property management decreased by $6.9 million, or 23.3%. In both periods the decreases were principally due to an increase in the number of consolidated real estate partnerships (resulting from increased ownership and GAAP consolidation requirements), which required elimination of fee income and associated property-operating expense related to such partnerships and the sales of properties within our unconsolidated partnerships (35 properties in 2005, 53 properties in 2004 and 37 properties in 2003) that had previously generated property management revenues.

Activity Fees and Asset Management

Activity fees are generated from transactional activity including tax credit syndications and redevelopments, dispositions, and refinancings. These transactions occur on varying timetables, thus the income varies from period to period. The majority of these fees are earned in connection with transactions related to affordable properties within the Aimco Capital portfolio. We have a large number of affiliated real estate partnerships for which we have identified a pipeline of transactional opportunities. As a result, we view activity fees as a predictable part of our core business strategy. Asset management revenue is from the financial management of partnerships, rather than management of day-to-day property operations. Asset management revenue includes deferred asset management fees that are recognized once a transaction or improvement in operations has occurred thereby generating available cash. Activity and asset management expenses are the direct expenses associated with transactional activities and asset management.

The following table summarizes the operating results of our transactional and asset management activities for the years ended December 31, 2005, 2004 and 2003 (in thousands):


	Year Ended December 31,
	2005		2004		2003
Activity fees and asset management revenues, primarily from affiliates	$	37,349	$	34,801	$	20,198
Activity and asset management expenses		10,630		11,879		8,367

Net operating income from activity fees and asset management	$	26,719	$	22,922	$	11,831

Included in the activity fees and asset management revenues, primarily from affiliates for the years ended December 31, 2005, 2004 and 2003, were $33.3 million, $30.3 million and $18.9 million, respectively, of fees related to affordable properties within the Aimco Capital portfolio.

For the year ended December 31, 2005, compared to the year ended December 31, 2004, net operating income from activity fees and asset management increased $3.8 million, or 16.6%. This overall increase was principally a result of increased activity fees related to syndication and developer activities of $6.0 million and $3.7 million, respectively, as well as a $1.2 million decrease in expenses associated with these activities. Additionally, we received $3.1 million in promote distributions from an unconsolidated partnership, as a result of us, as general partner, achieving financial returns to the limited partners in excess of established targets. These increases were offset by a $5.2 million decrease in asset management fees and decreases of $3.3 million and $1.9 million in activity fees related to disposition and refinancing activities, respectively.

For the year ended December 31, 2004, compared to the year ended December 31, 2003, net operating income from activity fees and asset management increased by $11.1 million, or 93.7%. This overall increase was principally a result of increased activity fees related to disposition, refinancing and developer activities of $7.3 million, $2.3 million and $3.0 million, respectively, due to a greater number of transactions in 2004 than in 2003. Additionally, there was an increase of $2.9 million related to the recognition of deferred asset management fees resulting from closed transactions and improved operations. These increases were offset by a $2.1 million decrease in syndication fees and $3.5 million in higher expenses associated with these activities.

Depreciation and Amortization

For the year ended December 31, 2005, compared to the year ended December 31, 2004, depreciation and amortization increased $62.2 million, or 19.1%. This increase was principally due to: $34.6 million of additional depreciation on certain real estate assets where the depreciation was adjusted prospectively (see Impairment of Long-Lived Assets in Note 2 of the consolidated financial statements in Item 8); $13.8 million and $8.3 million of

additional depreciation related to newly consolidated and acquisition properties, respectively; and $11.0 million from the completion of certain redevelopment properties. Additionally, $4.3 million of the increase was due to a change in estimated useful lives that apply to capitalized payroll and certain indirect costs (see Capital Expenditures and Related Depreciation in Note 2 of the consolidated financial statements in Item 8).

For the year ended December 31, 2004, compared to the year ended December 31, 2003, depreciation and amortization increased $30.7 million, or 10.4%. This increase was principally due to $8.5 million and $7.2 million of additional depreciation related to the newly consolidated and acquisition properties, respectively, as well as $9.9 million from the completion of certain redevelopment properties. Additionally, $5.9 million of the increase resulted from additional depreciation on certain real estate assets where the depreciation was adjusted prospectively (see Impairment of Long-Lived Assets in Note 2 of the consolidated financial statements in Item 8).

General and Administrative Expenses

For the year ended December 31, 2005, compared to the year ended December 31, 2004, general and administrative expenses increased $15.4 million, or 19.9%. This increase was principally due to $14.1 million in higher compensation related to increased staffing levels, increased health care costs, and transition costs associated with the chief financial and chief accounting officer positions. Additionally, at the end of 2005 there was $0.6 million in severance costs related to the restructuring of regional operating centers as a result of property dispositions.

For the year ended December 31, 2004, compared to the year ended December 31, 2003, general and administrative expenses increased $29.1 million, or 60.1%. This increase was principally due to: $15.5 million in higher compensation related to increased staffing levels, merit increases and variable compensation; $7.7 million related to increased health insurance costs and the effect of a favorable change in 2003 related to our accrual for insurance claims incurred but not reported (IBNR); $3.2 million in increased amortization of restricted stock and stock option compensation; and $3.1 million in legal costs and compliance costs primarily related to the internal control reporting requirements of Section 404 of the Sarbanes-Oxley Act of 2002.

Other Expenses (Income), Net

Other expenses (income), net includes income tax provision/benefit, franchise taxes, risk management activities related to our unconsolidated partnerships and partnership expenses.

For the year ended December 31, 2005 compared to the year ended December 31, 2004, other expenses (income), net changed $6.2 million from expense of $1.5 million in 2004 to income of $4.7 million in 2005. This change was principally due to an $9.5 million higher income tax benefit recognized in 2005 as compared to 2004, reflecting increased losses of our taxable REIT subsidiaries (see further discussion in Note 10 of the consolidated financial statements in Item 8). In the year ended December 31, 2005, there was a tax benefit of $16.1 million recorded, as compared to $6.7 million in the year ended December 31, 2004. Additionally, we had higher income associated with our risk management activities, primarily due to better workers compensation claim experience as a result of more focused loss prevention measures. These increases in other income were partially offset by $3.8 million of higher partnership expenses primarily related to increases in professional fees.

For the year ended December 31, 2004, compared to the year ended December 31, 2003, other expenses (income), net changed $8.6 million from income of $7.1 million in 2003 to expense of $1.5 million in 2004. This change was principally due to an $11.3 million lower income tax benefit recognized in 2004 as compared to 2003, due primarily to an $8.0 million benefit related to the reversal of a deferred income tax asset valuation allowance in 2003 (see further discussion in Note 10 of the consolidated financial statements in Item 8). In the year ended December 31, 2004, there was a tax benefit of $6.7 million recorded, as compared to $18.0 million in the year ended December 31, 2003.

Interest Income

Interest income consists primarily of interest and accretion on general partner notes receivable from our unconsolidated real estate partnerships. Transactions that result in accretion occur on varying timetables and thus the income generated may vary from period to period.

For the year ended December 31, 2005, as compared to the year ended December 31, 2004, interest income decreased $1.0 million, or 3.2%. This decrease was principally a result of $3.8 million in lower accretion income, partially offset by higher interest income from money market and interest-bearing accounts due to increased interest rates and higher cash balances.

For the year ended December 31, 2004, as compared to the year ended December 31, 2003, interest income increased $7.8 million, or 32.0%. This increase was principally a result of $5.0 million in higher interest due from general partner notes receivable, and $3.0 million in higher accretion income.

Interest Expense

For the year ended December 31, 2005, compared to the year ended December 31, 2004, interest expense, which includes the amortization of deferred financing costs, increased $25.2 million, or 7.7%. This increase was principally due to: $16.0 million and $5.0 million resulting from interest on the additional debt related to acquisition and newly consolidated properties, respectively; $17.7 million due to increased borrowings and increased interest rates on corporate and variable rate property debt and other items. These increases were partially offset by: $4.8 million in lower amortization of loan costs, primarily due to corporate debt restructuring in 2004; $8.5 million in higher capitalized interest due to increased redevelopment activity; and a $2.1 million decrease related to the redemption of mandatorily redeemable preferred securities in 2004 and early 2005.

For the year ended December 31, 2004, compared to the year ended December 31, 2003, interest expense increased $23.3 million, or 7.7%. This increase was principally due to: $9.9 million resulting from interest on the additional debt related to the newly consolidated properties; $9.6 million resulting from interest on the additional debt related to acquisition properties; and a $4.7 million decrease in capitalized interest due to redevelopment properties being placed in service. Additionally, an $8.8 million increase related to the credit facility and term loan (of which $1.8 million was associated with the write-off of deferred loan costs related to the November 2004 modification of the credit facility and term loan and $0.8 million related to the payoff of the indebtedness incurred to complete the acquisition of Casden Properties, Inc) due to higher average principal balances along with a higher weighted average interest rate. The November 2004 modification reduced the spread over LIBOR by an average of 1.25%, which has favorably impacted interest expense related to our revolving credit facility and $300 million term loan. These increases were partially offset by lower weighted average effective interest rates on mortgage debt due to refinancings that occurred in 2003 and 2004.

Deficit Distributions to Minority Partners

When real estate partnerships consolidated in our financial statements make cash distributions to partners in excess of the carrying amount of the minority interest, we record a charge equal to the amount of such distribution, even though there is no economic effect or cost.

For the year ended December 31, 2005, as compared to the year ended December 31, 2004, deficit distributions to minority partners decreased $5.8 million, or 33.1%. For the year ended December 31, 2004, as compared to the year ended December 31, 2003, deficit distributions to minority partners decreased $0.2 million, or 1.1%. The decrease in both periods was due to reduced levels of distributions being made by the consolidated real estate partnerships as a result of lower refinancing activity and decreased operating results, as well as our increased ownership of such partnerships.

Gain on Dispositions of Real Estate Related to Unconsolidated Entities and Other

Gain on dispositions of real estate related to unconsolidated entities and other includes our share of gain related to dispositions of real estate within our unconsolidated real estate partnerships, gain on dispositions of land and other non-depreciable assets and costs related to asset disposal activities.

For the year ended December 31, 2005, as compared to the year ended December 31, 2004, gain on dispositions of real estate related to unconsolidated entities and other decreased $52.3 million. For the year ended December 31, 2004, as compared to the year ended December 31, 2003, gain on dispositions of real estate related to unconsolidated entities and other increased $66.0 million. The change in both periods was principally due to a $34.6 million gain on the sale of a parcel of land located in Florida and a $17.4 million gain from the sale of one of our unconsolidated core properties, both of which occurred in 2004.

Changes in the level of gains recognized from period to period reflect the changing level of our disposition activity from period to period. Additionally, gains on properties sold are determined on an individual property basis or in the aggregate for a group of properties that are sold in a single transaction, and are not comparable period to period.

Minority Interest in Consolidated Real Estate Partnerships

Minority interest in consolidated real estate partnerships reflects minority partners’ share of operating results of consolidated real estate partnerships. This includes the minority partners’ share of property management fees, interest on notes and other amounts eliminated in consolidation that we charge to such partnerships. For the years ended December 31, 2005, 2004 and 2003, such minority interests had a favorable effect on our consolidated operating results.

For the year ended December 31, 2005, as compared to the year ended December 31, 2004, the benefit from minority interest in consolidated real estate partnerships decreased $9.9 million. For the year ended December 31, 2004, as compared to the year ended December 31, 2003, the benefit from minority interest in consolidated real estate partnerships increased $14.2 million. The change in both periods was driven by property operating results. During 2005 as compared to 2004 our property operating results improved, thereby reducing the benefit from minority interest. When comparing 2004 to 2003 our property operating results declined, thereby increasing the benefit from minority interest.

Income from Discontinued Operations, Net

For properties accounted for as held for sale, the results of operations for properties sold during the period or designated as held for sale at the end of the period are generally required to be classified as discontinued operations for all periods presented (see Note 2 of the consolidated financial statements in Item 8 for further policy information). The property-specific components of net earnings that are classified as discontinued operations include all property-related revenues and operating expenses, depreciation expense recognized prior to the classification as held for sale, property-specific interest expense to the extent there is secured debt on the property and the associated minority interest. In addition, any impairment losses on assets held for sale, and the net gain on the eventual disposal of properties held for sale are reported as discontinued operations.

For the years ended December 31, 2005, 2004, and 2003, income from discontinued operations, net totaled $96.3 million, $212.9 million and $98.8 million, respectively, which includes a loss from operations of $4.1 million in 2005 and income from operations of $9.0 million and $26.0 million in 2004 and 2003, respectively. In 2005, the income from operations included the operating results of 128 properties and one partnership that were sold or classified as held for sale during 2005 and the first nine months of 2006. In 2004 and 2003, the income from operations included the operating results of 182 properties and one partnership and 239 properties and one partnership, respectively, that were sold or classified as held for sale in 2003, 2004, 2005 and the first nine months of 2006. Due to varying number of properties and the timing of sales, the income from operations is not comparable year to year.

During 2005, we sold 83 properties and one partnership, resulting in a net gain on sale of approximately $100.6 million (which is net of $4.5 million of related income taxes). Additionally, we recognized $3.8 million in impairment losses on assets sold or held for sale in 2005 and $14.6 million of net recoveries of deficit distributions to minority partners. During 2004, we sold 54 properties, resulting in a net gain on sale of approximately $233.4 million (which is net of $16.0 million of related income taxes). Additionally, we recognized $7.3 million in impairment losses on assets sold or held for sale in 2004 and $3.2 million of net recoveries of deficit distributions to minority partners. During 2003, we sold 72 properties, resulting in a net gain on sale of approximately $89.7 million (which is net of $12.1 million of related taxes). Additionally, we recognized $9.0 million in impairment losses on assets sold or held for sale in 2003 and $5.6 million of net recoveries of deficit distributions to minority partners.

Cumulative Effect of Change in Accounting Principle

On March 31, 2004, we recorded a $4.0 million cumulative effect of change in accounting principle related to the adoption of FIN 46. This charge is attributable to our recognition of cumulative losses allocable to minority interest that would otherwise have resulted in minority interest deficits. See Note 2 of the consolidated financial statements in Item 8 for further information.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with GAAP, which requires us to make estimates and assumptions. We believe that the following critical accounting policies involve our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Impairment of Long-Lived Assets

Real estate and other long-lived assets to be held and used are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a property may not be recoverable, we make an assessment of its recoverability by comparing the carrying amount to our estimate of the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the aggregate undiscounted future cash flows, we recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.

Real estate investments are subject to varying degrees of risk. Several factors may adversely affect the economic performance and value of our real estate investments. These factors include:

	•		the general economic climate;

	•		competition from other apartment communities and other housing options;

	•		local conditions, such as loss of jobs or an increase in the supply of apartments, that might adversely affect apartment occupancy or rental rates;

	•		changes in governmental regulations and the related cost of compliance;

	•		increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents;

	•		changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multifamily housing;

	•		changes in market capitalization rates; and

	•		the relative illiquidity of such investments.

Any adverse changes in these and other factors could cause an impairment in our long-lived assets, including real estate and investments in unconsolidated real estate partnerships. Based on periodic tests of recoverability of long-lived assets, for the year ended December 31, 2005, we recorded impairment losses of $3.4 million related to properties to be held and used. For the years ended December 31, 2004 and 2003, we determined that the carrying amount for our properties to be held and used was recoverable and, therefore, we did not record any impairment losses related to such properties.

Notes Receivable and Interest Income Recognition

Notes receivable from unconsolidated real estate partnerships consist primarily of notes receivable from partnerships in which we are the general partner. The ultimate repayment of these notes is subject to a number of variables, including the performance and value of the underlying real estate property and the claims of unaffiliated mortgage lenders. Our notes receivable include loans extended by us that we carry at the face amount plus accrued interest, which we refer to as “par value notes,” and loans extended by predecessors whose positions we generally acquired at a discount, which we refer to as “discounted notes.”

We record interest income on par value notes as earned in accordance with the terms of the related loan agreements. We discontinue the accrual of interest on such notes when the notes are impaired, as discussed below, or when there is otherwise significant uncertainty as to the collection of interest. We record income on such nonaccrual loans using the cost recovery method, under which we apply cash receipts first to the recorded amount of the loan; thereafter, any additional receipts are recognized as income.

We recognize interest income on discounted notes receivable based upon whether the amount and timing of collections are both probable and reasonably estimable. We consider collections to be probable and reasonably estimable when the borrower has entered into certain closed or pending transactions (which include real estate sales, refinancings, foreclosures and rights offerings) that provide a reliable source of repayment. In such instances, we recognize accretion income, on a prospective basis using the effective interest method over the estimated remaining term of the loans, equal to the difference between the carrying amount of the discounted notes and the estimated collectible value. We record income on all other discounted notes using the cost recovery method. For the year

ended December 31, 2005, if we had not been able to complete certain transactions, our accretion income would have been lower by $2.5 million. Accretion income recognized in any given period is based on our ability to complete transactions to monetize the notes receivable and the difference between the carrying value and the estimated collectible value of the notes; therefore, accretion income varies on a period by period basis and could be lower or higher than in prior periods.

Allowance for Losses on Notes Receivable

We assess the collectibility of notes receivable on a periodic basis, which assessment consists primarily of an evaluation of cash flow projections of the borrower to determine whether estimated cash flows are sufficient to repay principal and interest in accordance with the contractual terms of the note. We recognize impairments on notes receivable when it is probable that principal and interest will not be received in accordance with the contractual terms of the loan. The amount of the impairment to be recognized generally is based on the fair value of the partnership’s real estate that represents the primary source of loan repayment. In certain instances where other sources of cash flow are available to repay the loan, the impairment is measured by discounting the estimated cash flows at the loan’s original effective interest rate.

During the years ended December 31, 2005 and 2004, we recorded $1.4 million and $1.8 million in net recovery of impairment losses on notes receivable. During the year ended December 31, 2003, we identified and recorded $2.2 million in net impairment losses on notes receivable. We will continue to evaluate the collectibility of these notes, and we will adjust related allowances in the future due to changes in market conditions and other factors.

Capitalized Costs

We capitalize costs, including certain indirect costs, incurred in connection with our capital expenditure activities, including redevelopment and construction projects, other tangible property improvements, and replacements of existing property components. Included in these capitalized costs are payroll costs associated with time spent by site employees in connection with the planning, execution and control of all capital expenditure activities at the property level. We characterize as “indirect costs” an allocation of certain department costs, including payroll, at the regional operating center and corporate levels that clearly relate to capital expenditure activities. We capitalize interest, property taxes and insurance during periods in which redevelopment and construction projects are in progress. Costs incurred in connection with capital expenditure activities are capitalized where the costs of the improvements or replacements exceed $250. We charge to expense as incurred costs that do not relate to capital expenditure activities, including ordinary repairs, maintenance, resident turnover costs and general and administrative expenses. See Note 2 — Capital Expenditures and Related Depreciation of the consolidated financial statements in Item 8 for further policy information.

For the years ended December 31, 2005, 2004 and 2003, for continuing and discontinued operations, we capitalized $18.1 million, $9.5 million and $14.5 million of interest costs, respectively, and $53.3 million, $46.7 million and $45.4 million of site payroll and indirect costs, respectively.

Funds From Operations

Funds From Operations, or FFO, is a non-GAAP financial measure that we believe, when considered with the financial statements determined in accordance with GAAP, is helpful to investors in understanding our performance because it captures features particular to real estate performance by recognizing that real estate generally appreciates over time or maintains residual value to a much greater extent than do other depreciable assets such as machinery, computers or other personal property. The Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as net income (loss), computed in accordance with GAAP, excluding gains from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. We compute FFO for all periods presented in accordance with the guidance set forth by NAREIT’s April 1, 2002 White Paper, which we refer to as the White Paper. We calculate FFO (diluted) by subtracting redemption related preferred stock issuance costs and dividends on preferred stock and adding back dividends/distributions on dilutive preferred securities and interest expense on dilutive mandatorily redeemable convertible preferred securities. FFO should not be considered an alternative to net income or net cash flows from operating activities, as determined in accordance with GAAP, as an indication of our performance or as a measure of liquidity. FFO is not necessarily indicative of cash available to fund future cash needs. In addition, although FFO is a measure used for comparability in assessing the performance of real estate investment trusts, there can be no assurance that our basis for computing FFO is comparable with that of other real estate investment trusts.

For the years ended December 31, 2005, 2004 and 2003, our FFO is calculated as follows (in thousands):


	2005			2004			2003
Net income (loss) attributable to common stockholders (1)	$	(16,966	)	$	174,693		$	65,292
Adjustments:
Depreciation and amortization (2)		387,713			325,494			294.809
Depreciation and amortization related to non-real estate assets		(17,700	)		(18,349	)		(20,370	)
Depreciation of rental property related to minority partners’ interest (3)		(34,396	)		(38,096	)		(21,386	)
Depreciation of rental property related to unconsolidated entities		20,661			22,360			25,817
Gain on dispositions of real estate related to unconsolidated entities and other		(16,859	)		(69,204	)		(3,178	)
Gain on dispositions of non-depreciable assets		2,481			38,977			—
Deficit distributions to minority partners (4)		11,615			17,374			17,560
Cumulative effect of change in accounting principle		—			3,957			—
Discontinued operations:
Gain on dispositions of real estate, net of minority partners’ interest (3)		(105,060	)		(249,436	)		(101,849	)
Depreciation of rental property, net of minority partners’ interest (3)		41,662			50,526			66,821
Recovery of deficit distributions to minority partners, net (4)		(14,604	)		(3,231	)		(5,617	)
Income tax arising from disposals		4,481			16,015			12,134
Minority interest in Aimco Operating Partnership’s share of above adjustments		(28,381	)		(10,289	)		(29,910	)
Preferred stock dividends		86,825			85,315			85,920
Redemption related preferred stock issuance costs		1,123			3,489			7,645

Funds From Operations	$	322,595		$	349,595		$	393,688
Preferred stock dividends		(86,825	)		(85,315	)		(85,920	)
Redemption related preferred stock issuance costs		(1,123	)		(3,489	)		(7,645	)
Dividends/distributions on dilutive preferred securities		168			2,798			11,330
Interest expense on mandatorily redeemable convertible preferred securities		—			—			987

Funds From Operations attributable to common stockholders — diluted	$	234,815		$	263,589		$	312,440


Weighted average number of common shares, common share equivalents and dilutive preferred securities outstanding:
Common shares and equivalents (5)		94,465			93,252			92,968
Dilutive preferred securities		74			1,106			3,639

Total		94,539			94,358			96,607


Notes:

(1)		Represents the numerator for earnings per common share, calculated in accordance with GAAP.

(2)		Includes amortization of management contracts where we are the general partner. Such management contracts were established in certain instances where we acquired a general partner interest in either a consolidated or an unconsolidated partnership. Because the recoverability of these management contracts depends primarily on the


		operations of the real estate owned by the limited partnerships, we believe it is consistent with the White Paper to add back such amortization, as the White Paper directs the add-back of amortization of assets uniquely significant to the real estate industry.

(3)		“Minority partners’ interest,” means minority interest in our consolidated real estate partnerships.

(4)		In accordance with GAAP, deficit distributions to minority partners are charges recognized in our income statement when cash is distributed to a non-controlling partner in a consolidated real estate partnership in excess of the positive balance in such partner’s capital account, which is classified as minority interest on our balance sheet. We record these charges for GAAP purposes even though there is no economic effect or cost. Deficit distributions to minority partners occur when the fair value of the underlying real estate exceeds its depreciated net book value because the underlying real estate has appreciated or maintained its value. As a result, the recognition of expense for deficit distributions to minority partners represents, in substance, either (a) our recognition of depreciation previously allocated to the non-controlling partner or (b) a payment related to the non-controlling partner’s share of real estate appreciation. Based on White Paper guidance that requires real estate depreciation and gains to be excluded from FFO, we add back deficit distributions and subtract related recoveries in our reconciliation of net income to FFO.

(5)		Represents the denominator for earnings per common share — diluted, calculated in accordance with GAAP, plus additional common share equivalents that are dilutive for FFO.

Liquidity and Capital Resources

Liquidity is the ability to meet present and future financial obligations either through the sale or maturity of existing assets or by the acquisition of additional funds through working capital management. Both the coordination of asset and liability maturities and effective working capital management are important to the maintenance of liquidity. Our primary source of liquidity is cash flow from our operations. Additional sources are proceeds from property sales and proceeds from refinancings of existing mortgage loans and borrowings under new mortgage loans.

Our principal uses for liquidity include normal operating activities, payments of principal and interest on outstanding debt, capital expenditures, dividends paid to stockholders and distributions paid to partners, and acquisitions of, and investments in, properties. We use our cash provided by operating activities to meet short-term liquidity needs. In the event that the cash provided by operating activities is not sufficient to cover our short-term liquidity demands, we have additional means, such as short-term borrowing availability and proceeds from property sales and refinancings, to help us meet our short-term liquidity demands. We use our revolving credit facility for general corporate purposes and to fund investments on an interim basis. We expect to meet our long-term liquidity requirements, such as debt maturities and property acquisitions, through long-term borrowings, both secured and unsecured, the issuance of debt or equity securities (including OP Units), the sale of properties and cash generated from operations.

At December 31, 2005, we had $161.7 million in cash and cash equivalents, an increase of $56.4 million from December 31, 2004, which cash is principally from sales and refinancing transactions that has yet to be distributed or applied to the outstanding balance of the revolving credit facility (see Note 8 to the consolidated financial statements in Item 8). At December 31, 2005, we had $284.0 million of restricted cash, primarily consisting of reserves and escrows held by lenders for bond sinking funds, capital expenditures, property taxes and insurance. In addition, cash, cash equivalents and restricted cash are held by partnerships that are not presented on a consolidated basis. The following discussion relates to changes in cash due to operating, investing and financing activities, which are presented in our Consolidated Statements of Cash Flows in Item 8.

Operating Activities

For the year ended December 31, 2005, our net cash provided by operating activities of $355.5 million was primarily from operating income from our consolidated properties, which is affected primarily by rental rates, occupancy levels and operating expenses related to our portfolio of properties. Cash provided by operating activities decreased $10.0 million compared with the year ended December 31, 2004, driven by changes in operating assets and liabilities. The changes in operating assets and liabilities were primarily due to cash used to reduce current liabilities related to interest and real estate tax accruals, offset by decreases in accounts receivable related to improved collections, and decreases in prepaid expense and restricted cash balances.

Investing Activities

For the year ended December 31, 2005, our net cash used in investing activities of $50.0 million primarily resulted from investments in our existing real estate assets through capital spending as well as the acquisition of Palazzo East at Park La Brea and five other properties (see Note 3 to the consolidated financial statements in Item 8 for further information on acquisitions), partially offset by proceeds received from sales of properties.

Although we hold all of our properties for investment, we sell properties when they do not meet our investment criteria or are located in areas that we believe do not justify our continued investment when compared to alternative uses for our capital. During the year ended December 31, 2005, we sold 83 consolidated properties and 35 unconsolidated properties. These properties were sold for an aggregate sales price of $960.0 million, of which $764.0 million related to the consolidated properties. The sale of the consolidated properties generated proceeds totaling $718.4 million, after the payment of transaction costs. Our share of the total net proceeds from the sale of the 118 properties, after repayment of existing debt, payment of transaction costs and distributions to limited partners, was $331.8 million, of which $36.4 million related to the unconsolidated properties and was included in our distributions received from investments in unconsolidated real estate partnerships. Sales proceeds were used to repay a portion of our outstanding short-term indebtedness and for other corporate purposes.

We are currently marketing for sale certain properties that are inconsistent with our long-term investment strategy. Additionally, from time to time, we may market certain properties that are consistent with our long-term investment strategy but offer attractive returns, such as sales to buyers who intend to convert the properties to condominiums. Gross sales proceeds from 2006 dispositions are expected to be $750 million to $950 million, and we plan to use our share of the net proceeds from such dispositions to reduce debt, fund capital expenditures on existing assets, fund property and partnership acquisitions, redeem preferred securities and for other operating needs and corporate purposes.

Capital Expenditures

We classify all capital spending as Capital Replacements (which we refer to as CR), Capital Improvements (which we refer to as CI), casualties or redevelopment. Non-redevelopment and non-casualty capitalizable expenditures are apportioned between CR and CI based on the useful life of the capital item under consideration and the period we have owned the property (i.e., the portion that was consumed during our ownership of the item represents CR; the portion of the item that was consumed prior to our ownership represents CI).

For the year ended December 31, 2005, we spent a total of $89.7 million on CR. These are expenditures that represent the share of expenditures that are deemed to replace the consumed portion of acquired capital assets. For the year ended December 31, 2005, we spent a total of $112.0 million, $23.9 million and $140.3 million, respectively, on CI, casualties and redevelopment. CI expenditures represent all non-redevelopment and non-casualty capital expenditures that are made to enhance the value, profitability or useful life of an asset from its original purchase condition. Casualty expenditures represent capitalized costs incurred in connection with casualty losses and are associated with the restoration of the asset. A portion of the restoration costs may be reimbursed by insurance carriers subject to deductibles associated with each loss. Redevelopment expenditures represent expenditures that substantially upgrade the property.

The table below details our share of actual spending, on both consolidated and unconsolidated real estate partnerships, for CR, CI, casualties and redevelopment for the year ended December 31, 2005 on a per unit and total dollar basis (based on approximately 150,200 ownership equivalent units (excluding non-managed units) weighted for the portion of the period that we owned the property), and reconciles it to our Consolidated Statement of Cash Flows for the same period (in thousands, except per unit amounts).


	Actual			Cost Per
	Cost			Unit
Capital Replacements Detail:
Building interiors	$	14,453		$	96
Includes: hot water heaters, kitchen/bath

Building exteriors		13,932			93
Includes: roofs, exterior painting, electrical, plumbing

Landscaping and grounds		7,509			50
Includes: parking lot improvements, pool improvements

Turnover related		38,047			253
Includes: carpet, vinyl, tile, appliance, and fixture replacements

Capitalized site payroll and indirect costs		15,719			105

Our share of Capital Replacements	$	89,660		$	597


Capital Replacements:
Conventional	$	83,197
Affordable		6,463

Our share of Capital Replacements		89,660


Capital Improvements:
Conventional		91,228
Affordable		20,736

Our share of Capital Improvements		111,964


Casualties:
Conventional		22,537
Affordable		1,380

Our share of casualties		23,917


Redevelopment:
Conventional		137,311
Affordable		3,021

Our share of redevelopment		140,332


Our share of capital expenditures		365,873

Plus minority partners’ share of consolidated spending		90,113
Less our share of unconsolidated spending		(12,104	)

Total capital expenditures per Consolidated Statement of Cash Flows	$	443,882

Included in the above spending for CI, casualties and redevelopment, was approximately $33.2 million of our share of capitalized site payroll and indirect costs related to these activities for the year ended December 31, 2005.

We funded all of the above capital expenditures with cash provided by operating activities, working capital, property sales and borrowings under the revolving credit facility.

Financing Activities

For the year ended December 31, 2005, net cash used in financing activities of $249.2 million primarily related to payments on our secured notes payable, payment of our dividends, and redemptions of the Class D Cumulative Preferred Stock and Trust Based Convertible Preferred Securities, which we refer to as TOPRS, partially offset by proceeds from borrowings.

Mortgage Debt

At December 31, 2005 and 2004, we had $5.7 billion in consolidated mortgage debt outstanding, which included $260.6 million and $636.6 million, respectively, of mortgage debt classified within liabilities related to assets held for sale. During the year ended December 31, 2005, we refinanced or closed mortgage loans on 68 consolidated properties generating $591.1 million of proceeds from borrowings with a weighted average interest rate of 5.02%. Our share of the net proceeds after repayment of existing debt, payment of transaction costs and distributions to limited partners, was $254.1 million. In addition, we closed mortgage loans on 15 unconsolidated properties, with a weighted average interest rate of 4.95%. Our share of the net proceeds from these 15 mortgage loans totaled $26.4 million. We used our total net proceeds from all loans closed of $280.5 million for corporate purposes. We intend to continue to refinance mortgage debt to generate proceeds in amounts exceeding our scheduled amortizations and maturities.

During the year ended December 31, 2005, we closed five mortgage loans totaling $130.3 million, with an initial weighted average interest rate of 3.27%, to finance our consolidated acquisitions.

Revolving Credit Facility and Term Loans

We have an Amended and Restated Senior Secured Credit Agreement with a syndicate of financial institutions, which we refer to as the Credit Agreement. On June 16, 2005, we amended our Credit Agreement, to provide for $100.0 million in additional term loan borrowings. The additional term loan matures on November 2, 2009 and bears interest at a rate of either LIBOR plus 1.75% or a base rate (determined by reference to the federal funds rate or Bank of America’s prime rate) plus 0.25%. The proceeds from the additional term loan were used to repay outstanding revolving loans.

The aggregate amount of commitments and loans under the Credit Agreement is $850.0 million, comprised of $450.0 million of revolving loan commitments and $400.0 million in term loans. The term loans mature on November 2, 2009 and the revolving loans mature on November 2, 2007. At December 31, 2005, the term loans had an outstanding principal balance of $400.0 million and a weighted average interest rate of 6.18% (based on LIBOR plus 2.00% for the original $300.0 million and LIBOR plus 1.75% for the additional $100.0 million). At December 31, 2005, the revolving loans had an outstanding principal balance of $217.0 million and a weighted average interest rate of 6.26% (based on various weighted average LIBOR and base rate borrowings outstanding with various maturities). The amount available under the revolving credit facility at December 31, 2005 was $208.3 million (after giving effect to $24.7 million outstanding for undrawn letters of credit issued under the revolving credit facility). The proceeds of revolving loans are generally permitted to be used to fund working capital and for other corporate purposes. For more information, see Note 8 of the consolidated financial statements in Item 8.

Equity Transactions

During the year ended December 31, 2005, we redeemed all outstanding shares of Class D Cumulative Preferred Stock for $31.3 million in cash.

As of December 31, 2005, under our shelf registration statement, which was declared effective in April 2004, we had available for issuance approximately $877 million of debt and equity securities and the Aimco Operating Partnership had available for issuance $500 million of debt securities. From time to time we may issue preferred securities in both public offerings and private placements to generate proceeds to be used to redeem higher cost preferred securities, to finance acquisitions of real estate interests and for other corporate purposes.

Our Board of Directors has, from time to time authorized us to repurchase shares of our outstanding capital stock. In April 2005, our Board of Directors replaced the existing authorization with a new authorization to repurchase up to a total of eight million shares of our Common Stock. These repurchases may be made from time to time in the open market or in privately negotiated transactions, subject to applicable law. During 2005, we did not repurchase any shares of our Common Stock.

Contractual Obligations

This table summarizes information contained elsewhere in this Annual Report regarding payments due under contractual obligations and commitments as of December 31, 2005 (amounts in thousands):


			Less than						More than
	Total		One Year		1-3 Years		3-5 Years		5 Years
Scheduled long-term debt maturities	$	5,440,282	$	520,192	$	902,072	$	581,044	$	3,436,975
Secured credit facility and term loans		617,000		—		217,000		400,000		—
Long-term liabilities related to assets held for sale		260,637		22,514		34,069		21,332		182,721
Redevelopment and other construction commitments		99,591		96,704		2,887		—		—
Leases for space occupied		43,743		7,784		14,663		9,925		11,371
Development fee payments (1)		12,500		10,000		2,500		—		—

Total	$	6,473,753	$	657,194	$	1,173,191	$	1,012,301	$	3,631,067


(1)		The development fee payments above were established in connection with the acquisition of Casden Properties, Inc. and our commitment as it relates to the Casden Development Company, LLC. We agreed to pay $2.5 million per quarter for five years (up to an aggregate amount of $50.0 million) to Casden Development Company, LLC as a retainer on account for redevelopment services on our assets.

In addition, we may enter into commitments to purchase goods and services in connection with the operations of our properties. Those commitments generally have terms of one year or less and reflect expenditure levels comparable to our historical expenditures.

Future Capital Needs

In addition to the items set forth in “Contractual Obligations” above, we expect to fund any future acquisitions, additional redevelopment projects and capital improvements principally with proceeds from property sales (including tax-free exchange proceeds), short-term borrowings, debt and equity financings and operating cash flows.

In 2006, we plan to invest between $150 and $200 million in conventional redevelopment projects that will impact approximately 70 properties with nearly 30,000 units. Additionally, in 2006 redevelopment expenditures on affordable properties will be approximately $80 million, predominantly funded by third-party tax credit equity, impacting 20 to 25 properties with more than 3,000 units.

Off-Balance Sheet Arrangements

We own general and limited partner interests in unconsolidated real estate partnerships, in which our total ownership interests range typically from less than 1% up to 50%. However, based on the provisions of the relevant partnership agreements, we are not deemed to have control of these partnerships sufficient to require or permit consolidation for accounting purposes (see Note 2 of the consolidated financial statements in Item 8). There are no lines of credit, side agreements, or any other derivative financial instruments related to or between our unconsolidated real estate partnerships and us and no material exposure to financial guarantees. Accordingly, our maximum risk of loss related to these unconsolidated real estate partnerships is limited to the aggregate carrying amount of our investment in the unconsolidated real estate partnerships and any outstanding notes receivable as reported in our consolidated financial statements. See Note 4 of the consolidated financial statements in Item 8 for additional information on our unconsolidated real estate partnerships.

Item 8.Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS


			Page
Financial Statements:
Report of Independent Registered Public Accounting Firm			20
Consolidated Balance Sheets as of December 31, 2005 and 2004			21
Consolidated Statements of Income for the Years Ended December 31, 2005, 2004 and 2003			22
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2005, 2004 and 2003			23
Consolidated Statements of Cash Flows for the Years Ended December 31, 2005, 2004 and 2003			24
Notes to Consolidated Financial Statements			26

Financial Statement Schedule:
Schedule III — Real Estate and Accumulated Depreciation			57
All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Stockholders and Board of Directors
Apartment Investment and Management Company

We have audited the accompanying consolidated balance sheets of Apartment Investment and Management Company as of December 31, 2005 and 2004, and the related consolidated statements of income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2005. Our audits also included the financial statement schedule listed in the accompanying Index to Financial Statements. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Apartment Investment and Management Company at December 31, 2005 and 2004, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2005, in conformity with United States generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects the information set forth therein.

As discussed in Note 2 to the consolidated financial statements, in 2004 the Company adopted the provisions of Financial Accounting Standards Board Interpretation No. 46 (revised December 2003),Consolidation of Variable Interest Entities.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Apartment Investment and Management Company’s internal control over financial reporting as of December 31, 2005, based on criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 6, 2006 expressed an unqualified opinion thereon.



	/s/ ERNST & YOUNG LLP

Denver, Colorado
March 6, 2006, except for notes 6, 10, 14, 15 and 17, as to which the date is November 30, 2006.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED BALANCE SHEETS

As of December 31, 2005 and 2004

(In thousands, except share data)


	2005			2004
ASSETS
Real estate:
Land	$	2,233,630		$	2,036,415
Buildings and improvements		8,255,582			7,573,564

Total real estate		10,489,212			9,609,979
Less accumulated depreciation		(2,097,966	)		(1,734,934	)

Net real estate		8,391,246			7,875,045
Cash and cash equivalents		161,730			105,343
Restricted cash		283,955			288,352
Accounts receivable		59,889			77,119
Accounts receivable from affiliates		43,070			39,216
Deferred financing costs		64,873			65,483
Notes receivable from unconsolidated real estate partnerships		177,200			165,281
Notes receivable from non-affiliates		23,760			31,716
Investment in unconsolidated real estate partnerships		167,818			207,847
Other assets		216,863			243,317
Deferred income tax assets, net		9,835			—
Assets held for sale		418,921			975,597

Total assets	$	10,019,160		$	10,074,316


LIABILITIES AND STOCKHOLDERS’ EQUITY
Secured tax-exempt bond financing	$	1,035,584		$	1,059,000
Secured notes payable		4,404,699			3,959,379
Mandatorily redeemable preferred securities		—			15,019
Term loans		400,000			300,000
Credit facility		217,000			68,700

Total indebtedness		6,057,283			5,402,098

Accounts payable		34,381			34,663
Accrued liabilities and other		423,633			403,049
Deferred income		46,837			43,625
Security deposits		37,577			33,939
Deferred income tax liabilities, net		—			20,139
Liabilities related to assets held for sale		267,937			644,802

Total liabilities		6,867,648			6,582,315


Minority interest in consolidated real estate partnerships		217,679			211,804
Minority interest in Aimco Operating Partnership		217,729			272,037

Stockholders’ equity:
Preferred Stock, perpetual		860,250			891,500
Preferred Stock, convertible		150,000			150,000

Class A Common Stock, $.01 par value, 426,157,976 shares authorized, 95,732,200 and 94,853,696 shares issued and outstanding, at December 31, 2005 and 2004, respectively		957			949
Additional paid-in capital		3,105,962			3,070,073
Unearned restricted stock		(24,255	)		(19,740	)
Notes due on common stock purchases		(25,911	)		(36,725	)
Distributions in excess of earnings		(1,350,899	)		(1,047,897	)

Total stockholders’ equity		2,716,104			3,008,160

Total liabilities and stockholders’ equity	$	10,019,160		$	10,074,316

See notes to consolidated financial statements.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF INCOME

For the Years Ended December 31, 2005, 2004 and 2003

(In thousands, except per share data)


	2005			2004			2003
REVENUES:
Rental and other property revenues	$	1,387,601		$	1,246,795		$	1,186,939
Property management revenues, primarily from affiliates		24,528			32,461			37,992
Activity fees and asset management revenues, primarily from affiliates		37,349			34,801			20,198

Total revenues		1,449,478			1,314,057			1,245,129


OPERATING EXPENSES:
Property operating expenses		668,360			599,011			522,611
Property management expenses		7,360			9,789			8,419
Activity and asset management expenses		10,630			11,879			8,367
Depreciation and amortization		387,713			325,494			294,809
General and administrative expenses		92,826			77,424			48,357
Other expenses (income), net		(4,690	)		1,499			(7,071	)

Total operating expenses		1,162,199			1,025,096			875,492


Operating income		287,279			288,961			369,637

Interest income		31,184			32,199			24,384
Recovery of (provision for) losses on notes receivable		1,365			1,765			(2,183	)
Interest expense		(352,593	)		(327,431	)		(304,149	)
Deficit distributions to minority partners		(11,615	)		(17,374	)		(17,560	)
Equity in losses of unconsolidated real estate partnerships		(3,139	)		(1,768	)		(6,428	)
Impairment losses related to real estate partnerships		(6,120	)		(3,426	)		(4,122	)
Gain on dispositions of real estate related to unconsolidated entities and Other		16,859			69,204			3,178

Income (loss) before minority interests, discontinued operations and cumulative effect of change in accounting principle		(36,780	)		42,130			62,757

Minority interests:
Minority interest in consolidated real estate partnerships		5,832			15,696			1,466
Minority interest in Aimco Operating Partnership, preferred		(7,226	)		(7,858	)		(9,312	)
Minority interest in Aimco Operating Partnership, common		12,837			4,547			5,104

Total minority interests		11,443			12,385			(2,742	)

Income (loss) from continuing operations		(25,337	)		54,515			60,015
Income from discontinued operations, net		96,319			212,939			98,842

Income before cumulative effect of change in accounting principle		70,982			267,454			158,857
Cumulative effect of change in accounting principle		—			(3,957	)		—

Net income		70,982			263,497			158,857
Net income attributable to preferred stockholders		87,948			88,804			93,565

Net income (loss) attributable to common stockholders	$	(16,966	)	$	174,693		$	65,292


Earnings (loss) per common share – basic:
Loss from continuing operations (net of preferred dividends)	$	(1.21	)	$	(0.37	)	$	(0.36	)
Income from discontinued operations		1.03			2.29			1.06
Cumulative effect of change in accounting principle		—			(0.04	)		—

Net income (loss) attributable to common stockholders	$	(0.18	)	$	1.88		$	0.70

Earnings (loss) per common share – diluted:
Loss from continuing operations (net of preferred dividends)	$	(1.21	)	$	(0.37	)	$	(0.36	)
Income from discontinued operations		1.03			2.29			1.06
Cumulative effect of change in accounting principle		—			(0.04	)		—

Net income (loss) attributable to common stockholders	$	(0.18	)	$	1.88		$	0.70


Weighted average common shares outstanding		93,894			93,118			92,850

Weighted average common shares and equivalents outstanding		93,894			93,118			92,850

Dividends declared per common share	$	3.00		$	2.40		$	2.84

See notes to consolidated financial statements.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Years Ended December 31, 2005, 2004 and 2003 (In thousands)



							Class A												Notes Due on Common
	Preferred Stock						Common Stock															Distri- butions
													Additional			Unearned						Distri- butions
	Shares						Shares						Paid-in			Restricted			Stock			in Excess
	Issued			Amount			Issued			Amount			Capital			Stock			Purchases			of Earnings			Total
BALANCE DECEMBER 31, 2002		35,725		$	945,012			93,770		$	938		$	3,050,057		$	(7,079	)	$	(48,964	)	$	(776,577	)	$	3,163,387
Net proceeds from issuances of Preferred Stock		6,000			150,000			—			—			(5,192	)		—			—			—			144,808
Conversion of Aimco Operating Partnership units to Class A Common Stock		—			—			338			3			12,032			—			—			—			12,035
Conversion of Preferred Operating Partnership units to Class A Common Stock		—			—			22			—			884			—			—			—			884
Redemption of Preferred Stock		(9,600	)		(239,770	)		—			—			7,645			—			—			(7,645	)		(239,770	)
Class A Common Stock received under Casden indemnification agreement and other activity		—			—			(585	)		(6	)		(25,520	)		—			—			—			(25,526	)
Conversion of mandatorily redeemable convertible preferred securities to Class A Common Stock		—			—			1			—			50			—			—			—			50
Repayment of notes receivable from officers		—			—			—			—			—			—			10,518			—			10,518
Purchase of stock by officers and awards of restricted stock, net of forfeitures		—			—			265			3			9,968			(7,781	)		(1,600	)		—			590
Stock options exercised		—			—			72			1			2,343			—			—			—			2,344
Amortization of stock option fair value and unearned restricted stock		—			—			—			—			892			4,088			—			—			4,980
Class A Common Stock issued as consideration for acquisition of interest in real estate		—			—			4			—			153			—			—			—			153
Net income		—			—			—			—			—			—			—			158,857			158,857
Dividends paid — Class A Common Stock		—			—			—			—			—			—			—			(285,054	)		(285,054	)
Dividends paid — Preferred Stock		—			—			—			—			—			—			—			(87,599	)		(87,599	)

BALANCE DECEMBER 31, 2003		32,125			855,242			93,887			939			3,053,312			(10,772	)		(40,046	)		(998,018	)		2,860,657
Net proceeds from issuances/exchanges of Preferred Stock		18,805			372,500			—			—			(12,828	)		—			—			—			359,672
Conversion of Aimco Operating Partnership units to Class A Common Stock		—			—			735			7			23,315			—			—			—			23,322
Conversion of Preferred Operating Partnership units to Class A Common Stock		—			—			8			—			259			—			—			—			259
Conversion of mandatorily redeemable convertible preferred securities to Class A Common Stock		—			—			2			—			100			—			—			—			100
Repurchase of Class A Common Stock		—			—			(397	)		(4	)		(12,594	)		—			—			—			(12,598	)
Redemption/exchange of Preferred Stock		(11,355	)		(186,242	)		—			—			3,638			—			—			(3,489	)		(186,093	)
Repayment of notes receivable from officers		—			—			—			—			—			—			4,639			—			4,639
Casden note receivable and legal settlement fair value contingent consideration adjustment		—			—			—			—			(4,848	)		—			—			—			(4,848	)
Purchase of stock by officers and awards of restricted and unrestricted stock, net of forfeitures		—			—			550			6			16,234			(13,871	)		(1,318	)		—			1,051
Stock options exercised		—			—			69			1			1,882			—			—			—			1,883
Amortization of stock option fair value and unearned restricted stock		—			—			—			—			1,603			4,903			—			—			6,506
Net income		—			—			—			—			—			—			—			263,497			263,497
Dividends paid — Class A Common Stock		—			—			—			—			—			—			—			(225,903	)		(225,903	)
Dividends paid — Preferred Stock		—			—			—			—			—			—			—			(83,984	)		(83,984	)

BALANCE DECEMBER 31, 2004		39,575			1,041,500			94,854			949			3,070,073			(19,740	)		(36,725	)		(1,047,897	)		3,008,160
Conversion of Aimco Operating Partnership units to Class A Common Stock		—			—			425			4			16,849			—			—			—			16,853
Conversion of Preferred Operating Partnership units to Class A Common Stock		—			—			1			—			41			—			—			—			41
Preferred Stock issuance costs		—			—			—			—			(409	)		—			—			—			(409	)
Redemption of Preferred Stock		(1,250	)		(31,250	)		—			—			1,123			—			—			(1,123	)		(31,250	)
Repayment of notes receivable from officers		—			—			—			—			—			—			12,255			—			12,255
Purchase of stock by officers and awards of restricted and unrestricted stock, net of forfeitures and other		—			—			379			4			14,875			(12,655	)		(1,441	)		—			783
Stock options exercised		—			—			65			—			2,315			—			—			—			2,315
Purchase of Oxford warrants		—			—			—			—			(1,050	)		—			—			—			(1,050	)
Class A Common Stock issued as consideration for acquisition of interest in real estate		—			—			8			—			310			—			—			—			310
Amortization of stock option fair value and unearned restricted stock		—			—			—			—			1,835			8,140			—			—			9,975
Net income		—			—			—			—			—			—			—			70,982			70,982
Dividends paid — Class A Common Stock		—			—			—			—			—			—			—			(226,815	)		(226,815	)
Dividends declared – Class A Common Stock		—			—			—			—			—			—			—			(57,439	)		(57,439	)
Dividends paid — Preferred Stock		—			—			—			—			—			—			—			(86,582	)		(86,582	)
Dividends declared — Preferred Stock		—			—			—			—			—			—			—			(2,025	)		(2,025	)

BALANCE DECEMBER 31, 2005		38,325		$	1,010,250			95,732		$	957		$	3,105,962		$	(24,255	)	$	(25,911	)	$	(1,350,899	)	$	2,716,104

See notes to consolidated financial statements.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2005, 2004 and 2003

(In thousands)


	2005			2004			2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	70,982		$	263,497		$	158,857

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		387,713			325,494			294,809
Deficit distributions to minority partners, net		11,615			17,374			17,560
Equity in losses of unconsolidated real estate partnerships		3,139			1,768			6,428
Gain on dispositions of real estate related to unconsolidated entities and other		(16,859	)		(69,204	)		(3,178	)
Impairment losses related to real estate partnerships		6,120			3,426			4,122
Deferred income tax provision (benefit)		(19,146	)		706			(11,215	)
Cumulative effect of change in accounting principle		—			3,957			—
Minority interest in Aimco Operating Partnership		(5,611	)		3,311			4,208
Minority interest in consolidated real estate partnerships		(5,832	)		(15,696	)		(1,466	)
Stock-based compensation expense		9,975			6,506			4,980
Amortization of deferred loan costs and other		1,700			5,484			(5,002	)
Discontinued operations:
Depreciation and amortization		47,151			57,233			78,407
Recovery of deficit distributions to minority partners		(14,604	)		(3,231	)		(5,617	)
Gain on dispositions of real estate, net of minority partners’ interest		(105,060	)		(249,436	)		(101,849	)
Impairment losses on real estate assets sold or held for sale		3,836			7,289			8,991
Minority interest in consolidated real estate partnerships		(2,235	)		(1,102	)		3,817
Minority interest in Aimco Operating Partnership		10,923			25,413			13,459
Changes in operating assets and operating liabilities:
Accounts receivable		11,450			(2,067	)		5,763
Other assets		17,542			(11,406	)		5,630
Accounts payable, accrued liabilities and other		(57,250	)		(3,793	)		(14,825	)

Total adjustments		284,567			102,026			305,022

Net cash provided by operating activities		355,549			365,523			463,879


CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of real estate		(243,996	)		(280,002	)		(126,046	)
Capital expenditures		(443,882	)		(301,937	)		(245,528	)
Proceeds from dispositions of real estate		718,434			971,568			697,642
Change in funds held in escrow from tax-free exchanges		(4,571	)		5,489			(21,643	)
Purchases of non-real estate related corporate assets		(14,405	)		(28,270	)		(23,621	)
Proceeds from sale of investments and other assets		4,629			—			6,730
Cash from newly consolidated properties		4,186			14,765			5,835
Purchases of general and limited partnership interests and other assets		(111,372	)		(104,441	)		(51,356	)
Originations of notes receivable from unconsolidated real estate partnerships		(38,336	)		(76,157	)		(71,969	)
Proceeds from repayment of notes receivable		28,556			79,599			60,576
Cash paid in connection with merger/acquisition related costs		(6,910	)		(15,861	)		(16,383	)
Distributions received from investments in unconsolidated real estate partnerships		57,706			72,160			64,046

Net cash (used in) provided by investing activities		(49,961	)		336,913			278,283


CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from secured notes payable borrowings		721,414			501,611			445,793
Principal repayments on secured notes payable		(735,816	)		(728,084	)		(755,786	)
Proceeds from tax-exempt bond financing		—			69,471			14,505
Principal repayments on tax-exempt bond financing		(78,648	)		(188,577	)		(77,793	)
Net borrowings (paydowns) on term loans and revolving credit facility		248,300			(66,687	)		29,376
Proceeds from other borrowings		—			38,871			—
Payment of loan costs		(11,242	)		(17,576	)		(19,516	)
Proceeds from issuance (redemption) of mandatorily redeemable preferred securities		(15,019	)		(98,875	)		97,250
Contributions from minority interest		34,990			44,292			100,684
Payment of distributions to minority interest		(78,739	)		(119,056	)		(107,964	)
Proceeds from issuance of Class A Common Stock, High Performance Units and exercise of options/warrants and other		2,454			3,164			4,552
Proceeds from issuance of preferred stock, net		—			359,672			144,808
Redemptions of preferred stock		(31,250	)		(186,093	)		(239,770	)
Principal repayments received on notes due on Class A Common Stock purchases		12,255			4,639			10,518
Repurchase of Class A Common Stock, redemption of OP Units and warrant purchase		(4,503	)		(18,410	)		(1,287	)
Payment of Class A Common Stock dividends		(226,815	)		(225,903	)		(285,054	)
Payment of preferred stock dividends		(86,582	)		(83,984	)		(87,599	)

Net cash used in financing activities		(249,201	)		(711,525	)		(727,283	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		56,387			(9,089	)		14,879
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		105,343			114,432			99,553

CASH AND CASH EQUIVALENTS AT END OF YEAR	$	161,730		$	105,343		$	114,432

See notes to consolidated financial statements.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2005, 2004 and 2003
(In thousands)


	2005			2004			2003
SUPPLEMENTAL CASH FLOW INFORMATION:

Interest paid	$	399,511		$	372,703		$	372,815

Dividends declared		65,679			—			—

Non Cash Transactions Associated with the Acquisition of Real Estate and Interests in Unconsolidated Real Estate Partnerships:
Secured debt assumed in connection with purchase of real estate		38,740			83,114			45,009
Issuance of OP Units for interests in unconsolidated real estate partnerships and acquisitions of real estate		125			2,609			841
Non Cash Transactions Associated with Merger:
Real estate		—			—			(63,535	)
Investments in and notes receivable, primarily from unconsolidated real estate partnerships		—			—			(2,163	)
Restricted cash		—			—			11,979
Other assets		—			—			3,349
Accounts payable, accrued and other liabilities		—			—			49,770
Deferred income tax payable, net		—			—			600
Non Cash Transactions Associated with Consolidation of Real Estate Partnerships:
Real estate, net		201,492			231,932			152,248
Investments in and notes receivable primarily from affiliated entities		(72,341	)		(40,178	)		(52,478	)
Restricted cash and other assets		16,942			47,744			9,972
Secured debt		112,521			204,243			101,962
Accounts payable, accrued and other liabilities		17,326			21,394			7,030
Minority interest in consolidated real estate partnerships		6,834			29,439			6,585

Other:
Conversion of Common OP Units for Class A Common Stock		16,853			23,322			12,035
Conversion of Preferred OP Units for Class A Common Stock		41			259			884
Origination of notes receivable from officers for Class A Common Stock purchases		1,441			1,528			1,600
Exchanges of preferred stock		—			150,000			—
Tenders payable for purchase of limited partner interests		950			2,799			10,037

See notes to consolidated financial statements.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2005

NOTE 1 — Organization

Apartment Investment and Management Company, or Aimco, is a Maryland corporation incorporated on January 10, 1994. We are a self-administered and self-managed real estate investment trust, or REIT, engaged in the acquisition, ownership, management and redevelopment of apartment properties. As of December 31, 2005, we owned or managed a real estate portfolio of 1,370 apartment properties containing 240,484 apartment units located in 47 states, the District of Columbia and Puerto Rico. Based on apartment unit data compiled by the National Multi Housing Council, as of December 31, 2005, we were the largest REIT owner and operator of apartment properties in the United States.

As of December 31, 2005, we:

	•		owned an equity interest in and consolidated 158,548 units in 619 properties (which we refer to as “consolidated”), of which 157,638 units were also managed by us;

	•		owned an equity interest in and did not consolidate 35,269 units in 264 properties (which we refer to as “unconsolidated”), of which 29,182 units were also managed by us; and

	•		provided services or managed, for third-party owners, 46,667 units in 487 properties, primarily pursuant to long-term agreements (including 41,421 units in 435 properties for which we provide asset management services only, and not also property management services), although in certain cases we may indirectly own generally less than one percent of the operations of such properties through a partnership syndication or other fund.

Through our wholly-owned subsidiaries, AIMCO-GP, Inc. and AIMCO-LP, Inc., we own a majority of the ownership interests in AIMCO Properties, L.P., which we refer to as the Aimco Operating Partnership. As of December 31, 2005, we held approximately a 90% interest in the common partnership units and equivalents of the Aimco Operating Partnership. We conduct substantially all of our business and own substantially all of our assets through the Aimco Operating Partnership. Interests in the Aimco Operating Partnership that are held by limited partners other than Aimco are referred to as “OP Units.” OP Units include common OP Units, partnership preferred units, or preferred OP Units, and high performance partnership units, or High Performance Units. The Aimco Operating Partnership’s income is allocated to holders of common OP Units based on the weighted average number of common OP Units outstanding during the period. The Aimco Operating Partnership records the issuance of common OP Units and the assets acquired in purchase transactions based on the market price of Aimco’s Class A Common Stock at the date of execution of the purchase contract. The holders of the common OP Units receive distributions, prorated from the date of issuance, in an amount equivalent to the dividends paid to holders of Aimco Class A Common Stock. Holders of common OP Units may redeem such units for cash or, at the Aimco Operating Partnership’s option, Aimco Class A Common Stock, which we refer to as Common Stock. During 2005, 2004 and 2003, the weighted average ownership interest in the Aimco Operating Partnership held by the common OP Unit holders was 10%, 10%, and 11%, respectively. Preferred OP Units entitle the holders thereof to a preference with respect to distributions or upon liquidation. At December 31, 2005, 95,732,200 shares of our Common Stock were outstanding and the Aimco Operating Partnership had 10,339,262 common OP Units and equivalents outstanding for a combined total of 106,071,462 shares of Common Stock and OP Units outstanding (excluding preferred OP Units).

Except as the context otherwise requires, “we,” “our,” “us” and the “Company” refer to Aimco, the Aimco Operating Partnership and their consolidated entities, collectively.

NOTE 2 — Basis of Presentation and Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Aimco, the Aimco Operating Partnership, and their consolidated entities. As used herein, and except where the context otherwise requires, “partnership” refers to a limited partnership or a limited liability company and “partner” refers to a limited partner in a limited partnership or a member in a limited liability company. Interests held in consolidated real estate partnerships by limited partners other than us are reflected as minority interest in consolidated real estate partnerships. All significant intercompany balances and transactions have been eliminated in consolidation. The assets of consolidated real estate partnerships owned or controlled by Aimco or the Aimco Operating Partnership generally are not available to pay creditors of Aimco or the Aimco Operating Partnership.

FASB Interpretation No. 46 (revised December 2003),Consolidation of Variable Interest Entities, or FIN 46, addresses the consolidation by business enterprises of variable interest entities. As a result of the adoption of FIN 46, as of March 31, 2004, we consolidate all variable interest entities for which we are the primary beneficiary. Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about an entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. FIN 46 requires a VIE to be consolidated in the financial statements of the entity that is determined to be the primary beneficiary of the VIE. The primary beneficiary generally is the entity that will receive a majority of the VIE’s expected losses, receive a majority of the VIE’s expected residual returns, or both.

Upon adoption of FIN 46, we determined that we were the primary beneficiary of 27 previously unconsolidated and five previously consolidated VIEs. These VIEs consisted of partnerships that are engaged, directly or indirectly, in the ownership and management of 29 apartment properties with 3,478 units. The initial consolidation of the previously unconsolidated entities as of March 31, 2004 resulted in an increase in our consolidated total assets (primarily real estate), liabilities (primarily indebtedness) and minority interest of approximately $113.5 million, $90.6 million and $26.8 million, respectively. We recorded a charge of approximately $4.0 million for the cumulative effect on retained earnings resulting from the adoption of FIN 46. This charge is attributable to our recognition of cumulative losses allocable to minority interests that would otherwise have resulted in minority interest deficits.

As of December 31, 2005, we were the primary beneficiary of, and therefore consolidated, 46 VIEs, which owned 40 apartment properties with 5,816 units. Real estate with a carrying value of $378.2 million collateralized the debt of those VIEs. The creditors of the consolidated VIEs do not have recourse to our general credit. As of December 31, 2005, we also held variable interests in 107 VIEs for which we were not the primary beneficiary. Those 107 VIEs consist primarily of partnerships, in which we acquired an interest prior to the adoption of FIN 46, that are engaged, directly or indirectly, in the ownership and management of 112 apartment properties with 10,812 units. We are involved with those VIEs as a non-controlling equity holder, lender, management agent, or through other contractual relationships. Our maximum exposure to loss as a result of our involvement with unconsolidated VIEs is limited to our recorded investments in and receivables from those VIEs totaling $30.8 million at December 31, 2005. We may be subject to additional losses to the extent of any financial support that we voluntarily provide in the future.

Generally, we consolidate real estate partnerships and other entities that are not VIEs when we own, directly or indirectly, a majority voting interest in the entity. In June 2005, the Financial Accounting Standards Board, or FASB, ratified Emerging Issues Task Force Issue 04-5,Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights, or EITF 04-5. EITF 04-5 provides an accounting model to be used by a general partner, or group of general partners, to determine whether the general partner(s) controls a limited partnership or similar entity in light of certain rights held by the limited partners and provides additional guidance on what constitutes substantive kick-out rights and substantive participating rights. EITF 04-5 was effective after June 29, 2005 for general partners of (a) all newly formed limited partnerships and (b) existing limited partnerships for which the partnership agreements have been modified. We consolidated four limited partnerships in the fourth quarter of 2005 based on EITF 04-5 requirements. The consolidation of these partnerships had an immaterial effect on our consolidated financial statements. As discussed in Note 19, we are required to apply EITF 04-5 to all existing limited partnerships and similar entities where we are the general partner as of January 1, 2006.

Acquisition of Real Estate Assets and Related Depreciation and Amortization

We capitalize the purchase price and incremental direct costs associated with the acquisition of properties as the cost of the assets acquired. In accordance with Statement of Financial Accounting Standards No. 141,Business Combinations, or SFAS 141, we allocate the cost of acquired properties to land, building, furniture, fixtures and equipment and intangibles, such as the value of above and below market leases, and origination costs associated with the in-place leases. In order to allocate purchase price on these various components we perform the following procedures for properties we acquire:

	1.		Determine the “as-if vacant” fair value of the physical property acquired (this value assumes the property goes “dark”);

	2.		Allocate the “as-if vacant” fair value among land, building, improvements (based on real estate valuation techniques), and furniture, fixtures and equipment; and

	3.		Compute the difference between the purchase price of the property and the “as-if vacant” fair value and allocate such difference to leases in-place (based on the nature of our business, customer relationship value is assumed to be zero), which will represent the total intangible assets. The fair value of the leases in-place are comprised of:

	a.		The value of the above and/or below market leases in-place. Above-market and below-market in-place lease values are computed based on the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over the period, including estimated lease renewals for below-market leases, that the leases are expected to remain in effect.

	b.		Avoided leasing commissions and other costs that were incurred to execute leases.

	c.		The value associated with lost rents during the absorption period (estimates of lost rental revenue during the expected lease-up periods based on current market demand).

The values of the above and below market leases are amortized over the remaining terms of the associated lease, including estimated lease renewals for below-market leases, to rental income. For the values associated with avoided leasing commissions and other costs that were incurred to execute leases and the value associated with lost rents during the absorption period, amortization expense is recorded over the expected terms of the associated leases. If a resident vacates the unit prior to the contractual termination of the lease and no rental payments are being made on the lease, any unamortized balance of the related intangible will be written off.

Depreciation for all tangible real estate assets is calculated using the straight-line method over their estimated useful lives. Acquired buildings and improvements are depreciated over a composite life of 14 to 52 years, based on the age, condition and other physical characteristics of the property. As discussed underImpairment of Long Lived Assetsbelow, we may adjust depreciation of properties that are expected to be disposed of prior to the end of their useful lives. Furniture, fixtures and equipment associated with acquired properties are depreciated over five years.

Capital Expenditures and Related Depreciation

We depreciate capitalized costs using the straight-line method over the estimated useful life of the related component or improvement, which is five, 15 or 30 years. Prior to July 1, 2005, we recorded capitalized site payroll costs and most capitalized indirect costs separately from other costs of the related capital projects. We depreciated capitalized site payroll costs over five years and capitalized indirect costs associated with capital replacement and improvement projects over five or 15 years. Capitalized indirect costs associated with redevelopment projects, together with other costs of the redevelopment projects, were depreciated over the estimated useful lives of those projects, predominantly 30 years.

Effective July 1, 2005, we refined the estimated useful lives for the capitalized site payroll and indirect costs that were recorded separately from other costs of the related capital projects. All capitalized site payroll and indirect costs incurred after June 30, 2005 are allocated proportionately, based on direct costs, among capital projects and depreciated over the estimated useful lives of such projects. This change in estimate is also being applied prospectively to the June 30, 2005 carrying amounts, net of accumulated depreciation, of previously incurred site payroll and indirect costs. Those amounts, based on the periods the costs were incurred, were allocated among capital projects that were completed in the corresponding periods in proportion to the original direct costs of such projects and are being depreciated over the remaining useful lives of the projects. We anticipate that these refinements will result in generally higher depreciation expense in foreseeable future accounting periods. For the year ended December 31, 2005, these changes in estimated useful lives resulted in decreased net income of approximately $4.6 million, and resulted in a decrease in basic and diluted earnings per share of $0.05.

Certain homogeneous items that are purchased in bulk on a recurring basis, such as carpeting and appliances, are depreciated using group methods that reflect the average estimated useful life of the items in each group. Except in the case of property casualties, where the net book value of lost property is written off in the determination of casualty gains or losses, we generally do not recognize any loss in connection with the replacement of an existing property component because normal replacements are considered in determining the estimated useful lives used in connection with our composite and group depreciation methods.

Asset Retirement Obligations

In March 2005, the FASB issued FASB Interpretation No. 47,Accounting for Conditional Asset Retirement Obligations, or FIN 47. FIN 47 clarifies the accounting for legal obligations to perform asset retirement activity in which the timing and/or method of settlement are conditional on future events. FIN 47 requires the fair value of such conditional asset retirement obligations to be recorded as incurred, if the fair value of the liability can be reasonably estimated. We have determined that FIN 47 applies to certain obligations that we have based on laws that require property owners to remove or remediate hazardous substances in certain circumstances. We adopted the provisions of FIN 47 as of December 31, 2005 and determined that asset retirement obligations that are required to be recognized under FIN 47 are immaterial to our financial condition and results of operations. See Note 9 for further discussion of asset retirement obligations.

Impairment of Long-Lived Assets

We apply the provisions of Statement of Financial Accounting Standards No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets,or SFAS 144, to determine whether our real estate and other long-lived assets are

impaired. Such assets to be held and used are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a property may not be recoverable, we make an assessment of its recoverability by comparing the carrying amount to our estimate of the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the aggregate undiscounted future cash flows, we recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property. Based on periodic tests of recoverability of long-lived assets, for the year ended December 31, 2005, we recorded impairment losses of $3.4 million related to properties to be held and used. For the years ended December 31, 2004 and 2003, we determined that the carrying amounts of our properties to be held and used were recoverable and, therefore, we did not record any impairment losses related to such properties.

Our tests of recoverability address real estate assets that do not currently meet all conditions to be classified as held for sale, but are expected to be disposed of prior to the end of their estimated useful lives. If an impairment loss is not required to be recorded in accordance with SFAS 144, the recognition of depreciation is adjusted prospectively, as necessary, to reduce the carrying value of the real estate to its estimated disposition value over the remaining period that the real estate is expected to be held and used. These depreciation adjustments decreased net income by $31.9 million and $6.4 million, and resulted in a decrease in basic and diluted earnings per share of $0.34 and $0.07, for the years ended December 31, 2005 and 2004, respectively.

Cash Equivalents

We consider highly liquid investments with an original maturity of three months or less to be cash equivalents.

Restricted Cash

Restricted cash includes capital replacement reserves, tax-free exchange funds, completion repair reserves, bond sinking fund amounts and tax and insurance escrow accounts held by lenders.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are generally comprised of amounts receivable from residents, amounts receivable from non-affiliated real estate partnerships for which we provide property management and other services and other miscellaneous receivables from non-affiliated entities. We evaluate collectibility of accounts receivable from residents and establish an allowance, after the application of security deposits and other anticipated recoveries, for accounts greater than 30 days past due for current residents and all receivables due from former residents. Accounts receivable from residents are stated net of allowances for doubtful accounts of approximately $2.3 million and $2.4 million as of December 31, 2005 and 2004, respectively.

We evaluate collectibility of accounts receivable from non-affiliated entities and establish an allowance for amounts that are considered to be uncollectible. Accounts receivable relating to non-affiliated entities are stated net of allowances for doubtful accounts of approximately $4.2 million and $4.5 million as of December 31, 2005 and 2004, respectively.

Accounts Receivable and Allowance for Doubtful Accounts from Affiliates

Accounts receivable from affiliates are generally comprised of receivables related to property management and other services provided to unconsolidated real estate partnerships in which we have an ownership interest. We evaluate collectibility of accounts receivable balances from affiliates on a periodic basis, and establish an allowance for the amounts deemed to be uncollectible. Accounts receivable from affiliates are stated net of allowances for doubtful accounts of approximately $4.7 million and $4.4 million as of December 31, 2005 and 2004, respectively.

Deferred Costs

We defer lender fees and other direct costs incurred in obtaining financing and amortize the cost over the terms of the related loan agreements. Amortization of these costs is included in interest expense.

We defer leasing commissions and other direct costs incurred in connection with successful leasing efforts and amortize the costs over the terms of the related leases. Amortization of these costs is included in property operating expenses.

Advertising Costs

We generally expense all advertising costs as incurred to property operating expense. For the years ended December 31, 2005, 2004 and 2003, for both continuing and discontinued operations, total advertising expense was $36.1 million, $33.1 million and $28.7 million, respectively.

Notes Receivable from Unconsolidated Real Estate Partnerships and Related Interest Income and Provision for Losses

Investments in Unconsolidated Real Estate Partnerships

We own general and limited partner interests in real estate partnerships that own apartment properties. We generally account for investments in real estate partnerships that we do not consolidate under the equity method. Under the equity method, our share of the earnings or losses of the entity for the periods being presented is included in equity in earnings (losses) from unconsolidated real estate partnerships, except for our share of impairments and property disposition gains related to such entities, which we report separately in the consolidated statements of income. Certain investments in real estate partnerships that were acquired in business combinations were determined to have insignificant value at the acquisition date and are accounted for under the cost method. Any distributions received from such partnerships are recognized as income when received.

Intangible Assets

At December 31, 2005 and 2004, other assets included goodwill of $81.9 million and $88.1 million, respectively, associated with our real estate segment. We account for goodwill and other intangible assets in accordance with the requirements of Statement of Financial Accounting Standards No. 142,Goodwill and Other Intangible Assets, or SFAS 142. SFAS 142 does not permit amortization of goodwill and other intangible assets with indefinite lives, but requires an annual impairment test of such assets. The impairment test compares the fair value of reporting units with their carrying amounts, including goodwill. Based on the application of the goodwill impairment test set forth in SFAS 142, we determined that our goodwill was not impaired in 2005, 2004 or 2003. As discussed in Note 10, we reduced goodwill by $6.2 million in 2005 in connection with the recognition of deferred income tax assets that were acquired in connection with business combinations in prior years.

Other assets also includes intangible assets for purchased management contracts with finite lives that we amortize on a straight-line basis over terms ranging from five to twenty years and intangible assets for in-place leases as discussed underAcquisition of Real Estate Assets and Related Depreciation and Amortization.

Capitalized Software Costs

Purchased software and other costs related to software developed for internal use are capitalized during the application development stage and are amortized using the straight-line method over the estimated useful life of the software, generally five years. We write off the costs of software development projects when it is no longer probable that the software will be completed and placed in service. For the years ended December 31, 2005, 2004 and 2003, we capitalized software development costs totaling $9.9 million, $18.1 million and $18.9 million, respectively. During 2005 and 2004, we wrote off $0.5 million and $1.1 million of software development costs. At December 31, 2005 and 2004, other assets included $40.2 million and $43.4 million of net capitalized software, respectively.

Minority Interest in Consolidated Real Estate Partnerships

We report unaffiliated partners’ interests in consolidated real estate partnerships as minority interest in consolidated real estate partnerships. Minority interest in consolidated real estate partnerships represents the minority partners’ share of the underlying net assets of our consolidated real estate partnerships. When these consolidated real estate partnerships make cash distributions to partners in excess of the carrying amount of the minority interest, we generally record a charge equal to the amount of such excess distribution, even though there is no economic effect or cost. We report this charge in the consolidated statements of income as deficit distributions to minority partners. We allocate the minority partners’ share of partnership losses to minority partners to the extent of the carrying amount of the minority interest. We generally record a charge when the minority partners’ share of partnership losses exceed the carrying amount of the minority interest, even though there is no economic effect or cost. We report this charge in the consolidated statements of income within minority interest in consolidated real estate partnerships. We do not record charges for distributions or losses in certain limited instances where the minority partner has a legal obligation and financial capacity to contribute additional capital to the partnership. For the years ended December 31, 2005, 2004, and 2003, we recorded charges for partnership losses resulting from depreciation of approximately $9.5 million, $5.2 million, and $1.5 million, respectively, that were not allocated to minority partners because the losses exceeded the carrying amount of the minority interest.

Minority interest in consolidated real estate partnerships consists primarily of equity interests held by limited partners in consolidated real estate partnerships that have finite lives. The terms of the related partnership agreements generally require the partnership to be liquidated following the sale of the partnership’s real estate. As the general partner in these partnerships, we ordinarily control the execution of real estate sales and other events that could lead to the liquidation, redemption or other settlement of minority interests. The aggregate carrying value of minority interests in consolidated real estate partnerships is approximately $217.7 million at December 31, 2005. The aggregate fair value of these interests varies based on the fair value of the real estate owned by the partnerships. Based on the number of classes of finite-life minority interests, the number of properties in which there is direct or indirect minority ownership, complexities in determining the allocation of liquidation proceeds among partners and other factors, we believe it is impracticable to determine the total required payments to the minority interests in an assumed liquidation at December 31, 2005. As a result of real estate depreciation that is recognized in our financial statements and appreciation in the fair value of real estate that is not recognized in our financial statements, we believe that the aggregate fair value of our minority interests exceeds their aggregate carrying value. As a result of our ability to control real estate sales and other events that require payment of minority interests and our expectation that proceeds from real estate sales will be sufficient to liquidate related minority interests, we anticipate that the eventual liquidation of these minority interests will not have an adverse impact on our financial condition.

Revenue Recognition

Our properties have operating leases with apartment residents with terms generally of twelve months or less. We recognize rental revenue related to these leases, net of any concessions, on a straight-line basis over the term of the lease. We recognize revenues from property management, asset management, syndication, development and other services when the related fees are earned and are realized or realizable.

Stock-Based Compensation

Effective January 1, 2003, we adopted the accounting provisions of Statement of Financial Accounting Standards No. 123,Accounting for Stock-Based Compensation,or SFAS 123, as amended by Statement of Financial Accounting Standards No. 148,Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of FASB Statement No. 123,or SFAS 148, and applied the prospective method set forth in SFAS 148 with respect to the transition. Under this method, we apply the fair value recognition provisions of SFAS 123 to all employee awards granted, modified, or settled on or after January 1, 2003, which has resulted in recognition of compensation expense related to stock options based on the fair value of the stock options. For stock options granted prior to January 1, 2003, we apply Accounting Principles Board Opinion No. 25,Accounting for Stock Issued to Employees, or APB 25, and related interpretations. Under APB 25, because the exercise price of our employee stock options equaled the market price of the underlying stock on the date of grant, no compensation expense related to such options has been recognized. We recognize compensation expense for stock options accounted for under SFAS 123 and restricted stock awards ratably over the period the awards vest. Compensation expense is reversed as forfeitures occur.

For purposes of the pro forma disclosures below, the estimated fair values for all awards made prior to January 1, 2003 are amortized over the respective vesting period for each such option and are shown as expense as if SFAS 123 had been applied to all such awards. Pro forma information regarding net income and earnings per share is required by SFAS 123, which also requires that the information be determined as if we had accounted for our employee stock options granted subsequent to December 31, 1994 under the fair value method. The fair value for our options granted over the last three years was estimated at the date of grant using a Black-Scholes valuation model. The estimated fair value of our stock options and underlying assumptions are as follows:


		2005		2004		2003
Weighted average fair value of options granted during the year	$	3.57	$	2.24	$	2.26

Assumptions:
Risk free interest rate		4.1	%	3.5	%	3.5	%
Expected dividend yield		6.31	%	7.5	%	9.0	%
Volatility factor of the expected market price of our Common Stock		0.190		0.191		0.195
Weighted average expected life of options		5.0 years		5.0 years		5.0 years

The Black-Scholes valuation model was developed for use in estimating the fair value of traded options and does not take into account vesting requirements or restrictions on transferability. In addition, the valuation model requires the input of highly subjective assumptions including the expected stock price volatility. Our employee stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value estimate.

The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all outstanding and unvested awards in each period presented. Our pro forma information for the years ended December 31, 2005, 2004 and 2003 is as follows (in thousands, except per share data):


	2005			2004			2003

Net income (loss) attributable to common stockholders, as reported	$	(16,966	)	$	174,693		$	65,292

Add: Stock-based employee compensation expense included in reported net income:
Restricted stock awards		8,140			4,903			4,088
Stock options		1,835			1,603			892
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards:
Restricted stock awards		(8,140	)		(4,903	)		(4,088	)
Stock options		(3,422	)		(4,289	)		(4,744	)
Add: Additional minority interest in Aimco Operating Partnership		161			276			435

Pro forma net income (loss) attributable to common stockholders	$	(18,392	)	$	172,283		$	61,875


Basic earnings (loss) per common share:
Reported	$	(0.18	)	$	1.88		$	0.70
Pro forma	$	(0.20	)	$	1.85		$	0.67
Diluted earnings (loss) per common share:
Reported	$	(0.18	)	$	1.88		$	0.70
Pro forma	$	(0.20	)	$	1.85		$	0.67

The effects of applying SFAS 123 in calculating pro forma income attributable to common stockholders and pro forma basic and diluted earnings per share may not necessarily be indicative of the effects of applying SFAS 123 to future years’ earnings. As discussed in Note 19, we will change our method of accounting for share-based compensation in 2006.

Discontinued Operations

In accordance with SFAS 144, we classify certain properties and related liabilities as held for sale (see Note 14). The operating results of such properties are presented in discontinued operations in both current periods and all comparable periods presented. Depreciation is not recorded on properties held for sale; however, depreciation expense recorded prior to classification as held for sale is included in discontinued operations. The net gain on sale and any impairment losses are presented in discontinued operations when recognized.

Derivative Financial Instruments

We primarily use long-term, fixed-rate and self-amortizing non-recourse debt to avoid, among other things, risk related to fluctuating interest rates. For our variable-rate debt, we are sometimes required by our lenders to limit our exposure to interest rate fluctuations by entering into interest rate swap or cap agreements. The interest rate swap agreements moderate our exposure to interest rate risk by converting the variable-rate debt to a fixed rate. The interest rate cap agreements effectively limit our exposure to interest rate risk by providing a ceiling on the underlying variable interest rate. The fair values of these instruments are reflected as assets or liabilities in the balance sheet, and periodic changes in fair value are included in interest expense. In 2005, we entered into a natural gas commodity swap agreement to limit our exposure to increases in the price of natural gas purchases for certain properties. These instruments are not material to our financial position and results of operations.

Insurance

We believe that our insurance coverages insure our properties adequately against the risk of loss attributable to fire, earthquake, hurricane, tornado, flood, and other perils. In addition, we reinsure substantial portions of our property, workers’ compensation, health, and general liability insurance coverage. Losses are accrued based upon our estimates of the aggregate liability for claims incurred using certain actuarial assumptions followed in the insurance industry and based on our experience.

Income Taxes

We have elected to be taxed as a REIT, as defined under the Internal Revenue Code of 1986, as amended. As a REIT, we generally will not be subject to United States Federal income taxes at the corporate level on our net income that is distributed to our stockholders if we distribute at least 90% of our REIT taxable income to our stockholders. If our taxable income exceeds our dividends in a tax year, REIT tax rules allow us to “throw back” dividends from the subsequent tax year in order to avoid current taxation on undistributed income. Throwing back of dividends can result in excise taxes. REITs are also subject to a number of other organizational and operational requirements. If we fail to qualify as a REIT in any taxable year, our taxable income will be subject to United States Federal income tax at regular corporate rates (including any applicable alternative minimum tax). Even if we qualify as a REIT, we may be subject to certain state and local income taxes and to United States Federal income tax. We also will be required to pay a 100% tax on non-arms length transactions between us and a taxable REIT subsidiary and on any net income from sales of property that was property held for sale to customers in the ordinary course.

Certain of our operations (property management, asset management, risk, etc.) are conducted through taxable REIT subsidiaries, which are subsidiaries of the Aimco Operating Partnership and each of which we refer to as a TRS. A TRS is a C-corporation that has not elected REIT status and as such is subject to United States Federal corporate income tax. We use the TRS format to facilitate our ability to offer certain services and activities to our residents, which services and activities are not generally considered to be qualifying REIT activities.

For our taxable REIT subsidiaries, deferred income taxes result from temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for Federal income tax purposes, and are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. We reduce deferred tax assets by recording a valuation allowance when we determine based on available evidence that it is more likely than not that the assets will not be realized.

Earnings per Share

Fair Value of Financial Instruments

The aggregate fair value of our cash and cash equivalents, receivables, payables and short-term secured debt as of December 31, 2005 approximates their carrying value due to their relatively short-term nature. We further believe that the fair value of our variable rate secured tax-exempt bond debt and secured long-term debt also approximate their carrying value. For notes receivable, fixed rate secured tax-exempt bond debt and secured long-term debt, fair values have been based on estimates using present value techniques. Present value calculations vary significantly depending on the assumptions used, including the discount rate and estimates of future cash flows. We estimate fair value for our fixed rate debt agreements based on the market rate for debt with the same or similar terms. In many cases, the fair value estimates may not be realized in immediate settlement of the instruments. The estimated combined fair value of our notes receivable at December 31, 2005 and December 31, 2004, was approximately $211 million and $201 million, respectively. See Note 5 for further details on notes receivable. The estimated combined fair value of our secured tax-exempt bonds and secured notes payable, including amounts within liabilities related to assets held for sale, at December 31, 2005 and December 31, 2004, was approximately $5.8 billion and $5.9 billion, respectively. The combined carrying value of our secured tax-exempt bonds and secured notes payable, including amounts within liabilities related to assets held for sale, at both December 31, 2005 and December 31, 2004, was approximately $5.7 billion. See Note 6 for further details on secured tax-exempt bonds and secured notes payable.

Concentration of Credit Risk

Financial instruments that potentially could subject us to significant concentrations of credit risk consist principally of notes receivable. Concentrations of credit risk with respect to notes receivable are limited due to the large number of partnerships comprising our partnership base, and the geographic diversity of the underlying properties.

Use of Estimates

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes thereto. Actual results could differ from those estimates.

Reclassifications

Certain items included in the 2004 and 2003 financial statements amounts have been reclassified to conform to the 2005 presentation.

NOTE 3 — Acquisitions

Real Estate Acquisitions

During 2005, we completed acquisitions of six properties (including Palazzo East at Park La Brea), containing approximately 1,006 residential units and six retail spaces for an aggregate purchase price of approximately $283.6 million, including transaction costs. Of the six properties acquired, four are located in the New York City area, one in Los Angeles, and one in New Jersey. The purchases were funded with cash, new debt and the assumption of existing debt.

During 2004, we completed acquisitions of 11 properties (including The Palazzo at Park La Brea), containing approximately 1,880 residential units (and some ground floor retail space) for an aggregate purchase price of approximately $361 million. Of the 11 properties acquired, six are located in the New York City area, one in Los Angeles, two in Massachusetts, one in Florida and one in the Chicago area. The purchases were funded with cash, tax-free exchange funds, new debt and the assumption of existing debt.

Acquisitions of Partnership Interests

During 2005 and 2004, we acquired limited partnership interests in 84 partnerships and 147 partnerships, respectively, in which our affiliates served as general partner. In connection with such acquisitions in both consolidated and unconsolidated real estate partnerships, during 2005 we paid approximately $56.0 million, including transaction costs, of which $55.6 million was in cash and the remainder in OP Units, and during 2004 we paid approximately $50.0 million, including transaction costs, of which $47.8 million was in cash and the remainder in OP Units. The 2005 and 2004 amounts were approximately $60.6 million and $89.2 million, respectively, in excess of the carrying amount of minority interest in such limited partnerships, which excess we generally assigned to real estate.

NOTE 4 — Investments in Unconsolidated Real Estate Partnerships

We owned general and limited partner interests in unconsolidated real estate partnerships owning approximately 264, 330 and 441 properties at December 31, 2005, 2004 and 2003, respectively. We acquired these interests through various transactions, including large portfolio acquisitions and offers to individual limited partners. Our total ownership interests in these unconsolidated real estate partnerships ranges typically from less than 1% to 50%.

The following table provides selected combined financial information for unconsolidated real estate partnerships as of and for the years ended December 31, 2005, 2004 and 2003 (in thousands):


	2005			2004			2003
Real estate, net of accumulated depreciation	$	763,219		$	1,004,501		$	1,441,739
Total assets		954,970			1,255,434			1,809,990
Secured and other notes payable		932,454			1,146,141			1,704,963
Total liabilities		1,248,450			1,545,250			2,256,370
Partners’ deficit		(293,480	)		(289,816	)		(446,380	)
Rental and other property revenues		311,429			320,687			538,759
Property operating expenses		(177,970	)		(201,248	)		(328,759	)
Depreciation expense		(63,056	)		(72,577	)		(110,978	)
Interest expense		(84,252	)		(99,120	)		(157,513	)
Gain on sale		106,465			100,669			85,718
Net income		82,123			50,778			40,782

The decrease in the amounts in the above table from year to year was primarily due to dispositions of real estate owned by the unconsolidated real estate partnerships and our purchase of additional interests in, and resulting consolidation of, various partnerships previously accounted for under the equity method.

As a result of our acquisition of interests in unconsolidated real estate partnerships, the investment in these partnerships at December 31, 2005 and 2004 of $167.8 million and $207.8 million, respectively, is approximately $236.0 million and $272.3 million, respectively, in excess of our share of the underlying historical partners’ deficit of the partnerships. The excess of the cost of the investments acquired over the equity in the underlying historical partners’ deficit is primarily ascribed to the fair values of land and buildings owned by the unconsolidated real estate partnerships. We amortize the excess basis related to the buildings over the estimated useful lives of the buildings. Such amortization is recorded as a component of equity in losses of unconsolidated real estate partnerships.

NOTE 5 — Notes Receivable

The following table summarizes our notes receivable at December 31, 2005 and 2004 (in thousands):


	2005								2004
	Unconsolidated								Unconsolidated
	Real Estate			Non-					Real Estate			Non-
	Partnerships			Affiliates		Total			Partnerships			Affiliates		Total
Par value notes	$	89,658		$	22,681	$	112,339		$	81,217		$	31,217	$	112,434
Discounted notes		92,451			1,079		93,530			91,221			499		91,720
Allowance for loan losses		(4,891	)		—		(4,891	)		(7,149	)		—		(7,149	)

Total notes receivable	$	177,218		$	23,760	$	200,978		$	165,289		$	31,716	$	197,005


Face value of discounted notes	$	130,342		$	—	$	130,342		$	132,654		$	1,249	$	133,903

Included in notes receivable from unconsolidated real estate partnerships at December 31, 2005 and 2004, are $28.8 million and $31.3 million, respectively, in notes that were secured by interests in real estate or interests in real estate partnerships. We earn interest on these secured notes receivable at various annual interest rates ranging between 6.0% and 12.0% and averaging 10.3%.

Included in the notes receivable from non-affiliates at December 31, 2005 and 2004, are $6.4 million and $9.1 million, respectively, in notes that were secured by interests in real estate or interests in real estate partnerships. We earn interest on these secured notes receivable at various annual interest rates ranging between 4.0% and 7.3% and averaging 6.1%.

Additionally, included in notes receivable from non-affiliates at December 31, 2005 and 2004 are notes receivable from Alan I. Casden for an aggregate of $2.5 million and $9.4 million, respectively. The notes were part of the settlement of litigation involving NAPICO that was underway prior to the March 2002 acquisition of Casden Properties, Inc. (which we refer to as the Casden Transactions) in which we acquired NAPICO. The notes were secured by certain shares of Common Stock and certain cash settlement proceeds. In 2004, we entered into an agreement with respect to certain proceeds to be received by Alan I. Casden and his right to deliver Common Stock at an agreed-upon value of $47 per share in satisfaction of the Notes. Pursuant to this agreement, in 2004 we received $20 million in cash as payment in full on three notes due in 2004, 2005 and 2006. In 2005, we received cash payments of $7.0 million in satisfaction of the note due in 2007 and in partial satisfaction of the note due in 2008. In 2006, we will receive a final payment of $2.5 million in satisfaction of the note due in 2008. This transaction resolved a contingency based on the price of our Common Stock related to the Casden Transactions. In accordance with SFAS 141, in 2004 we recorded a $4.8 million charge to additional paid-in capital, representing the difference between the $29.1 million fair value of the consideration to be paid pursuant to the settlement and the $33.9 million book value of the notes.

Interest income from total non-impaired par value and certain discounted notes for the years ended December 31, 2005, 2004 and 2003 totaled $19.2 million, $20.5 million and $15.5 million, respectively. For the years ended December 31, 2005, 2004, and 2003, we recognized accretion income on certain discounted notes of approximately $2.5 million, $6.3 million and $3.3 million, respectively.

The activity in the allowance for loan losses in total for both par value notes and discounted notes for the years ended December 31, 2005 and 2004, is as follows (in thousands):


	2005			2004
Balance at beginning of year	$	(7,149	)	$	(10,122	)
Additional provisions for losses on notes receivable		(577	)		(2,061	)
Recoveries of losses on notes receivable		1,942			3,826
Net reductions due to consolidation of real estate partnerships and property dispositions		893			1,208

Balance at end of year	$	(4,891	)	$	(7,149	)

During the years ended December 31, 2005 and 2004, we determined that an allowance for loan losses of $2.4 million and $3.7 million, respectively, was required on certain of our par value notes that had carrying values of $6.5 million and $17.1 million, respectively. The average recorded investment in the impaired par value notes for the years ended December 31, 2005 and 2004 was $6.7 million and $11.8 million, respectively. The remaining $105.8 million in par value notes receivable at December 31, 2005 is estimated to be collectible and, therefore, interest income on these par value notes is recognized as it is earned.

As of December 31, 2005 and 2004, we determined that an allowance for loan losses of $2.5 million and $3.4 million, respectively, was required on certain of our discounted notes that had carrying values of $5.0 million and $6.0 million, respectively. The average recorded investment in the impaired discounted notes for the years ended December 31, 2005 and 2004 was $5.0 million and $5.9 million, respectively.

NOTE 6 — Secured Tax-Exempt Bond Financings and Secured Notes Payable

The following table summarizes our secured tax-exempt bond financings at December 31, 2005 and 2004, the majority of which is non-recourse to us (in thousands):


	Weighted Average
	Interest Rate			Principal Outstanding
	2005			2005		2004
Fixed rate secured tax-exempt bonds payable		5.69	%	$	309,534	$	327,185
Variable rate secured tax-exempt bonds payable		3.56			726,050		731,815

Total				$	1,035,584	$	1,059,000

Fixed rate secured tax-exempt bonds payable mature at various dates through October 2045. Variable rate secured tax-exempt bonds payable mature at various dates through June 2034. Principal and interest on these bonds are generally payable in semi-annual installments or in monthly interest-only payments with balloon payments due at maturity. Certain of our tax-exempt bonds at December 31, 2005 are remarketed periodically by a remarketing agent to maintain a variable yield. If the remarketing agent is unable to remarket the bonds, then the remarketing agent can put the bonds to us. We believe that the likelihood of this occurring is remote. At December 31, 2005, our secured tax-exempt bond financings were secured by 75 properties with a combined net book value of $1,054.3 million.

The following table summarizes our secured notes payable at December 31, 2005 and 2004, the majority of which are non-recourse to us (in thousands):


	Weighted Average
	Interest Rate			Principal Outstanding
	2005			2005		2004
Conventional fixed rate secured notes payable		6.61	%	$	3,755,061	$	3,571,190
Conventional variable rate secured notes payable		5.28			546,850		320,819
Secured notes credit facility		5.08			102,788		67,370

Total				$	4,404,699	$	3,959,379

Fixed rate secured notes payable mature at various dates through August 2053. Variable rate secured notes payable mature at various dates through August 2011. Principal and interest are generally payable monthly or in monthly interest-only payments with balloon payments due at maturity. At December 31, 2005, our secured notes payable were secured by 486 properties with a combined net book value of $7,253.0 million.

We have a secured revolving credit facility that provides for borrowings of up to $250 million primarily to be used for financing properties that we generally intend to hold for the intermediate term, as well as properties that are designated for redevelopment. In addition to the amounts in the above table, there were approximately $4 million and $10 million of notes that were provided through this facility that are obligations of unconsolidated real estate partnerships and not included within secured notes payable at December 31, 2005 and 2004, respectively. The interest rate on the notes provided through this facility is the Fannie Mae Discounted Mortgage-Backed Security index plus 0.85%, which interest rate resets monthly. Each such loan under this facility is treated as a separate borrowing and is collateralized by a specific property, and none of the loans is cross-collateralized or cross-defaulted. This facility matures in September 2007, but can be terminated and repaid in full without penalty.

Our consolidated debt instruments generally contain covenants common to the type of facility or borrowing, including financial covenants establishing minimum debt service coverage ratios and maximum leverage ratios. At December 31, 2005, we were in material compliance with all financial covenants pertaining to our consolidated debt instruments.

As of December 31, 2005, the scheduled principal amortization and maturity payments for our secured tax-exempt bonds and secured notes payable are as follows (in thousands):


	Amortization		Maturities		Total
2006	$	124,607	$	395,585	$	520,192
2007		132,468		259,338		391,806
2008		137,518		372,748		510,266
2009		143,133		113,265		256,398
2010		147,334		177,312		324,646
Thereafter						3,436,975

					$	5,440,283

NOTE 7 — Mandatorily Redeemable Preferred Securities

In connection with the Insignia merger in 1998, we assumed the obligations under Trust Based Convertible Preferred Securities, which we refer to as TOPRS, with an aggregate liquidation amount of $149.5 million. Prior to 2005, approximately $134.5 million of these securities were converted, resulting in $15.0 million remaining as of December 31, 2004, which also represented the redemption value. On January 11, 2005, we redeemed for cash all outstanding TOPRS for a total redemption price of $50 per security, or $15.0 million, plus any accrued and unpaid distributions through the redemption date. For the years ended December 31, 2005, 2004 and 2003, $30,000, $1.0 million and $1.0 million, respectively, of distributions have been recorded in interest expense.

NOTE 8 — Term Loans and Credit Facility

On November 2, 2004, we entered into an Amended and Restated Senior Secured Credit Agreement, which we refer to as the Credit Agreement, with a syndicate of financial institutions. In addition to Aimco, the Aimco Operating Partnership and an Aimco subsidiary are also borrowers under the Credit Agreement. The Credit Agreement replaced our previous two separate credit agreements.

The Credit Agreement includes customary financial covenants, including the maintenance of specified ratios with respect to total indebtedness to gross asset value, total secured indebtedness to gross asset value, aggregate recourse indebtedness to gross asset value, variable rate debt to total indebtedness, debt service coverage and fixed charge coverage; the maintenance of a minimum adjusted tangible net worth; and limitations regarding the amount of cross-collateralized debt. The Credit Agreement includes other customary covenants, including a restriction on distributions and other restricted payments, but permits distributions during any four consecutive fiscal quarters in an aggregate amount of up to 95% of our funds from operations for such period or such amount as may be necessary to maintain our REIT status. The Credit Agreement also permits us to repurchase our Common Stock using up to 80% of sales proceeds in any trailing four-quarter period.

The original aggregate commitment under the Credit Agreement was $750 million, comprised of $450 million of revolving loan commitments and a $300 million term loan tranche. The revolving loans bear interest at a rate equal to (i) the LIBOR rate plus a margin that can range from 1.50% to 2.00% (for LIBOR loans) or (ii) the base rate plus a margin that can range from 0% to 0.25% (for base rate loans), in each case, depending on our leverage ratio. The original $300 million term loan bears interest at a rate equal to (i) the LIBOR rate plus 2.00% (for LIBOR loans) or (ii) the base rate plus 0.25% (for base rate loans). The default rate of interest for the loan is equal to the applicable rate described above plus 3%. The revolving loans mature on November 2, 2007, and the term loan matures on November 2, 2009.

On June 16, 2005, we amended the Credit Agreement to provide for $100.0 million in additional term loan borrowings from a syndicate of financial institutions. The additional $100.0 million term loan matures on November 2, 2009 and bears interest at a rate of either LIBOR plus 1.75% or a base rate (determined by reference to the federal funds rate or Bank of America’s prime rate) plus 0.25%. The proceeds from the additional term loan were used to repay outstanding revolving loans.

The lenders under the Credit Agreement may accelerate any outstanding loans if, among other things: we fail to make payments when due (subject to applicable grace periods); material defaults occur under other debt agreements; certain bankruptcy or insolvency events occur; material judgments are entered against us; we fail to comply with certain covenants, such as the requirement to deliver financial information or the requirement to provide notices regarding material events (subject to applicable grace periods in some cases); indebtedness is incurred in violation of the covenants; or prohibited liens arise.

At December 31, 2005, the outstanding principal balance of the term loans was $400.0 million at a weighted average interest rate of 6.18%. At December 31, 2005, the outstanding principal balance of the revolving loans was $217.0 million at a weighted average interest rate of 6.26% (based on various weighted average LIBOR and base rate borrowings outstanding with various maturities). The amount available under the revolving facility at December 31, 2005 was $208.3 million (after giving effect to $24.7 million outstanding for undrawn letters of credit issued under the revolving facility). As of December 31, 2005, we were in compliance with all financial covenant requirements.

NOTE 9 — Commitments and Contingencies

Commitments

In connection with the Casden Transactions, we made commitments to:

	•		invest up to $50 million for a 20% limited liability company interest in Casden Properties LLC. As of December 31, 2005, we had invested $44.8 million. Casden Properties LLC intends to pursue new development opportunities in Southern California and other markets. We have an option, but not an obligation, to purchase at completion all multifamily rental projects developed by Casden Properties LLC; and

	•		pay $2.5 million per quarter for five years (for an aggregate amount of $50 million) to Casden Properties LLC as a retainer on account for redevelopment services on our assets. As of December 31, 2005, $37.5 million has been paid.

In connection with our redevelopment and capital improvement activities, we have commitments of approximately $99.6 million related to construction projects that are due to be completed by early 2007. Additionally, there are times we may enter into certain commitments for future purchases of goods and services in connection with the operations of our properties. Those commitments generally have terms of one year or less and reflect expenditure levels comparable to our historical expenditures.

Tax Credit Syndication

We are required to manage certain consolidated real estate partnerships in compliance with various laws, regulations and contractual provisions that apply to our syndication of historic and low-income housing tax credits. In some instances, noncompliance with applicable requirements could result in projected tax benefits not being realized and require a refund or reduction of investor capital contributions, which are reported as minority interests in our consolidated balance sheet. The remaining compliance period for our tax credit syndication arrangements range from less than one year to 15 years. At December 31, 2005, we do not anticipate that any material refunds or reductions of investor capital contributions will be required in connection with these arrangements.

Legal Matters

In addition to the matters described below, we are a party to various legal actions and administrative proceedings arising in the ordinary course of business, some of which are covered by liability insurance, and none of which we expect to have a material adverse effect on our consolidated financial condition or results of operations.

Limited Partnerships

In connection with our acquisitions of interests in real estate partnerships, we are sometimes subject to legal actions, including allegations that such activities may involve breaches of fiduciary duties to the partners of such real estate partnerships or violations of the relevant partnership agreements. We may incur costs in connection with the defense or settlement of such litigation. We believe that we comply with our fiduciary obligations and relevant partnership agreements. Although the outcome of any litigation is uncertain, we do not expect any such legal actions to have a material adverse affect on our consolidated financial condition or results of operations.

Environmental

Various Federal, state and local laws subject property owners or operators to liability for management, and 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 or presence of the hazardous substances. The presence of, or the failure to manage or remedy properly, hazardous substances may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, and potential fines or penalties imposed by such agencies in connection therewith, the presence of hazardous substances 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, remediation or disposal of hazardous substances through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous 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 properties, we could potentially be liable for environmental liabilities or costs associated with our properties or properties we acquire or manage in the future.

We have determined that our legal obligations to remove or remediate hazardous substances may be conditional asset retirement obligations as defined in FIN 47. Except in limited circumstances where the asset retirement activities are expected to be performed in connection with a planned construction project or property casualty, we believe that the fair value of our asset retirement obligations cannot be reasonably estimated due to significant uncertainties in the timing and manner of settlement of those obligations. Asset retirement obligations that are reasonably estimable as of December 31, 2005 are immaterial to our consolidated financial condition and results of operations.

Mold

We have been named as a defendant in lawsuits that have alleged personal injury and property damage as a result of the presence of mold. In addition, we are aware of lawsuits against owners and managers of multifamily properties asserting claims of personal injury and property damage caused by the presence of mold, some of which have resulted in substantial monetary judgments or settlements. We have only limited insurance coverage for property damage loss claims arising from the presence of mold and for personal injury claims related to mold exposure. We have implemented policies, procedures, third-party audits and training, and include a detailed moisture intrusion and mold assessment during acquisition due diligence. We believe these measures will prevent or eliminate mold exposure from our properties and will minimize the effects that mold may have on our residents. To date, we have not incurred any material costs or liabilities relating to claims of mold exposure or to abate mold conditions. Because the law regarding mold is unsettled and subject to change we can make no assurance that liabilities resulting from the presence of or exposure to mold will not have a material adverse effect on our consolidated financial condition or results of operations.

Unclaimed Property and Use Taxes

Based on inquiries from several states, we are reviewing our historic forfeiture of unclaimed property pursuant to applicable state and local laws. We are also reviewing our historic filing of use tax returns in certain state and local jurisdictions that impose such taxes. At this time, we do not have sufficient information available to determine the extent or potential effect of any non-compliance on our consolidated financial condition or results of operations.

National Union Litigation

National Program Services, Inc. and Vito Gruppuso (collectively “NPS”) were insurance agents who sold to us property insurance issued by National Union Fire Insurance Company of Pittsburgh, Pennsylvania (“National Union”). The financial failure of NPS resulted in defaults under two agreements by which NPS indemnified us from losses relating to the matters described below. As a result of such defaults, we had a $16.7 million insurance-related receivable that was subsequently reduced to $6.7 million following our settlement with Lumbermens Mutual Casualty Company (“Lumbermens”) and an insurance agency. In addition, we have pending litigation against National Union, First Capital Group, a New York based insurance wholesaler, NPS and other agents of National Union, for a refund of at least $10 million of the prepaid premium plus other damages. Trial is set for May 30, 2006. The contingent liabilities arising from the NPS defaults also resulted in litigation against us by Cananwill, Inc. (“Cananwill”), a premium funding company, regarding an alleged balance due of $5.7 million on a premium finance agreement that funded premium payments made to National Union. We are also plaintiffs in litigation against Cananwill and Combined Specialty Insurance Company, formerly known as Virginia Surety Company, Inc., alleging Cananwill’s conversion of $1.6 million of unearned premium belonging to us and misapplication of such funds to the alleged debt asserted in the lawsuit initiated by Cananwill. The matter in which we are plaintiffs has been stayed by the court pending resolution of the action filed by Cananwill against us. The previously disclosed litigation brought by WestRM — West Risk Markets, Ltd. (“WestRM”) against XL Reinsurance America, Inc. (“XL”), Greenwich Insurance Company (“Greenwich”) and Lumbermens in which we have been made a third party defendant continues. Summary judgment has been entered against defendants XL and Greenwich. Similarly, the previously disclosed litigation brought by Highlands Insurance Company (“Highlands”) against Cananwill, XL, Greenwich and us also continues. In those cases in which we are a defendant, we believe that we have meritorious defenses to assert, and we will vigorously defend ourselves against claims brought against us. In addition, we will vigorously prosecute our own claims. Although the outcome of any claim or matter in litigation is uncertain, we do not believe that we will incur any material loss in connection with the insurance-related receivable or that the ultimate outcome of these separate but related matters will have a material adverse effect on our consolidated financial condition or results of operations.

FLSA Litigation

The Aimco Operating Partnership and NHP Management Company (“NHPMN”), our subsidiary, are defendants in a lawsuit alleging that they willfully violated the Fair Labor Standards Act (“FLSA”) by failing to pay maintenance workers overtime for all hours worked in excess of forty per week. The complaint, filed in the United States District Court for the District of Columbia, attempts to bring a collective action under the FLSA and seeks to certify state subclasses in California, Maryland, and the District of Columbia. Specifically, the plaintiffs contend that the Aimco Operating Partnership and NHPMN failed to compensate maintenance workers for time that they were required to be “on-call.” Additionally, the complaint alleges the Aimco Operating Partnership and NHPMN failed to comply with the FLSA in compensating maintenance workers for time that they worked in excess of 40 hours in a week. In June 2005, the court conditionally certified the collective action on both the on-call and overtime issues, which allows the plaintiffs to provide notice of the collective action to all non-exempt maintenance workers from August 7, 2000 through the present. Notices have been sent out to all current and former hourly maintenance workers. The opt-in period has not yet closed. When it does, the Aimco Operating Partnership and NHPMN will have the opportunity to move to decertify the collective action. Because the court denied plaintiffs’ motion to certify state subclasses, on September 26, 2005, the plaintiffs filed a class action with the same allegations in the Superior Court of California (Contra Costa County), and on November 5, 2005 in Montgomery County Maryland Circuit Court. Although the outcome of any litigation is uncertain, we do not believe that the ultimate outcome will have a material adverse effect on our consolidated financial condition or results of operations.

SEC Investigation

The Central Regional Office (the “Regional Office”) of the United States Securities and Exchange Commission (the “Commission”) conducted a formal investigation relating to certain matters. We believe the areas of investigation included our miscalculated monthly net rental income figures in third quarter 2003, forecasted guidance, accounts payable, rent concessions, vendor rebates, capitalization of payroll and certain other costs, and tax credit transactions. On December 19, 2005, we announced that the Regional Office informed us that its investigation has been recommended for termination and no enforcement action has been recommended to the Commission.

Operating Leases

We are obligated under office space and equipment non-cancelable operating leases. In addition, we sublease certain of our office space to tenants under non-cancelable subleases. Approximate minimum annual rentals under operating leases and approximate minimum payments to be received under annual subleases are as follows (in thousands):


	Operating
	Lease		Sublease
	Obligations		Receivables
2006	$	7,784	$	1,485
2007		7,622		1,508
2008		7,041		1,086
2009		5,508		597
2010		4,417		597
Thereafter		11,371		—

Total	$	43,743	$	5,273

Substantially all of the office space and equipment subject to the operating leases described above are for the use of our corporate offices and regional operating centers. Rent expense recognized totaled $7.4 million, $5.8 million, and $6.1 million for the years ended December 31, 2005, 2004 and 2003, respectively. Sublease receipts that offset rent expense totaled approximately $0.7 million, $0.9 million and $1.1 million for the years ended December 31, 2005, 2004 and 2003, respectively.

NOTE 10 — Income Taxes

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities of the taxable REIT subsidiaries for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax liabilities and assets are as follows (in thousands):


	December 31,			December 31,
	2005			2004
Deferred tax liabilities:
Partnership differences	$	53,347		$	50,109
Depreciation		6,330			3,745
Interest income		—			809
Deferred gains		—			13,070
Other		178			130

Total deferred tax liabilities	$	59,855		$	67,863


Deferred tax assets:
Net operating, capital and other loss carryforwards	$	34,046		$	10,432
Receivables		5,856			7,350
Accrued liabilities		6,942			11,184
Accrued interest expense		6,519			5,215
Intangibles — management contracts		9,880			10,922
Tax credit carryforwards		7,878			5,703
Other		442			—

Total deferred tax assets		71,563			50,806
Valuation allowance for deferred tax assets		(1,873	)		(3,082	)

Deferred tax assets, net of valuation allowance		69,690			47,724

Net deferred income tax assets (liabilities)	$	9,835		$	(20,139	)

During the year ended December 31, 2005, we identified approximately $12.2 million in previously unrecorded net deferred tax assets that were acquired in connection with business combinations in prior years. We recorded adjustments to recognize these net assets and reduce goodwill and real estate acquired in the corresponding business combinations by $6.2 million and $6.0 million, respectively. At December 31, 2005 and 2004, we maintained a $1.9 million valuation allowance for deferred tax assets primarily related to alternative minimum tax credits totaling approximately $1.9 million. At December 31, 2004, we also maintained a $1.2 million valuation allowance for certain low-income housing credits and rehabilitation credits. That allowance was reversed in 2005 based on our determination that it is more likely than not that the credits will be realized.

Significant components of the provision (benefit) for income taxes are as follows and are classified within other expenses (income), net in continuing operations and income from discontinued operations, net in our statements of income for 2005, 2004 and 2003 (in thousands):


	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2005			2004			2003
Current:
Federal	$	3,412		$	7,345		$	4,556
State		1,590			748			840

Total current		5,002			8,093			5,396


Deferred:
Federal		(17,303	)		634			(10,065	)
State		(1,843	)		72			(1,150	)

Total deferred		(19,146	)		706			(11,215	)

Total provision (benefit)	$	(14,144	)	$	8,799		$	(5,819	)

Classification:
Continuing operations	$	(16,353	)	$	(6,825	)	$	(17,953	)
Discontinued operations	$	2,209		$	15,624		$	12,134

Consolidated income (loss) subject to tax, consisting of pretax income of our taxable REIT subsidiaries and gains on certain property sales that are subject to income tax under section 1374 of the Internal Revenue Code, is $(36.9) million

for 2005, $20.5 million for 2004, and $(4.0) million for 2003. The reconciliation of income tax attributable to continuing and discontinued operations computed at the U.S. statutory rate to income tax expense (benefit) is shown below (dollars in thousands):


	Year Ended						Year Ended					Year Ended
	December 31, 2005						December 31, 2004					December 31, 2003
	Amount			Percent			Amount		Percent			Amount			Percent
Tax at U.S. statutory rates on consolidated income (loss) subject to tax	$	(12,922	)		35.0	%	$	7,174		35.0	%	$	(1,396	)		35.0	%
State income tax, net of Federal tax benefit		(253	)		0.7	%		818		4.0	%		(306	)		7.6	%
Effect of permanent differences		(69	)		0.2	%		314		1.5	%		2,202			(55.2	%)
Increase (decrease) valuation allowance		(900	)		2.4	%		493		2.4	%		(6,319	)		158.4	%

	$	(14,144	)		38.3	%	$	8,799		42.9	%	$	(5,819	)		145.8	%

During the quarter ended March 31, 2003, in an effort to streamline business processes and operational efficiencies of our property management and services businesses, we contributed all of the capital stock of NHP Management Company to AIMCO/Bethesda Holdings, Inc. (both of which are wholly-owned taxable REIT subsidiaries). In connection with this transaction, we reversed a valuation allowance related to future deductions and tax loss carryforwards of NHP Management Company and thereby recognized approximately $8.0 million of deferred tax benefits within other expenses (income), net. This deferred tax benefit increased net income by approximately $7.1 million, net of minority interest, and resulted in an increase in basic and diluted earnings per share of $0.08 for the year ended December 31, 2003.

Income taxes paid totaled approximately $4.8 million, $2.7 million, and $3.8 million in the years ended December 31, 2005, 2004 and 2003, respectively.

At December 31, 2005, we had net operating loss carryforwards (NOLs) of approximately $87.0 million for income tax purposes that expire in years 2020 to 2023. Subject to certain separate return limitations, we may use these NOLs to offset all or a portion of taxable income generated by our taxable REIT subsidiaries. Additionally, at December 31, 2005, we had low income housing and rehabilitation tax credit carryforwards of approximately $6.0 million for income tax purposes that expire in years 2012 to 2024.

For income tax purposes, dividends paid to holders of Common Stock primarily consist of ordinary income, return of capital, capital gains, qualified dividends and unrecaptured Sec. 1250 gains, or a combination thereof. For the years ended December 31, 2005, 2004 and 2003, dividends per share held for the entire year were estimated to be taxable as follows:


	2005 (1)					2004					2003
	Amount		Percentage			Amount		Percentage			Amount		Percentage
Ordinary income	$	0.21		7	%	$	0.04		2	%	$	0.80		26	%
Return of capital		—		—			—		—			—		—
Capital gains		1.44		48	%		1.77		74	%		0.77		25	%
Qualified dividends		0.24		8	%		0.03		1	%		—		—
Unrecaptured Sec. 1250 gain		1.11		37	%		0.56		23	%		1.49		49	%

	$	3.00		100	%	$	2.40		100	%	$	3.06		100	%


(1)		On December 28, 2005, our Board of Directors declared a quarterly cash dividend of $0.60 per common share for the quarter ended December 31, 2005, that was paid on January 31, 2006, to stockholders of record on December 31, 2005, which was one month earlier than the typical declaration. Pursuant to certain provisions within the Internal Revenue Code, this dividend is deemed paid by Aimco and received by the shareholders, in 2005.

NOTE 11 — Transactions Involving Minority Interest in Aimco Operating Partnership

Preferred OP Units

Various classes of preferred OP Units of the Aimco Operating Partnership are outstanding. Depending on the terms of each class, these preferred OP Units are convertible into common OP Units or redeemable for Common Stock and are paid distributions varying from 5.9% to 9.6% per annum per unit, or equal to the dividends paid on Common Stock based on the conversion terms. As of December 31, 2005, a total of 3.3 million preferred OP Units were outstanding with a redemption value of $90.2 million, which were redeemable into approximately 2.4 million shares of Common Stock. As of December 31, 2004, a total of 3.3 million preferred OP Units were outstanding with a redemption value of $90.5 million, which were redeemable into approximately 2.5 million shares of Common Stock.

During the years ended December 31, 2005 and 2004, approximately 1,700 and 10,400 preferred OP Units were tendered for redemption in exchange for approximately 1,100 and 7,900 shares of Common Stock, respectively. During the years ended December 31, 2005 and 2004, there were approximately 12,800 and 1,600 preferred OP Units tendered for redemption in exchange for cash, respectively.

Common OP Units

We completed tender offers for limited partnership interests resulting in the issuance of approximately 3,000 and 82,000 common OP Units in 2005 and 2004, respectively.

During the years ended December 31, 2005 and 2004, approximately 77,000 and 160,000 common OP Units, respectively, were redeemed in exchange for cash, and approximately 425,000 and 735,000 common OP Units, respectively, were redeemed in exchange for shares of Common Stock.

High Performance Partnership Units

As of December 31, 2005 and 2004, there were 2,379,084 Class I High Performance Partnership Units of the Aimco Operating Partnership outstanding. Also outstanding were 5,000 Class VI High Performance Partnership Units, or the Class VI Units, for which the valuation period began on January 1, 2003 and ended on December 31, 2005, 4,109 Class VII High Performance Partnership Units, or the Class VII Units, for which the valuation period began on January 1, 2004 and will end on December 31, 2006 and 5,000 Class VIII High Performance Partnership Units, or the Class VIII Units, for which the valuation period began on January 1, 2005 and will end on December 31, 2007. At December 31, 2005, we did not meet the required measurement benchmarks for the Class VI Units, Class VII Units or Class VIII Units and, therefore, we have not recorded any additional minority interest in Aimco Operating Partnership for such High Performance Partnership Units in the consolidated financial statements as of December 31, 2005 and such High Performance Partnership Units have no dilutive effect.

NOTE 12 — Stockholders’ Equity

Preferred Stock

At December 31, 2005 and 2004, we had the following classes of preferred stock outstanding classified as equity:



					Annual			Balance
					Dividend
	Redemption		Conversion		Rate Per Share			2005		2004
	Date (1)		Price		(paid quarterly)			(in thousands)		(in thousands)
Perpetual:
Class D Cumulative Preferred Stock, $.01 par value, 4,200,000 shares authorized, zero and 1,250,002 shares issued and outstanding (2)		02/19/2003		—		8.75	%	$	—	$	31,250
Class G Cumulative Preferred Stock, $.01 par value, 4,050,000 shares authorized, 4,050,000 shares issued and outstanding		07/15/2008		—		9.375	%		101,000		101,000
Class Q Cumulative Preferred Stock, $.01 par value, 2,530,000 shares authorized, 2,530,000 shares issued and outstanding		03/19/2006		—		10.10	%		63,250		63,250
Class R Cumulative Preferred Stock, $.01 par value, 6,940,000 shares authorized, 6,940,000 shares issued and outstanding		07/20/2006		—		10.00	%		173,500		173,500
Class T Cumulative Preferred Stock, $.01 par value, 6,000,000 shares authorized, 6,000,000 shares issued and outstanding		07/31/2008		—		8.00	%		150,000		150,000
Class U Cumulative Preferred Stock, $.01 par value, 8,000,000 shares authorized, 8,000,000 shares issued and outstanding		03/24/2009		—		7.75	%		200,000		200,000
Class V Cumulative Preferred Stock, $.01 par value, 3,450,000 shares authorized, 3,450,000 shares issued and outstanding		09/29/2009		—		8.00	%		86,250		86,250
Class Y Cumulative Preferred Stock, $.01 par value, 3,450,000 shares authorized, 3,450,000 shares issued and outstanding		12/21/2009		—		7.875	%		86,250		86,250

									860,250		891,500


Convertible (3):
Class W Cumulative Convertible Preferred Stock, $.01 par value, 1,904,762 shares authorized, 1,904,762 shares issued and outstanding		09/30/2007	$	52.50		8.10	%		100,000		100,000
Class X Cumulative Convertible Preferred Stock, $.01 par value, 2,000,000 shares authorized, 2,000,000 shares issued and outstanding		03/31/2006	$	52.50		8.50	%		50,000		50,000

									150,000		150,000

Total								$	1,010,250	$	1,041,500


(1)		All classes of preferred stock are redeemable, at our option, on and after the dates specified.

(2)		On January 21, 2005, we redeemed for cash the remaining 1.25 million shares outstanding of the Class D Cumulative Preferred Stock, or the Class D Preferred Stock, for a total redemption price of $25.0425 per share, which included a redemption price of $25.0 per share, and $0.0425 per share of accumulated and unpaid dividends through January 21, 2005. This redemption resulted in $1.1 million of related preferred stock issuance costs being deducted from net income to arrive at net loss attributable to common stockholders and thereby increased by $0.01 our loss per basic and diluted common share for the year ended December 31, 2005.

(3)		The articles supplementary set forth the relative rights and preferences of each class of securities and as shown above, the dividend rate on each class of convertible securities is the rate specified in the articles supplementary for each class. Such rate can be increased to the rate of the dividends paid on the number of shares of Common Stock into which a share of such preferred security is convertible. The initial conversion price of each class was in excess of the fair market value of a share of Common Stock on the respective dates on which the purchasers of each class agreed to purchase such securities.

All classes of preferred stock are pari passu with each other and are senior to Common Stock. The holders of each

class of preferred stock are generally not entitled to vote on matters submitted to stockholders. Dividends on all shares of preferred stock are subject to declaration by our Board of Directors. All of the above outstanding classes of preferred stock have a liquidation preference per share of $25, with the exception of the Class W Preferred Stock, which has a liquidation preference per share of $52.50.

The dividends paid on each class of preferred stock classified as equity for the years ended December 31, 2005, 2004, and 2003 are as follows (in thousands, except per share data):


	2005					2004					2003
	Amount			Total		Amount			Total		Amount			Total
	Per			Amount		Per			Amount		Per			Amount
Class of Preferred Stock	Share (1)			Paid		Share (1)			Paid		Share (1)			Paid
Perpetual:
Class C	$	—		$	—	$	—		$	—	$	1.60	(7)	$	3,840
Class D		0.59	(2)		736		4.87	(4)		6,090		3.21	(8)		8,677
Class G		2.34			9,492		2.34			9,492		2.34			9,492
Class H		—			—		—			—		2.01	(7)		4,011
Class Q		2.53			6,388		2.53			6,388		2.53			6,389
Class R		2.50			17,350		2.50			17,350		2.50			17,350
Class S		—			—		—			—		0.23	(9)		908
Class T		2.00			12,000		2.00			12,000		0.42	(10)		2,501
Class U		1.94			15,500		1.08	(5)		8,655		—			—
Class V		2.09	(3)		7,207		—	(3)		—		—			—
Class Y		1.61	(3)		5,547		—	(3)		—		—			—

					74,220					59,975					53,168

Convertible:
Class L		—			—		—			—		1.81	(7)		4,532
Class M		—			—		—			—		2.42	(11)		2,903
Class N		—			—		2.59	(6)		10,361		2.25			9,000
Class O		—			—		4.73	(6)		9,000		4.73			9,000
Class P		—			—		1.16	(6)		4,648		2.25			8,996
Class W		4.25	(3)		8,100		—	(3)		—		—			—
Class X		2.13	(3)		4,262		—	(3)		—		—			—

					12,362					24,009					34,431

Total				$	86,582				$	83,984				$	87,599


(1)		Amounts per share are calculated based on the number of preferred shares outstanding either at the end of each year or as of conversion or redemption date, as noted.

(2)		For the period from January 1, 2005 to the date of redemption.

(3)		For the period from the date of issuance to December 31, 2005. No dividends were paid during 2004 as preferred shares were issued during the third and fourth quarters of 2004.

(4)		Total amount paid includes dividends paid on 2.7 million shares of Class D Preferred Stock until November 5, 2004, when 1.5 million shares were redeemed for cash.

(5)		For the period from the date of issuance to December 31, 2004.

(6)		For the period from January 1, 2004 to the date of redemption. For Class N Preferred Stock, includes a 2%, or $0.50 redemption premium per share, on 2,000,000 shares.

(7)		For the period from January 1, 2003 to the date of redemption.

(8)		Total amount paid includes dividends paid on all 4.2 million shares of Class D Preferred Stock until August 18, 2003, when 1.5 million shares were redeemed for cash.

(9)		For the period from the date of issuance to July 1, 2003 when Statement of Financial Accounting Standards No. 150,Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equityrequired the Class S Cumulative Redeemable Preferred Stock to be reclassified from equity to liabilities.

(10)		For the period from the date of issuance to December 31, 2003.

(11)		For the period from January 1, 2003 to the date of redemption. Additionally, the amount per share includes a scheduled increase in the dividend from $2.13 per share to $2.31 per share starting after January 13, 2003 and a 2%, or $0.50 redemption premium per share.

Common Stock

During 2005 and 2004, we issued approximately 37,000 shares and 45,000 shares, respectively, of Common Stock to certain non-executive officers at market prices. In exchange for the shares purchased, the officers executed notes payable totaling $1.4 million and $1.5 million, respectively. These notes, which are 25% recourse to the borrowers, have a 10-year maturity and bear interest either at a fixed rate of 6% annually or a floating rate based on the one-month LIBOR plus 3.85%, which is subject to an annual interest rate cap of typically 7.25%. Total payments on such notes from officers in 2005 and 2004 were $12.3 million and $4.6 million, respectively.

In addition, in 2005 and 2004, we issued approximately 393,000 and 532,000 restricted shares of Common Stock, respectively, to certain officers and employees. The restricted stock was recorded at the fair market value of the Common Stock on the date of issuance. These shares of restricted Common Stock may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of and are subject to a risk of forfeiture prior to the expiration of the applicable vesting period (typically ratably over a period of three or five years). Certain shares of restricted stock issued during 2005 are subject to accelerated vesting upon the achievement of a specified calendar year performance measure target. As of December 31, 2005, achievement of the specified target is not considered probable.

There were no shares of stock repurchased during the year ended December 31, 2005. On February 18, 19 and 24, 2004, we purchased on the open market 30,000, 60,000 and 20,000 shares of Common Stock, respectively, at an average price per share of approximately $32.03, $32.17 and $31.26, respectively. Additionally, on February 24, 2004, we completed the purchase of 287,272 shares of Common Stock in a privately negotiated transaction at a price of $31.60 per share.

Registration Statements

As of December 31, 2005, under our shelf registration statement, which was declared effective in April 2004, we had available for issuance approximately $876.6 million of debt and equity securities, and the Aimco Operating Partnership had available for issuance $500.0 million of debt securities.

NOTE 13 — Employee Benefit and Stock Plans

401K Plan

We provide a 401(k) defined-contribution employee savings plan. Employees who have completed 30 days of service and are age 18 or older are eligible to participate. Our matching contributions are made in the following manner: (1) a 100% match on the first 3% of the participant’s contribution; (2) a 50% match on the next 2% of the participant’s contribution. We incurred costs in connection with this plan of approximately $4.1 million, $3.2 million and $2.4 million in 2005, 2004 and 2003, respectively.

Stock Award and Incentive Plan and Stock Warrants

We adopted the Apartment Investment and Management Company 1997 Stock Award and Incentive Plan, or the 1997 Plan to attract and retain officers, key employees and independent directors. The 1997 Plan reserves for issuance a maximum of 20,000,000 shares, which may be in the form of incentive stock options, non-qualified stock options and restricted stock, or other types of awards as authorized under the 1997 Plan. At December 31, 2005, there were approximately 4,200,000 shares available for issuance. The 1997 Plan is administered by the Compensation and Human Resources Committee of the Board of Directors. In the case of incentive stock options, the exercise price of the options granted may not be less than the fair market value of the Common Stock at the date of grant. The term of the incentive and non-qualified options is ten years from the date of grant. The options typically vest over a period of one to five years from the date of grant. Terms may be modified at the discretion of the Compensation and Human Resources Committee of the Board of Directors.

The 1997 Plan also authorizes grants of restricted stock awards as part of our equity compensation plan. For the years ended December 31, 2005, 2004 and 2003, we granted restricted stock awards of approximately 393,000, 532,000 and 235,000 shares, respectively, with weighted average fair values per share of $38.46, $29.56, and $38.09, respectively. Compensation cost related to these awards is being recognized ratably over the applicable vesting period (typically three or five years). Dividends paid on restricted stock awards (whether vested or unvested) are charged to distributions in excess of earnings. We evaluate quarterly the previously paid dividends on restricted stock awards that are forfeited to determine whether a reclassification between distributions in excess of earnings and compensation expense should be recorded. Dividends paid on restricted stock awards that were forfeited were immaterial for the years ended December 31, 2005, 2004 and 2003.

On December 2, 1997, we issued warrants, which we refer to as the Oxford Warrants, exercisable through December 31, 2006 to purchase up to an aggregate of 500,000 shares of Common Stock at $41 per share. The Oxford Warrants were issued to affiliates of Oxford Realty Financial Group, Inc., a Maryland corporation, or Oxford, in connection with the amendment of certain agreements pursuant to which we manage properties formerly controlled by Oxford or its affiliates. During the year ended December 31, 2005, we purchased from the holders thereof all outstanding Oxford Warrants for an aggregate purchase price of $1.05 million, which was determined to be fair value.

The following table summarizes the option and warrant activity for the years ended December 31, 2005, 2004 and 2003 (in thousands, except price data):


	2005					2004					2003
				Weighted					Weighted					Weighted
	Options			Average		Options			Average		Options			Average
	and			Exercise		and			Exercise		and			Exercise
	Warrants			Price		Warrants			Price		Warrants			Price
Outstanding at beginning of year		11,338		$	38.87		10,607		$	39.59		9,269		$	40.13
Granted		383			38.14		1,219			32.19		1,757			36.37
Exercised		(65	)		38.22		(69	)		29.11		(72	)		37.46
Forfeited		(102	)		39.98		(419	)		37.81		(347	)		37.67
Warrants purchased		(500	)		41.00		—			—		—			—

Outstanding at end of year		11,054		$	38.78		11,338		$	38.87		10,607		$	39.59

Exercisable at end of year		8,177		$	39.30		7,132		$	39.47		5,844		$	38.46
Weighted average fair value of options granted during the year				$	3.57				$	2.24				$	2.26

As of December 31, 2005, outstanding and exercisable options have the following ranges of exercise prices and remaining weighted average contractual terms (in thousands, except for price data):


		Range of Exercise Price
		$20.75 to $36.35			$36.48 to $39.94			$40.00 to $49.05			Total

Outstanding:
Number of options			2,840			5,158			3,056			11,054
Weighted average exercise price		$	34.51		$	37.55		$	44.83		$	38.78
Weighted average remaining term	7.46 years			2.98 years			5.79 years			4.91 years
Exercisable:
Number of options			1,148			4,752			2,277			8,177
Weighted average exercise price		$	35.14		$	37.51		$	45.12		$	39.30

NOTE 14 — Discontinued Operations and Assets Held for Sale

In accordance with SFAS 144 we report as discontinued operations real estate assets that meet the definition of a component of an entity and have been sold or meet the criteria to be classified as held for sale under SFAS 144. We included all results of these discontinued operations, less applicable income taxes, in a separate component of income on the consolidated statements of income under the heading “discontinued operations.” This treatment resulted in certain reclassifications of 2004 and 2003 financial statement amounts.

At December 31, 2005, we had 45 properties with an aggregate of 10,550 units classified as held for sale. For the years ended December 31, 2005, 2004 and 2003, discontinued operations includes the results of operations of these properties. During the year ended December 31, 2005, we sold 83 properties with an aggregate of 16,835 units and our interest in one partnership. For the years ended December 31, 2005, 2004, and 2003, discontinued operations includes the results of operations of these 83 properties and one partnership for periods prior to the date of sale. During 2004, we sold 54 properties with an aggregate of 12,248 units. For the years ended December 31, 2004 and 2003, discontinued operations includes the results of operations of these 54 properties for periods prior to the date of sale. During 2003, we sold 72 properties with an aggregate of 18,291 units. For the year ended December 31, 2003, discontinued operations includes the results of operations of these 72 properties for periods prior to the date of sale.

The following is a summary of the components of income from discontinued operations for the years ended December 31, 2005, 2004, and 2003 (dollars in thousands):


	2005			2004			2003
Rental and other property revenues	$	171,376		$	261,741		$	366,372
Property operating expense		(93,408	)		(132,138	)		(168,640	)
Depreciation and amortization		(47,151	)		(57,233	)		(78,407	)
Other (expenses) income, net		(79	)		(2,159	)		(4,142	)

Operating income		30,738			70,211			115,183
Interest income		558			424			744
Interest expense		(37,636	)		(62,748	)		(86,150	)
Minority interest in consolidated real estate partnerships		2,235			1,102			(3,817	)

Income (loss) before gain on dispositions of real estate, impairment losses, deficit distributions to minority partners, income tax and minority interest in Aimco Operating Partnership		(4,105	)		8,989			25,960
Gain on dispositions of real estate, net of minority partners’ interest		105,060			249,436			101,849
Impairment losses on real estate assets sold or held for sale		(3,836	)		(7,289	)		(8,991	)
Recovery of deficit distributions to minority partners		14,604			3,231			5,617
Income tax arising from disposals		(4,481	)		(16,015	)		(12,134	)
Minority interest in Aimco Operating Partnership		(10,923	)		(25,413	)		(13,459	)

Income from discontinued operations	$	96,319		$	212,939		$	98,842

We are currently marketing for sale certain real estate properties that are inconsistent with our long-term investment strategy. We expect that all properties classified as held for sale will sell within one year from the date classified as held for sale. Assets classified as held for sale of $418.9 million at December 31, 2005 include real estate net book value of $413.4 million and restricted cash and other assets of $5.5 million. Liabilities related to assets classified as held for sale of $267.9 million at December 31, 2005 include mortgage debt of $260.6 million. Assets classified as held for sale of $975.6 million at December 31, 2004 include real estate net book value of $961.9 million and restricted cash and other assets of $13.7 million, represented by 128 properties with 27,385 units that were classified as assets held for sale during 2004 and 2005. Liabilities related to assets classified as held for sale of $644.8 million at December 31, 2004 include mortgage debt of $636.6 million. The estimated proceeds, less anticipated costs to sell, for certain of these assets were less than the related net book value, and therefore we recorded impairment losses of $3.8 million, $7.3 million and $9.0 million for the years ended December 31, 2005, 2004 and 2003, respectively. We are also marketing for sale certain other properties that do not meet all of the criteria to be classified as held for sale.

NOTE 15 — Earnings per Share

We calculate earnings per share based on the weighted average number of shares of Common Stock, common stock equivalents and dilutive convertible securities outstanding during the period. The following table illustrates the calculation of basic and diluted earnings per share for the years ended December 31, 2005, 2004 and 2003 (in thousands, except per share data):


	2005			2004			2003
Numerator:
Income (loss) from continuing operations	$	(25,337	)	$	54,515		$	60,015
Less net income attributable to preferred stockholders		(87,948	)		(88,804	)		(93,565	)

Numerator for basic and diluted earnings per share — Loss from continuing operations	$	(113,285	)	$	(34,289	)	$	(33,550	)


Income from discontinued operations	$	96,319		$	212,939		$	98,842


Cumulative effect of change in accounting principle	$	—		$	(3,957	)	$	—

Net income	$	70,982		$	263,497		$	158,857
Less net income attributable to preferred stockholders		(87,948	)		(88,804	)		(93,565	)

Numerator for basic and diluted earnings per share — Net income (loss) attributable to common stockholders	$	(16,966	)	$	174,693		$	65,292

Denominator:
Denominator for basic earnings per share — weighted average number of shares of Common Stock outstanding		93,894			93,118			92,850
Effect of dilutive securities:
Dilutive potential common shares		—			—			—

Denominator for diluted earnings per share		93,894			93,118			92,850

Earnings (loss) per common share:
Basic earnings (loss) per common share:
Loss from continuing operations (net of income attributable to preferred stockholders)	$	(1.21	)	$	(0.37	)	$	(0.36	)
Income from discontinued operations		1.03			2.29			1.06
Cumulative effect of change in accounting principle		—			(0.04	)		—

Net income (loss) attributable to common stockholders	$	(0.18	)	$	1.88		$	0.70

Diluted earnings (loss) per common share:
Loss from continuing operations (net of income attributable to preferred stockholders)	$	(1.21	)	$	(0.37	)	$	(0.36	)
Income from discontinued operations		1.03			2.29			1.06
Cumulative effect of change in accounting principle		—			(0.04	)		—

Net income (loss) attributable to common stockholders	$	(0.18	)	$	1.88		$	0.70

The Class W Cumulative Convertible Preferred Stock and the Class X Cumulative Convertible Preferred Stock are convertible into Common Stock (see Note 12). All of our convertible preferred stock is anti-dilutive on an “as converted” basis. Therefore, we deduct all of the dividends payable on the convertible preferred stock to arrive at the numerator and no additional shares are included in the denominator when calculating basic and diluted earnings per common share. We have excluded from diluted earnings per share the common share equivalents related to approximately 12.6 million, 12.4 million and 11.8 million of vested and unvested stock options, shares issued for non-recourse notes receivable, and restricted stock awards for the years ended December 31, 2005, 2004 and 2003, respectively, because their effect would be anti-dilutive. For purposes of calculating diluted earnings per share in accordance with Statement of Financial Accounting Standards No. 128,Earnings per Share,we treat the dilutive impact of the unvested portion of restricted shares as common stock equivalents.

NOTE 16 — Unaudited Summarized Consolidated Quarterly Information

Summarized unaudited consolidated quarterly information for 2005 and 2004 is provided below (amounts in thousands, except per share amounts).


	Quarter (1)
Year Ended December 31, 2005	First			Second			Third			Fourth
Total revenues	$	344,484		$	354,432		$	368,374		$	382,188
Total operating expenses		(274,036	)		(278,010	)		(300,990	)		(309,163	)
Operating income		70,448			76,422			67,384			73,025
Loss from continuing operations		(1,232	)		(529	)		(7,155	)		(16,421	)
Income from discontinued operations		3,264			28,095			33,507			31,453
Net income		2,032			27,566			26,352			15,032
Earnings (loss) per common share – basic:
Loss from continuing operations (net of income attributable to preferred stockholders)	$	(0.26	)	$	(0.24	)	$	(0.31	)	$	(0.40	)
Net income (loss) attributable to common stockholders	$	(0.22	)	$	0.06		$	0.05		$	(0.07	)
Earnings (loss) per common share – diluted:
Loss from continuing operations (net of income attributable to preferred stockholders)	$	(0.26	)	$	(0.24	)	$	(0.31	)	$	(0.40	)
Net income (loss) attributable to common stockholders	$	(0.22	)	$	0.06		$	0.05		$	(0.07	)
Weighted average common shares outstanding		93,448			93,807			94,041			94,282
Weighted average common shares and common share equivalents outstanding		93,448			93,807			94,041			94,282


	Quarter (1)
Year Ended December 31, 2004	First			Second			Third			Fourth
Total revenues	$	314,433		$	322,550		$	333,307		$	343,767
Total operating expenses		(237,206	)		(247,155	)		(258,840	)		(281,895	)
Operating income		77,227			75,395			74,467			61,872
Income from continuing operations		3,128			999			26,136			24,252
Income from discontinued operations		14,857			12,987			137,072			48,023
Income before cumulative effect of change in accounting principle		17,985			13,986			163,208			72,275
Cumulative effect of change in accounting principle		(3,957	)		—			—			—
Net income		14,028			13,986			163,208			72,275
Earnings (loss) per common share – basic:
Income (loss) from continuing operations (net of income attributable to preferred stockholders)	$	(0.18	)	$	(0.22	)	$	0.02		$	0.02
Net income (loss) attributable to common stockholders	$	(0.06	)	$	(0.08	)	$	1.49		$	0.53
Earnings (loss) per common share – diluted:
Income (loss) from continuing operations (net of income attributable to preferred stockholders)	$	(0.18	)	$	(0.22	)	$	0.02		$	0.02
Net income (loss) attributable to common stockholders	$	(0.06	)	$	(0.08	)	$	1.48		$	0.53
Weighted average common shares outstanding		92,811			93,065			93,247			93,347
Weighted average common shares and common share equivalents outstanding		92,811			93,065			93,394			93,678


(1)		Certain reclassifications have been made to 2005 and 2004 quarterly amounts to conform to the full year 2005 presentation, primarily related to treatment of discontinued operations.

NOTE 17 — Business Segments

We have two reportable segments: real estate (owning and operating apartments) and investment management business (providing property management and other services relating to the apartment business to third parties and affiliates). We own and operate properties throughout the United States and Puerto Rico that generate rental and other property related income through the leasing of apartment units to a diverse base of residents. We separately evaluate the performance of each of our properties. However, because each of our properties has similar economic characteristics, the properties have been aggregated into a single apartment communities, or real estate, segment. All real estate revenues are from external customers and no revenues are generated from transactions with other segments. No single resident or related group of residents contributed 10% or more of total revenues during the years ended December 31, 2005, 2004 or 2003.

Statement of Financial Accounting Standards No. 131,Disclosures about Segments of an Enterprise and Related Information, or SFAS 131, requires that segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing such segments’ performance. Our chief operating decision maker is comprised of several members of our executive management team who use several generally accepted industry financial measures to assess the performance of the business including net operating income, free cash flow, funds from operations, and adjusted funds from operations. In 2005 and 2004, the chief operating decision maker emphasized net operating income as a key measurement of segment profit or loss. Accordingly, below we disclose net operating income for each of our segments. Net operating income is defined as segment revenues (after the elimination of intersegment revenues) less direct segment operating expenses. In 2003, we reported free cash flow as the primary basis for measurement of segment profit or loss. Certain reclassifications have been made to 2004 and 2003 amounts to conform to the 2005 presentation. These reclassifications primarily represent presentation changes related to discontinued operations.

The following table presents revenues and net operating income for the years ended December 31, 2005, 2004 and 2003, from these segments, and reconciles net operating income of reportable segments to operating income as reported (in thousands):


	For the Years Ended December 31,
	2005			2004			2003
Revenues:
Real estate segment	$	1,387,601		$	1,246,795		$	1,186,939
Investment management segment:
Gross revenues		141,649			144,304			141,942
Elimination of intersegment revenues		(79,772	)		(77,042	)		(83,752	)

Net revenues after elimination		61,877			67,262			58,190

Total revenues of reportable segments	$	1,449,478		$	1,314,057		$	1,245,129

Net operating income:
Real estate segment	$	719,241		$	647,784		$	664,328
Investment management segment		43,887			45,594			41,404

Total net operating income of reportable segments		763,128			693,378			705,732
Reconciliation of net operating income of reportable segments to operating income:
Depreciation and amortization		(387,713	)		(325,494	)		(294,809	)
General and administrative expenses		(92,826	)		(77,424	)		(48,357	)
Other (expenses) income, net		4,690			(1,499	)		7,071

Operating income	$	287,279		$	288,961		$	369,637


	December 31, 2005		December 31, 2004
ASSETS (in thousands):
Total assets for reportable segments (1)	$	9,646,729	$	9,709,080
Corporate and other assets		372,431		365,236

Total consolidated assets	$	10,019,160	$	10,074,316


(1)		Total assets for reportable segments include assets associated with both the real estate and investment management business segments, as well as our investment in unconsolidated real estate partnerships.

Our capital expenditures primarily relate to the real estate segment and totaled $443.9 million, $301.9 million and $245.5 million for the years ended December 31, 2005, 2004 and 2003, respectively.

NOTE 18 — Transactions with Affiliates

We earn revenue from affiliated real estate partnerships. These revenues include fees for property management services, partnership and asset management services, risk management services and transactional services such as syndication and acquisition, development, refinancing, construction supervisory and disposition. In addition, we are reimbursed for our costs in connection with the management of the unconsolidated real estate partnerships. These fees and reimbursements for the years ended December 31, 2005, 2004 and 2003 totaled $73.6 million, $89.6 million and $93.1 million, respectively. The total accounts receivable due from affiliates was $43.1 million, net of allowance for doubtful accounts of $4.7 million, at December 31, 2005, and $39.2 million, net of allowance for doubtful accounts of $4.4 million, at December 31, 2004.

Additionally, we earn interest income on notes from real estate partnerships in which we are the general partner and hold either par value or discounted notes. Interest income earned on par value notes from unconsolidated real estate partnerships totaled $17.4 million, $16.8 million, and $14.3 million for the years ended December 31, 2005, 2004 and 2003, respectively. Accretion income earned on discounted notes from unconsolidated real estate partnerships totaled $0.7 million, $6.2 million, and $2.7 million for the years ended December 31, 2005, 2004 and 2003, respectively. See Note 5 for additional information on notes receivable from unconsolidated real estate partnerships.

NOTE 19 — Recent Accounting Developments

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (revised 2004),Share-Based Payment, or SFAS 123R, which supersedes the existing SFAS 123, which we adopted in 2003 using the prospective method of transition as described therein. SFAS 123R requires all share-based employee compensation, including grants of employee stock options, to be recognized in the financial statements based on fair value and requires a modified prospective application method of adoption. Under this method, the provisions of SFAS 123R will be applied prospectively to new and modified awards granted on or after the required effective date. In addition, compensation cost is required to be recognized over the remaining vesting period for the unvested portion of outstanding awards granted prior to the effective date. The measurement and recognition provisions of SFAS 123R that apply to our stock option plans are similar to those currently being followed by us for awards granted on or after January 1, 2003. The primary change in expense recognition requirements, which also applies to our unvested restricted stock awards, relates to the treatment of forfeitures. Under SFAS 123R, expected forfeitures are required to be estimated in determining periodic compensation cost, whereas we currently recognize forfeitures as they occur. Upon adoption of SFAS 123R, we will estimate forfeitures of unvested awards of stock options and restricted stock and record a cumulative effect of a change in accounting principle to reflect the compensation expense that would not have been recognized in prior periods had forfeitures been estimated prior to the date of adoption. We are required to adopt SFAS 123R as of January 1, 2006. Upon adoption, our periodic compensation cost will increase over the remaining vesting period for stock options granted prior to January 1, 2003, for which no cost is currently being recognized. Based on preliminary estimates of such additional compensation cost, we do not anticipate that the adoption of SFAS 123R will have a material effect on our consolidated financial condition or results of operations.

In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154,Accounting Changes and Error Corrections,or SFAS 154, which replaces APB Opinion No. 20 and Statement of Financial Accounting Standards No. 3, and changes the requirements for the accounting for and reporting of a change in accounting principle. This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005, although early adoption is permitted for accounting changes and corrections of errors made in fiscal years beginning after the date SFAS 154 was issued. We do not anticipate that the adoption of SFAS 154 will have a material effect on our consolidated financial condition or results of operations.

As discussed underPrinciples of Consolidationin Note 2, we applied EITF 04-5 after June 29, 2005 to newly formed limited partnerships and to existing limited partnerships for which the partnership agreement was modified. EITF 04-5 is effective on January 1, 2006 for general partners in all other limited partnerships. We are analyzing the effects of EITF 04-5 on our investments in limited partnerships where we are a general partner and have tentatively identified certain unconsolidated partnerships that will be consolidated upon adoption of EITF 04-5. We plan to adopt EITF 04-5 using a transition method that does not involve retrospective application, but potentially involves an adjustment to opening retained earnings for the cumulative effect of the change in accounting principle. A charge to opening retained earnings will be required if we consolidate partnerships with deficits in partners’ equity that we were not required to recognize using the equity method of accounting for our investments in such partnerships. After adoption, we may be required to recognize losses for deficit distributions to minority partners in newly consolidated partnerships that would not be recognized using the equity method. We have not yet fully determined the effects that the adoption of EITF 04-5 will have on our financial condition or results of operations, but we anticipate that it will result in consolidation of additional partnerships.

NOTE 20 — Subsequent Events

Redemption of Class Q Cumulative Preferred Stock

On February 17, 2006, we announced that we would redeem for cash all 2.53 million outstanding shares of 10.10% Class Q Cumulative Preferred Stock on March 19, 2006. The total redemption price of $25.035 per share, or $63.3 million, includes the redemption price of $25.00 per share and $0.035 per share of accumulated and unpaid dividends through March 19, 2006.

Sale of a Portion of the Flamingo South Beach Property

On February 17, 2006, we closed the sale of a portion of the Flamingo South Beach property known as the South Tower. The South Tower sale price was $163.5 million and included 562 residential units and our rights to the property’s marina. Additionally, the buyer paid non-refundable funds of $5 million for the option to purchase the 614-unit North Tower for $169 million between September 1, 2006 and February 28, 2007 (subject to the right to extend for up to six months subject to certain conditions), and the option to purchase the 513-unit Central Tower, along with the remainder of improvements on the property, for $267.5 million between December 1, 2007 and May 31, 2008 (subject to the right to extend for up to four months subject to certain conditions and provided that the buyer has previously purchased the North Tower). The sales agreement also provides us with profit participation if certain thresholds are met. We will receive, through one of our taxable REIT subsidiaries, the first $19.8 million in proceeds in the proposed condominium conversion after certain development fees and certain returns on the buyer’s equity have been achieved, plus 20% of the buyer’s net profits thereafter. At December 31, 2005, the South Tower had a net book value of approximately $80 million and related property debt of approximately $77 million.

Schedule III

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2005

(In Thousands Except Unit Data)


															December 31, 2005
									(2)
									Initial Cost				(3)
		(1)											Cost Capitalized								Accumulated			Total Cost
	Property	Date			Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location		Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

100 Forest Place	High Rise	Dec-97		OakPark, IL		1987		237	$	2,664	$	18,815	$	2,358	$	2,664	$	21,173	$	23,837	$	(5,830	)	$	18,007	$	13,556
1582 First Avenue	High Rise	Mar-05		New York, NY		1900		17		4,250		752		56		4,250		808		5,058		(30	)		5,028		2,784
173 E. 90th	High Rise	May-04		New York, NY		1910		72		11,773		4,535		467		11,773		5,002		16,775		(275	)		16,500		9,812
236-238 East 88th Street	High Rise	Jan-04		New York, NY		1900		47		8,751		2,914		839		8,751		3,752		12,503		(238	)		12,265		7,389
237-239 Ninth Avenue	High Rise	Mar-05		New York, NY		1900		36		8,430		1,866		314		8,430		2,180		10,610		(75	)		10,535		5,449
306 East 89th Street	High Rise	Jul-04		New York, NY		1900		20		2,659		1,006		66		2,659		1,072		3,730		(69	)		3,661		1,989
311 & 313 East 73rd Street	Mid-Rise	Mar-03		New York, NY		1904		34		5,635		1,609		224		5,635		1,833		7,468		(269	)		7,199		2,965
322-324 East 61st Street	High Rise	Mar-05		New York, NY		1900		40		6,319		2,224		281		6,319		2,505		8,825		(76	)		8,749		—
452 East 78th Street	High Rise	Jan-04		New York, NY		1900		13		1,966		608		160		1,966		767		2,734		(44	)		2,689		1,719
510 East 88th Street	High Rise	Jan-04		New York, NY		1900		20		3,137		1,002		156		3,137		1,157		4,295		(78	)		4,217		2,829
514-516 East 88th Street	High Rise	Mar-05		New York, NY		1900		36		6,230		2,168		228		6,230		2,396		8,626		(75	)		8,551		4,803
6111 At Ridgeway Crossing	Garden	Dec-97		Memphis, TN		1984		584		1,749		10,479		6,326		1,749		16,805		18,554		(6,841	)		11,712		7,671
Alliance Towers	High Rise	Mar-02		Lombard, IL		1971		101		530		1,934		511		530		2,445		2,975		(347	)		2,628		2,285
Anchorage Apartments	Garden	Nov-96		League City, TX		1985		264		1,155		7,172		2,425		1,155		9,598		10,753		(2,556	)		8,197		3,911
Apartment, The	Garden	Jul-00		Omaha, NE		1973		204		959		8,526		742		959		9,268		10,227		(4,289	)		5,938		4,092
Arbors (Grovetree), The	Garden	Oct-97		Tempe, AZ		1967		200		1,092		6,208		1,476		1,092		7,684		8,776		(2,497	)		6,279		2,928
Arbors of Battle Creek I	Garden	Dec-99		Battle Creek, MI		1981		586		2,732		16,325		5,768		2,732		22,093		24,825		(4,643	)		20,182		7,280
Arbors on Battle Creek II	Garden	Dec-99		Battle Creek, MI		1987		76		496		3,555		328		496		3,883		4,378		(905	)		3,474		1,735
Arbors on Westheimer	Garden	Nov-96		Houston, TX		1972		360		1,760		9,325		7,899		1,760		17,224		18,984		(3,746	)		15,238		6,220
Arbours of Hermitage, The	Garden	Jul-00		Hermitage, TN		1972		350		1,797		14,451		4,176		1,797		18,627		20,424		(7,383	)		13,040		10,961
Arrowsmith	Garden	Mar-02		Corpus Christi, TX		1980		70		240		968		330		240		1,298		1,538		(256	)		1,282		1,374
Arvada House	High Rise	Nov-04		Arvada, CO		1977		88		641		3,314		1,805		641		5,118		5,760		(139	)		5,620		4,273
Ashford, The	Garden	Dec-95		Atlanta, GA		1968		221		2,771		8,366		23,267		2,771		31,633		34,404		(6,284	)		28,120		9,184
Ashland Manor	High Rise	Mar-02		East Moline, IL		1977		189		205		1,162		506		205		1,668		1,873		(244	)		1,629		1,268
Aspen Point	Garden	Dec-97		Arvada, CO		1972		120		353		3,807		3,594		353		7,401		7,754		(3,031	)		4,723		—
Aspen Station	Garden	Oct-01		Richmond, VA		1979		232		2,428		7,874		823		2,428		8,697		11,125		(2,794	)		8,331		6,742
Aspen Stratford B	High Rise	Oct-02		Newark, NJ		1920		60		362		2,887		510		362		3,397		3,758		(1,773	)		1,986		1,794
Aspen Stratford C	High Rise	Oct-02		Newark, NJ		1920		56		363		2,818		414		363		3,232		3,595		(1,692	)		1,903		1,582
Atriums of Plantation	Mid-Rise	Aug-98		Plantation, FL		1980		210		1,807		10,385		1,466		1,807		11,851		13,658		(3,344	)		10,314		6,901
Autumn Run	Garden	Oct-02		Naperville, IL		1984		320		1,812		16,911		1,249		1,812		18,160		19,972		(6,894	)		13,079		11,648
Autumn Woods	Garden	Sep-00		Jackson, MI		1973		112		1,042		3,705		1,354		1,042		5,059		6,101		(1,489	)		4,613		2,821
Baisley Park Gardens	Mid-Rise	Apr-02		Jamaica, NY		1982		212		1,765		12,309		1,767		1,765		14,076		15,841		(3,028	)		12,813		11,741
Baldwin Oaks	Mid-Rise	Oct-99		Parsippany ,NJ		1980		251		746		8,516		1,033		746		9,549		10,295		(4,716	)		5,578		6,707
Bangor House	High Rise	Mar-02		Bangor, ME		1979		121		1,140		4,595		556		1,140		5,150		6,290		(530	)		5,761		3,067
Bank Lofts	High Rise	Apr-01		Denver, CO		1920		117		3,525		9,045		690		3,525		9,734		13,259		(1,903	)		11,356		7,596
Bannock Arms	Garden	Mar-02		Boise, ID		1978		66		275		1,102		235		275		1,337		1,612		(239	)		1,373		1,473
Barcelona	Garden	Oct-99		Houston ,TX		1963		127		770		4,250		1,284		770		5,534		6,304		(1,444	)		4,860		3,090
Bay Parc Plaza	High Rise	Sep-04		Miami, FL		2000		471		22,680		41,847		1,630		22,680		43,476		66,156		(1,250	)		64,906		47,846


															December 31, 2005
									(2)
									Initial Cost				(3)
		(1)											Cost Capitalized								Accumulated			Total Cost
	Property	Date			Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location		Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Bay Ridge at Nashua	Garden	Jan-03		Nashua, NH		1984		412		3,352		39,831		783		3,352		40,614		43,966		(4,992	)		38,974		23,007
Bayberry Hill Estates	Garden	Aug-02		Framingham, MA		1971		425		18,915		35,945		5,589		18,915		41,534		60,450		(5,427	)		55,023		29,805
Bayhead Village	Garden	Oct-00		Indianapolis, IN		1978		202		1,411		5,139		1,264		1,411		6,403		7,814		(1,675	)		6,139		3,349
Bayview	Garden	Jun-05		San Francisco, CA		1976		146		241		19,548		708		241		20,256		20,498		(5,979	)		14,518		2,603
Beacon Hill	High Rise	Mar-02		Hillsdale, MI		1980		198		1,380		5,524		1,156		1,380		6,679		8,059		(1,197	)		6,863		5,531
Beau Jardin	Garden	Apr-01		West Lafayette, IN		1968		252		5,460		5,291		1,887		5,460		7,178		12,638		(2,689	)		9,949		4,522
Bedford House	Mid-Rise	Mar-02		Falmouth, KY		1979		48		230		919		139		230		1,057		1,287		(197	)		1,091		1,099
Beech Lake	Garden	May-99		Durham, NC		1986		345		2,222		12,641		2,278		2,222		14,918		17,140		(4,441	)		12,699		10,500
Beech’s Farm	Garden	Oct-00		Columbia, MD		1983		135		4,166		3,520		1,166		4,166		4,686		8,852		(1,029	)		7,823		10,976
Belmont Place	Garden	Jul-00		Marietta, GA		1972		326		11,298		2,363		28,672		11,298		31,034		42,332		(2,401	)		39,931		19,250
Bent Oaks	Garden	May-98		Austin, TX		1978		146		1,096		6,423		755		1,096		7,178		8,274		(2,562	)		5,712		3,550
Bent Tree I	Garden	Oct-02		Indianapolis, IN		1983		240		1,850		6,430		599		1,850		7,029		8,879		(1,533	)		7,346		4,000
Bent Tree III — Verandas	Garden	Sep-00		Indianapolis, IN		1985		96		1,767		3,379		1,021		1,767		4,400		6,168		(755	)		5,412		2,950
Berger Apartments	Mid-Rise	Mar-02		New Haven, CT		1981		145		1,152		4,657		1,216		1,152		5,873		7,025		(951	)		6,073		2,586
Bexley House	High Rise	Oct-05		Columbus, OH		1972		64		666		6,203		11		666		6,214		6,881		(1,682	)		5,198		2,108
Big Walnut	Garden	Apr-02		Columbus, OH		1968		251		582		9,701		1,574		582		11,274		11,856		(4,906	)		6,950		5,299
Biltmore Towers	High Rise	Mar-02		Dayton, OH		1980		230		1,813		6,411		11,404		1,813		17,815		19,629		(1,520	)		18,108		10,848
Blakewood	Garden	Oct-05		Statesboro, GA		1973		42		23		1,187		2		23		1,189		1,212		(775	)		437		783
Bluffs, The	Garden	Dec-98		Laffayette, IN		1982		181		979		5,556		1,492		979		7,048		8,027		(2,698	)		5,329		3,104
Boston Lofts	High Rise	Apr-01		Denver, CO		1890		158		3,447		20,589		1,159		3,447		21,748		25,194		(4,077	)		21,118		15,238
Boulder Creek	Garden	Jul-94		Boulder, CO		1972		221		755		7,730		15,896		755		23,626		24,381		(8,665	)		15,716		14,403
Brandywine	Garden	Jul-94		St. Petersburg, FL		1971		477		1,437		12,725		3,586		1,437		16,310		17,747		(10,020	)		7,727		8,484
Brant Rock Condominiums	Garden	Oct-97		Houston, TX		1984		84		337		1,976		848		337		2,823		3,160		(1,001	)		2,159		932
Breakers, The	Garden	Oct-98		Daytona Beach, FL		1985		208		1,008		5,507		2,022		1,008		7,530		8,537		(2,363	)		6,175		6,978
Brentwood Apartments	Garden	Nov-96		Lake Jackson, TX		1980		104		592		2,741		1,253		592		3,993		4,585		(1,292	)		3,293		1,298
Briarcliffe	Garden	Oct-00		Lansing, MI		1974		308		3,146		9,586		1,999		3,146		11,585		14,731		(2,986	)		11,745		6,197
Briarwest	Garden	Oct-99		Houston, TX		1970		380		2,459		13,868		1,936		2,459		15,804		18,264		(4,319	)		13,945		8,989
Briarwood	Garden	Oct-99		Houston, TX		1970		351		2,033		11,855		2,524		2,033		14,379		16,412		(3,631	)		12,782		8,427
Bridgewater Apartments, The	Garden	Nov-96		Tomball, TX		1978		206		969		5,976		2,490		969		8,466		9,435		(1,892	)		7,543		3,266
Brighton Crest	Garden	Jan-00		Marietta, GA		1987		320		2,084		13,212		2,241		2,084		15,454		17,537		(6,678	)		10,859		9,583
Broadcast Center	Garden	Mar-02		Los Angeles, CA		1990		280		27,603		41,244		2,832		27,603		44,077		71,679		(4,940	)		66,739		38,614
Broadmoor Ridge	Garden	Dec-97		Colorado Springs, CO		1974		200		460		2,917		10,389		460		13,307		13,766		(2,416	)		11,350		7,756
Broadmoor, The	Garden	May-98		Austin, TX		1984		200		1,370		8,361		980		1,370		9,341		10,712		(2,813	)		7,899		6,000
Brook Run	Garden	May-98		Arlington Heights, IL		1985		182		2,245		12,936		1,409		2,245		14,345		16,590		(4,957	)		11,633		11,800
Brookdale Lakes	Garden	May-98		Naperville, IL		1990		200		2,709		15,346		1,223		2,709		16,568		19,277		(5,403	)		13,874		10,970
Brookwood Apartments	Garden	Apr-01		Indianapolis, IN		1967		476		4,546		9,136		3,248		4,546		12,385		16,931		(3,421	)		13,509		9,186
Burke Shire Commons	Garden	Mar-01		Burke, VA		1986		360		4,689		22,607		2,446		4,689		25,053		29,742		(6,093	)		23,649		18,375
Cache Creek Apartment Homes	Mid-Rise	Jun-04		Clearlake, CA		2003		80		1,545		9,405		396		1,545		9,801		11,346		(1,007	)		10,338		2,371
Calhoun Beach Club	High Rise	Dec-98		Minneapolis, MN		1928/1998		332		11,708		73,334		40,607		11,708		113,941		125,649		(21,803	)		103,846		42,977
Campbell Heights	High Rise	Oct-02		Washington, D.C.		1978		170		750		6,719		474		750		7,193		7,943		(1,720	)		6,224		8,257
Canterbury Green Apartments	Garden	Dec-99		Fort Wayne, IN		1979		1,989		13,659		73,115		17,233		13,659		90,348		104,007		(23,963	)		80,044		44,610
Canyon Crest	Garden	Jan-03		Littleton, CO		1966		90		1,306		6,092		485		1,306		6,577		7,883		(1,758	)		6,124		3,177
Canyon Terrace	Garden	Mar-02		Saugus, CA		1984		130		7,300		6,602		1,001		7,300		7,603		14,903		(1,279	)		13,624		5,754
Cape Cod	Garden	May-98		San Antonio, TX		1985		212		1,307		7,012		769		1,307		7,781		9,089		(2,488	)		6,601		4,110
Captiva Club	Garden	Dec-96		Tampa, FL		1973		357		1,600		6,870		11,202		1,600		18,072		19,672		(5,505	)		14,167		7,510
Carriage Hill	Garden	Jul-00		East Lansing, MI		1972		143		810		8,890		1,430		810		10,319		11,129		(3,793	)		7,336		4,773
Casa de Las Hermanitas	Garden	Mar-02		Los Angeles, CA		1982		88		1,800		4,143		97		1,800		4,241		6,041		(694	)		5,347		1,993
Castle Court	High Rise	May-04		Bristol, MA		1974		240		15,239		7,850		1,956		15,239		9,806		25,045		(592	)		24,453		11,081
Castle Park	Mid-Rise	Mar-02		St. Louis, MO		1983		209		1,710		6,896		2,237		1,710		9,133		10,843		(1,441	)		9,402		9,033
Castlewood	Garden	Mar-02		Davenport, IA		1980		96		585		2,351		816		585		3,167		3,752		(512	)		3,240		3,561


															December 31, 2005
									(2)
									Initial Cost				(3)
		(1)											Cost Capitalized								Accumulated			Total Cost
	Property	Date			Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location		Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Cedar Rim	Garden	Apr-00		New Castle, WA		1980		104		773		5,497		972		773		6,469		7,242		(2,589	)		4,654		4,447
Centennial	Garden	Mar-02		Fort Wayne, IN		1983		88		550		2,207		538		550		2,745		3,295		(492	)		2,803		2,979
Center Square	High Rise	Oct-99		Doylestown, PA		1975		350		582		4,190		2,097		582		6,287		6,869		(1,791	)		5,078		9,062
Charleston Landing	Garden	Sep-00		Brandon, FL		1985		300		7,488		8,656		1,870		7,488		10,526		18,014		(1,436	)		16,578		10,750
Chatham Harbor	Garden	Oct-99		Altamonte Springs, FL		1985		324		2,288		13,068		1,441		2,288		14,510		16,797		(3,267	)		13,531		8,367
Chelsea Ridge Apartments	Garden	Apr-01		Wappingers Falls, NY		1966		835		10,403		33,000		6,933		10,403		39,933		50,336		(13,249	)		37,087		34,426
Cherry Ridge Terrace	Garden	Mar-02		Northern Cambria, PA		1983		62		372		1,490		278		372		1,768		2,140		(362	)		1,778		1,336
Chesapeake (Lost Mill)	Garden	Sep-04		Austin, TX		1984		124		437		3,503		172		437		3,675		4,112		(900	)		3,212		1,706
Chesapeake Apartments	Garden	Jan-96		Houston, TX		1983		320		775		7,317		2,088		775		9,405		10,180		(3,107	)		7,073		5,825
Chesapeake Landing I	Garden	Sep-00		Aurora, IL		1986		416		15,800		16,875		2,029		15,800		18,904		34,704		(4,314	)		30,390		24,949
Chesapeake Landing II	Garden	Mar-01		Aurora, IL		1987		184		1,969		7,980		996		1,969		8,976		10,945		(2,049	)		8,896		6,550
Chestnut Hill (CT)	Garden	Oct-99		Middletown, CT		1986		314		3,001		20,143		1,523		3,001		21,666		24,668		(5,645	)		19,022		16,070
Chestnut Hill (PA)	Garden	Apr-00		Philadelphia, PA		1963		821		6,463		49,315		13,349		6,463		62,664		69,127		(17,173	)		51,954		23,893
Cheswick	Garden	Jun-04		Indianapolis, IN		1976		187		873		5,854		466		873		6,320		7,193		(2,415	)		4,778		4,189
Chimney Top	Garden	Oct-02		Antioch, TN		1985		362		2,430		10,818		904		2,430		11,723		14,153		(1,864	)		12,288		8,054
Chimneys of Cradle Rock	Garden	Jun-04		Columbia, MD		1979		198		2,547		9,045		378		2,547		9,423		11,970		(1,541	)		10,429		4,984
Citadel	Garden	Jul-00		El Paso, TX		1973		261		1,024		8,337		517		1,024		8,854		9,877		(4,096	)		5,781		5,493
Citadel Village	Garden	Jul-00		Colorado Springs, CO		1974		122		928		6,779		933		928		7,712		8,640		(2,812	)		5,828		1,812
Citrus Grove	Garden	Jun-98		Redlands, CA		1985		198		1,118		6,642		1,520		1,118		8,161		9,279		(2,447	)		6,832		4,129
Citrus Sunset	Garden	Jul-98		Vista, CA		1985		97		663		3,992		1,075		663		5,067		5,730		(1,430	)		4,300		5,900
City Line	Garden	Mar-02		Hampton, VA		1976		200		500		2,014		314		500		2,328		2,828		(316	)		2,512		5,129
Coatesville Towers	High Rise	Mar-02		Coatesville, PA		1979		90		500		2,011		372		500		2,383		2,883		(411	)		2,472		2,231
Colonnade Gardens (Ferntree)	Garden	Oct-97		Phoenix, AZ		1973		196		766		4,346		1,755		766		6,101		6,867		(1,951	)		4,915		2,169
Colony at El Conquistador, The	Garden	Jun-98		Bradenton, FL		1986		166		1,121		6,360		1,336		1,121		7,696		8,817		(2,124	)		6,692		2,826
Colony at Kenilworth	Garden	Oct-99		Towson, MD		1966		383		2,329		19,680		4,538		2,329		24,218		26,547		(11,389	)		15,158		12,785
Columbus Avenue	Mid-Rise	Sep-03		New York, NY		1880		70		35,489		9,499		1,765		35,489		11,264		46,753		(1,477	)		45,276		19,366
Cooper’s Point	Garden	Oct-02		North Charleston, SC		1986		192		730		7,420		305		730		7,725		8,455		(3,199	)		5,256		7,735
Copper Chase Apartments	Garden	Dec-96		Katy, TX		1982		316		1,742		7,010		2,873		1,742		9,883		11,625		(4,002	)		7,623		5,669
Copper Mill Apartments	Garden	Oct-02		Richmond, VA		1987		192		1,039		8,842		931		1,039		9,773		10,812		(3,549	)		7,263		10,600
Copperfield Apartments I & II	Garden	Nov-96		Houston, TX		1983		196		940		7,900		1,357		940		9,257		10,197		(2,314	)		7,882		3,977
Copperwood II	Garden	Oct-05		The Woodlands, TX		1981		150		512		5,393		—		512		5,393		5,906		(2,224	)		3,682		—
Coral Garden Apartments	Garden	Jul-94		Las Vegas, NV		1983		670		3,190		12,589		6,389		3,190		18,978		22,168		(9,573	)		12,595		9,773
Country Club Heights	Garden	Mar-04		Quincy, IL		1976		200		676		5,715		4,526		676		10,241		10,917		(1,269	)		9,648		8,336
Country Club Villas	Garden	Jul-94		Amarillo, TX		1984		282		1,049		5,691		2,663		1,049		8,354		9,403		(3,410	)		5,993		4,347
Country Club West	Garden	May-98		Greeley, CO		1986		288		2,848		16,160		1,464		2,848		17,624		20,472		(5,738	)		14,734		10,421
Country Lakes I	Garden	Apr-01		Naperville, IL		1982		240		8,512		10,832		1,604		8,512		12,436		20,948		(2,833	)		18,115		10,561
Country Lakes II	Garden	May-97		Naperville, IL		1986		400		5,165		29,430		2,844		5,165		32,273		37,439		(9,231	)		28,208		14,520
Courtney Park	Garden	May-98		Fort Collins, CO		1986		248		2,727		15,459		1,279		2,727		16,738		19,465		(5,256	)		14,209		9,241
Coventry Square Apartments	Garden	Nov-96		Houston, TX		1983		270		700		5,072		2,842		700		7,914		8,614		(2,436	)		6,178		4,155
Covington Pointe	Garden	Oct-05		Dallas, TX		1984		180		1,983		11,730		19		1,983		11,749		13,732		(4,630	)		9,102		5,493
Creekside	Garden	Jan-00		Denver, CO		1974		328		1,702		13,694		1,255		1,702		14,949		16,651		(5,337	)		11,314		5,842
Creekside (CA)	Garden	Mar-02		Simi Valley, CA		1985		397		24,595		18,818		2,770		24,595		21,588		46,183		(3,784	)		42,399		35,407
Creekside Gardens	Garden	Mar-02		Loveland, CO		1983		50		350		1,401		274		350		1,675		2,025		(283	)		1,743		1,794
Creekview	Garden	Mar-02		Stroudsburg, PA		1982		80		400		1,610		241		400		1,851		2,251		(291	)		1,960		2,778
Crescent Gardens	Mid-Rise	Mar-02		West Hollywood, CA		1982		130		15,382		10,215		983		15,382		11,198		26,580		(1,876	)		24,704		15,000
Crockett Manor	Garden	Mar-04		Trenton, TN		1982		38		42		1,394		14		42		1,407		1,450		(67	)		1,383		978
Crossings Of Bellevue	Garden	May-98		Nashville, TN		1985		300		2,588		14,954		2,514		2,588		17,468		20,057		(5,763	)		14,294		6,965


															December 31, 2005
									(2)
									Initial Cost				(3)
		(1)											Cost Capitalized								Accumulated			Total Cost
	Property	Date			Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location		Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Crossroads	Garden	May-98		Phoenix, AZ		1982		316		2,180		12,661		1,869		2,180		14,530		16,710		(4,950	)		11,760		5,675
Crows Nest Condominiums	Garden	Nov-96		League City, TX		1984		176		939		5,831		1,363		939		7,194		8,133		(1,907	)		6,226		2,214
Cypress Landing	Garden	Dec-96		Savannah, GA		1984		200		1,083		5,696		1,986		1,083		7,682		8,765		(2,569	)		6,196		4,573
Daugette Tower	High Rise	Mar-02		Gadsden, AL		1979		101		540		2,178		995		540		3,173		3,713		(512	)		3,201		934
Deer Creek	Garden	Apr-00		Plainsboro, NJ		1975		288		2,215		16,804		2,490		2,215		19,294		21,509		(7,045	)		14,464		16,085
Deercross	Garden	Oct-02		Blue Ash, OH		1985		336		4,365		13,517		631		4,365		14,147		18,512		(4,655	)		13,857		11,101
Deercross (IN)	Garden	Oct-00		Indianapolis, IN		1979		372		3,175		10,426		1,809		3,175		12,235		15,411		(3,167	)		12,244		8,132
Delhaven Manor	Mid-Rise	Mar-02		Jackson, MS		1983		104		575		2,304		1,107		575		3,412		3,987		(480	)		3,507		3,824
Denny Place	Garden	Mar-02		North Hollywood, CA		1984		17		394		1,579		87		394		1,665		2,060		(234	)		1,825		1,155
Doral Oaks	Garden	Dec-97		Temple Terrace, FL		1967		252		2,095		3,943		10,865		2,095		14,808		16,904		(4,266	)		12,638		4,926
Douglaston Villas and Townhomes	Garden	Aug-99		Altamonte Springs, FL		1979		234		1,666		9,353		2,206		1,666		11,559		13,225		(3,523	)		9,702		6,245
Dunes Apartment Homes, The	Garden	Oct-99		Indian Harbor, FL		1963		200		1,200		5,740		1,143		1,200		6,882		8,082		(3,575	)		4,507		3,609
Eagle’s Nest	Garden	May-98		San Antonio, TX		1973		226		1,053		5,981		1,032		1,053		7,013		8,066		(2,970	)		5,096		3,855
East Central Towers	Mid-Rise	Mar-02		Fort Wayne, IN		1980		167		800		3,203		132		800		3,335		4,135		(493	)		3,641		3,281
East Farm Village	High Rise	Mar-02		East Haven, CT		1981		241		2,800		11,188		1,573		2,800		12,761		15,561		(1,724	)		13,837		8,671
Easton Village Condominiums I & II	Garden	Nov-96		Houston, TX		1983		146		1,070		9,790		1,092		1,070		10,883		11,953		(3,405	)		8,548		3,320
Echo Valley	Mid-Rise	Mar-02		West Warwick, RI		1978		100		550		2,294		1,013		550		3,306		3,856		(550	)		3,307		—
Elm Creek	Mid-Rise	Dec-97		Elmhurst, IL		1986		372		5,534		30,830		9,418		5,534		40,249		45,782		(8,492	)		37,290		19,019
Essex Park	Garden	Oct-99		Columbia, SC		1971		323		1,122		9,666		1,599		1,122		11,265		12,388		(5,020	)		7,368		6,098
Evanston Place	High Rise	Dec-97		Evanston, IL		1988		189		3,232		25,546		1,368		3,232		26,914		30,146		(6,489	)		23,656		15,391
Fairlane East	Garden	Jan-01		Dearborn, MI		1973		244		6,480		11,177		3,888		6,480		15,065		21,545		(3,908	)		17,637		10,515
Fairway	Garden	Jan-00		Plano, TX		1978		256		3,078		5,199		2,721		3,078		7,919		10,997		(3,255	)		7,742		5,712
Fairways	Garden	Jul-94		Chandler, AZ		1986		352		1,830		15,738		4,963		1,830		20,702		22,532		(8,071	)		14,461		8,199
Falls of Bells Ferry, The	Garden	May-98		Marietta, GA		1987		720		6,568		37,283		4,508		6,568		41,792		48,360		(14,159	)		34,201		25,000
Falls on Bull Creek, The	Garden	May-98		Austin, TX		1986		344		2,645		15,011		9,307		2,645		24,318		26,963		(7,264	)		19,699		7,905
Farmingdale	Mid-Rise	Oct-00		Darien, IL		1975		240		11,763		15,174		1,964		11,763		17,139		28,902		(2,989	)		25,913		19,000
Ferntree	Garden	Mar-01		Phoenix, AZ		1970		219		2,078		13,752		1,141		2,078		14,893		16,972		(2,767	)		14,204		4,332
Fieldcrest (FL)	Garden	Oct-98		Jacksonville, FL		1982		240		1,331		7,617		1,564		1,331		9,181		10,512		(2,838	)		7,674		8,980
Fisherman’s Landing	Garden	Dec-97		Bradenton, FL		1984		200		1,276		7,170		1,684		1,276		8,854		10,131		(2,787	)		7,344		8,232
Fisherman’s Landing	Garden	Sep-98		Temple Terrace, FL		1986		256		1,643		9,446		2,468		1,643		11,914		13,557		(3,404	)		10,152		12,466
Fisherman’s Wharf Apartments	Garden	Nov-96		Clute, TX		1981		360		1,257		7,584		3,208		1,257		10,792		12,049		(3,598	)		8,452		2,694
Flamingo South Beach	High Rise	Sep-97		Miami Beach, FL		1960/2005		1,126		32,191		38,399		213,114		32,186		251,514		283,700		(34,991	)		248,709		56,812
Foothill Place	Garden	Jul-00		Salt Lake City, UT		1973		450		3,865		21,817		3,620		3,865		25,437		29,303		(9,101	)		20,202		17,633
Fox Crest	Garden	Jan-03		Waukegan, IL		1974		245		2,129		12,316		228		2,129		12,545		14,674		(1,394	)		13,280		6,931
Fox Run (NJ)	Garden	Jan-00		Plainsboro, NJ		1973		776		7,119		48,588		10,056		7,119		58,644		65,763		(19,117	)		46,646		31,200
Fox Run (TX)	Garden	Mar-02		Orange, TX		1983		70		420		1,993		206		420		2,199		2,619		(314	)		2,305		1,723
Foxchase	Garden	Dec-97		Alexandria, VA		1947		2,113		15,419		96,062		15,877		15,419		111,939		127,359		(36,316	)		91,043		139,610
Foxtree	Garden	Oct-97		Tempe, AZ		1976		487		2,458		13,927		5,030		2,458		18,957		21,415		(6,554	)		14,861		6,787
Frankford Place	Garden	Jul-94		Carrollton, TX		1982		274		1,125		6,083		3,255		1,125		9,338		10,463		(3,498	)		6,965		4,776
Franklin Oaks	Garden	May-98		Franklin, TN		1987		468		3,936		22,832		7,668		3,936		30,501		34,437		(9,079	)		25,358		14,450
Freedom Place Club	Garden	Oct-97		Jacksonville, FL		1988		352		2,289		12,982		2,051		2,289		15,033		17,322		(4,820	)		12,503		5,321
Friendship Arms	Mid-Rise	Mar-02		Hyattsville, MD		1979		151		970		3,887		669		970		4,557		5,527		(907	)		4,620		5,445
Gary Manor	High Rise	Mar-02		Gary, IN		1980		198		1,090		4,370		696		1,090		5,066		6,156		(704	)		5,452		5,315
Gates Manor	Garden	Mar-04		Clinton, TN		1981		80		266		2,225		195		266		2,421		2,687		(685	)		2,002		1,808
Gateway Village	Garden	Mar-04		Hillsborough, NC		1980		64		433		1,666		125		433		1,791		2,224		(345	)		1,879		1,563
Georgetown	Garden	Aug-02		Framingham, MA		1964		207		12,351		13,168		885		12,351		14,053		26,404		(2,036	)		24,368		15,226
Gholson Hotel	Mid-Rise	Mar-02		Ranger, TX		1984		50		325		1,334		741		325		2,075		2,400		(220	)		2,180		2,182


															December 31, 2005
									(2)
									Initial Cost				(3)
		(1)											Cost Capitalized								Accumulated			Total Cost
	Property	Date			Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location		Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Glenbridge Manors	Garden	Sep-03		Cincinnati, OH		1978		290		1,023		17,618		11,564		1,023		29,182		30,205		(3,582	)		26,623		20,568
Governor’s Park (AR)	Garden	Apr-00		Little Rock, AR		1985		154		753		5,938		478		753		6,416		7,170		(2,596	)		4,574		3,294
Governor’s Park (CO)	Garden	Jan-00		Ft. Collins, CO		1982		188		1,116		9,089		867		1,116		9,956		11,072		(3,589	)		7,482		6,310
Granada	Mid-Rise	Aug-02		Framingham, MA		1958		72		4,577		4,058		324		4,577		4,381		8,958		(861	)		8,097		5,091
Grand Pointe	Garden	Dec-99		Columbia, MD		1974		325		2,715		16,771		3,120		2,715		19,891		22,606		(4,450	)		18,156		18,000
Greens	Garden	Jul-94		Chandler, AZ		2000		324		2,303		713		27,294		2,303		28,007		30,310		(3,981	)		26,329		15,382
Greenspoint Apartments	Garden	Jan-00		Phoenix, AZ		1985		336		2,196		13,969		1,415		2,196		15,383		17,579		(6,090	)		11,489		10,893
Greentree	Garden	Dec-96		Carrollton, TX		1983		365		1,873		9,848		4,039		1,873		13,887		15,760		(4,292	)		11,467		8,560
Hamlin Estates	Garden	Mar-02		North Hollywood, CA		1983		30		1,010		1,691		111		1,010		1,802		2,812		(287	)		2,525		1,797
Hampton Greens	Garden	Oct-02		Dallas, TX		1986		309		1,731		9,896		866		1,731		10,762		12,493		(4,460	)		8,032		2,804
Hampton Hill Apartments	Garden	Nov-96		Houston, TX		1984		332		1,311		7,122		3,011		1,311		10,133		11,444		(3,228	)		8,216		5,290
Harbor Town at Jacaranda	Garden	Sep-00		Plantation, FL		1988		280		9,776		10,643		2,017		9,776		12,660		22,436		(3,062	)		19,374		11,800
Harbour, The	Garden	Mar-01		Melbourne, FL		1987		162		4,108		3,563		1,444		4,108		5,007		9,115		(1,573	)		7,541		—
Harris Park Apartments	Garden	Dec-97		Rochester, NY		1968		114		475		2,786		905		475		3,691		4,166		(1,277	)		2,889		714
Hastings Place Apartments	Garden	Nov-96		Houston, TX		1984		176		934		5,021		2,366		934		7,386		8,320		(1,723	)		6,597		3,726
Heather Ridge (TX)	Garden	Dec-00		Arlington, TX		1982		180		785		4,900		527		785		5,427		6,212		(2,101	)		4,111		3,240
Hemet Estates	Garden	Mar-02		Hemet, CA		1983		80		700		2,802		341		700		3,143		3,843		(533	)		3,310		1,793
Heritage Park at Alta Loma	Garden	Jan-01		Alta Loma, CA		1986		232		1,200		6,428		2,196		1,200		8,625		9,825		(1,716	)		8,109		7,264
Heritage Park Escondido	Garden	Oct-00		Escondido, CA		1986		196		1,009		7,314		440		1,009		7,754		8,763		(2,817	)		5,946		7,299
Heritage Park Livermore	Garden	Oct-00		Livermore, CA		1988		167		829		8,977		737		829		9,714		10,543		(2,329	)		8,214		7,432
Heritage Park Montclair	Garden	Mar-01		Montclair, CA		1985		144		690		4,149		474		690		4,623		5,312		(960	)		4,352		4,620
Heritage Square	Garden	Mar-02		Texas City, TX		1983		50		668		859		278		668		1,137		1,804		(198	)		1,607		1,573
Heritage Village Anaheim	Garden	Oct-00		Anaheim, CA		1986		196		1,779		8,232		717		1,779		8,949		10,728		(3,172	)		7,556		8,858
Hibben Ferry I	Garden	Apr-00		Mt. Pleasant, SC		1983		240		1,460		8,886		4,997		1,460		13,884		15,344		(2,241	)		13,103		5,807
Hidden Cove (CA)	Garden	Jul-98		Escondido, CA		1985		334		3,043		17,615		3,899		3,043		21,514		24,557		(6,212	)		18,345		17,130
Hidden Cove (MI)	Garden	Apr-00		Belleville, MI		1976		120		433		5,166		760		433		5,926		6,360		(3,268	)		3,091		2,536
Hidden Harbour	Garden	Oct-02		Melbourne, FL		1985		216		984		8,050		628		984		8,678		9,662		(1,571	)		8,091		6,129
Hidden Lake	Garden	May-98		Tampa, FL		1983		267		1,361		7,765		1,866		1,361		9,631		10,993		(2,981	)		8,012		4,366
Hiddentree	Garden	Oct-97		East Lansing, MI		1966		261		1,470		8,340		2,556		1,470		10,895		12,365		(3,584	)		8,781		3,368
Highcrest Townhomes	Town Home	Jan-03		Woodridge, IL		1968		176		3,181		13,126		552		3,181		13,678		16,859		(3,842	)		13,016		5,975
Highland Park	Garden	Dec-96		Fort Worth, TX		1985		500		6,248		9,246		4,573		6,248		13,820		20,067		(4,953	)		15,114		10,121
Highland Ridge	Garden	Sep-04		Atlanta, GA		1984		219		1,357		6,778		4,146		1,357		10,924		12,281		(2,248	)		10,033		—
Highlawn Place	High Rise	Mar-02		Huntington, WV		1977		133		550		2,204		458		550		2,663		3,213		(351	)		2,861		2,163
Hillcreste	Garden	Mar-02		Los Angeles, CA		1989		315		33,755		47,216		3,258		33,755		50,474		84,230		(6,067	)		78,163		47,244
Hillmeade	Garden	Nov-94		Nashville, TN		1985		288		2,872		16,069		10,154		2,872		26,223		29,095		(12,390	)		16,705		8,411
Hills at the Arboretum, The	Garden	Oct-97		Austin, TX		1983		327		1,367		7,764		11,713		1,367		19,478		20,845		(4,419	)		16,426		14,059
Homestead	Garden	Apr-05		East Lansing, MI		1986		168		750		8,079		288		750		8,366		9,116		(2,780	)		6,336		4,011
Hopkins Village	Mid-Rise	Sep-03		Baltimore, MD		1979		165		857		4,207		690		857		4,896		5,753		(2,433	)		3,320		3,115
Hudson Gardens	Garden	Mar-02		Pasadena, CA		1983		41		914		1,548		132		914		1,680		2,595		(292	)		2,303		963
Hunt Club (MD)	Garden	Sep-00		Gaithersburg, MD		1986		336		17,859		13,149		1,977		17,859		15,127		32,986		(3,574	)		29,412		18,660
Hunt Club (PA)	Garden	Sep-00		North Wales, PA		1986		320		17,122		13,653		2,521		17,122		16,174		33,296		(4,983	)		28,313		21,500
Hunt Club (SC)	Garden	Sep-03		Spartanburg, SC		1987		204		4,107		6,616		618		4,107		7,233		11,341		(1,487	)		9,854		5,385
Hunt Club (TX)	Garden	Mar-01		Austin, TX		1987		384		10,342		11,920		1,207		10,342		13,127		23,469		(4,027	)		19,442		19,936
Hunt Club I	Garden	Oct-00		Ypsilanti, MI		1988		296		2,498		8,872		1,597		2,498		10,469		12,967		(2,456	)		10,510		9,605
Hunt Club II	Garden	Mar-01		Ypsilanti, MI		1988		144		1,628		6,049		632		1,628		6,681		8,309		(1,496	)		6,813		5,175
Hunter’s Chase	Garden	Jan-01		Midlothian, VA		1985		320		7,639		8,668		1,403		7,639		10,071		17,711		(1,937	)		15,773		17,042
Hunter’s Creek	Garden	May-99		Cincinnati, OH		1981		146		661		3,818		1,045		661		4,864		5,525		(1,658	)		3,867		2,725
Hunter’s Crossing	Garden	Apr-01		Leesburg, VA		1967		164		2,244		7,763		1,411		2,244		9,174		11,417		(2,838	)		8,579		4,007


															December 31, 2005
									(2)
									Initial Cost				(3)
		(1)											Cost Capitalized								Accumulated			Total Cost
	Property	Date			Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location		Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Hunters Glen	Garden	Apr-98		Austell, GA		1983		72		301		1,731		443		301		2,173		2,474		(692	)		1,782		663
Hunters Glen IV	Garden	Oct-99		Plainsboro, NJ		1976		264		2,227		14,811		2,834		2,227		17,646		19,873		(6,387	)		13,486		16,694
Hunters Glen V	Garden	Oct-99		Plainsboro, NJ		1977		304		2,688		17,797		3,252		2,688		21,049		23,737		(7,586	)		16,151		19,731
Hunters Glen VI	Garden	Oct-99		Plainsboro, NJ		1977		328		2,405		15,912		3,641		2,405		19,553		21,958		(7,768	)		14,189		20,536
Huntington Athletic Club	Garden	Oct-99		Morrisville, NC		1986		212		1,650		11,265		2,549		1,650		13,814		15,464		(5,270	)		10,194		6,353
Hyde Park Tower	High Rise	Oct-04		Chicago, IL		1990		155		4,683		14,928		540		4,683		15,468		20,151		(503	)		19,649		12,930
Indian Oaks	Garden	Mar-02		Simi Valley, CA		1986		254		23,927		15,801		1,462		23,927		17,263		41,190		(2,783	)		38,407		26,837
Island Club	Garden	Oct-02		Columbus, OH		1984		308		1,724		9,458		1,004		1,724		10,461		12,185		(1,332	)		10,853		9,073
Island Club (Beville)	Garden	Oct-00		Daytona Beach, FL		1986		204		6,755		9,465		1,200		6,755		10,665		17,421		(4,164	)		13,257		8,440
Island Club (CA)	Garden	Oct-00		Oceanside, CA		1986		592		17,897		28,428		5,139		17,897		33,567		51,464		(6,795	)		44,669		37,664
Island Club (MD)	Garden	Mar-01		Columbia, MD		1986		176		2,351		14,590		940		2,351		15,530		17,881		(2,975	)		14,906		11,081
Island Club (Palm Aire)	Garden	Oct-00		Pomano Beach, FL		1988		260		7,615		7,652		4,322		7,615		11,974		19,589		(2,665	)		16,924		11,285
Islandtree	Garden	Oct-97		Savannah, GA		1985		216		1,267		7,191		1,526		1,267		8,717		9,984		(2,922	)		7,062		3,216
Jefferson Place	Garden	Nov-94		Baton Rouge, LA		1985		234		2,697		16,332		1,786		2,697		18,117		20,814		(6,803	)		14,011		7,176
Jenny Lind Hall	High Rise	Mar-04		Springfield, MO		1977		78		142		3,684		66		142		3,751		3,892		(109	)		3,783		1,192
Key Towers	High Rise	Apr-01		Alexandria, VA		1964		140		1,526		7,050		1,066		1,526		8,117		9,643		(2,337	)		7,306		4,992
King’s Crossing	Garden	Jul-02		Columbia, MD		1983		168		4,361		7,531		456		4,361		7,987		12,348		(3,082	)		9,266		5,648
Kirkwood House	High Rise	Sep-04		Baltimore, MD		1979		261		1,746		6,663		243		1,746		6,906		8,653		(2,930	)		5,723		4,613
Knolls, The	Garden	Jul-02		Colorado Springs, CO		1972		262		3,127		14,594		8,496		3,127		23,090		26,218		(6,835	)		19,383		8,699
Knollwood	Garden	Jul-00		Nashville, TN		1972		326		1,911		14,032		2,950		1,911		16,982		18,893		(6,941	)		11,952		11,600
La Colina	Garden	Oct-99		Denton, TX		1984		264		1,374		9,143		597		1,374		9,740		11,114		(1,731	)		9,383		5,956
La Jolla de Tucson	Garden	May-98		Tucson, AZ		1978		223		1,342		7,816		1,152		1,342		8,968		10,310		(3,500	)		6,809		4,681
Lafayette Commons	Garden	Mar-04		West Lafayette, OH		1979		49		187		1,012		146		187		1,158		1,345		(149	)		1,197		887
Lake Castleton	Garden	May-99		Indianapolis, IN		1997		1,261		5,183		29,611		8,646		5,183		38,257		43,440		(10,468	)		32,971		26,225
Lake Forest Apartments	Garden	Jul-00		Omaha, NE		1971		312		1,892		12,839		960		1,892		13,799		15,691		(5,963	)		9,728		8,479
Lake Johnson Mews	Garden	Oct-99		Raleigh, NC		1972		201		1,266		9,411		4,447		1,266		13,858		15,124		(4,302	)		10,822		6,307
Lakehaven I	Garden	Dec-97		Carol Stream, IL		1984		144		1,652		3,849		761		1,652		4,610		6,261		(2,920	)		3,341		5,695
Lakehaven II	Garden	Dec-97		Carol Stream, IL		1985		348		2,822		16,128		1,858		2,822		17,986		20,807		(6,756	)		14,051		14,328
Lakes at South Coast, The	Mid-Rise	Mar-02		Costa Mesa, CA		1987		770		55,223		65,506		7,744		55,223		73,250		128,473		(10,183	)		118,290		86,732
Lakes, The	Garden	Jan-00		Raleigh, NC		1972		600		2,818		18,452		3,689		2,818		22,141		24,958		(10,005	)		14,953		9,656
Lakeside (IL)	Garden	Oct-99		Lisle, IL		1972		568		4,142		30,209		3,302		4,142		33,510		37,653		(11,651	)		26,002		21,988
Lakeside (NC)	Garden	Oct-05		Charlotte, NC		1981		216		1,144		9,336		16		1,144		9,352		10,496		(3,755	)		6,741		2,724
Lakeside North at Carrollwood	Garden	Sep-00		Tampa, FL		1984		168		3,118		5,358		816		3,118		6,174		9,292		(1,584	)		7,709		6,130
Lakeside Place	Garden	Oct-99		Houston, TX		1976		734		4,780		35,814		5,289		4,780		41,103		45,883		(15,744	)		30,139		20,300
Lakewood	Garden	Jul-02		Tomball, TX		1979		256		801		8,328		1,402		801		9,730		10,531		(3,234	)		7,297		4,772
Lamplighter Park	Garden	Apr-00		Bellevue, WA		1967		174		1,974		8,478		2,599		1,974		11,076		13,051		(3,452	)		9,598		7,094
Landau	Garden	Oct-05		Clinton, SC		1970		80		47		2,837		3		47		2,839		2,887		(1,498	)		1,389		471
Landmark	Garden	Apr-00		Raleigh, NC		1970		292		1,691		13,442		1,956		1,691		15,398		17,089		(6,479	)		10,610		7,000
Las Brisas	Garden	Dec-95		San Antonio, TX		1983		176		1,082		5,214		1,405		1,082		6,619		7,701		(2,326	)		5,375		3,587
Lasalle	Garden	Oct-00		San Francisco, CA		1976		145		1,256		10,359		8,444		1,256		18,803		20,059		(4,440	)		15,619		3,286
Latrobe	High Rise	Jan-03		Washington, DC		1980		176		1,305		11,257		3,705		1,305		14,962		16,267		(5,537	)		10,730		10,765
Lazy Hollow	Garden	Apr-05		Columbia, MD		1979		178		1,114		13,455		190		1,114		13,645		14,759		(4,123	)		10,636		9,246
Lebanon Station	Garden	Oct-99		Columbus, OH		1974		387		1,694		9,569		1,830		1,694		11,398		13,092		(3,731	)		9,361		6,353
Legend Oaks	Garden	May-98		Tampa, FL		1983		416		2,304		13,288		2,253		2,304		15,541		17,846		(5,001	)		12,845		6,357
Leona	Garden	Dec-97		Uvalde, TX		1973		40		100		524		419		100		942		1,042		(379	)		664		374
Lexington	Garden	Jul-94		San Antonio, TX		1981		72		312		1,688		690		312		2,378		2,690		(942	)		1,748		758
Lighthouse at Twin Lakes I	Garden	Apr-00		Beltsville, MD		1969		480		2,518		17,396		3,311		2,518		20,707		23,224		(3,930	)		19,295		11,516


															December 31, 2005
									(2)
									Initial Cost				(3)
		(1)											Cost Capitalized								Accumulated			Total Cost
	Property	Date			Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location		Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Lighthouse at Twin Lakes II	Garden	Apr-00		Beltsville, MD		1971		113		695		4,841		504		695		5,345		6,040		(1,147	)		4,893		2,670
Lighthouse at Twin Lakes III	Garden	Apr-00		Beltsville, MD		1978		107		482		3,299		187		482		3,486		3,968		(592	)		3,376		2,504
Lincoln Place Garden	Garden	Oct-04		Venice, CA		1951		755		49,195		90,661		20,700		49,195		111,361		160,556		(7,727	)		152,828		72,500
Locust House	High Rise	Mar-02		Westminster, MD		1979		99		650		2,604		368		650		2,972		3,622		(551	)		3,071		2,878
Lodge, The	Garden	Jan-00		Denver, CO		1973		376		1,987		13,935		2,328		1,987		16,263		18,250		(5,783	)		12,467		6,471
Loft, The	Garden	Oct-99		Raleigh, NC		1974		184		1,968		11,594		1,385		1,968		12,979		14,947		(4,343	)		10,604		4,584
Loring Towers	High Rise	Oct-02		Minneapolis, MN		1970		208		1,297		7,445		7,411		1,297		14,856		16,153		(2,309	)		13,844		8,467
Loring Towers Apartments	High Rise	Sep-03		Salem, MA		1973		250		727		7,740		2,309		727		10,049		10,776		(4,510	)		6,266		5,088
Los Arboles	Garden	Sep-97		Chandler, AZ		1985		232		1,662		9,504		2,161		1,662		11,665		13,327		(3,782	)		9,545		5,783
Lynnhaven	Garden	Mar-04		Durham, NC		1980		75		539		2,159		216		539		2,375		2,914		(337	)		2,577		2,020
Madera Point	Garden	May-98		Phoenix, AZ		1986		256		2,103		12,582		1,489		2,103		14,071		16,174		(4,747	)		11,427		8,067
Malibu Canyon	Garden	Mar-02		Calabasas, CA		1986		698		66,257		53,438		14,907		66,257		68,344		134,601		(11,179	)		123,422		64,563
Maple Bay	Garden	Dec-99		Virginia Beach, VA		1971		414		2,598		16,141		6,694		2,598		22,835		25,432		(4,826	)		20,606		19,927
Mariners Cove	Garden	Mar-02		San Diego, CA		1984		500		—		66,861		3,066		—		69,927		69,927		(8,170	)		61,757		8,942
Mariner’s Cove	Garden	Mar-00		Virginia Beach, VA		1974		458		1,517		10,034		15,802		1,517		25,836		27,353		(6,171	)		21,182		11,813
Meadow Creek	Garden	Jul-94		Boulder, CO		1972		332		1,435		24,532		3,893		1,435		28,426		29,861		(8,257	)		21,604		5,633
Meadows	Garden	Dec-00		Austin, TX		1983		100		580		3,667		358		580		4,025		4,605		(1,637	)		2,968		2,390
Merrill House	High Rise	Jan-00		Fairfax, VA		1962		159		1,836		10,831		1,779		1,836		12,610		14,446		(2,442	)		12,004		6,536
Mesa Ridge	Garden	May-98		San Antonio, TX		1986		200		1,210		6,863		868		1,210		7,732		8,942		(2,604	)		6,338		4,115
Michigan Apartments	Garden	Dec-99		Indianapolis, IN		1965		253		516		3,694		1,508		516		5,202		5,718		(1,182	)		4,536		1,109
Montblanc Gardens	Town Home	Dec-03		Yauco, PR		1982		128		391		3,859		642		391		4,501		4,892		(1,771	)		3,121		3,364
Montecito	Garden	Jul-94		Austin, TX		1985		268		1,268		6,896		3,371		1,268		10,267		11,535		(4,502	)		7,033		4,772
Mountain Run	Garden	Dec-97		Arvada, CO		1974		96		685		2,614		2,607		685		5,221		5,906		(1,503	)		4,403		2,949
Mountain View	Garden	May-98		Colorado Springs, CO		1985		252		2,546		14,841		1,536		2,546		16,376		18,923		(5,185	)		13,737		7,421
New Baltimore	Mid-Rise	Mar-02		New Baltimore, MI		1980		101		570		2,282		214		570		2,496		3,066		(319	)		2,747		1,031
Newberry Park	Garden	Dec-97		Chicago, IL		1985		84		1,150		7,862		272		1,150		8,135		9,285		(1,802	)		7,482		7,763
Newport	Garden	Jul-94		Avondale, AZ		1986		204		800		4,354		1,896		800		6,251		7,051		(2,641	)		4,410		3,898
North River Place	Garden	Jul-02		Chillicothe, OH		1980		120		858		3,351		234		858		3,585		4,443		(1,104	)		3,339		2,586
North Slope	Garden	Oct-02		Greenville, SC		1984		156		1,670		5,756		403		1,670		6,159		7,828		(1,342	)		6,486		3,745
Northlake Village	Garden	Oct-00		Lima, OH		1971		150		487		1,317		810		487		2,127		2,614		(775	)		1,839		1,129
Northpoint	Garden	Jan-00		Chicago, IL		1921		304		2,280		14,334		11,580		2,280		25,914		28,194		(4,430	)		23,764		21,168
Northwinds, The	Garden	Mar-02		Wytheville, VA		1978		144		500		2,012		792		500		2,805		3,305		(635	)		2,670		2,044
Northwoods	Garden	Oct-02		Worthington, OH		1983		280		2,667		9,260		983		2,667		10,244		12,911		(1,322	)		11,589		6,647
Northwoods (CT)	Garden	Mar-01		Middletown, CT		1987		336		16,080		14,435		1,554		16,080		15,989		32,069		(3,709	)		28,361		21,275
Oak Falls Condominiums	Garden	Nov-96		Spring, TX		1983		144		1,017		5,420		1,695		1,017		7,115		8,132		(1,586	)		6,546		4,069
Oak Forest	Garden	Oct-02		Arlington, TX		1983		204		1,020		5,888		838		1,020		6,727		7,746		(2,603	)		5,143		2,550
Oak Park Village I	Garden	Oct-00		Lansing, MI		1973		410		10,048		16,771		5,330		10,048		22,101		32,149		(7,384	)		24,765		23,487
Oak Run Apartments	Garden	Oct-02		Dallas, TX		1979		420		5,160		13,836		1,458		5,160		15,295		20,455		(6,772	)		13,683		8,500
Oakwood Apartments	Town Home	Mar-04		Cuthbert, GA		1982		50		188		1,058		160		188		1,217		1,405		(411	)		995		1,762
Oakwood Manor	Garden	Mar-04		Milan, TN		1984		34		95		498		9		95		507		602		(72	)		530		473
Oakwood Miami	High Rise	Dec-03		Miami, FL		1998		357		31,363		32,214		1,410		31,363		33,624		64,987		(1,595	)		63,392		47,377
Ocean Oaks	Garden	May-98		Port Orange, FL		1988		296		2,132		12,855		1,908		2,132		14,764		16,896		(4,163	)		12,733		10,295
Oceanfront	Garden	Nov-96		Galveston, TX		1985		102		513		3,045		5,098		513		8,143		8,656		(1,588	)		7,068		1,631
Olde Towne West II	Garden	Oct-02		Alexandria, VA		1977		72		214		2,865		338		214		3,202		3,416		(1,296	)		2,121		2,832
Olde Towne West III	Garden	Apr-00		Alexandria, VA		1978		75		581		3,463		1,234		581		4,697		5,278		(1,007	)		4,272		3,604
One Lytle Place	High Rise	Jan-00		Cincinnati, OH		1980		231		2,662		21,800		3,256		2,662		25,056		27,718		(4,621	)		23,097		11,946


															December 31, 2005
									(2)
									Initial Cost				(3)
		(1)											Cost Capitalized								Accumulated			Total Cost
	Property	Date			Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location		Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Oxford House	Mid-Rise	Mar-02		Deactur, IL		1979		156		993		4,164		251		993		4,415		5,408		(899	)		4,509		3,779
Palazzo at Park La Brea	Mid-Rise	Feb-04		Los Angeles, CA		2002		521		47,822		125,464		2,196		47,822		127,660		175,483		(8,577	)		166,906		87,664
Palazzo East at Park La Brea, The	Mid-Rise	Mar-05		Los Angeles, CA		2005		611		61,004		136,503		2,965		61,004		139,469		200,473		(3,962	)		196,511		112,524
Palencia	Garden	May-98		Tampa, FL		1985		420		2,804		16,262		8,046		2,804		24,309		27,112		(7,746	)		19,366		12,242
Palm Lake	Garden	Oct-99		Tampa, FL		1972		150		861		5,252		1,608		861		6,860		7,721		(3,549	)		4,172		2,631
Palm Springs Senior	Garden	Mar-02		Palm Springs, CA		1981		116		—		7,015		218		—		7,233		7,233		(1,015	)		6,218		3,880
Panorama Park	Garden	Mar-02		Bakersfield, CA		1982		66		570		2,288		265		570		2,553		3,123		(462	)		2,661		2,392
Paradise Palms	Garden	Jul-94		Phoenix, AZ		1970		130		647		3,515		2,616		647		6,132		6,779		(2,401	)		4,378		3,450
Park at Cedar Lawn, The	Garden	Nov-96		Galveston, TX		1985		192		1,025		6,162		1,860		1,025		8,023		9,048		(2,131	)		6,917		4,330
Park at Deerbrook	Garden	Oct-99		Humble, TX		1984		100		175		522		253		175		775		951		(936	)		14		2,348
Park Avenue Towers	Garden	Oct-00		Wilkes-Barre, PA		1978		130		292		2,546		492		292		3,038		3,330		(1,278	)		2,052		2,211
Park Capitol	Garden	Apr-00		Salt Lake City, UT		1972		135		731		5,215		1,158		731		6,373		7,104		(2,544	)		4,560		4,922
Park Place	Mid-Rise	Jun-05		St Louis, MO		1977		242		742		6,327		1,628		742		7,955		8,697		(492	)		8,205		10,000
Park Place Texas	Garden	Mar-02		Cleveland, TX		1983		60		390		1,587		205		390		1,792		2,182		(285	)		1,897		1,918
Park Towne	High Rise	Apr-00		Philadelphia, PA		1959		979		10,451		47,301		25,483		10,451		72,783		83,234		(8,607	)		74,627		35,284
Park Vista	Garden	Oct-05		Anaheim, CA		1958		392		7,682		30,660		—		7,682		30,660		38,342		(4,374	)		33,968		31,337
Parktown Townhouses	Garden	Oct-99		Deer Park, TX		1968		309		1,726		12,590		6,011		1,726		18,601		20,327		(4,714	)		15,613		6,770
Parkview	Garden	Mar-02		Sacramento, CA		1980		97		1,060		4,240		779		1,060		5,019		6,079		(712	)		5,367		2,770
Parkview NY	Mid-Rise	Jun-04		Bronx, NY		1920		72		247		3,007		457		247		3,464		3,712		(1,347	)		2,364		1,711
Parkway	Garden	Mar-00		Willamsburg, VA		1971		148		386		2,834		1,346		386		4,180		4,566		(2,163	)		2,403		4,939
Parkways, The	Garden	Jun-04		Chicago, IL		1925		446		3,684		23,257		3,484		3,684		26,741		30,425		(2,814	)		27,611		24,350
Peachtree Park	Garden	Jan-96		Atlanta, GA		1962/1995		295		4,683		11,713		8,737		4,683		20,450		25,133		(5,978	)		19,155		11,215
Peakview Place	Garden	Jan-00		Englewood, CO		1975		296		2,016		19,985		3,433		2,016		23,418		25,435		(8,468	)		16,966		10,507
Pebble Point	Garden	Oct-02		Indianapolis, IN		1980		220		1,790		6,883		404		1,790		7,287		9,077		(2,130	)		6,948		5,536
Peppermill Place Apartments	Garden	Nov-96		Houston, TX		1983		224		844		5,169		1,678		844		6,846		7,691		(1,797	)		5,893		4,043
Peppertree	Garden	Mar-02		Cypress, CA		1971		136		7,835		5,224		1,229		7,835		6,453		14,288		(1,306	)		12,982		6,170
Pine Lake Terrace	Garden	Mar-02		Garden Grove, CA		1971		111		3,975		6,035		883		3,975		6,918		10,893		(1,050	)		9,843		4,363
Pine Shadows	Garden	May-98		Phoenix, AZ		1983		272		2,095		11,899		1,627		2,095		13,527		15,622		(4,374	)		11,247		7,500
Pines, The	Garden	Oct-98		Palm Bay, FL		1984		216		603		3,318		1,423		603		4,741		5,343		(1,411	)		3,932		2,073
Pinewood Place	Garden	Mar-02		Toledo, OH		1979		100		420		1,698		632		420		2,330		2,750		(450	)		2,300		2,069
Plantation Crossing	Garden	Jan-00		Marietta, GA		1979		180		1,106		9,202		1,366		1,106		10,569		11,675		(4,241	)		7,434		4,124
Plantation Gardens	Garden	Oct-99		Plantation, FL		1971		372		3,732		19,025		2,718		3,732		21,742		25,474		(9,235	)		16,239		8,529
Pleasant Hills	Garden	Apr-05		Austin, TX		1982		100		1,188		2,631		1,649		1,188		4,280		5,468		(96	)		5,372		—
Pleasant Ridge	Garden	Nov-94		Little Rock, AR		1982		200		1,661		9,111		3,602		1,661		12,713		14,374		(4,888	)		9,485		5,670
Pleasant Valley Pointe	Garden	Nov-94		Little Rock, AR		1985		112		907		5,085		1,682		907		6,767		7,674		(2,684	)		4,990		2,916
Plum Creek	Garden	Oct-02		Charlotte, NC		1984		276		3,076		9,144		498		3,076		9,642		12,718		(1,552	)		11,166		7,524
Plummer Village	Mid-Rise	Mar-02		North Hills, CA		1983		75		624		2,647		521		624		3,168		3,792		(474	)		3,318		—
Post Ridge	Garden	Jul-00		Nashville, TN		1972		150		1,041		7,907		1,266		1,041		9,173		10,214		(3,391	)		6,823		4,380
Prairie Hills	Garden	Jul-94		Albuquerque, NM		1985		260		2,017		9,220		2,300		2,017		11,520		13,537		(4,686	)		8,851		5,200
Presidential House	Mid-Rise	Sep-05		N. Miami Beach, FL		1963		203		1,362		10,614		550		1,362		11,164		12,527		(4,408	)		8,118		4,888
Preston Creek	Garden	Oct-99		Dallas, TX		1979		228		1,598		8,944		4,421		1,598		13,365		14,963		(4,533	)		10,431		4,933
Pride Gardens	Garden	Dec-97		Flora, MS		1975		76		102		1,071		1,278		102		2,349		2,451		(848	)		1,603		1,139
Privado Park	Garden	May-98		Phoenix, AZ		1984		352		2,563		15,026		1,823		2,563		16,849		19,412		(6,210	)		13,202		7,415
Promontory Point Apartments	Garden	Oct-02		Austin, TX		1984		252		1,470		10,815		781		1,470		11,596		13,066		(4,313	)		8,754		3,647
Quail Hollow	Garden	Oct-99		West Columbia, SC		1973		215		1,091		7,872		1,642		1,091		9,515		10,606		(3,156	)		7,449		4,633
Quail Ridge	Garden	May-98		Tucson, AZ		1974		253		1,559		9,173		1,727		1,559		10,899		12,459		(3,972	)		8,486		5,160


															December 31, 2005
									(2)
									Initial Cost				(3)
		(1)											Cost Capitalized								Accumulated			Total Cost
	Property	Date			Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location		Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Quail Run	Garden	Oct-99		Zionsville, IN		1972		166		1,222		6,803		1,011		1,222		7,814		9,036		(2,601	)		6,435		5,110
Ramblewood Apartments	Garden	Dec-99		Grand Rapids, MI		1973		1,698		9,500		61,769		10,916		9,500		72,686		82,186		(17,068	)		65,118		31,955
Raven Hill	Garden	Jan-01		Burnsville, MN		1971		304		4,888		10,632		1,349		4,888		11,980		16,869		(5,055	)		11,814		11,183
Ravensworth Towers	High Rise	Jun-04		Annandale, VA		1974		219		1,811		18,680		1,014		1,811		19,694		21,506		(7,217	)		14,288		14,913
Reflections	Garden	Apr-02		Indianapolis, IN		1970		582		1,239		18,439		10,289		1,239		28,727		29,966		(8,572	)		21,394		12,889
Reflections (Casselberry)	Garden	Oct-02		Casselberry, FL		1984		336		3,052		11,607		1,390		3,052		12,997		16,048		(2,062	)		13,986		10,700
Reflections (Tampa)	Garden	Sep-00		Tampa, FL		1988		348		7,976		13,499		2,083		7,976		15,583		23,559		(2,868	)		20,691		13,500
Reflections (Virginia Beach)	Garden	Sep-00		Virginia Beach, VA		1987		480		15,988		13,684		3,049		15,988		16,733		32,721		(4,150	)		28,572		25,109
Reflections (West Palm Beach)	Garden	Oct-00		West Palm Beach, FL		1986		300		5,504		9,984		2,244		5,504		12,228		17,732		(2,629	)		15,103		9,653
Regency Oaks	Garden	Oct-99		Fern Park, FL		1965		343		1,812		9,933		4,176		1,812		14,110		15,922		(6,876	)		9,046		6,700
Ridgecrest	Garden	Dec-96		Denton, TX		1983		152		288		1,269		2,001		288		3,270		3,558		(183	)		3,375		3,708
Ridgewood (La Loma)	Garden	Mar-02		Sacramento, CA		1980		75		700		2,804		424		700		3,228		3,928		(420	)		3,508		2,000
Ridgewood Towers	High Rise	Mar-02		East Moline, IL		1977		140		698		2,803		396		698		3,199		3,897		(567	)		3,330		1,998
River Club	Garden	Apr-05		Edgewater, NJ		1998		266		30,578		30,638		166		30,578		30,804		61,382		(844	)		60,537		44,452
River Reach	Garden	Sep-00		Naples, FL		1986		556		17,728		18,337		3,096		17,728		21,433		39,162		(5,747	)		33,415		24,000
Riverbend Village	Garden	Jul-01		Arlington, TX		1983		201		893		4,128		1,290		893		5,418		6,311		(2,102	)		4,208		3,965
Rivercrest	Garden	Oct-99		Atlanta, GA		1970		312		2,320		16,370		3,211		2,320		19,580		21,900		(5,682	)		16,218		10,625
Riverloft Apartments	High Rise	Oct-99		Philadelphia, PA		1910		184		2,120		11,287		29,790		2,120		41,077		43,197		(8,742	)		34,455		23,667
Rivers Edge	Garden	Jul-00		Auburn, WA		1976		120		732		5,019		464		732		5,483		6,215		(2,150	)		4,065		3,461
Riverside	Mid-Rise	Jul-94		Littleton, CO		1987		248		1,956		8,427		2,834		1,956		11,261		13,217		(4,592	)		8,624		8,279
Riverside Park	High Rise	Apr-00		Alexandria, VA		1973		1,222		8,382		70,084		13,369		8,382		83,454		91,836		(31,980	)		59,856		52,224
Riverwalk	Garden	Dec-95		Little Rock, AR		1988		262		1,075		8,863		2,515		1,075		11,379		12,454		(4,105	)		8,349		5,034
Riverwind at St. Andrews	Garden	Apr-02		Columbia, SC		1984		160		1,246		4,370		119		1,246		4,489		5,735		(846	)		4,889		4,652
Riverwood (IN)	Garden	Oct-00		Indianapolis, IN		1978		120		1,032		3,424		1,002		1,032		4,426		5,458		(1,178	)		4,281		3,613
Robbie Robinson	Garden	Oct-05		Savannah, GA		1921		100		554		3,097		—		554		3,097		3,651		(23	)		3,628		3,769
Rosedale Court Apartments	Garden	Mar-04		Dawson Springs, KY		1981		40		194		1,177		25		194		1,202		1,396		(327	)		1,069		929
Rosewood	Garden	Mar-02		Camarillo, CA		1976		150		12,128		8,060		1,662		12,128		9,722		21,850		(1,554	)		20,295		7,775
Round Barn	Garden	Mar-02		Champaign, IL		1979		156		1,015		4,387		485		1,015		4,873		5,888		(853	)		5,036		3,962
Royal Crest Estates (Fall River)	Garden	Aug-02		Fall River, MA		1974		216		5,832		12,044		954		5,832		12,998		18,830		(2,621	)		16,209		10,313
Royal Crest Estates (Marlboro)	Garden	Aug-02		Marlborough, MA		1970		473		25,178		28,786		1,515		25,178		30,301		55,479		(6,417	)		49,062		31,479
Royal Crest Estates (Nashua)	Garden	Aug-02		Nashua, MA		1970		902		68,231		45,562		2,822		68,231		48,384		116,614		(9,698	)		106,916		55,329
Royal Crest Estates (North Andover)	Garden	Aug-02		North Andover, MA		1970		588		51,292		36,808		5,159		51,292		41,967		93,259		(8,896	)		84,362		48,824
Royal Crest Estates (Warwick)	Garden	Aug-02		Warwick, RI		1972		492		22,433		24,095		1,713		22,433		25,808		48,241		(5,011	)		43,230		25,887
Royal Palms	Garden	Jul-94		Mesa, AZ		1985		152		832		4,569		1,435		832		6,004		6,836		(2,223	)		4,613		2,525
Runaway Bay	Garden	Jul-02		Pinellas Park, FL		1986		192		1,933		7,341		363		1,933		7,704		9,637		(1,261	)		8,376		4,458
Runaway Bay (CA)	Garden	Oct-00		Antioch, CA		1986		280		12,503		10,499		1,433		12,503		11,932		24,435		(2,951	)		21,485		12,100
Runaway Bay (FL)	Garden	Oct-00		Lantana, FL		1987		404		5,934		16,052		2,233		5,934		18,285		24,219		(3,788	)		20,432		12,028
Runaway Bay (MI)	Garden	Oct-00		Lansing, MI		1987		288		2,106		6,559		1,995		2,106		8,554		10,660		(2,649	)		8,011		8,628
Runaway Bay (NC)	Garden	Oct-00		Charlotte, NC		1985		280		2,233		9,860		1,815		2,233		11,675		13,908		(2,989	)		10,920		8,128
Runaway Bay (Virginia Beach)	Garden	Nov-04		Virginia Beach, VA		1985		440		8,089		17,182		849		8,089		18,031		26,120		(797	)		25,323		17,569
Runawaybay I	Garden	Sep-03		Columbus, OH		1982		304		2,273		11,980		1,187		2,273		13,167		15,440		(4,388	)		11,053		10,464
Salem Park	Garden	Apr-00		Ft. Worth, TX		1984		168		837		4,109		1,974		837		6,084		6,921		(2,227	)		4,694		3,493
San Jose Apartments	Garden	Sep-05		San Antonio, TX		1970		220		506		8,038		53		506		8,091		8,597		(4,233	)		4,364		1,063
San Juan Del Centro	Mid-Rise	Sep-05		Boulder, CO		1971		150		719		6,746		15		719		6,761		7,480		(3,402	)		4,078		947
Sand Castles Apartments	Garden	Oct-97		League City, TX		1987		138		978		5,542		1,703		978		7,245		8,223		(2,206	)		6,017		2,364
Sandpiper Cove	Garden	Dec-97		Boynton Beach, FL		1987		416		3,511		21,396		4,957		3,511		26,353		29,865		(7,083	)		22,781		20,931
Sandy Hill Terrace	High Rise	Mar-02		Norristown, PA		1980		175		1,650		6,599		1,490		1,650		8,089		9,739		(1,255	)		8,484		4,431
Sandy Springs	Garden	Mar-05		Macon, GA		1979		74		153		1,736		552		153		2,287		2,440		(1,106	)		1,334		1,222


															December 31, 2005
									(2)
									Initial Cost				(3)
		(1)											Cost Capitalized								Accumulated			Total Cost
	Property	Date			Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location		Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Savannah Trace	Garden	Mar-01		Shaumburg, IL		1986		368		13,960		20,731		1,370		13,960		22,101		36,061		(5,034	)		31,027		22,971
Sawgrass	Garden	Jul-97		Orlando, FL		1986		208		1,443		8,137		2,087		1,443		10,223		11,666		(3,269	)		8,397		2,899
Scandia	Garden	Oct-00		Indianapolis, IN		1977		444		10,540		9,852		7,130		10,540		16,982		27,523		(3,888	)		23,635		12,821
Scotch Pines East	Garden	Jul-00		Ft. Collins, CO		1977		102		460		4,880		270		460		5,151		5,610		(2,258	)		3,352		2,745
Shadetree	Garden	Oct-97		Tempe, AZ		1965		123		591		3,359		1,631		591		4,991		5,582		(1,814	)		3,768		1,571
Shadow Creek	Garden	May-98		Phoenix, AZ		1984		266		2,016		11,886		1,920		2,016		13,806		15,822		(4,650	)		11,172		5,600
Sharp-Leadenhall I	Town Home	Mar-04		Baltimore, MD		1981		155		1,399		5,434		320		1,399		5,754		7,153		(1,112	)		6,041		5,754
Sharp-Leadenhall II	Town Home	Sep-03		Baltimore, MD		1981		37		171		1,636		259		171		1,895		2,066		(756	)		1,310		1,169
Shenandoah Crossing	Garden	Sep-00		Fairfax, VA		1984		640		18,492		57,197		3,677		18,492		60,874		79,366		(16,172	)		63,193		31,500
Sheraton Towers	High Rise	Mar-02		High Point, NC		1981		97		525		2,159		608		525		2,768		3,293		(372	)		2,921		3,303
Shoreview	Garden	Oct-99		San Francisco, CA		1976		156		633		8,610		10,386		633		18,997		19,630		(5,247	)		14,383		3,458
Sienna Bay	Garden	Apr-00		St. Petersburg, FL		1984		276		1,556		9,141		3,116		1,556		12,257		13,812		(3,686	)		10,126		11,000
Signal Pointe	Garden	Oct-99		Winter Park, FL		1971		368		1,485		12,653		2,879		1,485		15,532		17,017		(5,831	)		11,186		7,704
Signature Point Apartments	Garden	Nov-96		League City, TX		1994		304		2,810		17,579		1,912		2,810		19,491		22,301		(4,235	)		18,066		8,255
Silver Ridge	Garden	Oct-98		Maplewood, MN		1986		186		775		3,765		1,411		775		5,176		5,952		(1,856	)		4,095		4,525
Snug Harbor	Garden	Dec-95		Las Vegas, NV		1990		67		751		2,859		1,202		751		4,061		4,812		(1,549	)		3,263		1,978
Somerset Lakes	Garden	May-99		Indianapolis, IN		1974		360		3,436		19,668		1,741		3,436		21,409		24,845		(6,516	)		18,329		18,900
Somerset Village	Garden	May-96		West Valley City, UT		1985		486		4,315		16,727		4,569		4,315		21,296		25,611		(7,609	)		18,001		9,939
South Bay Villa	Garden	Mar-02		Los Angeles, CA		1981		80		663		2,770		582		663		3,352		4,015		(674	)		3,342		—
South Park	Garden	Mar-02		Elyria, OH		1970		138		200		931		709		200		1,641		1,841		(363	)		1,478		607
South Willow	Garden	Jul-94		West Jordan, UT		1987		440		2,224		12,075		3,991		2,224		16,066		18,291		(6,424	)		11,867		7,921
Southridge	Garden	Dec-00		Greenville, TX		1984		160		695		4,416		1,345		695		5,761		6,456		(2,450	)		4,005		3,321
Springhill Lake	Garden	Apr-00		Greenbelt, MD		1969		2,899		14,335		99,108		28,780		14,335		127,888		142,223		(42,393	)		99,830		113,500
Springhouse (KY)	Garden	Mar-04		Lexington, KY		1986		224		2,126		6,721		224		2,126		6,945		9,072		(1,156	)		7,916		6,669
Springhouse (SC)	Garden	Oct-02		North Charleston, SC		1986		248		3,488		10,331		424		3,488		10,755		14,243		(2,078	)		12,165		8,600
Springhouse (TX)	Garden	Oct-02		Dallas, TX		1983		372		3,391		9,619		1,557		3,391		11,176		14,567		(1,698	)		12,870		10,300
Springhouse at Newport	Garden	Jul-02		Newport News, VA		1986		432		5,354		14,492		1,551		5,354		16,043		21,397		(630	)		20,767		16,600
Springwoods at Lake Ridge	Garden	Jul-02		Lake Ridge, VA		1984		180		2,899		9,693		409		2,899		10,101		13,001		(240	)		12,761		7,096
Spyglass	Garden	Oct-02		Indianapolis, IN		1979		120		971		3,985		582		971		4,568		5,538		(1,192	)		4,346		2,803
Spyglass at Cedar Cove	Garden	Sep-00		Lexington Park, MD		1985		152		3,241		5,094		855		3,241		5,949		9,190		(1,410	)		7,780		4,300
Stafford	High Rise	Oct-02		Baltimore, MD		1889		96		706		4,032		2,149		706		6,182		6,888		(1,484	)		5,404		—
Steeplechase	Garden	Oct-00		Williamsburg, VA		1986		220		7,601		8,029		1,092		7,601		9,121		16,722		(2,255	)		14,467		12,425
Steeplechase (MD)	Garden	Sep-00		Largo, MD		1986		240		3,675		16,111		1,582		3,675		17,693		21,368		(3,745	)		17,623		11,759
Steeplechase (OH)	Garden	May-99		Loveland, OH		1988		272		1,975		9,264		1,345		1,975		10,609		12,585		(3,335	)		9,249		7,242
Steeplechase (TX)	Garden	Jul-02		Plano, TX		1985		368		6,438		9,596		1,058		6,438		10,654		17,091		(1,596	)		15,495		14,200
Sterling Apartment Homes, The	Garden	Oct-99		Philadelphia, PA		1962		536		8,414		53,515		7,691		8,414		61,206		69,620		(19,334	)		50,286		21,001
Sterling Village	Garden	Mar-02		San Bernadino, CA		1983		80		1,177		2,925		125		1,177		3,050		4,226		(492	)		3,734		1,816
Stirling Court Apartments	Garden	Nov-96		Houston, TX		1984		228		913		4,953		1,700		913		6,653		7,567		(1,749	)		5,817		3,893
Stone Creek Club	Garden	Sep-00		Germantown, MD		1984		240		13,593		9,347		2,092		13,593		11,439		25,032		(4,174	)		20,858		11,901
Stone Point Village	Garden	Dec-99		Fort Wayne, IN		1980		296		1,541		8,636		2,381		1,541		11,018		12,559		(2,975	)		9,584		5,208
Stonebrook	Garden	Jun-97		Sanford, FL		1991		244		1,583		8,587		2,670		1,583		11,257		12,839		(3,782	)		9,057		6,202
Stonebrook II	Garden	Mar-99		Sanford, FL		1998		112		488		8,736		272		488		9,008		9,495		(1,359	)		8,136		3,346
Stonegate Village	Garden	Oct-00		New Castle, IN		1970		122		313		1,895		510		313		2,405		2,718		(443	)		2,276		652
Stoney Brook Apartments	Garden	Nov-96		Houston, TX		1972		113		275		1,865		1,306		275		3,171		3,447		(599	)		2,848		2,239
Stonybrook	Garden	May-98		Tucson, AZ		1983		411		2,167		12,670		1,712		2,167		14,381		16,549		(4,847	)		11,702		5,598
Stratford, The	Garden	May-98		San Antonio, TX		1979		269		1,825		10,748		1,430		1,825		12,178		14,003		(4,464	)		9,539		4,800
Strawbridge Square	Garden	Oct-99		Alexandria, VA		1979		128		662		3,508		2,241		662		5,749		6,410		(1,094	)		5,316		7,460
Summit Creek	Garden	May-98		Austin, TX		1985		164		1,211		6,037		775		1,211		6,812		8,023		(1,859	)		6,165		3,229
Sun Lake	Garden	May-98		Lake Mary, FL		1986		600		4,551		25,543		4,624		4,551		30,167		34,718		(9,700	)		25,018		24,445


															December 31, 2005
									(2)
									Initial Cost				(3)
		(1)											Cost Capitalized								Accumulated			Total Cost
	Property	Date			Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location		Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Sun River Village	Garden	Oct-99		Tempe, AZ		1981		334		1,858		13,837		1,820		1,858		15,656		17,514		(6,319	)		11,195		8,835
Sunbury Downs Apartments	Garden	Nov-96		Houston, TX		1982		240		936		6,059		1,718		936		7,777		8,713		(2,101	)		6,612		4,385
Sunlake	Garden	Sep-98		Brandon, FL		1986		88		610		4,062		823		610		4,886		5,496		(1,786	)		3,710		2,267
Sycamore Creek	Garden	Apr-00		Cincinnati, OH		1978		295		1,984		9,614		2,822		1,984		12,436		14,420		(3,479	)		10,941		7,301
Talbot Woods	Garden	Sep-04		Middleboro, MA		1972		121		5,852		4,719		1,275		5,852		5,994		11,846		(330	)		11,516		6,409
Tamarac Pines Apartments	Garden	Sep-05		The Woodlands, TX		1980		300		1,149		5,969		4,596		1,149		10,565		11,714		(587	)		11,127		9,233
Tamarac Village	Garden	Apr-00		Denver, CO		1979		564		3,413		21,411		4,157		3,413		25,568		28,981		(8,742	)		20,239		18,614
Tamarind Bay	Garden	Jan-00		St. Petersburg, FL		1980		200		694		6,855		1,965		694		8,820		9,514		(3,190	)		6,325		4,125
Tar River Estates	Garden	Oct-99		Greenville, NC		1969		220		1,288		13,999		2,897		1,288		16,896		18,183		(4,534	)		13,650		4,674
Tatum Gardens	Garden	May-98		Phoenix, AZ		1985		128		1,323		7,155		863		1,323		8,018		9,342		(3,086	)		6,256		3,312
Tempo, The	High Rise	Sep-04		New York, NY		1900		202		68,006		12,140		742		68,006		12,882		80,888		(397	)		80,491		32,507
Terry Manor	Mid-Rise	Oct-05		Los Angeles, CA		1977		170		1,775		5,848		—		1,775		5,848		7,623		(154	)		7,469		—
Timber Ridge	Garden	Oct-99		Sharonville, OH		1972		248		1,184		8,077		1,193		1,184		9,269		10,453		(3,001	)		7,453		5,125
Timbermill	Garden	Oct-95		San Antonio, TX		1982		296		778		4,457		2,121		778		6,578		7,356		(2,593	)		4,763		2,825
Timbertree	Garden	Oct-97		Phoenix, AZ		1980		387		2,292		13,000		3,064		2,292		16,064		18,356		(5,697	)		12,659		6,018
Tompkins Terrace	Garden	Oct-02		Beacon, NY		1974		193		872		4,943		1,046		872		5,990		6,862		(913	)		5,949		2,830
Township At Highlands	Garden	Nov-96		Littleton, CO		1986		161		1,615		9,773		3,813		1,615		13,586		15,202		(4,072	)		11,130		5,979
Trails	Garden	Apr-02		Nashville, TN		1985		248		685		10,242		756		685		10,997		11,682		(4,993	)		6,689		3,891
Trails of Ashford	Garden	May-98		Houston, TX		1979		514		2,650		14,985		2,978		2,650		17,963		20,613		(6,319	)		14,295		7,305
Treetops	Garden	Mar-01		San Bruno, CA		1987		308		3,703		62,460		6,990		3,703		69,450		73,154		(12,638	)		60,516		34,631
Trestletree Village	Garden	Mar-02		Atlanta, GA		1981		188		1,150		4,655		655		1,150		5,310		6,460		(978	)		5,482		3,923
Trinity Apartments	Garden	Dec-97		Irving, TX		1985		496		2,053		12,387		2,827		2,053		15,214		17,266		(4,531	)		12,735		5,653
Twentynine Palms	Garden	Mar-02		Twenty-Nine Palms, CA		1983		48		311		1,247		280		311		1,527		1,838		(291	)		1,547		1,451
Twin Lake Towers	High Rise	Oct-99		Westmont, IL		1969		399		2,636		19,461		5,212		2,636		24,673		27,309		(10,314	)		16,995		11,059
Twin Lakes Apartments	Garden	Apr-00		Palm Harbor, FL		1986		262		2,018		12,754		1,783		2,018		14,537		16,556		(5,059	)		11,497		9,914
University Square	High Rise	Mar-05		Philadelphia, PA		1978		442		263		12,708		7,547		263		20,255		20,519		(2,282	)		18,237		14,649
Van Nuys Apartments	High Rise	Mar-02		Los Angeles, CA		1981		299		4,337		16,377		996		4,337		17,373		21,710		(2,458	)		19,251		16,917
Vantage Pointe	Mid-Rise	Aug-02		Swampscott, MA		1987		96		4,749		10,089		674		4,749		10,762		15,511		(1,814	)		13,697		8,800
Verandahs at Hunt Club	Garden	Jul-02		Apopka, FL		1985		210		1,848		8,400		509		1,848		8,909		10,757		(869	)		9,888		7,113
Versailles	Garden	Apr-02		Fort Wayne, IN		1969		156		369		6,104		506		369		6,610		6,979		(2,453	)		4,527		2,242
Victory Square	Garden	Mar-02		Canton, OH		1975		81		215		889		250		215		1,139		1,354		(261	)		1,093		908
Villa Del Sol	Garden	Mar-02		Norwalk, CA		1972		121		7,294		4,861		1,067		7,294		5,928		13,222		(1,089	)		12,134		4,739
Villa Hermosa Apartments	Mid-Rise	Oct-02		New York, NY		1920		272		1,815		10,312		2,158		1,815		12,470		14,285		(3,907	)		10,378		7,561
Villa La Paz	Garden	Jun-98		Sun City, CA		1990		96		573		3,370		575		573		3,946		4,519		(1,101	)		3,417		2,765
Villa Nova Apartments	Garden	Apr-00		Indianapolis, IN		1972		126		626		3,720		1,038		626		4,758		5,384		(1,060	)		4,324		—
Village Creek at Brookhill	Garden	Jul-94		Westminster, CO		1987		324		2,446		13,261		3,237		2,446		16,498		18,944		(6,521	)		12,423		13,351
Village Crossing	Garden	May-98		W. Palm Beach, FL		1986		189		1,618		9,757		1,808		1,618		11,565		13,182		(3,699	)		9,483		7,000
Village East	Garden	Jul-00		Colorado Springs, CO		1972		137		906		5,807		1,070		906		6,878		7,784		(2,691	)		5,093		2,000
Village Gardens	Garden	Oct-99		Fort Collins, CO		1973		141		830		5,784		682		830		6,467		7,297		(2,408	)		4,889		3,922
Village Green Altamonte Springs	Garden	Oct-02		Altamonte Springs, FL		1970		164		570		6,564		425		570		6,988		7,558		(2,813	)		4,745		3,181
Village in the Woods	Garden	Jan-00		Cypress, TX		1983		530		2,213		16,975		6,831		2,213		23,806		26,019		(7,101	)		18,919		12,426
Village of Kaufman	Garden	Mar-05		Kaufman, TX		1981		68		370		1,606		33		370		1,639		2,009		(271	)		1,738		1,432
Village of Pennbrook	Garden	Oct-98		Levitown, PA		1970		722		5,630		42,778		8,504		5,630		51,282		56,912		(13,046	)		43,867		26,945
Village, The	Garden	Jan-00		Barndon, FL		1986		112		570		5,700		744		570		6,444		7,015		(2,353	)		4,662		5,343
Villages of Baymeadows	Garden	Oct-99		Jacksonville, FL		1972		904		4,521		35,166		20,410		4,521		55,576		60,097		(16,098	)		43,998		40,000
Villas at Little Turtle	Garden	Sep-00		Westerville, OH		1985		160		1,309		5,513		911		1,309		6,424		7,733		(1,374	)		6,360		5,632
Villas at Park La Brea, The	Garden	Mar-02		Los Angeles, CA		2002		250		8,621		48,871		544		8,621		49,415		58,036		(5,043	)		52,993		36,138
Vinings Peak	Garden	Jan-00		Atlanta, GA		1980		280		1,830		15,148		1,685		1,830		16,833		18,662		(6,577	)		12,085		7,797
Vista Del Lagos	Garden	Dec-97		Chandler, AZ		1986		200		804		4,952		1,561		804		6,512		7,316		(2,179	)		5,137		3,305
Vista Park Chino	Garden	Mar-02		Chino, CA		1983		40		380		1,521		225		380		1,746		2,126		(328	)		1,798		1,656


															December 31, 2005
									(2)
									Initial Cost				(3)
		(1)											Cost Capitalized								Accumulated			Total Cost
	Property	Date			Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location		Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Walnut Springs	Garden	Dec-96		San Antonio, TX		1983		224		970		5,119		1,697		970		6,816		7,786		(3,016	)		4,769		3,372
Wasco Arms	Garden	Mar-02		Wasco, CA		1982		78		625		2,519		541		625		3,061		3,686		(597	)		3,088		3,131
Washington Square West	Mid-Rise	Sep-04		Philadelphia, PA		1982		132		555		11,169		2,298		555		13,466		14,021		(1,707	)		12,315		4,089
Waterford Apartments, The	Garden	Nov-96		Houston, TX		1984		312		983		6,801		2,470		983		9,271		10,254		(2,473	)		7,782		4,497
Waterford Village	Garden	Aug-02		Bridgewater, MA		1971		588		28,585		28,102		1,533		28,585		29,634		58,219		(6,873	)		51,347		34,138
Waterways Village	Garden	Jun-97		Aventura, FL		1991		180		4,504		11,064		2,256		4,504		13,320		17,824		(4,372	)		13,451		9,477
Webb Bridge Crossing	Garden	Sep-04		Alpharetta, GA		1985		164		959		6,261		1,051		959		7,311		8,270		(2,078	)		6,192		5,372
West 135th Street	Mid-Rise	Dec-97		New York, NY		1979		198		1,212		8,031		3,704		1,212		11,735		12,947		(4,171	)		8,776		7,793
West Lake Arms Apartments	Garden	Oct-99		Indianapolis, IN		1977		1,381		3,684		27,139		12,074		3,684		39,212		42,896		(10,319	)		32,577		10,505
West Winds	Garden	Mar-04		Columbia, SC		1981		100		501		3,968		465		501		4,433		4,934		(1,252	)		3,682		2,190
West Winds	Garden	Oct-02		Orlando, FL		1985		272		3,122		10,683		1,006		3,122		11,689		14,811		(2,066	)		12,745		6,952
West Woods	Garden	Oct-00		Annappolis, MD		1981		57		1,557		1,891		627		1,557		2,518		4,075		(560	)		3,514		1,708
Westgate	Garden	Oct-99		Houston, TX		1971		313		1,920		11,222		2,242		1,920		13,464		15,384		(3,457	)		11,927		7,584
Westway Village Apartments	Garden	May-98		Houston, TX		1979		326		2,921		11,384		1,061		2,921		12,446		15,366		(4,523	)		10,843		7,984
Westwood Terrace	Mid-Rise	Mar-02		Moline, IL		1976		97		720		3,242		368		720		3,611		4,330		(497	)		3,833		2,208
Wexford Village	Garden	Aug-02		Worcester, MA		1974		264		6,339		17,939		775		6,339		18,714		25,053		(3,373	)		21,680		14,198
White Cliff	Garden	Mar-02		Lincoln Heights, OH		1977		72		215		938		251		215		1,190		1,404		(250	)		1,154		1,023
Whitefield Place	Garden	Apr-05		San Antonio, TX		1980		80		223		3,151		1,895		223		5,046		5,269		(230	)		5,039		1,981
Wickertree	Garden	Oct-97		Phoenix, AZ		1983		226		1,225		6,923		1,559		1,225		8,482		9,707		(2,678	)		7,030		3,163
Wickford	Garden	Mar-04		Henderson, NC		1983		44		247		946		16		247		962		1,209		(195	)		1,014		761
Wilderness Trail	High Rise	Mar-02		Pineville, KY		1983		124		1,010		4,048		234		1,010		4,282		5,292		(553	)		4,739		4,872
Wilkes Towers	High Rise	Mar-02		North Wilkesboro, NC		1981		72		410		1,680		262		410		1,942		2,352		(286	)		2,066		1,765
Williams Cove	Garden	Jul-94		Irving, TX		1984		260		1,227		6,659		2,685		1,227		9,344		10,571		(3,650	)		6,922		4,464
Williamsburg	Garden	May-98		Rolling Meadows, IL		1985		329		2,717		15,437		3,332		2,717		18,769		21,486		(6,077	)		15,409		10,110
Williamsburg Manor	Garden	Apr-00		Cary, NC		1972		183		1,432		8,175		1,079		1,432		9,254		10,686		(3,107	)		7,579		5,181
Willow Park on Lake Adelaide	Garden	Oct-99		Altamonte Springs, FL		1972		185		899		7,796		1,590		899		9,386		10,285		(4,239	)		6,046		6,287
Willowick	Garden	Oct-99		Greenville, SC		1974		180		537		4,775		666		537		5,441		5,978		(2,501	)		3,476		2,700
Willowwood	Garden	Mar-02		North Hollywood, CA		1984		19		1,051		840		61		1,051		901		1,952		(133	)		1,819		1,107
Winchester Village Apartments	Garden	Nov-00		Indianapolis, IN		1966		96		104		2,234		512		104		2,746		2,850		(675	)		2,174		—
Winddrift (IN)	Garden	Oct-00		Indianapolis, IN		1980		166		1,265		3,912		1,272		1,265		5,183		6,449		(1,313	)		5,135		4,797
Windgate Place	Garden	May-99		Charlotte, NC		1972		196		1,044		5,900		1,396		1,044		7,296		8,340		(2,081	)		6,259		—
Windmere	Garden	Jan-03		Houston, TX		1982		257		2,150		10,796		461		2,150		11,257		13,406		(3,234	)		10,172		5,398
Windridge	Garden	May-98		San Antonio, TX		1983		276		1,406		8,272		1,098		1,406		9,370		10,776		(3,271	)		7,505		5,040
Windrift (CA)	Garden	Mar-01		Oceanside, CA		1987		404		24,960		17,590		1,878		24,960		19,468		44,428		(6,206	)		38,222		28,999
Windrift (FL)	Garden	Oct-00		Orlando, FL		1987		288		3,696		10,029		1,816		3,696		11,844		15,540		(2,743	)		12,797		9,426
Windsor at South Square	Garden	Oct-99		Durham, NC		1972		230		1,326		8,329		1,695		1,326		10,024		11,350		(3,034	)		8,316		4,523
Windsor Crossing	Garden	Mar-00		Newport News, VA		1978		156		307		2,110		1,027		307		3,136		3,443		(1,318	)		2,125		3,036
Windsor Park	Garden	Mar-01		Woodbridge, VA		1987		220		4,279		15,970		1,072		4,279		17,043		21,321		(3,590	)		17,731		13,758
Windward at the Villages	Garden	Oct-97		W. Palm Beach, FL		1988		196		1,595		9,079		2,642		1,595		11,721		13,316		(3,471	)		9,845		2,800
Winter Gardens	High Rise	Mar-04		St Louis, MO		1920		112		300		3,072		3,989		300		7,062		7,362		(294	)		7,068		4,015
Wood Lake	Garden	Jan-00		Atlanta, GA		1983		220		1,399		13,123		1,539		1,399		14,663		16,062		(5,770	)		10,292		6,904
Woodcreek	Garden	Oct-02		Mesa, AZ		1985		432		2,187		15,971		1,333		2,187		17,304		19,491		(6,988	)		12,503		10,474
Woodcrest	Garden	Dec-97		Odessa, TX		1972		80		41		229		211		41		440		481		(352	)		129		451
Woodfield Gardens	Garden	May-99		Charlotte, NC		1974		132		402		2,276		938		402		3,214		3,616		(1,105	)		2,511		—
Woodhill	Garden	Dec-00		Denton, TX		1984		352		1,530		10,477		1,529		1,530		12,006		13,537		(4,696	)		8,841		8,113
Woodhollow	Garden	Oct-97		Austin, TX		1974		108		658		3,728		957		658		4,685		5,343		(1,565	)		3,778		1,598
Woodland Hills	Garden	Oct-05		Jackson, MI		1980		125		541		3,875		—		541		3,875		4,416		(160	)		4,256		—
Woodland Ridge	Garden	Dec-00		Irving, TX		1984		130		600		3,617		875		600		4,492		5,092		(1,754	)		3,338		2,695
Woodridge	Garden	Mar-04		Galloway, OH		1986		70		380		1,476		131		380		1,607		1,987		(147	)		1,840		1,275
Woods Edge	Garden	Nov-04		Indianapolis, IN		1981		190		495		6,238		182		495		6,420		6,915		(785	)		6,131		4,849


															December 31, 2005
									(2)
									Initial Cost				(3)
		(1)											Cost Capitalized								Accumulated			Total Cost
	Property	Date			Year		Number				Buildings and		Subsequent to				Buildings and				Depreciation			Net of
Property Name	Type	Consolidated	Location		Built		of Units		Land		Improvements		Acquisition		Land		Improvements		Total		(AD)			AD		Encumbrances

Woods of Burnsville	Garden	Nov-04		Burnsville, MN		1984		400		2,339		20,402		392		2,339		20,793		23,132		(6,437	)		16,695		16,580
Woods of Inverness	Garden	Oct-99		Houston, TX		1983		272		1,427		11,698		1,633		1,427		13,331		14,758		(5,297	)		9,461		4,253
Woodshire	Garden	Mar-00		Virginia Beach, VA		1972		288		961		5,549		1,908		961		7,457		8,418		(1,895	)		6,522		6,981
Wyntre Brook Apartments	Garden	Oct-99		West Chester, PA		1976		212		972		9,070		10,183		972		19,253		20,225		(3,632	)		16,594		9,887
Yadkin	Mid-Rise	Mar-04		Salisbury, NC		1912		67		242		1,982		199		242		2,181		2,422		(704	)		1,719		1,850
Yorktown II Apartments	High Rise	Dec-99		Lombard, IL		1973		368		2,971		18,163		2,105		2,971		20,267		23,239		(3,209	)		20,030		15,857
Yorktree	Garden	Oct-97		Carolstream, IL		1972		293		1,968		11,457		3,231		1,968		14,688		16,656		(4,779	)		11,877		5,090
Other (4)								—		1,235		4,360		294		1,235		4,654		5,889		(1,099	)		4,790		—

								147,900	$	2,233,635	$	6,585,728	$	1,169,854	$	2,233,630	$	8,255,582	$	10,489,212	$	(2,097,966	)	$	8,391,246	$	5,440,283


(1)	Date we acquired the property or first consolidated the partnership which owns the property.

(2)	Initial cost includes the tendering costs to acquire the minority interest share of our consolidated real estate partnerships.

(3)	Costs capitalized subsequent to acquisition includes costs capitalized since acquisition or first consolidation of the partnership/property.

(4)	Other includes land parcels and commercial properties.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

REAL ESTATE AND ACCUMULATED DEPRECIATION
For the Years Ended December 31, 2005, 2004 and 2003
(In Thousands)


	2005			2004			2003
Real Estate
Balance at beginning of year	$	9,609,979		$	8,742,152		$	8,397,629
Additions during the year:
Newly consolidated assets (1)		260,715			277,580			262,054
Acquisitions		288,212			393,088			192,365
Foreclosures		—			2,022			—
Capital expenditures		436,781			301,937			245,528
Deductions during the year:
Casualty and other write-offs		(18,872	)		(13,869	)		(15,404	)
Assets held for sale reclassification (2)		(87,603	)		(92,931	)		(37,911	)
Sales (3)		—			—			(302,109	)

Balance at end of year	$	10,489,212		$	9,609,979		$	8,742,152

Accumulated Depreciation
Balance at beginning of year	$	1,734,934		$	1,462,080		$	1,289,983
Additions during the year:
Depreciation		412,701			346,156			304,537
Newly consolidated assets (1)		40,277			(31,209	)		(20,960	)
Deductions during the year:
Casualty and other write-offs		(3,191	)		(4,038	)		(7,372	)
Assets held for sale reclassification (2)		(86,755	)		(38,055	)		(40,570	)
Sales (3)		—			—			(63,538	)

Balance at end of year	$	2,097,966		$	1,734,934		$	1,462,080


(1)		Includes acquisition of limited partnership interests and related activity.

(2)		Represents activity on properties that have been sold or classified as held for sale that is included in the line items above.

(3)		Effective in fourth quarter of 2003 and on a prospective basis, all properties sold were classified as held for sale and, therefore, reclassified in the prior period balances.

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