UNITED STATES SECURITIES AND EXCHANGE COMMISSION

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 OF THE

SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-13232

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

(Exact name of registrant as specified in its charter)

MARYLAND 84-1259577

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

TOWER TWO, SUITE 2-1000,

DENVER, CO 80222-7900

(Address of principal executive offices) (Zip Code)

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

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

NAME OF EACH EXCHANGE

TITLE OF EACH CLASS ON WHICH REGISTERED

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

Class A Common Stock New York Stock Exchange

Class C Cumulative Preferred Stock New York Stock Exchange

Class D Cumulative Preferred Stock New York Stock Exchange

Class G Cumulative Preferred Stock New York Stock Exchange

Class H Cumulative Preferred Stock New York Stock Exchange

Class K Convertible Cumulative Preferred Stock New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

As of February 29, 2000, there were 67,096,142 shares of Class A Common Stock outstanding. The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant, was approximately $2,482.6 million as of February 29, 2000.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the registrant's 2000 annual meeting of stockholders are incorporated by reference into Part III of this Annual Report.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

TABLE OF CONTENTS

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

ITEM PAGE

---- ----

PART I

1. Business....................................................

1999 Developments...........................................

Financial Information About Industry Segments...............

Operating and Financial Strategies..........................

Growth Strategies...........................................

Property Management Strategies..............................

Taxation of the Company.....................................

Competition.................................................

Regulation..................................................

Insurance...................................................

Employees...................................................

2. Properties..................................................

3. Legal Proceedings...........................................

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

PART II

5. Market for the Registrant's Common Equity and Related

Stockholder Matters.........................................

6. Selected Financial Data.....................................

7. Management's Discussion and Analysis of Financial Condition

and Results of Operations...................................

7a. Quantitative and Qualitative Disclosures About Market

Risk........................................................

8. Financial Statements and Supplementary Data.................

9. Changes in and Disagreements with Accountants on Accounting

and Financial Disclosure....................................

PART III

10. Directors and Executive Officers of the Registrant..........

11. Executive Compensation......................................

12. Security Ownership of Certain Beneficial Owners and

Management..................................................

13. Certain Relationships and Related Transactions..............

PART IV

14. Exhibits, Financial Statement Schedule and Reports on Form

8-K.........................................................

PART I

ITEM 1. BUSINESS.

Apartment Investment and Management Company ("AIMCO"), a Maryland corporation formed on January 10, 1994, is a self-administered and self-managed REIT engaged in the ownership, acquisition, development, expansion and management of multi-family apartment properties. As of December 31, 1999, we owned or managed 363,462 apartment units in 1,942 properties located in 48 states, the District of Columbia and Puerto Rico. Based on apartment unit data compiled by the National Multi Housing Council, we believe that, as of December 31, 1999, we were the largest owner and manager of multifamily apartment properties in the United States. As of December 31, 1999, we:

- owned or controlled 106,148 units in 373 apartment properties;

- held an equity interest in 133,113 units in 751 apartment properties; and

- managed 124,201 units in 818 apartment properties for third party owners

and affiliates.

We conduct substantially all of our operations through our operating partnership, AIMCO Properties, L.P. Through a wholly-owned subsidiary, we act as the sole general partner of the AIMCO operating partnership. As of December 31, 1999, we owned approximately a 91% interest in the AIMCO operating partnership. We manage apartment properties for third parties and affiliates through unconsolidated subsidiaries that we refer to as the "management companies." Generally, when we refer to "we," "us" or the "Company" in this annual report on Form 10-K, we are referring to AIMCO, the AIMCO operating partnership, the management companies and their respective subsidiaries. We refer to interests in the AIMCO operating partnership that are held by third parties as "OP Units."

The Company's principal executive offices are located at 2000 South Colorado Blvd., Tower Two, Suite 2-1000, Denver, Colorado 80222-7900 and its telephone number is (303) 757-8101.

1999 DEVELOPMENTS

Individual Property Acquisitions

The Company directly acquired 28 apartment communities in unrelated transactions during 1999 (not including those acquired in connection with the merger with Insignia Properties Trust, "IPT"). The aggregate consideration paid by the Company of $495.0 million consisted of $91.5 million in cash, 2.4 million Preferred OP Units, 0.9 million common OP Units and 0.5 million shares of Class A Common Stock with a total recorded value of $116.8 million, assumption of $110.1 million of secured long-term indebtedness, the assumption of $15.2 million of other liabilities, and new financing of $161.4 million of secured long-term indebtedness. The Company has budgeted an additional $23.9 million for initial capital enhancements related to these properties.

Tender Offers

During 1999, the Company made separate offers to the limited partners of approximately 600 partnerships to acquire their limited partnership interests. The Company paid approximately $271 million in cash and OP Units to acquire limited partnership interests pursuant to the offers.

Property Dispositions

In 1999, the Company sold 63 properties for an aggregate sales price of approximately $426.0 million. Net cash proceeds to the Company from the sales of $135.8 million were used to repay a portion of the Company's outstanding short-term indebtedness. The results of operations of 55 of these properties were accounted for by the Company under the equity method.

Debt Assumptions and Financings

In August 1999, the Company closed a $300 million revolving credit facility arranged by Bank of America, N.A. BankBoston, N.A. and First Union National Bank and comprised of a total of nine lender participants. The obligations under the new credit facility are secured by certain non-real estate assets of the Company. The existing lines of credit were terminated. The credit facility is used for general corporate purposes and has a two-year term with two one-year extensions. The annual interest rate under the new credit facility is based on either LIBOR or a base rate which is the higher of Bank of America's reference rate or 0.5% over the federal funds rate, plus, in either case, an applicable margin. The margin ranges between 2.05% and 2.55%, in the case of LIBOR-based loans, and between 0.55% and 1.05%, in the case of base rate loans, based upon a fixed charge coverage ratio. The weighted average interest rate at December 31, 1999 was 8.84%. The amount available under the credit facility at December 31, 1999 was $90.8 million.

During the year ended December 31, 1999, the Company issued $410.3 million of long-term fixed rate, fully amortizing non-recourse mortgage notes payable with a weighted average interest rate of 7.3%. Each of the notes is individually secured by one of forty properties with no cross-collateralization. The Company used the net proceeds after transaction costs of $373.6 million to repay existing debt. During the year ended December 31, 1999, the Company has also assumed $110.1 million of long-term fixed rate, fully amortizing notes payables with a weighted average interest rate of 7.9% in connection with the acquisition of properties. Each of the notes is individually secured by one of thirteen properties with no cross-collateralization.

Equity Offerings

In 1999, the Company raised proceeds of $304.6 million in one public offering and two direct placements of equity securities (excluding equity issued in connection with the completion of the IPT merger discussed below and in connection with the purchase of real estate and limited partnership interests). These transactions are summarized below:

NUMBER TOTAL PROCEEDS DIVIDEND OR

OF IN DISTRIBUTION

TRANSACTION TYPE DATE SHARES MILLIONS RATE

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

Class K Convertible Cumulative

Preferred Stock of AIMCO........... Public Feb. 1999 5,000,000 $125.0 (1)

Class L Convertible Cumulative

Preferred Stock of AIMCO........... Direct May 1999 5,000,000 125.0 (2)

Class A Common Stock of AIMCO........ Direct Sept. 1999 1,382,580 54.6

------

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

======

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

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

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

cash dividends payable on the number of shares of Class A Common Stock (or

portion thereof) into which a share of Class K Preferred Stock is

convertible. Beginning with the third anniversary of the date of original

issuance, the Class K Preferred Stock dividend per share will be increased

to the greater of (i) $2.50 per year (equivalent to 10% of the liquidation

preference), or (ii) the cash dividends payable on the number of shares of

Class A Common Stock (or portion thereof) into which a share of Class K

Preferred Stock is convertible.

(2) For three years from the date of original issuance, the Class L Preferred

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

$2.025 per year (equivalent to 8.1% of the liquidation preference), or (ii)

the cash dividends payable on the number of shares of Class A Common Stock

into which a share of Class L Preferred Stock is convertible. Beginning with

the third anniversary of the date of original issuance, the holder of Class

L Preferred Stock will be entitled to receive an amount per share equal to

the greater of (i) $2.50 per year (equivalent to 10% of the liquidation

preference), or (ii) the cash dividends payable on the number of shares of

Class A Common Stock into which a share of Class L Preferred Stock is

convertible.

Insignia Properties Trust Merger

As a result of the Insignia merger on October 1, 1998, AIMCO acquired approximately 51% of the outstanding shares of beneficial interest of IPT. On February 26, 1999, IPT was merged into AIMCO. Pursuant to the merger, each of the outstanding shares of IPT that were not held by AIMCO were converted into the right to receive 0.3601 shares of AIMCO Class A Common Stock, resulting in the issuance of approximately 4.3 million shares of AIMCO Class A Common Stock (valued at approximately $158.8 million).

Pending Acquisitions

In the ordinary course of business, the Company engages in discussions and negotiations regarding the acquisition of apartment properties (including interests in entities that own apartment properties). The Company frequently enters into contracts and non-binding letters of intent with respect to the purchase of properties. These contracts are typically subject to certain conditions and permit the Company to terminate the contract in its sole and absolute discretion if it is not satisfied with the results of its due diligence investigation of the properties. The Company believes that such contracts essentially result in the creation of an option on the subject properties and give the Company greater flexibility in seeking to acquire properties. As of February 29, 2000, the Company had under contract or letter of intent an aggregate of 10 multi-family apartment properties with a maximum aggregate purchase price of $107.6 million, including estimated capital improvements, which, in some cases, may be paid in the form of assumption of existing debt. All such contracts are subject to termination by the Company as described above. No assurance can be given that any of these possible acquisitions will be completed or, if completed, that they will be accretive on a per share basis.

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

The Company operates in one industry segment, the ownership and management of real estate properties. See the consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K for financial information relating to the Company.

OPERATING AND FINANCIAL STRATEGIES

The Company strives to meet its objective of providing long-term, predictable funds from operations ("FFO") per share of Class A Common Stock, less an allowance for Capital Replacements of $300 per apartment unit, by implementing its operating and financing strategies which include the following:

- Acquisition of Properties at Less Than Replacement Cost. AIMCO attempts

to acquire properties at a significant discount to their replacement

cost.

- Geographic Diversification. AIMCO operates in 48 states, the District of

Columbia and Puerto Rico. This geographic diversification insulates the

Company, to some degree, from inevitable downturns in any one market.

AIMCO's net income before depreciation and interest expense is earned in

more than 175 local markets. In 1999, the largest single market

contributed 7% to net income before depreciation and interest expense,

and the five largest markets contributed 32%.

- Market Growth. The Company seeks to operate in markets where population

and employment growth are expected to exceed the national average and

where it believes it can become a regionally significant owner or manager

of properties. For the period from 1997 through 2000, annual population

and employment growth rates in AIMCO's five largest regional markets are

forecasted to be 2.2% and 3.6%, respectively.

- Product Diversification. The Company's portfolio of apartment properties

spans a wide range of apartment community types, both within and among

markets, including garden and high-rise apartments, as well as corporate

and student housing.

- Capital Replacement. AIMCO believes that the physical condition and

amenities of its apartment communities are important factors in its

ability to maintain and increase rental rates. The Company allocates

approximately $300 annually per owned apartment unit for capital

replacements, and reserves unexpended amounts for future capital

replacements.

- Debt Financing. AIMCO's strategy is generally to incur debt to increase

its return on equity while maintaining acceptable interest coverage

ratios. AIMCO seeks to maintain a ratio of free cash flow to combined

interest expense and preferred stock dividends of between 2:1 and 3:1,

and a ratio of earnings before interest, income taxes, depreciation and

amortization (with certain adjustments and after a provision of

approximately $300 per owned apartment unit) to debt service of at least

2:1, and to match debt maturities to the character of the assets

financed. For the year ended December 31, 1999, the Company was within

these targets. The Company uses predominantly long-term, fixed-rate and

self-amortizing non-recourse debt in order to avoid the refunding or

repricing risks of short-term borrowings. The Company uses short-term

debt financing to fund acquisitions and generally expects to refinance

such borrowings with proceeds from equity offerings or long-term debt

financings. As of December 31, 1999, approximately 9% of AIMCO's

outstanding debt was short-term debt and 91% was long-term debt.

- Dispositions. The Company regularly sells properties that do not meet its

return on investment criteria or that are located in areas where AIMCO

does not believe that the long-term neighborhood values justify the

continued investment in the properties.

- Dividend Policy. AIMCO pays dividends on its Class A Common Stock to

share its profitability with its stockholders. The Company distributed

61.3%, 65.8% and 66.5% of FFO to holders of Class A Common Stock for the

years ended December 31, 1999, 1998 and 1997, respectively. It is the

present policy of the Board of Directors to increase the dividend

annually in an amount equal to one-half of the projected increase in FFO,

adjusted for capital replacements, subject to minimum distribution

requirements to maintain its REIT status.

GROWTH STRATEGIES

The Company seeks growth through two primary sources -- internal expansion and acquisitions.

Internal Growth Strategies.

The Company pursues internal growth primarily through the following strategies:

- Revenue Increases. The Company increases rents where feasible and seeks

to improve occupancy rates.

- Controlling Expenses. Cost reductions are accomplished by local focus on

the regional operating center level and by exploiting economies of scale.

As a result of the size of its portfolio and its creation of regional

concentrations of properties, the Company has the ability to leverage

fixed costs for general and administrative expenditures and certain

operating functions, such as insurance, information technology and

training, over a large property base.

- Redevelopment of Properties. The Company believes redevelopment of

selected properties in superior locations provides advantages over

development of new properties. AIMCO believes that redevelopment

generally allows the Company to maintain rents comparable to new

properties and, compared to development of new properties, can be

accomplished with relatively lower financial risk, in less time and with

reduced delays due to governmental regulation.

- Expansion of Properties. The Company believes that expansion within or

adjacent to properties already owned or managed by the Company also

provides growth opportunities at lower risk than new development. Such

expansion can offer cost advantages to the extent common area amenities

and on-site management personnel can service the property expansions.

AIMCO's current policy is to limit redevelopments and expansions to 10%

of total equity market capitalization.

- Ancillary Services. The Company believes that its ownership and

management of properties provides it with unique access to a customer

base that allows us to provide additional services and thereby increase

occupancy, increase rents and generate incremental revenue. The Company

currently provides cable television, telephone services, appliance

rental, and carport, garage and storage space rental at certain

properties.

Acquisition Strategies.

The Company believes its acquisition strategies will increase profitability and predictability of earnings by increasing its geographic diversification, economies of scale and opportunities to provide ancillary services to tenants at its properties. Since AIMCO's initial public offering in July 1994, the Company has completed numerous acquisition and management transactions, expanding its portfolio of owned or managed properties from 132 apartment properties with 29,343 units to 1,942 apartment properties with 363,462 units as of December 31, 1999. The Company acquires additional properties primarily in three ways:

- Direct Acquisitions. AIMCO may directly, including through mergers and

other business combinations, acquire individual properties or portfolios

of properties and controlling interests in entities that own or control

such properties or portfolios. To date, a significant portion of AIMCO's

growth has resulted from the acquisition of other companies that owned or

controlled properties.

- Acquisition of Managed Properties. AIMCO believes that its property

management operations support its acquisition activities. Since AIMCO's

initial public offering, the Company has acquired from its managed

portfolio 16 properties comprising 5,697 units for total consideration of

$189.9 million.

- Increasing its Interest in Partnerships. For properties where AIMCO owns

a general partnership interest in the property-owning partnership, the

Company may seek to acquire, subject to its fiduciary duties, the

interests in the partnership held by third parties for cash or, in some

cases, in exchange for OP Units. AIMCO has completed tender offers with

respect to approximately 1,000 partnerships and has purchased additional

interests in such partnerships for cash and for OP Units.

PROPERTY MANAGEMENT STRATEGIES

AIMCO seeks to improve the operating results from its property management business by, among other methods, combining centralized financial control and uniform operating procedures with localized property management decision-making and market knowledge. AIMCO's management operations are organized into 31 regional operating centers. Each of the regional operating centers is supervised by a Regional Vice-President.

TAXATION OF THE COMPANY

The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, commencing with its taxable year ended December 31, 1994, and the Company intends to continue to operate in such a manner. The Company's current and continuing qualification as a REIT depends on its ability to meet the various requirements imposed by the Internal Revenue Code, through actual operating results, distribution levels and diversity of stock ownership.

If the Company qualifies for taxation as a REIT, it will generally not be subject to U.S. federal corporate income tax on its net income that is currently distributed to stockholders. This treatment substantially eliminates the "double taxation" (at the corporate and stockholder levels) that generally results from investment in a corporation. If the Company fails to qualify as a REIT in any taxable year, its taxable income will be subject to U.S. federal income tax at regular corporate rates (including any applicable alternative minimum tax). Even if the Company qualifies as a REIT, it may be subject to certain state and local income taxes and to U.S. federal income and excise taxes on its undistributed income.

If in any taxable year the Company fails to qualify as a REIT and incurs additional tax liability, the Company may need to borrow funds or liquidate certain investments in order to pay the applicable tax and the

Company would not be compelled to make distributions under the Code. Unless entitled to relief under certain statutory provisions, the Company would also be disqualified from treatment as a REIT for the four taxable years following the year during which qualification is lost. Although the Company currently intends to operate in a manner designed to qualify as a REIT, it is possible that future economic, market, legal, tax or other considerations may cause the Company to fail to qualify as a REIT or may cause the Board of Directors to revoke the REIT election.

The Company and its stockholders may be subject to state or local taxation in various state or local jurisdictions, including those in which it or they transact business or reside. The state and local tax treatment of the Company and its stockholders may not conform to the U.S. federal income tax treatment.

COMPETITION

There are numerous housing alternatives that compete with the Company's properties in attracting residents. The Company's properties compete directly with other multi-family rental apartments and single family homes that are available for rent or purchase in the markets in which the Company's properties are located. The Company's properties also compete for residents with new and existing and condominiums. The number of competitive properties in a particular area could have a material effect on the Company's ability to lease apartment units at its properties and on the rents charged. The Company competes with numerous real estate companies in acquiring, developing and managing multi-family apartment properties and seeking tenants to occupy its properties. In addition, the Company competes with numerous property management companies in the markets where the properties managed by the Company are located.

REGULATION

General

Multifamily apartment properties are subject to various laws, ordinances and regulations, including regulations relating to recreational facilities such as swimming pools, activity centers and other common areas. Changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions, as well as changes in laws affecting development, construction and safety requirements, may result in significant unanticipated expenditures, which would adversely affect the Company's cash flows from operating activities. In addition, future enactment of rent control or rent stabilization laws or other laws regulating multi-family housing may reduce rental revenue or increase operating costs in particular markets.

Laws Benefiting Disabled Persons

Under the Americans with Disabilities Act of 1990, all places of public accommodation are required to meet certain Federal requirements related to access and use by disabled persons. These requirements became effective in 1992. A number of additional Federal, state and local laws may also require modifications to the Company's properties, or restrict certain further renovations of the properties, with respect to access thereto by disabled persons. For example, the Fair Housing Amendments Act of 1988 requires apartment properties first occupied after March 13, 1990 to be accessible to the handicapped. Noncompliance with these laws could result in the imposition of fines or an award of damages to private litigants and also could result in an order to correct any non-complying feature, which could result in substantial capital expenditures. Although the Company believes that its properties are substantially in compliance with present requirements, it may incur unanticipated expenses to comply with these laws.

Regulation of Affordable Housing

As of December 31, 1999, the Company owned or controlled 27 properties and held an equity interest in 434 properties with a combined weighted average ownership percentage of 24%. AIMCO also managed for third parties and affiliates 477 properties that benefit from governmental programs intended to provide housing to people with low or moderate incomes. These programs, which are usually administered by the United States Department of Housing and Urban Development ("HUD") or state housing finance agencies, typically

provide mortgage insurance, favorable financing terms or rental assistance payments to the property owners. As a condition to the receipt of assistance under these programs, the properties must comply with various requirements, which typically limit rents to pre-approved amounts. If permitted rents on a property are insufficient to cover costs, a sale of the property may become necessary, which could result in a loss of management fee revenue. The Company must obtain the approval of HUD in order to manage, or acquire a significant interest in, a HUD-assisted or HUD-insured property. This approval process is commonly referred to as "2530 Clearance." The Company had three unresolved flags in the 2530 system as of December 31, 1999, which the Company believes will not have a material effect on its ability to receive 2530 approval. The Company can make no assurance, however, that it will always receive such approval.

Environmental

The Company is subject to various Federal, state and local laws that impose liability on property owners or operators for the costs of removal or remediation of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of the hazardous substances. The presence of, or the failure to properly remediate, hazardous substances may adversely affect occupancy at contaminated apartment communities and our ability to sell or borrow against contaminated properties. In addition to the costs associated with investigation and remediation actions brought by governmental agencies, the presence of hazardous wastes on a property could result in personal injury or similar claims by private plaintiffs. The Company also is subject to various laws that impose liability for the cost of removal or remediation of hazardous substances at a disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous or toxic substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of our properties, we could potentially be liable for environmental liabilities or costs associated with our properties or properties we may acquire or manage in the future.

INSURANCE

Management believes that the Company's properties are covered by adequate fire, flood and property insurance provided by reputable companies and with commercially reasonable deductibles and limits.

EMPLOYEES

The Company has a staff of employees performing various acquisition, redevelopment and management functions. The Company, through the AIMCO operating partnership and the management companies, has approximately 12,500 employees, most of whom are employed at the property level. None of the employees are represented by a union, and the Company has never experienced a work stoppage. The Company believes it maintains satisfactory relations with its employees.

ITEM 2. PROPERTIES.

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

NUMBER OF NUMBER OF

REGIONAL OPERATING CENTER DIVISION PROPERTIES UNITS

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

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

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

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

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

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

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

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

387 66,660

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

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

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

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

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

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

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

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

466 81,282

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

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

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

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

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

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

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

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

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

335 68,527

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

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

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

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

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

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

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

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

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

388 82,991

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

Portfolio:

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

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

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

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

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

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

165 36,397

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

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

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

1,942 363,462

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

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

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

Substantially all of the properties owned or controlled by the Company are encumbered by mortgage indebtedness or serve as collateral for the Company's indebtedness. At December 31, 1999, the Company had aggregate mortgage indebtedness totaling $2,375.1 million, which was secured by 361 properties with a combined net book value of $4,028.8 million, having an aggregate weighted average interest rate of 6.66%. As of December 31, 1999, approximately 9% of AIMCO's outstanding debt was short-term debt and 91% was long-term debt. See the financial statements included elsewhere in this Annual Report on Form 10-K for additional information about the Company's indebtedness.

ITEM 3. LEGAL PROCEEDINGS.

General

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

Limited Partnerships

In connection with the Company's offers to purchase interests in limited partnerships that own properties, the Company and its affiliates are sometimes subject to legal actions, including allegations that such activities may involve breaches of fiduciary duties to the limited partners of such partnerships or violations of the relevant partnership agreements. The Company believes it complies with its fiduciary obligations and relevant partnership agreements, and does not expect such legal actions to have a material adverse effect on the consolidated financial condition or results of operations of the Company and its subsidiaries taken as a whole. The Company may incur costs in connection with the defense or settlement of such litigation, which could adversely affect the Company's desire or ability to complete certain transactions and thereby have a material adverse effect on the Company and its subsidiaries.

Pending Investigations of HUD Management Arrangements

In 1997, NHP received subpoenas from the HUD Inspector General ("IG") requesting documents relating to arrangements whereby NHP or any of its affiliates provides compensation to owners of HUD-assisted or HUD-insured multi-family projects in exchange for or in connection with property management of a HUD project. In July 1999, NHP received a grand jury subpoena requesting documents relating to the same subject matter as the HUD IG subpoenas and NHP's operation of a group purchasing program created by NHP, known as Buyers Access. To date, neither the HUD IG nor the grand jury has initiated any action against NHP or AIMCO or, to NHP's or AIMCO's knowledge, any owner of a HUD property managed by NHP. AIMCO believes that NHP's operations and programs are in compliance, in all material respects, with all laws, rules and regulations relating to HUD-assisted or HUD-insured properties. AIMCO is cooperating with the investigations and does not believe that the investigations will result in a material adverse impact on its operations. However, as with any similar investigation, there can be no assurance that these will not result in material fines, penalties or other costs.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

AIMCO's Class A Common Stock has been listed and traded on the NYSE under the symbol "AIV" since July 22, 1994. The following table sets forth the quarterly high and low sales prices of the Class A Common Stock, as reported on the NYSE, and the dividends paid by the Company for the periods indicated.

DIVIDENDS

PAID

QUARTER ENDED HIGH LOW (PER SHARE)

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

1997

March 31, 1997....................................... 30 1/2 25 1/2 0.4625

June 30, 1997........................................ 29 3/4 26 0.4625

September 30, 1997................................... 36 3/16 28 1/8 0.4625

December 31, 1997.................................... 38 32 0.4625

1998

March 31, 1998....................................... 38 9/16 34 1/4 0.5625

June 30, 1998........................................ 39 7/8 36 1/2 0.5625

September 30, 1998................................... 41 31 0.5625

December 31, 1998.................................... 37 3/8 30 0.5625

1999

March 31, 1999....................................... 41 5/8 35 0.625

June 30, 1999........................................ 44 1/16 35 5/16 0.625

September 30, 1999................................... 42 5/8 37 5/16 0.625

December 31, 1999.................................... 40 3/16 34 1/16 0.625

2000

March 31, 2000 (through March 8, 2000)............... 39 11/16 36 5/8 0.70(1)

(1) On January 19, 2000, the Company's Board of Directors declared a cash

dividend of $0.70 per share of Class A Common Stock, paid on February 11,

2000 to stockholders of record on February 4, 2000.

On March 8, 2000, there were 67,109,473 shares of Class A Common Stock outstanding, held by 2,627 stockholders of record.

AIMCO, as a REIT, is required to distribute annually to holders of common stock at least 95% of its "real estate investment trust taxable income," which, as defined by the Internal Revenue Code and Treasury regulations, is generally equivalent to net taxable ordinary income. AIMCO measures its economic profitability and intends to pay regular dividends to its stockholders based on FFO during the relevant period. However, the future payment of dividends by AIMCO will be at the discretion of the Board of Directors and will depend on numerous factors including AIMCO's financial condition, its capital requirements, the annual distribution requirements under the provisions of the Internal Revenue Code applicable to REITs and such other factors as the Board of Directors deems relevant.

From time to time, AIMCO issues shares of Class A Common Stock in exchange for OP Units tendered to the AIMCO operating partnership for redemption in accordance with the terms and provisions of the agreement of limited partnership of the AIMCO operating partnership. Such shares are issued based on an exchange ratio of one share for each OP Unit. The shares are issued in exchange for OP Units in private transactions exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(2) thereof. During 1999, a total of 963,951 shares of Class A Common Stock were issued in exchange for OP Units.

On September 15, 1999, AIMCO completed a direct placement of 1,382,580 shares of Class A Common Stock at a net price of $39.50 per share to five institutional investors. The net proceeds of approximately $54.6 million were used to repay outstanding indebtedness under the Company's credit facility.

During 1999, the Company repurchased 205,300 shares of Class A Common Stock at a net price of $8.0 million.

ITEM 6. SELECTED FINANCIAL DATA

The following historical selected financial data for AIMCO is based on audited financial statements. This information should be read in conjunction with such financial statements, including the notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included herein.

FOR THE YEAR ENDED DECEMBER 31,

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

1999 1998 1997 1996 1995

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

OPERATING DATA:

RENTAL PROPERTY OPERATIONS:

Rental and other income................................... $ 533,917 $ 377,139 $ 193,006 $100,516 $ 74,947

Property operating expenses............................... (214,693) (147,541) (76,168) (38,400) (30,150)

Owned property management expenses........................ (15,429) (11,013) (6,620) (2,746) (2,276)

Depreciation.............................................. (131,753) (84,635) (37,741) (19,556) (15,038)

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

Income from property operations........................... 172,042 133,950 72,477 39,814 27,483

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

SERVICE COMPANY BUSINESS:

Management fees and other income.......................... 43,455 24,103 13,937 8,367 8,132

Management and other expenses............................. (25,470) (16,960) (10,961) (6,150) (5,731)

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

Income from service company business...................... 17,985 7,143 2,976 2,217 2,401

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

General and administrative expenses....................... (13,112) (13,568) (5,396) (1,512) (1,804)

Interest expense.......................................... (140,094) (89,424) (51,385) (24,802) (13,322)

Interest income........................................... 62,721 29,368 8,676 523 658

Equity in losses of unconsolidated real estate

partnerships............................................ (4,467) (4,854) (1,798) -- --

Equity in earnings (losses) of unconsolidated

subsidiaries............................................ (2,818) 11,570 4,636 -- --

Minority interest in other entities....................... (900) (468) 1,008 (111) --

Amortization.............................................. (5,860) (8,735) (948) (500) (428)

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

Income from operations.................................... 85,497 64,982 30,246 15,629 14,988

Gain (loss) on disposition of properties.................. (1,785) 4,674 2,720 44 --

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

Income before extraordinary item and minority interest in

operating partnership................................... 83,712 69,656 32,966 15,673 14,988

Extraordinary item -- early extinguishment of debt........ -- -- (269) -- --

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

Income before minority interest in operating

partnership............................................. 83,712 69,656 32,697 15,673 14,988

Minority interest in operating partnership................ (2,753) (5,182) (4,064) (2,689) (1,613)

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

Net income................................................ $ 80,959 $ 64,474 $ 28,633 $ 12,984 $ 13,375

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

OTHER INFORMATION:

Total owned or controlled properties (end of period)...... 373 242 147 94 56

Total owned or controlled apartment units (end of

period)................................................. 106,148 63,086 40,039 23,764 14,453

Total equity apartment units (end of period).............. 133,113 170,243 83,431 3,611 6,349

Units under management (end of period).................... 124,201 146,034 69,587 15,434 13,245

Basic earnings per common share........................... $ 0.39 $ 0.84 $ 1.09 $ 1.05 $ 0.86

Diluted earnings per common share......................... $ 0.38 $ 0.80 $ 1.08 $ 1.04 $ 0.86

Dividends paid per common share........................... $ 2.50 $ 2.25 $ 1.85 $ 1.70 $ 1.66

BALANCE SHEET INFORMATION:

Real estate, before accumulated depreciation.............. $4,508,535 $2,802,598 $1,657,207 $865,222 $477,162

Real estate, net of accumulated depreciation.............. 4,092,038 2,573,718 1,503,922 745,145 448,425

Total assets...................................... 5,684,951 4,248,800 2,100,510 827,673 480,361

Total indebtedness................................ 2,584,289 1,660,715 808,530 522,146 268,692

Company-obligated mandatory redeemable convertible

preferred securities of a subsidiary trust.............. 149,500 149,500 -- -- --

Stockholders' equity...................................... 2,262,828 1,902,564 1,045,300 215,749 169,032

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

OVERVIEW

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements in certain circumstances. Certain information included in this Report, the Company's Annual Report to Stockholders and other filings (collectively "SEC Filings") under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (as well as information communicated orally or in writing between the dates of such SEC Filings) contains or may contain information that is forward looking, including, without limitation, statements regarding the effect of acquisitions, the Company's future financial performance and the effect of government regulations. Actual results may differ materially from those described in the forward looking statements and will be affected by a variety of risks and factors including, without limitation, national and local economic conditions, the general level of interest rates, terms of governmental regulations that affect the Company and interpretations of those regulations, the competitive environment in which the Company operates, financing risks, including the risk that the Company's cash flows from operations may be insufficient to meet required payments of principal and interest, real estate risks, including variations of real estate values and the general economic climate in local markets and competition for tenants in such markets, acquisition and development risks, including failure of such acquisitions to perform in accordance with projections, and possible environmental liabilities, including costs which may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by the Company. In addition, the Company's continued qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code. Readers should carefully review the Company's financial statements and the notes thereto, as well as the risk factors described in the SEC Filings.

The following discussion and analysis of the results of operations and financial condition of the Company should be read in conjunction with the financial statements incorporated by reference in Item 8 of this Annual Report on Form 10-K. The following discussion of results of operations is based on net income calculated under accounting principles generally accepted in the United States. The Company, however, considers funds from operations, less a reserve for capital replacements, to be a more meaningful measure of economic performance.

RESULTS OF OPERATIONS

Comparison of the Year Ended December 31, 1999 to the Year Ended December 31, 1998

NET INCOME

The Company recognized net income of $81.0 million, and net income attributable to common stockholders of $24.1 million, for the year ended December 31, 1999, compared to net income and net income attributable to common stockholders of $64.5 million and $37.9 million, respectively, for the year ended December 31, 1998. Net income attributable to common stockholders represents net income less dividends on preferred stock.

The increase in net income of $16.5 million, or 25.6%, was primarily the result of the following:

- the increase in net "same store" property results;

- the acquisition of 22,459 units in 82 apartment communities during 1998;

- the acquisition of 12,721 units in 28 apartment communities during 1999;

- the acquisition of Ambassador Apartments, Inc. in May 1998 which impacted

the second half of 1998;

- the acquisition of the Insignia Multi-family Business in October 1998

which primarily impacted 1999;

- the completion of the Insignia Properties Trust Merger in February 1999;

- the purchase of $271 million in limited partnership interests from

unaffiliated third parties; and

- an increase in interest income on notes receivable from unconsolidated

real estate partnerships.

The effect of the above on net income was partially offset by the sale of eight properties in 1999 and five properties in 1998. These factors are discussed in more detail in the following paragraphs.

Rental Property Operations

The increases in rental property operations resulted primarily from improved same store sales results, acquisitions of properties in 1998 and 1999, and through the purchase of limited partnership interests from unaffiliated third parties which gave the Company a controlling interest in partnerships owning 125 properties in 1999.

Rental and other property revenues from the Company's owned and controlled properties totaled $533.9 million for the year ended December 31, 1999, compared to $377.1 million for the year ended December 31, 1998, an increase of $156.8 million, or 41.6%.

Property operating expenses totaled $214.7 million for the year ended December 31, 1999, compared to $147.5 million for the year ended December 31, 1998, an increase of $67.2 million, or 45.6%. Property operating expenses consist of on-site payroll costs, utilities (net of reimbursements received from tenants), contract services, turnover costs, repairs and maintenance, advertising and marketing, property taxes and insurance.

Owned property management expenses, representing the costs of managing the Company's owned or controlled properties, totaled $15.4 million for the year ended December 31, 1999, compared to $11.0 million for the year ended December 31, 1998, an increase of $4.4 million, or 40.0%.

Service Company Business

Income from the service company business was $18.0 million for the year ended December 31, 1999, compared to $7.1 million for the year ended December 31, 1998, an increase of $10.9 million or 153.5%. The increase was primarily due to management contracts acquired in the Insignia and IPT mergers that are held by the Company, as well as the transfer of majority-owned management contracts from the unconsolidated management companies to the AIMCO operating partnership. When the Company owns at least a 40% interest in a real estate partnership, the management contract with that real estate partnership is assigned to the AIMCO operating partnership increasing the amount of revenues recognized by the consolidated service company operations.

General and Administrative Expenses

General and administrative expenses totaled $13.1 million for the year ended December 31, 1999, compared to $13.6 million for the year ended December 31, 1998, a decrease of $0.5 million, or 3.7%. The decrease in general and administrative expenses is primarily due to efforts to align expenses with the revenues they help generate. The results of these efforts increased the amount of expenses allocated to both consolidated and unconsolidated service company management expenses.

Interest Expense

Interest expense, which includes the amortization of deferred finance costs, totaled $140.1 million for the year ended December 31, 1999, compared to $89.4 million for the year ended December 31, 1998, an increase of $50.7 million or 56.7%. The increase was primarily due to interest expense incurred in connection with 1999 and 1998 acquisitions, as well as the consolidation of an additional 125 properties when control was obtained.

Interest Income

Interest income totaled $62.7 million for the year ended December 31, 1999, compared to $29.4 million for the year ended December 31, 1998, an increase of $33.3 million or 113.3%. The Company holds investments in notes receivable which were either extended by the Company and are carried at the face amount plus accrued interest ("par value notes") or were made by predecessors whose positions have been acquired by the Company at a discount and are carried at the acquisition amount using the cost recovery

method ("discounted notes"). $32.5 million of the increase in interest income is due to the recognition of interest income that had previously been deferred and portions of the related discounts for certain discounted notes. Based upon closed or pending transactions, market conditions, and improved operations of the obligor, the collectibility of such notes is now believed to be probable and the amounts and timing of collections are estimable. The remaining increase is primarily related to other recurring interest earned on both the par value and discounted notes made by the Company to partnerships in which the Company acts as the general partner and interest earned on notes receivable acquired in the mergers with Insignia and IPT.

Comparison of the Year Ended December 31, 1998 to the Year Ended December 31, 1997

NET INCOME

The Company recognized net income of $64.5 million, and net income attributable to common stockholders of $37.9 million, for the year ended December 31, 1998, compared to net income and net income attributable to common stockholders of $28.6 million and $26.3 million, respectively, for the year ended December 31, 1997. Net income attributable to common stockholders represents net income less dividends on preferred stock.

The increase in net income of $35.9 million, or 125.5%, was primarily the result of the following:

- the increase in net "same store" property results;

- the acquisition of 11,706 units in 44 apartment communities during 1997;

- the acquisition of 22,459 units in 82 apartment communities during 1998;

- the acquisition of NHP Incorporated ("NHP") in December 1997 which

impacted operations in 1998;

- the acquisition of Ambassador Apartments, Inc. in May 1998 which impacted

the second half of 1998;

- the acquisition of the Insignia Multi-family Business in October 1998

which impacted the last quarter of 1998; and

- an increase in interest income on notes receivable from unconsolidated

real estate partnerships.

The effect of the above on net income was partially offset by the sale of five properties in 1998 and five properties in 1997. These factors are discussed in more detail in the following paragraphs.

Rental Property Operations

The increases in rental property operations resulted primarily from improved same store sale results, acquisitions of properties in 1997 and 1998, and acquisitions of controlling interests in properties through the NHP, Ambassador and Insignia mergers.

Rental and other property revenues from the Company's owned and controlled properties totaled $377.1 million for the year ended December 31, 1998, compared to $193.0 million for the year ended December 31, 1997, an increase of $184.1 million, or 95.4%.

Property operating expenses totaled $147.5 million for the year ended December 31, 1998, compared to $76.2 million for the year ended December 31, 1997, an increase of $71.3 million, or 93.6%. Property operating expenses consist of on-site payroll costs, utilities (net of reimbursements received from tenants), contract services, turnover costs, repairs and maintenance, advertising and marketing, property taxes and insurance.

Owned property management expenses, representing the costs of managing the Company's owned or controlled properties, totaled $11.0 million for the year ended December 31, 1998, compared to $6.6 million for the year ended December 31, 1997, an increase of $4.4 million, or 66.7%.

Service Company Business

Income from the service company business was $7.1 million for the year ended December 31, 1998, compared to $3.0 million for the year ended December 31, 1997, an increase of $4.1 million or 136.7%. The increase was primarily due to management contracts acquired in the Insignia merger that are held by the

Company, as well as the transfer of majority-owned management contracts from the management companies to the AIMCO operating partnership. When the Company owns at least a 40% interest in a real estate partnership, the management contract with that real estate partnership is assigned to the AIMCO operating partnership increasing the amount of revenues recognized by the consolidated service company operations.

General and Administrative Expenses

General and administrative expenses totaled $13.6 million for the year ended December 31, 1998, compared to $5.4 million for the year ended December 31, 1997, an increase of $8.2 million, or 151.9%. The increase in general and administrative expenses is primarily due to additional corporate costs and additional employee salaries associated with the purchase of NHP Real Estate Companies in June 1997 and the mergers with NHP Incorporated in December 1997, Ambassador Apartments, Inc. in May 1998 and Insignia Financial Group, Inc. in October 1998. In addition, due to the growth of the Company, several new departments have been added including legal, tax and Limited Partnership administration, as well as increased levels of personnel in the accounting and finance departments.

Interest Expense

Interest expense, which includes the amortization of deferred finance costs, totaled $89.4 million for the year ended December 31, 1998, compared to $51.4 million for the year ended December 31, 1997, an increase of $38.0 million or 73.9%. The increase was primarily due to interest expense incurred in connection with the acquisition of interests in Ambassador Apartments, Inc. and Insignia Financial Group, Inc. and interest expense incurred in connection with 1998 and 1997 acquisitions.

Interest Income

Interest income totaled $29.4 million for the year ended December 31, 1998, compared to $8.7 million for the year ended December 31, 1997. The increase is primarily due to interest earned on the increased average outstanding balances of notes receivable from unconsolidated real estate partnerships and subsidiaries.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1999, the Company had $101.6 million in cash and cash equivalents and $84.6 million of restricted cash, primarily consisting of reserves and impounds held by lenders for capital expenditures, property taxes and insurance. In addition, cash, cash equivalents and restricted cash are held by partnerships and subsidiaries which are not presented on a consolidated basis. The Company's principal demands for liquidity include normal operating activities, payments of principal and interest on outstanding debt, capital improvements, acquisitions of and investments in properties, dividends paid to stockholders and distributions paid to limited partners. The Company considers its cash provided by operating activities to be adequate to meet short-term liquidity demands.

In August 1999, the Company closed a $300 million revolving credit facility arranged by Bank of America, N.A. BankBoston, N.A. and First Union National Bank and comprised of a total of nine lender participants. The obligations under the credit facility are secured by certain non-real estate assets of the Company. The existing lines of credit were terminated. The credit facility is used for general corporate purposes and has a two-year term with two one-year extensions. The annual interest rate under the credit facility is based on either LIBOR or a base rate which is the higher of Bank of America's reference rate or 0.5% over the federal funds rate, plus, in either case, an applicable margin. The margin ranges between 2.05% and 2.55%, in the case of LIBOR-based loans, and between 0.55% and 1.05%, in the case of base rate loans, based upon a fixed charge coverage ratio. The weighted average interest rate at December 31, 1999 was 8.84%. The amount available under the credit facility at December 31, 1999 was $90.8 million.

As of December 31, 1999, 96.8% of the Company's owned or controlled properties and 45.4% of its total assets were encumbered by debt. The Company had total outstanding indebtedness of $2,584.3 million, of which $2,375.1 million was secured by properties. The Company's indebtedness is comprised of $1,954.3 million of secured long-term financing, $420.8 million of secured tax-exempt bond financing and $209.2 in

unsecured short-term financing. As of December 31, 1999, approximately 9% of the Company's indebtedness bears interest at variable rates. General Motors Acceptance Corporation has made 113 loans (the "GMAC Loans") to property owning partnerships of the Company, each of which is secured by the property owned by such partnership. The 113 GMAC Loans had an aggregate outstanding principal balance of $570.1 million as of December 31, 1999. Certain GMAC Loans are cross-collateralized with certain other GMAC Loans. Other than certain GMAC Loans, none of the Company's debt is subject to cross-collateralization provisions. The weighted average interest rate on the Company's secured, long-term notes payable was 6.66% with a weighted average maturity of 12.8 years as of December 31, 1999. At December 31, 1999, the weighted average interest rate on the Company's unsecured short-term financing was 8.84%.

During the year ended December 31, 1999, the Company issued $410.3 million of long-term fixed rate, fully amortizing notes payable with a weighted average interest rate of 7.3%. Each of the notes is individually secured by one of forty properties with no cross-collateralization. The Company used the net proceeds after transaction costs of $373.6 million to repay existing debt. During the year ended December 31, 1999, the Company has also assumed $110.1 million of long-term fixed rate, fully amortizing notes payable with a weighted average interest rate of 7.9% in connection with the acquisition of properties. Each of the notes is individually secured by one of thirteen properties with no cross-collateralization.

The Company expects to meet its long-term liquidity requirements, such as refinancing debt and property acquisitions, through long-term borrowings, both secured and unsecured, the issuance of debt or equity securities (including OP Units) and cash generated from operations. In August 1998, AIMCO and the AIMCO operating partnership filed a shelf registration statement with the Securities and Exchange Commission ("SEC") with respect to an aggregate of $1,268 million of debt and equity securities of AIMCO (of which $268 million was carried forward from AIMCO's 1997 shelf registration statement) and $500 million of debt securities of the AIMCO operating partnership. The registration statement was declared effective by the SEC on December 10, 1998. As of December 31, 1999, the Company had $1,088 million available and the AIMCO operating partnership had $500 million available from this registration statement. The Company expects to finance acquisition of real estate interests with cash from operations or the issuance of equity securities and debt.

CAPITAL EXPENDITURES

For the year ended December 31, 1999, the Company spent a total of $291.7 million for capital expenditures on its portfolio of assets. The Company's share of those expenditures for its conventional assets are as follows: $38.4 million for capital replacements (expenditures for routine maintenance of a property); $54.8 million for Initial Capital Expenditures ("ICE", expenditures at a property that have been identified, at the time the property is acquired, as expenditures to be incurred within one year of the acquisition); and $43.3 million for construction and capital enhancements (amenities that add a material new feature or revenue source at a property). The expenditures for capital replacements in 1999 exceeded the provision of $300 per apartment provided for by the Company by $9.7 million which represents unspent capital replacements and ICE from prior years. These expenditures were funded by net cash provided by operating activities, working capital reserves, and borrowings under the Company's credit facility. ICE and capital enhancements will primarily be funded by cash from operating activities and borrowings under the Company's credit facility.

The Company's accounting treatment of various capital and maintenance costs is detailed in the following table:

DEPRECIABLE LIFE

EXPENDITURE ACCOUNTING TREATMENT IN YEARS

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

Initial capital expenditures........................ capitalize 5 to 15

Capital enhancements................................ capitalize 5 to 30

Capital replacements:

Carpet/vinyl replacement............................ capitalize 5

Carpet cleaning..................................... expense N/A

Major appliance replacement (refrigerators, stoves,

dishwashers, washers/dryers)...................... capitalize 5

Cabinet replacement................................. capitalize 5

Major new landscaping............................... capitalize 5

Seasonal plantings and landscape replacements....... expense N/A

Roof replacements................................... capitalize 15

Roof repairs........................................ expense N/A

Model furniture..................................... capitalize 5

Office equipment.................................... capitalize 5

Exterior painting, significant...................... capitalize 5

Interior painting................................... expense N/A

Parking lot repairs................................. expense N/A

Parking lot repaving................................ capitalize 15

Equipment repairs................................... expense N/A

General policy for capitalization................... capitalize amounts Various

in excess of $ 250

FUNDS FROM OPERATIONS

The Company measures its economic profitability based on funds from operations ("FFO"), less a reserve for capital replacements of $300 per apartment unit. The Company's management believes that FFO, less such a reserve, provides investors with an understanding of the Company's ability to incur and service debt and make capital expenditures. The Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss), computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains and losses from debt restructuring and sales of property, plus real estate related depreciation and amortization (excluding amortization of financing costs), and after adjustments for unconsolidated partnerships and joint ventures. The Company calculates FFO based on the NAREIT definition, as adjusted for minority interest in the AIMCO operating partnership, amortization, the non-cash deferred portion of the income tax provision for unconsolidated subsidiaries and less the payment of dividends on preferred stock. FFO should not be considered an alternative to net income or net cash flows from operating activities, as calculated in accordance with GAAP, as an indication of the Company's performance or as a measure of liquidity. FFO is not necessarily indicative of cash available to fund future cash needs. In addition, there can be no assurance that the Company's basis for computing FFO is comparable with that of other real estate investment trusts.

For the years ended December 31, 1999, 1998 and 1997, the Company's FFO is calculated as follows (amounts in thousands):

1999 1998 1997

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

Income before minority interest in operating

partnership.................................... $ 83,712 $ 69,656 $ 32,697

Extraordinary item............................... -- -- 269

(Gain) loss on disposition of properties......... 1,785 (4,674) (2,720)

Real estate depreciation, net of minority

interests...................................... 121,689 80,369 33,751

Real estate depreciation related to

unconsolidated entities........................ 104,764 34,840 9,864

Amortization..................................... 36,731 26,177 2,535

Deferred taxes................................... 1,763 9,215 4,894

TOPR's interest expense.......................... 4,858 -- --

Preferred stock dividends........................ (32,905) (20,701) (135)

Preferred OP Unit distributions.................. (1,038) (136) --

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

Funds From Operations (FFO)...................... $ 321,359 $ 194,746 $ 81,155

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

Weighted average number of common shares, common

Share equivalents and OP Units outstanding:

Common stock................................... 63,644 45,187 24,055

Common stock equivalents....................... 91 2,437 381

Preferred stock, OP Units, and other securities

convertible into common stock............... 8,625 2,463 1,006

OP Units....................................... 6,313 6,732 3,677

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

78,673 56,819 29,119

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

CASH FLOW INFORMATION:

Cash flow provided by operating activities....... $ 253,257 $ 148,414 $ 73,032

Cash flow used in investing activities........... (281,106) (328,321) (717,663)

Cash flow provided by financing activities....... 58,148 214,124 668,549

CONTRIBUTION TO FREE CASH FLOW

The Company seeks to improve funds from operations, less a reserve for capital replacements, on a per share basis. In this regard, in addition to the year-to-year comparative discussion, the Company has provided disclosure (see Footnote 23 in the accompanying Notes to Consolidated Financial Statements) on the contribution (separated between consolidated and unconsolidated activity) to the Company's free cash flow from several components of the Company and a reconciliation of free cash flow to FFO, less a reserve for capital replacements, and to net income for the year ended December 31, 1999. The Company defines free cash flow as FFO, less a reserve for capital replacements, plus interest expense and preferred stock dividends.

The contributors to the Company's free cash flow of $528 million were real estate -- $421 million (80%), service businesses -- $51 million (10%), recurring interest income -- $32 million (6%) and transactions (fees and recovery of loan discounts) -- $37 million (7%), less general and administrative expenses -- $13 million (3%).

Expenses to arrive at FFO, less a reserve for capital replacements, were interest expense -- $201 million, and preferred stock and preferred OP unit dividends -- $34 million. This results in FFO, less a reserve for capital replacements, of $293 million of which $180 million (62%) is from consolidated activities and $113 million (38%) is from unconsolidated activities.

The real estate free cash flow contribution of $443 million before a $22 million minority interest deduction is concentrated in conventional apartment properties, which comprise $389 million or 88% of the real estate free cash flow contribution. Conventional apartments with rents of $500 per month or higher comprise $332 million or 85% of the real estate free cash flow contribution from conventional units. Conventional apartments with rents of $600 per month or higher comprise $222 million or 57% of the real estate free cash flow contribution from conventional units. Overall, the Company has balanced contributions to conventional real estate free cash flow from monthly rents of less than $500 per unit to monthly rents greater than $800 per unit.

Contributions to conventional real estate free cash flow for 1999 were as follows:

TOTAL CONTR. %

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

Average monthly rent greater than $800 per unit............. $ 78,100 21%

Average monthly rent $700 to $800 per unit.................. 57,627 15%

Average monthly rent $600 to $700 per unit.................. 86,133 22%

Average monthly rent $500 to $600 per unit.................. 110,499 28%

Average monthly rent $500 per unit.......................... 56,385 14%

-------- ---

$388,744 100%

======== ===

The service businesses contributed $51 million (10%) to free cash flow. The service businesses provide management services to properties and partnerships and includes Buyers Access, the nation's largest group purchasing organization serving the apartment industry. Management contracts contribute $47 million (92%) to the service businesses contribution. $36 million (75%) of the management contract contribution is derived from properties the Company controls through economic ownership or its general partner position. $10 million (22%) of the management contract contribution is from long-term management contracts. Less than $1 million is contributed from short-term third party management contracts (30 day cancelable). Buyer's Access contributed $3 million or 6% to the service businesses contribution.

The Company received recurring interest income from par value notes and other receivables and interest bearing accounts of $32 million (50% of total interest income in 1999). In addition, the Company has realized interest income from recoveries of notes receivable that were acquired at a discount to actual face value. As the Company improved property operations, some of these notes have become collectible. In 1999, the Company recognized $32 million (50% of total interest income) in recoveries from notes purchased at a discount.

Fees contributed $5 million (1%) to free cash flow contribution. Fees are earned in partnership sales and financing transactions. The Company considers fees and interest income from notes purchased at a discount as transactional. Together, the transactional contribution was $37 million (7%) of free cash flows contribution.

Footnote 23 in the accompanying Notes to Consolidated Financial Statements provides additional detail on each component of free cash flow. We believe this disclosure is complementary to the previous year-to-year results of operations comparisons.

CONTINGENCIES

Pending Investigations of HUD Management Arrangements

INFLATION

Substantially all of the leases at the Company's apartment properties are for a period of twelve months or less, allowing, at the time of renewal, for adjustments in the rental rate and the opportunity to re-lease the apartment unit at the prevailing market rate. The short term nature of these leases generally serves to

minimize the risk to the Company of the adverse effect of inflation and the Company does not believe that inflation has had a material adverse impact on its revenues.

ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's primary market risk exposure relates to changes in interest rates. The Company is not subject to any foreign currency exchange rate risk or commodity price risk, or any other material market rate or price risks. The Company uses predominantly long-term, fixed-rate and self-amortizing non-recourse mortgage debt in order to avoid the refunding or repricing risks of short-term borrowings. The Company uses short-term debt financing and working capital primarily to fund acquisitions and generally expects to refinance such borrowings with proceeds from operating activities, equity offerings or long-term debt financings.

The Company had $240.9 million of variable rate debt outstanding at December 31, 1999, which represents 9% of the Company's total outstanding debt. Based on this level of debt, an increase in interest rates of 1% would result in the Company's income and cash flows being reduced by $2.4 million on an annual basis. At December 31, 1999, the Company had $2,343.4 million of fixed rate debt outstanding. The partnership debt secured by individual properties in an aggregate amount of $51.8 million, $92.7 million, $66.9 million, $139.7 million and $205.7 million will mature in the years 2000, 2001, 2002, 2003 and 2004, respectively.

The estimated aggregate fair value of the Company's cash and cash equivalents, receivables, payables and short-term unsecured debt as of December 31, 1999 is assumed to approximate their carrying value due to their relatively short terms. Management further believes that the fair market value of the Company's secured tax-exempt bond debt and secured long-term debt approximates their carrying value, based on market comparisons to similar types of debt instruments having similar maturities.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The independent auditor's reports, consolidated financial statements and schedules listed in the accompanying index are filed as part of this report and incorporated herein by this reference. See "Index to Financial Statements" on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information regarding the Company's Directors required by this item is presented under the caption "Board of Directors and Officers" in AIMCO's proxy statement for its 2000 annual meeting of stockholders and is incorporated herein by reference.

The directors and executive officers of the Company as of February 29, 2000 are:

NAME AGE FIRST ELECTED POSITION

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

Terry Considine..... 52 July 1994 Chairman of the Board of Directors and

Chief Executive Officer

Peter K. 55 July 1994 Vice Chairman of the Board of Directors

Kompaniez......... and President

Thomas W. Toomey.... 39 January 1996 Chief Operating Officer

Harry G. Alcock..... 36 July 1996 Executive Vice President and Chief

Investment Officer

Joel F. Bonder...... 51 December 1997 Executive Vice President, General

Counsel and Secretary

Patrick J. Foye..... 43 May 1998 Executive Vice President

Lance J. Graber..... 38 October 1999 Executive Vice President -- Acquisitions

Steven D. Ira....... 49 July 1994 Co-Founder and Executive Vice

President -- Property Operations

Paul J. McAuliffe... 43 February 1999 Executive Vice President and Chief

Financial Officer

Richard S. 68 July 1994 Director, Chairman of the Audit

Ellwood........... Committee

J. Landis Martin.... 54 July 1994 Director, Chairman of the Compensation

Committee

Thomas L. Rhodes.... 60 July 1994 Director

John D. Smith....... 71 November 1994 Director

The following is a biographical summary of the experience of the current directors and executive officers of the Company for the past five years or more.

Terry Considine. Mr. Considine has been Chairman of the Board of Directors and Chief Executive Officer of the Company since July 1994. Mr. Considine serves as Chairman and director of Asset Investors Corporation ("Asset Investors") and Commercial Assets, Inc. ("Commercial Assets"), two other public real estate investment trusts. Mr. Considine has been and remains involved as a principal in a variety of other business activities.

Peter K. Kompaniez. Mr. Kompaniez has been Vice Chairman of the Board of Directors since July 1994 and was appointed President in July 1997. Mr. Kompaniez has also served as Chief Operating Officer of NHP Incorporated ("NHP"), which was acquired by the Company in December 1997. From 1986 to 1993, he served as President and Chief Executive Officer of Heron Financial Corporation ("HFC"), a United States holding company for Heron International, N.V.'s real estate and related assets. While at HFC, Mr. Kompaniez administered the acquisition, development and disposition of approximately 8,150 apartment units (including 6,217 units that have been acquired by the Company) and 3.1 million square feet of commercial real estate.

Thomas W. Toomey. Mr. Toomey served as Senior Vice President-Finance and Administration of the Company from January 1996 to March 1997, when he was promoted to Executive Vice President-Finance and Administration. Mr. Toomey served as Executive Vice President -- Finance and Administration until December 1999, when he was appointed Chief Operating Officer. From 1990 until 1995, Mr. Toomey served in a similar capacity with Lincoln Property Company ("LPC") as Vice President/Senior Controller and

Director of Administrative Services of Lincoln Property Services where he was responsible for LPC's computer systems, accounting, tax, treasury services and benefits administration. From 1984 to 1990, he was an audit manager with Arthur Andersen & Co. where he served real estate and banking clients. Mr. Toomey received a B.S. in Business Administration/Finance from Oregon State University.

Harry G. Alcock. Mr. Alcock served as a Vice President of the Company from July 1996 to October 1997, when he was promoted to Senior Vice President-Acquisitions. Mr. Alcock served as Senior Vice President-Acquisitions until October 1999, when he was promoted to Executive Vice President and Chief Investment Officer. Mr. Alcock has had responsibility for acquisition and financing activities of the Company since July 1994. From June 1992 until July 1994, Mr. Alcock served as Senior Financial Analyst for PDI and HFC. From 1988 to 1992, Mr. Alcock worked for Larwin Development Corp., a Los Angeles-based real estate developer, with responsibility for raising debt and joint venture equity to fund land acquisitions and development. From 1987 to 1988, Mr. Alcock worked for Ford Aerospace Corp. He received his B.S. from San Jose State University.

Joel F. Bonder. Mr. Bonder was appointed Executive Vice President, General Counsel and Secretary of the Company effective December 1997. Prior to joining the Company, Mr. Bonder served as Senior Vice President and General Counsel of NHP from April 1994 until December 1997. Mr. Bonder served as Vice President and Deputy General Counsel of NHP from June 1991 to March 1994 and as Associate General Counsel of NHP Incorporated from 1986 to 1991. From 1983 to 1985, Mr. Bonder practiced with the Washington, D.C. law firm of Lane & Edson, P.C. and from 1979 to 1983 practiced with the Chicago law firm of Ross and Hardies. Mr. Bonder received a B.A. from the University of Rochester and a J.D. from Washington University School of Law.

Patrick J. Foye. Mr. Foye was appointed Executive Vice President of the Company in May 1998. He is responsible for acquisitions of partnership securities, consolidation of minority interests, and corporate and other acquisitions. Prior to joining the Company, Mr. Foye was a Merger and Acquisitions Partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to 1998 and was Managing Partner of the firm's Brussels, Budapest and Moscow offices from 1992 through 1994. Mr. Foye is also Deputy Chairman of the Long Island Power Authority and serves as a member of the New York State Privatization Council. He received a B.A. from Fordham College and a J.D. from Fordham Law School and was Associate Editor of the Fordham Law Review.

Lance J. Graber. Mr. Graber was appointed Executive Vice President-Acquisitions of the Company in October 1999. His principal business function is acquisitions. Prior to joining the Company, Mr. Graber was an Associate from 1991 through 1992 and then a Vice President from 1992 through 1994 at Credit Suisse First Boston engaged in real estate financial advisory services and principal investing. He was a Director there from 1994 to May 1999, during which time he supervised a staff of seven in the making of principal investments in hotel, multi-family and assisted living properties. Mr. Graber received a B.S. and an M.B.A. from the Wharton School of the University of Pennsylvania.

Steven D. Ira. Mr. Ira is a Co-Founder of the Company and has served as Executive Vice President -- Property Operations of the Company since July 1994. From 1987 until July 1994, he served as President of Property Asset Management ("PAM"). Prior to merging his firm with PAM in 1987, Mr. Ira acquired extensive experience in property management. Between 1977 and 1981 he supervised the property management of over 3,000 apartment and mobile home units in Colorado, Michigan, Pennsylvania and Florida, and in 1981 he joined with others to form the property management firm of McDermott, Stein and Ira. Mr. Ira served for several years on the National Apartment Manager Accreditation Board and is a former president of both the National Apartment Association and the Colorado Apartment Association. Mr. Ira is the sixth individual elected to the Hall of Fame of the National Apartment Association in its 54-year history. He holds a Certified Apartment Property Supervisor (CAPS) and a Certified Apartment Manager designation from the National Apartment Association, a Certified Property Manager (CPM) designation from the National Institute of Real Estate Management (IREM) and he is a member of the Boards of Directors of the National Multi-Housing Council, the National Apartment Association and the Apartment Association of Greater Orlando. Mr. Ira received a B.S. from Metropolitan State College in 1975.

Paul J. McAuliffe. Mr. McAuliffe has been Executive Vice President of the Company since February 1999 and was appointed Chief Financial Officer in October 1999. Prior to joining the Company, Mr. McAuliffe was Senior Managing Director of Secured Capital Corp and prior to that time had been a Managing Director of Smith Barney, Inc. from 1993 to 1996, where he was senior member of the underwriting team that lead AIMCO's initial public offering in 1994. Mr. McAuliffe was also a Managing Director and head of the real estate group at CS First Boston from 1990 to 1993 and he was a Principal in the real estate group at Morgan Stanley & Co., Inc. where he worked from 1983 to 1990. Mr. McAuliffe received a B.A. from Columbia College and an M.B.A. from University of Virginia, Darden School.

Richard S. Ellwood. Mr. Ellwood was appointed a director of the Company in July 1994. Mr. Ellwood is currently Chairman of the Audit Committee and a member of the Compensation Committee. Mr. Ellwood is the founder and President of R.S. Ellwood & Co., Incorporated, a real estate investment banking firm. Prior to forming R.S. Ellwood & Co., Incorporated in 1987, Mr. Ellwood had 31 years experience on Wall Street as an investment banker, serving as: Managing Director and senior banker at Merrill Lynch Capital Markets from 1984 to 1987; Managing Director at Warburg Paribas Becker from 1978 to 1984; general partner and then Senior Vice President and a director at White, Weld & Co. from 1968 to 1978; and in various capacities at J.P. Morgan & Co. from 1955 to 1968. Mr. Ellwood currently serves as a director of Felcor Lodging Trust, Incorporated and Florida East Coast Industries, Inc.

J. Landis Martin. Mr. Martin was appointed a director of the Company in July 1994 and became Chairman of the Compensation Committee on March 19, 1998. Mr. Martin is a member of the Audit Committee. Mr. Martin has served as President and Chief Executive Officer of NL Industries, Inc., a manufacturer of titanium dioxide since 1987. Mr. Martin has served as Chairman of Tremont Corporation ("Tremont"), a holding company operating through its affiliates Titanium Metals Corporation ("TIMET") and NL Industries, Inc. ("NL"), since 1990 and as Chief Executive Officer and a director of Tremont since 1988. Mr. Martin has served as Chairman of TIMET, an integrated producer of titanium since 1987 and Chief Executive Officer since January, 1995. From 1990 until its acquisition by a predecessor of Halliburton Company ("Halliburton") in 1994, Mr. Martin served as Chairman of the Board and Chief Executive Officer of Baroid Corporation, an oilfield services company. In addition to Tremont, NL and TIMET, Mr. Martin is a director of Halliburton, which is engaged in the petroleum services, hydrocarbon and engineering industries, and Crown Castle International Corporation, a telecommunications company.

Thomas L. Rhodes. Mr. Rhodes was appointed a Director of the Company in July 1994 and is currently a member of the Audit and Compensation Committees. Mr. Rhodes has served as the President and Director of National Review magazine since November 1992, where he has also served as a Director since 1988. From 1976 to 1992, he held various positions at Goldman, Sachs & Co. and was elected a General Partner in 1986 and served as a General Partner from 1987 until November 1992. He is currently Co-Chairman of the Board, Co-Chief Executive Officer and a Director of Asset Investors and Commercial Assets. He also serves as a Director of Delphi Financial Group and its subsidiaries, Delphi International Ltd., Oracle Reinsurance Company and The Lynde and Harry Bradley Foundation.

John D. Smith. Mr. Smith was appointed a director of the Company in November 1994. Mr. Smith is a member of the Compensation Committee and the Audit Committee. Mr. Smith is Principal and President of John D. Smith Developments. Mr. Smith has been a shopping center developer, owner and consultant for over 8.6 million square feet of shopping center projects including Lenox Square in Atlanta, Georgia. Mr. Smith is a Trustee and former President of the International Council of Shopping Centers and was selected to be a member of the American Society of Real Estate Counselors. Mr. Smith served as a director for Pan-American Properties, Inc. (National Coal Board of Great Britain) formerly known as Continental Illinois Properties. He also serves as a director of American Fidelity Assurance Companies and is retained as an advisor by Shop System Study Society, Tokyo, Japan.

Additional information required by this item is presented under the caption "Other Matters -- Section 16(a) Compliance" in the Company's proxy statement for its 2000 annual meeting of stockholders and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is presented under the captions "Summary Compensation Table," "Option/SAR Grants in Last Fiscal Year" and "Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-end Options/SAR Values" in AIMCO's proxy statement for its 2000 annual meeting of stockholders and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item is presented under the caption "Security Ownership of Certain Beneficial Owners and Management" in AIMCO's proxy statement for its 2000 annual meeting of stockholders and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is presented under the caption "Certain Relationships and Transactions" in AIMCO's proxy statement for its 2000 annual meeting of stockholders and is incorporated herein by reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K

(a) (1) The financial statements listed in the Index to Financial Statements on Page F-1 of this report are filed as part of this report and incorporated herein by reference.

(a) (2) The financial statement schedule listed in the Index to Financial Statements on Page F-1 of this report is filed as part of this report and incorporated herein by reference.

(a) (3) The Exhibit Index is included on page 23 of this report and incorporated herein by reference.

(b) Reports on Form 8-K for the quarter ended December 31, 1999:

None.

INDEX TO EXHIBITS

EXHIBIT NO. DESCRIPTION

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

2.1 -- Second Amended and Restated Agreement and Plan of Merger,

dated as of January 22, 1999, by and between Apartment

Investment and Management Company and Insignia Properties

Trust (Exhibit 2.2 to the Current Report on Form 8-K of

Insignia Properties Trust, dated February 11, 1999, is

incorporated herein by this reference)

2.2 -- Amended and Restated Agreement and Plan of Merger, dated

as of May 26, 1998, by and among Apartment Investment

Management Company, AIMCO Properties, L.P., Insignia

Financial Group, Inc., and Insignia/ESG Holdings, Inc.

(Exhibit 2.1 to AIMCO's Registration Statement on Form

S-4, filed August 5, 1998, is incorporated herein by this

reference)

3.1 -- Charter

3.2 -- Bylaws

4.1 -- Amended and Restated Declaration of Trust of IFT

Financing I (formerly Insignia Financing I), dated as of

November 1, 1996, among Insignia Financial Group, Inc. as

Sponsor, First Union National Bank of South Carolina as

Property Trustee, First Union Bank of Delaware, as

Delaware Trustee and Andrew I. Farkas, John K. Lines and

Ronald Uretta as Regular Trustees (Exhibit 4.2 to Form

S-3 of Insignia Financial Group, Inc. dated December 10,

1996, is incorporated herein by this reference)

4.2 -- Indenture for the 6.5% Convertible Subordinated

Debentures, dated as of November 1, 1996, between

Insignia Financial Group, Inc., as Issuer and First Union

National Bank of South Carolina, as Trustee (Exhibit 4.2

to Form S-3 of Insignia Financial Group, Inc., dated

December 10, 1996, is incorporated herein by this

reference)

4.3 -- First Supplemental Indenture, dated as of October 1,

1998, by and among Apartment Investment and Management

Company, Insignia Financial Group, Inc., and First Union

National Bank (formerly First Union National Bank of

South Carolina, as Trustee) (Exhibit 4.3 to AIMCO's

Annual Report on Form 10-K for the fiscal year 1998, is

incorporated herein by this reference)

10.1 -- Third Amended and Restated Agreement of Limited

Partnership of AIMCO Properties, L.P., dated as of July

29, 1994 as amended and restated as of October 1, 1998

(Exhibit 10.8 to AIMCO's Quarterly Report on Form 10-Q

for the quarterly period ending September 30, 1998, is

incorporated herein by this reference)

EXHIBIT NO. DESCRIPTION

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

10.2 -- First Amendment to the Third Amended and Restated

Agreement of Limited Partnership of AIMCO Properties,

L.P., dated as of November 6, 1998 (Exhibit 10.9 to

AIMCO's Quarterly Report on Form 10-Q for the quarterly

period ending September 30, 1998, is incorporated herein

by this reference)

10.3 -- Second Amendment to the Third Amended and Restated

Agreement of Limited Partnership of AIMCO Properties,

L.P., dated as of December 30, 1998 (Exhibit 10.1 to

Amendment No. 1 to AIMCO's Current Report on Form 8-K/A,

filed February 11, 1999, is incorporated herein by this

reference)

10.4 -- Third Amendment to Third Amended and Restated Agreement

of Limited Partnership of AIMCO Properties, L.P., dated

as of February 18, 1999 (Exhibit 10.12 to AIMCO's Annual

Report on Form 10-K for the fiscal year 1998, is

incorporated herein by this reference)

10.5 -- Fourth Amendment to the Third Amended and Restated

Agreement of Limited Partnership of AIMCO Properties,

L.P., dated as of March 25, 1999 (Exhibit 10.2 to AIMCO's

Quarterly Report on Form 10-Q for the quarterly period

ending March 31, 1999, is incorporated herein by this

reference)

10.6 -- Fifth Amendment to the Third Amended and Restated

Agreement of Limited Partnership of AIMCO Properties,

L.P., dated as of March 26, 1999 (Exhibit 10.3 to AIMCO's

Quarterly Report on Form 10-Q for the quarterly period

ending March 31, 1999, is incorporated herein by this

reference)

10.7 -- Sixth Amendment to the Third Amended and Restated

Agreement of Limited Partnership of AIMCO Properties,

L.P., dated as of March 26, 1999 (Exhibit 10.1 to AIMCO's

Quarterly Report on Form 10-Q for the quarterly period

ending June 30, 1999, is incorporated herein by this

reference)

10.8 -- Seventh Amendment to the Third Amended and Restated

Agreement of Limited Partnership of AIMCO Properties,

L.P., dated as of September 27, 1999 (Exhibit 10.1 to

AIMCO's Quarterly Report on Form 10-Q for the quarterly

period ending September 30, 1999, is incorporated herein

by this reference)

10.9 -- Eighth Amendment to the Third Amended and Restated

Agreement of Limited Partnership of AIMCO Properties,

L.P., dated as of December 14, 1999

10.10 -- Ninth Amendment to the Third Amended and Restated

Agreement of Limited Partnership of AIMCO Properties,

L.P., dated as of December 21, 1999

10.11 -- Tenth Amendment to the Third Amended and Restated

Agreement of Limited Partnership of AIMCO Properties,

L.P., dated as of December 21, 1999

10.12 -- Eleventh Amendment to the Third Amended and Restated

Agreement of Limited Partnership of AIMCO Properties,

L.P., dated as of January 13, 2000

10.13 -- Shareholders Agreement, dated October 1, 1998, by and

among Apartment Investment and Management Company, Andrew

L. Farkas, James A. Aston and Frank M. Garrison (Exhibit

10.4 to AIMCO's Schedule 13D filed on October 15, 1998,

is incorporated herein by this reference)

10.14 -- Common Stock Purchase Agreement made as of August 26,

1997, by and between Apartment Investment and Management

Company and ABKB/LaSalle Securities Limited Partnership

(Exhibit 99.1 to AIMCO's Current Report on Form 8-K,

dated August 26, 1997, is incorporated herein by this

reference)

10.15 -- Amended and Restated Assignment and Assumption Agreement,

dated as of December 7, 1998, by and among Insignia

Properties, L.P. and AIMCO Properties, L.P. (Exhibit 10.1

to the Current Report on Form 8-K of Insignia Properties

Trust, dated February 11, 1999, is incorporated herein by

this reference)

EXHIBIT NO. DESCRIPTION

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

10.16 -- Amended and Restated Indemnification Agreement, dated as

of May 26, 1998, by and between Apartment Investment and

Management Company and Insignia/ESG Holdings, Inc.

(Exhibit 2.2 to AIMCO's Registration Statement on Form

S-4, filed August 5, 1998, is incorporated herein by this

reference)

10.17 -- Credit Agreement (Secured Revolving Credit Facility),

dated as of August 16, 1999, among AIMCO Properties,

L.P., Bank of America, BankBoston, N.A., and First Union

National Bank (Exhibit 10.1 to the Current Report on Form

8-K of Apartment Investment and Management Company, dated

as of August 16, 1999, is incorporated herein by this

reference)

10.18 -- Borrower Pledge Agreement, dated August 16, 1999 between

AIMCO Properties, L.P. and Bank of America (Exhibit 10.2

to the Current Report on Form 8-K of Apartment Investment

and Management Company, dated August 16, 1999 is

incorporated herein by this reference)

10.19 -- Form of Committed Loan Note, issued by AIMCO Properties,

L.P. to Bank of America, BankBoston, N.A., and First

Union National Bank (Exhibit 10.3 to the Current Report

on Form 8-K of Apartment Investment and Management

Company, dated August 16, 1999, is incorporated herein by

this reference)

10.20 -- Form of Swing Line Note, issued by AIMCO Properties, L.P.

to Bank of America, BankBoston, N.A., and First Union

National Bank (Exhibit 10.4 to the Current Report on Form

8-K of Apartment Investment and Management Company, dated

August 16, 1999, is incorporated herein by this

reference)

10.21 -- Form of Payment Guaranty, by Apartment Investment and

Management Company, AIMCO/NHP Holdings, Inc., NHP A&R

Services, Inc., and NHP Management Company (Exhibit 10.5

to the Current Report on Form 8-K of Apartment Investment

and Management Company, dated August 16, 1999, is

incorporated herein by this reference)

10.22 -- Employment Contract, executed on July 29, 1994, by and

between AIMCO Properties, L.P., and Peter Kompaniez

(Exhibit 10.44A to AIMCO's Annual Report on Form 10-K for

the fiscal year 1994, is incorporated herein by this

reference)*

10.23 -- Employment Contract executed on July 29, 1994 by and

between AIMCO Properties, L.P. and Terry Considine

(Exhibit 10.44C to AIMCO's Annual Report on Form 10-K for

the fiscal year 1994, is incorporated herein by this

reference)*

10.24 -- Employment Contract executed on July 29, 1994 by and

between AIMCO Properties, L.P. and Steven D. Ira (Exhibit

10.44D to AIMCO's Annual Report on Form 10-K for fiscal

year 1994, is incorporated herein by this reference)*

10.25 -- Apartment Investment and Management Company 1998

Incentive Compensation Plan (Annex B to AIMCO's Proxy

Statement for Annual Meeting of Stockholders to be held

on May 8, 1998, is incorporated herein by this

reference)*

10.26 -- Apartment Investment and Management Company 1997 Stock

Award and Incentive Plan (October 1999)*

10.27 -- Form of Restricted Stock Agreement (1997 Stock Award and

Incentive Plan) (Exhibit 10.11 to AIMCO's Quarterly

Report on Form 10-Q for the quarterly period ending

September 30, 1997, is incorporated herein by this

reference)*

10.28 -- Form of Incentive Stock Option Agreement (1997 Stock

Award and Incentive Plan) (Exhibit 10.42 to AIMCO's

Annual Report on Form 10-K for the fiscal year 1998, is

incorporated herein by this reference)*

EXHIBIT NO. DESCRIPTION

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

10.29 -- Apartment Investment and Management Company Non-Qualified

Employee Stock Option Plan, adopted August 29, 1996

(Exhibit 10.8 to AIMCO's Quarterly Report on Form 10-Q

for the quarterly period ending September 30, 1996, is

incorporated herein by this reference)*

10.30 -- Amended and Restated Apartment Investment and Management

Company Non-Qualified Employee Stock Option Plan (Annex B

to AIMCO's Proxy Statement for the Annual Meeting of

Stockholders to be held on April 24, 1997, is

incorporated herein by this reference)*

10.31 -- The 1994 Stock Incentive Plan for Officers, Directors and

Key Employees of Ambassador Apartments, Inc., Ambassador

Apartments, L.P., and Subsidiaries (Exhibit 10.40 to

Ambassador Apartments, Inc. Annual Report on Form 10-K

for the fiscal year 1997, is incorporated herein by this

reference)*

10.32 -- Amendment to the 1994 Stock Incentive Plan for Officers,

Directors and Key Employees of Ambassador Apartments,

Inc., Ambassador Apartments, L.P. and Subsidiaries

(Exhibit 10.41 to Ambassador Apartments, Inc. Annual

Report on Form 10-K for the fiscal year 1997, is

incorporated herein by this reference)*

10.33 -- The 1996 Stock Incentive Plan for Officers, Directors and

Key Employees of Ambassador Apartments, Inc., Ambassador

Apartments, L.P., and Subsidiaries, as amended March 20,

1997 (Exhibit 10.42 to Ambassador Apartments, Inc. Annual

Report on Form 10-K for the fiscal year 1997, is

incorporated herein by this reference)*

10.34 -- Insignia 1992 Stock Incentive Plan, as amended through

March 28, 1994 and November 13, 1995 (Exhibit 10.1 to

Insignia Financial Group, Inc. Annual Report on Form 10-K

for the fiscal year 1997, is incorporated herein by this

reference)*

10.35 -- NHP Incorporated 1990 Stock Option Plan (Exhibit 10.9 to

NHP Incorporated Annual Report on Form 10-K for the

fiscal year 1995, is incorporated herein by this

reference)*

10.36 -- NHP Incorporated 1995 Incentive Stock Option Plan

(Exhibit 10.10 to NHP Incorporated Annual Report on Form

10-K for the fiscal year 1995, is incorporated herein by

this reference)*

10.37 -- Summary of Agreement for Sale of Stock to Executive

Officers (Exhibit 10.104 to AIMCO's Annual Report on Form

10-K for the fiscal year 1996, is incorporated herein by

this reference)*

21.1 -- List of Subsidiaries

23.1 -- Consent of Ernst & Young LLP

27.1 -- Financial Data Schedule

99.1 -- Agreement re: disclosure of long-term debt instruments

(1) Schedule and supplemental materials to the exhibits have been omitted but

will be provided to the Securities and Exchange Commission upon request.

* Management contract

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 13th day of March, 2000.

APARTMENT INVESTMENT AND

MANAGEMENT COMPANY

/s/ TERRY CONSIDINE

Terry Considine

Chairman of the Board

And Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

SIGNATURE TITLE DATE

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

/s/ TERRY CONSIDINE Chairman of the Board and March 13, 2000

----------------------------------------------------- Chief Executive Officer

Terry Considine

/s/ PETER K. KOMPANIEZ Vice Chairman, President and March 13, 2000

----------------------------------------------------- Director

Peter K. Kompaniez

/s/ THOMAS W. TOOMEY Chief Operating Officer March 13, 2000

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

Thomas W. Toomey

/s/ PATRICK FOYE Executive Vice President March 13, 2000

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

Patrick Foye

/s/ PAUL MCAULIFFE Executive Vice President and March 13, 2000

----------------------------------------------------- Chief Financial Officer

Paul McAuliffe

/s/ RICHARD S. ELLWOOD Director March 13, 2000

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

Richard S. Ellwood

/s/ J. LANDIS MARTIN Director March 13, 2000

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

J. Landis Martin

/s/ THOMAS L. RHODES Director March 13, 2000

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

Thomas L. Rhodes

/s/ JOHN D. SMITH Director March 13, 2000

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

John D. Smith

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

INDEX TO FINANCIAL STATEMENTS

PAGE

----

FINANCIAL STATEMENTS:

Report of Independent Auditors............................ F-2

Consolidated Balance Sheets as of December 31, 1999 and

1998................................................... F-3

Consolidated Statements of Income for the Years Ended

December 31, 1999, 1998 and 1997....................... F-4

Consolidated Statements of Stockholders' Equity for the

Years Ended December 31, 1999, 1998 and 1997........... F-5

Consolidated Statements of Cash Flows for the Years Ended

December 31, 1999, 1998

and 1997............................................... F-6

Notes to Consolidated Financial Statements................ F-8

FINANCIAL STATEMENT SCHEDULE:

Schedule III -- Real Estate and Accumulated

Depreciation........................................... F-32

All other schedules are omitted because they are not

applicable or the required information is shown in the

financial statements or notes thereto

F-1

REPORT OF INDEPENDENT AUDITORS

Stockholders and Board of Directors

Apartment Investment and Management Company

We have audited the accompanying consolidated balance sheets of Apartment Investment and Management Company as of December 31, 1999 and 1998, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1999. Our audits also included the financial statement schedule listed in the Index at Item 14(a)(2). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Apartment Investment and Management Company at December 31, 1999 and 1998, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 1999 in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects the information set forth therein.

/s/ ERNST & YOUNG LLP

Denver, Colorado

January 20, 2000

F-2

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 1999 AND 1998

(IN THOUSANDS, EXCEPT SHARE DATA)

ASSETS

1999 1998

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

Real estate, net of accumulated depreciation of $416,497 and

$228,880.................................................. $4,092,038 $2,573,718

Property held for sale...................................... 4,162 27,304

Investments in unconsolidated real estate partnerships...... 891,449 945,035

Investments in unconsolidated subsidiaries.................. 44,921 62,244

Notes receivable from unconsolidated real estate

partnerships.............................................. 142,828 103,979

Notes receivable from unconsolidated subsidiaries........... 88,754 116,688

Cash and cash equivalents................................... 101,604 71,305

Restricted cash............................................. 84,595 55,826

Other assets................................................ 234,600 292,701

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

$5,684,951 $4,248,800

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

LIABILITIES AND STOCKHOLDERS' EQUITY

Secured notes payable....................................... $1,954,259 $ 843,791

Secured tax-exempt bond financing........................... 420,830 398,602

Unsecured short-term financing.............................. 209,200 310,300

Secured short-term financing................................ -- 108,022

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

Total indebtedness................................ 2,584,289 1,660,715

Accounts payable, accrued and other liabilities............. 271,627 188,815

Resident security deposits and prepaid rents................ 22,793 12,654

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

Total liabilities................................. 2,878,709 1,862,184

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

Commitments and contingencies............................... -- --

Company-obligated mandatorily redeemable convertible

preferred securities of a subsidiary trust................ 149,500 149,500

Minority interest in other entities......................... 168,533 185,705

Minority interest in operating partnership.................. 225,381 148,847

Stockholders' equity

Preferred Stock........................................... 641,250 792,468

Class A Common Stock, $.01 par value, 474,121,284 shares

and 484,027,500 shares authorized, 66,802,886 and

48,451,388 shares issued and outstanding,

respectively........................................... 668 485

Additional paid-in capital................................ 1,885,424 1,246,962

Notes receivable on common stock purchases................ (51,619) (49,658)

Distributions in excess of earnings....................... (212,895) (87,693)

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

Total stockholders' equity........................ 2,262,828 1,902,564

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

$5,684,951 $4,248,800

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

See accompanying notes to consolidated financial statements.

F-3

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

(IN THOUSANDS, EXCEPT PER SHARE DATA)

1999 1998 1997

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

RENTAL PROPERTY OPERATIONS

Rental and other property revenues......................... $ 533,917 $ 377,139 $193,006

Property operating expenses................................ (214,693) (147,541) (76,168)

Owned property management expense.......................... (15,429) (11,013) (6,620)

Depreciation............................................... (131,753) (84,635) (37,741)

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

Income from property operations............................ 172,042 133,950 72,477

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

SERVICE COMPANY BUSINESS

Management fees and other income........................... 43,455 24,103 13,937

Management and other expenses.............................. (25,470) (16,960) (10,961)

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

Income from service company business....................... 17,985 7,143 2,976

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

General and administrative expenses........................ (13,112) (13,568) (5,396)

Interest expense........................................... (140,094) (89,424) (51,385)

Interest income............................................ 62,721 29,368 8,676

Equity in losses of unconsolidated real estate

partnerships............................................. (4,467) (4,854) (1,798)

Equity in earnings (losses) of unconsolidated

subsidiaries............................................. (2,818) 11,570 4,636

Minority interest in other entities........................ (900) (468) 1,008

Amortization............................................... (5,860) (8,735) (948)

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

Income from operations..................................... 85,497 64,982 30,246

Gain (loss) on disposition of properties................... (1,785) 4,674 2,720

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

Income before extraordinary item and minority interest in

operating partnership.................................... 83,712 69,656 32,966

Extraordinary item -- early extinguishment of debt......... -- -- (269)

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

Income before minority interest in operating partnership... 83,712 69,656 32,697

Minority interest in operating partnership................. (2,753) (5,182) (4,064)

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

Net income................................................. 80,959 64,474 28,633

Net income attributable to preferred stockholders.......... 56,885 26,533 2,315

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

Net income attributable to common stockholders............. $ 24,074 $ 37,941 $ 26,318

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

Comprehensive Income

Net income................................................. $ 80,959 $ 64,474 $ 28,633

Other comprehensive income:

Net unrealized gains on investment in securities......... -- -- (1,683)

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

Comprehensive income....................................... $ 80,959 $ 64,474 $ 26,950

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

Basic earnings per common share............................ $ 0.39 $ 0.84 $ 1.09

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

Diluted earnings per common share.......................... $ 0.38 $ 0.80 $ 1.08

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

Weighted average common shares outstanding................. 62,242 45,187 24,055

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

Weighted average common shares and common share equivalents

outstanding.............................................. 63,446 47,624 24,436

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

Dividends paid per common share............................ $ 2.50 $ 2.25 $ 1.85

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

See accompanying notes to consolidated financial statements.

F-4

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

(IN THOUSANDS)

CLASS A CLASS B

PREFERRED STOCK COMMON STOCK COMMON STOCK NOTES

------------------ --------------- --------------- ADDITIONAL RECEIVABLE

SHARES SHARES SHARES PAID-IN FROM

ISSUED AMOUNT ISSUED AMOUNT ISSUED AMOUNT CAPITAL OFFICERS

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

BALANCE DECEMBER 31, 1996................. -- $ -- 14,980 $150 325 $ 3 $ 236,791 $ (7,140)

Net proceeds from issuance of Class A

Common Stock............................. -- -- 16,367 164 -- -- 509,950 --

Net proceeds from issuance of Preferred

Stock.................................... 750 75,000 -- -- -- -- -- --

Net proceeds from issuance of Class C

Preferred Stock.......................... 2,400 60,000 -- -- -- -- (1,890) --

Repurchase of Class A Common Stock from

officer.................................. -- -- -- -- -- -- (67) 67

Conversion of Class B Common Stock to

Class A Common Stock..................... -- -- 163 1 (163) (1) -- --

Conversion of operating partnership units

to Class A Common Stock.................. -- -- 562 6 -- -- 8,615 --

Purchase of stock by officers............. -- -- 1,149 11 -- -- 34,704 (33,517)

Repayment of notes receivable from

officers................................. -- -- -- -- -- -- -- 14,540

Stock options and warrants exercised...... -- -- 458 4 -- -- 8,714 (9,045)

Class A Common Stock issued as

consideration for NHP common stock....... -- -- 6,760 67 -- -- 180,784 --

Net income................................ -- -- -- -- -- -- -- --

Dividends paid -- Class A Common Stock.... -- -- -- -- -- -- -- --

Dividends paid -- Preferred Stock......... -- -- -- -- -- -- -- --

Unrealized loss on investments............ -- -- -- -- -- -- -- --

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

BALANCE DECEMBER 31, 1997................. 3,150 135,000 40,439 403 162 2 977,601 (35,095)

Net proceeds from issuances of Preferred

Stock.................................... 11,250 356,250 -- -- -- -- (15,353) --

Repurchase of Class A Common Stock........ -- -- (303) (3) -- -- (11,064) --

Conversion of Class B Common Stock to

Class A Common Stock..................... -- -- 162 2 (162) (2) -- --

Conversion of operating partnership units

to Class A Common Stock.................. -- -- 275 3 -- -- 5,792 --

Purchase of stock by officers and awards

of restricted stock...................... -- -- 640 7 -- -- 23,619 (23,471)

Repayment of notes receivable from

officers................................. -- -- -- -- -- -- -- 8,908

Stock options and warrants exercised...... -- -- 658 7 -- -- 11,008 --

Class A Common Stock issued as

consideration for Ambassador common

stock.................................... -- -- 6,580 66 -- -- 251,209 --

Class E Preferred Stock issued as

consideration for Insignia common

stock.................................... 8,424 301,218 -- -- -- -- -- --

Issuance of warrants to purchase Class A

Common Stock............................. -- -- -- -- -- -- 4,150 --

Net income................................ -- -- -- -- -- -- -- --

Dividends paid -- Class A Common Stock.... -- -- -- -- -- -- -- --

Dividends paid -- Preferred Stock......... -- -- -- -- -- -- -- --

Unrealized gain (loss) on investments..... -- -- -- -- -- -- -- --

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

BALANCE DECEMBER 31, 1998................. 22,824 792,468 48,451 485 -- -- 1,246,962 (49,658)

Net proceeds from issuances of Preferred

Stock.................................... 10,000 250,000 -- -- -- -- (16,899) --

Repurchase of Class A Common Stock........ -- -- (205) (2) -- -- (8,036) --

Conversion of operating partnership units

to Class A Common Stock.................. -- -- 964 10 -- -- 13,756 --

Conversion of Preferred Stock to Class A

Common Stock............................. (9,424) (401,218) 10,924 109 -- -- 401,109 --

Purchase of stock by officers and awards

of restricted stock...................... -- -- 240 2 -- -- 8,824 (8,202)

Repayment of notes receivable from

officers................................. -- -- -- -- -- -- -- 6,241

Stock options and warrants exercised...... -- -- 129 1 -- -- 3,201 --

Class A Common Stock issued as

consideration for Insignia Property Trust

merger................................... -- -- 4,044 40 -- -- 158,753 --

Class A Common Stock issued as

consideration for First Union

Acquisition.............................. -- -- 530 5 -- -- 21,135 --

Class A Common Stock Offering............. -- -- 1,383 14 -- -- 54,598 --

Warrants exercised........................ -- -- 343 4 -- -- 2,021 --

Net income................................ -- -- -- -- -- -- -- --

Dividends paid -- Class A Common Stock.... -- -- -- -- -- -- -- --

Dividends paid -- Preferred Stock......... -- -- -- -- -- -- -- --

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

BALANCE DECEMBER 31, 1999................. 23,400 $ 641,250 66,803 $668 -- $-- $1,885,424 $(51,619)

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

UNREALIZED

DISTRIBUTIONS GAIN

IN EXCESS (LOSS) ON

OF EARNINGS INVESTMENTS TOTAL

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

BALANCE DECEMBER 31, 1996................. $ (14,055) $ -- $ 215,749

Net proceeds from issuance of Class A

Common Stock............................. -- -- 510,114

Net proceeds from issuance of Preferred

Stock.................................... -- -- 75,000

Net proceeds from issuance of Class C

Preferred Stock.......................... -- -- 58,110

Repurchase of Class A Common Stock from

officer.................................. -- -- --

Conversion of Class B Common Stock to

Class A Common Stock..................... -- -- --

Conversion of operating partnership units

to Class A Common Stock.................. -- -- 8,621

Purchase of stock by officers............. -- -- 1,198

Repayment of notes receivable from

officers................................. -- -- 14,540

Stock options and warrants exercised...... -- -- (327)

Class A Common Stock issued as

consideration for NHP common stock....... -- -- 180,851

Net income................................ 28,633 -- 28,633

Dividends paid -- Class A Common Stock.... (44,660) -- (44,660)

Dividends paid -- Preferred Stock......... (846) -- (846)

Unrealized loss on investments............ -- (1,683) (1,683)

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

BALANCE DECEMBER 31, 1997................. (30,928) (1,683) 1,045,300

Net proceeds from issuances of Preferred

Stock.................................... -- -- 340,897

Repurchase of Class A Common Stock........ -- -- (11,067)

Conversion of Class B Common Stock to

Class A Common Stock..................... -- -- --

Conversion of operating partnership units

to Class A Common Stock.................. -- -- 5,795

Purchase of stock by officers and awards

of restricted stock...................... -- -- 155

Repayment of notes receivable from

officers................................. -- -- 8,908

Stock options and warrants exercised...... -- -- 11,015

Class A Common Stock issued as

consideration for Ambassador common

stock.................................... -- -- 251,275

Class E Preferred Stock issued as

consideration for Insignia common

stock.................................... -- -- 301,218

Issuance of warrants to purchase Class A

Common Stock............................. -- -- 4,150

Net income................................ 64,474 -- 64,474

Dividends paid -- Class A Common Stock.... (100,045) -- (100,045)

Dividends paid -- Preferred Stock......... (21,194) -- (21,194)

Unrealized gain (loss) on investments..... -- 1,683 1,683

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

BALANCE DECEMBER 31, 1998................. (87,693) -- 1,902,564

Net proceeds from issuances of Preferred

Stock.................................... -- -- 233,101

Repurchase of Class A Common Stock........ -- -- (8,038)

Conversion of operating partnership units

to Class A Common Stock.................. -- -- 13,766

Conversion of Preferred Stock to Class A

Common Stock............................. -- -- --

Purchase of stock by officers and awards

of restricted stock...................... -- -- 624

Repayment of notes receivable from

officers................................. -- -- 6,241

Stock options and warrants exercised...... -- -- 3,202

Class A Common Stock issued as

consideration for Insignia Property Trust

merger................................... -- -- 158,793

Class A Common Stock issued as

consideration for First Union

Acquisition.............................. -- -- 21,140

Class A Common Stock Offering............. -- -- 5