10-K 1 d23153e10vk.htm FORM 10-K e10vk
Table of Contents

 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-K
     
þ
  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 OF THE SECURITIES EXCHANGE ACT OF 1934
 
    For the fiscal year ended December 31, 2004
 
or
 
o
  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
incorporation or organization)
  (I.R.S. Employer
Identification No.)
 
4582 South Ulster Street Parkway, Suite 1100
Denver, Colorado
(Address of principal executive offices)
  80237
(Zip Code)
Registrant’s Telephone Number, Including Area Code: (303) 757-8101
Securities Registered Pursuant to Section 12(b) of the Act:
     
Title of Each Class   Name of Each Exchange on Which Registered
     
Class A Common Stock   New York Stock Exchange
Class G Cumulative Preferred Stock   New York Stock Exchange
Class Q Convertible Cumulative Preferred Stock   New York Stock Exchange
Class R Cumulative Preferred Stock   New York Stock Exchange
Class T Cumulative Preferred Stock   New York Stock Exchange
Class U Cumulative Preferred Stock   New York Stock Exchange
Class V Cumulative Preferred Stock   New York Stock Exchange
Class Y 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 Act 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 þ          No o
      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.     þ
      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).     Yes þ          No o
      The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant, was approximately $2.9 billion as of June 30, 2004. As of February 28, 2005, there were 94,877,048 shares of Class A Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
      Portions of the registrant’s definitive proxy statement to be issued in conjunction with the registrant’s annual meeting of stockholders to be held April 29, 2005 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, 2004
                 
Item       Page
         
 PART I
 1.    Business     2  
 2.    Properties     17  
 3.    Legal Proceedings     18  
 4.    Submission of Matters to a Vote of Security Holders     18  
 PART II
 5.    Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities     19  
 6.    Selected Financial Data     21  
 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations     22  
 7A.    Quantitative and Qualitative Disclosures About Market Risk     40  
 8.    Financial Statements and Supplementary Data     40  
 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure     41  
 9A.    Controls and Procedures     41  
 9B.    Other Information     43  
 PART III
 10.    Directors and Executive Officers of the Registrant     43  
 11.    Executive Compensation     43  
 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters     43  
 13.    Certain Relationships and Related Transactions     43  
 14.    Principal Accountant Fees and Services     43  
 PART IV
 15.    Exhibits, Financial Statement Schedules     43  
 Charter
 List of Subsidiaries
 Consent of Ernst & Young LLP
 Certification of CEO Pursuant to Section 302
 Certification of CFO Pursuant to Section 302
 Certification Pursuant to 18 U.S.C. Section 1350
 Certification Pursuant to 18 U.S.C. Section 1350
 Agreement Re: Disclosure of Long-Term Debt Instruments

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FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements in certain circumstances. In addition to historical information, this Annual Report on Form 10-K (“Annual Report”) contains or may contain certain information that is forward-looking, including, without limitation, statements regarding the effect of acquisitions, our future financial performance and the effect of government regulations. When used in this Annual Report, the words “may,” “will,” “expect,” “intend,” “plan,” “believe,” “anticipate,” “estimate,” “continue” or other similar words or expressions are generally intended to identify forward-looking statements. You should not place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this Annual Report. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors including, without limitation: national and local economic conditions; the general level of interest rates; the terms of governmental regulations that affect us and interpretations of those regulations; the competitive environment in which we operate; financing risks, including the risk that our 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; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and possible environmental liabilities, including costs that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us. In addition, our current and continuing qualification as a real estate investment trust involves the application of highly technical and complex provisions of the Internal Revenue Code and depends on our ability to meet the various requirements imposed by the Internal Revenue Code, through actual operating results, distribution levels and diversity of stock ownership. Readers should carefully review our financial statements and the notes thereto, as well as the section entitled “Risk Factors” described in Item 1 of this Annual Report and the other documents we file from time to time with the Securities and Exchange Commission.
PART I
Item 1.     Business
The Company
      Apartment Investment and Management Company, or Aimco, is a Maryland corporation incorporated on January 10, 1994. We are a self-administered and self-managed real estate investment trust, or REIT, engaged in the acquisition, ownership, management and redevelopment of apartment properties. As of December 31, 2004, we owned or managed a real estate portfolio of 1,499 apartment properties containing 263,734 apartment units located in 47 states, the District of Columbia and Puerto Rico. Based on apartment unit data compiled by the National Multi Housing Council, as of December 31, 2004, we were the largest REIT owner and operator of apartment properties in the United States. Our portfolio includes garden style, mid-rise and high-rise properties.
      We own an equity interest in, and consolidate the majority of, the properties in our owned real estate portfolio. These properties represent the consolidated real estate holdings in our financial statements, which we refer to as consolidated properties. In addition, we have an equity interest in, but do not consolidate for financial statement purposes, certain properties that are accounted for under the equity method. These properties represent our investment in unconsolidated real estate partnerships in our financial statements, which we refer to as unconsolidated properties. Additionally, we manage (both property and asset) but do not own an equity interest in other properties, although in certain cases we may indirectly own generally less than one percent of the

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operations of such properties through a partnership syndication or other fund. Our equity holdings and managed properties are as follows as of December 31, 2004:
                 
    Total Portfolio
     
    Properties   Units
         
Consolidated properties
    676       169,932  
Unconsolidated properties
    330       44,728  
Property managed for third parties
    72       7,841  
Asset managed for third parties
    421       41,233  
             
Total
    1,499       263,734  
             
      Through our wholly owned subsidiaries, AIMCO-GP, Inc. and AIMCO-LP, Inc., we own a majority of the ownership interests in AIMCO Properties, L.P., which we refer to as the Aimco Operating Partnership. As of December 31, 2004, we held approximately a 90% interest in the common partnership units and equivalents of the Aimco Operating Partnership. We conduct substantially all of our business and own substantially all of our assets through the Aimco Operating Partnership. Interests in the Aimco Operating Partnership that are held by limited partners other than Aimco are referred to as “OP Units.” OP Units include common OP Units, partnership preferred units, or preferred OP Units, and high performance partnership units, or High Performance Units. Generally after a holding period of twelve months, holders of common OP Units may redeem such units for cash or, at the Aimco Operating Partnership’s option, Aimco Class A Common Stock, which we refer to as Common Stock. At December 31, 2004, 94,853,696 shares of our Common Stock were outstanding and the Aimco Operating Partnership had 10,840,754 common OP Units and equivalents outstanding for a combined total of 105,694,450 shares of Common Stock and OP Units outstanding (excluding preferred OP Units).
      Since our initial public offering in July 1994, we have completed numerous transactions, expanding our portfolio of owned or managed properties from 132 properties with 29,343 apartment units to 1,499 properties with 263,734 apartment units as of December 31, 2004. These transactions have included purchases of properties and interests in entities that own or manage properties, as well as corporate mergers.
      Except as the context otherwise requires, “we,” “our,” “us” and the “Company” refer to Aimco, the Aimco Operating Partnership and Aimco’s consolidated corporate subsidiaries and consolidated real estate partnerships, collectively. As used herein, and except where the context otherwise requires, “partnership” refers to a limited partnership or a limited liability company and “partner” refers to a limited partner in a limited partnership or a member in a limited liability company.
Available Information
      Our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and any amendments to any of those reports that we file with the Securities and Exchange Commission are available free of charge as soon as reasonably practicable through our website at www.aimco.com. The information contained on our website is not incorporated into this Annual Report. Our Common Stock is listed on the New York Stock Exchange under the symbol “AIV.”
Financial Information About Industry Segments
      We operate in two reportable segments: real estate (owning and operating apartments) and investment management business (providing property management and other services relating to the apartment business to third parties and affiliates). For further information on these segments, see Note 18 of the consolidated financial statements in Item 8, and Management’s Discussion and Analysis in Item 7.
Business Overview
      Our principal objective is to increase long-term stockholder value, which we believe results from increasing asset values, increasing operating cash flows and long-term, predictable Funds From Operations, or FFO (as defined by the National Association of Real Estate Investment Trusts), per share of Common Stock, less capital

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spending for replacements. For a description of the meaning of FFO and its use and limitations as an operating measure, see the discussion titled “Funds From Operations” in Item 7.
      We strive to meet our objectives by focusing on property operations, generation of fees, portfolio management, reinvestment in properties, increasing land values through entitlements, managing our cost of capital by using leverage that is largely long-term, non-recourse and property specific, and managing our general and administrative costs through increasing productivity.
Property Operations
      We divide property operations into two business components: conventional and affordable. Our conventional operations, which typically are market-rate apartments with rents paid by the resident, include 591 properties with 164,807 units and also include our university communities portfolio (16 properties with 4,277 units). Aimco Capital conducts our affordable operations of 415 properties with 49,853 units, which typically are apartments with rents set by a government agency and frequently subsidized or paid by a government agency.
      Our property operations are characterized by diversification of product, location and price point. We operate a broad range of property types, from suburban garden-style to urban high-rise properties in 47 states, the District of Columbia and Puerto Rico at a broad range of average monthly rental rates, with most between $500 and $1,100 per month, and reaching as much as $6,000 per month at some of our premier properties. This geographic diversification insulates us, to some degree, from inevitable downturns in any one market.
Conventional
      Our conventional operations are organized into four divisions, each of which is supervised by a Division Vice President, or DVP, and as of December 31, 2004, are further sub-divided into 17 regional operating centers, or ROCs, and a university communities group. Each ROC is supervised by a Regional Vice President, or RVP. The ROCs are generally smaller business units with specialized operational, financial and human resource leadership. We seek to improve the operating results from our property operations by, among other methods, combining centralized financial control and uniform operating procedures with localized property management decision-making and market knowledge. To manage our nationwide portfolio more efficiently and to increase the benefits from our local management expertise, we have given direct responsibility for operations to the RVP with oversight from extensive regular reviews with senior management. To enable the RVPs to focus on sales and service, as well as improve financial control and budgeting, we have dedicated a regional financial officer to support each RVP and have an expanded construction services group to handle all work on site beyond routine maintenance, thus reducing the need for RVPs to spend time on oversight of construction projects. We continue to improve our corporate-level oversight of conventional property operations by developing better systems, standardizing business goals, operational measurements and internal reporting, and enhancing financial controls over field operations. Many changes were made during 2003 and 2004 that we believe will enable our regional and community managers to benefit from more organizational clarity, more and better information, and more tools to help them make quicker, better decisions closer to the property and to the customer, including the areas discussed below:
  •  Customer Service. We are changing our operating culture to become more focused on our customers, by emphasizing customer service and evaluating our performance through a customer satisfaction tracking system. We increased training at the community level and elevated the role of the service manager in enhancing the experience of our residents. These changes included an increased emphasis on our service order intake process and implementation of standardized preventive and proactive maintenance programs.
 
  •  Resident Selection and Retention. In apartment properties, neighbors are a part of the product, together with the location of the property and the physical quality of the apartment units. Part of our conventional operations strategy is to focus on resident acquisition and retention — attracting and retaining credit-worthy residents who are good neighbors. In addition to the customer service initiatives discussed above, we enhanced our resident acquisition and retention processes by: implementing structured goals and coaching for all of our sales personnel; refining the content and placement of our advertising; standardizing the content and timing of our phone and email responses to customer inquiries, including

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  the implementation of a tracking system for inquiries; and standardizing our renewal communication programs. We standardized residential financial stability requirements and raised the standard across our portfolio to reduce turnover costs and improve retention. Additionally, we have implemented policies and monitoring practices to maintain our resident quality. We believe that the costs exceed the benefits when higher occupancy results from lowering of financial stability standards.
 
  •  Revenue Increases. We increase rents where feasible and seek to improve occupancy rates. We are also focused on the automation of on-site operations, as we believe that timely and accurate collection of property performance and resident profile data will enable us to maximize revenue through better property management and leasing decisions. We have standardized policies for new and renewal pricing with timely data and analyses by floor-plan, thereby enabling us to maximize our ability to modify pricing, even in challenging sub-markets. In addition, we intend to continue our emphasis on the quality of our on-site employees through recruiting, training and retention programs, which we believe lead to increased occupancy rates through improved customer service and enhanced performance.
 
  •  Controlling Expenses. Cost controls are accomplished by local focus at the ROC level and by taking advantage of economies of scale at the corporate level. As a result of the size of our portfolio and our creation of regional concentrations of properties, we have the ability to spread over a large property base fixed costs for general and administrative expenditures and certain operating functions, such as purchasing, insurance and information technology. We are currently implementing a local vendor consolidation program and an electronic procurement system to provide better ongoing control over purchasing decisions and to take advantage of volume discounts.
 
  •  Ancillary Services. We believe that our ownership and management of properties provide us with unique access to a customer base that allows us to provide additional services and thereby increase occupancy and rents, while also generating incremental revenue. We currently provide cable television, telephone services, appliance rental, and carport, garage and storage space rental at certain properties.

University Communities
      We established University Communities as an autonomous division in 2003 with the goal of becoming the most significant operator in the student-housing sector. In 2004, the division managed 16 properties with 4,277 apartments and maintained academic year occupancy at 93% through focused attention on student leasing. University Communities is actively acquiring multi-family and residence hall properties both on its own, through our joint venture with the California State Teachers Retirement System (CalSTRS), and in partnership with major universities. In 2004, we added two well-located properties with 504 units to this portfolio, one next to Duke University in Durham, North Carolina and one adjoining the campus of the University of Notre Dame in South Bend, Indiana.
Aimco Capital
      We are among the largest owners and operators of affordable properties in the United States. We formed Aimco Capital in 2002 to focus on our affordable housing properties, the operations of which are most often subsidized or financed by the United States Department of Housing and Urban Development, or HUD, state housing agencies or tax credit financing. Aimco Capital has organized its property operations and asset management under a management team dedicated to this sector. Aimco Capital operates its affordable properties through four ROCs. Affordable properties tend to have stable rents and occupancy due to government subsidies and thus are much less affected by market circumstances.
      Aimco Capital also generates income from asset management (compliance oversight for its owned and operated affordable portfolio as well as two other large portfolios that are asset managed only) and transactional activity related to its affordable holdings. Currently, Aimco Capital generates revenue primarily from: current asset management fees; deferred asset management fees; refinancing and disposition fees; developer fees; and syndication fees. In addition, Aimco Capital is exploring other sources of revenue related to the tax credit redevelopment process. We believe that Aimco Capital is well positioned as it has the national structure, knowledge and pipeline to grow as a more autonomous operation with dedicated capital.

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Portfolio Management
Conventional
      We view our conventional property portfolio in terms of “core” and “non-core” properties. Core properties are those properties that are located in selected markets, many where population and employment growth are expected to exceed national trends and where we believe that we can become a regionally significant owner. We categorize core properties among: “preferred markets” — which are typically coastal, with high barriers to entry and home prices and median incomes above the national average; “growth markets” — which are typically in sunbelt regions with expectations of above average job growth; and “stable markets” — which are located in Midwest areas with limited new construction but also limited job growth. We intend to hold and improve core properties over the long-term and seek an allocation of properties among the above three categories in order to reduce volatility of our overall property operations. At December 31, 2004, we had 377 conventional core properties in 38 selected markets. Within our core portfolio, the largest single market (Washington, D.C.) contributed approximately 11%, and the five largest markets (Washington, D.C., greater Los Angeles, Philadelphia, Chicago and Miami-Fort Lauderdale) together contributed approximately 32%, to income before depreciation and interest expense, or net operating income. At December 31, 2004, we had 214 conventional non-core properties. Non-core properties are those properties located in 32 other markets or in less favored locations within the 38 selected markets, which we generally intend to hold for investment for the intermediate term. During 2005, we expect to exit an additional 10-12 markets and over the next several years we expect to exit the remaining markets in which we hold our non-core properties.
      Portfolio management includes expanding our core portfolio through acquisitions of properties located in selected markets throughout the United States. We specifically seek investments in a variety of asset qualities and types in the selected markets at a purchase price below replacement cost. Currently, we acquire properties and property interests primarily in three ways:
  •  the direct acquisition of a property or portfolio of properties;
 
  •  acquisition of a portfolio of properties through a purchase from, or a merger or business combination with, an entity that owns or controls the property or portfolio being acquired; and
 
  •  the purchase from third parties, subject to our fiduciary duties, of additional interests in partnerships where we own a general partnership interest. These are typically executed for cash or OP Units. Since 1996, we have completed over 2,800 tender offers with respect to various partnerships resulting in over 171,000 transactions totaling $891 million in cash paid and OP Units issued to purchase additional interests in such partnerships.
      In 2004, we completed direct acquisitions of 11 conventional core properties, containing approximately 1,880 residential units for an aggregate purchase price of approximately $361 million and acquired additional interests in 147 partnerships for approximately $50 million (including transaction costs).
      Portfolio management also includes dispositions of properties located in other markets, properties located in less desirable sub-markets or properties that do not meet our long-term investment criteria. Additionally, from time to time, we may dispose of certain core properties that are consistent with our long-term investment strategy but offer attractive returns, such as in sales to buyers who intend to convert the properties to condominiums. The sales of core and non-core properties partially fund our acquisitions. In 2004, we sold 40 non-core properties generating net cash proceeds to us, after repayment of existing debt, payment of transaction costs and distributions to limited partners, of $147 million. Additionally, in 2004, we sold seven core properties and one land parcel, generating net cash proceeds to us, after repayment of existing debt, payment of transaction costs and distributions to limited partners, of $338 million.
Aimco Capital
      The portfolio management strategy for Aimco Capital is similar to that of our Conventional portfolio. Aimco Capital seeks to dispose of properties that are inconsistent with our long-term investment strategy and Aimco Capital’s operations. During 2004, we sold 60 non-core properties from within the Aimco Capital portfolio,

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generating net cash proceeds to us, after repayment of existing debt, payment of transaction costs and distributions to limited partners, of $45 million. At December 31, 2004 within the Aimco Capital portfolio, we had 415 properties, of which approximately two-thirds were non-core properties, which we generally intend to hold for investment for the intermediate term. During 2005, we intend to sell approximately the same number of Aimco Capital properties as we sold in 2004.
Rezoning and Entitlements
      Rezoning and entitlements are another aspect of portfolio management. Rezoning and entitlements provide us the opportunity to enhance the value of our existing portfolio by obtaining local approvals required to add dwelling or residential units to a site, which should enable us to realize upside in land values through increasing density of use. To date, we have identified 12 properties with an aggregate value in excess of $700 million where we believe there exists this opportunity. These properties are typically well located and were built 30 or more years ago. These properties were built at lower densities than the local zoning laws currently provide.
Reinvestment in Properties
      We believe that the physical condition and amenities of our apartment properties are important factors in our ability to maintain and increase rental rates. In 2004, we spent $77.2 million, or $483 per owned apartment unit, for Capital Replacements, which are expenditures that represent the share of expenditures that are deemed to replace the consumed portion of acquired capital assets. Additionally, we spent $82.4 million for Capital Improvements, which are non-redevelopment capital expenditures that are made to enhance the value, profitability or useful life of an asset from its original purchase condition.
      In addition to maintenance and improvements of our properties, we focus on the redevelopment of certain properties each year. We believe redevelopment of certain properties in superior locations provides advantages over ground-up development, enabling us to generate rents comparable to new properties with relatively lower financial risk, in less time and with reduced delays associated with governmental permits and authorizations. We undertake two types of redevelopment projects including: major projects, where a substantial number or all available units are vacated for significant renovations to the property; and moderate projects, where there is significant renovation, such as exteriors, common areas or unit improvements, typically done upon lease expirations without the need to vacate units on any wholesale or substantial basis. We have a specialized Redevelopment and Construction Services Group, which includes engineers, architects and construction managers, to oversee these projects. As of December 31, 2004, we had 34 projects at various stages of redevelopment, which included 10 properties for which redevelopment activities were complete but the property operations of which had not yet stabilized. Of the 24 active projects, 14 are conventional properties (one major project and 13 moderate projects) and 10 are affordable redevelopments. During 2004, redevelopment expenditures totaled $137 million, of which our share totaled $89 million. Redevelopment expenditures for our one active major project in Marietta, GA will be approximately $32.2 million (our share $18.4 million), of which approximately $11.3 million (our share $6.5 million) remains to be spent. Total redevelopment expenditures for our 13 active conventional moderate projects will be approximately $100.3 million (our share $75.2 million), of which approximately $81.5 million (our share $60.1 million) remains to be spent. Total redevelopment expenditures for our 10 affordable redevelopments will be approximately $106.0 million, of which approximately $54.3 million remains to be spent, most of which will be funded by third-party tax credit equity and tax-exempt debt. Additionally, we have four major projects, 25 moderate projects and seven affordable redevelopments under review for possible commencement in 2005.
Cost of Capital
      We are focused on minimizing our cost of capital. In 2004, we modified our credit facility and term debt, resulting in lower interest rate spreads, extended maturity dates, and more operating and financial covenant flexibility. We also refinanced $734 million in property debt at an average rate of 4.48% generating a savings of approximately 2.0% over prior rates. Additionally, we have reduced our cost of capital through the redemption of higher cost preferred securities with proceeds from the issuance of lower cost preferred securities.

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Productivity
      Over the past several years, we have had growth in our general and administrative spending as a result of the building of our infrastructure in certain areas in which we had needs, including, operational systems, information technology and other automation, human resources, and expanded accounting, legal, and financial planning and analysis functions. We are focused on containing this spending going forward through enhanced productivity and process improvements.
Taxation
      We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, which we refer to as the Code, commencing with our taxable year ended December 31, 1994, and intend to continue to operate in such a manner. Our current and continuing qualification as a REIT depends on our ability to meet the various requirements imposed by the Code, which are related to organizational structure, distribution levels, diversity of stock ownership and certain restrictions with regard to owned assets and categories of income. If we qualify for taxation as a REIT, we will generally not be subject to United States Federal corporate income tax on our taxable 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.
      Even if we qualify as a REIT, we may be subject to United States Federal income and excise taxes in various situations, such as on our undistributed income. We also will be required to pay 100% tax on non-arms length transactions between us and a TRS (described below) and on any net income from sales of property that the Internal Revenue Service, IRS, successfully asserts was property held for sale to customers in the ordinary course. We and our stockholders may be subject to state or local taxation in various state or local jurisdictions, including those in which we transact business or our stockholders reside. Any taxes imposed on us would reduce our operating cash flow and net income. The state and local tax laws may not conform to the United States Federal income tax treatment.
      Certain of our operations (property management, asset management, risk, etc.) are conducted through taxable REIT subsidiaries, each of which we refer to as a TRS. A TRS is a C-corporation that has not elected REIT status and as such is subject to United States Federal corporate income tax. We use the TRS format to facilitate our ability to offer certain services and activities to our residents that are not generally considered as qualifying REIT activities.
Competition
      In attracting and retaining residents to occupy our properties we compete with numerous other housing alternatives. Our properties compete directly with other rental apartments, as well as with condominiums and single-family homes that are available for rent or purchase in the markets in which our properties are located. Principal factors of competition include rent or price charged, attractiveness of the location and property and quality and breadth of services. The number of competitive properties in a particular area has a material effect on our ability to lease apartment units at our properties and on the rents we charge. Additionally, we compete with other real estate investors, including other apartment REITs, pension and investment funds, partnerships and investment companies in acquiring, redeveloping and managing apartment properties. This affects our ability to acquire properties we want to add to our portfolios and the price that we pay in such acquisitions.
Regulation
General
      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 our net income

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and cash flows from operating activities. In addition, future enactment of rent control or rent stabilization laws or other laws regulating multifamily housing may reduce rental revenue or increase operating costs in particular markets.
Environmental
      Various Federal, state and local laws subject property owners or operators to liability for management, and the costs of removal or remediation, of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of the hazardous substances. The presence of, or the failure to manage or remedy properly, hazardous substances may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, the presence of hazardous substances on a property could result in claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal, remediation or disposal of hazardous substances through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of properties, we could potentially be liable for environmental liabilities or costs associated with our properties or properties we acquire or manage in the future.
      We are aware of lawsuits against owners and managers of multifamily properties asserting claims of personal injury and property damage caused by the presence of mold, some of which have resulted in substantial monetary judgments or settlements. We have only limited insurance coverage for property damage loss claims arising from the presence of mold and for personal injury claims related to mold exposure. We have a national policy and procedures to prevent or eliminate mold from our properties. Our policy and procedures are based on guidelines established by various Federal, state and local bodies. We believe that our measures will eliminate, or at least minimize, the effects that mold could have on our residents. To date, we have not incurred any material costs or liabilities relating to claims of mold exposure or to abate mold conditions. Because the law regarding mold is unsettled and subject to change we can make no assurance that liabilities resulting from the presence of or exposure to mold will not have a material adverse effect on our consolidated financial condition or results of operations.
Insurance
      Our primary lines of insurance coverage are property, general liability and workers’ compensation. We believe that our insurance coverages adequately insure our properties against the risk of loss attributable to fire, earthquake, hurricane, tornado, flood and other perils and adequately insure us against other risks. Our coverage includes deductibles, retentions and limits that are customary in the industry. We have established loss prevention, loss mitigation, claim handling, litigation management and loss reserving procedures to manage our exposure.
Employees
      We currently have approximately 6,800 employees, of which approximately 5,700 are at the property level, performing various on-site functions, with the balance managing corporate and regional operations, including investment and debt transactions, legal, financial reporting, accounting, information systems, human resources and other support functions. Unions represent approximately 200 of our employees. We have never experienced a work stoppage and believe we maintain satisfactory relations with our employees.
Risk Factors
      The risk factors noted in this section and other factors noted throughout this Annual Report, describe certain risks and uncertainties that could cause our actual results to differ materially from those contained in any forward-looking statement.

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Changes in the real estate market may limit our ability to generate Funds From Operations.
      Our ability to make payments to our investors depends on our ability to generate Funds From Operations in excess of required debt payments and capital expenditure requirements. Funds From Operations and the value of our properties may be adversely affected by events or conditions beyond our control, including:
  •  the general economic climate;
 
  •  competition from other apartment communities and other housing options;
 
  •  local conditions, such as an increase in unemployment or an increase in the supply of apartments, that might adversely affect apartment occupancy or rental rates;
 
  •  changes in governmental regulations and the related cost of compliance;
 
  •  increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents;
 
  •  changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multifamily housing;
 
  •  changes in interest rates and the availability of financing; and
 
  •  the relative illiquidity of real estate investments.
If we are not able successfully to acquire, operate, redevelop and expand properties, our growth and results of operations will be adversely affected.
      The selective acquisition, redevelopment and expansion of properties are one component of our growth strategy. However, we may not be able to complete successfully transactions in the future. Although we seek to acquire, operate, redevelop and expand properties only when such activities increase our net income on a per share basis, such transactions may fail to perform in accordance with our expectations. When we redevelop or expand properties, we are subject to the risks that:
  •  costs may exceed original estimates;
 
  •  occupancy and rental rates at the property may be below our projections;
 
  •  financing may not be available on favorable terms or at all;
 
  •  redevelopment and leasing of the properties may not be completed on schedule; and
 
  •  we may experience difficulty or delays in obtaining necessary zoning, land-use, building, occupancy and other governmental permits and authorizations.
We may have difficulty integrating any acquired businesses or properties.
      We have grown rapidly. Since our initial public offering in July 1994, we have completed numerous acquisition transactions, expanding our portfolio of owned or managed properties from 132 properties with 29,343 apartment units to 1,499 properties with 263,734 apartment units as of December 31, 2004. These acquisitions have included purchases of properties and interests in entities that own or manage properties, as well as corporate mergers. Our ability to successfully integrate acquired businesses and properties depends, among other things, on our ability to:
  •  attract and retain qualified personnel;
 
  •  integrate the personnel and operations of the acquired businesses;
 
  •  maintain standards, controls, procedures and policies; and
 
  •  maintain adequate accounting and information systems.

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      We can provide no assurance that we will be able to accomplish these goals and successfully integrate any acquired businesses or properties. If we fail to integrate successfully such businesses, our results of operations could be adversely affected.
We may be subject to litigation associated with partnership acquisitions that could increase our expenses and prevent completion of beneficial transactions.
      We have engaged in, and intend to continue to engage in, the selective acquisition of interests in partnerships that own apartment properties. In some cases, we have acquired the general partner of a partnership and then made an offer to acquire the limited partners’ interests in the partnership. In these transactions, we may be subject to litigation based on claims that we, as the general partner, have breached our fiduciary duty to our limited partners or that the transaction violates the relevant partnership agreement or state law. Although we intend to comply with our fiduciary obligations and the relevant partnership agreements, we may incur additional costs in connection with the defense or settlement of this type of litigation. In some cases, this type of litigation may adversely affect our desire to proceed with, or our ability to complete, a particular transaction. Any litigation of this type could also have a material adverse effect on our financial condition or results of operations.
Our existing and future debt financing could render us unable to operate, result in foreclosure on our properties or prevent us from making distributions on our equity.
      Our strategy is generally to incur debt to increase the return on our equity while maintaining acceptable interest coverage ratios. We seek to maintain a ratio of free cash flow to combined interest expense and preferred stock dividends of greater than 2:1 and to match debt maturities to the character of the assets financed. For the year ended December 31, 2004, however, we had a ratio of free cash flow to combined interest expense and preferred stock dividends of 1.5:1, and this ratio in prior periods has also deviated from our goal. In addition, our Board of Directors could change this strategy at any time and increase our leverage. Our organizational documents do not limit the amount of debt that we may incur, and we have significant amounts of debt outstanding. Payments of principal and interest may leave us with insufficient cash resources to operate our properties or pay distributions required to be paid in order to maintain our qualification as a REIT. We are also subject to the risk that our cash flow from operations will be insufficient to make required payments of principal and interest, and the risk that existing indebtedness may not be refinanced or that the terms of any refinancing will not be as favorable as the terms of existing indebtedness. If we fail to make required payments of principal and interest on any debt, our lenders could foreclose on the properties securing such debt, which would result in loss of income and asset value to us. As of December 31, 2004, substantially all of the properties that we owned or controlled were encumbered by debt.
Increases in interest rates would increase our interest expense.
      As of December 31, 2004, we had approximately $1,533.2 million of variable-rate indebtedness outstanding. Based on this level of debt, an increase in interest rates of 1% would result in our income and cash flows being reduced by $15.3 million on an annual basis and could reduce our ability to service our indebtedness and make dividends or other distributions. Of the total debt subject to variable interest rates, floating rate tax-exempt bond financing was $741.8 million. Floating rate tax-exempt bond financing is benchmarked against the Bond Market Association Municipal Swap Index, or the BMA Index, which since 1981 has averaged 52.1% of the 10-year Treasury Yield. If this relationship continues, an increase in the 10-year Treasury Yield, of 1% (0.52% in tax-exempt interest rates) would result in our income before minority interests and cash flows being reduced by $11.8 million on an annual basis.
Covenant restrictions may limit our ability to make payments to our investors.
      Some of our debt and other securities contain covenants that restrict our ability to make distributions or other payments to our investors unless certain financial tests or other criteria are satisfied. Our credit facility provides that we may make distributions to our investors during any 12-month period in an aggregate amount that does not exceed the greater of 95% of our Funds From Operations for such period or such amount as may be necessary to maintain our REIT status.

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      Our outstanding classes of preferred stock prohibit the payment of dividends on our Common Stock if we fail to pay the dividends to which the holders of the preferred stock are entitled. If we are unable to pay dividends on our Common Stock, we may fail to qualify as a REIT. This would subject us to corporate taxation and reduce our ability to make distributions to our investors.
We depend on distributions and other payments from our subsidiaries that they may be prohibited from making to us.
      All of our properties are owned, and all of our operations are conducted, by the Aimco Operating Partnership and our other subsidiaries. As a result, we depend on distributions and other payments from our subsidiaries in order to satisfy our financial obligations and make payments to our investors. The ability of our subsidiaries to make such distributions and other payments depends on their earnings and may be subject to statutory or contractual limitations. As an equity investor in our subsidiaries, our right to receive assets upon their liquidation or reorganization will be effectively subordinated to the claims of their creditors. To the extent that we are recognized as a creditor of such subsidiaries, our claims may still be subordinate to any security interest in or other lien on their assets and to any of their debt or other obligations that are senior to our claims.
Laws benefiting disabled persons may result in our incurrence of unanticipated expenses.
      Under the Americans with Disabilities Act of 1990, or ADA, all places intended to be used by the public are required to meet certain Federal requirements related to access and use by disabled persons. Likewise, the Fair Housing Amendments Act of 1988, or FHAA, requires apartment properties first occupied after March 13, 1990 to be accessible to the handicapped. These and other Federal, state and local laws may require modifications to our properties, or restrict renovations of the properties. 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 we believe that our properties are substantially in compliance with present requirements, we may incur unanticipated expenses to comply with the ADA and the FHAA.
Affordable housing regulations may limit rent increases at some of our properties, reducing our revenue and, in some cases, causing us to sell properties that we might otherwise continue to own.
      As of December 31, 2004, we owned an equity interest in 415 affordable properties and managed for third parties and affiliates 409 properties that benefit from governmental programs intended to provide housing to people with low or moderate incomes. These programs, which are usually administered by HUD or state housing finance agencies, typically provide mortgage insurance, favorable financing terms or rental assistance payments to the property owners. As a condition of 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. We usually need to obtain the approval of HUD in order to manage, or acquire a significant interest in, a HUD-assisted property. We may not always receive such approval.
We depend on our senior management
      Our success depends upon the retention of our senior management, including Terry Considine, our chief executive officer and president. We cannot assure you that we would be able to find qualified replacements for the individuals who make up our senior management if their services were no longer available. The loss of services of one or more members of our senior management team could have a material adverse effect on our business, financial condition and results of operations. We do not currently maintain key-man life insurance for any of our employees. The loss of any member of senior management could adversely affect our ability to pursue effectively our business strategy.

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We may fail to qualify as a REIT.
      We believe that we operate, and have always operated, in a manner that enables us to meet the requirements for qualification as a REIT for Federal income tax purposes. Our continued qualification as a REIT will depend on our satisfaction of certain asset, income, investment, organizational, distribution, stockholder ownership and other requirements on a continuing basis. Our ability to satisfy the asset tests depends upon our analysis of the fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals. Our compliance with the REIT income and quarterly asset requirements also depends upon our ability to manage successfully the composition of our income and assets on an ongoing basis. Moreover, the proper classification of an instrument as debt or equity for Federal income tax purposes may be uncertain in some circumstances, which could affect the application of the REIT qualification requirements. Accordingly, there can be no assurance that the Internal Revenue Service, or the IRS, will not contend that our interests in subsidiaries or other issuers constitutes a violation of the REIT requirements. Moreover, future economic, market, legal, tax or other considerations may cause us to fail to qualify as a REIT, or our Board of Directors may determine to revoke our REIT status. If we fail to qualify as a REIT, we will not be allowed a deduction for dividends paid to our stockholders in computing our taxable income, and we will be subject to Federal income tax at regular corporate rates, including any applicable alternative minimum tax. This would substantially reduce our funds available for payment to our investors. Unless entitled to relief under certain provisions of the Code, we also would be disqualified from taxation as a REIT for the four taxable years following the year during which we ceased to qualify as a REIT.
      In addition, our failure to qualify as a REIT would trigger the following consequences:
  •  we would be obligated to repurchase certain classes of our preferred stock, plus accrued and unpaid dividends to the date of repurchase; and
 
  •  we would be in default under our primary credit facilities and certain other loan agreements.
REIT distribution requirements limit our available cash.
      As a REIT, we are subject to annual distribution requirements, which limit the amount of cash we retain for other business purposes, including amounts to fund our growth. We generally must distribute annually at least 90% of our net REIT taxable income, excluding any net capital gain, in order for our distributed earnings not to be subject to corporate income tax. We intend to make distributions to our stockholders to comply with the requirements of the Code. However, differences in timing between the recognition of taxable income and the actual receipt of cash could require us to sell assets or borrow funds on a short-term or long-term basis to meet the 90% distribution requirement of the Code.
Legislative or other actions affecting REITs could have a negative effect on us.
      The rules dealing with Federal income taxation are constantly under review by persons involved in the legislative process and by the IRS and the United States Treasury Department. Changes to the tax laws, which may have retroactive application, could adversely affect our investors or us. We cannot predict how changes in the tax laws might affect our investors or us. For example, under legislation effective January 1, 2001, if any of our taxable REIT subsidiaries were deemed to operate or manage a health care or lodging facility, we would fail to qualify as a REIT. Although we believe that, since January 1, 2001, none of our taxable REIT subsidiaries have operated or managed any health care or lodging facilities, the statute provides little guidance as to the definition of a health care or lodging facility. Accordingly, we cannot assure that the IRS will not contend that any of our taxable REIT subsidiaries operate or manage a health care or lodging facility, resulting in our disqualification as a REIT.
A reduction, in 2003, in the maximum tax rate applicable to dividends may make REIT investments less attractive.
      Tax legislation enacted in 2003 reduced (through 2008) the maximum tax rate for dividends payable to individuals from 38.6% to 15%. Dividends payable by REITs are generally not eligible for the reduced rates.

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Although this legislation does not adversely affect the taxation of REITs or dividends paid by REITs, the more favorable rates applicable to regular corporate dividends could cause investors who are individuals to perceive investments in REITs to be relatively less attractive than investments in the capital stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the capital stock of REITs, including our Common Stock. In addition, the relative attractiveness of real estate in general may be adversely affected by the newly favorable tax treatment given to corporate dividends, which could negatively affect the value of our real estate assets.
The FBI has issued alerts regarding potential terrorist threats involving apartment buildings — a risk for which we are only partially insured.
      From time to time, the Federal Bureau of Investigation, or FBI, and the United States Department of Homeland Security issue alerts regarding potential terrorist threats involving apartment buildings. Threats of future terrorist attacks, such as those announced by the FBI and the Department of Homeland Security, could have a negative effect on rent and occupancy levels at our properties. The effect that future terrorist activities or threats of such activities could have on our business is uncertain and unpredictable. If we incur a loss at a property as a result of an act of terrorism, we could lose all or a portion of the capital we have invested in the property, as well as the future revenue from the property. Since September 2001, our lenders have increased their scrutiny regarding terrorism exposure, and we have sometimes been required to purchase terrorism insurance. In all cases, we have purchased insurance that exceeds the minimum requirements of our lenders. Currently, these costs have not had a negative effect on our consolidated financial condition or results of operations.
The market place for insurance coverage is uncertain and in some cases insurance is becoming more expensive and more difficult to obtain.
      The current insurance market is characterized by volatility with respect to premiums, deductibles and coverage. For certain types of coverage, such as property coverage, we are currently experiencing stable or declining premiums. For other types of coverage, however, such as liability and executive coverage, we continue to experience rising premiums, higher deductibles, and more restrictive coverage language. Although we make use of many alternative methods of risk financing that enable us to insulate ourselves to some degree from variations in coverage language and cost, sustained deterioration in insurance marketplace conditions may have a negative effect on our operating results.
Limits on ownership of shares in our charter may result in the loss of economic and voting rights by purchasers that violate those limits.
      Our charter limits ownership of our Common Stock by any single stockholder to 8.7% of our outstanding shares of Common Stock, or 15% in the case of certain pension trusts, registered investment companies and Mr. Considine. Our charter also limits ownership of our Common Stock and preferred stock by any single stockholder to 8.7% of the value of the outstanding Common Stock and preferred stock, or 15% in the case of certain pension trusts, registered investment companies and Mr. Considine. The charter also prohibits anyone from buying shares of our capital stock if the purchase would result in us losing our REIT status. This could happen if a transaction results in fewer than 100 persons owning all of our shares of capital stock or results in five or fewer persons, applying certain attribution rules of the Code, owning 50% or more of the value of all of our shares of capital stock. If anyone acquires shares in excess of the ownership limit or in violation of the ownership requirements of the Code for REITs:
  •  the transfer will be considered null and void;
 
  •  we will not reflect the transaction on our books;
 
  •  we may institute legal action to enjoin the transaction;
 
  •  we may demand repayment of any dividends received by the affected person on those shares;
 
  •  we may redeem the shares;

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  •  the affected person will not have any voting rights for those shares; and
 
  •  the shares (and all voting and dividend rights of the shares) will be held in trust for the benefit of one or more charitable organizations designated by us.
      We may purchase the shares of capital stock held in trust at a price equal to the lesser of the price paid by the transferee of the shares or the then current market price. If the trust transfers any of the shares of capital stock, the affected person will receive the lesser of the price paid for the shares or the then current market price. An individual who acquires shares of capital stock that violate the above rules bears the risk that the individual:
  •  may lose control over the power to dispose of such shares;
 
  •  may not recognize profit from the sale of such shares if the market price of the shares increases;
 
  •  may be required to recognize a loss from the sale of such shares if the market price decreases; and
 
  •  may be required to repay to us any distributions received from us as a result of his or her ownership of the shares.
Our charter may limit the ability of a third party to acquire control of us.
      The 8.7% ownership limit discussed above may have the effect of precluding acquisition of control of us by a third party without the consent of our Board of Directors. Our charter authorizes our Board of Directors to issue up to 510,587,500 shares of capital stock. As of December 31, 2004, 426,157,976 shares were classified as Common Stock and 84,429,524 shares were classified as preferred stock. Under our charter, our Board of Directors has the authority to classify and reclassify any of our unissued shares of capital stock into shares of capital stock with such preferences, rights, powers and restrictions as our Board of Directors may determine. The authorization and issuance of a new class of capital stock could have the effect of delaying or preventing someone from taking control of us, even if a change in control were in our stockholders’ best interests.
Maryland business statutes may limit the ability of a third party to acquire control of us.
      As a Maryland corporation, we are subject to various Maryland laws that may have the effect of discouraging offers to acquire us and increasing the difficulty of consummating any such offers, even if our acquisition would be in our stockholders’ best interests. The Maryland General Corporation Law restricts mergers and other business combination transactions between us and any person who acquires beneficial ownership of shares of our stock representing 10% or more of the voting power without our Board of Directors’ prior approval. Any such business combination transaction could not be completed until five years after the person acquired such voting power, and generally only with the approval of stockholders representing 80% of all votes entitled to be cast and 662/3% of the votes entitled to be cast, excluding the interested stockholder, or upon payment of a fair price. Maryland law also provides generally that a person who acquires shares of our capital stock that represent 10% or more of the voting power in electing directors will have no voting rights unless approved by a vote of two-thirds of the shares eligible to vote. Additionally, Maryland law provides, among other things, that the board of directors has broad discretion in adopting stockholders’ rights plans and has the sole power to fix the record date, time and place for special meetings of the stockholders. In addition, Maryland law provides that corporations that:
  •  have at least three directors who are not employees of the entity or related to an acquiring person; and
 
  •  are subject to the reporting requirements of the Securities Exchange Act of 1934,
may elect in their charter or bylaws or by resolution of the board of directors to be subject to all or part of a special subtitle that provides that:
  •  the corporation will have a staggered board of directors;
 
  •  any director may be removed only for cause and by the vote of two-thirds of the votes entitled to be cast in the election of directors generally, even if a lesser proportion is provided in the charter or bylaws;

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  •  the number of directors may only be set by the board of directors, even if the procedure is contrary to the charter or bylaws;
 
  •  vacancies may only be filled by the remaining directors, even if the procedure is contrary to the charter or bylaws; and
 
  •  the secretary of the corporation may call a special meeting of stockholders at the request of stockholders only on the written request of the stockholders entitled to cast at least a majority of all the votes entitled to be cast at the meeting, even if the procedure is contrary to the charter or bylaws.
      To date, we have not made any of the elections described above.

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Item 2.      Properties
      Our properties are located in 47 states, the District of Columbia and Puerto Rico. As of December 31, 2004, our conventional properties are operated through 17 regional operating centers and a university communities group. Affordable property operations are managed through Aimco Capital and are operated through four regional operating centers. The following table sets forth information on all of our property operations as of December 31, 2004 and 2003:
                                   
    December 31, 2004   December 31, 2003
         
    Number of   Number   Number of   Number
Regional Operating Center   Properties   of Units   Properties   of Units
                 
Conventional:
                               
Atlanta, GA
    31       8,644       37       10,826  
Austin, TX
    24       5,388             (1)
Boston, MA
    16       5,745       14       5,385  
Chicago, IL
    36       9,697       41       10,747  
Columbia, SC
    61       14,414       64       14,979  
Dallas, TX
    36       8,867       63       14,837  
Denver, CO
    34       7,572       34       7,572  
Houston, TX
    37       9,776       37       9,776  
Indianapolis, IN
    37       11,191       41       11,925  
Los Angeles, CA
    38       10,468       43       11,900  
Michigan
    26       9,507       58       16,629  
Ohio
    30       6,099             (1)
Philadelphia, PA
    16       7,451       17       7,681  
Phoenix, AZ
    36       10,001       42       11,388  
Rockville, MD
    38       14,024       39       14,502  
South Florida
    15       5,862       17       6,507  
Tampa/ Orlando, FL
    54       14,931       59       16,102  
University Communities
    16       4,277       14       3,773  
                         
 
Total conventional owned and managed
    581       163,914       620       174,529  
                         
Affordable (Aimco Capital):
                               
Midwest
    63       8,324       102       14,067  
Northeast
    108       16,280       132       19,023  
Southeast
    109       10,025       116       11,472  
West
    86       8,872       100       9,647  
                         
 
Total affordable owned and managed
    366       43,501       450       54,209  
                         
Owned but not managed
    59       7,245       50       8,257  
Property managed for third parties
    72       7,841       96       11,137  
Asset managed for third parties
    421       41,233       413       39,428  
                         
Total
    1,499       263,734       1,629       287,560  
                         
 
(1)  As of December 31, 2003, we operated our conventional properties through 15 regional operating centers. The regional operating centers in Austin, TX and Ohio were added during 2004.
      At December 31, 2004, we owned an equity interest in and consolidated 676 properties containing 169,932 apartment units, which we refer to as “consolidated.” These consolidated properties contain, on average, 251 apartment units, with the largest property containing 2,899 apartment units. These properties offer residents a

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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. Additional information on our consolidated properties is contained in “Schedule III, Real Estate and Accumulated Depreciation” in this Annual Report. At December 31, 2004, we held an equity interest in and did not consolidate 330 properties containing 44,728 apartment units, which we refer to as “unconsolidated.” In addition, we provided property management services for third parties owning 72 properties containing 7,841 apartment units, and asset management services for third parties owning 421 properties containing 41,233 apartment units, although in certain cases we may indirectly own generally less than one percent of the operations of such properties through a partnership syndication or other fund.
      Substantially all of our consolidated properties are encumbered by mortgage indebtedness. At December 31, 2004, our consolidated properties were encumbered by aggregate mortgage indebtedness totaling $5,604.7 million (not including $50.2 million of mortgage indebtedness included within liabilities related to assets held for sale), having an aggregate weighted average interest rate of 5.95%. Such mortgage indebtedness was secured by 648 properties with a combined net book value of $8,687.0 million. Included in the 648 properties, we had a total of 48 mortgage loans, with an aggregate principal balance outstanding of $539.2 million, that were each secured by property and cross-collateralized with certain (but not all) other mortgage loans within this group of 48 mortgage loans. See Note 6 of the consolidated financial statements in Item 8 for additional information about our indebtedness.
Item 3.      Legal Proceedings
      See the information under the caption “Legal Matters” in Note 9 of the consolidated financial statements in Item 8 for information regarding legal proceedings, which information is incorporated by reference in this Item 3.
Item 4.      Submission of Matters to a Vote of Security Holders
      None.

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PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
      Our 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 our Common Stock, as reported on the NYSE, and the dividends declared for the periods indicated:
                           
            Dividends
            Declared
Quarter Ended   High   Low   (per share)
             
2004
                       
 
December 31, 2004
  $ 39.25     $ 34.60     $ 0.60  
 
September 30, 2004
    36.95       30.85       0.60  
 
June 30, 2004
    31.50       26.45       0.60  
 
March 31, 2004
    36.00       30.18       0.60  
2003
                       
 
December 31, 2003
    42.05       33.00       0.60  
 
September 30, 2003
    39.85       34.11       0.60  
 
June 30, 2003
    39.81       33.67       0.82  
 
March 31, 2003
    39.19       34.64       0.82  
      On February 28, 2005, the closing price of our Common Stock was $38.26 per share, as reported on the NYSE and there were 94,877,048 shares of Common Stock outstanding, held by 3,868 stockholders of record. The number of holders does not include individuals or entities who beneficially own shares but whose shares are held of record by a broker or clearing agency, but does include each such broker or clearing agency as one recordholder.
      As a REIT, we are required to distribute annually to holders of common stock at least 90% of our “real estate investment trust taxable income,” which, as defined by the Code and United States Department of Treasury regulations, is generally equivalent to net taxable ordinary income. We measure our economic profitability and intend to pay regular dividends to our stockholders based on Funds From Operations, less Capital Replacements during the relevant period. Future payment of dividends are at the discretion of our Board of Directors and will depend on numerous factors including our financial condition, capital requirements, the annual distribution requirements under the provisions of the Code applicable to REITs and such other factors as our Board of Directors deems relevant.
      From time to time, we issue shares of Common Stock in exchange for common and preferred OP Units tendered to the Aimco Operating Partnership for redemption in accordance with the terms and provisions of the agreement of limited partnership of the Aimco Operating Partnership. Such shares are issued based on an exchange ratio of one share for each common OP Unit or applicable conversion ratio for preferred OP Units. The shares are generally issued in exchange for OP Units in private transactions exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof. During the three and twelve months ended December 31, 2004, approximately 23,000 and 735,000 shares of Common Stock were issued in exchange for common OP Units. During the three and twelve months ended December 31, 2004, approximately 365 and 8,000 shares of Common Stock were issued in exchange for preferred OP Units.

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      The following table summarizes repurchases of our equity securities in the year ended December 31, 2004 (1):
                                 
                Maximum Number
            Total Number of   of Shares that
            Shares Purchased   May Yet Be
    Total Number   Average   as Part of Publicly   Purchased Under
    of Shares   Price Paid   Announced Plans or   Plans or Programs
Fiscal period   Purchased   per Share   Programs   (in millions)
                 
January 1 — January 31, 2004
                      1.9  
February 1 — February 29, 2004
    397,272 (2)   $ 31.70       397,272       1.5  
March 1 — March 31, 2004
                      1.5  
April 1 — April 30, 2004
                      1.5  
May 1 — May 31, 2004
                      1.5  
June 1 — June 30, 2004
                      1.5  
July 1 — July 31, 2004
                      1.5  
August 1 — August 31, 2004
                      1.5  
September 1 — September 30, 2004
                      1.5  
October 1 — October 31, 2004
                      1.5  
November 1 — November 30, 2004
                      1.5  
December 1 — December 31, 2004
                      1.5  
                         
Total
    397,272     $ 31.70       397,272          
                         
 
(1)  Our Board of Directors has, from time to time, authorized us to repurchase shares of our outstanding capital stock. Currently, we are authorized to repurchase up to a total of approximately 1.5 million shares of either our Common Stock or preferred stock. These repurchases may be made from time to time in the open market or in privately negotiated transactions, subject to applicable law.
 
(2)  Of these shares of Common Stock repurchased, 110,000 were purchased in open-market transactions and 287,272 were purchased in a privately negotiated transaction.

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Item 6.     Selected Financial Data
      The following selected financial data is based on our audited historical financial statements. This information should be read in conjunction with such financial statements, including the notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included herein or in previous filings with the Securities and Exchange Commission.
                                           
    For the Years Ended December 31,
     
    2004   2003(1)   2002(1)   2001(1)   2000(1)
                     
    (Dollar amounts in thousands, except per share data)
OPERATING DATA:
                                       
Total revenues
  $ 1,468,915     $ 1,394,705     $ 1,266,919     $ 1,168,556     $ 893,172  
Total expenses
    (1,140,157 )     (975,686 )     (801,593 )     (787,063 )     (651,168 )
Operating income
    328,758       419,019       465,326       381,493       242,004  
Income from continuing operations
    55,696       64,148       148,606       89,806       81,010  
Income from discontinued operations, net
    211,758       94,709       20,440       17,546       18,168  
Cumulative effect of change in accounting principle
    (3,957 )                        
Net income
    263,497       158,857       169,046       107,352       99,178  
Net income attributable to preferred stockholders
    88,804       93,565       93,558       90,331       63,183  
Net income attributable to common stockholders
    174,693       65,292       75,488       17,021       35,995  
OTHER INFORMATION:
                                       
Total consolidated properties (end of period)
    676       679       728       557       566  
Total consolidated apartment units (end of period)
    169,932       174,172       187,506       157,256       153,872  
Total unconsolidated properties (end of period)
    330       441       511       569       683  
Total unconsolidated apartment units (end of period)
    44,728       62,823       73,924       91,512       111,748  
Units managed for others (end of period)(2)
    49,074       50,565       56,722       31,520       60,669  
Earnings (loss) per common share —basic:
                                       
 
Income (loss) from continuing operations (net of income attributable to preferred stockholders)
  $ (0.36 )   $ (0.32 )   $ 0.64     $ (0.01 )   $ 0.26  
 
Net income attributable to common stockholders
  $ 1.88     $ 0.70     $ 0.88     $ 0.23     $ 0.53  
Earnings (loss) per common share —diluted:
                                       
 
Income (loss) from continuing operations (net of income attributable to preferred stockholders)
  $ (0.36 )   $ (0.32 )   $ 0.63     $ (0.01 )   $ 0.26  
 
Net income attributable to common stockholders
  $ 1.88     $ 0.70     $ 0.87     $ 0.23     $ 0.52  
Dividends declared per common share
  $ 2.40     $ 2.84     $ 3.28     $ 3.16     $ 2.80  
BALANCE SHEET INFORMATION:
                                       
Real estate, net of accumulated depreciation
  $ 8,785,046     $ 8,145,443     $ 7,969,033     $ 5,903,281     $ 5,410,663  
Total assets
    10,072,241       10,087,394       10,309,101       8,300,672       7,699,874  
Total indebtedness
    5,988,372       5,731,701       5,560,096       4,101,516       3,896,506  
Stockholders’ equity
    3,008,160       2,860,657       3,163,387       2,710,615       2,501,657  
 
(1)  Certain reclassifications have been made to 2003, 2002, 2001, and 2000 amounts to conform to the 2004 presentation. These reclassifications primarily represent presentation changes related to discontinued operations resulting from the 2002 adoption of Statement of Financial Accounting Standards No. 144. Also, effective January 1, 2001, as a result of the REIT Modernization Act permitting REITs to own taxable REIT subsidiaries, we began consolidating our previously unconsolidated taxable REIT subsidiaries. Prior to this date, we did not control such subsidiaries, which were accounted for under the equity method, and as a result, the periods prior to 2001 are not comparable.
 
(2)  In 2004, 2003 and 2002, includes approximately 41,233, 39,428 and 45,187 units, respectively, that are only asset managed by us, and not also property managed, although in certain cases we may indirectly own generally less than one percent of the operations of such properties through a partnership syndication or other fund.

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Item 7.                     Management’s Discussion and Analysis of Financial Condition and Results of Operations
Executive Overview
      We are a self-administered and self-managed real estate investment trust, or REIT, engaged in the ownership, acquisition, management and redevelopment of apartment properties. Our property operations are characterized by diversification of product, location and price point. As of December 31, 2004, we owned or managed 1,499 apartment properties containing 263,734 units located in 47 states, the District of Columbia and Puerto Rico. Our primary sources of income and cash are rents associated with apartment leases.
      The key financial indicators that we use in managing our business and in evaluating our financial condition and operating performance are: Funds From Operations, or FFO; FFO less spending for Capital Replacements, or AFFO; same store property operating results; net operating income; net operating income less spending for Capital Replacements; financial coverage ratios; and leverage as shown on our balance sheet. These terms are defined and described in the sections captioned “Funds From Operations” and “Capital Expenditures” below. The key macro-economic factors and non-financial indicators that affect our financial condition and operating performance are: rates of job growth; unemployment rates; single-family and multifamily housing starts; and interest rates.
      Because our operating results depend primarily on income from our properties, the supply and demand for apartments substantially influences our results. Additionally, the level of expenses required to operate and maintain our properties and the pace and price at which we redevelop, acquire and dispose of our apartment properties can affect our operating results. Our cost of capital is affected by the conditions in the capital and credit markets and the terms that we negotiate for our equity and debt financings.
      We have grown rapidly over the past decade, and during the past three years our growth has moderated. During 2004, the apartment industry continued to face a challenging operating environment — job growth at a pace slower than anticipated, low interest rates and an abundant supply of housing alternatives. In addition, we experienced greater difficulty as compared to our peers because our property operating systems and structure were not as effective in meeting the challenges presented by the apartment markets. The effect of these operational challenges was mitigated by a favorable investment climate in which we were able to sell properties at attractive prices, generally higher than the cost of replacement.
      In response to this challenging operating environment and our specific operational issues, during late 2003 and throughout 2004 we adjusted our business strategies to compete successfully in challenging times and to be ready to maximize our opportunities as the economy improves. We focused on a number of areas related to improving operations, including those related to customer service, resident selection and retention, marketing, pricing, and operating cost management. Our resident selection initiatives designed to make our communities more desirable places to live and work, which drives better financial performance from higher and more stable occupancy levels, increased pricing power and reduced costs. In combination, our initiatives are resulting in improved customer service, better pricing decisions, increased resident quality, a focus on sales and marketing and higher employee satisfaction. Our revenue building initiatives are largely completed with processes in place for continued improvement in resident quality, pricing, sales and marketing.
      Our focus in 2005 will be to continue to increase revenue and work on cost management and productivity initiatives including centralizing purchasing, restructuring business processes, using technology to increase efficiency and implementing structured monthly reporting to identify issues and improve effectiveness of spending. We believe that our improvement efforts are working and have resulted in a positive trend in certain operating results and are the foundation for long-term benefits that we began to realize in the second half of 2004 and expect to continue throughout 2005 and beyond. These initiatives and others have also resulted in improved asset quality, and we will continue to seek opportunities to reinvest in our properties through capital expenditures and to manage our portfolio through property sales and acquisitions.
      The following discussion and analysis of the results of our operations and financial condition should be read in conjunction with the financial statements.

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Results of Operations
Overview
2004 compared to 2003
      We recognized net income of $263.5 million and net income attributable to common stockholders of $174.7 million for the year ended December 31, 2004, compared to net income of $158.9 million and net income attributable to common stockholders of $65.3 million for the year ended December 31, 2003, increases of $104.6 million and $109.4 million, respectively. These increases were principally due to the following items, all of which are discussed in further detail within this section:
  •  an increase in net gain on disposition of real estate (including the gain recognized in discontinued operations and the gain related to unconsolidated entities and other); and
 
  •  an increase in activity fees and asset management revenues.
      These increases were partially offset by:
  •  an overall decline in net operating income, which included increases related to acquisitions and newly consolidated properties, offset by a decline in same store net operating results;
 
  •  an increase in general and administrative expenses;
 
  •  an increase in interest expense; and
 
  •  an increase in depreciation and amortization expense.
      The following paragraphs discuss these and other items affecting our results of operations in more detail.
2003 compared to 2002
      We recognized net income of $158.9 million and net income attributable to common stockholders of $65.3 million for the year ended December 31, 2003, compared to net income of $169.0 million and net income attributable to common stockholders of $75.5 million for the year ended December 31, 2002, decreases of $10.1 million and $10.2 million, respectively. These decreases were principally due to the following items, all of which are discussed in further detail within this section:
  •  an overall decline in net operating income, which included increases related to acquisitions and newly consolidated properties, offset by a decline in same store net operating results;
 
  •  an increase in depreciation and amortization expenses;
 
  •  an increase in interest expense;
 
  •  a decrease in interest income; and
 
  •  a decrease in property management revenues.
      These decreases were partially offset by:
  •  an increase in net gain on disposition of real estate (including the gain recognized in discontinued operations and the gain relating to unconsolidated entities); and
 
  •  lower minority interest allocations as a result of lower property operating results.
Rental Property Operations
      Our operating income is primarily generated from the operations of our consolidated properties. The principal components within our total consolidated property operations are: consolidated same store properties, which consist of all conventional properties that were owned, stabilized and consolidated for all comparable periods presented; and other consolidated entities, which include acquisition, newly consolidated, affordable and redevelopment properties.

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      The following table summarizes the overall performance of our consolidated properties for the years ended December 31, 2004, 2003 and 2002 (in thousands):
                         
    Year Ended December 31,
     
    2004   2003   2002
             
Rental and other property revenues
  $ 1,401,653     $ 1,336,515     $ 1,188,747  
Property operating expenses
    668,807       585,185       465,318  
                   
Net operating income
  $ 732,846     $ 751,330     $ 723,429  
                   
      For the year ended December 31, 2004, compared to the year ended December 31, 2003, net operating income for our consolidated property operations decreased by $18.5 million, or 2.5%. This decrease was principally due to a $40.3 million decrease in consolidated same store net operating income (see further discussion of same store results under the heading “Conventional Same Store Property Operating Results”). Additionally, there was a $6.6 million decrease related to net casualty losses and other costs primarily resulting from hurricanes and tropical storms in the third quarter of 2004, which damaged over 100 of our properties and $4.0 million in higher property management costs. These decreases were offset by an $18.2 million increase related to operations of newly consolidated properties, which are properties that had been previously unconsolidated and accounted for by the equity method (42 properties first consolidated in 2004, which includes 24 properties that were consolidated due to the adoption of Financial Accounting Standards Board Interpretation No. 46, Consolidation of Variable Interest Entities, or FIN 46, and 12 properties that were first consolidated after the first quarter of 2003) and a $16.0 million increase related to operations of acquisition properties, which were principally comprised of The Palazzo at Park La Brea and 10 other properties purchased in 2004, and three properties purchased in 2003.
      For the year ended December 31, 2003, compared to the year ended December 31, 2002, net operating income for our consolidated property operations increased by $27.9 million, or 3.9%. This increase was principally due to $62.2 million related to operations of newly consolidated properties (19 properties first consolidated in 2003 and 78 properties first consolidated in 2002) and $34.6 million related to operations of acquisition properties, which were principally comprised of three properties purchased in 2003, 115 properties acquired in the March 2002 acquisition of Casden Properties, Inc., 11 properties acquired in the August 2002 acquisition of New England area properties, and two properties purchased in 2002. This was partially offset by a $71.1 million decrease in consolidated same store net operating income (see further discussion of same store results under the heading “Conventional Same Store Property Operating Results”).
Conventional Same Store Property Operating Results
      Same store operating results is a key indicator we use to assess the performance of our property operations and to understand the period over period operations of a consistent portfolio of properties. We define “same store” properties as conventional properties in which our ownership interest exceeds 10% and the operations of which are stabilized for all periods presented. To ensure comparability, the information for all periods shown is based on current period ownership. The following table summarizes the conventional rental property operations on a “same store” basis (which is not in accordance with generally accepted accounting principles, or GAAP)

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and reconciles them to consolidated rental property operations (which is in accordance with GAAP) described in the above comparative discussions (dollars in thousands):
                           
    Year Ended December 31,
     
    2004   2003   2002
             
Our share of same store revenues
  $ 890,441     $ 897,271     $ 931,966  
Our share of same store expenses
    402,152       381,052       342,792  
                   
Our share of same store net operating income
    488,289       516,219       589,174  
Adjustments to reconcile same store net operating income to real estate segment net operating income(1)
    244,557       235,111       134,255  
                   
Real estate segment net operating income
  $ 732,846     $ 751,330     $ 723,429  
                   
Same store statistics for three year period:
                       
 
Properties
    499       499       499  
 
Apartment units
    139,102       139,102       139,102  
 
Average physical occupancy
    90.1 %     91.7 %     92.6 %
 
Average rent /unit/month
  $ 685     $ 686     $ 705  
 
(1)  Includes: (i) minority partners’ share of consolidated, less our share of unconsolidated, property revenues and property operating expenses (at current period ownership); (ii) property revenues and property operating expenses related to consolidated properties other than same store properties (e.g., affordable, acquisition and redevelopment properties); and (iii) eliminations and other adjustments made in accordance with GAAP.
      For the year ended December 31, 2004, compared to the year ended December 31, 2003, our share of same store net operating income decreased $27.9 million, or 5.4%. Revenues decreased $6.8 million, or 0.8%, primarily due to lower occupancy (down 1.6%), and slightly lower average rent (down $1 per unit), offset by higher utility reimbursements from residents and lower bad debt expense. Expenses increased by $21.1 million, or 5.5%, primarily due to: an increase of $18.9 million in compensation and benefit expense related to a new employee health plan, merit increases and increased staffing levels; an increase of $3.7 million in utilities due to the increase in the cost of natural gas; and an increase of $3.9 million in marketing and administrative expenses associated with our efforts to increase occupancy. These increases were partially offset by a decrease in property taxes related to successful appeals and changes in estimates related to assessments.
      For the year ended December 31, 2003, compared to the year ended December 31, 2002, our share of same store net operating income decreased $73.0 million, or 12.4%. Revenues decreased $34.7 million, or 3.7%, primarily due to lower average rent (down $19 per unit), lower occupancy (down 0.9%), and increased bad debt. Expenses increased by $38.3 million, or 11.2%, primarily due to: an increase of $10.1 million in turnover, marketing and administrative costs in 2003 related to focused efforts to improve property appearance and the condition of units ready to be occupied; $9.6 million in contract services and repairs and maintenance primarily driven by seasonal factors such as landscaping and snow removal due to more severe winter conditions in 2003 than in 2002; $6.0 million in utilities due to the increase in the cost of natural gas, electric, water and sewer; and $4.8 million in property hazard insurance due to increased casualty losses.
Property Management
      We earn income from property management primarily from unconsolidated real estate partnerships for which we are the general partner. The income is primarily in the form of fees generated through property management and other associated activities. Our revenue from property management decreases as we consolidate real estate partnerships and the income generated is therefore eliminated in consolidation. We expect this trend to continue as we increase our ownership in more of these partnerships or otherwise determine that consolidation is required by GAAP. Additionally, our revenue decreases as properties within our unconsolidated real estate partnerships are sold. Offsetting the revenue earned in property management are the direct expenses associated with property management.

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      The following table summarizes the overall performance of our property management business for the years ended December 31, 2004, 2003 and 2002 (in thousands):
                         
    Year Ended December 31,
     
    2004   2003   2002
             
Property management revenues, primarily from affiliates
  $ 32,461     $ 37,992     $ 56,550  
Property management expenses
    9,199       8,106       7,340  
                   
Net operating income from property management
  $ 23,262     $ 29,886     $ 49,210  
                   
      For the year ended December 31, 2004, compared to the year ended December 31, 2003, net operating income from property management decreased by $6.6 million, or 22.2%. For the year ended December 31, 2003, compared to the year ended December 31, 2002, net operating income from property management decreased by $19.3 million, or 39.3%. In both periods the decreases were principally due to an increase in consolidated real estate partnerships, which required elimination of fee income and associated property operating expense related to such partnerships, and the sales of properties within our unconsolidated partnerships (53 properties in 2004 and 37 properties in 2003) that had previously generated property management revenues.
Activity Fees and Asset Management
      Activity fees are generated from transactional activity including dispositions, syndications, tax credit redevelopments and refinancings. These transactions occur on varying timetables, thus the income generated may vary from period to period. The majority of these fees are generated by transactions related to affordable properties within the Aimco Capital portfolio. Asset management revenue is from the financial management of properties, rather than management of day-to-day property operations. Asset management revenue includes deferred asset management fees that are recognized once a transaction or improvement in operations has occurred to generate available cash. Offsetting the revenue earned in activity fees and asset management are the direct expenses associated with these activities.
      The following table summarizes the overall performance of our activity fees and asset management for the years ended December 31, 2004, 2003 and 2002 (in thousands):
                         
    Year Ended December 31,
     
    2004   2003   2002
             
Activity fees and asset management revenues, primarily from affiliates
  $ 34,801     $ 20,198     $ 21,622  
Activity and asset management expenses
    11,802       8,367       9,747  
                   
Net operating income from activity fees and asset management
  $ 22,999     $ 11,831     $ 11,875  
                   
      Included in the activity fees and asset management revenues, primarily from affiliates for the years ended December 31, 2004, 2003 and 2002, were $30.3 million, $18.9 million and $19.7 million, respectively, of fees related to affordable properties within the Aimco Capital portfolio.
      For the year ended December 31, 2004, compared to the year ended December 31, 2003, net operating income from activity fees and asset management increased by $11.2 million, or 94.4%. This overall increase was principally a result of increased activity fees related to disposition, refinancing and developer activities of $7.3 million, $2.3 million and $3.0 million, respectively, due to a greater number of transactions in 2004 than in 2003. Additionally, there was an increase of $2.9 million related to the recognition of deferred asset management fees resulting from closed transactions and improved operations. These increases were offset by a $2.1 million decrease related to syndication fees and $3.4 million in higher expenses associated with these activities.
      For the year ended December 31, 2003, compared to the year ended December 31, 2002, net operating income from activity fees and asset management decreased by $0.04 million. This overall decrease was principally a result of decreased activity fees related to disposition and refinancing activities of $2.6 million and $2.3 million, respectively, due to a fewer number of transactions in 2003 than in 2002. Additionally, there was a decrease of $3.5 million related to the recognition of deferred asset management fees resulting from fewer closed

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transactions in 2003. These decreases were offset by a $6.6 million increase related to syndication fees and lower expenses of $1.4 million associated with these activities.
Depreciation and Amortization
      For the year ended December 31, 2004, compared to the year ended December 31, 2003, depreciation and amortization increased $37.2 million, or 11.2%. This increase was principally due to $11.3 million and $7.2 million of additional depreciation related to the newly consolidated and acquisition properties, respectively, as well as $10.5 million from the completion of certain redevelopment properties. Additionally, $7.1 million of the increase resulted from additional depreciation on certain assets where, based on a periodic review, the estimated useful lives were reduced.
      For the year ended December 31, 2003, compared to the year ended December 31, 2002, depreciation and amortization increased $63.5 million, or 23.7%. This increase was principally due to $23.4 million and $23.5 million of additional depreciation related to the acquisition properties and the newly consolidated properties, respectively, as well as $12.3 million of additional depreciation related to new capital spending on same store properties. Additionally, amortization of intangibles increased $2.7 million as a result of additional amortization recognized due to the termination of certain management contracts acquired in the Casden Transactions.
General and Administrative Expenses
      For the year ended December 31, 2004, compared to the year ended December 31, 2003, general and administrative expenses increased $29.4 million, or 60.5%. This increase was principally due to: $15.5 million in higher compensation related to increased staffing levels, merit increases and variable compensation; $7.7 million related to increased health insurance costs and the effect of a favorable change in 2003 related to our accrual for insurance claims incurred but not reported (IBNR); $3.2 million in increased amortization of restricted stock and stock option compensation; and $3.1 million in legal costs and compliance costs primarily related to the internal control reporting requirements of Section 404 of the Sarbanes-Oxley Act of 2002.
      For the year ended December 31, 2003, compared to the year ended December 31, 2002, general and administrative expenses remained relatively flat decreasing $0.4 million, or 0.8%. This decrease was principally due to: $6.0 million related to lower health insurance costs and the effect of a favorable change in our IBNR accrual in 2003; and $2.9 million in lower salaries, primarily related to lower variable compensation. These decreases were offset by an $8.7 million increase in consulting fees associated with the implementation of site level software and legal fees.
Other Expenses (Income), Net
      Other expenses (income), net includes tax provision/benefit, franchise taxes, risk management activities related to our unconsolidated partnerships and partnership expenses.
      For the year ended December 31, 2004, compared to the year ended December 31, 2003, other expenses (income), net changed $9.7 million from income of $6.3 million in 2003 to expense of $3.4 million in 2004. This change was principally due to a $10.8 million lower tax benefit recognized in 2004 as compared to 2003, due primarily to an $8.0 million benefit related to the reversal of a deferred income tax asset valuation allowance (see further discussion in Note 10 of the consolidated financial statements in Item 8). In the year ended December 31, 2004, there was a tax benefit of $7.2 million recorded, as compared to $18.0 million in the year ended December 31, 2003.
      For the year ended December 31, 2003, compared to the year ended December 31, 2002, other expenses (income), net changed $8.3 million from expense of $2.0 million in 2002 to income of $6.3 million in 2003. This change was principally due to a $15.1 million higher tax benefit recognized in 2003 as compared to 2002, partially offset by $2.4 million in higher franchise taxes and $1.3 million in decreased risk operations due to increased legal expenses. In the year ended December 31, 2003, there was a tax benefit of $18.0 million recorded, as compared to $2.9 million in the year ended December 31, 2002. See discussion above on the 2003 tax activity.

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Interest Income
      Interest income consists primarily of interest and accretion on general partner notes receivable from our unconsolidated real estate partnerships. Transactions that result in accretion occur on varying timetables and thus the income generated may vary from period to period.
      For the year ended December 31, 2004, as compared to the year ended December 31, 2003, interest income increased $7.6 million, or 30.8%. This increase was principally a result of $5.0 million in higher interest due from general partner notes receivable, and $3.0 million in higher accretion income.
      For the year ended December 31, 2003, as compared to the year ended December 31, 2002, interest income decreased $51.6 million, or 67.5%. This decrease was principally a result of: $33.5 million in reduced accretion income; $11.1 million in lower interest due from general partner notes receivable resulting from the consolidation of real estate partnerships, and therefore the elimination of interest income, as well as the collection of outstanding notes receivable; and $7.7 million related to gain recognized in second quarter 2002 on the sale of certain tax-exempt bonds.
Recovery of (Provision for) Losses on Notes Receivable
      For the year ended December 31, 2004, as compared to the year ended December 31, 2003, recovery of (provision for) losses on notes receivable changed $3.9 million from a provision of $2.2 million in 2003 to a recovery of $1.8 million in 2004. For the year ended December 31, 2003, as compared to the year ended December 31, 2002, provision for losses on notes receivable decreased $6.8 million.
      The provision or recovery in each period was determined based on our periodic review of the collectibility of each loan made to affiliated partnerships within our loan receivable portfolio as well as actual cash collections. We continue to monitor these loans and assess the collectibility of each loan on a periodic basis and record provisions as necessary based on the projected operating cash flows of the underlying real estate assets.
Interest Expense
      For the year ended December 31, 2004, compared to the year ended December 31, 2003, interest expense, which includes the amortization of deferred financing costs, increased $24.8 million, or 7.3%. This increase was principally due to: $9.9 million resulting from interest on the additional debt related to the newly consolidated properties; $9.6 million resulting from interest on the additional debt related to acquisition properties; and a $4.7 million decrease in capitalized interest due to redevelopment properties being placed in service. Additionally, an $8.8 million increase related to the credit facility and term loan (of which $1.8 million was associated with the write-off of deferred loan costs related to the November 2004 modification of the credit facility and term loan and $0.8 million related to the payoff of the indebtedness incurred to complete the Casden Transactions) due to higher average principal balances along with a higher weighted average interest rate. The November 2004 modification reduced the spread over LIBOR by an average of 1.25%, which will favorably impact interest expense related to our revolving credit facility and $300 million term loan. These increases were partially offset by lower weighted average effective interest rates on mortgage debt due to refinancings that occurred in 2003 and 2004.
      For the year ended December 31, 2003, as compared to the year ended December 31, 2002, interest expense increased $47.0 million, or 16.0%. This increase was principally due to $26.6 million and $21.3 million of additional interest on the debt related to the newly consolidated properties and the acquisition properties, respectively.
Deficit Distributions to Minority Partners
      When real estate partnerships consolidated in our financial statements make cash distributions to partners in excess of the carrying amount of the minority interest, we record a charge equal to the amount of such distribution, even though there is no economic effect or cost.

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      For the year ended December 31, 2004, as compared to the year ended December 31, 2003, deficit distributions to minority partners decreased $4.6 million, or 20.4%. For the year ended December 31, 2003, as compared to the year ended December 31, 2002, deficit distributions to minority partners decreased $4.9 million, or 17.8%. Each of these decreases were due to reduced levels of distributions being made by the consolidated real estate partnerships as a result of lower refinancing activity and decreased operating results, as well as our increased ownership of such partnerships.
Equity in Earnings (Losses) of Unconsolidated Real Estate Partnerships
      For the year ended December 31, 2004, as compared to the year ended December 31, 2003, equity in losses of unconsolidated real estate partnerships decreased $4.7 million, or 72.5%. This decrease in loss was principally the result of increased ownership in certain unconsolidated partnerships and better property operating results at certain properties.
      For the year ended December 31, 2003, as compared to the year ended December 31, 2002, equity in earnings (losses) of unconsolidated real estate partnerships changed $7.1 million from equity in earnings of $0.7 million in 2002 to equity in losses of $6.4 million in 2003. This increase was principally the result of the purchase of equity interests in unconsolidated real estate partnerships that resulted in these properties becoming consolidated. Such real estate partnerships owned better performing properties that are now contributing to consolidated rental revenues and expenses. In addition, the remaining properties within unconsolidated real estate partnerships had decreased earnings driven by lower property operating results in 2003 than in 2002.
Gain (Loss) on Dispositions of Real Estate Related to Unconsolidated Entities and Other
      Gain on dispositions of real estate related to unconsolidated entities and other includes our share of gain related to dispositions of real estate within our unconsolidated real estate partnerships, gain on dispositions of non-depreciable assets and costs related to asset disposal activities. Gains (losses) on properties sold are determined on a property-by-property basis and are not comparable period to period.
      For the year ended December 31, 2004, as compared to the year ended December 31, 2003, gain on dispositions of real estate related to unconsolidated entities and other increased $65.5 million. This increase was principally due to a $34.6 million gain on the sale of a parcel of land located in Florida, and $17.4 million gain from the sale of one of our unconsolidated core properties.
      For the year ended December 31, 2003, as compared to the year ended December 31, 2002, gain on dispositions of real estate related to unconsolidated entities and other increased $25.5 million. Included in 2002 was a loss of approximately $28.0 million that resulted primarily from a change in estimate due to better insight into information related to the finalization of the recording of purchase price accounting to appropriate entities acquired in past acquisitions and the related historical estimation process in determining the carrying value of assets sold. The recognition of this amount in 2002 was considered to be a change in estimate associated with the historical estimated gain or loss on the sale of these properties. The recognition of this change in estimate resulted in a decrease in basic and diluted earnings per share of $0.28 for the year ended December 31, 2002.
Minority Interest in Consolidated Real Estate Partnerships
      For the year ended December 31, 2004, as compared to the year ended December 31, 2003, minority interest in consolidated real estate partnerships changed $17.5 million. For the year ended December 31, 2003, as compared to the year ended December 31, 2002, minority interest in consolidated real estate partnerships changed $13.5 million. The changes in both periods were principally a result of decreased earnings caused by lower property operating results than in the prior year.
Income from Discontinued Operations, Net
      For properties accounted for as held for sale, the results of operations for properties sold during the period or designated as held for sale at the end of the period are required to be classified as discontinued operations. The property-specific components of net earnings that are classified as discontinued operations include all property-

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related revenues and operating expenses, depreciation expense recognized prior to the classification as held for sale, property-specific interest expense to the extent there is secured debt on the property and the associated minority interest. In addition, any impairment losses on assets held for sale, and the net gain on the eventual disposal of properties held for sale are reported as discontinued operations.
      For the years ended December 31, 2004, 2003, and 2002, income from discontinued operations, net totaled $211.8 million, $94.7 million and $20.4 million, respectively, which includes income from operations of $6.6 million, $15.4 million and $35.6 million, respectively. In 2004, the income from operations included 68 properties that were sold or classified as held for sale during 2004. In 2003 and 2002, the income from operations included 140 properties and 182 properties, respectively, that were sold or classified as held for sale in 2002, 2003 and 2004. Due to varying number of properties and the timing of sales, the income from operations is not comparable year to year.
      During 2004, we sold 54 properties, resulting in a net gain on sale of approximately $233.9 million (which is net of $16.0 million of related taxes). Additionally, we recognized $7.3 million in impairment losses on assets sold or held for sale in 2004. During 2003, we sold 72 properties, resulting in a net gain on sale of approximately $89.7 million (which is net of $12.1 million of related taxes). Additionally, we recognized $9.0 million in impairment losses on assets sold or held for sale in 2003. During 2002, we sold 42 properties, resulting in a net loss on sale of approximately $8.5 million (including $2.5 million of related taxes). Additionally, we recognized $2.9 million in impairment losses on assets sold or held for sale in 2002.
      Gains (losses) on properties sold are determined on a property-by-property basis and are not comparable period to period. See Note 15 of the consolidated financial statements in Item 8 for more details on discontinued operations.
Cumulative Effect of Change in Accounting Principle
      On March 31, 2004, we recorded a $4.0 million cumulative effect of change in accounting principle related to the adoption of FIN 46. This charge is attributable to our recognition of cumulative losses allocable to minority interest that would otherwise have resulted in minority interest deficits. See Note 2 of the consolidated financial statements in Item 8 for further information.
Critical Accounting Policies and Estimates
      We prepare our consolidated financial statements in accordance with GAAP, which requires us to make estimates and assumptions. We believe that the following critical accounting policies involve our more significant judgments and estimates used in the preparation of our consolidated financial statements.
Impairment of Long-Lived Assets
      Real estate and other long-lived assets to be held and used are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a property may not be recoverable, we make an assessment of its recoverability by comparing the carrying amount to our estimate of the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the aggregate undiscounted future cash flows, we recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.
      Real estate investments are subject to varying degrees of risk. Several factors may adversely affect the economic performance and value of our real estate investments. These factors include:
  •  the general economic climate;
 
  •  competition from other apartment communities and other housing options;
 
  •  local conditions, such as an increase in unemployment or an increase in the supply of apartments, that might adversely affect apartment occupancy or rental rates;
 
  •  changes in governmental regulations and the related cost of compliance;

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  •  increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents;
 
  •  changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multifamily housing;
 
  •  changes in market capitalization rates; and
 
  •  the relative illiquidity of such investments.
      Any adverse changes in these factors could cause an impairment in our long-lived assets, including real estate, goodwill and investments in unconsolidated real estate partnerships. Based on periodic tests of recoverability of long-lived assets, we have determined that the carrying amount for our properties to be held and used is recoverable and, therefore, we did not record any impairment losses related to such properties during the years ended December 31, 2004, 2003 and 2002.
Notes Receivable and Interest Income Recognition
      Notes receivable from unconsolidated real estate partnerships consist primarily of subordinated notes receivable from partnerships in which we are the general partner. The ultimate repayment of these notes is subject to a number of variables, including the performance and value of the underlying real estate property and the claims of unaffiliated mortgage lenders. Our notes receivable include loans extended by us that we carry at the face amount plus accrued interest, which we refer to as “par value notes,” and loans extended by predecessors whose positions we generally acquired at a discount, which we refer to as “discounted notes.”
      We record interest income on par value notes as earned in accordance with the terms of the related loan agreements. We discontinue the accrual of interest on such notes when the notes are impaired, as discussed below, or when there is otherwise significant uncertainty as to the collection of interest. We record income on such nonaccrual loans using the cost recovery method, under which we apply cash receipts first to the recorded amount of the loan; thereafter, any additional receipts are recognized as income.
      We recognize interest income on discounted notes receivable based upon whether the amount and timing of collections are both probable and reasonably estimable. We consider collections to be probable and reasonably estimable when the borrower has entered into certain closed or pending transactions (which include real estate sales, refinancings, foreclosures and rights offerings) that provide a reliable source of repayment. In such instances, we recognize accretion income, on a prospective basis using the effective interest method over the estimated remaining term of the loans, equal to the difference between the carrying amount of the discounted notes and the estimated collectible value. We record income on all other discounted notes using the cost recovery method. For the year ended December 31, 2004, if we had not been able to complete certain transactions, our accretion income would have decreased by $6.3 million ($0.06 per basic and diluted share). Accretion income recognized in any given period is based on our ability to complete transactions to monetize the notes receivable and the difference between the carrying value and the estimated collectible value of the notes; therefore, accretion income varies on a period by period basis and could be lower or higher than in prior periods.
Allowance for Losses on Notes Receivable
      We assess the collectibility of notes receivable on a periodic basis, which assessment consists primarily of an evaluation of cash flow projections of the borrower to determine whether estimated cash flows are sufficient to repay principal and interest in accordance with the contractual terms of the note. We recognize impairments on notes receivable when it is probable that principal and interest will not be received in accordance with the contractual terms of the loan. The amount of the impairment to be recognized generally is based on the fair value of the partnership’s real estate that represents the primary source of loan repayment. In certain instances where other sources of cash flow are available to repay the loan, the impairment is measured by discounting the estimated cash flows at the loan’s original effective interest rate.
      During the year ended December 31, 2004, we recorded $1.8 million in net recovery of impairment losses on notes receivable. During the years ended December 31, 2003 and 2002, we identified and recorded

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$2.2 million, and $9.0 million in impairment losses on notes receivable (net of recoveries), respectively. We will continue to evaluate the collectibility of these notes, and we may adjust related allowances in the future due to changes in market conditions and other factors.
Capitalized Costs
      We capitalize direct and allocable indirect costs (including salaries, interest, real estate taxes and other costs) incurred in connection with redevelopment, Capital Improvement and Capital Replacement activities. We charge to expense as incurred indirect costs that do not relate to the above activities, including general and administrative expenses. The amounts capitalized depend on the volume and costs of such activities. Based on the level of capital spending during the year ended December 31, 2004, if capital activities had increased or decreased during the period by 10%, our income before minority interest would have increased or decreased, respectively, by approximately $5.1 million. See further discussion under the heading “Capital Expenditures.”
Funds From Operations
      Funds From Operations, or FFO, is a non-GAAP financial measure that we believe, when considered with the financial data determined in accordance with GAAP, is helpful to investors in understanding our performance because it captures features particular to real estate performance by recognizing that real estate generally appreciates over time or maintains residual value to a much greater extent than do other depreciable assets such as machinery, computers or other personal property. The Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as net income, computed in accordance with GAAP, excluding gains (or losses) from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. We compute FFO for all periods presented in accordance with the guidance set forth by NAREIT’s April 1, 2002 White Paper, which we refer to as the White Paper. We calculate FFO (diluted) by subtracting redemption related preferred stock issuance costs and dividends on preferred stock, adding back dividends/ distributions on dilutive preferred securities and adding back the interest expense on dilutive mandatorily redeemable convertible preferred securities. FFO should not be considered an alternative to net income or net cash flows from operating activities, as calculated in accordance with GAAP, as an indication of our performance or as a measure of liquidity. FFO is not necessarily indicative of cash available to fund future cash needs. In addition, although FFO is a measure used for comparability in assessing the performance of real estate investment trusts, there can be no assurance that our basis for computing FFO is comparable with that of other real estate investment trusts.

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      For the years ended December 31, 2004, 2003 and 2002, our FFO is calculated as follows (amounts in thousands):
                               
    2004   2003   2002
             
Net income attributable to common stockholders(1)
  $ 174,693     $ 65,292     $ 75,488  
Adjustments:
                       
 
Depreciation and amortization(2)
    368,844       331,609       268,085  
 
Depreciation and amortization related to non-real estate assets
    (18,349 )     (20,370 )     (19,070 )
 
Depreciation on rental property related to minority partners’ interest(3)
    (43,387 )     (28,714 )     (22,542 )
 
Depreciation on rental property related to unconsolidated entities
    22,360       25,817       33,549  
 
(Gain) loss on disposition of real estate related to unconsolidated entities and other
    (68,634 )     (3,178 )     22,362  
 
Gain on dispositions of non-depreciable assets
    38,977              
 
Deficit distributions to minority partners, net(4)
    18,007       22,629       27,535  
 
Cumulative effect of change in accounting principle
    3,957              
 
Discontinued operations:
                       
   
Depreciation on rental property, net of minority partners’ interest(3)
    12,404       37,349       48,458  
   
(Gain) loss on dispositions of real estate, net of minority partners’ interest(3)
    (249,944 )     (101,849 )     6,021  
   
(Recovery of deficit distributions) deficit distributions to minority partners(4)
    (3,863 )     (10,686 )     765  
   
Income tax arising from disposals
    16,015       12,134       2,507  
Minority interest in Aimco Operating Partnership’s share of above adjustments
    (10,289 )     (29,910 )     (44,500 )
Preferred stock dividends
    85,315       85,920       93,558  
Redemption related preferred stock issuance costs
    3,489       7,645        
                   
Funds From Operations
  $ 349,595     $ 393,688     $ 492,216  
Preferred stock dividends
    (85,315 )     (85,920 )     (93,558 )
Redemption related preferred stock issuance costs
    (3,489 )     (7,645 )      
Dividends/distributions on dilutive preferred securities
    2,798       11,330       38,091  
Interest expense on mandatorily redeemable convertible preferred securities
          987       1,161  
                   
Funds From Operations attributable to common stockholders — diluted
  $ 263,589     $ 312,440     $ 437,910  
                   
Weighted average number of common shares, common share equivalents and dilutive preferred securities outstanding:
                       
 
Common shares and equivalents(5)
    93,252       92,968       86,773  
 
Dilutive preferred securities
    1,106       3,639       9,588  
                   
     
Total
    94,358       96,607       96,361  
                   
 
Notes:
(1)  Represents our numerator for earnings per common share calculated in accordance with GAAP.
 
(2)  Includes amortization of management contracts where we are the general partner. Such management contracts were established in certain instances where we acquired a general partner interest in either a consolidated or an unconsolidated partnership. Because the recoverability of these management contracts

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depends primarily on the operations of the real estate owned by the limited partnerships, we believe it is consistent with the White Paper to add back such amortization, as the White Paper directs the add-back of amortization of assets uniquely significant to the real estate industry.
 
(3)  “Minority partners’ interest,” means minority interest in our consolidated real estate partnerships.
 
(4)  In accordance with GAAP, deficit distributions to minority partners are charges recognized in our income statement when cash is distributed to a non-controlling partner in a consolidated real estate partnership in excess of the positive balance in such partner’s capital account, which is classified as minority interest on our balance sheet. We record these charges for GAAP purposes even though there is no economic effect or cost. Deficit distributions to minority partners occur when the fair value of the underlying real estate exceeds its depreciated net book value because the underlying real estate has appreciated or maintained its value. As a result, the recognition of expense for deficit distributions to minority partners represents, in substance, either (a) our recognition of depreciation previously allocated to the non-controlling partner or (b) a cost related to the non-controlling partner’s share of real estate appreciation. Based on White Paper guidance that requires real estate depreciation and gains to be excluded from FFO, we add back deficit distributions and subtract related recoveries in our reconciliation of net income to FFO.
 
(5)  Represents our denominator for earnings per common share — diluted calculated in accordance with GAAP plus additional common share equivalents that are dilutive for FFO.

Liquidity and Capital Resources
      Liquidity is the ability to meet present and future financial obligations either through the sale or maturity of existing assets or by the acquisition of additional funds through working capital management. Both the coordination of asset and liability maturities and effective working capital management are important to the maintenance of liquidity. Our primary source of liquidity is cash flow from our operations. Additional sources are proceeds from property sales and proceeds from refinancings of existing mortgage loans and borrowings under new mortgage loans.
      Our principal uses for liquidity include normal operating activities, payments of principal and interest on outstanding debt, capital expenditures, dividends paid to stockholders and distributions paid to partners, and acquisitions of, and investments in, properties. We use our cash provided by operating activities to meet short-term liquidity needs. In the event that the cash provided by operating activities is not sufficient to cover our short-term liquidity demands, we have additional means, such as short-term borrowing availability and proceeds from property sales and refinancings, to help us meet our short-term liquidity demands. We use our revolving credit facility for general corporate purposes and to fund investments on an interim basis. We expect to meet our long-term liquidity requirements, such as debt maturities and property acquisitions, through long-term borrowings, both secured and unsecured, the issuance of debt or equity securities (including OP Units), the sale of properties and cash generated from operations.
      At December 31, 2004, we had $105.3 million in cash and cash equivalents, a decrease of $9.1 million from December 31, 2003, which cash is principally from sales and refinancing transactions that has yet to be distributed or applied to the outstanding balance on the revolving credit facility (see Note 8 to the consolidated financial statements in Item 8). At December 31, 2004, we had $282.0 million of restricted cash (including $12.6 million of restricted cash that is included within Assets Held for Sale), primarily consisting of reserves and escrows held by lenders for bond sinking funds, capital expenditures, property taxes and insurance. In addition, cash, cash equivalents and restricted cash are held by partnerships that are not presented on a consolidated basis. The following discussion relates to changes in cash due to operating, investing and financing activities, which are presented in our Consolidated Statements of Cash Flows in Item 8.
Operating Activities
      For the year ended December 31, 2004, our net cash provided by operating activities of $365.5 million was primarily from operating income from our consolidated properties, which is determined by rental rates, occupancy levels and operating expenses related to our portfolio of properties. This decreased $98.4 million compared with the year ended December 31, 2003, driven primarily by lower property operating results.

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Investing Activities
      For the year ended December 31, 2004, our net cash provided by investing activities of $336.9 million primarily resulted from proceeds received from sales of properties, offset by the acquisition of The Palazzo at Park La Brea and several other properties (see Note 3 of the consolidated financial statements in Item 8 for further information on acquisitions), as well as investments in our existing real estate assets through capital spending (see further discussion on capital expenditures under the heading “Capital Expenditures”).
      Although we hold all of our properties for investment, we sell properties when they do not meet our investment criteria or are located in areas that we believe do not justify our continued investment when compared to alternative uses for our capital. In the year ended December 31, 2004, we sold 54 consolidated properties, three consolidated land parcels, and 53 unconsolidated properties. These properties were sold for an aggregate sales price of $1.4 billion, of which $1.0 billion related to the consolidated properties and land parcels. The sale of the consolidated properties generated proceeds totaling $971.6 million, after the payment of transaction costs. Our share of the total net proceeds from the sale of the 107 properties and three land parcels, after repayment of existing debt, payment of transaction costs and distributions to limited partners, was $530.3 million, of which $60.9 million related to the unconsolidated properties. Of the $60.9 million, $39.0 million was received as of December 31, 2004, and was included in our distributions received from investments in unconsolidated real estate partnerships. These proceeds were used to repay a portion of our outstanding short-term indebtedness, redeem preferred securities, and for other corporate purposes.
      We are currently marketing for sale certain properties that are inconsistent with our long-term investment strategy. Additionally, from time to time, we may market certain properties that are consistent with our long-term investment strategy but offer attractive returns, such as sales to buyers who intend to convert the properties to condominiums. Gross sales proceeds from 2005 dispositions are expected to be $500 million to $550 million, and we plan to use such proceeds to reduce debt, fund capital expenditures on existing assets, fund property and partnership acquisitions, and for other operating needs and corporate purposes.
Financing Activities
      For the year ended December 31, 2004, net cash used in financing activities of $711.5 million primarily related to payments on our secured notes payable, the repayment in full of the term loan we entered into in connection with the Casden Transactions, payment of our dividends, and the full or partial redemptions of mandatorily redeemable preferred securities, the Class P Convertible Cumulative Preferred Stock, the Class D Cumulative Preferred Stock and the Class N Cumulative Preferred Stock. These were offset by proceeds from the issuance of Class U Cumulative Preferred Stock, Class V Cumulative Preferred Stock, Class Y Cumulative Preferred Stock and mortgage loans (see notes to the consolidated financial statements in Item 8 for further details on these activities).
Mortgage Debt
      At December 31, 2004, we had $5.6 billion in consolidated mortgage debt outstanding as compared to $5.2 billion outstanding at December 31, 2003. During the year ended December 31, 2004, we refinanced or closed mortgage loans on 38 consolidated properties generating $444.3 million of proceeds from borrowings with a weighted average interest rate of 4.03%. Our share of the net proceeds after repayment of existing debt, payment of transaction costs and distributions to limited partners, was $120.2 million. In addition, we closed mortgage loans on 22 unconsolidated properties, with a weighted average interest rate of 4.04%. Our share of the net proceeds from these 22 mortgage loans totaled $26.2 million and are included in our distributions received from investments in unconsolidated real estate partnerships within investing activities. We used our total net proceeds from all loans closed of $146.4 million to repay existing short-term debt and for other corporate purposes. In 2005, we intend to continue to refinance mortgage debt to generate proceeds in amounts exceeding our scheduled amortizations and maturities.
      During the year ended December 31, 2004, we closed five mortgage loans totaling $126.8 million, with a weighted average interest rate of 3.40%, to finance our acquisitions.

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Revolving Credit Facility and Term Loans
      On November 2, 2004, we entered into an Amended and Restated Senior Secured Credit Agreement, which we refer to as the Credit Agreement, with a syndicate of financial institutions. The Credit Agreement replaced our previous two separate credit agreements. The original aggregate commitment under the Credit Agreement is $750 million, comprised of $450 million of revolving loan commitments and a $300 million term loan tranche. Proceeds from the term loan made on the closing date were used to repay the outstanding indebtedness under our previous loan facilities and for other corporate purposes. Proceeds from the revolving loans made on the closing date were used to repay outstanding indebtedness under the previous loan facilities. The term loan matures on November 2, 2009 and the revolving loans mature on November 2, 2007. See Note 8 of the consolidated financial statements in Item 8 for detailed information on the Credit Agreement.
      At December 31, 2004, the outstanding principal balance of the term loan was $300.0 million at an interest rate of 4.18% (based on LIBOR plus 2.00%). The proceeds of future term loans are generally permitted to be used to fund general working capital and other corporate purposes.
      At December 31, 2004, the outstanding principal balance of the revolving loans was $68.7 million at an interest rate of 4.64% (based on various weighted average LIBOR and base rate borrowings outstanding with various maturities). The amount available under the revolving credit facility at December 31, 2004 was $358.2 million (after giving effect to $23.1 million outstanding for undrawn letters of credit issued under the revolving credit facility). The proceeds of future revolving loans are generally permitted to be used to fund working capital and for other corporate purposes.
      Additionally, during 2004, we repaid $104.4 million of indebtedness that was incurred in connection with the Casden Transactions.
Equity Transactions
      During the year ended December 31, 2004, we issued $522.5 million of new preferred securities with rates ranging from 7.75% to 8.5%. With proceeds from these issuances, we redeemed or exchanged $336.2 million of outstanding preferred securities with rates ranging from 8.75% to 9.00%. Additionally, we redeemed all outstanding shares of Class S Cumulative Redeemable Preferred Stock for $98.9 million (see Notes 7 and 13 to the consolidated financial statements in Item 8).
      Under our shelf registration, which was declared effective in April 2004, we had approximately $877 million of debt and equity securities available and the Aimco Operating Partnership had $500 million of debt available as of December 31, 2004 (see Notes 12 and 13 to the consolidated financial statements in Item 8 for further details on the shelf registration statement and preferred securities). We intend to continue to issue preferred securities in both public offerings and private placements to generate proceeds that we will use to redeem higher cost preferred securities, to finance acquisitions of real estate interests and for other corporate purposes.
      Our Board of Directors has, from time to time and most recently in 2001, authorized us to repurchase shares of our outstanding capital stock. Currently, we are authorized to repurchase up to a total of approximately 1.5 million shares of either our Common Stock or preferred stock. These repurchases may be made from time to time in the open market or in privately negotiated transactions, subject to applicable law. On February 18, 19 and 24, 2004, we purchased in the open market 30,000, 60,000 and 20,000 shares of Common Stock, respectively, at an average price per share of approximately $32.03, $32.17 and $31.26, respectively. Additionally, on February 24, 2004, we completed the purchase of 287,272 shares of Common Stock at a price of $31.60 per share in a privately negotiated transaction.
      The dividend paid in February 2005 of $0.60 per share represents a distribution of 120% of diluted Adjusted Funds From Operations, which we refer to as AFFO, and 83% of diluted FFO for the quarter ended December 31, 2004.

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Capital Expenditures
      Effective January 1, 2004, we classify all capital spending as Capital Replacements (which we refer to as CR), Capital Improvements (which we refer to as CI) or redevelopment. We believe the new classifications are simpler to apply, allow more discrete differentiation between categories, facilitate sound economic decisions, and assist investors and analysts in better understanding our capital spending.
      Non-redevelopment capitalizable expenditures are apportioned between CR and CI based on the useful life of the capital item under consideration and the period we have owned the property (i.e., the portion that was consumed during our ownership of the item represents CR; the portion of the item that was consumed prior to our ownership represents CI).
      For the year ended December 31, 2004, we spent a total of $77.2 million on CR. These are expenditures that represent the share of expenditures that are deemed to replace the consumed portion of acquired capital assets. For the year ended December 31, 2004, we spent a total of $82.4 million and $88.8 million, respectively, on CI and redevelopment. CI expenditures represent all non-redevelopment capital expenditures that are made to enhance the value, profitability or useful life of an asset from its original purchase condition, and redevelopment expenditures represent expenditures that substantially upgrade the property.

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      The table below details our share of actual spending, on both consolidated and unconsolidated real estate partnerships, for CR, CI and redevelopment for the year ended December 31, 2004 on a per unit and total dollar basis (based on approximately 160,000 ownership equivalent units), and reconciles it to our Consolidated Statement of Cash Flows for the same period (in thousands, except per unit amounts).
                     
    Actual Cost   Cost Per Unit
         
Capital Replacements Detail:
               
Building interiors
  $ 14,839     $ 93  
 
Includes: hot water heaters, kitchen/bath
               
Building exteriors
    12,011       75  
 
Includes: roofs, exterior painting, electrical, plumbing
               
Landscaping and grounds
    7,928       50  
 
Includes: parking lot improvements, pool improvements
               
Turnover related
    29,311       183  
 
Includes: carpet, vinyl, tile, appliance, and fixture replacements
               
Capitalized payroll and other indirect costs
    13,152       82  
             
Total our share of Capital Replacements
  $ 77,241     $ 483  
             
Capital Replacements:
               
Conventional
  $ 67,491          
Affordable
    9,750          
             
Total our share of Capital Replacements
    77,241          
             
Capital Improvements:
               
   
Conventional
    62,339          
   
Affordable
    20,030          
             
Total our share of Capital Improvements
    82,369          
             
Redevelopment:
               
   
Conventional
    75,259          
   
Affordable
    13,550          
             
Total our share of redevelopment
    88,809          
             
Total our share of capital expenditures
    248,419          
             
 
Plus minority partners’ share of consolidated spending
    68,027          
 
Less our share of unconsolidated spending
    (14,509 )        
             
Total capital expenditures per Consolidated Statement of Cash Flows
  $ 301,937          
             
      Included in the above spending for CI and redevelopment, is approximately $26.6 million of our share of capitalized payroll and other indirect costs related to these activities for the year ended December 31, 2004.
      We funded all of the above capital expenditures with cash provided by operating activities, working capital, and borrowings under the revolving credit facility.

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Contractual Obligations
      This table summarizes information contained elsewhere in this Annual Report regarding payments due under contractual obligations and commitments as of December 31, 2004 (amounts in thousands):
                                         
        Less than           More than
    Total   One Year   1-3 Years   3-5 Years   5 Years
                     
Scheduled long-term debt maturities
  $ 5,604,653     $ 254,840     $ 1,006,250     $ 600,811     $ 3,742,752  
Secured credit facility and term loans
    368,700             68,700       300,000        
Mandatorily redeemable preferred securities(1)
    15,019                         15,019  
Redevelopment and other construction commitments
    72,706       69,943       2,254       509        
Commitments to purchase real estate(2)
    485,500       485,500                    
Leases for space occupied
    46,926       7,262       14,292       11,337       14,035  
Development fee payments(3)
    22,500       10,000       12,500              
                               
Total
  $ 6,616,004     $ 827,545     $ 1,103,996     $ 912,657     $ 3,771,806  
                               
 
(1)  Mandatorily redeemable preferred securities were fully redeemed on January 11, 2005 (see Note 22 of the consolidated financial statements in Item 8 for further information).
 
(2)  Of the $485.5 million total: $201 million was associated with our commitment to purchase Westwood (a commitment entered into in connection with the Casden Transactions), which commitment was extinguished on January 3, 2005; and $199 million was associated with our commitment to acquire the Palazzo East at Park La Brea (a commitment entered into in connection with the Casden Transactions), which transaction was completed on February 28, 2005. As a result, as of February 28, 2005 the total remaining commitment to purchase real estate is $85.5 million. See Notes 9 and 22 of the consolidated financial statements in Item 8.
 
(3)  The development fee payments above were established in connection with the Casden Transactions and our commitment as it relates to the Casden Development Company, LLC. We agreed to pay $2.5 million per quarter for five years (up to an aggregate amount of $50.0 million) to Casden Development Company, LLC as a retainer on account for redevelopment services on our assets.
Future Capital Needs
      In addition to the items set forth in “Contractual Obligations” above, we expect to fund any future acquisitions, additional redevelopment projects and capital improvements principally with proceeds from property sales (including tax-free exchange proceeds), short-term borrowings, debt and equity financings and operating cash flows.
Off-Balance Sheet Arrangements
      We own general and limited partner interests in unconsolidated real estate partnerships, which interests were acquired through portfolio acquisitions, individual property purchases and separate offers to other limited partners. Our total ownership interests in these unconsolidated real estate partnerships ranges typically from less than 1% to 50%. However, based on the provisions of the related partnership agreements, which grant varying degrees of control, we are not deemed to have control of these partnerships sufficient to require or permit consolidation for accounting purposes. The requirement or ability to consolidate a real estate partnership is determined by FIN 46 (see Note 2 of the consolidated financial statements in Item 8). There are no lines of credit, side agreements, or any other derivative financial instruments related to or between our unconsolidated real estate partnerships and us and no material exposure to financial guarantees (see Note 9 of the consolidated financial statements in Item 8). Accordingly, our maximum risk of loss related to these unconsolidated real estate partnerships is limited to the aggregate carrying amount of our investment in the unconsolidated real estate partnerships and any outstanding notes receivable as reported in our consolidated financial statements. See Note 4

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of the consolidated financial statements in Item 8 for additional information on our unconsolidated real estate partnerships.
Item 7A.      Quantitative and Qualitative Disclosures About Market Risk
      Our primary market risk exposure relates to changes in interest rates. We are not subject to any foreign currency exchange rate risk or commodity price risk, or any other material market rate or price risks. We use predominantly long-term, fixed-rate and self-amortizing non-recourse mortgage debt in order to avoid the refunding and repricing risks of short-term borrowings. We use short-term debt financing and working capital primarily to fund short-term uses and acquisitions and generally expect to refinance such borrowings with cash from operating activities, property sales proceeds, long-term debt or equity financings.
      We had $1,533.2 million of floating rate debt outstanding at December 31, 2004. Of the total floating rate debt, the major components were floating rate tax-exempt bond financing ($741.8 million), floating rate secured notes ($422.7 million), revolving loans ($68.7 million), and the term loan ($300.0 million). Based on this level of debt, an increase in interest rates of 1% would result in our income before minority interests and cash flows being reduced by $15.3 million on an annual basis. Historically, changes in tax-exempt interest rates have been at a ratio of less than 1:1 with changes in taxable interest rates. Floating rate tax-exempt bond financing is benchmarked against the BMA Index, which since 1981 has averaged 52.1% of the 10-year Treasury Yield. If this relationship continues, an increase in the 10-year Treasury Yield, of 1% (0.52% in tax-exempt interest rates) would result in our income before minority interests and cash flows being reduced by $11.8 million on an annual basis. At December 31, 2004, we had $4,455.2 million of fixed-rate debt outstanding. As of December 31, 2003, based on our level of floating rate debt of $1,599.0 million, an increase in interest rates of 1% would have resulted in our income before minority interests and cash flows being reduced by $16.0 million on an annual basis. The potential reduction of income before minority interests and cash flows due to an increase in interest rates decreased $0.7 million for 2004 compared to 2003 due to lower floating rate balances resulting from the redemption of Class S Cumulative Redeemable Preferred Stock and repayment of a portion of the term loan.
      We believe that the fair value of our floating rate secured tax-exempt bond debt and floating rate secured long-term debt as of December 31, 2004 approximate their carrying values. The fair value for our fixed-rate debt agreements were estimated based on the quoted market rate for the same or similar issues. The combined carrying amount of our fixed-rate secured tax-exempt bonds and fixed rate secured notes payable at December 31, 2004 was $4.4 billion compared to the computed fair value of $4.8 billion (see Note 2 to the consolidated financial statements in Item 8).
      As of December 31, 2004, the scheduled principal amortization and maturity payments for our consolidated secured notes payable and consolidated secured tax-exempt bonds were as follows (dollars in thousands):
                                 
    Amortization   Maturities   Total   Percentage
                 
2005
  $ 128,720     $ 126,120     $ 254,840       4.5 %
2006
    133,238       495,054       628,292       11.2  
2007
    140,490       237,468       377,958       6.7  
2008
    145,163       178,215       323,378       5.8  
2009
    152,794       124,639       277,433       5.0  
Thereafter
                    3,742,752       66.8  
                         
                    $ 5,604,653       100.0 %
                         
Item 8.      Financial Statements and Supplementary Data
      The independent registered public accounting firm’s report, consolidated financial statements and schedule 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 of this Annual Report.

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Item 9.      Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
      None.
Item 9A.      Controls and Procedures
Disclosure Controls and Procedures
      Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, our chief executive officer and chief financial officer have concluded that, as of the end of such period, our disclosure controls and procedures are adequate.
Management’s Report on Internal Control Over Financial Reporting
      Management of the company is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
  •  pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
 
  •  provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
 
  •  provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
      Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
      Management assessed the effectiveness of the company’s internal control over financial reporting as of December 31, 2004. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.
      Based on our assessment, management concluded that, as of December 31, 2004, the company’s internal control over financial reporting is effective.
      The company’s independent registered public accounting firm has issued an audit report on our assessment of the company’s internal control over financial reporting.
Changes in Internal Control over Financial Reporting
      There have been no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)) under the Exchange Act) during fourth quarter 2004 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Report of Independent Registered Public Accounting Firm
Stockholders and Board of Directors of Apartment Investment and Management Company
We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that Apartment Investment and Management Company (the “Company”) maintained effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, management’s assessment that Apartment Investment and Management Company maintained effective internal control over financial reporting as of December 31, 2004, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, Apartment Investment and Management Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2004, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Apartment Investment and Management Company as of December 31, 2004 and 2003, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2004, and our report dated March 10, 2005 expressed an unqualified opinion thereon.
  /s/ Ernst & Young LLP
Denver, Colorado
March 10, 2005

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Item 9B.      Other Information
      None.
PART III
Item 10.      Directors and Executive Officers of the Registrant
      The information required by this item is presented under the captions “Board of Directors and Officers,” “Corporate Governance Matters — Code of Ethics” and “Other Matters — Section 16(a) Beneficial Ownership Reporting Compliance” in the proxy statement for our 2005 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 “Corporate Governance Matters — Compensation of Directors,” “Corporate Governance Matters — Compensation and Human Resources Committee Interlocks and Insider Participation,” “Compensation and Human Resources Committee Report to Stockholders,” “Summary Compensation Table,” “Option/ SAR Grants in Last Fiscal Year,” “Aggregated Option/ SAR Exercises in Last Fiscal Year and Fiscal Year-End Option/ SAR Values,” “Employment Arrangements” and “Stock Price Performance Graph” in the proxy statement for our 2005 annual meeting of stockholders and is incorporated herein by reference.
Item 12.      Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
      The information required by this item is presented under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Securities Authorized for Issuance Under Equity Compensation Plans” in the proxy statement for our 2005 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 Related Transactions” in the proxy statement for our 2005 annual meeting of stockholders and is incorporated herein by reference.
Item 14.      Principal Accountant Fees and Services
      The information required by this item is presented under the caption “Principal Accountant Fees and Services” in the proxy statement for our 2005 annual meeting of stockholders and is incorporated herein by reference.
PART IV
Item 15. Exhibits, Financial Statement Schedules
      (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 incorporated herein by reference.

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INDEX TO EXHIBITS(1)(2)
         
Exhibit No.   Description
     
  2 .1   Agreement and Plan of Merger, dated as of December 3, 2001, by and among Apartment Investment and Management Company, Casden Properties, Inc. and XYZ Holdings LLC (Exhibit 2.1 to Aimco’s Current Report on Form 8-K, filed December 6, 2001, is incorporated herein by this reference)
  3 .1   Charter
  3 .2   Bylaws (Exhibit 3.2 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2001, 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 ended September 30, 1998, is incorporated herein by this reference)
  10 .2   First Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of November 6, 1998 (Exhibit 10.9 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended 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 year ended December 31 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 ended 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 ended 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 ended 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 ended 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 (Exhibit 10.9 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 1999, is incorporated herein by reference)
  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 (Exhibit 10.10 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 1999, is incorporated hereby by reference)
  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 (Exhibit 10.11 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 1999, is incorporated herein by reference)
  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 (Exhibit 10.12 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 1999, is incorporated herein by reference)
  10 .13   Twelfth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of April 19, 2000 (Exhibit 10.2 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2000, is incorporated herein by this reference)

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Exhibit No.   Description
     
  10 .14   Thirteenth Amendment to the Third and Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of August 7, 2000 (Exhibit 10.1 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2000, is incorporated herein by this reference)
  10 .15   Fourteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 12, 2000 (Exhibit 10.1 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended September 30, 2000, is incorporated herein by this reference)
  10 .16   Fifteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 15, 2000 (Exhibit 10.2 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended September 30, 2000, is incorporated herein by this reference)
  10 .17   Sixteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 15, 2000 (Exhibit 10.3 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended September 30, 2000, is incorporated herein by this reference)
  10 .18   Seventeenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of November 10, 2000 (Exhibit 10.4 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended September 30, 2000, is incorporated herein by this reference)
  10 .19   Eighteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of November 16, 2000 (Exhibit 10.19 to Aimco’s Annual Report on Form 10-K/A for the fiscal year 2000, is incorporated herein by this reference)
  10 .20   Nineteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of February 28, 2001 (Exhibit 10.20 to Aimco’s Annual Report on Form 10-K/A for the fiscal year 2000, is incorporated herein by this reference)
  10 .21   Twentieth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 19, 2001 (Exhibit 10.21 to Aimco’s Annual Report on Form 10-K/A for the fiscal year 2000, is incorporated herein by this reference)
  10 .22   Twenty-first Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of May 10, 2001 (Exhibit 10.1 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference)
  10 .23   Twenty-second Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of June 20, 2001 (Exhibit 10.2 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference)
  10 .24   Twenty-third Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 20, 2001 (Exhibit 10.3 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference)
  10 .25   Twenty-fourth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of August 1, 2001 (Exhibit 10.4 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference)
  10 .26   Twenty-fifth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 2, 2001 (Exhibit 10.5 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference)
  10 .27   Twenty-sixth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 2, 2001 (Exhibit 10.6 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference)

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Exhibit No.   Description
     
  10 .28   Twenty-seventh Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 2, 2001 (Exhibit 10.7 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference)
  10 .29   Twenty-eighth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 25, 2002 (Exhibit 10.1 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended March 31, 2002, is incorporated herein by this reference)
  10 .30   Twenty-ninth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 11, 2002 (Exhibit 10.2 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended March 31, 2002, is incorporated herein by this reference)
  10 .31   Thirtieth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of April 1, 2002 (Exhibit 10.3 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended March 31, 2002, is incorporated herein by this reference)
  10 .32   Thirty-first Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of April 10, 2002 (Exhibit 10.4 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended March 31, 2002, is incorporated herein by this reference)
  10 .33   Thirty-second Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of May 14, 2002 (Exhibit 10.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2002, is incorporated herein by this reference)
  10 .34   Thirty-third Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of November 27, 2002 (Exhibit 10.34 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 2002, is incorporated herein by this reference)
  10 .35   Thirty-fourth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of April 29, 2003 (Exhibit 10.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003, is incorporated herein by this reference)
  10 .36   Thirty-fifth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of April 30, 2003 (Exhibit 10.2 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003, is incorporated herein by this reference)
  10 .37   Thirty-sixth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 16, 2003 (Exhibit 10.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2003, is incorporated herein by this reference)
  10 .38   Thirty-seventh Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 24, 2003 (Exhibit 10.2 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2003, is incorporated herein by this reference)
  10 .39   Thirty-eighth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of January 30, 2004 (Exhibit 10.39 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 2003, is incorporated herein by this reference)
  10 .40   Thirty-ninth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 17, 2004 (Exhibit 10.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004, is incorporated herein by this reference)
  10 .41   Fortieth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of June 18, 2004 (Exhibit 10.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, is incorporated herein by this reference)
  10 .42   Forty-First Amendment to Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 24, 2004 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report on Form 8-K dated September 24, 2004, is incorporated herein by this reference)

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Exhibit No.   Description
     
  10 .43   Forty-Second Amendment to Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 30, 2004 (Exhibit 4.2 to AIMCO Properties, L.P.’s Current Report on Form 8-K dated September 24, 2004, is incorporated herein by this reference)
  10 .44   Forty-Third Amendment to Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 30, 2004 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report on Form 8-K dated September 29, 2004, is incorporated herein by this reference)
  10 .45   Forty-fourth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of December 21, 2004 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report on Form 8-K dated September 29, 2004, is incorporated herein by this reference)
  10 .46   Forty-fifth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of February 18, 2005 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report on Form 8-K dated February 18, 2005, is incorporated herein by this reference)
  10 .47   Forty-sixth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of February 28, 2005 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report on Form 8-K dated February 28, 2005, is incorporated herein by this reference)
  10 .48   Amended and Restated Secured Credit Agreement, dated as of November 2, 2004, by and among Aimco, AIMCO Properties, L.P., AIMCO/Bethesda Holdings, Inc., and NHP Management Company as the borrowers and Bank of America, N.A., Keybank National Association, and the Lenders listed therein (Exhibit 4.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004, is incorporated herein by this reference)
  10 .49   Master Indemnification Agreement, dated December 3, 2001, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., XYZ Holdings LLC, and the other parties signatory thereto (Exhibit 2.3 to Aimco’s Current Report on Form 8-K, filed December 6, 2001, is incorporated herein by this reference)
  10 .50   Tax Indemnification and Contest Agreement, dated December 3, 2001, by and among Apartment Investment and Management Company, National Partnership Investments, Corp., and XYZ Holdings LLC and the other parties signatory thereto (Exhibit 2.4 to Aimco’s Current Report on Form 8-K, filed December 6, 2001, is incorporated herein by this reference)
  10 .51   Limited Liability Company Agreement of AIMCO JV Portfolio #1, LLC dated as of December 30, 2003 by and among AIMCO BRE I, LLC, AIMCO BRE II, LLC and SRV-AJVP#1, LLC (Exhibit 10.54 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 2003, is incorporated herein by this reference)
  10 .52   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 year ended December 31, 1994, is incorporated herein by this reference)*
  10 .53   Apartment Investment and Management Company 1997 Stock Award and Incentive Plan (October 1999) (Exhibit 10.26 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 1999, is incorporated herein by this reference)*
  10 .54   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 ended September 30, 1997, is incorporated herein by this reference)*
  10 .55   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 year ended December 31, 1998, is incorporated herein by this reference)*
  10 .56   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 .57   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 year ended December 31, 1997, is incorporated herein by this reference)*
  21 .1   List of Subsidiaries

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Exhibit No.   Description
     
  23 .1   Consent of Independent Registered Public Accounting Firm
  31 .1   Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  31 .2   Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  32 .1   Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  32 .2   Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  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.
 
(2)  The file reference number for all exhibits is 001-13232, and all such exhibits remain available pursuant to the Records Control Schedule of the Securities and Exchange Commission.
  *    Management contract or compensatory plan or arrangement

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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 14th day of March 2005.
  Apartment Investment and
  Management Company
 
  /s/ Terry Considine
 
 
  Terry Considine
  Chairman of the Board,
  Chief Executive Officer and President
      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 dates indicated.
             
Signature   Title   Date
         
 
/s/ Terry Considine
 
Terry Considine
  Chairman of the Board, Chief Executive Officer and President
(principal executive officer)
  March 14, 2005
 
/s/ Paul J. McAuliffe
 
Paul J. McAuliffe
  Executive Vice President and Chief Financial Officer
(principal financial officer)
  March 14, 2005
 
/s/ Thomas M. Herzog
 
Thomas M. Herzog
  Senior Vice President and Chief Accounting Officer
(principal accounting officer)
  March 14, 2005
 
/s/ James N. Bailey
 
James N. Bailey
  Director   March 14, 2005
 
/s/ Richard S. Ellwood
 
Richard S. Ellwood
  Director   March 14, 2005
 
/s/ J. Landis Martin
 
J. Landis Martin
  Director   March 14, 2005
 
/s/ Thomas L. Rhodes
 
Thomas L. Rhodes
  Director   March 14, 2005
 
/s/ Michael A. Stein
 
Michael A. Stein
  Director   March 14, 2005

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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
INDEX TO FINANCIAL STATEMENTS
           
    Page
     
Financial Statements:
       
      F-2  
      F-3  
      F-4  
      F-5  
      F-6  
      F-8  
 
Financial Statement Schedule:
       
      F-45  
 
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


Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Stockholders and Board of Directors Apartment Investment and Management Company
We have audited the accompanying consolidated balance sheets of Apartment Investment and Management Company as of December 31, 2004 and 2003, and the related consolidated statements of income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2004. Our audits also included the financial statement schedule listed in the Index at Item 15(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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Apartment Investment and Management Company at December 31, 2004 and 2003, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2004, in conformity with United States generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects the information set forth therein.
As discussed in Note 2 to the consolidated financial statements, in 2004 the Company adopted the provisions of Financial Accounting Standards Board Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Apartment Investment and Management Company’s internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 10, 2005 expressed an unqualified opinion thereon.
  /s/ Ernst & Young LLP
Denver, Colorado
March 10, 2005

F-2


Table of Contents

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED BALANCE SHEETS
As of December 31, 2004 and 2003
(In thousands, except share data)
                       
    2004   2003
         
ASSETS
Real estate:
               
 
Land
  $ 2,211,109     $ 1,959,382  
 
Buildings and improvements
    8,588,649       7,887,573  
             
Total real estate
    10,799,758       9,846,955  
 
Less accumulated depreciation
    (2,014,712 )     (1,701,512 )
             
   
Net real estate
    8,785,046       8,145,443  
Cash and cash equivalents
    105,343       114,432  
Restricted cash
    269,368       242,066  
Accounts receivable
    75,044       64,341  
Accounts receivable from affiliates
    39,216       55,003  
Deferred financing costs
    72,426       69,402  
Notes receivable from unconsolidated real estate partnerships
    165,289       139,930  
Notes receivable from non-affiliates
    31,716       68,771  
Investment in unconsolidated real estate partnerships
    188,137       230,054  
Other assets
    287,381       266,685  
Assets held for sale
    53,275       691,267  
             
     
Total assets
  $ 10,072,241     $ 10,087,394  
             
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Secured tax-exempt bond financing
  $ 1,133,794     $ 1,064,250  
Secured notes payable
    4,470,859       4,118,445  
Mandatorily redeemable preferred securities
    15,019       113,619  
Term loans
    300,000       354,387  
Credit facility
    68,700       81,000  
             
     
Total indebtedness
    5,988,372       5,731,701  
             
Accounts payable
    34,663       30,765  
Accrued liabilities and other
    400,971       366,644  
Deferred income
    47,203       25,573  
Security deposits
    38,063       38,099  
Deferred income taxes payable, net
    20,139       19,993  
Liabilities related to assets held for sale
    50,829       515,595  
             
     
Total liabilities
    6,580,240       6,728,370  
             
Minority interest in consolidated real estate partnerships
    211,804       194,462  
Minority interest in Aimco Operating Partnership
    272,037       303,905  
Stockholders’ equity:
               
 
Preferred Stock, perpetual
    891,500       555,250  
 
Preferred Stock, convertible
    150,000       299,992  
 
Class A Common Stock, $.01 par value, 426,157,976 and 444,962,738 shares authorized, 94,853,696 and 93,887,040 shares issued and outstanding, at December 31, 2004 and 2003, respectively
    949       939  
 
Additional paid-in capital
    3,070,073       3,053,312  
 
Unvested restricted stock
    (19,740 )     (10,772 )
 
Notes due on common stock purchases
    (36,725 )     (40,046 )
 
Distributions in excess of earnings
    (1,047,897 )     (998,018 )
             
     
Total stockholders’ equity
    3,008,160       2,860,657  
             
     
Total liabilities and stockholders’ equity
  $ 10,072,241     $ 10,087,394  
             
See notes to consolidated financial statements.

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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31, 2004, 2003 and 2002
(In thousands, except per share data)
                               
    2004   2003   2002
             
REVENUES:
                       
Rental and other property revenues
  $ 1,401,653     $ 1,336,515     $ 1,188,747  
Property management revenues, primarily from affiliates
    32,461       37,992       56,550  
Activity fees and asset management revenues, primarily from affiliates
    34,801       20,198       21,622  
                   
     
Total revenues
    1,468,915       1,394,705       1,266,919  
                   
EXPENSES:
                       
Property operating expenses
    668,807       585,185       465,318  
Property management expenses
    9,199       8,106       7,340  
Activity and asset management expenses
    11,802       8,367       9,747  
Depreciation and amortization
    368,844       331,609       268,085  
General and administrative expenses
    78,093       48,670       49,068  
Other expenses (income), net
    3,412       (6,251 )     2,035  
                   
     
Total expenses
    1,140,157       975,686       801,593  
                   
Operating income
    328,758       419,019       465,326  
Interest income
    32,470       24,824       76,425  
Recovery of (provision for) losses on notes receivable
    1,765       (2,183 )     (9,006 )
Interest expense
    (366,617 )     (341,771 )     (294,741 )
Deficit distributions to minority partners, net
    (18,007 )     (22,629 )     (27,535 )
Equity in (losses) earnings of unconsolidated real estate partnerships
    (1,768 )     (6,428 )     694  
Impairment losses related to unconsolidated real estate partnerships
    (3,426 )     (4,122 )     (5,540 )
Gain (loss) on dispositions of real estate related to unconsolidated entities and other
    68,634       3,178       (22,362 )
                   
Income before minority interests, discontinued operations and cumulative effect of change in accounting principle
    41,809       69,888       183,261  
Minority interests:
                       
   
Minority interest in consolidated real estate partnerships
    17,304       (147 )     (13,693 )
   
Minority interest in Aimco Operating Partnership, preferred
    (7,858 )     (9,312 )     (10,874 )
   
Minority interest in Aimco Operating Partnership, common
    4,441       3,719       (10,088 )
                   
     
Total minority interests
    13,887       (5,740 )     (34,655 )
                   
Income from continuing operations
    55,696       64,148       148,606  
Income from discontinued operations, net
    211,758       94,709       20,440  
                   
Income before cumulative effect of change in accounting principle
    267,454       158,857       169,046  
Cumulative effect of change in accounting principle
    (3,957 )            
                   
Net income
    263,497       158,857       169,046  
Net income attributable to preferred stockholders
    88,804       93,565       93,558  
                   
Net income attributable to common stockholders
  $ 174,693     $ 65,292     $ 75,488  
                   
Earnings (loss) per common share — basic:
                       
 
Income (loss) from continuing operations (net of preferred dividends)
  $ (0.36 )   $ (0.32 )   $ 0.64  
 
Income from discontinued operations
    2.28       1.02       0.24  
 
Cumulative effect of change in accounting principle
    (0.04 )            
                   
 
Net income attributable to common stockholders
  $ 1.88     $ 0.70     $ 0.88  
                   
Earnings (loss) per common share — diluted:
                       
 
Income (loss) from continuing operations (net of preferred dividends)
  $ (0.36 )   $ (0.32 )   $ 0.63  
 
Income from discontinued operations
    2.28       1.02       0.24  
 
Cumulative effect of change in accounting principle
    (0.04 )            
                   
 
Net income attributable to common stockholders
  $ 1.88     $ 0.70     $ 0.87  
                   
Weighted average common shares outstanding
    93,118       92,850       85,698  
                   
Weighted average common shares and equivalents outstanding
    93,118       92,850       86,773  
                   
Dividends declared per common share
  $ 2.40     $ 2.84     $ 3.28  
                   
See notes to consolidated financial statements.

F-4


Table of Contents

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Years Ended December 31, 2004, 2003 and 2002
(In thousands)
                                                                         
        Class A           Notes        
    Preferred Stock   Common Stock           Due on        
            Additional   Unvested   Common   Distributions    
    Shares       Shares       Paid-In   Restricted   Stock   in Excess    
    Issued   Amount   Issued   Amount   Capital   Stock   Purchases   of Earnings   Total
                                     
BALANCE DECEMBER 31, 2001
    41,644     $ 1,124,467       74,499     $ 745     $ 2,209,803     $ (5,775 )   $ (46,460 )   $ (572,165 )   $ 2,710,615  
Net proceeds from issuances of Preferred Stock
    2,000       50,000                   511                         50,511  
Net proceeds from issuances of Class A Common stock
                8,000       80       367,673                         367,753  
Conversion of Aimco Operating Partnership units to Class A Common Stock
                1,100       11       45,830                         45,841  
Conversion of Classes B, K, L, and P Preferred Stock to Class A Common Stock
    (7,919 )     (229,455 )     5,699       57       229,398                          
Conversion of mandatorily redeemable convertible preferred securities to Class A Common Stock
                107       1       5,467                         5,468  
Repayment of notes receivable from officers
                                        5,251             5,251  
Purchase of stock by officers and awards of restricted stock, net of forfeitures
                268       3       13,373       (5,537 )     (7,755 )           84  
Stock options and warrants exercised
                567       6       12,151                           12,157  
Amortization of unvested restricted stock
                                  4,233                   4,233  
Class A Common Stock issued as consideration for the Casden Transactions
                3,508       35       164,847                         164,882  
Class A Common Stock issued as consideration for acquisition of interest in real estate
                22             1,004                         1,004  
Net income
                                              169,046       169,046  
Dividends paid — Class A Common Stock
                                              (278,867 )     (278,867 )
Dividends paid — Preferred Stock
                                              (94,591 )     (94,591 )
                                                       
BALANCE DECEMBER 31, 2002
    35,725       945,012       93,770       938       3,050,057       (7,079 )     (48,964 )     (776,577 )     3,163,387  
Net proceeds from issuances of Preferred Stock
    6,000       150,000                   (5,192 )                       144,808  
Conversion of Aimco Operating Partnership units to Class A Common Stock
                338       3       12,032                         12,035  
Conversion of Preferred Operating Partnership units to Class A Common Stock
                22             884                         884  
Redemption of Preferred Stock
    (9,600 )     (239,770 )                                         (239,770 )
Class A Common Stock received under Casden indemnification agreement and other activity
                (585 )     (6 )     (25,520 )                       (25,526 )
Conversion of mandatorily redeemable convertible preferred securities to Class A Common Stock
                1             50                         50  
Repayment of notes receivable from officers
                                        10,518             10,518  
Purchase of stock by officers and awards of restricted stock, net of forfeitures
                265       3       9,968       (7,781 )     (1,600 )           590  
Stock options exercised
                72       1       2,343                         2,344  
Amortization of stock option fair value and unvested restricted stock
                            892       4,088                   4,980  
Class A Common Stock issued as consideration for acquisition of interest in real estate
                4             153                         153  
Net income
                                              158,857       158,857  
Dividends paid — Class A Common Stock
                                              (285,054 )     (285,054 )
Redemption related preferred stock issuance costs
                            7,645                   (7,645 )      
Dividends paid — Preferred Stock
                                              (87,599 )     (87,599 )
                                                       
BALANCE DECEMBER 31, 2003
    32,125       855,242       93,887       939       3,053,312       (10,772 )     (40,046 )     (998,018 )     2,860,657  
Net proceeds from issuances/exchanges of Preferred Stock
    18,805       372,500                   (12,828 )                       359,672  
Conversion of Aimco Operating Partnership units to Class A Common Stock
                735       7       23,315                         23,322  
Conversion of Preferred Operating Partnership units to Class A Common Stock
                8             259                         259  
Conversion of mandatorily redeemable convertible preferred securities to Class A Common Stock
                2             100                         100  
Repurchase of Class A Common Stock
                (397 )     (4 )     (12,594 )                       (12,598 )
Redemption/exchange of Preferred Stock
    (11,355 )     (186,242 )                 149                         (186,093 )
Repayment of notes receivable from officers
                                        4,639             4,639  
Casden note receivable and legal settlement fair value contingent consideration adjustment
                            (4,848 )                       (4,848 )
Purchase of stock by officers and awards of restricted stock and unrestricted stock awards, net of forfeitures
                550       6       16,234       (13,871 )     (1,318 )           1,051  
Stock options exercised
                69       1       1,882                         1,883  
Amortization of stock option fair value and unvested restricted stock
                            1,603       4,903                   6,506  
Net income
                                              263,497       263,497  
Dividends paid — Class A Common Stock
                                              (225,903 )     (225,903 )
Redemption related preferred stock issuance costs
                            3,489                   (3,489 )      
Dividends paid — Preferred Stock
                                              (83,984 )     (83,984 )
                                                       
BALANCE DECEMBER 31, 2004
    39,575     $ 1,041,500       94,854     $ 949     $ 3,070,073     $ (19,740 )   $ (36,725 )   $ (1,047,897 )   $ 3,008,160  
                                                       
See notes to consolidated financial statements.

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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2004, 2003 and 2002
(In thousands)
                                 
    2004   2003   2002
             
CASH FLOWS FROM OPERATING ACTIVITIES:
                       
 
Net income
  $ 263,497       158,857       169,046  
                   
 
Adjustments to reconcile net income to net cash provided by operating activities:
                       
   
Depreciation and amortization
    368,844       331,609       268,085  
   
Deficit distributions to minority partners, net
    18,007       22,629       27,535  
   
Equity in losses (earnings) of unconsolidated real estate partnerships
    1,768       6,428       (694 )
   
(Gain) loss on dispositions of real estate related to unconsolidated entities and other
    (68,634 )     (3,178 )     22,362  
   
Impairment losses related to unconsolidated real estate partnerships
    3,426       4,122       5,540  
   
Deferred income tax provision (benefit)
    706       (11,215 )     (1,815 )
   
Cumulative effect of change in accounting principle
    3,957              
   
Minority interest in Aimco Operating Partnership
    3,417       5,593       20,962  
   
Minority interest in consolidated real estate partnerships
    (17,304 )     147       13,693  
   
Stock-based compensation expense
    6,506       4,980       4,233  
   
Amortization of deferred loan costs and other
    5,484       (5,002 )     (12,353 )
   
Discontinued operations:
                       
     
Depreciation and amortization
    13,883       41,607       54,897  
     
(Recovery of deficit distributions) deficit distributions to minority partners, net
    (3,863 )     (10,686 )     765  
     
(Gain) loss on dispositions of real estate, net of minority partners’ interest
    (249,944 )     (101,849 )     6,021  
     
Impairment losses on real estate assets sold or held for sale
    7,289       8,991       2,937  
     
Minority interest in consolidated real estate partnerships
    445       2,203       2,019  
     
Minority interest in Aimco Operating Partnership
    25,307       12,074       2,946  
   
Changes in operating assets and operating liabilities:
                       
     
Accounts receivable
    (2,067 )     5,763       (1,904 )
     
Other assets
    (11,406 )     5,632       (2,510 )
     
Accounts payable, accrued liabilities and other
    (3,795 )     (14,826 )     (73,812 )
                   
       
Total adjustments
    102,026       305,022       338,907  
                   
       
Net cash provided by operating activities
    365,523       463,879       507,953  
                   
CASH FLOWS FROM INVESTING ACTIVITIES:
                       
 
Purchases of real estate
    (280,002 )     (126,046 )     (578,745 )
 
Capital expenditures
    (301,937 )     (245,528 )     (270,096 )
 
Proceeds from dispositions of real estate
    971,568       697,642       370,837  
 
Funds held in escrow from tax-free exchanges
    5,489       (21,643 )      
 
Purchases of non-real estate related corporate assets
    (28,270 )     (23,621 )     (3,164 )
 
Proceeds from sale of investments and other assets
          6,730       22,747  
 
Cash from newly consolidated properties
    14,765       5,835       13,602  
 
Purchases of general and limited partnership interests and other assets
    (104,441 )     (51,356 )     (75,985 )
 
Originations of notes receivable from unconsolidated real estate partnerships
    (76,157 )     (71,969 )     (109,475 )
 
Proceeds from repayment of notes receivable
    79,599       60,576       83,332  
 
Cash paid in connection with merger/acquisition related costs
    (15,861 )     (16,383 )     (260,874 )
 
Distributions received from investments in unconsolidated real estate partnerships
    72,160       64,046       10,780  
                   
       
Net cash provided by (used in) investing activities
    336,913       278,283       (797,041 )
                   
CASH FLOWS FROM FINANCING ACTIVITIES:
                       
 
Proceeds from secured notes payable borrowings
    501,611       445,793       956,565  
 
Principal repayments on secured notes payable
    (728,084 )     (755,786 )     (642,745 )
 
Proceeds from tax-exempt bond financing
    69,471       14,505       297,551  
 
Principal repayments on tax-exempt bond financing
    (188,577 )     (77,793 )     (423,613 )
 
Net borrowings (paydowns) on term loans and revolving credit facility
    (66,687 )     29,376       192,509  
 
Proceeds from other borrowings
    38,871              
 
Payment of loan costs
    (17,576 )     (19,516 )     (17,384 )
 
Proceeds from issuance (redemption) of mandatorily redeemable preferred securities
    (98,875 )     97,250        
 
Proceeds from issuance of Class A Common Stock, High Performance Units and exercise of options/warrants
    3,164       4,552       373,504  
 
Proceeds from issuance of preferred stock, net
    359,672       144,808       50,511  
 
Redemptions of preferred stock
    (186,093 )     (239,770 )      
 
Principal repayments received on notes due on Class A Common Stock purchases
    4,639       10,518       5,251  
 
Repurchase of Class A Common Stock and redemption of OP Units
    (18,410 )     (1,287 )     (684 )
 
Payment of Class A Common Stock dividends
    (225,903 )     (285,054 )     (278,867 )
 
Contributions from minority interest
    44,292       100,684        
 
Payment of distributions to minority interest
    (119,056 )     (107,964 )     (109,366 )
 
Payment of preferred stock dividends
    (83,984 )     (87,599 )     (94,591 )
                   
Net cash (used in) provided by financing activities
    (711,525 )     (727,283 )     308,641  
                   
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    (9,089 )     14,879       19,553  
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    114,432       99,553       80,000  
                   
CASH AND CASH EQUIVALENTS AT END OF PERIOD
  $ 105,343     $ 114,432     $ 99,553  
                   
See notes to consolidated financial statements.

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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2004, 2003 and 2002
(In thousands)
                             
    2004   2003   2002
             
SUPPLEMENTAL CASH FLOW INFORMATION:
                       
 
Interest paid
  $ 383,758     $ 386,812     $ 347,352  
 
Non Cash Transactions Associated with the Acquisition of Real Estate and Interests in Unconsolidated Real Estate Partnerships:
                       
   
Secured debt assumed in connection with purchase of real
estate
    83,114       45,009        
   
Issuance of OP Units for interests in unconsolidated real estate partnerships and other interests
    2,147       841       22,460  
   
OP Units issued for acquisitions of real estate
    462              
 
Non Cash Transactions Associated with Mergers:
                       
   
Real estate
          (63,535 )     1,076,569  
   
Investments in and notes receivable, primarily from unconsolidated real estate partnerships
          (2,163 )     41,722  
   
Restricted cash
          11,979       70,095  
   
Other assets
          3,349       42,336  
   
Secured debt
                684,661  
   
Accounts payable, accrued and other liabilities
          49,770       129,668  
   
Deferred income tax payable, net
          600       2,147  
   
OP Units issued
                41,491  
   
Class A Common Stock issued
                164,882  
 
Non Cash Transactions Associated with Consolidation of Assets:
                       
   
Real estate
    231,932       152,248       743,014  
   
Investments in and notes receivable primarily from affiliated entities
    (40,178 )     (52,478 )     (271,231 )
   
Restricted cash
    21,105       4,737       19,492  
   
Other assets
    26,639       5,235       44,294  
   
Secured debt
    204,243       101,962       488,464  
   
Accounts payable, accrued and other liabilities
    21,394       7,030       39,960  
   
Minority interest in consolidated real estate partnerships
    29,439       6,585       16,337  
 
Other:
                       
   
Conversion of Common OP Units for Class A Common Stock
    23,322       12,035       45,841  
   
Conversion of Preferred OP Units for Class A Common Stock
    259       884        
   
Origination of notes receivable from officers for Class A Common Stock purchases
    1,528       1,600       7,755  
   
Conversion of Preferred Stock into Class A Common Stock
          50       234,923  
   
Exchanges of Preferred Stock
    150,000              
   
Tenders payable for purchase of limited partner interests
    2,799       10,037       340  
See notes to consolidated financial statements.

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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004
Note 1 — Organization
      Apartment Investment and Management Company, or Aimco, is a Maryland corporation incorporated on January 10, 1994. We are a self-administered and self-managed real estate investment trust, or REIT, engaged in the acquisition, ownership, management and redevelopment of apartment properties. As of December 31, 2004, we owned or managed a real estate portfolio of 1,499 apartment properties containing 263,734 apartment units located in 47 states, the District of Columbia and Puerto Rico. Based on apartment unit data compiled by the National Multi Housing Council, as of December 31, 2004, we were the largest REIT owner and operator of apartment properties in the United States.
      As of December 31, 2004, we:
  •  owned an equity interest in and consolidated 169,932 units in 676 properties (which we refer to as “consolidated”), of which 169,276 units were also managed by us;
 
  •  owned an equity interest in and did not consolidate 44,728 units in 330 properties (which we refer to as “unconsolidated”), of which 38,129 units were also managed by us; and
 
  •  provided services or managed, for third-party owners, 49,074 units in 493 properties, primarily pursuant to long-term agreements (including 41,233 units in 421 properties that are asset managed only, and not also property managed), although in certain cases we may indirectly own generally less than one percent of the operations of such properties through a partnership syndication or other fund.
      Through our wholly owned subsidiaries, AIMCO-GP, Inc. and AIMCO-LP, Inc., we own a majority of the ownership interests in AIMCO Properties, L.P., which we refer to as the Aimco Operating Partnership. As of December 31, 2004, we held approximately a 90% interest in the common partnership units and equivalents of the Aimco Operating Partnership. We conduct substantially all of our business and own substantially all of our assets through the Aimco Operating Partnership. Interests in the Aimco Operating Partnership that are held by limited partners other than Aimco are referred to as “OP Units.” OP Units include common OP Units, partnership preferred units, or preferred OP Units, and high performance partnership units, or High Performance Units. The Aimco Operating Partnership’s income is allocated to holders of common OP Units based on the weighted average number of common OP Units outstanding during the period. The Aimco Operating Partnership records the issuance of common OP Units and the assets acquired in purchase transactions based on the market price of Aimco’s Class A Common Stock at the date of execution of the purchase contract. The holders of the common OP Units receive distributions, prorated from the date of issuance, in an amount equivalent to the dividends paid to holders of Aimco Class A Common Stock. Holders of common OP Units may redeem such units for cash or, at the Aimco Operating Partnership’s option, Aimco Class A Common Stock, which we refer to as Common Stock. During 2004, 2003 and 2002, the weighted average ownership interest in the Aimco Operating Partnership held by the common OP Unit holders was 10%, 11%, and 13%, respectively. Preferred OP Units entitle the holders thereof to a preference with respect to distributions or upon liquidation. At December 31, 2004, 94,853,696 shares of our Common Stock were outstanding and the Aimco Operating Partnership had 10,840,754 common OP Units and equivalents outstanding for a combined total of 105,694,450 shares of Common Stock and OP Units outstanding (excluding preferred OP Units).
      Except as the context otherwise requires, “we,” “our,” “us” and the “Company” refer to Aimco, the Aimco Operating Partnership and Aimco’s consolidated corporate subsidiaries and consolidated real estate partnerships, collectively.

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Note 2 — Basis of Presentation and Summary of Significant Accounting Policies
Principles of Consolidation
      The accompanying consolidated financial statements include the accounts of Aimco, the Aimco Operating Partnership, consolidated corporate subsidiaries and consolidated real estate partnerships. As used herein, and except where the context otherwise requires, “partnership” refers to a limited partnership or a limited liability company and “partner” refers to a limited partner in a limited partnership or a member in a limited liability company. Interests held in consolidated real estate partnerships by limited partners other than us are reflected as minority interest in consolidated real estate partnerships. All significant intercompany balances and transactions have been eliminated in consolidation. The assets of consolidated real estate partnerships owned or controlled by Aimco or the Aimco Operating Partnership generally are not available to pay creditors of Aimco or the Aimco Operating Partnership.
      As a result of the adoption of Financial Accounting Standards Board, or FASB, Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, or FIN 46, as of March 31, 2004, we consolidate all variable interest entities for which we are the primary beneficiary. See below for additional information about the adoption of FIN 46.
Adoption of New Accounting Pronouncements
FASB Interpretation No. 46
      As of March 31, 2004, we adopted FIN 46 and applied its requirements to all entities in which we hold a variable interest. FIN 46 addresses the consolidation by business enterprises of variable interest entities. Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group the holders of the equity investment at risk lack (i) the ability to make decisions about an entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. FIN 46 requires a VIE to be consolidated in the financial statements of the entity that is determined to be the primary beneficiary of the VIE. The primary beneficiary generally is the entity that will receive a majority of the VIE’s expected losses, receive a majority of the VIE’s expected residual returns, or both.
      Upon adoption of FIN 46, we determined that we were the primary beneficiary of 27 previously unconsolidated and five previously consolidated VIEs. These VIEs consisted of partnerships that are engaged, directly or indirectly, in the ownership and management of 29 apartment properties with 3,478 units. The initial consolidation of the previously unconsolidated entities as of March 31, 2004 resulted in an increase in our consolidated total assets (primarily real estate), liabilities (primarily indebtedness) and minority interest of approximately $113.5 million, $90.6 million and $26.8 million, respectively. We recorded a charge of approximately $4.0 million for the cumulative effect on retained earnings resulting from the adoption of FIN 46. This charge is attributable to our recognition of cumulative losses allocable to minority interests that would otherwise have resulted in minority interest deficits.
      As of December 31, 2004, we were the primary beneficiary of and consolidated 39 VIEs, which owned 35 apartment properties with 4,730 units. Real estate with a carrying value of $104.1 million collateralized the debt of those VIEs. The creditors of the consolidated VIEs do not have recourse to our general credit. As of December 31, 2004, we also held variable interests in 61 VIEs for which we were not the primary beneficiary. Those 61 VIEs consist primarily of partnerships, in which we acquired an interest prior to the adoption of FIN 46, that are engaged, directly or indirectly, in the ownership and management of 67 apartment properties with 7,407 units. We are involved with those VIEs as a non-controlling equity holder, lender, management agent, or through other contractual relationships. Our maximum exposure to loss as a result of our involvement with unconsolidated VIEs is limited to our recorded investments in and receivables from those VIEs totaling

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$37.5 million at December 31, 2004. We may be subject to additional losses to the extent of any financial support that we voluntarily provide in the future.
Statement of Financial Accounting Standards No. 150
      In May 2003, the FASB issued Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, or SFAS 150, which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. The requirements of SFAS 150 apply to the classification and measurement of freestanding financial instruments, including those that comprise more than one option or forward contract. SFAS 150 requires that certain financial instruments, such as mandatorily redeemable securities, put options, forward purchase contracts, and obligations that can be settled with shares, be classified as liabilities, where in some cases these have previously been classified as equity or between the liabilities and equity section of the consolidated balance sheet. SFAS 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. We adopted SFAS 150 as of July 1, 2003 and now present mandatorily redeemable securities within the scope of SFAS 150 as liabilities (see Note 7).
      In September 2003, financial statement issuers first became aware that the FASB intended for SFAS 150 to also apply to the non-controlling interests in consolidated finite life partnerships. However, on October 29, 2003, the FASB indefinitely deferred the provisions of SFAS 150 that were intended to apply to non-controlling interests in consolidated finite life partnerships. Minority interest in consolidated real estate partnerships consists primarily of equity interests held by limited partners in consolidated real estate partnerships that have finite lives. The terms of the related partnership agreements generally require the partnership to be liquidated following the sale of the partnership’s real estate. As the general partner in these partnerships, we ordinarily control the execution of real estate sales and other events that could lead to the liquidation, redemption or other settlement of minority interests. The aggregate carrying value of minority interests in consolidated real estate partnerships is approximately $211.8 million at December 31, 2004. The aggregate fair value of these interests varies based on the fair value of the real estate owned by the partnerships. Based on the number of classes of finite-life minority interests, the number of properties in which there is direct or indirect minority ownership, complexities in determining the allocation of liquidation proceeds among partners and other factors, management believes it is impracticable to determine the required payment to the minority interests at December 31, 2004 in an assumed liquidation. As a result of real estate depreciation that is recognized in our financial statements and appreciation in the fair value of real estate that is not recognized in our financial statements, we believe that the aggregate fair value of our minority interests exceeds their aggregate carrying value. As a result of our ability to control real estate sales and other events that require payment of minority interests and our expectation that proceeds from real estate sales will be sufficient to liquidate related minority interests, we anticipate that the eventual payment of these minority interests will not have an adverse impact on our financial condition.
Acquisition of Real Estate Assets and Related Depreciation and Amortization
      We capitalize the purchase price and incremental direct costs associated with the acquisition of properties as the cost of the assets acquired. In accordance with Statement of Financial Accounting Standards No. 141, Business Combinations, or SFAS 141, we allocate the cost of acquired properties to land, building, furniture, fixtures and equipment and intangibles, such as the value of above and below market leases, and origination costs associated with the in-place leases. In order to allocate purchase price on these various components we perform the following procedures for properties we acquire:
  1.  Determine the “as-if vacant” fair value of the physical property acquired (this value assumes the property goes “dark”);
 
  2.  Allocate the “as-if vacant” fair value among land, building, improvements (based on real estate valuation techniques), and furniture, fixtures and equipment; and
 
  3.  Compute the difference between the purchase price of the property and the “as-if vacant” fair value and allocate such difference to leases in-place (based on the nature of our business, customer relationship

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  value is assumed to be zero), which will represent the total intangible assets. The fair value of the leases in-place are comprised of:

  a.  The value of the above and/or below market leases in-place. Above-market and below-market in-place lease values are computed based on the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over the period, including estimated lease renewals for below-market leases, that the leases are expected to remain in effect.
  b.  Avoided leasing commissions and other costs that were incurred to execute leases.
  c.  The value associated with lost rents during the absorption period (estimates of lost rental revenue during the expected lease-up periods based on current market demand).
      The values of the above and below market leases are amortized over the remaining terms of the associated lease, including estimated lease renewals for below-market leases, to rental income. For the values associated with avoided leasing commissions and other costs that were incurred to execute leases and the value associated with lost rents during the absorption period, amortization expense is recorded over the expected terms of the associated leases. If a resident vacates the unit prior to the contractual termination of the lease and no rental payments are being made on the lease, any unamortized balance of the related intangible will be written off.
      Depreciation for all tangible real estate assets is calculated using the straight-line method over their estimated useful lives. Acquired buildings and improvements are depreciated over a composite life of 14 to 52 years, based on the age, condition and other physical characteristics of the property. Furniture, fixtures and equipment associated with acquired properties are depreciated over five years.
Capital Expenditures and Related Depreciation
      We capitalize direct and certain indirect costs incurred in connection with our capital expenditure activities, including redevelopment and construction projects, other tangible property improvements, and replacements of existing property components. Direct costs consist of costs that are directly identifiable with a specific project and include payroll costs associated with time spent by site employees in connection with the planning, execution and control of the project. Indirect costs consist of interest, property taxes, and certain other costs, including an allocation of costs incurred by certain departments that perform activities that clearly relate to capital projects. Costs incurred in connection with capital projects are capitalized where the direct costs of the project, excluding direct labor, exceed $250. Expenditures for ordinary repairs, maintenance and resident turnover costs are expensed as incurred. We charge to expense as incurred indirect costs that do not relate to the above activities, including general and administrative expenses.
      The costs of capital projects are depreciated over the estimated useful life of the related component or improvement, which is generally five to fifteen years. Certain homogeneous items that are purchased in bulk on a recurring basis, such as carpeting and appliances, are depreciated using group methods that reflect the average estimated useful life of the items in each group. Except in the case of property casualties, where the net book value of lost property is written off in the determination of casualty gains or losses, we generally do not recognize any expense in connection with the replacement of an existing property component because normal replacements are considered in determining the estimated useful lives used in connection with our composite and group depreciation methods.
      For the years ended December 31, 2004, 2003 and 2002, the amounts of capitalized interest were $9.5 million, $14.5 million and $16.8 million, respectively. Additionally, for the years ended December 31, 2004, 2003 and 2002, we capitalized payroll and indirect costs totaling $46.7 million, $45.4 million and $46.0 million, respectively.
Impairment of Long-Lived Assets
      Real estate and other long-lived assets to be held and used are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate

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that the carrying amount of a property may not be recoverable, we make an assessment of its recoverability by comparing the carrying amount to our estimate of the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the aggregate undiscounted future cash flows, we recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property. Based on periodic tests of recoverability of long-lived assets, we have determined that the carrying amount for our properties to be held and used is recoverable and, therefore, we did not record any impairment losses related to such properties for the years ended December 31, 2004, 2003 and 2002.
Cash Equivalents
      We consider highly liquid investments with an original maturity of three months or less to be cash equivalents.
Restricted Cash
      Restricted cash includes capital replacement reserves, tax-free exchange funds, completion repair reserves, bond sinking fund amounts and tax and insurance escrow accounts held by lenders.
Accounts Receivable and Allowance for Doubtful Accounts
      Accounts receivable are generally comprised of amounts receivable from residents, amounts receivable from non-affiliated real estate partnerships for which we provide property management and other services and other miscellaneous receivables from non-affiliated entities. We evaluate all accounts receivable from residents and establish an allowance, after the application of security deposits and other anticipated recoveries, for accounts greater than 30 days past due for current residents and all receivables due from former residents. Accounts receivable from residents are stated net of allowances for doubtful accounts of approximately $2.4 million and $3.6 million as of December 31, 2004 and 2003, respectively.
      We evaluate all accounts receivable from non-affiliated entities and establish an allowance for amounts that are considered to be uncollectible. Accounts receivable relating to non-affiliated entities are stated net of allowances for doubtful accounts of approximately $4.5 million and $4.6 million as of December 31, 2004 and 2003, respectively.
Accounts Receivable and Allowance for Doubtful Accounts from Affiliates
      Accounts receivable from affiliates are generally comprised of receivables related to property management and other services provided to unconsolidated real estate partnerships in which we have an ownership interest. We evaluate all accounts receivable balances from affiliates on a periodic basis, and establish an allowance for the amounts deemed to be uncollectible. Accounts receivable from affiliates are stated net of allowances for doubtful accounts of approximately $4.4 million and $3.0 million as of December 31, 2004 and 2003, respectively.
Deferred Costs
      We defer lender fees and other direct costs incurred in obtaining financing and amortize the cost over the terms of the related loan agreements. Amortization of these costs is included in interest expense.
      We defer leasing commissions and other direct costs incurred in connection with successful leasing efforts and amortize the costs over the terms of the related leases. Amortization of these costs is included in property operating expenses.
Advertising Costs
      We generally expense all advertising costs as incurred to property operating expense. Total advertising expense for the years ended December 31, 2004, 2003 and 2002 was $29.0 million, $28.7 million and $19.6 million, respectively.

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Notes Receivable from Unconsolidated Real Estate Partnerships and Related Interest Income and Provision for Losses
      Notes receivable from unconsolidated real estate partnerships consist primarily of subordinated notes receivable from partnerships in which we are the general partner. The ultimate repayment of these notes is subject to a number of variables, including the performance and value of the underlying real estate property and the claims of unaffiliated mortgage lenders. Our notes receivable include loans extended by us that we carry at the face amount plus accrued interest, which we refer to as “par value notes,” and loans extended by predecessors whose positions we generally acquired at a discount, which we refer to as “discounted notes.”
      We record interest income on par value notes as earned in accordance with the terms of the related loan agreements. We discontinue the accrual of interest on such notes when the notes are impaired, as discussed below, or when there is otherwise significant uncertainty as to the collection of interest. We record income on such nonaccrual loans using the cost recovery method, under which we apply cash receipts first to the recorded amount of the loan; thereafter, any additional receipts are recognized as income.
      We recognize interest income on discounted notes receivable based upon whether the amount and timing of collections are both probable and reasonably estimable. We consider collections to be probable and reasonably estimable when the borrower has entered into certain closed or pending transactions (which include real estate sales, refinancings, foreclosures and rights offerings) that provide a reliable source of repayment. In such instances, we recognize accretion income, on a prospective basis using the effective interest method over the estimated remaining term of the loans, equal to the difference between the carrying amount of the discounted notes and the estimated collectible value. We record income on all other discounted notes using the cost recovery method.
      We assess the collectibility of notes receivable on a periodic basis, which assessment consists primarily of an evaluation of cash flow projections of the borrower to determine whether estimated cash flows are sufficient to repay principal and interest in accordance with the contractual terms of the note. We recognize impairments on notes receivable when it is probable that principal and interest will not be received in accordance with the contractual terms of the loan. The amount of the impairment to be recognized generally is based on the fair value of the partnership’s real estate that represents the primary source of loan repayment. In certain instances where other sources of cash flow are available to repay the loan, the impairment is measured by discounting the estimated cash flows at the loan’s original effective interest rate.
Investments in Unconsolidated Real Estate Partnerships
      We own general and limited partner interests in real estate partnerships that own apartment properties. We account for investments in real estate partnerships that we do not consolidate under the equity method. Under the equity method, our share of the earnings or losses of the entity for the periods being presented is included in equity in earnings (losses) from unconsolidated real estate partnerships, except for our share of impairments and property disposition gains related to such entities, which we report separately in the consolidated statements of income.
Intangible Assets
      At December 31, 2004 and 2003, other assets included goodwill of $88.1 million and $99.8 million, respectively, associated with the purchase of affordable properties and other businesses that we had previously amortized on a straight-line basis. We account for goodwill and other intangible assets in accordance with the requirements of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, or SFAS 142. SFAS 142 does not permit amortization of goodwill and other intangible assets with indefinite lives, but requires an annual impairment test of such assets. The first step of the impairment test compares the fair value of reporting units with their carrying amounts, including goodwill. Based on the application of the goodwill impairment test set forth in SFAS 142, we determined that our goodwill was not impaired in 2004, 2003 or 2002. The 2004 decrease in goodwill was attributable to a change in the accounting for our investment in a previously consolidated entity that we now account for under the equity method.

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      Other assets also includes intangible assets for purchased management contracts with finite lives that we amortize on a straight-line basis over terms ranging from five to twenty years and intangible assets for in-place leases as discussed under Acquisition of Real Estate Assets and Related Depreciation and Amortization.
Capitalized Software Costs
      Purchased software and other costs related to software developed for internal use are capitalized during the application development stage and are amortized using the straight-line method over the estimated useful life of the software, generally five years. We write off the costs of software development projects when it is no longer probable that the software will be completed and placed in service. During 2004, we wrote off $1.1 million of software development costs. For the years ended December 31, 2004, 2003 and 2002, we capitalized software development costs totaling $18.1 million, $18.9 million and $8.0 million, respectively. At December 31, 2004 and 2003, other assets included $43.4 million and $36.7 million of net capitalized software, respectively.
Minority Interest in Consolidated Real Estate Partnerships
      We reflect unaffiliated partners’ interests in consolidated real estate partnerships as minority interest in consolidated real estate partnerships. Minority interest in consolidated real estate partnerships represents the minority partners’ share of the underlying net assets of our consolidated real estate partnerships. When these consolidated real estate partnerships make cash distributions to partners in excess of the carrying amount of the minority interest, we generally record a charge equal to the amount of such excess distribution, even though there is no economic effect or cost. We report this charge in the consolidated statements of income as deficit distributions to minority partners. We allocate partnership losses to minority partners to the extent of the carrying amount of the minority interest. We generally record a charge when partnership losses exceed the carrying amount of the minority interest, even though there is no economic effect or cost. We report this charge in the consolidated statements of income within minority interest in consolidated real estate partnerships. We do not record charges for distributions or losses in certain limited instances where the minority partner has a legal obligation and financial capacity to contribute additional capital to the partnership. For the years ended December 31, 2004, 2003, and 2002, we recorded charges for partnership losses resulting from depreciation of approximately $5.2 million, $1.5 million, and $7.0 million, respectively, that were not allocated to minority partners because the losses exceeded the carrying amount of the minority interest.
Revenue Recognition
      Our properties have operating leases with apartment residents with terms generally of twelve months or less. We recognize rental revenue related to these leases, net of any concessions, on a straight-line basis over the term of the lease. We recognize revenues from property management, asset management, syndication, development and other services when the related fees are earned and are realized or realizable.
Stock-Based Compensation
      Effective January 1, 2003, we adopted the accounting provisions of Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, or SFAS 123, as amended by Statement of Financial Accounting Standards No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of FASB Statement No. 123, or SFAS 148, and applied the prospective method set forth in SFAS 148 with respect to the transition. Under this method, we apply the fair value recognition provisions of SFAS 123 to all employee awards granted, modified, or settled on or after January 1, 2003, which has resulted in recognition of compensation expense related to stock options based on the fair value of the stock options. For stock options granted prior to January 1, 2003, we apply Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, or APB 25, and related interpretations. Under APB 25, because the exercise price of our employee stock options equaled the market price of the underlying stock on the date of grant, no compensation expense related to such options has been recognized. We recognize compensation expense for stock options accounted for under SFAS 123 and restricted stock awards ratably over the period the awards vest. Compensation expense is reversed as forfeitures occur.

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      For purposes of the pro forma disclosures below, the estimated fair values for all awards made prior to January 1, 2003 are amortized over the respective vesting period for each such option and are shown as expense as if SFAS 123 had been applied to all such awards. Pro forma information regarding net income and earnings per share is required by SFAS 123, which also requires that the information be determined as if we had accounted for our employee stock options granted subsequent to December 31, 1994 under the fair value method. The fair value for our options granted over the last three years was estimated at the date of grant using a Black-Scholes valuation model with the following assumptions:
                         
    2004   2003   2002
             
Risk free interest rate
    3.5%       3.5%       4.2%  
Expected dividend yield
    7.5%       9.0%       7.5%  
Volatility factor of the expected market price of our Common Stock
    0.191       0.195       0.210  
Weighted average expected life of options
    5.0  years       5.0  years       4.5  years  
Weighted average fair value of options granted during the year
    $2.24       $2.26       $3.52  
      The Black-Scholes valuation model was developed for use in estimating the fair value of traded options and does not take into account vesting requirements or restrictions on transferability. In addition, the valuation model requires the input of highly subjective assumptions including the expected stock price volatility. Our employee stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value estimate.
      The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all outstanding and unvested awards in each period presented. Our pro forma information for the years ended December 31, 2004, 2003 and 2002 is as follows (in thousands, except per share data):
                           
    2004   2003   2002
             
Net income attributable to common stockholders, as reported
  $ 174,693     $ 65,292     $ 75,488  
Add: Stock-based employee compensation expense included in reported net income:
                       
 
Restricted stock awards
    4,903       4,088       4,233  
 
Stock options
    1,603       892        
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards:
                       
 
Restricted stock awards
    (4,903 )     (4,088 )     (4,233 )
 
Stock options
    (4,289 )     (4,744 )     (6,921 )
Add: Additional minority interest in Aimco Operating
Partnership
    276       435       871  
                   
Pro forma net income attributable to common stockholders
  $ 172,283     $ 61,875     $ 69,438  
                   
Basic earnings per common share:
                       
 
Reported
  $ 1.88     $ 0.70     $ 0.88  
 
Pro forma
  $ 1.85     $ 0.67     $ 0.81  
Diluted earnings per common share:
                       
 
Reported
  $ 1.88     $ 0.70     $ 0.87  
 
Pro forma
  $ 1.85     $ 0.67     $ 0.80  
      The effects of applying SFAS 123 in calculating pro forma income attributable to common stockholders and pro forma basic and diluted earnings per share may not necessarily be indicative of the effects of applying SFAS 123 to future years’ earnings. As discussed in Note 21, we are required to change our method of accounting for stock-based compensation in 2005.

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Discontinued Operations
      In accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment of Long-Lived Assets to be Disposed Of, or SFAS 144, we classify certain properties as held for sale (see Note 15). The property operating income, interest expense and interest income are presented in discontinued operations in both current periods and all comparable periods presented. In addition, depreciation is not recorded on properties held for sale, however, depreciation expense recorded prior to classification as held for sale is included in discontinued operations. The net gain on sale and any impairment losses are presented in discontinued operations when recognized.
Derivative Financial Instruments
      We primarily use long-term, fixed-rate and self-amortizing non-recourse debt in order to avoid, among other things, risk related to fluctuating interest rates. For our variable-rate debt, we are sometimes required by our lenders to limit our exposure to interest rate fluctuations by entering into interest rate swap or cap agreements. The interest rate swap agreements moderate our exposure to interest rate risk by converting the variable-rate debt to a fixed rate. The interest rate cap agreements effectively limit our exposure to interest rate risk by providing a ceiling on the underlying variable interest rate. The fair values of these instruments are reflected as assets or liabilities in the balance sheet, and periodic changes in fair value are included in interest expense. These instruments are not material to our financial position and results of operations.
Insurance
      We believe that our insurance coverages insure our properties adequately against the risk of loss attributable to fire, earthquake, hurricane, tornado, flood, and other perils. In addition, we reinsure substantial portions of our property, workers’ compensation, health, and general liability insurance coverage. Losses are accrued based upon our estimates of the aggregate liability for claims incurred using certain actuarial assumptions followed in the insurance industry and based on our experience.
Income Taxes
      We have elected to be taxed as a REIT, as defined under the Internal Revenue Code of 1986, as amended. As a REIT, we generally will not be subject to United States Federal income taxes at the corporate level on our net income that is distributed to our stockholders if we distribute at least 90% of our REIT taxable income to our stockholders. If our taxable income exceeds our dividends in a tax year, REIT tax rules allow us to “throw back” dividends from the subsequent tax year in order to avoid current taxation on undistributed income. Throwing back of dividends can result in excise taxes. REITs are also subject to a number of other organizational and operational requirements. If we fail to qualify as a REIT in any taxable year, our taxable income will be subject to United States Federal income tax at regular corporate rates (including any applicable alternative minimum tax). Even if we qualify as a REIT, we may be subject to certain state and local income taxes and to United States Federal income tax. We also will be required to pay a 100% tax on non-arms length transactions between us and a taxable REIT subsidiary and on any net income from sales of property that the IRS successfully asserts was property held for sale to customers in the ordinary course.
      Certain of our operations (property management, asset management, risk, etc.) are conducted through taxable REIT subsidiaries, which are subsidiaries of the Aimco Operating Partnership and each of which we refer to as a TRS. A TRS is a C-corporation that has not elected REIT status and as such is subject to United States Federal corporate income tax. We use the TRS format to facilitate our ability to offer certain services and activities to our residents that are not generally considered as qualifying REIT activities.
      For our taxable REIT subsidiaries, deferred income taxes result from temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for Federal income tax purposes, and are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse.

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Earnings Per Share
      We calculate earnings per share based on the weighted average number of shares of Common Stock, common stock equivalents and dilutive convertible securities outstanding during the period (see Note 16).
Fair Value of Financial Instruments
      The aggregate fair value of our cash and cash equivalents, receivables, payables and short-term secured debt as of December 31, 2004 approximates their carrying value due to their relatively short-term nature. We further believe that the fair value of our variable rate secured tax-exempt bond debt and secured long-term debt also approximate their carrying value. For notes receivable, fixed rate secured tax-exempt bond debt and secured long-term debt, fair values have been based on estimates using present value techniques. Present value calculations vary significantly depending on the assumptions used, including the discount rate and estimates of future cash flows. We estimate fair value for our fixed rate debt agreements based on the quoted market prices for the same or similar issues. In many cases, the fair value estimates may not be realized in immediate settlement of the instruments. The estimated combined fair value of our notes receivable at December 31, 2004 and December 31, 2003, was approximately $201 million and $216 million, respectively. See Note 5 for further details on notes receivable. The estimated combined fair value of our secured tax-exempt bonds and secured notes payable at December 31, 2004 and December 31, 2003, was approximately $6.0 billion and $6.0 billion, respectively. See Note 6 for further details on secured tax-exempt bonds and secured notes payable.
Concentration of Credit Risk
      Financial instruments that potentially could subject us to significant concentrations of credit risk consist principally of notes receivable. Concentrations of credit risk with respect to notes receivable are limited due to the large number of partnerships comprising our partnership base, the geographic diversity of the underlying properties, and the amount of partnership distributions.
Use of Estimates
      The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes thereto. Actual results could differ from those estimates.
Reclassifications
      Certain items included in the 2003 and 2002 financial statements amounts have been reclassified to conform to the 2004 presentation.
Note 3 — Acquisitions and Joint Ventures
Real Estate Acquisitions
      During 2004, we completed acquisitions of 11 properties (including The Palazzo at Park La Brea), containing approximately 1,880 residential units (and some ground floor retail space) for an aggregate purchase price of approximately $361 million. Of the 11 properties acquired, six are located in the New York City area, one in Los Angeles, two in Massachusetts, one in Florida and one in the Chicago area. The purchases were funded with cash, tax-free exchange funds, new debt and the assumption of existing debt.
      During 2003, we completed acquisitions of two properties (one located in the New York City area and one in Florida) containing 415 residential units and 12 commercial units for an aggregate purchase price of $96.5 million. The purchases were funded with cash, common OP units, new debt, and the assumption of existing debt.

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Acquisitions of Partnership Interests
      During 2004 and 2003, we acquired limited partnership interests in 147 partnerships and 166 partnerships, respectively, in which our affiliates served as general partner. In connection with such acquisitions in both consolidated and unconsolidated real estate partnerships, during 2004 we paid approximately $50 million, which included transaction costs, of which $48 million was in cash and the remainder in OP Units, and during 2003 we paid approximately $27 million, which included transaction costs, of which $26 million was in cash and the remainder in OP Units. The 2004 and 2003 amounts were approximately $89 million and $56 million, respectively, in excess of the minority interests’ book value in such limited partnerships, which we generally identified to real estate.
      In July 2003, we acquired the remaining 50% interest in the partnership that owns Lincoln Place, a 795-unit apartment community in Venice, California, for a purchase price of approximately $63 million, funded through a combination of cash and assumed non-recourse mortgage debt. During 2001, we acquired an approximate 50% interest in the partnership that owns Lincoln Place, which we funded through the payment of cash and the issuance of Class Nine Partnership Preferred Units, or the Class Nine Preferred Units. In connection with the July 2003 transaction, we repurchased for approximately $33 million all outstanding Class Nine Preferred Units that were issued in connection with the 2001 purchase and approximately 147,000 common OP Units that had been issued upon conversion of Class Nine Preferred Units issued in the 2001 purchase.
GE Joint Venture
      On December 30, 2003 we entered into an equity financing with GE Real Estate in the form of a joint venture, which we refer to the as the GE JV. At closing, we contributed to the GE JV interests in 33 of our apartment properties with a total of 9,534 units, and GE Real Estate contributed cash, of which we received approximately $107 million before transaction costs and funding of reserves. The 33 apartment properties we contributed had an agreed-upon transaction value of approximately $346 million and mortgage debt of approximately $204 million that was assumed by the GE JV. In March 2004, we contributed to the GE JV interests in four additional apartment properties with a total of 900 units, and GE Real Estate contributed cash, of which we received approximately $11.0 million before transaction costs and funding of reserves. The four apartment properties we contributed had an agreed-upon transaction value of approximately $36.0 million and mortgage debt of approximately $21.0 million that was assumed by the GE JV. As a result of our control over day-to-day operations, we continue to consolidate the properties contributed to the GE JV in our consolidated financial statements and did not recognize any gain as a result of this transaction. GE Real Estate’s interest in these net assets is included in minority interest in consolidated real estate partnerships.
Note 4 — Investments in Unconsolidated Real Estate Partnerships
      We owned general and limited partner interests in unconsolidated real estate partnerships owning approximately 330, 441 and 511 properties at December 31, 2004, 2003 and 2002, respectively. We acquired these interests through various transactions, including large portfolio acquisitions and offers to individual limited partners. Our total ownership interests in these unconsolidated real estate partnerships ranges typically from less than 1% to 50%.

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      The following table provides selected combined financial information for our unconsolidated real estate partnerships as of and for the years ended December 31, 2004, 2003 and 2002 (in thousands):
                         
    2004   2003   2002
             
Real estate, net of accumulated depreciation
  $ 1,004,501     $ 1,441,739     $ 1,569,144  
Total assets
    1,255,434       1,809,990       1,880,982  
Secured and other notes payable
    1,146,141       1,704,963       1,787,756  
Total liabilities
    1,545,250       2,256,370       2,306,931  
Partners’ deficit
    (289,816 )     (446,380 )     (425,949 )
Rental and other property revenues
    320,687       538,759       587,199  
Property operating expenses
    (201,248 )     (328,759 )     (319,685 )
Depreciation expense
    (72,577 )     (110,978 )     (123,489 )
Interest expense
    (99,120 )     (157,513 )     (176,087 )
Gain on sale
    100,669       85,718       48,748  
Net income
    50,778       40,782       27,505  
      The decrease in the amounts in the above table from year to year was primarily due to dispositions of real estate owned by our unconsolidated real estate partnerships and our purchase of additional interests in, and resulting consolidation of, various partnerships previously accounted for under the equity method.
      As a result of our acquisition of interests in unconsolidated real estate partnerships, the investment in these partnerships at December 31, 2004 and 2003 of $188.1 million and $230.1 million, respectively, is approximately $123.7 million and $322.7 million, respectively, in excess of our share of the underlying historical partners’ deficit of the partnerships. The excess of the cost of the investments acquired over the equity in the underlying historical partners’ deficit is primarily ascribed to the fair values of land and buildings owned by the unconsolidated real estate partnerships. We amortize the excess basis related to the buildings over the estimated useful lives of the buildings. Such amortization is recorded as a component of equity in earnings (losses) of unconsolidated real estate partnerships.
Note 5 — Notes Receivable
      The following table summarizes our notes receivable at December 31, 2004 and 2003 (in thousands):
                                                 
    2004   2003
         
    Unconsolidated       Unconsolidated    
    Real Estate       Real Estate    
    Partnerships   Non-Affiliates   Total   Partnerships   Non-Affiliates   Total
                         
Par value notes
  $ 81,217     $ 31,217     $ 112,434     $ 63,829     $ 68,431     $ 132,260  
Discounted notes
    91,221       499       91,720       86,223       340       86,563  
Allowance for loan losses
    (7,149 )           (7,149 )     (10,122 )           (10,122 )
                                     
Total notes receivable
  $ 165,289     $ 31,716     $ 197,005     $ 139,930     $ 68,771     $ 208,701  
                                     
Face value of discounted notes
  $ 132,654     $ 1,249     $ 133,903     $ 136,979     $ 1,249     $ 138,228  
      Included in notes receivable from unconsolidated real estate partnerships at December 31, 2004 and 2003, are $31.3 million and $30.8 million, respectively, in notes that were secured by interests in real estate or interests in real estate partnerships. We earn interest on these secured notes receivable at various annual interest rates ranging between 6.0% and 12.0% and averaging 9.7%.
      Included in the notes receivable from non-affiliates at December 31, 2004 and 2003, are $9.1 million and $20.9 million, respectively, in notes that were secured by interests in real estate or interests in real estate partnerships. We earn interest on these secured notes receivable at various annual interest rates ranging between 4.0% and 9.0% and averaging 7.3%.

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      Additionally, included in notes receivable from non-affiliates at December 31, 2004 and 2003 are notes receivable from Alan I. Casden for an aggregate of $9.4 million and $35.0 million, respectively. Prior to the March 2002 acquisition of Casden Properties, Inc. (which we refer to as the Casden Transactions) in which we acquired NAPICO, investors holding limited partnership units in various limited partnerships of which NAPICO is the corporate general partner commenced an action (the “REAL Litigation”) against NAPICO and certain other defendants. On December 30, 2003, a settlement agreement (the “Settlement Agreement”) between NAPICO and Aimco and the prior shareholders of Casden Properties, Inc. closed in accordance with its terms. Among other things, the Settlement Agreement provided that The Casden Company deliver promissory notes (each a Note and collectively, the Notes) to NAPICO in an aggregate amount of $35 million ($7 million per year for 5 years), plus interest, on a secured, non-recourse basis. The Notes were secured by (i) approximately 804,000 shares of Common Stock and (ii) cash proceeds of recoveries or settlements that Alan I. Casden or any of his affiliates, or any of the former shareholders of Casden Properties Inc., receive in connection with or related to the REAL Litigation. On September 22, 2004, we entered into an agreement with respect to certain proceeds to be received by Alan I. Casden and Casden’s right to deliver Common Stock at an agreed-upon value of $47 per share in satisfaction of the Notes. Pursuant to this agreement, we received $20 million in cash as payment in full on the three Notes due in 2004, 2005 and 2006. Thereafter, at various intervals spanning approximately 1.5 years, we will receive cash payments of $4.0 million, $3.0 million and $2.5 million in satisfaction of the Notes due in 2007 and 2008. This transaction resolves a contingency based on the price of our Common Stock related to the Casden Transactions. In accordance with SFAS 141, we recorded a $4.8 million charge to additional paid-in capital, representing the difference between the $29.1 million fair value of the consideration to be paid pursuant to the settlement and the $33.9 million book value of the Notes.
      Interest income from total non-impaired par value notes for the years ended December 31, 2004, 2003 and 2002 totaled $20.5 million, $15.5 million and $26.6 million, respectively. For the years ended December 31, 2004, 2003, and 2002, we recognized accretion income on total discounted notes of approximately $6.3 million ($0.06 per basic and diluted share), $3.3 million ($0.03 per basic and diluted share), and $36.8 million ($0.37 per basic and diluted share), respectively.
      The activity in the allowance for loan losses in total for both par value notes and discounted notes for the years ended December 31, 2004 and 2003, is as follows (in thousands):
                   
    2004   2003
         
Balance at beginning of year
  $ (10,122 )   $ (9,979 )
 
Recoveries of (provision for) losses on notes receivable
    1,765       (2,183 )
 
Net reductions due to newly consolidated and property sales
    1,208       2,040  
             
Balance at end of year
  $ (7,149 )   $ (10,122 )
             
      During the year ended December 31, 2004 and 2003, we determined that an allowance for loan losses of $3.7 million and $6.6 million, respectively, was required on certain of our par value notes that had carrying values of $17.1 million and $16.3 million, respectively. The average recorded investment in the impaired par value notes for the years ended December 31, 2004 and 2003 was $15.8 million and $14.6 million, respectively. The remaining $95.3 million in par value notes receivable at December 31, 2004 is collectible and, therefore, interest income on these par value notes is recognized as it is earned.
      As of December 31, 2004 and 2003, we determined that an allowance for loan losses of $3.4 million and $3.5 million, respectively, was required on certain of our discounted notes that had carrying values of $6.0 million and $4.9 million, respectively. The average recorded investment in the impaired discounted notes for the years ended December 31, 2004 and 2003 was $5.8 million and $6.3 million, respectively.

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Note 6 — Secured Tax-Exempt Bond Financings and Secured Notes Payable
      The following table summarizes our secured tax-exempt bond financings at December 31, 2004 and 2003, the majority of which is non-recourse to us (in thousands):
                           
    Weighted Average        
    Interest Rate   2004   2003
             
Fixed rate secured tax-exempt bonds payable
    6.03 %   $ 391,979     $ 368,769  
Variable rate secured tax-exempt bonds payable
    2.18       741,815       695,481  
                   
 
Total
          $ 1,133,794     $ 1,064,250  
                   
      Fixed rate secured tax-exempt bonds payable mature at various dates through October 2045. Variable rate secured tax-exempt bonds payable mature at various dates through June 2034. Principal and interest on these bonds are generally payable in semi-annual installments or in monthly interest-only payments with balloon payments due at maturity. Certain of our tax-exempt bonds at December 31, 2004 are remarketed periodically by a remarketing agent to maintain a variable yield. If the remarketing agent is unable to remarket the bonds, then the remarketing agent can put the bonds to us. We believe that the likelihood of this occurring is remote. At December 31, 2004, our secured tax-exempt bond financings were secured by 90 properties with a combined net book value of $1,786.5 million.
      The following table summarizes our secured notes payable at December 31, 2004 and 2003, the majority of which are non-recourse to us (in thousands):
                           
    Weighted Average        
    Interest Rate   2004   2003
             
Conventional fixed rate secured notes payable
    6.89 %   $ 4,048,157     $ 3,894,453  
Conventional variable rate secured notes payable
    3.64       348,670       39,664  
Secured notes credit facility
    3.21       74,032       184,328  
                   
 
Total
          $ 4,470,859     $ 4,118,445  
                   
      Fixed rate secured notes payable mature at various dates through October 2045. Variable rate secured notes payable mature at various dates through November 2028. Principal and interest are generally payable monthly or in monthly interest-only payments with balloon payments due at maturity. At December 31, 2004, our secured notes payable were secured by 558 properties with a combined net book value of $6,900.5 million.
      We have a secured revolving credit facility that provides for borrowings of up to $250 million primarily to be used for financing properties that we intend to sell, as well as properties that are under redevelopment. In addition to the amounts in the above table, there were approximately $10 million and $9 million of notes that were provided through this facility that are unconsolidated and not included within secured notes payable at December 31, 2004 and 2003, respectively. The interest rate on the notes provided through this facility is the Fannie Mae Discounted Mortgage-Backed Security index plus 0.85%, which interest rate resets monthly. Each such loan under this facility is treated as a separate borrowing and is collateralized by a specific property, and none of the loans is cross-collateralized or cross-defaulted. This facility matures in September 2007, but can be terminated and repaid in full without penalty after September 2005.
      Our consolidated debt instruments generally contain covenants common to the type of facility or borrowing, including financial covenants establishing minimum debt service coverage ratios and maximum leverage ratios. At December 31, 2004, we were in material compliance with all financial covenants pertaining to our consolidated debt instruments.

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      As of December 31, 2004, the scheduled principal amortization and maturity payments for our secured tax-exempt bonds and secured notes payable are as follows (in thousands):
                         
    Amortization   Maturities   Total
             
2005
  $ 128,720     $ 126,120     $ 254,840  
2006
    133,238       495,054       628,292  
2007
    140,490       237,468       377,958  
2008
    145,163       178,215       323,378  
2009
    152,794       124,639       277,433  
Thereafter
                    3,742,752  
                   
                    $ 5,604,653  
                   
Note 7 — Mandatorily Redeemable Preferred Securities
      In accordance with SFAS 150, we report Trust Based Convertible Preferred Securities, which we refer to as TOPRS, and the Class S Cumulative Redeemable Preferred Stock, which we refer to as the Class S Preferred Stock, within the liabilities section of the consolidated balance sheets as of December 31, 2004 and 2003 (see Note 2 for further details on SFAS 150).
      In connection with the Insignia merger in 1998, we assumed the obligations under TOPRS with an aggregate liquidation amount of $149.5 million. Since 1998, approximately $134.5 million of the securities have been converted, resulting in $15.0 million remaining as of December 31, 2004, which also represents the redemption value. The securities mature on September 30, 2016 and require quarterly distributions payable in arrears at the rate of 6.5% per annum. For the years ended December 31, 2004, 2003 and 2002, $1.0 million, $1.0 million and $1.2 million, respectively, of distributions have been recorded to interest expense. The securities are convertible by the holders at any time through September 30, 2016 and may be redeemed by us on or after November 1, 1999. Each $50 of liquidation value of the securities can be converted into Common Stock at a conversion price of $49.61, which equates to 1.007 shares of Common Stock. In 2004 and 2003, the holders of the securities converted approximately $0.1 million and $0.05 million, respectively, of the securities into approximately 2,000 and 1,000 shares of Common Stock, respectively. On January 11, 2005, we redeemed for cash, all outstanding TOPRS (see Note 22 for further details on the redemption).
      On April 30, 2003, we sold 4,000,000 shares ($100 million) of Class S Preferred Stock through a private placement to an institutional investor. On January 30, 2004, we redeemed 1,015,228 shares of the Class S Preferred Stock at a redemption price of $24.625 per share. On March 26, 2004, we redeemed the remaining 2,984,772 shares of the Class S Preferred Stock at a redemption price of $24.75 per share. In accordance with SFAS 150, for the year ended December 31, 2004, we recorded to interest expense approximately $0.8 million of dividends paid on the Class S Preferred Stock and $0.4 million resulting from a redemption value adjustment on February 1, 2004. For the year ended December 31, 2003, we recorded to interest expense $2.0 million of dividends paid on the Class S Preferred Stock and $0.75 million resulting from a redemption value adjustment.
Note 8 — Term Loans and Credit Facility
      On November 2, 2004, we entered into an Amended and Restated Senior Secured Credit Agreement, which we refer to as the Credit Agreement, with a syndicate of financial institutions. In addition to Aimco, the Aimco Operating Partnership and two Aimco subsidiaries, NHP Management Company and AIMCO/ Bethesda Holdings, Inc. are also borrowers under the Credit Agreement. The Credit Agreement replaced our previous two separate credit agreements.
      The original aggregate commitment under the Credit Agreement is $750 million, comprised of $450 million of revolving loan commitments and a $300 million term loan tranche. The revolving loans bear interest at a rate equal to (i) the LIBOR rate plus a margin that can range from 1.50% to 2.00% (for LIBOR loans) or (ii) the base rate plus a margin that can range from 0% to 0.25% (for base rate loans), in each case, depending on our leverage ratio. The term loan bears interest at a rate equal to (i) the LIBOR rate plus 2.00% (for LIBOR loans) or (ii) the

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base rate plus 0.25% (for base rate loans). The default rate of interest for the loan is equal to the applicable rate described above plus 3%. The revolving loans mature on November 2, 2007, and the term loan matures on November 2, 2009.
      The Credit Agreement includes customary financial covenants, including the maintenance of specified ratios with respect to total indebtedness to gross asset value, total secured indebtedness to gross asset value, aggregate recourse indebtedness to gross asset value, variable rate debt to total indebtedness, debt service coverage and fixed charge coverage; the maintenance of a minimum adjusted tangible net worth; and limitations regarding the amount of cross-collateralized debt. The Credit Agreement includes other customary covenants, including a restriction on distributions and other restricted payments, but permits distributions during any 12-month period in an aggregate amount of up to 95% of our funds from operations for such period or such amount as may be necessary to maintain our REIT status. The Credit Agreement also permits us to repurchase our Common Stock using up to 80% of sales proceeds in any trailing four-quarter period.
      The lenders under the Credit Agreement may accelerate any outstanding loans if, among other things: we fail to make payments when due (subject to applicable grace periods); material defaults occur under other debt agreements; certain bankruptcy or insolvency events occur; material judgments are entered against us; we fail to comply with certain covenants, such as the requirement to deliver financial information or the requirement to provide notices regarding material events (subject to applicable grace periods in some cases); indebtedness is incurred in violation of the covenants; or prohibited liens arise.
      Upon entering into the Credit Agreement on November 2, 2004, we borrowed $300.0 million under the term loan facility, which bears interest at the LIBOR rate plus 2.0%, and $145.0 million under the revolving credit facility, which currently bears interest at the LIBOR rate plus 1.75%. Proceeds from the term loan were used to repay the outstanding loans under our previous loan facilities and for other corporate purposes. Proceeds from the revolving loans made on the closing date were used to repay outstanding loans under the previous loan facilities. The proceeds of future revolving loans are generally permitted to be used to fund working capital and other corporate purposes.
      At December 31, 2004, the outstanding principal balance of the term loan was $300.0 million at an interest rate of 4.18%. At December 31, 2004, the outstanding principal balance of the revolving loans was $68.7 million at a weighted average interest rate of 4.64% (based on various weighted average LIBOR and base rate borrowings outstanding with various maturities). The amount available under the revolving facility at December 31, 2004 was $358.2 million (after giving effect to $23.1 million outstanding for undrawn letters of credit issued under the revolving facility). As of December 31, 2004, we were in compliance with all financial covenant requirements.
Note 9 — Commitments and Contingencies
Commitments
      In connection with the Casden Transactions, we have commitments to:
  •  purchase, for a contractually agreed minimum consideration of approximately $199 million, Palazzo East at Park La Brea upon satisfactory completion of construction and attainment of 60% occupancy. Palazzo East at Park La Brea is comprised of a total of 610 units, construction of which was completed in December 2003. The Palazzo East at Park La Brea acquisition was completed on February 28, 2005 (see Note 22). With regard to our previously disclosed commitment to purchase Westwood, on January 3, 2005, we finalized an agreement that extinguished our purchase obligation;
 
  •  provide a stand-by facility of $64.5 million in debt financing associated with the development of Palazzo East at Park La Brea and Westwood (as of December 31, 2004, no funds have been drawn on this stand-by facility). In connection with the Westwood agreement described above, the maximum amount we are required to provide through this stand-by facility was reduced to $32.1 million. Additionally, with the February 28, 2005 acquisition of Palazzo East at Park La Brea, we are no longer required to provide this stand-by facility;

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  •  invest up to $50 million for a 20% limited liability company interest in Casden Properties LLC. As of December 31, 2004, we had invested $39.2 million. Casden Properties LLC intends to pursue new development opportunities in Southern California and other markets. We have an option, but not an obligation, to purchase at completion all multifamily rental projects developed by Casden Properties LLC; and
 
  •  pay $2.5 million per quarter for five years (for an aggregate amount of $50 million) to Casden Properties LLC as a retainer on account for redevelopment services on our assets (as of December 31, 2004, $27.5 million has been paid).
Guarantees
      In the ordinary course of business, we provide certain guarantees that are covered by the provisions of FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, or FIN 45. These guarantees include: (i) standby letters of credit, which we may provide to enhance credit or guarantee our performance under contractual obligations; (ii) limited guarantees, which we may provide to certain of our lenders and that may require us to provide funds to maintain required loan-to-value ratios; and (iii) guarantees in connection with our syndication of historical and affordable housing tax credits, which we may provide to make available additional funding to cover operating cash flow deficiencies, cover shortfalls related to the delivery of tax credits and cover financing shortfalls related to project development. These guarantees have varying expiration dates ranging from less than one year to fourteen years. The fair values of guarantees that are required to be recognized under FIN 45 are not material to our financial statements.
Legal Matters
      In addition to the matters described below, we are a party to various legal actions and administrative proceedings arising in the ordinary course of business, some of which are covered by liability insurance, and none of which we expect to have a material adverse effect on our consolidated financial condition or results of operations.
Limited Partnerships
      In connection with our acquisitions of interests in real estate partnerships, we are sometimes subject to legal actions, including allegations that such activities may involve breaches of fiduciary duties to the partners of such real estate partnerships or violations of the relevant partnership agreements. We may incur costs in connection with the defense or settlement of such litigation. We believe that we comply with our fiduciary obligations and relevant partnership agreements. Although the outcome of any litigation is uncertain, we do not expect any such legal actions to have a material adverse affect on our consolidated financial condition or results of operations.
Environmental
      Various Federal, state and local laws subject property owners or operators to liability for management, and the costs of removal or remediation, of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of the hazardous substances. The presence of, or the failure to manage or remedy properly, hazardous substances may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, the presence of hazardous substances on a property could result in claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal, remediation or disposal of hazardous substances through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of properties, we could potentially

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be liable for environmental liabilities or costs associated with our properties or properties we acquire or manage in the future.
Mold
      As previously disclosed, we have been named as a defendant in lawsuits that have alleged personal injury as a result of the presence of mold. In addition, we are aware of lawsuits against owners and managers of multifamily properties asserting claims of personal injury and property damage caused by the presence of mold, some of which have resulted in substantial monetary judgments or settlements. We have only limited insurance coverage for property damage loss claims arising from the presence of mold and for personal injury claims related to mold exposure. We have implemented a national policy and procedures to prevent or eliminate mold from our properties and believe that our measures will eliminate, or at least minimize, the effects that mold could have on our residents. To date, we have not incurred any material costs or liabilities relating to claims of mold exposure or to abate mold conditions. Because the law regarding mold is unsettled and subject to change we can make no assurance that liabilities resulting from the presence of or exposure to mold will not have a material adverse effect on our consolidated financial condition or results of operations.
San Francisco Litigation
      As previously disclosed, Aimco and four of its affiliated partnerships were parties to a lawsuit with the City and County of San Francisco and certain of its agents. A settlement agreement among the parties resolving the litigation became effective on November 4, 2004. The settlement was subject to certain previously disclosed conditions subsequent that have been satisfied. We intend to complete a renovation of the properties. The settlement and anticipated renovation of the properties have had no material adverse effect on our consolidated financial condition or results of operations.
National Union Litigation
      As previously disclosed, National Program Services, Inc. and Vito Gruppuso (collectively “NPS”) were insurance agents who sold to us property insurance issued by National Union Fire Insurance Company of Pittsburgh, Pennsylvania (“National Union”). The financial failure of NPS resulted in defaults under two agreements by which NPS indemnified us from losses relating to the matters described below. As a result of such defaults we had a $16.7 million insurance-related receivable that was subsequently reduced to $6.7 million following our settlement with Lumbermens Mutual Casualty Company (“Lumbermens”) and an insurance agency. In addition, we have pending litigation against National Union, First Capital Group, a New York based insurance wholesaler, NPS and other agents of National Union, for a refund of at least $10 million of the prepaid premium plus other damages. The contingent liabilities arising from the NPS defaults also resulted in litigation against us by Cananwill, Inc. (“Cananwill”), a premium funding company, regarding an alleged balance due of $5.7 million on a premium finance agreement that funded premium payments made to National Union. We are also plaintiffs in litigation against Cananwill and Combined Specialty Insurance Company, formerly known as Virginia Surety Company, Inc., alleging Cananwill’s conversion of $1.6 million of unearned premium belonging to us and misapplication of such funds to the alleged debt asserted in the lawsuit initiated by Cananwill. The matter in which we are plaintiffs has been stayed by the court pending resolution of the action filed by Cananwill against us. The previously disclosed litigation brought by WestRM — West Risk Markets, Ltd. (“WestRM”) against XL Reinsurance America, Inc. (“XL”), Greenwich Insurance Company (“Greenwich”) and Lumbermens in which we have been made a third party defendant continues. Summary judgment has been entered against defendants XL and Greenwich. Similarly, the previously disclosed litigation brought by Highlands Insurance Company (“Highlands”) against Cananwill, XL, Greenwich and us also continues. In those cases in which we are a defendant, we believe that we have meritorious defenses to assert, and we will vigorously defend ourselves against claims brought against us. In addition, we will vigorously prosecute our own claims. Although the outcome of any claim or matter in litigation is uncertain, we do not believe that we will incur any material loss in connection with the insurance-related receivable or that the ultimate outcome of these separate but related matters will have a material adverse effect on our consolidated financial condition or results of operations.

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FLSA Litigation
      As previously disclosed, the Aimco Operating Partnership and NHP Management Company (“NHPMN”), our affiliate, are defendants in a lawsuit alleging that they willfully violated the Fair Labor Standards Act (“FLSA”) by failing to pay maintenance workers overtime for all hours worked in excess of forty per week. The complaint attempts to bring a collective action under the FLSA and seeks to certify state subclasses in California, Maryland, and the District of Columbia. Specifically, the plaintiffs contend that the Aimco Operating Partnership and NHPMN failed to compensate maintenance workers for time that they were required to be “on-call.” Additionally, the complaint alleges the Aimco Operating Partnership and NHPMN failed to comply with the FLSA in compensating maintenance workers for time that they worked in responding to a call while “on-call.” We have filed an answer to the amended complaint denying the substantive allegations. Discovery relating to the certification of the collective action has concluded and briefing on the matter is underway. Although the outcome of any litigation is uncertain, we do not believe that the ultimate outcome will have a material adverse effect on our consolidated financial condition or results of operations.
SEC Investigation
      As previously disclosed, the Central Regional Office of the United States Securities and Exchange Commission (the “SEC”) is conducting a formal investigation relating to certain matters. Although the staff of the SEC is not limited in the areas that it may investigate, we believe the areas of investigation include our miscalculated monthly net rental income figures in third quarter 2003, forecasted guidance, accounts payable, rent concessions, vendor rebates, capitalization of payroll and certain other costs, and tax credit transactions. We are cooperating fully. We are not able to predict when the matter will be resolved. We do not believe that the ultimate outcome will have a material adverse effect on our consolidated financial condition or results of operations.
Operating Leases
      We are obligated under office space and equipment non-cancelable operating leases. In addition, we sublease certain of our office space to tenants under non-cancelable subleases. Approximate minimum annual rentals under operating leases and approximate minimum payments to be received under annual subleases are as follows (in thousands):
                 
    Operating Lease   Sublease
    Obligations   Receivables
         
2005
  $ 7,262     $ 1,536  
2006
    7,226       1,485  
2007
    7,066       1,508  
2008
    6,445       1,086  
2009
    4,892       597  
Thereafter
    14,035       597  
             
Total
  $ 46,926     $ 6,809  
             
      Substantially all of the office space and equipment subject to the operating leases described above are for the use of our corporate offices and regional operating centers. Rent expense recognized totaled $5.8 million, $6.1 million, and $5.0 million for the years ended December 31, 2004, 2003 and 2002, respectively. Sublease receipts totaled approximately $0.9 million, $1.1 million and $0.8 million for the years ended December 31, 2004, 2003 and 2002, respectively.
Note 10 — Income Taxes
      Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities of the taxable REIT subsidiaries for financial reporting purposes and the amounts used for

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income tax purposes. Significant components of our deferred tax liabilities and assets are as follows (in thousands):
                   
    December 31,   December 31,
    2004   2003
         
Deferred tax liabilities:
               
 
Partnership differences
  $ 50,109     $ 54,317  
 
Depreciation of fixed assets
    3,745       956  
 
Interest income
    809       8,240  
 
Deferred gains
    13,070       5,061  
 
Other
    130       3,289  
             
Total deferred tax liabilities
  $ 67,863     $ 71,863  
             
Deferred tax assets:
               
 
Net operating and capital loss carryforward
  $ 10,432     $ 16,401  
 
Receivables
    7,350       7,887  
 
Accrued liabilities
    11,184       8,854  
 
Accrued interest expense
    5,215       3,893  
 
Intangibles — management contracts
    10,922       12,193  
 
Rehabilitation & Low Income Housing credits
    3,830       3,358  
             
Total deferred tax assets
    48,933       52,586  
Valuation allowance for deferred tax assets
    (1,209 )     (716 )
             
Deferred tax assets, net of valuation allowance
    47,724       51,870  
             
Net deferred tax liabilities
  $ 20,139     $ 19,993  
             
      During the year ended December 31, 2004, we recorded a deferred tax asset related to low income housing credits of approximately $0.5 million for which a full valuation reserve was recorded. The remaining amount of our valuation reserve relates to tax credits that we do not expect to utilize to reduce future tax obligations.
      Significant components of the provision (benefit) for income taxes are as follows and are classified within other expenses (income), net in continuing operations and income from discontinued operations, net in our statements of income for 2004, 2003 and 2002 (in thousands):
                           
    Year Ended   Year Ended   Year Ended
    December 31,   December 31,   December 31,
    2004   2003   2002
             
Current:
                       
 
Federal
  $ 7,345     $ 4,556     $ (302 )
 
State
    748       840       1,686  
                   
Total current
    8,093       5,396       1,384  
                   
Deferred:
                       
 
Federal
    634       (10,065 )     (175 )
 
State
    72       (1,150 )     (1,640 )
                   
Total deferred
    706       (11,215 )     (1,815 )
                   
Total provision (benefit)
  $ 8,799     $ (5,819 )   $ (431 )
                   
Classification:
                       
Continuing operations
  $ (7,216 )   $ (17,953 )   $ (2,938 )
Discontinued operations
  $ 16,015     $ 12,134     $ 2,507  

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      Consolidated income (loss) subject to tax is $20,498,000 for 2004, ($3,990,000) for 2003, and $7,171,000 for 2002. The reconciliation of income tax attributable to continuing and discontinued operations computed at the U.S. statutory rate to income tax expense (benefit) is shown below (dollars in thousands):
                                                 
    Year Ended   Year Ended   Year Ended
    December 31, 2004   December 31, 2003   December 31, 2002
             
    Amount   Percent   Amount   Percent   Amount   Percent
                         
Tax at U.S. statutory rates on consolidated income (loss) subject to tax
  $ 7,174       35.0 %   $ (1,396 )     35.0 %   $ 2,510       35.0 %
State income tax, net of Federal tax benefit
    818       4.0 %     (306 )     7.6 %     46       0.7 %
Effect of permanent differences
    314       1.5 %     2,202       (55.2 )%     4,143       62.2 %
Increase (decrease) valuation allowance
    493       2.4 %     (6,319 )     158.4 %     (7,130 )     (103.9 )%
                                     
    $ 8,799       42.9 %   $ (5,819 )     145.8 %   $ (431 )     (6.0 )%
                                     
      During the quarter ended March 31, 2003, in an effort to streamline business processes and operational efficiencies of our property management and services businesses, we contributed all of the capital stock of NHP Management Company to AIMCO/ Bethesda Holdings, Inc. (both of which are wholly-owned taxable REIT subsidiaries). In connection with this transaction, we reversed a valuation reserve related to future deductions and tax loss carryforwards of NHP Management Company and thereby recognized approximately $8.0 million of deferred tax benefits within other expenses (income), net. This deferred tax benefit increased net income by approximately $7.1 million, net of minority interest, and resulted in an increase in basic and diluted earnings per share of $0.08 for the year ended December 31, 2003.
      Income taxes paid totaled approximately $2,727,000, $3,771,000, and $1,189,000 in the years ended December 31, 2004, 2003 and 2002, respectively.
      At December 31, 2004, we had net operating loss carryforwards (NOLs) of approximately $27.0 million for income tax purposes that expire in years 2017 to 2023. Subject to certain separate return limitations, we may use these NOLs to offset all or a portion of taxable income generated by our taxable REIT subsidiaries. Additionally, at December 31, 2004, we had tax credit carryforwards of approximately $3.8 million for income tax purposes that expire in years 2012 to 2023.
      Earnings and profits, which determine the taxability of dividends to stockholders, differ from net income reported for financial reporting purposes principally due to differences for United States Federal tax purposes in the estimated useful lives and methods used to compute depreciation and the carrying value (basis) of the investments in properties. The following table reconciles our net income to REIT taxable income for the years ended December 31, 2004, 2003 and 2002 (in thousands):
                         
    2004   2003   2002
             
Net income
  $ 263,497     $ 158,857     $ 169,046  
Elimination of earnings from taxable REIT subsidiaries
    21,291       4,897       9,725  
Depreciation and amortization expense, not deductible for tax
    (731 )     (888 )     (23,763 )
Gain on disposition of real estate property
    171,477       136,211       62,146  
Interest income, not currently taxable
    (958 )     (997 )     (18,169 )
Depreciation timing differences on real estate
    22,503       23,263       33,777  
Dividends on officer stock, not deductible for tax
    1,397       2,053       2,787  
Provision for loan losses
    3,493       467       6,107  
Limited partner deficit allocations, not deductible for tax
    14,381       10,791       24,551  
Transaction and project costs, deductible for tax
    9,013       4,030       10,525  
                   
REIT taxable income
  $ 505,363     $ 338,684     $ 276,732  
                   
      For income tax purposes, dividends paid to holders of Common Stock primarily consist of ordinary income, return of capital, capital gains, qualified dividends and unrecaptured Sec. 1250 gains, or a combination thereof.

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For the years ended December 31, 2004, 2003 and 2002, dividends paid per share were estimated to be taxable as follows:
                                                 
    2004   2003   2002
             
    Amount   Percentage   Amount   Percentage   Amount   Percentage
                         
Ordinary income
  $ 0.04       2 %   $ 0.80       26 %   $ 2.00       61 %
Return of capital
                            0.66       20 %
Capital gains
    1.77       74 %     0.77       25 %     0.23       7 %
Qualified dividends
    0.03       1 %                        
Unrecaptured Sec.1250 gain
    0.56       23 %     1.49       49 %     0.39       12 %
                                     
    $ 2.40       100 %   $ 3.06       100 %   $ 3.28       100 %
                                     
Note 11 — Transactions Involving Minority Interest in Aimco Operating Partnership
Preferred OP Units
      Various classes of preferred OP Units of the Aimco Operating Partnership are outstanding. Depending on the terms of each class, these preferred OP Units are convertible into common OP Units or redeemable for Common Stock and are paid distributions varying from 8% to 9.5% per annum per unit, or equal to the dividends paid on Common Stock based on the conversion terms. As of December 31, 2004, a total of 3.3 million preferred OP Units were outstanding with a redemption value of $90.5 million, which were redeemable into approximately 2.5 million shares of Common Stock. As of December 31, 2003, a total of 3.3 million preferred OP Units were outstanding with a redemption value of $90.8 million, which were redeemable into approximately 2.5 million shares of Common Stock.
      During the years ended December 31, 2004 and 2003, approximately 10,000 and 32,000 preferred OP Units were tendered for redemption in exchange for approximately 8,000 and 22,000 shares of Common Stock, respectively. During the years ended December 31, 2004 and 2003, there were none and approximately 13,000 preferred OP Units tendered for redemption in exchange for cash. Additionally, in July 2003, we repurchased all outstanding Class Nine Preferred Units for approximately $27 million (see Note 3 for further information).
Common OP Units
      We completed tender offers for limited partnership interests resulting in the issuance of approximately 82,000 and 23,000 common OP Units in 2004 and 2003, respectively. In addition, in December 2003, we issued 88,792 common OP Units valued at $3.5 million in connection with the acquisition of an individual property.
      During the years ended December 31, 2004 and 2003, approximately 160,000 and 35,000 common OP Units, respectively, were redeemed in exchange for cash and approximately 735,000 and 338,000 common OP Units, respectively, were redeemed in exchange for shares of Common Stock.
High Performance Partnership Units
      As of December 31, 2004 and 2003, there were 2,379,084 Class I High Performance Partnership Units outstanding. Also outstanding were 4,398 Class V High Performance Partnership Units, or the Class V Units, for which the valuation period began on January 1, 2002 and ended on December 31, 2004, 5,000 Class VI High Performance Partnership Units, or the Class VI Units, for which the valuation period began on January 1, 2003 and will end on December 31, 2005 and 4,109 Class VII High Performance Partnership Units, or the Class VII Units, for which the valuation period began on January 1, 2004 and will end on December 31, 2006. At December 31, 2004, we did not meet the required measurement benchmarks for the Class V Units, Class VI Units or Class VII Units and therefore, we have not recorded any value to such High Performance Partnership Units in the consolidated financial statements as of December 31, 2004 and such High Performance Partnership Units have no dilutive effect.

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Note 12 — Registration Statements
      On March 26, 2004, we filed a shelf registration statement with the Securities and Exchange Commission, or the SEC, with respect to an aggregate of $1.05 billion of our debt and equity securities (of which approximately $50 million was carried over from the 2001 shelf registration statement) and $500.0 million of debt securities of the Aimco Operating Partnership (all of which was carried forward from the 2001 shelf registration statement). On April 5, 2004, the SEC declared the 2004 shelf registration statement effective. Under this 2004 shelf registration statement, we have approximately $876.6 million of debt and equity securities, and the Aimco Operating Partnership has $500.0 million of debt securities, available for sale as of December 31, 2004.
Note 13 — Stockholders’ Equity
      Preferred Stock
      At December 31, 2004 and 2003, we had the following classes of preferred stock outstanding classified as equity:
                                         
                Balance
            Annual Dividend    
    Redemption   Conversion   Rate Per Share   2004   2003
Perpetual:   Date(1)   Price   (paid quarterly)   (in thousands)   (in thousands)
                     
Class D Cumulative Preferred Stock, $.01 par value, 4,200,000 shares authorized, 1,250,002 and 2,700,002 shares issued and outstanding(2)
    02/19/2003             8.75%     $ 31,250     $ 67,500  
Class G Cumulative Preferred Stock, $.01 par value, 4,050,000 shares authorized, 4,050,000 shares issued and outstanding
    07/15/2008             9.375%       101,000       101,000  
Class Q Cumulative Preferred Stock, $.01 par value, 2,530,000 shares authorized, 2,530,000 shares issued and outstanding
    03/19/2006             10.10%       63,250       63,250  
Class R Cumulative Preferred Stock, $.01 par value, 6,940,000 shares authorized, 6,940,000 shares issued and outstanding
    07/20/2006             10.00%       173,500       173,500  
Class T Cumulative Preferred Stock, $.01 par value, 6,000,000 shares authorized, 6,000,000 shares issued and outstanding
    07/31/2008             8.00%       150,000       150,000  
Class U Cumulative Preferred Stock, $.01 par value, 8,000,000 shares authorized, 8,000,000 and zero shares issued and outstanding(3)
    03/24/2009             7.75%       200,000        
Class V Cumulative Preferred Stock, $.01 par value, 3,450,000 shares authorized, 3,450,000 and zero shares issued and outstanding(4)
    09/29/2009             8.00%       86,250        
Class Y Cumulative Preferred Stock, $.01 par value, 3,450,000 shares authorized, 3,450,000 and zero shares issued and outstanding(5)
    12/21/2009             7.875%       86,250        
                               
                              891,500       555,250  
                               

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                Balance
            Annual Dividend    
    Redemption   Conversion   Rate Per Share   2004   2003
Convertible(6):   Date(1)   Price   (paid quarterly)   (in thousands)   (in thousands)
                     
Class N Convertible Cumulative Preferred Stock, $.01 par value, 4,000,000 shares authorized, zero and 4,000,000 shares issued and outstanding(7)
    09/12/2003     $ 52.50       9.00%             100,000  
Class O Cumulative Convertible Preferred Stock, $.01 par value, 1,904,762 shares authorized, zero and 1,904,762 shares issued and outstanding(8)
    09/15/2003     $ 52.50       9.00%             100,000  
Class P Convertible Cumulative Preferred Stock, $.01 par value, 4,000,000 shares authorized, zero and 3,999,662 shares issued and outstanding(9)
    03/26/2004     $ 56.00       9.00%             99,992  
Class W Cumulative Convertible Preferred Stock, $.01 par value, 1,904,762 shares authorized, 1,904,762 and zero shares issued and outstanding(8)
    09/30/2007     $ 52.50       8.10%       100,000        
Class X Cumulative Convertible Preferred Stock, $.01 par value, 2,000,000 shares authorized, 2,000,000 and zero shares issued and outstanding(10)
    03/31/2006     $ 52.50       8.50%       50,000        
                               
                              150,000       299,992  
                               
Total   $ 1,041,500     $ 855,242  
             
 
  (1)  All classes of preferred stock are redeemable, at our option, on and after the dates specified.
 
  (2)  On August 18, 2003, we redeemed 1,499,998 shares of Class D Cumulative Preferred Stock, par value $0.01 per share, or the Class D Preferred Stock, at a redemption price of $25 per share, or $37.5 million, plus an amount equal to accumulated and unpaid dividends through August 18, 2003, for a total of $25.2066 per share. On November 5, 2004, we redeemed 1,450,000 shares of the Class D Preferred Stock at a redemption price of $25 per share, or $36.25 million, plus an amount equal to accumulated and unpaid dividends through November 5, 2004, for a total of $25.1276 per share.
 
  (3)  On March 24, 2004, we sold 8,000,000 shares of Class U Cumulative Preferred Stock, par value $0.01 per share, or the Class U Preferred Stock, in a registered public offering. We used the net proceeds of approximately $193.2 million to redeem a portion of Class S Preferred Stock and the remainder to pay down the revolving credit facility that we later used to redeem Class P Convertible Cumulative Preferred Stock.
 
  (4)  On September 29, 2004, we sold 3,450,000 shares of Class V Cumulative Preferred Stock, par value $0.01 per share, or the Class V Preferred Stock, in a registered public offering. We used the net proceeds of approximately $83.2 million to redeem 2,000,000 shares of Class N Convertible Cumulative Preferred Stock, or the Class N Preferred Stock, and the remainder to pay down the revolving credit facility that we later used to redeem 1,450,000 shares of the Class D Preferred Stock (discussed above).
 
  (5)  On December 21, 2004, we sold 3,450,000 shares of Class Y Cumulative Preferred Stock, par value $0.01 per share, or the Class Y Preferred Stock, in a registered public offering. We used the net proceeds of approximately $83.5 million to pay down the revolving credit facility, with the intention of redeeming the remaining 1,250,000 shares of the Class D Preferred Stock and the $15 million of outstanding TOPRS (see Note 22).

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  (6)  The articles supplementary set forth the relative rights and preferences of each class of securities and as shown above, the dividend rate on each class of convertible securities is the rate specified in the articles supplementary for each class. Such rate can be increased to the rate of the dividends paid on the number of shares of Common Stock into which a share of such preferred security is convertible. The initial conversion price of each class was in excess of the fair market value of a share of Common Stock on the respective dates on which the purchasers of each class agreed to purchase such securities.
 
  (7)  On September 30, 2004, we completed a partial redemption for cash of 2,000,000 outstanding shares of the Class N Preferred Stock for a total redemption price of $25.68125 per share, which included a redemption price of $25 per share, $0.18125 per share of accumulated and unpaid dividends through October 29, 2004, and a 2%, or $0.50 per share, redemption premium. Additionally, on September 30, 2004, we issued 2,000,000 shares of Class X Cumulative Convertible Preferred Stock, par value $0.01 per share, or the Class X Preferred Stock, in exchange for 2,000,000 shares of the Class N Preferred Stock in a private transaction. See additional discussion below on the Class X Preferred Stock. The conversion ratio for the Class N Preferred Stock is 0.4762.
 
  (8)  On September 30, 2004, we issued 1,904,762 shares of Class W Cumulative Convertible Preferred Stock, par value $0.01 per share, or the Class W Preferred Stock, in exchange for all 1,904,762 shares of Class O Cumulative Convertible Preferred Stock, or the Class O Preferred Stock, in a private transaction. Each share of the Class W Preferred Stock is redeemable at our option beginning September 30, 2007 for cash at a price per share equal to 102% of the liquidation preference, plus all accrued and unpaid dividends, if any, to the date fixed for redemption. The conversion ratio for the Class O Preferred Stock and the Class W Preferred Stock is 1.0. Accordingly, upon a conversion of all outstanding shares of Class W Preferred Stock, 1,904,762 shares of Common Stock would be issued.
 
  (9)  On April 21, 2004, we redeemed for cash all 3,999,662 outstanding shares of Class P Convertible Cumulative Preferred Stock, or the Class P Preferred Stock, for a total redemption price of $25.0375 per share, which included a redemption price of $25 per share, and $0.0375 per share of accumulated and unpaid dividends through April 20, 2004. The conversion ratio for the Class P Preferred Stock is 0.4464.
(10)  On September 30, 2004, we issued 2,000,000 shares of the Class X Preferred Stock, in exchange for 2,000,000 shares of the Class N Preferred Stock in a private transaction. Beginning on April 1, 2006, holders of the Class X Preferred Stock are entitled to receive an amount per share equal to the greater of (i) $2.25 per year (equivalent to 9.0% of the liquidation preference), or (ii) the cash dividends payable on the number of shares of Common Stock into which a share of the Class X Preferred Stock is convertible. Each share of the Class X Preferred Stock is redeemable at our option beginning March 31, 2006 for cash in the amount of $25 per share, plus all accrued and unpaid dividends, if any, to the date fixed for redemption. Under certain circumstances prior to March 31, 2006, the Class X Preferred Stock may be redeemed at 102% of the liquidation preference. The conversion ratio for the Class X Preferred Stock is 0.4762. Accordingly, upon a conversion of all outstanding shares of Class X Preferred Stock, 952,400 shares of Common Stock would be issued.
      All classes of preferred stock are pari passu with each other and are senior to Common Stock. The holders of each class of preferred stock are generally not entitled to vote on matters submitted to stockholders. Dividends on all shares of preferred stock are subject to declaration by our Board of Directors. All of the above outstanding classes of preferred stock have a liquidation preference per share of $25, with the exception of the Class O Preferred Stock and the Class W Preferred Stock, which both have a liquidation preference per share of $52.50.
      On July 31, 2003, the SEC clarified Emerging Issues Task Force, Topic No. D-42, The Effect on the Calculation of Earnings Per Share for the Redemption or Induced Conversion of Preferred Stock, or Topic D-42, which provides that any excess of (a) the fair value of the consideration transferred to the holders of preferred stock redeemed over (b) the carrying amount of the preferred stock should be subtracted from net earnings to determine net earnings available to common stockholders in the calculation of earnings per share. The SEC interpreted Topic D-42 to require that the issuance costs of the preferred securities reduce the carrying amount of the preferred securities, regardless of where in the stockholders’ equity section those costs were initially classified on issuance. Under the clarification, these issuance costs must be treated like a preferred dividend and deducted from net income to arrive at net income attributable to common stockholders. The July 2003 clarification of Topic

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D-42 was effective for us for the quarter ended September 30, 2003. The partial redemption of the Class D Preferred Stock, the redemption of the Class P Preferred Stock, and the exchanges of the Class N Preferred Stock and the Class O Preferred Stock during the year ended December 31, 2004, resulted in $3.5 million of redemption related preferred stock issuance costs and a $1.0 million redemption premium being deducted from net income to arrive at net income attributable to common stockholders and thereby reduced by $0.05 our earnings per basic and diluted common share for the year ended December 31, 2004. During 2003, the partial redemption of the Class D Preferred Stock and the redemptions of the Class C Cumulative Preferred Stock, the Class H Cumulative Preferred Stock, the Class L Convertible Cumulative Preferred Stock and the Class M Convertible Cumulative Preferred Stock resulted in $7.7 million of redemption related preferred stock issuance costs being deducted from net income to arrive at net income attributable to common stockholders and thereby reduced by $0.08 our earnings per basic and diluted common share for the year ended December 31, 2003.
      The dividends paid on each class of preferred stock classified as equity for the years ended December 31, 2004, 2003, and 2002 are as follows (in thousands, except per share data):
                                                 
    2004   2003   2002
             
    Amount   Total   Amount   Total   Amount   Total
    Per   Amount   Per   Amount   Per   Amount
Class of Preferred Stock   Share(1)   Paid   Share(1)   Paid   Share(1)   Paid
                         
Perpetual:
                                               
Class C
  $     $     $ 1.60 (6)   $ 3,840     $ 2.25     $ 5,400  
Class D
    4.87 (2)     6,090       3.21 (7)     8,677       2.19       9,188  
Class G
    2.34       9,492       2.34       9,492       2.34       9,492  
Class H
                2.01 (6)     4,011       2.38       4,750  
Class Q
    2.53       6,388       2.53       6,389       2.53       6,388  
Class R
    2.50       17,350       2.50       17,350       2.32 (11)     16,101  
Class S
                0.23 (8)     908              
Class T
    2.00       12,000       0.42 (9)     2,501              
Class U
    1.08 (3)     8,655                          
Class V, Y(4)
                                   
                                     
              59,975               53,168               51,319  
                                     
Convertible:
                                               
Class B
                            7.95 (12)     3,334  
Class K
                            0.58 (12)     2,500  
Class L
                1.81 (6)     4,532       2.21 (13)     7,892  
Class M
                2.42 (10)     2,903       2.13       2,550  
Class N
    2.59 (5)     10,361       2.25       9,000       2.25       9,000  
Class O
    4.73 (5)     9,000       4.73       9,000       4.73       9,000  
Class P
    1.16 (5)     4,648       2.25       8,996       2.25       8,996  
Class W, X(4)
                                   
                                     
              24,009               34,431               43,272  
                                     
Total
          $ 83,984             $ 87,599             $ 94,591  
                                     
 
  (1)  Amounts per share are calculated based on the number of preferred shares outstanding either at the end of each year or as of conversion or redemption date, as noted.
 
  (2)  Total amount paid includes dividends paid on 2.7 million shares of Class D Preferred Stock until November 5, 2004, when 1.5 million shares were redeemed for cash.
 
  (3)  For the period from the date of issuance to December 31, 2004.

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  (4)  No dividends were paid during 2004 as preferred shares were issued during the third and fourth quarters of 2004.
 
  (5)  For the period from January 1, 2004 to the date of redemption. For Class N Preferred Stock, includes a 2%, or $0.50 redemption premium per share, on 2,000,000 shares.
 
  (6)  For the period from January 1, 2003 to the date of redemption.
 
  (7)  Total amount paid includes dividends paid on all 4.2 million shares of Class D Preferred Stock until August 18, 2003, when 1.5 million shares were redeemed for cash.
 
  (8)  For the period from the date of issuance to July 1, 2003 when SFAS 150 required the Class S Preferred Stock to be reclassified from equity to liabilities (see Note 7).
 
  (9)  For the period from the date of issuance to December 31, 2003.
(10)  For the period from January 1, 2003 to the date of redemption. Additionally, the amount per share includes a scheduled increase in the dividend from $2.13 per share to $2.31 per share starting after January 13, 2003 and a 2%, or $0.50 redemption premium per share.
 
(11)  For the period from the date of issuance to December 31, 2002.
 
(12)  For the period from January 1, 2002 to the date of conversion to Common Stock.
 
(13)  Total amount paid includes dividends paid on all 5.0 million shares of Class L Convertible Cumulative Preferred Stock until May 6, 2002, when 2.5 million shares were converted into Common Stock. Additionally, the amount per share includes a scheduled increase in the dividend from $2.03 per share to $2.50 per share starting after May 28, 2002.
Common Stock
      During 2004 and 2003, we issued approximately 45,000 shares and 50,000 shares, respectively, of Common Stock to certain officers at market prices. In exchange for the shares purchased, the officers executed notes payable totaling $1.5 million and $1.6 million, respectively. These notes, which are 25% recourse to the holder, have a 10-year maturity and bear interest either at a fixed rate of 6% annually or a floating rate based on the one-month LIBOR plus 3.85%, which is subject to an annual interest rate cap of typically 7.25%. Total payments on such notes from officers in 2004 and 2003 were $4.6 million and $10.5 million, respectively.
      In addition, in 2004 and 2003, we issued approximately 532,000 and 235,000 restricted shares of Common Stock, respectively, to certain officers and employees. The restricted stock was recorded at the fair market value of the Common Stock on the date of issuance. These shares of restricted Common Stock may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of and are subject to a risk of forfeiture prior to the expiration of the applicable vesting period (typically ratably over a period of three or five years).
      On February 18, 19 and 24, 2004, we purchased on the open market 30,000, 60,000 and 20,000 shares of Common Stock, respectively, at an average price per share of approximately $32.03, $32.17 and $31.26, respectively. Additionally, on February 24, 2004, we completed the purchase of 287,272 shares of Common Stock in a privately negotiated transaction at a price of $31.60 per share. There were no shares repurchased during the year ended December 31, 2003, however, we accepted approximately 532,000 shares of Common Stock as payment in full of an obligation pursuant to the terms of the settlement agreement associated with the REAL Litigation (described in Note 5).
Note 14 — Stock Option Plans and Stock Warrants
      We adopted the Apartment Investment and Management Company 1997 Stock Award and Incentive Plan, or the 1997 Plan, and the Apartment Investment and Management Company Non-Qualified Employee Stock Option Plan, or the Non-Qualified Plan, to attract and retain officers, key employees and independent directors. The 1997 Plan provides for the granting of a maximum of 20,000,000 options to purchase Common Stock. The Non-Qualified Plan provides for the granting of a maximum of 500,000 options to purchase Common Stock. At December 31, 2004, there were approximately 5,000,000 shares available for issuance under these plans. The 1997 Plan allows for the grant of incentive and non-qualified stock options, and together with the Non-Qualified

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Plan, which provides for the grant of non-qualified options only, are administered by the Compensation and Human Resources Committee of the Board of Directors. In the case of incentive stock options, the exercise price of the options granted may not be less than the fair market value of the common stock at the date of grant. The term of the incentive and non-qualified options is ten years from the date of grant. The options typically vest over a period of one to five-years from the date of grant. Terms may be modified at the discretion of the Compensation and Human Resources Committee of the Board of Directors.
      The 1997 Plan also authorizes grants of restricted stock awards as part of our equity compensation plan. For the years ended December 31, 2004, 2003 and 2002, we granted restricted stock awards of approximately 532,000, 235,000 and 80,000 shares, respectively, with weighted average fair values per share of $29.56, $38.09, and $43.65, respectively. Compensation costs related to these awards is being recognized over the applicable vesting period (typically ratably over a period of three or five years). Dividends paid on restricted stock awards (whether vested or unvested) are charged to distributions in excess of earnings. We evaluate quarterly the previously paid dividends on restricted stock awards that are forfeited to determine whether a reclassification between distributions in excess of earnings and compensation expense should be recorded. Dividends paid on restricted stock awards that were forfeited were immaterial for the years ended December 31, 2004, 2003 and 2002.
      On December 2, 1997, Aimco issued warrants, which we refer to as the Oxford Warrants, exercisable to purchase up to an aggregate of 500,000 shares of Common Stock at $41 per share. The Oxford Warrants were issued to affiliates of Oxford Realty Financial Group, Inc., a Maryland corporation, or Oxford, in connection with the amendment of certain agreements pursuant to which we manage properties formerly controlled by Oxford or its affiliates. The Oxford Warrants were amended in connection with the acquisition of the Oxford entities in September 2000, are currently exercisable and expire on December 31, 2006.
      The following table summarizes the option and warrant activity for the years ended December 31, 2004, 2003 and 2002 (in thousands, except price data):
                                                 
    2004   2003   2002
             
        Weighted       Weighted       Weighted
    Options   Average   Options   Average   Options   Average
    and   Exercise   and   Exercise   and   Exercise
    Warrants   Price   Warrants   Price   Warrants   Price
                         
Outstanding at beginning of year
    10,607     $ 39.59       9,269     $ 40.13       8,323     $ 38.71  
Granted
    1,219       32.19       1,757       36.37       2,070       43.79  
Exercised
    (69 )     29.11       (72 )     37.46       (1,054 )     36.05  
Forfeited
    (419 )     37.81       (347 )     37.67       (70 )     41.17  
                                     
Outstanding at end of year
    11,338     $ 38.87       10,607     $ 39.59       9,269     $ 40.13  
Exercisable at end of year
    7,132     $ 39.47       5,844     $ 38.46       4,295     $ 38.09  
Weighted-average fair value of options granted during the year
          $ 2.24             $ 2.26             $ 3.52  

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      As of December 31, 2004, outstanding and exercisable options and warrants have the following ranges of exercise prices and remaining weighted-average contractual lives (in thousands, except for price data):
                                   
    Range of Exercise Price
     
    $17.13 to $35.94   $36.35 to $39.94   $40.00 to $49.05   Total
                 
Outstanding:
                               
 
Number of options and warrants
    1,315       6,428       3,595       11,338  
 
Weighted average exercise price
    $32.12       $37.21       $44.30       $38.87  
 
Weighted average remaining life
    8.73 years       4.67 years       6.10 years       5.59  years  
Exercisable:
                               
 
Number of options and warrants
    72       4,893       2,167       7,132  
 
Weighted average exercise price
    $30.08       $37.42       $44.40       $39.47  
 
Weighted average remaining life
    2.05 years       3.66 years       5.51 years       4.21  years  
Note 15 — Discontinued Operations and Assets Held for Sale
      In accordance with SFAS 144 we report as discontinued operations real estate assets that meet the definition of a component of an entity and have been sold or meet the criteria to be classified as held for sale under SFAS 144. We included all results of these discontinued operations, less applicable income taxes, in a separate component of income on the consolidated statements of income under the heading “discontinued operations.” This treatment resulted in certain reclassifications of 2003 and 2002 financial statement amounts.
      At December 31, 2004, we had 14 properties with an aggregate of 2,270 units classified as held for sale. For the years ended December 31, 2004, 2003 and 2002, discontinued operations includes the results of operations of these properties. During the year ended December 31, 2004, we sold 54 properties with an aggregate of 12,248 units. For the years ended December 31, 2004, 2003, and 2002, discontinued operations includes the results of operations of these 54 properties for periods prior to the date of sale. During 2003, we sold 72 properties with an aggregate of 18,291 units. For the years ended December 31, 2003 and 2002, discontinued operations includes the results of operations of these 72 properties for periods prior to the date of sale. During 2002, we sold 42 properties with an aggregate of 8,547 units. For the year ended December 31, 2002, discontinued operations includes the results of operations of these 42 properties for periods prior to the date of sale.

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      The following is a summary of the components of income from discontinued operations for the years ended December 31, 2004, 2003, and 2002 (dollars in thousands):
                         
    2004   2003   2002
             
Rental and other property revenues
  $ 89,080     $ 196,204     $ 272,811  
Property operating expense
    (44,305 )     (88,099 )     (112,777 )
Depreciation and amortization
    (13,883 )     (41,607 )     (54,897 )
Other (expenses) income, net
    (1,217 )     (497 )     (331 )
                   
Operating income
    29,675       66,001       104,806  
Interest income
    153       304       1,426  
Interest expense
    (22,821 )     (48,729 )     (68,597 )
Minority interest in consolidated real estate partnerships
    (445 )     (2,203 )     (2,019 )
                   
Income before gain (loss) on dispositions of real estate, impairment losses, deficit distributions to minority partners, income tax and minority interest in Aimco Operating Partnership
    6,562       15,373       35,616  
Gain (loss) on dispositions of real estate, net of minority partners’ interest
    249,944       101,849       (6,021 )
Impairment losses on real estate assets sold or held for sale
    (7,289 )     (8,991 )     (2,937 )
Recovery of deficit distributions (deficit distributions) to minority partners, net
    3,863       10,686       (765 )
Income tax arising from disposals
    (16,015 )     (12,134 )     (2,507 )
Minority interest in Aimco Operating Partnership
    (25,307 )     (12,074 )     (2,946 )
                   
Income from discontinued operations
  $ 211,758     $ 94,709     $ 20,440  
                   
      We are currently marketing for sale certain real estate properties that are inconsistent with our long-term investment strategy. We expect that all properties classified as held for sale will sell within one year from the date classified as held for sale. Assets classified as held for sale of $53.3 million at December 31, 2004 include real estate net book value of $51.9 million and restricted cash and other assets of $1.4 million. Liabilities related to assets classified as held for sale of $50.8 million at December 31, 2004 include mortgage debt of $50.2 million. Assets classified as held for sale of $691.3 million at December 31, 2003 include real estate net book value of $667.7 million, represented by 68 properties with 14,518 units that were classified as assets held for sale during 2003 and 2004. Liabilities related to assets classified as held for sale of $515.6 million at December 31, 2003 include mortgage debt of $506.9 million. The estimated proceeds, less anticipated costs to sell, for certain of these assets were less than the related net book value, and therefore we recorded impairment losses of $7.3 million, $9.0 million and $2.9 million for the years ended December 31, 2004, 2003 and 2002, respectively. We are also marketing for sale certain other properties that do not meet all of the criteria under SFAS 144 to be classified as held for sale.

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Note 16 — Earnings per Share
      We calculate earnings per share based on the weighted average number of shares of Common Stock, common stock equivalents and dilutive convertible securities outstanding during the period. The following table illustrates the calculation of basic and diluted earnings per share for the years ended December 31, 2004, 2003 and 2002 (in thousands, except per share data):
                           
    2004   2003   2002
             
Numerator:
                       
Income from continuing operations
  $ 55,696     $ 64,148     $ 148,606  
Less net income attributable to preferred stockholders
    (88,804 )     (93,565 )     (93,558 )
                   
Numerator for basic and diluted earnings per share  — Income (loss) from continuing operations
  $ (33,108 )   $ (29,417 )   $ 55,048  
                   
Income from discontinued operations
  $ 211,758     $ 94,709     $ 20,440  
                   
Cumulative effect of change in accounting principle
  $ (3,957 )   $        
                   
Net income
  $ 263,497     $ 158,857     $ 169,046  
Less net income attributable to preferred stockholders
    (88,804 )     (93,565 )     (93,558 )
                   
Numerator for basic and diluted earnings per share  — Net income attributable to common stockholders
  $ 174,693     $ 65,292     $ 75,488  
                   
Denominator:
                       
Denominator for basic earnings per share — weighted average number of shares of Common Stock outstanding
    93,118       92,850       85,698  
Effect of dilutive securities:
                       
Dilutive potential common shares
                1,075  
                   
Denominator for diluted earnings per share
    93,118       92,850       86,773  
                   
Earnings (loss) per common share:
                       
Basic earnings (loss) per common share:
                       
 
Income (loss) from continuing operations (net of income attributable to preferred stockholders)
  $ (0.36 )   $ (0.32 )   $ 0.64  
 
Income from discontinued operations
    2.28       1.02       0.24  
 
Cumulative effect of change in accounting principle
    (0.04 )            
                   
 
Net income attributable to common stockholders
  $ 1.88     $ 0.70     $ 0.88  
                   
Diluted earnings (loss) per common share:
                       
 
Income (loss) from continuing operations (net of income attributable to preferred stockholders)
  $ (0.36 )   $ (0.32 )   $ 0.63  
 
Income from discontinued operations
    2.28       1.02       0.24  
 
Cumulative effect of change in accounting principle
    (0.04 )            
                   
 
Net income attributable to common stockholders
  $ 1.88     $ 0.70     $ 0.87  
                   
      The Class W Preferred Stock and the Class X Preferred Stock are convertible into Common Stock (see Note 13). The Class D Preferred Stock, the Class G Cumulative Preferred Stock, the Class Q Cumulative Preferred Stock, the Class R Cumulative Preferred Stock, the Class T Cumulative Preferred Stock, the Class U Preferred Stock, the Class V Preferred Stock and the Class Y Preferred Stock are not convertible. All of our convertible preferred stock is anti-dilutive on an “as converted” basis, therefore, we deduct all of the dividends payable on the convertible preferred stock to arrive at the numerator and no additional shares are included in the denominator when calculating basic and diluted earnings per common share. We have excluded from diluted

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earnings per share the common share equivalents related to approximately 12.4 million, 11.8 million and 3.6 million of vested and unvested stock options, shares issued for non-recourse notes receivable, and restricted stock awards for the years ended December 31, 2004, 2003 and 2002, respectively, because their effect would be anti-dilutive. For purposes of calculating diluted earnings per share in accordance with Statement of Financial Accounting Standards No. 128, Earnings per Share, we treat the dilutive impact of the unvested portion of restricted shares as common stock equivalents.
Note 17 — Unaudited Summarized Consolidated Quarterly Information and Significant Adjustments
      Summarized unaudited consolidated quarterly information for 2004 and 2003 is provided below (amounts in thousands, except per share amounts).
                                   
    Quarter(1)
     
Year Ended December 31, 2004   First   Second   Third   Fourth
                 
Rental and other property revenues
  $ 334,247     $ 341,588     $ 358,273     $ 367,545  
Property operating expenses
    (155,149 )     (159,679 )     (175,511 )     (178,468 )
Operating income
    87,491       87,612       84,172       69,483  
Income from continuing operations
    3,084       2,794       26,630       23,188  
Income from discontinued operations
    14,901       11,192       136,578       49,087  
Income before cumulative effect of change in accounting principle
    17,985       13,986       163,208       72,275  
Cumulative effect of change in accounting principle
    (3,957 )                  
Net income
    14,028       13,986       163,208       72,275  
Earnings (loss) per common share — basic:
                               
Income (loss) from continuing operations (net of income attributable to preferred stockholders)
  $ (0.18 )   $ (0.20 )   $ 0.02     $ 0.01  
 
Net income (loss) attributable to common stockholders
  $ (0.06 )   $ (0.08 )   $ 1.49     $ 0.53  
Earnings (loss) per common share — diluted:
                               
Income (loss) from continuing operations (net of income attributable to preferred stockholders)
  $ (0.18 )   $ (0.20 )   $ 0.02     $ 0.01  
 
Net income (loss) attributable to common stockholders
  $ (0.06 )   $ (0.08 )   $ 1.48     $ 0.53  
Weighted average common shares outstanding
    92,811       93,065       93,247       93,347  
Weighted average common shares and common share equivalents outstanding
    92,811       93,065       93,394       93,678  
                                   
    Quarter(1)
     
Year Ended December 31, 2003   First   Second   Third   Fourth
                 
Rental and other property revenues
  $ 327,141     $ 334,780     $ 339,401     $ 335,193  
Property operating expenses
    (142,447 )     (143,548 )     (152,931 )     (146,259 )
Operating income
    109,666       112,292       105,407       91,654  
Income from continuing operations
    21,291       23,596       11,293       7,968  
Income from discontinued operations
    532       35,634       29,342       29,201  
Net income
    21,823       59,230       40,635       37,169  
Earnings (loss) per common share — basic:
                               
Income (loss) from continuing operations (net of income attributable to preferred stockholders)
  $ (0.01 )   $ (0.01 )   $ (0.17 )   $ (0.12 )
 
Net income attributable to common stockholders
  $ 0.00     $ 0.37     $ 0.15     $ 0.19  
Earnings (loss) per common share — diluted:
                               
Income (loss) from continuing operations (net of income attributable to preferred stockholders)
  $ (0.01 )   $ (0.01 )   $ (0.17 )   $ (0.12 )
 
Net income attributable to common stockholders
  $ 0.00     $ 0.37     $ 0.15     $ 0.19  
Weighted average common shares outstanding
    92,692       92,747       92,839       93,122  
Weighted average common shares and common share equivalents outstanding
    92,692       92,747       92,839       93,122  

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(1)  Certain reclassifications have been made to 2004 and 2003 quarterly amounts to conform to the full year 2004 presentation, including certain intercompany eliminations, as well as the treatment of discontinued operations.
      During the quarter ended March 31, 2003, we reversed a valuation reserve against certain deferred tax assets related to future deductions and tax loss carryforwards of NHP Management Company that increased our net income by approximately $7.1 million and our basic and diluted earnings per share by $0.08 for the year ended December 31, 2003. See Note 10 for further details.
Note 18 — Business Segments
      We have two reportable segments: real estate (owning and operating apartments) and investment management business (providing property management and other services relating to the apartment business to third parties and affiliates). We own and operate properties throughout the United States and Puerto Rico that generate rental and other property related income through the leasing of apartment units to a diverse base of residents. We separately evaluate the performance of each of our properties. However, because each of our properties has similar economic characteristics, the properties have been aggregated into a single apartment communities, or real estate, segment. All real estate revenues are from external customers and no revenues are generated from transactions with other segments. No single resident or related group of residents contributed 10% or more of total revenues during the years ended December 31, 2004, 2003 or 2002.
      Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information, or SFAS 131, requires that segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing such segments’ performance. Our chief operating decision maker is comprised of several members of our executive management team who use several generally accepted industry financial measures to assess the performance of the business including net operating income, free cash flow, funds from operations, and adjusted funds from operations. In 2004, the chief operating decision maker emphasized net operating income as a key measurement of segment profit or loss. Accordingly, below we disclose net operating income for each of our segments. Net operating income is defined as segment revenues (after the elimination of intersegment revenues) less direct segment operating expenses. In 2003, we reported free cash flow as the primary basis for measurement of segment profit or loss. Certain reclassifications have been made to 2003 and 2002 amounts to conform to the 2004 presentation. These reclassifications primarily represent presentation changes related to discontinued operations resulting from the requirements of SFAS 144 and intercompany eliminations.

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      The following table presents revenues and net operating income for the years ended December 31, 2004, 2003 and 2002, from these segments, and reconciles net operating income of reportable segments to operating income as reported (in thousands):
                             
    For the Years Ended December 31,
     
    2004   2003   2002
             
Revenues:
                       
 
Real estate segment
  $ 1,401,653     $ 1,336,515     $ 1,188,747  
 
Investment management segment:
                       
   
Gross revenues
    144,304       141,942       119,331  
   
Elimination of intersegment revenues
    (77,042 )     (83,752 )     (41,159 )
                   
   
Net revenues after elimination
    67,262       58,190       78,172  
                   
Total revenues of reportable segments
  $ 1,468,915     $ 1,394,705     $ 1,266,919  
                   
Net operating income:
                       
 
Real estate segment
  $ 732,846     $ 751,330     $ 723,429  
 
Investment management segment
    46,261       41,717       61,085  
                   
Total net operating income of reportable segments
    779,107       793,047       784,514  
Reconciliation of net operating income of reportable segments to operating income:
                       
 
Depreciation and amortization
    (368,844 )     (331,609 )     (268,085 )
 
General and administrative expenses
    (78,093 )     (48,670 )     (49,068 )
 
Other (expenses) income, net
    (3,412 )     6,251       (2,035 )
                   
Operating income
  $ 328,758     $ 419,019     $ 465,326  
                   
                 
    December 31,   December 31,
    2004   2003
         
    (In thousands)
ASSETS:
               
Total assets for reportable segments(1)
  $ 9,715,629     $ 9,701,095  
Corporate and other assets
    356,612       386,299  
             
Total consolidated assets
  $ 10,072,241     $ 10,087,394  
             
 
(1)  Total assets for reportable segments include assets associated with both the real estate and investment management business segments.
      Our capital expenditures primarily relate to the real estate segment and totaled $301.9 million, $245.5 million and $270.1 million for the years ended December 31, 2004, 2003 and 2002, respectively.
Note 19 — Transactions with Affiliates
      We earn revenue from unconsolidated real estate partnerships in which we are the general partner and have a 23% average ownership interest and earn fees from consolidated real estate partnerships. These revenues and fees include property management services, partnership and asset management services, risk management services and transactional services such as syndication and acquisition, development, refinancing, construction supervisory and disposition. In addition, we are reimbursed for our costs in connection with the management of the unconsolidated real estate partnerships. Fees earned for these services and reimbursement of costs from our unconsolidated real estate partnerships for the years ended December 31, 2004, 2003 and 2002 were $89.6 million, $93.1 million and $104.6 million, respectively, and were recorded within various captions on our consolidated statements of income. The total accounts receivable due from affiliates was $39.2 million, net of

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allowance for doubtful accounts of $4.4 million, at December 31, 2004, and $55.0 million, net of allowance for doubtful accounts of $3.0 million, at December 31, 2003.
      Additionally, we earn interest income on notes from unconsolidated and consolidated real estate partnerships, in which we are the general partner and hold either par value or discounted notes. Interest income earned on par value notes from unconsolidated real estate partnerships totaled $16.8 million, $14.3 million, and $26.6 million for the years ended December 31, 2004, 2003 and 2002, respectively. Accretion income earned on discounted notes from unconsolidated real estate partnerships totaled $6.2 million, $2.7 million, and $36.8 million for the years ended December 31, 2004, 2003 and 2002, respectively. See Note 5 for additional information on notes receivable from unconsolidated real estate partnerships.
      In the consolidated balance sheets, we eliminate the accounts receivable and notes receivable from affiliates due from consolidated real estate partnerships. We eliminate in the consolidated statements of income the income from services and interest income earned on notes from consolidated real estate partnerships. We eliminate in the consolidated statements of income to the extent of our ownership any intercompany profits on income earned from unconsolidated real estate partnerships.
Note 20 — Employee Benefit Plans
      We provide a 401(k) defined-contribution employee savings plan. Effective January 1, 2004, employees who have completed 30 days of service are eligible to participate. Effective January 1, 2004, our matching contributions are made in the following manner: (1) a 100% match on the first 3% of the participant’s contribution; (2) a 50% match on the next 2% of the participant’s contribution. Previously we matched 50% to 100% of the participant’s contributions to the plan up to a maximum of 6% of the participant’s contribution and our match percentage was based on employee tenure. Our expense incurred totaled approximately $3.2 million, $2.4 million and $2.6 million in 2004, 2003 and 2002, respectively.
Note 21 — Recent Accounting Developments
Statement of Financial Accounting Standards No. 123 (revised 2004)
      In December 2004, the FASB issued SFAS 123R, which supersedes the existing SFAS 123, which we adopted in 2003 using the prospective method of transition as described therein. SFAS 123R requires all share-based employee compensation, including grants of employee stock options, to be recognized in the financial statements based on fair value and requires, at a minimum, a modified prospective application method of adoption. Under this method, the provisions of SFAS 123R will be applied prospectively to new and modified awards granted on or after the required effective date. In addition, compensation expense is required to be recognized over the remaining vesting period for the unvested portion of outstanding awards granted prior to the effective date. The measurement and recognition provisions of SFAS 123R that apply to our stock option plans are similar to those currently being followed by us for awards granted on or after January 1, 2003. The primary change in expense recognition requirements, which also applies to our unvested restricted stock awards, relates to the treatment of forfeitures. Under SFAS 123R, expected forfeitures are required to be estimated in determining periodic compensation expense, whereas we currently recognize forfeitures as they occur. Upon adoption of SFAS 123R, we will estimate forfeitures of unvested awards of stock options and restricted stock and record a cumulative effect of a change in accounting principle to reflect the compensation expense that would not have been recognized in prior periods had forfeitures been estimated prior to the date of adoption. We are required to adopt SFAS 123R as of July 1, 2005, although early adoption is permitted. Upon adoption, our periodic compensation expense will increase due to the recognition of expense for stock options granted prior to January 1, 2003, for which no expense is currently being recognized. Based on preliminary estimates of such additional compensation expense, we do not anticipate that the adoption of SFAS 123R will have a material impact on our financial condition or results of operations.
Statement of Financial Accounting Standards No. 153
      In December 2004, the FASB issued Statement of Financial Accounting Standards No. 153, Exchanges of Nonmonetary Assets — an amendment of APB Opinion No. 29, or SFAS 153. The guidance in APB Opinion

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No. 29, Accounting for Nonmonetary Transactions, is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. This guidance, however, included certain exceptions to that principle. SFAS 153 amends APB Opinion 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS 153 is effective for fiscal periods beginning after June 15, 2005. We do not anticipate that the adoption of SFAS 153 will have a material impact on our financial condition or results of operations.
Statement of Position 03-3
      In December 2003, the American Institute of Certified Public Accountants issued Statement of Position 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer, or SOP 03-3. SOP 03-3 addresses accounting for differences between contractual cash flows and cash flows expected to be collected from an investor’s initial investment in loans or debt securities (loans) acquired in a transfer if those differences are attributable, at least in part, to credit quality. SOP 03-3 limits the yield that may be accreted to the excess of the investor’s estimate of undiscounted expected principal, interest, and other cash flows over the investor’s initial investment in the loan. This SOP requires that the excess of contractual cash flows over cash flows expected to be collected not be recognized as an adjustment of yield, loss accrual, or valuation allowance. Subsequent increases in cash flows expected to be collected generally should be recognized prospectively through adjustment of the loan’s yield over its remaining life. Decreases in cash flows expected to be collected are required to be recognized as an impairment. SOP 03-3 is effective for loans acquired in fiscal years beginning after December 15, 2004. SOP 03-3 also is required to be applied prospectively to decreases in cash flows expected to be collected that relate to loans previously acquired at a discount. We do not anticipate that the adoption of SOP 03-3 will have a material impact on our financial condition or results of operations.
Emerging Issues Task Force No. 03-16
      In March 2004, the Financial Accounting Standards Board ratified the consensus reached by the Emerging Issues Task Force on Issue No. 03-16, EITF 03-16, regarding accounting for investments in limited liability companies. The Task Force reached a consensus that an investment in an LLC that maintains a “specific ownership account” for each investor — similar to a partnership capital account structure — should be viewed as similar to an investment in a limited partnership for purposes of determining whether a noncontrolling investment in an LLC should be accounted for using the cost method or the equity method. EITF 03-16 is effective for reporting periods beginning after June 15, 2004. We do not anticipate that the adoption of EITF No. 03-16 will have a material impact on our financial condition or results of operations.
Note 22 — Subsequent Events
Dividend Declared
      On January 28, 2005, our Board of Directors declared a quarterly cash dividend of $0.60 per common share for the quarter ended December 31, 2004, that was paid on February 28, 2005, to stockholders of record on February 18, 2005.
Redemption of TOPRS
      On January 11, 2005, we redeemed for cash all outstanding TOPRS (see Note 7) for a total redemption price of $50 per security, or $15.0 million, plus any accrued and unpaid distributions through the redemption date.
Redemption of Class D Preferred Stock
      On January 21, 2005, we redeemed for cash the remaining 1.25 million shares outstanding of the Class D Preferred Stock for a total redemption price of $25.0425 per share, which included a redemption price of $25 per share, and $0.0425 per share of accumulated and unpaid dividends through January 21, 2005.

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Acquisition of Palazzo East at Park La Brea
      On February 28, 2005, we completed the acquisition of Palazzo East at Park La Brea, a mid-rise apartment community with 610 units, for approximately $199.3 million. Palazzo East at Park La Brea is the third of three phases to be completed as part of the Park La Brea development. In connection with the Casden Transactions, we agreed to purchase all three phases of the Park La Brea development upon completion and attainment of 60% occupancy (see Note 9). For Palazzo East at Park La Brea, we paid approximately $86.8 million in cash and were required to repay existing mortgage indebtedness of approximately $113.0 million. The repayment of existing mortgage indebtedness was funded through a variable rate property note of $112.5 million.

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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2004
(In Thousands Except Unit Data)
                                                                                                             
                                December 31, 2004    
                        (2)            
                        Initial Cost   (3)       Total Cost    
        (1)                   Cost Capitalized       Net of    
    Property   Date       Year   Number       Buildings and   Subsequent to       Buildings and       Accumulated   Accumulated    
Property Name   Type   Consolidated   Location   Built   of Units   Land   Improvements   Acquisition   Land   Improvements   Total   Depreciation   Depreciation   Encumbrances
                                                         
100 Forest Place
    High Rise     Dec-97     Oak Park, IL       1987       234     $ 2,664     $ 18,815     $ 1,808     $ 2,664     $ 20,624     $ 23,287     $ (5,148 )   $ 18,139     $ 13,854  
173 E. 90th
    High Rise     May-04     New York, NY       1910       72       12,046       4,535       2       12,046       4,537       16,583       (101 )     16,482       10,039  
236 — 238 East 88th Street
    High Rise     Jan-04     New York, NY       1900       47       8,738       2,914       174       8,738       3,087       11,825       (81 )     11,744       7,497  
306 East 89th Street
    High Rise     Jul-04     New York, NY       1930       20       2,564       940       26       2,564       966       3,531       (15 )     3,516        
311 & 313 East 73rd Street
    Mid-Rise     Mar-03     New York, NY       1904       34       5,322       1,459       276       5,322       1,735       7,056       (134 )     6,922       3,009  
452 East 78th Street
    High Rise     Jan-04     New York, NY       1900       13       1,957       608       7       1,957       615       2,572       (17 )     2,555       1,744  
510 East 88th Street
    High Rise     Jan-04     New York, NY       1900       20       3,137       1,002       72       3,137       1,074       4,211       (32 )     4,180       2,870  
6111 At Ridgeway Crossing
    Garden     Dec-97     Memphis, TN       1984       584       1,750       10,479       5,819       1,750       16,298       18,048       (5,993 )     12,055       8,176  
Abington I
    Garden     Jul-02     Indianapolis, IN       1979       108       726       3,037       617       726       3,655       4,381       (625 )     3,756       2,132  
Abington II
    Garden     Oct-02     Indianapolis, IN       1980       220       1,357       6,274       512       1,357       6,786       8,143       (1,297 )     6,846       4,606  
Alliance Towers
    High Rise     Mar-02     Lombard, IL       1971       101       530       1,934       437       530       2,371       2,901       (254 )     2,647       2,296  
Anchorage Apartments
    Garden     Nov-96     League City, TX       1985       264       1,155       7,172       2,046       1,155       9,218       10,373       (2,256 )     8,117       3,941  
Anthracite
    High Rise     Mar-02     Pittston, PA       1981       121       670       2,524       141       670       2,666       3,336       (337 )     2,999       3,032  
Apartment, The
    Garden     Jul-00     Omaha, NE       1973       204       934       8,778       492       934       9,270       10,203       (3,909 )     6,295       4,235  
Apple Creek (TX)
    Garden     Jan-00     Temple, TX       1984       176       479       3,752       477       479       4,229       4,708       (1,224 )     3,484       1,403  
Arbors
    Garden     May-98     Deland, FL       1987       224       1,507       9,075       948       1,507       10,023       11,530       (3,006 )     8,524       7,605  
Arbors (Grovetree), The
    Garden     Oct-97     Tempe, AZ       1967       200       1,092       6,208       1,086       1,092       7,295       8,387       (2,195 )     6,192       3,094  
Arbours of Hermitage, The
    Garden     Jul-00     Hermitage, TN       1972       350       1,727       14,758       2,175       1,727       16,933       18,659       (6,800 )     11,859       5,650  
Armitage Commons
    Mid Rise     Mar-02     Chicago, IL       1983       104       1,070       4,292       624       1,070       4,916       5,986       (443 )     5,542       5,082  
Arrowsmith
    Garden     Mar-02     Corpus Christi, TX       1980       70       240       968       294       240       1,262       1,502       (170 )     1,332       1,413  
Arvada House
    High Rise     Nov-04     Arvada, CO       1977       88       965       3,314             965       3,314       4,279       (14 )     4,266       4,298  
Ashford, The
    Garden     Dec-95     Atlanta, GA       1968       221       2,771       8,366       23,034       2,771       31,399       34,170       (4,910 )     29,260       5,910  
Ashland Manor
    High Rise     Mar-02     East Moline, IL       1977       189       205       1,162       374       205       1,536       1,741       (186 )     1,556       1,416  
Aspen Point
    Garden     Dec-97     Arvada, CO       1972       120       353       3,807       3,472       353       7,280       7,633       (2,452 )     5,181        
Aspen Station
    Garden     Oct-01     Richmond, VA       1979       232       2,466       7,874       484       2,466       8,358       10,825       (2,478 )     8,347       6,917  
Aspen Stratford B
    High Rise     Oct-02     Newark, NJ       1920       60       358       2,887       384       358       3,271       3,629       (1,602 )     2,027       1,799  
Aspen Stratford C
    High Rise     Oct-02     Newark, NJ       1920       56       363       2,818       327       363       3,145       3,508       (1,533 )     1,975       1,588  
Atriums of Plantation
    Mid Rise     Aug-98     Plantation, FL       1980       210       1,806       10,385       1,041       1,806       11,426       13,233       (2,944 )     10,288       7,137  
Autumn Run (IL)
    Garden     Oct-02     Naperville, IL       1984       320       1,888       17,335       901       1,888       18,236       20,124       (6,832 )     13,291       12,038  
Autumn Woods
    Garden     Sep-00     Jackson, MI       1973       112       1,059       3,705       1,004       1,059       4,709       5,768       (1,146 )     4,622       2,858  
Baisley Park Gardens
    Mid Rise     Apr-02     Jamaica, NY       1982       212       1,765       12,309       1,374       1,765       13,683       15,448       (2,245 )     13,203       11,823  
Baldwin Oaks
    Mid Rise     Oct-99     Parsippany ,NJ       1980       251       746       8,516       795       746       9,311       10,057       (4,329 )     5,728       6,937  
Bangor House
    High Rise     Mar-02     Bangor, ME       1979       121       1,140       4,595       369       1,140       4,964       6,104       (311 )     5,793       3,188  
Bank Lofts
    High Rise     Apr-01     Denver, CO       1920       117       3,525       9,125       497       3,525       9,622       13,147       (1,531 )     11,615       7,671  
Bannock Arms
    Garden     Mar-02     Boise, ID       1978       66       275       1,102       134       275       1,236       1,511       (175 )     1,336       1,504  
Barcelona
    Garden     Oct-99     Houston ,TX       1963       127       772       4,264       1,047       772       5,310       6,082       (1,190 )     4,892       7,261  
Bay Parc Plaza
    High Rise     Sep-04     Miami, FL       2000       471       22,640       41,853       76       22,640       41,929       64,569       (381 )     64,188       48,181  
Bay Ridge at Nashua
    Garden     Jan-03     Nashua, NH       1984       412       3,187       39,809       398       3,187       40,206       43,393       (7,117 )     36,276       23,773  
Bayberry Hill Estates
    Garden     Aug-02     Framingham, MA       1971       424       18,915       35,945       2,256       18,915       38,201       57,116       (3,492 )     53,623       30,843  
Bayhead Village
    Garden     Oct-00     Indianapolis, IN       1978       202       1,434       5,139       1,041       1,434       6,179       7,613       (1,297 )     6,316       3,477  
Baymeadows
    Garden     Oct-99     Jacksonville, FL       1972       904       4,534       35,294       8,125       4,534       43,419       47,953       (14,040 )     33,913       24,510  
Beacon Hill
    High Rise     Mar-02     Hillsdale, MI       1980       198       1,380       5,524       975       1,380       6,498       7,878       (839 )     7,040       5,719  
Beau Jardin
    Garden     Apr-01     West Lafayette, IN       1968       252       5,460       5,291       1,520       5,460       6,811       12,271       (1,717 )     10,555       4,608  
Bedford House
    Mid Rise     Mar-02     Falmouth, KY       1979       48       230       919       104       230       1,023       1,253       (132 )     1,121       1,102  

F-45


Table of Contents

                                                                                                             
                                December 31, 2004    
                        (2)            
                        Initial Cost   (3)       Total Cost    
        (1)                   Cost Capitalized       Net of    
    Property   Date       Year   Number       Buildings and   Subsequent to       Buildings and       Accumulated   Accumulated    
Property Name   Type   Consolidated   Location   Built   of Units   Land   Improvements   Acquisition   Land   Improvements   Total   Depreciation   Depreciation   Encumbrances
                                                         
Beech Lake
    Garden     May-99     Durham, NC       1986       345       2,222       12,641       1,596       2,222       14,237       16,459       (3,824 )     12,634       10,559  
Beech’s Farm
    Garden     Oct-00     Columbia, MD       1983       135       3,873       3,447       956       3,873       4,403       8,277       (847 )     7,430       3,795  
Belmont Place
    Garden     Jul-00     Marietta, GA       1972       326       11,312       2,345       17,850       11,312       20,195       31,507       (225 )     31,282        
Bent Oaks
    Garden     May-98     Austin, TX       1978       146       1,096       6,423       694       1,096       7,116       8,212       (2,156 )     6,057       3,690  
Bent Tree (NC)
    Garden     Sep-00     Greensboro, NC       1986       244       2,637       9,790       1,203       2,637       10,993       13,630       (1,623 )     12,006       7,334  
Bent Tree I
    Garden     Oct-02     Indianapolis, IN       1983       240       1,879       6,430       414       1,879       6,844       8,723       (974 )     7,749       4,000  
Bent Tree III — Verandas
    Garden     Sep-00     Indianapolis, IN       1985       96       1,774       3,379       456       1,774       3,835       5,609       (563 )     5,046       2,950  
Berger Apartments
    Mid Rise     Mar-02     New Haven, CT       1981       145       1,152       4,657       609       1,152       5,265       6,417       (676 )     5,741       2,895  
Berkeley Gardens
    High Rise     Mar-02     Martinsburg, WV       1981       132       264       825       873       264       1,698       1,962       (301 )     1,660       1,024  
Big Walnut
    Garden     Apr-02     Columbus, OH       1968       251       583       9,721       890       583       10,611       11,194       (4,352 )     6,843       5,451  
Biltmore Towers
    High Rise     Mar-02     Dayton, OH       1980       230       1,630       6,411       7,390       1,630       13,801       15,431       (867 )     14,564       10,908  
Bluffs (IN), The
    Garden     Dec-98     Laffayette, IN       1982       181       979       5,556       1,261       979       6,817       7,796       (2,236 )     5,560       3,259  
Boston Lofts
    High Rise     Apr-01     Denver, CO       1890       158       3,446       20,884       698       3,446       21,581       25,028       (3,259 )     21,768       15,383  
Boulder Creek
    Garden     Jul-94     Boulder, CO       1972       221       755       7,730       15,807       755       23,537       24,292       (7,962 )     16,329       14,926  
Boulevard Tower
    High Rise     Mar-02     Bronx, NY       1967       332       1,992       7,960       2,988       1,992       10,948       12,940       (1,373 )     11,566       4,565  
Braesview
    Garden     May-98     San Antonio, TX       1982       396       3,135       17,813       2,041       3,135       19,855       22,990       (6,004 )     16,986       11,765  
Brandywine
    Garden     Jul-94     St. Petersburg, FL       1971       477       1,437       12,725       3,012       1,437       15,737       17,174       (9,298 )     7,876       8,927  
Brant Rock Condominiums
    Garden     Oct-97     Houston, TX       1984       84       337       1,976       773       337       2,748       3,085       (873 )     2,213       981  
Breakers, The
    Garden     Oct-98     Daytona Beach, FL       1985       208       1,008       5,507       1,660       1,008       7,167       8,175       (2,040 )     6,135       3,578  
Brentwood Apartments
    Garden     Nov-96     Lake Jackson, TX       1980       104       592       2,741       791       592       3,531       4,123       (1,138 )     2,986       1,384  
Briarcliffe
    Garden     Oct-00     Lansing, MI       1974       308       3,195       9,586       1,564       3,195       11,150       14,346       (2,278 )     12,067       6,314  
Briarwest
    Garden     Oct-99     Houston, TX       1970       380       2,467       13,868       1,626       2,467       15,494       17,961       (3,511 )     14,450       7,261  
Briarwood
    Garden     Oct-99     Houston, TX       1970       351       2,040       11,890       1,906       2,040       13,796       15,836       (3,015 )     12,821       7,261  
Bridgewater Apartments, The
    Garden     Nov-96     Tomball, TX       1978       206       969       5,976       2,152       969       8,128       9,097       (1,500 )     7,597       3,420  
Brighton Crest
    Garden     Jan-00     Marietta, GA       1987       320       2,090       13,241       1,594       2,090       14,835       16,925       (6,031 )     10,894       9,887  
Brinton Manor
    Garden     Sep-03     Pittsburgh, PA       1971       219       367       5,251       1,390       367       6,641       7,008       (2,086 )     4,922       1,594  
Brinton Towers
    High Rise     Sep-03     Pittsburgh, PA       1973       190       280       4,210       851       280       5,061       5,341       (2,770 )     2,571       2,582  
Broadcast Center
    Garden     Mar-02     Los Angeles, CA       1990       279       27,248       41,244       1,762       27,248       43,007       70,255       (3,513 )     66,742       34,000  
Broadmoor Ridge
    Garden     Dec-97     Colorado Springs, CO       1974       200       460       2,917       10,167       460       13,085       13,545       (1,902 )     11,643       8,040  
Broadmoor, The
    Garden     May-98     Austin, TX       1984       200       1,370       8,361       816       1,370       9,177       10,547       (2,475 )     8,072       6,000  
Brook Run
    Garden     May-98     Arlington Heights, IL       1985       182       2,245       12,936       1,236       2,245       14,172       16,417       (4,361 )     12,056       11,800  
Brookdale Lakes
    Garden     May-98     Naperville, IL       1990       200       2,709       15,346       1,127       2,709       16,473       19,182       (4,890 )     14,292       11,405  
Brookview
    Garden     Dec-97     Montgomery, AL       1975       64       86       1,545       424       86       1,969       2,054       (400 )     1,654       420  
Brookwood Apartments (IN)
    Garden     Apr-01     Indianapolis, IN       1967       476       4,631       11,022       2,681       4,631       13,704       18,335       (2,735 )     15,600       9,377  
Burgundy Court
    Garden     Apr-00     Cincinnati, OH       1969       234       1,848       9,619       913       1,848       10,532       12,380       (2,436 )     9,944       5,913  
Burke Shire Commons
    Garden     Mar-01     Burke, VA       1986       360       4,689       22,607       1,418       4,689       24,025       28,714       (5,079 )     23,635       18,530  
Cache Creek Apartment Homes
    Mid-Rise     Jun-04     Clearlake, CA       2002       80       1,545       9,405       430       1,545       9,835       11,380       (566 )     10,814       2,386  
Calhoun Beach Club
    High Rise     Dec-98     Minneapolis, MN       1928/1998       332       11,708       73,334       39,826       11,708       113,160       124,868       (17,695 )     107,173       45,032  
Campbell Heights
    High Rise     Oct-02     Washington, D.C.       1978       170       750       6,719       265       750       6,984       7,733       (1,413 )     6,320       8,438  
Canoga Park
    Garden     Mar-02     North Hollywood, CA       1983       14       161       639       18       161       657       818       (73 )     745       679  
Canterbury Green Apartments
    Garden     Dec-99     Fort Wayne, IN       1979       1,988       13,659       73,160       12,706       13,659       85,866       99,525       (17,459 )     82,066       46,258  
Canyon Crest
    Garden     Jan-03     Littleton, CO       1966       90       1,335       6,071       292       1,335       6,363       7,698       (1,417 )     6,281       3,298  
Canyon Terrace
    Garden     Mar-02     Saugus, CA       1984       130       7,300       6,602       829       7,300       7,431       14,731       (880 )     13,851       5,839  
Cape Cod
    Garden     May-98     San Antonio, TX       1985       212       1,307       7,012       639       1,307       7,652       8,959       (2,095 )     6,864       4,275  
Captiva Club
    Garden     Dec-96     Tampa, FL       1973       357       1,600       6,870       10,359       1,600       17,230       18,830       (4,848 )     13,982       7,798  
Carriage Hill
    Garden     Jul-00     East Lansing, MI       1972       143       836       8,888       1,020       836       9,908       10,744       (3,238 )     7,507       4,875  
Carriage House
    Garden     Oct-99     Gastonia, NC       1971       102       426       3,426       723       426       4,148       4,574       (1,665 )     2,909       1,810  
Casa de Las Hermanitas
    Garden     Mar-02     Los Angeles, CA       1982       88       1,815       4,143       63       1,815       4,207       6,022       (513 )     5,509       2,187  
Castle Court
    High Rise     May-04     Bristol, MA       1974       240       14,226       8,756       457       14,226       9,212       23,438       (191 )     23,246       11,435  
Castle Park
    Mid Rise     Mar-02     St. Louis, MO       1983       209       1,710       6,896       898       1,710       7,794       9,504       (968 )     8,536       9,056  

F-46


Table of Contents

                                                                                                             
                                December 31, 2004    
                        (2)            
                        Initial Cost   (3)       Total Cost    
        (1)                   Cost Capitalized       Net of    
    Property   Date       Year   Number       Buildings and   Subsequent to       Buildings and       Accumulated   Accumulated    
Property Name   Type   Consolidated   Location   Built   of Units   Land   Improvements   Acquisition   Land   Improvements   Total   Depreciation   Depreciation   Encumbrances
                                                         
Castlewood
    Garden     Mar-02     Davenport, IA       1980       96       585       2,351       672       585       3,023       3,608       (306 )     3,302       3,574  
Cedar Brooke Apartments
    Garden     Apr-00     Independence, MO       1971       158       1,012       4,810       615       1,012       5,426       6,438       (3,178 )     3,260       5,410  
Cedar Rim
    Garden     Apr-00     New Castle, WA       1980       104       790       5,592       717       790       6,310       7,100       (2,495 )     4,606       4,591  
Centennial
    Garden     Mar-02     Fort Wayne, IN       1983       88       550       2,207       319       550       2,526       3,076       (316 )     2,760       2,989  
Center City
    Mid Rise     Mar-02     Hazelton, PA       1981       176       925       3,724       478       925       4,202       5,127       (933 )     4,194       3,972  
Center Square
    High Rise     Oct-99     Doylestown, PA       1975       350       582       4,190       1,954       582       6,144       6,726       (1,463 )     5,263       9,376  
Charleston Landing
    Garden     Sep-00     Brandon, FL       1985       300       7,606       8,656       1,237       7,606       9,894       17,499       (938 )     16,562       10,750  
Chatham Harbor
    Garden     Oct-99     Altamonte Springs, FL       1985       324       2,288       13,068       1,160       2,288       14,228       16,516       (2,668 )     13,849       8,663  
Chelsea Ridge Apartments
    Garden     Apr-01     Wappingers Falls, NY       1966       835       10,403       33,000       4,203       10,403       37,203       47,606       (10,198 )     37,408       34,851  
Cherry Ridge Terrace
    Garden     Mar-02     Northern Cambria, PA       1983       62       372       1,490       150       372       1,640       2,012       (257 )     1,755       1,436  
Chesapeake (Lost Mill)
    Garden     Sep-04     Austin, TX       1984       124       438       3,512       63       438       3,575       4,013       (748 )     3,265       1,135  
Chesapeake Apartments
    Garden     Jan-96     Houston, TX       1983       320       775       7,317       1,943       775       9,260       10,035       (2,727 )     7,308       6,093  
Chesapeake Landing I
    Garden     Sep-00     Aurora, IL       1986       416       16,065       16,860       1,553       16,065       18,413       34,478       (3,538 )     30,939       24,949  
Chesapeake Landing II
    Garden     Mar-01     Aurora, IL       1987       184       2,001       7,980       731       2,001       8,711       10,712       (1,637 )     9,075       6,642  
Chestnut Hill (CT)
    Garden     Oct-99     Middletown, CT       1986       314       3,001       20,143       1,052       3,001       21,195       24,196       (4,948 )     19,247       16,070  
Chestnut Hill (PA)
    Garden     Apr-00     Philadelphia, PA       1963       821       6,481       49,463       6,728       6,481       56,192       62,674       (15,159 )     47,515       24,291  
Cheswick
    Garden     Jun-04     Indianapolis, IN       1976       187       886       5,854       97       886       5,951       6,837       (2,094 )     4,743       2,915  
Chidester Place
    High Rise     Mar-02     Ypsilanti, MI       1979       151       960       3,814       331       960       4,145       5,105       (435 )     4,670       2,010  
Chimney Top
    Garden     Oct-02     Antioch, TN       1985       362       2,502       10,930       436       2,502       11,366       13,869       (1,524 )     12,345       8,320  
Chimneys of Cradle Rock
    Garden     Jun-04     Columbia, MD       1979       198       1,838       7,516       185       1,838       7,701       9,539       (2,359 )     7,180       5,151  
Chimneys of Oak Creek I
    Garden     Oct-02     Kettering, OH       1981       200       1,496       6,088       377       1,496       6,466       7,962       (753 )     7,210       5,300  
Chimneys of Oak Creek II
    Garden     Jun-04     Kettering, OH       1984       188       908       7,106       466       908       7,571       8,480       (2,172 )     6,307       6,000  
Citadel
    Garden     Jul-00     El Paso, TX       1973       261       1,011       8,488       362       1,011       8,850       9,861       (3,828 )     6,033       5,527  
Citadel Village
    Garden     Jul-00     Colorado Springs, CO       1974       122       897       6,789       623       897       7,412       8,309       (2,475 )     5,833       2,450  
Citrus Grove
    Garden     Jun-98     Redlands, CA       1985       198       1,117       6,642       1,340       1,117       7,982       9,100       (2,101 )     6,998       4,325  
Citrus Sunset
    Garden     Jul-98     Vista, CA       1985       97       663       3,992       769       663       4,762       5,425       (1,225 )     4,200       5,900  
City Heights
    High Rise     Mar-02     Wilkes-Barre, PA       1978       151       755       3,044       178       755       3,223       3,978       (388 )     3,590       3,209  
City Line
    Garden     Mar-02     Hampton, VA       1976       200       500       2,014       234       500       2,248       2,748       (199 )     2,550       2,389  
Coatesville Towers
    High Rise     Mar-02     Coatesville, PA       1979       90       500       2,011       257       500       2,268       2,768       (292 )     2,475       2,261  
Cold Harbor
    Garden     Dec-04     Mechanicsville, VA       1977       156       339       5,695       300       339       5,995       6,334       (2,522 )     3,812       3,141  
Colonial Crest
    Garden     Dec-99     Bloomington, IN       1965       208       903       4,593       2,263       903       6,856       7,759       (1,736 )     6,023       1,479  
Colonnade Gardens (Ferntree)
    Garden     Oct-97     Phoenix, AZ       1973       196       766       4,346       1,417       766       5,763       6,529       (1,622 )     4,907       2,292  
Colony at El Conquistador, The
    Garden     Jun-98     Bradenton, FL       1986       166       1,121       6,360       864       1,121       7,223       8,344       (1,829 )     6,516       2,920  
Colony at Kenilworth
    Garden     Oct-99     Towson, MD       1966       383       2,336       19,722       3,783       2,336       23,504       25,840       (10,546 )     15,294       13,199  
Colony of Springdale
    Garden     Dec-03     Springdale, OH       1969       261       1,894       9,908       1,927       1,894       11,835       13,729       (4,757 )     8,973       4,873  
Columbus Avenue
    Mid-Rise     Sep-03     New York, NY       1880       70       34,148       10,825       835       34,148       11,660       45,808       (877 )     44,931       19,666  
Cooper’s Point
    Garden     Oct-02     North Charleston, SC       1986       192       764       7,615       169       764       7,783       8,547       (3,193 )     5,355       3,799  
Cooper’s Pond
    Garden     Jan-00     Tampa, FL       1978       463       1,529       14,199       1,748       1,529       15,947       17,475       (6,321 )     11,154       9,998  
Copper Chase Apartments
    Garden     Dec-96     Katy, TX       1982       316       1,742       7,010       2,698       1,742       9,707       11,449       (3,500 )     7,949       6,175  
Copper Mill Apartments
    Garden     Oct-02     Richmond, VA       1987       192       1,077       9,064       168       1,077       9,232       10,309       (3,507 )     6,802       5,452  
Copperfield Apartments I & II
    Garden     Nov-96     Houston, TX       1983       196       940       7,900       1,267       940       9,167       10,106       (1,979 )     8,128       4,163  
Coral Garden Apartments
    Garden     Jul-94     Las Vegas, NV       1983       670       3,190       12,589       5,607       3,190       18,197       21,387       (8,794 )     12,593       10,361  
Country Club Heights
    Garden     Mar-04     Quincy, IL       1976       200       676       5,715       4,257       676       9,972       10,647       (434 )     10,213       8,577  
Country Club Villas
    Garden     Jul-94     Amarillo, TX       1984       282       1,049       5,691       2,475       1,049       8,165       9,214       (3,136 )     6,078       4,590  
Country Club West
    Garden     May-98     Greeley, CO       1986       288       2,848       16,160       1,206       2,848       17,366       20,214       (5,197 )     15,016       10,572  
Country Lakes I
    Garden     Apr-01     Naperville, IL       1982       240       8,512       10,832       1,420       8,512       12,252       20,764       (2,283 )     18,482       10,934  
Country Lakes II
    Garden     May-97     Naperville, IL       1986       400       5,166       29,430       2,495       5,166       31,925       37,091       (8,154 )     28,937       13,168  
Courtney Park
    Garden     May-98     Fort Collins, CO       1986       248       2,727       15,459       880       2,727       16,339       19,066       (4,749 )     14,318       9,375  
Coventry Square Apartments
    Garden     Nov-96     Houston, TX       1983       270       700       5,072       2,761       700       7,833       8,533       (2,096 )     6,437       4,342  
Creekside
    Garden     Jan-00     Denver, CO       1974       328       1,754       13,865       749       1,754       14,615       16,368       (5,261 )     11,107       5,952  

F-47


Table of Contents

                                                                                                             
                                December 31, 2004    
                        (2)            
                        Initial Cost   (3)       Total Cost    
        (1)                   Cost Capitalized       Net of    
    Property   Date       Year   Number       Buildings and   Subsequent to       Buildings and       Accumulated   Accumulated    
Property Name   Type   Consolidated   Location   Built   of Units   Land   Improvements   Acquisition   Land   Improvements   Total   Depreciation   Depreciation   Encumbrances
                                                         
Creekside (CA)
    Garden     Mar-02     Simi Valley, CA       1985       397       24,595       18,818       2,254       24,595       21,072       45,667       (2,826 )     42,841       19,070  
Creekside Gardens
    Garden     Mar-02     Loveland, CO       1983       50       350       1,401       80       350       1,481       1,831       (195 )     1,636       1,840  
Creekview
    Garden     Mar-02     Stroudsburg, PA       1982       80       400       1,610       187       400       1,797       2,197       (204 )     1,993       1,766  
Crescent Gardens
    Mid Rise     Mar-02     West Hollywood, CA       1982       130       15,382       10,215       799       15,382       11,014       26,396       (1,362 )     25,034       10,700  
Crockett Manor
    Garden     Mar-04     Trenton, TN       1982       38       42       1,394       4       42       1,398       1,440       (46 )     1,393       980  
Crossings Of Bellevue
    Garden     May-98     Nashville, TN       1985       300       2,588       14,954       2,007       2,588       16,961       19,549       (5,443 )     14,106       7,235  
Crossroads
    Garden     May-98     Phoenix, AZ       1982       316       2,180       12,661       1,440       2,180       14,101       16,281       (4,137 )     12,144       5,895  
Crows Nest Condominiums
    Garden     Nov-96     League City, TX       1984       176       939       5,831       1,209       939       7,041       7,980       (1,639 )     6,340       2,329  
Cypress Landing
    Garden     Dec-96     Savannah, GA       1984       200       1,083       5,696       1,731       1,083       7,427       8,510       (2,286 )     6,224       4,793  
Daugette Tower
    High Rise     Mar-02     Gadsden, AL       1979       101       540       2,178       897       540       3,075       3,615       (311 )     3,304       1,101  
Deer Creek
    Garden     Apr-00     Plainsboro, NJ       1975       288       2,091       16,981       1,832       2,091       18,813       20,904       (6,139 )     14,764       12,585  
Deercross
    Garden     Oct-02     Blue Ash, OH       1985       336       4,634       13,916       291       4,634       14,207       18,842       (4,591 )     14,251       11,444  
Deercross (IN)
    Garden     Oct-00     Indianapolis, IN       1979       372       3,225       10,400       1,416       3,225       11,816       15,041       (2,491 )     12,550       8,491  
Deerfield Apartments
    Garden     Apr-01     Jacksonville, FL       1989       256       3,476       6,690       1,183       3,476       7,873       11,349       (1,315 )     10,033       7,509  
Delhaven Manor
    Mid Rise     Mar-02     Jackson, MS       1983       104       575       2,304       447       575       2,752       3,327       (292 )     3,034       3,810  
Denny Place
    Garden     Mar-02     North Hollywood, CA       1984       17       394       1,579       27       394       1,606       2,000       (159 )     1,840       1,162  
Doral Oaks
    Garden     Dec-97     Temple Terrace, FL       1967       252       2,095       3,943       10,632       2,095       14,575       16,670       (3,444 )     13,226       5,306  
Douglaston Villas and Townhomes
    Garden     Aug-99     Altamonte Springs, FL       1979       234       1,666       9,353       1,835       1,666       11,188       12,854       (3,017 )     9,837       6,466  
Dunes Apartment Homes, The
    Garden     Oct-99     Indian Harbor, FL       1963       200       1,099       6,120       989       1,099       7,108       8,207       (3,243 )     4,964       3,743  
Dunwoody Park
    Garden     Jul-94     Dunwoody, GA       1980       318       1,838       10,513       3,370       1,838       13,883       15,721       (5,200 )     10,522       9,719  
Eagle’s Nest
    Garden     May-98     San Antonio, TX       1973       226       1,053       5,981       812       1,053       6,793       7,846       (2,407 )     5,440       4,010  
East Central Towers
    Mid Rise     Mar-02     Fort Wayne, IN       1980       167       800       3,203       112       800       3,315       4,115       (395 )     3,720       3,383  
East Farm Village
    High Rise     Mar-02     East Haven, CT       1981       240       2,800       11,188       601       2,800       11,789       14,589       (1,250 )     13,338       8,879  
Easton Village Condominiums I & II
    Garden     Nov-96     Houston, TX       1983       146       1,071       9,790       989       1,071       10,779       11,850       (3,091 )     8,759       3,477  
Echo Valley
    Mid Rise     Mar-02     West Warwick, RI       1978       100       550       2,294       657       550       2,950       3,500       (352 )     3,148        
Edgewater
    High Rise     Mar-02     Springfield, MA       1974       366       1,500       6,241       1,313       1,500       7,554       9,054       (931 )     8,123       6,083  
Elm Creek
    Mid Rise     Dec-97     Elmhurst, IL       1986       372       5,533       30,830       3,046       5,533       33,876       39,409       (7,323 )     32,086       19,895  
Essex Park
    Garden     Oct-99     Columbia, SC       1971       323       1,126       9,686       1,369       1,126       11,055       12,181       (4,488 )     7,693       6,314  
Evanston Place
    High Rise     Dec-97     Evanston, IL       1988       189       3,232       25,546       1,258       3,232       26,804       30,036       (5,691 )     24,345       15,996  
Fairlane East
    Garden     Jan-01     Dearborn, MI       1973       244       6,642       13,807       1,616       6,642       15,423       22,064       (3,078 )     18,987       10,913  
Fairway
    Garden     Jan-00     Plano, TX       1978       256       3,087       5,214       679       3,087       5,893       8,980       (2,908 )     6,073       5,913  
Fairway View I
    Garden     Oct-99     Baton Rouge, LA       1972       242       1,187       9,684       774       1,187       10,458       11,645       (4,409 )     7,236       4,802  
Fairway View II
    Garden     Oct-99     Baton Rouge, LA       1981       204       1,287       9,052       699       1,287       9,751       11,038       (3,878 )     7,160       5,015  
Fairways
    Garden     Jul-94     Chandler, AZ       1986       352       1,830       15,738       4,218       1,830       19,957       21,787       (7,243 )     14,544       8,622  
Falls of Bells Ferry, The
    Garden     May-98     Marietta, GA       1987       720       6,568       37,283       3,638       6,568       40,921       47,489       (12,437 )     35,052       22,450  
Falls on Bull Creek, The
    Garden     May-98     Austin, TX       1986       344       2,645       15,011       9,037       2,645       24,048       26,693       (6,241 )     20,452       8,220  
Farmingdale
    Mid Rise     Oct-00     Darien, IL       1975       240       11,948       15,174       740       11,948       15,914       27,862       (2,488 )     25,374       13,748  
Ferntree
    Garden     Mar-01     Phoenix, AZ       1970       219       2,078       13,752       669       2,078       14,421       16,499       (1,987 )     14,512       4,515  
Fieldcrest (FL)
    Garden     Oct-98     Jacksonville, FL       1982       240       1,332       7,617       1,342       1,332       8,959       10,291       (2,458 )     7,833       5,446  
Fisherman’s Landing
    Garden     Sep-98     Temple Terrace, FL       1986       256       1,643       9,446       2,327       1,643       11,773       13,416       (2,929 )     10,487       4,713  
Fisherman’s Landing
    Garden     Dec-97     Bradenton, FL       1984       200       1,276       7,170       1,324       1,276       8,495       9,771       (2,461 )     7,310       5,306  
Fisherman’s Wharf Apartments
    Garden     Nov-96     Clute, TX       1981       360       1,257       7,584       2,824       1,257       10,408       11,665       (2,941 )     8,724       2,837  
Flamingo South Beach
    High Rise     Sep-97     Miami Beach, FL       1960       1,688       16,682       90,432       248,099       16,682       338,530       355,212       (22,967 )     332,245       80,586  
Foothill Place
    Garden     Jul-00     Salt Lake City, UT       1973       450       3,881       21,694       2,308       3,881       24,002       27,883       (8,198 )     19,685       10,100  
Four Winds
    Garden     Oct-02     Overland Park, KS       1986       350       1,797       16,653       1,012       1,797       17,665       19,462       (6,829 )     12,633       8,669  
Fox Crest
    Garden     Jan-03     Waukegan, IL       1974       245       2,136       12,319       144       2,136       12,463       14,599       (794 )     13,805       7,113  
Fox Run
    Garden     Jan-00     Plainsboro, NJ       1973       776       6,799       48,766       7,438       6,799       56,204       63,003       (16,527 )     46,476       32,248  
Foxchase
    Garden     Dec-97     Alexandria, VA       1947       2,113       15,420       96,062       13,770       15,420       109,832       125,252       (32,019 )     93,232       141,949  
Foxfire
    Garden     Oct-99     Doraville, GA       1971       266       1,397       10,287       1,544       1,397       11,831       13,228       (4,134 )     9,095       6,265  
Foxtree
    Garden     Oct-97     Tempe, AZ       1976       487       2,458       13,927       4,229       2,458       18,156       20,614       (5,504 )     15,110       7,172  

F-48


Table of Contents

                                                                                                             
                                December 31, 2004    
                        (2)            
                        Initial Cost   (3)       Total Cost    
        (1)                   Cost Capitalized       Net of    
    Property   Date       Year   Number       Buildings and   Subsequent to       Buildings and       Accumulated   Accumulated    
Property Name   Type   Consolidated   Location   Built   of Units   Land   Improvements   Acquisition   Land   Improvements   Total   Depreciation   Depreciation   Encumbrances
                                                         
Frankford Place
    Garden     Jul-94     Carrollton, TX       1982       274       1,125       6,083       2,465       1,125       8,547       9,672       (3,252 )     6,420       5,033  
Franklin Oaks
    Garden     May-98     Franklin, TN       1987       468       3,936       22,832       7,210       3,936       30,042       33,978       (8,008 )     25,971       15,005  
Freedom Place Club
    Garden     Oct-97     Jacksonville, FL       1988       352       2,289       12,982       1,883       2,289       14,866       17,155       (4,284 )     12,870       5,622  
Friendship Arms
    Mid Rise     Mar-02     Hyattsville, MD       1979       151       970       3,887       550       970       4,438       5,408       (695 )     4,713       5,678  
Gary Manor
    High Rise     Mar-02     Gary, IN       1980       198       1,090       4,370       260       1,090       4,630       5,720       (504 )     5,216       5,336  
Gates Manor
    Garden     Mar-04     Clinton, TN       1981       80       266       2,225       19       266       2,244       2,510       (585 )     1,926       1,855  
Gateway Village
    Garden     Mar-04     Hillsborough, NC       1980       64       436       1,666       76       436       1,742       2,178       (328 )     1,850       1,590  
Georgetown (MA)
    Garden     Aug-02     Framingham, MA       1964       207       12,352       13,168       735       12,352       13,904       26,256       (1,423 )     24,833       15,755  
Gholson Hotel
    Mid Rise     Mar-02     Ranger, TX       1984       50       325       1,334       46       325       1,380       1,705       (169 )     1,537       1,500  
Gladys Hampton Houses
    High Rise     Oct-02     New York, NY       1980       205       1,009       7,662       1,116       1,009       8,778       9,787       (1,773 )     8,013       7,598  
Glen Hollow
    Garden     Dec-99     Charlotte, NC       1972       336       2,157       10,062       2,335       2,157       12,398       14,555       (2,456 )     12,099       6,661  
Glenbridge Manors
    Garden     Sep-03     Cincinnati, OH       1978       290       1,059       17,925       11,479       1,059       29,404       30,463       (1,647 )     28,816       21,000  
Governor’s Park (AR)
    Garden     Apr-00     Little Rock, AR       1985       154       755       5,950       336       755       6,286       7,041       (2,354 )     4,687       3,407  
Governor’s Park (CO)
    Garden     Jan-00     Ft. Collins, CO       1982       188       1,119       9,110       645       1,119       9,754       10,873       (3,222 )     7,651       6,510  
Granada
    Mid Rise     Aug-02     Framingham, MA       1958       72       4,577       4,058       168       4,577       4,226       8,802       (607 )     8,195       5,268  
Grand Pointe
    Garden     Dec-99     Columbia, MD       1974       325       2,715       16,771       2,037       2,715       18,808       21,523       (3,615 )     17,908       10,272  
Greens (AZ)
    Garden     Jul-94     Chandler, AZ       2000       324       2,303       713       22,542       2,303       23,254       25,557       (3,091 )     22,466       15,939  
Greenspoint Apartments
    Garden     Jan-00     Phoenix, AZ       1985       336       2,184       13,895       977       2,184       14,872       17,056       (5,735 )     11,321       8,039  
Greentree
    Garden     Dec-96     Carrollton, TX       1983       365       1,873       9,848       3,459       1,873       13,307       15,180       (3,671 )     11,510       8,959  
Hamlin Estates
    Garden     Mar-02     North Hollywood, CA       1983       30       1,010       1,691       37       1,010       1,728       2,738       (205 )     2,533       1,618  
Hampton Greens
    Garden     Oct-02     Dallas, TX       1986       309       1,781       10,170       502       1,781       10,673       12,454       (4,252 )     8,202       5,184  
Hampton Hill Apartments
    Garden     Nov-96     Houston, TX       1984       332       1,311       7,122       2,826       1,311       9,948       11,259       (2,794 )     8,466       5,529  
Harbor Ridge II
    Garden     Mar-04     Maineville, OH       1985       24       263       1,279       70       263       1,349       1,612       (198 )     1,414       823  
Harbor Ridge III
    Garden     Mar-04     Maineville, OH       1985       48       457       2,119       19       457       2,138       2,596       (33 )     2,563       1,598  
Harbor Town at Jacaranda
    Garden     Sep-00     Plantation, FL       1988       280       9,930       10,643       2,145       9,930       12,788       22,717       (2,401 )     20,316       11,800  
Harbour, The
    Garden     Mar-01     Melbourne, FL       1987       162       4,652       3,083       1,188       4,652       4,271       8,924       (1,296 )     7,628        
Harris Park Apartments
    Garden     Dec-97     Rochester, NY       1968       114       475       2,786       850       475       3,635       4,110       (1,073 )     3,037       818  
Hastings Place Apartments
    Garden     Nov-96     Houston, TX       1984       176       934       5,021       1,993       934       7,014       7,948       (1,402 )     6,546       3,892  
Heather Ridge (AZ)
    Garden     May-98     Phoenix, AZ       1983       252       1,610       9,141       1,069       1,610       10,210       11,820       (3,086 )     8,734       4,995  
Heather Ridge (TX)
    Garden     Dec-00     Arlington, TX       1982       180       784       4,900       455       784       5,355       6,139       (1,774 )     4,365       3,359  
Hemet Estates
    Garden     Mar-02     Hemet, CA       1983       80       700       2,802       272       700       3,074       3,774       (369 )     3,405       1,955  
Heritage Park at Alta Loma
    Garden     Jan-01     Alta Loma, CA       1986       232       1,203       6,430       1,552       1,203       7,982       9,185       (1,295 )     7,890       7,264  
Heritage Park Escondido
    Garden     Oct-00     Escondido, CA       1986       196       1,012       7,330       296       1,012       7,626       8,638       (2,519 )     6,118       7,299  
Heritage Park Livermore
    Garden     Oct-00     Livermore, CA       1988       167       832       9,001       421       832       9,421       10,254       (1,955 )     8,299       7,432  
Heritage Park Montclair
    Garden     Mar-01     Montclair, CA       1985       144       692       4,149       309       692       4,458       5,150       (766 )     4,384       4,620  
Heritage Square
    Garden     Mar-02     Texas City, TX       1983       50       668       859       98       668       957       1,625       (137 )     1,488       1,578  
Heritage Village Anaheim
    Garden     Oct-00     Anaheim, CA       1986       196       1,784       8,251       505       1,784       8,756       10,540       (2,794 )     7,747       8,858  
Hibben Ferry I
    Garden     Apr-00     Mt. Pleasant, SC       1983       240       1,465       8,889       944       1,465       9,833       11,298       (1,794 )     9,504       5,985  
Hickory Hill
    Garden     Oct-02     Frederick, MD       1981       162       756       5,724       270       756       5,994       6,750       (1,171 )     5,578       5,058  
Hidden Cove (CA)
    Garden     Jul-98     Escondido, CA       1985       334       3,043       17,615       3,633       3,043       21,249       24,292       (5,397 )     18,894       17,797  
Hidden Cove (MI)
    Garden     Apr-00     Belleville, MI       1976       120       463       5,334       522       463       5,857       6,320       (2,895 )     3,425       2,622  
Hidden Harbour
    Garden     Oct-02     Melbourne, FL       1985       216       2,587       8,050       260       2,587       8,310       10,897       (1,168 )     9,729       7,142  
Hidden Lake
    Garden     May-98     Tampa, FL       1983       267       1,361       7,765       1,229       1,361       8,994       10,355       (2,621 )     7,734       4,573  
Hiddentree
    Garden     Oct-97     East Lansing, MI       1966       261       1,470       8,340       2,057       1,470       10,396       11,866       (3,180 )     8,687       3,559  
Highcrest Townhomes
    Town Home     Jan-03     Woodridge, IL       1968       176       3,308       13,056       325       3,308       13,381       16,689       (3,154 )     13,535       6,213  
Highland Park
    Garden     Dec-96     Fort Worth, TX       1985       500       6,247       9,246       4,048       6,247       13,295       19,542       (4,446 )     15,095       10,601  
Highland Ridge
    Garden     Sep-04     Atlanta, GA       1984       219       1,361       6,806       963       1,361       7,769       9,130       (1,806 )     7,325        
Highlawn Place
    High Rise     Mar-02     Huntington, WV       1977       133       550       2,204       232       550       2,437       2,987       (253 )     2,734       2,267  
Hillcreste (CA)
    Garden     Mar-02     Los Angeles, CA       1989       315       33,322       47,216       2,063       33,322       49,279       82,602       (4,199 )     78,403       47,827  

F-49


Table of Contents

                                                                                                             
                                December 31, 2004    
                        (2)            
                        Initial Cost   (3)       Total Cost    
        (1)                   Cost Capitalized       Net of    
    Property   Date       Year   Number       Buildings and   Subsequent to       Buildings and       Accumulated   Accumulated    
Property Name   Type   Consolidated   Location   Built   of Units   Land   Improvements   Acquisition   Land   Improvements   Total   Depreciation   Depreciation   Encumbrances
                                                         
Hillmeade
    Garden     Nov-94     Nashville, TN       1985       288       2,872       16,069       9,262       2,872       25,331       28,203       (10,678 )     17,525       8,948  
Hills at the Arboretum, The
    Garden     Oct-97     Austin, TX       1983       327       1,367       7,764       11,614       1,367       19,378       20,745       (3,761 )     16,984       14,566  
Hollymead Square
    Garden     Mar-00     Charlottesville, VA       1978       100       404       3,063       436       404       3,499       3,903       (1,902 )     2,001       3,197  
Hopkins Village
    Mid-Rise     Sep-03     Baltimore, MD       1979       165       870       4,207       536       870       4,743       5,613       (2,241 )     3,372       3,228  
Hudson Gardens
    Garden     Mar-02     Pasadena, CA       1983       41       940       1,548       95       940       1,644       2,584       (206 )     2,377       1,048  
Hunt Club (IN)
    Garden     Oct-99     Indianapolis, IN       1972       200       825       5,629       950       825       6,579       7,404       (3,476 )     3,928       3,501  
Hunt Club (MD)
    Garden     Sep-00     Gaithersburg, MD       1986       336       18,141       13,149       1,595       18,141       14,744       32,885       (3,165 )     29,720       19,031  
Hunt Club (NC)
    Garden     Apr-02     Winston-Salem, NC       1983       128       971       4,101       656       971       4,757       5,728       (480 )     5,247       3,546  
Hunt Club (PA)
    Garden     Sep-00     North Wales, PA       1986       320       17,392       13,653       2,374       17,392       16,027       33,419       (4,134 )     29,285       21,500  
Hunt Club (SC)
    Garden     Sep-03     Spartanburg, SC       1987       204       4,172       7,435       529       4,172       7,964       12,136       (850 )     11,286       5,385  
Hunt Club (TX)
    Garden     Mar-01     Austin, TX       1987       384       10,505       11,920       1,002       10,505       12,922       23,428       (2,767 )     20,661       19,936  
Hunt Club I
    Garden     Oct-00     Ypsilanti, MI       1988       296       2,537       8,872       1,277       2,537       10,149       12,686       (1,969 )     10,716       9,953  
Hunt Club II
    Garden     Mar-01     Ypsilanti, MI       1988       144       1,653       6,049       445       1,653       6,495       8,148       (1,215 )     6,932       5,313  
Hunter’s Chase
    Garden     Jan-01     Midlothian, VA       1985       320       7,827       8,668       867       7,827       9,535       17,362       (1,496 )     15,865       10,376  
Hunter’s Chase I (OH)
    Garden     Jun-04     Montgomery, OH       1985       292       1,606       10,816       601       1,606       11,418       13,024       (3,836 )     9,188       8,374  
Hunter’s Creek
    Garden     May-99     Cincinnati, OH       1981       146       661       3,818       914       661       4,733       5,394       (1,446 )     3,948       2,812  
Hunter’s Crossing (VA)
    Garden     Apr-01     Leesburg, VA       1967       164       2,244       7,763       922       2,244       8,685       10,929       (2,135 )     8,794       4,150  
Hunters Glen
    Garden     Apr-98     Austell, GA       1983       72       300       1,731       411       300       2,142       2,443       (595 )     1,847       745  
Hunters Glen IV
    Garden     Oct-99     Plainsboro, NJ       1976       264       2,175       14,947       2,141       2,175       17,088       19,263       (6,359 )     12,904       11,626  
Hunters Glen V
    Garden     Oct-99     Plainsboro, NJ       1977       304       2,617       17,915       2,588       2,617       20,504       23,121       (7,550 )     15,571       13,284  
Hunters Glen VI
    Garden     Oct-99     Plainsboro, NJ       1977       328       2,409       16,305       2,810       2,409       19,116       21,525       (7,781 )     13,744       13,826  
Huntington Athletic Club
    Garden     Oct-99     Morrisville, NC       1986       212       1,655       11,293       1,478       1,655       12,771       14,426       (4,605 )     9,821       6,574  
Hyde Park Tower
    High Rise     Oct-04     Chicago, IL       1990       155       3,047       16,499       11       3,047       16,510       19,557       (114 )     19,442       15,554  
Indian Creek Village
    Garden     Oct-99     Overland Park, KS       1972       273       2,358       11,454       2,609       2,358       14,062       16,420       (5,892 )     10,528       8,001  
Indian Oaks
    Garden     Mar-02     Simi Valley, CA       1986       254       23,927       15,801       1,053       23,927       16,854       40,781       (2,065 )     38,716       15,500  
Island Club
    Garden     Oct-02     Columbus, OH       1984       308       2,073       10,780       412       2,073       11,192       13,265       (2,637 )     10,628       9,371  
Island Club (Beville)
    Garden     Oct-00     Daytona Beach, FL       1986       204       6,801       9,465       1,092       6,801       10,557       17,359       (3,297 )     14,062       8,440  
Island Club (CA)
    Garden     Oct-00     Oceanside, CA       1986       592       18,185       28,428       4,337       18,185       32,765       50,950       (4,763 )     46,187       37,664  
Island Club (MD)
    Garden     Mar-01     Columbia, MD       1986       176       2,379       14,600       693       2,379       15,293       17,672       (2,405 )     15,266       11,081  
Island Club (Palm Aire)
    Garden     Oct-00     Pomano Beach, FL       1988       260       7,692       7,652       2,719       7,692       10,371       18,063       (2,123 )     15,940       10,967  
Islandtree
    Garden     Oct-97     Savannah, GA       1985       216       1,267       7,191       1,353       1,267       8,544       9,811       (2,600 )     7,211       3,398  
Jefferson Place
    Garden     Nov-94     Baton Rouge, LA       1985       234       2,697       16,332       1,465       2,697       17,797       20,494       (6,221 )     14,273       7,636  
Jenny Lind Hall
    High Rise     Mar-04     Springfield, MO       1977       78       142       3,696       26       142       3,722       3,864       (71 )     3,793       1,214  
Jersey Park
    Garden     Dec-03     Smithfield, VA       1980       80       185       2,055       218       185       2,272       2,458       (900 )     1,557       1,592  
Key Towers
    High Rise     Apr-01     Alexandria, VA       1964       140       1,526       7,050       965       1,526       8,015       9,541       (1,784 )     7,758       5,145  
King’s Crossing
    Garden     Jul-02     Columbia, MD       1983       168       4,429       7,531       186       4,429       7,717       12,146       (2,747 )     9,399       5,752  
Kirkwood House
    High Rise     Sep-04     Baltimore, MD       1979       261       1,774       6,663       92       1,774       6,756       8,530       (2,667 )     5,862       4,798  
Knolls, The
    Garden     Jul-02     Colorado Springs, CO       1972       262       3,214       15,312       2,380       3,214       17,692       20,906       (6,101 )     14,804       9,045  
Knollwood
    Garden     Jul-00     Nashville, TN       1972       326       1,824       14,272       2,225       1,824       16,497       18,321       (6,417 )     11,904       6,780  
La Colina
    Garden     Oct-99     Denton, TX       1984       264       1,378       9,169       367       1,378       9,536       10,914       (1,231 )     9,684       6,145  
La Jolla
    Garden     May-98     San Antonio, TX       1975       300       2,074       11,809       1,066       2,074       12,875       14,949       (3,863 )     11,086       7,425  
La Jolla de Tucson
    Garden     May-98     Tucson, AZ       1978       223       1,342       7,816       1,017       1,342       8,833       10,175       (2,999 )     7,175       4,927  
Lake Castleton
    Garden     May-99     Indianapolis, IN       1997       1,261       5,183       29,611       7,768       5,183       37,380       42,563       (8,539 )     34,024       26,731  
Lake Forest Apartments
    Garden     Jul-00     Omaha, NE       1971       312       1,839       12,891       689       1,839       13,581       15,420       (5,162 )     10,257       8,534  
Lake Johnson Mews
    Garden     Oct-99     Raleigh, NC       1972       201       1,271       9,442       2,988       1,271       12,429       13,700       (3,653 )     10,047       6,514  
Lakehaven I
    Garden     Dec-97     Carol Stream, IL       1984       144       1,652       3,849       582       1,652       4,431       6,083       (2,637 )     3,446       5,955  
Lakehaven II
    Garden     Dec-97     Carol Stream, IL       1985       348       2,822       16,128       1,391       2,822       17,519       20,341       (6,103 )     14,238       14,983  
Lakes at South Coast, The
    Mid Rise     Mar-02     Costa Mesa, CA       1987       770       55,223       65,506       4,284       55,223       69,791       125,014       (7,716 )     117,297       75,600  
Lakes, The
    Garden     Jan-00     Raleigh, NC       1972       600       2,826       18,492       2,977       2,826       21,468       24,294       (8,945 )     15,349       12,240  
Lakeside
    Garden     Oct-99     Lisle, IL       1972       568       4,155       30,279       2,017       4,155       32,296       36,451       (10,685 )     25,766       22,697  

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Table of Contents

                                                                                                             
                                December 31, 2004    
                        (2)            
                        Initial Cost   (3)       Total Cost    
        (1)                   Cost Capitalized       Net of    
    Property   Date       Year   Number       Buildings and   Subsequent to       Buildings and       Accumulated   Accumulated    
Property Name   Type   Consolidated   Location   Built   of Units   Land   Improvements   Acquisition   Land   Improvements   Total   Depreciation   Depreciation   Encumbrances
                                                         
Lakeside North at Carrollwood
    Garden     Sep-00     Tampa, FL       1984       168       3,168       5,358       696       3,168       6,055       9,223       (1,283 )     7,939       6,130  
Lakeside Place
    Garden     Oct-99     Houston, TX       1976       734       4,831       36,651       3,376       4,831       40,027       44,859       (15,320 )     29,539       21,014  
Lakewood
    Garden     Jul-02     Tomball, TX       1979       256       803       8,349       273       803       8,622       9,425       (2,732 )     6,693       4,927  
Lamplighter Park
    Garden     Apr-00     Bellevue, WA       1967       174       1,994       8,583       2,034       1,994       10,617       12,611       (3,249 )     9,362       7,326  
Landings
    Garden     Jan-01     Indianapolis, IN       1973       150       616       3,303       1,159       616       4,461       5,077       (2,021 )     3,056       3,204  
Landmark
    Garden     Apr-00     Raleigh, NC       1970       292       1,668       14,204       1,198       1,668       15,402       17,069       (6,664 )     10,405       7,000  
Las Americas Housing
    Garden     Apr-02     Ponce, Puerto Rico       1981       250       1,271       10,032       286       1,271       10,318       11,588       (3,913 )     7,676       7,306  
Las Brisas (TX)
    Garden     Dec-95     San Antonio, TX       1983       176       1,082       5,214       1,335       1,082       6,549       7,631       (2,089 )     5,543       3,779  
Lasalle
    Garden     Oct-00     San Francisco, CA       1976       145       1,162       10,453       7,282       1,162       17,735       18,897       (3,364 )     15,533       3,444  
Latrobe
    High Rise     Jan-03     Washington, DC       1980       176       1,199       11,350       2,977       1,199       14,327       15,526       (5,014 )     10,513       11,193  
Lebanon Station
    Garden     Oct-99     Columbus, OH       1974       387       1,699       9,594       1,415       1,699       11,008       12,708       (3,215 )     9,493       6,551  
Legend Oaks
    Garden     May-98     Tampa, FL       1983       416       2,304       13,288       2,042       2,304       15,331       17,635       (4,462 )     13,172       6,657  
Leona
    Garden     Dec-97     Uvalde, TX       1973       40       100       524       371       100       895       995       (312 )     683       376  
Lexington
    Garden     Jul-94     San Antonio, TX       1981       72       312       1,688       624       312       2,312       2,624       (852 )     1,772       808  
Lexington Green
    Garden     Oct-99     Sarasota, FL       1974       267       1,466       9,956       2,048       1,466       12,004       13,470       (3,990 )     9,480       6,310  
Lighthouse at Twin Lakes I
    Garden     Apr-00     Beltsville, MD       1969       479       2,525       17,450       2,025       2,525       19,475       22,000       (3,020 )     18,981       11,705  
Lighthouse at Twin Lakes II
    Garden     Apr-00     Beltsville, MD       1971       113       697       4,855       408       697       5,263       5,960       (911 )     5,049       2,714  
Lighthouse at Twin Lakes III
    Garden     Apr-00     Beltsville, MD       1978       107       483       3,308       158       483       3,466       3,949       (469 )     3,480       2,544  
Lincoln Place Garden
    Garden     Aug-03     Venice, CA       1951       755       43,060       94,589       7,346       43,060       101,936       144,996       (5,713 )     139,282       72,500  
Locust House
    High Rise     Mar-02     Westminster, MD       1979       99       650       2,604       238       650       2,842       3,492       (409 )     3,083       3,008  
Lodge, The
    Garden     Jan-00     Denver, CO       1973       376       1,944       14,262       1,740       1,944       16,002       17,945       (5,682 )     12,264       6,593  
Loft, The
    Garden     Oct-99     Raleigh, NC       1974       184       2,012       11,902       869       2,012       12,771       14,784       (3,541 )     11,242       3,983  
Loring Towers (MN)
    High Rise     Oct-02     Minneapolis, MN       1970       230       1,399       7,445       6,132       1,399       13,577       14,977       (999 )     13,978       8,623  
Loring Towers Apartments
    High Rise     Sep-03     Salem, MA       1973       250       693       8,309       2,054       693       10,363       11,056       (4,526 )     6,530       5,401  
Los Arboles
    Garden     Sep-97     Chandler, AZ       1985       232       1,662       9,504       1,884       1,662       11,388       13,050       (3,312 )     9,737       6,050  
Lynnhaven
    Garden     Mar-04     Durham, NC       1980       75       537       2,165       76       537       2,241       2,778       (229 )     2,549       2,055  
Madera Point
    Garden     May-98     Phoenix, AZ       1986       256       2,103       12,582       1,276       2,103       13,858       15,961       (4,231 )     11,730       8,067  
Malibu Canyon
    Garden     Mar-02     Calabasas, CA       1986       698       65,407       53,438       8,208       65,407       61,646       127,053       (7,644 )     119,409       46,900  
Maple Bay
    Garden     Dec-99     Virginia Beach, VA       1971       414       2,598       16,141       3,061       2,598       19,202       21,800       (3,883 )     17,917       8,971  
Mariners Cove
    Garden     Mar-02     San Diego, CA       1984       500             66,861       2,879             69,740       69,740       (5,554 )     64,187       9,622  
Mariner’s Cove
    Garden     Mar-00     Virginia Beach, VA       1974       458       1,517       10,034       15,503       1,517       25,537       27,054       (5,370 )     21,684       12,382  
Mayfair Village
    Garden     Nov-00     West Lafayette, IN       1964       72       977       1,283       342       977       1,624       2,601       (382 )     2,219       1,169  
Meadow Creek
    Garden     Jul-94     Boulder, CO       1972       332       1,435       24,532       3,359       1,435       27,891       29,326       (7,205 )     22,121       6,007  
Meadows
    Garden     Dec-00     Austin, TX       1983       100       580       3,667       315       580       3,982       4,562       (1,422 )     3,140       2,502  
Merrill House
    High Rise     Jan-00     Fairfax, VA       1962       159       1,836       10,831       1,479       1,836       12,310       14,146       (1,999 )     12,147       6,630  
Mesa Ridge
    Garden     May-98     San Antonio, TX       1986       200       1,210       6,863       614       1,210       7,477       8,687       (2,357 )     6,330       4,275  
Michigan Apartments
    Garden     Dec-99     Indianapolis, IN       1965       253       516       3,694       754       516       4,449       4,965       (924 )     4,040       1,218  
Michigan Plaza
    Garden     Dec-99     Indianapolis, IN       1965       6       24       219             24       219       243       (125 )     118        
Millhopper Village
    Garden     Oct-99     Gainesville, FL       1969       136       759       5,906       455       759       6,361       7,120       (2,317 )     4,803       3,867  
Montblanc Gardens
    Town Home     Dec-03     Yauco, PR       1982       128       391       3,859       567       391       4,426       4,816       (1,598 )     3,218       3,380  
Montecito
    Garden     Jul-94     Austin, TX       1985       268       1,268       6,896       3,262       1,268       10,158       11,426       (4,147 )     7,279       5,051  
Mountain Run
    Garden     Dec-97     Arvada, CO       1974       96       685       2,614       2,449       685       5,063       5,748       (1,203 )     4,544       3,051  
Mountain View
    Garden     May-98     Colorado Springs, CO       1985       252       2,546       14,841       1,109       2,546       15,950       18,496       (4,656 )     13,840       7,750  
Mulberry
    High Rise     Mar-02     Scranton, PA       1981       206       1,120       4,487       771       1,120       5,258       6,378       (627 )     5,751       2,662  
New Baltimore
    Mid Rise     Mar-02     New Baltimore, MI       1980       101       570       2,282       185       570       2,467       3,037       (226 )     2,811       1,208  
New West 111th St Apartments
    High Rise     Oct-02     New York, NY       1929       74       530       3,297       295       530       3,592       4,122       (376 )     3,746       3,538  
Newberry Park
    Garden     Dec-97     Chicago, IL       1985       84       1,150       7,862       222       1,150       8,084       9,234       (1,573 )     7,661       7,843  
Newport
    Garden     Jul-94     Avondale, AZ       1986       204       800       4,354       1,728       800       6,082       6,883       (2,365 )     4,518       4,092  
North River Club
    Garden     Mar-02     Oceanside, CA       1983       56       510       2,046       112       510       2,158       2,668       (290 )     2,378       2,235  

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Table of Contents

                                                                                                             
                                December 31, 2004    
                        (2)            
                        Initial Cost   (3)       Total Cost    
        (1)                   Cost Capitalized       Net of    
    Property   Date       Year   Number       Buildings and   Subsequent to       Buildings and       Accumulated   Accumulated    
Property Name   Type   Consolidated   Location   Built   of Units   Land   Improvements   Acquisition   Land   Improvements   Total   Depreciation   Depreciation   Encumbrances
                                                         
North River Place
    Garden     Jul-02     Chillicothe, OH       1980       120       858       3,351       154       858       3,506       4,364       (940 )     3,424       2,668  
North Slope
    Garden     Oct-02     Greenville, SC       1984       156       1,696       5,791       346       1,696       6,137       7,833       (902 )     6,930       3,745  
Northlake Village
    Garden     Oct-00     Lima, OH       1971       150       494       1,317       707       494       2,024       2,518       (612 )     1,907       1,238  
Northpoint
    Garden     Jan-00     Chicago, IL       1921       304       2,333       14,334       5,929       2,333       20,263       22,596       (3,240 )     19,356       21,425  
Northwinds, The
    Garden     Mar-02     Wytheville, VA       1978       144       500       2,012       736       500       2,748       3,248       (481 )     2,767       2,136  
Northwoods
    Garden     Oct-02     Worthington, OH       1983       280       2,817       7,004       3,054       2,817       10,058       12,875       (1,376 )     11,499       6,840  
Northwoods (CT)
    Garden     Mar-01     Middletown, CT       1987       336       16,382       14,388       1,323       16,382       15,711       32,094       (3,062 )     29,032       21,275  
Oak Falls Condominiums
    Garden     Nov-96     Spring, TX       1983       144       1,017       5,420       1,602       1,017       7,022       8,039       (1,306 )     6,733       4,249  
Oak Forest
    Garden     Oct-02     Arlington, TX       1983       204       1,024       5,902       608       1,024       6,510       7,533       (2,235 )     5,298       2,550  
Oak Park Village I
    Garden     Oct-00     Lansing, MI       1973       618       10,207       16,771       4,511       10,207       21,282       31,488       (5,868 )     25,620       23,487  
Oak Run Apartments
    Garden     Oct-02     Dallas, TX       1979       420       5,176       13,864       938       5,176       14,802       19,978       (5,901 )     14,077       8,500  
Oakbrook (MI)
    Garden     Dec-99     Battle Creek, MI       1981       586       3,158       16,325       4,270       3,158       20,596       23,754       (3,497 )     20,257       7,481  
Oaks at Woodridge I
    Garden     Oct-02     Fairfield, OH       1985       332       3,375       11,043       327       3,375       11,371       14,746       (862 )     13,883       10,276  
Oakwood Apartments
    Town Home     Mar-04     Cuthbert, GA       1985       50       188       1,058       28       188       1,085       1,273       (331 )     942       1,119  
Oakwood Manor
    Garden     Mar-04     Milan, TN       1984       34       95       498       9       95       508       603       (51 )     551       503  
Oakwood Miami
    High Rise     Dec-03     Miami, FL       1998       357       31,355       32,214       495       31,355       32,709       64,064       (745 )     63,319       48,714  
Oakwood Village On Lake Nancy
    Garden     Oct-99     Winter Park, FL       1973       278       1,207       11,029       1,138       1,207       12,167       13,374       (5,321 )     8,054       6,323  
Ocean Oaks
    Garden     May-98     Port Orange, FL       1988       296       2,132       12,855       2,323       2,132       15,179       17,311       (4,243 )     13,068       10,295  
O’Fallon
    Garden     Mar-02     O’Fallon, IL       1982       132       870       3,466       294       870       3,761       4,631       (519 )     4,111       4,133  
Okemos Station
    Garden     Oct-02     Okemos, MI       1981       112       558       3,644       228       558       3,872       4,430       (689 )     3,741       2,728  
Old Salem
    Garden     Oct-99     Charlottesville, VA       1967       364       2,106       16,621       2,215       2,106       18,836       20,942       (6,785 )     14,157       8,892  
Olde Towne West II
    Garden     Oct-02     Alexandria, VA       1977       72       151       3,016       255       151       3,270       3,421       (1,278 )     2,143       2,924  
Olde Towne West III
    Garden     Apr-00     Alexandria, VA       1978       75       581       3,463       1,093       581       4,556       5,137       (770 )     4,367       3,721  
One Lytle Place
    High Rise     Jan-00     Cincinnati ,OH       1980       231       2,662       21,800       1,287       2,662       23,087       25,749       (3,691 )     22,058       12,079  
Orchidtree
    Garden     Oct-97     Scottsdale, AZ       1971       278       2,314       13,140       2,622       2,314       15,762       18,076       (4,662 )     13,413       5,859  
Oxford House
    Mid Rise     Mar-02     Deactur, IL       1979       156       1,040       4,164       167       1,040       4,331       5,371       (659 )     4,712       3,962  
Palazzo at Park La Brea
    Mid-Rise     Feb-04     Los Angeles, CA       2002       521       24,429       138,521       394       24,429       138,915       163,344       (4,059 )     159,285       88,072  
Palencia
    Garden     May-98     Tampa, FL       1985       420       2,804       16,262       7,753       2,804       24,015       26,819       (7,009 )     19,810       12,441  
Palm Lake
    Garden     Oct-99     Tampa ,FL       1972       150       711       5,038       1,287       711       6,324       7,035       (3,309 )     3,726       2,727  
Palm Springs Senior
    Garden     Mar-02     Palm Springs, CA       1981       116             7,015       114             7,129       7,129       (708 )     6,421       3,943  
Panorama Park
    Garden     Mar-02     Bakersfield, CA       1982       66       570       2,288       215       570       2,502       3,072       (325 )     2,747       2,462  
Paradise Palms
    Garden     Jul-94     Phoenix, AZ       1970       130       647       3,515       1,918       647       5,433       6,080       (2,098 )     3,982       3,623  
Park at Cedar Lawn, The
    Garden     Nov-96     Galveston, TX       1985       192       1,025       6,162       1,649       1,025       7,812       8,837       (1,799 )     7,038       4,494  
Park at Deerbrook
    Garden     Oct-99     Humble, TX       1984       100       176       521       239       176       760       936       (835 )     101       2,417  
Park Avenue Towers (PA)
    Garden     Oct-00     Wilkes-Barre, PA       1978       130       292       2,546       447       292       2,993       3,285       (1,131 )     2,154       2,226  
Park Capitol
    Garden     Apr-00     Salt Lake City, UT       1972       135       718       5,316       681       718       5,997       6,715       (2,255 )     4,460       2,725  
Park Colony
    Garden     May-98     Norcross, GA       1984       352       3,257       18,481       1,975       3,257       20,456       23,713       (6,111 )     17,602       9,436  
Park Place Texas
    Garden     Mar-02     Cleveland, TX       1983       60       390       1,587       128       390       1,715       2,105       (204 )     1,901       1,919  
Park Towne
    High Rise     Apr-00     Philadelphia, PA       1959       979       7,711       49,104       22,601       7,711       71,705       79,416       (14,067 )     65,349       35,576  
Parker House
    Garden     Apr-01     Hyattsville, MD       1965       296       10,676       8,682       949       10,676       9,631       20,307       (1,281 )     19,026       7,134  
Parktown Townhouses
    Garden     Oct-99     Deer Park, TX       1968       309       1,731       12,635       5,429       1,731       18,064       19,795       (3,705 )     16,090       7,010  
Parkview
    Garden     Mar-02     Sacramento, CA       1980       97       1,060       4,240       393       1,060       4,633       5,693       (460 )     5,233       2,851  
Parkview NY
    Mid-Rise     Jun-04     Bronx, NY       1920       72       247       3,007       141       247       3,148       3,395       (1,164 )     2,232       1,712  
Parkway (VA)
    Garden     Mar-00     Willamsburg, VA       1971       148       386       2,834       915       386       3,749       4,135       (1,940 )     2,196       2,015  
Pavilion
    High Rise     Mar-04     Philadelphia, PA       1976       296             15,416       33             15,449       15,449       (817 )     14,632       10,845  
Peachtree Park
    Garden     Jan-96     Atlanta, GA       1962/1995       295       4,683       11,713       4,277       4,683       15,990       20,673       (5,453 )     15,219       11,815  
Peakview Place
    Garden     Jan-00     Englewood, CO       1975       296       1,968       20,775       2,579       1,968       23,354       25,322       (7,425 )     17,897       10,896  
Pebble Point
    Garden     Oct-02     Indianapolis, IN       1980       220       1,819       6,883       237       1,819       7,121       8,940       (1,576 )     7,363       5,655  
Peppermill Place Apartments
    Garden     Nov-96     Houston, TX       1983       224       844       5,169       1,545       844       6,714       7,558       (1,521 )     6,036       4,195  

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Table of Contents

                                                                                                             
                                December 31, 2004    
                        (2)            
                        Initial Cost   (3)       Total Cost    
        (1)                   Cost Capitalized       Net of    
    Property   Date       Year   Number       Buildings and   Subsequent to       Buildings and       Accumulated   Accumulated    
Property Name   Type   Consolidated   Location   Built   of Units   Land   Improvements   Acquisition   Land   Improvements   Total   Depreciation   Depreciation   Encumbrances
                                                         
Peppermill Village
    Garden     Oct-02     West Lafayette, IN       1981       192       1,095       5,875       717       1,095       6,591       7,686       (664 )     7,023       4,605  
Peppertree
    Garden     Mar-02     Cypress, CA       1971       136       7,835       5,224       1,123       7,835       6,347       14,182       (887 )     13,295       6,242  
Pickwick Place
    Garden     Oct-99     Indianapolis, IN       1973       336       967       8,941       2,383       967       11,324       12,290       (4,831 )     7,460       5,817  
Pine Lake Terrace
    Garden     Mar-02     Garden Grove, CA       1971       111       3,975       6,035       772       3,975       6,807       10,782       (693 )     10,089       4,414  
Pine Shadows
    Garden     May-98     Phoenix, AZ       1983       272       2,095       11,899       1,113       2,095       13,013       15,108       (3,917 )     11,191       7,500  
Pinebrook Manor
    Garden     Mar-02     Lansing, MI       1971       136       620       2,488       703       620       3,191       3,811       (599 )     3,212       967  
Pines, The
    Garden     Oct-98     Palm Bay, FL       1984       216       602       3,318       1,018       602       4,335       4,938       (1,199 )     3,739       2,100  
Pinewood Place
    Garden     Mar-02     Toledo, OH       1979       100       420       1,698       573       420       2,271       2,691       (278 )     2,413       2,080  
Place Du Plantier
    Garden     Oct-99     Baton Rouge, LA       1972       268       1,362       10,735       736       1,362       11,471       12,833       (5,104 )     7,729       5,934  
Place One
    Garden     Jul-01     Richmond, VA       1976       114       405       2,806       609       405       3,414       3,820       (1,642 )     2,178       1,940  
Plantation Creek
    Garden     Oct-02     Atlanta, GA       1976       484       3,118       25,992       1,617       3,118       27,609       30,727       (10,663 )     20,065       14,246  
Plantation Crossing
    Garden     Jan-00     Marietta, GA       1979       180       1,107       9,210       848       1,107       10,059       11,166       (3,871 )     7,295       4,276  
Plantation Gardens
    Garden     Oct-99     Plantation, FL       1971       372       3,928       19,418       2,055       3,928       21,474       25,402       (8,334 )     17,068       8,839  
Plaza on the Park
    Garden     Mar-04     Chicago, IL       1928       151       492       7,568       338       492       7,906       8,398       (1,394 )     7,004       7,157  
Pleasant Ridge
    Garden     Nov-94     Little Rock, AR       1982       200       1,661       9,111       2,898       1,661       12,008       13,669       (4,379 )     9,290       5,670  
Pleasant Valley Pointe
    Garden     Nov-94     Little Rock, AR       1985       112       907       5,085       1,532       907       6,617       7,524       (2,444 )     5,080       3,093  
Plum Creek
    Garden     Oct-02     Charlotte, NC       1984       276       3,125       9,144       367       3,125       9,511       12,635       (1,090 )     11,546       7,807  
Plummer Village
    Mid Rise     Mar-02     North Hills, CA       1983       75       650       2,647       194       650       2,841       3,491       (322 )     3,169       2,968  
Point West Apartments
    Garden     Dec-97     Lenexa, KS       1985       172       912       5,580       1,030       912       6,610       7,522       (2,070 )     5,453       5,070  
Pointe James
    Garden     Oct-99     Charleston, SC       1977       128       466       2,158       2,211       466       4,370       4,836       (1,475 )     3,361       3,678  
Post Ridge
    Garden     Jul-00     Nashville, TN       1972       150       991       7,931       766       991       8,697       9,688       (3,058 )     6,630       4,521  
Prairie Hills
    Garden     Jul-94     Albuquerque, NM       1985       260       2,017       9,220       2,184       2,017       11,404       13,421       (4,322 )     9,099       5,542  
Preston Creek
    Garden     Oct-99     Dallas, TX       1979       228       1,706       9,315       1,309       1,706       10,624       12,330       (4,171 )     8,159       5,099  
Pride Gardens
    Garden     Dec-97     Flora, MS       1975       76       102       1,071       1,194       102       2,265       2,367       (702 )     1,665       1,157  
Privado Park
    Garden     May-98     Phoenix, AZ       1984       352       2,563       15,026       1,545       2,563       16,572       19,135       (5,202 )     13,933       7,710  
Promontory Point Apartments
    Garden     Oct-02     Austin, TX       1984       252       1,520       11,101       472       1,520       11,573       13,093       (4,211 )     8,882       3,709  
Prospect Towers
    High Rise     Mar-02     Brooklyn, NY       1967       154       4,521       7,034       2,124       4,521       9,158       13,679       (964 )     12,715       2,368  
Pynchon I
    Garden     Mar-02     Springfield, MA       1973       250       1,820       7,266       2,020       1,820       9,287       11,107       (1,172 )     9,935       4,802  
Quail Hollow
    Garden     Oct-99     West Columbia, SC       1973       215       1,095       7,893       1,131       1,095       9,024       10,118       (2,629 )     7,489       4,785  
Quail Ridge
    Garden     May-98     Tucson, AZ       1974       253       1,559       9,173       1,446       1,559       10,619       12,178       (3,220 )     8,957       5,365  
Quail Run
    Garden     Oct-99     Columbia, SC       1970       332       1,752       12,967       1,370       1,752       14,336       16,089       (4,987 )     11,102       7,936  
Quail Run
    Garden     Oct-99     Zionsville, IN       1972       166       1,226       6,820       794       1,226       7,614       8,840       (2,272 )     6,569       5,282  
Quail Woods
    Garden     Oct-99     Gastonia, NC       1974       188       491       4,650       692       491       5,342       5,833       (1,014 )     4,818       3,342  
Ramblewood Apartments (MI)
    Garden     Dec-99     Grand Rapids, MI       1973       1,698       9,500       61,770       8,909       9,500       70,679       80,179       (13,750 )     66,430       33,136  
Randol Crossing
    Garden     Dec-00     Fort Worth, TX       1984       160       698       4,691       273       698       4,964       5,662       (2,067 )     3,595       2,979  
Raven Hill
    Garden     Jan-01     Burnsville, MN       1971       304       4,468       9,557       1,171       4,468       10,728       15,197       (4,751 )     10,446       11,607  
Ravensworth Towers
    High Rise     Jun-04     Annandale, VA       1974       219       1,830       18,794       187       1,830       18,981       20,811       (6,884 )     13,927       15,227  
Reflections
    Garden     Apr-02     Indianapolis, IN       1970       582       1,243       18,504       10,202       1,243       28,706       29,949       (7,141 )     22,808       13,215  
Reflections (Casselberry)
    Garden     Oct-02     Casselberry, FL       1984       336       3,235       11,977       795       3,235       12,772       16,006       (2,565 )     13,441       10,700  
Reflections (Tampa)
    Garden     Sep-00     Tampa, FL       1988       348       8,102       13,499       1,680       8,102       15,179       23,281       (2,170 )     21,112       13,500  
Reflections (Virginia Beach)
    Garden     Sep-00     Virginia Beach, VA       1987       480       16,178       13,746       2,322       16,178       16,068       32,246       (3,366 )     28,879       25,109  
Reflections (West Palm Beach)
    Garden     Oct-00     West Palm Beach, FL       1986       300       5,649       9,972       1,561       5,649       11,533       17,183       (2,098 )     15,085       10,020  
Regency Oaks
    Garden     Oct-99     Fern Park, FL       1965       343       1,164       10,844       3,577       1,164       14,420       15,585       (6,272 )     9,313       6,946  
Ridgecrest
    Garden     Dec-96     Denton, TX       1983       152       296       1,359       1,566       296       2,925       3,221       (159 )     3,062       3,869  
Ridgewood (La Loma)
    Garden     Mar-02     Sacramento, CA       1980       75       700       2,804       160       700       2,965       3,665       (252 )     3,413       2,059  
Ridgewood Towers
    High Rise     Mar-02     East Moline, IL       1977       140       700       2,803       314       700       3,117       3,817       (422 )     3,395       2,091  
River Bend
    Garden     Jul-01     Arlington, TX       1983       201       895       4,139       1,015       895       5,154       6,049       (1,803 )     4,246       3,965  
River Reach
    Garden     Sep-00     Naples, FL       1986       556       18,008       18,337       2,746       18,008       21,083       39,091       (4,702 )     34,389       24,000  
Rivercreek
    Garden     Apr-00     Augusta, GA       1980       224       667       6,944       1,215       667       8,159       8,826       (1,918 )     6,909       3,482  
Rivercrest
    Garden     Oct-99     Atlanta, GA       1970       312       2,327       16,415       2,519       2,327       18,934       21,261       (4,963 )     16,298       11,002  

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Table of Contents

                                                                                                             
                                December 31, 2004    
                        (2)            
                        Initial Cost   (3)       Total Cost    
        (1)                   Cost Capitalized       Net of    
    Property   Date       Year   Number       Buildings and   Subsequent to       Buildings and       Accumulated   Accumulated    
Property Name   Type   Consolidated   Location   Built   of Units   Land   Improvements   Acquisition   Land   Improvements   Total   Depreciation   Depreciation   Encumbrances
                                                         
Riverloft Apartments
    High Rise     Oct-99     Philadelphia, PA       1910       184       2,120       11,287       29,579       2,120       40,866       42,986       (6,598 )     36,388       24,534  
Rivers Edge
    Garden     Jul-00     Auburn, WA       1976       120       721       4,991       341       721       5,332       6,053       (1,981 )     4,072       3,581  
Riverside
    Mid Rise     Jul-94     Littleton, CO       1987       248       1,956       8,427       2,540       1,956       10,966       12,922       (4,208 )     8,714       8,703  
Riverside Park
    High Rise     Apr-00     Alexandria ,VA       1973       1,222       8,402       70,251       9,740       8,402       79,991       88,393       (28,723 )     59,670       54,135  
Riverwalk
    Garden     Dec-95     Little Rock, AR       1988       262       1,075       8,863       2,279       1,075       11,142       12,217       (3,658 )     8,559       5,287  
Riverwind at St. Andrews
    Garden     Apr-02     Columbia, SC       1984       160       1,265       4,370       104       1,265       4,474       5,739       (656 )     5,083       4,691  
Riverwood (IN)
    Garden     Oct-00     Indianapolis, IN       1978       120       1,048       3,424       824       1,048       4,248       5,296       (903 )     4,393       3,719  
Rocky Creek
    Garden     Oct-99     Augusta, GA       1979       120       450       3,702       401       450       4,104       4,554       (1,623 )     2,931       2,231  
Rosecroft Mews
    Garden     Apr-01     Ft. Washington, MD       1966       304       3,134       10,239       1,851       3,134       12,089       15,223       (3,326 )     11,898       8,653  
Rosedale Court Apartments
    Garden     Mar-04     Dawson Springs, KY       1981       40       196       1,178       14       196       1,192       1,388       (283 )     1,104       939  
Rosewood
    Garden     Mar-02     Camarillo, CA       1976       150       12,128       8,060       1,005       12,128       9,065       21,193       (1,117 )     20,076       7,867  
Round Barn
    Garden     Mar-02     Champaign, IL       1979       156       1,120       4,387       309       1,120       4,696       5,816       (618 )     5,198       4,163  
Royal Crest Estates (Fall River)
    Garden     Aug-02     Fall River, MA       1974       216       5,832       12,044       740       5,832       12,783       18,616       (1,843 )     16,773       10,671  
Royal Crest Estates (Marlborough)
    Garden     Aug-02     Marlborough, MA       1970       473       21,358       32,605       918       21,358       33,523       54,881       (4,517 )     50,365       32,575  
Royal Crest Estates (Nashua)
    Garden     Aug-02     Nashua, MA       1970       902       68,231       45,562       2,052       68,231       47,613       115,844       (6,606 )     109,238       57,246  
Royal Crest Estates (North Andover)
    Garden     Aug-02     North Andover, MA       1970       588       51,292       36,808       3,583       51,292       40,391       91,682       (6,432 )     85,251       50,525  
Royal Crest Estates (Warwick)
    Garden     Aug-02     Warwick, RI       1972       492       22,433       24,095       1,327       22,433       25,422       47,855       (3,394 )     44,461       26,789  
Royal Palms
    Garden     Jul-94     Mesa, AZ       1985       152       832       4,569       1,018       832       5,587       6,419       (2,014 )     4,405       2,691  
Runaway Bay
    Garden     Jul-02     Pinellas Park, FL       1986       192       2,013       7,386       225       2,013       7,611       9,624       (1,041 )     8,583       4,575  
Runaway Bay (CA)
    Garden     Oct-00     Antioch, CA       1986       280       12,700       10,499       1,154       12,700       11,653       24,353       (2,465 )     21,888       12,100  
Runaway Bay (FL)
    Garden     Oct-00     Lantana, FL       1987       404       6,089       16,052       1,856       6,089       17,908       23,997       (3,218 )     20,779       12,458  
Runaway Bay (MI)
    Garden     Oct-00     Lansing, MI       1987       288       2,139       6,559       1,459       2,139       8,018       10,157       (2,064 )     8,093       8,725  
Runaway Bay (NC)
    Garden     Oct-00     Charlotte, NC       1985       280       2,270       9,858       1,626       2,270       11,485       13,754       (2,112 )     11,642       8,197  
Runaway Bay (Virginia Beach)
    Garden     Nov-04     Virginia Beach, VA       1985       440       4,692       20,645       63       4,692       20,708       25,400       (1,927 )     23,473       18,061  
Runawaybay I
    Garden     Sep-03     Columbus, OH       1982       304       2,309       11,980       739       2,309       12,720       15,029       (3,947 )     11,082       10,699  
Saddlebrook
    Garden     Oct-02     Norcross, GA       1985       305       4,049       11,370       692       4,049       12,062       16,112       (1,529 )     14,582       9,685  
Salem Park
    Garden     Apr-00     Ft. Worth, TX       1984       168       661       4,122       810       661       4,932       5,593       (1,562 )     4,032       2,938  
Sand Castles Apartments
    Garden     Oct-97     League City, TX       1987       138       977       5,542       1,024       977       6,566       7,543       (1,917 )     5,626       2,498  
Sandpiper
    Garden     Apr-00     St. Petersburg, FL       1984       276       1,578       9,379       1,281       1,578       10,660       12,238       (3,460 )     8,777       3,950  
Sandpiper Cove
    Garden     Dec-97     Boynton Beach, FL       1987       416       3,511       21,396       3,246       3,511       24,642       28,153       (6,163 )     21,990       11,634  
Sands Point Apartments
    Garden     Jan-00     Phoenix, AZ       1985       432       2,247       15,496       1,523       2,247       17,019       19,266       (6,387 )     12,879       8,929  
Sandwich Manor
    Mid Rise     Mar-02     Sandwich, IL       1980       90       450       1,799       207       450       2,006       2,456       (188 )     2,268       1,280  
Sandy Hill Terrace
    High Rise     Mar-02     Norristown, PA       1980       175       1,650       6,599       1,172       1,650       7,771       9,421       (853 )     8,567       4,605  
Savannah Trace
    Garden     Mar-01     Shaumburg, IL       1986       368       14,185       20,726       1,071       14,185       21,797       35,982       (4,142 )     31,840       22,971  
Sawgrass
    Garden     Jul-97     Orlando, FL       1986       208       1,442       8,137       1,747       1,442       9,883       11,325       (2,876 )     8,449       3,246  
Scandia
    Garden     Oct-00     Indianapolis, IN       1977       444       10,707       9,852       2,267       10,707       12,119       22,826       (3,031 )     19,796       13,212  
Scotch Pines East
    Garden     Jul-00     Ft. Collins, CO       1977       102       462       4,890       180       462       5,070       5,531       (2,038 )     3,493       2,800  
Seaside Point Condominiums
    Garden     Nov-96     Galveston, TX       1985       102       513       3,045       4,144       513       7,188       7,701       (1,264 )     6,437       1,708  
Shadetree
    Garden     Oct-97     Tempe, AZ       1965       123       591       3,359       1,412       591       4,772       5,363       (1,579 )     3,784       1,660  
Shadow Creek (AZ)
    Garden     May-98     Phoenix, AZ       1984       266       2,016       11,886       1,209       2,016       13,095       15,111       (3,956 )     11,154       5,834  
Shadow Lake
    Garden     Oct-97     Greensboro, NC       1988       136       1,054       5,978       1,138       1,054       7,116       8,170       (2,016 )     6,154       2,607  
Sharp-Leadenhall I
    Town Home     Mar-04     Baltimore, MD       1981       155       1,428       5,427       113       1,428       5,540       6,968       (839 )     6,129       5,838  
Sharp-Leadenhall II
    Town Home     Sep-03     Baltimore, MD       1981       37       173       1,636       230       173       1,866       2,039       (685 )     1,355       1,195  
Shenandoah Crossing
    Garden     Sep-00     Fairfax, VA       1984       640       18,784       57,197       2,689       18,784       59,886       78,671       (13,131 )     65,539       31,615  
Sheraton Towers
    High Rise     Mar-02     High Point, NC       1981       97       525       2,159       205       525       2,365       2,890       (244 )     2,645       3,347  
Shoreview
    Garden     Oct-99     San Francisco, CA       1976       156       510       8,732       8,970       510       17,703       18,213       (4,194 )     14,019       3,622  
Signal Pointe
    Garden     Oct-99     Winter Park, FL       1971       368       1,489       12,685       2,123       1,489       14,808       16,297       (5,161 )     11,137       7,977  
Signature Point Apartments
    Garden     Nov-96     League City, TX       1994       304       2,810       17,579       1,504       2,810       19,083       21,893       (3,612 )     18,281       8,596  

F-54


Table of Contents

                                                                                                             
                                December 31, 2004    
                        (2)            
                        Initial Cost   (3)       Total Cost    
        (1)                   Cost Capitalized       Net of    
    Property   Date       Year   Number       Buildings and   Subsequent to       Buildings and       Accumulated   Accumulated    
Property Name   Type   Consolidated   Location   Built   of Units   Land   Improvements   Acquisition   Land   Improvements   Total   Depreciation   Depreciation   Encumbrances
                                                         
Silver Ridge
    Garden     Oct-98     Maplewood, MN       1986       186       777       3,776       1,271       777       5,047       5,824       (1,613 )     4,211       4,525  
Snowden Village I
    Garden     Oct-99     Fredericksburg, VA       1970       132       668       4,242       546       668       4,788       5,456       (1,535 )     3,921       4,177  
Snowden Village II
    Garden     Oct-99     Fredericksburg, VA       1980       122       608       4,019       389       608       4,408       5,016       (1,357 )     3,660       2,301  
Snug Harbor
    Garden     Dec-95     Las Vegas, NV       1990       64       751       2,859       988       751       3,847       4,598       (1,379 )     3,219       2,075  
Somerset at The Crossing
    Garden     Sep-00     Tucker, GA       1989       264       6,512       11,894       1,381       6,512       13,276       19,788       (2,847 )     16,940       10,000  
Somerset Lakes
    Garden     May-99     Indianapolis, IN       1974       360       3,436       19,668       1,508       3,436       21,176       24,612       (5,740 )     18,872       12,580  
Somerset Village
    Garden     May-96     West Valley City, UT       1985       486       4,315       16,727       3,890       4,315       20,617       24,932       (6,821 )     18,110       10,477  
South Bay Villa
    Garden     Mar-02     Los Angeles, CA       1981       80       690       2,770       315       690       3,085       3,775       (485 )     3,290       3,027  
South Park
    Garden     Mar-02     Elyria, OH       1970       138       200       931       403       200       1,334       1,534       (244 )     1,290       612  
South Willow
    Garden     Jul-94     West Jordan, UT       1987       440       2,224       12,075       3,289       2,224       15,364       17,588       (5,853 )     11,736       8,398  
Southridge
    Garden     Dec-00     Greenville, TX       1984       160       694       4,416       1,010       694       5,426       6,120       (1,928 )     4,192       3,466  
Spectrum Pointe
    Garden     Jul-94     Marietta, GA       1984       196       1,029       5,651       2,190       1,029       7,842       8,871       (3,044 )     5,827       4,243  
Springhill Lake
    Garden     Apr-00     Greenbelt, MD       1969       2,899       14,190       99,383       20,889       14,190       120,272       134,463       (34,023 )     100,440       113,500  
Springhouse (GA)
    Garden     Oct-02     Augusta, GA       1985       244       2,030       7,397       239       2,030       7,636       9,666       (889 )     8,777       7,230  
Springhouse (KY)
    Garden     Mar-04     Lexington, KY       1986       224       2,083       7,181       93       2,083       7,275       9,358       (980 )     8,378       6,797  
Springhouse (SC)
    Garden     Oct-02     North Charleston, SC       1986       248       3,543       10,331       166       3,543       10,498       14,041       (1,652 )     12,388       8,600  
Springhouse (TX)
    Garden     Oct-02     Dallas, TX       1983       372       3,532       10,150       1,074       3,532       11,224       14,756       (1,750 )     13,006       10,300  
Springhouse at Newport
    Garden     Jul-02     Newport News, VA       1986       432       5,507       14,499       743       5,507       15,242       20,749       (4,362 )     16,388       16,600  
Springhouse I
    Garden     Mar-04     Winston-Salem, NC       1984       249       1,742       6,278       125       1,742       6,403       8,145       (982 )     7,163       6,473  
Springhouse II
    Garden     Oct-02     Winston-Salem, NC       1984       184       1,154       5,912       457       1,154       6,369       7,522       (742 )     6,780       4,902  
Springwoods at Lake Ridge
    Garden     Jul-02     Lake Ridge, VA       1984       180       2,797       9,360       138       2,797       9,497       12,294       (2,013 )     10,281       7,266  
Spyglass
    Garden     Oct-02     Indianapolis, IN       1979       120       986       3,985       411       986       4,396       5,383       (928 )     4,455       2,892  
Spyglass at Cedar Cove
    Garden     Sep-00     Lexington Park, MD       1985       152       3,289       5,097       663       3,289       5,760       9,049       (1,165 )     7,884       4,381  
Stafford
    High Rise     Oct-02     Baltimore, MD       1889       96       706       4,032       510       706       4,543       5,249       (1,296 )     3,953        
Steeplechase
    Garden     Oct-00     Williamsburg, VA       1986       220       7,695       8,055       943       7,695       8,997       16,693       (1,834 )     14,858       12,425  
Steeplechase (MD)
    Garden     Sep-00     Largo, MD       1986       240       3,733       16,111       857       3,733       16,968       20,701       (3,008 )     17,693       11,947  
Steeplechase (OH)
    Garden     May-99     Loveland, OH       1988       272       1,975       9,264       1,187       1,975       10,451       12,426       (2,927 )     9,499       7,507  
Steeplechase (TX)
    Garden     Jul-02     Plano, TX       1985       368       6,539       9,596       579       6,539       10,175       16,714       (1,054 )     15,660       14,200  
Steeplechase (VA)
    Garden     Oct-02     Fredricksburg, VA       1985       156       4,358       4,746       210       4,358       4,956       9,314       (549 )     8,765       5,035  
Sterling Apartment Homes, The
    Garden     Oct-99     Philadelphia, PA       1962       536       9,034       53,042       4,413       9,034       57,455       66,489       (17,496 )     48,993       21,365  
Sterling Village
    Garden     Mar-02     San Bernadino, CA       1983       80       1,177       2,925       88       1,177       3,013       4,190       (350 )     3,840       1,973  
Stirling Court Apartments
    Garden     Nov-96     Houston, TX       1984       228       913       4,953       1,536       913       6,489       7,402       (1,499 )     5,903       4,038  
Stone Creek Club
    Garden     Sep-00     Germantown, MD       1984       240       13,808       9,347       1,695       13,808       11,042       24,850       (3,479 )     21,371       12,091  
Stone Point Village
    Garden     Dec-99     Fort Wayne, IN       1980       296       1,805       8,636       1,805       1,805       10,442       12,247       (2,136 )     10,110       5,432  
Stonebrook
    Garden     Jun-97     Sanford, FL       1991       244       1,582       8,587       2,373       1,582       10,959       12,541       (3,311 )     9,230       6,493  
Stonebrook II
    Garden     Mar-99     Sanford, FL       1998       112       488       8,736       187       488       8,922       9,410       (988 )     8,423       3,419  
Stonegate Village
    Garden     Oct-00     New Castle, IN       1970       122       152       2,286       377       152       2,664       2,815       (276 )     2,539       726  
Stoney Brook Apartments
    Garden     Nov-96     Houston, TX       1972       113       275       1,865       1,172       275       3,037       3,312       (449 )     2,863       2,328  
Stonybrook
    Garden     May-98     Tucson, AZ       1983       411       2,167       12,670       1,392       2,167       14,062       16,229       (4,356 )     11,873       5,598  
Stratford, The (TX)
    Garden     May-98     San Antonio, TX       1979       269       1,825       10,748       1,267       1,825       12,015       13,840       (3,792 )     10,048       4,990  
Strawbridge Square
    Garden     Oct-99     Alexandria, VA       1979       128       662       3,508       2,177       662       5,685       6,347       (737 )     5,610       7,709  
Sugar Bush
    Garden     Oct-02     Muncie, IN       1981       240       1,423       7,078       415       1,423       7,493       8,916       (1,589 )     7,327       5,561  
Summit Creek
    Garden     May-98     Austin, TX       1985       164       1,212       6,037       671       1,212       6,708       7,920       (1,503 )     6,418       3,336  
Sun Lake
    Garden     May-98     Lake Mary, FL       1986       600       4,551       25,543       3,425       4,551       28,967       33,518       (8,670 )     24,849       13,536  
Sun River Village
    Garden     Oct-99     Tempe, AZ       1981       334       1,864       13,867       1,409       1,864       15,276       17,140       (5,727 )     11,413       9,128  
Sunbury Downs Apartments
    Garden     Nov-96     Houston, TX       1982       240       937       6,059       1,625       937       7,684       8,621       (1,802 )     6,819       4,572  
Sunlake
    Garden     Sep-98     Brandon, FL       1986       88       610       4,062       706       610       4,768       5,378       (1,601 )     3,777       2,365  
Sunland Terrace
    Garden     Mar-02     Phoenix, AZ       1984       80       490       1,963       204       490       2,167       2,657       (318 )     2,338       2,169  
Sunrunner
    Garden     Jan-00     St. Petersburg, FL       1980       200       693       6,854       581       693       7,435       8,128       (3,053 )     5,075       4,263  
Sunset Village
    Garden     Jul-98     Oceanside, CA       1987       114       1,127       6,395       856       1,127       7,252       8,379       (1,888 )     6,491       7,802  

F-55


Table of Contents

                                                                                                             
                                December 31, 2004    
                        (2)            
                        Initial Cost   (3)       Total Cost    
        (1)                   Cost Capitalized       Net of    
    Property   Date       Year   Number       Buildings and   Subsequent to       Buildings and       Accumulated   Accumulated    
Property Name   Type   Consolidated   Location   Built   of Units   Land   Improvements   Acquisition   Land   Improvements   Total   Depreciation   Depreciation   Encumbrances
                                                         
Sunstone
    Garden     Jul-01     Chapel Hill, NC       1985       260       5,976       9,058       744       5,976       9,802       15,778       (1,950 )     13,828       10,905  
Swiss Village Apartments
    Garden     Nov-96     Houston, TX       1972       360       1,760       9,325       7,358       1,760       16,682       18,442       (3,024 )     15,419       6,500  
Sycamore Creek
    Garden     Apr-00     Cincinnati ,OH       1978       295       1,990       9,643       2,558       1,990       12,201       14,190       (2,964 )     11,226       7,543  
Talbot Woods
    Garden     Sep-04     Middleboro, MA       1969       121       5,612       4,719       28       5,612       4,747       10,359       (71 )     10,288        
Tamarac Pines I
    Garden     Nov-04     Woodlands, TX       1979       144       227       2,294       24       227       2,317       2,545       (517 )     2,028       2,118  
Tamarac Pines II
    Garden     Nov-04     Woodlands, TX       1980       156       291       2,714       35       291       2,749       3,041       (626 )     2,415       2,469  
Tamarac Village
    Garden     Apr-00     Denver, CO       1979       564       3,460       21,675       2,844       3,460       24,519       27,979       (8,236 )     19,743       19,225  
Tar River Estates
    Garden     Oct-99     Greenville, NC       1969       220       1,292       14,039       2,703       1,292       16,742       18,034       (3,660 )     14,374       4,823  
Tatum Gardens
    Garden     May-98     Phoenix, AZ       1985       128       1,323       7,155       683       1,323       7,838       9,161       (2,739 )     6,423       3,451  
The Parkways
    Garden     Jun-04     Chicago, IL       1925       446       3,769       23,257       1,744       3,769       25,001       28,770       (1,909 )     26,861       24,815  
The Tempo
    High Rise     Sep-04     New York, NY       1928       202       68,320       12,140       13       68,320       12,153       80,473       (87 )     80,386       32,969  
Tide Mill
    Garden     Oct-02     Salisbury, MD       1987       104       1,012       4,427       190       1,012       4,617       5,628       (683 )     4,946       2,591  
Timber Ridge
    Garden     Oct-99     Sharonville, OH       1972       248       1,184       8,077       960       1,184       9,036       10,220       (2,604 )     7,616       5,200  
Timbermill
    Garden     Oct-95     San Antonio, TX       1982       296       778       4,457       2,056       778       6,512       7,290       (2,325 )     4,966       2,958  
Timbertree
    Garden     Oct-97     Phoenix, AZ       1980       387       2,292       13,000       2,583       2,292       15,583       17,875       (4,680 )     13,195       6,359  
Tompkins Terrace
    Garden     Oct-02     Beacon, NY       1974       193       872       4,943       899       872       5,843       6,715       (607 )     6,107       3,025  
Township At Highlands
    Garden     Nov-96     Littleton, CO       1986       161       1,825       9,773       3,531       1,825       13,305       15,130       (3,464 )     11,666        
Trails
    Garden     Apr-02     Nashville, TN       1985       248       687       10,261       275       687       10,536       11,223       (4,507 )     6,716       4,063  
Trails of Ashford
    Garden     May-98     Houston, TX       1979       514       2,650       14,985       2,605       2,650       17,590       20,240       (5,380 )     14,860       7,595  
Treehouse II Apartments
    Garden     Jan-00     College Station, TX       1982       156       510       3,915       273       510       4,187       4,697       (1,110 )     3,587       1,587  
Treetops
    Garden     Mar-01     San Bruno, CA       1987       308       3,762       62,460       1,954       3,762       64,413       68,176       (10,227 )     57,949       34,692  
Trestletree Village
    Garden     Mar-02     Atlanta, GA       1981       188       1,150       4,655       464       1,150       5,119       6,269       (675 )     5,594       4,039  
Trinity Apartments
    Garden     Dec-97     Irving, TX       1985       496       2,052       12,387       2,493       2,052       14,880       16,932       (3,966 )     12,966       6,270  
Trinity Place
    Garden     Oct-02     Middletown, OH       1982       200       1,459       7,700       153       1,459       7,853       9,312       (845 )     8,467       6,071  
Twentynine Palms
    Garden     Mar-02     Twenty-Nine Palms, CA       1983       48       310       1,247       120       310       1,367       1,677       (193 )     1,484       1,479  
Twin Lake Towers
    High Rise     Oct-99     Westmont, IL       1969       399       2,511       19,878       4,861       2,511       24,739       27,250       (10,605 )     16,644       11,461  
Twin Lakes Apartments
    Garden     Apr-00     Palm Harbor, FL       1986       262       2,024       12,785       1,401       2,024       14,186       16,210       (4,505 )     11,706       6,531  
University Woods II
    Garden     Oct-02     Fairborn, OH       1983       42       340       2,054       38       340       2,091       2,432       (688 )     1,744       1,226  
Van Nuys Apartments
    High Rise     Mar-02     Los Angeles, CA       1981       299       4,337       16,377       688       4,337       17,065       21,402       (1,809 )     19,593       17,302  
Vantage Pointe
    Mid Rise     Aug-02     Swampscott, MA       1987       96       4,749       10,089       529       4,749       10,618       15,367       (1,333 )     14,034       9,106  
Ventura Landing
    Garden     Oct-02     Orlando, FL       1973       184       830       8,279       480       830       8,759       9,589       (3,683 )     5,906       3,871  
Verandahs at Hunt Club
    Garden     Jul-02     Apopka, FL       1985       210       1,877       8,400       307       1,877       8,708       10,585       (382 )     10,203       7,315  
Versailles
    Garden     Apr-02     Fort Wayne, IN       1969       156       370       6,117       366       370       6,483       6,854       (2,158 )     4,696       2,308  
Victory Square
    Garden     Mar-02     Canton, OH       1975       81       215       889       162       215       1,052       1,267       (175 )     1,091       920  
Villa Del Sol
    Garden     Mar-02     Norwalk, CA       1972       120       7,294       4,861       804       7,294       5,665       12,959       (709 )     12,249       4,796  
Villa Hermosa Apartments
    Mid Rise     Oct-02     New York, NY       1920       272       1,821       10,307       1,498       1,821       11,805       13,626       (3,175 )     10,451       7,791  
Villa La Paz
    Garden     Jun-98     Sun City, CA       1990       96       573       3,370       487       573       3,857       4,430       (976 )     3,454       2,895  
Villa Nova Apartments
    Garden     Apr-00     Indianapolis, IN       1972       126       628       3,732       865       628       4,597       5,225       (792 )     4,433        
Village Creek at Brookhill
    Garden     Jul-94     Westminster, CO       1987       324       2,446       13,261       2,873       2,446       16,134       18,580       (5,986 )     12,594       13,649  
Village Crossing
    Garden     May-98     W. Palm Beach, FL       1986       189       1,618       9,757       1,439       1,618       11,196       12,814       (3,306 )     9,508       7,000  
Village East
    Garden     Jul-00     Colorado Springs, CO       1972       137       873       5,819       769       873       6,588       7,461       (2,415 )     5,047       2,150  
Village Gardens
    Garden     Oct-99     Fort Collins, CO       1973       141       883       5,996       563       883       6,559       7,442       (2,217 )     5,225       4,061  
Village Green Altamonte Springs
    Garden     Oct-02     Altamonte Springs, FL       1970       164       571       6,577       253       571       6,830       7,402       (2,407 )     4,995       3,284  
Village Grove
    Garden     Mar-02     Corona, CA       1974       104       2,722       5,985       668       2,722       6,652       9,374       (797 )     8,578       3,552  
Village in the Woods
    Garden     Jan-00     Cypress, TX       1983       530       2,172       17,600       2,227       2,172       19,828       22,000       (6,934 )     15,065       12,858  
Village of Pennbrook
    Garden     Oct-98     Levitown, PA       1970       722       5,651       42,902       1,994       5,651       44,897       50,548       (11,598 )     38,951       27,855  
Village, The
    Garden     Jan-00     Barndon, FL       1986       112       572       5,714       630       572       6,344       6,916       (2,107 )     4,809       3,377  
Villas (VA)
    Garden     Mar-00     Portsmouth, VA       1977       196       689       4,519       496       689       5,015       5,704       (1,852 )     3,853       2,522  
Villas at Little Turtle
    Garden     Sep-00     Westerville, OH       1985       160       1,330       5,513       705       1,330       6,218       7,548       (1,100 )     6,448       5,701  

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Table of Contents

                                                                                                             
                                December 31, 2004    
                        (2)            
                        Initial Cost   (3)       Total Cost    
        (1)                   Cost Capitalized       Net of    
    Property   Date       Year   Number       Buildings and   Subsequent to       Buildings and       Accumulated   Accumulated    
Property Name   Type   Consolidated   Location   Built   of Units   Land   Improvements   Acquisition   Land   Improvements   Total   Depreciation   Depreciation   Encumbrances
                                                         
Villas at Park La Brea, The
    Garden     Mar-02     Los Angeles, CA       2002       250       8,621       48,871       175       8,621       49,045       57,666       (3,359 )     54,307       37,431  
Vinings Peak
    Garden     Jan-00     Atlanta, GA       1980       280       1,823       15,110       1,048       1,823       16,158       17,980       (6,210 )     11,771       8,084  
Vista Del Lagos
    Garden     Dec-97     Chandler, AZ       1986       200       916       4,840       1,423       916       6,263       7,179       (1,880 )     5,299       3,670  
Vista Park Chino
    Garden     Mar-02     Chino, CA       1983       40       380       1,521       160       380       1,681       2,061       (238 )     1,823       1,700  
Vista Ventana
    Garden     May-98     Phoenix, AZ       1982       275       1,850       10,869       1,230       1,850       12,099       13,949       (3,651 )     10,299       5,365  
Walden Village
    Garden     May-99     Clarkston, GA       1972       372       2,045       11,498       3,454       2,045       14,952       16,997       (3,980 )     13,017       10,141  
Walnut Springs
    Garden     Dec-96     San Antonio, TX       1983       224       969       5,119       1,633       969       6,752       7,721       (2,769 )     4,952       3,527  
Wasco Arms
    Garden     Mar-02     Wasco, CA       1982       78       625       2,519       359       625       2,879       3,504       (434 )     3,069       3,136  
Washington Square West
    Mid-Rise     Sep-04     Philadelphia, PA       1982       132       607       10,847       232       607       11,079       11,686       (3,240 )     8,446       5,412  
Waterford Apartments, The
    Garden     Nov-96     Houston, TX       1984       312       983       6,801       2,330       983       9,131       10,114       (2,108 )     8,006       4,710  
Waterford Village
    Garden     Aug-02     Bridgewater, MA       1971       588       28,585       28,102       1,185       28,585       29,286       57,871       (4,712 )     53,159       35,321  
Waterways Village
    Garden     Jun-97     Aventura, FL       1991       180       4,504       11,064       1,933       4,504       12,996       17,500       (3,931 )     13,569       9,957  
Weatherly
    Garden     Oct-98     Stone Mountain, GA       1984       224       1,275       7,296       1,252       1,275       8,548       9,823       (2,346 )     7,476       4,378  
Webb Bridge Crossing
    Garden     Sep-04     Alpharetta, GA       1985       164       962       6,278       49       962       6,326       7,288       (1,609 )     5,679       5,594  
West 135th Street
    Mid Rise     Dec-97     New York, NY       1979       198       1,212       8,031       3,047       1,212       11,077       12,290       (3,457 )     8,833       7,925  
West Lafayette
    Garden     Mar-04     West Lafayette, OH       1979       49       187       1,115       29       187       1,144       1,331       (131 )     1,201       896  
West Lake Arms Apartments
    Garden     Oct-99     Indianapolis, IN       1977       1,381       3,684       27,139       5,850       3,684       32,989       36,672       (8,377 )     28,295       11,749  
West Winds
    Garden     Oct-02     Orlando, FL       1985       272       1,923       12,003       520       1,923       12,523       14,445       (1,472 )     12,973       7,230  
West Winds
    Garden     Mar-04     Columbia, SC       1981       100       467       4,002       320       467       4,323       4,789       (1,136 )     3,653       2,251  
West Woods
    Garden     Oct-00     Annapolis, MD       1981       57       1,581       1,891       529       1,581       2,419       4,000       (448 )     3,552       1,760  
Westgate
    Garden     Oct-99     Houston, TX       1971       313       1,926       11,255       1,747       1,926       13,002       14,927       (2,924 )     12,003       7,261  
Westway Village Apartments
    Garden     May-98     Houston, TX       1979       326       2,921       11,384       933       2,921       12,318       15,239       (3,999 )     11,240       8,319  
Westwood Terrace
    Mid Rise     Mar-02     Moline, IL       1976       97       840       3,242       212       840       3,454       4,294       (372 )     3,922       2,323  
Wexford Village
    Garden     Aug-02     Worcester, MA       1974       264       6,339       17,939       559       6,339       18,497       24,836       (2,333 )     22,503       14,690  
Whispering Pines
    Garden     Oct-98     Madison, WI       1986       136       934       3,587       1,031       934       4,618       5,552       (1,426 )     4,125       3,652  
White Cliff
    Garden     Mar-02     Lincoln Heights, OH       1977       72       240       938       183       240       1,121       1,361       (184 )     1,177       1,028  
Wickertree
    Garden     Oct-97     Phoenix, AZ       1983       226       1,225       6,923       1,148       1,225       8,071       9,296       (2,328 )     6,968       3,343  
Wickford
    Garden     Mar-04     Henderson, NC       1983       44       251       946       7       251       952       1,204       (147 )     1,056       786  
Wilderness Trail
    High Rise     Mar-02     Pineville, KY       1983       124       1,010       4,048       192       1,010       4,240       5,250       (407 )     4,843       4,904  
Wilkes Towers
    High Rise     Mar-02     North Wilkesboro, NC       1981       72       410       1,680       204       410       1,884       2,294       (215 )     2,079       1,819  
Williams Cove
    Garden     Jul-94     Irving, TX       1984       260       1,227       6,659       1,835       1,227       8,494       9,721       (3,288 )     6,433       4,708  
Williamsburg
    Garden     May-98     Rolling Meadows, IL       1985       329       2,717       15,437       2,862       2,717       18,299       21,016       (5,376 )     15,640       10,510  
Williamsburg Apartments
    Garden     Oct-99     Indianapolis, IN       1974       460       1,680       16,237       1,978       1,680       18,215       19,894       (9,260 )     10,635       8,304  
Williamsburg Manor
    Garden     Apr-00     Cary, NC       1972       183       1,449       8,265       873       1,449       9,138       10,586       (2,955 )     7,632       4,150  
Williamsburg on the Wabash
    Garden     Dec-99     West Lafayette, IN       1967       473       2,835       17,185       1,805       2,835       18,991       21,826       (3,631 )     18,195       10,928  
Willow Park on Lake Adelaide
    Garden     Oct-99     Altamonte Springs, FL       1972       185       902       7,813       1,045       902       8,857       9,759       (3,917 )     5,842       3,512  
Willowick
    Garden     Oct-99     Greenville, SC       1974       180       539       4,785       524       539       5,309       5,848       (2,283 )     3,565       2,795  
Willowwood
    Garden     Mar-02     North Hollywood, CA       1984       19       1,051       840       42       1,051       882       1,933       (95 )     1,838       1,115  
Winchester Village Apartments
    Garden     Nov-00     Indianapolis, IN       1966       96       104       2,234       434       104       2,669       2,773       (420 )     2,352        
Winddrift (IN)
    Garden     Oct-00     Indianapolis, IN       1980       166       1,281       3,916       1,152       1,281       5,067       6,348       (1,041 )     5,307       4,854  
Windmere
    Garden     Jan-03     Houston, TX       1982       257       2,194       10,806       262       2,194       11,068       13,262       (2,547 )     10,716       5,612  
Windridge
    Garden     May-98     San Antonio, TX       1983       276       1,406       8,272       978       1,406       9,250       10,656       (2,942 )     7,714       5,240  
Windrift (CA)
    Garden     Mar-01     Oceanside, CA       1987       404       25,397       17,547       1,571       25,397       19,119       44,515       (5,239 )     39,276       28,999  
Windrift (FL)
    Garden     Oct-00     Orlando, FL       1987       288       3,737       10,046       1,152       3,737       11,197       14,934       (2,193 )     12,741       7,911  
Windsor at South Square
    Garden     Oct-99     Durham, NC       1972       230       1,331       8,352       1,019       1,331       9,371       10,701       (2,597 )     8,104       4,656  
Windsor Crossing
    Garden     Mar-00     Newport News, VA       1978       156       306       2,110       463       306       2,573       2,879       (1,189 )     1,690       3,216  
Windsor Hills
    Garden     Oct-99     Blacksburg, VA       1970       300       1,608       10,526       1,308       1,608       11,835       13,443       (3,641 )     9,802       6,148  
Windsor Landing
    Garden     Oct-97     Morrow, GA       1991       200       1,641       9,303       1,063       1,641       10,366       12,007       (2,970 )     9,038       4,395  
Windsor Park
    Garden     Mar-01     Woodbridge, VA       1987       220       4,289       16,028       718       4,289       16,746       21,035       (2,907 )     18,127       13,758  
Windward at the Villages
    Garden     Oct-97     W. Palm Beach, FL       1988       196       1,595       9,079       2,116       1,595       11,196       12,791       (3,161 )     9,629       3,135  

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                                December 31, 2004    
                        (2)            
                        Initial Cost   (3)       Total Cost    
        (1)                   Cost Capitalized       Net of    
    Property   Date       Year   Number       Buildings and   Subsequent to       Buildings and       Accumulated   Accumulated    
Property Name   Type   Consolidated   Location   Built   of Units   Land   Improvements   Acquisition   Land   Improvements   Total   Depreciation   Depreciation   Encumbrances
                                                         
Winter Gardens
    High Rise     Mar-04     St Louis, MO       1920       112       300       2,862       2,832       300       5,694       5,994       (65 )     5,929       4,050  
Wood Lake
    Garden     Jan-00     Atlanta, GA       1983       220       1,394       13,096       927       1,394       14,024       15,418       (5,448 )     9,970       7,158  
Woodcreek
    Garden     Oct-02     Mesa, AZ       1985       432       2,262       16,384       891       2,262       17,275       19,536       (6,846 )     12,690       11,558  
Woodcrest
    Garden     Dec-97     Odessa, TX       1972       80       41       229       83       41       312       353       (303 )     50       520  
Woodhaven
    Garden     Apr-00     Chesapeake, VA       1968       208       886       6,193       742       886       6,934       7,821       (1,335 )     6,485       5,164  
Woodhill
    Garden     Dec-00     Denton, TX       1984       352       1,530       10,477       1,245       1,530       11,722       13,252       (3,981 )     9,271       8,473  
Woodhollow
    Garden     Oct-97     Austin, TX       1974       108       658       3,728       842       658       4,571       5,229       (1,395 )     3,833       1,688  
Woodland Ridge
    Garden     Dec-00     Irving, TX       1984       130       600       3,763       293       600       4,056       4,656       (1,509 )     3,147       2,817  
Woodland Village I
    Garden     Oct-99     Columbia, SC       1970       308       1,479       11,805       1,609       1,479       13,414       14,893       (4,926 )     9,967       7,383  
Woodlands (MI)
    Garden     Dec-99     Battle Creek, MI       1987       76       496       3,555       291       496       3,846       4,342       (682 )     3,660       1,799  
Woodlands of Tyler
    Garden     Jul-94     Tyler, TX       1984       256       1,029       5,567       1,762       1,029       7,329       8,358       (2,867 )     5,491       4,233  
Woodmere
    Garden     Apr-00     Cincinnati, OH       1971       150       583       5,803       1,090       583       6,893       7,476       (2,318 )     5,159        
Woodridge
    Garden     Mar-04     Galloway, OH       1986       70       960       1,202       81       960       1,284       2,243       (96 )     2,147       1,305  
Woods Edge
    Garden     Nov-04     Indianapolis, IN       1981       190       503       6,238       42       503       6,280       6,783       (423 )     6,360       4,897  
Woods of Burnsville
    Garden     Nov-04     Burnsville, MN       1984       400       1,378       19,917       181       1,378       20,098       21,476       (5,604 )     15,872       16,580  
Woods of Inverness
    Garden     Oct-99     Houston, TX       1983       272       2,024       11,669       1,222       2,024       12,891       14,915       (4,916 )     9,999       4,692  
Woodshire
    Garden     Mar-00     Virginia Beach, VA       1972       288       961       5,549       1,285       961       6,834       7,795       (1,510 )     6,285       7,335  
Woodside Villas
    Garden     Mar-04     Arcadia, FL       1983       34       52       919       34       52       953       1,006       (128 )     877       609  
Wyckford Commons
    Garden     Apr-00     Indianapolis, IN       1973       248       1,799       7,775       1,496       1,799       9,271       11,070       (4,774 )     6,295       4,852  
Wyntre Brook Apartments
    Garden     Oct-99     West Chester, PA       1976       212       972       9,070       10,103       972       19,173       20,146       (2,778 )     17,368       10,210  
Yadkin
    Mid-Rise     Mar-04     Salisbury, NC       1912       67       242       1,982       75       242       2,057       2,299       (610 )     1,689       1,861  
Yorktown II Apartments
    High Rise     Dec-99     Lombard, IL       1973       368       2,980       18,218       1,679       2,980       19,897       22,877       (2,369 )     20,508       16,438  
Yorktree
    Garden     Oct-97     Carolstream, IL       1972       293       1,968       11,457       2,825       1,968       14,282       16,250       (4,177 )     12,073       5,350  
Other(4)
                                        1,125       2,044       7       1,133       2,043       3,176       (291 )     2,886        
                           
                                  167,988       2,211,101       7,157,674       1,430,983       2,211,109       8,588,649       10,799,758       (2,014,712 )     8,785,046       5,604,653  
                           
 
(1)  Date we acquired the property or first consolidated the partnership which owns the property.
 
(2)  Initial cost includes the tendering costs to acquire the minority interest share of our consolidated real estate partnerships.
 
(3)  Costs capitalized subsequent to acquisition includes costs capitalized since acquisition or first consolidation of the partnership/property.
 
(4)  Other includes land parcels and commercial properties.

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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
REAL ESTATE AND ACCUMULATED DEPRECIATION
For the Years Ended December 31, 2004, 2003 and 2002
                             
    2004   2003   2002
             
    (In thousands)
Real Estate
                       
 
Balance at beginning of year
  $ 9,846,955     $ 9,458,246     $ 7,293,939  
 
Additions during the year:
                       
   
Newly consolidated assets(1)
    277,580       262,054       1,053,860  
   
Acquisitions
    393,088       192,365       1,728,558  
   
Foreclosures
    2,022             32,371  
   
Capital expenditures
    301,937       245,528       270,096  
 
Deductions during the year:
                       
   
Casualty write-offs
    (13,869 )     (15,404 )     (5,144 )
   
Assets held for sale reclassification(2)
    (7,955 )     6,275       (366,235 )
   
Sales(3)
          (302,109 )     (549,199 )
                   
 
Balance at end of year
  $ 10,799,758     $ 9,846,955     $ 9,458,246  
                   
Accumulated Depreciation
                       
 
Balance at beginning of year
  $ 1,701,512     $ 1,489,213     $ 1,390,658  
 
Additions during the year:
                       
   
Depreciation
    346,156       304,537       244,989  
   
Newly consolidated assets(1)
    (31,209 )     (20,960 )     122,936  
 
Deductions during the year:
                       
   
Casualty write-offs
    (4,038 )     (7,372 )     (1,473 )
   
Assets held for sale reclassification(2)
    2,291       (368 )     (51,407 )
   
Sales(3)
          (63,538 )     (216,490 )
                   
 
Balance at end of year
  $ 2,014,712     $ 1,701,512     $ 1,489,213  
                   
 
(1)  Includes acquisition of limited partnership interests and related activity.
 
(2)  Represents activity on properties that have been sold or classified as held for sale that is included in the line items above.
 
(3)  Effective in fourth quarter 2003 and on a prospective basis, all properties sold were classified as held for sale and, therefore, reclassified in the prior period balances.

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INDEX TO EXHIBITS
         
Exhibit No.   Description
     
  2 .1   Agreement and Plan of Merger, dated as of December 3, 2001, by and among Apartment Investment and Management Company, Casden Properties, Inc. and XYZ Holdings LLC (Exhibit 2.1 to Aimco’s Current Report on Form 8-K, filed December 6, 2001, is incorporated herein by this reference)
  3 .1   Charter
  3 .2   Bylaws (Exhibit 3.2 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2001, 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 ended September 30, 1998, is incorporated herein by this reference)
  10 .2   First Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of November 6, 1998 (Exhibit 10.9 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended 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 year ended December 31 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 ended 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 ended 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 ended 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 ended 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 (Exhibit 10.9 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 1999, is incorporated herein by reference)
  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 (Exhibit 10.10 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 1999, is incorporated hereby by reference)
  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 (Exhibit 10.11 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 1999, is incorporated herein by reference)
  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 (Exhibit 10.12 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 1999, is incorporated herein by reference)
  10 .13   Twelfth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of April 19, 2000 (Exhibit 10.2 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2000, is incorporated herein by this reference)


Table of Contents

         
Exhibit No.   Description
     
  10 .14   Thirteenth Amendment to the Third and Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of August 7, 2000 (Exhibit 10.1 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2000, is incorporated herein by this reference)
  10 .15   Fourteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 12, 2000 (Exhibit 10.1 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended September 30, 2000, is incorporated herein by this reference)
  10 .16   Fifteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 15, 2000 (Exhibit 10.2 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended September 30, 2000, is incorporated herein by this reference)
  10 .17   Sixteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 15, 2000 (Exhibit 10.3 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended September 30, 2000, is incorporated herein by this reference)
  10 .18   Seventeenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of November 10, 2000 (Exhibit 10.4 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended September 30, 2000, is incorporated herein by this reference)
  10 .19   Eighteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of November 16, 2000 (Exhibit 10.19 to Aimco’s Annual Report on Form 10-K/A for the fiscal year 2000, is incorporated herein by this reference)
  10 .20   Nineteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of February 28, 2001 (Exhibit 10.20 to Aimco’s Annual Report on Form 10-K/A for the fiscal year 2000, is incorporated herein by this reference)
  10 .21   Twentieth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 19, 2001 (Exhibit 10.21 to Aimco’s Annual Report on Form 10-K/A for the fiscal year 2000, is incorporated herein by this reference)
  10 .22   Twenty-first Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of May 10, 2001 (Exhibit 10.1 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference)
  10 .23   Twenty-second Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of June 20, 2001 (Exhibit 10.2 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference)
  10 .24   Twenty-third Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 20, 2001 (Exhibit 10.3 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference)
  10 .25   Twenty-fourth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of August 1, 2001 (Exhibit 10.4 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference)
  10 .26   Twenty-fifth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 2, 2001 (Exhibit 10.5 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference)
  10 .27   Twenty-sixth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 2, 2001 (Exhibit 10.6 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference)


Table of Contents

         
Exhibit No.   Description
     
  10 .28   Twenty-seventh Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 2, 2001 (Exhibit 10.7 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended June 30, 2001, is incorporated herein by this reference)
  10 .29   Twenty-eighth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 25, 2002 (Exhibit 10.1 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended March 31, 2002, is incorporated herein by this reference)
  10 .30   Twenty-ninth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 11, 2002 (Exhibit 10.2 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended March 31, 2002, is incorporated herein by this reference)
  10 .31   Thirtieth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of April 1, 2002 (Exhibit 10.3 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended March 31, 2002, is incorporated herein by this reference)
  10 .32   Thirty-first Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of April 10, 2002 (Exhibit 10.4 to the Quarterly Report on Form 10-Q of AIMCO Properties, L.P. for the quarterly period ended March 31, 2002, is incorporated herein by this reference)
  10 .33   Thirty-second Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of May 14, 2002 (Exhibit 10.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2002, is incorporated herein by this reference)
  10 .34   Thirty-third Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of November 27, 2002 (Exhibit 10.34 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 2002, is incorporated herein by this reference)
  10 .35   Thirty-fourth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of April 29, 2003 (Exhibit 10.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003, is incorporated herein by this reference)
  10 .36   Thirty-fifth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of April 30, 2003 (Exhibit 10.2 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003, is incorporated herein by this reference)
  10 .37   Thirty-sixth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 16, 2003 (Exhibit 10.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2003, is incorporated herein by this reference)
  10 .38   Thirty-seventh Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 24, 2003 (Exhibit 10.2 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2003, is incorporated herein by this reference)
  10 .39   Thirty-eighth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of January 30, 2004 (Exhibit 10.39 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 2003, is incorporated herein by this reference)
  10 .40   Thirty-ninth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 17, 2004 (Exhibit 10.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004, is incorporated herein by this reference)
  10 .41   Fortieth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of June 18, 2004 (Exhibit 10.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, is incorporated herein by this reference)
  10 .42   Forty-First Amendment to Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 24, 2004 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report on Form 8-K dated September 24, 2004, is incorporated herein by this reference)


Table of Contents

         
Exhibit No.   Description
     
  10 .43   Forty-Second Amendment to Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 30, 2004 (Exhibit 4.2 to AIMCO Properties, L.P.’s Current Report on Form 8-K dated September 24, 2004, is incorporated herein by this reference)
  10 .44   Forty-Third Amendment to Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of September 30, 2004 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report on Form 8-K dated September 29, 2004, is incorporated herein by this reference)
  10 .45   Forty-fourth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of December 21, 2004 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report on Form 8-K dated September 29, 2004, is incorporated herein by this reference)
  10 .46   Forty-fifth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of February 18, 2005 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report on Form 8-K dated February 18, 2005, is incorporated herein by this reference)
  10 .47   Forty-sixth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of February 28, 2005 (Exhibit 4.1 to AIMCO Properties, L.P.’s Current Report on Form 8-K dated February 28, 2005, is incorporated herein by this reference)
  10 .48   Amended and Restated Secured Credit Agreement, dated as of November 2, 2004, by and among Aimco, AIMCO Properties, L.P., AIMCO/Bethesda Holdings, Inc., and NHP Management Company as the borrowers and Bank of America, N.A., Keybank National Association, and the Lenders listed therein (Exhibit 4.1 to Aimco’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004, is incorporated herein by this reference)
  10 .49   Master Indemnification Agreement, dated December 3, 2001, by and among Apartment Investment and Management Company, AIMCO Properties, L.P., XYZ Holdings LLC, and the other parties signatory thereto (Exhibit 2.3 to Aimco’s Current Report on Form 8-K, filed December 6, 2001, is incorporated herein by this reference)
  10 .50   Tax Indemnification and Contest Agreement, dated December 3, 2001, by and among Apartment Investment and Management Company, National Partnership Investments, Corp., and XYZ Holdings LLC and the other parties signatory thereto (Exhibit 2.4 to Aimco’s Current Report on Form 8-K, filed December 6, 2001, is incorporated herein by this reference)
  10 .51   Limited Liability Company Agreement of AIMCO JV Portfolio #1, LLC dated as of December 30, 2003 by and among AIMCO BRE I, LLC, AIMCO BRE II, LLC and SRV-AJVP#1, LLC (Exhibit 10.54 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 2003, is incorporated herein by this reference)
  10 .52   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 year ended December 31, 1994, is incorporated herein by this reference)*
  10 .53   Apartment Investment and Management Company 1997 Stock Award and Incentive Plan (October 1999) (Exhibit 10.26 to Aimco’s Annual Report on Form 10-K for the year ended December 31, 1999, is incorporated herein by this reference)*
  10 .54   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 ended September 30, 1997, is incorporated herein by this reference)*
  10 .55   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 year ended December 31, 1998, is incorporated herein by this reference)*
  10 .56   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 .57   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 year ended December 31, 1997, is incorporated herein by this reference)*
  21 .1   List of Subsidiaries


Table of Contents

         
Exhibit No.   Description
     
  23 .1   Consent of Independent Registered Public Accounting Firm
  31 .1   Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  31 .2   Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  32 .1   Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  32 .2   Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  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.
 
(2)  The file reference number for all exhibits is 001-13232, and all such exhibits remain available pursuant to the Records Control Schedule of the Securities and Exchange Commission.
  *    Management contract or compensatory plan or arrangement