Apartment Investment and Management Company Announces Fourth Quarter 2005 Results

DENVER, Feb. 9 /PRNewswire-FirstCall/ -- SUMMARY FINANCIAL RESULTS: Apartment Investment and Management Company (Aimco) announced fourth quarter 2005 results including:

* Net income was $15.0 million, compared with $72.3 million in the fourth quarter 2004. The $57.3 million decrease in net income was primarily a result of $53.4 million higher gains on property sales in 2004, related to both consolidated and unconsolidated properties. Earnings per share (EPS) was a loss of $0.07 on a diluted basis, compared with earnings of $0.53 in the fourth quarter 2004. * Funds from operations (diluted) (FFO) is a non-GAAP financial measure defined in the glossary in the Supplemental Information (the Glossary). FFO calculated in accordance with the definition prescribed by the National Association of Real Estate Investment Trusts (NAREIT) was $57.3 million, or $0.60 per share, compared with $67.6 million, or $0.72 per share, in the fourth quarter 2004. FFO before impairment and preferred redemption charges was $57.2 million, also $0.60 per share. FFO includes a charge of $0.09 per share related to damage caused by Hurricane Wilma, which increased from the November 2005 estimate of $0.08 per share. * Adjusted funds from operations (diluted) (AFFO; a non-GAAP financial measure defined in the Glossary) was $38.8 million, or $0.41 per share, compared with $47.0 million, or $0.50 per share, in the fourth quarter 2004. AFFO includes deductions of $0.19 and $0.22 per share for capital replacement expenditures in the fourth quarter 2005 and fourth quarter 2004, respectively. Diluted Per Share Results FOURTH QUARTER FULL YEAR 2005 2004 2005 2004 Earnings (loss) - EPS ($ 0.07) $ 0.53 ($ 0.18) $ 1.88 Funds from operations - FFO $ 0.60 $ 0.72 $ 2.48 $ 2.79 FFO before impairment and preferred redemption charges $ 0.60 $ 0.72 $ 2.59 $ 2.93 Adjusted funds from operations - AFFO $ 0.41 $ 0.50 $ 1.74 $ 2.19 Management Comments

Chairman and Chief Executive Officer Terry Considine comments: "Aimco enjoyed a successful fourth quarter on several fronts:

* We served more customers, enjoying 94.6% occupancy for the quarter and realizing higher rents, which together produced a "Same Store" growth rate of 8.7%; * We received final approval to increase the density at Springhill Lake by 2,901 units, an increase from 2,899 to 5,800; * Aimco Capital earned record revenues and income; * We are delighted to have successfully resolved the SEC investigation.

We have a lot of momentum as we begin 2006, and I look forward to the year ahead."

Chief Financial Officer Tom Herzog adds: "Our mid-point 2006 FFO projection of $2.89 is up 7% over 2005, after adjusting 2005 by $0.22 for impairment, preferred redemption and hurricane charges. Same Store NOI is projected to increase 7%, which assumes a 5.5% increase in revenue and a 3.5% increase in expenses. Projected revenue growth is driven primarily by (i) higher average occupancy, up 2.3% from the 2005 average; and (ii) rental rate increases, up 3.5% from 2005. Expenses are expected to rise with inflationary effects on salaries and services as well as higher rates for utilities, taxes & insurance, partially offset by lower year-over-year unit turnover costs." Please refer to the 2006 Outlook on page 12 for further details.

Business Components - Conventional Operations and Aimco Capital

CONVENTIONAL REAL ESTATE OPERATIONS -- Conventional real estate operations include Aimco's diversified portfolio of market rate apartment communities. At the end of the fourth quarter 2005, this portfolio had 526 properties with 151,613 units in which Aimco had a weighted average ownership of 81%. During the fourth quarter 2005, conventional real estate operations generated net operating income of $159.9 million.

"Same Store" Results

The Same Store portfolio is a sub-set of total conventional properties (see the Glossary). In the fourth quarter 2005, the Same Store portfolio included 464 communities with 109,136 effective units based on Aimco's weighted average ownership of 82% (see Supplemental Schedules 6a through 7).

Comparing Same Store results in the fourth quarter 2005 with the fourth quarter 2004, total revenue increased $17.2 million, or 7.0%. The increase in revenue was generated by: higher occupancy, up 370 basis points from 90.9% to 94.6%; higher average rent, up $17 per unit, or 2.3%, from $752 per unit to $769 per unit; and lower bad debt, down $1.9 million. Same Store expenses of $114.1 million increased by $5.4 million, or 5.0%, compared with the fourth quarter 2004. Increased expenses were primarily due to: $3.4 million increased utility costs driven by higher natural gas rates up 45%, as well as higher water and electricity rates; $1.4 million increased payroll and benefits; and $0.8 million increased turnover costs related to a greater number of turned units; all partially offset by lower repairs and maintenance. Same Store portfolio net operating income was $147.5 million for the fourth quarter 2005, up 8.7% from the fourth quarter 2004.

FOURTH QUARTER Year-over-year Sequential 2005 2004 Variance 3rd Qtr Variance Same Store Operating Measures (1) Average Physical Occupancy 94.6% 90.9% 370 bp 93.3% 130 bp Average Rent Per Unit $ 769 $ 752 2.3% $767 0.3% Total Same Store Revenue $ 261.6 $ 244.4 7.0% $ 258.2 1.3% (2) Expenses (114.1) (108.7) 5.0% (117.0) -2.4% NOI ($mm) $ 147.5 $ 135.7 8.7% $ 141.2 4.5% FULL YEAR 2005 2004 Variance Same Store Operating Measures (1) Average Physical Occupancy 92.2% 89.3% 290 bp Average Rent Per Unit $ 762 $ 746 2.1% Total Same Store Revenue $ 999.4 $ 941.7 6.1% (2) Expenses (443.1) (418.2) 6.0% NOI ($mm) $ 556.3 $ 523.5 6.3% (1) As of the first quarter 2005, Aimco's reported occupancy represents the weighted average daily occupancy for the quarter. Comparable prior periods have been calculated accordingly. Previously, reported occupancy was as of the end of the month and average occupancy for a quarter was the arithmetic average of the three, month-end occupancies. (2) In the fourth quarter 2005, Same Store expenses included a $367,000 charge related to Hurricane Wilma. Deducting the effect of this charge, Same Store expenses and NOI would have shown a variance 4Q05 versus 4Q04 of 4.7% and 8.9%, respectively.

Comparing Same Store results on a sequential basis, total revenue increased $3.4 million in the fourth quarter 2005 compared with the third quarter 2005, driven primarily by a 130 basis point increase in occupancy and a 0.3% increase in rental rate. Expenses decreased $2.9 million, primarily due to lower unit turnover costs due to stable occupancy, lower marketing costs and lower property taxes, all partially offset by higher utilities costs. Net operating income increased $6.3 million, or 4.5%, on a sequential basis.

Comparing the full year 2005 with 2004, Same Store revenue increased $57.7 million, or 6.1%, from $941.7 million to $999.4 million reflecting a 290 basis point increase in occupancy and a 2.1% increase in rental rates. Same Store expenses increased $24.9 million or 6.0% primarily due to higher personnel, utilities and property tax expenses. Same Store NOI increased $32.8 million, or 6.3%.

CORE PROPERTIES -- Core properties (defined in the Glossary) offer the potential for long-term growth at higher rates of return. In the fourth quarter 2005, Aimco reduced its core markets from 38 to 27, with core operations focused in markets located predominantly in coastal states as well as the Rocky Mountain region and Chicago. Markets moved from core to non-core include certain Texas and Midwest markets where the average four-year growth rate is projected below the core average of 3.3%. In the fourth quarter 2005, core properties accounted for 72% of conventional operations net operating income. The core properties portfolio had better operating characteristics than non-core properties (defined in the Glossary). Core property average rent was $974 per month and average occupancy was 94.1% compared with non-core, which had average monthly rent of $612 and average occupancy of 93.2%.

UNIVERSITY COMMUNITIES -- Aimco's University Communities portfolio includes 15 properties with 4,443 units after completing the sale of five properties in the fourth quarter. Aimco seeks to own properties in close proximity to major universities. In the fourth quarter 2005, University Communities had average occupancy of 95.7% and average rent of $733.

AIMCO CAPITAL -- Aimco is among the largest owners and operators of affordable properties in the United States. Aimco Capital has been organized to oversee Aimco's affordable property operations, asset management and transactional activities, and is led by a management team dedicated to this sector.

Affordable Property Operations

At the end of the fourth quarter 2005, Aimco's owned affordable portfolio included 357 properties with 42,204 units in which Aimco had an average ownership of 40%. During the fourth quarter 2005, affordable property operations generated net operating income of $18.2 million and property management net operating income of $2.0 million. On a year-over-year basis, fourth quarter average month-end occupancy for the owned and managed portfolio increased 170 basis points from 94.8% to 96.5%, and average rent per unit increased 4.1% from $655 to $682 per unit.

Affordable Asset Management and Transactional Activity

Aimco Capital generates activity fees from transactions (including tax credit redevelopments, syndications, dispositions, refinancings and partnership promotes), and asset management income from the financial management of affordable real estate partnerships. Aimco Capital activity fee and asset management net operating income was $8.3 million in the fourth quarter 2005 compared with $3.9 million in the fourth quarter 2004. For the full year 2005, Aimco Capital generated net operating income of $72.2 million from property operations, $10.3 million from property management and $22.6 from activity and asset management compared with $81.1 million, $16.3 million and $18.9 million, respectively, in 2004. Lower net operating income from property operations and property management in 2005 compared with 2004 is primarily due to the sale of 47 affordable properties during 2005.

Portfolio Management and Redevelopment Activity

Acquisitions -- Aimco did not acquire any properties in the fourth quarter 2005. For the full year 2005, Aimco purchased seven properties including 1,526 units for a total purchase price of $352 million, plus one property for which the purchase price was not disclosed. Acquired properties are located in New York, New Jersey and California and have average rents of $2,068 per month. The Palazzo East property located in the Mid-Wilshire area of Los Angeles continues to lease-up and reached 79% occupancy at the end of January. See Supplemental Schedule 8 for additional information on acquisition activity.

During the fourth quarter 2005, Aimco also purchased for an aggregate of $3.6 million additional limited partnership interests in 30 partnerships that own 91 properties. For 2005, Aimco purchased for an aggregate of $52.7 million limited partnership interests in 84 partnerships that own 153 properties.

Dispositions -- Non-core sales: Aimco regularly reviews its portfolio to identify properties that do not meet its long-term investment criteria and are typically located in markets that Aimco seeks to exit. These properties are considered non-core and Aimco seeks to hold them over the intermediate term.

In the fourth quarter 2005, Aimco sold 39 non-core conventional properties and 14 affordable properties with 8,618 and 2,146 units, respectively, for $437 million in gross proceeds (Aimco share $323 million). Aimco's share of net proceeds after repayment of existing property debt and transaction costs was $131 million. For the year 2005, Aimco sold 71 conventional properties and 47 affordable properties for gross proceeds of $960 million (Aimco share $726 million) and exited nine markets. Since identifying non-core properties in January 2003, Aimco has sold 190 non-core conventional properties for $1.9 billion in gross proceeds and reduced the number of conventional markets from nearly 100 to 59, and Aimco Capital has sold 140 non-core affordable properties for gross proceeds of $608 million. See Supplemental Schedule 8 for additional information on disposition activity.

Gain on Dispositions -- Aimco's property dispositions resulted in total gains on dispositions of real estate (including gains related to sales of unconsolidated entities and other and gains within discontinued operations net of related taxes), of $26.3 million for the fourth quarter 2005, compared with gains of $78.6 million for the fourth quarter 2004. For the year 2005, net gains totaled $117.4 million compared with 2004 at $302.6 million.

REDEVELOPMENT ACTIVITY -- Aimco continues to expand its redevelopment activity. At year-end, Aimco's Redevelopment and Construction Services groups had 59 projects in various stages of redevelopment, including 37 conventional projects and 22 affordable projects. During the fourth quarter 2005, redevelopment expenditures totaled $63.0 million (Aimco share $41.8 million) as Aimco completed nine new conventional projects and initiated four new conventional projects. During 2005, Aimco's redevelopment program included the completion of interior upgrades or new construction on 2,188 conventional units of which 1,687 were leased at year-end for an estimated 33% increase in rent from prior rates. Further information on redevelopment projects is provided in Supplemental Schedule 10.

ENTITLEMENT ACTIVITY -- Aimco has additional development opportunities tied to successful property re-entitlement activity. During the fourth quarter, Aimco received final approval for the Springhill Lake conceptual site plan, including increasing the density of the property from 2,899 to 5,800 units. Aimco currently has 27 active entitlement projects.

Additional Financial Information

PROPERTY MANAGEMENT INCOME -- Income from property management is generated from the management of properties in which Aimco has unconsolidated interests. Property management net operating income was $4.2 million in the fourth quarter 2005 compared with $4.0 million in the fourth quarter 2004. For the year 2005 property management income was $17.2 million compared with $22.7 million in 2004. Property management net operating income declined due to sales of unconsolidated properties and increased ownership resulting in consolidation.

ACTIVITY FEE AND ASSET MANAGEMENT INCOME -- Activity fees are generated from transactional activities (including tax credit redevelopments, syndications, dispositions, refinancings and partnership promotes) and are earned primarily by Aimco Capital. Asset management income is earned by Aimco Capital from the financial management of partnerships, rather than property management of day-to-day operations. Activity fee and asset management net operating income from both conventional and Aimco Capital operations was $11.7 million in the fourth quarter 2005 compared with $7.9 million in the fourth quarter 2004. For the year 2005, fee and asset management income was $26.7 million compared with $23.0 million in 2004. The amount of this net operating income may vary each quarter depending upon the nature and timing of transactional activity.

Aimco received $3.1 million in "promote distributions" from an unconsolidated partnership. This income reflects provisions within the partnership agreement that reward the general partner for achieving financial returns to the limited partners in excess of established targets.

INTEREST INCOME -- Interest income was $9.3 million for the fourth quarter 2005, an increase of $2.0 million compared with the fourth quarter 2004 primarily due to increased interest rates received on general partner loans and cash balances. Interest income in the fourth quarter 2005 benefited from transaction related accretion income of $0.7 million versus $1.6 million in the fourth quarter 2004. Interest income was generated primarily from notes receivable totaling $201.0 million at December 31, 2005 and from interest- bearing accounts.

DEBT ACTIVITY -- During the fourth quarter 2005, Aimco closed 31 mortgage loans. Total proceeds were $290.3 million at a weighted average interest rate of 5.97%. After repayment of existing property debt, transaction costs and distributions to limited partners totaling $224.8 million, Aimco's share of net proceeds was $65.5 million. For the year 2005, Aimco closed 91 mortgage loans totaling $971.5 million at an average rate of 5.06%. This included the refinancing of loans totaling $415.2 with prior rates averaging 7.33%.

At year-end 2005, Aimco's corporate debt balance was $617.0 million at an average interest rate of 6.21%. The balance on Aimco's revolving credit facility totaled $217 million, leaving $208.3 million (after $24.7 million in outstanding letters of credit) in available capacity. Please refer to Schedule 5 of the Supplemental Information for more detail on debt activity.

As of December 31, 2005, Aimco had $6.3 billion total consolidated debt outstanding of which $2.0 billion was floating rate. The floating rate debt included $617 million corporate debt, $668 million floating rate secured notes and $726 million of tax-exempt bonds.

INTEREST EXPENSE -- Consolidated interest expense was $95.0 million for the fourth quarter 2005, an increase of $10.5 million from $84.5 million in the fourth quarter 2004. The increase in interest expense was primarily the result of: (i) $8.0 million due to increased interest rates on variable rate debt and increased debt balances; and (ii) $2.5 million due to increased debt balances primarily associated with acquisition and newly consolidated properties. For the year 2005, consolidated interest expense was $367.9 million, up $25.8 million from 2004. The increase was primarily the result of (i) $21.0 million due to increased debt balances (ii) $12.3 million due to increased rates on variable rate debt and other items; partially offset by (iii) $8.5 million higher capitalized interest due to increased redevelopment activity.

G&A -- General and administrative expenses for the fourth quarter 2005 of $27.2 million were up $3.7 million compared with $23.5 million in the fourth quarter 2004. The year-over-year increase is primarily due to increased compensation related to increased staffing levels, recruiting fees and higher health care costs. For the year 2005, general and administrative expenses were $92.9 million compared with $77.5 million in 2004, with the increase similarly the result of increased compensation and benefits.

Outlook

For the first quarter 2006, FFO is forecast in a range from $0.64 to $0.68 per share, before impairment and preferred redemption charges, and AFFO is forecast in a range from $0.47 to $0.51 per share.

For the full year 2006, FFO is forecast in a range from $2.81 to $2.97 per share, before impairment and preferred redemption charges, and AFFO is forecast in a range from $2.18 to $2.34 per share. Please refer to the Outlook Schedule for more detail on the first quarter and full year 2006, which follows the Consolidated Financial Statements in this release.

Dividends on Common Stock

As announced on December 28, 2005, the Aimco Board of Directors declared a quarterly cash dividend of $0.60 per share of Class A Common Stock for the quarter ended December 31, 2005, payable on January 31, 2006 to stockholders of record on December 31, 2005. The dividend represents 146% of AFFO (diluted) and 100% of FFO (diluted), on a per share basis, and a 6.3% annualized yield based on the $37.87 closing price of Aimco's Class A Common Stock on December 30, 2005.

Earnings Conference Call

Please join Aimco management for the Fourth Quarter 2005 earnings conference call to be held Thursday, February 9, 2006 at 2:00 p.m. Eastern Time. You may join the conference call through an Internet audiocast via Aimco's Website at http://www.aimco.com/CorporateInformation/About/Financial/4Q2005 then click on the Webcast link. Alternatively, you may join the conference call via telephone by dialing 800-510-9834, or 617-614-3669 for international callers. Please call approximately five minutes before the conference call is scheduled to begin and indicate that you wish to join the Apartment Investment and Management Company Fourth Quarter 2005 earnings conference call. If you are unable to join the live conference call, you may access the replay for 30 days on Aimco's Website or by dialing 888-286-8010 (617-801-6888 for international callers) and using pass-code 89550417.

Supplemental Information

The Supplemental Information referenced in this release is available at Aimco's Website at the link http://www.aimco.com/CorporateInformation/About/Financial/4Q2005 or by calling Investor Relations at 303-691-4350.

Forward-looking Statements

This earnings release and Supplemental Information contain forward-looking statements, including statements regarding projected results and specifically forecasts of first quarter and full year 2006 results. These forward-looking statements are based on management's judgment as of this date and include certain risks and uncertainties. Risks and uncertainties include, but are not limited to, Aimco's ability to maintain current or meet projected occupancy, rent levels and Same Store results and Aimco's ability to close transactions necessary to generate fee income as anticipated. Actual results may differ materially from those described in these forward-looking statements and, in addition, will be affected by a variety of risks and factors that are beyond the control of Aimco including, without limitation: natural disasters such as hurricanes; national and local economic conditions; the general level of interest rates; energy costs; the terms of governmental regulations that affect Aimco and interpretations of those regulations; the competitive environment in which Aimco operates; 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 fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets; insurance risk; acquisition and development risks, including failure of such acquisitions to perform in accordance with projections; the timing of acquisitions and dispositions; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by Aimco. Readers should carefully review Aimco's financial statements and notes thereto, as well as the risk factors described in Aimco's Annual Report on Form 10-K for the year ended December 31, 2004 and the other documents Aimco files from time to time with the Securities and Exchange Commission. These forward-looking statements reflect management's judgment as of this date, and Aimco assumes no obligation to revise or update them to reflect future events or circumstances.

About Aimco

Aimco is a real estate investment trust headquartered in Denver, Colorado that owns and operates a geographically diversified portfolio of apartment communities through 21 regional operating centers. Aimco, through its subsidiaries, operates 1,370 properties, including approximately 240,000 apartment units, and serves approximately one million residents each year. Aimco's properties are located in 47 states, the District of Columbia and Puerto Rico. Aimco common shares are included in the S&P 500.

GAAP Income Statements Consolidated Statements of Income (in thousands, except per share data) (unaudited) For the Three Months Ended For the Year Ended December 31, December 31, 2005 2004 2005 2004 REVENUES: Rental and other property revenues $380,382 $343,120 $1,459,646 $1,308,815 Property management revenues, primarily from affiliates 5,844 6,429 24,528 32,461 Activity fees and asset management revenues, primarily from affiliates 14,634 10,420 37,349 34,801 Total revenues 400,860 359,969 1,521,523 1,376,077 EXPENSES: Property operating expenses 187,527 167,874 705,505 632,512 Property management expenses 1,629 2,462 7,292 9,789 Activity and asset management expenses 2,932 2,503 10,606 11,802 Depreciation and amortization 105,678 94,556 412,075 340,536 General and administrative expenses 27,221 23,481 92,918 77,501 Other expenses (income), net (816) 4,071 (6,314) 1,870 Total expenses 324,171 294,947 1,222,082 1,074,010 Operating income 76,689 65,022 299,441 302,067 Interest income 9,284 7,268 31,451 32,310 Recovery of losses on notes receivable 13 3,538 1,365 1,765 Interest expense (94,993) (84,514) (367,860) (342,059) Deficit distributions to minority partners (5,942) (3,201) (11,952) (17,865) Equity in earnings (losses) of unconsolidated real estate partnerships (1,267) 1,901 (3,139) (1,768) Impairment losses related to real estate partnerships (4,411) (1,110) (6,120) (3,426) Gain on dispositions of real estate related to unconsolidated entities and other 3,176 27,863 16,489 69,241 Income (loss) before minority interests, discontinued operations and cumulative effect of change in accounting principle (17,451) 16,767 (40,325) 40,265 Minority interests: Minority interest in consolidated real estate partnerships (1,505) 9,304 6,581 16,922 Minority interest in Aimco Operating Partnership, preferred [a] (1,802) (1,950) (7,226) (7,858) Minority interest in Aimco Operating Partnership, common [a] 4,240 167 13,073 4,646 Total minority interests 933 7,521 12,428 13,710 Income (loss) from continuing operations (16,518) 24,288 (27,897) 53,975 Income from discontinued operations, net [b] 31,550 47,987 98,879 213,479 Income before cumulative effect of change in accounting principle 15,032 72,275 70,982 267,454 Cumulative effect of change in accounting principle -- -- -- (3,957) Net income 15,032 72,275 70,982 263,497 Net income attributable to preferred stockholders 21,693 22,497 87,948 88,804 Net income (loss) attributable to common stockholders $(6,661) $49,778 $(16,966) $174,693 Weighted average number of common shares outstanding 94,282 93,347 93,894 93,118 Weighted average number of common shares and common share equivalents outstanding 94,282 93,678 93,894 93,118 Earnings (loss) per common share - basic: Income (loss) from continuing operations (net of income attributable to preferred stockholders) $(0.41) $0.02 $(1.23) $(0.37) Income from discontinued operations 0.34 0.51 1.05 2.29 Cumulative effect of change in accounting principle -- -- -- (0.04) Net income (loss) attributable to common stockholders $(0.07) $0.53 $(0.18) $1.88 Earnings (loss) per common share - diluted: Income (loss) from continuing operations (net of income attributable to preferred stockholders) $(0.41) $0.02 $(1.23) $(0.37) Income from discontinued operations 0.34 0.51 1.05 2.29 Cumulative effect of change in accounting principle -- -- -- (0.04) Net income (loss) attributable to common stockholders $(0.07) $0.53 $(0.18) $1.88 GAAP Income Statements Notes to Consolidated Statements of Income [a] The Aimco Operating Partnership is AIMCO Properties, L.P., the operating partnership in Aimco's UPREIT structure [b] Income from discontinued operations of consolidated properties is broken down as follows (in thousands): Three Months Ended Year Ended December 31, December 31, 2005 2004 2005 2004 Rental and other property revenue $11,417 $39,142 $99,332 $199,722 Property operating expense (8,279) (22,059) (56,263) (98,637) Other (expenses) income, net (506) (1,044) (1,703) (1,788) Depreciation and amortization (3,605) (8,785) (22,789) (42,194) Interest expense (2,909) (8,973) (22,371) (48,119) Interest income 44 77 292 315 Minority interest in consolidated real estate partnerships 457 1,365 1,499 (102) Income (loss) from operations (3,381) (277) (2,003) 9,197 Gain on dispositions of real estate, net of minority partners' interest 24,758 53,470 105,417 249,376 Recovery of impairment losses (impairment losses) on real estate assets sold or held for sale 4,559 2,653 (3,836) (7,289) Recovery of deficit distributions to minority partners 10,746 656 14,941 3,722 Income tax arising from disposals (1,632) (2,780) (4,481) (16,015) Minority interest in Aimco Operating Partnership (3,500) (5,735) (11,159) (25,512) Income from discontinued operations $31,550 $47,987 $98,879 $213,479 GAAP Balance Sheets Consolidated Balance Sheets (in thousands) (unaudited) As of As of December 31, 2005 December 31, 2004 ASSETS Buildings and improvements $8,690,782 $7,984,874 Land 2,299,039 2,090,737 Accumulated depreciation (2,238,114) (1,847,160) TOTAL REAL ESTATE 8,751,707 8,228,451 Cash and cash equivalents 161,730 105,343 Restricted cash 284,834 289,135 Accounts receivable 57,479 75,044 Accounts receivable from affiliates 43,070 39,216 Deferred financing costs 67,498 68,175 Notes receivable from unconsolidated real estate partnerships 177,218 165,289 Notes receivable from non-affiliates 23,760 31,716 Investment in unconsolidated real estate partnerships 167,799 207,839 Other assets 216,863 243,317 Deferred tax asset, net 9,835 -- Assets held for sale 54,958 618,716 TOTAL ASSETS $10,016,751 $10,072,241 LIABILITIES AND STOCKHOLDERS' EQUITY Secured tax-exempt bond financing $1,076,569 $1,101,225 Secured notes payable 4,590,674 4,133,887 Mandatorily redeemable preferred securities -- 15,019 Term loans 400,000 300,000 Credit facility 217,000 68,700 TOTAL INDEBTEDNESS 6,284,243 5,618,831 Accounts payable 34,381 34,663 Accrued liabilities and other 421,225 400,974 Deferred income 47,138 43,808 Security deposits 38,789 35,070 Deferred income taxes payable, net -- 20,139 Liabilities related to assets held for sale 39,464 426,755 TOTAL LIABILITIES 6,865,240 6,580,240 Minority interest in consolidated real estate partnerships 217,679 211,804 Minority interest in Aimco Operating Partnership 217,729 272,037 STOCKHOLDERS' EQUITY Class A Common Stock 957 949 Additional paid-in capital 3,105,961 3,070,073 Perpetual preferred stock 860,250 891,500 Convertible preferred stock 150,000 150,000 Distributions in excess of earnings (1,350,899) (1,047,897) Unearned restricted stock (24,255) (19,740) Notes due on common stock purchases (25,911) (36,725) TOTAL STOCKHOLDERS' EQUITY 2,716,103 3,008,160 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $10,016,751 $10,072,241 GAAP Statements of Cash Flows Consolidated Statements of Cash Flows (in thousands) (unaudited) Year Ended Year Ended December 31, 2005 December 31, 2004 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $70,982 $263,497 Depreciation and amortization 412,075 340,536 Adjustments to net income from discontinued operations (84,073) (178,001) Other adjustments to reconcile net income (15,177) (43,239) Changes in operating assets and liabilities (28,258) (17,270) Net cash provided by operating activities 355,549 365,523 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of real estate (243,996) (280,002) Capital expenditures (443,882) (301,937) Proceeds from dispositions of real estate 718,434 971,568 Change in funds held in escrow from tax-free exchanges (4,571) 5,489 Cash from newly consolidated properties 4,186 14,765 Purchases of non-real estate related corporate assets (14,405) (28,270) Purchases of general and limited partnership interests and other assets (111,372) (104,441) Originations of notes receivable from unconsolidated real estate partnerships (38,336) (76,157) Proceeds from repayment of notes receivable 28,556 79,599 Cash paid in connection with merger and acquisition related costs (6,910) (15,861) Distributions received from investments in unconsolidated real estate partnerships 57,706 72,160 Other investing activities 4,629 -- Net cash (used in) provided by investing activities (49,961) 336,913 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from secured notes payable borrowings 721,414 501,611 Principal repayments on secured notes payable (735,816) (728,084) Proceeds from tax-exempt bond financing -- 69,471 Principal repayments on tax-exempt bond financing (78,648) (188,577) Net borrowings on term loans and revolving credit facility 248,300 (66,687) Proceeds from other borrowings -- 38,871 Redemption of mandatorily redeemable preferred securities (15,019) (98,875) Proceeds from issuance of preferred stock -- 359,672 Redemption of preferred stock (31,250) (186,093) Repurchase of Class A Common Stock, redemption of OP Units and warrant purchase (4,503) (18,410) Payment of Class A Common Stock dividends (226,815) (225,903) Payment of preferred stock dividends (86,582) (83,984) Contributions from minority interest 34,990 44,292 Payment of distributions to minority interest (78,739) (119,056) Other financing activities 3,467 (9,773) Net cash used in financing activities (249,201) (711,525) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 56,387 (9,089) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 105,343 114,432 CASH AND CASH EQUIVALENTS AT END OF PERIOD $161,730 $105,343 Outlook and Forward Looking Statement First Quarter and Full Year 2006 (unaudited)

This earnings release and Supplemental Information contain forward-looking statements, including statements regarding projected results and specifically forecasts of first quarter and full year 2006 results. These forward-looking statements are based on management's judgment as of this date and include certain risks and uncertainties. Risks and uncertainties include, but are not limited to, Aimco's ability to maintain current or meet projected occupancy, rent levels and Same Store results and Aimco's ability to close transactions necessary to generate fee income as anticipated. Actual results may differ materially from those described in these forward-looking statements and, in addition, will be affected by a variety of risks and factors that are beyond the control of Aimco including, without limitation: natural disasters such as hurricanes; national and local economic conditions; the general level of interest rates; energy costs; the terms of governmental regulations that affect Aimco and interpretations of those regulations; the competitive environment in which Aimco operates; 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 fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets; insurance risk; acquisition and development risks, including failure of such acquisitions to perform in accordance with projections; the timing of acquisitions and dispositions; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by Aimco. Readers should carefully review Aimco's financial statements and notes thereto, as well as the risk factors described in Aimco's Annual Report on Form 10-K for the year ended December 31, 2004 and the other documents Aimco files from time to time with the Securities and Exchange Commission. These forward-looking statements reflect management's judgment as of this date, and Aimco assumes no obligation to revise or update them to reflect future events or circumstances.

First Quarter 2006 Full Year 2006 GAAP Earnings per share (1) -$0.33 to -$0.29 -$1.01 to -$0.85 Add: Depreciation and other $0.97 $3.82 FFO per share (2) $0.64 to $0.68 $2.81 to $2.97 AFFO per share $0.47 to $0.51 $2.18 to $2.34 2006 Same Store Operating Assumptions: Weighted average daily occupancy 94% to 95% 94% to 95% NOI change - sequential -3% to -2% NOI change - 2006 vs. 2005 6.5% to 7.5% Gross dispositions (3) $750M to $950M (Aimco Share $575M - $700M) Gross acquisitions (4) $20M to $30M (1) Aimco's earnings per share guidance does not include estimates for (i) gain on dispositions or impairment losses due to the unpredictable timing of transactions or (ii) deferred costs recognized on early repayment of debt or redemption related preferred stock issuance charges. (2) FFO per share represents FFO before impairments and redemption related preferred stock issuance charges. (3) Aimco anticipates gross sales proceeds of $750 to $950 million for 2006 ($565 to $675 million related to conventional properties and $185 to $275 million related to affordable properties). Aimco share of proceeds is expected to be $575 to $700 million ($499 to $586 million related to conventional properties and $76 to $114 million related to affordable properties). Aimco estimates that its share of cash from these dispositions, net of mortgage debt and third-party equity interests, will be $300 to $400 million ($250 to $325 million related to conventional properties and $50 to $75 million related to affordable properties). (4) Gross acquisitions include property acquisitions and limited partnership acquisitions.