Stock Quote

Apartment Investment and Management Company Announces Second Quarter 2008 Results

DENVER, Aug. 1 /PRNewswire-FirstCall/ -- SUMMARY FINANCIAL RESULTS: Apartment Investment and Management Company (Aimco) (NYSE: AIV) today announced results for the second quarter 2008. In accordance with Generally Accepted Accounting Principles (GAAP), all previously reported share and per share data has been adjusted to take into account the special dividend paid on January 30, 2008, which resulted in the issuance of approximately 4.6 million additional shares of Aimco's Class A Common Stock.

-- Net income attributable to common stockholders for the quarter was $242.4 million, compared with $3.0 million for the second quarter 2007. Higher results were driven primarily by higher gains on dispositions of real estate and other of $289.3 million, higher investment management income, net of tax, of $20.4 million and higher property net operating income of $6.7 million. These items were partially offset by lower income from discontinued operations (excluding gains on dispositions of real estate) of $40.7 million, higher interest expense of $6.8 million and higher other expenses of $8.6 million. Earnings per share (EPS) attributable to common stockholders was $2.76 on a diluted basis, compared with $0.03 per share in the second quarter 2007.

-- 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 $75.6 million, or $0.83 per share, compared with $87.3 million, or $0.84 per share, in the second quarter 2007. FFO, before impairment losses, was $81.5 million, or $0.90 per share, which was $0.09 per share higher than the mid-point of guidance for the quarter. Higher investment management income, net of tax, contributed $0.16 per share to the FFO outperformance and Same Store operating results contributed an additional $0.02 per share. Other expenses were $0.11 per share higher than expected, primarily due to: the write-off of communication hardware and capitalized costs associated with a discontinued technology infrastructure project; and certain litigation settlements and reserves.

-- Adjusted funds from operations (diluted) (AFFO; a non-GAAP financial measure defined in the Glossary) was $58.2 million, or $0.66 per share, compared with $63.6 million, or $0.61 per share, in the second quarter 2007. AFFO includes deductions of $0.24 and $0.23 per share for capital replacement expenditures in the second quarter 2008 and the second quarter 2007, respectively.


    Diluted Per Share Results
                                                         SECOND QUARTER
                                                                      2007
                                                       2008         Adjusted*
    Earnings - EPS                                     $2.76          $0.03
    Funds from operations - FFO                        $0.83          $0.84
    FFO before impairment losses**                     $0.90          $0.84
    Adjusted funds from operations - AFFO              $0.66          $0.61

* Adjusted to reflect January 30, 2008, special dividend, see Special Supplement following the Outlook schedule in this earnings release for additional details.

** During the second quarter, Aimco recognized impairment losses, net of Minority interests in Aimco Operating Partnership, of $5.9 million.

Management Comments

Chairman and Chief Executive Officer Terry Considine comments: "Property operations had a solid quarter with conventional same-store net operating income growth of 4.4%. Our redevelopment and capital investments are driving improved asset quality with more than $280 million invested in our properties year-to-date. Through our portfolio management activities, we continue to reallocate capital among our target markets and to improve portfolio quality. As we look forward to the balance of 2008, we are maintaining our focus on these core value-creating strategies."

Chief Financial Officer Tom Herzog adds: "Second quarter FFO, before impairment losses, was $0.90 per share, or $0.09 above the mid-point of guidance. Positive results for the quarter included higher same-store operating results and investment management income, partially offset by several non-recurring items, including the write-off of certain capitalized IT project costs and litigation costs. During the second quarter and through July, Aimco repurchased a total of 6.8 million shares of its Common Stock for $252.9 million, or an average price of $37.01 per share. We are establishing third quarter FFO guidance of $0.86 to $0.90 per share and increasing our full year FFO guidance from $3.22 to $3.38 per share to $3.33 to $3.43 per share."

Property Operations

Conventional Real Estate Operations

Aimco is among the nation's largest owners and operators of market rate apartment communities. Conventional real estate operations consist of Aimco's diversified portfolio of market rate apartment communities. At the end of the second quarter 2008, this portfolio included 397 properties with 114,687 units in which Aimco had a weighted average ownership of 89%. During the second quarter 2008, conventional real estate operations generated net operating income of $162.7 million.

"Same Store" Results

In the second quarter 2008, the Same Store portfolio included 302 communities with 81,293 Effective Units (see the Glossary) based on Aimco's weighted average ownership of 90% (See Supplemental Schedules 6a through 6c).

Comparing Same Store results in the second quarter 2008 with the second quarter 2007, total revenue increased $4.6 million, or 2.1%. The increase in revenue was primarily generated by higher average rent, up $21 per unit, or 2.3%, from $897 per unit to $918 per unit, higher occupancy, which was up 10 basis points from 94.7% to 94.8%. Same Store expenses of $90.8 million decreased $1.2 million, or 1.3%, compared with the prior year, primarily due to decreases in personnel and related expenses. Same Store portfolio net operating income was $138.9 million for the second quarter 2008, up 4.4% from the second quarter 2007.



    Same Store Operating Results
                                        SECOND QUARTER
                         Year-over-year                   Sequential
                     2008       2007    Variance     1st Qtr     Variance

    Same Store Operating
     Measures
       Average
        Physical
        Occupancy   94.8%      94.7%     0.1%         94.7%        0.1%
       Average Rent
        Per Unit    $918       $897      2.3%         $914         0.4%
    Total Same Store
     ($mm)
       Revenue    $229.7     $225.1      2.1%       $229.2         0.2%
       Expenses    (90.8)     (92.0)    -1.3%        (93.5)       -2.8%
       NOI ($mm)  $138.9    $ 133.1      4.4%       $135.7         2.4%


Comparing Same Store results on a sequential basis, total revenue increased $0.5 million, or 0.2%, in the second quarter 2008 compared with the first quarter 2008, driven by a $4 per unit increase in average rental rates and an increase in occupancy of 10 basis points, partially offset by lower utility reimbursements. Expenses decreased $2.7 million, or 2.8%, primarily due to lower personnel expenses, utilities, real estate taxes and insurance, partially offset by higher turnover costs, repairs and maintenance costs and contract services. Net operating income increased $3.2 million, or 2.4%, on a sequential basis.

Affordable Real Estate Operations

Aimco is among the nation's largest owners and operators of affordable apartment communities. At the end of the second quarter 2008, Aimco's owned affordable portfolio included 308 properties with 36,725 units in which Aimco had an average ownership of 51%. During the second quarter 2008, affordable property operations generated net operating income of $22.2 million. Average month-end occupancy for the affordable portfolio increased 20 basis points from 97.8% for the second quarter 2007 to 98.0% for the second quarter 2008, while average rent per unit increased 3.4% from $739 to $764 per unit.

Investment Management

Investment management includes portfolio strategy, capital allocation, joint ventures, tax credit syndication, acquisitions, dispositions and other transaction activities. Within our owned portfolio, we refer to these activities as Portfolio Management and their benefit is seen in property operating results and in investment gains. For affiliated partnerships, we refer to these activities as Asset Management for which we are separately compensated through fees paid by third party investors.

Investment management income includes the fees earned for providing asset management services to third party investors, syndication fees and deferred income related to tax credit activities, and portfolio management income earned through investment gains on our owned assets. Consolidated investment management income, net of tax, was $29.2 million in the second quarter 2008 compared to $8.8 million in the second quarter 2007. See Supplemental Schedule 11 for additional information on investment management income.

Portfolio Management

Portfolio management includes the ongoing allocation of investment capital to meet our geographic and product type goals. Our geographic allocation strategy focuses on the largest 20 U.S. markets as measured by total market capitalization. We believe these markets to be deep, relatively liquid and possessing desirable long-term growth characteristics. They are primarily coastal markets, and also include a number of Sun Belt cities and Chicago, Illinois. We may also invest in other markets on an opportunistic basis. As we implement this strategy, we expect to reduce our investment in markets outside the largest 20 markets and to increase our investment in the largest 20 markets both by making acquisitions and through redevelopment spending.

See Supplemental Schedules 6 and 7 for additional details regarding Aimco's portfolio allocation.

ACQUISITIONS - During the second quarter 2008, Aimco acquired Monterey Grove Apartments with 224 units, located in San Jose, California, for $56.0 million, or $250,000 per unit.

DISPOSITIONS - Aimco regularly reviews its portfolio to identify properties that do not meet its long-term investment criteria. In the second quarter 2008, Aimco sold 40 conventional properties and one affordable property with 12,662 and 240 units, respectively, for $921.5 million in gross proceeds (Aimco share $787.6 million). Aimco's share of net proceeds after repayment of existing property debt and transaction costs was $367.8 million.

Aimco's property dispositions resulted in gains on dispositions of real estate (including gains on dispositions of unconsolidated real estate and other and gains within discontinued operations) of $314.2 million for the second quarter 2008, compared with gains of $24.9 million for the second quarter 2007.

See Supplemental Schedule 8 for additional information on acquisition and disposition activity.

Redevelopment

Aimco actively reinvests in and upgrades its portfolio through property redevelopments. At the end of the second quarter 2008, Aimco had 44 active conventional redevelopment projects and 18 active tax credit redevelopment projects in process. Aimco's share of total redevelopment expenditures was $81.3 million during the second quarter 2008. Conventional redevelopment project expenditures totaled $61.6 million and tax credit redevelopment project expenditures totaled $19.7 million for the quarter. Further information on redevelopment projects is provided in Supplemental Schedule 10.

Additional Financial Information

INTEREST INCOME - Consolidated interest income was $0.7 million for the second quarter 2008 compared with $10.1 million for the second quarter 2007. Interest income is earned in part from money market and interest bearing accounts as well as on notes receivable from unconsolidated partnerships and non-affiliates. The decrease in interest income of $9.4 million is the result of lower interest rates, the repayment of certain high yielding notes receivable from unconsolidated partnerships in the second quarter 2007 and an adjustment to accretion of discounted notes receivable.

DEBT ACTIVITY - During the six months ended June 30, 2008, Aimco closed loans on 47 properties generating gross proceeds of $443.3 million at a weighted average interest rate of 5.41%. This included refinancing $151.2 million in existing mortgage loans. After repayment of existing property debt, transaction costs and distributions to limited partners, Aimco's share of net proceeds was $255.5 million.

As of June 30, 2008, Aimco had $7.4 billion of consolidated debt outstanding, which consisted of: $5.6 billion of fixed rate mortgage debt; $1.7 billion of floating rate property and corporate debt; and $87.8 million of other borrowings. In addition, Aimco had $100.0 million of floating rate preferred stock outstanding. The fixed and floating rate property debt is primarily non-recourse. Aimco's FFO exposure to changes in floating interest rates is mitigated by $695.3 million of tax-exempt bonds with rates tied to the Securities Industry and Financial Markets Association Municipal Swap Index (SIFMA) (previously named the Bond Market Association Index), which moves at approximately 0.68% for a 1.00% change in LIBOR. Aimco's exposure is further offset by floating rate assets, such as cash and notes receivable, and interest capitalized on entitlement and redevelopment properties. Based on Aimco's proportionate share of quarter-end balances (see Supplemental Schedule 3), Aimco estimates its sensitivity to a 100 basis point change in LIBOR to be approximately $0.02 per share per quarter.

See Supplemental Schedule 5 for more detail on debt characteristics and activity.

INTEREST EXPENSE - Consolidated interest expense was $102.4 million for the second quarter 2008 compared with $95.6 million for the second quarter 2007. The $6.8 million increase in interest expense is the result of higher balances on property debt, partially offset by lower weighted average interest rates.

STOCKHOLDERS' EQUITY - During the second quarter 2008, Aimco repurchased approximately 3.9 million shares of its Class A Common Stock at an average price of $38.91 per share for a total cost of $152.9 million.

During the month of July 2008, Aimco repurchased approximately 2.9 million shares of its Class A Common Stock at an average price of $34.45 per share for a total cost of $100.0 million. Since Aimco began repurchasing shares during the third quarter 2006, the company has repurchased approximately 21.7 million shares, or approximately 22% of shares outstanding on June 30, 2006, at an average price of $40.15 per share for a total cost of $869.6 million.

Although for financial statement purposes GAAP requires that historical share repurchases be restated to reflect shares issued in connection with the special dividend paid on January 30, 2008, the number of shares repurchased as described above has not been adjusted.

We are currently authorized to repurchase approximately 21.3 million additional shares. Repurchases may be made from time to time in the open market or in privately negotiated transactions.

G&A - General and administrative expenses for the second quarter 2008 of $27.1 million increased $3.0 million when compared with the second quarter 2007 primarily due to personnel and related costs.

Outlook

For the third quarter 2008, FFO, before impairment losses and preferred redemption charges, is expected to be in a range from $0.86 to $0.90 per share and we are increasing our full year FFO guidance from a range of $3.22 to $3.38 per share to a range of $3.33 to $3.43 per share. Please refer to the Outlook Schedule, which follows the Consolidated Financial Statements in this release, for more detail on third quarter and full year 2008 guidance.

Dividends on Common Stock

As announced on July 18, 2008, the Aimco Board of Directors declared a special dividend of $3.00 per share of Class A Common Stock, to be paid on August 29, 2008, to stockholders of record on July 28, 2008. A portion of the special dividend in the amount of $0.60 per share represents payment of the regular dividend for the quarter ended June 30, 2008, and a portion represents an additional dividend payment in the amount of $2.40 per share associated with actual and projected taxable gains arising from property dispositions in 2008.

The special dividend will be payable in a combination of cash and additional shares of Class A Common Stock. The aggregate amount of cash payable to stockholders in the special dividend, other than cash payable in lieu of fractional shares, is not expected to exceed $51.3 million. Subject to this limitation on the aggregate amount of cash payable, stockholders will have the option to make an election to receive payment of the special dividend in cash or in shares, except that cash will be paid in lieu of fractional shares. Stockholders who do not make an election, or elect to receive the special dividend in all cash, will receive payment in the form of at least $0.60 per share in cash.

A prospectus and election form will be mailed to stockholders on or about August 4, 2008, and will describe in more detail the terms of the special dividend, including the ability of stockholders to elect to receive the special dividend in the form of cash or shares of Aimco's Class A Common Stock, and a limitation on the aggregate amount of cash to be included in the special dividend. The election must be made prior to 5:00 p.m. Eastern time on August 20, 2008.

Aimco expects the special dividend to be a taxable dividend to its stockholders, without regard to whether a particular stockholder receives the dividend in the form of cash or shares. It therefore allows Aimco to satisfy its REIT distribution requirement while preserving cash for other corporate purposes, including share repurchases.

Share and per share amounts disclosed in the accompanying earnings release and supplemental schedules have not been retroactively adjusted for the effect of shares to be issued pursuant to this special dividend, as the number of shares is not presently determinable. Such retroactive adjustments will be reflected in earnings releases and financial information prepared subsequent to the payment date.

Cash dividends declared on Class A Common Stock attributable to the six months ended June 30, 2008 totaled $1.20 per share, or 100% of AFFO (undiluted) and 74% of FFO (diluted), on a per share basis, and a 7.0% cash yield based on the $34.06 closing price of Aimco's Class A Common Stock on June 30, 2008. Cash dividends attributable to the six months ended June 30, 2008, include that portion of the July 2008 special dividend which represents payment of the regular dividend for the second quarter 2008.

Earnings Conference Call

Please join Aimco management for the Second Quarter 2008 earnings conference call to be held Friday, August 1, 2008, at 1:00 p.m. Eastern time. You may join the conference call through an Internet audiocast by clicking on the Webcast link on Aimco's website at http://www.aimco.com/CorporateInformation/Overview.aspx. Alternatively, you may join the conference call via telephone by dialing 800.860.2442, or 412.858.4600 for international callers, and indicating that you wish to join the Apartment Investment and Management Company Second Quarter 2008 earnings conference call. If you are unable to join the live conference call, you may access the conference call replay for seven days by dialing 877.344.7529, or 412.317.0088 for international callers, passcode 421210, or you may access the audiocast replay by clicking on the Webcasts link on Aimco's website at http://www.aimco.com/CorporateInformation/About/Financial/news.aspx.

Supplemental Information

The full text of this release and the Supplemental Information referenced in this release is available on Aimco's Website at the link http://www.aimco.com/CorporateInformation/About/Financial/QEarnRelease.aspx.

Forward-looking Statements

This earnings release and Supplemental Information contain forward-looking statements, including statements regarding projected results and specifically forecasts of third quarter and full year 2008 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 and severe weather 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 the markets in which Aimco operates 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. 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 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, 2007, 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. This press release does not constitute an offer of any securities for sale.

About Aimco

Aimco is a real estate investment trust headquartered in Denver, Colorado that owns and operates a geographically diversified portfolio of apartment communities. Aimco, through its subsidiaries and affiliates, is the largest owner and operator of apartment communities in the United States with 1,114 properties, including 188,672 apartment units, and serves approximately 750,000 residents each year. Aimco's properties are located in 46 states, the District of Columbia and Puerto Rico. Aimco common shares are traded on the New York Stock Exchange under the ticker symbol AIV and are included in the S&P 500. For more information about Aimco, please visit our website at http://www.aimco.com.


    GAAP Income Statements

    Consolidated Statements of Income
    (in thousands, except per share data) (unaudited)
                                       Three Months Ended   Six Months Ended
                                            June 30,            June 30,
                                         2008      2007      2008      2007
    REVENUES:
       Rental and other property
        revenues                       $384,191  $372,289  $768,354  $734,645
       Property management revenues,
        primarily from affiliates         1,415     1,271     3,519     3,367
       Asset management and tax credit
        revenues                         38,175    15,178    51,027    26,808
            Total revenues              423,781   388,738   822,900   764,820

    OPERATING EXPENSES:
       Property operating expenses      174,158   168,992   361,441   336,618
       Property management expenses       1,187     2,452     2,457     3,935
       Investment management expenses     5,728     5,521    10,017     9,987
       Depreciation and amortization    120,692   110,743   239,086   221,923
       General and administrative
        expenses                         27,064    24,024    48,488    46,100
       Other expenses (income), net       5,459    (3,128)   10,297      (379)
            Total operating expenses    334,288   308,604   671,786   618,184

    Operating income                     89,493    80,134   151,114   146,636

    Interest income                         718    10,107     9,114    20,154
    Provision for losses on notes
     receivable                            (534)     (735)   (1,693)   (2,278)
    Interest expense                   (102,365)  (95,578) (203,677) (190,586)
    Deficit distributions to minority
     partners                            (1,265)   (1,554)   (5,276)   (2,482)
    Equity in (losses) earnings of
     unconsolidated real estate
     partnerships                          (843)      930    (1,872)   (2,055)
    Real estate impairment losses        (2,518)      -      (2,518)      -
    Gain on dispositions of
     unconsolidated real estate and
     other                                  139       602       129     1,695
    Gain on extinguishment of debt            -         -         -    19,373

    Loss before minority interests and
     discontinued operations            (17,175)   (6,094)  (54,679)   (9,543)

    Minority interests:
       Minority interest in
        consolidated real estate
        partnerships                     (2,352)      (85)    4,590    (3,793)
       Minority interest in Aimco
        Operating Partnership,
        preferred [1]                    (1,925)   (1,782)   (3,707)   (3,564)
       Minority interest in Aimco
        Operating Partnership,
        common [1]                        3,437     2,240     7,908     4,661
    Total minority interests               (840)      373     8,791    (2,696)

    Loss from continuing operations     (18,015)   (5,721)  (45,888)  (12,239)

       Income from discontinued
        operations, net [3]             274,054    25,050   277,381    56,776

    Net income                          256,039    19,329   231,493    44,537

    Net income attributable to
     preferred stockholders              13,670    16,346    27,878    32,694
    Net income attributable to common
     stockholders                      $242,369    $2,983  $203,615   $11,843

    Weighted average common shares
     outstanding [2]                     87,790   100,494    89,381   100,494
    Weighted average common shares and
     common share equivalents
     outstanding [2]                     87,790   100,494    89,381   100,494

    Earnings (loss) per common share -
     basic [2]:
      Loss from continuing operations
       (net of income
       attributable to preferred
       stockholders)                     $(0.36)   $(0.22)   $(0.83)   $(0.45)
      Income from discontinued
       operations                          3.12      0.25      3.11      0.57
      Net income attributable to
       common stockholders                $2.76     $0.03     $2.28     $0.12
    Earnings (loss) per common share -
     diluted [2]:
      Loss from continuing operations
       (net of income
       attributable to preferred
       stockholders)                     $(0.36)   $(0.22)   $(0.83)   $(0.45)
      Income from discontinued
       operations                          3.12      0.25      3.11      0.57
      Net income attributable to
       common stockholders                $2.76     $0.03     $2.28     $0.12




    GAAP Income Statements (continued)

    Notes to Consolidated Statements of Income

    [1] The Aimco Operating Partnership is AIMCO Properties, L.P., the
        operating partnership in Aimco's UPREIT structure.
    [2] Weighted average share, common share equivalent and earnings per share
        amounts for each of the periods presented above have been
        retroactively adjusted for the effect of shares of common stock issued
        January 30, 2008, pursuant to the special dividend declared by Aimco's
        Board of Directors on December 21, 2007.
    [3] Income from discontinued operations of consolidated properties
        consists of the following (in thousands):
                                        Three Months Ended   Six Months Ended
                                             June 30,            June 30,
                                           2008     2007      2008      2007
    Rental and other property revenues   $36,207  $54,288   $76,661  $113,452
    Property operating expenses          (19,606) (25,774)  (40,214)  (56,990)
    Depreciation and amortization         (5,884) (12,662)  (15,939)  (26,985)
    Other expenses, net                   (2,271)    (651)   (2,498)   (1,885)
         Operating Income                  8,446   15,201    18,010    27,592
    Interest income                           39      367       340       782
    Interest expense                      (5,383)  (9,842)  (12,695)  (22,607)
    Gain on extinguishment of debt             -        -         -    22,852
    Minority interest in consolidated
     real estate partnerships                257       35       174    (2,064)
         Income before gain on
          dispositions of real estate,
          impairment losses, deficit
          distributions to minority
          partners, income taxes and
          minority interest in
          Aimco Operating Partnership      3,359    5,761     5,829    26,555
    Gain on dispositions of real
     estate, net of  minority partners'
     interest                            314,025   24,311   315,350    39,901
    Real estate impairment (losses)
     recoveries, net                      (4,018)      60    (4,018)     (783)
    Recovery of deficit distributions
     (deficit distributions) to
     minority partners                     7,701       81     7,510      (321)
    Income tax arising from disposals    (17,149)  (2,597)  (17,063)   (2,761)
    Minority interest in Aimco
     Operating Partnership               (29,864)  (2,566)  (30,227)   (5,815)
         Income from discontinued
          operations                    $274,054  $25,050  $277,381   $56,776



    GAAP Balance Sheets

    Consolidated Balance Sheets
    (in thousands)
    (unaudited)

                                             June 30, 2008  December 31, 2007
     ASSETS
     Buildings and improvements                 $9,275,563         $8,944,353
     Land                                        2,551,108          2,542,322
     Accumulated depreciation                   (2,962,147)        (2,747,403)
        NET REAL ESTATE                          8,864,524          8,739,272
     Cash and cash equivalents                     330,163            210,461
     Restricted cash                               316,892            316,233
     Accounts receivable                            78,439             71,463
     Accounts receivable from affiliates            32,420             34,958
     Deferred financing costs                       68,768             74,166
     Notes receivable from unconsolidated
      real estate partnerships                      31,869             35,186
     Notes receivable from non-affiliates          147,635            143,054
     Investment in unconsolidated real
      estate partnerships                          106,388            117,217
     Other assets                                  192,851            207,857
     Deferred income tax asset, net                 11,059             14,426
     Assets held for sale                          145,670            642,239
        TOTAL ASSETS                           $10,326,678        $10,606,532

     LIABILITIES AND STOCKHOLDERS' EQUITY
     Property tax-exempt bond financing           $910,300           $901,985
     Property loans payable                      5,809,951          5,563,703
     Term loans                                    475,000            475,000
     Credit facility                               145,000               -
     Other borrowings                               87,839             75,057
        TOTAL INDEBTEDNESS                       7,428,090          7,015,745
     Accounts payable                               30,931             56,792
     Accrued liabilities and other                 366,197            449,485
     Deferred income                               205,494            201,498
     Security deposits                              48,450             45,622
     Liabilities related to assets held
      for sale                                     113,723            532,645
        TOTAL LIABILITIES                        8,192,885          8,301,787

     Minority interest in consolidated
      real estate partnerships                     415,835            441,778
     Minority interest in Aimco Operating
      Partnership                                  124,337            113,263

     STOCKHOLDERS' EQUITY
        Perpetual preferred stock                  723,500            723,500
        Class A Common Stock                           874                961
        Additional paid-in capital               2,740,890          3,049,417
        Notes due on common stock
         purchases                                  (4,125)            (5,441)
        Distributions in excess of
         earnings                               (1,867,518)        (2,018,733)
           TOTAL STOCKHOLDERS' EQUITY            1,593,621          1,749,704

           TOTAL LIABILITIES AND
            STOCKHOLDERS' EQUITY               $10,326,678        $10,606,532



    Outlook and Forward Looking Statement
    Third Quarter and Full Year 2008
    (unaudited)

This Earnings Release and Supplemental Information contain forward-looking statements, including statements regarding projected results and specifically forecasts of third quarter and full year 2008 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 transactional 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 and severe weather 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, 2007, 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.


                                           Third Quarter 2008   Full Year 2008
    GAAP earnings per share [1][4]          -$0.34 to -$0.30    $1.68 to $1.78
    FFO per share [2][5]                      $0.86 to $0.90    $3.33 to $3.43
    AFFO per share [5]                                           greater than
                                                   [3]              $2.40
    2008 Same Store operating assumptions:
      Weighted average daily occupancy          94% to 95%        94% to 95%
      NOI change - sequential                 -1.5% to -2.5%
      NOI change - 2008 vs. 2007                2.5% to 3.5%     2.5% to 4.5%


    [1] Aimco's earnings per share guidance does not include estimates for (i)
        gains on dispositions or impairment losses due to the unpredictable
        timing of transactions, (ii) gains or losses on early repayment of
        debt, (iii) preferred stock redemption related costs or (iv) potential
        future share repurchases.

    [2] FFO per share represents FFO before impairment and preferred
        redemption related charges.

    [3] Outlook for AFFO is provided on an annual basis.

    [4] The GAAP earnings per share is calculated based on 84.0 million and
        86.6 million weighted average common shares (diluted) for third
        quarter 2008 and full year 2008, respectively.

    [5] FFO per share and AFFO per share are calculated based on 84.5 million
        and 88.1 million weighted average common shares (diluted) for the
        third quarter 2008 and full year 2008, respectively.


    Special Supplement to Second Quarter 2008 Earnings Release

    2007 Special Dividend

As announced on December 21, 2007, the Aimco Board of Directors declared a special dividend of $2.51 per share of Class A Common Stock, paid on January 30, 2008, to stockholders of record on December 31, 2007. The special dividend was paid in a combination of approximately $55.0 million of cash and 4.6 million additional shares of Class A Common Stock based on stockholder elections, subject to certain limitations.

Generally Accepted Accounting Principles require that all reported per share data, for current and prior periods, be adjusted to reflect the issuance of the shares described above. The following table provides Aimco's results for the three and six months ended June 30, 2007, as reported in 2007, prior to the special dividend, and as currently reported, after the effect of the special dividend:

                                                 Three Months       Six Months
                                                    Ended             Ended
                                                   June 30,          June 30,
    Financial Results                                2007              2007

    Earnings - EPS, excluding special dividend       $0.03             $0.12
    Earnings - EPS, including special dividend       $0.03             $0.12

    Funds from operations - FFO, excluding
     special dividend                                $0.88             $1.62
    Funds from operations - FFO, including
     special dividend                                $0.84             $1.55

    FFO before impairment and preferred redemption
     charges, excluding special dividend             $0.88             $1.63
    FFO before impairment and preferred redemption
     charges, including special dividend             $0.84             $1.55

    Adjusted funds from operations - AFFO,
     excluding special dividend                      $0.64             $1.22
    Adjusted funds from operations - AFFO,
     including special dividend                      $0.61             $1.17


    Calculation of Weighted Average Shares

    Earnings - EPS
    Weighted average common shares - diluted,
     excluding the special dividend                 95,973            95,972
    Weighted average common shares - diluted
     attributable to the special dividend            4,521             4,522
    Weighted average common shares - diluted,
     including the special dividend                100,494           100,494

    Funds from operations - FFO
    Weighted average common shares - diluted,
     excluding the special dividend                 99,200            99,608
    Weighted average common shares - diluted
     attributable to the special dividend            4,646             4,650
    Weighted average common shares - diluted,
     including the special dividend                103,846           104,258

    FFO before impairment and preferred
     redemption charges
    Weighted average common shares - diluted,
     excluding the special dividend                 99,200            99,608
    Weighted average common shares - diluted
     attributable to the special dividend            4,646             4,650
    Weighted average common shares - diluted,
     including the special dividend                103,846           104,258

    Adjusted funds from operations - AFFO
    Weighted average common shares - diluted,
     excluding the special dividend                 99,128            99,572
    Weighted average common shares - diluted
     attributable to the special dividend            4,642             4,649
    Weighted average common shares - diluted,
     including the special dividend                103,770           104,221

SOURCE Apartment Investment and Management Company

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