Apartment Investment and Management Company Announces Fourth Quarter 2007 Results

DENVER, Feb. 8 /PRNewswire-FirstCall/ -- SUMMARY FINANCIAL RESULTS: Apartment Investment and Management Company (Aimco) today announced results for the fourth quarter 2007. In accordance with Generally Accepted Accounting Principles (GAAP), all reported per share data has been adjusted to take into account the special dividend declared on December 21, 2007, and 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 loss for the quarter was $26.6 million, compared with net income of $66.1 million in the fourth quarter 2006. Lower results in the fourth quarter 2007 were due to various items including: lower gains on dispositions of real estate and other of $101.0 million, higher interest expense of $9.0 million and real estate impairment charges of $6.6 million, which were partially offset by higher property net operating income of $15.1 million and higher activity and asset management revenues of $17.6 million. Earnings per share (EPS) was a loss of $0.27 on a diluted basis, compared with income of $0.66 per share in the fourth quarter 2006. -- 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 $83.8 million, or $0.83 per share, compared with $88.0 million, or $0.84 per share, in the fourth quarter 2006. FFO before impairment and preferred redemption charges was $0.88 per share, which was at the mid-point of guidance as restated for the special dividend. -- Adjusted funds from operations (diluted) (AFFO; a non-GAAP financial measure defined in the Glossary) was $61.3 million, or $0.62 per share, compared with $72.8 million, or $0.70 per share, in the fourth quarter 2006. AFFO includes deductions of $0.26 and $0.14 per share for capital replacement expenditures in the fourth quarter 2007 and the fourth quarter 2006, respectively. Diluted Per Share Results* FOURTH QUARTER FULL YEAR 2007 2006 2007 2006 Earnings (loss) - EPS ($0.27) ($0.66) ($0.36) $0.95 Funds from operations - FFO $0.83 $0.84 $3.17 $2.90 FFO before impairment and preferred redemption charges $0.88 $0.84 $3.25 $2.95 Adjusted funds from operations - AFFO $0.62 $0.70 $2.34 $2.28 * Adjusted to reflect January 30, 2008, special dividend (see Special Supplement) Management Comments

Chairman and Chief Executive Officer Terry Considine comments: "Aimco had a solid 2007. Property operating results improved on a Same Store basis by 4.5%. We invested more than $300 million in value-adding redevelopments. A highlight of the quarter for our asset management and transactions team was the formation of a joint venture with a fund managed by J.P. Morgan Asset Management to invest in certain Los Angeles properties. Given the current choppiness of the economy, we expect more moderate growth in 2008."

Chief Financial Officer Tom Herzog adds: "Fourth quarter FFO of $0.88 per share was in-line with guidance, as restated for the special dividend, and full year 2007 FFO of $3.25 per share was 10% higher than in 2006. During the fourth quarter 2007 and January 2008, Aimco repurchased, on an accretive basis, approximately 8.5 million shares of its Common Stock for approximately $302 million, or an average price of $35.19 per share. Looking ahead to 2008, we expect FFO of $0.68 to $0.72 per share in the first quarter and $3.22 to $3.38 per share for the year."

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 fourth quarter 2007, this portfolio included 439 properties with 127,532 units in which Aimco had a weighted average ownership of 88%. During the fourth quarter 2007, conventional real estate operations generated net operating income of $179.9 million.

"Same Store" Results

In the fourth quarter 2007, the Same Store portfolio included 357 communities with 94,047 Effective Units (see the Glossary) based on Aimco's weighted average ownership of 88% (See Supplemental Schedules 6a through 7).

Comparing Same Store results in the fourth quarter 2007 with the fourth quarter 2006, total revenue increased $9.9 million, or 4.0%. The increase in revenue was primarily generated by higher average rent, up $24 per unit, or 2.8%, from $862 per unit to $886 per unit, higher occupancy, which was up 0.3% from 94.4% to 94.7%, and increased utility reimbursements, up $2.2 million. Same Store expenses of $105.5 million increased $5.6 million, or 5.7%, compared with the prior year period as a result of higher payroll, marketing, insurance, contract services and utilities. Same Store portfolio net operating income was $152.6 million for the fourth quarter 2007, up 2.9% from the fourth quarter 2006.

Same Store Operating Results FOURTH QUARTER FULL YEAR Year-over-year Sequential Vari- 3rd Vari- Vari- 2007 2006 ance Qtr ance 2007 2006 ance Same Store Operating Measures Average Physical Occupancy 94.7% 94.4% 0.3% 94.8% -0.1% 94.7% 94.5% 0.2% Average Rent Per Unit $886 $862 2.8% $881 0.6% $862 $831 3.7% Total Same Store ($mm) Revenue $258.1 $248.2 4.0% $255.2 1.1% $988.1 $946.7 4.4% Expenses (105.5) (99.9) 5.7% (107.1) -1.5% (409.2) (392.7) 4.2% NOI ($mm) $152.6 $148.3 2.9% $148.1 3.0% $578.9 $554.0 4.5%

Comparing Same Store results on a sequential basis, total revenue increased $2.9 million in the fourth quarter 2007 compared with the third quarter of 2007, driven by a $5 per unit increase in average rental rates, partially offset by a decrease in occupancy of 10 basis points. Expenses decreased $1.6 million, or 1.5%, primarily due to lower turnover, contract services, repairs and maintenance costs and taxes. Net operating income increased $4.5 million, or 3.0%, on a sequential basis.

Comparing Same Store results on a full year basis, total revenue increased $41.4 million in 2007 compared with 2006, driven by a 3.7% increase in average rental rates per unit, a 20 basis point increase in occupancy and a 20.6% increase in utility reimbursements. Expenses increased $16.5 million, or 4.2%, primarily due to higher payroll, utilities, contract services, marketing, administrative expenses, taxes and insurance, partially offset by lower turnover and repairs and maintenance. Net operating income increased $24.9 million, or 4.5%, on a year-over-year basis.

Affordable Real Estate Operations

Aimco is among the nation's largest owners and operators of affordable apartment communities. At the end of the fourth quarter 2007, Aimco's owned affordable portfolio included 312 properties with 37,104 units in which Aimco had an average ownership of 51%. During the fourth quarter 2007, affordable property operations generated net operating income of $19.2 million. Average month-end occupancy for the affordable portfolio decreased 60 basis points from 96.9% for the fourth quarter 2006 to 96.3% for the fourth quarter 2007, while average rent per unit increased 5.1% from $719 to $756 per unit. Average month-end occupancy also decreased 60 basis points from 97.2% in 2006 to 96.6% for the full year 2007, while rents increased $28 per unit, or 3.9%, from $711 to $739 per unit.

Aimco Capital

Aimco Capital, a division led by a dedicated management team, oversees Aimco's portfolio management activities including acquisitions, dispositions and joint venture efforts, as well as asset management and partnership transactions.

Asset Management and Transactions

Asset management income is earned from the financial management of partnerships. Transaction income is earned from activities such as tax credit syndications, dispositions, refinancings and land sales. Proceeds received in exchange for the transfer of tax credits are recognized ratably as the tax benefits are delivered, and syndication fees are recognized upon completion of tax credit syndications. Consolidated asset management and transaction net operating income, net of tax, was $28.7 million in the fourth quarter 2007 compared to $13.3 million in the fourth quarter 2006. Consolidated asset management and transaction net operating income, net of tax, for the full year 2007 was $58.8 million, an increase of $18.1 million, or 44.3%, when compared to 2006. See Supplemental Schedule 11 for additional information on asset management and transaction income.

During the fourth quarter 2007, Aimco formed a joint venture with a fund managed by J.P. Morgan Asset Management. Aimco contributed to the venture The Palazzo at Park La Brea, The Palazzo East at Park La Brea and The Villas at Park La Brea at a value of $725.7 million, or approximately $525,000 per unit. Aimco received $202.2 million in cash from J.P. Morgan in exchange for an approximate 47% interest in the joint venture. Aimco receives property management and other fees for its continued operation of the properties.

Portfolio Management

ACQUISITIONS -- During the fourth quarter 2007, Aimco had no significant acquisition activity.

DISPOSITIONS -- Aimco regularly reviews its portfolio to identify properties that do not meet its long-term investment criteria. In the fourth quarter 2007, Aimco sold eight non-core conventional properties and ten affordable properties with 1,675 and 689 units, respectively, for $101.5 million in gross proceeds (Aimco share $66.8 million). Aimco's share of net proceeds after repayment of existing property debt and transaction costs was $27.7 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 $12.9 million for the fourth quarter 2007, compared with gains of $113.9 million for the fourth quarter 2006.

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 fourth quarter 2007, Aimco had 48 active conventional redevelopment projects and 11 active tax credit redevelopment projects in process. Aimco's share of total redevelopment expenditures was $121.5 million during the fourth quarter 2007. Conventional redevelopment project expenditures totaled $99.8 million and tax credit redevelopment project expenditures totaled $21.7 million for the quarter. Further information on redevelopment projects is provided in Supplemental Schedule 10.

Additional Financial Information

PROPERTY MANAGEMENT INCOME -- Income from property management is generated when Aimco provides property management services to properties with unaffiliated partners. Income from consolidated properties is eliminated in Aimco's consolidated GAAP financial statements and the related economic benefit is reflected in minority interest.

INTEREST INCOME -- Consolidated interest income was $11.1 million for the fourth quarter 2007 compared with $12.7 million for the fourth quarter 2006. 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.

DEBT ACTIVITY -- During the fourth quarter 2007, Aimco closed 28 property loans generating gross proceeds of $398.0 million at a weighted average interest rate of 6.24%. This included refinancing $121.6 million in existing mortgage loans, reducing the average interest rate from 6.74% to 6.08%. After repayment of existing property debt, transaction costs and distributions to limited partners, Aimco's share of net proceeds was $248.9 million.

As of December 31, 2007, Aimco had $7.5 billion of consolidated debt outstanding, which consisted of: $5.7 billion of fixed rate mortgage debt, which is primarily non-recourse; $1.7 billion of floating rate property and corporate debt; and $75.1 million of other borrowings. In addition, Aimco had $100.0 million of floating rate preferred stock outstanding. Aimco's FFO exposure to changes in floating interest rates is mitigated by $698.4 million of tax-exempt bonds with rates tied to 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 $110.5 million for the fourth quarter 2007 compared with $101.5 million for the fourth quarter 2006. The $9.0 million increase in interest expense is the result of higher balances on property debt, offset by lower weighted average interest rates and higher capitalized interest.

STOCKHOLDERS' EQUITY -- During the fourth quarter 2007, Aimco repurchased approximately 4.0 million shares of its Class A Common Stock at an average price of $37.28 per share for a total cost of $150.4 million, bringing full-year 2007 common stock repurchases to 7.5 million shares at an average price of $43.70 per share for a total cost of $325.8 million.

During the month of January 2008, Aimco repurchased approximately 4.5 million shares of its Class A Common Stock at an average price of $33.33 per share for a total cost of $151.2 million. Since Aimco began repurchasing shares during the third quarter 2006, the company has repurchased approximately 14.3 million shares, or approximately 14.7% of shares outstanding on July 31, 2006, at an average price of $41.79 per share for a total cost of $597.3 million.

On January 29, 2008, the Aimco Board of Directors increased our existing share repurchase authorization by 25 million shares. We are currently authorized to repurchase approximately 28.7 million additional shares. Repurchases may be made from time to time in the open market or in privately negotiated transactions.

Aimco issued approximately 4.6 million shares of its Class A Common Stock on January 30, 2008, in connection with the payment of the special dividend declared on December 21, 2007. See additional details regarding dividends on Common Stock below, and further information regarding the impact of the special dividend on share count contained in the Special Supplement.

G&A -- General and administrative expenses for the fourth quarter 2007 of $23.9 million increased $0.5 million or 2.3% when compared with the fourth quarter 2006.

Outlook

For the first quarter 2008, FFO, before impairment and preferred redemption charges, is expected to be in a range from $0.68 to $0.72 per share. For the full year 2008, FFO, before impairment and preferred redemption charges, is expected to be in a range between $3.22 and $3.38 per share. Please refer to the Outlook Schedule, which follows the Consolidated Financial Statements in this release, for more detail on first quarter and full year 2008 guidance.

Dividends on Common Stock

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 shares of Class A Common Stock. The dividend is taxable to the stockholders in 2007 without regard to whether a particular stockholder receives the dividend in the form of cash or shares. The special dividend allowed Aimco to satisfy its REIT distribution requirement while preserving cash for other corporate purposes, including share repurchases.

Cash dividends paid on Class A Common Stock during the year ended December 31, 2007, totaled $2.40 per share, or 96% of AFFO (undiluted, excluding special dividend) and 70% of FFO (diluted, excluding special dividend), on a per share basis, and a 6.9% cash yield based on the $34.73 closing price of Aimco's Class A Common Stock on December 31, 2007.

Earnings Conference Call

Please join Aimco management for the Fourth Quarter 2007 earnings conference call to be held Friday, February 8, 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/About/Financial/4Q2007. Alternatively, you may join the conference call via telephone by dialing 866-700-5192 with passcode 39039038, or dialing 617-213-8833 for international callers. Please call approximately five minutes before the conference call is scheduled to begin. 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 passcode 70772669.

Supplemental Information

The Supplemental Information referenced in this release is available on Aimco's Website at the link http://www.aimco.com/CorporateInformation/About/Financial/4Q2007 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 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 levels, 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: 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. 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, 2006, 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 19 regional operating centers. Aimco, through its subsidiaries and affiliates, is the largest owner and operator of apartment communities in the United States with 1,169 properties, including 203,040 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 web site at http://www.aimco.com/.

GAAP Income Statements Consolidated Statements of Income (in thousands, except per share data) (unaudited) Three Months Ended Year Ended December 31, December 31, 2007 2006 2007 2006 REVENUES: Rental and other property revenues $419,072 $395,794 $1,640,506 $1,540,500 Property management revenues, primarily from affiliates 1,731 3,091 6,923 12,312 Activity fees and asset management revenues 34,201 16,582 73,755 48,893 Total revenues 455,004 415,467 1,721,184 1,601,705 OPERATING EXPENSES: Property operating expenses 199,053 190,877 768,457 709,694 Property management expenses 753 1,385 5,506 5,111 Activity and asset management expenses 5,345 5,819 23,102 17,342 Depreciation and amortization 120,978 121,532 487,822 452,741 General and administrative expenses 23,930 23,402 89,251 90,149 Other (income) expenses, net 4,003 3,177 (212) 7,403 Total operating expenses 354,062 346,192 1,373,926 1,282,440 Operating income 100,942 69,275 347,258 319,265 Interest income 11,079 12,724 42,539 34,043 Recoveries of (provisions for) losses on notes receivable, net (1,827) (2,067) (3,951) (2,785) Interest expense (110,482) (101,453) (422,130) (391,465) Deficit distributions to minority partners (24,016) (856) (39,150) (20,802) Equity in earnings (losses) of unconsolidated real estate partnerships 1,432 536 (277) (2,070) Recoveries of (provisions for) real estate impairment losses, net (6,638) - (6,638) 813 Gain on dispositions of unconsolidated real estate and other 4,874 7,329 31,777 26,845 Loss before minority interests and discontinued operations (24,636) (14,512) (50,572) (36,156) Minority interests: Minority interest in consolidated real estate partnerships 2,426 4,551 (2,036) (12,338) Minority interest in Aimco Operating Partnership, preferred [1] (1,782) (1,785) (7,128) (7,153) Minority interest in Aimco Operating Partnership, common [1] 3,560 2,726 11,682 13,172 Total minority interests 4,204 5,492 2,518 (6,319) Loss from continuing operations (20,432) (9,020) (48,054) (42,475) Income from discontinued operations, net [3] 8,147 91,519 77,965 219,262 Net (loss) income (12,285) 82,499 29,911 176,787 Net income attributable to preferred stockholders 14,302 16,388 66,016 81,132 Net (loss) income attributable to common stockholders $(26,587) $66,111 $(36,105) $95,655 Weighted average number of common shares outstanding [2] 97,986 100,245 99,629 100,280 Weighted average number of common shares and common share equivalents outstanding [2] 97,986 100,245 99,629 100,280 Earnings (loss) per common share - basic [2]: Loss from continuing operations (net of income attributable to preferred stockholders) $(0.35) $(0.25) $(1.14) $(1.23) Income from discontinued operations 0.08 0.91 $0.78 2.18 Net (loss) income attributable to common stockholders $(0.27) $0.66 $(0.36) $0.95 Earnings (loss) per common share - diluted [2]: Loss from continuing operations (net of income attributable to preferred stockholders) $(0.35) $(0.25) $(1.14) $(1.23) Income from discontinued operations 0.08 0.91 0.78 2.18 Net (loss) income attributable to common stockholders $(0.27) $0.66 $(0.36) $0.95 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 on 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 Year Ended Ended December 31, December 31, 2007 2006 2007 2006 Rental and other property revenues $3,694 $31,722 $52,456 $164,733 Property operating expenses (1,435) (16,252) (29,677) (86,005) Depreciation and amortization (735) (8,740) (12,518) (46,036) Other expenses (356) (1,968) (3,066) (5,956) Operating income 1,168 4,762 7,195 26,736 Interest income 236 551 993 2,126 Interest expense (679) (5,762) (9,959) (32,896) Gain on extinguishment of debt - - 22,852 - Minority interest in consolidated real estate partnerships (176) 5 1,107 3,561 Income (loss) before gain on dispositions of real estate, impairment recoveries, (deficit distributions) recoveries of deficit distributions to minority partners, income tax and minority interests in Aimco Operating Partnership 549 (444) 22,188 (473) Gain on dispositions of real estate, net of minority partners' interests 8,065 106,600 65,378 259,855 Real estate impairment recoveries, net 911 311 128 434 (Deficit distributions) recoveries of deficit distributions to minority partners (19) (2,476) 390 15,724 Income tax arising from disposals (525) (2,721) (2,135) (32,918) Minority interests in Aimco Operating Partnership (834) (9,751) (7,984) (23,360) Income from discontinued operations, net $8,147 $91,519 $77,965 $219,262 GAAP Balance Sheets Consolidated Balance Sheets (in thousands) (unaudited) December 31, 2007 December 31, 2006 ASSETS Buildings and improvements $9,724,669 $9,105,284 Land 2,659,265 2,355,497 Accumulated depreciation (3,035,242) (2,702,092) NET REAL ESTATE 9,348,692 8,758,689 Cash and cash equivalents 210,461 229,824 Restricted cash 318,959 346,029 Accounts receivable, net 71,463 87,166 Accounts receivable from affiliates, net 34,958 19,370 Deferred financing costs 79,923 70,418 Notes receivable from unconsolidated real estate partnerships, net 35,186 40,641 Notes receivable from non- affiliates, net 143,054 139,352 Investment in unconsolidated real estate partnerships 117,217 39,000 Other assets 207,857 202,759 Deferred income tax asset, net 14,426 - Assets held for sale 24,336 356,527 TOTAL ASSETS $10,606,532 $10,289,775 LIABILITIES AND STOCKHOLDERS' EQUITY Property tax-exempt bond financing $941,555 $926,952 Property loans payable 6,040,170 5,098,916 Term loans 475,000 400,000 Credit facility - 140,000 Other borrowings 75,057 67,660 TOTAL INDEBTEDNESS 7,531,782 6,633,528 Accounts payable 56,792 54,972 Accrued liabilities and other 449,485 409,990 Deferred income 202,392 142,260 Security deposits 49,469 42,401 Deferred income tax liability, net - 4,379 Liabilities related to assets held for sale 11,867 264,757 TOTAL LIABILITIES 8,301,787 7,552,287 Minority interests in consolidated real estate partnerships 441,778 212,149 Minority interests in Aimco Operating Partnership 113,263 185,447 STOCKHOLDERS' EQUITY Perpetual preferred stock 723,500 723,500 Convertible preferred stock - 100,000 Class A Common Stock 961 968 Additional paid-in capital 3,050,212 3,095,430 Notes due on common stock purchases (5,441) (4,714) Distributions in excess of earnings (2,019,528) (1,575,292) TOTAL STOCKHOLDERS' EQUITY 1,749,704 2,339,892 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $10,606,532 $10,289,775 GAAP Statements of Cash Flows Consolidated Statements of Cash Flows (in thousands) (unaudited) Year Ended Year Ended 2007 2006 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $29,911 $176,787 Depreciation and amortization 487,822 452,741 Adjustments to income from discontinued operations (68,527) (210,178) Other adjustments to reconcile net income 2,958 33,090 Changes in operating assets and liabilities 13,372 66,470 Net cash provided by operating activities 465,536 518,910 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of real estate (201,434) (153,426) Capital expenditures (689,719) (512,564) Proceeds from dispositions of real estate 431,863 958,604 Change in funds held in escrow from tax-free exchanges 25,863 (19,021) Cash from newly consolidated properties 7,549 23,269 Proceeds from sale of interests in real estate partnerships 194,329 45,662 Purchases of partnership interests (86,204) (37,570) Originations of notes receivable (10,812) (94,640) Proceeds from repayment of notes receivable 14,370 9,604 Other investing activities 42,596 13,122 Net cash (used in) provided by investing activities (271,599) 233,040 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from property loans 1,552,048 1,185,670 Principal repayments on property loans (850,484) (1,004,142) Proceeds from tax-exempt bonds 82,350 75,568 Principal repayments on tax-exempt bond financing (70,029) (229,287) Borrowings under term loans 75,000 - Repayments on revolving credit facility (140,000) (77,000) Proceeds (paydowns) on other borrowings (8,468) (22,838) Proceeds from issuance of preferred stock - 97,491 Redemption of preferred stock (100,000) (286,750) Repurchase of Class A Common Stock (307,382) (109,937) Proceeds from Class A Common Stock option exercises 53,887 107,603 Principal payments on Class A stock notes 1,659 21,844 Payment of Class A Common Stock dividends (230,806) (231,697) Payment of preferred stock dividends (69,100) (74,700) Payment of distributions to minority interests (180,684) (117,216) Other financing activities (21,291) (18,465) Net cash used in financing activities (213,300) (683,856) NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (19,363) 68,094 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 229,824 161,730 CASH AND CASH EQUIVALENTS AT END OF PERIOD $210,461 $229,824 Outlook and Forward Looking Statement First 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 first 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 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, 2006, 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 2008 Full Year 2008 GAAP earnings per share [1][4] -$0.57 to -$0.53 -$1.78 to -$1.62 Add: Depreciation and other $1.25 $5.00 FFO per share [2][5] $0.68 to $0.72 $3.22 to $3.38 AFFO per share [3][5] greater than $2.40 2008 Same Store operating assumptions: Weighted average daily occupancy 94% to 95% 94% to 95% NOI change - sequential -3.5% to -2.5% NOI change - 2008 vs. 2007 0.5% to 1.5% 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 or (iii) preferred stock redemption related costs. [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 90.9 million and 90.6 million weighted average common shares (diluted) for first quarter 2008 and full year 2008, respectively [5] FFO per share and AFFO per share is calculated based on 91.6 million and 91.8 million weighted average common shares (diluted) for the first quarter 2008 and full year 2008, respectively.