SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark One)
[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
	OR
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE TRANSITION PERIOD FROM       TO

Commission File Number 1-13232

Apartment Investment and Management Company
(Exact name of registrant as specified in its charter)

Maryland (State or other jurisdiction of Incorporation or organization)	84-1259577 (I.R.S. Employer Identification No.)
2000 South Colorado Boulevard, Tower 2, Suite 2-1000 Denver, Colorado (Address of principal executive offices)	80222 (Zip Code)

(303) 757-8101
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address, and former fiscal year,
if changed since last report)

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

The number of shares of Class A Common Stock outstanding as of April 30, 2001: 73,365,985

TABLE OF CONTENTS

EX-3.2 Amended/Restated Bylaws

EX-99.1 Agmt. Re: Disclosure of Long-Term Debt

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

FORM 10-Q

INDEX

			Page
	PART I.	FINANCIAL INFORMATION
ITEM 1.		Financial Statements
		Consolidated Balance Sheets as of March 31, 2001 (unaudited) and December 31, 2000		3
		Consolidated Statements of Income for the Three Months Ended March 31, 2001 and 2000		4
		(unaudited)
		Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2001 and		5
		2000 (unaudited)
		Notes to Consolidated Financial Statements (unaudited)		6
ITEM 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations		17
ITEM 3.		Quantitative and Qualitative Disclosures about Market Risk		24
	PART II.	OTHER INFORMATION
ITEM 1.		Legal Proceedings		25
ITEM 2.		Changes in Securities and Use of Proceeds		25
ITEM 3.		Defaults Upon Senior Securities		25
ITEM 4.		Submission of Matters to a Vote of Security Holders		25
ITEM 5.		Other Information		25
ITEM 6.		Exhibits and Reports on Form 8-K		26
Signatures				28

2

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)

March 31, 2001							December 31, 2000
				(Unaudited)
			ASSETS
Real estate:
	Improved land			$	1,023,785		$	976,421
	Buildings and improvements				6,658,285			6,036,031
Total real estate					7,682,070			7,012,452
	Less accumulated depreciation				(1,196,092	)		(913,263	)
		Net real estate			6,485,978			6,099,189
Investments in unconsolidated real estate partnerships					615,987			676,188
Investments in unconsolidated subsidiaries					—			107,781
Investments in debt securities					110,576			—
Notes receivable from unconsolidated real estate partnerships					214,082			140,860
Notes receivable from and advances to unconsolidated subsidiaries, net					—			190,453
Cash and cash equivalents					113,739			157,115
Restricted cash					155,275			126,914
Accounts receivable					78,412			2,873
Deferred financing costs, net					50,316			44,403
Goodwill, net					111,539			100,532
Other assets					201,723			53,566
			Total assets	$	8,137,627		$	7,699,874
			LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Secured notes payable				$	3,553,309		$	3,258,342
Secured tax-exempt bond financing					773,035			773,033
Term loan					—			74,040
Credit facility					275,603			254,700
			Total indebtedness		4,601,947			4,360,115
Accounts payable					67,291			88,818
Accrued and other liabilities					210,752			211,324
Deferred rental income					11,267			5,611
Deferred taxes liability, net					34,167			—
Security deposits					31,714			28,332
			Total liabilities		4,957,138			4,694,200
Mandatorily redeemable convertible preferred securities					32,270			32,330
Minority interest in other entities					113,924			139,731
Minority interest in Operating Partnership					320,038			331,956
Stockholders’ equity:
	Preferred Stock, perpetual				379,020			315,770
	Preferred Stock, convertible				621,947			521,947
	Class A Common Stock, $.01 par value, 461,902,738 shares and 468,432,738   shares authorized, 73,523,297 and 71,337,217 shares issued and outstanding,   at March 31, 2001 and December 31, 2000, respectively				735			713
	Additional paid-in capital				2,175,904			2,072,208
	Accumulated other comprehensive income				3,550			—
	Notes receivable on common stock purchases				(41,971	)		(44,302	)
	Distributions in excess of earnings				(424,928	)		(364,679	)
			Total stockholders’ equity		2,714,257			2,501,657
			Total liabilities and stockholders’ equity	$	8,137,627		$	7,699,874

See notes to consolidated financial statements.

3

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Data)
(Unaudited)

		Three Months Ended
		March 31,
		2001			2000
RENTAL PROPERTY OPERATIONS:
Rental and other property revenues		$	322,234		$	224,320
Property operating expense			(125,686	)		(90,751	)
Owned property management expense			(3,210	)		(2,104	)
Income from property operations			193,338			131,465
SERVICE COMPANY BUSINESS:
Management fees and other income from affiliates			51,020			10,025
Management and other expenses			(32,049	)		(3,904	)
General and administrative expenses allocation			(1,281	)		(1,053	)
Amortization of intangibles			(4,901	)		(1,575	)
Income from service company business			12,789			3,493
General and administrative expenses:
	Before allocation		(4,092	)		(4,264	)
	Allocation to consolidated service company business		1,281			1,053
General and administrative expenses, net			(2,811	)		(3,211	)
Depreciation on rental property			(105,391	)		(61,291	)
Interest expense			(87,216	)		(58,207	)
Interest and other income			14,663			13,004
Equity in earnings (losses) of unconsolidated real estate partnerships			(4,476	)		2,445
Equity in earnings of unconsolidated subsidiaries			—			2,771
Minority interest in other entities			(5,625	)		(7,120	)
Income before gain on disposition of properties and minority interest in Operating Partnership			15,271			23,349
Gain on disposition of properties, net			66			5,105
Income before minority interest in Operating Partnership			15,337			28,454
Minority interest in Operating Partnership, common			782			(989	)
Minority interest in Operating Partnership, preferred			(2,101	)		(1,583	)
Net income			14,018			25,882
Net income attributable to preferred stockholders			18,695			14,515
Net income (loss) attributable to common stockholders		$	(4,677	)	$	11,367
Basic earnings (loss) per common share		$	(0.07	)	$	0.17
Diluted earnings (loss) per common share		$	(0.07	)	$	0.17
Dividends declared per common share		$	0.78		$	0.70

See notes to consolidated financial statements.

4

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)

				Three Months Ended
				March 31,
				2001			2000
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income			$	14,018		$	25,882
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			110,292			62,866
		Gain on disposition of properties			(66	)		(5,105	)
		Gain on sale of investments			(7,148	)		—
		Minority interest in Operating Partnership			1,319			2,572
		Minority interest in other entities			5,625			7,120
		Equity in (earnings) losses of unconsolidated real estate partnerships			4,476			(2,445	)
		Equity in earnings of unconsolidated subsidiaries			—			(2,771	)
		Changes in operating assets and operating liabilities			(43,363	)		(18,562	)
			Total adjustments		71,135			43,675
			Net cash provided by operating activities		85,153			69,557
CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchase of and additions to real estate				(65,099	)		(39,389	)
	Proceeds from sales of property				30,147			16,953
	Proceeds from sales of investments				137,899			—
	Cash from newly consolidated properties				22,486			14,179
	Purchase of notes receivable, general and limited partnership interests and other assets				(36,801	)		(102,814	)
	Purchase of/additions to notes receivable				(27,083	)		(21,114	)
	Proceeds from repayment of notes receivable				3,584			8,684
	Cash paid in connection with mergers/acquisitions				(16,777	)		—
	Cash paid for merger/acquisition related costs				(10,144	)		(4,679	)
	Distributions received from investments in unconsolidated real estate partnerships				18,743			18,976
			Net cash provided by (used in) investing activities		56,955			(109,204	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from secured notes payable borrowings				75,849			82,762
	Principal repayments on secured notes payable				(69,635	)		(38,082	)
	Principal repayments on secured tax-exempt bond financing				(3,254	)		(1,572	)
	Principal repayments on secured short-term financing				(25,105	)		—
	Net borrowings (paydowns) on term loan and revolving credit facilities				(120,170	)		68,000
	Payment of loan costs				(417	)		(3,603	)
	Proceeds from issuance of common and preferred stock, exercise of options/warrants				62,970			35,720
	Repurchase of Class A Common Stock and Operating Partnership Units				(8,922	)		(2,515	)
	Principal repayments received on notes due from officers on Class A Common Stock purchases				4,521			3,526
	Payment of common stock dividends				(55,138	)		(45,642	)
	Payment of distributions to minority interest				(27,054	)		(12,198	)
	Payment of preferred stock dividends				(19,129	)		(11,463	)
			Net cash provided by (used in) financing activities		(185,484	)		74,933
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS					(43,376	)		35,286
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD					157,115			101,604
CASH AND CASH EQUIVALENTS AT END OF PERIOD				$	113,739		$	136,890

See notes to consolidated financial statements.

5

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2001
(Unaudited)

NOTE 1 — Organization

      Apartment Investment and Management Company, a Maryland corporation incorporated on January 10, 1994 (“AIMCO” and, together with its consolidated subsidiaries and other controlled entities, the “Company”), owns a majority of the ownership interests in AIMCO Properties, L.P., (the “AIMCO Operating Partnership”) through its wholly owned subsidiaries, AIMCO-GP, Inc. and AIMCO-LP, Inc. The Company held an approximate 86% interest in the AIMCO Operating Partnership as of March 31, 2001. AIMCO-GP, Inc. is the sole general partner of the AIMCO Operating Partnership.

      As of March 31, 2001, AIMCO:

• owned or controlled (consolidated) and managed 157,368 units in 580 apartment properties;

• held an equity interest in (unconsolidated) and managed 99,374 units in 612 apartment properties; and

• managed 56,634 units in 451 apartment properties for third party owners.

      At March 31, 2001, AIMCO had 73,523,297 shares of Class A Common Stock (the “Common Stock”) outstanding and the AIMCO Operating Partnership had 8,745,129 Partnership Common Units (“Common OP Units”) outstanding and 2,379,084 special units (excluding units held by the Company), for a combined total of 84,647,510 shares of Common Stock, Common OP Units, and special units outstanding.

NOTE 2 — Basis of Presentation

      The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2001 are not necessarily indicative of the results that may be expected for the year ending December 31, 2001.

      The balance sheet at December 31, 2000 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

      For further information, refer to the statements and notes thereto included in the AIMCO annual report on Form 10-K for the year ended December 31, 2000. Certain 2000 financial statement amounts have been reclassified to conform to the 2001 presentation.

      The accompanying consolidated financial statements include the accounts of AIMCO, the AIMCO Operating Partnership, majority owned subsidiaries and controlled real estate limited partnerships. Interests held by limited partners in real estate partnerships controlled by the Company are reflected as minority interest in other entities. All significant intercompany balances and transactions have been eliminated in consolidation. Minority interest in limited partnerships represents the non-controlling partners’ share of the underlying net assets of the Company’s controlled limited partnerships. With regard to such partnerships, losses in excess of the minority partners' basis of $10.9 million for the three months ended March 31, 2001 have been charged to operations. The assets of property owning limited partnerships and limited liability companies owned or controlled by AIMCO or the AIMCO Operating Partnership generally are not available to pay creditors of AIMCO or the AIMCO Operating Partnership.

6

NOTE 3 — Acquisitions

      During the three months ended March 31, 2001 the Company purchased:

• for $47 million, limited partnership interests in 145 partnerships (which own 292 properties) where AIMCO serves as general partner;

• one apartment community with details below:

Date Acquired	Location	Number of Units	Purchase Price
March 2001	Naperville, IL	240	$19 million

      On March 26, 2001, the Company completed a merger pursuant to an agreement entered into on November 29, 2000 between AIMCO and Oxford Tax Exempt Fund II Limited Partnership (“OTEF”), for a total purchase price of $270 million, comprised of $100 million in Class P Convertible Cumulative Preferred Stock (the “Class P Preferred Stock”), $106 million in Common Stock issued at $48.46 per share, $17 million in cash, and $47 million in assumed liabilities. OTEF merged with a subsidiary of the AIMCO Operating Partnership. In connection with the Company’s acquisition of interests in properties (the “Oxford properties”) from affiliates of Oxford Realty Financial Group, Inc., on September 20, 2000, the Company had acquired interests in OTEF’s managing general partner and OTEF’s associate general partner. After the merger, the Company’s interests in OTEF include a 1% general partner interest held by OTEF’s managing general partner and a 99% limited partner interest held by the AIMCO Operating Partnership. OTEF was a publicly traded master limited partnership that invested primarily in tax-exempt bonds issued to finance high quality apartment and senior living/health care communities, the majority of which were owned by affiliates of OTEF, including Oxford entities. In the merger, each BAC was converted into the right to receive 0.299 shares of Common Stock and 0.547 shares of AIMCO’s Class P Preferred Stock. In addition, the BAC holders received a special distribution of $50 million, or $6.21 per BAC.

NOTE 4 — Notes Receivable

      The following table summarizes the Company’s notes receivable from unconsolidated real estate partnerships and subsidiaries at March 31, 2001 and 2000 (in thousands):

	Notes Receivable from				Notes Receivable from
	Unconsolidated Real Estate				Unconsolidated
	Partnerships						Subsidiaries
	2001		2000			2001			2000
Par value notes	$	53,473	$	52,425		$		—	$	89,633
Discounted notes		160,609		67,273			—			—
Total	$	214,082	$	119,698		$		—	$	89,633

      The Company recognizes interest income earned from its investments in notes receivable based upon whether the collectibility of such amounts is both probable and estimable. The notes receivable were either extended by the Company and are carried at the face amount plus accrued interest (“par value notes”) or were made by predecessors whose positions have been acquired by the Company at a discount and are carried at the acquisition amount using the cost recovery method (“discounted notes”).

      As of March 31, 2001 and March 31, 2000, the Company held $53.5 million and $52.4 million, respectively, of par value notes receivable from unconsolidated real estate partnerships, including accrued interest, for which management believes the collectibility of such amounts is both probable and estimable. As such, interest income from the par value notes is generally recognized as it is earned. Interest income from the par value

7

notes for the three months ended March 31, 2001 and 2000, totaled $6.3 million and $3.8 million, respectively.

      As of March 31, 2001 and 2000, the Company held discounted notes, including accrued interest, with a carrying value of $160.6 million and $67.3 million, respectively. The total face value plus accrued interest of these notes were $237.7 million and $141.4 million in 2001 and 2000, respectively. Effective January 1, 2001, the Company now consolidates its previously unconsolidated subsidiaries (see Note 10). As a result, the notes receivable from unconsolidated subsidiaries have been eliminated and notes receivable from unconsolidated real estate partnerships have increased, and includes discounted notes which were held at the previously unconsolidated subsidiaries. In general, interest income from the discounted notes is not recognized as it is earned until such time as the timing and amounts of cash flows are probable and estimable.

      Under the cost recovery method, the discounted notes are carried at the acquisition amount, less subsequent cash collections, until such time as collectibility is probable and the timing and amounts are estimable. Based upon closed or pending transactions (including sales activity), market conditions, and improved operations of the obligor, among other things, certain notes and the related discounts have been determined to be collectible. Accordingly, interest income that had previously been deferred and portions of the related discounts were recognized as interest income during the period. For the three months ended March 31, 2001 and 2000, the Company recognized deferred interest income and discounts of approximately $1.4 million ($0.02 per basic and diluted share) and $6.2 million ($0.08 per basic and diluted share). Approximately 90% of the recognized interest income is collected in cash or recapitalized within 12 months from the date that such amounts were determined to be collectible, and the remainder is collected in the following six months.

NOTE 5 — Commitments and Contingencies

   Legal

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

   Limited Partnerships

      In connection with the Company’s acquisitions of interests in limited partnerships that own properties, the Company and its affiliates are sometimes subject to legal actions, including allegations that such activities may involve breaches of fiduciary duties to the limited partners of such partnerships or violations of the relevant partnership agreements. The Company believes it complies with its fiduciary obligations and relevant partnership agreements, and does not expect any such legal actions to have a material adverse effect on the consolidated financial condition or results of operations of the Company and its subsidiaries taken as a whole.

   Pending Investigations of HUD Management Arrangements

      In July 1999, the National Housing Partnership (“NHP”) received a grand jury subpoena requesting documents relating to NHP’s management of HUD-assisted or HUD-insured multi-family projects and NHP’s operation of a group purchasing program created by NHP, known as Buyers Access. The subpoena relates to the same subject matter as subpoenas NHP received in October and December of 1997 from the HUD Inspector General. To date, neither the HUD Inspector General nor the grand jury has initiated any action against NHP or AIMCO or, to NHP’s or AIMCO’s knowledge, any owner of HUD property managed by NHP. AIMCO believes that NHP’s operations and programs are in compliance, in all material respects, with all laws, rules and regulations relating to HUD-assisted or HUD-insured properties. AIMCO is cooperating with the investigation and does not believe that the investigation will result in a material adverse effect on the financial condition of the Company. However, as with any similar investigation, there can be no assurance that these will not result in material fines, penalties or other costs that may impact the Company’s future results of operations or cash flows.

   Environmental

      Various Federal, state and local laws subject property owners or operators to liability for the costs of removal or remediation of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of the hazardous substances. The

8

presence of, or the failure to properly remediate, hazardous substances may adversely affect occupancy at contaminated apartment communities and our ability to sell or borrow against contaminated properties. In addition to the costs associated with investigation and remediation actions brought by governmental agencies, the presence of hazardous wastes on a property could result in personal injury or similar claims by private plaintiffs. Various laws also impose liability for the cost of removal or remediation of hazardous substances at the disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous or toxic substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of our properties, the Company could potentially be liable for environmental liabilities or costs associated with properties or properties it acquires or manages in the future.

NOTE 6 — Stockholders’ Equity

					Class A
	Preferred Stock				Common Stock									Notes						Accumulated
											Additional			Receivable			Distributions			other
	Shares				Shares						Paid-in			from			in Excess			Comprehensive
(In Thousands)	Issued		Amount		Issued			Amount			Capital			Officers			of Earnings			Income		Total
BALANCE DECEMBER 31, 2000		30,174	$	837,717		71,337		$	713		$	2,072,208		$	(44,302	)	$	(364,679	)	$	—	$	2,501,657
Net proceeds from issuances of   Preferred Stock		2,530		63,250		—			—			(2,226	)		—			—			—		61,024
Repurchase of Class A Common   Stock		—		—		(185	)		(2	)		(7,650	)		—			—			—		(7,652	)
Conversion of mandatorily redeemable   convertible preferred securities to Class   A Common Stock		—		—		1			—			60			—			—			—		60
Conversion of AIMCO Operating   Partnership units to Class A Common   Stock		—		—		68			1			3,096			—			—			—		3,097
Purchase of stock by officers and   awards of restricted stock		—		—		52			1			2,077			(2,190	)		—			—		(112	)
Repayment of notes receivable from   officers		—		—		—			—			—			4,521			—			—		4,521
Class P Preferred Stock issued as   consideration for the OTEF merger		4,000		100,000		—			—			—			—			—			—		100,000
Stock options and warrants exercised		—		—		65			—			2,056			—			—			—		2,056
Class A Common Stock issued as   consideration for the OTEF merger		—		—		2,185			22			106,283			—			—			—		106,305
Net income		—		—		—			—			—			—			14,018			—		14,018
Dividends paid — Class A Common   Stock		—		—		—			—			—			—			(55,138	)		—		(55,138	)
Dividends paid — Preferred Stock		—		—		—			—			—			—			(19,129	)		—		(19,129	)
Unrealized gain on investments		—		—		—			—			—			—			—			3,550		3,550
BALANCE MARCH 31, 2001		36,704	$	1,000,967		73,523		$	735		$	2,175,904		$	(41,971	)	$	(424,928	)	$	3,550	$	2,714,257

   Preferred Stock

      On March 26, 2001, AIMCO issued 4,000,000 shares of newly created Class P Preferred Stock, par value $.01 per share, in connection with the OTEF merger. The Class P Preferred Stock is valued at $100 million based on a $25 per share liquidation preference. Holders of Class P Preferred Stock are entitled to receive, when and as declared by the AIMCO board of directors, cash dividends in an amount per share equal to the greater of (i) $2.25 per year (equivalent to 9% of the liquidation preference) or (ii) the cash dividends payable on the number of shares of Common Stock into which a share of Class P Preferred Stock is convertible. Each share of Class P Preferred Stock is convertible at the option of the holder into 0.4464 shares of Common Stock, subject to certain anti-dilutive adjustments. The initial conversion ratio was in excess of the fair market value of the Common Stock on the commitment date. The Class P Preferred Stock is senior to Common Stock as to dividends and liquidation. Upon any liquidation, dissolution or winding up of the Company, before payments or distributions by the Company are made to any holders of Common Stock, the holders of the Class P Preferred Stock are entitled to receive a liquidation preference of $25 per share, plus accumulated, accrued and unpaid dividends.

      On March 19, 2001, AIMCO completed the sale of 2,200,000 shares of its Class Q Cumulative Preferred Stock, $.01 par value per share (the “Class Q Preferred Stock”), in an underwritten public offering. AIMCO also gave the

9

underwriters an option to purchase up to 330,000 additional shares of the Class Q Preferred Stock to cover over-allotments, which was exercised on March 29, 2001. The net proceeds of approximately $61 million were used to repay short-term indebtedness. Holders of Class Q Preferred Stock are entitled to receive, when and as declared by the AIMCO board of directors cash dividends in an amount per share equal to $2.525 per year (equivalent to 10.10% of the liquidation preference). On and after March 19, 2006, the Company may redeem the Class Q Preferred Stock for cash at a price per share equal to the $25 liquidation preference plus accumulated, accrued and unpaid dividends, if any, to the redemption date. The Class Q Preferred Stock is senior to Common Stock as to dividends and liquidation. Upon any liquidation, dissolution or winding up of AIMCO, before payments or distributions by AIMCO are made to any holders of Common Stock, the holders of the Class Q Preferred Stock are entitled to receive a liquidation preference of $25 per share, plus accumulated, accrued and unpaid dividends.

   Common Stock

      On March 26, 2001, AIMCO issued approximately 2.2 million shares of Class A Common Stock in connection with the OTEF merger. Pursuant to the agreement of merger, each OTEF BAC was converted into the right to receive 0.299 shares of Common Stock.

      During the three months ended March 31, 2001, the Company repurchased and retired approximately 185,000 shares of Class A Common Stock at an average price of $41.36 per share.

      During the three months ended March 31, 2001, 68,191 shares of Class A Common Stock were issued in exchange for Common OP Units.

NOTE 7 — Earnings Per Share

      Earnings per share is calculated based on the weighted average number of shares of common stock, common stock equivalents and dilutive convertible securities outstanding during the period. The following tables illustrate the calculation of basic and diluted earnings per share for the three months ended March 31, 2001 and 2000 (in thousands, except per share data):

			Three Months Ended
			March 31,
			2001			2000
NUMERATOR:
Net income			$	14,018		$	25,882
Preferred stock dividends				(18,695	)		(14,515	)
Numerator for basic and diluted earnings per share — income (loss) attributable to common stockholders			$	(4,677	)	$	11,367
DENOMINATOR:
Denominator for basic earnings per share — weighted average number of shares of common stock outstanding				70,619			65,947
Effect of dilutive securities:
Dilutive potential common shares, options and warrants				—			368
Denominator for dilutive earnings per share				70,619			66,315
Basic earnings (loss) per common share:
	Operations		$	(0.07	)	$	0.09
	Gain on disposition of properties			—			0.08
		Total	$	(0.07	)	$	0.17
Diluted earnings (loss) per common share:
	Operations		$	(0.07	)	$	0.09
	Gain on disposition of properties			—			0.08
		Total	$	(0.07	)	$	0.17

10

NOTE 8 — Industry Segments

      AIMCO has two reportable segments: real estate and service business. The Company owns and operates multi-family apartment communities throughout the United States and Puerto Rico which generate rental and other property related income through the leasing of apartment units to a diverse base of residents. The Company separately evaluates the performance of each of its apartment communities. However, because each of the apartment communities has similar economic characteristics, facilities, services and residents, the apartment communities have been aggregated into a single apartment communities segment, or real estate segment. There are different components of the multi-family business for which management considers disclosure to be useful. All real estate revenues are from external customers and no revenues are generated from transactions with other segments. There were no residents that contributed 10% or more of the Company’s total revenues during the three months ended March 31, 2001 and 2000. The Company also manages apartment properties for third parties and affiliates through its service company business segment. As disclosed, a significant portion of the revenues of the service business are from affiliates of the Company.

      The performance measure used by management of the Company for each segment is its contribution to free cash flow (“Free Cash Flow” (“FCF”)). Free Cash Flow is defined by the Company as net operating income minus the capital spending required to maintain the related assets. Free Cash Flow measures profitability prior to the cost of capital. Other performance measures also used by management of the Company include Funds From Operations (“FFO”), Adjusted Funds From Operations (“AFFO”) and Earnings Before Structural Depreciation (“EBSD”).

      The following tables present the contribution (separated between consolidated and unconsolidated activity) to the Company’s Free Cash Flow for the three months ended March 31, 2001 and 2000 from these segments, and a reconciliation of Free Cash Flow to Funds From Operations, Adjusted Funds From Operations, and net income (in thousands, except equivalent units (ownership effected and period weighted) and monthly rents):

11

FREE CASH FLOW FROM BUSINESS COMPONENTS
For the Three Months Ended March 31, 2001 and 2000
(in thousands)

								2001											2000
					Consolidated			Unconsolidated		Total			%			Consolidated			Unconsolidated		Total			%
Real Estate
Conventional
	Average monthly rent greater than $900 per unit (equivalent units of 15,785 and 7,417 for 2001 and 2000)				$	37,585		$	2,498	$	40,083			19.2	%	$	13,674		$	2,012	$	15,686			10.2	%
	Average monthly rent $800 to $900 per unit (equivalent units of 12,183 and 7,952 for 2001 and 2000)					23,201			1,261		24,462			11.7	%		12,986			1,848		14,834			9.7	%
	Average monthly rent $700 to $800 per unit (equivalent units of 15,759 and 10,617 for 2001 and 2000)					23,947			2,057		26,004			12.4	%		11,432			2,705		14,137			9.2	%
	Average monthly rent $600 to $700 per unit (equivalent units of 38,355 and 32,658 for 2001 and 2000)					46,033			4,361		50,394			24.1	%		27,916			5,025		32,941			21.5	%
	Average monthly rent $500 to $600 per unit (equivalent units of 36,019 and 46,053 for 2001 and 2000)					32,663			3,783		36,446			17.4	%		35,006			4,982		39,988			26.0	%
	Average monthly rent less than $500 per unit (equivalent units of 16,292 and 26,549 for 2001 and 2000)					10,473			373		10,846			5.2	%		14,818			1,999		16,817			11.0	%
				Subtotal conventional real estate contribution to Free Cash Flow		173,902			14,333		188,235			89.9	%		115,832			18,571		134,403			87.5	%
Affordable (equivalent units of 14,692 and 13,521 for 2001 and 2000)						5,533			6,496		12,029			5.7	%		2,809			8,449		11,258			7.3	%
College housing (average rent of $630 and $663 per month for 2001 and 2000) (equivalent units of 3,365 and 3,962 for 2001 and 2000)						2,950			173		3,123			1.5	%		3,256			340		3,596			2.3	%
Other real estate						1,615			17		1,632			0.8	%		440			665		1,105			0.7	%
Resident services						(130	)		77		(53	)		0.0	%		1,407			159		1,566			1.0	%
Minority interest						(25,204	)		—		(25,204	)		(12.0	%)		(18,696	)		—		(18,696	)		(12.2	%)
		Total real estate contribution to Free Cash Flow				158,666	(1)		21,096		179,762			85.9	%		105,048	(1)		28,184		133,232			86.8	%
Service Business
	Management contracts (property and asset management)
			Controlled properties			7,185			—		7,185			3.4	%		3,417			1,862		5,279			3.4	%
			Third party with terms in excess of one year			196			—		196			0.1	%		—			2,185		2,185			1.4	%
			Third party cancelable in 30 days			325			—		325			0.2	%		—			257		257			0.2	%
			Other service income			2,514			—		2,514			1.2	%		532			1,142		1,674			1.1	%
				Service business contribution to Free Cash Flow before fees		10,220			—		10,220			4.9	%		3,949			5,446		9,395			6.1	%
Activity based fees						7,470			—		7,470			3.6	%		1,119			—		1,119			0.7	%
			Total service business contribution to Free Cash Flow			17,690	(2)		—		17,690			8.5	%		5,068	(2)		5,446		10,514			6.8	%
Interest income
	General partner loan interest					6,334			—		6,334			3.0	%		3,815			—		3,815			2.5	%
	Transactional income					4,735			—		4,735			2.3	%		6,191			—		6,191			4.0	%
	Money market and interest bearing accounts					3,127			—		3,127			1.5	%		2,532			—		2,532			1.6	%
	Other notes receivable					467			—		467			0.2	%		466			—		466			0.3	%
			Total interest income contribution to Free Cash Flow			14,663			—		14,663			7.0	%		13,004			—		13,004			8.5	%
General and Administrative Expense						(2,811	)		—		(2,811	)		(1.3	%)		(3,211	)		—		(3,211	)		(2.1	%)
Free Cash Flow (FCF) (4)						188,208			21,096		209,304			100	%		119,909			33,630		153,539			100	%

12

FREE CASH FLOW FROM BUSINESS COMPONENTS
For the Three Months Ended March 31, 2001 and 2000
(in thousands)

								2001										2000
					Consolidated				Unconsolidated			Total			Consolidated				Unconsolidated			Total
Free Cash Flow (FCF)(4)						188,208				21,096			209,304			119,909				33,630			153,539
Interest expense:
	Secured debt
			Long-term, fixed rate			(75,675	)			(9,870	)		(85,545	)		(40,968	)			(9,945	)		(50,913	)
			Long-term, variable rate			(722	)			(2,524	)		(3,246	)		(176	)			(431	)		(607	)
			Short-term			(2,188	)			(106	)		(2,294	)		(10,850	)			(811	)		(11,661	)
	Lines of credit and other unsecured debt					(9,738	)			(1	)		(9,739	)		(5,778	)			(248	)		(6,026	)
	Interest expense on convertible preferred securities					(525	)			—			(525	)		(2,429	)			—			(2,429	)
	Interest capitalized					1,632				—			1,632			1,994				1,165			3,159
				Total interest expense before minority interest		(87,216	)			(12,501	)		(99,717	)		(58,207	)			(10,270	)		(68,477	)
	Minority interest share of interest expense					12,678				—			12,678			7,940				—			7,940
				Total interest expense after minority interest		(74,538	)			(12,501	)		(87,039	)		(50,267	)			(10,270	)		(60,537	)
Distributions on preferred OP units						(2,101	)			—			(2,101	)		(1,583	)			—			(1,583	)
Dividends on preferred securities owned by minority interest						(678	)			—			(678	)		(678	)			—			(678	)
Dividends on preferred stock						(18,695	)			—			(18,695	)		(14,515	)			—			(14,515	)
		Total dividends / distributions on preferred securities				(21,474	)			—			(21,474	)		(16,776	)			—			(16,776	)
Non-structural depreciation, net of capital replacements						(3,836	)			(289	)		(4,125	)		(851	)			(950	)		(1,801	)
Amortization of intangibles						(4,901	)			—			(4,901	)		(1,575	)			(508	)		(2,083	)
Gain on disposition of properties						66				—			66			5,105				—			5,105
Deferred tax provision						—				—			—			—				(852	)		(852	)
	Earnings Before Structural Depreciation (EBSD)(4)					83,525				8,306			91,831			55,545				21,050			76,595
Structural depreciation, net of minority interest in other entities						(84,508	)			(12,782	)		(97,290	)		(48,405	)			(15,834	)		(64,239	)
	Net income (loss) attributable to common OP Unitholders and stockholders					(983	)			(4,476	)(3)		(5,459	)		7,140				5,216	(3)		12,356
Gain on disposition of properties						(66	)			—			(66	)		(5,105	)			—			(5,105	)
Structural depreciation, net of minority interest in other entities						84,508				12,782			97,290			48,405				15,834			64,239
Non-structural depreciation, net of minority interest in other entities						13,304				2,224			15,528			8,572				3,128			11,700
Amortization of intangibles						4,901				—			4,901			1,575				508			2,083
Deferred tax provision						—				—			—			—				852			852
	Funds from Operations (FFO) (4)					101,664				10,530			112,194			60,587				25,538			86,125
Capital replacement reserve						(9,468	)			(1,935	)		(11,403	)		(7,721	)			(2,178	)		(9,899	)
	Adjusted Funds From Operations (AFFO) (4)				$	92,196			$	8,595		$	100,791		$	52,866			$	23,360		$	76,226

							Earnings (Loss)							Earnings
		Earnings (Loss)			Shares		Per Share			Earnings		Shares		Per Share
EBSD
	Basic	$	91,831			81,750				$	76,595		72,307
	Diluted		106,416			98,575					88,592		87,150
Net Income (Loss)
	Basic		(5,459	)		81,750	$	(0.07	)		12,356		72,307	$	0.17
	Diluted		(5,459	)		81,750	$	(0.07	)		12,356		72,675	$	0.17
FFO
	Basic		112,194			81,750					86,125		72,307
	Diluted		126,779			98,575					98,122		87,150
AFFO
	Basic		100,791			81,750					76,226		72,307
	Diluted		115,376			98,575					88,223		87,150

13

(1) Reconciliation of total consolidated real estate contribution to Free Cash Flow to consolidated rental and other property revenues:

		2001		2000
Consolidated real estate contribution to Free Cash Flow		$	158,666	$	105,048
Plus: minority interest			25,204		18,696
Plus: capital replacement reserves			9,468		7,721
Plus: property operating expenses			125,686		90,751
Plus: owned property management expenses			3,210		2,104
	Rental and other property revenues	$	322,234	$	224,320

(2) Reconciliation of total service business contribution to Free Cash Flow to consolidated management fees and other income from affiliates:

		2001		2000
Consolidated service business contribution to Free Cash Flow		$	17,690	$	5,068
Plus: management and other expenses			32,049		3,904
Plus: general and administrative expenses allocation			1,281		1,053
	Management fees and other income from affiliates	$	51,020	$	10,025

(3) Reconciliation of unconsolidated net income attributable to common OP unitholders and stockholders to equity in earnings (losses) of unconsolidated real estate partnerships and equity in earnings (losses) of unconsolidated subsidiaries:

			2001			2000
Equity in earnings of unconsolidated subsidiaries			$	—		$	2,771
Equity in earnings (losses) of unconsolidated real estate
	partnerships			(4,476	)		2,445
		Unconsolidated net income (loss) attributable to common OP unitholders and stockholders	$	(4,476	)	$	5,216

(4) Free Cash Flow, Earnings Before Structural Depreciation, Funds From Operations, and Adjusted Funds From Operations are measurement standards used by the Company’s management. These should not be considered alternatives to net income or net cash flow from operating activities, as determined in accordance with GAAP, as an indication of the Company’s performance or as a measure of liquidity.

    • “Free Cash Flow” is defined by the Company as net operating income minus the capital spending required to maintain the related assets. It measures profitability prior to the cost of capital.

    • “Earnings Before Structural Depreciation” is defined by the Company as Net Income, determined in accordance with GAAP, plus “structural depreciation”, i.e., depreciation of buildings and land improvements whose useful lives exceed 20 years.

    • “Funds From Operations” is defined by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”) as net income (loss), computed in accordance with generally accepted accounting principles (“GAAP”), excluding gains and losses from debt restructuring and sales of property, plus real estate related depreciation and amortization (excluding amortization of financing costs), and after adjustments for unconsolidated partnerships and joint ventures. The Company calculates FFO (diluted) based on the NAREIT definition, as further adjusted for minority interest in the AIMCO Operating Partnership, amortization of intangibles for which no economic loss is anticipated or occurring, interest expense on mandatorily convertible preferred securities, the non-cash deferred portion of the income tax provision and less the payment of dividends on perpetual and non-dilutive convertible preferred stock. There can be no assurance that the Company’s basis for computing FFO is comparable with that of other real estate investment trusts.

    • “Adjusted Funds From Operations” (“AFFO”) is defined by the Company as FFO less a charge for capital

14

replacements equal to at least $300 per apartment unit.

Reconciliation of FCF, EBSD, FFO and AFFO to Net Income:

	For the Three Months Ended March 31, 2001												For the Three Months Ended March 31, 2000
	FCF			EBSD			FFO			AFFO			FCF			EBSD			FFO			AFFO
Amount per Free Cash Flow schedule above	$	209,304		$	91,831		$	112,194		$	100,791		$	153,539		$	76,595		$	86,125		$	76,226
Total interest expense after minority interest		(87,039	)		—			—			—			(60,537	)		—			—			—
Dividends on preferred securities owned by minority interest		(678	)		—			—			—			(678	)		—			—			—
Distributions on preferred OP units		—			2,101			2,101			2,101			—			1,583			1,583			1,583
Dividends on preferred stock		—			18,695			18,695			18,695			—			14,515			14,515			14,515
Structural depreciation, net of minority interest		(97,290	)		(97,290	)		(97,290	)		(97,290	)		(64,239	)		(64,239	)		(64,239	)		(64,239	)
Non-structural depreciation, net of minority interest		(15,528	)		—			(15,528	)		(15,528	)		(11,700	)		—			(11,700	)		(11,700	)
Capital replacements reserve		11,403			—			—			11,403			9,899			—			—			9,899
Amortization of intangibles		(4,901	)		—			(4,901	)		(4,901	)		(2,083	)		—			(2,083	)		(2,083	)
Gain on sale		66			—			66			66			5,105			—			5,105			5,105
Deferred income tax provision		—			—			—			—			(852	)		—			(852	)		(852	)
Minority interest in Operating Partnership		(1,319	)		(1,319	)		(1,319	)		(1,319	)		(2,572	)		(2,572	)		(2,572	)		(2,572	)
Net Income	$	14,018		$	14,018		$	14,018		$	14,018		$	25,882		$	25,882		$	25,882		$	25,882

ASSETS:
		March 31, 2001		December 31, 2000
Total assets for reportable segments (1)		$	7,094,761	$	6,522,114
Corporate and other assets			1,042,866		1,177,760
	Total consolidated assets	$	8,137,627	$	7,699,874

(1) Assets associated with the service business are immaterial, and therefore included in total assets for reportable segments, and not separately disclosed.

NOTE 9 — Derivative Financial Instruments

      In June 1998, Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (“Statement 133”) was issued. In June 2000, Statement of Financial Accounting Standards No. 138, Accounting for Certain Derivative Instruments and Hedging Activities (“Statement 138”), an amendment of Statement 133 was issued. Statements 133 and 138 require that all derivative instruments be recorded on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction.

      The Company predominately uses long-term, fixed-rate and self-amortizing non-recourse debt in order to avoid, among other things, risk related to fluctuating interest rates. Where the Company does use variable-rate debt, occasionally the Company enters into short-term economic hedges, such as interest rate swap agreements and interest rate cap agreements, to reduce its exposure to interest rate fluctuations. The interest rate swap agreements are generally utilized by the Company to modify the Company’s exposure to interest rate risk by converting the variable-rate debt to a fixed rate. The interest rate cap agreements utilized by the Company effectively limit the Company’s exposure to interest rate risk by providing a ceiling on the underlying variable rate debt. Normally, the interest rate caps are embedded within the original debt contract and considered clearly and closely related to the debt contract and, therefore are not measured as separate derivative instruments. The Company adopted Statements

15

133 and 138 on January 1, 2001. Due to the Company’s limited use of derivative instruments, the adoption of Statements 133 and 138 did not have a material effect on the Company’s financial statements.

NOTE 10 — Consolidation of Subsidiaries

      In prior years, in order to satisfy certain requirements of the Internal Revenue Code applicable to the Company’s status as a REIT, certain assets of the Company were held through unconsolidated subsidiaries in which the AIMCO Operating Partnership held non-voting preferred stock representing a 99% economic interest and certain officers and directors of the Company held all of the voting common stock, representing a 1% economic interest. As a result of the controlling ownership interest in the unconsolidated subsidiaries being held by others, the Company accounted for its interest in the unconsolidated subsidiaries using the equity method.

      The REIT Modernization Act, which became effective January 1, 2001, among other things, permits REITS to own taxable REIT subsidiaries. Therefore, effective January 1, 2001, the Company acquired the 1% controlling ownership interest in the unconsolidated subsidiaries. As a result, the Company now consolidates these subsidiaries. The following table provides selected financial information assuming these subsidiaries were consolidated in the prior year (in thousands):

	For the Three Months Ended
Operating Data:	March 31, 2000
Income from rental property operations		$	131,465
Income from service company business			9,115
Interest and other income			14,316
Interest expense			(59,241	)
Net income			25,882

Balance Sheet Data:	As of December 31, 2000
Real estate	$	6,370,288
Total assets		8,043,846
Total indebtedness		4,625,314
Total liabilities		5,015,416
Stockholders’ equity		2,501,657

NOTE 11 — Transactional Income

      For the three months ended March 31, 2001, the Company's interest and other income included transactional income (gains on sale of bonds or accretion of discounted notes) of $4.7 million, net of allocated expenses of $3.8 million.

      The Company received proceeds of approximately $138 million from the sale of certain of the tax-exempt mortgage bonds. Certain remaining tax-exempt mortgage bonds have been classified as available for sale and carried at estimated fair value of approximately $111 million. Unrealized gains and losses are recorded in other comprehensive income. Realized gains and losses are determined on the specific identification method and are reflected in net income.

16

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

      The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements in certain circumstances. Certain information included in this Report contains or may contain information that is forward-looking, including, without limitation, statements regarding the effect of acquisitions, the Company’s future financial performance and the effect of government regulations. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors including, without limitation, national and local economic conditions: the general level of interest rates; the terms of governmental regulations that affect the Company and interpretations of those regulations; the competitive environment in which the Company operates; financing risks, including the risk that the Company’s cash flows from operations may be insufficient to meet required payments of principal and interest; real estate risks, including variations of real estate values and the general economic climate in local markets and competition for residents in such markets; acquisition and development risks, including failure of such acquisitions to perform in accordance with projections; and possible environmental liabilities, including costs which may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by the Company. In addition, the Company’s 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 its ability to meet the various requirements imposed by the Internal Revenue Code, through actual operating results, distributions levels and diversity of stock ownership. Readers should carefully review the Company’s financial statements and the notes thereto, as well as the risk factors described in documents the Company files from time to time with the Securities and Exchange Commission.

      AIMCO is a real estate investment trust with headquarters in Denver, Colorado and 25 regional operating centers, which holds a geographically diversified portfolio of apartment communities. As of March 31, 2001, the Company owned or managed 313,376 apartment units, comprised of 157,368 units in 580 apartment properties owned or controlled by the Company (the “Owned Properties”), 99,374 units in 612 apartment properties in which the Company has an equity interest (the “Equity Properties”) and 56,634 units in 451 apartment properties which the Company manages for third parties (the “Managed Properties” and together with the Owned Properties and the Equity Properties, the “AIMCO Properties”). The apartment communities are located in 47 states, the District of Columbia and Puerto Rico.

      In the three months ended March 31, 2001, the Company completed $378 million in acquisitions, dispositions, and mortgage financing transactions. The Company acquired one property for $19 million and purchased $47 million of limited partnership interests. The Company sold 22 apartment communities for a total of $84 million of which the Company’s share was $32 million. First quarter refinancing activity included the closing of $228 million of new mortgages at a weighted average interest rate of 5.63%.

17

Results of Operations

       Comparison of the Three Months Ended March 31, 2001 to the Three Months Ended March 31, 2000

      In order for a meaningful analysis of the financial statements to be made, the revenues and expenses for the unconsolidated subsidiaries for the three months ended March 31, 2000, have been included as though they had been consolidated in the following analysis. All significant intercompany revenues and expenses have been eliminated.

			Three Months Ended
			March 31,
			2001			2000
RENTAL PROPERTY OPERATIONS:
Rental and other property revenues			$	322,234		$	224,320
Property operating expense				(125,686	)		(90,751	)
Owned property management expense				(3,210	)		(2,104	)
Income from property operations				193,338			131,465
SERVICE COMPANY BUSINESS:
Management fees and other income from affiliates				51,020			37,936
Management and other expenses				(32,049	)		(25,685	)
General and administrative expenses allocation				(1,281	)		(1,053	)
Amortization of intangibles				(4,901	)		(2,083	)
Income from service company business				12,789			9,115
General and administrative expenses:
	Before allocation			(4,092	)		(4,264	)
		Allocation to consolidated service company business		1,281			1,053
General and administrative expenses, net				(2,811	)		(3,211	)
Depreciation on rental property				(105,391	)		(61,291	)
Interest expense				(87,216	)		(59,241	)
Interest and other income				14,663			14,316
Equity in earnings (losses) of unconsolidated real estate partnerships				(4,476	)		168
Provision for income taxes				—			(852	)
Minority interest in other entities				(5,625	)		(7,120	)
Income before gain on disposition of properties and minority interest in AIMCO Operating Partnership				15,271			23,349
Net gain on disposition of properties				66			5,105
Income before minority interest in AIMCO Operating Partnership				15,337			28,454
Minority interest in AIMCO Operating Partnership, common				782			(989	)
Minority interest in AIMCO Operating Partnership, preferred				(2,101	)		(1,583	)
Net income			$	14,018		$	25,882

Net Income

      The Company recognized net income of $14.0 million for the three months ended March 31, 2001, compared with $25.9 million for the three months ended March 31, 2000. The following paragraphs discuss the results of operations in detail.

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Consolidated Rental Property Operations

      Consolidated rental and other property revenues from the consolidated Owned Properties totaled $322.2 million for the three months ended March 31, 2001, compared with $224.3 million for the three months ended March 31, 2000, an increase of $97.9 million, or 43.6%. This increase in consolidated rental and other property revenues is a result of the purchase of controlling interests and the subsequent consolidation of partnerships owning 91 properties in 2000 and 8 properties in 2001 contributing 60.4% of the increase, the purchase of interests in the Oxford properties and 12 other properties in 2000, which contributed 35.5% of the increase, and a 5.6% increase in “same store” sales revenues, which contributed 14.2% of the total increase. The effect of the foregoing was offset by the sale of 23 apartment properties in 2000 and 3 apartment properties in 2001.

      Consolidated property operating expenses for the consolidated Owned Properties, consisting of on-site payroll costs, utilities (net of reimbursements received from residents), contract services, turnover costs, repairs and maintenance, advertising and marketing, property taxes and insurance, totaled $125.7 million for the three months ended March 31, 2001, compared with $90.8 million for the three months ended March 31, 2000, an increase of $34.9 million or 38.4%. The increase in property operating expenses was due to the purchase of controlling interests and the subsequent consolidation of partnerships owning 91 properties in 2000 and 8 properties in 2001, resulting in 64.5%, the purchase of interests in the Oxford properties and 12 other properties in 2000, contributing 38.4%, and an increase in “same store” expenses of 5.5%, contributing 14.4% of the total increase, offset by the sale of 23 apartment properties in 2000 and 3 apartment properties in 2001.

      Depreciation expense increased $44.1 million to $105.4 million for the three months ended March 31, 2001, compared to $61.3 million for the three months ended March 31, 2000 as a result of the purchase of controlling interests and the subsequent consolidation of partnerships owning 91 properties in 2000 and 8 properties in 2001, and the acquisition of the Oxford properties and 12 other properties in 2000.

Consolidated Service Company Business

      The Company’s share of income from the consolidated service company business totaled $12.8 million for the three months ended March 31, 2001, compared with income of $9.1 million for the three months ended March 31, 2000, an increase of $3.7 million or 40.7%. The increase resulted from an increase in activity-based fees, offset by higher corporate general and administrative expenses of $6.6 million, primarily for compensation and other allocated expenses, and additional property and asset management contract intangible amortization of $2.8 million as a result of the acquisition of interests in the Oxford properties.

Consolidated General and Administrative Expenses

      Consolidated general and administrative expenses, before allocation to the service company, remained consistent, with $4.1 million for the three months ended March 31, 2001 compared to $4.3 million for the three months ended March 31, 2000.

Consolidated Interest Expense

      Consolidated interest expense, which includes the amortization of deferred financing costs, totaled $87.2 million for the three months ended March 31, 2001, compared with $59.2 million for the three months ended March 31, 2000, an increase of $28.0 million, or 47.3%. The increase was due to the purchase of controlling interests and the subsequent consolidation of partnerships owning 91 properties in 2000 and 8 properties in 2001 resulting in 49.3% of the increase, the acquisition of interests in the Oxford properties and 12 other properties in 2000, contributing 47.9% of the increase, and increased usage of the credit facility and the term loan associated with the acquisition of interests in the Oxford properties contributed 10.2%. These increases were offset by the sale of 23 apartment properties in 2000 and 3 apartment properties in 2001. The Company had $276 million outstanding on its credit facility as of March 31, 2001, compared with $277 million at March 31, 2000. The cost of such borrowing was at a weighted average interest rate of 7.70% and 8.55% at March 31, 2001 and March 31, 2000, respectively.

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Consolidated Interest and Other Income

      Consolidated interest and other income remained relatively unchanged, with $14.7 million for the three months ended March 31, 2001, compared with $14.3 million for the three months ended March 31, 2000, while transactional income, which was comprised of gains on sale of bonds or accretion of discounted notes, net of allocated expenses, decreased from $6.2 million for the three months ended March 31, 2000 to $4.7 million for the three months ended March 31, 2001.

Equity in Earnings (Losses) of Unconsolidated Real Estate Partnerships

      Equity in earnings (losses) of unconsolidated real estate partnerships totaled $(4.5) million for the three months ended March 31, 2001, compared with $0.2 million for the three months ended March 31, 2000, a decrease of $4.7 million. The acquisition of interests in the Oxford properties in 2000 contributed approximately $3.1 million to the earnings of unconsolidated real estate partnerships. However, this was offset by the purchase of equity interests in better performing apartment properties which resulted in these properties being consolidated and contributing to consolidated rental revenues and expenses (91 properties in 2000 and 8 properties in 2001).

Minority Interest in Other Entities

      Minority interest in other entities totaled $5.6 million for the three months ended March 31, 2001, compared to $7.1 million for the three months ended March 31, 2000, a decrease of $1.5 million. This decrease is a result of the Company’s purchase of additional interests in consolidated properties, thereby reducing the minority interest allocation.

Gain on Disposition of Properties

      Gain on disposition of properties totaled $0.1 million for the three months ended March 31, 2001, compared to $5.1 million for the three months ended March 31, 2000, a decrease of $5.0 million. In both periods the properties sold were considered by management to be inconsistent with the Company’s long-term investment strategy.

Same Store Property Operating Results

      The Company defines “same store” properties as conventional apartment communities in which AIMCO’s ownership interest exceeded 10% in the comparable periods of 2001 and 2000. Total portfolio includes same store properties plus acquisition and redevelopment properties. The following table summarizes the unaudited conventional rental property operations on a “same store” and a total portfolio basis (dollars in thousands):

	Same Store						Total Portfolio
	Three Months Ended March 31,						Three Months Ended March 31,
	2001			2000			2001			2000
Properties		670			670			698			688
Apartment units		181,902			181,902			192,195			189,269
Average physical occupancy		93.6	%		93.8	%		92.8	%		92.0	%
Average rent collected/unit/month	$	679		$	651		$	681		$	651
Revenues	$	261,254		$	247,656		$	280,655		$	260,151
Expenses		95,805			90,790			104,884			96,802
Net operating income	$	165,719		$	156,866		$	175,771		$	163,349

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     Funds From Operations

      For the three months ended March 31, 2001 and 2000, the Company’s Funds From Operations (“FFO”) on a fully diluted basis were as follows (dollars in thousands):

			Three Months Ended March 31,
			2001			2000
Net Income			$	14,018		$	25,882
	Adjustments:
	Real estate depreciation, net of minority interest			97,811			56,977
	Real estate depreciation related to unconsolidated entities			15,006			18,962
	Amortization of intangibles			4,901			2,083
	Gain on disposition of properties			(66	)		(5,105	)
	Other items:
	Deferred income tax provision			—			852
	Preferred stock dividends and distributions			(6,735	)		(6,530	)
	Interest expense on mandatorily redeemable convertible preferred securities			525			2,429
	Minority interest in AIMCO Operating Partnership			1,319			2,572
Diluted Funds From Operations (FFO) available to common    shares and OP Units			$	126,779		$	98,122
Weighted average number of common shares, common share    equivalents and Common OP Units outstanding:
	Common share and common share equivalents			89,824			80,790
	Common OP Units			8,751			6,360
		Total		98,575			87,150

      Liquidity and Capital Resources

For the three months ended March 31, 2001 and 2000, net cash flows were as follows (dollars in thousands):

	2001			2000
Cash flow provided by operating activities	$	85,153		$	69,557
Cash flow provided by (used in) investing activities		56,955			(109,204	)
Cash flow provided by (used in) financing activities		(185,484	)		74,933

      During the three months ended March 31, 2001, the Company closed $228 million of long-term, fixed-rate, fully amortizing notes payable with a weighted average interest rate of 5.63%. Each of the notes is individually secured by one of 22 properties with no cross-collateralization. The Company used the net proceeds totaling $125 million after transaction costs to repay existing debt and for working capital.

      In April 2001, the Company’s credit facility was expanded to the full commitment of $400 million, adding an additional two lenders to the participating bank group. The obligations under the credit facility are secured by a first priority pledge of certain non-real estate assets of the Company and a second priority pledge of the stock of certain subsidiaries of the Company owned by the AIMCO Operating Partnership, NHP Management Company, AIMCO/Bethesda Holdings, Inc., AIMCO Holdings, L.P, and certain options to purchase BACs in OTEF. Borrowings under the credit facility are available for general corporate purposes. The credit facility matures in July 2002 and can be extended twice at AIMCO’s option, for a term of one year. The annual interest rate under the credit facility is based either on LIBOR or a base rate which is the higher of Bank of America's reference rate or 0.50% over the federal funds rate, plus, in either case, an applicable margin. The margin ranges between 2.05% and 2.55%, in the case of LIBOR-based loans, and between 0.55% and 1.05%, in the case of base rate loans, based upon a fixed charge coverage ratio. The weighted average interest rate at March 31, 2001 was 7.70%. The amount

21

available under the credit facility at March 31, 2001 was $74 million. At April 25, 2001, $182 million was outstanding on the line, providing availability of $218 million.

      On September 20, 2000, AIMCO completed the acquisition of interests in the Oxford properties. In order to pay the cash portion of the purchase price and transactions costs, the Company borrowed $302 million from Bank of America, N.A., Lehman Commercial Paper Inc. and several other lenders, pursuant to a term loan. In March 2001, the Company paid off the remaining balance of the term loan and charged to operations approximately $2.2 million for the complete amortization of deferred financing and loan origination costs principally related to the term loan.

      At March 31, 2001, the Company had $113.7 million in cash and cash equivalents. In addition, the Company had $155.3 million of restricted cash, primarily consisting of reserves and impounds held by lenders for capital replacements, property taxes and insurance. The Company’s principal liquidity requirements include normal operating expenses, payments of principal and interest on outstanding debt, capital improvements, acquisitions of or investments in properties, dividends paid to its stockholders and distributions paid to limited partners. The Company considers its cash provided by operating activities, and funds available under its credit facilities, to be adequate to meet short-term liquidity demands. The Company utilizes its revolving credit facility for general corporate purposes and to fund investments on an interim basis.

      The Company expects to fund its requirements for property acquisitions, tender offers and refinancing of short-term debt with: cash generated from operations; long-term, fixed rate, fully amortizing non-recourse property debt; secured or unsecured short-term debt; and the issuance of debt or equity securities in public offerings or private placements.

      From time to time, the Company has offered to acquire and, in the future, may offer to acquire the interests held by third party investors in certain limited partnerships for which the Company acts as general partner. Any such acquisitions will require funds to pay the cash purchase price for such interests. During the three months ended March 31, 2001, the Company made separate offers to the limited partners of 145 partnerships to acquire their limited partnership interests, and purchased approximately $47 million (including transaction costs) of limited partnership interests.

Return on Assets and Return on Equity

      The Company’s Return On Assets and Return On Equity for the three months ended March 31, 2001 and 2000 are as follows:

		Based on AFFO						Based on FFO
		Three Months Ended						Three Months Ended
		March 31,						March 31,
		2001			2000			2001			2000
Return on Assets (a)			9.7	%		10.2	%		10.1	%		10.7	%
Return on Equity
	Basic (b)		14.3	%		14.4	%		15.3	%		15.8	%
	Diluted (c)		12.9	%		13.0	%		13.8	%		14.1	%

(a)

The Company defines Return on Assets (AFFO) as (i) annualized Free Cash Flow, divided by (ii) Average Assets. Average Assets are computed by averaging the sum of Assets, as defined below, at the beginning and the end of the period. Assets are total assets, plus accumulated depreciation, less accumulated Capital Replacements of $115,009 and $73,138 for the three months ended March 31, 2001 and 2000, respectively, and less all non-indebtedness liabilities. The Company defines Return on Assets (FFO) as (i) annualized Free Cash Flow plus Capital Replacements, divided by (ii) Average Assets plus accumulated Capital Replacements.

(b)

The Company defines Return on Equity-Basic (AFFO) as (i) annualized AFFO-Basic, divided by (ii) Average Equity. Average Equity is computed by averaging the sum of Equity, as defined below, at the beginning and the end of the period. Equity is total stockholders’ equity, plus accumulated depreciation, less accumulated

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Capital Replacements of $115,009 and $73,138 for the three months ended March 31, 2001 and 2000, respectively, less preferred stock, plus minority interest in the AIMCO Operating Partnership, net of preferred OP unit interests $130,785 and $106,401 for the three months ended March 31, 2001 and 2000, respectively. The Company defines Return on Equity-Basic (FFO) as (i) annualized AFFO-Basic plus Capital Replacements; divided by (ii) Average Equity plus accumulated Capital Replacements.

(c)

The Company defines Return on Equity-Diluted (AFFO) and Return on Equity-Diluted (FFO) assuming conversion of debt and preferred securities whose conversion is dilutive.

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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

      The Company’s primary market risk exposure relates to changes in interest rates. The Company is not subject to any foreign currency exchange rate risk or commodity price risk, or any other material market rate or price risks. The Company believes that an increase in energy costs will not have a material adverse effect on its results of operations. The Company uses predominantly long-term, fixed-rate and self-amortizing non-recourse debt in order to avoid the refunding or repricing risks of short-term borrowings. The Company uses short-term debt financing and working capital primarily to fund acquisitions and generally expects to refinance such borrowings with proceeds from equity offerings or long-term debt financings.

      The Company had $420.7 million of variable rate debt outstanding at March 31, 2001, which represented 9.1% of the Company’s total outstanding debt. Based on this level of debt, an increase in interest rates of 1% would result in the Company’s income and cash flows being reduced by $4.2 million on an annual basis.

      The estimated aggregate fair value of the Company’s cash and cash equivalents, receivables, payables and short-term secured and unsecured debt as of March 31, 2001 is assumed to approximate their carrying value due to their relatively short terms. Management further believes that, after consideration of interest rate agreements, the fair market value of the Company’s secured tax-exempt bond debt and secured long-term debt approximates their carrying value, based on market comparisons to similar types of debt instruments having similar maturities.

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PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

      None.

ITEM 2. Changes in Securities and Use of Proceeds

      From time to time during the quarter, AIMCO issued shares of Common Stock in exchange for Common OP Units tendered to the AIMCO Operating Partnership for redemption in accordance with the terms and provisions of the agreement of limited partnership of the AIMCO Operating Partnership. Such shares are issued based on an exchange ratio of one share for each Common OP Unit. The shares are issued in exchange for Common OP Units in private transactions exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(2) thereof. During the three months ended March 31, 2001, 68,191 shares of Common Stock were issued in exchange for Common OP Units in these transactions.

       In January 2001, the holders of trust convertible preferred securities ("TOPRS") converted a total of $60,000 of TOPRS into 1,209 shares of Common Stock. The convertible preferred securities were assumed by AIMCO in October 1998 in connection with its merger with Insignia Financial Group, Inc. The preferred securities have a conversion price of $49.61 per share which, based on a liquidation amount of $50 per security, results in the issuance of 1.0079 shares of Common Stock for each preferred security converted.

      All of the foregoing issuances were made in private placement transactions exempt from registration under the Securities Act pursuant to Section 4(2) thereof.

ITEM 3. Defaults Upon Senior Securities

      None.

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

      None.

ITEM 5. Other Information

      None.

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ITEM 6.  Exhibits and Reports on Form 8-K

      (a) Exhibits. The following exhibits are filed with this report (1):

EXHIBIT
NO.	DESCRIPTION
3.1	Charter (Exhibit 3.1 to AIMCO's Annual Report on Form 10-K/A for the year ended December 31, 2000, is incorporated herein by this reference)
3.2	Bylaws
10.1	Nineteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of February 28, 2001 (Exhibit 10.20 to AIMCO’s Annual Report on Form 10-K/A for the year ended December 31, 2000, is incorporated herein by this reference)
10.2	Twentieth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 19, 2001 (Exhibit 10.21 to AIMCO’s Annual Report on Form 10-K/A for the year ended December 31, 2000, is incorporated herein by this reference)
99.1	Agreement re: disclosure of long-term debt instruments

(1) Schedules and supplemental materials to the exhibits have been omitted but will be provided to the Securities and Exchange Commission upon request.

      (b) Reports on Form 8-K for the quarter ended March 31, 2001:

      During the quarter for which this report is filed, Apartment Investment and Management Company filed its

      • Amendment No. 2, on January 18, 2001, to its Current Report on Form 8-K, dated September 20, 2000, relating to the acquisition of all of the stock and other interests held by officers and directors in the entities that controlled properties owned by affiliates of Oxford Realty Financial Group, Inc., and the acquisition of the entity which owned the managing general partner of Oxford Tax Exempt Fund II Limited Partnership, including certain pro forma financial information;

      • Current Report on Form 8-K dated January 31, 2001 (and Amendment No. 1 thereto filed on March 12, 2001), relating to an increase in Apartment Investment and Management Company’s measure of economic profitability for the fourth quarter of 2000, compared to the quarter ended December 31, 1999;

      • Amendment No. 3, on February 28, 2001, to its Current Report on Form 8-K, dated September 20, 2000, relating to the acquisition of all of the stock and other interests held by officers and directors in the entities that controlled properties owned by affiliates of Oxford Realty Financial Group, Inc., and the acquisition of the entity which owned the managing general partner of Oxford Tax Exempt Fund II Limited Partnership, including certain pro forma financial information;

      • Current Report on Form 8-K, dated March 19, 2001, relating to Regulation FD disclosure of materials to be presented at an address by AIMCO’s President to a group of analysts and investors to discuss the Company’s results of operations and financial performance for fiscal year 2000;

26

      • Current Report on Form 8-K, dated as of March 21, 2001, relating to the sale of shares of Class Q Cumulative Preferred Stock in an underwritten public offering; and

      • Current Report on Form 8-K, dated March 26, 2001, relating to the acquisition of Oxford Tax Exempt Fund II Limited Partnership, including Financial Statements of Oxford Tax Exempt Fund II Limited Partnership for the year ended December 31, 1999, together with the Report of Independent Auditors, Financial Statements of Oxford Tax Exempt Fund II Limited Partnership for the nine months ended September 30, 2000 (unaudited), and certain pro forma financial information.

27

APARTMENT INVESTMENT AND MANAGEMENT COMPANY

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

APARTMENT INVESTMENT AND MANAGEMENT COMPANY
By:	/s/  PAUL J. McAULIFFE
	Paul J. McAuliffe
	Executive Vice President, Chief Financial Officer (duly authorized officer and principal financial officer)
By:	/s/  THOMAS C. NOVOSEL
	Thomas C. Novosel
	Senior Vice President, Chief Accounting Officer

Date: May 14, 2001

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EXHIBIT INDEX(1)

Exhibit
Number	Description
3.1	Charter
3.2	Bylaws
10.1	Nineteenth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of February 28, 2001 (Exhibit 10.20 to AIMCO’s Annual Report on Form 10-K/A for the year ended December 31, 2000, is incorporated herein by this reference)
10.2	Twentieth Amendment to the Third Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of March 19, 2001 (Exhibit 10.21 to AIMCO’s Annual Report on Form 10-K/A for the year ended December 31, 2000, is incorporated herein by this reference)
99.1	Agreement re: disclosure of long-term debt instruments

(1) Schedule and supplemental materials to the exhibits have been omitted but will be provided to the Securities and Exchange Commission upon request.