SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
| ý | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2002 |
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OR |
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o |
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
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Commission file number 1-13232
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
401(k) RETIREMENT PLAN
(Full title of the plan)
Apartment Investment and Management Company
4582 South Ulster Street Parkway, Suite 1100
Denver, Colorado 80237
(Name of issuer of the securities held pursuant to
the plan and the address of its principal executive office)
Financial Statements and Schedule
Apartment Investment and Management Company
401(k) Retirement Plan
December 31, 2002 and 2001 and for the year ended December 31, 2002
| Report of Independent Auditors | 2 | |
Audited Financial Statements |
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Statements of Net Assets Available for Benefits |
3 |
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| Statement of Changes in Net Assets Available for Benefits | 4 | |
| Notes to Financial Statements | 5 | |
Schedule |
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Schedule of Assets (Held at End of Year) |
9 |
1
Report of Independent Auditors
Pension
Plan Committee
Apartment Investment and Management Company
401(k) Retirement Plan
We have audited the accompanying statements of net assets available for benefits of Apartment Investment and Management Company 401(k) Retirement Plan (Plan) as of December 31, 2002 and 2001 and the related statement of changes in net assets available for benefits for the year ended December 31, 2002. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2002 and 2001 and the changes in its net assets available for benefits for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at year end) as of December 31, 2002 is presented for the purpose of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
May 15,
2003
Indianapolis, Indiana
2
Apartment Investment and Management Company
401(k) Retirement Plan
Statements of Net Assets Available for Benefits
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December 31 |
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2002 |
2001 |
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| Assets: | |||||||
| Investments, at fair value | $ | 55,622,402 | $ | 64,621,953 | |||
| Contribution receivable: | |||||||
| Employee contribution receivable | — | 63,273 | |||||
| Employer contribution receivable | — | 36,185 | |||||
| — | 99,458 | ||||||
| Total assets | 55,622,402 | 64,721,411 | |||||
| Liability: | |||||||
| Participant refunds payable | — | 154,902 | |||||
| Net assets available for benefits | $ | 55,622,402 | $ | 64,566,509 | |||
See accompanying notes.
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Apartment Investment and Management Company
401(k) Retirement Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2002
| Additions: | |||||
| Employee contributions | $ | 4,639,256 | |||
| Employer contributions | 2,572,934 | ||||
| Rollover contributions | 412,261 | ||||
| 7,624,451 | |||||
| Interest and dividend income | 1,437,403 | ||||
| Total additions | 9,061,854 | ||||
| Deductions: | |||||
| Benefit payments | 9,389,006 | ||||
| Net depreciation in fair value of investments | 8,520,707 | ||||
| Administrative expenses | 96,248 | ||||
| Total deductions | 18,005,961 | ||||
| Net decrease | (8,944,107 | ) | |||
| Net assets available for benefits at the beginning of the year | 64,566,509 | ||||
| Net assets available for benefits at the end of the year | $ | 55,622,402 | |||
See accompanying notes.
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Apartment Investment and Management Company
401(k) Retirement Plan
Notes to Financial Statements
December 31, 2002
1. Description of the Plan
The following description of the Apartment Investment and Management Company 401(k) Retirement Plan (the "Plan") provides only general information. Participants should refer to the Summary Plan Description for a more complete description of the Plan's provisions.
The Plan is a defined contribution plan covering all employees of the Apartment Investment and Management Company (the "Company") who have at least 1/2 year of service and are age 18 or older. The Plan is administered by Fidelity Investments Retirement Services Company and trusteed by the Fidelity Management Trust Company. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
Participants may elect to contribute to the Plan from 1% to 20% of their compensation on a pretax basis, subject to certain statutory limitations. The Company, at its discretion, may make a matching contribution based on the first 6% of a participant's contribution, on behalf of each participant in the following manner: (1) for participants with six months to five years of service, a 50% match of the participant's contribution; (2) for participants with six to ten years of service, a 75% match of the participant's contribution; or (3) for participants with ten or more years of service, a 100% match of the participant's contribution.
Each participant's account is credited with the participant's contributions and allocations of the Company's contributions and Plan earnings and is charged with an allocation of administrative expenses. The benefit to which a participant is entitled is the account balance at the time of distribution.
Participants are immediately vested in their voluntary contributions. The Company's matching contributions are fully vested after three years of service. Upon withdrawal, the nonvested portion of a participant's account will be used by the Company to reduce the next employer contribution or pay expenses of the Plan. During 2002 and 2001, forfeited balances of terminated participants' nonvested accounts were $149,873 and $140,461, respectively.
Participants may borrow funds from their own account. Loans are permitted in amounts not to exceed the lesser of $50,000 reduced by the highest outstanding loan balance for the preceding year or 50% of the value of the vested interest in the participant's account. Only one loan is permitted during any twelve month period.
Although the Company has not expressed any intent to do so, it has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of termination of the Plan, each participant will become fully vested and will receive a total distribution of their account.
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2. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements of the Plan are presented on the accrual basis of accounting.
Investments
Investments other than participant loans are valued at fair value as determined by reference to quoted market values. The participant loans are valued at their outstanding balances, which approximate fair value.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates.
Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service dated February 7, 2001, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the "Code") and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Sponsor has indicated that it will take the necessary steps to maintain the Plan's qualified status.
3. Investments
The Plan's investments are held in trust by Fidelity Management Trust, the trustee of the Plan. The Plan's investments in the various funds (including investments bought, sold, and held during the year) appreciated (depreciated) in fair value for the year ended December 31, 2002 as presented in the following table:
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Net Depreciation in Fair Value During Year |
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|---|---|---|---|---|
| Fair value as determined by quoted market prices: | ||||
| Investments in mutual funds | $ | 8,304,844 | ||
| Investments in common stocks | 215,863 | |||
| $ | 8,520,707 | |||
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The fair value of individual investments that represent 5% or more of the Plan's net assets are as follows:
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December 31 |
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|---|---|---|---|---|---|---|---|
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2002 |
2001 |
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| Fair value determined by quoted market prices: | |||||||
| Fidelity Investment Mutual Funds: | |||||||
| Magellan Fund | $ | 7,398,654 | $ | 9,996,733 | |||
| Growth Company Fund | 3,998,500 | 6,230,945 | |||||
| Growth and Income Fund | 6,288,849 | 8,199,562 | |||||
| Retirement Money Market Fund | 7,856,391 | 8,022,647 | |||||
| Asset Manager Fund | 4,645,234 | 5,690,031 | |||||
| Equity Income II Fund | 3,908,450 | 4,959,270 | |||||
| Intermediate Bond Fund | 3,647,838 | 3,230,431 | |||||
| Fidelity Management Trust Company Common Collective Trust Fund: | |||||||
| Managed Income Portfolio Fund | 9,456,786 | 9,163,138 | |||||
4. Related Party Transactions
As of December 31, 2002, the Plan owned 139,612 units of AIMCO Stock Fund with a cost basis of $1,726,467 and a fair value of $1,856,034. During 2002, units of AIMCO Stock Fund were purchased at a total cost of $529,035 and units with a cost of $864,511 were sold for $721,947.
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SCHEDULE
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Apartment Investment and Management Company
401(k) Retirement Plan
Schedule H, line 4i — Schedule of Assets (Held at End of Year)
December 31, 2002
EIN:
58-1471003
Plan Number: 004
| Identity of Issue, Borrower, Lessor or, Similar Party |
Description of Investment, including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value |
Current Value |
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|---|---|---|---|---|---|---|
| Common Stock: | ||||||
| *AIMCO Stock | 139,612 shares | $ | 1,856,034 | |||
| *Fidelity Management Trust Company Mutual Funds: | ||||||
| Magellan Fund | 93,701 shares | 7,398,654 | ||||
| Growth Company Fund | 112,888 shares | 3,998,500 | ||||
| Growth and Income Fund | 207,484 shares | 6,288,849 | ||||
| Intermediate Bond Fund | 339,966 shares | 3,647,838 | ||||
| Asset Manager Fund | 336,611 shares | 4,645,234 | ||||
| Equity Income II Fund | 224,753 shares | 3,908,450 | ||||
| Aggressive Growth Fund | 100,352 shares | 1,122,937 | ||||
| Diversified International Fund | 29,449 shares | 505,343 | ||||
| Low Price Stock Fund | 41,377 shares | 1,041,449 | ||||
| Spartan US Equity Index Fund | 20,387 shares | 635,045 | ||||
| Retirement Money Market Fund | 7,856,391 shares | 7,856,391 | ||||
| Fidelity Real Estate Fund | 8,141 shares | 149,705 | ||||
| Fidelity Small Cap Stock Fund | 1,592 shares | 18,845 | ||||
| Fidelity Freedom Income Fund | 1,049 shares | 11,121 | ||||
| Fidelity Freedom 2000 Fund | 1,814 shares | 19,972 | ||||
| Fidelity Freedom 2010 Fund | 7,218 shares | 82,569 | ||||
| Fidelity Freedom 2020 Fund | 11,082 shares | 117,916 | ||||
| Fidelity Freedom 2030 Fund | 15,862 shares | 162,442 | ||||
| Fidelity Freedom 2040 Fund | 12,737 shares | 74,642 | ||||
| 41,685,902 | ||||||
| Common Collective Trust: | ||||||
| Managed Income Portfolio Fund | 9,456,786 shares | 9,456,786 | ||||
| Participant Loans | Interest rates range from 6.75% to 10.25% | 2,623,680 | ||||
| $ | 55,622,402 | |||||
*Indicates a party-in-interest to the Plan
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Pursuant to the requirements of the Securities and Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: June 30, 2003
APARTMENT INVESTMENT AND MANAGEMENT COMPANY 401(k) RETIREMENT PLAN |
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By: |
/s/ JAMES PURVIS James Purvis Executive Vice President of Human Resources |
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| EXHIBIT NO. |
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| 23.1 | Consent of Ernst & Young LLP | |
99.1 |
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |