Other Significant Transactions

Asset Management Business Disposition

In December 2012, we sold the Napico portfolio, our legacy asset management business. The transaction was primarily seller-financed, and the associated notes are scheduled to be repaid over several years. The notes will be repaid from the operation and liquidation of the portfolio and are collateralized by the buyer’s interests in the portfolio.

In accordance with the provisions of GAAP applicable to sales of real estate or interests therein, for accounting purposes, we have not recognized the sale and are accounting for the transaction under the profit sharing method. Until full payment has been received for the seller-financed notes, we will continue to recognize the portfolio’s assets and liabilities, each condensed into single line items within other assets and accrued liabilities and other, respectively, in our consolidated balance sheets, for all dates following the transaction. Similarly, we will continue to recognize the portfolio’s results of operations, also condensed into a single line item within our consolidated statements of operations, for periods subsequent to the transaction. To date we have received all required payments under the seller-financed notes.

At March 31, 2014, the Napico portfolio consisted of 17 partnerships that held investments in 14 apartment communities that were consolidated and 60 apartment communities that were accounted for under the equity or cost method of accounting. The portfolio’s assets and liabilities included in our condensed consolidated balance sheets are summarized below (in thousands):



	March 31, 2014		December 31, 2013
Real estate, net	$	118,583	$	120,175
Cash and cash equivalents and restricted cash	30,334		29,046
Investment in unconsolidated real estate partnerships	10,335		10,817
Other assets	3,700		3,811
Total assets	$	162,952	$	163,849

Total indebtedness	$	106,971	$	106,032
Accrued and other liabilities	18,833		19,263
Total liabilities	$	125,804	$	125,295

Noncontrolling interests in consolidated real estate partnerships	34,945		35,818
Equity attributable to Aimco and the Aimco Operating Partnership	2,203		2,736
Total liabilities and equity	$	162,952	$	163,849

Summarized information regarding the Napico portfolio’s results of operations, including any expense we recognize under the profit sharing method, is shown below in thousands. The net loss related to Napico (before noncontrolling interests) is included in other, net in our condensed consolidated statements of operations.



	Three Months Ended March 31,
	2014			2013
Revenues	$	5,675		$	5,447
Expenses	(5,201		)	(5,664		)
Equity loss of unconsolidated entities, gains or losses on dispositions and other, net	(1,994		)	(2,489		)
Net loss related to legacy asset management business	(1,520		)	(2,706		)
Income tax benefit (expense) associated with legacy asset management business	70			(26		)
Loss allocated to noncontrolling interests in consolidated real estate partnerships	899			2,682
Net losses of legacy asset management business attributable to Aimco and the Aimco Operating Partnership	$	(551	)	$	(50	)

The results of operations for the consolidated apartment communities sold by the owner of this portfolio through December 31, 2013, are presented within income from discontinued operations in our consolidated statement of operations for the three months ended March 31, 2013, and are excluded from the summary above.

Based on our limited economic ownership in this portfolio, most of the assets and liabilities are allocated to noncontrolling interests and do not significantly affect our consolidated equity and partners’ capital. Additionally, the operating results of this portfolio generally have an insignificant effect on the amounts of income or loss attributable to us. Income or loss attributable to these noncontrolling interests will continue to be recognized commensurate with the recognition of the results of operations of the portfolio. If full payment is received on the notes and we meet the requirements to recognize the sale for accounting purposes, we expect to recognize a gain attributable to Aimco and the Aimco Operating Partnership.