Quarterly report pursuant to Section 13 or 15(d)

SPIN-OFF OF NEW RESIDENTIAL AND NEW MEDIA

v2.4.0.8
SPIN-OFF OF NEW RESIDENTIAL AND NEW MEDIA
 6 Months Ended
Jun. 30, 2014
Discontinued Operations and Disposal Groups [Abstract]  
SPIN-OFF OF NEW RESIDENTIAL AND NEW MEDIA
3.    SPIN-OFF OF NEW RESIDENTIAL AND NEW MEDIA
 
On May 15, 2013, Newcastle completed the spin-off of New Residential from Newcastle.
 
On February 13, 2014, Newcastle completed the spin-off of New Media from Newcastle.
 
The following table presents the carrying value of the assets and liabilities of New Media, immediately preceding the February 13, 2014 spin-off.
Assets
 
Property, plant and equipment, net
$
266,385
Intangibles, net
144,664
Goodwill
126,686
Cash and cash equivalents
23,845
Restricted cash
6,477
Receivables and other assets
101,940
Total Assets
$
669,997
 
 
Liabilities
 
Credit facilities - media
$
177,955
Accounts payable, accrued expenses and other liabilities
100,695
Total Liabilities
$
278,650
 
 
Net Assets
$
391,347
 
As a result of the May 15, 2013 spin-off and the February 13, 2014 spin-off, for all periods presented, the assets, liabilities and results of operations of those components of Newcastle’s operations that (i) were part of the spin-off, and (ii) represent operations in which Newcastle has no significant continuing involvement, are presented separately in discontinued operations in Newcastle’s consolidated financial statements.
 
Results from discontinued operations related to New Media and New Residential were as follows:
 
Three Months Ended  June 30,
 
Six Months Ended  June 30,
 
2014
 
2013
 
2014
 
2013
Interest Income
$
—
 
$
5,060
 
$
—
 
$
15,095
Interest Expense
—
 
—
 
2,096
 
—
Net interest income (loss)
—
 
5,060
 
(2,096
)
 
15,095
 
 
 
 
 
 
 
 
Media income
—
 
—
 
68,213
 
—
Other income (loss)
—
 
(2
)
 
—
 
(2
)
Change in fair value of investments in excess mortgage servicing rights
—
 
2,036
 
—
 
3,894
Change in fair value of investments in equity method investees
—
 
(84
)
 
—
 
885
Earnings from investments in equity method investees
—
 
18,286
 
—
 
18,286
Total other income
—
 
20,236
 
—
 
23,063
 
 
 
 
 
 
 
 
Media operating expenses
—
 
—
 
65,826
 
—
Property operating costs
—
 
5
 
—
 
12
General and administrative expenses
—
 
(290
)
 
1,904
 
2,417
Depreciation and amortization
—
 
—
 
4,596
 
—
Income tax (benefit) expense
—
 
—
 
(915
)
 
—
Total expenses
—
 
(285
)
 
71,411
 
2,429
 
 
 
 
 
 
 
 
Income (loss) from discontinued operations
$
—
 
$
25,581
 
$
(5,294
)
 
$
35,729
 
 
 
 
 
 
 
 
Net income attributable to noncontrolling interest
$
—
 
$
—
 
$
522
 
$
—
 
The May 15, 2013 spin-off resulted in a $1.2 billion reduction in the basis upon which Newcastle’s management fees are computed (and an equivalent reduction in the basis upon which the incentive compensation threshold is computed), as well as a reduction in the strike price of Newcastle’s then outstanding options (see Note 13).
 
The February 13, 2014 spin-off resulted in a $0.4 billion reduction in the basis upon which Newcastle’s management fees are computed (and an equivalent reduction in the basis upon which the incentive compensation threshold is computed), as well as a reduction in the strike price of Newcastle’s then outstanding options (see Note 13).