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
3 Months Ended
Mar. 31, 2014
Spin-Off Of New Residential And New Media  
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
99,857

Total Liabilities
$
277,812

 
 

Net Assets
$
392,185

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 were as follows:
 
Three Months Ended 
 March 31,
 
2014
 
2013
Interest Income
$
—

 
$
10,035

Interest Expense
2,096

 
—

Net interest income (loss)
(2,096
)
 
10,035

 
 
 
 
Media income
68,213

 
—

 
 
 
 
Change in fair value of investments in excess mortgage servicing rights
—

 
1,858

Change in fair value of investments in equity method investees
—

 
969

Other income
—

 
2,827

 
 
 
 
Media operating expenses
65,826

 
—

Property operating costs
—

 
7

General and administrative expenses
1,904

 
2,707

Depreciation and amortization
4,596

 
—

Income tax (benefit) expense
(915
)
 
—

Total expenses
71,411

 
2,714

 
 
 
 
Net income attributable to noncontrolling interest
522

 
—

 
 
 
 
Income (loss) from discontinued operations
$
(4,772
)
 
$
10,148


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).