Quarterly report pursuant to Section 13 or 15(d)

DISCONTINUED OPERATIONS

v2.4.0.8
DISCONTINUED OPERATIONS
 9 Months Ended
Sep. 30, 2014
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS
3.   DISCONTINUED OPERATIONS
 
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 and at December 31, 2013.
 
February 13, 2014
 
December 31, 2013
Assets
 
 
 
Property, plant and equipment, net
$
266,385

 
$
270,188

Intangibles, net
144,664

 
145,400

Goodwill
126,686

 
126,686

Cash and cash equivalents
23,845

 
31,811

Restricted cash
6,477

 
6,477

Receivables and other assets
101,940

 
110,184

Total Assets
$
669,997

 
$
690,746

 
 
 
 
Liabilities
 
 
 
Credit facilities - media
$
177,955

 
$
182,016

Accounts payable, accrued expenses and other liabilities
100,695

 
113,251

Total Liabilities
$
278,650

 
$
295,267

 
 
 
 
Net Assets
$
391,347

 
$
395,479

 
As of September 30, 2014, Newcastle is working to sell its commercial real estate properties in Beavercreek, OH.
 
As a result of the May 15, 2013 spin-off, the February 13, 2014 spin-off, and the plan to sell the commercial real estate properties in Beavercreek, OH, 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/or (ii) represent operations in which Newcastle has no significant continuing involvement, are presented separately in discontinued operations in Newcastle’s consolidated financial statements.
 
With respect to the planned sale of the commercial real estate properties in Beavercreek, Ohio, the assets of discontinued operations include $6.6 million and $6.6 million of investments in other real estate and $0.3 million and $0.2 million of cash and cash equivalents, restricted cash and receivables and other assets, as of September 30, 2014 and December 31, 2013, respectively. The liabilities of discontinued operations include $0.4 million of accounts payable, accrued liabilities and other liabilities, as of September 30, 2014 and December 31, 2013.
 
Results from discontinued operations were as follows:
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2014
 
2013
 
2014
 
2013
Interest Income
$
—

 
$
—

 
$
—

 
$
15,095

Interest Expense
—

 
—

 
2,096

 
—

Net interest income (loss)
—

 
—

 
(2,096
)
 
15,095

 
 
 
 
 
 
 
 
Media income
—

 
—

 
68,213

 
—

Rental income
527

 
542

 
1,630

 
1,545

Other income (loss)
—

 
(2,386
)
 
—

 
(2,388
)
Change in fair value of investments in excess mortgage servicing rights
—

 
—

 
—

 
3,894

Change in fair value of investments in equity method investees
—

 
—

 
—

 
885

Earnings from investments in equity method investees
—

 
1,045

 
—

 
19,331

Total media, rental and other income (loss)
527

 
(799
)
 
69,843

 
23,267

 
 
 
 
 
 
 
 
Media operating expenses
—

 
—

 
65,826

 
—

Property operating costs
327

 
262

 
838

 
761

General and administrative expenses
9

 
6

 
1,973

 
2,429

Depreciation and amortization
64

 
54

 
4,773

 
164

Income tax (benefit) expense
—

 
—

 
(915
)
 
—

Total expenses
400

 
322

 
72,495

 
3,354

 
 
 
 
 
 
 
 
Income (loss) from discontinued operations
$
127

 
$
(1,121
)
 
$
(4,748
)
 
$
35,008

 
 
 
 
 
 
 
 
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.
 
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).
 
Upon the spin-off of New Senior expected on November 6, 2014, the assets, liabilities and results of operations of this component of Newcastle’s operations that (i) are part of the spin-off, and (ii) represent operations in which Newcastle has no significant continuing involvement, will be presented separately in discontinued operations in Newcastle’s consolidated financial statements.