Current report filing

DISCONTINUED OPERATIONS

v2.4.0.8
DISCONTINUED OPERATIONS
 12 Months Ended
Dec. 31, 2013
Discontinued Operations  
DISCONTINUED OPERATIONS
   
4. DISCONTINUED OPERATIONS

On April 26, 2013, Newcastle announced that its board of directors had formally declared the distribution of shares of common stock of New Residential Investment Corp. (“New Residential,” NYSE: NRZ), a then wholly owned subsidiary of Newcastle. Following the May 15, 2013 spin-off, New Residential is an independent, publicly traded REIT primarily focused on investing in residential mortgage related assets. The spin-off transaction was effected as a taxable pro rata distribution by Newcastle of all the outstanding shares of common stock of New Residential to the stockholders of record of Newcastle at close of business day as of May 6, 2013. The stockholders of Newcastle as of the record date received one share of New Residential common stock for each share of Newcastle common stock held.

 

On February 13, 2014, Newcastle completed the spin-off of New Media Investment Group Inc. (“New Media”), and established New Media as a separate, publicly traded company (NYSE:NEWM). The spin-off was effected as a taxable pro rata distribution by Newcastle of all of the outstanding shares of common stock it held of New Media to Newcastle’s common stockholders of record at the close of business on February 6, 2014. The distribution ratio was 0.0722 shares of New Media common stock for each share of Newcastle common stock.

 

As a result of the spin-offs, 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-offs, and (ii) represent operations in which Newcastle has no significant continuing involvement, are presented separately in discontinued operations in Newcastle’s consolidated financial statements. These components are primarily related to media operations, Excess MSRs and consumer loans for the periods presented herein.

 

 

Assets and liabilities of discontinued operations were as follows:

    December 31,
    2013   2012
Assets                
Property, plant and equipment, net of accumulated depreciation     270,188       —  
Investments in excess mortgage servicing rights at fair value     —       245,036  
Intangibles, net of accumulated amortization     145,400       —  
Goodwill     126,686       —  
Cash and cash equivalents     31,811       —  
Restricted cash     6,477       —  
Receivables and other assets     110,184       33  
Total assets of discontinued operations   $ 690,746     $ 245,069  
                 
Liabilities                
Credit facilities, media     182,016       —  
Purchase price payable on investments in excess mortgage servicing rights     —       59  
Accounts payable, accrued expenses and other liabilities     113,251       421  
Total liabilities of discontinued operations   $ 295,267     $ 480  

 

Results of operations from discontinued operations were as follows:

    Year Ended December 31,
    2013   2012   2011
Interest income   $ 15,095     $ 27,508     $ 1,260  
Interest expense     1,591       —       —  
      Net interest income     13,504       27,508       1,260  
                         
Other Revenues                        
   Advertising income     38,757       —       —  
   Circulation income     16,649       —       —  
   Commercial printing and other income     6,231       —       —  
   Rental income     —       —       136  
      Total other revenues     61,637       —       136  
Other Income (Loss)                        
   Change in fair value of investments in excess mortgage servicing rights     3,894       —       —  
   Change in fair value of investments in equity method investees     885       —       —  
   Equity income in Local Media Group     1,870       —       —  
   Equity from investments in equity method investees     18,286       —       —  
   Other income (loss), net     (2,415 )     17,421       428  
      22,520       17,421       428  
Expenses                        
   Property operating expenses     15       26       177  
   Media operating expenses     49,092       —       —  
   General and administrative expense     4,004       5,735       1,086  
   Depreciation and amortization     3,845       —       —  
   Income tax expense     1,062       —       —  
      58,018       5,761       1,263  
Income from discontinued operations, net of tax   $ 39,643     $ 39,168     $ 561