Quarterly report pursuant to Section 13 or 15(d)

DISCONTINUED OPERATIONS

v3.2.0.727
DISCONTINUED OPERATIONS
 6 Months Ended
Jun. 30, 2015
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS
3.   DISCONTINUED OPERATIONS

On February 13, 2014, Newcastle completed the spin-off of New Media Investment Group Inc. ("New Media") from Newcastle.
On November 6, 2014, Newcastle completed the spin-off of New Senior Investment Group Inc. ("New Senior") from Newcastle.
In April 2015, Newcastle closed the sale of its commercial real estate properties in Beavercreek, OH for $7.0 million, net of closing costs, and recognized a net gain on the sale of these assets of approximately $0.3 million. In addition, Newcastle repaid the related debt on this property of $6.0 million held within CDO IX, which was eliminated in consolidation.

As a result of the spin-offs and the sale of the commercial real estate properties in Beavercreek, OH (which was initially reported as held-for-sale as of September 30, 2014), the assets, liabilities and results of operations of those components of Newcastle’s operations that (i) were part of the spin-offs, 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 for all periods presented.
With respect to the sale of the commercial real estate properties in Beavercreek, OH, the assets of discontinued operations include zero investments in other real estate as of June 30, 2015 and $6.6 million as of December 31, 2014, and cash and cash equivalents, restricted cash and receivables and other assets in the total amount of $0.1 million and $0.2 million as of June 30, 2015 and December 31, 2014, respectively. There were no liabilities of discontinued operations as of June 30, 2015. The liabilities of discontinued operations include accounts payable, accrued liabilities and other liabilities of $0.5 million as of December 31, 2014.

Results from discontinued operations were as follows:
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2015
 
2014
 
2015
 
2014
Interest income
$
—

 
$
—

 
$
—

 
$
—

Interest expense
—

 
13,592

 
—

 
29,389

Net interest income (loss)
—

 
(13,592
)
 
—

 
(29,389
)
 
 
 
 
 
 
 
 
Media income
—

 
—

 
—

 
68,213

Rental income
50

 
54,595

 
549

 
107,485

Care and ancillary income
—

 
5,666

 
—

 
11,127

Gain on settlement of investments
318

 
—

 
318

 
—

Other income (loss)
—

 
(22
)
 
—

 
(22
)
Total media, rental and other income
368

 
60,239

 
867

 
186,803

 
 
 
 
 
 
 
 
Media operating expenses
—

 
—

 
—

 
65,826

Property operating expenses
(157
)
 
26,459

 
187

 
52,419

General and administrative expenses (A)
1

 
4,911

 
30

 
12,463

Depreciation and amortization
—

 
23,245

 
11

 
50,733

Income tax (benefit) expense
—

 
536

 
—

 
(224
)
Total expenses
(156
)
 
55,151

 
228

 
181,217

 
 
 
 
 
 
 
 
Income (loss) from discontinued operations
$
524

 
$
(8,504
)
 
$
639

 
$
(23,803
)
 
 
 
 
 
 
 
 
Net income attributable to noncontrolling interests
$
—

 
$
—

 
$
—

 
$
522

(A)
Includes acquisition and spin-off related expenses of $3.4 million and $10.7 million for the three and six months ended June 30, 2014.

The February 13, 2014 spin-off of New Media 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.

The November 6, 2014 spin-off of New Senior resulted in a $0.7 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.