Quarterly report pursuant to Section 13 or 15(d)

Discontinued Operations

v2.4.0.8
Discontinued Operations
 9 Months Ended
Sep. 30, 2013
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
Discontinued Operations
On December 19, 2012, the Company completed the contribution of its equity interests in its wholly owned subsidiary, Two Harbors Property Investment LLC, to Silver Bay. Two Harbors Property Investment LLC previously held the Company’s portfolio of single-family rental properties. Because the Company will not have any significant continuing involvement in Two Harbors Property Investment LLC, all of the associated operating results were removed from continuing operations and are presented separately as discontinued operations for the three and nine months ended September 30, 2013 and 2012.
Summarized financial information for the discontinued operations are presented below.
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
(in thousands)
2013
 
2012
 
2013
 
2012
Income:
  

 
   

 
  

 
   

Gain on contribution of entity
$
871

 
$
—

 
$
3,126

 
$
—

Real estate related revenues
—

 
721

 
—

 
808

Total income
871

 
721

 
3,126

 
808

Expenses:
 
 
 
 
 
 
 
Management fees
—

 
804

 
—

 
804

Real estate related expenses
—

 
1,786

 
—

 
1,984

Other operating expenses
—

 
805

 
(138
)
 
921

Total expenses
—

 
3,395

 
(138
)
 
3,709

Income (loss) from discontinued operations
$
871

 
$
(2,674
)
 
$
3,264

 
$
(2,901
)


In addition to the gain on contribution of entity that was recorded in 2012 in connection with the closing of the contribution, certain adjustments were agreed to be recognized in 2013. These include an installment sales gain of approximately $4.0 million from Silver Bay, a reduction of 2013 management fees payable to PRCM Advisers of $4.3 million, and an immaterial amount of additional working capital adjustments determined in accordance with the contribution agreement entered into with Silver Bay. Of these amounts, $0.9 million and $3.2 million of the installment sales gain was recorded as a gain on contribution of entity within discontinued operations for the three and nine months ended September 30, 2013, respectively, and the full $4.3 million of the reduction of 2013 management fees payable to PRCM Advisers was recorded within management fees, on the condensed consolidated statements of comprehensive income for the nine months ended September 30, 2013, respectively. The remaining $0.1 million recorded within discontinued operations on the condensed consolidated statements of comprehensive income for the nine months ended September 30, 2013 relates to accrual adjustments for transaction expenses related to the contribution. See Note 23 - Related Party Transactions for additional information.