Discontinued Operations

12 Months Ended

Dec. 31, 2012

Discontinued Operations

Discontinued Operations

NOTE 6—Discontinued Operations

        Spin-off of Financing    In 2009, the Company completed the spin-off of its Financing business and the merger of that business with Hanover Capital Mortgage Holdings, Inc. to create Walter Investment Management Corp. ("Walter Investment"), which operates as a publicly traded Company. The subsidiaries and assets that Walter Investment owned at the time of the spin-off included all assets of Financing except for those associated with the workers' compensation program and various other run-off insurance programs within Cardem Insurance Co., Ltd. As a result of the spin-off, the Company no longer has any ownership interest in Walter Investment. Amounts previously reported in the Financing segment are presented as discontinued operations for the year ended December 31, 2010.

        Closure of Homebuilding    In 2008, the Company made the decision to close the Homebuilding business. This decision was reached despite the efforts of management and employees, including a major restructuring during 2008 that closed nearly half of the sales centers. After the decision was made, the Company immediately took steps to liquidate the remaining assets and wind down the business. This wind down was substantially complete in 2009 and as a result, the Company has reported the results of operations and cash flows of the Homebuilding segment as discontinued operations for the year ended December 31, 2010.

        Closure of Kodiak Mining Co.    In 2008, the Company announced the permanent closure of the underground coal mine operations of Kodiak Mining Company, LLC ("Kodiak") due to high operational costs, difficult operating conditions and a challenging pricing environment for Kodiak's product. During the quarter ended June 30, 2012, the Company divested the Kodiak assets and liabilities for cash proceeds of $9.5 million. The sale resulted in an after-tax gain of $5.2 million. The Company has reported the results of operations and cash flows of Kodiak as discontinued operations for the years ended December 31, 2012 and 2010. The Kodiak operations did not have a material impact on either the Company's revenues or operating income for the year ended December 31, 2011 and as such was not reported as discontinued operations.

        The table below presents the significant components of operating results included in income (loss) from discontinued operations (primarily Financing, Homebuilding and Kodiak) for the years ended December 31, 2012, and 2010 (in thousands):

	For the years ended December 31,
	2012		2010
Sales and revenues	$	—	$	4,293
Other income, net	$	8,282	$	—
Income (loss) from discontinued operations before income tax expense (benefit)	$	8,282	$	(5,856	)
Income tax expense (benefit)		3,102		(2,228	)
Income (loss) from discontinued operations	$	5,180	$	(3,628	)

        Prior to discontinuing these operations, the Company allocated certain corporate expenses, limited to specifically identified costs and other corporate shared services which supported segment operations, to discontinued operations. These costs represented expenses that had historically been allocated to and recorded by the Company's operating segments as selling, general and administrative expenses. The Company did not elect to allocate corporate interest expense to discontinued operations.