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Discontinued operations | 12 Months Ended
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Dec. 31, 2012
Discontinued operations | 2. Discontinued operations Introduction In order to expand shareholder value in the longer term and allow the Company to focus on and pursue additional accretive concessions, the Company divested many of its subsidiaries during 2012. In addition, the divestiture of the subsidiaries resulted in the elimination of certain outstanding payables, earn-out liabilities and tax provisions in the aggregate amount of $41.6 million. On May 2, May 14, August 31, and November 30, 2012, the Company disposed of Zhejiang Continental, Shenyang Jingli, Qingdao Kaixiang and Wuxi Ruizhong, respectively. On December 31, 2012, the Company entered into a Share Purchase Agreement and completed the sale of SearchMedia International and its remaining subsidiaries. As a result of the Company’s disposal of Zhejiang Continental, Shenyang Jingli, Qingdao Kaixiang and Wuxi Ruizhong and the Company’s divestment of SearchMedia International, together with its remaining subsidiaries, the results and accounts of each of these subsidiaries are shown as discontinued operations in the Company’s financial statements. Disposal of Zhejiang Continental On May 2, 2012, the Company divested 100% of the equity interests in Zhejiang Continental back to its original selling shareholders and eliminated the related acquisition contingent payable of $8,250 in exchange for the issuance of 1.0 million ordinary shares of the Company. The gain on the elimination on acquisition contingent payable was recognized by the Company to its income statement in accordance with ASC Topic 805-30-35 and reflected in the Company’s 2012 financial statements. The following financial information presents the results of operations of Zhejiang Continental for the years ended December 31, 2010, 2011 and for the period ended the disposal date.
|  | Period ended December 31, 2010 |  |  | Year ended December 31, 2011 |  |  | Period ended May 2, 2012 |
Advertising service revenues |  |  | 4,370 |  |  |  | 2,611 |  |  |  | 379 |
Pretax profit/(loss) |  |  | 3,269 |  |  |  | 303 |  |  |  | (143 | )
Net profit / (loss) |  |  | 2,451 |  |  |  | 100 |  |  |  | (143 | )
The Company recorded a cumulative gain on the disposal of Zhejiang Continental, pursuant to the following:
Total consideration on disposal – 1,000,000 shares issued |  | $ | (1,700 | )
Add: Extinguishment of current accounts |  |  | 80 |
Add: Earn-out consideration payable settled |  |  | 8,250 |
Less: Net book value of assets in connection with the disposal |  |  | (1,170 | )
Net gain on the disposal of Zhejiang Continental |  |  | 5,460 |
Disposal of Shenyang Jingli On May 14, 2012, the Company divested 100% of the equity interests in Shenyang Jingli back to its original selling shareholders and eliminated the related acquisition contingent payable of $1,437. The gain on the elimination on acquisition contingent payable was recognized by the Company to its income statement in accordance with ASC Topic 805-30-35 and reflected in the Company’s 2012 financial statements. The following financial information presents the results of operations of Shenyang Jingli for the year ended December 31, 2010, 2011 and for the period ended the disposal date.
|  | Year ended December 31, 2010 |  |  | Year ended December 31, 2011 |  |  | Period ended May 14, 2012 |
Advertising service revenues |  |  | 1,246 |  |  |  | 471 |  |  |  | 6 |
Pretax profit/(loss) |  |  | (241 | ) |  |  | (549 | ) |  |  | 251 |
Net profit / (loss) |  |  | (181 | ) |  |  | (816 | ) |  |  | 222 |
The Company recorded a cumulative gain on the disposal of Shenyang Jingli, pursuant to the following:
Total consideration on disposal |  | $ | — |
Add: Extinguishment of current accounts |  |  | 1,586 |
Add: Extinguishment of acquisition consideration payable |  |  | 1,437 |
Add: Net book value of liability in connection with the disposal |  |  | 1,641 |
Net gain on the disposal of Shenyang Jingli |  |  | 4,664 |
Disposal of Qingdao Kaixiang On August 31, 2012, the Company divested 100% of the equity interests in Qingdao Kaixiang back to its original selling shareholders and eliminated the related acquisition contingent payable of $4,126. The gain on the elimination on acquisition contingent payable was recognized by the Company to its income statement in accordance with ASC Topic 805-30-35 and reflected in the Company’s 2012 financial statements. The following financial information presents the results of operations of Qingdao Kaixiang for the years ended December 31, 2010, 2011 and for the period ended the disposal date.
|  | Year ended December 31, 2010 |  |  | Year ended December 31, 2011 |  |  | Period ended August 31, 2012 |
Advertising service revenues |  |  | 4,111 |  |  |  | 2,603 |  |  |  | 89 |
Pretax profit/(loss) |  |  | 1,495 |  |  |  | 338 |  |  |  | (563 | )
Net profit / (loss) |  |  | 1,259 |  |  |  | 253 |  |  |  | (563 | )
The Company recorded a cumulative loss on the disposal of Qingdao Kaixiang, pursuant to the following:
Total consideration on disposal |  | $ | — |
Add: Extinguishment of current accounts |  |  | 1,891 |
Add: Extinguishment of acquisition consideration payable |  |  | 4,126 |
Less: Net book value of assets in connection with the disposal |  |  | (4,574 | )
Less: Goodwill writeoff |  |  | (3,261 | )
Net loss on the disposal of Qingdao Kaixiang |  |  | (1,818 | )
Disposal of Wuxi Ruizhong On November 30, 2012, the Company divested 100% of the equity interests in Wuxi Ruizhong back to its original selling shareholders and eliminated the related acquisition contingent payable of $322. The gain on the elimination on acquisition contingent payable was recognized by the Company to its income statement in accordance with ASC Topic 805-30-35 and reflected in the Company’s 2012 financial statements. The following financial information presents the results of operations of Wuxi Ruizhong for the years ended December 31, 2010, 2011 and for the period ended the disposal date.
|  | Year ended December 31, 2010 |  |  | Year ended December 31, 2011 |  |  | Period ended November 30, 2012 |
Advertising service revenues |  |  | 2,165 |  |  |  | 2,035 |  |  |  | 1,656 |
Pretax profit/(loss) |  |  | 931 |  |  |  | 493 |  |  |  | 146 |
Net profit / (loss) |  |  | 588 |  |  |  | 192 |  |  |  | (19 | )
The Company recorded a cumulative loss on the disposal of Wuxi Ruizhong, pursuant to the following:
Total consideration on disposal |  | $ | 147 |
Add: Obligation exempted |  |  | 328 |
Add: Extinguishment of current accounts |  |  | 1,414 |
Add: Extinguishment of acquisition consideration payable |  |  | 322 |
Less: Net book value of assets in connection with the disposal |  |  | (1,750 | )
Less: Goodwill writeoff |  |  | (3,103 | )
Net loss on the disposal of Wuxi Ruizhong |  |  | (2,642 | )
Divestiture of SearchMedia International Limited and its subsidiaries On December 31, 2012, the Company announced the divestiture of its SearchMedia International Limited, together with all its remaining subsidiaries. As part of the transaction, SearchMedia International and its remaining subsidiaries were divested to an independent third party, by granting an option to acquire 650,000 shares of Tiger Media at $1.25 per share to eliminate the remaining earn-out obligations and potential tax liabilities pursuant to the acquisition agreements with the subsidiaries of SearchMedia International. As part of the transaction, the independent third party will pursue the collection of all receivables and all claims for SearchMedia International, for the benefit of Tiger Media and share 50% of any receivables, net proceeds, awards or judgments from any claims or lawsuits brought about by SearchMedia International entities; provided, however, 100% of any sale proceeds from the sale or transfer of any of the SearchMedia International’s subsidiaries will accrue to Tiger Media. Included in the divestiture of SearchMedia International are the subsidiaries, HK Ad-Icon, Wanshuizhiyuan and Shanghai Botang subsidiaries. As of December 31, 2012, SearchMedia International’s operating results will no longer form part of the Company’s consolidated financial statements. The following financial information presents the results of operations of SearchMedia International and its remaining subsidiaries for the years ended December 31, 2010, 2011 and 2012.
|  | Year ended December 31, 2010 |  |  | Year ended December 31, 2011 |  |  | Year ended December 31, 2012 |
Advertising service revenues |  |  | 37,075 |  |  |  | 47,851 |  |  |  | 27,899 |
Pretax profit/(loss) |  |  | (48,367 | ) |  |  | (10,214 | ) |  |  | (6,192 | )
Net profit / (loss) |  |  | (48,450 | ) |  |  | (11,073 | ) |  |  | (6,220 | )
The Company recorded a cumulative gain on the divestiture of SearchMedia International with its remaining subsidiaries, pursuant to the following:
Total consideration on disposal |  | $ | (421 | )
Add: Net book value of liability in connection with the divestiture |  |  | 118,153 |
Less: Extinguishment of current accounts |  |  | (107,243 | )
Net gain on the divestiture of SearchMedia International |  | $ | 10,489 |
The net book value of liability includes the extinguished acquisition payable to Wanshuizhiyuan and Wenzhou Rigao, amounting to $1,206 and $3,610, respectively. The following financial information presents the total results of operations of Zhejiang Continental, Shenyang Jingli, Qingdao Kaixiang, Wuxi Ruizhong, SearchMedia International and its subsidiaries for the years/period ended December 31, 2010, 2011 and for the period ended the disposal dates.
|  | Year ended December 31, 2010 |  |  | Year ended December 31, 2011 |  |  | Period ended disposal dates |
Advertising service revenues |  |  | 48,967 |  |  |  | 55,571 |  |  |  | 30,029 |
Pretax profit/(loss) |  |  | (42,913 | ) |  |  | (9,629 | ) |  |  | (6,501 | )
Net profit / (loss) |  |  | (44,333 | ) |  |  | (9,712 | ) |  |  | (6,723 | )
The main classes of assets and liabilities of discontinued components are as follows:
|  | 2011 |  |  | 2012 |
Cash |  | $ | 4,592 |  |  | $ | — |
Accounts receivable |  |  | 15,822 |  |  |  | — |
Prepayments and other receivables |  |  | 9,476 |  |  |  | — |
Amount due from related party |  |  | 2,079 |  |  |  | — |
Property, plant and equipment |  |  | 633 |  |  |  | — |
Long-term deferred expenses |  |  | 31 |  |  |  | — |
Deferred tax assets |  |  | 866 |  |  |  | — |
Goodwill |  |  | 16,926 |  |  |  | — |
Assets of discontinued components |  | $ | 50,425 |  |  | $ | — |
Accounts payable |  |  | 14,167 |  |  |  | — |
Accrued expenses and other payables |  |  | 15,764 |  |  |  | — |
Amount due to related party |  |  | 205 |  |  |  | — |
Income tax payable |  |  | 9,524 |  |  |  | — |
Acquisition payable |  |  | 22,196 |  |  |  | — |
Liabilities of discontinued components |  | $ | 61,856 |  |  | $ | — |
The Company recorded a cumulative gain on the disposal of divestiture of Zhejiang Continental, Shenyang Jingli, Qingdao Kaixiang, Wuxi Ruizhong, SearchMedia International with its remaining subsidiaries, pursuant to the following:
|  | Gain/(loss) on disposal of discontinued components |
Zhejiang Continental |  |  | 5,460 |
Shenyang Jingli |  |  | 4,664 |
Qingdao Kaixiang |  |  | (1,818 | )
Wuxi Ruizhong |  |  | (2,642 | )
SearchMedia International and its remaining subsidiaries |  |  | 10,489 |
Gain/(loss) on disposal of discontinued components |  |  | 16,153 |

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- Definition The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1474-107760 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 144 -Paragraph 43-48 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e957-107759 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2941-110230 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=8077374&loc=d3e2443-110228 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1012-107759 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1510-107760 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1020-107759 + Details
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