What Are Non-Core Assets?

Non-core assets are assets that are either not essential or simply no longer used in a company's business operations. Non-core assets are often sold when a company needs to raise cash. Some businesses sell their non-core assets in order to pay d🉐own debt. Although non-core assets are not critical to a company's core operations,♋ they do have value and can generate a return on investment.

Understanding Non-Core Assets

A non-core business asset can be any kind of non-essential asset with respect to generating revenue and the core business operations of the company. A non-core asset coul🔥d be a factory or property that is no l﷽onger being used. Non-core assets might also be an entire subsidiary or a holding in another company. Typically, non-core assets can include the following:

• Real estate
• 澳洲幸运5开奖号码历史查询:Commodities
• Idle equipment
• Natural resources
• Investment securities
• Land that's not being used

Non-core assets can also be referred to as 澳洲幸运5开奖号码历史查询:non-operating assets because they may generate income or provide a return on their investment but are not essential to the ongoing operation of the company. Apple Inc. might own marketable securities, for example, that generate investment income. However,🐽 the securities are not essential to generating revenue for the company's core operation of selling iPhones.

Whether an asset is considered, non-core is entirely relative to the company. An asset that is non-core for one company might be a core asset for another. An oil company might sell off some real estate that's considered a non-core asset. The real estate company that purchases it with the goal of developing it into an office park would consider the property a core asset.

Non-Core Assets vs. Core Assets

Core assets include the assets that are critical to a company and its business operations. In other words, core business assets are needed for the company to 🌌generate revenue and remain profitable. Core assets can include equipment, machinery, factories, and distribution channels, such as vehicles. Core assets can also include a trademark or a patent. 

Conversely, non-core assets are the assets that are not critical to the production of a company's goods, nor are they critical to generating revenue. Although non-core assets have value and can be important to a company, they're typically not viewed as core or central to the overall profitability of a company. 

Real World Examples of Non-Core Assets

Sometimes a company will spin off 🎉a subsidiary that it considers non-core into a separate company. Selling off non-core assets cannot only raise cash but also make a company more efficient. If those non-core assets required maintenance and other expenses such as taxes, unloading them would eliminate those costs, resulting in greater profitability.

Chesapeake Energy

Chesapeake Energy Corporation (CHK) reported a net loss of $308 million for all of 2019 according to the company's end-of-year . The company also had approximately $8.9 billion in outstanding debt. The company announced that it would enhance its 澳洲幸运5开奖号码历史查询:liquidity or funding "with $300 to $500 million in proceeds from expected non-core asset sales." The funds are to be used to pay de🥂bt, such as bonds, that are maturing in 2020.

Honeywell International

In 2018, Honeywell International Inc. (HON) announced via a that its two spin-offs would become independent companies per the filings with the U.S. 澳洲幸运5开奖号码历史查询:Secur🐓ities and Exchange Commission (S🦂EC).

Garrett Motion Inc. was the spin-off of Honeywell's transportation systems business and Resideo Technologies, Inc. was the spin-off of Honeywell's Homes and ADI Global Distribution business. As a result, the companies became separate, legal entities. According to Honeywell, the sale of the non-core assets generated approximately $3 billion, which were to be used to pay down debt and buy back shares of stock.