Newcastle Announces First Quarter 2008 Results
NEW YORK, May 12 /PRNewswire-FirstCall/ --
Highlights
- FFO and GAAP loss of $44.3 million, or $0.84 per diluted share, for the
quarter ended March 31, 2008. FFO and income, excluding net charges
was $29.6 million, or $0.56 per diluted share, for the quarter ended
March 31, 2008.
- In the first quarter, the Company reduced its recourse debt by $1.0
billion.
- Increased unrestricted cash from $29 million as of December 31, 2007 to
$123 million as of May 8, 2008.
First Quarter 2008 Financial Results
Newcastle Investment Corp. (NYSE: NCT) reported that for the quarter ended March 31, 2008, Funds from Operations ("FFO") loss and loss attributable to common stockholders was $44.3 million, or $0.84 per diluted share. This compares to FFO of $0.71 per diluted share and income of $0.70 per diluted share for the quarter ended March 31, 2007. First quarter 2008 FFO and net loss includes net charges of $73.9 million, comprised of other income (loss) and discontinued operations. FFO excluding such charges, which is equivalent to Operating Income (net of preferred dividends) was $29.6 million, or $0.56 per diluted share, and FFO return on average invested equity, excluding the effect of charges, was 14.6%.
Of the $73.9 million of charges recorded in the first quarter 2008, $70.2 million represented impairment under U.S. GAAP. These charges resulted in a reduction in FFO and income available to common stockholders of $1.33 per diluted share.
Book Value
Our GAAP book value decreased to $(4.12) per share, or $(217.5) million at March 31, 2008 down from $5.59 per share, or $295.1 million at December 31, 2007. The decrease in book value was primarily attributable to an unrealized market value decline in our securities portfolio due to wider credit spreads and changes in the value of derivatives used to hedge interest rates.
Our securities portfolio is predominantly financed to maturity with long-term collateralized debt obligations ("CBOs") that are not callable as a result of changes in value and are non-recourse to the Company. While the assets in the CBOs are consolidated on our books for GAAP purposes, our exposure to losses is limited to our investment in each CBO. Our March 31, 2008 GAAP book value reflects approximately $650 million of unrealized losses in assets in our CBOs that could not be realized by the Company.
We believe that a better measure of shareholder value is our adjusted book value which marks-to-market all of our financial assets and liabilities. At March 31, 2008, we estimate our adjusted book value per share would have been $16.28. Our GAAP book value would equal our adjusted book value if we elected to mark all of our financial assets and liabilities to fair value under SFAS 159, "The Fair Value Option for Financial Assets and Financial Liabilities."
The following table compares Newcastle's book value as of March 31, 2008 and December 31, 2007 ($ in per share amounts):
March 31, December 31,
2008 2007
Adjusted book value (1) $16.28 $16.39
GAAP book value $(4.12) $5.59
(1) Represents GAAP book value as if Newcastle had elected to measure all
of its financial assets and liabilities at fair value under SFAS 159.
For a reconciliation and discussion of GAAP net income (loss) attributable to common stockholders to FFO, Operating Income (net of preferred dividends), and GAAP book equity to invested common equity, as well as GAAP book value to adjusted book value, please refer to the tables following the presentation of GAAP results.
Dividends
For the quarter ended March 31, 2008, Newcastle's Board of Directors declared a dividend of $0.25 per common share. The first quarter dividend represents approximately 45% of Newcastle's Operating Income (net of preferred dividends) for the period.
We also declared dividends on our 9.75% Series B, 8.05% Series C and 8.38% Series D Cumulative Redeemable Preferred Stock in the amounts of $0.609375, $0.503125 and $0.523438 per share, respectively.
Investment Portfolio
Newcastle's current $6.7 billion investment portfolio consists primarily of commercial, residential and corporate debt. During the first quarter, we purchased $13.9 million, sold $1.3 billion and had paydowns of $194.5 million for a net decrease of $1.5 billion. Of the assets sold, $762.5 million were FNMA/FHLMC securities, $297.2 million were commercial assets and $273.3 million were corporate assets.
The following table describes our investment portfolio ($ in millions):
Weighted
Number Average
Face Basis of Life
Amount Amount % of Invest- Credit (years)
$ $ Basis ments (1) (2)
Commercial Assets
CMBS $2,256 $2,170 34.2% 256 BBB- 5.5
Mezzanine Loans 816 813 12.8% 23 68% 3.4
B-Notes 421 405 6.4% 15 64% 3.4
Whole Loans 69 69 1.1% 4 69% 3.3
ICH Loans 29 27 0.4% 20 -- 0.2
Total Commercial
Assets 3,591 3,484 54.9% 4.7
Residential Assets
MH and Residential
Loans 621 596 9.4% 15,522 696 5.6
Subprime Securities 562 355 5.6% 122 BB 4.6
Subprime Retained
Securities 76 54 0.8% 6 B+ 7.0
Subprime Residual
Interests 49 49 0.8% 2 637 5.3
Real Estate ABS 105 103 1.6% 26 BBB- 4.8
1,413 1,157 18.2% 5.2
FNMA/FHLMC
Securities 433 435 6.9% 15 AAA 3.8
Total Residential
Assets 1,846 1,592 25.1% 4.9
Corporate Assets
REIT Debt 653 664 10.5% 65 BBB- 5.4
Corporate Bank
Loans 633 605 9.5% 14 B 3.3
Total Corporate
Assets 1,286 1,269 20.0% 4.4
Total/Weighted Average (3) $6,723 $6,345 100.0% 4.7
(1) Credit statistics represent weighted average rating for rated assets,
LTV for non-rated commercial assets, FICO score for non-rated
residential assets and implied AAA for FNMA/FHLMC securities.
(2) Mezzanine loans, B-Notes and whole loans are based on the fully
extended maturity date.
(3) Excludes real estate held for sale of $37 million and $406 million of
loans subject to call option.
The following table compares certain supplemental data relating to our investment portfolio ($ in millions):
March 31, December 31,
2008 2007
Face Amount ($) 6,723 8,232
Weighted average asset yield 6.55% 7.06%
Weighted average liability cost 4.54% 5.38%
Weighted average net spread 2.01% 1.68%
Excluding the FNMA/FHLMC Securities, our weighted average net spread was 2.09% as of March 31, 2008 and 1.90% as of December 31, 2007.
Commercial Assets
We own $3.6 billion of commercial assets, which includes CMBS, mezzanine loans, B-Notes and whole loans.
- During the first quarter, we sold $297.2 million, had paydowns of
$81.5 million and purchased $13.9 million for a net decrease of
$366.0 million. Of the assets sold, $261.3 million were CMBS.
- We had 14 CMBS securities or $83.8 million upgraded (from an average
rating of A- to A+) with 7 securities or $24.6 million downgraded (from
an average rating of BB+ to B).
CMBS portfolio ($ in thousands):
Average Face Basis
Vintage Rating Number Amount $ Amount $
Pre 2004 BBB+ 79 411,450 407,554
2004 BBB- 59 435,908 428,683
2005 BB+ 50 586,384 553,621
2006 BB+ 36 448,919 428,903
2007 BBB 32 373,624 351,182
TOTAL/WA BBB- 256 2,256,285 2,169,943
% of Delinquency Principal Average
Vintage Basis 60+/FC/REO Subordination Life (yr)
Pre 2004 18.7% 0.8% 9.1% 4.6
2004 19.8% 0.1% 5.2% 5.8
2005 25.5% 0.2% 4.3% 6.5
2006 19.8% 0.4% 5.6% 3.9
2007 16.2% 0.1% 8.7% 6.6
TOTAL/WA 100.0% 0.3% 6.3% 5.5
Mezzanine loans, B-Notes and whole loan portfolio ($ in thousands):
Whole
Mezzanine B-Note Loan Total
Face Amount ($) 816,490 421,104 68,604 1,306,198
Basis Amount ($) 812,860 405,189 68,580 1,286,629
WA First $ Loan To Value 57% 48% 0% 52%
WA Last $ Loan To Value 68% 64% 69% 68%
Delinquency 0.0% 0.0% 0.0% 0.0%
In the first quarter, we recorded an $18.3 million charge related to 3 investments in our commercial portfolio. The majority of the charge was related to a $14.8 million impairment on a B-Note secured by residential land located in Mobile, AZ.
Residential Assets
We own $1.8 billion of residential assets, which includes manufactured housing ("MH"), residential loans, subprime securities and FNMA/FHLMC securities.
- During the first quarter, we sold $762.5 million of FNMA/FHLMC
securities and had paydowns of $88.8 million, of which $32.2 million
was related to subprime securities (including retained interests).
- We had no ABS securities upgraded with 38 securities or $179.0 million
downgraded (from an average rating of BB+ to B-).
Manufactured housing loan portfolios ($ in thousands):
Weighted
Average
Face Basis % of Loan Age
Deal Amount $ Amount $ Basis (months)
Portfolio 1 209,136 195,577 39.2% 80
Portfolio 2 314,594 303,466 60.8% 109
TOTAL/WA 523,730 499,043 100.0% 97
Actual Projected
Cumulative Cumulative
Original Delinquency Loss to Loss to
Deal Balance $ 90+/FC/REO Date Date
Portfolio 1 327,855 0.7% 3.5% 5.0%
Portfolio 2 434,743 0.5% 1.8% 3.0%
TOTAL/WA 762,598 0.6% 2.4% 3.8%
Subprime securities portfolio excluding our residuals and retained interests in our own securitizations ($ in thousands):
Average Face Basis % of
Vintage Rating Number Amount $ Amount $ Basis
2003 A- 16 37,583 35,771 10.1%
2004 BBB+ 30 157,053 147,998 41.7%
2005 BBB- 44 200,167 159,138 44.8%
2006 CC+ 29 159,497 11,095 3.2%
2007 CCC 3 7,750 832 0.2%
TOTAL/WA BB 122 562,050 354,834 100.0%
Average
Loan Principal Cumulative
Age Collateral 3 Month Subordi- Excess Delinquency Loss to
Vintage (months) Factor CPR (1) nation Spread 90+/FC/REO Date
2003 55 0.20 15.7 % 21.8 % 3.2 % 9.9 % 2.1 %
2004 45 0.24 19.3 % 14.9 % 3.6 % 14.4 % 1.5 %
2005 32 0.36 23.3 % 14.8 % 4.4 % 23.2 % 1.7 %
2006 20 0.68 17.8 % 3.8 % 2.8 % 24.1 % 1.5 %
2007 12 0.88 11.3 % 10.6 % 2.8 % 16.7 % 0.2 %
TOTAL/WA 34 0.41 19.9 % 12.1 % 3.6 % 20.0 % 1.6 %
(1) CPR is constant prepayment rate.
In the first quarter, we recorded a $40.9 million charge related to our $562.0 million subprime securities portfolio. The majority of the charge was related to a $27.0 million impairment on 18 of our 2005 vintage securities and a $9.6 million impairment on 29 of our 2006 vintage securities. We also recorded a $1.2 million charge related to our residential loan portfolio based on updated loss and prepayment assumptions.
Residuals and retained securities
We own $76.4 million of retained securities and $48.6 million of residual interests in two subprime portfolio securitizations from 2006 ("Portfolio 1") and 2007 ("Portfolio 2"). The following table summarizes our subprime portfolio securitizations ($ in thousands):
Security Characteristics
Face Basis % of
Deal Amount $ Amount $ Basis
Portfolio 1 55,492 50,003 48.7%
Portfolio 2 69,457 52,644 51.3%
TOTAL/WA 124,949 102,647 100.0%
Portfolio Characteristics
Average Original Actual Projected
Loan Securiti- Cumulative Cumulative
Age zation Current Delinquency Loss to Loss to
Deal (months) Balance $ Balance $ 90+/FC/REO Date Date
Portfolio 1 31 1,502,181 834,013 15.3 % 0.5 % 0.6 %
Portfolio 2 14 1,087,942 996,859 6.3 % 0.0 % 0.1 %
TOTAL/WA 22 2,590,123 1,830,872 10.4 % 0.3 % 0.3 %
In the first quarter, even though the portfolios have been out-performing our initial underwriting, we updated our future loan loss and prepayment assumptions based on current market conditions. Under the new assumptions, we recorded impairments of $1.6 million on the residuals and $3.9 million on the retained securities. The following summarizes the changes in our prepayment and loss assumptions on both portfolios:
Portfolio Characteristics
Portfolio 1 Portfolio 2
Cumulative Loss
Original Underwriting 5.3% 8.0%
Revised Underwriting 8.6% 14.5%
Change +3.3% +6.5%
Lifetime Constant Voluntary Prepayment Rate
Original Underwriting 28.0% 30.1%
Revised Underwriting 20.2% 13.6%
Change -7.8% -16.5%
In addition, prior to the securitization of Portfolio 2, the seller repurchased $185 million (or 14.6%) of the original loan pool due to early payment defaults. We believe these loans would otherwise have contributed to significantly higher delinquencies and ultimately greater losses in the deal.
Corporate Assets
We own $1.3 billion of corporate assets, including REIT debt and corporate bank loans.
- During the quarter, we sold $273.3 million and had paydowns of
$24.2 million for a net decrease of $297.5 million. Of the assets
sold, $263.9 million were REIT debt.
- We had 2 REIT assets totaling $32.5 million upgraded (from an average
rating of BBB+ to A-), 5 REIT assets totaling $98.0 million downgraded
(from an average rating of BB to BB-) and 3 bank loans totaling
$46.6 million downgraded (from an average rating of B to CCC-).
REIT debt portfolio ($ in thousands):
Average Face Basis % of
Industry Rating Number Amount $ Amount $ Basis
Retail BB+ 16 200,035 202,895 30.6%
Office BBB 14 132,919 136,055 20.5%
Diversified BBB 14 151,463 152,159 22.9%
Hotel BBB- 4 42,720 43,478 6.6%
Multifamily BBB+ 8 44,508 45,854 6.9%
Healthcare BBB- 4 36,600 37,244 5.6%
Industrial BBB 3 20,865 21,827 3.3%
Storage A- 2 23,406 24,225 3.6%
TOTAL/WA BBB- 65 652,516 663,737 100.0%
Corporate bank loan portfolio ($ in thousands):
Average Face Basis % of
Industry Rating Number Amount $ Amount $ Basis
Real Estate B- 4 174,336 171,156 28.3%
Resorts BB- 1 110,991 108,465 17.9%
Media B+ 1 112,000 101,221 16.7%
Retail B- 1 100,000 95,035 15.7%
Restaurant CCC+ 2 44,363 40,201 6.6%
Transportation NR 2 37,000 35,146 5.8%
Gaming B+ 2 29,692 29,692 4.9%
Theatres BB- 1 24,591 24,591 4.1%
TOTAL/WA B 14 632,973 605,507 100.0%
In the first quarter, we recorded a $4.3 million charge related to a $19.8 million senior bank loan to a borrower in the restaurant industry.
Financing and Liquidity
In the first quarter, the Company reduced its recourse debt by $1.0 billion and reduced its non-recourse debt by $420 million. Newcastle also increased unrestricted cash from $29 million as of December 31, 2007 to $123 million as of May 8, 2008.
The following table compares the face amount of our liabilities as of March 31, 2008 compared to December 31, 2007 ($ in millions):
March 31, 2008 December 31, 2007
Recourse Financings
Real Estate Securities and Loans(1) $365 $601
FNMA/FHLMC Securities 422 1,206
Total Recourse Financings 787 1,807
Non-Recourse Financings
CBOs and Other 4,860 5,280
Total Financings $5,647 $7,087
Recourse Financings as % of
Total Financings 14% 25%
(1) Recourse financings on our real estate securities and loans include
off-balance sheet debt (in the form of total return swaps) of
$77 million as of March 31, 2008 and $172 million as of
December 31, 2007.
Conference Call
Newcastle's management will conduct a live conference call today, May 12, 2008, at 1:00 P.M. Eastern Time to review the financial results for the quarter ended March 31, 2008. All interested parties are welcome to participate on the live call. You can access the conference call by dialing (888) 243-2046 (from within the U.S.) or (706) 679-1533 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference "Newcastle First Quarter Earnings Call."
A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.newcastleinv.com. Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast. An online replay of the webcast will be available until June 30, 2008.
A telephonic replay of the conference call will also be available until 11:59 P.M. eastern time on Monday, May 19, 2008 by dialing (800) 642-1687 (from within the U.S.) or (706) 645-9291 (from outside of the U.S.); please reference access code "44729804."
About Newcastle
Newcastle Investment Corp. owns and manages a $6.7 billion highly diversified real estate debt portfolio with moderate credit risk that is primarily financed with match funded debt. Our business strategy is to "lock in" and optimize the difference between the yield on our assets and the cost of our liabilities. Newcastle is organized and conducts its operations to qualify as a real estate investment trust (REIT) for federal income tax purposes. Newcastle is managed by an affiliate of Fortress Investment Group LLC, a global alternative asset manager with approximately $34.2 billion in assets under management as of March 31, 2008. For more information regarding Newcastle Investment Corp. or to be added to our e-mail distribution list, please visit www.newcastleinv.com.
Safe Harbor
Certain items in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to our ability to acquire assets with attractive returns and the delinquent and loss rates on our subprime portfolios. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, many of which are beyond our control; Newcastle can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from Newcastle's expectations include, but are not limited to, the risk that we can find additional suitably priced investments; the risk that investments made or committed to be made cannot be financed on the basis and for the term at which we expect; the relationship between yields on assets which are paid off and yields on assets in which such monies can be reinvested; and the relative spreads between the yield on the assets we invest in and the cost and availability of debt and equity financing. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operation" in the Company's Annual Report on Form 10-K, which available on the Company's website (www.newcastleinv.com). In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Such forward-looking statements speak only as of the date of this press release. Newcastle expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.
Newcastle Investment Corp.
Consolidated Statements of Operations
(dollars in thousands, except share data)
(Unaudited)
Three Months Ended March 31,
2008 2007
Revenues
Interest income $132,894 $162,216
132,894 162,216
Expenses
Interest expense 89,375 116,751
Loan and security servicing expense 1,730 1,983
Provision for credit losses 2,505 2,036
General and administrative expense 1,592 1,293
Management fee to affiliate 4,597 3,906
Incentive compensation to affiliate - 3,688
Depreciation and amortization 72 73
99,871 129,730
Operating Income 33,023 32,486
Other Income (Loss)
Gain on sale of investments, net 6,526 2,212
Other income (loss), net (19,308) 717
Other than temporary impairment (46,372) -
Loan impairment (20,326) -
Gain (loss) on extinguishment of debt 8,533 -
Equity in earnings of unconsolidated
subsidiaries 708 847
(70,239) 3,776
Income (loss) from continuing operations (37,216) 36,262
Income (loss) from discontinued operations (3,688) (71)
Net Income (Loss) (40,904) 36,191
Preferred dividends (3,375) (2,515)
Income (Loss) Applicable to Common
Stockholders $(44,279) $33,676
Net Income Per Share of Common Stock
Basic $(0.84) $0.71
Diluted $(0.84) $0.70
Income (loss) from continuing operations
per share of common stock, after preferred
dividends
Basic $(0.77) $0.71
Diluted $(0.77) $0.70
Income (loss) from discontinued
operations per share of common stock
Basic $(0.07) $-
Diluted $(0.07) $-
Weighted Average Number of Shares of
Common Stock Outstanding
Basic 52,780,319 47,572,895
Diluted 52,780,319 47,823,497
Dividends Declared per Share of
Common Stock $0.250 $0.690
Newcastle Investment Corp.
Consolidated Balance Sheets
(dollars in thousands, except share data)
March 31, 2008
(unaudited) December 31, 2007
Assets
Real estate securities, available
for sale $3,090,024 $4,835,884
Real estate related loans, net 1,818,908 1,856,978
Residential mortgage loans, net 609,073 634,605
Subprime mortgage loans subject to
call option 394,913 393,899
Investments in unconsolidated
subsidiaries 15,500 24,477
Operating real estate, held for sale 33,458 34,399
Cash and cash equivalents 118,014 55,916
Restricted cash 122,991 133,126
Derivative assets - 4,114
Receivables and other assets 50,623 64,372
$6,253,504 $8,037,770
Liabilities and Stockholders' Equity
Liabilities
CBO bonds payable 4,368,664 4,716,535
Other bonds payable 476,651 546,798
Repurchase agreements 710,434 1,634,362
Financing of subprime mortgage loans
subject to call option 394,913 393,899
Junior subordinated notes payable
(security for trust preferred) 100,100 100,100
Derivative liabilities 232,130 133,510
Dividends payable 15,445 40,251
Due to affiliates 7,741 7,741
Accrued expenses and other liabilities 12,405 16,949
6,318,483 7,590,145
Stockholders' Equity
Preferred stock, $0.01 par value,
100,000,000 shares authorized,
2,500,000 shares of 9.75% Series B
Cumulative Redeemable Preferred Stock
1,600,000 shares of 8.05% Series C
Cumulative Redeemable Preferred
Stock, and 2,000,000 shares of 8.375%
Series D Cumulative Redeemable
Preferred Stock liquidation preference
$25.00 per share, issued and outstanding
(Series D issued in 2007) 152,500 152,500
Common stock, $0.01 par value,
500,000,000 shares authorized,
52,780,429 and 52,779,179 shares issued
and outstanding at March 31, 2008 and
December 31, 2007, respectively 528 528
Additional paid-in capital 1,033,341 1,033,326
Dividends in excess of earnings (293,687) (236,213)
Accumulated other comprehensive
income (957,661) (502,516)
(64,979) 447,625
$6,253,504 $8,037,770
Newcastle Investment Corp.
Reconciliation of GAAP Net Income (Loss) to FFO
(dollars in thousands)
(Unaudited)
Three Months Ended Three Months Ended
March 31, 2008 March 31, 2007
Net income (loss) attributable
to common stockholders $(44,279) $33,676
Operating real estate depreciation - 256
Funds from operations ("FFO") $(44,279) $33,932
We believe FFO is one appropriate measure of the operating performance of real estate companies because it provides investors with information regarding our ability to service debt and make capital expenditures. We also believe that FFO is an appropriate supplemental disclosure of operating performance for a REIT due to its widespread acceptance and use within the REIT and analyst communities. Furthermore, FFO is used to compute our incentive compensation to our manager. FFO, for our purposes, represents net income available for common stockholders (computed in accordance with GAAP), excluding extraordinary items, plus real estate depreciation, and after adjustments for unconsolidated subsidiaries, if any. We consider gains and losses on resolution of our investments to be a normal part of our recurring operations and therefore do not exclude such gains and losses when arriving at FFO. Adjustments for unconsolidated subsidiaries, if any, are calculated to reflect FFO on the same basis. FFO does not represent cash generated from operating activities in accordance with GAAP and therefore should not be considered an alternative to net income as an indicator of our operating performance or as an alternative to cash flow as a measure of liquidity and is not necessarily indicative of cash available to fund cash needs. Our calculation of FFO may be different from the calculation used by other companies and, therefore, comparability may be limited.
As a result of the sale or expected sale of all of our operating real estate, and the resultant discontinuation of depreciation, our income (loss) applicable to common stockholders is now equal to our FFO.
Newcastle Investment Corp.
Reconciliation of Operating Income (Net of Preferred Dividends)
(dollars in thousands)
(Unaudited)
March 31,
2008
Operating Income $33,023
Preferred dividends (3,375)
Operating Income (Net of Preferred Dividends) $29,648
Newcastle Investment Corp.
Reconciliation of GAAP Book Equity to Invested Common Equity
(dollars in thousands)
(Unaudited)
March 31,
2008
Book equity $(64,979)
Preferred stock (152,500)
Accumulated depreciation on operating real estate 6,206
Accumulated other comprehensive loss 957,661
Invested common equity $746,388
Newcastle Investment Corp.
Reconciliation of GAAP Book Value to Adjusted Book Value
(dollars in thousands, except per share)
(Unaudited)
Amount Per Share
GAAP Book Value $(217,479) $(4.12)
Adjustments to Fair Value:
Commercial Real Estate Loans (155,774) (2.95)
CDO Liabilities 1,201,760 22.77
Other Loan Investments and Debt
Obligations 30,639 0.58
Total Adjustments 1,076,625 20.40
Adjusted Book Value $859,146 $16.28
SOURCE Newcastle Investment Corp.
Released May 12, 2008