SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
|
12 Months Ended |
Dec. 31, 2016 |
|---|
| Accounting Policies [Abstract] |
|
| Schedule of accumulated other comprehensive income |
The following table summarizes Drive Shack Inc.’s accumulated other comprehensive income:
|
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|
|
|
|
|
|
|
|
December 31, |
|
2016 |
|
2015 |
Net unrealized gain on securities |
$ |
1,168 |
|
|
$ |
33,277 |
|
Net unrealized gain (loss) on derivatives designated as cash flow hedges |
— |
|
|
20 |
|
Accumulated other comprehensive income |
$ |
1,168 |
|
|
$ |
33,297 |
|
|
| Schedule of realized/unrealized (gain) loss on investments and other income (loss), net |
Realized/Unrealized (Gain) Loss on Investments and Other Income (Loss), Net — These items are comprised of the following:
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|
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|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
2016 |
|
2015 |
|
2014 |
(Gain) on settlement of real estate securities |
$ |
(19,129 |
) |
|
$ |
(42,356 |
) |
|
$ |
(23,679 |
) |
Loss on settlement of real estate securities |
16,178 |
|
|
9,850 |
|
|
— |
|
Unrealized loss on securities, intent-to-sell |
23,128 |
|
|
— |
|
|
— |
|
Realized (gain) loss on settlement of TBAs, net |
(18,318 |
) |
|
12,907 |
|
|
4,151 |
|
(Gain) loss on repayment/disposition of loans held-for-sale |
48 |
|
|
(1,519 |
) |
|
(32,500 |
) |
Loss recognized on termination of derivative instruments |
— |
|
|
612 |
|
|
— |
|
Unrealized (gain) on non-hedge derivative instruments |
(1,222 |
) |
|
(1,758 |
) |
|
(17,599 |
) |
Realized loss recognized upon de-designation of hedges |
— |
|
|
— |
|
|
34 |
|
Realized/unrealized (gain) loss on investments |
$ |
685 |
|
|
$ |
(22,264 |
) |
|
$ |
(69,593 |
) |
|
|
|
|
|
|
Gain (loss) on lease modifications and terminations |
$ |
(62 |
) |
|
$ |
471 |
|
|
$ |
7,219 |
|
Collateral management fee income, net |
592 |
|
|
708 |
|
|
963 |
|
Equity in earnings (losses) of equity method investees, net |
(1,338 |
) |
|
(6,194 |
) |
|
954 |
|
(Loss) on disposal of long-lived assets |
(22 |
) |
|
(1,403 |
) |
|
(1,294 |
) |
Other income (loss) |
(2,244 |
) |
|
844 |
|
|
437 |
|
Other income (loss), net |
$ |
(3,074 |
) |
|
$ |
(5,574 |
) |
|
$ |
8,279 |
|
|
| Schedule of reclassification from accumulated other comprehensive income into net income |
The following table summarizes the amounts reclassified out of accumulated other comprehensive income into net income:
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|
Year Ended December 31, |
Accumulated Other Comprehensive
Income (“AOCI”) Components |
|
Income Statement
Location |
|
2016 |
|
2015 |
|
2014 |
Net realized (gain) loss on securities |
|
|
|
|
|
|
|
|
Impairment (reversal) |
|
Impairment (reversal) |
|
$ |
54 |
|
|
$ |
(31 |
) |
|
$ |
— |
|
(Gain) on settlement of real estate securities |
|
Realized/unrealized (gain) loss on investments |
|
(19,129 |
) |
|
(42,356 |
) |
|
(23,679 |
) |
Loss on settlement of real estate securities |
|
Realized/unrealized (gain) loss on investments |
|
16,178 |
|
|
9,850 |
|
|
— |
|
Realized (gain) on deconsolidation of CDO VI |
|
Gain on deconsolidation |
|
(20,682 |
) |
|
— |
|
|
— |
|
Unrealized loss on real estate securities, intent-to-sell, reclassified from AOCI into income |
|
Realized/unrealized (gain) loss on investments |
|
23,128 |
|
|
— |
|
|
— |
|
|
|
|
|
$ |
(451 |
) |
|
$ |
(32,537 |
) |
|
$ |
(23,679 |
) |
|
|
|
|
|
|
|
|
|
Net realized (gain) loss on derivatives designated as cash flow hedges |
|
|
|
|
|
|
|
|
Realized loss recognized upon de-designation of hedges |
|
Realized/unrealized (gain) loss on investments |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
34 |
|
Loss recognized on termination of derivative instruments |
|
Realized/unrealized (gain) loss on investments |
|
— |
|
|
612 |
|
|
— |
|
Amortization of deferred hedge (gain) |
|
Interest expense |
|
(20 |
) |
|
(78 |
) |
|
(61 |
) |
Loss reclassified from AOCI into income, related to effective portion |
|
Interest expense |
|
— |
|
|
1,363 |
|
|
4,379 |
|
|
|
|
|
$ |
(20 |
) |
|
$ |
1,897 |
|
|
$ |
4,352 |
|
|
|
|
|
|
|
|
|
|
Total reclassifications |
|
|
|
$ |
(471 |
) |
|
$ |
(30,640 |
) |
|
$ |
(19,327 |
) |
|
|
|
|
|
|
|
|
|
|
| Schedule of useful lives of property, plant, and equipment |
Depreciation is calculated using the straight-line method based on the following estimated useful lives:
|
|
|
Buildings and improvements |
10-30 years |
Capital leases - equipment |
3-7 years |
Furniture, fixtures, and equipment |
3-7 years |
|
| Schedule of amortization period |
Amortization of all intangible assets is calculated using the straight-line method based on the following estimated useful lives:
|
|
|
Trade name |
30 years |
Leasehold intangibles |
1 - 26 years |
Management contracts |
1 - 26 years |
Internally-developed software |
5 years |
Membership base |
7 years |
|
| Schedule of consolidated VIE |
The following table presents certain assets of consolidated VIEs which are included in the Consolidated Balance Sheets and there were no such assets as of December 31, 2016. The assets in the table below include only those assets that can be used to settle obligations of consolidated VIEs, and are equal to or in excess of those obligations. Additionally, the assets in the table below exclude intercompany balances that eliminate in consolidation.
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|
|
|
|
|
|
December 31, 2015 |
Assets of consolidated VIEs that can only be used to settle obligations of consolidated VIEs |
|
|
Real estate securities, available-for-sale |
|
$ |
46,392 |
|
Subprime mortgage loans subject to call option |
|
380,806 |
|
Restricted cash |
|
128 |
|
Receivables and other assets |
|
77 |
|
Total assets of consolidated VIEs that can only be used to settle obligations of consolidated VIEs |
|
$ |
427,403 |
|
The following table presents certain liabilities of consolidated VIEs which are included in the Consolidated Balance Sheets and there were no such liabilities as of December 31, 2016. The liabilities in the table below include third-party liabilities of consolidated VIEs due to third parties only, and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts where creditors or beneficial interest holders have recourse to the general credit of Drive Shack Inc.
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|
December 31, 2015 |
Liabilities of consolidated VIEs for which creditors or beneficial interest holders do not have recourse to the general credit of Drive Shack Inc. |
|
|
CDO bonds payable |
|
$ |
92,933 |
|
Other bonds and notes payable |
|
4,672 |
|
Financing of subprime mortgage loans subject to call option |
|
380,806 |
|
Accounts payable, accrued expenses and other liabilities |
|
29 |
|
Total liabilities of consolidated VIEs for which creditors or beneficial interest holders do not have recourse to the general credit of Drive Shack Inc. |
|
$ |
478,440 |
|
|
| Schedule of restricted cash from continuing operations |
Substantially all amounts on deposit with major financial institutions exceed insured limits. Restricted cash consisted of:
|
|
|
|
|
|
|
|
|
|
December 31, |
|
2016 |
|
2015 |
CDO bond sinking funds |
$ |
— |
|
|
$ |
51 |
|
CDO trustee accounts |
192 |
|
|
272 |
|
Derivative margin accounts |
— |
|
|
887 |
|
Restricted cash for construction-in-progress |
2,267 |
|
|
2,784 |
|
Other restricted cash - traditional golf |
3,945 |
|
|
475 |
|
|
$ |
6,404 |
|
|
$ |
4,469 |
|
|
| Schedule of supplemental non-cash investing and financing activities relating to CDOs |
Reduction of assets and liabilities relating to spin-offs and acquisitions that are non-cash are disclosed below (there were no such reductions for the years ended December 31, 2016 and 2015):
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|
|
|
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|
Year Ended December 31, 2014 |
Reduction of Assets and Liabilities relating to the spin-off of New Media and New Senior, non-cash portion |
|
|
Investments in senior housing real estate, net |
|
$ |
1,574,048 |
|
Property, plant and equipment, net |
|
$ |
266,385 |
|
Goodwill and intangibles, net |
|
$ |
379,008 |
|
Restricted cash |
|
$ |
6,477 |
|
Receivables and other assets |
|
$ |
197,882 |
|
Mortgage notes payable |
|
$ |
1,260,633 |
|
Credit facilities - media |
|
$ |
177,955 |
|
Accrued expenses and other liabilities |
|
$ |
189,940 |
|
Supplemental non-cash investing and financing activities relating to CDOs are disclosed below:
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|
|
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|
|
|
|
|
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|
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|
Year Ended December 31, |
|
2016 |
|
2015 |
|
2014 |
Restricted cash generated from sale of securities |
$ |
— |
|
|
$ |
139,257 |
|
|
$ |
125,850 |
|
Restricted cash generated from sale of loans |
$ |
— |
|
|
$ |
55,574 |
|
|
$ |
— |
|
Restricted cash generated from pay downs on securities and loans |
$ |
2,310 |
|
|
$ |
78,853 |
|
|
$ |
325,932 |
|
Restricted cash used for repayments of CDO and other bonds payable |
$ |
2,748 |
|
|
$ |
148,966 |
|
|
$ |
382,177 |
|
CDO VI deconsolidation: |
|
|
|
|
|
Real estate securities |
$ |
43,889 |
|
|
$ |
— |
|
|
$ |
— |
|
Restricted cash |
$ |
67 |
|
|
$ |
— |
|
|
$ |
— |
|
CDO and other bonds payable |
$ |
105,423 |
|
|
$ |
— |
|
|
$ |
— |
|
|
| Schedule of receivables and other assets |
Receivables and other assets are comprised of the following, net of allowances for doubtful accounts of $1.1 million and $1.0 million, as of December 31, 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
December 31, |
|
2016 |
|
2015 |
Accounts receivable, net |
$ |
8,047 |
|
|
$ |
9,889 |
|
Prepaid expenses |
3,654 |
|
|
3,205 |
|
Interest receivable |
1,697 |
|
|
1,142 |
|
Deposits |
4,105 |
|
|
7,437 |
|
Inventory |
4,496 |
|
|
5,057 |
|
Derivative assets |
856 |
|
|
127 |
|
Residential mortgage loans, held-for-sale, net |
231 |
|
|
532 |
|
Miscellaneous assets, net (A)
|
14,931 |
|
|
11,157 |
|
|
$ |
38,017 |
|
|
$ |
38,546 |
|
|
|
(A) |
Includes one owned property in Annandale, New Jersey in the Traditional Golf segment classified as held-for-sale as of December 31, 2016. The Company recorded an impairment of $3.6 million based on our estimated selling price. We expect to close on this property within the next 12 months.
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|
| Schedule of accounts payable, accrued expenses and other liabilities |
Accounts payable, accrued expenses and other liabilities are comprised of the following:
|
|
|
|
|
|
|
|
|
|
December 31, |
|
2016 |
|
2015 |
Accounts payable and accrued expenses |
$ |
26,249 |
|
|
$ |
26,966 |
|
Deferred revenue |
36,107 |
|
|
33,926 |
|
Security deposits payable |
6,073 |
|
|
5,975 |
|
Unfavorable leasehold interests |
4,225 |
|
|
5,485 |
|
Derivative liabilities |
— |
|
|
684 |
|
Accrued rent |
2,613 |
|
|
3,135 |
|
Due to affiliates |
892 |
|
|
892 |
|
Miscellaneous liabilities |
12,278 |
|
|
11,876 |
|
|
$ |
88,437 |
|
|
$ |
88,939 |
|
|
| Schedule of accretion of discount and other amortization |
Amortization of Discount and Premium and Other Amortization — As reflected in the Consolidated Statements of Cash Flows, these items are comprised of the following:
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|
Year Ended December 31, |
|
2016 |
|
2015 |
|
2014 |
Accretion of net discount on securities, loans and other investments |
$ |
(7,926 |
) |
|
$ |
(5,802 |
) |
|
$ |
(28,638 |
) |
Amortization of net discount on debt obligations and deferred financing costs |
1,501 |
|
|
3,325 |
|
|
14,217 |
|
Amortization of net deferred hedge gains – debt
|
(20 |
) |
|
(78 |
) |
|
(61 |
) |
Amortization of discount and premium |
$ |
(6,445 |
) |
|
$ |
(2,555 |
) |
|
$ |
(14,482 |
) |
|
|
|
|
|
|
Amortization of leasehold intangibles |
$ |
4,451 |
|
|
$ |
4,942 |
|
|
$ |
5,000 |
|
Accretion of membership deposit liability |
5,803 |
|
|
5,840 |
|
|
5,663 |
|
Other amortization |
$ |
10,254 |
|
|
$ |
10,782 |
|
|
$ |
10,663 |
|
|