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ORGANIZATION
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2014
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ORGANIZATION |
1. ORGANIZATION
Newcastle Investment Corp. (and its subsidiaries, “Newcastle”) is a Maryland corporation that was formed in 2002. Newcastle focuses on opportunistically investing in, and actively managing, a variety of real estate-related and other investments. Newcastle is organized and conducts its operations to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. As such, Newcastle will generally not be subject to U.S. federal corporate income tax on that portion of its net income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by prescribed dates and complies with various other requirements.
On February 13, 2014, Newcastle completed the spin-off of New Media Investment Group Inc. ("New Media"), and established New Media as a separate, publicly traded company (NYSE:NEWM). The spin-off was effected as a taxable pro rata distribution by Newcastle of all of the outstanding shares of common stock it held of New Media to Newcastle’s common stockholders of record at the close of business on February 6, 2014. The distribution ratio was approximately 0.0722 shares of New Media common stock for each share of Newcastle common stock.
On August 6, 2014, Newcastle's board of directors approved a 1-for-3 reverse stock split of its common stock. The reverse stock split was effective after the close of trading on August 18, 2014, and the shares of Newcastle's common stock began trading on a reverse split-adjusted basis on the New York Stock Exchange on August 19, 2014.
On October
16, 2014, Newcastle's board of directors approved a 1-for-2 reverse stock split of its common stock. The reverse stock split
was effective after the close of trading on October 22, 2014 and shares of Newcastle's common stock began trading on a
reverse split-adjusted basis on the New York Stock Exchange on October 23, 2014. No fractional shares were issued in
connection with the reverse stock splits. Each stock holder who would otherwise be entitled to receive a fractional share of
Newcastle's common stock was entitled to receive a cash payment in lieu of a fractional share. The reverse stock splits were
not subject to stockholder approval and did not change the authorized number of shares of Newcastle or the par value of
Newcastle's common stock or preferred stock.
All common shares, outstanding options and per share amounts for all periods were retroactively adjusted to reflect the reverse stock splits.
On November 6, 2014, Newcastle completed the spin-off of New Senior Investment Group Inc. ("New Senior") and established New Senior as a separate, publicly traded company (NYSE:SNR). The spin-off was effected as a taxable pro rata distribution by Newcastle of all of the outstanding shares of common stock it held of New Senior to Newcastle's common stockholders of record at the close of business on October 27, 2014. The distribution ratio was one share of New Senior common stock for each share of Newcastle common stock, based on the number of Newcastle shares outstanding following the 1-for-3 and 1-for-2 reverse stock splits. In connection with the spin-off, Newcastle contributed to New Senior all of its investments in senior housing properties, any liabilities relating to these properties and a cash and cash equivalents balance of $245.2 million.
As a result, Newcastle now conducts its business through the following segments: (i) debt investments financed with collateralized debt obligations (“CDOs”), (ii) other debt investments (“Other Debt”), (iii) investments in golf properties and facilities (“Golf”) and (iv) corporate. With respect to the CDOs and other debt investments, subject to the passing of certain periodic coverage tests, Newcastle is generally entitled to receive the net cash flows from these structures on a periodic basis.
Newcastle is party to a management agreement (the “Management Agreement”) with FIG LLC (the “Manager”), a subsidiary of Fortress Investment Group LLC (“Fortress”), pursuant to which the Manager provides for a management team and other professionals who are responsible for implementing Newcastle’s business strategy, subject to the supervision of Newcastle’s board of directors. For its services, the Manager is entitled to an annual management fee and incentive compensation, both as defined in, and in accordance with the terms of, the Management Agreement. For a further discussion of the Management Agreement, see Note 13.
Approximately 1.1 million shares of Newcastle’s common stock were held by Fortress, through its affiliates, and its principals at December 31, 2014. In addition, Fortress, through its affiliates, held options to purchase approximately 5.0 million shares of Newcastle’s common stock at December 31, 2014.
The following table presents information on shares of Newcastle’s common stock issued subsequent to its formation:
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