| Schedule of segment reporting |
Summary financial data on Newcastle's segments is given below, together with reconciliation to the same data for Newcastle as a whole:
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Senior
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Debt Investments (A)
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Inter-segment Elimination and
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Housing (A)
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CDOs
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Other Debt (B)
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Golf
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Corporate
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Discontinued Operations (C)
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Total
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Three Months Ended March 31, 2014
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Interest income
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$
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—
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$
|
30,722
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$
|
16,952
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$
|
41
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|
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$
|
11
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|
|
$
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(1,274
|
)
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$
|
46,452
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Interest expense
|
13,701
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6,128
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|
12,663
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3,682
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|
955
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(1,274
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)
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35,855
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Net interest income (expense)
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(13,701
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)
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24,594
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4,289
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(3,641
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)
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(944
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)
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—
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10,597
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Impairment (reversal)
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—
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|
432
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|
814
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—
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—
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—
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1,246
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Operating revenues
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57,810
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—
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|
541
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63,278
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—
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—
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121,629
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Other income (loss)
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(2
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)
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13,610
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2,198
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—
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—
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—
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15,806
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Property operating expenses
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23,520
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—
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284
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—
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—
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—
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23,804
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Operating expenses - golf
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—
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—
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—
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58,338
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—
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—
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58,338
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Cost of sales - golf
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—
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—
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—
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5,956
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—
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—
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5,956
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Depreciation and amortization
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22,835
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—
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57
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7,430
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37
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—
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30,359
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Other operating expenses
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7,792
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156
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702
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1,081
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8,375
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—
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18,106
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Income tax expense
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155
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—
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—
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140
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—
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—
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295
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Income (loss) from continuing operations
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(10,195
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)
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37,616
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5,171
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(13,308
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)
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(9,356
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)
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—
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9,928
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Income (loss) from discontinued operations, net of tax
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—
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—
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—
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—
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—
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(5,305
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)
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(5,305
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)
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Net income (loss)
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(10,195
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)
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37,616
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5,171
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(13,308
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)
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(9,356
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)
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(5,305
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)
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4,623
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Preferred dividends
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—
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—
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—
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—
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(1,395
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)
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—
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(1,395
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)
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Net loss attributable to noncontrolling interests
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—
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—
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—
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139
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—
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522
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661
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Income (loss) applicable to common stockholders
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$
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(10,195
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)
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$
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37,616
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$
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5,171
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$
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(13,169
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)
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$
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(10,751
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)
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$
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(4,783
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)
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$
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3,889
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Senior
|
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Debt Investments (A)
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Inter-segment Elimination and
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Housing (A)
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CDOs
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Other Debt (B)
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Golf
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Corporate
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Discontinued Operations (C)
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Total
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March 31, 2014
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Investments
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$
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1,465,735
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$
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807,388
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$
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718,082
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$
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351,906
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$
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—
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$
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(86,313
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)
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$
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3,256,798
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Cash and restricted cash
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36,095
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1,304
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752
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12,916
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75,300
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—
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126,367
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Other assets
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63,969
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36,733
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1,350
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34,455
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1,089
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(152
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)
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137,444
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Total assets
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1,565,799
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845,425
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720,184
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399,277
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76,389
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(86,465
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)
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3,520,609
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Debt
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1,091,823
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543,859
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624,240
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182,373
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51,236
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(86,313
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)
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2,407,218
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Other liabilities
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69,440
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10,918
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2,123
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181,165
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44,422
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(152
|
)
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307,916
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Total liabilities
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1,161,263
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554,777
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626,363
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363,538
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95,658
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(86,465
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)
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2,715,134
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Preferred stock
|
—
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—
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—
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—
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61,583
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|
—
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61,583
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Noncontrolling interests
|
—
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—
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—
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|
227
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—
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—
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|
227
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GAAP book value
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$
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404,536
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$
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290,648
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$
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93,821
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$
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35,512
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$
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(80,852
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)
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$
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—
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$
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743,665
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Additions to investments in real estate
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$
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24,640
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$
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—
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$
|
33
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$
|
1,892
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|
$
|
—
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$
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—
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$
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26,565
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Senior
|
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Debt Investments (A)
|
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Inter-segment Elimination and
|
|
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|
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Housing (A)
|
|
CDOs
|
|
Other Debt (B)
|
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Golf
|
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Corporate
|
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Discontinued Operations (C)
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Total
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|
Three Months Ended March 31, 2013
|
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Interest income
|
$
|
—
|
|
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$
|
31,828
|
|
|
$
|
30,298
|
|
|
$
|
—
|
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|
$
|
72
|
|
|
$
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(866
|
)
|
|
$
|
61,332
|
|
|
Interest expense
|
1,232
|
|
|
7,135
|
|
|
14,257
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—
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|
952
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|
|
(866
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)
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|
22,710
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Net interest income (expense)
|
(1,232
|
)
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|
24,693
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16,041
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—
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(880
|
)
|
|
—
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38,622
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|
Impairment (reversal)
|
—
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|
|
3,182
|
|
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(409
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,773
|
|
|
Operating revenues
|
12,997
|
|
|
—
|
|
|
503
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,500
|
|
|
Other income (loss)
|
8
|
|
|
4,572
|
|
|
1,190
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,770
|
|
|
Property operating expenses
|
8,423
|
|
|
—
|
|
|
247
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,670
|
|
|
Depreciation and amortization
|
4,022
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,079
|
|
|
Other operating expenses
|
2,081
|
|
|
194
|
|
|
855
|
|
|
—
|
|
|
11,375
|
|
|
—
|
|
|
14,505
|
|
|
Income (loss) from continuing operations
|
(2,753
|
)
|
|
25,889
|
|
|
16,984
|
|
|
—
|
|
|
(12,255
|
)
|
|
—
|
|
|
27,865
|
|
|
Income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,148
|
|
|
10,148
|
|
|
Net income (loss)
|
(2,753
|
)
|
|
25,889
|
|
|
16,984
|
|
|
—
|
|
|
(12,255
|
)
|
|
10,148
|
|
|
38,013
|
|
|
Preferred dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,395
|
)
|
|
—
|
|
|
(1,395
|
)
|
|
Income (loss) applicable to common stockholders
|
$
|
(2,753
|
)
|
|
$
|
25,889
|
|
|
$
|
16,984
|
|
|
$
|
—
|
|
|
$
|
(13,650
|
)
|
|
10,148
|
|
|
$
|
36,618
|
|
|
|
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(A)
|
Assets held within non-recourse structures, including all of the assets in the senior housing and CDO segments, are not available to satisfy obligations outside of such financings, except to the extent net cash flow distributions are received from such structures. Furthermore, creditors or beneficial interest holders of these structures generally have no recourse to the general credit of Newcastle. Therefore, the exposure to the economic losses from such structures generally is limited to invested equity in them and economically their book value cannot be less than zero. Therefore, impairment recorded in excess of Newcastle’s investment, which results in negative GAAP book value for a given non-recourse financing structure, cannot economically be incurred and will eventually be reversed through amortization, sales at gains, or as gains at the deconsolidation or termination of such non-recourse financing structure.
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(B)
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The following table summarizes the investments and debt in the other debt segment:
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March 31, 2014
|
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Investments
|
|
Debt
|
|
Non-Recourse
|
Outstanding
Face Amount
|
|
Carrying
Value
|
|
Outstanding
Face Amount*
|
|
Carrying
Value*
|
|
Manufactured housing loan portfolio I
|
$
|
98,925
|
|
|
$
|
89,113
|
|
|
$
|
70,943
|
|
|
$
|
63,325
|
|
|
Manufactured housing loan portfolio II
|
123,611
|
|
|
123,277
|
|
|
88,785
|
|
|
88,524
|
|
|
Subprime mortgage loans subject to call options
|
406,217
|
|
|
406,217
|
|
|
406,217
|
|
|
406,217
|
|
|
Real estate securities
|
54,446
|
|
|
50,226
|
|
|
38,253
|
|
|
34,811
|
|
|
Operating real estate
|
N/A
|
|
|
6,573
|
|
|
6,000
|
|
|
6,000
|
|
|
Subtotal
|
683,199
|
|
|
675,406
|
|
|
610,198
|
|
|
598,877
|
|
|
Other
|
|
|
|
|
|
|
|
|
Unlevered real estate securities
|
128,032
|
|
|
4,129
|
|
|
—
|
|
|
—
|
|
|
Other investments
|
N/A
|
|
|
6,239
|
|
|
—
|
|
|
—
|
|
|
Residential mortgage loans
|
44,183
|
|
|
32,308
|
|
|
25,363
|
|
|
25,363
|
|
|
|
$
|
855,414
|
|
|
$
|
718,082
|
|
|
$
|
635,561
|
|
|
$
|
624,240
|
|
*An aggregate face amount of $133.6 million (carrying values of $86.3 million) of debt represents intersegment financing, which is eliminated upon consolidation.
|
|
|
(C)
|
Represents the elimination of investments and financings and their related income and expenses between the CDO segment, the other debt segment and the golf segment as the corresponding inter-segment investments and financings are presented on a gross basis within each of these segments. In addition, includes the results of discontinued segments.
|
|