SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
|
12 Months Ended |
Dec. 31, 2015 |
|---|
| Accounting Policies [Abstract] |
|
| Schedule of accumulated other comprehensive income |
The following table summarizes Newcastle’s accumulated other comprehensive income:
|
|
|
|
|
|
|
|
|
|
December 31, |
|
2015 |
|
2014 |
Net unrealized gain on securities |
$ |
33,277 |
|
|
$ |
67,682 |
|
Net unrealized gain (loss) on derivatives designated as cash flow hedges |
20 |
|
|
(1,817 |
) |
Accumulated other comprehensive income |
$ |
33,297 |
|
|
$ |
65,865 |
|
|
| Schedule of gain (loss) on settlement of investments, net and other income (loss), net |
Gain (Loss) on Settlement of Investments, Net and Other Income (Loss), Net — These items are comprised of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
2015 |
|
2014 |
|
2013 |
Gain on settlement of investments, net |
|
|
|
|
|
Gain on settlement of real estate securities |
$ |
42,356 |
|
|
$ |
23,679 |
|
|
$ |
9,853 |
|
Loss on settlement of real estate securities |
(9,850 |
) |
|
— |
|
|
(3,592 |
) |
Loss on settlement of TBAs |
(12,907 |
) |
|
(4,151 |
) |
|
— |
|
Gain on repayment/disposition of loans held-for-sale |
1,533 |
|
|
32,500 |
|
|
10,716 |
|
Loss on repayment/disposition of loans held-for-sale |
(14 |
) |
|
— |
|
|
(354 |
) |
Gain (loss) recognized on termination of derivative instruments |
(612 |
) |
|
— |
|
|
813 |
|
|
$ |
20,506 |
|
|
$ |
52,028 |
|
|
$ |
17,436 |
|
Other income, net |
|
|
|
|
|
Gain on non-hedge derivative instruments |
$ |
1,758 |
|
|
$ |
17,599 |
|
|
$ |
10,525 |
|
Gain on lease modifications and terminations |
471 |
|
|
7,219 |
|
|
— |
|
Realized loss recognized upon de-designation of hedges |
— |
|
|
(34 |
) |
|
(110 |
) |
Equity in earnings (losses) of equity method investees |
1,311 |
|
|
954 |
|
|
(97 |
) |
Collateral management fee income, net |
708 |
|
|
963 |
|
|
1,279 |
|
Loss on disposal of long-lived assets |
(1,403 |
) |
|
(1,294 |
) |
|
(67 |
) |
Other income |
844 |
|
|
437 |
|
|
1,759 |
|
|
$ |
3,689 |
|
|
$ |
25,844 |
|
|
$ |
13,289 |
|
|
| 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
Accumulated Other Comprehensive
Income (“AOCI”) Components |
|
Income Statement
Location |
|
2015 |
|
2014 |
|
2013 |
Net realized gain (loss) on securities |
|
|
|
|
|
|
|
|
Reversal (impairment) |
|
Portion of other-than-temporary impairment on securities recognized in other comprehensive income (loss) |
|
$ |
31 |
|
|
$ |
— |
|
|
$ |
(44 |
) |
Gain on settlement of real estate securities |
|
Gain on settlement of investments, net |
|
42,356 |
|
|
23,679 |
|
|
9,853 |
|
Loss on settlement of real estate securities |
|
Gain on settlement of investments, net |
|
(9,850 |
) |
|
— |
|
|
(3,592 |
) |
|
|
|
|
$ |
32,537 |
|
|
$ |
23,679 |
|
|
$ |
6,217 |
|
|
|
|
|
|
|
|
|
|
Net realized (loss) on derivatives designated as cash flow hedges |
|
|
|
|
|
|
|
|
Realized loss recognized upon de-designation of hedges |
|
Other income, net |
|
$ |
— |
|
|
$ |
(34 |
) |
|
$ |
(110 |
) |
Realized loss recognized on termination of hedges |
|
Gain on settlement of investments, net
|
|
$ |
(612 |
) |
|
$ |
— |
|
|
$ |
— |
|
Amortization of deferred gain |
|
Interest expense |
|
78 |
|
|
61 |
|
|
11 |
|
Loss reclassified from AOCI into income, related to effective portion |
|
Interest expense |
|
(1,363 |
) |
|
(4,379 |
) |
|
(6,128 |
) |
|
|
|
|
$ |
(1,897 |
) |
|
$ |
(4,352 |
) |
|
$ |
(6,227 |
) |
|
|
|
|
|
|
|
|
|
Total reclassifications |
|
|
|
$ |
30,640 |
|
|
$ |
19,327 |
|
|
$ |
(10 |
) |
|
|
|
|
|
|
|
|
|
|
| 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 |
6-7 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 restricted cash from continuing operations |
Substantially all amounts on deposit with major financial institutions exceed insured limits. Restricted cash consisted of:
|
|
|
|
|
|
|
|
|
|
December 31, |
|
2015 |
|
2014 |
CDO bond sinking funds |
$ |
51 |
|
|
$ |
11,497 |
|
CDO trustee accounts |
272 |
|
|
293 |
|
Derivative margin accounts |
887 |
|
|
877 |
|
Collateral for Golf lease obligations |
3,259 |
|
|
3,047 |
|
|
$ |
4,469 |
|
|
$ |
15,714 |
|
|
| 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 year ended December 31, 2015):
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
2014 |
|
2013 |
Reduction of Assets and Liabilities relating to the spin-off of New Residential/New Media/New Senior, non-cash portion |
|
|
|
Real estate securities, available-for-sale |
$ |
— |
|
|
$ |
1,647,289 |
|
Residential mortgage loans, held-for-investment, net |
$ |
— |
|
|
$ |
35,865 |
|
Investments in excess mortgage servicing rights at fair value |
$ |
— |
|
|
$ |
229,936 |
|
Investments in equity method investees |
$ |
— |
|
|
$ |
392,469 |
|
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 |
|
|
$ |
37,844 |
|
Mortgage notes payable |
$ |
1,260,633 |
|
|
$ |
— |
|
Credit facilities - media |
$ |
177,955 |
|
|
$ |
— |
|
Repurchase agreements |
$ |
— |
|
|
$ |
1,320,360 |
|
Accrued expenses and other liabilities |
$ |
189,940 |
|
|
$ |
642 |
|
Acquisitions of Assets and Liabilities relating to media and golf investments, non-cash portion |
|
|
|
Investments in other real estate |
$ |
— |
|
|
$ |
259,573 |
|
Property, plant and equipment |
$ |
— |
|
|
$ |
272,153 |
|
Intangibles |
$ |
— |
|
|
$ |
244,885 |
|
Goodwill |
$ |
— |
|
|
$ |
126,686 |
|
Receivables and other assets |
$ |
— |
|
|
$ |
145,191 |
|
Credit facilities |
$ |
— |
|
|
$ |
334,498 |
|
Accounts payable, accrued expenses and other liabilities |
$ |
— |
|
|
$ |
287,439 |
|
Noncontrolling interests |
$ |
— |
|
|
$ |
366 |
|
Supplemental non-cash investing and financing activities relating to CDOs are disclosed below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
2015 |
|
2014 |
|
2013 |
Restricted cash generated from sale of securities |
$ |
139,257 |
|
|
$ |
125,850 |
|
|
$ |
136,148 |
|
Restricted cash generated from sale of real estate related and other loans |
$ |
55,574 |
|
|
$ |
— |
|
|
$ |
104,837 |
|
Restricted cash generated from paydowns on securities and loans |
$ |
78,853 |
|
|
$ |
325,932 |
|
|
$ |
331,349 |
|
Restricted cash used for repayments of CDO bonds payable |
$ |
148,966 |
|
|
$ |
382,177 |
|
|
$ |
513,879 |
|
Restricted cash used for settlement of derivative instruments |
$ |
— |
|
|
$ |
— |
|
|
$ |
1,563 |
|
|
| Schedule of receivables and other assets |
Receivables and other assets are comprised of the following, net of allowances for doubtful accounts of $1.0 million and $0.9 million, as of December 31, 2015 and 2014:
|
|
|
|
|
|
|
|
|
|
December 31, |
|
2015 |
|
2014 |
Accounts receivable, net |
$ |
9,889 |
|
|
$ |
7,369 |
|
Derivative assets |
127 |
|
|
— |
|
Prepaid expenses |
3,205 |
|
|
4,691 |
|
Interest receivable |
1,142 |
|
|
2,324 |
|
Deposits |
7,437 |
|
|
7,339 |
|
Inventory |
5,057 |
|
|
4,964 |
|
Miscellaneous assets, net (A) |
11,157 |
|
|
8,504 |
|
|
$ |
38,014 |
|
|
$ |
35,191 |
|
|
|
(A) |
In the first quarter of 2015, Newcastle adopted ASU 2015-03 (see Recent Accounting Pronouncements below), which requires retrospective application to all prior periods. Accordingly, Miscellaneous assets, net is reduced by $0.4 million for deferred financing costs as of December 31, 2014.
|
|
| Schedule of accounts payable, accrued expenses and other liabilities |
Accounts payable, accrued expenses and other liabilities are comprised of the following:
|
|
|
|
|
|
|
|
|
|
December 31, |
|
2015 |
|
2014 |
Accounts payable and accrued expenses |
$ |
26,966 |
|
|
$ |
35,854 |
|
Deferred revenue |
28,931 |
|
|
29,322 |
|
Security deposits payable |
5,975 |
|
|
5,293 |
|
Unfavorable leasehold interests |
5,485 |
|
|
6,443 |
|
Derivative liabilities |
684 |
|
|
4,328 |
|
Accrued rent |
3,135 |
|
|
2,605 |
|
Due to affiliates |
892 |
|
|
1,125 |
|
Miscellaneous liabilities |
11,876 |
|
|
14,742 |
|
|
$ |
83,944 |
|
|
$ |
99,712 |
|
|
| Schedule of accretion of discount and other amortization |
Accretion of Discount and Other Amortization — As reflected in the Consolidated Statements of Cash Flows, this item is comprised of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
2015 |
|
2014 |
|
2013 |
Accretion of net discount on securities, loans and other investments |
$ |
(5,802 |
) |
|
$ |
(28,638 |
) |
|
$ |
(34,525 |
) |
Amortization of net discount on debt obligations and deferred financing costs |
3,325 |
|
|
14,217 |
|
|
3,915 |
|
Amortization of net deferred hedge gains - debt |
(78 |
) |
|
(61 |
) |
|
(11 |
) |
Amortization of leasehold intangibles |
4,942 |
|
|
5,000 |
|
|
— |
|
Accretion of membership deposit liability |
5,840 |
|
|
5,663 |
|
|
— |
|
|
$ |
8,227 |
|
|
$ |
(3,819 |
) |
|
$ |
(30,621 |
) |
|