Annual report pursuant to Section 13 and 15(d)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

v3.3.1.900
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), NetThese 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
)