EQUITY AND EARNINGS PER SHARE (Tables)
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12 Months Ended |
Dec. 31, 2015 |
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| Stockholders' Equity Note [Abstract] |
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| Schedule of amounts used in computing basic and diluted EPS |
Newcastle is required to present both basic and diluted earnings per share (“EPS”). The following table shows the amounts used in computing basic and diluted EPS:
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For Year Ended December 31, |
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2015 |
|
2014 |
|
2013 |
Numerator for basic and diluted earnings per share: |
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Income from continuing operations after preferred dividends and noncontrolling interest |
|
$ |
15,621 |
|
|
$ |
62,855 |
|
|
$ |
134,286 |
|
Income (loss) from discontinued operations, net of tax |
|
646 |
|
|
(35,189 |
) |
|
11,547 |
|
Income Applicable to Common Stockholders |
|
$ |
16,267 |
|
|
$ |
27,666 |
|
|
$ |
145,833 |
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Denominator: |
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Denominator for basic earnings per share - weighted average shares |
|
66,479,321 |
|
|
61,500,913 |
|
|
46,146,882 |
|
Effect of dilutive securities |
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|
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Options |
|
2,168,594 |
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1,630,314 |
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|
1,071,392 |
|
Denominator for diluted earnings per share - adjusted weighted average shares |
|
68,647,915 |
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63,131,227 |
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47,218,274 |
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Basic earnings per share: |
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Income from continuing operations per share of common stock, after preferred dividends and noncontrolling interest |
|
$ |
0.23 |
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|
$ |
1.02 |
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|
$ |
2.91 |
|
Income (loss) from discontinued operations per share of common stock |
|
$ |
0.01 |
|
|
$ |
(0.57 |
) |
|
$ |
0.25 |
|
Income Applicable to Common Stock, per share |
|
$ |
0.24 |
|
|
$ |
0.45 |
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$ |
3.16 |
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|
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Diluted earnings per share: |
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Income from continuing operations per share of common stock, after preferred dividends and noncontrolling interest |
|
$ |
0.23 |
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|
$ |
1.00 |
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|
$ |
2.84 |
|
Income (loss) from discontinued operations per share of common stock |
|
$ |
0.01 |
|
|
$ |
(0.57 |
) |
|
$ |
0.24 |
|
Income Applicable to Common Stock, per share |
|
$ |
0.24 |
|
|
$ |
0.44 |
|
|
$ |
3.09 |
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| Schedule of shares of common stock issued in connection with public offerings |
The following table presents shares of common stock issued by Newcastle in connection with public offerings since 2013:
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Price per Share |
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Aggregate Shares purchased by
Principals of Fortress
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Options Granted to Manager (A) |
Date |
|
Number
of Shares
Issued |
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To
Public |
|
To Underwriters |
|
Net
Proceeds
(millions) |
|
Number
of Shares |
|
Price |
|
Number
of Shares |
|
Grant Date Strike
Price |
|
Grant Date
Value (millions) |
January 2013 |
|
9,583,333 |
|
$ |
56.10 |
|
|
N/A |
|
|
$ |
526.2 |
|
|
35,650 |
|
|
$ |
56.10 |
|
|
958,333 |
|
$ |
56.10 |
|
|
$ |
18.0 |
|
February 2013 |
|
3,833,333 |
|
N/A |
|
|
$ |
62.04 |
|
|
$ |
237.4 |
|
|
31,833 |
|
|
$ |
62.88 |
|
|
383,333 |
|
$ |
62.88 |
|
|
$ |
8.4 |
|
June 2013 |
|
6,708,333 |
|
N/A |
|
|
$ |
29.52 |
|
|
$ |
197.6 |
|
|
125,000 |
|
|
$ |
29.82 |
|
|
670,833 |
|
$ |
29.82 |
|
|
$ |
3.8 |
|
November 2013 |
|
9,658,492 |
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N/A |
|
|
$ |
31.26 |
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|
$ |
301.4 |
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|
75,159 |
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|
$ |
31.50 |
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|
965,849 |
|
$ |
31.50 |
|
|
$ |
6.0 |
|
August 2014 |
|
7,654,166 |
|
N/A |
|
|
$ |
25.92 |
|
|
$ |
197.9 |
|
|
83,333 |
|
|
$ |
26.34 |
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|
765,416 |
|
$ |
26.34 |
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|
$ |
1.7 |
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(A) |
In connection with these offerings, Newcastle granted options to the Manager for the purpose of compensating the Manager for its role in raising capital for Newcastle. |
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(B) |
This figure also includes shares purchased by officers of Newcastle. |
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| Schedule of outstanding options |
The following is a summary of the changes in Newcastle's outstanding options for the year ended December 31, 2015.
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Number of Options |
|
Weighted Average Strike Price |
|
Weighted Average Life Remaining (in years) |
Balance at December 31, 2014 |
|
5,500,599 |
|
|
$ |
4.26 |
|
|
|
Granted |
|
178,740 |
|
|
1.00 |
|
|
|
Exercised |
|
(202,446 |
) |
|
1.00 |
|
|
|
Expired |
|
(55,332 |
) |
|
14.92 |
|
|
|
Forfeited |
|
— |
|
|
— |
|
|
|
Balance at December 31, 2015 |
|
5,421,561 |
|
|
$ |
2.85 |
|
|
6.79 years |
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|
|
|
|
|
Exercisable at December 31, 2015 |
|
4,723,210 |
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|
$ |
2.75 |
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6.52 years |
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| Schedule of outstanding options summary |
Newcastle's outstanding options were summarized as follows:
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Year Ended December 31, 2015 |
|
Year Ended December 31, 2014 |
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Issued Prior
to 2011 |
|
Issued in 2011
and thereafter |
|
Total |
|
Issued Prior to 2011
|
|
Issued in 2011
and thereafter |
|
Total |
Held by the Manager |
115,239 |
|
|
5,010,243 |
|
|
5,125,482 |
|
|
157,791 |
|
|
4,833,961 |
|
|
4,991,752 |
|
Issued to the Manager and subsequently transferred to certain Manager’s employees |
29,422 |
|
|
266,657 |
|
|
296,079 |
|
|
41,869 |
|
|
466,645 |
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|
508,514 |
|
Issued to the independent directors |
— |
|
|
— |
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|
— |
|
|
333 |
|
|
— |
|
|
333 |
|
Total |
144,661 |
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|
5,276,900 |
|
|
5,421,561 |
|
|
199,993 |
|
|
5,300,606 |
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|
5,500,599 |
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| Summary of Newcastle's outstanding options |
The following table summarizes Newcastle’s outstanding options at December 31, 2015. Note that the last sales price on the New York Stock Exchange for Newcastle’s common stock in the year ended December 31, 2015 was $4.08 per share.
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Recipient |
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Date of Grant/Exercise |
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Number of Options (A) |
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Options Exercisable at
December 31, 2015 |
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Weighted Average
Strike Price (A) |
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Fair Value At Grant
Date (millions) (B) |
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Intrinsic Value at
December 31, 2015
(millions) |
Directors |
|
Various |
|
3,333 |
|
|
— |
|
|
$ |
— |
|
|
Not Material |
|
— |
|
Manager (C)
|
|
2002 - 2007 |
|
587,277 |
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|
144,661 |
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|
$ |
13.18 |
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|
$ |
6.4 |
|
|
— |
|
Manager (C)
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|
Mar-11 |
|
311,853 |
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|
206,881 |
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|
$ |
1.00 |
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|
$ |
7.0 |
|
(I) |
$ |
0.6 |
|
Manager (C)
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Sep-11 |
|
524,212 |
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|
376,268 |
|
|
$ |
1.00 |
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|
$ |
5.6 |
|
(J) |
$ |
1.2 |
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Manager (C)
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Apr-12 |
|
348,352 |
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|
279,452 |
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$ |
1.00 |
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$ |
5.6 |
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(K) |
$ |
0.9 |
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Manager (C)
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May-12 |
|
396,316 |
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|
316,871 |
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|
$ |
1.00 |
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|
$ |
7.6 |
|
(L) |
$ |
1.0 |
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Manager (C)
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Jul-12 |
|
437,991 |
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|
353,674 |
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$ |
1.00 |
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$ |
8.3 |
|
(M) |
$ |
1.1 |
|
Manager (C)
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Jan-13 |
|
958,331 |
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|
872,528 |
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$ |
2.32 |
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$ |
18.0 |
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(N) |
$ |
1.5 |
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Manager (C)
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Feb-13 |
|
383,331 |
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|
349,011 |
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$ |
2.95 |
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$ |
8.4 |
|
(O) |
$ |
0.4 |
|
Manager (C)
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Jun-13 |
|
670,829 |
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|
610,770 |
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$ |
3.23 |
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$ |
3.8 |
|
(P) |
0.5 |
|
Manager (C)
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Nov-13 |
|
965,847 |
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|
804,873 |
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$ |
3.57 |
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$ |
6.0 |
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(Q) |
0.4 |
|
Manager (C)
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Aug-14 |
|
765,416 |
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|
408,221 |
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$ |
4.01 |
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|
$ |
1.7 |
|
(R) |
0.1 |
|
Exercised (D)
|
|
Prior to 2008 |
|
(173,853 |
) |
|
N/A |
|
|
$ |
14.09 |
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|
N/A |
|
|
N/A |
|
Exercised (E)
|
|
Oct-12 |
|
(15,972 |
) |
|
N/A |
|
|
$ |
1.48 |
|
|
N/A |
|
|
N/A |
|
Exercised (F)
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|
Sep-13 |
|
(51,306 |
) |
|
N/A |
|
|
$ |
1.67 |
|
|
N/A |
|
|
N/A |
|
Exercised (G)
|
|
2014 |
|
(216,186 |
) |
|
N/A |
|
|
$ |
1.46 |
|
|
N/A |
|
|
N/A |
|
Exercised (H)
|
|
2015 |
|
(202,446 |
) |
|
N/A |
|
|
1.00 |
|
|
N/A |
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|
N/A |
|
Expired unexercised |
|
2002-2005 |
|
(271,764 |
) |
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
Outstanding |
|
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|
5,421,561 |
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|
4,723,210 |
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(A) |
The strike prices are subject to adjustment in connection with return of capital dividends and spin-offs. A portion of Newcastle’s 2008 dividends was deemed return of capital dividends. The effect on the strike prices was not significant. In the first quarter of 2014, strike prices were adjusted by $0.32 reflecting the portion of Newcastle's 2013 dividends which was deemed return of capital. The strike prices were adjusted for the New Residential, New Media and New Senior spin-offs as described above. On May 7, 2015, and pursuant to the anti-dilution provisions of the 2014 Plan, 2012 Plan and Newcastle Option Plan, as applicable, Newcastle’s board of directors approved an equitable adjustment of all outstanding options in order to account for the impact of the 2014 return of capital distributions. The equitable adjustment entails a strike price adjustment and the issuance of additional options which were determined so as to compensate for the loss in value that would have otherwise occurred as a result of the 2014 return of capital distributions. As a result of this adjustment, options relating to a total of 178,740 shares were issued on May 7, 2015 at a strike price of $1.00 per share as detailed below.
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|
Grant Date |
|
Number of Options Issued |
Mar-11 |
|
24,354 |
|
Sep-11 |
|
92,963 |
|
Apr-12 |
|
32,105 |
|
May-12 |
|
12,987 |
|
Jul-12 |
|
16,331 |
|
Total options issued |
|
178,740 |
|
As of December 31, 2015, the weighted average strike price of the outstanding options issued prior to 2011 was $13.18.
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(B) |
The fair value of the options was estimated using an option valuation model. Since the Newcastle Option Plan, 2012 Plan, 2014 Plan and 2015 Plan have characteristics significantly different from those of traded options, and since the assumptions used in such model, particularly the volatility assumption, are subject to significant judgment and variability, the actual value of the options could vary materially from management’s estimate. The volatility assumption for these options was estimated based primarily on the historical volatility of Newcastle’s common stock and management’s expectations regarding future volatility. The expected life assumption for options issued prior to 2011 was estimated based on the simplified term method. This simplified method was used because Newcastle did not have sufficient historical data to conclude on the appropriate expected life of its options and because historical data to date was consistent with the simplified term method. The expected life assumption for options issued in 2011 and thereafter was estimated based primarily on the historical expected life of applicable previously issued options. |
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(C) |
The Manager assigned certain of its options to Fortress’s employees as follows: |
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Date of Grant |
|
Range of Strike Prices |
|
Total Unexercised Inception to Date |
2006 |
|
$13.38 |
|
6,373 |
|
2007 |
|
$12.44 - $14.44 |
|
23,049 |
|
2011 |
|
$1.00 |
|
— |
|
2012 |
|
$1.00 |
|
— |
|
2013 |
|
$2.32 - $3.57 |
|
266,657 |
|
|
|
Total |
|
296,079 |
|
|
|
(D) |
111,770 of the total options exercised were by the Manager. 61,417 of the total options exercised were by employees of Fortress subsequent to their assignment. 666 of the total options exercised were by directors.
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(E) |
Exercised by employees of Fortress subsequent to their assignment. The options exercised had an intrinsic value of $0.2 million.
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(F) |
Exercised by employees of Fortress subsequent to their assignment. The options exercised had an intrinsic value of $0.9 million.
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(G) |
215,853 options were exercised by employees of Fortress subsequent to their assignment with an intrinsic value of $4.1 million. 333 options were exercised by directors with a minimal intrinsic value.
|
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(H) |
Exercised by employees of Fortress subsequent to their assignment. The options exercised had an intrinsic value of $0.8 million.
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(I) |
The assumptions used in valuing the options were: a 1.7% risk-free rate, 107.8% volatility and a 3.3 year expected term.
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|
(J) |
The assumptions used in valuing the options were: a 1.13% risk-free rate, 13.2% dividend yield, 151.1% volatility and a 4.6 year expected term.
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|
(K) |
The assumptions used in valuing the options were: a 1.3% risk-free rate, 12.9% dividend yield, 149.4% volatility and a 4.7 year expected term.
|
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|
(L) |
The assumptions used in valuing the options were: a 1.05% risk-free rate, 11.9% dividend yield, 148.4% volatility and a 4.8 year expected term.
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|
(M) |
The assumptions used in valuing the options were: a 0.75% risk-free rate, 11.9% dividend yield, 147.5% volatility and a 4.8 year expected term.rice
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|
(N) |
The assumptions used in valuing the options were: a 2.0% risk-free rate, 8.8% dividend yield, 56.2% volatility and a 10 year term.
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(O) |
The assumptions used in valuing the options were: a 2.1% risk-free rate, 7.8% dividend yield, 55.5% volatility and a 10 year term.
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|
(P) |
The assumptions used in valuing the options were: a 2.5% risk-free rate, 8.8% dividend yield, 36.9% volatility and a 10 year term.
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|
(Q) |
The assumptions used in valuing the options were: a 2.8% risk-free rate, 6.7% dividend yield, 32.0% volatility and a 10 year term.
|
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|
(R) |
The assumptions used in valuing the options were: a 2.7% risk-free rate, 8.6% dividend yield, 23.4% volatility and a 10 year term.
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| Schedule of options issued |
As a result of this adjustment, options relating to a total of 178,740 shares were issued on May 7, 2015 at a strike price of $1.00 per share as detailed below.
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|
|
Grant Date |
|
Number of Options Issued |
Mar-11 |
|
24,354 |
|
Sep-11 |
|
92,963 |
|
Apr-12 |
|
32,105 |
|
May-12 |
|
12,987 |
|
Jul-12 |
|
16,331 |
|
Total options issued |
|
178,740 |
|
|
| Schedule of assigned options to Fortress's employees |
The Manager assigned certain of its options to Fortress’s employees as follows:
|
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|
|
|
|
|
Date of Grant |
|
Range of Strike Prices |
|
Total Unexercised Inception to Date |
2006 |
|
$13.38 |
|
6,373 |
|
2007 |
|
$12.44 - $14.44 |
|
23,049 |
|
2011 |
|
$1.00 |
|
— |
|
2012 |
|
$1.00 |
|
— |
|
2013 |
|
$2.32 - $3.57 |
|
266,657 |
|
|
|
Total |
|
296,079 |
|
|