Quarterly report pursuant to Section 13 or 15(d)

RECENT ACTIVITIES

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RECENT ACTIVITIES
 6 Months Ended
Jun. 30, 2014
Subsequent Events [Abstract]  
RECENT ACTIVITIES
19.    RECENT ACTIVITIES
 
These financial statements include a discussion of material events, if any, that have occurred subsequent to June 30, 2014 (referred to as “subsequent events”) through the issuance of these consolidated financial statements. Events subsequent to that date have not been considered in these financial statements.
 
In July 2014, Newcastle sold residential whole loans with an outstanding face amount of $37.6 million out of the June 30, 2014 pool of $43.2 million outstanding face amount (Note 6) at a price of 91.5% of par or $34.8 million of proceeds.  A part of the proceeds was used to repay $23.0 million in repurchase agreements associated with these loans.  Newcastle recognized a gain on settlement of investments of $7.3 million and incurred approximately $1.2 million of transaction expenses. 
 
In July 2014, Newcastle financed an additional $20.0 million face amount of previously repurchased CDO bonds payable with repurchase agreements for $12.0 million.  These repurchase agreements bear interest at one month LIBOR + 1.65%, mature in August 2014 and are subject to customary margin provisions.
 
In July 2014, Newcastle issued an aggregate of 15,658 shares of its common stock to its independent directors as compensation.
 
On August 6, 2014, Newcastle's board of directors approved a 3-for-1 reverse stock split of its common stock. Newcastle expects the reverse stock split will be effective after the close of trading on Monday, August 18, 2014, and that shares of Newcastle's common stock will begin trading on a split-adjusted basis on the New York Stock Exchange beginning at the opening of trading on Tuesday, August 19, 2014.
 
As a result of the reverse stock split, every three shares of Newcastle's common stock will be converted into one share of common stock, reducing the number of issued and outstanding shares of Newcastle's common stock from approximately 352 million to approximately 117 million. Newcastle's common stock will continue to trade under the symbol “NCT”.
 
No fractional shares will be issued in connection with the reverse stock split. Each stockholder who would otherwise be entitled to receive a fractional share of Newcastle's common stock will be entitled to receive a cash payment in lieu of a fractional share.
 
The reverse stock split is not subject to stockholder approval and will not change the authorized number of shares of Newcastle or the par value of Newcastle's common stock or preferred stock.
 
The following table presents pro forma basic and diluted earnings per share attributable to Newcastle’s stockholders to reflect the effect of the 3-for-1 reverse common stock split:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
Income Per Share of Common Stock
 
 
 
 
 
 
 
Basic
$
0.26
 
$
0.61
 
$
0.30
 
$
1.08
Diluted
$
0.26
 
$
0.59
 
$
0.29
 
$
1.06
Income from continuing operations per share of common stock, after preferred dividends and noncontrolling interests
 
 
 
 
 
 
 
Basic
$
0.27
 
$
0.31
 
$
0.34
 
$
0.65
Diluted
$
0.26
 
$
0.30
 
$
0.33
 
$
0.63
Income (loss) from discontinued operations per share of common stock
 
 
 
 
 
 
 
Basic
$
—
 
$
0.30
 
$
(0.05
)
 
$
0.43
Diluted
$
—
 
$
0.29
 
$
(0.05
)
 
$
0.42
Weighted Average Number of Shares of Common Stock Outstanding
 
 
 
 
 
 
 
Basic
117,199,333
 
86,409,447
 
117,175,382
 
82,416,367
Diluted
120,953,502
 
88,465,406
 
120,987,689
 
84,269,204