Drive Shack Inc. Quarterly report pursuant to Section 13 or 15(d)

[1]	(G) The total outstanding face amount was $0.4 billion for fixed rate securities and $0.6 billion for floating rate securities.
[2]	*Measured at fair value on a recurring basis.
[3]	(B) These two items result from an option, not an obligation, to repurchase loans from Newcastle's subprime mortgage loan securitizations (Note 5), are noneconomic until such option is exercised, and are equal and offsetting.
[4]	(C) This represents one interest rate swap agreement with a total notional balance of $186.1 million, maturing in March 2015, an interest rate cap agreement with a notional balance of $23.4 million, maturing in August 2019 and linked transactions entered into in June 2013 with $116.8 face amount of underlying financed securities. Newcastle entered into the interest rate swap and cap agreement to reduce its exposure to interest rate changes on the floating rate financings of CDO VI and the senior living assets. These derivative agreements were not designated as hedges for accounting purposes as of June 30, 2013.
[5]	(D) Newcastle's derivatives fall into two categories. As of June 30, 2013, all derivative liabilities, which represent two interest rate swaps, were held within Newcastle's nonrecourse structures. An aggregate notional balance of $291.9 million is only subject to the credit risks of the respective CDO structures. As they are senior to all the debt obligations of the respective CDOs and the fair value of each of the CDOs' total investments exceeded the fair value of each of the CDOs' derivative liabilities, no credit valuation adjustments were recorded. Derivatives with an aggregate notional balance of $140.2 million, which were assets at period end, represent an interest rate cap with a notional of $23.4 million and linked transactions with $116.8 face amount of underlying financed securities. No adjustments have been made to the fair value quotation received on the interest rate cap that relate to credit risk as a result of the counterparty's "AA" credit rating. Newcastle's interest rate swap and cap counte
[6]	(F) Newcastle notes that the unrealized gain on the liabilities within CDOs and other non-recourse financing structures cannot be fully realized. Assets held within CDOs and other non-recourse structures are not available to satisfy obligations outside of such financings, except to the extent Newcastle receives net cash flow distributions from such structures. Furthermore, creditors or beneficial interest holders of these structures have no recourse to the general credit of Newcastle. Therefore, Newcastle?s exposure to the economic losses from such structures is limited to its invested equity in them and economically their book value cannot be less than zero. As a result, the fair value of Newcastle?s net investments in these nonrecourse financing structures is equal to the present value of their expected future net cash flows.
[7]	(E) See Schedule of Fair Value Of Derivative Assets.