| Schedule of segment reporting |
Summary financial data on Newcastle’s segments is given below, together with reconciliation to the same data for Newcastle as a whole:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (A) |
|
|
|
|
|
|
|
CDOs |
|
Other Debt (B) |
|
Golf |
|
Corporate |
|
Total |
Three Months Ended March 31, 2016 |
|
|
|
|
|
|
|
|
|
Interest income |
$ |
1,097 |
|
|
$ |
19,894 |
|
|
$ |
42 |
|
|
$ |
6 |
|
|
$ |
21,039 |
|
Interest expense |
(491 |
) |
|
(9,433 |
) |
|
(2,665 |
) |
|
(945 |
) |
|
(13,534 |
) |
Net interest income (expense) |
606 |
|
|
10,461 |
|
|
(2,623 |
) |
|
(939 |
) |
|
7,505 |
|
Total impairment |
110 |
|
|
2,198 |
|
|
— |
|
|
— |
|
|
2,308 |
|
Total operating revenues |
— |
|
|
— |
|
|
62,158 |
|
|
— |
|
|
62,158 |
|
Total other income (loss) |
82,130 |
|
|
(1,403 |
) |
|
(284 |
) |
|
— |
|
|
80,443 |
|
Loan and security servicing expense |
30 |
|
|
7 |
|
|
— |
|
|
— |
|
|
37 |
|
Operating expenses - golf (C) |
— |
|
|
— |
|
|
54,713 |
|
|
— |
|
|
54,713 |
|
Operating expenses - golf, repairs and maintenance expenses |
— |
|
|
— |
|
|
1,892 |
|
|
— |
|
|
1,892 |
|
Cost of sales - golf |
— |
|
|
— |
|
|
6,211 |
|
|
— |
|
|
6,211 |
|
General and administrative expense |
— |
|
|
— |
|
|
841 |
|
|
1,883 |
|
|
2,724 |
|
General and administrative expense - acquisition and transaction expenses (D) |
— |
|
|
— |
|
|
138 |
|
|
38 |
|
|
176 |
|
Management fee to affiliate |
— |
|
|
— |
|
|
— |
|
|
2,675 |
|
|
2,675 |
|
Depreciation and amortization |
— |
|
|
— |
|
|
6,031 |
|
|
— |
|
|
6,031 |
|
Income tax expense |
— |
|
|
— |
|
|
44 |
|
|
— |
|
|
44 |
|
Income (loss) from continuing operations |
82,596 |
|
|
6,853 |
|
|
(10,619 |
) |
|
(5,535 |
) |
|
73,295 |
|
Net income (loss) |
82,596 |
|
|
6,853 |
|
|
(10,619 |
) |
|
(5,535 |
) |
|
73,295 |
|
Preferred dividends |
— |
|
|
— |
|
|
— |
|
|
(1,395 |
) |
|
(1,395 |
) |
Net loss attributable to noncontrolling interests |
— |
|
|
— |
|
|
124 |
|
|
— |
|
|
124 |
|
Income (loss) applicable to common stockholders |
$ |
82,596 |
|
|
$ |
6,853 |
|
|
$ |
(10,495 |
) |
|
$ |
(6,930 |
) |
|
$ |
72,024 |
|
Summary segment financial data (continued).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (A) |
|
|
|
|
|
|
|
CDOs |
|
Other Debt (B) |
|
Golf |
|
Corporate |
|
Total |
March 31, 2016 |
|
|
|
|
|
|
|
|
|
Investments |
$ |
— |
|
|
$ |
943,204 |
|
|
$ |
297,454 |
|
|
$ |
— |
|
|
$ |
1,240,658 |
|
Cash and restricted cash |
— |
|
|
660 |
|
|
7,634 |
|
|
27,730 |
|
|
36,024 |
|
Other assets |
— |
|
|
367,888 |
|
|
35,377 |
|
|
153 |
|
|
403,418 |
|
Total assets |
— |
|
|
1,311,752 |
|
|
340,465 |
|
|
27,883 |
|
|
1,680,100 |
|
Debt, net |
— |
|
|
736,498 |
|
|
79,649 |
|
|
51,223 |
|
|
867,370 |
|
Other liabilities |
— |
|
|
382,407 |
|
|
163,292 |
|
|
14,272 |
|
|
559,971 |
|
Total liabilities |
— |
|
|
1,118,905 |
|
|
242,941 |
|
|
65,495 |
|
|
1,427,341 |
|
Preferred stock |
— |
|
|
— |
|
|
— |
|
|
61,583 |
|
|
61,583 |
|
Noncontrolling interests |
— |
|
|
— |
|
|
(381 |
) |
|
— |
|
|
(381 |
) |
Equity (deficit) attributable to common stockholders |
$ |
— |
|
|
$ |
192,847 |
|
|
$ |
97,905 |
|
|
$ |
(99,195 |
) |
|
$ |
191,557 |
|
|
|
|
|
|
|
|
|
|
|
Additions to investments in real estate |
$ |
— |
|
|
$ |
— |
|
|
$ |
2,262 |
|
|
$ |
— |
|
|
$ |
2,262 |
|
Summary segment financial data (continued).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Investments (A) |
|
|
|
|
|
Discontinued |
|
|
|
|
|
CDOs |
|
Other Debt |
|
Golf |
|
Corporate |
|
Operations |
|
Eliminations |
|
Total |
Three Months Ended March 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
$ |
15,922 |
|
|
$ |
12,595 |
|
|
$ |
35 |
|
|
$ |
4 |
|
|
$ |
— |
|
|
$ |
(1,478 |
) |
|
$ |
27,078 |
|
Interest expense |
(2,583 |
) |
|
(9,579 |
) |
|
(5,097 |
) |
|
(946 |
) |
|
— |
|
|
1,478 |
|
|
(16,727 |
) |
Inter-segment elimination |
(1,478 |
) |
|
— |
|
|
1,478 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Net interest income (expense) |
11,861 |
|
|
3,016 |
|
|
(3,584 |
) |
|
(942 |
) |
|
— |
|
|
— |
|
|
10,351 |
|
Total impairment |
337 |
|
|
68 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
405 |
|
Total operating revenues |
— |
|
|
— |
|
|
60,826 |
|
|
— |
|
|
— |
|
|
— |
|
|
60,826 |
|
Total other income (loss) |
530 |
|
|
(37 |
) |
|
8 |
|
|
— |
|
|
— |
|
|
— |
|
|
501 |
|
Loan and security servicing expense |
96 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
96 |
|
Operating expenses - golf (C) |
— |
|
|
— |
|
|
52,971 |
|
|
— |
|
|
— |
|
|
— |
|
|
52,971 |
|
Operating expenses - golf, repairs and maintenance expenses |
— |
|
|
— |
|
|
1,966 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,966 |
|
Cost of sales - golf |
— |
|
|
— |
|
|
6,053 |
|
|
— |
|
|
— |
|
|
— |
|
|
6,053 |
|
General and administrative expense |
— |
|
|
— |
|
|
249 |
|
|
1,428 |
|
|
— |
|
|
— |
|
|
1,677 |
|
General and administrative expense - acquisition and transaction expenses (D) |
— |
|
|
— |
|
|
36 |
|
|
— |
|
|
— |
|
|
— |
|
|
36 |
|
Management fee to affiliate |
— |
|
|
— |
|
|
— |
|
|
2,668 |
|
|
— |
|
|
— |
|
|
2,668 |
|
Depreciation and amortization |
— |
|
|
— |
|
|
6,753 |
|
|
— |
|
|
— |
|
|
— |
|
|
6,753 |
|
Income tax expense |
— |
|
|
— |
|
|
46 |
|
|
— |
|
|
— |
|
|
— |
|
|
46 |
|
Income (loss) from continuing operations |
11,958 |
|
|
2,911 |
|
|
(10,824 |
) |
|
(5,038 |
) |
|
— |
|
|
— |
|
|
(993 |
) |
Income from discontinued operations |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
115 |
|
|
— |
|
|
115 |
|
Net income (loss) |
11,958 |
|
|
2,911 |
|
|
(10,824 |
) |
|
(5,038 |
) |
|
115 |
|
|
— |
|
|
(878 |
) |
Preferred dividends |
— |
|
|
— |
|
|
— |
|
|
(1,395 |
) |
|
— |
|
|
— |
|
|
(1,395 |
) |
Net loss attributable to non-controlling interests |
— |
|
|
— |
|
|
181 |
|
|
— |
|
|
— |
|
|
— |
|
|
181 |
|
Income (loss) applicable to common stockholders |
$ |
11,958 |
|
|
$ |
2,911 |
|
|
$ |
(10,643 |
) |
|
$ |
(6,433 |
) |
|
$ |
115 |
|
|
$ |
— |
|
|
$ |
(2,092 |
) |
|
|
(A) |
Assets held within non-recourse structures, including all of the assets in the CDO segment, are not available to satisfy obligations outside of such financings, except to the extent net cash flow distributions are received from such structures. Furthermore, creditors or beneficial interest holders of these structures generally have no recourse to the general credit of Newcastle. Therefore, the exposure to the economic losses from such structures generally is limited to invested equity in them and economically their book value cannot be less than zero. Therefore, impairment recorded in excess of Newcastle’s investment, which results in negative GAAP book value for a given non-recourse financing structure, cannot economically be incurred and will eventually be reversed through amortization, sales at gains, or as gains at the deconsolidation or termination of such non-recourse financing structure. |
|
|
(B) |
The following table summarizes the investments and debt in the Other Debt segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2016 |
|
Investments |
|
Debt |
Non-Recourse |
Outstanding
Face Amount |
|
Carrying
Value |
|
Outstanding
Face Amount |
|
Carrying
Value |
Subprime mortgage loans subject to call options |
$ |
372,874 |
|
|
$ |
372,874 |
|
|
$ |
372,874 |
|
|
$ |
372,874 |
|
Other |
|
|
|
|
|
|
|
Unlevered real estate securities (E) |
37,471 |
|
|
12,638 |
|
|
— |
|
|
— |
|
Levered real estate securities (F) |
363,080 |
|
|
381,206 |
|
|
352,049 |
|
|
352,049 |
|
Real estate related and other loans |
246,517 |
|
|
155,075 |
|
|
11,660 |
|
|
11,575 |
|
Other investments |
N/A |
|
|
20,965 |
|
|
— |
|
|
— |
|
Residential mortgage loans |
780 |
|
|
446 |
|
|
— |
|
|
— |
|
|
$ |
1,020,722 |
|
|
$ |
943,204 |
|
|
$ |
736,583 |
|
|
$ |
736,498 |
|
|
|
(C) |
Operating expenses - golf includes rental expenses recorded under operating leases for carts and equipment in the amount of $1.0 million and $1.1 million for the three months ended March 31, 2016 and 2015, respectively.
|
|
|
(D) |
Includes all transaction related expenses. |
|
|
(E) |
Excludes 13 securities with zero value, which had an aggregate face amount of $192.0 million.
|
|
|
(F) |
These investments represent purchases that were traded on March 31, 2016 but settled on April 13, 2016. The debt represents repurchase agreements collateralized by sold investments that were traded on March 31, 2016 and settled on April 13, 2016. |
|