EQUITY AND EARNINGS PER SHARE
|6 Months Ended|
Jun. 30, 2018
|Equity and Earnings Per Share [Abstract]|
|EQUITY AND EARNINGS PER SHARE||
EQUITY AND EARNINGS PER SHARE
Equity and Dividends
In January 2018, New Residential issued 28.8 million shares of its common stock in a public offering at a price to the public of $17.10 per share for net proceeds of approximately $482.3 million. To compensate the Manager for its successful efforts in raising capital for New Residential, in connection with this offering, New Residential granted options to the Manager relating to 2.9 million shares of New Residential’s common stock at the public offering price, which had a fair value of approximately $3.8 million as of the grant date. The assumptions used in valuing the options were: a 2.58% risk-free rate, a 9.86% dividend yield, 23.16% volatility and a 10-year term.
On June 21, 2018, New Residential’s board of directors declared a second quarter 2018 dividend of $0.50 per common share or $169.9 million, which was paid on July 27, 2018 to stockholders of record as of July 2, 2018.
In June 2018, the Manager and one or more affiliates and employees of the Manager, including an executive officer and director of New Residential, exercised an aggregate of 15,803,216 options and were issued an aggregate of 3,694,228 shares of New Residential’s common stock in a cashless exercise, which were sold to third parties in a simultaneous secondary offering.
Approximately 0.5 million shares of New Residential’s common stock were held by Fortress, through its affiliates, at June 30, 2018.
As of June 30, 2018, New Residential’s outstanding options were summarized as follows:
The following table summarizes New Residential’s outstanding options as of June 30, 2018. The last sales price on the New York Stock Exchange for New Residential’s common stock in the quarter ended June 30, 2018 was $17.49 per share.
The following table summarizes activity in New Residential’s outstanding options:
Income and Earnings Per Share
New Residential is required to present both basic and diluted earnings per share (“EPS”). Basic EPS is calculated by dividing net income by the weighted average number of shares of common stock outstanding. Diluted EPS is computed by dividing net income by the weighted average number of shares of common stock outstanding plus the additional dilutive effect, if any, of common stock equivalents during each period. New Residential’s common stock equivalents are its outstanding options. During the six months ended June 30, 2018, based on the treasury stock method, New Residential had 3,112,055 dilutive common stock equivalents outstanding. During the six months ended June 30, 2017, based on the treasury stock method, New Residential had 1,845,375 dilutive common stock equivalents outstanding.
Noncontrolling interests is comprised of the interests held by third parties in consolidated entities that hold New Residential’s Servicer Advance Investments (Note 6) and Consumer Loans (Note 9).
The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef