Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING

v3.19.2
SEGMENT REPORTING
6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]  
SEGMENT REPORTING
SEGMENT REPORTING
 
New Residential conducts its business through the following segments: (i) Servicing and Originations, (ii) Residential Securities and Loans, (iii) Consumer Loans and (iv) Corporate. The corporate segment consists primarily of (i) general and administrative expenses, (ii) the management fees and incentive compensation related to the Management Agreement and (iii) corporate cash and related interest income. Securities owned by New Residential (Note 7) that are collateralized by servicer advances and consumer loans are included in the Servicing and Originations and Consumer Loans segments, respectively. Secured corporate loans effectively collateralized by Excess MSRs are included in the Servicing and Originations segment.

During the third quarter of 2018, New Residential changed the composition of its reportable segments primarily to reflect the (i) aggregation of the similar MSR, Excess MSR and Servicer Advance segments as the new Servicing and Originations segment and (ii) incorporation of the Shellpoint Acquisition. Segment information for prior periods has been restated to reflect this change.

Summary financial data on New Residential’s segments is given below, together with a reconciliation to the same data for New Residential as a whole:
 
 
 
Residential Securities and Loans
 
 
 
 
 
 
 
 
Servicing and Originations
 
Real Estate Securities
 
Residential Mortgage Loans
 
Consumer Loans
 
Corporate
 
Total
Three Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
$
147,416

 
$
168,489

 
$
56,303

 
$
43,839

 
$

 
$
416,047

Interest expense
 
71,883

 
106,669

 
40,622

 
8,830

 

 
228,004

Net interest income (expense)
 
75,533

 
61,820

 
15,681

 
35,009

 

 
188,043

Impairment
 

 
8,859

 
5,800

 
7,652

 

 
22,311

Servicing revenue, net
 
(85,537
)
 

 

 

 

 
(85,537
)
Gain on sale of originated mortgage loans, net
 
49,504

 

 

 

 

 
49,504

Other income (loss)
 
(40,867
)
 
(37,446
)
 
113,092

 
(12,204
)
 
2,992

 
25,567

Operating expenses
 
162,334

 
1,096

 
7,963

 
7,004

 
23,466

 
201,863

Income (Loss) Before Income Taxes
 
(163,701
)
 
14,419

 
115,010

 
8,149

 
(20,474
)
 
(46,597
)
Income tax expense (benefit)
 
(41,649
)
 

 
20,050

 
22

 

 
(21,577
)
Net Income (Loss)
 
$
(122,052
)
 
$
14,419

 
$
94,960

 
$
8,127

 
$
(20,474
)
 
$
(25,020
)
Noncontrolling interests in income (loss) of consolidated subsidiaries
 
$
1,874

 
$

 
$

 
$
5,049

 
$

 
$
6,923

Net income (loss) attributable to common stockholders
 
$
(123,926
)
 
$
14,419

 
$
94,960

 
$
3,078

 
$
(20,474
)
 
$
(31,943
)

 
 
 
Residential Securities and Loans
 
 
 
 
 
 
 
 
Servicing and Originations
 
Real Estate Securities
 
Residential Mortgage Loans
 
Consumer Loans
 
Corporate
 
Total
Six Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
$
279,216

 
$
372,962

 
$
114,492

 
$
88,244

 
$

 
$
854,914

Interest expense
 
138,369

 
207,969

 
76,473

 
18,025

 

 
440,836

Net interest income (expense)
 
140,847

 
164,993

 
38,019

 
70,219

 

 
414,078

Impairment
 

 
16,375

 
(4
)
 
18,736

 

 
35,107

Servicing revenue, net
 
80,316

 

 

 

 

 
80,316

Gain on sale of originated mortgage loans, net
 
93,488

 

 

 

 

 
93,488

Other income (loss)
 
(54,331
)
 
(84,404
)
 
125,491

 
(7,673
)
 
5,704

 
(15,213
)
Operating expenses
 
289,176

 
2,285

 
17,283

 
14,431

 
59,075

 
382,250

Income (Loss) Before Income Taxes
 
(28,856
)
 
61,929

 
146,231

 
29,379

 
(53,371
)
 
155,312

Income tax expense (benefit)
 
(2,275
)
 

 
26,594

 
101

 

 
24,420

Net Income (Loss)
 
$
(26,581
)
 
$
61,929

 
$
119,637

 
$
29,278

 
$
(53,371
)
 
$
130,892

Noncontrolling interests in income (loss) of consolidated subsidiaries
 
$
4,732

 
$

 
$

 
$
12,509

 
$

 
$
17,241

Net income (loss) attributable to common stockholders
 
$
(31,313
)
 
$
61,929

 
$
119,637

 
$
16,769

 
$
(53,371
)
 
$
113,651


 
 
 
Residential Securities and Loans
 
 
 
 
 
 
 
 
Servicing and Originations
 
Real Estate Securities
 
Residential Mortgage Loans
 
Consumer Loans
 
Corporate
 
Total
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Investments
 
$
7,735,888

 
$
12,125,826

 
$
5,980,982

 
$
964,442

 
$

 
$
26,807,138

Cash and cash equivalents
 
280,215

 
24,792

 
1,917

 
8,107

 
91,007

 
406,038

Restricted cash
 
125,596

 

 

 
33,555

 

 
159,151

Other assets
 
3,451,887

 
5,476,600

 
190,498

 
32,979

 
243,439

 
9,395,403

Goodwill
 
24,645

 

 

 

 

 
24,645

Total assets
 
$
11,618,231

 
$
17,627,218

 
$
6,173,397

 
$
1,039,083

 
$
334,446

 
$
36,792,375

Debt
 
$
7,650,793

 
$
15,165,568

 
$
5,026,169

 
$
935,480

 
$

 
$
28,778,010

Other liabilities
 
585,063

 
322,826

 
61,466

 
4,390

 
239,790

 
1,213,535

Total liabilities
 
8,235,856

 
15,488,394

 
5,087,635

 
939,870

 
239,790

 
29,991,545

Total equity
 
3,382,375

 
2,138,824

 
1,085,762

 
99,213

 
94,656

 
6,800,830

Noncontrolling interests in equity of consolidated subsidiaries
 
60,234

 

 

 
22,631

 

 
82,865

Total New Residential stockholders’ equity
 
$
3,322,141

 
$
2,138,824

 
$
1,085,762

 
$
76,582

 
$
94,656

 
$
6,717,965

Investments in equity method investees
 
$
133,468

 
$

 
$

 
$
25,486

 
$

 
$
158,954

 

 

Residential Securities and Loans







 
Servicing and Originations

Real Estate Securities

Residential Mortgage Loans

Consumer Loans

Corporate

Total
Three Months Ended June 30, 2018
 











Interest income
 
$
191,632


$
115,592


$
40,685


$
55,022


$
874


$
403,805

Interest expense
 
55,735


48,548


18,614


11,019




133,916

Net interest income (expense)
 
135,897


67,044


22,071


44,003


874


269,889

Impairment
 


12,631


(9,430
)

13,088




16,289

Servicing revenue, net
 
146,193

 

 

 

 

 
146,193

Gain on sale of originated mortgage loans, net
 

 

 

 

 

 

Other income (loss)
 
(122,940
)

16,783


5,727


4,478


(860
)

(96,812
)
Operating expenses
 
50,392


643


10,275


8,839


49,604


119,753

Income (Loss) Before Income Taxes
 
108,758

 
70,553

 
26,953

 
26,554

 
(49,590
)

183,228

Income tax expense (benefit)
 
203

 

 
(2,811
)
 

 


(2,608
)
Net Income (Loss)
 
$
108,555

 
$
70,553

 
$
29,764

 
$
26,554

 
$
(49,590
)

$
185,836

Noncontrolling interests in income (loss) of consolidated subsidiaries
 
$
1,056

 
$

 
$

 
$
10,022

 
$


$
11,078

Net income (loss) attributable to common stockholders
 
$
107,499

 
$
70,553

 
$
29,764

 
$
16,532

 
$
(49,590
)

$
174,758



 
 
 
Residential Securities and Loans
 
 
 
 
 
 
 
 
Servicing and Originations
 
Real Estate Securities
 
Residential Mortgage Loans
 
Consumer Loans
 
Corporate
 
Total
Six Months Ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
$
386,400

 
$
216,725

 
$
75,077

 
$
107,670

 
$
1,506

 
$
787,378

Interest expense
 
110,765

 
90,078

 
34,925

 
22,535

 

 
258,303

Net interest income (expense)
 
275,635

 
126,647

 
40,152

 
85,135

 
1,506

 
529,075

Impairment
 

 
19,301

 
(4,247
)
 
26,912

 

 
41,966

Servicing revenue, net
 
363,429

 

 

 

 

 
363,429

Gain on sale of originated mortgage loans, net
 

 

 

 

 

 

Other income (loss)
 
140,371

 
27,352

 
(14,490
)
 
9,568

 
4,911

 
167,712

Operating expenses
 
102,875

 
940

 
19,222

 
18,276

 
86,257

 
227,570

Income (Loss) Before Income Taxes
 
676,560

 
133,758

 
10,687

 
49,515

 
(79,840
)
 
790,680

Income tax expense (benefit)
 
(6,953
)
 

 
(2,811
)
 
244

 

 
(9,520
)
Net Income (Loss)
 
$
683,513

 
$
133,758

 
$
13,498

 
$
49,271

 
$
(79,840
)
 
$
800,200

Noncontrolling interests in income (loss) of consolidated subsidiaries
 
$
2,439

 
$

 
$

 
$
18,750

 
$

 
$
21,189

Net income (loss) attributable to common stockholders
 
$
681,074

 
$
133,758

 
$
13,498

 
$
30,521

 
$
(79,840
)
 
$
779,011