Quarterly report pursuant to Section 13 or 15(d)

SEGMENT REPORTING

v3.19.3
SEGMENT REPORTING
9 Months Ended
Sep. 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 September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
$
135,892

 
$
184,933

 
$
86,971

 
$
40,331

 
$

 
$
448,127

Interest expense
 
69,679

 
123,023

 
45,707

 
7,493

 

 
245,902

Net interest income (expense)
 
66,213

 
61,910

 
41,264

 
32,838

 

 
202,225

Impairment
 

 
5,567

 
(16,553
)
 
5,863

 

 
(5,123
)
Servicing revenue, net
 
53,050

 

 

 

 

 
53,050

Gain on sale of originated mortgage loans, net
 
100,541

 

 

 

 

 
100,541

Other income (loss)
 
(38,547
)
 
116,081

 
55,152

 
(2,651
)
 
(1,189
)
 
128,846

Operating expenses
 
168,100

 
1,839

 
14,006

 
3,965

 
62,655

 
250,565

Income (Loss) Before Income Taxes
 
13,157

 
170,585

 
98,963

 
20,359

 
(63,844
)
 
239,220

Income tax expense (benefit)
 
10,749

 

 
(15,546
)
 
(643
)
 

 
(5,440
)
Net Income (Loss)
 
$
2,408

 
$
170,585

 
$
114,509

 
$
21,002

 
$
(63,844
)
 
$
244,660

Noncontrolling interests in income (loss) of consolidated subsidiaries
 
$
4,141

 
$

 
$

 
$
10,597

 
$

 
$
14,738

Dividends on Preferred Stock
 
$

 
$

 
$

 
$

 
$
5,338

 
$
5,338

Net income (loss) attributable to common stockholders
 
$
(1,733
)
 
$
170,585

 
$
114,509

 
$
10,405

 
$
(69,182
)
 
$
224,584


 
 
 
Residential Securities and Loans
 
 
 
 
 
 
 
 
Servicing and Originations
 
Real Estate Securities
 
Residential Mortgage Loans
 
Consumer Loans
 
Corporate
 
Total
Nine Months Ended September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
$
396,662

 
$
557,895

 
$
219,909

 
$
128,575

 
$

 
$
1,303,041

Interest expense
 
203,940

 
330,992

 
126,288

 
25,518

 

 
686,738

Net interest income (expense)
 
192,722

 
226,903

 
93,621

 
103,057

 

 
616,303

Impairment
 

 
21,942

 
(16,557
)
 
24,599

 

 
29,984

Servicing revenue, net
 
133,366

 

 

 

 

 
133,366

Gain on sale of originated mortgage loans, net
 
194,029

 

 

 

 

 
194,029

Other income (loss)
 
(92,878
)
 
31,677

 
180,643

 
(10,324
)
 
4,515

 
113,633

Operating expenses
 
457,276

 
4,124

 
31,289

 
18,396

 
121,730

 
632,815

Income (Loss) Before Income Taxes
 
(30,037
)
 
232,514

 
259,532

 
49,738

 
(117,215
)
 
394,532

Income tax expense (benefit)
 
8,474

 

 
11,048

 
(542
)
 

 
18,980

Net Income (Loss)
 
$
(38,511
)
 
$
232,514

 
$
248,484

 
$
50,280

 
$
(117,215
)
 
$
375,552

Noncontrolling interests in income (loss) of consolidated subsidiaries
 
$
8,873

 
$

 
$

 
$
23,106

 
$

 
$
31,979

Dividends on Preferred Stock
 
$

 
$

 
$

 
$

 
$
5,338

 
$
5,338

Net income (loss) attributable to common stockholders
 
$
(47,384
)
 
$
232,514

 
$
248,484

 
$
27,174

 
$
(122,553
)
 
$
338,235


 
 
 
Residential Securities and Loans
 
 
 
 
 
 
 
 
Servicing and Originations
 
Real Estate Securities
 
Residential Mortgage Loans
 
Consumer Loans
 
Corporate
 
Total
September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Investments
 
$
6,374,099

 
$
16,853,910

 
$
7,444,405

 
$
904,216

 
$

 
$
31,576,630

Cash and cash equivalents
 
197,607

 
43,604

 
7,281

 
12,091

 
477,636

 
738,219

Restricted cash
 
129,504

 

 

 
33,644

 

 
163,148

Other assets
 
3,378,631

 
4,939,205

 
247,431

 
34,384

 
228,291

 
8,827,942

Goodwill
 
41,986

 

 

 

 

 
41,986

Total assets
 
$
10,121,827

 
$
21,836,719

 
$
7,699,117

 
$
984,335

 
$
705,927

 
$
41,347,925

Debt
 
$
6,192,811

 
$
17,196,772

 
$
6,248,142

 
$
878,506

 
$

 
$
30,516,231

Other liabilities
 
600,622

 
2,608,316

 
68,838

 
14,897

 
276,904

 
3,569,577

Total liabilities
 
6,793,433

 
19,805,088

 
6,316,980

 
893,403

 
276,904

 
34,085,808

Total equity
 
3,328,394

 
2,031,631

 
1,382,137

 
90,932

 
429,023

 
7,262,117

Noncontrolling interests in equity of consolidated subsidiaries
 
61,132

 

 

 
22,520

 

 
83,652

Total New Residential stockholders’ equity
 
$
3,267,262

 
$
2,031,631

 
$
1,382,137

 
$
68,412

 
$
429,023

 
$
7,178,465

Investments in equity method investees
 
$
249,134

 
$

 
$

 
$
23,033

 
$

 
$
272,167

 

 

Residential Securities and Loans







 
Servicing and Originations

Real Estate Securities

Residential Mortgage Loans

Consumer Loans

Corporate

Total
Three Months Ended September 30, 2018
 











Interest income
 
$
187,584


$
138,197


$
48,782


$
50,961


$


$
425,524

Interest expense
 
61,706


67,117


23,662


10,321




162,806

Net interest income (expense)
 
125,878


71,080


25,120


40,640




262,718

Impairment
 


3,889


(4,436
)

9,907




9,360

Servicing revenue, net
 
175,355

 

 

 

 

 
175,355

Gain on sale of originated mortgage loans, net
 
45,732

 

 

 

 

 
45,732

Other income (loss)
 
(92,243
)

17,994


(12,729
)

3,795


(115
)

(83,298
)
Operating expenses
 
132,542


63


6,436


8,467


44,599


192,107

Income (Loss) Before Income Taxes
 
122,180

 
85,122

 
10,391

 
26,061

 
(44,714
)

199,040

Income tax expense (benefit)
 
495

 

 
3,100

 
(32
)
 


3,563

Net Income (Loss)
 
$
121,685

 
$
85,122

 
$
7,291

 
$
26,093

 
$
(44,714
)

$
195,477

Noncontrolling interests in income (loss) of consolidated subsidiaries
 
$
1,086

 
$

 
$

 
$
9,783

 
$


$
10,869

Net income (loss) attributable to common stockholders
 
$
120,599

 
$
85,122

 
$
7,291

 
$
16,310

 
$
(44,714
)

$
184,608



 
 
 
Residential Securities and Loans
 
 
 
 
 
 
 
 
Servicing and Originations
 
Real Estate Securities
 
Residential Mortgage Loans
 
Consumer Loans
 
Corporate
 
Total
Nine Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
$
574,379

 
$
354,922

 
$
123,464

 
$
158,631

 
$
1,506

 
$
1,212,902

Interest expense
 
172,471

 
157,195

 
58,587

 
32,856

 

 
421,109

Net interest income (expense)
 
401,908

 
197,727

 
64,877

 
125,775

 
1,506

 
791,793

Impairment
 

 
23,190

 
(8,683
)
 
36,819

 

 
51,326

Servicing revenue, net
 
538,784

 

 

 

 

 
538,784

Gain on sale of originated mortgage loans, net
 
45,732

 

 

 

 

 
45,732

Other income (loss)
 
48,128

 
45,346

 
(27,219
)
 
13,363

 
4,796

 
84,414

Operating expenses
 
235,417

 
1,003

 
25,658

 
26,743

 
130,856

 
419,677

Income (Loss) Before Income Taxes
 
799,135

 
218,880

 
20,683

 
75,576

 
(124,554
)
 
989,720

Income tax expense (benefit)
 
(6,458
)
 

 
289

 
212

 

 
(5,957
)
Net Income (Loss)
 
$
805,593

 
$
218,880

 
$
20,394

 
$
75,364

 
$
(124,554
)
 
$
995,677

Noncontrolling interests in income (loss) of consolidated subsidiaries
 
$
3,525

 
$

 
$

 
$
28,533

 
$

 
$
32,058

Net income (loss) attributable to common stockholders
 
$
802,068

 
$
218,880

 
$
20,394

 
$
46,831

 
$
(124,554
)
 
$
963,619